August 2010

Robert Fuller: The Dignity of Work: Transforming the One-Size-Fits-All Workhouse Into a Custom-Fit Workplace

August 25, 2010

The inefficiency of slavery is now obvious, but to George Washington it came as a revelation. While on a visit to Philadelphia, Washington noticed that free men there could do in “two or three days what would employ [his slaves] a month or more.” His explanation–that slaves had no chance “to establish a good name [and so were] too regardless of a bad one”–was that of a practical man concerned with the bottom line, not that of a moralizer. Sadly for us, our first president did not draw the full implications of his insight. Had he done so, he might have used his immense prestige to end the indignity of slavery. Today’s employers are not dealing with slaves, though it is often argued that wage-earners are wage-slaves, and that the dignity of salaried employees is only marginally more secure. Since Washington’s time, it has gradually become clear that negative motivation–fear of punishment–is less effective than the positive motivation that comes from being part of a team of trusted, responsible professionals. Once a year, on Labor Day, the dignity of work is extolled from sea to shining sea. In the new book The Custom-Fit Workplace , authors Joan Blades and Nanette Fondas show how to turn that noble ideal into a year-round reality by providing a blueprint for employers intent on creating workplaces that unleash the full potential of employees. The ill-effects of rigid work schedules, inequitable pay, and other demeaning practices are now the subject of a growing body of research documenting the damage done not only to individual employees but to the companies for which they work. It turns out that rankism –the rank-based discrimination and abuse to which most indignities can be traced–is no better for the bottom line than racism, sexism, and homophobia. All the discriminatory “isms” are self-inflicted wounds that drain away the life-blood of enterprises harboring them. The indignities of rankism are not merely unfair, they are inefficient and counterproductive. Fear and humiliation work only so long as people lack options. The young are increasingly unwilling to put up with rankist environments, and soon these vestiges of the workhouse will become untenable throughout the economy. A culture of dignity in the workplace provides a competitive advantage because it means happier, healthier, more creative and productive employees. What does it matter if they work together in lockstep–so long as they get the job done? People who feel recognized as individuals and respected as human beings are more likely to give their best. Much as eliminating malnutrition makes for healthier workers, eliminating malrecognition makes for more reliable ones. Customized workplaces respect employees’ dignity in ways that previous generations would have found astonishing and the next generation will take for granted. Great managers have long known that nothing motivates workers quite so consistently as pride in a job well done. In chapters on flextime, virtual and contract work, job and career lane changes, and childcare at work, Blades and Fondas provide a design for a dignitarian workplace that pays off in performance and profits. Today, slavery has no defenders. As the liberating and empowering practices in this handbook spread through the global marketplace, the institutional indignities of the one-size-fits-all workplace will likewise be revealed as paternalistic, demeaning, and inefficient. When the history of the dignity movement is written, The Custom-Fit Workplace will stand as a beacon that lit the way.

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Video: Ritter Finds Facebook’s $34 Billion Valuation Credible: Video

August 25, 2010

Aug. 25 (Bloomberg) — Jay Ritter, a finance professor at the University of Florida, talks about the valuation of Facebook Inc. Facebook, the social networking website that plans an initial public share offering in the next few years, is worth almost $34 billion on the basis of secondary market transactions, the Financial Times reported. Ritter speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

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Madoff’s Prison Described As ‘Camp Fluffy’: Exclusive Clips From New CNBC Special (VIDEO)

August 25, 2010

When Bernie Madoff applied to run the budget of the Butner Prison’s landscaping crew, he didn’t get the job. “Yeah right I’d hire him as a clerk,” remarked the inmate in charge of the crew. “All our money’d be missing!” Nicknamed “Camp Fluffy” for its commodious environs, Madoff’s prison even features a soundproof music room — and periodic “special treats” like popcorn and cotton candy. Sentenced to 150 years at the Butner Federal Corrections Complex in North Carolina, Madoff apparently spends his time reading law books, John Grisham, and Dean Koontz–when he’s not working his job in the prison cafeteria. This is one of many stories from a new episode of CNBC’s “American Greed,” which offers an exclusive look into the infamous Ponzi-schemer’s life of incarceration. The episode, titled “Madoff Behind Bars,” will premier tonight at 9pm. “Madoff Behind Bars” features interviews with past and current inmates who interacted with the financial scammer while in jail. Watch the new clips for “Madoff Behind Bars” below! WATCH:

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BWise Increases Development of North American Operations; Names Joseph C. LeBas President

August 25, 2010

NEW YORK, NY and HERTOGENBOSCH, NETHERLANDS–(Marketwire – August 25, 2010) –   BWise, the global leader in governance, risk and compliance (GRC) management software, is pleased to announce continued growth and augmentation of its operations in North America. As a result of increased demand and strong results in the market, BWise has expanded its North American team, including hiring a new President for the firm, Joseph C. LeBas , effective immediately.

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Peter G. Miller: Obama Mortgage Modification Plan — 100 Times Better Than Bush

August 25, 2010

Just about every posting regarding the Obama mortgage modification program says it’s a dud. Those on the left say not enough has been done, those on the right say too many homeowners are washing out of the program. What’s too often left out is any sense of context. The reality is that the Obama loan modification program has saved roughly 100 times as many homes from foreclosure as the programs started under President Bush. That doesn’t mean the Obama plan is perfect or wonderful, but it’s surely better than many commentators suggest. For it’s part the Bush Administration had two important foreclosure programs. Hope For Homeowners First, there was the Hope for Homeowners plan, a program which set aside $300 billion to refinance toxic loans made no later than January 1, 2008. No doubt $300 billion is a lot of money but just how many loans were refinanced under H4H? Let’s see, there were 0 in fiscal 2008 , 23 in fiscal 2009 and 48 so far in fiscal 2010 . That’s a total of 71 loans. Over three years. A little more than one per state. Why did Hope for Homeowners fail? Lender participation was voluntary, new loans were limited to 90 percent of appraised value and appraised values had gone down so lenders were being asked to take a loss for every loan refinanced under the program. FHASecure Second, there was the FHASecure program. “In the coming days,” said President Bush in 2007, “the FHA will launch a new program called FHA-Secure. This program will allow American homeowners who have got good credit history but cannot afford their current payments to refinance into FHA-insured mortgages. This means that many families who are struggling now will be able to refinance their loans, meet their monthly payments and keep their homes. In other words, we’re going to start reaching out and making sure people know that this option is available to them so they can stay in their homes.” Sounds great. So what happened? To follow the program you have to look at the number of delinquent conventional loans refinanced with FHA-insured mortgages. There were no such loans in fiscal 2007 , 3,794 such loans in fiscal 2008 and 316 mortgages in fiscal 2009 . That’s a total of 4,110. But according to then-HUD Secretary Alphonso Jackson the story was different. “FHASecure,” he said, “has helped more than 100,000 families stay in their homes. Homeowners are cutting their monthly mortgage payments by an average of $400 a month compared to their exotic subprime loans. They no longer have anxiety about finding foreclosure notices in their mailboxes, thanks to the safe mortgage alternative that FHASecure offers.” So did the program help 4,100 delinquent conventional borrowers or more than 100,000? The original purpose of the FHASecure program was to help delinquent conventional borrowers get FHA financing. Jackson himself had testified before Congress in 2007 that the FHASecure program was for “borrowers who are otherwise creditworthy, but have recently become delinquent on their mortgages as their teaser rates reset.” But since the program wasn’t working the solution was to redefine the program. HUD did this by simply changing its FHASecure Frequently Asked Questions page to say “these FAQs have been modified to reflect that the term FHASecure applies to all conventional to FHA refinance transactions. The previous edition of FAQs indicated that only those borrowers who were delinquent due to reset of their non-FHA ARMs were eligible for FHASecure, causing confusion.” And just like that the FHASecure program was a “success” — unless you were one of the millions of borrowers with a toxic loan that needed to be refinanced. Making Home Affordable In March 2009 , a few weeks after entering office, the Obama Administration started the Making Home Affordable program. In basic terms, the program today has four elements: The Home Affordable Refinancing is for those making payments who want to refinance but lack equity. The Home Affordable Modification is for borrowers who face foreclosure as a result of higher mortgage payments, reduced income or hardship (think medical bills). The Second Lien Modification Program (2MP) is for borrowers with second liens of more than $5,000. May result in lower interest rate or an extended loan term. The Home Affordable Foreclosure Alternatives Program (HAFA) is for borrowers who have been unable to get help under Making Home Affordable. It provides as much as $3,000 to borrowers who participate in a short sale or deed-in-lieu of foreclosure. So how is the program doing? The July 2010 results look like this: The government has identified 1,623,584 delinquent borrowers who qualify for program help. Some 1,528,563 have been asked to participate in the program. Amazingly, 245,651 refused, meaning that 1,282,912 borrowers started loan modification trials. Of those who started loan modifications, 520,814 could not complete the three-month trial period and will likely lose their homes. In addition, 8,823 who passed the trial modification period and obtained a “permanent” loan modification actually re-defaulted. In total, 529,637 borrowers have washed out of the program to date. Roughly 364,077 borrowers are still in trials. There have been 389,198 permanent modifications to this point. These are people who otherwise would have lost their homes. The bottom line: The Obama program has so far saved 389,000 borrowers from foreclosure, a number which will increase in the coming months and a number which is now nearly 100 times greater than the foreclosure prevention results under the Bush Administration. Is it good that more than nearly 530,000 borrowers have so far dropped out of the program? Of course not, it’s a terrible thing to face foreclosure. But ask yourself: When did the foreclosure mess begin? Why did past bouts of unemployment not produce a flood of foreclosures? Why did regulators let lenders offer toxic loans? Why weren’t distressed borrowers helped before, when the foreclosure crisis first began to unfold? How much help and enthusiasm have lenders given the Administration’s modification efforts? What better alternative has anyone been able to offer the 530,000 borrowers who did not succeed with Making Home Affordable? Blaming the Obama program for failing to save more distressed homeowners is like a guy in a life raft who drills a hole in the bottom and then complains that everyone else isn’t bailing fast enough. It just isn’t right. _____________________ For more by insights and ideas by Peter G. Miller, please visit his consumer real estate information site, OurBroker.com .

