January 2011

EUR/SEK Looking to Carve Inverse Head & Shoulders Base

January 26, 2011

EUR/SEK Looking to Carve Inverse Head & Shoulders Base

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FOREX: British Pound May Rebound on Bank of England Minutes

January 26, 2011

FOREX: British Pound May Rebound on Bank of England Minutes

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Recall of 1.7 million Toyota vehicles worldwide

January 26, 2011

Recall of 1.7 million Toyota vehicles worldwide

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Crude Oil Falls on Broad-Based Selling, Gold Inches Lower

January 26, 2011

Crude Oil Falls on Broad-Based Selling, Gold Inches Lower

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FOREX CENTRAL BANK WATCH: BOE Interest Rate Expectations Fall with GDP

January 26, 2011

FOREX CENTRAL BANK WATCH: BOE Interest Rate Expectations Fall with GDP

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Blackstone Sells Former Hilton HQ to Tishman

January 26, 2011

The Blackstone Group sold the former Hilton Hotels Corp. headquarters at 9336-9346 Civic Center Drive in Beverly Hills, CA, to Tishman Speyer. The assets include two four-story buildings totaling 184,305 square feet of commercial office space on 2.6 acres in Los Angeles County. Blackstone acquired Hilton Hotels for $26 billion in 2007. The corporate property in Beverly Hills has been vacant since 2009, when the hotel chain, now known as Hilton…

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Sandler O’Neill Inks Long-Term Deal for 74,000 SF

January 26, 2011

Sandler O’Neill & Partners, L.P. signed a 74,164-square-foot lease at 1251 Avenue of the Americas in New York. Occupancy is scheduled for 2012. The 54-story, 2.29 million-square-foot office building was built in 1970 and is located in the Times Square submarket. Other tenants of 1251 Sixth Ave. include Mizuho and The Bank of Tokyo-Mitsubishi, as well as Natixis, which also recently leased a large block of space in the building. John Cefaly…

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Robert L. Borosage: A Strong State of the Union Address for a Union in a Different State

January 26, 2011

No surprise that President Obama knows how to deliver a speech. His State of the Union speech will add to his reviving poll numbers. He set up what should be a centerpiece of Washington’s debate over the next months: invest and grow vs. the Republican “cut and grow,” or in the Republican Study Group version, “gut and grow.” This is an argument that will mobilize progressives and that the president can win if he wages it. Americans are more concerned about jobs and growth than they are about deficits and cutting spending. And the president did a good job of describing how investments in research and development, infrastructure and education are vital to our growth. But what was striking was not how new, but how dated and conventional the speech seemed. This was a speech that sounded as if it were anchored in 1992 or before. But the world has changed, and the illusions of conventional wisdom have been shattered since then. Obama movingly described the plight of working Americans who found their jobs, indeed their dreams, shipped out from under them. But Americans aren’t losing jobs and income and security, as the president then suggested, because of “revolutions in technology” and China and India “educating their children” and “investing in new research.” As Germany’s success as a high wage export nation proves, Americans have lost wages, benefits and job security, and are scarred by Gilded Age inequality because of failed public policies: a Wall Street trade policy explicitly designed to facilitate the export of jobs rather than products; a corporate war on labor plus executive pay policies that keep workers from capturing a fair share of productivity gains; and inadequate investment in areas vital to our growth, and of course, successive top end tax cuts. The flawed diagnosis leads to an inadequate prescription. Investment in education, R&D and infrastructure is essential, as the president said. A move to new energy and capturing a lead in the green industrial revolution are vital. But the Chinese are using their mercantilist toolkit to make themselves the global manufacturer of solar panels and windmills. Without a serious industrial policy and a reformed trade policy that challenges Chinese mercantilism, US technology and companies will build green jobs abroad. The president, eager to brandish his fiscal probity, chose not to make an explicit argument for putting off budget cuts until the economy comes back. Instead he agreed the time had come for getting our books in order. He noted that we couldn’t afford to make the top end tax cuts permanent — a populist gesture that was popularly received according to reports from dial testing of independents. But his emphasis was on spending cuts — extending his three year freeze on federal DOMESTIC discretionary spending to five years, to the lowest levels as a percentage of GDP since Eisenhower. (thereby virtually insuring that his investment agenda will suffer the fate of his recovery plan — too small and cribbed to do the job). The source of current deficits — two unfunded wars, massive defense spending and “homeland security spending” increases, successive tax cuts, skewed to the wealthy and recession — were not mentioned. Obama wisely argued that the main source of future deficits comes from soaring health care costs — as opposed to entitlements, making the case for continuing with his health care reforms. But instead of going after next step common sense reform that would actually save big time money — lifting the ridiculous ban on Medicare from negotiating bulk savings on prescription drugs for example, he turned, in a gesture to Republicans, to ending “frivolous lawsuits,” a political posture that doesn’t do anything on the cost of health care. The president chose to put Social Security on the table, arguing for the need to “strengthen Social Security” in the context of deficit reduction -”to put ourselves on solid ground ” — where it simply doesn’t belong. It hasn’t added to the deficit, and reforms won’t help reduce the deficit in the short term. The AARP, which had been silent in the run up to the speech, was sufficiently alarmed to put out a statement decrying the error. Washington still seems oblivious to the straits we are in. Republicans are clueless, arguing for the same policies that drove us into the worst downturn since the Great Depression. They assume the economy is growing so they can slash and burn government spending while pursing top end tax cuts (and blame Obama for excessive spending and regulation if jobs don’t revive). Obama assumes the economy is growing so he doesn’t need to push an immediate jobs program, or a new global strategy or take on the unsustainable concentration of wealth or the big banks. The president set up a debate on investment which progressives will be happy to join. But the limits of this debate are too narrow, the reforms too limited. This isn’t 1995 when Bill Clinton could count on a rising economy and a dot com bubble to fuel his revival. What is reviving in America is the old economy that was unsustainable — Gilded Age inequality, debilitating trade deficits, concentrated and highly leveraged banks, and a declining middle class. Progressives will have to challenge the confines of this debate and offer a far bolder strategy to revive the American dream that politicians of both parties invoke.

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Joseph J. Thorndike: Will Business Kill Tax Reform?

January 26, 2011

Corporations like to complain about their taxes. In testimony, statements, and speeches, executives rehearse the same old litany of woe. Rates are too high! We pay too much! We can’t compete with foreign companies! There’s a kernel of truth in these complaints. U.S. corporate tax rates are among the highest in the world. And some U.S. companies are paying a lot of taxes. Corporate tax reform, as President Obama declared in his State of the Union speech, is certainly long overdue. But what sort of reform? Some corporations are paying too much, but others aren’t paying enough. We talk about the “business community” like it really exists, but when it comes to tax reform, it’s riven by fault lines. Business support for tax reform depends on papering over these divisions in the hopes of procuring a pain-free package of goodies from Congress. Level playing field? My colleague at Tax Analysts, Marty Sullivan, has underscored the disparities plaguing the corporate income tax. “The essence of an efficient and competitive tax system is a level playing field,” he told the House Ways and Means Committee last week. “Government should not attempt to outguess the market and pick winners and losers. Unfortunately, there is a wide disparity in the tax treatment of businesses under current law.” Wide disparities, indeed. In recent years, General Electric paid taxes at an effective rate of just 3.6 percent, while Home Depot paid 35.4 percent. Merck paid 12.5 percent, while Disney paid 36.5 percent. Pfizer paid 17.1 percent while CVS paid 38.8 percent. Why do some companies pay so little while others pay so much? Low rates are common, according to Sullivan, in industries where operations and technology can be readily moved offshore to low-tax jurisdictions. By contrast, companies that find their markets here in the United States aren’t so lucky. It’s hard to ship your customers overseas along with your factories. Tax disparities within the business sector mean that policy reforms helping one company will end up hurting another. And that makes genuine reform a long shot, since business support for reform is likely to evaporate once talk moves from the general to the specific. Hands off my loophole! Multinational companies are doing pretty well under the current tax system, thank you very much. And while they’re happy to see statutory rates fall, they aren’t so wild about additional reforms that might be used to pay for lower rates. Closing loopholes always seems like a good idea until it’s your loophole that’s getting closed. Among multinational corporations with low effective rates (thanks to provisions allowing them to shift profits to overseas subsidiaries), any effort to shore up the tax base is likely to run headlong into a buzz saw of opposition. In his speech, Obama attributed tax law disparities to the “parade of lobbyists” who have advanced the interests of their clients even as they undermined the tax system as a whole. And he’s certainly right. But many of the benefits showered on multinational corporations have been deliberate, designed to encourage the competitiveness of U.S. corporations and protect U.S. jobs. That’s not crazy, but it’s not right, either. As Marty Sullivan told Congress: Yes, U.S. multinationals create jobs. But so do purely domestic corporations. So do small businesses. And so also do foreign-headquartered companies that invest in the United States. Multinational companies have their own needs and desires, often quite distinct from those of real, live American workers. The tax system doesn’t need to penalize multinationals, but it shouldn’t favor them either. Tax favors aren’t just unfair, they’re also unwise. As the Center on Budget and Policy Priorities has observed, tax disparities distort decision-making , encouraging companies to make investments based on tax consequences, not business fundamentals. Leveling the playing field among corporate taxpayers would help eliminate such distortions, boosting efficiency across the economy. Goodies for everyone But if you’re hoping for that sort of tax reform, get ready for disappointment. Tax reform is currently all the rage, as evidenced by Obama’s endorsement. But the popularity of the idea – especially within the “business community” — is premised on the unspoken condition that reform means rate cuts without loophole closing. That sort of “reform” neatly avoids creating winners and losers by simply making everyone a winner. At least over the short term. Over the long-term, however, that sort of reform would be a disaster. It costs about $8 billion for each percentage-point reduction in the corporate tax rate, according to a report from Bloomberg. Unless offset by base broadening, that sort of giveaway is simply unaffordable in our current fiscal climate. Indeed, corporate tax reform should really be used to raise money, not lose it. Sadly, though, revenue-losing tax reform is still a distinct possibility, despite its patent absurdity. As New York University law professor Daniel Shaviro has observed , “You don’t need to rely on broader intellectual consensus if you are simply handing out goodies, rather than mixing them with sour medicine.” Business leaders, like Proctor & Gamble CEO Robert McDonald, have been urging precisely that sort of pain-free tax reform. Obama has made clear that corporate tax reform shouldn’t lose money. And maybe he’ll stick to his guns, demanding a broader tax base in exchange for lower rates. But as last December’s tax deal made clear, there’s plenty of congressional interest in further tax reduction, especially among Republicans. Let’s hope Obama will stand up to them. And stand up for real reform.

