March 2011

Video: RealD’s Lewis Says Number of 3-D Films to Double

March 29, 2011

March 29 (Bloomberg) — Michael Lewis, chief executive officer of RealD Inc., talks about the company’s growth, overseas expansion and prospects for 3-D movies. He speaks with Cory Johnson on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

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Video: Todd Harrison Says Post-Crisis Markets `Aren’t Free’

March 29, 2011

March 29 (Bloomberg) — Todd Harrison, chief executive officer of Minyanville Media Inc., talks about the state of the financial industry and markets since the financial crisis. Harrison talks with Bloomberg Television contributing editor William Cohan and Julie Hyman on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Wisconsin Judge Blocks Implementation Of Union Law

March 29, 2011

MADISON, Wis. — The showdown over Wisconsin’s explosive union bargaining law shifted from the Statehouse back to the courthouse on Tuesday, but it remained unclear when or even whether the measure would take effect. Republican lawmakers pushed through passage of the law earlier this month despite massive protests that drew up to 85,000 people to the state Capitol and a boycott by Democratic state senators. Opponents immediately filed a series of lawsuits that resulted in further chaos that might not end until the state Supreme Court weighs in. That appeared even more likely after a hearing on Tuesday, when a Dane County judge again ordered the state to put the law on hold while she considers a broader challenge to its legality. She chastised state officials for ignoring her earlier order to halt the law’s publication. “Apparently that language was either misunderstood or ignored, but what I said was the further implementation of (the law) was enjoined,” Dane County Circuit Judge Maryann Sumi said during a hearing. “That is what I now want to make crystal clear.” Sumi is set to hear additional arguments Friday on the larger question of whether GOP legislative leaders violated the state’s open meetings law during debate on the measure. She also is considering Republican claims that the law technically took effect last weekend after a state agency unexpectedly published it online. Whether she decides it did or didn’t become law on Saturday, the measure’s legitimacy will likely be decided by the state Supreme Court, which is already considering whether to take up an appeals court’s request to hear the case. The back and forth amplified the often angry debate between new Gov. Scott Walker, his Republican allies in the Legislature and the state’s public sector unions. Walker and the GOP have aggressively pushed forward their effort to remove the bargaining rights of state workers, using a surprise parliamentary maneuver to break a weeks-long stalemate to get it passed and then finding another route to publish the law after Sumi’s order blocked the secretary of state from doing so. State Department of Justice spokesman Steve Means said the agency continues to believe the law was properly published and is in effect. Wisconsin Department of Administration Secretary Mike Huebsch, Walker’s top aide, issued a statement saying the agency will evaluate the judge’s order. Earlier this month Sumi issued an emergency injunction in the case that blocked Secretary of State Doug La Follette from publishing the law. Republican leaders sidestepped the order, convincing the Legislative Reference Bureau, another state agency, to post the law on its website on Friday. The GOP declared that move amounted to publication and said the law would take effect Saturday. Dane County Democratic District Attorney Ismael Ozanne – the plaintiff in the lawsuit heard Tuesday – argued the reference bureau can’t publish a law without a date from the secretary of state. Attorneys for the state Department of Justice, which is representing the Republicans, argued the case means nothing because legislators are immune from civil lawsuits and the law is in effect. The district attorney asked Sumi to declare that the law had not been published, but she refused to rule, saying she wanted to hear more testimony. But she issued the new restraining order, warning anyone who violates this one will face sanctions. “Wisconsin working families hope that (Gov.) Scott Walker and his Republican allies in the legislature will finally begin to respect our state’s judicial process and reverse any damage they’ve done to the working families of our state, Stephanie Bloomingdale, secretary-treasurer of the Wisconsin State AFL-CIO, said in a statement. Justice Department attorneys maintain Sumi has no authority to intervene in the legislative process. And Assembly Speaker Jeff Fitzgerald, R-Horicon, said in a statement that once again Sumi has improperly injected herself into the legislative process. “Her action today again flies in the face of the separation of powers between the three branches of government,” Fitzgerald said. The law has been a flashpoint of controversy since Walker introduced it in February. The measure requires most public workers to contribute more to their pensions and health insurance. It also strips away their rights to collectively bargain for anything except wages. Walker, who wrote the law, insists the measure is necessary to help close the state’s budget deficit. But Democrats see the law as a political move to cripple unions, who are traditionally among their strongest campaign supporters. Tens of thousands of people staged almost non-stop demonstrations at the state Capitol for nearly three weeks and Senate Democrats fled the state for Illinois to block a vote in that chamber. Republicans who control the Legislature ended the stalemate by removing what they said were the fiscal elements from the plan on March 9, allowing the Senate to vote without a quorum. The Assembly passed the measure the next day and Walker signed the measure into law on March 11. Dane County Executive Kathleen Falk, a Democrat, and several unions have filed lawsuits challenging the Senate vote, arguing the final law still contains fiscal components. Those lawsuits are still pending.

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Jack Myers: Television Network Upfront 2011/2012: ‘Them That Has, Gets!’

