February 2011

Benitec Limited (ASX:BLT) Announce Formation Of Chief Investigators Group

February 18, 2011

Benitec Limited (ASX:BLT) Announce Formation Of Chief Investigators Group

Read the full article →

Pryme Oil and Gas Limited (ASX:PYM) Operational Update Of Turner Bayou Project In Louisiana, USA

February 18, 2011

Pryme Oil and Gas Limited (ASX:PYM) Operational Update Of Turner Bayou Project In Louisiana, USA

Read the full article →

Gold – FOREX Correlations Strengthen as US Dollar Falls

February 18, 2011

Gold – FOREX Correlations Strengthen as US Dollar Falls

Read the full article →

Dollar Surge and Euro Tumble Not too Far on the Horizon

February 18, 2011

Dollar Surge and Euro Tumble Not too Far on the Horizon

Read the full article →

FOREX CENTRAL BANK WATCH: BoC Interest Rate Expectations Rise Ahead of CPI

February 18, 2011

FOREX CENTRAL BANK WATCH: BoC Interest Rate Expectations Rise Ahead of CPI

Read the full article →

Video: Vgo’s Semonite Sees Many Uses for Telepresence Robot

February 17, 2011

Feb. 18 (Bloomberg) — Ned Semonite, vice president for Vgo Communications Inc., talks about the applications of the company’s telepresence robot and market strategy. (Source: Bloomberg)

Read the full article →

Video: Vgo’s Semonite Sees Many Uses for Telepresence Robot

February 17, 2011

Feb. 18 (Bloomberg) — Ned Semonite, vice president for Vgo Communications Inc., talks about the applications of the company’s telepresence robot and market strategy. (Source: Bloomberg)

Read the full article →

Dave Lerner: I Am Incubator

February 17, 2011

This is part of my Series on Entrepreneurial Cultur e. The leading dramatis personae of the early-stage tech ecosystem are well established by now in the mainstream collective consciousness. High-tech wunderkind entrepreneurs are of course the most recognizable of the various archetypes, but nowadays once obscure protagonists with strange appellations such as hacker, combinator, seed-stage VC and angel no longer generate quizzical looks and raised eyebrows when others point them out at cocktail parties or gush about them in the mainstream press. The newest hero/villain cast member is of course the so-called “superangel” who one immediately associates with Silicon Valley Olympians such as Ron Conway, Jeff Clavier, Aydin Senkut, Keith Rabois, Chris Sacca, Dave McClure, Mike Maples and others. If the production were an opera, these men would certainly be the tenors and would be seen furiously making out checks by the hundred to web-native entrepreneurs, enjoying great feasts (sometimes replete with petty human dramas) at restaurants like Bin 38 , and occasionally hurling lightning bolts at one another in fits of pique , (or thunderous indigestion). There remains, however, another sort of actor altogether in this early stage landscape of ours. He dwells far from this rarefied air and his profile is yet obscured and shrouded from public view. In the aforementioned operatic production, he would most certainly play the the phantom. And what is it that he does? Ensconced in dank subterranean forges these Hephaestus-like practitioners hammer-out out from the mute schist of their environments the vaguest and earliest impressions of ideas and technologies some of which will one day appear as these same companies that superangels will foist with lavish checks. Yet the work of these shadowy figures is so nascent as to sometimes resemble the proverbial cave-art of our most ancient forbears. I am one such troglodyte. Another appellation is of course, “Incubator”. Or, as I thought I heard Russell Crowe say to the very Emperor’s face at the center of the gladatorial arena: “I Am Incubator” Among my brethren and sistren in incubation I count the folks working at places like idealab, betaworks, alleycorp, as well as certain current and former university venture lab specialists I hold in high esteem. These modern-day alchemists are constantly mixing, tweaking, stirring and coalescing the incipient ideas, technologies, nascent teams and pre-seed capital that form the raw ingredients of what they hope will become valuable companies one day. In this mini-series I will be shining a light on the sorts of activities with which we are engaged. I’ll be sharing some lessons learned from my own entrepreneurial life, which, between my solo ventures and work within Columbia University, has led to the incubation of a few dozen companies by now. But I’ll mainly be drawing from conversations I’ll be having with some of the real heavyweights in this field who have achieved great things and have some remarkable stories to share. With this said, I shall now retreat to my lair from whence I shall write my next piece. :)

Read the full article →

Video: Liberty Mutual’s Kelly Says Inflation May Rise to 9%

February 17, 2011

Feb. 17 (Bloomberg) — Edmund “Ted” Kelly, chief executive officer of Liberty Mutual Holding Co., talks about the outlook for U.S. inflation. Kelly says inflation may rise over the next five years as the government deficit increases and Federal Reserve policies weaken the dollar. Kelly also discusses Liberty Mutual’s investment strategy. He talks with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Read the full article →

Video: Liberty Mutual’s Kelly Says Inflation May Rise to 9%

February 17, 2011

Feb. 17 (Bloomberg) — Edmund “Ted” Kelly, chief executive officer of Liberty Mutual Holding Co., talks about the outlook for U.S. inflation. Kelly says inflation may rise over the next five years as the government deficit increases and Federal Reserve policies weaken the dollar. Kelly also discusses Liberty Mutual’s investment strategy. He talks with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Read the full article →

Video: Owens Discusses Hiring Discrimination Against Unemployed

February 17, 2011

Feb. 17 (Bloomberg) — Christine Owens, executive director of the National Employment Law Project, talks about discrimination against jobless applications. Owens speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

Read the full article →

Video: Owens Discusses Hiring Discrimination Against Unemployed

February 17, 2011

Feb. 17 (Bloomberg) — Christine Owens, executive director of the National Employment Law Project, talks about discrimination against jobless applications. Owens speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

Read the full article →

Video: Stocks Advance on Improving Economic Reports, Earnings

February 17, 2011

Feb. 17 (Bloomberg) — Bloomberg’s Deborah Kostroun reports on the performance of the U.S. equity market today. U.S. stocks rose, sending the Standard & Poor’s 500 Index to a 32-month high, as improving corporate earnings and manufacturing data overshadowed higher-than-forecast growth in consumer prices. Bloomberg’s Pimm Fox also speaks. (Source: Bloomberg)

Read the full article →

Video: Stocks Advance on Improving Economic Reports, Earnings

February 17, 2011

Feb. 17 (Bloomberg) — Bloomberg’s Deborah Kostroun reports on the performance of the U.S. equity market today. U.S. stocks rose, sending the Standard & Poor’s 500 Index to a 32-month high, as improving corporate earnings and manufacturing data overshadowed higher-than-forecast growth in consumer prices. Bloomberg’s Pimm Fox also speaks. (Source: Bloomberg)

Read the full article →

Karl Giberson, Ph.D: Where Is My Free Market?

February 17, 2011

I am sitting now in a pose familiar to millions of Americans: on hold trying to get a response from Comcast after dispatching the various automatons to reach a real person. Of course the first real person you talk to at Comcast — a maternal type — can’t do anything. She is there to express sympathy and tell you that someone with more authority will be with you “shortly.” So I am on hold while she searches for someone who can do something. At least that is what she said. I have this sinking feeling she is gathered now with co-workers, setting up a betting pool to see how long before I lose hope, cave in, and hang up. After a few minutes of silence Comcast starts up some dreadful elevator music, apparently intended to keep me content. The music is terrible. Do they really think that listeners want to hear music through their tiny no-fidelity phone speakers? The music is so unpleasant I am wondering if its real purpose is to wear me down. I recall that the US Army blasted heavy metal music at Noriega to get him to surrender during the Iran-Contra affair, or at least accept a credit on his internet service. After several painful minutes of this music “Jasmine” comes on the line to talk to me. She is quite friendly but won’t give me her last name. I repeat my complaint. I think this makes 6 different people at Comcast who have heard this story about my demon-possessed modem. Perhaps there is a betting pool at the office on this as well — how many times will this poor guy repeat his story before he gives up? “I am not a happy customer,” I tell Jasmine. “I have been paying a premium for high speed internet for years and receiving the much cheaper “economy” speed.” (In technospeak, I have been paying for 22 Megabytyes per second and receiving less than 10% of that, which I suppose would be like renting a van that is supposed to hold 10 passengers and getting a Smart Car that seats one. The only difference is that high internet speeds look so similar to low speeds that low tech consumers like me can’t tell the difference.) A friend alerted me to my problem. He connected me to a website I did not know existed — www.speedtest.net — that provides a simple and quick measure of internet speed. And mine was 90% lower than what I was paying for. I called Comcast and they promptly sent out a knowledgeable friendly tech support guy who checked the modem Comcast had installed in my house years ago. “Your modem was set incorrectly on the “economy” setting” he told me, as snow from his boots melted all over my living room floor. “It should be fine now.” I checked, and it was. Thank God for www.speedtest.net. “I should get a refund for overpaying all these years shouldn’t I?” I asked. “Yes” said the tech, barely able to contain his laughter, “but you might have to fight to get it.” I explain all this to Jasmine, who goes away to talk to someone and returns with the happy message that Comcast will give me a credit of $22 per month for the previous year. I object on the grounds that I have been overpaying for a decade — not a year — and am entitled to a bigger credit than that. (My current Comcast bill, which covers cable, internet and phone, is $221 per month, or $2652 per year, or $26,520 per decade — I have a been a good customer over the years and am thinking that this should be worth something. In fact, for a company rapidly losing customers to the competition, it should be worth a lot.) In response to my objection Jasmine tells me that Comcast considers it the customer’s responsibility to alert them to problems like the internet speed. If a customer does not complain, she says, they assume everything is fine and the customer has no grounds for complaint. “If HBO stops working,” she said, making an analogy, “the customer is supposed to contact us. If they don’t then we assume everything thing is OK.” I object to this bogus analogy. “If HBO is not working, it is easy to tell, “I explain in exasperation. “The screen is blank. How is a customer supposed to know whether their internet speed is less than what they are paying for?” Comcast apparently assumes their customers are all geeks, downloading movies with stopwatches in their hand, and eagerly texting their friends about how many Megabytes per second they have. This response is preposterous. Consumers like me use the internet mainly for email, reading news, Googling information and other less demanding activities. The difference between high and low speeds for some of these activities is simply not noticeable. Only with extended video downloads would the difference become noticeable, and then only if a consumer had a standard of comparison. It turns out–no surprise– that Jasmine is not authorized to give more than a year of credit for such problems. So she transfers me to an even higher authority. After some more Noriega music I am connected to the “Executive Office,” and speak with “Nancy,” who says she will look into things and call me back the next day. I object, to no avail, that this is the 3rd promise for a “callback”. The next day I get my callback with the final resolution, which is no resolution at all. Apparently it is possible although “very rare” for a modem to change its setting on its own. Any time a customer does anything with their service–upgrade, change to a new package, shout “Verizon FIOS” too loudly–a signal is sent from Comcast to the consumer. This signal, said Sharon from the Executive Office, can actually change the modem setting from high to low speed. Apparently it can’t change from low to high though. She did acknowledge that she had “hardly ever seen it.” My guess is she had never seen it even once and merely heard a story about it happening once to a customer in Antarctica during an eclipse. But, because she had “no way to know” that this had not happened–it is, after all, not prohibited by the laws of physics–she had to assume that this very rare event had occurred recently and was the source of my problem. Otherwise, Comcast would have to credit me for what was probably, by her own admission, years and years of overpayment for a premium service I never received. Unfortunately customers in much of the country are captive to this kind of heavy-handed treatment. Living without internet and cable is not a real option, and many consumers have just one provider–Verizon is not available to me but I have no reason to think they would be any different. And, with the product being a complex and intimidating technology, customers are forced to simply trust that the signals coming through their wires are what they are paying for.

