October 2010

Video: Pharo’s Dow Says `Floor’ Still Needed for U.S. Economy: Video

October 28, 2010

Oct. 28 (Bloomberg) — Mark Dow who helps manage $3 billion at Pharo Management LLC, talks about Federal Reserve policy and the U.S. economy. Dow says the U.S. economy still needs a “floor” to support the recovery. He speaks with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: Arthur Laffer Says U.S. Shouldn’t Raise Taxes on Wealthy: Video

October 28, 2010

Oct. 28 (Bloomberg) — Arthur Laffer, chairman of Laffer Associates, talks about the possible expiration of the Bush-era tax cuts and the impact on the U.S. economy. Laffer talks with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: Knapp Says Barclays Expects Third-Quarter GDP at 2.5%

October 28, 2010

Oct. 28 (Bloomberg) — Barry Knapp, chief U.S. equity strategist at Barclays Capital Inc., talks about the outlook for tomorrow’s report on third-quarter U.S. gross domestic product. Kanpp and Todd Horwitz, chief strategist for the Adam Mesh Trading Group, speak with Matt Miller, Carol Massar and Adam Johnson on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: Williams Says Azure May Be Major Microsoft Growth Driver

October 28, 2010

Oct. 28 (Bloomberg) — Richard Williams, an analyst at Cross Research Inc., talks about Microsoft Corp.’s first-quarter earnings and outlook. The world’s largest software maker reported a 51 percent gain in first-quarter profit, topping analysts’ predictions, as corporate customers stepped up purchases of computers and the programs that run on them. Williams talks with Carol Massar, Matt Miller and Julie Hyman on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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MEDA Board of Directors Hires Trey Davis as President

October 28, 2010

JEFFERSON CITY, MO–(Marketwire – October 28, 2010) – The Board of Directors of the Missouri Energy Development Association (MEDA) announces the hiring of Trey Davis to serve as its new President effective December 6th.

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Video: Hugin Sees Celgene Revlimid Patents Holding Until 2027

October 28, 2010

Oct. 28 (Bloomberg) — Robert Hugin, chief executive officer of Celgene Corp., talks about possible generic competition for Celgene’s best-selling Revlimid cancer pill. Hugin also discusses Celgene’s drug pipeline and the acquisition of Abraxis BioScience Inc. He talks with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Mike Stark: Confidence Game Kills a Zombie Lie (Well, Sorta…)

October 28, 2010

Wall Street’s last decade is full of assorted criminals and villains that will never be held to account. It’s simply not plausible that so many well-meaning, law-abiding people made so many innocent mistakes that, purely by coincidence, just happened to fatten their bonus pools. Of course, apologists remain. Over and over again, the propagandists responsible for propping up the hollow façade that remains of Wall Street tell us that “nobody saw this coming.” It doesn’t matter that that lie has been deconstructed and exposed over and over and over again. The zombie lie lives on, because Wall Street needs it to. Which is why I’m not the least bit confident that Christine Richard’s Confidence Game (Wiley, 2008) will change things very much, notwithstanding its compelling narrative, meticulous reporting and unassailable documentation. Did I mention its compelling narrative? Because this book hooks you right from the start. Confidence Game tells the story of a bright hedge fund manager that saw his spot, went all in, faced down the best sharks on Wall Street and emerged with a billion-dollar payout. Typically, this would be the story of a villain, right? Not in this case. Bill Ackman looked at the emperor and saw that he was naked back in 2002. He loudly proclaimed as much. And all the emperor’s horses, and all the emperor’s men on Wall Street ran interference. For the next six years. Before all was said and done, Ackman was investigated by Eliot Spitzer, the New York State Insurance Commissioner’s Office and the SEC. Ackman stood firm in the face of the onslaught, and for his travails, walked away with $1.1 billion dollars. How did it happen? Well, a whole book was written on the subject, but in a nutshell, Ackman realized that a pillar of the bond-insurance racket (it was a racket), MBIA, had shuffled some paperwork to conceal their potential liability. They had severely underpriced their insurance contracts and could only sustain themselves so long as the economy continued to grow. Ackman’s evidence was ironclad, and he was generous in terms of sharing his information. After all, he had a reason to be — he had bet against MBIA and fully expected their share price to fall when the information he uncovered penetrated the market. That’s where things began to go wrong. The market didn’t want to accept the information Ackman was providing. Instead, they were downright hostile to it. Market participants (investment banks that built the bond deals MBIA insured) knew that if MBIA suffered, they’d suffer as well. That’s the abstract argument. In the real world, these bankers saw that if Ackman got any traction, their bonus pools would dry up overnight as their industry crashed. So they ignored Ackmen. For six years. For six years the deals continued, getting bigger and bigger. Ackman looked on with unruffled confidence. He kept whaling away at the borg, until one day, the system fell apart. And Ackman was left standing on a pile of money. If Wall Street or its regulators had listened to Ackman when he first chirped, the canary in the coal mine may have prevented what may go down in history as the world’s most devastating financial crisis. Ackman would have earned less than 1% of what he ultimately gained, but mainstreet would almost definitely be better off today. Of course, the shame of all of this is that none of it has changed Wall Street. The bankers got their bonuses, even after being bailed out. They learned that trickery, lies, deceit, intentionally feigned ignorance and any other unethical behavior required to protect their bonus pools is what pays in the end. Bill Ackmans and Bethany McLeans will come and go, but the titans of finance will always be with us. (disclaimer: I sometimes get free books. If I read them and like them, I sometimes review them. Because I like getting free books. Confidence Game was one of the books that I got for free, enjoyed reading and decided was worth reviewing, because I think you should read it, too.)

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Nine Great Brands That Had To Change Their Names

October 28, 2010

lightly (Apple Inc. was once Apple Computer), but hardly enough for most people to notice. Some of the world’s largest companies have changed their names out of necessity, often due to mergers. Sirius XM Radio (NASDAQ: SIRI) is the combination of two companies-Sirius Satellite Radio and XM Satellite Radio. Time Warner Inc. (NYSE: TWX) was once AOL Time Warner and owned Time Warner Cable (NYSE: TWC) and online portal AOL (NYSE: AOL). Both of those companies are gone and so is the firm’s former name. As part of 24/7 Wall St.’s ongoing look at brands, the value of brands, and the purchase and sale of brands, we looked at nine large companies that changed their names. Usually, particularly for corporations that have been in business for decades, the decision carries substantial risks. Tens of millions if not billions of dollars are put into creating brand identities and visibility, often over a long period – over a century, in the case of Coca-Cola (NYSE: KO) or J.C. Penney (NYSE: JCP).