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Michael Likosky: Obama’s Economic Philosophy

January 26, 2011

President Obama reaffirmed his economic philosophy in the State of the Union address — a government that works, invests, delivers opportunity, and that we can believe in. It is a lean government, not a big government. It is not a problem, but a problem-solver. The approach that Obama laid out for infrastructure and clean energy investment is emblematic. I describe it in my book: Obama’s Bank: Financing a Durable New Deal . Rather than looking to 2012, the State of the Union Address returned to 2008, on the campaign trail in Janesville. In front of an audience of workers at the GM Plant, Obama first set out his economic philosophy. The GM plant would not survive to see his inauguration; however, the approach that Obama set forth in Janesville was the template for the State of the Union address. What Obama said in Janesville in 2008 is far more inspiring and durable than Paul Ryan’s rebut tonight. Importantly, the Janesville speech — and the State of the Union — start off by reminding us that our crisis has been decades in the making. In other words, our crisis did not emerge in the subprime mortgage market, and it will note be solved there. Instead, we have divested from our real economy for decades. In the meantime, our new competitors — China, etc — have invested in state-of-the art infrastructure. As a result, we risk loosing our competitive edge. In other words, we do not have the state-of-the-art infrastructure that makes companies like GE see the US as an attractive place to do business. Enlisting Jeffrey Immelt in our recovery effort is valuable for exactly this reason — he knows what it takes to insource jobs, repatriate the operations of American firms, draw money out of the TARP banks and into our real economy. And, just as in Janesville, Obama explained how we can co-invest with the private sector to return the country to its prestige place. The State of the Union spoke of the types of co-investments that happened during the Cold War that produced the Internet. Forget about the controversial shovel ready projects, few would deny that Obama’s examples tonight of entrepreneurs who benefited from a little federal help — not a lot — have excelled in the midst of the crisis. Certainly, this is the story of GE in Schenectady. When it came to infrastructure investment, Obama too returned to Janesville. We have a long term deficit in the infrastructure field. Our bridges crumble. The American Society of Engineers awarding us a D. Obama once again explained how we have to bring private investment into US infrastructure to solve this problem. Government lends a hand, but only as honey to attract private sector money. And, it’s all about the importance of opportunity — from the nod to Biden and Boehner and their uniquely American stories to the need to invest in infrastructure not only to make our powerhouse metropolitan regions even more competitive. But instead, to make sure that the off-ramps of the high speed rail and our highways that we build today become the on-ramps of vibrant cities and towns tomorrow. This was the benefit of the Transcontinental Railroad, the Eisenhower national road system, and the Internet. This is the essence of not only the Progressive Movement, but also America Dream

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Hilton’s Former Beverly Hills HQ Trades to Tishman

January 26, 2011

Hilton Hotels, the hotel corporation acquired nearly three years ago by Blackstone for $26 billion, sold its former headquarters at 9336-9346 Civic Center Drive in Beverly Hills, CA, to Tishman Speyer. The complex includes two four-story buildings totaling 184,305 square feet of commercial office space on 2.6 acres in Los Angeles County. Hilton relocated its headquarters to Park Place II in McLean, VA. Tishman made the purchase because…

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Dan Solin: Rich and Poor Serve Their Wall Street Masters

January 26, 2011

I am often accused of being too hard on brokers (usually by brokers!). They say I cherry pick bad portfolios and there are many “hard working, honest brokers” who do the right thing for their clients. That has some surface appeal and I used to believe it. I no longer do. I have reviewed thousands of portfolios sent to me by readers of my books and blogs. I have yet to see a globally diversified portfolio in an appropriate asset allocation, invested solely in low cost, high quality, stock and bond index funds, exchange traded funds or passively managed funds. Not one! I also regularly review findings (misnamed “awards”) issued by the Financial Industry Regulatory Authority (FINRA) which has exclusive jurisdiction over disputes between investors and their brokers. In last week’s blog , I wrote about the experience of Joanne Bohnke, a 74-year-old widow of modest means, who was harmed by the misconduct of her broker. She got partial recompense, which is rare for investors, since these panels tend to either side totally with the securities industry or award only a fraction of the damages suffered by the investor. Wealthy investors fare even worse, both with their brokers and with FINRA arbitration panels. Lawyers for the broker brand the wealthy as “sophisticated investors”, implying that their financial success in their business life made them fair game for the machinations of their broker. The panels usually buy this defense and rarely make any meaningful awards in these cases. For this reason, my curiosity was piqued by an award (Case Number: 08-04276) in an arbitration brought by James D. Murphy, a 61-year-old Florida retiree, against Salomon Smith Barney. The panel awarded Mr. Murphy $1,042,986.22, plus interest. This is a big number for a FINRA award. According to Robert Savage, Tampa based counsel for Mr. Murphy, his client had net losses in his portfolio of almost $2.3 million, representing a significant portion of his initial investment of $4 million. Mr. Murphy had been a conservative investor, with a portfolio consisting almost exclusively of municipal bonds, which he held to maturity. His broker persuaded him to use these bonds as collateral, and buy stocks on margin with the proceeds. According to the Statement of Claim, the activity in Mr. Murphy’s account was stunning. He started with an average equity in his account of $3.6 million in 2003 and ended with an average equity of $1.3 million in 2008. During this time period, his broker turned over his account thirty times, racked up a whopping $807,301 in margin interest and (according to Mr. Savage) $500,000 in commissions. When I talk about the transfer of wealth from you to your broker, this is precisely what I have in mind. On an account with an average equity of $3.6 million, the brokerage firm gained $1.3 million (in commissions and margin interest) for “managing” this portfolio. Mr. Murphy’s average equity decreased from $3.6 million to $1.3 million during this period. Viewed in context, the award of the FINRA tribunal fits into a familiar pattern. The panel simply required the brokerage firm to return most of the gains it made from its wrongful conduct. It should have awarded what are known as “well managed account damages”, which is the difference in the account as managed and what it would have been if the account had been invested in a globally diversified portfolio of low cost stock and bond index funds, in an appropriate asset allocation for Mr. Murphy (or it could have used other appropriate benchmark investments). There are no circumstances which would justify the excessive trading and margin interest in this account. It would be unsuitable for any investor, except a day trader. I ran some numbers which are interesting. I assumed the right asset allocation for Mr. Murphy was 60% stocks and 40% bonds, which gives the broker the benefit of the doubt since it is probably too aggressive for someone Mr. Murphy’s age. I used an initial investment of $3.6 million in 2003 and computed the value of the portfolio on December 31, 2008, using a passively managed portfolio of stock and bond funds. The ending value was $5,051,660! The panel should have done a similar calculation and made an award that would have compensated Mr. Murphy for his real losses. In addition, since there is no justification for this amount of margin (or any margin) or for the excessive trading in this account, the panel should have assessed punitive damages, attorneys’ fees and all costs against Salomon Smith Barney. Instead, it denied Murphy’s request for attorneys’ fees and for punitive damages. In a final blow, the panel assessed Mr. Murphy $15,300 in hearing fees. It assessed the same amount against Salomon Smith Barney. Mr. Savage stated there was no settlement offer in this case. I am not surprised. There is no incentive to settle when you are confident you will either prevail at the hearing or, at worst, have to give up just a portion of your ill-gotten gains. Whether you are rich or poor, you need to understand the present system is set up to transfer your money from your pocket to the coffers of your brokerage firm. They have closed the loop with the cozy FINRA mandatory arbitration scheme. No matter how bad the conduct of your broker, if you recover at all, it will likely be for a small portion of your losses, which will be further reduced by attorneys’ fees. A corporate representative for the brokerage firm would not respond to questions concerning the case. His comment was limited to noting “respectful disagreement” with the award. He should have been thrilled with it. The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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Don Tapscott: Davos 2011: Davos Becoming a Year-Round Network to Tackle Global Problems