Read the full article →

Angela Haines: From Neckties to Nuclear Waste: The U.S. Government Is Open for Business

February 17, 2011

This month it got a little easier to add to your client list the country’s biggest spender: the US Government. The Small Business Administration announced its Women-Owned Small Business Procurement Programs (WOSB) which provides greater access to contracts with 83 industries by allowing procurement officers to set aside contracts for women-owned and economically disadvantaged women-owned businesses (EDWOSB). Federal statute already mandates government contracts over $3000 and under $100,000 be set aside for small businesses, with an additional 5% procurement targeted for women-owned small businesses, but results have never met the mark. While department and agency standards vary, in practice, procurement officers can now exclude other bidders once they receive a minimum of two bids from qualified women business owners. Furthermore, the February ruling requires the set asides go into effect in 2011 government budgets with over $30 billion of contracts available to women. SBA Administrator Karen Mills feels these contracts “can provide women-owned small businesses with the oxygen they need to take their business to the next level.” What’s at stake? Each year the government purchases some $500 billion dollars worth of goods and services. Typically it spends in every category imaginable from goods, such as lab equipment, furniture, office machines, toiletries, clothing, and athletic equipment to services, such as accounting, construction, advertising and janitorial. Occasionally it even wades into unexpected territory. One Army contract totaled $5.6 million for T shirts imprinted with “Go Army.” Another $500,000 contract went for a Spider Man impersonator to entertain troops abroad. Federal contracting consultant Lourdes Martin-Rosa, head of Government Business Solutions , advises business owners “to take advantage of every tool the federal government offers, while making yourself known to the right people within the government.” The Small Business Administration provides requirements on its website; it also offers training and other outreach programs to help small businesses fulfill requirements. Additionally, the Federal Business Opportunities (FedBizOpps) website lists all government contract needs above $25,000. Recently a survey by American Express Open , an initiative that supports small businesses with products, training and educational resources, agrees that given “the government goal of awarding 23% of their spending to small firms — some $115 billion annually — Federal contracting is an important avenue of growth for many small businesses to consider.” Once they win Federal contracts, the report continues, “Women businesses achieve success in equal measure to that of their peers.” But success takes takes time, about 17 months, on average, to land the first contract. Once they bid, the survey concludes, women win 43% of the contracts they seek compared to 40% for men. While becoming contract ready requires extensive research, the steps are relatively straightforward. The first step is to register online in the Central Contractor Registration (CCR). While registration is free, basic identification facts and figure are required. One key is to select your proper product or service classification codes (NAICS) among the 83 categories available for women businesses. Choosing the codes can be one major key to success. Ask small business owner Maureen Borzacchiello, CEO of Creative Display Solutions , an exhibit and events production firm based in Garden City, New York whose blue chip clients include JetBlue, Pfizer and American Express. When the economic slump hit, Maureen decided to explore government contracts, though she admits the project takes dedicated focus. “When I first looked at the categories of industries, I felt we fit two or three, but with more digging I have discovered 43 categories for which we are eligible. One area that turned up unexpected business was storage, a service Creative Display Solutions routinely provides its clients. The government, however, labels storage contracts “general warehousing,” a big budget item at one particular agency which Maureen is currently targeting. Last year she won her first government contract from the Army. Her advice for women seeking government business? Don’t start out with the attitude that you should get these jobs just because you are a woman. Your first goal is to demonstrate you’re a solid company and be willing to provide the financial records they require along with recommendations from other clients. To be a government contractor, you can’t keep your receipts in a shoebox. You need a comprehensive business development strategy. Consultant Lourdes Rosa-Martin, who also advises on government contracting for the American Express Open program, agrees that doing business with the government isn’t a piece of cake. “But,” she adds, “the resources are there because the government provides remarkable transparency.” One website, USASpending.gov , provides details of previously-awarded contracts to help you determine if your prices are competitive. Furthermore, Lourdes adds, “there are 230,000 credit card purchasing officers ready to buy any product or service that costs $3000 or less at any time without further authorization. Just jump in.” One veteran Federal contractor, CEO-Founder Susan Rice of Cavanagh Group Services which provides onsite logistics management for disposal of nuclear, hazardous and toxic wastes to support environmental clean-up, currently derives 85% of her $22 million revenues from government contracts. In some cases, she contracts directly; other times she subcontracts from major companies who routinely develop lists of qualified suppliers. But with ballooning deficits and impending budget cuts, Sue Rice says she now plans to start chasing more private business to achieve a 50-50 split between government and private contracts. “When one sector peaks,” Sue observes, “the other dips. For me the solution is to be nimble enough to ride the waves.”

Read the full article →

Insight Management Corporation — Announces New Director David Kimmel Brings Excitement to the "Green Team"

February 17, 2011

NEW YORK, NY–(Marketwire – February 17, 2011) – Insight Management Corp. ( OTCQB : ISIM ) ( PINKSHEETS : ISIM ) Insight Management Corporation welcomes David Kimmel as one of the new Directors. Kevin Jasper, CEO, stated that the addition of Mr. Kimmel will spark fresh and new ideas to help ISIM move forward in building a green technology ISIM. Mr. Kimmel has spent his last 32 years working in the LOHAS (Lifestyles of Health and Sustainability) channels, a market segment focused on health and wellness, the environment, organic food and beverages, personal development, sustainable living and social justice. Mr. Kimmel specializes in new green technology product development and new business launch. He has significant background in concept development, strategic planning and operational implementation. His services have been rendered to national retailers,

Read the full article →

Insight Management Corporation — Announces New Director David Kimmel Brings Excitement to the "Green Team"

February 17, 2011

NEW YORK, NY–(Marketwire – February 17, 2011) – Insight Management Corp. ( OTCQB : ISIM ) ( PINKSHEETS : ISIM ) Insight Management Corporation welcomes David Kimmel as one of the new Directors. Kevin Jasper, CEO, stated that the addition of Mr. Kimmel will spark fresh and new ideas to help ISIM move forward in building a green technology ISIM. Mr. Kimmel has spent his last 32 years working in the LOHAS (Lifestyles of Health and Sustainability) channels, a market segment focused on health and wellness, the environment, organic food and beverages, personal development, sustainable living and social justice. Mr. Kimmel specializes in new green technology product development and new business launch. He has significant background in concept development, strategic planning and operational implementation. His services have been rendered to national retailers,

Read the full article →

Hank Morris Is Going To Prison

February 17, 2011

NEW YORK — A former top political consultant to New York’s disgraced ex-comptroller was led off to prison Thursday after being sentenced to at least a year and four months behind bars for his pivotal role in an influence-peddling scandal involving the state pension fund. Henry “Hank” Morris, who rose to political prominence in the state as a campaign manager for Democrats, apologized to the people of the state for compromising their faith in government before a Manhattan judge handed down the punishment. “Words cannot express the depth of my remorse,” he said, his voice and hands shaking as he read a prepared statement. Supreme Court Justice Lewis Bart Stone was unmoved. He sentenced Morris to the maximum allowed under the law, then denied him time to put his affairs in order before going to prison. “No. It’s time to go,” the judge said. Morris, 57, pleaded guilty in November to securities fraud. He admitted using his connections to former state Comptroller Alan Hevesi and other officials who oversaw New York’s massive pension fund to extract kickbacks from investment firms hoping to manage some of the funds’ assets. New York’s $125 billion retirement pool is one of the world’s largest government pension funds and richest sources of potential investment dollars. Over just a few years, Morris made $19 million in fees from companies awarded state business by Hevesi’s office. Prosecutors with the state attorney general’s office and the Securities and Exchange Commission said firms that refused to play ball had a harder time getting their foot in the door. The scandal enveloped a number of state officials and money managers, including Steven Rattner, the Wall Street financier who helped lead the Obama administration bailout and restructuring of Chrysler and General Motors. Morris has agreed to forfeit his millions of dollars in fees and has already repaid the retirement fund about $18 million, officials said. But “it is not sufficient that a thief restore stolen property so as to avoid jail time,” the judge wrote in explaining his sentencing decision. Morris will be eligible for parole after 16 months and would serve no more than four years behind bars. “Throughout my life, I have believed in the potential for government to be a force for good in the lives of people. In fact, I devoted the bulk of my professional life to achieving that goal,” Morris told the court before he was sentenced. “To recognize that my actions undermined those efforts has been very painful.” “Simply put, my actions undermined the integrity of New York State’s government, and, most importantly, have led ordinary people to question their faith in the political system.” As he was led away in handcuffs, he told relatives and friends in the courtroom: “I love you. I love everybody. Thank you.” The pension fund investigation was initiated and led for several years by former State Attorney General Andrew Cuomo, a Democrat who is now the governor. He called Morris’ sentence “a strong signal that it’s time to clean up Albany and the culture of corruption must and will end.” The pension fund probe became a political issue during Cuomo’s run for governor last year. His Republican opponent, Buffalo businessman Carl Paladino, argued that Democrats were going easy on Democrats in the case. Paladino continued his criticism Thursday, saying Morris emerged with too light a conviction and adding, “These people should pay for their indiscretions.” Eight people pleaded guilty to criminal charges in the case, including Hevesi, who admitted taking campaign contributions and luxury vacations from one money manager seeking pension fund business, and David Loglisci, the pension fund’s chief investment officer. Several financial firms also paid more than $170 million in civil penalties for their actions, including well-known, politically connected firms like the Carlyle Group. Rattner, who was accused of arranging for his investment company to pay Morris $1 million to better the firm’s chances of landing an investment deal with the pension fund, ultimately paid $16.2 million to settle civil lawsuits filed against him by Cuomo’s office and the SEC. Attorney General Eric Schneiderman, a Democrat who inherited the case from Cuomo, said Morris’ sentence showed “that those who abuse positions of power to line their own pockets will be held accountable by this office.” ___ Associated Press writer Michael Gormley in Albany contributed to this report.

Read the full article →

Middle East Protests Spark ‘Fears Of The Unknown,’ As Prices Rise

February 17, 2011

As civil unrest spreads through the Middle East, investors continue to fear that political change in the region could disrupt the world’s economies. Weeks after protests began in Tunisia and Egypt, violence erupted in Bahrain Thursday morning, as riot police assaulted demonstrators. If the upheaval continues to intensify, and if the region’s oil supply is disrupted, rising oil prices could drain consumers’ resources, put jobs at risk and threaten global economies, experts say. But investor fears seem to extend beyond even that prospect. Even as the U.S. economy shows promising signs of recovery, some investors are behaving as if dark days were at hand. “You have a convergence of economic fears that were already there,” said Jeffrey Garten, a professor of international trade and finance at Yale, and a former undersecretary of commerce for international trade in the Clinton Administration. “On top of that, now there are these fears of the unknown — how is the political ball going to bounce? All of that drives up commodity prices even more.” A disruption in the Middle Eastern oil supply could indeed pose a serious threat to the global economic recovery. If the price of a barrel of oil were to rise by $10.70 — or roughly 10 percent — and stay there for a year, the American economy would lose 270,000 jobs, according to a recent simulation produced by IHS Global Insight. As prices would rise at the gas pump, and as the transportation of goods would become more expensive, consumers would feel the squeeze. The price of oil has been rising since the protests began, leaving investors to weigh the probability of calamity in the region. On Wednesday, the price of Brent crude oil, an industry benchmark, rose above $104, to hit its highest level since September 2008. Back then, a summer of record-high oil prices — nearly hitting $150 a barrel — helped drag the economy into recession. A repeat of such a price spike could be devastating. “The economic recovery would probably remain intact, although the risks would be very high,” said Mark Zandi, chief economist at Moody’s Analytics. “If it went up to $150 and stayed there for the rest of the year, then all the benefit of the tax cut deal would be wiped out.” As Iranian warships are reportedly trying to pass through Egypt’s Suez Canal, investor behavior reflects a general sense of foreboding. The price of gold, which enjoyed a historic rise and then a decline late last year, is climbing once again. Early Thursday, spot gold gained 0.3 percent to hit $1,378.15 an ounce, Reuters reported. Gold futures grew in value by 0.7 percent, to hit the highest price for such a contract since mid-January. The fears driving this desire for gold may be overblown, economists say. Investors generally buy gold when they are worried about inflation, fearing that paper money will lose value. Right now, that doesn’t seem to be a risk, said Mark Weisbrot, co-director of the Center for Economic Policy and Research, in Washington. “All the catastrophe theorists love gold,” he said. “Gold has its own dynamic that’s separate from all the other commodities.” Inflation could, in theory, stem from a variety of sources. The prices of all sorts of commodities, including foodstuffs and cotton, have risen dramatically over the past year, and they’ve climbed ever higher in recent weeks, apparently on fears that Middle Eastern unrest could disrupt trade. Under pressure, food producers in rich countries like the U.S. might pass this higher cost onto consumers, but such increases are small, economists say. Higher costs of commodities pushed prices slightly higher in January, as the consumer price index , a measure of inflation, rose 0.4 percent. Over the past few months, inflation has been at historic lows. The principal economic risk emerging from Middle Eastern unrest seems to be a potential disruption in the oil trade. Inflation just isn’t much of an issue, Harvard economist Kenneth Rogoff said. “Any effect on inflation is extremely indirect. It would more be something that destabilized the global economy in general, and inflation ended up being a byproduct,” he said. “Oil is the most conspicuous economic risk, but it’s hard to know.” Still, investors are apparently nervous. Some risks associated with the Middle Eastern protests could be wholly unforeseen. “What may look like an isolated thing in Egypt or Bahrain is actually putting coal on a fire,” Garten said. “It’s the coal that represents unknown political factors. How bad will this get? And of course, nobody knows.”

