August 2010

West Virginia Mine Explosion Leads To More Enforcement And Disclosure

August 27, 2010

It was back on April 5, right around the afternoon shift change, when methane gas or coal dust or both suddenly ignited in the Upper Big Branch coal mine in West Virginia, sending a massive fireball shooting down its low-ceilinged passageways. Twenty-nine miners working in several different sections of the mine were killed instantly, making it the deadliest mining disaster in 40 years. The conflagration was so intense that federal officials investigating its cause had to wait two months before the risk of fire and the levels of methane in the air were low enough that they could start looking for clues underground. Today, Upper Big Branch remains closed to everyone but those investigators, who are still only partway through their methodical examination. Federal Mine Safety and Health Administration director Joseph A. Main went down into the mine a few weeks ago and all around him, he said, were signs of “a pretty violent explosion.” “You have ventilation controls that are destroyed — your block walls are blown out — you have residue from the heat and fire,” he said in an interview with the Huffington Post. The floors are littered with debris and damaged equipment. There was, Main said, “a vast area that was affected.” MSHA’s operating theory appears to be that something Massey did to the mine’s ventilation system let methane and possibly dust build up to explosive levels. Before the explosion, Upper Big Branch had received more “unwarrantable failure” orders — for safety violations that constitute more than just ordinary negligence — than any other mine in the country, Main said. Civil and criminal investigations are both underway. And federal officials have now disclosed that they found handheld methane monitors deep inside the mine that had maxed out, suggesting explosive quantities of the gas. “Without a doubt, something went wrong with the ventilation,” Main said. “Ventilation is used to render harmless methane in a mine. And that didn’t happen.” (The Charleston (W.Va.) Gazette , the Pittsburgh Post-Gazette and NPR are among the few news outlets that have continued to doggedly follow the story.) Meanwhile, as generally happens in response to a major accident, the regulatory environment is changing. After the explosion, MSHA was hammered for letting mines with alarming safety records exploit loopholes to evade fines and stay open. A June memo from the Department of Labor’s Inspector General found that between 2007 and 2009, MSHA apparently declined to subject some problem mines to closer scrutiny because it was too much work. Since the April explosion, Main has dramatically stepped up MSHA’s enforcement activities. A reform bill making its way through Congress would expand the mine regulator’s authority, but what’s already changed is that inspectors are now using preexisting powers to a much fuller extent — particularly their ability to conduct surprise inspections and pull workers out of mines with serious health hazards until those hazards have been abated. “We’re aggressively using the closure order as a tool of choice” Main said. “I see more withdraw orders than I ever saw in the past,” said Ellen Smith , the managing editor of Mine Safety and Health News . “MSHA’s always had power to issue them,” she said, “they just didn’t use the power that they had to the fullest extent. They’re doing that now. They’ve never done it before, under anyone.” MSHA statistics show 1,287 closure orders between April 5 and August 5 of this year, 285 more than during the same period last year. Smith said she’s even heard of surprise inspections in off hours. “For MSHA to go into a mine on third shift was unheard of,” she said. As the Associated Press reported Thursday , MSHA is cracking down on mine companies that tip off their underground workers before federal officials making surprise inspections can get down there themselves. And although the money hasn’t arrived yet, Congress recently appropriated $18.2 million for MSHA to prosecute appeals of its citations, and $3.8 million to the Federal Mine Safety and Health Review Commission to help reduce a massive backlog of cases. On the Hill, legislation introduced by Rep. George Miller (D-Calif.) has passed by the House Judiciary Committee but not the full House; Sen. Jay Rockefeller (D-W.Va.) has introduced nearly identical legislation in the Senate. The bills would give MSHA more leverage over mine operators with troubling safety records and would further protect workers who speak up about safety concerns. Meanwhile, the mammoth Massey Energy Company and its famously combative CEO, Don Blankenship, remain entirely unapologetic. Late last month, Blankenship lectured a Washington crowd about morals and said that accidents happen. “I believe that the physics of natural law and God trump whatever man tries to do,” he said. “Whether you get earthquakes underground, whether you get broken floors, whether you get gas inundations, whether you get roof falls, oftentimes they are unavoidable just as other accidents are in society.” That same day, his company officially tried to shift blame for the accident to a natural event — a crack in the mine floor that ostensibly created an unusually big and sudden burst of methane. Blankenship has also publicly urged the families of the victims to settle with the company without hiring lawyers or filing lawsuits. And just this week, he got his way with four of the families , who agreed to settle for undisclosed terms. Massey had previously offered families settlements of at least $3 million each. One of the most far-reaching changes to the mining industry since the April explosion may actually end up being the insertion — at the request of Rockefeller and his fellow West Virginia Democrat, the late Sen. Robert Byrd — of an amendment to the recently passed financial reform bill. The amendment, now law, requires publicly-traded mining companies to include serious mine safety violations in their public filings with the Securities and Exchange Commission. Unlike the citations themselves, these SEC filings are closely tracked by shareholders and industry analysts. Indeed, on August 23, Massey filed a notice with the SEC acknowledging that MSHA had, in an enforcement order issued on July 21, accused it of creating an “imminent danger” of death or serious physical injuries. As it turns out , MSHA investigators working their way through the Upper Big Branch mine had discovered a two-by-two-by-three-foot box labeled “explosives” in a conveyor belt tunnel. The explosives had nothing to do with the April 5 explosion, but nevertheless, this was a big deal. And because it was in an SEC filing, the market noticed. Massey Energy stock prices dropped suddenly, eventually falling $4.13, or 13 percent, over the next four days. Similarly, the first 10-Q quarterly reports were filed under the new law earlier this month, allowing stock analysts like SNL Financial to easily compare and contrast various companies’ safety performance. SNL concluded: Massey Energy Co. racked up, by a wide margin, the highest number of mine safety transgressions among U.S. public coal producers during the second quarter, according to data provided by the companies in their latest Form 10-Q filings. The U.S. Mine Safety and Health Administration assessed more than $4 million in proposed fines against Massey during the second quarter, a number that far and away exceeded the performance of other public U.S. coal companies. In fact, no other coal producer reporting safety data to the SEC was fined more than $1 million during the second quarter. “This information is really going to play a huge role in corporate responsibility,” Smith said. Meanwhile, what Main called “enhanced enforcement” continues. “We’re finding some pretty egregious things ,” he said, noting that one mine — Wilcoal Mining Inc.’s Tri-State One Mine in Claiborne County, Tenn. — stayed closed for three weeks while it fixed a series of ventilation-related violations, among others. Main, a former United Mine Workers of America safety official, had already been running MSHA for six months when the Upper Big Branch mine exploded. Some of the changes MSHA has made since the explosion were already in the works before that, he said. But would a more concerted crackdown before April have saved the lives of 29 miners? “I think anyone always looks back to figure out what went wrong. What did you miss? What did you miss? Those are things I’ll think about for the rest of my life,” Main said. “But the other thing is: you find it and fix it. You learn the lessons of the event and you plan the reforms pretty quick.” ************************* Dan Froomkin is senior Washington correspondent 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 , and/or become a fan and get e-mail alerts when he writes.

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Janet Ranganathan: Minding the Sustainability GAAP

August 27, 2010

Limited transparency around corporate sustainability risks can lead to investments that are bad for the environment, and investors’ bottom lines. Yesterday BP abandoned its hope of bidding on a potentially lucrative exploration license in Greenland. The implication is that its tarnished reputation is undermining its ability to compete for projects. Across the Atlantic, the Tennessee Valley Authority has lost nearly $50 million in power generation during this summer’s heatwave, because the Tennessee river is too hot for the nuclear plants’ cooling towers to function. What do these two stories have in common? They are both examples of how environmental degradation can hit home for companies. The global environmental crisis, including climate change, water scarcity and ecosystem degradation, isn’t just a problem for “greens.” It also creates significant financial risks for companies and their investors. Environmental Risks Alter Balance Sheets Such risks vary from sector to sector but include: potential liability for environmental accidents; the physical impacts of climate change on supply chains; and growing water scarcity in many parts of the world. BP’s recent crisis generated by the mammoth Gulf of Mexico oil spill is an extreme example of environmental risk. It turned the company’s anticipated net income of $5.6 billion for the second quarter of 2010 into a record $17.1 billion loss. But in a resource-constrained and warming world, there are many other risks that may significantly alter the balance sheet. For example, research suggests that consumer goods companies could face a loss of earnings if they do not respond to environmental pressures in their supply chains, including physical climate change impacts and public policy responses to them. Specifically, the World Resources Institute (WRI) report Rattling the Supply Chains indicates that such businesses could face a 13-31 percent reduction in earnings before interest and taxes as soon as 2013, rising to 19-47 percent in 2018. Certain sectors will be heavily impacted by specific risks in vulnerable countries or regions. For example, 79% of planned new power plant capacity in India will be built in water scarce or stressed areas. Since thermal and hydroelectric power plants depend heavily on water for cooling and energy generation, uncertain water supply creates significant risks for domestic power companies. A Gap in Financial Accounting Standards Worldwide, current financial accounting standards and generally accepted accounting principles (known as GAAP) fail explicitly to address such risks, which often derive from unsustainable business strategies. They can also miss the opportunities that such challenges create. Superior environmental performance by corporations can translate into lower costs from improved energy and resource efficiency and higher revenues from product innovation and enhanced brand recognition. General Electric’s Ecomagination™ product line is one compelling case in point. Current financial accounting standards and generally accepted accounting principles fail explicitly to address environmental risks, which often derive from unsustainable business strategies. Corporate sustainability reports can help fill information gaps on some risks. But sustainability reporting standards, such as the Global Reporting Initiative , remain largely voluntary, and as a result, their uptake is limited. Another recent WRI report Undisclosed Risk , for example, found that developing markets have particularly lagged behind in producing corporate sustainability reports. What’s more, stand alone reports all but guarantee that sustainability remains at the periphery rather than the mainstream of financial and investment decisions. A 2008 KPMG International Survey of Corporate Social Responsibility , for example, found that only three percent of annual financial reports had corporate responsibility information fully integrated into them. The failure to integrate sustainability as a strategic business issue in annual financial reports means that businesses and investors continue to make investments that are bad for the environment, society and ultimately their own bottom line. As a result, environmental trends continue on a downward trajectory, creating even greater risks for companies, especially those that have not embraced sustainable business strategies. Towards Integrated Reporting A solution may finally be on its way. A coalition of businesses, regulators, accountants, securities exchanges and not-for-profit groups recently launched an International Integrated Reporting Committee initiative to “create a globally accepted framework for accounting for sustainability.” Jointly convened by HRH Prince Charles’s UK-based Accounting for Sustainability Project and the Global Reporting Initiative, the committee includes participants from the International Accounting Standards Board, U.S. Financial Accounting Standards Board, International Organisation of Securities Commissions, the Big Four auditors – Price Waterhouse Coopers, Deloitte, Ernst & Young and KPMG – and NGOs including the World Resources Institute. The committee intends to present a framework, which brings together financial, environmental, social and governance information in a single “integrated” reporting format, at the G20 intergovernmental summit in France in 2011. The G20 already backs the formation of a single set of reporting standards, and G20 support for broader rules will be crucial to their introduction. Moving sustainability from the periphery to mainstream investment is an essential next step in preparing the corporate sector to deal with environmental risks. The move won’t be easy. But given worsening environmental trends and the fact that today’s investment decisions will either sustain or degrade the earth’s environment, integrated reporting is both sorely needed and long overdue.