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Obama: More Aggressive Anti-Foreclosure Efforts Would Help People Who Don’t Deserve It

October 28, 2010

WASHINGTON — President Barack Obama defended his administration’s beleaguered foreclosure-prevention initiatives on Wednesday by arguing that more aggressive steps to assist homeowners might help people who don’t deserve to be helped. Asked if his administration had done enough to stem the foreclosure crisis, Obama opted not to address the foreclosure fraud scandal that has forced banks to temporarily halt home repossessions across the country. Instead, he claimed that the government’s efforts had stabilized the housing market, and argued that the “biggest challenge” was to make sure speculators and deadbeats didn’t take advantage of the government’s help. “The biggest challenge is how do you make sure that you are helping those who really deserve help and if they get some temporary help can get back on their feet, make their payments and move forward and stay in their home versus either people who are speculators, own second homes that they really couldn’t afford because they’d gotten a subprime loan, and people who through no fault of their own just can’t afford their house anymore because of the change in housing values or their incomes don’t support it,” Obama said during a roundtable discussion with a handful of progressive bloggers at the White House. “And we’re always trying to find that sweet spot to use as much of the money that we have available to us to help those who can be helped, without wasting that money on folks who don’t deserve help,” he continued. “And that’s a tough balance to strike.” Homeowner advocates, members of Congress, and auditors of the administration’s Home Affordable Modification Program have relentlessly criticized the Treasury Department for the program’s shortcomings. President Obama said in early 2009 when he announced HAMP that it would help “as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.” While 640,300 homeowners are benefiting from reduced payments under HAMP, 728,686 people have been bounced from the program. Fewer than 500,000 are in active “permanent” five-year modifications. There is no shortage of stories from homeowners who say banks acted in bad faith by stretching out “trial” modifications that are supposed to last for only three months, then denying permanent modifications and leaving homeowners faced with imminent foreclosure — and no shortage of class action lawsuits , either. (Though there has been only one street protest by frustrated homeowners.) On Monday, a federal bailout watchdog reported that HAMP sometimes actually causes the foreclosures it’s designed to prevent, as applicants “end up unnecessarily depleting their dwindling savings in an ultimately futile effort to obtain the sustainable relief promised by the program guidelines.” It’s an allegation that had already been made by homeowner advocates. Obama is unfazed by all of that. “The HAMP program has gotten a lot of criticism, but the fact of the matter is, is that you’ve got half a million people who have gone through permanent loan modifications that are saving 500 bucks a month,” Obama said. “And I get letters every day from people whose homes were saved as a consequence of it.” Obama and other officials in his administration have ditched the three to four million number and now insist that the purpose of HAMP was to help the broader housing market and give doomed homeowners a softer landing when they are booted from their homes. Even HAMP borrowers in trial periods who are ultimately bounced from their homes, the administration argues, benefit from reduced monthly payments, which are typically $500 less than their normal amount. One of the biggest changes to HAMP since it started last year has been the requirement that as of June, borrowers must prove their eligibility with documents like tax forms and pay stubs. The administration argues that many people were denied permanent modifications because they were put into trial plans before their ability to pay had been verified. Obama pointed out that what’s driving foreclosures nowadays is the jobs crisis, rather than predatory lending and exploding mortgages. “And so the single most important thing I can do for the housing market is actually improve economic growth as a whole,” he said. “If we can get the economy moving stronger, if we can drive the unemployment rate down, that will have probably the biggest impact on foreclosures, as well as housing prices, as just about anything. ”

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Wells Fargo To Amend 55,00 Foreclosures

October 28, 2010

CHARLOTTE, N.C./SAN FRANCISCO (Reuters) – Wells Fargo & Co. said on Wednesday it will re-file documents on 55,000 foreclosures, drawing immediate fire from one of the state attorneys general most critical of banks in the continuing home foreclosure crisis. The announcement was the first admission of possible problems in the way the San Francisco-based bank repossesses homes. Wells Fargo — the second largest U.S. home mortgage servicer — has continued to foreclose on delinquent borrowers in recent weeks, even as its rivals instituted moratoriums amid a public furor over whether banks cut corners in the foreclosure process with so-called “robo-signers” of legal documents used to justify taking homes. Ohio Attorney General Richard Cordray — who filed a lawsuit against Ally Financial Inc earlier this month over affidavit problems — said he was “pretty unhappy” about the Wells Fargo announcement. “We had talked to them and they assured us they didn’t have any of these problems,” said Cordray in an interview with Reuters. He added that the Wells Fargo admission “makes it hard to believe any of the big financial firms in terms of what their process has been.” Attorneys general in all 50 U.S. states are investigating whether lenders rushed through foreclosures and evicted borrowers from their homes without properly checking documents. Lawsuits have already begun to trickle in and banks may also face fines or be forced to repurchase faulty loans. Wells Fargo found problems with foreclosure affidavits in 23 U.S. states where the final internal review or the notarization of the documents did not meet company standards. The bank plans to re-file the affidavits by mid-November. In cases where the foreclosure is imminent, the bank will ask for an extension from the local courts. “We found human errors, and we are fixing those errors,” said Teri Schrettenbrunner, Wells Fargo spokeswoman, who declined to discuss the nature of the errors the bank found. NO SYSTEMIC U.S. PROBLEM espite problems, the bank had no plans to institute its own moratorium because it believes the filing mistakes did not lead to borrowers being unjustly evicted from their homes. On average, borrowers are 16 months behind on payments at the time of their foreclosure, according to Wells Fargo data released on Wednesday. One analyst said Wells Fargo’s announcement was a minor surprise, given its prior statements that a foreclosure moratorium was unnecessary. “Do I regard this as devastating? No, but the bank should have known this before they spoke about it beforehand,” said Nancy Bush, bank analyst with NAB Research. Bank of America Corp., the largest U.S. mortgage servicer, instituted a 50-state foreclosure moratorium earlier this month that has since been partially lifted. JPMorgan Chase & Co. and GMAC Mortgage, a division of Ally Financial Inc., both imposed 23-state halts. Wells Fargo also said the affidavits will have no impact on its mortgage repurchase obligations. The bank has reserved $1.3 billion to repurchase bad mortgages from investors. The foreclosure crisis in recent weeks has sparked fears of a shoddy paper trail for mortgages held by third-party investors totaling billions of U.S. dollars, which banks could be forced to repurchase. On Wednesday, the chief of the U.S. Treasury’s homeowner preservation office told a Congressional panel she did not see a systemic threat posed by banks rebuying mortgages, and regulators were monitoring the situation closely. (Reporting by Joe Rauch and Dan Levine) Copyright 2010 Thomson Reuters. Click for Restrictions .

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SolarWinds Expands Leadership Team With Two Key Hires — Senior Vice President of Product Strategy and Vice President of Asia-Pacific Sales

October 28, 2010

Suku Krishnaraj’s Leadership Expected to Guide and Accelerate SolarWinds Portfolio of Network, Application and Storage Management Solutions; Gary Angel to Lead Sales Organization in Asia-Pacific Region

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Unemployed Entrepreneur Of The Week: 60-Year-Old Loses Job, Creates 12 Websites

October 28, 2010

WASHINGTON — When Bob Bernstein, 60, was laid off from his job as a real estate broker at the height of the recession in 2008, he says he had a feeling it would be a really long time before he found a job in his field again. “Like everyone else, I asked myself, what do I do now?” Bernstein said. “The real estate market was going down, so I was not going to find another broker position.” Since there were no jobs in his field, Bernstein decided he was going to have to create a job for himself. He had owned some retail clothing stores for about fifteen years, but he no longer had the energy to deal with landlords, bring in inventory, hire employees and maintain hours. So he decided to take all his entrepreneurial ideas to the web. “I thought that with the right domain name, whatever creative concept I could come up with could generate some income and maybe even compete against the big guys,” Bernstein told HuffPost. Since he lacked the technical skills to write all the code for a website, he teamed up with DevHub.com, a 2007 start-up company that makes it easy for people with ideas to create lucrative websites using drag-and-drop tools and a built-in network of web advertisers. Since 2008, Bernstein has eked out a living for himself by creating twelve different websites using DevHub.com , including a travel discount site ( DealstoVegas.com ), an outdoor sporting goods store ( Outtrek.com ), a job search hub ( Careersquick.com ), and a website dedicated to comparing health insurance quotes ( RXCare.org ). Bernstein’s most lucrative site to date, ZipQuote.com , is a place where users can type in their zipcodes and receive free insurance quotes based on their locations. The site was so successful he moved it off of the DevHub platform and is now treating it as a full-time job. “My focus and dedication to Zipquote is as if I’m opening a business,” said Bernstein, who is now in the process of trademarking the website’s name. “It’s only been in its current state for about five months, and it makes between $500 and $1000 a month. Hopefully, as I start to promote it, it will grow further and further.” Bernstein said that it’s now so easy for him to create websites that he created one last week in the course of a day, and it’s made him $50 so far. “You can literally open anything up online in a day,” he told HuffPost. “It’s amazing.” DevHub CEO Geoff Nuval said he knows of a number of unemployed people who have used his site to start generating income and, for the lucky ones like Bernstein, to eventually become fully self-employed. “We launched our newest version in late June, and from that version we already have over 60,000 users,” Nuval said. “There are a bunch of people who are unemployed or not working at the moment who are using our platform to make some extra cash on the side. It takes away the tech hurdles, so all they have to do is put in the creativity.” Although Bernstein says he isn’t making quite as much money running websites as he did in real estate, he does make enough to support his family, and he never wants to go back to his old job. “I get to work from home, I’m totally focused on what I do because I know it’s all for my family and our future, and I’m building a business that is mine, rather than working for someone else and building their business,” he said. “It’s absolutely rewarding and totally satisfying. I could do this sixteen hours a day.” How have you been coping with the recession? Please send your stories to LBassett@huffingtonpost.com .