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Video: Louisiana’s Kennedy Discusses Oil Drilling Moratorium: Video

August 25, 2010

Aug. 25 (Bloomberg) — Louisiana State Treasurer John Kennedy talks about the deep-water oil drilling moratorium. President Barack Obama’s administration halted drilling in waters deeper than 500 feet after BP Plc’s Macondo well in the Gulf of Mexico blew out April 20. Kennedy speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (This report is an excerpt of the full interview. Source: Bloomberg)

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Danny Schechter: Hard Times Are Getting Harder, Left Is Silent

August 25, 2010

Who is Talking About What Matters Aren’t job losses and foreclosures as important as a “Ground Zero Mosque” (that isn’t a mosque, hasn’t been built or isn’t even at ground zero?) We know we live in hard times that are on the verge of getting harder with 500,000 new claims for unemployment last week, a recent record. The stock market may be over for now as fear and panic drives small investors out. Big corporations hoard stashes of cash rather then hire workers. The D-Word (depression) is back in play. Foreclosures are up, and the administration’s programs to stop them are down, well below their stated goals, only helping 1/6th of those promised assistance. And here’s a statistic for you: 300,000. That’s the number of foreclosure filings every month for the past 17 months. This year, 1.9 million homes will be lost, down from 2 million last year. Is that progress? In July alone, 92, 858 homes were repossessed. At the same time, the number of canceled mortgage modifications exceeded the number of successful ones. According to Ml-implode.com, last month, “the number of trial modification cancellations surged to 616,839, greatly outnumbering the 421,804 active permanent modifications.” And don’t think this is only a problem that affects the homeowners about to go homeless. The New York Times quotes Michael Feder, the chief executive of the real estate data firm Radar Logic to the effect that we are all at risk. “My concern is that if we have another protracted housing dip, it’s going to bring the economy down,” Mr. Feder said. “If consumers don’t think their houses are worth what they were six months ago, they’re not going to go out and spend money. I’m concerned this problem isn’t being addressed.” The larger point is that even if you believe the economy is already down, it can go lower. No one knows how to “fix it” either just as BP couldn’t plug the “leak” that, truth be told, is still oozing oil. So what are we doing about it? Are we demanding debt relief or a moratorium on foreclosures? Are we shutting down the foreclosure factories? Nope. Progressives are spending time and wasting passion this August debating on an Islamic Cultural Center near Ground Zero, invariably responding to the provocations and agenda of adversaries. They are always on the defense, never taking the offense. Who is beating the drum for job creation and a new economic policy? Maybe the unions, but their voice is muted and ignored in the electronic noise machine. Marches are planned by the UAW and Rev. Jesse Jackson on August 28th in Detroit and in Washington on 10.02.10. But the expected war of the words between Rev. Al Sharpton and Glenn Beck over the legacy of the March on Washington is expected to generate more heat. Meanwhile, even as the administration seems to be finding signs of a “recovery,” a parade of failures march on from the discovery that there is an oil slick the size of Manhattan in the Gulf to the persistence of frauds in finance from state pension funds in New Jersey to the case against the head of the Bank of America. Even worse, Shorebank, one of the banks that community activists considered a national model of social responsibility has gone down in Chicago, the 104th bank to fail this year with fifteen branches including some in Detroit and Cleveland. It was also active in 40 countries. In June, it reported over $2 billion in deposits. By August, it was gone. In all, 349 US banks have disappeared since 2007. ShoreBank promoted itself as a community development and environmental bank. It was based in Michelle Obama’s old neighborhood with the slogan “Lets Change The World.” Now the world of Wall Street has changed the bank with a partnership of investors including American Express, Bank of America and Goldman Sachs taking over under the name “United Partnership.” Hundreds of other banks are on the FDIC hit parade and may be next. There were many worse casualties in banking in the past according to Barry James Dyke’s informative book, Pirates of Manhattan . He notes that ten thousand banks failed during the depression and 2,900 bit the dust in the S&L crisis. The current number may have been higher had Congress not bailed out the Banksters who used some of our money to play PacMan, gobbling up smaller institutions. AP reported, “ShoreBank lost $39.5 million in the second quarter amid soured real estate loans. The bank had been under a so-called cease and desist order from the FDIC for more than a year, requiring it to boost its capital reserves. ShoreBank was able to raise more than $146 million in capital this spring from several big Wall Street institutions. It was unable, however, to secure federal bailout funds it sought from the Treasury Department’s Troubled Asset Relief Program.” Republicans are “investigating” alleged administration support for the Bank. AP explained, “Rep. Darrell Issa of California, the senior Republican on the House Oversight and Government Reform Committee, sent a letter to a White House legal adviser asking specific questions on possible contacts between administration officials and executives of ShoreBank or potential investors. The White House has said no administration officials met with ShoreBank concerning its rescue or requested help from financial institutions on its behalf.” Questions raised by Republicans, of course, seek to politicize the issue when it is the FDIC ‘s deal with the big banks that needs to be probed, as Zero Hedge explains: “As it stands, Goldman and 11 other banks are receiving a multimillion dollar gift to conduct a portfolio liquidation run-off of ShoreBank’s assets, while merely making sure existing deposits are serviced.” (Note: the FDIC is led by a Republican.) Blogger Mike, “Mish” Shedlock concludes: “The FDIC’s handling of Shore Bank smells as bad as a pile of dead alewives on a Chicago beach in mid-July.” My question is: Why didn’t the administration help shore up ShoreBank (if it could be shored up) as they did so many of the “too big to fail” banks? Their hands-off attitude, perhaps in fear of being criticized, as they were anyway, helped doom the bank and, by extension, the idea that we could have socially responsible lending institutions. So much for the priorities and power of Obama’s “Chicago Mafia.” If they don’t have the guts to save a bank in their own hometown they know has meant so much to so many, is it any wonder they won’t take on the crimes on Wall Street? Last week, Treasury Secretary Tim Geithner was complaining that he is being falsely identified as a “Goldman Guy,” insisting he never worked for the financial institution that was recently branded a “Giant Squid On The Face Of Humanity.” He doesn’t seem to realize that the speculation is not based on the details of his resume but on an assessment of his track record with the pals he worked with when he ran the Federal Reserve Bank in New York. And by the way, Tim, why the hold-up on the appointment of Elizabeth Warren to run the new Consumer Financial Protection Bureau in your old institution? Is she too smart and popular for you? Why the fiddling while our modern Rome burns? News Dissector Danny Schechter directed Plunder The Crime of Our Tim e, a DVD and a companion book, The Crime Of Our Time on the financial crisis as a crime story. Comments to: dissector@mediachannel.org

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Thomas Welsh Joins HomeBanc as Director of Finance

August 25, 2010

TAMPA, FL–(Marketwire – August 25, 2010) – Tampa-based HomeBancorp, Inc. has named Thomas Welsh as Director of Finance for HomeBanc. He is based in HomeBancorp’s Tampa headquarters, located at 101 E. Kennedy Boulevard, Suite 4100. 