Read the full article →

Kelly Services, Inc., Elects New Board Member

February 17, 2011

DMC Executive Joins Board of Directors

Read the full article →

Sara Ackerman: State Banks: A New, Old Idea To Increase Growth In Your Community

February 17, 2011

Every year billions of state tax dollars are taken from their respective states and deposited into the Wall Street “Too Big To Fail” banks. These same banks use municipal deposits to give loans to out-of-state big businesses, often shifting wealth from local communities; a huge loss of potential that could be better used encouraging local businesses and creating more jobs. With increased attention to where and how municipalities deposit their operating funds due in large part to the Move Your Money project, many are beginning to wonder: why can’t that money stay local? If community banks could accept public deposits, we could keep local money in the communities where it originated. Unfortunately, community banks are often unable or unwilling to accept large public deposits due to high collateral limits, making the venture unprofitable. That is where the idea of a public state bank–or partnership bank–comes into play. The movement to create a publicly owned state bank has been on the rise this year as multiple states including Washington, Hawaii, and Oregon have already introduced bills in their respective states, with more expected to follow. The idea of a state bank is not new, but rather models after the Bank of North Dakota created in 1919 which today runs at a profit and allows for the state of North Dakota to make significant investments in agriculture, economic development, and student loans- all at no cost to the state. So what has caused a resurgence of an idea nearly one hundred years old? It is in large part due to the remarkable success experienced by North Dakota as the rest of the nation suffers through the global financial crisis. After the economic downturn sent shockwaves felt throughout the world, North Dakota ran counter-cyclical, leaving many to wonder what insulated the state from all the turmoil. While most municipal governments found record deficits, North Dakota found record surpluses and while most communities grappled with high unemployment, foreclosures, and bank failures, North Dakota remarkably survived the brunt of the attack unscathed. Undoubtedly, the fact that North Dakota’s economy which is primarily based on agriculture and oil was a major contributor, but many are also pointing to North Dakota’s state-owned bank as a major impetus to their success. The Bank of North Dakota was created by a non-partisan populist movement in 1919 after farmers were fed up with out of state bankers limiting their access to credit. Farmers, whose livelihood primarily rests on factors outside of their control, revolted against their dire situation in creating the Bank of North Dakota. While the Bank of North Dakota was not an immediate success, over time the bank would serve as a tool to increase capital for local businesses and farms. A common misconception of state banks is that they compete with private banks. This however, is not the case. While the Bank of North Dakota has the legal right to accept private deposits, in practice only 1 percent of their total deposits come from individuals and businesses (many of the current proposals will potentially go one step further and outright ban the ability for state banks to accept private deposits). Rather, a public bank mainly serves as a “bankers’ bank,” allowing a small, community bank to make larger loans by sharing the risk and buying down the interest rate or buying loans from community banks which increases lending for small businesses and agriculture. Small businesses, which account for 70 percent of the nation’s workforce, have been particularly hurt by the credit crunch. In a recent survey of small business owners in Oregon, 67 percent reported problems with accessing capital to expand and 75 percent supported the creation of a state bank. Easing community banks ability to supply loans will not only increase profits for the bank but also help small businesses grow and create jobs. Additionally, a state bank could provide additional services to banks including currency exchange, check clearing, and providing liquidity. Thus, the relationship is more akin to a partnership, encouraging and strengthening community banks and allowing them to compete against the Wall Street behemoths. The benefits of state banks however, go further than just community banks. Since public banks have no shareholders to please, they have more freedom in choosing where they allocate their capital. Start-ups and small businesses that may provide long-term economic growth to a community are often passed over by Wall Street for investments that are more profitable to their immediate bottom-line. Yet a state bank would be able to leverage earned income through more lucrative activities to help subsidize economic growth in local communities. An additional plus of the state bank movement is that it could be a potential source of revenue for the state. The Bank of North Dakota was able to return over $350 million to the state’s General Fund in the last decade, which came in handy when the state faced a $40 million budget shortfall at the turn of the century. A state bank may or may not be the solution for your state, but it is an interesting experiment that some state legislators feel is worth a try. During this legislative session, it will be exciting to see which bills are successful and which fall short. Nevertheless, the creation of a state bank is a new, old idea that is worth a strong consideration.

Read the full article →

Ron Ashkenas: Your Communications May Not Be Communicating

February 17, 2011

Cross-posted from Harvard Business Review Have you ever been in an organization where communication was not an issue? If so, you’re the exception rather than the rule. Large organizations in particular have always struggled with the challenges of communications . In fact, the concept of span of control — a decades-old organizational design principle — was derived originally from communications research analyzing supervisors’ interactions with various numerical sets of subordinates. For example, one study noted that going from four to five subordinates increased potential interactions from 44 to 100; and that going from seven to eight brought the total from 490 to 1080. Hence the ideal number for traditional spans was usually pegged at seven, so that supervisors would be able to get more face time with their workers. Today, we’re not restricted to face-to-face communication for conveying information, and most companies have invested in full-time communications professionals. Consequently organizations are constantly communicating with their people through a wide range of modes and media: Newsletters and magazines, email blasts, town meetings, streaming videos — as well as traditional meetings . But yet somehow, communications are still a problem. As one of my clients is fond of saying (along with George Bernard Shaw ), “The greatest problem with communication is the assumption that it has taken place.” Now, I’ve never found a senior manager who says that communications are not important; so why do organizational communications continue to break down despite all of the investment and generally good intentions? Let me present three common traps: 1. Lack of context: How many times have you received a message but didn’t know what was behind it or why it was important? Not long ago, the senior leaders of a large corporation decided to launch a number of very critical initiatives, and consequently assigned project leaders from their areas. When the overall effort started to fall behind, the CEO called a meeting of all the project leaders and discovered that they lacked a common understanding of the initiatives: their urgency, their impact on the overall business, and their interconnectedness. Without that context, the project leaders were treating this as just one more assignment among many. 2. Lack of questions and dialogue: Recently I sat in on an “all-hands” meeting for a department of a major bank. At the session, departmental and corporate leaders made well-prepared, informative presentations — complete with slides, graphs, and videos. After 90 minutes of presentations, the departmental manager asked if there were any questions and — when none of the 150 people raised their hands — adjourned the meeting. A week later, when people were asked to give feedback about the meeting, most recalled that it was “useful” but very few could remember any specific takeaways. Without questions, your audience has no opportunity to digest the content through discussion, and communications are hard to absorb . 3. Lack of connection: Finally, communication is always local. The first lens that everyone uses to understand a message is: “What does it mean for me?” Because of that, communications can often be interpreted differently depending on the person. For example, a number of years ago an executive visited a manufacturing site to give employees the “bad news” that the plant was going to be gradually shut down over the next few years. After his announcement, he was surprised to hear a wide variety of reactions: Some were happy that they would get a payoff and be able to retire early; others were indifferent because they didn’t think it would really happen; and most thought it was too far into the future to worry about at present. All of the employees received the same message — but the individual interpretations were different, and none of them were what the executive expected. But because this executive didn’t have personal relationships with the plant workers, he was not prepared for their reactions. Communication in organizations is equivalent to the neural network in the human body. If there is a misfire, the organism becomes inefficient or even dysfunctional. If you’re a manager, part of your job is to strengthen the communication pathways to, from, and between your people. To do this effectively, take the time to provide context, encourage questions, and stay sufficiently connected to the different ways that people respond and react to messages. Of course there is more to effective communication than just these factors ; but for most managers, it’s a good place to start. How have you avoided the communications traps described here — and what others have you seen? For more, visit the Communication Insight Center

Read the full article →

José Cruz: The Toxic Rhetoric of For-Profit College Companies

February 17, 2011

For-profit college companies are indignant. They are outraged that the U.S. Department of Education is developing standards to define what it means to “prepare students for gainful employment in a recognized occupation,” the key term of a long-standing prerequisite enabling those companies to qualify for federal Title IV student financial aid, which includes Pell Grants and Stafford loans. And the for-profits are spending millions in a marketing campaign to let their indignation be heard, aided by a very diverse team of well-compensated, newfound friends — all of it to distract from the dubious quality of some of the academic programs they offer. Interestingly, their anti-regulation argument is not the typical claim that regulations hamper innovation and increase transaction costs. No — they tell us their real concern is that the proposed gainful employment regulations represent an indiscriminate assault on the educational “choices” and “opportunities” available to non-traditional and low-income students. Say what? In fact, the Education Department’s proposed regulations are actually just a timid attempt at accountability, ensuring that the students’ and taxpayers’ investment actually supports education leading to job earnings that are reasonably well-matched to the cost of that education. Currently, for-profit colleges need only check a box certifying that they prepare their students for gainful employment. That’s right — enforcement relies on the honor system. And the honor system has worked very well for the for-profits. During the past decade, their enrollments have grown by 236 percent. In one year, the sector captured over $24 billion in federal subsidies. But that honor system has not worked so well for students: The few who actually graduate from a for-profit institution with a bachelor’s degree have a median debt four times higher than that of bachelor’s degree holders from public colleges. The for-profits also rake in a high level of federal dollars relative to the number of students they serve. While they enroll only 12 percent of the nation’s college students, they consume 24 percent of all federal student loan dollars. And their proportion of loan defaults is even higher: for-profits produce 43 percent of all defaults on federal loans. So how draconian are the proposed “gainful employment” regulations? Not very, as it turns out. To be declared ineligible to receive federal student aid, programs must produce student debt burdens above 12 percent of students’ total income and above 30 percent of their discretionary income, and they must have loan repayment rates below 35 percent. Yes, the government is willing to live with 65 percent of loans not being repaid by students who have enrolled in very expensive academic programs. What about the programs that are just shy of meeting this toxicity test? In this case, the institutions would simply be required to limit enrollment growth until they get their risks under control. Clearly, the proposed standards do not threaten legitimate choice and opportunity. What they may do, however, is to stop legitimizing — through the availability of federal subsidies – academic “choices” that are so toxic they only constitute an illusion of “opportunity.” Unless the Education Department gives in to the toxic rhetoric of the for-profits and debilitates the already timid regulations. It is important for the Education Department to remember that oftentimes when corporations and trade organizations spend millions articulating their concern for the public, it is a strategy to reduce the risk of regulation by selling the idea that they can self-regulate. British Petroleum presents itself as aiming “for no accidents, no harm to people, and no damage to the environment.” Halliburton claims as a core value the aim “to be welcomed as a good corporate neighbor in our communities… to validate our progress through transparency and reporting.” McDonald’s touts commitment to “Nutrition and Well Being.” So it’s no surprise that the Association of Private Sector Colleges and Universities — the Washington group representing the for-profit industry — stresses a “passionate commitment to our members and the students they serve” and a “dedication to integrity, accountability and excellence in career and professional higher education.” For-profit colleges that earn their profits through innovation in educational delivery, rather than through under-investment in student success, have nothing to worry about. These companies should welcome the proposed regulations, since removing the worst actors will protect the sector’s reputation and provide an opportunity for market growth. The last time a powerful corporate sector gained rapid growth by aggressively targeting the underserved with high-risk products — benefiting from lax government regulations and a lack of appetite for enforcement — the result was the subprime mortgage crisis. The banks’ arguments were eerily similar to those of the for-profit colleges: Beware of unintended consequences that will limit “choice and opportunity.” The truth is that the bankers were asking us to protect toxic assets — and now the for-profit colleges are asking us to do the same. Inaction is not an option. We have to rein in those that abuse our social investment and prey on our underserved population. Choice and opportunity — as concepts, as values, as concrete manifestations of the American Dream — deserve more respect.