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Video: Cowen’s O’Donoghue Says Fed Has `Enough Ammunition’: Video

August 27, 2010

Aug. 27 (Bloomberg) — John O’Donoghue, head of equities at Cowen & Co. LLC, talks about the outlook for Federal Reserve monetary policy. Cowen also discusses U.S. stocks, investor sentiment and his investment strategy. He talks with Matt Miller, Dominic Chu and Adam Johnson on Bloomberg Television’s “Street Smart.” Richard Regan of ProTradingCourse.com also speaks. (Source: Bloomberg)

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Mark Miller: It’s Time to Bolster Social Security, Not Slash It

August 27, 2010

Social Security was signed into law 75 years ago this month by President Franklin Delano Roosevelt. Today, it is the most important component of retirement security for most Americans. Unlike our damaged system of private pensions, Social Security is efficient, reliable and stable. But rather than celebrate Social Security’s successes at this milestone anniversary, many policy makers and much of the news media are focused on a different narrative. Social Security, they argue, is running out of money due to the impending retirement of millions of baby boomers. Social Security contributes to our ballooning national debt. We can’t afford Social Security in its current form, and must scale back benefits. This narrative is inaccurate, and it poses a serious threat to Americans’ long-term retirement security. While Social Security will require some modest adjustments to assure its long-term financial health, there is no imminent solvency crisis. Moreover, we should not be contemplating cuts in Social Security at a time when all the other pillars of retirement security have eroded to the point where many Americans won’t be able to meet basic expenses in retirement. Instead, new revenue sources should be created to address Social Security’s modest long-range solvency problem. And, rather than cut benefits, we should look at ways to enhance Social Security benefits for those who will need them most. Consider these facts: 1. Two-thirds of Americans in the lowest pre-retirement income brackets will run out of the money they need to meet basic expenses within ten years of retirement, according to the respected non-partisan Employee Benefit Research Institute (EBRI); almost one-third of affluent Americans will run short after 10 to 20 years in retirement. Older boomers face the greatest risk, according to EBRI’s research, but younger boomers and GenXers — currently age 36 to 45 — are on track to run out of money in retirement, too. 2. The value of private sector retirement plans plunged 19 percent in the ten-year period ending in 2008, according to Towers Watson, the employee benefits consulting firm, due mainly to the almost complete disappearance of traditional defined benefit pensions offered to employees by businesses. 3. We can afford to pay Social Security benefits without overwhelming our economy. Benefits are equal to 4.9 percent of gross domestic product (GDP) this year, and will rise to just 6.2 percent in 2035. After 2035, Social Security expenditures are projected to stay steady at that level of GDP through 2085. 4. Current benefits are modest — but critical. The average retired-worker benefit is about $14,000 per year — just a few thousand dollars above the official poverty guideline for an older single person. At the same time, Social Security provides an average of 40 percent of retirement income for the average American. The program keeps millions out of poverty, especially elderly women. 5. The Social Security Trust Fund is running a $2.5 trillion surplus that is headed toward a peak of $4.2 trillion in 2024, according to the Economic Policy Institute. That surplus was created as a result of the Social Security reforms of 1983, which included a substantial increase in payroll taxes levied on employers and employees, and a gradual increase in the retirement age from 65 to 67. 6. As boomers draw their Social Security checks in increasing numbers, the trust fund will be

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Marty Zwilling: Startups Need Focus to Cross All the Chasms

August 27, 2010

Everyone in the business world has heard of the book by Geoffrey A. Moore titled ” Crossing the Chasm ” (1991), but most entrepreneurs have no idea how it relates to them. In fact, it’s all about the “focus” required to get early stage technology products across the deadly chasm from early adopters to mainstream customers. Most investors and startup professionals expand this concept of focus to apply to key issues of every aspect of strategic and tactical planning in a startup. Missions and products that are too broad confuse your team, your customers, and potential investors. There are other chasms out there just as deadly as the technology one, such as the ones below: • Market requirements chasm. The first chasm is getting the customer requirements right, product or service, to satisfy a real need that a large number of customers will pay real money to satisfy. It takes focus to resist adding a long list of features that seem to make the opportunity larger, but dilute to focus on both you and potential customers. • Product development chasm. Another common chasm is never-ending product development. Focus is required to resist adding a few more neat features, made possible by the new technology, which in fact make the product more complex to use, impossible to test, and very expensive in time and cost. • Marketing and sales chasm. Lots of people still believe the major cost of a new product is development. These days, with all the clutter in the marketplace, the highest cost is usually marketing. Focus is required here to pick the low-hanging fruit, break through the clutter, and then move on to the next segment. Marketing costs can be a deep hole. • Customer support chasm. Products that have features which are unfocused, or aimed at too broad an audience, can be almost impossible to support. Customers need lots of help with installation, or can’t make the product work the way they expect. The result is that customer satisfaction in unachievable or at least very expensive. In his book, Moore limits his discussion to the transition between customers that are visionaries (early adopters) and customer pragmatists (early majority), in the context of high technology products that appear “disruptive,” meaning they move innovation in that arena to a new level. Here are the five customer segments outlined in his analysis: • Innovators – they love the challenge of a new technology and expect problems • Early adopters – customer visionaries driven by technology who expect it to work • Early majority – pragmatists that buy only with peer review, references and support • Late majority – conservatives who wait until the product is no longer state-of-the-art • Laggards – skeptics who will only adopt when forced or the need is critical The reason that his book was so popular, and is still studied in MBA programs and talked about by investors, is because his analysis has proven to be right so many times. There is a big gap between people who love to try new technologies, and the rest of us, who tend to be much more “technophobic.” Startups need to show real traction before attempting to cross the chasm. I always recommend focus as the key to avoiding Moore’s chasm, as well as the others highlighted here. Start your business with a narrow niche and a focused strategy, but don’t stay there. As the company matures, and you learn more about your customers and your market, then it is time to go broader or deeper. Build an overt strategy with feedback triggers to enhance the product to meet the needs of another segment of customers, and add more features to serve additional needs for the customers you already have. With this approach, you will find it a lot easier to jump all the chasms without crashing or breaking a leg

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Usha Haley: The Pandora’s Box of Trade With China

August 27, 2010

Statistics released last week confirmed that China became the second-largest producer in the world, overtaking Japan. This marker received much more breathless media attention (see ” Fareed Zakaria GPS ” ) than another, more significant milestone. In 2009, China surpassed Germany to become the world’s largest exporter. In the first half of this year, China increased its export lead over Germany. As Leo Hindery wrote recently in the Huffington Post China’s overall trade surplus surged in July to $28.7 billion, its highest level in 18 months. Its surplus with just the U.S. was about $26 billion, or an almost unbelievable 90% of the total. China’s exports rose 38% year on year, while its pace of growth in imports slowed sharply….Yet China’s enormous positive trade balance with the U.S. alone reduces each year our country’s GDP by more than $400 billion or nearly three percent. My studies of the Chinese steel, paper and glass industries indicate that these extraordinary increases in Chinese production and exports have arisen through massive Chinese government subsidies and concomitant expansion of Chinese production capacity. Labor costs, a traditional explanation for China’s rise, are small portions of total costs in the capital-intensive industries in which China has export prowess. Two millennia ago, the military strategist, Sun Tzu wrote that if you know neither your competitor nor yourself, you will succumb in every battle. The U.S.’s ballooning trade deficit with China, and associated job losses, testify to this dictum. As every student of economics knows, free trade leads to efficient resource allocation only when three conditions hold: lack of subsidies to distort true prices, lack of monopolies and lack of negative externalities so companies, rather than societies, bear production costs such as pollution. China’s subsidized, government-bolstered and polluting manufacturing industries negate these conditions. Consequently, the markets have failed, and U.S. government intervention needs to close the Pandora’s Box. A cogent letter from 104 U.S. Senators and Representatives highlighted the effects of Chinese trade. Citing a study I conducted on Chinese subsidies , the bi-partisan Congressional letter called on President Obama to conduct an in-depth examination of China’s unfair subsidization of its domestic paper industry. Congress asked the President to use the study as the basis for action to remedy these unfair trade practices: America’s paper industry is the most efficient in the world and is part of a supply chain that promotes sustainable forestry practices and good-paying jobs. This industry should not be asked to continue to compete on the unlevel playing field that China has constructed through heavy subsidization of domestic production. Let us examine the facts on China’s paper industry to which Congress alluded. Since 2000, China has tripled its paper production. In 2008, China overtook the U.S. to become the world’s largest producer of paper. In 2009, China produced over 17% of the world’s paper output and consolidated its place as one of the world’s largest paper exporters. However, the research showed that rather than economies of scale or scope or labor costs, China’s rapid rise in the global paper industry was fueled by over $33.1 billion in government subsidies from 2002 to 2009. China has no inherent cost advantages in the capital-intensive paper industry. Labor makes up only 4% of the costs in this industry; in contrast, imported recycled paper and pulp comprise over 35% of the costs. Raw materials, which make up three-fourths of the costs of producing Chinese paper, as well as electricity, coal, and transportation, have doubled in price over the last decade. Yet, Chinese paper sells at a substantial discount compared to U.S. or European paper. The Chinese paper industry has limited economies of scale or scope, with 88% of the companies being small and 12% medium-sized. The industry is geographically fragmented as well, operating in 30 of 31 Chinese provinces. China’s forest base is among the smallest in the world per capita. With no natural advantage for the production of paper, China is the largest importer in the world of pulp and recycled paper. Despite global overcapacity, China’s paper industry has added on average 26% of new capacity every year from 2004. With saturated domestic markets, exports have led the development of China’s paper industry, with detrimental effects on the U.S. and global economy. The U.S. trade deficit with China on paper has been increasing exponentially since 2002. Imports from China are rising faster than those from any other country for this industry. In February 2010, the annualized growth rate of Chinese paper and paper-product imports into the U.S. approximated 22%. Government involvement occurs every step of the way in China. The Chinese government’s policies on forestry have systematically aimed to reduce China’s dependence on imported raw materials and to subsidize the paper industry’s restructuring. Central and local governments’ subsidies and soft loans have also protected debt-ridden, state-owned enterprises and small, local companies with excess-production capacity in China. Only timely U.S. government intervention on trade with China will forestall the demise of U.S. manufacturing. This is not protectionism, but wise competitive policy in a global environment where market failures stave off the benefits from free trade. As U.S. manufacturing jobs in paper and elsewhere evaporate, never to return, so do interlinked competencies in other U.S. manufacturing sectors, including high-technology and green manufacturing. President Obama must realize that inaction too constitutes action, and with respect to trade with China, would be an irreversible, strategic mistake.