January 26, 2011

Davos, Switzerland — The World Economic Forum is quickly morphing from a once-a-year talkathon into a year-round network of leaders and leading thinkers tackling global problems. Nature hates a vacuum, and the Forum is expanding to fill a void in our systems for global cooperation. It gets people acting constructively, in sharp contrast to the recent failures of other bodies such as the Doha Development Round of the World Trade Organization and the Cancun or Copenhagen Conferences on climate change. It also fills a special role in bringing together the leaders of the Asian “Tiger Countries” into dialogue with the West — something no one else is doing well. We need such networks for dialogue and for launching important initiatives. True, no one “elected” the Forum to try and solve global problems. But increasingly legitimacy flows to those who actually accomplish things and most participants would say that the Forum is doing just that. For example, over the last two years a thousand leading thinkers have been collaborating in 72 so-called Global Agenda Councils, rethinking many aspects of society from poverty to the future of government. One group of legal scholars has a modest little project — rethinking the global legal system, which they argue is “no longer fit for function.” These councils meet several times a year and collaborate between meetings on a global technology platform developed by the Forum. Many of the recommendations from these councils have been implemented by governments and corporations and some important initiatives have been catalyzed. One of these, the Global Risk Response Network to be launched here this week, addresses a new set of emerging risks that threaten the global economy, society and even the very existence of humanity. Failure of the financial system, weapons of mass destruction, new communicable diseases, collapse of environmental systems, water security and 20 other possibilities make the world a volatile place subject to significant and potentially catastrophic risks. Consider something as seemingly mundane as the global supply chain. The vast networks that provide the world with food, clothing, fuel and other necessities could handle an Iceland volcano and one other catastrophe such as the failure of the Panama Canal. But according to experts, a third simultaneous disaster would collapse the system. People around the world would stop getting food and water, leading to unthinkable social unrest. The Risk Network is designed to help corporate, government and civil society leaders better mitigate such risks. The world’s most relevant global decision-makers will be brought together through a community of Risk Officers from top corporations, governments and international organizations. It will draw on insights from the World Economic Forum’s communities and contributors, including expert Forum working groups and a network of the world’s top universities. If a global crisis arises, these leaders could spring to action on a secure network, drawing on insights from any of the Forum’s many communities. More important, rather than just reacting to unanticipated problems like the European sovereign debt crisis, leaders could be more proactive. This approach was informally prototyped during the Haitian earthquake disaster. It wasn’t the United Nations that organized the world’s response to Haiti – it was myriad organizations and individuals that self-organized to save lives and restore order and Haitian society. The informal network of collaborators orchestrated by the Forum was one of these, pointing to the potential of a more disciplined approach. Rather than a typical think tank, the World Economic Forum is becoming a do tank. Don Tapscott recently co-authored Macrowikinomics: Rebooting Business and the World.

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Guggenheim Unveils Four HighYield ETFs

January 26, 2011

Guggenheim Funds Distributors has launched four Guggenheim BulletShares High Yield Corporate Bond ETFs

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NIS Holdings Corp. Announces Changes to Board of Directors

January 25, 2011

Three New Highly Accomplished Business Leaders Are Added to the Board as One Resigns

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Sun Healthcare Group, Inc. Announces New President of SunBridge Healthcare, LLC

January 25, 2011

IRVINE, CA–(Marketwire – January 25, 2011) – Sun Healthcare Group, Inc. ( NASDAQ : SUNH ) announced the recent promotion of Logan Sexton to president of SunBridge Healthcare, LLC, Sun’s inpatient subsidiary.

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Edward Muzio: Over 30? Quit Whining About The Next Generation At Work

January 25, 2011

I’m going to say something to my fellow professionals over 30. You probably don’t want to hear it, but you should: Quit whining about how the next generation is ruining the workplace. My grandparents’ parents were looked upon by their elders as being headed for big trouble because of their newfangled, non-traditional ways of living. Something about immigrating to America, I think. It was bound to end in disaster. My parents were chastised by their parents — the children of those same wacky, devil-may-care immigrants — for listening to overly suggestive, inappropriate music, destined to be the downfall of modern society. I’m talking about stuff like — brace yourself — “I want a dream lover so I don’t have to dream alone” (Bobby Darin, 1959) or “You are my candy girl and you’ve got me wanting you” (The Archies, 1969). Scandalous! The old people were up in arms. Need I bore you with more examples? I’m sure you have your own. Every generation gripes about the next one. If you’re over 30 and complaining about young peoples’ short attention spans caused by Twitter, or their insensitivity to violence caused by video games, or the reduction in their thinking and problem solving skills caused by Google, stop it. It’s not novel, not interesting, not productive, not effective. Just stop it. I’m not saying you should stop believing those things — that’s up to you, and whatever research you’re willing to find. To be honest, I’m inclined to agree with you on some of the facts. It’s undisputed, for example, that people who have worked for less time often lack the wisdom that experience brings. That’s not exactly news. If you meet a younger person in the workplace who has poor communication skills, or lacks a complete understanding of your business, and you want to be a mentor, great! Of course, if you meet someone your own age in the workplace with poor communication skills, or an incomplete understanding of the business, you might also want to mentor that person. Come to think of it, you probably shouldn’t make decisions regarding who to mentor based on age. You certainly wouldn’t feel comfortable making such decisions based upon gender or race. Helping is good. Creating action plans is good. Doing research and publishing results along with suggested improvement actions is great. Complaining, on the other hand, is useless. It creates unnecessary worry, fear and division. It reinforces the notion that this generation is different from that one, when in reality there many similarities that offset the differences. If you don’t believe me, just find a few sets of parents in their 20s, a few in their 30s and a few in their 40s and ask them what they want for their children. I’ll bet the answers are pretty similar. Besides being divisive, complaining also damages your credibility. I can’t be the first person who has noticed this, but many of you are complaining about social media on social media. It would be one thing if you weren’t participating in the evils you condemn. I suppose you’d still be the next generation of old-fogeys, griping about those young whippersnappers, but at least you’d have integrity. You’d be on the porch in a rocking chair, bemoaning the loss of your old Model T and shaking your fist at youngsters speeding by in their new, fast, scary cars. But that’s not the case. A surprising number of you are on blogs, Facebook and Twitter, mourning the demise of youth caused by blogs, Facebook and Twitter. I personally know more than one person who will bemoan the younger generation’s loss of interpersonal skills because of text messaging, then stop mid-sentence to flip open a phone and read an inbound text message. That’s just crazy. And, it makes you look like a hypocrite. You and I have both already figured out that the new tools themselves are not bad. (I can tell you’ve concluded that, because you’re using them.) Much of our concern, then, stems from our discomfort with the change itself. We’re somewhat distracted by all the texts, blogs and social media, so we assume younger people will be, too. I hate to be this particular messenger, but the problem might not be with the new stuff. The problem might be that our brains got all baked up before the new stuff came along. We didn’t have the chance to build the kinds of neural pathways necessary to use all of it. That’s why your kid is better with a computer than you are: he or she grew up with it. You and I didn’t. Actually, I did grow up with just a little of it. My generation was predicted to have serious violence issues because of our modern video games. Games like “Pac Man” and “Donkey Kong,” played on controllers that had a single joystick and maybe two buttons at most, doomed us. And yet, rarely do you see a delinquent 30-something prowling the streets hurling wooden barrels at innocent bystanders. We turned out so well, in fact, that we’re the ones now worrying about serious violence issues in children because of the current generation of video games — games, by the way, which are played on controllers so complex that many of us can’t even use them properly. Of course, I’m not saying don’t worry. I’m saying don’t complain! Instead, take action within your sphere of influence. You could mentor a few kids in your neighborhood, or start a new hire development program at your office. Or, if you manage young people, you could be extra careful to be specific and clear about job expectations and the results of performance and non-performance. Be a really great manager, and you’ll be a really great role model. But whether you’re mentoring or role modeling, I suggest you avoid broad statements about generational differences and details about how your young audience is doomed. Instead, tell them they’re joining the workforce at the most exciting time in history, when technology is going to help us make personal and informational connections beyond our wildest dreams. Tell them the basics are still important — businesses need revenue, for example, and people need to know how to communicate with each other. But also show them you understand that they’re going to have to do some things differently than you did, because the challenges they face will be different than yours were. Show them what they need, and then ask for their thoughts on how they might apply what you’ve demonstrated. In short, treat them with respect. That’s one interpersonal behavior that never goes out of style. If you do that, I’ll bet the respect will flow both ways. Who knows, your blog might get more hits than ever before. I promise I’ll read it — at least until my next text message comes in.