Read the full article →

Richard (RJ) Eskow: Hank Paulson: Ex-Goldman Sachs CEO, Ex-Bush Treasury Secretary, and Ex-actly Right

February 17, 2011

Somebody said that regulators need real power in order to be tough and effective. He said a strong, independent consumer protection agency is needed to help prevent the next financial crisis. And that we should help the millions of “responsible” homeowners hurt by the crash, instead of demonizing them. This guy described Fannie and Freddie’s assets as “bullsh*t capital” — $5.4 trillion of it, with taxpayers on the hook and potential debtors that included China and France. He also said this about the whole notion of privatizing a government activity: “To me, if there’s a guarantee, they should be a (government) utility (rather than a private company) — why should people get wealthy off of a government guarantee?” So who is this socialist — Noam Chomsky? He’s Hank Paulson, former Goldman Sachs CEO and Bush’s Treasury Secretary during the 2008 meltdown. Paulson’s interview with the Financial Crisis Inquiry Commission may leave you wishing he was still in Washington. The clarity of his comments highlight the absurdity of those politicians who claim that the FCIC reached a “partisan” conclusion. Here’s a Wall Street powerhouse and GOP stalwart who’s saying the same things — and more. Paulson didn’t just express opinions to the FCIC. He also provided anecdotes that illustrate the real problem with Fannie, Freddie, and the entire “privatize government” movement: When you give government backing to people with private-sector incentives, very bad things happen. So as the media distracts itself (and us) with the power struggle between Democrats and Republicans, a conflict it insists on describes as the “left” versus the “right,” Paulson described problems and their solutions in ways that neither party’s leaders are willing to discuss. Paulson spoke to FCIC staff last April, and an internal memo summarized that conversation: Not enough regulation + no consumer protection = catastrophe Here’s how the memo summarized Paulson’s thoughts, under the heading “Sec. Paulson’s Evaluation of Root Causes of Crisis” (all emphases in these excerpts are mine): Sec. Paulson stated that the root causes of the crisis were housing policy in addition to the lack of regulation . He explained that many mortgages had big regulatory gaps and many mortgages issued in many number of states did not have an adequate regulator. Sec. Paulson recommended including in a regulatory blue print a consumer agency that focuses on consumer protection and a mortgage origination commission that evaluates the training and regulation that goes on a state level and will be able to evaluate the different programs so investors would be informed . [ pdf ] Look at what Paulson’s saying: We need more regulation (“regulatory gaps”) and more regulators. We need a “consumer agency that focuses on consumer protection” (we now have the Consumer Financial Protection Bureau — it was downgraded from an agency to a bureau by the Senate). We need better training and regulation at the state level (banks are now trying to overrule state regulations to escape the consequences of foreclosure fraud). Investors need to be better informed about where there investments are going (Mr. Paulson’s former company is, of course, a major offender in this area). How many of these ideas are being promoted today by either party? And about that “housing policy”: This may sound like the old right-wing theme that it’s over-reaching when government tries to help poor people, but that’s not what he’s saying. As I hear it, he’s saying that many people were encouraged to buy homes who would’ve been better off renting. The problem wasn’t that government was too activist, but that the “ownership society” idea (and other government policies, including taxation) used government to encourage over-borrowing by some homeowners, enriching financial speculators while creating needless risk for borrowers. A lot of innocent homeowners got hurt — and they weren’t getting enough help. Paulson held town hall-style meetings in hard-hit real estate markets like Burbank, Stockton, Orlando, Chicago, and Kansas City. “I was literally sickened in terms of what I saw in terms of what had happened to some people, the terms of the mortgages,” he told the FCIC staff. He added that “lending essentially shut down on the private side, so now we were in a situation where very responsible people who wanted to buy or refinance to prevent losing their homes under very reasonable terms were having difficulty doing so.” Paulson described his own efforts to get loans out to these homeowners, which met with strong resistance from Fannie and Freddie’s badly-incentivized executives. Since Paulson left office, the current Administration’s HAMP program has only helped a few hundred thousand people although an estimated eleven million homes are considered at risk for foreclosure, and HAMP has harmed many others through the “extend and pretend” phenomenon. Meanwhile the House is planning to eviscerate funding for all housing programs in the next budget. Ideological battles diverted Congress from the task at hand. It’s ironic how many politicians who get campaign money from Wall Street banks — banks which continue to collect billions in indirect government assistance — resist anything that might help homeowners, because American families who obtained mortgages from those banks are supposedly “undeserving.” From the FCIC memo: According to Sec. Paulson, the “march to reform” in 2008 was diverted because of “really what were inconsequential battles” in the House over the Hope for Homeowners legislation, which he called a “a flash point” in the debate about on one hand, bailing out irresponsible individuals, and on the other hand inflating the number of individuals it would actually help … the battle over the program delayed GSE regulatory reform from being accomplished. In other words, Representatives were trying so hard to score points by knocking homeowners that they delayed action on the big-picture reforms that were so desperately needed. Significantly, ten Republican on the House Financial Services Committee crossed party lines to join with Democrats in forwarding Hope For Homeowners to the floor of the House, proving once again that common-sense reform needn’t be and shouldn’t be a partisan issue. By privatizing Fannie and Freddie, we created a monster. Intentionally or not, Paulson paints the picture of a monster: A company run by private-sector sharks, backed by government guarantees but unwilling to help the government carry out its policy — and aggressively lobbying to undermine the very principles that led to its creation. From the FCIC memo: “I had been trying to work regulatory reform through Congress, the House was not a problem, the Senate was a big problem” … Sec. Paulson said that he felt it was necessary to get the GSEs on board with reform … “I wanted them [the GSEs] to reiterate in front of the Senators the commitment to raise capital,” Sec. Paulson said. “And also, we had figured out that we were not going to get regulatory reform done if they opposed it. They had a lot of contacts on both sides of aisle, and were enormously effective , and they had different views …” Here’s what Paulson doesn’t say: Like Sallie Mae , the institution created to issue government-backed student loans, Fannie and Freddie were privatized and then went on a lobbying rampage designed to undermine their very own mission in order to further enrich the executives in charge. Paulson ran into roadblocks when he tried to get these “government sponsored enterprises” to collaborate with the government during an emergency. “Regulators were downplaying [the capital situation],” said Paulson. “There was a little bit of regulatory capture going on, I think.” That’s an understatement: He’s referring to $5.4 trillion in loose securities that had the implicit guarantee of the Federal government. $1.7 trillion was held by foreign countries, and Paulson explains how messy it became when he tried to explain this illogical and risky public/private marriage to leaders from countries like China and France. From the memo: Sec. Paulson said that the enterprises had “flimsy capital” and he said that some people referred to it as “bullshit capital,” (the deferred tax asset, for example), and that the regulator had no discretion to use its judgment with respect to the level of capital. Added to that, the country promoted a policy where the companies were chartered by Congress, “try to go around the world and explain to one leader after another what this implicit-not-explicit government guarantee was about. To me, if there’s a guarantee, they should be a utility — why should people get wealthy off of a government guarantee? Regarding those regulators, Paulson’s putting it mildly. Fannie and Freddie’s overseers ” didn’t have the power of a normal safety and soundness regulator,” as he put it, adding: “I don’t want to leave Washington without there being some major attempt to make it better and get a regulator who was more power.” Overall, Paulson paints the picture of runaway enterprises that were designed to fulfill a government mission but structured to do what private corporations do – with the corrupting influence of government guarantees creating a recipe for disaster. The end result was almost inevitable: Overly aggressive and reckless officers, backed by a Board of Directors Paulson described as “cheeky” and uncooperative. Despite this experiences, what’s the most popular recommendation in Washington these days for reforming Fannie and Freddie? Making them even more “privatized.” Somebody really ought to listen to Hank Paulson. In fact, why not put him in charge of the SEC? I know, I know: He’s ex-Goldman. But hey, Joe Kennedy did a damned good job at the SEC under Roosevelt. This guy’s learned a thing or two, and we could use him now. Besides, nobody ever called Hank Paulson a socialist. 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

Read the full article →

North Dakota Oil Boom Outpaces Oversight

February 17, 2011

BISMARCK, N.D. — Understaffed and overwhelmed, government oilfield inspectors are struggling to provide adequate oversight amid an explosion of activity in North Dakota’s oil patch, state and federal officials told The Associated Press. Hundreds of oilfield spills and thousands of waste disposal sites are being untended or are infrequently monitored because of a lack of personnel and funding, the officials said. And the staffing limitations come at a time when the industry – and a popular former governor – have pushed for a cut in state oil field taxes that help fund such monitoring programs. “It’s a fire drill every day,” Lynn Helms, director of the state Department of Mineral Resources, said in an interview with the AP. “We need more properly trained enforcement people helping the industry stay on track.” Oil production in North Dakota has boomed with the development of the Bakken and Three Forks formations, but oversight has not kept pace. Helms said the agency’s staffing is designed to handle 100 rigs and about 5,000 wells, whereas a record 169 rigs were drilling on Wednesday and more than 5,300 wells were pumping oil. About 2,000 more new wells are expected by the end of the year, Helms said. Moreover, he said the agency has funding for 13 inspectors though only 12 are on the job at present. Agencies that oversee oil production on federal land face some of the same inspection-staffing woes. The state inspectors, who are geologists or engineers, inspect the construction of new wells, disposal wells that hold waste and abandoned wells. They monitored a record 1,213 new wells last year, visiting each site at least six times during the three-week construction phase, Helms said. The inspectors ensure, among other things, that the steel pipe driven into the ground and cemented into place is done correctly to prevent groundwater contamination. Helms said the oversight of well construction is adequate but other monitoring is lacking. Nearly 900 disposal wells that hold saltwater, a byproduct of oil production, and about 5,200 sites that hold other oil waste are being monitored only twice annually at best, agency records show. They should be visited at least six to 12 times a year “to keep bad things from happening,” Helms said. Records show at least two wells that companies abandoned in the state’s oil patch have gone unplugged. The so-called orphan wells pose some of the biggest threats to groundwater supplies if not plugged correctly, but Helms said the agency doesn’t have the people or the funding to cap the wells at present and that’s dropped down the priority list. “Production has gotten ahead of oversight and without the resources to protect the environment and health, you have a worst-case scenario,” said Wayde Schafer, a North Dakota spokesman for the Sierra Club. “Yikes.” State Health Department records show 614 oil field-related spills were reported by companies last year, up from 478 in 2009. The number of reported spills this year – 127 through Wednesday – appears on pace to set a record. Dave Glatt, director of the state Health Department’s environmental health section, said most spills are minor and are cleaned up quickly. Only 10 have resulted in fines or other sanctions in the past year, he said. Glatt could not say how many oil field spills inspectors personally observed, saying, “we look at as many as one or two people can do.” The agency has had just one field inspector but recently shifted two workers from other duties, Glatt said. Helms’ agency has a two-year, $11.6 million budget for the fiscal cycle that ends June 30. It is asking for a $2.6 million increase in the next budget cycle, which Helms said would allow for about a dozen more oilfield inspectors. Ron Ness, president of the North Dakota Petroleum Council, said his group that represents about 250 companies supports a bigger budget for inspectors. “It is a heavily regulated industry but you’ve got to have enough regulators there to make sure it’s being done right and we support it being done right,” Ness said. Funding for the inspectors comes from the state’s 11.5 oil tax rate, which oil industry officials and former North Dakota Gov. Ed Schafer have pushed lawmakers to cut – though the state House defeated the proposed cut on Tuesday. “Yes, we don’t have enough inspectors . . . but lowering the oil taxes doesn’t affect inspectors and oversight,” the former governor said. “This is a legislative issue. We have not been spending the money properly that’s coming off the resource.” North Dakota is slated to collect about $961 million in oil taxes during its current budget period, and oil tax collections are expected to top $2 billion during the 2011-13 budget cycle. The U.S. Forest Service, which monitors oil and gas drilling and production on North Dakota’s federal grasslands, monitors about 600 active oil wells at present but expects to oversee about 350 more in the next decade. It is keeping pace with activity at present with its 18 inspectors, but would like to add at least three more – though federal budget constraints may keep that from happening, said Larry Melvin, mineral manager for the Forest Service. “We’re in the same pickle as the state,” Melvin said. Keeping pace with the booming oil activity on tribal land also has been a struggle, said Jim Albano, a spokesman for the Bureau of Land Management, which oversees oil development on the Fort Berthold Indian Reservation in western North Dakota. The number of oil-related projects has risen from 13 in 2008 to 113 last year, and another 57 projects have been proposed so far this year. The agency has increased its inspection staff from four to six but would like to even more. About 160 wells have been drilled on the reservation so far and the BLM is forecasting the number to rise to 1,000 by 2018. “It’s a challenge and it’s putting a lot of pressure on our staff,” Albano said. “Certain things are stacking up.”