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Roberto G. Quercia: For Whom the Bell Tolls: Making the Best Choice for Borrowers in a Bad Situation

August 27, 2010

This week, the housing news has been dismal: record low sales, talk of a double dip in values, and growing foreclosures. Meanwhile, the help that many homeowners hoped would come from government programs has not materialized. Instead, ever changing and complicated programs without teeth seem designed to prop up the industry rather than truly assist homeowners. Not surprisingly, many borrowers are coming to the realization that their options are limited. While some savvy borrowers are defaulting for purely ‘strategic’ motivations (meaning they have reasonable means to continue to pay but choose not to), for many others, the decision is not so clear cut, especially when they face an extended period of owing more than their home is worth with little economic relief in sight. Despite efforts by industry and elected officials to discourage it, more and more borrowers may choose to exercise their option to default. Why? First of all, defaulting on a mortgage is completely legal. There is an implicit option in all mortgage contracts that allows borrowers to give the house back to lenders in exchange for extinguishing the mortgage obligation. The value of this option is a function of the outstanding debt, the value of the home and the costs associated with default. Lenders price this option when they originate the loan expecting that a small number of borrowers will default. Unfortunately, bad lending decisions leading to and combined with steep drops in house values have made this option rational for many more borrowers. Instead of owning up to their mistake, financial companies and government programs have promoted loan modifications so that borrowers can continue to make payments, even if such action may cause more harm than good to many of them in the long run. It is not difficult to see why default is the best option for many borrowers. According to the National Association of Realtors, a single-family house typically sold for around $220,000 between 2005 and 2007. Even assuming a very conservative 20% down payment and the ability to refinance at the favorable 5.0% interest rate currently going for conventional, conforming, fixed-rate mortgages, mortgage payments would still come to $945 a month, or 36% higher than the current median asking rent reported by the U.S. Census Bureau. That is, borrowers who continue to make mortgage payments spend about $3,000 more a year than if they chose to rent instead. Analysts at J.P. Morgan Securities estimate that if house prices remain flat, 13 million borrowers currently have an incentive to walk away from their mortgage. Even if housing prices appreciate by 3% for the next five years, the number would still be 6.5 million borrowers. Meaning that, for several years, millions of homeowners will pay thousands of dollars a year above the cost of housing just to meet their obligation to the bank. All together, this amounts to nearly $100 billion of wealth flowing away from communities to line the pockets of Wall Street. Most rental properties are owned by individuals or partnerships. The Property Owners and Managers Survey found that a quarter of landlords live on the rental premises. Rent payment to them is cash that supports local businesses. Even the mortgage payments made by those landlords typically go to local banks, where they can be recycled into the community. By contrast, residential mortgages are more likely to be held by large financial companies and investors all over the world. Everyone debates the causes of the crisis. Was it irresponsible borrowers? Deceitful lenders? Greedy financiers? Lenient regulators? Regardless, the financial burden seems to have fallen heavily on borrowers and taxpayers. From day one, Wall Street has made money from these mortgages. The loans were highly profitable during the boom years; then, when they started to default in large numbers, Congress authorized $700 billion under the Temporary Asset Relief Program to purchase the loans, supposedly at market value. But the Congressional Oversight Panel found Treasury paid $254 billion for assets actually worth just $176 billion, a 44% mark-up. Imagine how many underwater homeowners could be put right with that kind of deal. What has Wall Street done with this heads-I-win-tails-you-lose arrangement? Paid itself handsomely. In 2009, at the depth of the crisis when one in six Americans were out of work, domestic financial industries raked in $242 billion in profits and Wall Street paid $145 billion in bonuses, all benefits and other compensation. The result is an exacerbation of wealth and income inequality. Nearly 34% of new worth is currently held by the top one percent. Moreover, the explosion of sub-prime lending was an expansion of credit particularly to low-income households, although it was certainly not limited to them. While most subprime loans went to whites and higher-income borrowers, the housing bust has disproportionately affected those least able to weather the storm. In 14 of the 16 metro areas that the S&P Case-Shiller House Price Index breaks out homes by value, the lower tier of homes experienced greater price appreciation than the higher tier between 2002 and 2006; and in 15 of those metro areas, the lower tier experienced greater price declines between 2006 and 2010. For example, the peak-to-trough decline in house price in Los Angeles was 30% for higher-valued homes but 56% for lower-valued ones. Given that low-income borrowers are more likely to own lower-valued homes and are also more likely to have higher loan-to-value ratios to begin with, these borrowers who already paying the higher interest rates associated with subprime loans are also more likely to be underwater. By some estimates, home equity accounts for 60-80 percent of household wealth among low-income borrowers and/or minority households. In the presence of negative equity and the fact that sustainable appreciation occurs very gradually, these households are likely to feel the aftermath of the crisis especially hard for years to come. Continuing mortgage payments on a loan that has no relationship to the value of the underlying house is likely to deplete even more the precious financial resources of low income/low wealth borrowers. Unfortunately, this depletion of resources exacerbates an already unfortunate trend. For decades, policy has encouraged consumer spending when most of the gains in economic growth went to those with the highest income among us. According to Robert Reich, America’s median wage, adjusted for inflation, has barely changed for decades and between 2000 and 2007 it actually dropped. For most Americans, the only way to consume and keep up with ever higher prices was to acquire debt, mostly by using the homes as ATMs, i.e., taking large amounts of equity out of the property through often lender-promoted refinance or junior lien borrowing. From a policy perspective, such promotion of consumption was not a savings or asset-building-friendly policy. Neither are federally supported policies leading to modifications of mortgage loans that increase the loan balances when there is little hope of financial gains in any foreseeable future. Longer term, this policy-induced neglect of asset building is likely to worsen the so-called “retirement crisis” at a time when policy makers are trying to figure out what to do about it. Policy makers fear the collapse of the Social Security system when an unprecedented number of baby boomers retire and they encourage Americans to rely on household savings, invested over time, and home equity. Promoting additional mortgage payments when they make no financial sense works against such efforts. Isn’t the left hand aware of what the right hand is doing? We know from our work that the vast majority of mortgage borrowers take their responsibilities seriously, even if underwater. This is especially true of modest-wealth households that will go to extreme sacrifices to continue to make mortgage payments. They will exhaust their savings, max out their credit cards, try to get a second or third job, and tap or deplete children’s college and their own retirement funds. For example, we know that in 2009, 18% of Americans 45 years or older, including 22% of Hispanics and 26% of African Americans, withdrew funds prematurely from their retirement accounts, already depleted by the financial crisis, to continue making mortgage payments. Unfortunately, we also know that there is a high probability that despite these sacrifices, borrowers are likely to lose their home anyway, and almost certainly experience long-term financial ruin. Isn’t there a better way to solve the problem? Until 1993, judges were allowed to “cram down” mortgage debt on primary residences as part of Chapter 13 bankruptcy. The mortgage amount could be reduced to the value of the property with the remaining amount treated as unsecured debt. The concept of allowing bankruptcy judges to modify the mortgage debt owed on primary residences as they can on other debt, including properties owned for investment (or speculative) purposes, had been considered by Congress and the Obama administration, but was ultimately rejected due to industry complaints. The Mortgage Bankers Association and others claimed that the uncertainty of the legal process would result in greater lending costs and restricted access to credit. But a recent report by the Cleveland Federal Reserve found a similar process introduced in the wake of the 1980s farm crisis had only a minor effect on the cost and availability of credit to farmers. In fact, the threat of legal proceedings prompted lenders to seek private modification settlements. Such a stick might induce more loan modifications with principal reductions than the carrot of HAMP has been able to accomplish. The latest Office of the Comptroller/Office of Thrift Supervision Mortgage Metrics report reveals that just 0.1% — that is, one tenth of one percent — of HAMP loan modifications and 1.9% of all modifications in the first quarter of 2010 involved principal reduction. Without principal reduction, what options are left for underwater borrowers? Unfortunately, the widely touted solution of improving a borrower’s financial literacy is likely to be considered counterproductive by some. That is because many underwater borrowers who become better informed about financial issues will soon realize their best choice is to exercise the default option already written in their mortgage contracts. Concern about such a realization is probably what is prompting industry and public officials to play the “morality” card. They say that these borrowers have not only a financial obligation but also a moral obligation to repay their mortgage instead of walking away. John Courson, chief executive of the Mortgage Bankers Association, asks “What about the message they will send to their family and their kids and their friends?” I would ask what kind of message borrowers send their children when their own retirement savings and savings for their children’s futures are poured down the drain to support a financial crisis that has already added billions, perhaps trillions, of dollars to the tab of the next generation to pay for the excesses of the private mortgage market? With no realistic prospects of gain, many underwater borrowers who continue making payments are really only transferring wealth — theirs and their children’s — to Wall Street. Now, that is immoral and comes at a terribly high social cost. In the absence of any real solution to fundamentally address this problem, any policy initiative that continues to put the well being of Wall Street and the lending industry ahead of the ability of many Americans and their children to build wealth should fail in the long run. That failure is a price none of us should be willing to pay.