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Financial Meltdown Was ‘Avoidable,’ Crisis Panel Finds

January 25, 2011

WASHINGTON — The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a Congressional inquiry.

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Artisanal Ice Cream Makers To Sit With First Lady At State Of The Union

January 25, 2011

Joining a host of guests invited to sit with the first lady for tonight’s State of the Union address are Kendra Baker and Zachary Davis, who opened Penny Ice Creamery , an artisanal ice cream shop in Santa Cruz, CA, with the help of a $250,000 Recovery Act SBA loan. Baker and Davis posted an open thank-you in the form of a a YouTube video back in October that got the attention of the White House, and in November, Vice President Biden personally called them to thank them for the video and wish them luck with their shop. From the White House’s release on the first lady’s State of the Union guests: Business partners Kendra Baker and Zachary Davis had a dream of opening an organic, homemade ice cream shop in Santa Cruz, California, but had trouble finding a lender that would help finance their dream. With the help of a Recovery Act SBA loan of $250,000, Kendra and Zack were able open the doors to The Penny Ice Creamery in August 2010. The SBA Recovery Act funding allowed them to not only open the shop, but also to employ eleven people, purchase American-made equipment, and to hire nearly twenty local businesses to design and renovate the space. Kendra and Zack were so thankful for the financing help, that they posted a video on YouTube thanking the Administration and Members of Congress for their Recovery Act SBA loan. As a result of the video, the Vice President called them in November 2010 to thank them for the video and wish them good luck. Unlike most ice cream shops, Penny Ice doesn’t buy pre-made bases, which means they have to pasteurize their homemade base in-house. In a recent interview with Civil Eats , Baker explained the detailed process: In order to make your ice cream from scratch, you have to pasteurize your base, so that’s kind of the step that most people don’t do. They buy a pre-made base from a large distributor and they are adding flavor to it. When we were developing this business plan we wanted to have complete control over our recipes and what went into our product. Any time you create an ice cream base it has to be pasteurized, that’s the California Department of Food & Agriculture law. So we had to create a creamer, which is essentially the micro version of what you would find at a large milk production facility. We had to purchase a pasteurizer that fits our production cycle, which is seven to 15 gallons, because we make everything in really small batches. The process for that is you have to bring up the base to a minimum of 155 degrees with an airspace temperature of five degrees above that. We have to hold it for 30 minutes after which you draw your product and pull it down to below 40 degrees. Our production cycle is actually a two day process. There is a cooling and an aging period, because ice cream is actually enhanced when it is allowed to sit for about 24 hours. The next day you spin it and then it goes through a hardening period where it needs to go into a deep freezer. After that we can start to temper it, which is a softening of the ice cream, before we actually serve it. So it’s a lengthy process. They also discussed the work involved in starting up, and their November call from the White house: ZD: …I’m a firm believer in the American dream and I want everyone to believe that anything is possible. It’s not to say it’s not a lot of work. We put in over two years now, putting this together, just the loan part itself was over six months of extremely frequent back and forth to the bank giving them all the information they needed, proving ourselves. It’s not like we just said, “Oh, we’re going to go get an SBA loan” and walked into the bank and they gave us the money. There’s work, it’s all real work. KB: We had no idea what type of response we would get and we never anticipated that we would actually get a call from the White House…that was pretty incredible. Penny Ice Creamery’s YouTube thank-you video :

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Ian Fletcher: Why Free Trade Can’t Abolish International Economic Rivalry

January 25, 2011

A recent article criticizing my work contained this multifaceted gem of fallacies: Even a dumb lawyer like me can see that modern global supply chains have made “a world of ruthless economic rivalry” a thing of the distant past, and that trade (i.e., voluntary, mutually beneficial exchanges) has never, ever been a zero sum game. Let’s take this apart, step-by-step. 1. The idea that modern global supply chains have abolished international economic rivalry is trivially false. Even if aircraft, say, are now made out of components manufactured all over the world and brought together for assembly, this doesn’t change the fact that the steps of the supply chain with high value-added per man-hour will take place in some nations and not others. And high value-added per man-hour is the only possible basis of sustainable high wages. That’s why Alabama paid $153 million in incentives to land a Mercedes-Benz plant, and governments all over the world are in a similar race. 2. The statement that “trade (i.e., voluntary, mutually beneficial exchanges) has never, ever been a zero sum game” is, by virtue of its id est parenthesis, strictly speaking a mere tautology. I assume that what the author meant to say was that “trade consists of voluntary, mutually beneficial exchanges and has therefore never, ever been a zero sum game.” (He is welcome to correct me if I misunderstand him here.) There are three problems with this idea: a) Trade doesn’t have to be a zero-sum game to be a rivalry. Football isn’t a zero-sum game, because even if you lose, you still have the fun of playing the game. But that doesn’t mean there aren’t winners and losers. b) By the “mutually beneficial” standard, it is advantageous for a starving man to sell his shoes! True enough, narrowly speaking, but it avoids the much more important question of how he got to be starving and without any other assets in the first place. Selling his shoes is a response to a particular bargaining position that he finds himself in; it does nothing about how he got into this position or how to avoid ending up thus. Analogously, America borrowing money from abroad to buy flat-screen TVs (as we do) is indeed better for us than going without the TVs. But what would be even better for us is if we had the capacity to produce them for ourselves, as then we would not only enjoy the TVs, but also the high-paying jobs associated with hosting a technologically advanced major industry. c) The calculation of what is “mutually beneficial” depends, in a market economy, on prices being right. And there are any number of reasons why they can be wrong in international trade. Let’s start with the obvious fact of China’s government artificially manipulating its currency to gain competitive advantage. If prices are wrong due to state intervention, then free-market responses to those prices will be wrong, too. As I’ve noted before, libertarianism only works in a perfect world.

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New York Is Officially The Best And Worst Place To Rent

January 25, 2011

Rent, or buy? Buy or rent?? We know you think this when you shave, when you jog, when you commute, when you everything. Luckily, Trulia.com just posted this handy Rent vs. Buy Index rating the nation’s median rent vs. the median housing costs, and it sure puts into perspective just how unique New York is (it’s the biggest and reddest!). From Trulia : Trulia’s Rent vs. Buy Index tracks whether buying a home or renting is less expensive.com in America’s 50 largest U.S. cities by population. The price-to-rent ratio is calculated using the average list price compared with average rent on two bedroom apartments, condos and townhomes listed on Trulia.com. Where, say, Chicago’s average sale listing price was $200K-$300K, New York’s was $1.3-$1.4 million . The second most expensive city was San Francisco at $700K-$800K. After crunching the numbers, Trulia found that it was more affordable to buy than rent in %72 of the country, and in that small sliver that is more affordable to RENT than to buy, New York didn’t just quietly assimilate but completely dominate (see humungous red dot). So, if you are renting and want to feel vindicated for your choice to rent (not that it’s a choice in this city) that’s not really the point. Sadly, the high costs to purchase a place in New York create this silver lining, if you want to can call it that. If we weren’t so tired of him, we would mention something about Jimmy McMillan here.

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Alicia Morga: Where Are the Women Entrepreneurs?