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Video: Loretta Cross Sees `Flurry’ of M&A in Gulf Oil Industry: Video

August 25, 2010

Aug. 25 (Bloomberg) — Loretta Cross, managing partner for corporate advisory and restructuring services at Grant Thornton LLP, discusses the potential impact of the BP Plc Gulf of Mexico oil spill on mergers and acquisitions in the energy industry. Cross talks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

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Video: Feder Says U.S. Home Market Moving in Buyer’s Direction: Video

August 25, 2010

Aug. 25 (Bloomberg) — Michael Feder, chief executive officer of Radar Logic Inc., talks about U.S. home prices and the outlook for the housing market. U.S. home prices fell 1.6 percent in the second quarter from a year earlier as record foreclosures added to the inventory of properties for sale. Sales of new homes unexpectedly dropped in July to the lowest level on record. Purchases fell 12 percent from June to an annual pace of 276,000, the weakest since data began in 1963, according to the Commerce Department. Feder speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

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10 Local American Economies That Have Changed Forever (PHOTOS)

August 25, 2010

By 24/7 Wall St. : A city does not die when its last resident moves away. Death happens when municipalities lose the industries and vital populations that made them important cities. The economy has evolved so much since the middle of the 20th Century that many cities that were among the largest and most vibrant in America have collapsed. Some have lost more than half of their residents. Others have lost the businesses that made them important centers of finance, manufacturing, and commerce. Most of our list of America’s Ten Dead Cities were once major manufacturing hubs and others were important ports or financial services centers. The downfall of one city, New Orleans, began in the 1970s, but was accelerated by Hurricane Katrina. Notably, the rise of inexpensive manufacturing in Japan destroyed the ability of the industrial cities on this list to effectively compete in the global marketplace. Foreign business activity and US government policy were two of the three major blows that caused the downfall of these cities. The third was the labor movement and its demands for higher compensation which ballooned the costs of manufacturing in many of these cities as well. 24/7 Wall St. looked at a number of sources in order to select the list. One was the US Census Bureau’s list of largest cities by population by decade from 1950 to 2000 with estimates for 2007. Detroit, for example, had 1.9 million people in 1950 and was the fifth largest city in the nation. By 2000, the figure was 951,000. The city was not even on the top ten list in 2007. The Census data also describes the shift of much of the population to cities which were not considered large at all in 1950. Most of these are in the southern part of the US. Rising populations in these locations has been driven by the growing number of retired people and a relocation of the nation’s workforce. This is how San Diego, Phoenix, and San Antonio have moved onto the list of the ten largest cities in America. Researchers at the Massachusetts Institute of Technology did a study of what they described as America’s 150 forgotten cities. The municipalities on their list were medium-sized and ranked by measurements that included poverty. The reason for their demise largely match the cities on the 24/7 Wall St list . The MIT research work goes beyond a mere list of statistics and points out reasons why some of these cities will never recover. In almost every case, tax bases have disappeared, which has undermined the ability of local governments to spend money on revitalization. Abandoned areas of these cities have high crime rates, which not only keeps people from relocating to these areas but is actually an incentive for them to move away. This in turn, leads to the image of these cities as desolate urbanscapes. Check out below the 10 local American economies that have changed forever — and visit 24/7 Wall Street for more information : For more, visit our new Third World America section.

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Video: Reilly Says Oil Drilling Ban Likely to Be Lifted Early: Video

August 25, 2010

Aug. 25 (Bloomberg) — William Reilly, co-chairman of President Barack Obama’s commission investigating the BP Plc oil spill in the Gulf of Mexico, discusses the outlook for the deep-water drilling moratorium to be lifted ahead of its Nov. 30 expiration. Reilly speaks in Washington with Megan Hughes and Margaret Brennan on Bloomberg Television’s “In Business.” (Source: Bloomberg)

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Long-Term Jobless Get Their Money Back After Congressional Lapse

August 25, 2010

Most of the 2.5 million long-term jobless cut off from unemployment insurance during a 50-day congressional standoff this summer have received the money they missed. But for some, the back payments are not enough to make up for the financial burden caused by a lapse in crucial benefits. “By the time I received the money we had sold just about everything of value we owned in order to stay as close to current with all debts as possible,” wrote Steve Santos of Zion, Ill. in an email to HuffPost on Aug. 5. “I sold my golf clubs last week, the last personal item of value I had left. I have not played all year; I usually play every Sunday from April through October with a college buddy and others.” Santos, who said he lost his job as a retail manager in November, received the standard 26 weeks of state-funded benefits. But he was cut off from the federally-funded extended benefits as the Senate dithered over whether to reauthorize the benefits after they expired at the end of May. A spokesman for the Illinois Department of Employment Security told HuffPost the state paid 90 percent of back benefits by July 30. Santos said he received two lump sum payments totaling $2,497 shortly thereafter. “I wonder when and if I will ever find a job,” Santos wrote. “I am not entrepreneurial, but I have made money for every employer I had. I am 55, face a future of minimum wage or less, which in turn minimizes my already meager Social Security pension, if it isn’t torn from us. We lost all savings, including our 401K’s, using hardship clauses to withdraw them. So what hope does our future hold?” In some states, the local labor department was unable to get the money out so speedily. The Las Vegas Review-Journal reported that long-term jobless only received back payments last week because “the claims backlog created by the lapse overwhelmed the ability of the Nevada Department of Training and Rehabilitation to deliver the money.” Other states boasted they began processing claims the same day the president signed the reauthorization and finished distributing back payments within two weeks. Republicans in the Senate, joined by Nebraska Democrat Ben Nelson, blocked the extended unemployment benefits because of their $33 billion impact on the deficit — though not even fiscally conservative economists outside of Congress thought nickel-and-diming the unemployed was a smart strategy for deficit reduction. Republicans on the campaign trail, joined by colleagues in the House and Senate (and a few Democrats, too) suggested the extended benefits, which in some states gave the unemployed 99 weeks of aid, discouraged people from looking for work. Judy Barbee of Calvert County, Md. told HuffPost she lost her job as a senior legal secretary at a D.C. law firm in June 2009 and has since gone bankrupt and lost her house. “Not only do I job search daily, I have applied to hundreds of offers, but rarely get any kind of response.” Barbee said she withdrew $10,000 from her IRA and took a $9 per hour part-time job at a gas station after her benefits stopped. She said that with the reduction in her weekly benefit caused by the part-time work, her total income is $3 more per hour than it would be with the benefits alone. “Words are not enough to express how angry, frustrated, humiliated, and devastated I am,” wrote Barbee, 59. “It appears the elitists (Congress, corporations and their lawyers) are trying and succeeding in demolishing middle class America.” David Britton of Louisville, Ky. told HuffPost the chunks of money he received from the Kentucky Office of Employment and Training were gone within 28 hours as he paid off creditors. “What can’t be made up is the late fees, overdraft fees, and damage to credit etc. that occurs when you simply have no money,” wrote Britton, 60, who said he lost his job as a sales director in December. “Plus the creditors don’t go away. They extract promises for lump sum payments in the future where you hope to be employed. I will be facing quite a few of those in September.” Britton said he became adept at “existential unemployment decisions” during the congressional lapse, racking up more than $1,000 in overdraft fees to keep the electricity on and the rent paid, but let go of things like the phone and DSL. “I haven’t used my grill all summer,” he said — but he added that he’s optimistic about his prospects as a food- and beverage-industry consultant. The reauthorization that the Senate approved at the end of July lasts until November, when Congress will once again battle over whether to maintain the lifeline to the 6.5 million people who’ve been out of work for longer than six months.