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Video: Freeman Says Still `Bumps in Road’ for Blackstone

October 28, 2010

Oct. 28 (Bloomberg) — Roger Freeman, an analyst at Barclays Capital, talks with Bloomberg’s Lisa Murphy and Cristina Alesci about Blackstone Group LP’s third-quarter profit released today. The world’s largest private-equity firm said profit rose 23 percent to $339.3 million, or 30 cents a share, from $275.3 million, or 25 cents, a year earlier. (Source: Bloomberg)

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Myriam Miedzian: Capitalism Uber Alles: How the American Working Class Got Brainwashed

October 28, 2010

In his recent book, After Shock , former Secretary of Labor Robert Reich argues that the economic downward mobility of American workers, has “to do with power…income and wealth in fewer hands.” Apparently, many working class Americans want to keep it that way. A recent SEIU poll reveals that, 38 percent of American voters are opposed to rescinding Bush’s tax cuts for the 2 percent who earn $250,000 or more annually. 2 or 3 percent of taxpayers probably earn close enough to $250,000, to think they might be affected someday. This leaves about 33 percent voting against their self-interest — higher taxes on the wealthiest would reduce the national debt, facilitate spending on levies, bridges, schools, healthc are, and create jobs. Similarly, an AP-GfK poll found that in the upcoming election, 58 percent of white working class Americans favor Republicans who opposed rescinding the Bush tax cut, and fought every Democratic bill benefiting low income earners including extending unemployment benefits. On the other hand, a 2005 study by Dan Ariely of Duke and Michael Norton of Harvard, reveals that when presented with unlabeled pie charts representing wealth distribution in the U.S where the richest 20 percent control about 84 percent of wealth and Sweden where the top 20 percent control 36 percent, 92 percent of respondents — who reflected U.S. ideological, economic, and gender demographics — stated they would rather live in a country with Sweden’s wealth distribution. “Why don’t more Americans — especially those with low incomes advocate for greater redistribution of wealth?” the authors ask. Their answer: Americans drastically underestimate the disparity between the very rich and the rest of the population, are overly optimistic about social mobility, and there exists a disconnect between their attitudes toward inequality, their self-interest and public policy preferences. Why do so many working class Americans hold these detrimental false assumptions. Why this disconnect between self-interest and voting patterns? Our country has long been admired for its extraordinary social mobility, but as Arianna Huffington points out in Third World America , Canada, Germany, Denmark, Norway, Finland, Sweden, and France now have greater social mobility — university education is free, or at minimal cost in Western Europe. Compared to other advanced industrialized countries which all provide universal health care, we are at the bottom in life expectancy and infant mortality. Americans have three months unpaid parental leave — Swedes have 13 months, paid. Unlike Western Europeans, we have no government legislated paid vacations. In Germany, the world’s largest exporter after China, workers get 6 weeks a year off. Americans average 13 days. American conservatives delight in predicting the imminent demise of socialistic Western European benefits. But these benefits are part of the social contract within which all major European political parties, including conservatives, operate. While large national debts are leading to some cuts in benefits, these cuts do not represent reneging on that contract, just as cuts to education in the U.S. do not represent reneging on government funding for education — which is part of our social contract. A look at the divergence in political thinking between Western Europeans and Americans provides much of the answer to why we lag so far behind. European workers define themselves as working class which facilitates awareness that their interests are opposed to those of the upper classes — factory owners, bankers, financiers etc. Since WW2, the common wisdom in the U.S. has been that we have no working class. Factory workers, the folks who flip Hamburgers at MacDonald — they’re all middle class, so it’s a small leap to becoming upper middle class. Someday, with hard work and a little luck, you, or your children, could be making millions, or at least hundreds of thousands — true for a small percentage of working class Americans, but for the vast majority more than ever, a fantasy that discourages struggling for better conditions. The shift to “we are all middle class,” coincided with virulent McCarthyism which lumped socialism and communism together — no distinction made between murderous, totalitarian Communist regimes, and democratic socialist societies developing in Europe — and turned both into un-American dirty words. (Right wingers’ attacks on centrist President Obama as a “socialist” testify that it remains an attack word 60 years later.) Talk of working class versus capitalist class, common among European workers, became anathema — such talk supposedly created class conflict where none existed. But it does exist. With all due respect to our many responsible CEO’s — and wealthy Americans willing to pay higher taxes — a vast majority care only about their bottom line. Unions, still influential in Western Europe, are committed to democratic socialism. Since the 1970′s U.S. unions have been in sharp decline. Industry moving to un-unionized areas, employers — with their lawyers — using labor law to evade unionization, corrupt union leaders, have been factors. By the 1990′s most workers — especially blue collar — were without power and without the political education that unions historically provided. Instead, as Reich points out “rich and powerful think tanks, books, media, ads” were designed to convince Americans that free markets “know best” and operate in the interest of working people. They also convinced them that their enemies are not the heads of large corporations and the Republicans who represent them, but rather the Ivy League quiche eating, Eastern elite — people like Senators John Kerry and Ted Kennedy, outspoken supporters of policies beneficial to working class Americans. This has fed into a “Real Men Vote Republican” reaction among many white male blue collar workers. Because of our long history of pioneers going into territory uncharted by any but Native Americans, we have developed a strong frontier mentality of self-reliance, leading to a “government off my back,” attitude. Nothing could be further from European workers’ approach. Their concern is getting corporations off their back by pressuring government to pass legislation protecting them from corporate greed, and they look to government to provide benefits improving their quality of life. Many working class Americans believe that programs such as welfare and Medicaid only help inner city African Americans (in fact a majority of recipients are white.) Understandably, they resent Medicaid recipients getting free medical care that many of them cannot afford, but instead of demanding universal health care and other benefits, they demand less government spending. American exceptionalism leads to support of unnecessary wars — supposedly fought in the name of democracy — which eat up funds that could improve the quality of life of working class Americans. According to Robert Reich, the total cost of wars in Iraq and Afghanistan will be approximately 3 trillion. It also leads to the assumption that we are the greatest and have nothing to learn from other countries. Most American workers would be shocked if they knew how much better off Western European workers are. In Europe elections are almost entirely publicly financed. In the U.S. bribery is an essential ingredient of the electoral process. Corporations and wealthy Americans throw money at candidates who support their interests. Democrats — who have traditionally represented working class interests — are also on the take which explains the timidity of many of their votes, and the inadequacy of many of their bills. This facilitates working class people voting for Republicans who are completely opposed to their interests. In Third World America , Huffington argues correctly that a “complete reboot of the way we finance our elections,” is the single most important change needed to rescue our country. In the meantime, our best hope for the 2012 election is that the American left will wake up, start organizing unemployed workers, and move them away from self-destructive voting.