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Video: Reinhart Sees Seven More Years of High Unemployment: Video

August 27, 2010

Aug. 27 (Bloomberg) — Carmen Reinhart, economics professor at the University of Maryland in College Park, talks with Bloomberg’s Michael McKee about the outlook for U.S. growth, the labor market and Federal Reserve policy. Reinhart and her husband Vincent Reinhart presented a paper at the Fed’s annual symposium in Jackson Hole, Wyoming, today that finds the U.S., Germany and other advanced economies may face a decade of slow growth and high unemployment if the aftermath of the 2007 financial crisis tracks other post-crisis recoveries of the past century. (Source: Bloomberg)

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Video: Reinhart Sees Seven More Years of High Unemployment: Video

August 27, 2010

Aug. 27 (Bloomberg) — Carmen Reinhart, economics professor at the University of Maryland in College Park, talks with Bloomberg’s Michael McKee about the outlook for U.S. growth, the labor market and Federal Reserve policy. Reinhart and her husband Vincent Reinhart presented a paper at the Fed’s annual symposium in Jackson Hole, Wyoming, today that finds the U.S., Germany and other advanced economies may face a decade of slow growth and high unemployment if the aftermath of the 2007 financial crisis tracks other post-crisis recoveries of the past century. (Source: Bloomberg)

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Video: Reinhart Sees Seven More Years of High Unemployment: Video

August 27, 2010

Aug. 27 (Bloomberg) — Carmen Reinhart, economics professor at the University of Maryland in College Park, talks with Bloomberg’s Michael McKee about the outlook for U.S. growth, the labor market and Federal Reserve policy. Reinhart and her husband Vincent Reinhart presented a paper at the Fed’s annual symposium in Jackson Hole, Wyoming, today that finds the U.S., Germany and other advanced economies may face a decade of slow growth and high unemployment if the aftermath of the 2007 financial crisis tracks other post-crisis recoveries of the past century. (Source: Bloomberg)

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Lynn Tilton: We Need Policy — Not Politics — to Rebuild America

August 27, 2010

This week, House Republican Leader, John Boehner, called on President Obama to fire his economic team. As recovery wanes, dissatisfaction runs deep, but this public appeal seems more the initiate of a campaign for majority House Speaker than the proffer of solution to the financial downturn that plagues our nation. While I agree that Timothy Geithner and Lawrence Summers have not delivered on the administration’s promise of economic recovery, we need not a change of the guard and a revamp of rhetoric — we need a business plan to rebuild America. Only changes in policy will ignite job creation and fuel a sustainable economic turnaround. The urgency of transformation is more about principle than people. Infrastructure issues demand appropriate actions. We must make a commitment to manufacturing and modify policies to support that pledge. Many foreign countries subsidize raw materials by as much as 30% – this equates to dumping, not free trade. Such truth belies America’s inability to compete in the global economy. We close our eyes to what we choose not to see. Immediate changes to policy could put Americans to work now, and place our country on the fast track to a sustained recovery. The United States government should subsidize value-added jobs, and mandate their Department of Defense’s $140 billion procurement budget be spent on American manufactured goods. To witness the wisdom of subsidized employment, we need look no farther than Germany. Germans take pride in their industrial base; America once shared that sentiment. Today, Germany’s unemployment rate is 7.6%, 3 million of a total workforce of 42 million. America’s current 9.5% unemployment rate equals almost 15 million out-of-work citizens. The more accurate count of unemployed hovers at 30 million when including the discouraged workers, the part-timers who long for full-time positions and the permanently unemployed. Germany has successfully maintained its manufacturing workforce by assisting employers through a program affectionately called “short work.” In essence, during times of economic distress, workers are granted reduced hours by companies while the German government supports their wages up to 85% of full-time salary. In Germany, they pay their citizens to work — Americans are paid to stay home. Subsidized employment does not equate to additional government or taxpayer costs. Rather, it is the difference between an expensive band-aid and less costly value-added solution; the government contribution to workers’ paychecks is an alternative to unemployment benefits. Companies that would otherwise engage in mass layoffs or liquidate are provided with temporary support to keep workers employed. More companies survive downturns, benefits are shorter in duration and the debate on benefit abuse is eradicated. Each job saved is multiplied by at least 5 more employed as an economic effect on a town or city. Executed properly, this is a win-win. Involuntary unemployment has devastating effects on American workers and families. Studies show job loss correlates to depression and despair to illness, creating a downward spiral of government costs beyond benefits. Loss of American employment decreases household wealth, reducing consumption of locally manufactured goods and further stifling job creation. Joblessness, homelessness and hopelessness have enveloped our nation. As November’s mid-term elections approach, politicians will engage in negative debate and critique absent solutions, bringing us no closer to job creation and economic growth. Rebuilding America must start with a plan, not politics. Subsidized employment and the sole source allocation of Department of Defense dollars to American goods must be followed by trade policies that eradicate foreign advantage. The Department of Defense’s $140 billion procurement budget equates to revenues of General Electric, America’s second largest employer with more than 300,000 workers. Buying American could create hundreds of thousands of new jobs. Rather than political sparring and stonewalling, a more noble approach would be to stand shoulder to shoulder to create employment and rebuild America. A business plan to restructure our economy can be designed — the tools are within our reach. It starts with a commitment to our nation that overshadows party loyalties and ideological preconceptions.

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Mark H. Ayers: It’s the Height of Audacity to Claim a Skilled Worker "Shortage" When 20% Percent of American Skilled Craft Workers Are Unemployed

August 27, 2010

As a labor leader, I have learned over the years to never underestimate the lengths to which some unscrupulous employers, and some associations and consultants who serve them in the business community at large, will go to squeeze American workers and fatten their profit margins, regardless of the social impact their actions may have. The most recent example comes in the form of a newly issued report by a company called Manpower, Inc., which bills itself as “…a world leader in innovative workforce solutions; creating and delivering services that enable its clients to win in the changing world of work.” And those services happen to include “permanent, temporary, and contract recruitment.” I always find it interesting when companies that have a product to sell – in this case worker recruitment – somehow magically produce a report that suggests some sort of emergency or crisis that can be solved by, you guessed it, the services that they provide. And it’s even more incredible to me when some “respected” media outlets report it as fact without once ever considering that the source of the report is inherently biased. In this case, the Manpower, Inc. report to which I refer is titled, “Strategic Migration – A Short-Term Solution to the Skilled Trades Shortage.” The report essentially concludes that “Strategic migration is a practical answer to talent mismatches today. Without it, there would simply be no near-term way to alleviate shortages of skilled blue-collar workers.” Now, let me just say three things about this report. First, it is suspect from the start due to its source. Secondly, the brain trust at Manpower, Inc. is apparently unaware that there is 20% unemployment right now among the skilled trades in the United States (and in many areas of the nation, the rate is above 30% and sometimes 40%). Third, the term “strategic migration” is simply a more elegant way to say that American employers – not all American employers, mind you, but a significant number of them – are chomping at the bit to ease immigration restrictions for guest workers so that they can pay less for skilled craft labor. The news of the release of this report undoubtedly foreshadows the ratcheting up of pressure on American lawmakers to expand the guest worker programs under the federal H-1B and H-2B visa programs, as well as further expand the L1 Intra-Company transfer visas. This increased pressure stems from the disappointment of the U.S. Chamber of Commerce and other business organizations over the fact that the issue of comprehensive immigration reform was placed on the back burner this year by the U.S. Congress. The next logical step for the business community would be to manufacture a “crisis” in order to get Congress to pass a massive expansion of flawed guest worker programs. The stated view of the Chamber and the business community at large on the issue of guest workers is that the “market” should determine the number of visas and, of course, the market is defined by employer demand. The abuse of the H-2B visa program gets very little attention, yet it is an issue that has wide-ranging effects on the wages and working conditions for skilled craft workers all across the United States; in similar fashion to the escalation of “employee misclassification” in the construction industry which is now reaching epidemic proportions and wreaking havoc on workers, communities and many state’s already-dire fiscal troubles (due to the significant drop-off in tax revenues caused by this shameful practice). Until recently, employers and unscrupulous labor brokers who used the H-2B visa program to exploit foreign workers and drive down community wage standards have operated in the shadows. But today, thanks to watered down application and enforcement provisions, these parasitic “visa vultures” are free to ply their unscrupulous trade out in the open. Hence, the Manpower, Inc. “report.” Hundreds of billions of dollars have been appropriated by the federal government over the course of the last two years for the purpose of jump-starting our national economy. Many of the jobs that are being created by the stimulus bill are in the construction trades. And with an industry unemployment rate that continues to hover at 20% nationally, the last thing we would think possible is for U.S. employers to claim that there are not enough American welders, electricians, boilermakers and other skilled craft workers available to fill these jobs. Rather, these employers believe that there are not enough skilled craft professionals who are willing to work for the starvation wages they would like to pay, and for which they can find willing foreign workers. Just like the scourge of abuse occurring in the Gulf Coast region, where some employers continue to engage in the abuse of the H-2B visa program. Their modus operandi typically involves mis-advertising for lower-skill workers at the lowest level of wages (Levels 1 and 2 as defined by the H-2B program) when in actuality the jobs require much higher skill levels. By advertising for a lower class of skill, these employers are virtually guaranteeing that they won’t get a pool of “qualified” American workers. For example, they will advertise for a lower-skill “production welder” rather than a “construction welder” for a job in shipyard, knowing full well that any welder that works in a U.S. shipyard must pass a certification test. The United Association of Plumbers and Pipefitters (UA) has done a remarkable job of exposing this travesty. They have had qualified union members apply for these lower wage jobs, and when the employer finds out who they are and examines their stellar qualifications, these applicants are simply never contacted. Over the last couple of years throughout the Gulf Coast, the UA has successfully stopped over 12,000 individual job placements from going forward because of such fraudulent advertising practices. And this comes on the heels of another employer in the Gulf Coast who, in 2007, fraudulently submitted applications for 6,000 foreign H-2B visa workers to work on re-building the petrochemical industry in that region after the devastation of Hurricanes Katrina and Rita, when many American workers in that region were desperate for work. Of the 6,000 applications for welders, 3,000 were targeted for the Motiva Refinery, 1,500 for Valero, 1,000 for Total Petrochemical & 500 for ExxonMobil. The State Workforce Agency killed this application after complaints from local building trades unions in that area, along with newspaper stories and investigations. With so much fraud involved it is unfathomable that not one single person went to jail or was even charged for filing forged documents and falsified applications! If that’s not enough, you could point to the example of late 2006, again along the Gulf Coast, where U.S. and Indian recruiters defrauded more than 500 Indian workers of $20,000 each for an American dream–promises of good work and green cards–but delivered to them instead temporary visas binding them to one employer, along with deplorable conditions at Signal International shipyards, and constant threats of deportation from the company. Or, the example in Los Angeles, CA where it was discovered that Jacobs Engineering was seeking H-2B visas to import several hundred workers to fill skilled craft positions at a Los Angeles refinery. And in Florida, where the quick action on the part of our State Building and Construction Trades Council thwarted attempts by Blackhawk Marine to obtain H-2B visas for 400 foreign national workers in the Tampa area. The list of these types of abuses goes on and on. It is time that American lawmakers were reminded that their job is to protect the sanctity of American community standards and the interests of American workers. It is long past time for the federal government to initiate rapid regulatory reform of the H-2B process in order to require State Workforce agencies to review employer applications for H-2B temporary labor certifications and to revoke regulations that authorize employer “attestation;” to put an end to three-year “temporary” labor certifications for the construction industry; and to debar from the H-2B program for up to three years any employers, attorneys, or agents who commit willful violations of its requirements. We are on the verge of experiencing tremendous investment in America’s domestic energy sources – including oil, gas, nuclear, solar, wind, and geothermal. And we are hopeful that the Congress will soon devote some attention to the state of our crumbling infrastructure. In each instance, there is the potential for substantial job growth for American skilled craft workers. And the joint labor-management skilled craft apprenticeship training infrastructure that our unions operate, and which is funded by approximately $1 billion annually in private monies, is fully prepared to meet the challenge of developing this workforce. As stated in the Labor Movement’s Framework for Comprehensive Immigration Reform, one of the great failures of our current employment-based immigration system is that the level of legal work-based immigration is set arbitrarily by Congress as a product of political compromise – without regard to real labor market needs – and it is rarely updated to reflect changing circumstances or conditions. This failure has allowed unscrupulous employers to manipulate the system to the detriment of workers and respectable employers alike. The system for allocating employment visas – both temporary and permanent – should be de-politicized and placed in the hands of an independent commission that can assess labor market needs on an on-going basis and – based on methodology approved by Congress – determine the number of foreign workers to be admitted for employment purposes, based on labor market needs.