March 29, 2011

As the national TV Upfront season moves toward the May/June negotiating period, one thing television networks, media agency executives and marketers all agree upon is that broadcast and cable network TV remains the engine that pulls the media and marketing train. As the digital rocket ship climbs through the atmosphere, marketers’ remain committed to shoveling more and more coal to fuel the TV train and keep it running smoothly. In this week’s Jack Myers Media Business Report , I shared historical network TV Upfront cost-per-thousand data from 2002 to 2004, the two seasons following the 2001 recession. The 2002-2004 Myers data arguably serves as a forecast for the 2011/2012 national television Upfront season, which should be one of the most interesting and robust in recent history. As a child, I played Monopoly with my dad. When I landed on his hotel on Boardwalk or Park Place, his favorite comment was “Them that has, gets!” In this year’s Upfront, the broadcast and major cable networks have the best real estate and have built out their houses and hotels. As advertisers move their pieces around the Media Monopoly board, they can still buy less desirable real estate, but the best properties are controlled by the TV networks. Once the agency buyers pass “GO” and move into the May/June negotiating season, there will be no Get Out of Jail Free card and it’s pretty clear that “Them That Has, Will Get!” With broadcast network TV rating erosion taking its toll again this year, the leading networks will be under pressure to generate cost-per-thousand increases that not only compensate for lost rating points, but that assure meaningful revenue increases. Strikes threatening the NFL and NBA seasons add increased demand for primetime network and high appeal, male targeted programming. It’s unlikely that broadcast and leading cable networks will increase year-to-year sell out. Marketers’ options are limited as digital video CPMs remain greater than broadcast and cable costs. Cinema, video place-based and point-of-influence media, and local TV and radio will all benefit with increased revenues but will not significantly reduce advertiser demand for network TV. The most appealing national broadcast syndicators will experience strong CPM increases, especially as supply erodes with the shift of Oprah to cable. Smaller cable networks will experience some gains but agency buyers point to their clients’ current reach over-exposure on cable and are reluctant to increase their current cable ratings levels. The top ten cable networks led by Turner, A&E Networks, FX and NBCU are likely to generate costs-per-thousand increases at or above broadcast network levels. Bottom line, the national TV marketplace is healthy. Marketers continue to depend on broadcast and cable network TV as the foundation of their advertising plans. And this year’s Upfront will be fascinating to follow as it continues to unfold. Share your comments here . These issues and more will be discussed this Thursday at the annual IRTS Foundation Media Buyers Newsmaker Breakfast, featuring Gibbs Haljun of MEC Global, Greg Kahn of Optimedia, Mike Rosen of Starcom, Maribeth Papuga of Mediavest and Dani Benowitz of UM. I am moderating the panel discussion, which will be at the Pierre Hotel. Advance purchase is required and tickets are available by calling the IRTS at (212) 867-6650 x 11. Jack Myers can be reached at Jack@mediadvisorygroup.com . JackMyersThinkTank is free and underwritten, as part of MediaBizBloggers.com , by subscriptions to Jack Myers Media Business Report ( www.jackmyers.com ). Subscribe free to all MediaBizBloggers reports at www.MediaBizBloggers . For Jack Myers Media Business Report subscription information visit www.myersreport.com or contact Jack Myers at Jack@mediadvisorygroup.com . Jack Myers and Media Advisory Group provide details on all underwriters and companies in which we have an investment at www.jackmyers.com . This commentary was originally published at www.jackmyers.com

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Bill Cheney: Debit Interchange: Those Who Can Least Afford It Will Be Hurt Most