January 25, 2011

Silicon Valley has been batting around the question, where are the women entrepreneurs? There are women entrepreneurs. In fact, women-owned businesses contribute close to $3 trillion to the U.S. GDP, according to the Small Business Association. But these ladies aren’t on the radar of Silicon Valley because they don’t have venture funding. It’s easy to see why many women don’t have venture funding. You only have to understand what it takes to obtain it. Most women owners of small-to-medium sized businesses don’t go after venture capital because they don’t know anybody employed by a venture capital firm — part of what is required to gain entry. The venture capital community, for all the power it yields, is small and insular. That’s not to say it can’t be cracked, but if you don’t live in Silicon Valley, New York, Boston, Colorado, Austin or Los Angeles, you’re going to have a hard time building the relationships it takes to get a meeting. There is, however, another way. You have a big idea with a large potential return on investment. The critique of women is often that they don’t think big enough, but the critics forget the practical realities of aiming for the fences. It’s risky. Many of the women who start businesses often get their companies to a place where they are making more money than perhaps they thought they’d ever see — probably right around $250,000 a year in take home pay. At that income level, they can put their kids through college, buy a home and manage their lives. For all the risk inherent in entrepreneurship, it’s a comfortable outcome and doesn’t make the owner any less of an entrepreneur. It is not a number, however, that excites venture capitalists. Many of these businesses actually could be bigger and more interesting to VCs, but at least three things would have to happen — and they’re not unique to women owned businesses. First, the owners would have to have access to capital to expand. It’s nearly impossible these days to get a small business loan and you can see here the classic chicken versus the egg conundrum. Second, the businesses would have to be centered on technology. Venture capitalists, in general, are uncomfortable with non-technology focused businesses, even though non-technology focused businesses make up greater than 50% of the stock market. Third, the owners would have to acquire new skills. It’s one thing when you’re the plumber. You can generate a certain amount of revenue doing most of the plumbing yourself. But in order to expand, the plumber has to become a manager, has to build systems, an organization and these are difficult things to do when you’re trying to actually get work done at the same time. Even if all these criteria are met venture capital investment may still not make sense for the business. And there are plenty of women who are smart enough to know that and therefore do not seek it. Yet, Silicon Valley doesn’t recognize these ladies as entrepreneurs. To fit Silicon Valley’s myopic view of an entrepreneur women business owners would have to raise venture capital which a certain percentage don’t need, some don’t qualify for, and others don’t even know is possible. Still, if we want more venture-backed women led businesses, we can start by inspiring women to first become entrepreneurs. We can do this by touting all women entrepreneurs, regardless of their type of business or financing. Further, we can educate young women about the venture capital industry. It’s easy to forget when you’re in Silicon Valley, but many young people, future business leaders, have never even heard of venture capital. Exposure can help shape the form of dreams. Finally, the venture community itself could benefit from meeting women entrepreneurs where they find them. Innovative financing models, such as extracting a return through dividends and smaller, paced investments alongside a broadening of the types of businesses funded, might not only support a more balanced landscape but also restore venture capital as a viable asset class. The reality is there are a number of women entrepreneurs out there who have built successful businesses — often, one dollar at a time. These ladies are my heroes and from my vantage point, I see them everywhere.

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David Isenberg: PMSC Challenges in Kosovo

January 25, 2011

One of the tasks the U.S. government uses private military contractors for is overseas law enforcement. No, they are not walking a beat in another country. But they are used to demonstrate the U.S. Government’s (USG’s) commitment to international operations. Beyond the deployment of police personnel to interim policing missions, LE agencies may also be involved in international operations to enforce U.S. domestic law; for capacity building; and/or in support of U.S. military forces. This is a task that firms like DynCorp, to name one of the bigger PMCS, has long specialized in. It is, to be sure a necessary task; one can’t have stability in an area where there is or recently was conflict without effective and uncorrupted law enforcement agencies. While many PMC have performed this critical work capably it is not without costs. A recent study, Lessons Learned from U. S. Government Law Enforcement in International Operations , by the U.S. Army’s Peacekeeping and Stability Operations Institute examined lessons from three operations: Panama (1989-99), Colombia (1989-Present), and Kosovo (1998-Present). In regard to the last it looked at the UN Interim Administration Mission in Kosovo (UNMIK) mission. Although the study does not name the contractor DynCorp has long had the civilian police (CIVPOL) contract, which supplies personnel for U.N. police missions. The United States was the largest contributor of police personnel to the UNMIK mission. At its peak, the United States had 605 officers (all as individually-deployed personnel; the United States did not provide an SPU) in Kosovo. All personnel were recruited (mostly from a variety of U.S. state and local agencies), trained and administered by a contracting company for 12-month deployments to the UNMIK. Using this means, the United States was able to provide a well-regarded, well-equipped contingent of police officers to the mission. However, recruitment of police professionals by contractors draws from a relatively small pool of qualified and available personnel, so there were a few cases of less than suitable personnel (unfit or inappropriately qualified) deployed with the contingents. Another recruitment problem was attracting the right range of law enforcement personnel; although salaries offered by the contractor were very competitive for generalist officers from smaller departments, they were less attractive to still-active personnel from big city departments or officers with management or specialist expertise. Use of a contracting company as an intermediary also created difficulties in dismissing and disciplining officers, and still required government involvement in, and close supervision of, the predeployment training provided in order to ensure the required standards were maintained. In addition, this did not provide a way to institutionalize knowledge and provide for long-term capacity … 3. Use of Contractors. The USG provided a sufficient number of qualified contracted law enforcement professionals to the mission. Overall they performed their tasks well, but there were challenges in recruiting, securing specific expertise, and management overhead. While using contracted LE professionals has had both benefits and challenges, currently a contractor-dependent system is the only means by which the USG deploys large numbers of police to international operations. Existing legislation (particularly under the Tenth Amendment to the Constitution) limits USG ability to deputize state or local employees to federal roles; so these individuals can only work as advisors, contractors, or be added to the permanent federal work force. In addition, while the DoS can develop relationships with local/state LE to recruit LE personnel for overseas deployment, often local/state police stations cannot easily release their personnel and will not agree to do so absent some form of legal mandate (e.g., for National Guard and Reserve military forces). Finally, some relevant skills required in overseas contingencies are not commonly available in state and local LE forces. For the DoS, one of the primary benefits of maintaining a contracting system means that it does not have to permanently employ more people. Contracting allows the DoS to avoid permanently hiring personnel who may only be required for a few years and also reduces the management overhead to vendors who oversee payroll, benefits, and other issues. The DoS is limited to ensuring the contracts are legal and current and to providing some oversight to the overall operation. While not a prevalent problem, one of the related challenges of using contractors includes discipline and accountability. In some cases, companies providing contractors are reluctant to take disciplinary action against their contractors even in the face of clear violations because they want to maintain the mandated number of personnel in country. Contracts often do not specify the steps to be taken in such cases, making it difficult to take adequate disciplinary measures against offenders. This can foster a dangerous kind of impunity under which no system exists to deal with actions that are illegal or are contrary to USG strategic priorities and guidelines.

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David Kroodsma: CEO of Manpower: We Have Entered "The Human Age"

January 25, 2011

Manpower Inc. believes that the global economy has fundamentally changed. The focus is now on you. A global corporation that connects temporary workers with businesses, Manpower keeps up to date on employment trends. In Davos, Hub Culture sat down with Jeffery Joerres, the CEO of Manpower Inc. and asked him about his company’s most recent report. In the interview below, Mr. Joerres explains how the global economy has (slowly) emerged from a recession, but he also explains how he thinks we have entered a new age of employment. Mr. Joerres says that we are at the beginning of “The Human Age.” We had the industrial age, then the space age, followed by the information age; now we enter an age dominated by the individual. Or so Manpower predicts. Below is the interview. The focus is not on technology, but how it is used. As Joerres said, it isn’t the iPad, but the “10 billionth” ap that is downloaded. Below is a schematic of how Manpower views this shift from the “information age” to the “human age.” Yesterday → Today Industrial/Information Ages→ The Human Age Capitalism→ Talentism Access to capital the differentiator→ Access to talent the differentiator Driven by owners and companies→ Driven by skilled individuals Workers chasing companies→ Companies chasing workers Companies dictate terms→ Employees dictate terms Workers living near (or from) place of work→ Workers living (or from) anywhere Talent glut→ Talent shortage Unemployment from over-supply→ Unemployment from specific demand Technology the enslaver→ Technology the liberator Closed borders→ Open borders Migration rare→ Migration commonplace Job for life→ 10-14 jobs by age 38 Corporate opacity; secretiveness→ Corporate transparency; openness, human approach OECD countries growing and dominant→ Non-OECD countries growing and dominant – BRIC-MIST, esp. China, India, Africa Work for an organization→ Work with an organization Be lean and mean→ Look out, not in Size matters→ Agility matters Hire power→ Hire passion Command and control→ Flexible frameworks What do you think? Do you agree?