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Parisa Sabeti: Promoting Entrepreneurship: Creating Lasting Economic Development in Underserved Communities

August 27, 2010

Last year Karl Williams, the owner of Society Coffee and 67 Orange Street in Harlem, like many other small business owners, was struggling with high financing costs and flat growth. As a first time restaurateur faced with a difficult economy, Karl turned to the Clinton Foundation’s Clinton Economic Opportunity Initiative (CEO). He enrolled in CEO’s Entrepreneur Mentoring Program (EMP), a partnership with Inc. magazine which pairs small business owners with successful entrepreneurs and business leaders who serve as mentors. Karl was partnered with Richard Coraine, President of New Business for the Union Square Hospitality Group, the restaurant group that owns establishments like Gramercy Tavern and the Shake Shack. Working with his mentor and CEO, Karl has restructured his financing, developed a new marketing strategy with the help of Union Square Hospitality Group’s marketing team, and even launched a new artisanal coffee business. As a result, he has seen his revenue grow each month since the beginning of the year. Over 50 EMP entrepreneurs in five cities nationwide have been matched with successful business leaders like Richard Coraine, who volunteer to help small business owners in underserved communities succeed and compete in the marketplace. According to the U.S. government, small businesses like Karl’s have historically provided over 50% of all jobs and 64% of all net new jobs. Small businesses are especially crucial in inner-city communities, where they make up 99% of all establishments and 80% of jobs. New small business owners, however, face a tough economic reality: about half of them will fail in the first five years. At CEO, we recognize that the American Dream — earning a good living and giving future generations the opportunity to better their lives — has become harder to achieve. The Clinton Foundation’s approach to this challenge is to support small business owners, because we believe that promoting entrepreneurship is one of the strongest ways to create lasting economic development in underserved communities — because it creates jobs, promotes development and generates wealth in those communities. While our mentoring program matches local entrepreneurs with successful mentors, CEO’s Consulting Program, a partnership with Booz & Company and NYU Stern School of Business, provides pro bono consulting services directly to small business owners. Since 2002, the consulting program has provided more than 72,000 hours of consulting services worth more than $15 million to support entrepreneurs in New York City. CEO’s approach to supporting entrepreneurs involves promoting public service from private sector players. But CEO is also involved in creating new partnerships with other like-minded not-for-profits in order to reach more business owners with better tools and resources. This past week we were excited to announce a new partnership with Seedco Financial Services, a not-for-profit Community Development Financial Institution that provides affordable financing and business assistance to organizations in low-to-moderate income and underserved communities. Seedco Financial’s unique Growth Opportunity Loans and Services Program (GOLS), which blends financing with high-level business assistance, consists of a $20 million fund to provide loans to small business owners located in low-to-moderate income communities throughout New York City. Through our strategic partnership with Seedco Financial, up to twenty small business owners will receive: strategic assessments from Booz & Company and NYU MBA students through CEO’s Consulting Program, a loan of up to $750,000 from Seedco Financial, an EMP mentor, and access to a network of professional service providers through GOLS. CEO’s partnership with Seedco Financial is an economic empowerment model that works cooperatively to promote economic opportunity in underserved communities by bringing together the best practices from each organization’s work. We believe that the partnership of our respective programs will provide small businesses with the full set of tools and resources they need to grow their businesses. Small businesses are critical drivers of our economic recovery. They are the ones hiring a majority of people across the United States. Together, the Clinton Foundation with partners like Seedco Financial, Booz & Company, and Inc. magazine are working to help these small businesses preserve existing jobs, create new ones, and, in the process, empower entire communities.

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15 Percent Of Women Have Slept With Their Bosses: Center For Work-Life Policy Study

August 27, 2010

Research out this fall from the Center for Work-Life Policy shows sponsorship to be the critical promotional lever for women in the marzipan layer, the layer just below the top layer of management. No matter how high achieving, an upper middle-level female executive will fail to find career traction unless she is sponsored by a powerful senior executive — who, more often than not, is male and married.

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US Highland Announces Successful Reorganization and Commitment to Business Model

August 27, 2010

GLENPOOL, OK–(Marketwire – August 27, 2010) – US Highland ( OTCBB : UHLN ) has completed reorganization of its executive officers necessitated by the tragic air accident that took the lives of three key executives. The company has been very fortunate that strong, key team members with broad experience, critical knowledge, and existing company duties were available to come forward and continue with the company’s unique strategic plan.

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Linda Tarr-Whelan: Women Call for Obama to Act on Women’s Leadership

August 27, 2010

Yesterday marked Women’s Equality Day, the commemoration of women’s suffrage achieved in 1920. What better time to take stock of what’s left to do? We need a national conversation led by the White House to explore how women decision-makers can help achieve better economic performance and a more prosperous future for all. The administration of Barack Obama has already taken the first step by appointing talented women — including Mary Schapiro, who holds the top job at the Securities and Exchange Commission; Elizabeth Warren, who chairs the Congressional Oversight Panel; and Sheila Bair, who heads the Federal Deposit Insurance Corp. — to help dig us out of the financial mess. Having a few females at the top is wonderful, but until we have at least 30 percent of senior women in leadership, we will be ignoring a strong dynamic that is working well elsewhere. Today, a growing body of research that shows positive outcomes from having balanced leadership has been ignored. Other countries are addressing the fundamental issue of leadership in ways that have yet to gain much traction in the U.S. We can certainly do better. Tapping the full range of talent that includes the skills, experience and leadership of women as well as men is hardly a radical idea. As the Economist magazine famously wrote in 2006, “Forget China, India and the Internet: Economic growth is driven by women.” An increasing number of reports show that having at least 30 percent of women in corporate and governmental leadership roles improves decision-making, opens up institutions and removes barriers to full participation. Performance Driver The U.S. has much to gain from a new leadership model. Economic growth and stock prices can only benefit. New York-based consulting firm McKinsey & Co. has released a series of reports since 2007 making the case that gender diversity at the top is a corporate performance driver. Yet, they note that three-quarters of 1,500 biggest companies have no women on their management boards. Further, there are only 28 female chief executive officers in 1,000 largest companies. Goldman Sachs, the most profitable securities firm on Wall Street, recommends investing in countries where the gender gap is closing and where the “laws and social norms that have discriminated against women are shifting.” Its studies show gross-domestic-product growth accelerates when women hold positions of power. Goldman has created the 10,000 Women Initiative, a $100 million, five-year program to provide an advanced business education for women. Costly Failures Failing to address challenges that keep women out of leadership is costly. New York-based research group Catalyst Inc. has shown that firms with three or more women on management boards boosted their return on equity by 112 percent, compared with those with fewer women. Recently, French President Nicolas Sarkozy joined a fast- moving trend in Europe to achieve 30 percent to 40 percent women on corporate boards. The French are following the lead of Norway, Spain and the Netherlands, which have already moved to accomplish these goals. The World Bank and the United Nations’ Global Compact policy initiative have also recognized women’s advancement as essential to economic growth. Michel Ferrary, a professor of management at the Skema Business School in Sophia Antipolis, France, studied the effects of balanced leadership in France during the financial crisis of 2007-08. “The more women there were in a company’s management, the less the share price fell in 2008,” he said . Investment Concept Similar results have been published by Pepperdine University in Malibu, California, and in the U.K., India and Australia. Gender equality, as an investment concept, has been taken up by mutual funds such as Pax World Investments, which recently started a Global Women’s Equality Fund betting that companies with more diverse leadership will perform better than others. A recent study by the National Council for Research on Women, based on data from Hedge Fund Research Inc., showed women hedge-fund managers outperformed their male counterparts. Our country has nothing to lose and much to gain by addressing the lack of women in top leadership. But it won’t just happen. The U.S., a country that aspires to be a world leader, ranks a pathetic 31st out of 134 countries in eliminating the disparities between women and men in the World Economic Forum’s Global Gender Gap Report. On the 90th anniversary of women’s suffrage, President Obama should consider convening a White House Roundtable to find ways to increase the number of women decision-makers in the economy. Then we can celebrate women’s equality in America. This piece was originally

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Video: Bloomberg’s Baum Discusses Impact of Bush Tax Cuts: Video