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Jamie Lisac Joins Dresner Partners to Lead Financial Restructuring and Corporate Turnaround Practice

August 25, 2010

CHICAGO, IL–(Marketwire – August 25, 2010) – Dresner Partners, a leading middle-market investment bank and IMAP-member firm, announced today that Jamie Lisac has joined the firm as Managing Director and will lead the Financial Restructuring and Corporate Turnaround practice.

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Great American Group(R) Hires Milton Guffogg as European Operations Director – GA Asset Advisors, LLC

August 25, 2010

WOODLAND HILLS, CA–(Marketwire – August 25, 2010) –  Great American Group, Inc. ( OTCBB : GAMR ), a leading provider of asset disposition, valuation and appraisal services, announces the appointment of Milton Guffogg as Operations Director of GA Asset Advisors, LLC.

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Tony Greenberg: Surfing the WWC (The Worldwide Wine Club)

August 25, 2010

What Happens When A Wine Club Is Anything But Exclusive “I’d never join a club that would allow a person like me to become a member.”Groucho Marx Recently, I got a cold call at the office from a wine club I recently had joined (mostly for research, actually). The club had a hot deal, what the caller said was a great wine at a phenomenal price, and the cases were sure to be gone soon. It seems everyone everywhere has a deal on a bottle of wine. Okay, that got me going. If the wine was selling so fast, and it was already nearly gone, how come he had to call me to sell more of it? Well, he wanted to make sure I got a chance to buy before the wine was gone. But, I asked, won’t you get more if it’s selling so well? Oh no, it wouldn’t be restocked for 18 months, or maybe ever, once it was gone. Now I was really getting wound up. All this hooey grinds my guts sometimes. So I asked what was all that background noise on the call? Of course, the noise came from his co-workers, maybe 30 to 40 of them, he said, all working in what was likely to be a sort of boiler-room operation to push that “hot-selling” wine to club members. I knew the cold caller worked for a company that provides fulfillment services for several wine clubs that are each tied to big luxury brands. So, what was the difference between the clubs, I asked sweetly. He said he couldn’t really answer, and transferred me to Customer Service, to a very nice woman whom I’ll call Michelle. What Michelle then told me was so perfectly goofy, I couldn’t believe this wasn’t a prank call, written by pals just to push my buttons. Amazingly, it wasn’t, and more importantly, Michelle unwittingly illustrated the shortcomings of most wine clubs, and why we can do better for wine lovers. Which, it turns out, Michelle isn’t. Yes, Michelle was there to help customers understand more about wines they were buying from her company. But Michelle said she really didn’t drink wine, except (wait for it) “white zinfandel.” “I really don’t like all those dry wines, ” she said. I asked if her employer had a white Zinfandel wine club. “Unfortunately not,” she said. Then I asked where sweet (and sweet-wine-drinking) Michelle learned about wine, given that she didn’t like it much. Other than a few swills of Sutter Home, she said they gave her two weeks of training in wine issues to handle any consumer questions. Now I wanted to know what the differences were between the big clubs her company ran. She confessed the clubs really weren’t that different at all. Members of each club receive pretty much the same wines the members of the other clubs get, at pretty much the same price. So, what’s wrong here? Nothing, if you want to buy your wine based on a generic branding exercise designed to move a lot of random juice to a moneyed class of not-very-discriminating consumers. But there has to be a better way to run a wine club. Wine lovers deserve clubs that target a specific group of consumers with specific sets of shared taste (not just brand) preferences. Those clubs should provide affordable access to wines that this group is most likely to enjoy. That means some smart cookie will create a White Zinfandel club for Michelle and other sweet blush wine lovers out there. In the interim Michelle, may I humbly acquaint you with a lovely sweeter Rose’? Side bar: White Zinfandel may not be an actual grape, but nor is a Meritage. So stuff that in my pretentious Riedel and quaff it. Cheers and L’chaim to anyone who loves a wine they can afford and they can get when they want it.

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Michael Deane: Young Scientists Making Every Drop Count

August 25, 2010

Summer break is nearly over, and for many students that means saying goodbye to fun in the sun and reigniting a desire to learn. But summer wasn’t a total wash for students interested in pursuing education and careers in the water industry. Across the country, students from grade school to incoming-college freshman participated in programs that immersed them in the biology, geology, hydrology and just plain interesting stuff that happens between a water reservoir and the kitchen faucet. Meanwhile, a national dialogue continues on education, particularly in the areas of science, technology, engineering and math (STEM), encouraging students to engage in these critical fields. Part of this effort is being undertaken by American industry, seeking to develop future engineers, conservationists, facilities managers and even chemists, and the water industry is no exception, engaging in a variety of programs designed to expose the career possibilities in protecting and delivering this essential resource. To cite just a few examples of students and industry working together this summer: • NAWC continued its long term commitment to engaging students in water-related education by helping sponsor the Federal Water Quality Association’s scholarships for four graduating high school seniors; • Middlesex Water held a “Faces Behind the Faucet” competition for 6-8th grade New Jersey students about the myriad careers in the water industry. Students were asked to write an essay on a career path they found interesting, and winners were selected to shadow a water professional for a day to see hands-on what goes into bringing water into the home; and • Teenagers in Connecticut got a chance to see the inner workings of Aquarion Water Company , in a “boot camp” designed by a local biology teacher. Company experts explained pieces of the complex water services process, and opened participant eyes to opportunities to contribute to this essential industry. On a personal note, I’ve enjoyed regularly engaging with students at my alma mater, Duke University, who are pursuing careers in water and/or environmental management. These graduate students, just like the kids participating in the Middlesex and Aquarion programs, represent the future of our industry, so working with them now not only helps to prepare them for the challenges of their professional futures, but gives me a leg up when we’re all working for them later! All of these students have one thing in common: curiosity. It is up to all of us, in whatever industry we are involved in, to encourage this pursuit of knowledge. If you have young inquiring minds at home, don’t let the end of summer mean the end of opportunity to expose them to hands-on learning away from the classroom. As STEM education progresses, the country will rely on them and their interest and ingenuity to meet the growing global demand for innovation. We can do our part simply by opening their eyes the world of possibilities.

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Laurence J. Kotlikoff: What Should the Fed Do to Move the Economy Ahead?