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Richard (RJ) Eskow: Getting Medieval On Your Assets: Four Reasons Foreclosure Fraud Really, Really Matters

October 28, 2010

The current debate over foreclosure fraud has been a revelation, even for those of us who have become familiar with the power of moneyed interests to influence the national dialog. Despite overwhelming evidence of widespread lawbreaking and deception, there’s still a popular point of view that says that fraudulent foreclosures are “just a technicality” and that what we’re seeing is neither a systemic problem nor a crime wave of epidemic proportions. Actually, it’s both. Here are four reasons why the foreclosure fraud scandal is very important. They’re counterarguments to the conventional “paperwork” wisdom, a point of view whose numbing effects threaten to anesthetize us to the profound significance of this scandal. 1. Dragnet A recent New York Times article is just one of many that put names and faces to the foreclosure scandal: A man who paid cash for a vacation cabin found that foreclosure papers had been filed and his locks had been changed, despite the fact that there was no mortgage on the property. A couple was foreclosed upon — successfully — by a mortgage trust that court papers say doesn’t exist. A woman in Colorado also had her locks changed by mistake, so the bank offered to let her skip a mortgage payment as an apology. When she did, foreclosure papers were filed on her. The writers of the Times article also frame the counterargument: “Even if the paperwork was faulty, the fact remains that most homeowners in foreclosure have not paid their bills … ” That’s Argument #1 in favor of downplaying the foreclosure fraud controversy: Sure, there have been some outrageous cases like the ones listed above. But the vast majority of people facing foreclosure really have mortgages, and they’re really delinquent on them. So, the argument goes, what’s the big deal? Fix the paperwork, weed out the errors, and let’s all get on with our lives. Here’s the real problem: Any massive invasion of personal rights and liberties will catch some people who deserve to be caught. If we placed the entire country under martial law, initiated a state of siege, and rounded up every suspicious-looking person in America with a nationwide dragnet, many — perhaps most — of the people dragged off to jails would be guilty of something. But that’s not how free societies operate. People have rights, even if they owe money. The legal process around foreclosures has become a massive dragnet, run and managed by the financial services industry with the compliance of too many state and national legal institutions. The most egregious stories — i.e., people who paid cash for houses and had them seized anyway — are almost certainly a small minority of the foreclosure cases out there. But they show us how badly corrupt the entire process has become, and how far we’ve drifted away from fundamental principles of due process. 2. The Dukes of Moral Hazard Here’s the complete sentence from the Times article: “Even if the paperwork was faulty, the fact remains that most homeowners in foreclosure have not paid their bills, often because they bought more house than they could afford or because they lost their jobs. As a result, they will most likely lose their homes eventually, once the banks clean up their paperwork …” That’s a point the financial services industry is only too happy to underscore: “We believe that the overwhelming majority of the cases will be that the loan was seriously delinquent and needed to go to foreclosure,” the article quotes an industry spokesperson as saying. While the Times journalists did some excellent reporting for this piece, their sentence (above) framed the situation so well – from the financial industry’s point of view, that is – that a quote from the industry itself was almost redundant. Sure, a lot of people “bought more house than they could afford,” and some of them did so irresponsibly. But the financial industry’s all too happy to leave it at that, characterizing all these foreclosures as problems of individual character rather what they really are: a breakdown of process, law, and ethics on a systemic level. According to the most recent report from Lender Processing Services, Inc ., 9.22% of all mortgages in the US are delinquent – and that’s not counting those that are in foreclosure. 8.22% are either in foreclosure or more than 90 days overdue. All told, roughly 11% of all mortgages are either delinquent or in the foreclosure process. That’s a problem with the system, not the product of millions of flawed individual characters. Here’s the bottom line: More than one in ten mortgages is in bad trouble. What’s more, one in four mortgages is underwater, which means there’s not enough collateral to cover billions of dollars in loans. The generous explanation for the banking industry is that they’re completely incompetent at what they do. A huge chunk of the loans they’ve written are bad. Forgive the language here, but the bank-friendliest explanation for this systemwide breakdown is that bankers suck at what they do. But the real explanation is that they knew these loans were bad — and wrote them anyway. Why? Because they intended to make quick and easy money by pumping up housing values, churning loans to customers who they knew couldn’t pay. (The customers didn’t know that, but the banks did.) They thought they could float this crap game forever, riding an ever-growing bubble and tossing the defaulting homeowners away when they couldn’t pay the nut. But the bubble burst and the crap game got shut down. They were able to walk away from this massive nationwide scam by convincing the country that the only irresponsible parties were people who “bought more house than they could afford.” It worked, too. But now they’ve been caught in widespread fraud — and they want to walk away from that, too. Nobody’s suggesting there weren’t irresponsible buyers out there, too. But so far, the bankers have been able to convince the country that the “moral hazard” was everybody’s but theirs — even though they were running the entire system, and it’s the entire system that’s broken down. This time, the guilty parties should be made to pay for criminal behavior. And they should be forced to accept some of the financial consequences of their bad behavior by writing down some of the principal on the bad loans they’ve issued and sold. 3. Contract Killers A loan is a contract, an agreement between two parties. The lender agrees to provide a certain sum of money, which the borrower agrees to repay according to agreed-upon terms and conditions. One of the biggest problems with the foreclosure fraud scandal – and the systems, tricks, and traps that created it – is that it obscures the contractual record between the parties, leaving all the information (and all the power) on one side of the transaction. Consider the woman whose bank offered to let her skip a monthly payment in return for accidentally changing her locks, and then proceeded to foreclose on her. With shell games like the mortgage industry’s MERS, which obscures the actual trail of ownership and insulates the lender from court proceedings , the bank in question doesn’t even have to show up during the foreclosure process. That means that she’s denied the right to face her trading partner in court. Due process is trampled upon, and so is the right to legally enforce a contract. People facing foreclosure aren’t just people who lost their jobs or “bought too much house.” They’re people who had a deal with their bank. Then they were hit with late fees, or unilateral changes to their loan terms, or other surprises that caused them to fall into a spiral of debt. Of those who have missed payments, many of them have a legitimate case to make: that the other party broke the contract and that’s why they’ve missed payments. The foreclosure fraud scandal has taken away their right to defend themselves in court. 4. Getting Medieval On Your Assets The last counterargument is literally an ancient one. It’s based on the long-established right of any citizen to be inviolable in their home and possessions. This goes back to the Magna Carta, which established that the will of the monarch wasn’t arbitrary and that the property of “freemen” could not be seized without proper legal recourse. This principle was enshrined in the Fifth Amendment of the Constitution, which says “No person shall be deprived of life, liberty or property without due process of law.” (emphasis mine) It’s bad enough that we’ve seen massive violations of the Constitution and people are saying it’s no big deal. But we’re also seeing massive violations of a legal principle that was established as an inalienable human right … in 1215 AD ! And people are still saying it’s no big deal. This isn’t a “technical” problem or a “paperwork” issue. It reflects on our national character, and our will to preserve the rights and liberties that have existed for eight centuries. The problem isn’t that some people bought “more house than they can afford.” The problem is that we have more rights as free citizens than the banking industry can afford. So, naturally, they want us to pretend those rights don’t exist. If we do, we’ll lose them. And that will be a really big deal. _______________________________________________________________ Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America’s Future. This post was produced as part of the Curbing Wall Street project. Richard also blogs at A Night Light . He can be reached at “rjeskow@ourfuture.org.” Website: Eskow and Associates

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Katie Corrigan: Think Flexibly/Act Locally: The National Dialogue on Workplace Flexibility Goes on the Road