August 27, 2010

Aug. 27 (Bloomberg) — Bloomberg columnist Caroline Baum talks with Mark Crumpton about tax cuts passed during the administration of President George W. Bush and their impact on the economy. (Source: Bloomberg)

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Bill Baker: Bernanke to World: "We’re Going to Fiddle While Rome Burns"

August 27, 2010

In Jackson Hole, Wyoming today Fed Chairman Ben Bernanke said the risk of an “undesirable rise in inflation or of significant further disinflation seems low.” Yup, can’t argue with that. If you are operating a bank, and you had lost your depositors’ funds by making bad real estate loans, normally you would be sweating bullets by now, or among the 14.6 million pounding the pavement looking for work. But you need not worry. You got $1.3 trillion of reserves to tide you over while your bad loans continue to deteriorate. Uncle Ben bailed you out, and he even gave you the money to pay back your other uncle, Sam. Now that you got rid of the TARP, you can go back to paying out big bonuses, even if they are on profits facilitated by the easing of accounting rules. So why is the spotlight on Ben now? Some employment, consumer confidence, and even national income data have weakened a little. But mainly the stock market has everyone a little scared. Big bank stocks have acted like a canary in the coal mine, failing to do much since a year ago. Some regionals have been sliding since this spring, in sympathy with FDIC Chairman Shiela Bair’s laying to rest a growing list of institutions outside the money centers. How come? Home prices are down maybe 30% from the top, which wipes out the equity of most “conservatively” financed purchases. Since real estate is about half of bank assets, another drop of say 15% would mean trouble. The FDIC has the barest sliver of funds. So outside of getting fresh Fed reserves into dodgy regionals, something the Fed is wont to do, the safety of your deposits rests on a thin reed. Not to worry, a diverse group of economists, real estate experts, investment and market strategists surveyed by MacroMarkets in June 2010 project that the U.S. housing market will experience double-digit cumulative appreciation between 2010 and the end of 2014, adding some $1.7 trillion to aggregate household wealth. Bernanke draws from the body of econometric knowledge generated by academics, which has proven beyond dispute that gold is a barbarous relic, and that the consumer price index, along with national income accounts, are the best indicators of whether we are launching into inflation or falling into a deflationary rathole. The media is hot and bothered as to whether the Fed will print a trivial amount of money again like it did in 2009, when in reality the printing presses shut down in 2008. Before everyone was all loaned up, banks used to print money – gobs of it – every year, maybe $1.5 trillion annually. Now broad money is shrinking. Being an economist of the Austrian school, I see why many of my brethren focus upon the explosive growth in the monetary base that has occurred under Bernanke, and why they focus upon the “true money supply,” which also rose quickly once the fix was in. But Ludwig von Mises, the father of this strain of economists, taught that money existed in two forms: money and money substitutes (i.e. deposits). Today the two are indistinguishable, whereas in times past gold or gold-exchangeable dollars were the reserve upon which the system was pyramided. No one asks you if your check or electronic payment came from the base or the tip of the pyramid, they just want bills paid. Bernanke and the monetarists and Keynsians are riding a horse with two blinders on: no deflation on the left, no inflation on the right. But his steed is running downhill, towards a glen filled with thorns and rocks. With the banks insulated from the credit crisis, they are like the patrons of Nero’s orgy, listening to the reassuring strains of Uncle Ben’s fiddle while the houses of Rome are burning. I can’t imagine a banking establishment or its titular leader more out of touch with mainstream America, clueless as to the most basic observation that it has run a fractional reserve lending system into a generational-sized ditch. William Baker is the author of “Endless Money: The Moral Hazards of Socialism.” (John Wiley, 2010) A Chinese language edition is due out soon. Disclosures: Long and short equities. Long gold, gold derivatives, and gold equities.

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Video: Shaw Wu Says 3Par Valuation `Getting Quite Expensive’: Video

August 27, 2010

Aug. 27 (Bloomberg) — Shaw Wu, an analyst at Kaufman Bros., talks about the bidding competition between Hewlett-Packard Co. and Dell Inc. for 3Par Inc. Hewlett-Packard topped Dell in the bidding for 3Par for the third time, agreeing to pay $30 a share, or $2 billion, for the data-storage provider. Wu speaks with Bloomberg’s Mark Crumpton and Dominic Chu. (Source: Bloomberg)

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Trump International Hotel & Tower Toronto(R) Appoints Seasoned Management Team

August 27, 2010

Star Players Include Director of Sales & Marketing Mary Ann Gamboa, Director of Finance Sebastian Lightly, and Director of Human Resources Pete Kangalee

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Video: Horizon’s Adgate Says Internet TV Increases Viewership: Video

August 27, 2010

Aug. 27 (Bloomberg) — Brad Adgate, research director at Horizon Media Inc., a New York-based advertising company, and Susan Lyne, chief executive officer at Gilt Group Inc., talk about the outlook for television on the Internet. They speak with Margaret Brennan on Bloomberg Television’s “InBusiness”. (Source: Bloomberg)

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U.S. Birth Rate Sets Record, Hits Lowest Level In A Century

August 27, 2010

By Marilynn Marchione, AP Medical Writer: The U.S. birth rate has dropped for the second year in a row, and experts think the wrenching recession led many people to put off having children. The 2009 birth rate also set a record: lowest in a century. Births fell 2.7 percent last year even as the population grew, numbers released Friday by the National Center for Health Statistics show. The U.S. birth rate has dropped for the second year in a row, and experts think the wrenching recession led many people to put off having children. The 2009 birth rate also set a record: lowest in a century. “It’s a good-sized decline for one year. Every month is showing a decline from the year before,” said Stephanie Ventura, the demographer who oversaw the report. The birth rate, which takes into account changes in the population, fell to 13.5 births for every 1,000 people last year. That’s down from 14.3 in 2007 and way down from 30 in 1909, when it was common for people to have big families. “It doesn’t matter how you look at it — fertility has declined,” Ventura said. The situation is a striking turnabout from 2007, when more babies were born in the United States than any other year in the nation’s history. The recession began that fall, dragging stocks, jobs and births down. “When the economy is bad and people are uncomfortable about their financial future, they tend to postpone having children. We saw that in the Great Depression the 1930s and we’re seeing that in the Great Recession today,” said Andrew Cherlin, a sociology professor at Johns Hopkins University. “It could take a few years to turn this around,” he added, noting that the birth rate stayed low throughout the 1930s. Another possible factor in the drop: a decline in immigration to the United States. The downward trend invites worrisome comparisons to Japan and its lost decade of choked growth in the 1990s and very low birth rates. Births in Japan fell 2 percent in 2009 after a slight rise in 2008, its government has said. Not so in Britain, where the population took its biggest jump in almost half a century last year and the fertility rate is at its highest level since 1973. France’s birth rate also has been rising; Germany’s birth rate is lower but rising as well. “Our birth rate is still higher than the birth rate in many wealthy countries and we also have many immigrants entering the country. So we do not need to be worried yet about a birth dearth” that would crimp the nation’s ability to take care of its growing elderly population, Cherlin said. The new U.S. report is a rough count of births from states. It estimates there were 4,136,000 births in 2009, down from 4,251,095 in 2008 and more than 4.3 million in 2007. The report does not give details on trends in different age groups. That will come next spring and will give a clearer picture who is and is not having children, Ventura said. Last spring’s report, on births in 2008, showed an overall drop but a surprising rise in births to women over 40, who may have felt they were running out of time to have children and didn’t want to delay despite the bad economy. Women postponing having children because of careers also may find they have trouble conceiving, said Mark Mather of the Population Reference Bureau, a Washington-based demographic research group. “For some of those women, they’re going to find themselves in their mid-40s where it’s going to be hard to have the number of children they want,” he said. Heather Atherton is nearing that mark. The Sacramento, Calif., mom, who turns 36 next month, started a home-based public relations business after having a baby girl in 2003. She and her husband upgraded to a larger home in 2005 and planned on having a second child not long afterward. Then the recession hit, drying up her husband’s sales commissions and leaving them owing more on their home than it is worth. A second child seemed too risky financially. “However, we just recently decided that it’s time to stop waiting and just go for it early next year and let the chips fall where they may,” she said. “We can’t allow the recession to dictate the size of our family. We just need to move forward with our lives.”

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Video: Herrmann Says State Street `More Upbeat’ on U.S. Economy: Video

August 27, 2010

Aug. 27 (Bloomberg) — John Herrmann, senior fixed-income strategist at State Street Global Markets, talks with Bloomberg’s Mark Crumpton about U.S. economic growth. The world’s largest economy grew at a 1.6 percent annual pace in the second quarter, exceeding the median forecast of economists surveyed by Bloomberg News and down from an estimate of 2.4 percent issued last month, revised figures from the Commerce Department showed today in Washington. (Source: Bloomberg)

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Steve Cohen, Billionaire Hedge Fund Manager, Reportedly Hosts GOP Strategy Session

August 27, 2010

Hedge Fund manager Steve Cohen held a meeting at his home in Greenwich, Connecticut with Republican Party candidates to discuss strategy for the midterm elections in November, Absolute Return reports.