March 29, 2011

It’s easy and popular to demonize the big banks of Wall Street. In many cases, they deserve it. But the attempt by retailers, big and small, to cast the current political battle over debit card interchange as a fight between Wall Street and Main Street (with merchants, of course, claiming the Main Street mantle), is grossly inaccurate and misleading. When smaller card issuers — like the credit unions my association represents — express their deep concern about the impact of interchange, we are painted by proponents of the new law restricting interchange fees as fronting for the big Wall Street banks that they say are the true targets of the legislation and related rules proposed by the Federal Reserve Board. Credit unions are cooperatives, locally based and owned by their 93 million members — the people who do the saving and borrowing. Many are teachers, firefighters, police officers, members of the military. That’s as Main Street as you can get. Our industry has no allegiance to the banks, which have a history of opposing pretty much everything credit unions try to do. We are only aligned with the banks on interchange because in this case our members will be harmed by the effects of the legislation and pending Fed proposal. What’s the concern? Well, you’ve heard the old line about the businessman who is selling a product for less than it cost him to produce it, and when asked what he plans to do, responds: “Don’t worry, we’ll make it up on volume.” That encapsulates what’s going to happen if the Fed’s interchange proposal is allowed to take effect. Credit unions receive on average about 44 cents per debit card transaction as interchange revenue. The Fed proposal would chop that to 12 cents, a figure that doesn’t begin to account for the actual debit card service costs, such as those related to fraud and systems support. The 12-cent rate puts us in the same boat as that businessman trying to make up his losses on volume. We estimate that up to two out of every three credit unions would lose money on their debit card programs if the interchange regulations reduced interchange-related revenue by 40 percent. Remember, credit unions are member-owned cooperatives. Their business model is all about passing savings onto their consumer-members. Last year, for example, consumers saved $6.5 billion using credit unions rather than banks. In this case, however, credit unions will have absolutely no choice but to pass the higher interchange costs on to their members, most likely by adding fees to debit cards or other services. And the people who can afford it least are the ones likely to be hurt most. “No worries!” say the merchants and their supporter on Capitol Hill. “The interchange law exempts most community banks and credit unions” (those with assets under $10 billion). But the exemption is fatally flawed. Larger institutions account for the majority of debit transactions. Over time, smaller institutions will lose out, too. Market pressures will force the interchange price that smaller institutions receive toward the lower, 12-cent rate. Influential regulators like Fed Chairman Ben Bernanke and FDIC Chairman Sheila Bair have voiced doubts about the efficacy of the small institution exemption. The need to address the inherent flaws in the exemption is why Sen. Jon Tester (D-MT) and Rep. Shelley Moore Capito (R-WV) have introduced legislation to delay and further study the Fed’s implementation of interchange. And the call for delay, further study or both is coming from other quarters, too: The National Community Reinvestment Coalition, the Hispanic Chamber of Commerce, the NAACP, and most recently, the National Education Association. All share a concern that the ones who can least afford it — low- and moderate-income consumers — will be hurt the most by added fees. Those of us working to help Sen. Tester and Rep. Capito to delay and study this troubling issue are admittedly, as the Wall Street Journal terms us , a “collection of strange bedfellows.” But it is a grouping brought together by shared concern about the unintended yet potentially harmful consequences of the interchange restrictions. And this unlikely conglomeration demonstrates that attempting to narrowly cast interchange as some type of deserved comeuppance for Wall Street banks misses a much broader and consumer-oriented picture. Put another way: In the zeal to reform interchange, don’t hurt consumers and the financial institutions that they own in the process.

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Video: Evercore’s Schlosstein Says M&A in `Multiyear Upcycle’

March 29, 2011

March 29 (Bloomberg) — Ralph Schlosstein, chief executive officer of Evercore Partners, and Robert Pozen, chairman emeritus of MFS Investment Management, talk about the outlook for corporate mergers and acquisitions. Schlosstein and Pozen also discusses the U.S. recovery, Evercore’s performance and the overhaul of U.S. financial regulation. They speak with Julie Hyman and Bloomberg Contributing Editor Bill Cohan on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Video: London Cycle Commuter Detours to Paris-Roubaix’s Cobbles

March 29, 2011

March 30 (Bloomberg) — Tom Underhill, a sales director at Artemis Fund Managers Ltd., talks about his preparations to ride an amateur version of the Paris-Roubaix cycle race, known as the “Hell of the North,” on April 9. (Source: Bloomberg)

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Gilbert B. Kaplan: Apply the Obama Doctrine to the Trade Problems With China

March 29, 2011

We have one trade problem in this country that so far surpasses every other one that it is almost not worth talking about any of the others. The problem is Chinese subsidy practices, and our resulting $260 billion sustained trade deficit with China. The problem has recently taken on a new, more dangerous bent. First, China has made it increasingly clear they are not going to do anything about their undervalued currency . One aspect of the currency problem has been much talked about — how it makes Chinese exports to the United States very cheap and our exports to China uncompetitive. But it is now clear that the Chinese undervaluation has an even more nefarious and dangerous and long-term effect. It is a big driver forcing U.S. companies to leave the United States and relocate to China . This is because of the simple reason that a relatively “overvalued” dollar goes much further in China building plants and buying inputs and paying workers, than it does in the United States. This is not just a question of very low wages in China, it is about the additional accelerant of low cost renminbi making already low wages and cheap inputs even cheaper. So U. S. companies cannot afford to stay in the U. S. And once they leave it is very unlikely they will ever come back. The other development is a Chinese government pronouncement late last year that they are pumping subsidies of $1.5 trillion into seven strategic industries . The money will be going to the same emerging industries that President Obama and substantially every governor in the United States touts as the “industries of the future” that will rescue the United States from its high unemployment and anemic growth. The industries include information technology, environmental protection, new forms of energy (read wind and solar), biology, and new materials. On average that’s $214 billion per industry, and this leaves even the best U.S. companies with a choice. They can stay in the United States and scrap for the few million dollars the local communities and states and Federal government might provide. Or they can pull up stakes, go to China, and get their share of the $1.5 trillion being passed out over there. The Chinese, by the way, have no problem giving their money to U.S. companies, if the U.S. companies will put their plants up in China and turn over their technology. Unfortunately, even for the most patriotic CEO’s and Boards of Directors, this is an offer that is almost impossible to refuse. President Obama has not done nearly enough about this. There is no unfair trade strike force to fight back against Chinese subsidies. There’s no application of the countervailing duty (anti-subsidy) law to Chinese currency undervaluation. There’s no new trade legislation being proposed to modernize our laws, despite the fact that our last major trade law reforms occurred in 1994, 17 years ago. Why is this? I suspect that one reason is that President Obama does not want the United States alone to bear the brunt, economically or in terms of foreign policy, of standing up to China. All the Treasury bonds held by China, all the U. S. companies already substantially invested there, the Chinese spot on the U. N. Security Council, all militate against this much needed aggressive posture on trade. But I urge the president to take a lesson from himself, and apply the reasoning of Monday night’s speech on Libya to the international trade arena . The President should work on building an international consensus to deal with Chinese subsidies. He should direct his trade officials to meet intensively with other countries to kick-off this initiative. I think he would find allies for this effort in the European Union, and in Mexico, Turkey, Argentina, Canada, Brazil, and Japan, among other countries. I have talked to trade negotiators and industries in all these countries and they share our concerns. None of them want to see their industries moving to China, particularly the emerging industries of the future. Conveniently, Secretary of the Treasury Tim Geithner is going to Nanjing, China this week to meet with the G-20 leadership to discuss global economic issues. He should take the opportunity to meet off-line with like minded G-20 leaders and should focus on two issues. First, he should suggest that these countries join with the United States to begin an anti-subsidy case at the WTO (World Trade Organization) regarding the Chinese undervalued currency. In my view this international case is not the ideal approach; it would be better to proceed alone under our own laws. But it may be one the Administration is more comfortable with, consistent with the new Obama Doctrine of coalition building. Secondly Mr. Geithner should call on key members of the G-20 to begin a strategic dialogue with China, on their subsidy practices for emerging industries, which would demand a change in direction. Subsidies are as unfair and distortive as tariffs, a trade barrier the U.S. led the world in fighting back years ago when it started the GATT and the WTO. It is now time for us to exercise the same leadership on this most significant unfair trade practice of today.