October 28, 2010

A lot can happen in a year. Since 2009′s National Work and Family Month, we’ve come a very long way — and the stage is finally set for workplace flexibility as a national priority, in the year 2010 and beyond. In March, the President and First Lady summoned a group of nationally recognized leaders — including CEOs, academic researchers, advocates and union representatives — for a groundbreaking discussion on the need to increase flexibility in the American workplace. That day, President Obama shared his belief that workplace flexibility has become, “…an issue that affects the well-being of our families and the success of our businesses. It affects the strength of our economy — whether we’ll create the workplaces and jobs of the future that we need to compete in today’s global economy.” The president’s comments signaled a tremendous evolution in issues at the intersection of work and family. They indicated that it’s no longer good enough to let families muddle through this on their own. Indeed, addressing this issue has become a social and economic imperative. But to really understand the depth of this challenge and the need for flexibility, it’s critical that we understand what’s happening on the ground — in workplaces and communities large and small. For meaningful change to happen in the American workplace, we need the engagement and commitment of business and civic leaders and employees and employers from across the country. That on-the-ground engagement and commitment is building quickly. Last week, far from DC and in the heart of Texas, a group of small business owners, managers, and employees — as well as advocates, researchers and union leaders — gathered on the Dallas campus of Southern Methodist University to carry on the conversation that began at the White House. They were the first to participate in the “National Dialogue on Workplace Flexibility” series being organized and hosted by the Department of Labor in cities across the country. Labor Secretary Hilda Solis kicked off the event, expressing how critical these issues have become. As she said in her recent editorial, “June Cleaver, Meet Juana Solis,” “Workplace flexibility initiatives aren’t niceties; they’re necessities for working families. For employers, they aren’t just the right thing to do; they’re the smart thing to do.” And then the conversation really began. We heard the latest data on small business from the Families and Work Institute — and got to hear from local business leaders on why they use flexibility as a business strategy. Participants engaged each other on best practices for implementing innovative flexibility programs — particularly within a small business — and addressed the challenges that come with them. We heard participants asking and answering critical questions such as: What’s the best way to train managers so that they understand how flexibility can support their own objectives — and overall business success? How do you implement flexibility programs that meet the needs of all workers — particular those on the “front lines” that need be physically present during regular hours? How can businesses — particularly small businesses — contain costs while also trying to offer paid leave when employees need it? To each of these challenging questions, participants offered innovative ideas and potential solutions. And ultimately, participant’s experiences and stories revealed a truly remarkable theme. That is — both employers and employees are recognizing that the nature of work has changed irrevocably over the last several decades. And that flexibility can be a crucial tool in helping the American workplace catch up. Before the Dallas event, the Society for Human Resource Management, a leading business association, published an ad declaring that “a flexible workplace is the next business imperative.” At the same time, the National Partnership for Women and Families and Family Values @ Work released a report — “Dallas Workers Speak” — outlining how employees “satisfaction correlates with a positive workplace culture that embraces flexibility and fosters trust.” There’s no doubt we’ve reached a turning point this year. There is increasing agreement that flexibility can support working families and business’ bottom line at the same time. And indeed, there are many innovative, effective workplace flexibility practices being used right now that are benefiting both employees and employers. In our conversations around the country, we’ve heard about business innovation, new models of measuring success and achieving your bottom line, practical ways to make work work for a diverse workforce, and community efforts to promote flexibility as a tool to combat traffic congestion, stabilize the low wage workforce, allow for job training opportunities, and boost health and wellness. Sharing these stories — and spreading the word on innovative practices — is a key to creating meaningful change in the American workplace. Which is why it is so critical the Obama Administration has taken this national conversation on workplace flexibility on the road, and into local communities. The Department of Labor’s next stops are in Atlanta and Los Angeles — with more to come in Seattle, Chicago, Boston and cities in between. For more information on attending an upcoming event, visit the National Dialogue on Workplace Flexibility website. And if you can’t make it to an event, considering hosting your own through the White House Work-Flex Event Starter Kit. Local, on the ground knowledge will make all the difference in propelling this national conversation forward. Make your voice be heard!

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Christopher Hytry Derrington: Broadband Is Coming To Rural America And My Work Force Is About Skyrocket

October 28, 2010

You’re entitled to “Life, Liberty, the Pursuit of Happiness, and Broadband Internet Access!” Or, given that the mid-term elections are upon us: “A chicken in every pot and high-speed broadband internet access for every computer!” Why the silly clichés? For the past several weeks I’ve been gathering background data in preparation for a speech on November 3 at the National Broadband Expo in Dallas, TX. My topic is “Labor Components Of Rural Broadband: The Impact Of OnShoring.” And what I’ve learned from my rural broadband research makes me scream with excitement at the entrepreneurial opportunities. These statistics, in particular, jumped out to me: The United States now ranks 22nd among the world’s nations in the density of broadband internet penetration and 72nd in the density of mobile telephony subscriptions. There are an estimated 50 million Americans living in rural areas (defined as having a population less than 10,000). Rural population areas have a broadband penetration of 75 percent; well below the national average of 89 percent. The 2009 American Reinvestment and Recovery Act appropriated 7.2 billion to “expand broadband access and adoption in communities across the U.S., which will increase jobs, spur investments in technology and infrastructure, and provide long-term economic benefits.” ( Grants and loan funds available. ) Based on these statistics, approximately 10 million people will eventually have access to broadband for the first time. They will be a mix of farmers, workers, freelancers, and business owners. They will need jobs, education, e-commerce sites, web tools, new business support services, etc. If these rural areas were themselves a single state, this market would be the eighth largest state in the U.S., behind Ohio. These new broadband users will bring thousands of new jobs back to rural America. Because their cost of living can be up to half of urban areas, rural Americans are willing to work or provide services at rates that are far less than their urban brethren and competitive with overseas firms. Rural onshoring will continue to take outsourcing market share away from both urban firms and offshore companies. This is the market niche that my company is successfully attacking. Depending on which research study you read, anywhere from 250,000 to 2,400,000 jobs will be created. Tele-workers and micro-business development centers of five to 50 people will flourish. Expanded infrastructure support, new virtual management techniques, and new process methodologies will be required. Remote infrastructure innovation is best when created from the bottom up. Businesses of all shapes and sizes are being created — from small e-commerce companies started in private homes to large companies, like those teaching English to customers overseas. Many of these companies will fail, but the ones that prosper will create more jobs, strengthen the community by paying more taxes, and generate wealth. They will need professional services provided either by local firms or via the Internet. Many of the rural professionals I’ve hired moved to the “boonies” in order to have a rural lifestyle or be close to family members. Over 90 percent work from their homes. These talented people bring with them Internet know-how and advanced professional skills. It’s a pity, because we have turned down numerous other well-qualified candidates simply because they don’t have access to broadband. As a history buff, I have a theory that I want to share: Beginning in the 1800s, as the Industrial Revolution swept across the U.S., people left the rural areas and moved to the urban mills and factories in pursuit of jobs and wealth. Almost 200 years later, we’re seeing a convergence of factors that will change history. During the Internet Information Age, as access to broadband becomes more prevalent in rural America, cost of living continues to rise in urban areas, and government services decline, the population flow will eventually reverse with more moving to rural areas than flowing towards urban. (Check out this report ). What do you think? Agree or disagree? Entrepreneurs, rural American markets await your drive and creativity. Go out and amaze us!