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On Eve Of State Of The Union, The Housing Market Is Hitting The Skids

January 25, 2011

As we already noted, it took Peter Baker several thousand words to say nothing at all about the overall decline of the housing market that lies at ground zero of the economic collapse. Tonight, the president himself will have the opportunity to say several thousand more words about matters of great import to Americans. Will he mention anything about housing? We’ll see, but we’re guessing that he probably does not want to say something like, “The state of our union is in peril, because its citizens reside mainly in a bunch of shanties that are rapidly declining in value.” The Washington Post ‘s Dina ElBoghdady, thankfully, minces few words in a piece titled, ” Home prices fall in nearly all major cities, heightening fears of double dip .” And the picture she paints is not pretty: From October to November, prices fell in 19 of the 20 metro areas tracked by the Standard & Poor’s/Case-Shiller index, widely considered a gauge of the housing market’s health. The only exception was San Diego, where prices were basically unchanged. Only four areas posted year-over-year gains in November, including Los Angeles, San Diego, San Francisco and the Washington region. But in the aggregate, prices dipped 1.6 percent in November from the same time a year earlier, falling in 16 cities. You should note that the fact that “the Washington region” is doing quite well. In fact, ElBohghdady reports, the region “has bucked the trend” because of its “healthy job market.” By “trend”, she means the “trend” of home prices declining to the point of a “double dip” because the market is being dragged down by the twin maladies of mass unemployment and widespread foreclosures. Included in that “healthy job market” are the many politicos and lobbyists and media figures who gather here to cavort together in a bubblicious orgy of high self-regard. But I’m sure doesn’t obscure coverage of this issue at all. Here’s a fun fact! Among the nine cities that have “hit their lowest annual levels since the housing bust” are Tampa and Charlotte, the confirmed and all-but-confirmed locations of the 2012 Republican and Democratic National Conventions, respectively. So the good news is that D.C.-based politicians and media figures may, at some point in the next two years, have the opportunity to become intimately familiar with the crisis they are not in any way addressing. In the meantime, everyone should start reading Dina ElBoghdady, okay? RELATED: Home prices fall in nearly all major cities, heightening fears of double dip [PostBusiness @ WaPo] [Would you like to follow me on Twitter ? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here .]

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Google Hiring More Than 6,200 Workers This Year

January 25, 2011

SAN FRANCISCO — Google Inc. plans to hire more than 6,200 workers this year in the biggest expansion yet by the Internet’s most profitable company. The hiring spree will likely be welcomed by President Barack Obama, who is expected to emphasize the need for more jobs during his State of the Union address Tuesday night. Google CEO Eric Schmidt was among a group of business leaders who met with Obama last month to discuss ways to bolster the listless economy. But Google’s push to further expand a work force that grew by 23 percent last year may not be as well received on Wall Street, where the Internet search leader’s spending has annoyed some investors who would prefer a more frugal approach in hopes of fatter returns. Google executives have consistently brushed aside those concerns, saying that the company needs to aggressively recruit the smartest computer engineers and most persuasive sales representatives to maintain its lead in online search and advertising, as well as to diversify into other services in computing, telecommunications and the media. The company outlined its hiring plans Tuesday with The Associated Press without providing many specifics beyond its pledge to hire more people than it did in 2007 when it added 6,131 workers. Google hired nearly 4,600 people last year to end 2010 with 24,400 employees. Based on its hiring commitment, Google’s work force will increase by at least 25 percent this year. Analysts polled by FactSet expect Google’s net revenue to increase 22 percent this year. Google wouldn’t say how many of the new jobs will be based in the United States, where most of its current workers are located. In a speech Tuesday, Schmidt said Google will hire more than 1,000 workers in Europe this year. All told, Google has more than 60 offices in 30 countries. “At this stage, the number of opportunities just vastly exceed the number of people we have at the company,” said Alan Eustace, Google’s senior vice president of engineering and research. Even if it surpasses 31,000 employees this year, Google will still have far fewer people than Microsoft Corp., probably its fiercest rival. Microsoft employed about 88,400 people through September, the most recent head count available. Managing a company with the population of a small city will pose another challenge for Google co-founder Larry Page as he prepares to take over as the company’s CEO April 4 in a shake-up that will reassign Schmidt to executive chairman. In that role, Schmidt will focus on meeting with government officials, business partners and potential takeover targets while Page runs the company. Page, 37, served as CEO in Google’s early days when the company was far smaller. Google had fewer than 300 employees when Schmidt replaced Page as CEO a decade ago. Google has become a coveted place to work, largely because Page and fellow co-founder Sergey Brin have always insisted on making the company’s offices seem like a home away from home in an effort to make people more productive. All meals, snacks and drinks are free at Google, and employees can commute on free shuttles equipped with Internet access to San Francisco and other cities located within a 50-mile radius of the company’s Mountain View, Calif. headquarters. The sprawling headquarters, dubbed the “Googleplex,” is a testament to the company’s explosive growth and its ambitions to become far larger. Google owns or leases about 4.2 million square feet scattered across more than 60 buildings in Mountain View and hopes to build another corporate campus on a nearby NASA complex in Silicon Valley. It also signaled plans to expand in New York last year when it paid about $2 billion to buy a 15-story office spanning about 2.9 million square feet – more space than the Empire State building. About 2,000 Google employees currently work in that New York office. Trying to get a job at Google is akin to trying to get into Stanford University, where Page and Brin started working on their search engine as graduate students. The company receives more than 1 million applications a year and identifies the top candidates through a rigorous screening process that analyzes SAT scores, grade point averages and their performance on tests with mind-questions such as: “How many different ways can you color an icosahedron with one of three colors on each face?” The people who make it through Google’s intellectual gauntlet will likely be under intense pressure if they get hired. Management is pushing aggressively for more innovation so that the Internet giant can compete against emerging threats from smaller companies such as Facebook and Twitter. “The opportunities are so big this year that for us to maximize them we are going to have to work quicker and we are going to have to make decisions faster,” Eustace said. As its Internet social network grows, Facebook has become more successful at luring away Google’s workers. About 200 of Facebook’s roughly 2,000 employees formerly worked at Google. The defections haven’t left a big dent, given that the company hired an average of nearly 200 workers every two weeks last year. But the recent raids by Facebook and other promising startups got Google’s attention. In an effort to retain its current employees, the company this year gave its entire work force a raise of 10 percent. That move alone could increase Google’s operating expenses by about $500 million this year, based on analyst estimates. Virtually all employees also receive stock options, a benefit that turned most of the company’s early hires into multimillionaires. Shares of Google rose by 1 percent to $617.81 in afternoon trading, even with most of the tech sector selling off Tuesday.

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Avantor Performance Materials Names Jean-Marc Gilson as Chief Executive Officer

January 25, 2011

Experienced Executive With More Than 20 Years of Leadership in the Global Specialty Chemicals Industry Joins Avantor

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Hansen Medical Names Michael T. MacKinnon Vice President U.S. Commercial Operations

January 25, 2011

Veteran Sales Executive Has Experience Building Successful Medical Device Teams in Vascular Market

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Daniel Dicker: Opaque Commodity Trading: You’ll Be Paying for it at the Pump

January 25, 2011

The final dam to stopping $120-a-barrel oil and $4-a-gallon gas is being breached, as financial regulation continues its daily erosion into worthlessness. Yesterday, Ohio Senator Sherrod Brown demanded that the Commodity Futures Trading Commission (CFTC) use the Dodd-Frank tools at their disposal to protect consumers and small business from artificially inflated energy prices. Yet, watching the CFTC attempt to back up Dodd-Frank legislation since it was passed has been like watching salmon flop upstream as the water drains out — it’s slow, arduous and likely to lead nowhere. It is clear now that we will instead be witness to the highest prices for commodities ever, fueled by the biggest influx of profit-driven trading and investment ever, unstaunched even in the slightest by financial regulation legislation. In my upcoming book, Oil’s Endless Bid , due out from John Wiley & Sons in March, I argue that financial influences from investors and traders and the massive growth of derivatives markets have been the single most important factor for oil’s high and unreliable price, far outstripping fundamental arguments of emerging market growth, peak oil or any other supply constraints or a devaluing dollar. Putting controls on at least some of these speculative influences was supposed to be one of the goals of Dodd-Frank, but the actual rule-making to put teeth behind the legislation has been left to the Commodity Futures Trading Commission (CFTC). But, since it began writing proposals for rules in July 2010, the CFTC has literally been buried by the pushback from industry lobbyists, hired-gun lawyers, derivatives broker/dealers and virtually every industrial corporation with a trading desk that depends even marginally on derivatives activity to protect or augment profits. The problem has been the virtual avalanche of opinion that has descended on the commissioners has been almost entirely from the industry side; no one has bothered to speak for the American public — the consumer — and the industry is lobbying for Dodd-Frank and the CFTC’s profit-dissolving proposals to go away. Consequently, there has been no substantive rule writing to date, despite the mandate of the legislation to have rules for energy markets in place by January, a deadline that the CFTC has already indicated it will miss. Two specific areas have already convinced me that the rules will ultimately be toothless, business will proceed as usual and whatever is implemented will do nothing to curb the explosive price rises we’ve seen not only in oil, but in copper, corn, coffee and cotton last year. Proposals on contract position limits, necessary to avoid any single participant from having overwhelming influence on prices, were argued previously in December without resolution. Bart Chilton, the one commissioner committed to strict position-limits in futures markets has given up on a hard limit, proposing a much weaker “point system” to monitor participants, without any authority to force any limits or liquidation of positions. If Chilton has given in on this crucial point, we shouldn’t expect substantial position-limiting rules in futures markets to come from the CFTC. Indeed, the commission has tabled the entire issue until 2012, a year past their mandated deadline. Another issue defining new swaps clearinghouses and who can own them has generated similar industry interest and push back. Creating “aggregately”-owned clearinghouses would help in transparency, fairness of access and help keep the clearing business competitive. Undue influence by a small group of banks in a new Swaps Execution Facility (SEF) threatens independent control of these new trade nexuses and gives far too much of a trading advantage for the bank owners. Republican commission members have agreed with investment bank lawyers and the Futures Industry Association (FIA) that even the proposed 40% ownership limit for any one participant is still too low. A recent Department of Justice opinion advocating third-party ownership of new SEFs has been excoriated by industry spokespersons representing the banks saying: “The DOJ letter’s analysis appears deficient and fails to consider the relevant history and features of the derivatives markets.” The intention of Dodd-Frank legislation to create transparent swaps clearing is being lost: If allowed to majority-own these new SEF’s, banks will enjoy pass-through clearing that will in name only be at all different from the bilateral clearing system that is already in place and has sunk derivative markets in the past. The bottom line is that commodity trading isn’t about to change one iota from the mechanisms that have caused one boom and bust cycle for oil already and is currently causing others in corn, coffee, copper and cotton. A great opportunity to avoid the similar problems in oil and other commodities we saw in 2008 with credit default swaps and mortgage securities is being lost. Get ready for $4 gas and your local Starbucks brew heading north of 5 bucks — all courtesy of the financial lobbyists, hedge fund traders, industry spokesmen and a brow-beaten CFTC.