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BP Loses Personal Data Of 13,000 Oil Spill Claimants

March 29, 2011

NEW ORLEANS — BP says one of its employees lost a laptop containing personal data belonging to thousands of residents who filed claims for compensation after the Gulf oil spill. The oil giant disclosed the potential data security breach to The Associated Press on Tuesday. But BP spokesman Curtis Thomas says the company doesn’t have any evidence that claimants’ personal information has been misused. Thomas said the company mailed out letters Monday to roughly 13,000 people, notifying them that their data was in the computer. The data belonged to individuals who filed claims with BP before the Gulf Coast Claims Facility took over the processing of claims in August. BP paid roughly $400 million in claims before the switch. As of Tuesday, it had paid roughly $3.6 billion to 172,539 claimants.

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Video: Stocks Advance Despite Home Price Decline, Consumer Data

March 29, 2011

March 29 (Bloomberg) — Bloomberg’s Deborah Kostroun reports on the performance of the U.S. equity market today. U.S. stocks advanced, sending the Standard & Poor’s 500 Index to a three-week high, despite decline in consumer confidence and lower residential real estate prices. Bloomberg’s Julie Hyman also speaks. (Source: Bloomberg)

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Video: Berman Says Housing Still Needs Limited Government Role

March 29, 2011

March 29 (Bloomberg) — Michael Berman, chairman of the Mortgage Bankers Association, talks about legislation proposed by congressional Republicans that would begin reducing the influence of government-run mortgage companies Fannie Mae and Freddie Mac. Berman speaks with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: FivePoint’s Haddad Sees `Healthy’ Housing Market in 2013

March 29, 2011

March 29 (Bloomberg) — Emile Haddad, chief executive officer of FivePoint Communities Inc., talks about the U.S. housing and commercial real estate markets and his company’s strategy. He speaks with Matt Miller and Carol Massar on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Witness: Accused Inside Trader Removed Office Records On Day Of Arrest