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Christopher Hytry Derrington: Broadband Is Coming To Rural America And My Work Force Is About Skyrocket

October 28, 2010

You’re entitled to “Life, Liberty, the Pursuit of Happiness, and Broadband Internet Access!” Or, given that the mid-term elections are upon us: “A chicken in every pot and high-speed broadband internet access for every computer!” Why the silly clichés? For the past several weeks I’ve been gathering background data in preparation for a speech on November 3 at the National Broadband Expo in Dallas, TX. My topic is “Labor Components Of Rural Broadband: The Impact Of OnShoring.” And what I’ve learned from my rural broadband research makes me scream with excitement at the entrepreneurial opportunities. These statistics, in particular, jumped out to me: The United States now ranks 22nd among the world’s nations in the density of broadband internet penetration and 72nd in the density of mobile telephony subscriptions. There are an estimated 50 million Americans living in rural areas (defined as having a population less than 10,000). Rural population areas have a broadband penetration of 75 percent; well below the national average of 89 percent. The 2009 American Reinvestment and Recovery Act appropriated 7.2 billion to “expand broadband access and adoption in communities across the U.S., which will increase jobs, spur investments in technology and infrastructure, and provide long-term economic benefits.” ( Grants and loan funds available. ) Based on these statistics, approximately 10 million people will eventually have access to broadband for the first time. They will be a mix of farmers, workers, freelancers, and business owners. They will need jobs, education, e-commerce sites, web tools, new business support services, etc. If these rural areas were themselves a single state, this market would be the eighth largest state in the U.S., behind Ohio. These new broadband users will bring thousands of new jobs back to rural America. Because their cost of living can be up to half of urban areas, rural Americans are willing to work or provide services at rates that are far less than their urban brethren and competitive with overseas firms. Rural onshoring will continue to take outsourcing market share away from both urban firms and offshore companies. This is the market niche that my company is successfully attacking. Depending on which research study you read, anywhere from 250,000 to 2,400,000 jobs will be created. Tele-workers and micro-business development centers of five to 50 people will flourish. Expanded infrastructure support, new virtual management techniques, and new process methodologies will be required. Remote infrastructure innovation is best when created from the bottom up. Businesses of all shapes and sizes are being created — from small e-commerce companies started in private homes to large companies, like those teaching English to customers overseas. Many of these companies will fail, but the ones that prosper will create more jobs, strengthen the community by paying more taxes, and generate wealth. They will need professional services provided either by local firms or via the Internet. Many of the rural professionals I’ve hired moved to the “boonies” in order to have a rural lifestyle or be close to family members. Over 90 percent work from their homes. These talented people bring with them Internet know-how and advanced professional skills. It’s a pity, because we have turned down numerous other well-qualified candidates simply because they don’t have access to broadband. As a history buff, I have a theory that I want to share: Beginning in the 1800s, as the Industrial Revolution swept across the U.S., people left the rural areas and moved to the urban mills and factories in pursuit of jobs and wealth. Almost 200 years later, we’re seeing a convergence of factors that will change history. During the Internet Information Age, as access to broadband becomes more prevalent in rural America, cost of living continues to rise in urban areas, and government services decline, the population flow will eventually reverse with more moving to rural areas than flowing towards urban. (Check out this report ). What do you think? Agree or disagree? Entrepreneurs, rural American markets await your drive and creativity. Go out and amaze us!

Read the full article →

Inder Sidhu: They Might Be Giants: Management Insights From San Francisco’s Boys of Summer

October 28, 2010

” Misfits and castoffs .” That’s what some are calling San Francisco’s surprise World Series contenders, the Giants. After defeating the Philadelphia Phillies four games to two for the National League Championship, the team takes on the Texas Rangers this week in the 104th edition of Major League Baseball’s Fall Classic. Fans in the Bay Area could not be more delighted. This year’s team features a lovable cast of characters with back stories that could have been conjured by a Hollywood screenwriter. Take ace relief pitcher Brian Wilson. He sports a menacing pirates beard, dyed jet black to intimidate opposing batters. Then there’s fastball specialist Tim Lincecum, known as “The Freak” for his powerful arm and boyish looks. San Franciscans have especially warmed to outfielder Cody Ross, the the NL Championship Series MVP. Ross joined the team in mid-summer after being dumped unceremoniously by the Florida Marlins. Instead of sitting home watching TV, he now finds himself starring on it. I could go on, but you get the point: The Giants roster is filled with individuals that other teams either overlooked or did not want. So how did the organization turn them into winners? Simple: it provided opportunities for individuals to shine while building a foundation of cohesive teamwork. While that might sound easy, anyone who has ever managed a team knows it isn’t. In organizations that prioritize the collective, new ideas are often smothered and groupthink frequently prevails. When this happens, individuals lose their drive to aspire for greatness. As a result, mediocrity often settles in. Similarly, organizations dominated by superstars have their own problems. When jumbo-sized egos take over, teams lose their unity and sense of purpose. Without shared organizational goals, individuals focus more on their own glory than on team pursuits. When this occurs, internal strife often results. Giants fans need only think back to the last time San Francisco was in the World Series to be reminded of this. The year was 2002, the height of the Barry Bonds era. Though the all-time career leader in home runs, Bonds is one of baseball’s most polarizing figures. When he was the Giants’ highest paid player, Bonds wouldn’t pose for the team picture or ride the team bus. He had his own trainer, his own chef and his own PR spokesman. Bonds won five MVP awards as a Giant, but he never led his team to baseball’s ultimate prize. To be fair, neither did San Francisco’s more beloved Hall of Fame players, including Willie Mays, Orlando Cepeda, Willie McCovey, Juan Marichal and Gaylord Perry. Try as they might, these legendary superstars could not produce both the team cohesion and individual excellence that the 2010 Giants have. Give credit to team manager Bruce Bochy for doing both . In his four years with the team, he has convinced his players to aim high, work collaboratively and check their egos at the door. Specifically, he has experimented with the lineup, providing an opportunity for different players to have their moment in the spotlight. Take rookie Buster Posey. When first called up from the minors, he played backup catcher. But Bochy convinced the young player he could achieve greatness if he got in better shape and improved on his hand speed. Posey did and worked his way into the starting lineup. After batting .305 for the year, he’s now a candidate for league Rookie of the Year. While inspiring individual performers to aim high, Bochy has also promoted an atmosphere of inclusion and camaraderie. That’s inspired stars such as Wilson to spend more time bonding with teammates. He, for example, is a regular at the dominoes table in the locker room with his teammates. Bochy’s insistence that stat leaders and role players stand together has helped him to make some difficult choices. In the post season, he dropped the team’s highest paid player, pitcher Barry Zito, from the active roster due to inconsistent play. Recognizing that the decision was controversial and could divide team loyalties, the affable Zito stepped up and expressed his support for the decision. ” My heart and soul is in this clubhouse ,” Zito said afterward. “I have no other options in myself than to pull for every one of these guys.” You can bet they remembered his unselfishness as they took the field last night against the Rangers. Superstar performers or team players? In San Francisco, it’s nearly impossible to tell them apart. Managers everywhere should take note. Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco , and the author of Doing Both: How Cisco Captures Today’s Profits and Drives Tomorrow’s Growth . Follow Inder on Twitter at @indersidhu .