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Video: Gilt’s Lyne Discusses U.S. Consumer Spending Trends: Video

August 27, 2010

Aug. 27 (Bloomberg) — Susan Lyne, chief executive officer of Gilt Groupe Inc., talks about the impact of economic uncertainty on U.S. consumer behavior and hiring plans by businesses. Lyne speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (This is a excerpt of the full interview. Source: Bloomberg)

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Video: Ethan Harris Says Bernanke Trying to `Buy Time’ for Fed: Video

August 27, 2010

Aug. 27 (Bloomberg) — Ethan Harris, head of North America economics at Bank of America-Merrill Lynch Global Research, talks about the outlook for Federal Reserve policy. Fed Chairman Ben S. Bernanke said today the U.S. central bank “will do all that it can” to ensure a continuation of the economic recovery and said more securities purchases may be warranted if growth slows. Harris speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

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Kathleen Reardon: The Precarious Genius of the Middle Class

August 27, 2010

What will America become if we have to rely solely on the wealthy to provide medical, scientific, engineering, manufacturing, art and social inventions? Genius is not confined to any socio-economic group. It can emerge anywhere. Yet poverty closes most doors to the development of genius. Shut down the American middle class and where would genius arise? What route would it take to its fruition? Genius would need to come largely from the wealthy. The upshot of a two-tier America – the wealthy and everyone else scraping by – will be the death of American genius. If this had been the case during Jonas Salk’s childhood, where would we be? The son of Russian immigrants lacking formal education, he was encouraged to become the first of his family to attend college? The rest is history and polio became a disease of the past. What about Thomas Edison , the seventh child of middle-class parents? His educator mother saw in him a talent that others considered mere oddity, and she was able to foster that talent with home schooling. During Edison’s life, necessity became the mother of invention as he in turn sought to support his ailing parents. His genius, enabled by a middle-class upbringing, combined to change the course of mankind. If we had to rely solely on wealthy families for those who have shaped America, would we not be much less a nation than we are today? Georgia O’Keefe, Leonard Bernstein, Maya Angelou, President Obama, President Clinton, Secretary of State Hillary Clinton, Betty Friedan, Bella Abzug, General David Petraeus, Supreme Court Justice Sonia Sortomayor, Michael J. Fox, Steve Jobs, Ken Burns, Margaret Mead and so many others would not have influenced art, music, law, society, human behavior research, and technology to the extent they did were it not for the ability of those without great wealth to change the world. It is difficult to precisely define the parameters of the middle class. And certainly the upper echelons of the American middle class offer a greater boost to the flowering of genius. But without this range and the dreams it enables, this nation can only suffer. Why then would we stand by idly while the very wealthy and their big-business entities buy off our senators and congressmen, as they manipulate and dumb down mass media to keep Americans out of touch, and their shills call for “deficit reduction” efforts to cut Medicare and Social Security while keeping extraordinary tax breaks and loopholes for the very rich intact? How do we justify turning a blind eye to how the U.S. economy remains managed by the very people who brought us the catastrophic and continuing failure of the financial and mortgage markets? How can we allow the “too-big-to fail” banking-bailout slights of hand to continue? Can we afford to passively watch efforts to keep a politics-averse champion like Elizabeth Warren from actually protecting “consumers”? Why do we listen to propagandistic pundits warn against redistribution of wealth when the real redistribution over the last 30 years has been the transfer of middle-class American dollars into the pockets of the very, very rich? What benefit is there to remaining quiet while the quality of public education deteriorates? While alternate forms of energy barely blip the surface of our energy policies and are actively opposed? While the infrastructure of the U.S. not only fails to lead the world or even advance competitively, but is overburdened and crumbling? As if surreptitious forms of destroying the middle class weren’t enough, in Third World America Arianna Huffington describes another egregious way that the depletion of wealth for all but the few happens in broad daylight: The corporate class games the system — making sure its license to break the rules is built into the rules themselves. One of the most glaring examples of this continues to be the ability of corporations to cheat the public out of tens of billions of dollars a year by suing offshore tax havens. Indeed, it’s estimated that companies and wealthy individuals funneling money through offshore tax havens are evading around $100 billion a year in taxes — leaving the rest of us to pick up the tab. And yet, government initiatives that benefit people whose lives are shattered or in danger of being so is labeled “socialism.” Apparently it’s okay in America today to make the rich richer, but don’t dare give a hand up to hard working people who are barely getting by. Unless we heed the signs of increasing greed and inhumanity among the most powerful entities in America, and fight it at every turn, America is heading toward a day when it will no longer be the land of opportunity for those with little money, nor the protector of life, liberty and the pursuit of happiness, nor a place where dreams can come true for even the poorest of children. Rather it will become the killing fields of its own native genius, the dismantler of hope and the enemy of its own promise. Dr. Reardon also blogs at bardscove .

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Bernanke At Jackson Hole: Economic Outlook ‘Inherently Uncertain,’ But Fed May Act

August 27, 2010

JACKSON, Wyo. — Federal Reserve Chairman Ben Bernanke said Friday that the Fed will consider making another large-scale purchase of securities if the slowing economy were to deteriorate significantly and signs of deflation were to flare. Bernanke acknowledged that the recent pace of growth is “less vigorous than we expected.” He described the outlook as uncertain and said the economy “remains vulnerable to unexpected developments.” At the same time, he said growth is likely to pick up next year. He downplayed the odds of another recession, even after a series of dismal reports on housing and manufacturing this week stoked fears that the economy may be on the verge of another downturn. His remarks came 90 minutes after the government said the economic growth slowed sharply in the second quarter to a 1.6 percent pace. Bernanke stopped short of committing to any specific action. But he raised the prospect of another Fed purchase of securities, most likely government debt or mortgage securities, to drive down rates on mortgages and other debt to spur more spending by Americans. “I believe that additional purchases of longer-term securities should the FOMC choose to undertake them, would be effective in further easing financial conditions,”he said. The FOMC stands for the Federal Open Market Committee, the group of Fed policymakers that makes decisions on interest rates and other steps to aid the economy. The other two options he laid out are: _Providing more information in the Fed’s post-meeting policy statements about how long Fed policymakers would continue to keep rates at record lows. For more than a year, the Fed has been pledging to hold rates at ultra-low levels for an “extended period.” _ Cutting to zero the interest the Fed pays for banks to keep money parked at the Fed. That rate is now 0.25 percent. “The issue at this stage is not whether we have the tools to help support economic activity and guard against disinflation. We do,” Bernanke said. “The issue is instead whether, at any given juncture, the benefits of each tool, in terms of additional stimulus, outweigh the associated costs or risks of using each tool.” Investors appeared to be pleased by Bernanke’s remarks. The Dow Jones industrial average rose 114 points in early trading. Broader indexes were also up. Brian Bethune, economist at IHS Global Insight, said the Fed is right to hold off until it becomes clear that the weakening trend in the U.S. economy is persisting. If the economy shrinks in the third quarter, he said, the central bank’s hand would be forced. “I think they’d have to make a move,” he said. The Fed’s strategy carries no guarantees. Short-term interest rates near zero have yet to rejuvenate the economy. The benefits of federal stimulus programs are fading, and Congress has declined to pass any major new economic aid. That is putting immense pressure on Bernanke to provide relief, and he has no easy options for fixing the economy. At a Fed meeting earlier this month, Bernanke persuade his colleagues to use a relatively small amount of money generated by its portfolio of mortgage securities to buy government debt. The goal is to further ease rates on mortgages and other loans. The economy, which has been losing momentum all year, slowed to a near crawl in the second quarter. At such a weak pace, the nation’s 9.5 percent unemployment rate could climb and pass 10 percent later this year or early next year, some analysts say. With economic conditions worsening, there’s the danger that consumers and businesses will turn even more cautious in their spending, causing the economy to stall, or worse, slip into reverse. Bernanke said the prospect of high unemployment for a long period is a central concern for the Fed. He also made clear that he is determined to prevent the United States from slipping into a deflationary spiral. Deflation is a widespread and prolonged drop in wages, the prices of goods and services and in the value of stocks, houses and other assets. The country’s last serious episode of deflation was in the 1930s. Keeping interest rates super low and taking unconventional to lower rates on mortgages and other debt is a way to nip any deflationary forces. Japan’s deflation problems and stagnant growth caused the country to suffer what many refer to as a “lost decade” in the 1990s. It is still fighting deflation now even as it has kept its key interest rates near zero like the Fed. Although most economists believe the odds are relatively low that the United States will slide into deflation, it can’t be ruled out given the economy’s weak growth, they say. Despite the economy’s recent slowing, Bernanke, however, continues to believe there will be “some pickup” in growth in 2011, but not enough to substantially drive down unemployment and reduce the vast ranks of the unemployed. “We have come a long way, but there is still some way to travel,” Bernanke said. ___ AP Business Writer Alan Zibel contributed from Washington to this report.

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Blythe McGarvie: Jobs and Today’s Youth

August 27, 2010

In my last book and in subsequent speeches and essays, I have addressed some of the challenges of incorporating today’s young people into established businesses. With unemployment rates among America’s youth currently around 20%, and many recent college graduates working at low-end jobs, it seems appropriate to revisit the issue. The trigger for my newsletter earlier this month appeared in the Chicago Tribune , in which a front page story, “Are students, parents too connected?”, asserts that many parents may well be hindering the independence of their teen-aged or young adult offspring. Today’s young adults, whom I will define as between the ages of 18 to 30, have certain skills and abilities that we did not possess at this age — primarily those pertaining to computer technology. However, it is generally well established that they lack the analytical reasoning skills, self-confidence, and language skills both of earlier generations and of competitors for jobs who come from other countries. These are key factors in business success! Yet, perhaps even more significantly, today’s young adults lack the emotional and psychological maturity expected for people their age. The sensitivity, emotional neediness, and lack of confidence of young people hurts them in the workplace. My generation, the “boomers,” benefited from a relatively unusual combination of opportunity and freedom during our childhood and early adult years. As children, it was not uncommon for 8 or 9 year olds to leave on their bikes on a summer morning not to return home until the dinner hour. The intervening hours would be filled playing ball, fishing, playing games or just thinking. Frequently days were highlighted by squabbles — “I was safe!”, or “Why won’t you trade Boardwalk for Marvin Gardens and $500?” — and at times these arguments even escalated into fights. In the process we learned to manage time, prioritize interests, deal with different types of people, and to handle disputes. We learned how to be on our own — and to succeed on our own — and to stand up for ourselves. There were no play dates and no arbitrators for disputes. Moreover, when we were in trouble in school, parents took the teachers’ side, not the child’s. Today, children do not have the freedom we had. As we matured we encountered a higher education system that welcomed us. It became common place for boomers of varied races, classes and interests to attend college. When we graduated and entered “white-collar” careers in the 1970s or 1980s, we found tremendous opportunity in a burgeoning economy that offered great entry-level salaries and possibilities for rapid advancement. The immediately preceding and succeeding generations did not have the same combination of independence and opportunity. Parents of boomers had to deal with the Depression, World War II, and limited educational opportunities. They grew up with a fair degree of independence, but did not have the nurturing and educational support that we had. Today’s young people have all the nurturing any person could reasonably tolerate. But the K-12 educational system they have passed through is a national embarrassment and colleges today, in trying to compensate for twelve years of educational mediocrity, are frustrated by helicopter parents and the immaturity of the students. This comes back to the lack of independence today’s young adults had as children. They never had the chance to plan their own days, umpire their own games, resolve their own arguments, and overcome adversity on their own. Every blow has been softened, every opportunity has been polished–but, many are still children at age 30. The Tribune blames text-messaging and other technological advances for making college students, hundreds of miles from home, connected to Mom and Dad. But, this technology can be overcome with a change in attitude. Some young adults experience a different upbringing. Often, first or second generation children of immigrants apply their broader sense of the world and other cultures to take advantage of opportunities to try, fail, try again, and succeed. Some young adults are taking risks to earn income and contribute to their college fund. But, perhaps even greater independence is shown by those young people who, eschewing the high unemployment here, are heading overseas to find jobs, life experience, and freedom. Knowing some young adults who established independence from their parents makes me hopeful that eventually they will improve our society. I encourage young adults to travel and even work in other countries to meet people who are “different” and start learning what and who is shaking the globe.