March 29, 2011

NEW YORK (By Grant McCool) – A former Galleon Group trader contends he saw a brother of accused hedge fund founder Raj Rajaratnam remove notebooks from their office on the day of Rajaratnam’s October 2009 arrest, according to trial documents. The claim, from ex-Galleon employee and government witness Adam Smith, emerged in court filings in the biggest Wall Street insider trading case in a generation, with the defense asking the judge to bar that portion of his expected testimony to the jury because it was prejudicial. “I’m leaning somewhat toward the defense position,” U.S. District Judge Richard Holwell said, but he reserved final decision until Tuesday. A federal prosecutor told the judge Smith would be called to begin his testimony on Tuesday. The trial resumed on Monday with a different government witness acknowledging that some information he says he gave Rajaratnam may have been wrong or subject to media or analysts’ speculation. “Whatever I had I passed on to him,” former Intel Corp executive Rajiv Goel, 52, told defense lawyer Terence Lynam about the chipmaker’s earnings and deal information in 2007 and 2008. “I don’t know whether it was right or not.” Sri Lankan-born Rajaratnam faces criminal charges of conspiracy and securities fraud. He has vowed to clear his name at trial, arguing his trades were based on research or publicly available information. The Manhattan federal court trial began on March 8 and could last two months. Goel and Smith are among 19 people who pleaded guilty in the Galleon case. Smith gave an interview to the FBI on February 1 in which he discussed documents taken from the Galleon office on the day Rajaratnam was arrested, according to court papers. Smith claimed in the interview that Rengan Rajaratnam spoke to him about the removal of the documents some time later “in a manner in which Smith interpreted to mean that ‘Rengan wanted to confirm (Smith) was not going to say anything about the notebooks,’” the court filings say. Prosecutors argued that “Smith’s observations are being offered to prove the existence of the charged conspiracy.” Rengan Rajaratnam, also a fund manager, has been described by prosecutors as an unindicted co-conspirator. Raj Rajaratnam’s lawyers said the documents retrieved by Rengan Rajaratnam reflected Raj Rajaratnam’s “charitable donations and real property holdings on the instructions of counsel” for a bail hearing after his arrest. Rajaratnam, 53, is accused of getting inside stock tips from highly placed friends and associates about companies, including Google Inc, Intel Corp and Goldman Sachs Group, between 2003 and 2009. On Monday, prosecutors also called Xilinx Inc. executive Rick Muscha to the witness stand. Prosecutors accuse Rajaratnam of conspiring with friend Kris Chellam to obtain non-public information about Xilinx earnings. The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184. (Reporting by Grant McCool; editing by Andre Grenon and Matthew Lewis) Copyright 2010 Thomson Reuters. Click for Restrictions .

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News Corp. May Be Looking To Hand Off MySpace To Vevo

March 29, 2011

News Corp. (NWSA) is in talks to hand over control of Myspace to Vevo.com, the online music website partly owned by the world’s biggest record companies, according to three people with knowledge of the situation.

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Seven Arts Appoints New Board Member and President

March 29, 2011

HOLLYWOOD, CA–(Marketwire – March 29, 2011) – Seven Arts Pictures plc ( NASDAQ : SAPX ) (“Seven Arts”) announced the appointment of Erika Smith as an executive board director and President of Seven Arts Entertainment Inc. Seven Arts accepted today the resignation of Michael Garstin, its president, chief financial officer and a board member. Ms. Elaine New, a director of Seven Arts, will become chief financial officer.

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Robert Lenzner: I Should Have Kept Those Buffalo Nickels

March 29, 2011

It’s a sign of the times, when gold and silver are making new highs in precious metals markets and investors everywhere are worried about the value of their paper money. Those old coins in the bottom of your attic trunk just got marvelously valuable, if two full-page ads in the New York Times this weekend is any proof. You are asked to bring your old Buffalo nickels. I used to have some, but they are long gone. Try to find those old silver quarters and dimes or pre-1966 paper money in “Brand New Condition” and you could collect a small fortune-a very small fortune. Up to $300 for a $100 bill. You’re also being invited to bring in wrist watches (up to $70,000 for a Patek Philippe, $20,000 for a Rolex), sterling pitchers, flatware and candlesticks, gold wedding bands ($100), diamonds (1 carat, $4,000), even costume jewelry, or wheat pennies (whatever they are) at 20% over face value. Five days at eight hotels in NYC area sponsored by Anderson, Carter, Bascom & Assoc., who warn “You should not clean your coins! You may hurt their value! Under the heading “Important Economic Information” there is the suggestion that high prices for your gold and silver may not last forever. “We have studied the investment and collectibles markets for decades, and in the past during times of economic uncertainty (which is happening now), there have been dramatic price declines in many areas of the jewelry, coin, and collectible markets.” Hmmm! I’d like to know when this economic certainty is coming. Doesn’t seem too likely to me, what with global markets, spiking food and fuel prices, political instability, sovereign debt issues, radioactive nuclear plants, and the need to get the U.S. budget into balance.

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Eric Cantor: No Stopgap Spending Bill Beyond April 8

March 29, 2011

WASHINGTON — The No. 2 Republican in the House said Tuesday that the chamber won’t pass another short-term federal funding bill to avert a government shutdown if talks between the GOP and the White House fail to produce a 2011 spending agreement by an April 8 deadline. Majority Leader Rep. Eric Cantor of Virginia said “time is up” and that it’s up to Democrats controlling the White House and the Senate to offer significant spending cuts as part of legislation to fund the government for the rest of the budget year. “We’re going to need to see a deal struck where our members can go home and tell their constituents that we’re doing what we said we would do,” Cantor said. Cantor’s remarks to reporters suggest that Republicans could advance a stopgap bill if an agreement is struck between Democrats and the White House that would need time to draft into legislation and pass through House and Senate. Talks have mostly broken down, however, and the combatants are instead casting blame in a daily back-and-forth public relations battle. Democrats say that GOP leaders, fearing a tea-party rebellion, have pulled back from a near-agreement on an overall figure for spending cuts that would slash President Barack Obama’s budget requests for the current year by $70 billion or more. Republicans say Democrats have yet to offer sizable enough cuts and that some of the many conservative policy additions added in floor debate last month must be included in a final agreement. Current stopgap funding runs out April 8 and failure to act would precipitate a partial shutdown of every government agency, though essential workers such as military troops, FBI agents, homeland security workers and many others would remain on the job. Cantor’s comments signal that such a shutdown is increasingly likely next Friday unless the pace of negotiations accelerates sharply.