August 25, 2010

First, some background. The U.S. is bankrupt. Don’t take my work for it. Take the IMF’s. In its recent review of the U.S. economy, the IMF said “The U.S. fiscal gap is huge for plausible discount rates.” And “… closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.” (See section 6 of http://www.imf.org/external/pubs/ft/scr/2010/cr10248.pdf) The fiscal gap is the value today (the present value) of the different between projected spending (including serving official debt) and projected revenue in all future years. To put 14 percent of U.S. GDP in perspective, total revenues currently constitute only 14.9 percent of GDP. The Congressional Budget Office’s Long-Term Alternative (i.e., honest) Fiscal Scenario projection shows, if anything, an even greater degree of insolvency. Using the CBO’s spreadsheet, I measure the fiscal gap at $202 trillion. Congress may cut some spending and raise some taxes, but it’s not going to come up with anything close to 14 percent of GDP on an annual basis without radically reforming and simplifying our tax, retirement, healthcare, and financial systems, each of which is an incredibly complex and hugely inefficient mess. Congressman Paul Ryan’s Roadmap offers such radical, simplifying, growth-promoting, and physiologically-inspiring reforms. If Uncle Sam doesn’t come up with a KISS (keep it simple, stupid) like Ryan’s or mine (see my recent book, Jimmy Stewart Is Dead, including the Afterword), which entails ironclad control on growth in federal spending, Uncle Sam will be forced to make money the third-world way — by printing it. Let’s consider this most likely scenario. I.e., let’s consider the fact that Uncle Sam has a time-path of expenditures net of taxes, which he can only “finance” by printing money. I put the word finance in quotes because printing money is simply a way of imposing a hidden and subtle tax, which economists call seignorage. In printing money and spending it, the government meets its obligations. But the extra money leads prices to rise by more than would otherwise occur. This reduces the purchasing power of the money and of the government bonds people already hold. And this loss of purchasing power of existing money balances and the decline in the real value of government debt represents the seignorage tax. So monetary policy is a form of fiscal policy, and we have to think about the Fed’s actions from the perspective of fiscal policy. If we take it as given that Uncle Sam will print money to “cover” his bills, the only question is when. He can print money today to pay off future bills or he can wait until the future to do so. Printing money today to buy long-term Treasury bonds is an example of the former. Sam can also print money today to buy assets that will generate income over time. The return on those assets can then be used to pay future bills. For example, the Fed could print $9 trillion this morning and buy back all outstanding Treasury bills and bonds. (Note, the Fed would need to print more money if the price of these securities rose as it was buying them up). This afternoon, it could print, say, $25 trillion and buy up half the world’s stocks. These two acts would make a big improvement in Uncle Sam’s finances. But the prices of goods and services would skyrocket and the dollar would lose all of its value. Worse, everyone would see they’d been taken and that they should never have held dollars or anything denominated in dollars. Overnight people would make the yuan, the Canadian dollar, or some other more trustworthy money the reserve currency. So as much as Uncle Sam would like to print $9 trillion this morning and $25 trillion this afternoon and shave $34 trillion off his $202 trillion fiscal gap, he’s not likely to do so for fear of exposing his racket. Instead, Uncle Sam, actually, Uncle Ben (as in Ben Bernanke), has decided to print money to buy back U.S. bonds and to buy private assets, but on a smaller scale. We heard this week of the Fed’s plans to further expand its “balance” sheet and purchase longer term U.S. Treasury bonds. The Fed also will, it appears, continue to indirectly purchase private assets, primarily in the form of mortgage-backed securities issued by Fannie Mae and Freddie Mac. This makes sense. When prices are stable or falling, the ability of the public to see through to what’s really going on is that much less. Indeed, exacting the seniorage tax is easiest when prices are falling because the public doesn’t realize that had the central bank not printed so much money, prices would have fallen even further and they would have enjoyed a bigger increase in the purchasing power of their money and government bonds. I.e., when prices are falling and the government prints money, it effectively taxes holders of money and government bonds by limiting their real capital gains on these holdings. Yes, this is very subtle, but that’s what’s going on. So, to get back to the question of what monetary policy the Fed should be running right now, my answer is that if the Fed is ultimately going to need to print money to pay the government’s bills, this is the time to do it or, at least,more of it. The danger, though, is that when the economy returns to normal, there will be so much money sloshing around that prices will rise dramatically. The Fed is very worried about this outcome having printed $1,152 trillion since August 2007 and jacked up the monetary base by a factor of 2.4. Indeed, the Fed is so worried about this extra money getting into the economy’s blood stream that it’s been bribing banks to horde this money as excess reserves. The bribe is coming in the form of paying interest on the excess reserves. This bribe has also been used to pass money under the table to the banks so they could “earn” money in a completely safe manner and, thereby, remain solvent. In worrying about inflation and in keeping the banks afloat via payment of interest on excess reserves, the Fed has undermined it’s other objective, namely getting the banks to make more loans to the private sector. I think it’s time to focus on that objective. Hence, I’d also recommend that the Fed stop paying interest on deposits and take the risk on inflation. Jobs, at this point, are more important than prices.

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Laurence J. Kotlikoff: Proprietary Information Is a Cover for Fraud and Is Dragging Our Economy Down

August 25, 2010

The financial system will continue to be a drag on economic growth because no one trusts it, and, for good reason. Whether or not capital requirements are doubled or tripled, financial firms can, at any time, use the cover of proprietary information to manufacture and sell fraudulent securities. This means that there can be runs on banks, insurance companies, hedge funds, etc. at any time based on rumours, whether true or not, of fraud. This fact that we can’t see in real time and on the web what these companies are doing with our money makes the system incredibly fragile. Dick Fuld, CEO of Lehman before it collapsed, said what happened to Lehman could happen to any bank. He’s right. But his statement also means that Lehman wasn’t to be trusted and that no surviving financial intermediary should be trusted. Unfortunately, regulators, raters, boards of directors, and politicians aren’t going to look carefully at what these companies are buying, holding, and selling, and protect investors. Their incentives are to do the opposite. If we want to get our economies growing, we need to adopt Limited Purpose Banking (see my worst-selling book, Jimmy Stewart Is Dead, which has been endorsed by an absolutely incredible list of people, starting with former Treasury Secretary George Shultz and economist Jeff Sachs, and which I very much hope you will read), which forces all financial corporations to operate as mutual fund holding companies and provides for the full and highly detailed disclosure, in real time, of all the assets and liabilities of the mutual funds. If you like the book, send it to your favorite member of Congress. We need them to start thinking out of the box if we are ever to truly fix our financial system.

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Executive Compensation: Barney Frank To Hold Hearing On Wall Street Pay

August 25, 2010

Rep. Barney Frank, chairman of the House Financial Services Committee, said Tuesday that he will hold a hearing this fall to examine whether regulators are being tough enough in curbing pay practices at Wall Street firms that can lead to excessively risky practices.

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Bioanalytical Systems, Inc. Appoints New VP – Business Development and Marketing

August 25, 2010

WEST LAFAYETTE, IN–(Marketwire – August 25, 2010) –  Bioanalytical Systems, Inc. ( NASDAQ : BASI ) announces that Alberto Hidalgo has joined the Company as Vice President – Business Development and Marketing effective August 18, 2010. Mr. Hidalgo has over 15 years of senior-level sales experience in both domestic and international markets including 13 years in the CRO Market. Most recently he consulted with companies to develop and implement new sales and marketing strategies. Prior to that he served as Area Director of Sales with Covance Central Laboratory Services and held various positions including Director of Sales, for Eli Lilly Export, Puerto Rico. He has a strong history of developing new business relationships and sales strategies resulting in exceptional sales growth.

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Laurence J. Kotlikoff: Is There A Government Bond Bubble?

August 25, 2010

YES, there is a government bond bubble. And it’s huge. Uncle Sam and his counterparts in the EU and Japan are broke and are, almost surely, going to print vast quantities of money to cover their enormous spending obligations. The printing presses are already working full time. The Fed, for example, has increased the monetary base by 140% in the last three years. If and when this money gets lent out by the banks (they are now holding much of it in excess reserves) prices of goods and services (the price level) should rise by 140%! A one-time jump in prices of this magnitude would leave the nominal price of outstanding nominal bonds unchanged, but reduce the real price (the purchasing power of nominal bonds) by 58%. But what we’ve seen is the beginning, not the end, of the money creation process, and any increases in the current price level will give rise to expectations of future increases in prices. This will raise long-term interest rates and lower nominal bond prices. And it doesn’t take much of an increase in expected future inflation to do a very big number on the prices of long-term bonds. So current bondholders will get hurt in two ways. The prices of their bonds will fall due to concern about future money creation and the current price level will jump due to past money creation. Is this for sure? Nothing’s for sure in a very uncertain world in which bond traders and the public are focused on countries’ official debts, rather than their fiscal gaps, to gauge the need to print money. The labeling problem in economics (discussed, informally, in prior blogs and, formally, here and here) renders official debt figures utterly meaningless. But this emperor’s new clothes continue to draw lots of attention. Although I wouldn’t touch long-term, US nominal bonds with a 1,000-foot pole, the Fed would scoff at my concerns about inflation. The Fed says it’s ready, at the first sign of inflation, to sell huge quantities of bonds into the market to suck out all the money it injected in the last three years. The Fed thinks it can do so without depressing bond prices and raising interest rates. Maybe it can, maybe it can’t. But as of last week, the Fed was concerned enough about raising rates to announce it would continue to actively buy bonds (i.e., print even more money). What the Fed can’t avoid, short of Congress’ adopting radical structural reforms, is the fiscal train wreak that’s coming. Congress cannot forever continue to borrow from Peter to pay Paul, whether explicitly, through the formal sale of bonds, or implicitly, through the expansion of pay-as-you-go transfer programs. At some point foreigners will stop enabling our Ponzi scheme and Uncle Sam will find that he can’t “borrow” or “tax” additional resources from younger generations to hand over to older ones because the younger generations will have already handed over everything or almost everything they earn. Well before this happens, the Fed will come under enormous pressure to lower interest rates, the need for which is the standard handy excuse for making money by making money. As this occurs and inflation takes off, we’ll likely see a switch from the dollar to the yuan or to a basket of foreign currencies as the world’s reserve currency. All it will take is a couple of big players to signal they’ve lost faith in the dollar and Uncle Sam’s gig will be up and its bonds will be down–way down.