Read the full article →

Jeffrey Korchek: Are Studios Dead?

February 17, 2011

While it may be true that in the movie business nobody knows anything, although I imagine James Cameron begs to differ, what about other businesses? Steve Jobs seems to know exactly what we want in elegantly styled electronics products, even before we do and even if they aren’t quite perfect. Jeff Bezos knows how to sell us almost everything we want online — and we thought he’d never make it past books. And how about that guy at Groupon who just turned down $6 billion for a company that didn’t exist 3 years ago and has zero barriers to entry in its business plan — he must know something. Of course, you can forget about Jesse Eisenberg/Mark Zuckerberg — he knows, what, about 600 million somethings. So, what does this have to do with movie studios? Well, it’s possible that the General Motors model of a studio — to paraphrase Alfred P. Sloan, “a movie for every person and purpose” — where one studio and its executives try to make a steady stream of comedies, dramas, genre pictures and those $200 million-plus things that hold up tents, is over. With studios’ high overhead and proven inability to control costs on one hand, and the daily onslaught of new technology that takes their product from them in ways they can’t understand and pays them less per viewing on the other, the very model of a modern major studio may just be dead. It’s a mixed up muddled up shook up world if you’re a major studio; everything that should go up is just going down — movie admissions, cable TV subscribers, and most dramatically DVD sales — while the wrong things — motion picture production and distribution costs, Redbox rentals, internet streaming and Netflix’s share price — all keep going up. Only the steady rise in the average price of movie tickets — up 5% in 2010 over the prior year, keeping box office results flat while attendance fell 5.3%, makes the business seem in okay shape. But, it’s not. Especially if you plot rising ticket prices and falling attendance on the same x:y graph and think about where that ends up. In the past, when studios green-lit their movies, theatrical performance was always the variable with video revenue and cable output deals a given, escalating based on box office gross. But now, with DVD sales down 33% over the past four years and cable networks like Showtime less interested in studio output deals, how can a studio even begin to green-light a movie based on historical revenue assumptions that are unlikely to be accurate 12-18 months later when the picture comes out? The existing major studios are all part of very large corporations, so their continued existence is not in jeopardy. Their corporate parents may get tired of owning them, like General Electric, but a bad movie or a few years of them isn’t likely to put them out of business. And while now nearly everybody can make a movie (but not necessarily get it released) the major studios still do something that other movie companies can’t: produce, distribute and market motion pictures on a worldwide basis, in all possible media and, of equal importance, collect the money. What the major studios don’t seem to be able to do, however, is adapt their current business model to the new world. They’re still making a yearly portfolio of unrelated movies with decision-making done on an incremental basis, paying big participations on expensive star-driven pictures in success (maybe less first dollar gross but then it’s just a participation pool with a minimal or no distribution fee and 100% of video income thrown in), while owning all the failure. While studios can say that financing partnerships lessen their risk, they also lessen the upside, which is what you’re in the movie business for in the first place. It’s possible, then, that the better model is the one practiced by Apple, Amazon and yes, Jim Cameron: do what you do, do it better than anybody else in a way or volume that allows you to exact a premium, build brand loyalty and keep your competitors out. Apple, Amazon, Groupon and the Facebook, despite their different businesses — one sells stuff they make, one predominantly sells other peoples’ stuff, one allows other people to sell their stuff to people who otherwise wouldn’t buy it, and one allows everyone to sell themselves — have something very important in common: a direct relationship with their customers and customers’ affinity for their brand. Studios long ago ceded that relationship. Back when, when people actually went to the movies every week, that relationship existed and studios had individual identities. And they controlled all aspects of the motion picture process — the talent, the production, distribution and exhibition of the pictures and the publicity surrounding them. Those days, of course, are long gone for a variety of reasons: crushing overhead, the Justice Department, technology the studios didn’t control and lack of foresight. The world is a different place, and movies may just have a different place in it. For the large corporations that control the 6 remaining major studios, what is the maximum point of leverage, and therefore revenue potential: producing content or controlling its distribution? With the high cost of producing content, a studio wants to maximize distribution of its product to consumers, but some of the alternatives, Redbox rentals for $1 or unlimited streaming on Netflix for $9.99 a month and whatever Amazon may do generate relatively minimal revenue and commoditize the product that the studios spend so much to make. And here the movie business is unique as the cost of making movies is totally separate from the price at which they’re sold, and increased costs cannot be passed on to consumers. So as a studio you’re torn between getting your content out there in the form that consumers demand while trying to retain some control so you’re not, say, merely providing a loss leader to companies who’s main business is something else, like electronic devices. In the future, fortune will favor the content producers with direct access to consumers, especially in the home and through the electronic devices that serve as extensions of the home — News Corp. which controls Fox and Direct-TV, Comcast with its purchase of NBC-Universal and Disney with its network and cable channels and its brand that guarantees access and Apple in its back pocket (actually it’s the other way around). Warner, which recently spun off Time-Warner cable, has the sheer power of its size. Paramount and Sony are riskier; the former with less connection to the home and the later with a foreign parent preventing ownership of a network (Is it odd that we allow foreign governments to own a good part of our country through Treasury bonds and other investments but we won’t let them tell us what to watch?). Now, don’t let me go all Peter Bart on you but here’s a memo: what the movie business needs is a unified plan and someone to lead it. Where is the movie business’ Steve Jobs, the person who knows what people want to see before they do, knows that giving content away for free on the internet isn’t such a good idea and who creates excitement, brand loyalty and an enduring corporate culture? Or is the development and production process for movies just too attenuated so that what once seemed like a good/clever idea isn’t when it finally gets made and released? And, is it unrealistic to expect that the same group of executives can effectively manage a diverse slate of 20 pictures, year in and year out, especially given the cost of all that? Before, even without enlightened leadership we could count on the intersection of self-interest and money to secure a future for the movie business. But now, with so much uncertainty in the economy, turbulence in the distribution of motion pictures, reduced shelf space for DVD’s at Walmart and maybe no shelf space at Blockbuster, and with the stakes so high because of the costs, there is no safe harbor. While change may be a natural cycle of any market economy, the motion picture business has to be careful to not bring it upon itself. Schumpeter would call this “creative self-destruction.” To avoid this, there must be a consensus among studios, talent and their representatives and unions. The unanimity with which the studios generally approach union negotiations should be brought to bear on distribution windows, technical standards and other forms of distribution, as well as talent relationships, just so long as cooperation stops short of collusion. If a secure future for studios is no longer merely controlling a vast library, it must be controlling the destiny, and exploitation, of their product. And in that, what is the defining relationship? It is the one with the consumer. It’s what Apple has mastered with their products, their stores; their community. It’s what Netflix has done by making its streaming service available on over 100 platforms — truly Movies Everywhere. That’s what studios or their corporate parents need to create and if it’s not through their content, it’s through how that content is delivered to the consumer. Consumer products companies create that relationship through brands, reaching through the retail outlets for their product to consumers. But movies aren’t really brands (and neither are stars; they, like Soylent Green, are just people) — brands offer security, status by association and trust, not to mention premium pricing. Movies are individual products that have one weekend to make a first, and lasting, impression on their audiences. Studios risk their future by ceding the relationship with the consumer to all those who sell their product.

Read the full article →

Darrin Redus: Boom In Black-Owned Firms Having Limited Effect On Black Unemployment

February 17, 2011

African-American entrepreneurship is on the rise at rates greater than the general population, according to data from the Census Bureau . The newly-released figures, reflecting the period between 2002 and 2007, show that the number of businesses owned by African Americans rose nearly 61 percent in those five years. By comparison, during the same period the overall number of U.S. businesses increased by just 18 percent. These figures are encouraging, but they are not surprising. Inner cities — where 82 percent of the residents are minorities — experienced job losses throughout the first decade of this century, despite growing job markets in suburbs and outer regions of cities from 2000 through 2008. Many African Americans — like other Americans — have turned to entrepreneurship out of necessity where job growth has slowed or disappeared. This trend is likely to continue for all Americans as we continue to shift to a new, globally competitive economy. The data also reflect the types of companies primarily being created. In 2007, nearly four in ten of these African American startups operated in the healthcare and social-assistance sectors, as well as repair, maintenance, personal and laundry services. Consistent with the type of businesses being started, the majority of the African-American businesses employed between one and four people . Fast forward to 2011, and we now need more than 15 million jobs nationally to get back to 2007 employment levels. For all of the encouraging trends regarding the growth of African-American entrepreneurship reflected in this data, a shift is necessary to start growing the types of companies that can create a much more significant number of jobs. When it comes to job creation, this happens via a very specific type of entrepreneurial company, as opposed to entrepreneurship more generally. According to the Kauffman Foundation: All net new job growth in the United States in the last 30 years has been the result of companies less than five years old. The companies creating the most significant net new job growth are young . The top 1 percent of companies are creating roughly 40 percent of new jobs. The most significant job growth comes from the fastest-growing companies . These companies are using transformative technologies, often accessing that technology from a university or research lab. The companies have a unique product or service. These companies have access to capital. They are able to actually grow because they are able to access funds. And the Census data reflect that most African-American entrepreneurs are not creating these types of businesses. There are numerous reasons for this, including a lack of access to these types of technologies and resources, awareness of how to secure risk-based investor capital, and knowledge of how to move a company from an idea into a job-creating entity. It is equally critical that high-growth entrepreneurship is encouraged and developed among entrepreneurs located in inner city locations, because these entrepreneurs can have a disproportionately positive impact on inner city job creation. The Initiative for a Competitive Inner City (ICIC), a research and strategy non-profit and national expert on inner-city economics, identified that high-growth inner city firms accounted for virtually all of the new inner city jobs created in the ten years prior to 2007 . Perhaps more importantly, they created new jobs for inner city residents at twice the rate of other companies located in “city limits,” and seven times the rate of companies located in the suburbs. And job creation in inner cities — jobs that, in turn, provide living wages and household income to inner city residents — is the first step in addressing many of the other challenges faced by inner cities communities, such as affordable housing, crime reduction and poverty. Glen Johnson and Pete Durette’s story is both an inspiration and an example of this type of high-growth entrepreneurship. Together, the duo had more than 40 years of IT experience, selling and delivering technology solutions to Fortune 100 companies. Glen and Pete wanted to capitalize on the Internet’s impact on the music industry and decided to apply their corporate IT experience to a new digital business model that lets millions of artists share their music with fans around the world on free social networking sites. Dubbed Melody Management , the company’s web-based platform lets artists upload their music, distribute it across dozens of social networking sites, and get paid directly. The unique payment piece is one of Melody Management’s competitive advantages; artists use the software to set song prices, receive 85 cents for every dollar sold, and get paid weekly. Melody Management founders Glen and Pete worked with Ohio-based venture development firm JumpStart to craft their message of differentiation and refine their business plan before going for investment consideration. And ultimately, the two raised $250,000 for their Software as-a-Service (SaaS) company. Although they are not a big company yet, they certainly have big market potential. So, how can we encourage more high-growth entrepreneurship among minority entrepreneurs, including those entrepreneurs located in inner cities? 1) A new dialogue is the first step. A rise in minority entrepreneurship is worth a celebration, but it’s not enough. All entrepreneurs need to be aware of, and consider, the opportunity to use a transformative technology or idea, apply it to a global market, raise funding to support it, and generate thousands of jobs and personal wealth as a result. Minority entrepreneurship must move rapidly into these higher growth markets and larger scale opportunities. 2) Engagement and outreach are the second steps. While there are many programs and initiatives across the country focused on emerging industries and technologies, the participation rate of minority entrepreneurs in these programs is disproportionately low. It takes a consistent, longer-term, and focused effort to engage and reach out to these culturally diverse citizens in order to truly develop a vibrant and inclusive entrepreneurial ecosystem. 3) Intensive preparation and facilitating key connections are the third steps. This isn’t different than what any high-growth entrepreneur needs to ensure the articulation of an idea most successfully, and the right audience of investors or customers to hear that articulation. But these specific services and key industry relationships must be expanded beyond their historical networks to ensure that all entrepreneurs have equitable access to higher growth opportunities. So, while we absolutely celebrate the positive trends in entrepreneurship for African American and other culturally diverse citizens, the country must now work to ensure that future Census reports reflect a much greater number of larger scale, diverse firms that employ by the hundreds versus staff with one to four employees.