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Donald Trump Releases Birth Certificate, Take Two

March 29, 2011

Donald Trump released his official birth certificate to ABC News on Tuesday, the network reports . The document, issued by the New York City Department of Health, surfaces one day after Trump provided what was described as his official birth certificate to Newsmax. That document , however, turned out to be a “certificate of live birth,” likely given to his family by the New York hospital where he was born, not his actual “birth certificate.” An image of the document released by Trump on Tuesday and posted on the ABC News website indicates the potential presidential candidate was born at the Jamaica Hospital in New York on June 14, 1946. The same information was featured on the form relayed by Newsmax one day earlier. While the difference between the documents may seem trivial to some and simply a matter of technicalities, a Trump staffer explained in an e-mail to ABC News that there is a clear distinction between the two. Michael Falcone reports : “A ‘birth certificate’ and a ‘certificate of live birth’ are in no way the same thing, even though in some cases they use some of the same words,” wrote Trump staffer Thuy Colayco in a message to ABC News. “One officially confirms and records a newborn child’s identity and details of his or her birth, while the other only confirms that someone reported the birth of a child. Also, a ‘certificate of live birth’ is very easy to get because the standards are much lower, while a ‘birth certificate’ is only gotten through a long and detailed process wherein identity must be proved beyond any doubt. If you had only a certificate of live birth, you would not be able to get a proper passport from the Post Office or a driver’s license from the Department of Motor Vehicles. Therefore, there is very significant difference between a ‘certificate of live birth’ and a ‘birth certificate’ and one should never be confused with the other.” In releasing his birth records to Newsmax on Monday, Trump called on President Barack Obama to do the same. The billionaire and potential presidential candidate has sparked controversy in recent weeks by questioning whether the president was born in the United States. “It took me one hour to get my birth certificate,” Trump said of what now appears to be his “certificate of live birth.” “It’s inconceivable that, after four years of questioning, the president still hasn’t produced his birth certificate. I’m just asking President Obama to show the public his birth certificate. Why’s he making an issue out of this?” Politico’s Ben Smith noted on Monday: As I wrote earlier, an official copy of Obama’s birth certificate — the same thing Trump would have to prove his own birth — has been available and online for more than three years. Trump questioned whether the president was born in the United States during a phone interview on “Fox and Friends” earlier this week. “He could have been born outside of this country,” he said before asking, “Why can’t he produce a birth certificate?” Trump said during the segment that the issue of the president’s birthplace has him “really concerned.”

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Primus Names Christie A. Hill General Counsel and Secretary

March 29, 2011

MCLEAN, VA–(Marketwire – March 29, 2011) – Primus Telecommunications Group, Incorporated ( OTCBB : PMUG ) (PTGi), a global facilities-based integrated provider of advanced telecommunications products and services, has named Christie A. Hill General Counsel and Secretary. Ms. Hill joins PTGi from Arbinet Corporation, which PTGi acquired on February 28, 2011, and brings nearly 25 years of legal and corporate experience to Primus. 

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Mike Lux: Wall Street Banks: Making Enemies Everywhere

March 29, 2011

In a post a few days back , I observed that the big Wall Street banks were in for a fall because they had become so arrogant in their power and wealth. One example of this is on the swipe fee issue, where their over-the-top market manipulation and hyper-aggressive political tactics are ticking off not just old progressive populists like me, but a lot of the rest of the business community. Small retailers, grocers, restaurant owners, gas station owners, and cabbies have become incensed at the way these banks and their credit card companies charge exorbitant swipe fees and will not negotiate on the matter. I have started working with retail business groups on this issue simply because I’d much rather see these Main Street business folks get more of the $48 billion going out the door in swipe fees than the big banks that control more than 80 percent of the market. This issue is likely to come up for a vote within days in the Senate, so raise some hell. Here’s a new Web ad an organization I chair, American Family Voices , just put up that does a great job of talking about this issue from the small business point of view. Check it out : Over the weekend, I wrote about an ad on the Clean Air Act that AFV had just put up. Yesterday, I wrote about the Social Security and Medicare issue . While these are very different issues in one way, they all have one thing in common: They are about attacks on the American middle class. Wealthy special interests, along with their allies in Congress and the right-wing flacks like Glenn Beck that defend them (have you seen Beck’s high-pitched whining over the last week about the outrageous idea that people might actually want to take to the streets to challenge Wall Street on foreclosures?), want the ability to run roughshod over the American middle class — even if it means poisoning your kids, telling your Grandma she’s just going to have to get by on less, or taking money out of the pockets of consumers and struggling small businesses on every credit/debit card transaction. Washington is dominated by these behemoths, so even when standing up for policies that so obviously benefit the vast majority of middle-class Americans, it is difficult to fight them. These Wall Street banks are the worst of the special interests. It is not enough to have crashed the entire world economy with their speculative bubbles and financial fraud; it is not enough that in their determination to continue to manipulate their books and inflate their assets they are foreclosing on millions of homeowners rather than writing down their mortgages; it is not enough that they fight tooth and nail against every tiny little bit of oversight that sensible folks want to place on them; it is not enough that the six biggest banks already own assets equaling 64 percent of our nation’s GDP. None of that wealth, power, and hubris is enough for them. They also want to gouge every mom-and-pop businessperson who wants to let customers pay for things with a credit or debit card. The first step in restoring the American Dream is to take these wealthy, arrogant Wall Street guys and other wealthy special interests out of the temple of our government . Mike Lux is the President of American Family Voices.