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Spectrem Millionaire Index Turns Sharply Bearish On The Economy

August 25, 2010

NEW YORK (Reuters) — The Spectrem millionaire investor confidence index fell to its lowest level in more than a year in August as wealthy U.S. investors worried about politics and unemployment, according to Spectrem Group. The Spectrem Millionaire Investor Confidence Index fell 11 points in August to -18, its lowest level since June 2009, when it fell a record 18 points to -20 shortly after the S&P 500 index hit a 12-year low.

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Egg Recall: U.S. Chose Not To Require Vaccine For Salmonella Egg Threat

August 25, 2010

DES MOINES, Iowa — Low-cost vaccines that may help prevent the kind of salmonella outbreak that has led to the recall of more than a half-billion eggs haven’t been given to nearly half the nation’s egg-laying hens. The vaccines aren’t required in the U.S., although in Great Britain, officials say vaccinations have given them the safest egg supply in Europe. A survey conducted by the European food safety agency in 2009 found about 1 percent of British flocks had salmonella compared to about 60 to 70 percent of flocks elsewhere in Europe, said Amanda Cryer, spokeswoman for the British Egg Information Service. Since Britain’s vaccinations began, the only salmonella outbreaks in eggs have been linked to those imported from elsewhere in the European Union, Cryer said. Overall salmonella cases in the country dropped by half within three years. There’s been no push to require vaccination in the U.S., in part because it would cost farmers and in part because advocates have been more focused on more comprehensive food safety reforms, those watching the poultry industry said. And the U.S. Food and Drug Administration has not yet determined how the hens in Iowa became infected. But Darrell Trampel, a poultry veterinarian at Iowa State University, predicted vaccination will become more common after the recent outbreak. “I think (vaccination) will move from hit and miss to being a standard,” Trampel said. About 125 million of the 218 million egg-laying hens in the U.S. have been vaccinated, said Gary Baxter, a spokesman for French pharmaceutical company CEVA, which makes some of the vaccines available in the U.S. The salmonella vaccine prevents chickens from becoming infected and then passing the bacteria on to their eggs. It has been available in the U.S. since 1992. There are two forms. One is a spray that uses a live bacteria, and chickens inhale it. The other contains dead bacteria that’s injected. Jewanna Porter, a spokeswoman for the Egg Safety Center, an industry group, said both forms provide good protection. The injected vaccine lasts longer, but veterinarians recommend both be updated. In most cases, laying hens are vaccinated at between 10 and 16 weeks old, which is before they are put into production. The FDA said last month it doesn’t believe mandatory vaccination is necessary, but it supports farmers doing it voluntarily. Data on the vaccine’s effectiveness in field trials conducted in real world conditions “was insufficient to support a mandatory vaccination requirement,” the agency said in the text of new rules requiring increased inspections and testing of eggs. “If individual producers have identified vaccines that are effective for particular farms, FDA encourages the use of vaccine as an additional preventative measure,” the agency said. Telephone and e-mail messages left for FDA spokeswoman Patricia El-Hinnawy for further explanation were not immediately returned Tuesday. Doug Grian-Sherman, senior scientist at the Union of Concerned Scientists, said the vaccine deserves additional study, but it would likely have only have limited effectiveness against a bacteria like salmonella, which has many different strains. “It’s only going to be a Band-Aid on a much bigger problem,” he said. It would be more effective to give the FDA additional authority to stop repeat offenders and pull contaminated products off shelves and to move away from big production facilities that ship across the nation and can quickly spread disease, Grian-Sherman said. “The way we produce a lot of our food and meat and eggs in particular, has gotten to a scale where it’s very difficult to prevent these problems,” he said. “That needs to change and we need to think about producing food on a scale that is better for the communities and safer for consumers.” Trample, the Iowa State University veterinarian, said no vaccine for any disease is required for chickens. “They are all left up to the decision of the producer,” he said. “Almost all other vaccines are strictly for chicken diseases that have no public health significance.” Both farms involved in the recall vaccinated some of their chickens. Julie DeYoung, a spokeswoman for Hillandale Farms, said the company began purchasing vaccinated laying hens in September 2009. The company didn’t vaccinate older hens but replaced them with vaccinated ones as they went out of production, she said. “So about 80 percent of the hens have been vaccinated,” DeYoung said. Wright County Egg has vaccinated some hens since 2009, investing more than $570,000 in the effort, spokeswoman Hinda Mitchell said. She declined to offer details due to an FDA investigation but said young hens were vaccinated “when they are in our care.” The FDA’s El-Hinnawy said Monday it appeared the company vaccinated some but not all of its hens. In Great Britain, farmers use a vaccine that goes into the water hens drink. The British government began encouraging, but not requiring, vaccination after a salmonella scare in the late 1980s crippled its egg industry. There was a 60 percent drop in egg sales overnight, Cryer said. “Looking back, that scare was probably the best thing for the industry because we sorted out the problem, and we now have very high standards and there are no consumer concerns about safety,” she said. At least 90 percent of eggs in Great Britain come from vaccinated hens. The other 10 percent come from very small farmers who may have vaccinated chickens but don’t sell to major retailers. Dr. George Boggan, a veterinarian with CEVA, said they aren’t always effective. If egg farms are dirty, and there’s a lot of contamination, the bacteria can “overwhelm” the protection from the vaccine, he said. “It’s in the best interest to keep the environment as clean as possible,” Boggan said. S&R Farms near Whitewater, Wis., began inoculating its 2.5 million hens seven years ago. “We kept our birds on that program and we’ve never had a positive (salmonella) result in the thousands of tests we’ve done,” manager Dave Hill said. He didn’t know exactly how much the company paid for the vaccines, but others estimated vaccination costs between 40 and 60 cents per bird. That includes the cost of the vaccine and the expense involved in administering it. “It’s a relatively inexpensive thing to do for the safety you get from it,” Hill said. ___ AP Medical Writer Maria Cheng in London contributed to this report.

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Why Bush Tax Cuts For The Rich Must Go: John Podesta, Robert Greenstein

August 25, 2010

Our leaders face the enormous challenge of navigating economic policy through a narrow channel. The president and Congress must provide near-term support for an economy still struggling to recover from a devastating recession, while simultaneously addressing longer-term structural budget deficits. Extending the middle-class tax cuts but permitting tax cuts for the wealthy to expire on schedule supports both goals.

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Raymond J. Learsy: "Its Not About the Money" — If Only the Texas Wyly Brothers Ran the SEC

August 25, 2010

There are still some straight shooters in our midst, and you can count the Wyly Brothers in that category. The SEC, fresh from their cream-puff settlement with Goldman Sachs, turned around late last month and laid a 78-page complaint on the Wyly Brothers alleging all manner of misconduct . The SEC claimed that the Wylys’ 58 trust and offshore corporations — based in such cozy tax havens as the Isle of Man and the Cayman Islands — were using hundreds of millions of untaxed dollars to pay for business ventures. Not surprisingly, the SEC’s action was filed just days after the SEC’s settlement with Goldman Sachs, the timing of which had raised not a few eyebrows. (See ” The Goldman Sachs Settlement, the Wall Street Journal, Warren Buffett, and the White House ” 07.17.10) And that is the rub. The timing of the Goldman Sachs settlement was too close to the passage of the Financial Regulations Bill, giving many the impression that one was tied to the other. And then there was the size of the settlement. $500 million — for a company like Goldman that had allegedly gamed the system for billions — was almost an insult to the marketplace and to many who found themselves on the opposite side of Goldman deals. The sum was less than 3% of Goldman’s 2009 bonus pool alone ($20 billion — that’s $20,000,000,000, in case you are counting). While the SEC cratered to Goldman, braying their $500 million settlement, thereby surrendering the one opportunity at closing a deep wound to Americans’ sense of fair-play. It would have been far more important to America, and to Main Street especially, had the SEC’s action against Goldman been settled by a jury. One way or another it would have brought closure to an issue that now still remains an open wound. Take the Wylys by comparison. Did the SEC, by bringing an action against the Wylys, seek to force a settlement on the Wylys? According to the Wyly brothers, they did nothing wrong. Their position as set forth in a front page New York Times article : “We made all the shareholders money, we made all the employees money, we did a good job for the customers, we did a good job for the vendors. We did everything you’re supposed to do with a company”. Continuing, “I could write them a check, but that’s not the point. It’s not about the money.” Had the SEC taken a page from the Wyly book, much of the pent-up venom surrounding all that has happened within the financial community could at least have been diffused in the knowledge that a jury of American citizens (and not our Wall Street-beholden government) would sit in judgment of Goldman Sachs — irrespective of the outcome. Litigate against Sam and Charles Wyly? Whoa! How about having them ride herd on the SEC?