Read the full article →

Dodd-Frank Progress Report: What’s Going On?

February 17, 2011

Welcome to our new blog, “The Watchdog,” which will keep a close eye on regulatory agencies and how their actions impact the lives of everyday Americans. Though the rules and regulations they write — from determining how much arsenic is allowable in your drinking water to whether your favorite TV show can drop the F-bomb in primetime — affect all of us, their deliberations and the way that lobbyists influence their decisions receives very little coverage. To make sense of these debates, follow the implementation of health care reform and financial reform and decipher the minutia of the Federal Register, “The Watchdog” is on the case. If you have any tips or suggestions, send them to marcus@huffingtonpost.com .

Read the full article →

Brian Frederick: It’s Time to Include Fans in NFL Labor Talks

February 17, 2011

Fans deserve to be present at NFL negotiations. Tuesday night, the Sports Fans Coalition sent a letter to the NFL and the NFL Players Association requesting that representatives from the fans be present during future negotiations until an agreement is reached. Allowing representatives of the fans to be present in the room is the least the NFL and NFLPA can do. In the letter to NFL Commissioner Roger Goodell and NFLPA Executive Director DeMaurice Smith, we write: We are not asking for a seat at the negotiating table — although we believe fans deserve one — but merely to be present in the room so that we may inform fans across the country about the state of ongoing negotiations and ensure that progress is being made towards an agreement that ensures a central consideration of fans. As fans and taxpayers, we have invested over $6.5 billion around the country on NFL stadiums, in addition to the billions we have spent on tickets and NFL merchandise. We have transformed our urban centers with the promise that new stadiums would serve as an economic boon to the surrounding community. A work stoppage would be devastating to many cities, including local workers and businesses. The NFL and other professional sports leagues also enjoy an exemption from federal antitrust statutes with respect to negotiating broadcast rights, which has enabled the owners and players to make significant revenues. If the NFL and NFLPA cannot come to an agreement and a devastating work stoppage is the result, the public has a right to know why. We realize that our request is likely to be greeted with skepticism by the NFL and NFLPA and some fans. But why? Why should the negotiations be behind closed doors if fans have such a massive stake in the future of the NFL as well? If the league and the players want to play in stadiums that are completely privately financed on private property, they are free to do so. They can lockout and strike and blackout all the games they want. Sports are different from other businesses, though. Not only do they ask for heavy public subsidies, they unite our communities in a way that Coca-Cola, Ford Mustangs and American Idol never could. These are our Packers or our Lakers or our Red Sox. We feel invested in the teams. And oftentimes, that’s because we literally are invested in them. So it’s time that all those who have invested — with our hearts and our tax dollars — have someone representing them in the negotiating room. Hell, it’s gotta work better than the status quo. If you agree, please let the NFL and NFLPA know and head over to Save Next Season to show your support for the fans. Brian Frederick is the Executive Director of Sports Fans Coalition . He holds a Ph.D. in Communication and lives in Washington, D.C. Email him at brian@sportsfans.org.

Read the full article →

Fred Wilson: Is Business School Turning Into ‘Entrepreneur School’?

February 17, 2011

Yesterday I went up to Harvard Business School and participated in a lunch and a class. My friend Jeff Bussgang arranged the trip and we were hosted by HBS Professor Tom Eisenmann . Jeff and I sat in front of Tom’s class Launching Technology Ventures and talked for almost 2 hours on topics like Lean Startup Methodology, Pivoting, doing a startup vs joining a startup, and more. I can tell you this, the HBS I visited is not the HBS I used to know. The students I had lunch with had all built a startup and exited before going to HBS. The knowledge and passion for startups evident in Tom’s class was off the charts. If business school is turning into entrepreneur school, then that’s a damn good thing. Anyway, Jeff took notes from the day and posted them on his blog . Every time I talk in front of a large group and take questions, some things come out of my mouth that are new thoughts that I’ve not expressed before. Between Jeff’s post and the tweet stream from the class , I was able to review the talk and a few thoughts struck me as good enough to share here. There is a very high correlation between lean startup approach and the top performing companies in our two funds. Lean startup methology is great, but it is really a lean startup culture you want. Lean startup is a machine, garbage in will give you garbage out. Early in a startup, product decisions should be hunch driven. Later on, product decisions should be data driven. Hunches come from being a power user of the products in your category and from having a long standing obsession about the problem you are solving. Domain expertise to the point of obsession is highly correlated with the most successful entrepeneurs in our portfolio. Ideas that most people derided as ridiculous have produced the best outcomes. Don’t do the obvious thing. Monetization should be native and improve the experience for users. If you have an idea that you can’t get out of your head, do a startup. Otherwise join a startup. If you are not technical, get product experience. Get your hands dirty and work with engineers. Take risks when you get out of business school. If you don’t take risks, you won’t find yourself in an interesting job and career. Finally, I’d like to say that Tom encouraged his class to tweet during class. I think that is fantastic. The tweet stream is like publicly available course notes for the class we did yesterday. Every time I talk to a class full of students I am going to call out a hashtag at the start of class and encourage tweeting. I’m very encouraged with what is going on at HBS and some of the other top business schools I’ve visited this year. Entrepreneurship is alive and well and a growing theme of business education. As it should be. This post originally appeared on AVC.com

Read the full article →

CVPS Names Larry Reilly to Be Next President

February 17, 2011

RUTLAND, VT–(Marketwire – February 17, 2011) – Larry Reilly, former president of distribution companies at New England Electric System and executive vice president at National Grid, will be the next president and chief executive officer of Central Vermont Public Service ( NYSE : CV ).

Read the full article →

John P. Jordan Named CFO of Zygo

February 17, 2011

MIDDLEFIELD, CT–(Marketwire – February 17, 2011) – Zygo Corporation ( NASDAQ : ZIGO ), a worldwide supplier of optical metrology instruments and high precision optical systems, today announced the appointment of John P. Jordan to the position of Vice President and Chief Financial Officer effective immediately. 

Read the full article →

Global Earth Energy, Inc. Announces the Addition of Mr. Richard Chenel to the Board of Advisors

February 17, 2011

WILMINGTON, NC–(Marketwire – February 17, 2011) – Global Earth Energy, Inc. ( OTCBB : GLER ) is pleased to announce an addition of our management team and the first of our new Board of Advisors, Mr. Richard Chenel.

Read the full article →

Strong comeback for Malaysia’s housing market

February 17, 2011

sustained economic recovery in Malaysia coupled with political stability last year contributed to the strongest house price increases since 2000

Read the full article →

Grubb & Ellis Restructures Troubled TIC Unit; Hires FBR Capital Markets To Identify Capital Sources

February 17, 2011

Grubb & Ellis Co. has created Daymark Realty Advisors Inc., a wholly owned and separately managed subsidiary that will now be responsible for managing the company’s entire tenant-in-common (TIC) portfolio and provide specialized management services to the owners of the tenant-in-common properties. As a result of the restructuring, Daymark Realty Advisors becomes one of the largest real estate asset management companies in the country, serving more…

Read the full article →

Grubb & Ellis Restructures Troubled TIC Unit; Hires FBR Capital Markets To Identify Capital Sources

February 17, 2011

Grubb & Ellis Co. has created Daymark Realty Advisors Inc., a wholly owned and separately managed subsidiary that will now be responsible for managing the company’s entire tenant-in-common (TIC) portfolio and provide specialized management services to the owners of the tenant-in-common properties. As a result of the restructuring, Daymark Realty Advisors becomes one of the largest real estate asset management companies in the country, serving more…

Read the full article →

Inland Western Retail Giving up Non-Traded Status for Public Offering on the Big Board

February 17, 2011

Inland Western Retail Real Estate Trust Inc., one of the best known among the major private, non-traded REITs in the country, is shifting course and recapitalizing as a publicly traded company on the NYSE. The Oak Brook, IL-based owner of 272 properties with 36.7 million square feet of gross leasable area valued at $6.7 billion filed a registration statement with the Securities and Exchange Commission seeking to raise $350 million in a proposed…

Read the full article →

KBS REIT II Acquires $90M Industrial Portfolio

February 17, 2011

KBS Real Estate Investment Trust II (KBS REIT II) has acquired a four-building industrial portfolio of commercial properties located throughout Pittston, Hazleton, and Jessup, PA for $90 million, or about $55 per square foot. The portfolio consists of 1.6 million square feet of class A industrial space in the Northeast Pennsylvania industrial market located along the highly traveled Interstate 81 corridor. The four buildings are fully leased to…

Read the full article →

KBS REIT II Acquires $90M Industrial Portfolio

February 17, 2011

KBS Real Estate Investment Trust II (KBS REIT II) has acquired a four-building industrial portfolio of commercial properties located throughout Pittston, Hazleton, and Jessup, PA for $90 million, or about $55 per square foot. The portfolio consists of 1.6 million square feet of class A industrial space in the Northeast Pennsylvania industrial market located along the highly traveled Interstate 81 corridor. The four buildings are fully leased to…