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Video: Feldstein Sees Continued U.S. Growth at `Subpar’ Pace: Video

August 27, 2010

Aug. 27 (Bloomberg) — Martin Feldstein, an economics professor at Harvard University, discusses the outlook for the U.S. economy. Feldstein talks with Bloomberg’s Michael McKee and Betty Liu from the Fed’s annual symposium in Jackson Hole, Wyoming. (Source: Bloomberg)

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Video: Feldstein Sees Continued U.S. Growth at `Subpar’ Pace: Video

August 27, 2010

Aug. 27 (Bloomberg) — Martin Feldstein, an economics professor at Harvard University, discusses the outlook for the U.S. economy. Feldstein talks with Bloomberg’s Michael McKee and Betty Liu from the Fed’s annual symposium in Jackson Hole, Wyoming. (Source: Bloomberg)

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Video: Feldstein Sees Continued U.S. Growth at `Subpar’ Pace: Video

August 27, 2010

Aug. 27 (Bloomberg) — Martin Feldstein, an economics professor at Harvard University, discusses the outlook for the U.S. economy. Feldstein talks with Bloomberg’s Michael McKee and Betty Liu from the Fed’s annual symposium in Jackson Hole, Wyoming. (Source: Bloomberg)

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Grant Cardone: Economy Won’t Improve Until You Do!

August 27, 2010

I am shocked that everyone is surprised by the disappointing new home sales numbers. Was anyone expecting them to be good? The homebuilders aren’t building unique-’must have’ product and your local agent isn’t calling on you to make a case of why you should buy a house. Real estate agents and the housing industry are doing nothing to create improvement but waiting for the economy to improve. YOUR SECTOR OF THE ECONOMY IS NOT GOING TO IMPROVE UNTIL YOU IMPROVE. Economic Advice- 1) Quit waiting for good economic news. 2) Relearn how to create revenue through sales and sales skills . 3) Organizations must make serious commitment to sales training and sales effectiveness in a tough economy. Real sales skills have been lost over a decade of a synthetic economy where companies neglected a commitment to sales training . 4) Do not wait for consumers, create them. Only individuals and businesses that insist on their people creating revenue opportunities will survive. 5) Build sales muscle through sales training now or you won’t be ready to when things do improve. The reality is that the real estate industry doesn’t know how to sell their products, make sense of value or justify to the public why this is a great time to buy. Except for a handful of professionals this is forgotten skill set. With the cheapest mortgage rates in my lifetime and housing prices, in some places, below construction cost, you would think that your local realtor would be pitching you, but they do not! Why? After years of economic bliss and insufficient sales training , sales motivation, sales discipline and sales persistence the majority of real estate people are unable to produce revenue. And this same story applies to automobiles, furniture, appliances, investments, consumer goods, advertising, and I could go on and on. After decades of order taking, easy credit and an overhyped economy businesses, individuals and entire industries have forgotten how to sell. If you are waiting for your sector to improve, jobs to come back or economic numbers to somehow magically improve you are in for a very painful 4 to 5 years. The most valuable individuals and companies in this economy are those that are able to create and drive revenues by committing to sales training , sales motivation and sales skills . Grant Cardone, Sales Training Expert and NY Times Best Selling Author

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Video: Italian, Spanish Soccer Clubs Start New Season in Debt

August 27, 2010

Aug. 27 (Bloomberg) — Bloomberg’s John Cookson reports on the financial state of Europe’s top soccer clubs.

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Video: Italian, Spanish Soccer Clubs Start New Season in Debt

August 27, 2010

Aug. 27 (Bloomberg) — Bloomberg’s John Cookson reports on the financial state of Europe’s top soccer clubs.

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Video: Italian, Spanish Soccer Clubs Start New Season in Debt

August 27, 2010

Aug. 27 (Bloomberg) — Bloomberg’s John Cookson reports on the financial state of Europe’s top soccer clubs.

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Video: Taylor Sees `Severe Slowdown,’ No Double-Dip Recession: Video

August 27, 2010

Aug. 27 (Bloomberg) — John Taylor, a professor of economics at Stanford University, discusses Federal Reserve monetary policy and the prospects for a double-dip recession in the U.S. Taylor speaks from the Fed’s annual symposium in Jackson Hole, Wyoming, with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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Public-Private Investment Program Earns Solid Returns For Taxpayers

August 27, 2010

American taxpayers are already poised to make unexpected billions from rescuing the nation’s banks. Now, they could reap another sizable profit from a government program devised to purge troubled real estate assets from the financial system.

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Video: Roubini Says U.S. Can’t Prevent Slower Economic Growth: Video

August 27, 2010

Aug. 27 (Bloomberg) — New York University professor Nouriel Roubini discusses expectations for U.S. economic growth in the third quarter. Roubini, talking with Tom Keene and Ken Prewitt on Bloomberg Radio’s “Bloomberg Surveillance,” also discusses the effectiveness of Federal Reserve monetary policy. (This report is an excerpt. Source: Bloomberg)

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Video: Hewlett-Packard Boosts Bid for 3Par Again to $30 a Share: Video

August 27, 2010

Aug. 27 (Bloomberg) — Hewlett-Packard Co. topped Dell Inc. in the bidding for 3Par Inc. for the third time, agreeing to pay $30 a share or $2 billion for the data-storage provider. Bloomberg’s Suzanne O’Halloran reports. (Source: Bloomberg)

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Video: Hewlett-Packard Boosts Bid for 3Par Again to $30 a Share: Video

August 27, 2010

Aug. 27 (Bloomberg) — Hewlett-Packard Co. topped Dell Inc. in the bidding for 3Par Inc. for the third time, agreeing to pay $30 a share or $2 billion for the data-storage provider. Bloomberg’s Suzanne O’Halloran reports. (Source: Bloomberg)

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Auto-tune The Financial Crisis: ‘Bankers’ Song’ Takes On The Financial Crisis (VIDEO)

August 27, 2010

Ever heard of Commissioner Rouglas Scholtz-Tweakin of the Financial Crisis Inquiry Commission? Neither had we. To go along with their new expose on banks’ self-dealing, NPR and ProPublica collaborated with “reporters” at Auto-tune the News to bring us exclusive footage of the “eleventh commissioner” at the private hearings. (Hence, the reference to commissioner Douglas Holtz-Eakin.) In “Bankers’ Song – We Didn’t See It Coming,” we get to see how the FCIC’s top investigator gets some real answers out of Goldman Sachs chief Lloyd Blankfein, Bank Of America CEO Brian Moynihan and former Clinton administration Treasury Secretary Robert Rubi, albeit with tambourines and key-tars. WATCH the video here:

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Zuora Names NetSuite Engineering Head as Vice President Products and Engineering, Former Ariba Executive as Chief Marketing Officer

August 27, 2010

Luke Braud and Andrew Harman Bring Expertise in SaaS Financial and Commerce Applications

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Bush Tax Cuts: Some Top Democrats May Be Rethinking Tax Hike On The Rich

August 27, 2010

The Bush tax cuts are set to expire in December. Republicans are pushing to extend them all, while President Obama has forcefully argued that the country cannot afford to keep tax breaks on income over $250,000 a year for families and $200,000 a year for individuals. But a growing cadre of Democrats – alarmed by evidence that the recovery is losing steam and fearful of wounding conservative Democrats in a tough election year – are advocating a plan that would permanently extend tax cuts benefiting the middle class while renewing breaks for the wealthy through 2011, senior Democratic aides said.

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Video: Dino Kos Says U.S. Underlying Growth Rate Is 1.5% to 2%: Video

August 27, 2010

Aug. 27 (Bloomberg) — Dino Kos, managing director at Portales Partners LLC, discusses potential Federal Reserve actions to stimulate growth and the outlook for the U.S. economy. Kos speaks from the Fed’s annual symposium in Jackson Hole, Wyoming, with Michael McKee and Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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Video: Blackstone Returns Fees in First Clawback Set at Firm: Video

August 27, 2010

Aug. 27 (Bloomberg) — Blackstone Group LP is refunding some performance fees earned during the commercial real estate boom, the first time fund investors have clawed back cash from executives at the world’s largest private-equity company. Bloomberg’s Monica Bertran reports. (Source: Bloomberg)

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Video: Zentner Says Markets Are Overreacting to Economic Data: Video

August 27, 2010

Aug. 27 (Bloomberg) — Ellen Zentner, senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd., talks about second-quarter U.S. gross domestic product and market reaction. The economy grew at a 1.6 percent annual rate in the second quarter as companies reined in inventories and the trade deficit widened. Zentner, speaking with Betty Liu on Bloomberg Television’s “In the Loop,” also discusses the economic growth outlook. Bloomberg’s Michael McKee and Jon Erlichman also speak. (Source: Bloomberg)

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Video: Zentner Says Markets Are Overreacting to Economic Data: Video

August 27, 2010

Aug. 27 (Bloomberg) — Ellen Zentner, senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd., talks about second-quarter U.S. gross domestic product and market reaction. The economy grew at a 1.6 percent annual rate in the second quarter as companies reined in inventories and the trade deficit widened. Zentner, speaking with Betty Liu on Bloomberg Television’s “In the Loop,” also discusses the economic growth outlook. Bloomberg’s Michael McKee and Jon Erlichman also speak. (Source: Bloomberg)

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Video: Collender Says Politics May Leave Recovery Effort to Fed: Video

August 27, 2010

Aug. 27 (Bloomberg) — Stanley Collender, managing director of Qorvis Communications, discusses the possible extension of President George W. Bush’s tax cuts and the outlook for the U.S. economy. Collender talks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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Video: Collender Says Politics May Leave Recovery Effort to Fed: Video

August 27, 2010

Aug. 27 (Bloomberg) — Stanley Collender, managing director of Qorvis Communications, discusses the possible extension of President George W. Bush’s tax cuts and the outlook for the U.S. economy. Collender talks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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