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Coupa Software Appoints Steven Sovik Vice President of Sales and Tony Dawson Vice President of Alliances

August 25, 2010

Software-as-a-Service Veterans Join to Further Accelerate Business Growth and Strategic Partnerships

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TerraSpark Announces New Appointments to Management Team; Leadership to Execute on New Business Strategy

August 25, 2010

HOUSTON, TX and BOULDER, CO–(Marketwire – August 25, 2010) –  TerraSpark Geosciences LLC® announced today the appointment of three new senior leaders to its management team. The team members — Tom Robinson, Mark Whittier and Sherry Madison — will lead TerraSpark’s activities in Global Sales, Marketing and Finance, respectively.

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SEO Technology Leader Conductor Adds Experian Hitwise Executive to Team

August 25, 2010

Conductor Hires Accomplished Executive to Lead the Best Practices and Customer Success Team That Supports Fortune 500 and Internet Retailer 500 Clients

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Philip N. Cohen: Home, School?

August 25, 2010

Homeownership and college education were booming trends after the mid-20th century, together ballooning the U.S. middle class — and distinguishing that class from those below it. As the century ended, haves had homes and college educations, and have-nots had neither. The news about real estate markets reminds me that the connection between home wealth and college attendance was sometimes direct, as when experts  advised parents to use home equity loans to send their kids to college (advice you don’t hear so much these days). But even without home equity loans, the wealth stored in middle-class homes — for most such families their largest asset — underwrote millions of college educations. I guess you could say the federal policies promoting homeownership were big boons for the higher education industry, not just the GIs and mostly-white suburbanites who landed inside the picket fences. With economic shifts requiring more education for success, an increase in demand contributed to the rise in college costs. But to this non-expert it appears rising home values (and increased access to home ownership) were a factor as well. Sources: Federal Housing Finance Agency ; Bureau of Labor Statistics . Given the compound fracture apparent in these trend lines, must something give? Maybe fewer people will go to college. Or we could increase access to student loans and grants, so the state would cover more of the cost, and widen the access to higher education. Or — just thinking out loud here — someone might look for a way to at least slow the increase in college costs. Please feel free to set me straight on what’s missing here. Cross posted from the Family Inequality blog.

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Brett King: Why does my Internet Bank suck?

August 25, 2010

Is it just me or have you noticed that the pages behind the login for your bank haven’t changed much in the last 5 or 6 years? According to the omnipresent Wikipedia, Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in October 1994. Interestingly, while the Gramm-Leach-Bliley Act introduced some important elements to support internet banking, it wasn’t until 2002 that the The Office of the Comptroller of the Currency issued final regulations on the use of Electronic Banking for US-based banks. This informs another key innovator’s dilemma. That of trailing regulation. In fact, it’s also indicative more broadly of the speed at which the banking industry adapts to changes of the significance of the introduction of the Internet. Far too slow for the rate of change that is occurring these days. Excuse me sir, your Internet banking is looking a little tattered… I wrote recently on The Finanser’s Blog about the problem of lack of investment in Internet banking by the mainstream banks. The issue is that when you categorize Internet banking internally as a channel where you migrate customers to reduce cost, the initial impetus for investment in Internet banking is just getting the required functionality in place – once in place, and cost savings on-track, it’s hard to get further investment in the customer experience behind the login because it’s already doing its job. The problem is – it isn’t doing its job. The assumption that internet banking behind the login is about transactional costs savings for the bank is a very bad assumption. It assumes that customers are using the channel to save the bank money, when customers are actually using the channel for convenience and to increasingly engage the bank on the fundamentals of day-to-day banking. The increase of online banking usage just doesn’t want to slow down because of this behavioral shift, and unless banks understand and adapt to this shift, their internet banking platforms will increasingly isolate customers who want more convenience and control. Here’s how comScore, who has been measuring this since 2006, characterizes the relentless take-up of internet banking: Since the inaugural comScore online banking report in 2006, the number of DDA customers visiting the top 10 online banking sites has increased from approximately 40 million people to more than 58 million people . In any given quarter, nearly 60 percent of the total U.S. Internet population visits at least one of the top 20 financial institution (FIs) sites. Comscore: 2010 State of Online Banking Report This is played out across the world. In looking at data on major website and internet banking redesigns, the fact is that since the launch of Internet banking in the last 90s and early 2000′s most banks update their public website’s look and feel every couple of years, whereas they’ve only updated behind the login capability every 3-5 years at most and in general the last round of updates was largely cosmetic. And yet, the growth keeps coming…Look at the statistics for Commonwealth Bank of Australia for monthly logins between 2007-2010 as reported in The Age of August 12th, 2010. See more details at CommBank Investors site That’s a 92% increase in usage between 2007-2010. This trend is borne out the world over. Internet banking usage is increasingly not only in that a larger portion of the population is logging in, but that existing customers are logging in more frequently. So if Internet banking needs more than just a facelift, what exactly does Internet banking need to become to capture the behavioral needs of the customers who are using it? More than bill pay – my financial control tower What I need more than a transaction dashboard, more than pure functionality is something that helps me manage my finances. Right now Internet Banking is to intelligence, what an old mainframe dumb terminal is to an iPad. Extremely primitive. There are some solutions out there right now that do an admirable job of personal financial management, I’d rank Geezeo’s and Yodlee’s toolset and Mint as solutions every bank should be looking at. Geezeo has taken it once step further of recent times with their customizable widget /dashboard approach. The thing is most banks are not yet using PFM and many claim the jury is out on whether or not PFM really generates strong ROI. Intuit certainly sees differently, their acquisition of Mint late last year for US$170m is telling – they see the future in managing the finances of individuals. The top three activities within Internet banking are still checking account balances, transfers and bill payment. But just adding PFM functionality is not necessarily going to be the answer to solve the flagging, lagging development of the world behind the login. More is needed. The future of behind the login What customers will be looking for from their Internet banking portal moving forward is more control. More than just offering the ability to pay bills, customers will be looking for integrated bill management – this is not just direct debit services. Customers will be looking to see a consolidated view of their billing relationships, and have their internet banking dashboard help manage bill payments automatically. This will require banks to be integrated in respect to data with utility companies, telecomms network operators, cable companies, and the usual suspects. The Internet banking dashboard will become the place I go to see my aggregated monthly expenses, drill down on individual accounts and statements, and setup rules for automated bill management. On the products side, banks are going to have to start to get a lot more proactive. For example, if I have a lump sum sitting in my savings or deposit account, the bank could show me how much interest I could be earning if I invested that in either a term deposit, CD or in something more exotic like an equity-linked investment. On my credit card statement, that large ticket item purchase you made last month…the bank could offer to put that on a 12-month payment plan at a lower interest rate. Observing that you do a lot of travel, the bank could proactively upgrade your credit card to a deal that gets you free air miles with your favorite airline. In addition to those more obvious elements, the whole multi-channel thing will start to come into play here too. For example, the dashboard will also let me manage alerts. Increasingly we’ll have to handle of whole lot of messages in respect to ingoing and outgoing payments, warnings about upcoming bills where your balance is short, location-based offers for retailers that you frequent and where you get a discount for using your NFC mobile enabled credit card, and other trigger-based alerts or offers that you subscribe to. Mobile has to become one of the primary acquisition tools that banks will use in the future, but to ensure that this channel is not abused by overeager marketers, we’ll need a filter mechanism. That means that you’ll need somewhere to tell the bank what you will and won’t accept being sent either by SMS or to the the apps that you utilize on your smartphone. The Internet banking dashboard will need to manage all of this – it will be a critical tool in managing the multi-channel relationship. If you’re a bank you better get serious about investing behind the login – you’ve got a long way to go. If you are on the corporate banking side, stay tuned…I’ll talk about corporate Internet banking dashboards next

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ECOLOGIX Resource Group Appoints Dr. Philip Rudolph Du Toit as President of African Administration

August 25, 2010

BEVERLY HILLS, CA–(Marketwire – August 25, 2010) –  Ecologix Resource Group ( OTCBB : EXRG ) announced today the appointment of Dr. Philip Rudolph Du Toit as president of African Administration, effective immediately. He will oversee Ecologix’s African operations and business development.