Read the full article →

A QUICK FIX: Bank Regulator’s Easy Solution May Hurt Homeowners

February 17, 2011

The federal bank regulator overseeing the nation’s largest lenders is pushing for a quick and modest settlement to the months-long federal and state probes into abusive mortgage practices, frustrating other federal agencies and state regulators and raising questions over President Barack Obama’s delay in naming a pro-consumer chief to head the agency. The Office of the Comptroller of the Currency, which oversees lenders like JPMorgan Chase and Bank of America, plays a key role in the ongoing investigations launched last September into improper foreclosure practices. The federal review involves the OCC and other bank regulators, as well as the Departments of Justice, Housing and Urban Development and the newly formed Bureau of Consumer Financial Protection. The 50-state probe involves state attorneys general and state bank regulators. But the OCC, known for its light-touch approach, is trying to come to a quick settlement with the banks it supervises, according to officials from multiple agencies involved in the investigations. The agency is negotiating an agreement that would cost the industry less than $5 billion in fines and mortgage modifications for troubled homeowners, including principal reductions, the officials said. Other agencies are pushing for something bigger. On Wednesday, Rep. Patrick McHenry, a North Carolina Republican, said during a House hearing on housing issues that he had heard the potential settlement would be in the “tens of billions range.” In 2008, state attorneys general reached an $8.4 billion agreement with just one company — Countrywide Financial — to settle predatory lending accusations. The money was used to aid distressed homeowners. The OCC is also trying to persuade mortgage companies that collect payments from borrowers, known as servicers, into adopting new standards in how they deal with homeowners. The agency has wide influence over the way banks service mortgages: It supervises firms that control nearly two-thirds of all home mortgages in the U.S., or more than 33 million loans totaling about $5.8 trillion. But officials said the OCC’s proposals give the institutions wide discretion, potentially undercutting their intent. The OCC is said to be rushing to settle in hopes of forcing the hand of other regulators on the federal and state level, weakening their efforts to extract a more meaningful resolution. The probes have cast a pall over the industry as bank executives have been forced to answer questions about the investigations posed by investors and analysts. The industry wants to put the whole matter behind it and move on. Officials at the Treasury Department and Federal Deposit Insurance Corporation have grown frustrated with the OCC’s efforts, people familiar with the matter said. State regulators conducting their own probe said they aren’t a part of the OCC’s seemingly lonely action. “Any statements or actions by the OCC at this point are on the agency’s own behalf and not in conjunction with the 50-state attorneys general,” Iowa Attorney General Tom Miller said in a statement. “Regardless of any federal action, we intend to fully pursue all state claims and remedies.” Spokesmen for the OCC didn’t respond to a request for comment e-mailed after regular business hours. State and federal officials are trying to reach a global settlement that will deter future abuses in the way mortgage servicers modify delinquent home loans and foreclose on homeowners, as well as levy penalties as a measure of restitution and force lenders to restructure distressed mortgages. The OCC’s efforts subvert the possibility of a unified settlement, officials said. In December, Federal Reserve Governor Daniel K. Tarullo said the federal review had found “significant weaknesses in risk-management, quality control, audit, and compliance practices as underlying factors contributing to the problems associated with mortgage servicing and foreclosure documentation.” “We have also found shortcomings in staff training, coordination among loan modification and foreclosure staff, and management and oversight of third-party service providers, including legal services,” he said. In the wake of the worst housing crisis in generations, consumer advocates, housing analysts and bank regulators have heavily criticized the industry’s performance. In addressing the recent controversies of improper foreclosures during a speech last November, Fed governor Sarah Bloom Raskin said procedural flaws like robo-signing and other efforts that cut corners are “part of a deeper, systemic problem.” She added that she was “gravely concerned.” “The complex challenges faced by the loan servicing industry right now are emblematic of the problems that emerge in any industry when incentives are fundamentally misaligned, and when the race for short-term profit overwhelms sustainable, long-term goals and practices,” Raskin said. “I believe that serious and sustained reform is needed to address the larger problems in mortgage servicing.” Tarullo said the “problems are sufficiently widespread that they suggest structural problems in the mortgage servicing industry.” “The servicing industry overall has not been up to the challenge of handling the large volumes of distressed mortgages,” he said in December. “It is clear that the industry will need to make substantial investments to improve its functioning in these areas and supervisors must ensure that these improvements occur.” But as of last week, nothing had changed, Raskin said in another speech. “These problems existed before November and as far as I can tell they remain unaddressed,” Raskin said. “How do I know this? Late last year, the federal banking agencies began a targeted review of loan servicing practices at large financial institutions that had significant market concentrations in mortgage servicing. The preliminary results from this review indicate that widespread weaknesses exist in the servicing industry.” “These deficiencies pose significant risk to mortgage servicing and foreclosure processes, impair the functioning of mortgage markets, and diminish overall accountability to homeowners,” she added. “I’m sure this has been said, but I’ll say it again because I have seen little to no evidence of improvement in the operational performance of servicers since the onset of the crisis in 2007.” Bank regulators will address the issue on Thursday during a Senate hearing. On Wednesday, Federal Housing Administration Commissioner David Stevens said that a settlement would come in the next month. Options include penalties against the nation’s largest banks, more mortgage modifications for borrowers, and the reduction of homeowners’ mortgage principal, he said. Stevens also touched on how regulators aren’t on the same page. “There’s two ways we can go about coming to a conclusion here,” Stevens said. “We can come up with one set of solutions, assuming the general findings are the same, or we can go individually. That process is being worked through right now.” The FHA chief added that the agencies would have to work together “to make this less disruptive in the market,” an acknowledgement that a massive principal write-down scheme would likely impair the nation’s largest financial institutions. The OCC’s actions in trying to derail a more substantial settlement raises questions over the Obama administration’s delay in nominating the agency’s next leader. Its last chief, John C. Dugan, stepped down in August after his five-year term ended, and joined Covington & Burling LLP, where he leads the firm’s financial institutions group. Dugan “advises clients on a range of legal matters affected by significantly increased regulatory requirements resulting from the financial crisis,” according to the firm’s Web site. One of his colleagues is Edward Yingling, who last year stepped down as president and chief executive officer of the American Bankers Association, the industry’s largest trade group. Consumer advocates pushed for the White House to nominate an outsider who was less connected to the OCC’s prior failures. The agency came under withering criticism for its lax oversight of the industry in a report published by the bipartisan, Congressionally-appointed Financial Crisis Inquiry Commission. Treasury Secretary Timothy Geithner picked Dugan’s former chief of staff at the OCC, John Walsh, as Dugan’s interim replacement. Obama has not yet named his successor. The nomination requires Senate approval. But Democrats lost six seats in the Senate in last fall’s election. The administration now faces an uphill battle to get a tough regulator in the role. ************************* Shahien Nasiripour is a business reporter for The Huffington Post. You can send him an e-mail ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455.

Read the full article →

Apartment Owners React Cautiously To Proposed GSE Reform

February 17, 2011

In its proposal to reform bailed-out mortgage financing giants Fannie Mae and Freddie Mac, the Obama Administration appears to primarily take aim at preventing another financing bubble that resulted in the collapse of single-family housing values and sent the economy spiraling into recession. Apartment landlords, investors and industry groups are concerned they may become collateral damage in the President’s plan to reduce the government’s footprint…

Read the full article →

Apartment Owners React Cautiously To Proposed GSE Reform

February 17, 2011

In its proposal to reform bailed-out mortgage financing giants Fannie Mae and Freddie Mac, the Obama Administration appears to primarily take aim at preventing another financing bubble that resulted in the collapse of single-family housing values and sent the economy spiraling into recession. Apartment landlords, investors and industry groups are concerned they may become collateral damage in the President’s plan to reduce the government’s footprint…

Read the full article →

Apartment Owners React Cautiously To Proposed GSE Reform

February 17, 2011

In its proposal to reform bailed-out mortgage financing giants Fannie Mae and Freddie Mac, the Obama Administration appears to primarily take aim at preventing another financing bubble that resulted in the collapse of single-family housing values and sent the economy spiraling into recession. Apartment landlords, investors and industry groups are concerned they may become collateral damage in the President’s plan to reduce the government’s footprint…

Read the full article →

Susan Buchanan: New Orleans Tap Water Beats Odds, Meets All Regulatory Standards

February 17, 2011

The Crescent City draws its water from the Mississippi — a river lined with petrochemical plants and storage tanks and full of waste from northern neighbors. Residents worry about spills in the river, and wonder if oil lapping at the coast has affected their faucet water. In a weekend last November, city dwellers endured a boiled-water advisory after a plant problem. And life on some blocks has been disrupted by water main breaks in recent years. Local, state and federal authorities, however, say the city’s tap water meets and, under some criteria, exceeds their standards because of controls on discharges in the river, constant water sampling and cleansing at plants. Last week, the purification superintendent at the Sewerage & Water Board of New Orleans rated the quality of the city’s tap water as “excellent.” The 106-year-old Carrollton plant, outfitted with pumps, pipes and generators to pull water from the river, uses conventional purification processes, filters the water and provides 135 million gallons daily to nearly 300,000 people over hundreds of square miles. The facility’s tile-roofed buildings employ 200 workers, and contain a water-quality laboratory. Vincent Fouchi, Superintendent of Water Purification at the S&WB, said “we have the same plants, the same chemicals and procedures as before Katrina.” Across the river, the Algiers plant supplies the West Bank with 10 million gallons of drinking water each day. “We monitor the two plants daily and monthly to comply with U.S. Environmental Protection Agency and state Dept. of Health & Hospitals water-quality guidelines,” Fouchi said. “We’re in compliance with current regulatory levels. The state’s Dept. of Environmental Quality has done a good job of controlling the flow of industrial waste in the river by strict permitting of plant emissions.” The U.S. Coast Guard has helped enforce those permits. Fouchi said, in his opinion, “the S&WB provides excellent-quality, potable water to our customers.” He continued, saying “DHH tests for agricultural runoff and pesticides in the river.” And while the BP spill was too far away to hurt the city’s water supply, “we remain vigilant for upriver oil spills between Baton Rouge and New Orleans.” The DEQ has an Early Warning Organic Compound Detection System or EWOCDS for spills. The S&WB lab analyzes river water daily and reports any contaminants to the DEQ. Fouchi said river pumping operations are halted “when we choose to stop taking water from the river.” Decisions to stop drawing are based on types and concentrations of contaminants. “We have more than one river pumping station and sometimes a spill may affect one, but not two stations,” he said. In a long-ago study, released in 2003, the Natural Resources Defense Council said the city’s water quality was good, but source protection was poor. Fouchi said “for source-water protection, EWOCDS is our best tool. The Mississippi River is leveed between Baton Rouge and the mouth of the river, so the only sources of possible contamination along this stretch are permitted industrial discharges and marine traffic accidents.” He noted that other large cities on the Mississippi like St. Louis draw their water from the river, though Baton Rouge gets its supply from deep wells. New Orleans, meanwhile, is strapped for cash for upgrading the water system. “Our infrastructure needs are still significant, and greatly outreach our current, capital-improvement funding levels,” Fouchi said. “We’re doing our best to repair infrastructure and equipment, as needed, within our current, budgetary constraints.” The U.S. Army Corps of Engineers is installing a new generator at the Carrollton plant in an estimated $48 million project. Nancy Allen, Army Corps spokeswoman, said a contractor is building a structure to house the generator, which should be in place this September. At the Algiers plant, “we switched from elemental chlorine to sodium hypochlorite about two years ago,” Fouchi said. Sodium hypochlorite is a chemical compound used to disinfect water. “We’re currently constructing a sodium hypochlorite storage and feed facility at Carrollton, where sodium hypochlorite will replace elemental chlorine as our disinfectant.” Those change are intended to eliminate risks from chlorine gas releases. Clyde Carlson, New Orleans-based, district engineer in the Office of Public Health of the La. Dept of Health and Hospitals, said “the city is in compliance with safe-drinking water regulations. Customers can look at the S&WB’s website and read its consumer confidence report released last summer, along with updates on that report.” In terms of water quality, the city’s purification plants meet all state and federal, including EPA, standards. Under EPA requirements, a consumer confidence report must be mailed to customers once a year. The S&WB plans to send out its next report this summer. New Orleans drinking water escaped any affects from the Gulf spill. “We’re 100 miles upstream from the mouth of the Mississippi River, and the BP spill occurred 50 miles out in the Gulf and in no way impacted water quality in New Orleans,” Carlson said. “We’re vigilant about any spills that might occur on the river upstream from us, however.” A network of monitors, involving the DEQ, DHH’s Office of Public Health and the U.S. Coast Guard, alerts stakeholders and water authorities about any detected spills in the river. The last, big river spill in New Orleans occurred in July 2008 and left residents concerned about tap water. “In the 2008 incident, in which a barge overrun by a tanker spilled oil in the river, we saw a quick response from the Coast Guard, DEQ, EPA and Louisiana’s Office of the Oil Spill Coordinator,” Carlson said. “The S&WB Algiers’ plant closely monitored or closed down water intakes from the river in an appropriate response.” A water advisory was issued for Algiers, however. As for leaky water mains and pipes in New Orleans, Carlson said “mains that have exceeded their design life are a challenge for aging infrastructure across the country. However, with enough positive pressure from electrical and steam power in the distribution system, contaminants are unlikely to get into tap water from broken mains.” Last November’s boil-water advisory in New Orleans, Carlson said, “was based on an abundance of caution after a brief power outage at the Carrollton plant affected delivery of water to the distribution system, but didn’t alter treatment.” Carlson continued, saying that joint, water-quality testing is performed by S&WB and the DHH. “Daily, monthly, and yearly reports are sent to us at the Safe Drinking Water Program of the Office of Public Health.” Bacteriological sampling is conducted monthly at the East and West Bank distribution systems, and all EPA protocols for monitoring pollutants are followed. “Sampling is routinely done under lead and copper rules and disinfection byproduct regulations,” he said. The S&WB water lab is state-certified every three years. Carlson said “the Carrollton power plant was flooded by Katrina, but in a staged recovery, potable tap water in areas closest to the plant was back on in about three weeks.” Other city neighborhoods were gradually brought back. “However, it took almost a year for the Lower Ninth Ward to have potable, tap water because of water quality and pressure issues,” he said. Fouchi at S&WB said the Carrollton plant was shut down for several days after Katrina, but it was several months before normal operations resumed because it hard to procure water-treatment chemicals. Meanwhile, the Algiers plant was not flooded by Katrina. As for other water sources, Carlson said Baton Rouge relies on wells because of high-quality ground water in that area. New Orleans has some wells that aren’t for drinking. Audubon Park, for example, contains a well for irrigation purposes. Ground water in the New Orleans area can be highly colored or highly saline, and would require different treatment than river water, Carlson said. “And there are some instances across the country where ground water withdrawals have caused subsidence” or ground sinking, he noted. Jesse Means, geologist with the Drinking Water Protection Program at the La. Dept of Environmental Quality, said “our program focuses on public awareness, and we did surveys across the state from 2000 to 2003 to locate water wells and surface water intakes, including intakes in the Mississippi River, for every public water system.” The DWPP is an outreach program to help communities protect aquifers, rivers and lakes used for drinking water. The surveys have been updated in recent program work. “We’ve identified facilities and activities such as chemical plants, gas stations, and cemeteries near public wells and water intakes that have chemicals associated with them,” Means said. Barge-cleaning operations, anchorages and wharves have been recorded. “We’ve surveyed everything from St. Francisville down to Boothville on both sides of the river, and tried to identify all plants and other activities discharging into the river,” he said. A third of Louisiana’s residents get their water from surface water–lakes, rivers and bayous–while two-thirds drink water that comes from wells and is pumped out of aquifers. Means said “the DEQ looks at drinking water use and what the quality of the river water needs to be, and has a strict, discharge-permitting system. Plants are allowed to discharge a specified amount of treated waste water into the Mississippi River under their permits.” He continued “if plants treat their water and follow what’s authorized in their permits, they are not unduly polluting the water supply. The DEQ has routinely worked to locate unpermitted discharges for years in the New Orleans area and elsewhere.” The U.S. Coast Guard permits and inspects sewage-treatment systems for vessels in navigable waterways. Means said “the DWPP tries to get as many people and businesses involved in pollution prevention as possible. We’ve set up volunteer committees–made up of citizens, officials, water-system operators, business owners and anyone that’s interested in participating–to visit businesses near water-supply intakes and wells, and we try to educate them on best management practices to prevent pollution.” Meanwhile, in an issue that has resurfaced, Carlson said “OPH is aware of the recent, EPA draft guidance on perchlorate, and will continue to work with EPA on related rules and regulations in the future.” In early February, the EPA said it will regulate perchlorate, a component of rocket fuel, along with sixteen other volatile organic compounds that can cause cancer. Carlson also said “the Office of Public Health does not advocate point-of-use treatment devices for water, particularly when water meets regulations. However, if a resident chooses to use a filter, they should use an NSF-certified device.” NSF International, an independent, public-health group, tests and certifies products. Carlson advised “run tap water until the temperature changes, especially in older buildings in the morning, to flush out plumbing contaminants and metals from old pipes. And always use water from the cold tap for consumption.” Also, make sure prescription drugs are not disposed of in sinks, toilets, drains or through any conduit to the watershed, he said. This article was published in the Feb. 14, 2011 edition of “The Louisiana Weekly.”