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Johann Koss: Davos 2011: Communities of Action to End Extreme Poverty

January 25, 2011

This week in Davos, Switzerland, policy leaders from around the world will convene amidst a range of profound undercurrents that are redefining many tenets of global cooperation. At one side of the spectrum, longstanding economic powers are grappling with high unemployment, tight budgets, and a profound sense of economic fragility. At another side, emerging economies that teetered on the brink of ruin barely a decade ago are now the apples of investors’ eyes globally. Meanwhile prices for the world’s most fundamental commodity — food — are breaching all time records, starkly highlighting the persistent challenges entailed in meeting basic human needs. High food prices prompt alarm for the huge numbers with scarce resources to buy it, alongside quiet pride among the farmers and investors fortunate enough to benefit from selling it. Far away from the conference centers, the pace of technological innovation continues unabated. Hundreds of millions more people are getting access to mobile phones and the Internet every year, and social networking entrepreneurs are finding new and exciting ways every day for all of those people to connect at personal, professional, and humanitarian levels. The unprecedented ability of geographically diffuse communities to link and act around common interests marks one of the great transformations of our time. But the inevitable focus on navigating new global sources of influence and power cannot be left to overshadow the persistent challenges faced by the world’s poorest and least influential people — the ones whom the world has spent 10 years promising to help achieve the Millennium Development Goals (MDGs) to cut extreme poverty in its many forms by half by 2015. With roughly one fifth of humanity still living on less than $1/day, the global community must take advantage of the latest tools available to fulfill its commitments. To that end, a year ago more than 60 members of the World Economic Forum’s community of Young Global Leaders made public pledges at the Forum’s Annual Meeting Davos, committing their own private individual and organizational efforts to time-bound, quantified and practical initiatives that can help achieve the MDGs. This week, at the 2011 annual meeting, the MDG Pledges initiative is launching its first major progress report, which is also posted on www.mdgpledges.org . Over the past year, many MDG pledges have made exciting progress. For example, Veronica Colondam and the YCAB Foundation have helped to educate more than 2,700 school drop outs in Indonesia. Leading economists Esther Duflo, Kristin Forbes, Michael Kremer, and Vikram Akula, through Deworm the World, have dewormed more than 3 million children. Zainab Salbi and Women for Women International have supported nearly 43,000 women survivors of war across a range of developing countries. James Kondo and Table for Two have helped to deliver approximately 6 million school meals in Africa. And at a person-to-person scale, Alec Oxenford and the Germinare Foundation have helped two students receive a full scholarship that will enable them to complete both primary and secondary school. These pledges reflect the spirit of the Millennium Developing Goals, one in which everyone must make their best effort to contribute however they can. The pledges are not a supplement for government action. They are an invitation to other individuals and organizations to make their own pledges for the goals, and to register them publicly on www.mdgpledges.org . More than anything, they are indicative of how far and fast an interconnected global community can move forward together, when individuals and organizations decide to collaborate in tackling the world’s most pressing challenges.

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What If Davos Actually Worked?

January 25, 2011

Later this week, the world’s elite will once again gather in Davos, Switzerland at the World Economic Forum’s annual meeting. For those of us not attending, you can think of the Davos conference as a kind of Olympic Village for the powerful. In any given year, there will likely be no greater concentration of influence, sheer talent and wealth than at Davos. Which makes it all the more disappointing that, by many accounts, little is actually accomplished there. World-class networking opportunities aside, there’s considerable gloom surrounding this year’s events, even from the normally supportive media. “Who needs a World Economic Forum?” the BBC asked, while the U.K.’s Telegraph grimly wondered , “Does all the talking make a difference?” Even the WEF’s founder, Klaus Schwab, alluded to the weariness of the tone at Davos this year by warning that the economic recovery may be hindered by “global burnout syndrome.” “We have in the world a situation where the political system and the institutions are just overwhelmed by the complexity which they have to face,” Schwab told Reuters last week. This may explain why, sprinkled amid jargon like “Global Risk Response Mechanism” and “Inclusive Growth,” the WEF’s theme this year is the dreary “Shared Norms For A New Reality.” But what if Davos actually worked? Below, we’ve suggested — okay, not entirely seriously — a few ways the world could benefit if the Davos attendees dropped the rhetoric and got down to business: Russian President Dmitry Medvedev, slated to be the conference’s opening speaker, would realize that his country can’t use Davos to solicit private investment shortly after imprisoning a billionaire in a trial widely viewed as a sham . Many Davos attendees would be dumbstruck upon their first introduction to the concept of “hypocrisy.” The conference’s title would change to “How We Can Help.” Chastened by the 2010 words of Greek prime minister George Papandreou, who told a Davos crowd “We need no bilateral loans ” — just a few months before his country received a massive bilateral loan — the world’s elite would collectively agree on the meaning of “no.” With two “strategic partner” tickets to Davos costing somewhere near $301,000 , per Andrew Ross Sorkin’s estimates, the nonprofit WEF would prominently display a statement of the total revenue pulled in each year, as well as the cost to put on the soiree. Conference attendees would then be able to property assess the value of their Davos swag. Despite Medvedev’s fielding questions via social media , the Davos crowd would realize that just because you’re on Twitter doesn’t mean you’re transparent. Or support human rights . The Davos organizers, recalling their “inclusive growth” theme, would stop prevaricating about a shortage of qualified female attendees and realize they can’t become an “unrivaled platform to shape the global agenda” without full representation from the group that makes up roughly half the world’s population. World leaders would agree that though there are ” dumb regulations ” and bad taxes, there are just as many dumb, if profitable, business ideas and bad CEOs. In a burst of inspiration, the Davos crowd would agree to ditch the Manichean framing of taxes and economic growth. For a lesson, the attendees would consider the entrepreneurial haven of Norway . Instead of waiting until 2019, the bankers in attendance would agree to adopt all of the Basel III requirements , including rules increasing the amount of capital banks must hold against losses. The move would set off a global race to become the healthiest bank in the world. On the news, stock prices would magically rise somehow. Climate change, on the heels of the U.N.’s recent meeting in Cancun , would be recognized as a environmental, social and political threat — and, crucially, a threat to ski conditions at future Davos conferences. Journalists would recognize the terms “pro-business ” and ” pro-growth ” for what they are: euphemisms for a specific set of interests shared by large and powerful corporations. Still, conference attendees would unanimously agree that a “pro-business” global agenda is necessary. Bankers like Barclays chief Bob Diamond would realize that blaming the banking industry for what the IMF has estimated is a $2.28-trillion loss in global wealth is both necessary and deserved — even if he skipped a bonus or two. After widespread worries about his emotional well being, conference founder Klaus Schwab would stop warning of “global burnout syndrome” and begin cautioning about an excess of “reasoned optimism.” Even if the world is heading into, as one top analyst put it, a”super cycle” of economic growth , the Davos-scenti would realize that the bust from our last period of hyper-growth exacted enormous social costs on much of the world. Including, but not limited to