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Ohio Panel Approves Public Worker Union Bill

March 29, 2011

COLUMBUS, Ohio — A legislative committee in Ohio approved a measure Tuesday that would limit collective bargaining rights for 350,000 public workers and delivering a blow to unions in how they collect certain fees. The Republican-controlled House Commerce and Labor Committee voted 9-6 along party lines to recommend the bill after making more than a dozen substantive changes to the legislation that was approved by the Senate. The changes include removing jail time as a possible penalty for workers who participate in strikes and making clear that public safety workers could negotiate over equipment. A vote on the bill in the GOP-controlled House could come Wednesday. The Senate, also led by Republicans, passed the bill earlier this month on a 17-16 vote and would have to agree to any House changes before Gov. John Kasich could sign it into law. Similar limits to collective bargaining have cropped up in statehouses across the country, most notably in Wisconsin, where the governor earlier this month signed a measure into law eliminating most of state workers’ collective bargaining rights. The Ohio measure would apply to public workers across the state, such as police, firefighters, teachers and state employees. They could negotiate wages and certain work conditions but not health care, sick time or pension benefits. The measure would do away with automatic pay raises and would base future wage increases on merit. Opponents have vowed a ballot repeal if the Ohio measure passes. Democrats have offered no amendments. Instead, they delivered boxes containing more than 65,000 opponent signatures to the committee’s chairman. The legislation was met with demonstrations and packed hearing rooms in the weeks before the Senate passed the measure. On Tuesday, several hundred protesters listened to the committee’s amendments over the loudspeakers positioned around the Statehouse before they headed outside to chants of “Kill the bill!” Other changes the committee made would prevent nonunion employees affected by contracts from paying fees to union organizations and would ban automatic deductions from employee paychecks that would go the unions’ political arm. All GOP members on the House panel voted in favor of the changes, while Democrats voted against them. ___ Associated Press writer Julie Carr Smyth contributed to this report.

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Richard L. Revesz and Michael A. Livermore: Thirty Years of Regulatory Review

March 29, 2011

Thirty years ago, President Reagan put cost-benefit analysis at the heart of how agencies like the EPA and OSHA do business and initiated one of the most important recent developments in how the federal government works. In a 1981

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What’s At Stake In The Massive Walmart Anti-Discrimination Case Before The Supreme Court

March 29, 2011

Walmart Stores, the

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Michael Pento: The Inflation Knuckle Ball