Read the full article →

How Much Is Your Life Worth?

February 17, 2011

WASHINGTON — As the players here remake the nation’s vast regulatory system, they have been grappling with a subject that is more the province of poets and philosophers than bureaucrats: what is the value of a human life?

Read the full article →

Shira Hirschman Weiss: ‘Are You There God? It’s Me, Jobless’

February 17, 2011

Last Thursday, the Labor Department released data stating that the number of new unemployment applications is at its lowest since July 2008. While this indicates the economy is picking up speed, the news can either be a beacon of hope or salt rubbed into wounds for the presently unemployed. Faith is in a precarious perch for the religious and jobless. While some become despondent from repeated rejection and thwarted efforts, others cling to faith and turn fervently to prayer. Deirdre McEachern is a career coach who says she sees clients “whose faith has been enhanced and re-affirmed by the job hunt.” One of those clients, Jennifer Bindhammer, was a flight attendant with United in September 2011. “She came to me in early 2002 re-evaluating her life,” explains McEachern. “We worked together for several months and in the process she reconnected strongly with her personal faith. Once she deciphered her life purpose, she felt as if God was opening doors for her — helpful coincidences kept appearing — like the sign she spotted on a subway platform advertising an MBA program.” This literal and figurative ‘sign’ led the flight attendant to pursue her MBA. In the process of contemplating the switch to a corporate profession, Bindhammer — no stranger to the friendly skies — turned to the heavens . “I enjoyed flying and I enjoyed my job, she writes in a testimonial, “It just wasn’t the challenge that I wanted it to be, and realized that I needed to be challenged. When I thought about changing careers, I prayed about it — I actively prayed .” Bindhammer followed her passion, received her MBA and kept praying. She is now working with an international air transport consultancy that focuses on aviation. While the former flight attendant’s faith was reaffirmed, Fiona (not her real name) reflects on how she sunk into a deep depression when she was laid off from a Public Relations start-up during the late 90s “dot bomb” era. She stopped praying and began spending Friday nights at local bars instead of the synagogue. She could have benefitted from an organization like Project Ezrah, had it been around at the time. The North Jersey based organization was founded in 2001 to aid members of the Jewish community (and now helps Jews and non-Jews alike) who were suffering from the hardships of unemployment. Rabbi Yossie Stern, Executive Director of Project Ezrah, has seen individuals like Fiona who have been turned off to the synagogue experience, who are angry with God, and who are depressed about their situation to the point of losing faith. His organization has put together programs to help those who feel despondent. Notably, it developed initiatives to professionally retrain unemployed baby boomers. “When your brother is impoverished, you have to be able to empower him to be self sufficient,” he explains, “The highest form of charity is being able to afford someone a job, to help him achieve the same sense of self-esteem and quality of life that you have.” His organization provides a wide range of services including a popular job board, career counseling services, financial counseling, mental health counseling, job training, and “in the box and out of the box services. We try to provide it all,” Stern says. There is also a LinkedIn group that includes seminars on how to use social networking to find a career and much more. “We empower people to network, which is the best way to find employment.” Fiona eventually found her way back to a public relations career and to the synagogue, but admits that she felt at odds with her faith when things were uncertain: “I didn’t feel it was God’s fault,” she explains, “It was related to a sudden, dark depression, which came about from my unemployment.” And which, she admits, also may have been related to the fact that she was in a bad relationship at the time. “When life is unstable, it contributes to the instability of unemployment.” Rabbi Stern stresses that it is critical that spouses be encouraging and not place blame due to unemployment. He emphasizes that a support system and building of confidence is essential to one’s job hunt. While Fiona received counseling for her depression, she realized she needed to make significant efforts to find a new job. “The Hebrew word Hishtadlut kept flashing through my head,” she says. Hishtadlut means that one must make their own efforts. It relates to the universal concept of “God only helps those who help themselves.” We frequently hear news stories of people who take out billboards on major highways declaring “Hire Me!” While some may cringe, others applaud the bravery of these individuals … Then suddenly, they’re on Oprah. There’s no question that personal efforts need to be extended, that while you may pray for a miracle, divine intervention is a hand reaching across to meet the other hand — that of personal, human intervention. This may be the reason why video producer Richard Lucas is going public with his job hunt: “I’m using my faith to find my next job and blogging about it ,” he tells me, “I’m letting God lead me to new people and places (driving from New Hampshire to Southern California) in the belief that He will lead me to my next job. I’m not there yet, but the journey has just started and I’m only as far as Virginia.” Prior to his big road expedition, Lucas held jobs in radio, television, high tech marketing and sales. He also owned a repair business in Southern California and most recently, a small video production house in New Hampshire. “I couldn’t drum up enough business to get a profit out of the video business so I moved to southern New Hampshire and stayed with my brother for 4 months, looking for work but no joy,” he says. “My plan was to go back to Southern California where there are more video jobs and I have a larger personal network. My faith in God is strong and I believe that on the road trip back to LA, God will show me opportunities along the way. In fact, He did just that at a church in Virginia. I’m staying here now (in VA) for a few days to do video projects while recording segments for a documentary project on miracles.” Lucas says that he believes “God is guiding me to do these things. He will lead me to a new job or even a new career. It may be in Southern California or it or it may be somewhere else. I’m completely walking in my faith here. I’m quite certain that without that faith I would not have the direction and optimism that I currently possess with regard to the future.” Rabbi Stern and other religious leaders applaud this type of optimism. As Stern says, “Everyone in this world gets challenged and there are bumps, the question is ‘how do we deal with the bumps’?” As a clinical psychologist, Dr. Randy Gilchrist is able to make his own observations about faith and unemployment: “From what I have seen, people who are unemployed do tend to go through a definite trial of their faith. Common questions they may ask themselves during that period: ‘I’m a good person, why would God allow this to happen to me?’, ‘Am I being punished’, or ‘What did I do to deserve this?’ (as if God were punishing them personally). In these cases, one’s faith is tried, strained, and sometimes lost if a resolution is not forthcoming. On the other hand, others who have a belief in God that better allows for apparent unfairness tend to do much better in challenging circumstances like job loss and extended unemployment. They may even have their faith strengthened through the experience. In these cases, they may ask themselves an entirely different question, such as, ‘how will this situation strengthen me?’, ‘what better opportunity is God preparing me for’, ‘how will this help me develop character?’, or even, ‘how will this circumstance allow me to better serve God or others?’. ” In other words, Gilchrist feels that different conceptualizations of God and varying extents of belief will largely determine the response, which “could go either way.” Bob Pautke of the Cincinatti, Ohio based Job Search Focus Group (JSFG) which meets in the Hyde Park Community United Methodist Church, says he doesn’t see a loss of faith in members but the opposite: “They are taking the time to better understand their selves and their gifts, bringing them to a stronger faith.” He says he has seen congregants, who are frustrated and seemingly desperate, turn to faith as a source of hope and direction as they attend weekly support meetings to hear advice from experts and peers. Across the U.S., other churches, synagogues and places of worship now offer programs and services to the unemployed, ranging from networking events to career and mental health counseling, motivational speakers and more. Rabbi Aharon Ciment of Congregation Arzei Darom in Teaneck, NJ, jokes that he is like Sy Sperling, the president of Hair Club for Men, who famously declared in the late ’80s commercials “I’m not only the hair club president, but I’m also a client.” Ciment can relate to congregants in need because there was a time when he too was out of work. Now about to receive his Masters in Mental Health while teaching high school students, Ciment says he would not have considered the idea of going back to school had he not lost his old job and realizes now that it was divine intervention. He echoes what Fiona stresses about Hishtadlut . During his period of unemployment, he made every effort to look for a new job. In addition, he says, one must have Emunah — belief, to go along with one’s personal efforts. “Never lose hope,” he stresses, “God remembers all of us.”

Read the full article →

Deep Yellow Limited (ASX:DYL) Update On Shiyela Iron Project Exploration Programme In Namibia

February 17, 2011

Deep Yellow Limited (ASX:DYL) Update On Shiyela Iron Project Exploration Programme In Namibia

Read the full article →

Drillsearch Energy Limited (ASX:DLS) Announce Sale Of Gippsland Basin Permits To Larus Energy Pty Limited

February 17, 2011

Drillsearch Energy Limited (ASX:DLS) Announce Sale Of Gippsland Basin Permits To Larus Energy Pty Limited

Read the full article →

CanAlaska Uranium Limited (CVE:CVV) To Exhibit At PDAC 2011 Mining Convention

February 17, 2011

CanAlaska Uranium Limited (CVE:CVV) To Exhibit At PDAC 2011 Mining Convention

Read the full article →