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Yahoo To Lay Off ANOTHER 100 To 150 Employees

January 25, 2011

SUNNYVALE, Calif. — Yahoo Inc. is laying off 100 to 150 workers in the latest sign of the pressures facing the Internet company as it begins the fifth year of a financial funk. The job cuts made Tuesday represent about 1 percent of Yahoo’s work force of roughly 13,500 employees. It marks the second round of payroll trimming in two months. Yahoo jettisoned 600 workers just before Christmas. Yahoo, based in Sunnyvale, Calif., provided few details about the latest layoffs except they affected office around the world. The company said it still planned to hire people in key areas that it didn’t identify in a statement. The reasons for Yahoo’s cutbacks may become clearer when the company releases its fourth-quarter quarter earnings after the stock market closes Tuesday. Most analysts expect the results to show meager revenue growth at a time other Internet companies such as Google Inc. and Facebook are thriving. Google, which reigns as the Internet’s biggest moneymaker, is doing so well that it intends to hire more than 6,200 employees this year, increasing its work force by at least 25 percent. It will be the biggest hiring spree in Google’s 12-year history. Yahoo’s malaise has intensified the pressure on CEO Carol Bartz to lower expenses in an effort to boost earnings and lift the company’s stock price, which dipped slightly last year while most of the market climbed. Yahoo shares fell 20 cents to $15.89 in afternoon trading. Bartz’s cost-cutting strategy has provided the desired lift to Yahoo’s bottom line even as revenue growth has consistently disappointed investors. Analysts expect Yahoo’s fourth-quarter earnings to more than double.

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Tina Dupuy: Government Workers Are the New Illegal Aliens

January 25, 2011

Did you know the government can’t create jobs? Nearly two years ago on CNN, former Republican National Committee chairman Michael Steele said, “Not in the history of mankind has the government ever created jobs.” And then, “Trust me.” When Steele said those words, he was widely panned. It was dismissed on the right as a gaffe and debunked on the left as grossly inaccurate . It was laughable… when Steele said it. Cut to: Meet the Press last Sunday. Erin Burnett CNBC’s Squawk on the Street host said, “Government can’t create jobs.” It was left unchallenged by any of the other panelists and host David Gregory. Karen Hughes who worked in the Bush administration, her government j-o-b added, “Well… the president seems to have had a revelation that it’s actually business that creates jobs.” Then to top it all off the Democratic Congressman James Clyburn — agreed. “No, we can’t create jobs, and we shouldn’t. We want them created in the private sector. ” Over 16.5% of Americans are employed by the government , about 22 million of the 135 million payroll jobs. And they’re not just pencil-pushing, useless cushy benefit collectors — but scientists. There are no private sector astronauts. None. Firefighters are government employees as are police. “More cops on the streets” means more government trained and compensated people in your community. The district attorneys, judges and bailiffs draw an Uncle Sam signed paycheck. The government? Law and order. The second largest employer in the country is the United States Postal Service. Try telling the lady raising her family by delivering your overdue notices that the government can’t create jobs. According to the Department of Labor, the private sector has been steadily adding jobs and the public sector has been cutting jobs at the fastest rate in 30 years . Especially local government jobs: teachers, sanitation workers and librarians. So the government does, in fact, create jobs. It also slashes them. Cities and states have been balancing their budgets by cutting back on everything. Most infamously Camden, New Jersey is eliminating half of their police force . To those who work for a living, a job is a job. To those who sloganeer for a living, cutting jobs means magically creating them. It seems government workers are the new illegal immigrants. They are the new group who are treated like parasites on the system; their jobs are illegitimate and disposable. Lawmakers gleefully talk about eliminating government employees’ livelihoods. The rhetoric would have us believe those aren’t even jobs . It’s not the banksters and hucksters on Wall Street who wrecked our economy. No, now they’re the only ones who can save us! It’s not a general revenue slow down tied to a collapse after the Saturnalia of liar loans and real estate cheats. It’s those comfortable public servants who are bleeding us dry! We’re told we’re bankrupt because of well-paid government employees with “Cadillac health insurance plans.” Yes, we still refer to posh things as an American made car from a company, GM, which the U.S. government saved and made profitable again. So everyone who makes an actual Cadillac can thank the government for their job. Out of our $3.5 trillion annual budget we dole out around $1.5 trillions on “defense” spending. It really should be considered “offense” spending these days, but I digress. There are some accounting tricks with mandatory and discretionary spending. But added up: it’s $1.5 trillion . What is the military? Jobs. Careers too. Plus a retirement plan and socialized medicine. It’s a jobs program the government created . It’s also a big wasteful unaccountable sieve for tax dollars. If the GOP-controlled House is really looking to weed out pork (which they arguably are not) they would check out the bacon haven we call the Pentagon. But, better to stick with the empty and symbolic than tackle the difficult.

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Bear Stearns Emails Suggest Bank Sold Clients ‘Sack Of Sh–’

January 25, 2011

A new lawsuit alleges fresh evidence of corruption at collapsed banking giant Bear Stearns. The lawsuit — filed in 2008 by mortgage insurer Ambac Assurance Corp against Bear Stearns and JP Morgan — was unsealed last week, the Atlantic reports . The suit alleges that Bear Stearns took extreme measures to defraud investors — and that JP Morgan has been hiding the evidence since it was first filed in 2008. The Atlantic neatly captures the nature of the game: “the lawsuit’s supporting e-mails, going back as far as 2005, highlight Bear traders telling their superiors they were selling investors like Ambac a ‘sack of shit.’” According to the Atlantic , after selling the toxic mortgage securities, Bear Stearns traders would “then sell back the bad loans with early payment defaults to the banks that originated them at a discount. The traders would pocket the refund, and would not pass it on to the mortgage trust, which was where it should have gone to be distributed to the investors who owned the bonds.” Thus, allowing the traders to get paid twice on the deal. Then, in 2008, when Bear Stearns collapsed and JPMorgan bought the remains , the bank covered up the fraud, allowing executives to reap “tens of millions of dollars in compensation” from the deal, the suit alleges. In a separate lawusit insurance giants like TIAA-CREF and other investors are suing Bank of America’s Countrywide division for “massive fraud” regarding its holding of mortgage-backed securities (MBS). Here’s B loomberg on the lawsuit : “Countrywide was an enterprise driven by only one purpose — to originate and securitize as many mortgage loans as possible into MBS to generate profits for the Countrywide defendants without regard to the investors that relied on the critical, false information provided to them with respect to the related certificates,” according to the complaint. Read the full piece at the Atlantic here.

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DH Capital Assists Voxel in Outside Funding and Recruiting Raul Martynek as CEO

January 25, 2011

NEW YORK, NY and BOULDER, CO–(Marketwire – January 25, 2011) – Voxel, a leading provider of hybrid cloud hosting and managed services, announced that it has raised its first equity capital from outside investors and has appointed Raul K. Martynek, a respected industry veteran, as Chief Executive Officer and a member of the Board of Directors. Raj Dutt, Voxel’s Founder and CEO since 1999, will transition into a new role as the company’s first Chief Technology Officer.

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Support and Resistance Levels

January 25, 2011

Support and Resistance Levels

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Guest Commentary: The Great Debt Shift

January 25, 2011

Guest Commentary: The Great Debt Shift

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The South Korean economy expanded during the fourth quarter of 2010

January 25, 2011

The South Korean economy expanded during the fourth quarter of 2010

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Guest Commentary: The Great Debt Shift

January 25, 2011

Guest Commentary: The Great Debt Shift

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GBPJPY Hits its Targets, Watching AUDUSD for Wendesday’s FOMC Decision

January 25, 2011

GBPJPY Hits its Targets, Watching AUDUSD for Wendesday’s FOMC Decision

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GBPJPY Hits its Targets, Watching AUDUSD for Wendesday’s FOMC Decision

January 25, 2011

GBPJPY Hits its Targets, Watching AUDUSD for Wendesday’s FOMC Decision

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Inflation in India leads to high interest rates

January 25, 2011

Inflation in India leads to high interest rates

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Euro Rally Continues, Supported by Rising Optimism

January 25, 2011

Euro Rally Continues, Supported by Rising Optimism

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Plot Forex Trading Sessions on your Currency Charts

January 25, 2011

Plot Forex Trading Sessions on your Currency Charts

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GBPJPY Quickly Hits its First and Second Targets

January 25, 2011

GBPJPY Quickly Hits its First and Second Targets

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American Stocks fluctuated by the end of today’s session

January 25, 2011

American Stocks fluctuated by the end of today’s session

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EURAUD Ready to Resume Downtrend?

January 25, 2011

EURAUD Ready to Resume Downtrend?

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DuPont’s Q4 2010 earnings down

January 25, 2011

DuPont’s Q4 2010 earnings down

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