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Inder Sidhu: They Might Be Giants: Management Insights From San Francisco’s Boys of Summer

October 28, 2010

” Misfits and castoffs .” That’s what some are calling San Francisco’s surprise World Series contenders, the Giants. After defeating the Philadelphia Phillies four games to two for the National League Championship, the team takes on the Texas Rangers this week in the 104th edition of Major League Baseball’s Fall Classic. Fans in the Bay Area could not be more delighted. This year’s team features a lovable cast of characters with back stories that could have been conjured by a Hollywood screenwriter. Take ace relief pitcher Brian Wilson. He sports a menacing pirates beard, dyed jet black to intimidate opposing batters. Then there’s fastball specialist Tim Lincecum, known as “The Freak” for his powerful arm and boyish looks. San Franciscans have especially warmed to outfielder Cody Ross, the the NL Championship Series MVP. Ross joined the team in mid-summer after being dumped unceremoniously by the Florida Marlins. Instead of sitting home watching TV, he now finds himself starring on it. I could go on, but you get the point: The Giants roster is filled with individuals that other teams either overlooked or did not want. So how did the organization turn them into winners? Simple: it provided opportunities for individuals to shine while building a foundation of cohesive teamwork. While that might sound easy, anyone who has ever managed a team knows it isn’t. In organizations that prioritize the collective, new ideas are often smothered and groupthink frequently prevails. When this happens, individuals lose their drive to aspire for greatness. As a result, mediocrity often settles in. Similarly, organizations dominated by superstars have their own problems. When jumbo-sized egos take over, teams lose their unity and sense of purpose. Without shared organizational goals, individuals focus more on their own glory than on team pursuits. When this occurs, internal strife often results. Giants fans need only think back to the last time San Francisco was in the World Series to be reminded of this. The year was 2002, the height of the Barry Bonds era. Though the all-time career leader in home runs, Bonds is one of baseball’s most polarizing figures. When he was the Giants’ highest paid player, Bonds wouldn’t pose for the team picture or ride the team bus. He had his own trainer, his own chef and his own PR spokesman. Bonds won five MVP awards as a Giant, but he never led his team to baseball’s ultimate prize. To be fair, neither did San Francisco’s more beloved Hall of Fame players, including Willie Mays, Orlando Cepeda, Willie McCovey, Juan Marichal and Gaylord Perry. Try as they might, these legendary superstars could not produce both the team cohesion and individual excellence that the 2010 Giants have. Give credit to team manager Bruce Bochy for doing both . In his four years with the team, he has convinced his players to aim high, work collaboratively and check their egos at the door. Specifically, he has experimented with the lineup, providing an opportunity for different players to have their moment in the spotlight. Take rookie Buster Posey. When first called up from the minors, he played backup catcher. But Bochy convinced the young player he could achieve greatness if he got in better shape and improved on his hand speed. Posey did and worked his way into the starting lineup. After batting .305 for the year, he’s now a candidate for league Rookie of the Year. While inspiring individual performers to aim high, Bochy has also promoted an atmosphere of inclusion and camaraderie. That’s inspired stars such as Wilson to spend more time bonding with teammates. He, for example, is a regular at the dominoes table in the locker room with his teammates. Bochy’s insistence that stat leaders and role players stand together has helped him to make some difficult choices. In the post season, he dropped the team’s highest paid player, pitcher Barry Zito, from the active roster due to inconsistent play. Recognizing that the decision was controversial and could divide team loyalties, the affable Zito stepped up and expressed his support for the decision. ” My heart and soul is in this clubhouse ,” Zito said afterward. “I have no other options in myself than to pull for every one of these guys.” You can bet they remembered his unselfishness as they took the field last night against the Rangers. Superstar performers or team players? In San Francisco, it’s nearly impossible to tell them apart. Managers everywhere should take note. Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco , and the author of Doing Both: How Cisco Captures Today’s Profits and Drives Tomorrow’s Growth . Follow Inder on Twitter at @indersidhu .

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David Callahan: Secrets of Florida’s "Foreclosure King"

October 28, 2010

A troubling truth about today’s white collar crime wave is that wherever there is a complicated fraud, there is usually a lawyer helping make it happen — or even a whole firm of lawyers. That was the case in the dotcom era, where Enron and other companies cooked their books with the help of top law firms. It was also true with subprime mortgages and predatory lending, where lawyers helped generate the loan contracts that hoodwinked consumers and, on Wall Street, helped structure some of the shady deals that securitized mortgage debt. So it should come as no great surprise that lawyers are now implicated in some of the bad behavior that has surrounded the collapse of the housing market and the epidemic of foreclosures. Specifically, a number of law firms have been accused of generating false documentation for banks intent on repossessing homes as fast as possible. These so-called “foreclosure mills” are said to have created paper trails to prove bank ownership of homes in those cases where proper record-keeping was ignored during boom times. New insights into how foreclosure mills operate have emerged in Florida, where the state attorney general is going after David Stern, a lawyer known as the “Foreclosure King.” Stern’s business model was based on volume and his firm was paid $1,400 to produce documents for each foreclosure. That put a premium on churning out the documents fast and the firm became adept at doing exactly that. According to a deposition of a key Stern employee, taken by the attorney general’s office, over 1,000 foreclosure documents were sometimes signed in a single day without being reviewed and without any witnesses present, as required by notarization rules. Often signatures were forged. (Read the deposition to get an inside look at how a foreclosure mill operates.) One paralegal claims she was fired after refusing to falsify documents. Asked about the investigations into foreclosure fraud, the paralegal, Tammie Lou Kapusta, told ABCNews.com: “This is just the beginning really. . . . It’s the tip of an extreme iceberg.” Stern’s firm filed a staggering 70,382 foreclosure cases in 2009 and reportedly billed nearly $100 million. As explained by the deposed employee, Kelly Scott, the firm was always under heavy pressure from lenders — including Fannie Mae and Freddie Mac — to speed up the processing of documents. The case against Stern is still under investigation and no charges have been filed against him. Stern’s lawyer says that the campaign to vilify him is unfair and advances the interests of “a well-organized defense bar who is making a lot of money keeping people in their homes.” Others say that it’s the banks that are to blame for the existence of foreclosure mills in the first place, which is a good point. One thing that is clear, though, is that Stern has done very well for himself thanks to the misery of others. He reportedly owns a $20 million yacht, a $15 million mansion, and several other expensive properties. Along with the bankers who have made record profits due to the Fed’s zero interest lending, Stern is an example of those who have prospered as a result of the financial crash. Greed, it turns out, thrives in both good times and bad. David Stern may, in fact, not be a bad guy. But it can be pretty tempting to forget about ethics when there’s the potential to make tens of millions of dollars by systematically cutting corners. Especially when the chances of punishment are pretty slim. Beyond the investigation by the state attorney general, Stern may eventually face judgment before his peers in the Florida State Bar Association. But don’t expect much there, even if it turns out that Stern has been unethical. State bars have a spotty track record at best of disciplining their own wayward members.

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David Callahan: Secrets of Florida’s "Foreclosure King"

October 28, 2010

A troubling truth about today’s white collar crime wave is that wherever there is a complicated fraud, there is usually a lawyer helping make it happen — or even a whole firm of lawyers. That was the case in the dotcom era, where Enron and other companies cooked their books with the help of top law firms. It was also true with subprime mortgages and predatory lending, where lawyers helped generate the loan contracts that hoodwinked consumers and, on Wall Street, helped structure some of the shady deals that securitized mortgage debt. So it should come as no great surprise that lawyers are now implicated in some of the bad behavior that has surrounded the collapse of the housing market and the epidemic of foreclosures. Specifically, a number of law firms have been accused of generating false documentation for banks intent on repossessing homes as fast as possible. These so-called “foreclosure mills” are said to have created paper trails to prove bank ownership of homes in those cases where proper record-keeping was ignored during boom times. New insights into how foreclosure mills operate have emerged in Florida, where the state attorney general is going after David Stern, a lawyer known as the “Foreclosure King.” Stern’s business model was based on volume and his firm was paid $1,400 to produce documents for each foreclosure. That put a premium on churning out the documents fast and the firm became adept at doing exactly that. According to a deposition of a key Stern employee, taken by the attorney general’s office, over 1,000 foreclosure documents were sometimes signed in a single day without being reviewed and without any witnesses present, as required by notarization rules. Often signatures were forged. (Read the deposition to get an inside look at how a foreclosure mill operates.) One paralegal claims she was fired after refusing to falsify documents. Asked about the investigations into foreclosure fraud, the paralegal, Tammie Lou Kapusta, told ABCNews.com: “This is just the beginning really. . . . It’s the tip of an extreme iceberg.” Stern’s firm filed a staggering 70,382 foreclosure cases in 2009 and reportedly billed nearly $100 million. As explained by the deposed employee, Kelly Scott, the firm was always under heavy pressure from lenders — including Fannie Mae and Freddie Mac — to speed up the processing of documents. The case against Stern is still under investigation and no charges have been filed against him. Stern’s lawyer says that the campaign to vilify him is unfair and advances the interests of “a well-organized defense bar who is making a lot of money keeping people in their homes.” Others say that it’s the banks that are to blame for the existence of foreclosure mills in the first place, which is a good point. One thing that is clear, though, is that Stern has done very well for himself thanks to the misery of others. He reportedly owns a $20 million yacht, a $15 million mansion, and several other expensive properties. Along with the bankers who have made record profits due to the Fed’s zero interest lending, Stern is an example of those who have prospered as a result of the financial crash. Greed, it turns out, thrives in both good times and bad. David Stern may, in fact, not be a bad guy. But it can be pretty tempting to forget about ethics when there’s the potential to make tens of millions of dollars by systematically cutting corners. Especially when the chances of punishment are pretty slim. Beyond the investigation by the state attorney general, Stern may eventually face judgment before his peers in the Florida State Bar Association. But don’t expect much there, even if it turns out that Stern has been unethical. State bars have a spotty track record at best of disciplining their own wayward members.