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George Consagra Joins GoodGuide as CEO

August 25, 2010

Former Scribd President and Bebo COO Brings Extensive Experience in Accelerating Company Expansion

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Dennis Clerke Joins Software Equity Group

August 25, 2010

SAN DIEGO, CA–(Marketwire – August 25, 2010) – Software Equity Group (SEG), the software industry’s premier boutique investment bank and M&A advisory, today announced the addition of Dennis Clerke to its deal team. Clerke, who joins as Executive Vice-President, brings to SEG more than twenty years of experience and success as a software entrepreneur, dealmaker, CEO of venture-backed software companies, and executive level strategist with deep expertise in software company financing, operations, product development, sales and channel development.

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Credit Card Debt Drops To Lowest Level In 8 Years

August 25, 2010

NEW YORK — The amount consumers owed on their credit cards in this year’s second quarter dropped to the lowest level in more than eight years as cardholders continued to pay off balances in the uncertain economy. The average combined debt for bank-issued credit cards – like those with a MasterCard or Visa logo – fell to $4,951 in the three months ended June 30, down more than 13 percent from $5,719 in the same period a year ago, according to TransUnion. The credit reporting agency said it was the first three-month period during which card debt fell below $5,000 since the first quarter of 2002. Credit card debt remained the highest in Alaska, but slid 7 percent there to $7,148. A total of 22 states recorded debt higher than the national average. Residents of Alabama paid off the most debt, dropping their average balance by 27 percent to $4,753. More borrowers also made payments on time. The rate of cardholders past due by 90 days or more fell to 0.92 percent in the second quarter, from 1.17 percent last year. That’s the first time the delinquency rate has been below 1 percent since the second quarter of 2007, before the recession, said Ezra Becker, director of consulting and strategy in TransUnion’s financial services unit. The rate fluctuates during the year, he said, but the improvement is more evidence that consumers are working to make sure their credit cards remain in good standing. That concern reflects several economic factors, from the fear of unemployment to the fact that the collapsed housing market means it’s harder to cash in on home equity when money gets tight. “You can’t buy groceries with your house anymore,” Becker said. Reflecting the weak economies in the states hardest hit by the housing crisis, the delinquency rate was highest in Nevada, at 1.5 percent of cardholders, followed by Florida, 1.24 percent, Arizona, 1.11 percent and California, 1.08 percent. In all, 16 states fared worse than the national average for delinquencies. The lowest delinquency rates remained in North Dakota, at 0.54 percent, and South Dakota, at 0.55 percent. In a twist, Becker said the foreclosure crisis could be helping to improve the timeliness of credit card payments and lower balances. When people don’t make mortgage payments, he suggested, they have a short-term cash boost. “That can provide extra money to pay down credit cards,” he said. Besides paying down debt, consumers are getting fewer new cards. Nationwide, the number of new accounts opened dropped almost 6.5 percent from last year. TransUnion predicts that the national delinquency rate will remain below 1 percent for the rest of the year. However, on the high end, the Nevada rate is forecast to edge up to 1.6 percent.

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Video: Bloxham’s McQuaid Says Ireland’s Debt Costs `Manageable’

August 25, 2010

Aug. 25 (Bloomberg) — Alan McQuaid, chief economist at Bloxham Stockbrokers, talks about Standard & Poor’s decision to cut Ireland’s credit rating one step by to AA- on concern the rising cost of supporting its struggling banks will swell the budget deficit. He speaks from Dublin with Maryam Nemazee on Bloomberg Television’s “The Pulse.”

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Video: Admiral’s Stevens Sees No Drop in Car Insurance Prices

August 25, 2010

Aug. 25 (Bloomberg) — David Stevens, chief operating officer of Admiral Group Plc, talks about the outlook for car insurers in the U.K. and the company’s plans to expand into France. He speaks with Francine Lacqua on Bloomberg Television’s “On The Move.”

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Video: Charles Nenner Sees Dow Falling to 5000 in Two Years

August 25, 2010

Aug. 25 (Bloomberg) — Charles Nenner, founder of the Charles Nenner Research Center, talks about cycle forecasting and his forecast for the Dow Jones Industrial Average. He speaks on Bloomberg Television’s “On The Move” with Francine Lacqua.

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Video: Ifo’s Carstensen Sees Slow German Growth in Second Half

August 25, 2010

Aug. 25 (Bloomberg) — Kai Carstensen, an economist at the Ifo Institute, talks about the unexpected rise in German business confidence in August. The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, increased to 106.7 from 106.2 in July. That’s the fourth straight monthly increase and the highest level since June 2007. Carstensen speaks from Munich with Maryam Nemazee on Bloomberg Television’s “The Pulse.”

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Video: Mentel Says He’s `More A Buyer Than Seller’ in Ireland

August 25, 2010

Aug. 25 (Bloomberg) — Lothar Mentel, chief investment officer at Octopus Investments Ltd., talks with Bloomberg about Ireland’s credit rating downgrade and the outlook for mergers and acquisitions. He speaks with Mark Barton on Bloomberg Television’s “Countdown.”

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Video: Heyhoe, Analyst, Says BHP Has `Strong Growth Potential’

August 25, 2010

Aug. 25 (Bloomberg) — Mark Heyhoe, a mining analyst at Westhouse Securities Ltd., talks about BHP Billiton Ltd.’s full-year earnings and the company’s hostile bid for Potash Corp. of Saskatchewan Inc. He speaks on Bloomberg Television’s “Countdown” with Mark Barton.

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Video: Solar Sailor’s Dane Says H.K. Star Ferry Can Go Electric: Video

August 25, 2010

Aug. 25 (Bloomberg) — Robert Dane, chief executive officer of Solar Sailor Holdings Limited, talked about the potential of environment-friendly marine transportation in Hong Kong and China.¶¶¶ Solar Sailor owns patented “solarsail” technology, which can harvest wind and solar energy on any vehicle and has developed hybrid marine power technology for a variety of applications from small unmanned vessels, to ferries, cruisers and tankers, according to the company’s website. Solar Sailor’s technology is on dispaly at the 2010 World Expo in Shanghai, and the company has sold boats to the Hong Kong Jockey Club. Dane speaks in Hong Kong with Bloomberg’s Danielle Tran. (Source: Bloomberg)

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Speculation Rising Over Impact of Expiring Capital Gains Tax Cuts on CRE Sales

August 25, 2010

The debate over tax cuts enacted in 2001 is expected to heat up when the U.S. Senate reconvenes in September after its summer recess. The maximum tax rate on capital gains and dividends will revert from the current 15%, a 70-year low, back to 20% on Jan…

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Video: L&G’s Taylor Says Irish Recovery Plan `Hasn’t Worked’

August 25, 2010

Aug. 25 (Bloomberg) — Georgina Taylor, an equity strategist at Legal & General Group Plc, talks about Ireland’s credit rating downgrade and equities strategy. She speaks with Mark Barton on Bloomberg Television’s “Countdown.”

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STG Leases 111,900 SF at Reston Town Center

August 25, 2010

STG, a contractor that provides IT services to the U.S. government, signed a 10-year office lease for 111,896 square feet at 12011 Sunset Hills Road in Reston, VA. The 12-story property totals 321,394 square feet in One Reston Overlook in the Reston…

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STG Leases 111,900 SF at Reston Town Center

August 25, 2010

STG, a contractor that provides IT services to the U.S. government, signed a 10-year office lease for 111,896 square feet at 12011 Sunset Hills Road in Reston, VA. The 12-story property totals 321,394 square feet in One Reston Overlook in the Reston…

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