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HealthEd Expands Executive Team, Focusing on Future Growth

October 28, 2010

CLARK, NJ–(Marketwire – October 28, 2010) –   HealthEd , a specialized agency focused on turning health education into positive outcomes, today announced several key senior-level appointments — Mike Brzozowski as chief strategy officer, Sonja “Sunny” Foster-Storch as executive vice president, managing director for HealthEd, and Paul Steiner as executive vice president, managing director for Encore, a HealthEd company. With these additions to the executive leadership team, HealthEd Group signals its focus on expanding its strategic and consultative services to meet changing client needs.

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Ataccama Corp. Names New Marketing Chief to Expand Executive Team

October 28, 2010

Master Data Management Software Developer Adds Experienced Professional

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RALLY Marketing Group Adds New Talent to Support Growth in Integrated Marketing Services

October 28, 2010

SEATTLE, WA–(Marketwire – October 28, 2010) –  RALLY Marketing Group is pleased to announce the addition of Duane Walker as Director of Client Services, and Erica Zelaya as Integrated Marketing Director.

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Rubicon Professional Services Energizes the Construction Management Marketplace With Appointment of Three Key Team Members

October 28, 2010

Trio Brings More Than Six Decades of Experience to Leading Construction Management, Energy Services, Consulting, and Engineering Firm

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Unicast Names James Dillon General Manager and Senior Vice President

October 28, 2010

Esteemed Industry Expert and Company Veteran to Oversee Worldwide Operations and Drive Global Market Strategy

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Queensland Mining Corporation Limited (ASX:QMN) White Range Project Global Resource Increases

October 28, 2010

Queensland Mining Corporation Limited (ASX:QMN) White Range Project Global Resource Increases

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W. P. Carey Announces Election of Wharton School International Financial Expert Dr. Richard Marston to Independent Investment Committee

October 28, 2010

NEW YORK, NY–(Marketwire – October 28, 2010) – Investment firm W. P. Carey & Co. LLC ( NYSE : WPC ) has announced that Richard C. Marston has been elected to the Investment Committee of Carey Asset Management Corp., the Company’s affiliate responsible for managing the firm’s Corporate Property Associates (CPA ® ) series of non-traded real estate investment trusts. 

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Benitec Limited (ASX:BLT) Cash Flow Update For The Quarter Ended 30 September 2010

October 28, 2010

Benitec Limited (ASX:BLT) Cash Flow Update For The Quarter Ended 30 September 2010

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China West International Holdings Limited (ASX:CWH) Became A Substantial Shareholder In Uranium Exploration Australia Limited (ASX:UXA)

October 28, 2010

China West International Holdings Limited (ASX:CWH) Became A Substantial Shareholder In Uranium Exploration Australia Limited (ASX:UXA)

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Australian Market Report of October 29, 2010: Red Hill Iron (ASX:RHI) Resource Estimates Increase To 472 Million Tonnes

October 28, 2010

Australian Market Report of October 29, 2010: Red Hill Iron (ASX:RHI) Resource Estimates Increase To 472 Million Tonnes

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China West International Holdings Limited (ASX:CWH) Applies Resonance Frequency Geo Technology To Accelerate Mining Activities

October 28, 2010

China West International Holdings Limited (ASX:CWH) Applies Resonance Frequency Geo Technology To Accelerate Mining Activities

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Pike River Coal Limited (NZE:PRC) Been Named New Zealand Best On-line Communicator Of Top 50 Listed Companies

October 28, 2010

Pike River Coal Limited (NZE:PRC) Been Named New Zealand Best On-line Communicator Of Top 50 Listed Companies

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Australian Power & Gas (ASX:APK) Ranked No 1 In 2010 Business Review Weekly Fast 100 Awards

October 28, 2010

Australian Power & Gas (ASX:APK) Ranked No 1 In 2010 Business Review Weekly Fast 100 Awards

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Australian Power & Gas (ASX:APK) Ranked No 1 In 2010 Business Review Weekly Fast 100 Awards

October 28, 2010

Australian Power & Gas (ASX:APK) Ranked No 1 In 2010 Business Review Weekly Fast 100 Awards

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Bandanna Energy Limited (ASX:BND) Announces Marketable Reserves Of 49.2 Million Tonnes At Springsure Creek Project

October 28, 2010

Bandanna Energy Limited (ASX:BND) Announces Marketable Reserves Of 49.2 Million Tonnes At Springsure Creek Project

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Bandanna Energy Limited (ASX:BND) Announces Marketable Reserves Of 49.2 Million Tonnes At Springsure Creek Project

October 28, 2010

Bandanna Energy Limited (ASX:BND) Announces Marketable Reserves Of 49.2 Million Tonnes At Springsure Creek Project

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Yet another U.S session ends with severe volatility

October 28, 2010

Yet another U.S session ends with severe volatility

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Seems like Everyone is in the Monetary Easing Game

October 28, 2010

Seems like Everyone is in the Monetary Easing Game

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U.S. Dollar Slips by Prospect of Higher Bond Yields

October 28, 2010

U.S. Dollar Slips by Prospect of Higher Bond Yields

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British Pound Benefitting from Rising Yield Expectations and Dollar Weakness

October 28, 2010

British Pound Benefitting from Rising Yield Expectations and Dollar Weakness

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Trading Styles

October 28, 2010

Trading Styles

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Dollar Hammered Before Friday GDP, A Breakout Tomorrow?

October 28, 2010

Dollar Hammered Before Friday GDP, A Breakout Tomorrow?

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Evaluating My EURUSD and GBPUSD Trades Pre-GDP

October 28, 2010

Evaluating My EURUSD and GBPUSD Trades Pre-GDP

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Starwood suffers $6m loss in Q3

October 28, 2010

Starwood suffers $6m loss in Q3

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Deloitte ranked No.1 consulting provider globally by revenue

October 28, 2010

Deloitte ranked No.1 consulting provider globally by revenue

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Nissan to recall 2.1m cars worldwide

October 28, 2010

Nissan to recall 2.1m cars worldwide

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Norwegian Innotech Solar breaks ground at new German site

October 28, 2010

Norwegian Innotech Solar breaks ground at new German site

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Motorola posts $109m net income in Q3

October 28, 2010

Motorola posts $109m net income in Q3

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