March 29, 2011

Inflation has now manifested itself in nearly every asset class and price level in our economy. Fed Chairman Ben Bernanke’s plan from the start has been to lower the dollar’s value and cause asset prices to rise–especially in real estate. But that goal was full of hubris from the start because the Fed can’t control the exact rate of inflation nor can it direct where inflation will be distributed across the economy. In other words, inflation is like a knuckle ball: once you let it loose, you’re never really sure where it will end up. And Bernanke’s pitches are so wild they would make Tim Wakefield jealous. But the Fed’s printing spree is so far off the mark that Bernanke now has a difficult choice. He can either do nothing and allow most price levels in the economy to become intractable or to raise interest rates significantly and crush the housing market. Data released last week shows that the median home price of existing homes declined 5.2% in February compared to the previous year, to $156,100. New home prices fared even worse; the median sales price dropped to $202,100 in February, from $221,900 a year earlier, a tumble of some 9%! And data released today from the S&P/Case-Shiller 20 city home price index showed that prices have now dropped 6 months in a row and were down 3.1% from last year. Yet, perhaps nowhere is the Fed’s inflation madness so apparent as in commodity prices. Gold is up over 4% in the last three months, as M2 is rising at a 6% annualized rate. The CRB Index is up 8% so far this year and the Dollar Index has lost 4% of its value over the same period. The dollar is down against other fiat currencies in the last three months despite the following: the world’s third largest economy has most likely been taken off-line due to a catastrophic earthquake; the EU was placed further in turmoil when the Prime Minister of Portugal failed to pass his austerity measures and was forced to resign; and, a plethora of Middle Eastern countries have erupted in violence, leading the U.S. to enter into a war with Libya. Yes, in the face of a world of turmoil, still the dollar fell. This is clear evidence that Bernanke’s policies are causing investors to second-guess the dollar’s historic ‘safe haven’ status. It’s really no wonder that faith is waning. The effects of inflation are being felt right now and there is no prospect for a change in policy any time soon. By all reasonable accounts, commodity prices will continue to surge as real interest rates continue to fall. Right now, the yield on the one year T-bill is .23%, while the YOY increase in inflation is 2.1%. And this is using the government’s twisted figures! I estimate real interest rates are somewhere close to -8.75% if using a more realistic inflation rate of 9%. Therefore, investors are being thrust into the arms of precious metals and away from dollar-based assets. There really isn’t much choice. However, since the real estate market was in a prolonged and lofty bubble, it will be the last asset class to respond to the Fed’s dollar debasement strategy. Bernanke should have studied more about asset bubbles than the Great Depression. If he did, he would have learned that gold took decades to recover to its nominal high in 1981 and the NASDAQ is still 45% below its all-time nominal high set over a decade ago. And those markets were allowed to clear, unlike housing prices, which are being levitated by the government. But amazingly, since 40% of the core CPI is owner’s equivalent rent, Bernanke will continue to miss the mark about the true level of the inflation he has created. The aftershock of the real estate bubble has sent millions of homes into foreclosure, left 11% of homes vacant, and caused 23% of mortgage holders to be without any equity in the home. And since home prices are still falling the number of individuals with negative equity continues to increase. The housing market is still very anemic despite the fact that the government is providing 95% of new mortgage financing. But unless the Fed starts to create credit to buy houses directly off the market, it will be very difficult to get real estate values to move higher. If Bernanke does chose to go that route, I’d recommend taking the money you got from selling your house to the Fed and find a property in a country that actual cares about its currency. It is clear that by trying to target his inflation into just one asset class, Bernanke has placed the entire US economy in severe danger. And he is now facing a serious conundrum. Does he raise interest rates significantly to fight inflation and thus pour a concrete containment structure over the housing market, or does he sit idly by and watch the broader economy suffer an inflationary meltdown? The fallout from either choice isn’t pleasant. But we can be assured of this: if he waits for the bond vigilantes to raise interest rates for him, the situation will quickly spiral out of control. Michael Pento is the Senior Economist for Euro Pacific Capital

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Maine Governor Taken To Task After Removal Of Labor Mural

March 29, 2011

PORTLAND, Maine — The president of Mount Holyoke (HOH’-lee-ohk) College in Massachusetts has sent a scathing letter to the governor of Maine for removing a mural from the Department of Labor headquarters that included an image of 1902 graduate and former U.S. Labor Secretary Frances Perkins. Lynn Pasquerella faxed a letter Tuesday outlining “grave concerns” about Gov. Paul LePage’s decision to remove the 36-foot mural from the lobby and to rename departmental conference rooms now named for labor leaders, including Perkins. Pasquerella was surprised to hear LePage was influenced by an anonymous letter comparing the mural to North Korean political propaganda. It depicts mill workers, shipbuilders, labor strikes and child laborers. Pasquerella said removing the mural “conjures thoughts of the rewriting of history prevalent in totalitarian regimes.” LePage says it’s biased in favor of organized labor.

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Oil Prices, Japan Holding U.S. Auto Sales Back

March 29, 2011

By Ben Klayman DETROIT (Reuters) – U.S. auto sales in March are expected to rise about 12 percent from last year’s depressed levels, but high gasoline prices and production problems caused by the Japanese earthquake could slow a recovery, analysts and investors said. Auto sales represent one of the first snapshots every month of U.S. consumer demand, and while an increase from last year is expected, lower incentives will likely mean a decline from February. However, that does not scare investors who like the industry’s recovery story. “Gas prices and disruptions with the Japanese earthquake are relevant, we pay attention to them, but it doesn’t change the medium- or longer-term backdrop of there being some compelling fundamentals for new-car sales,” said Walter Stackow, a senior research analyst with Manning & Napier. Stackow, whose firm owns shares in BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz), Suzuki (7269.T: Quote, Profile, Research, Stock Buzz) and several dealers, cited the average age of cars topping 10 years, sales trailing the rate at which people scrap older vehicles, the rising cost of used cars and the improving financing market as reasons for longer-term optimism. Automakers are set to report March auto sales on Friday. March is traditionally a stronger sales month than February, but lower incentive spending by General Motors Co (GM.N: Quote, Profile, Research, Stock Buzz), Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) and others likely resulted in a lower growth rate than February’s stronger-than-expected 27 percent gain, analysts said. For the sixth consecutive month, sales on an annualized basis are expected to top 12 million vehicles in March. The average forecast of 34 economists surveyed by Reuters was 13.2 million vehicles on that basis, up from 11.78 million last year, but off slightly from 13.4 million in February. J.D. Power and Associates expects a 9 percent increase in March sales, while TrueCar.com and Edmunds.com estimate gains of 12 percent and 16 percent, respectively. PAIN AT THE PUMP Despite the expected sales increase, rising oil prices and the resulting pain at the pump could push consumers away from more lucrative light trucks, analysts said. J.P. Morgan analyst Himanshu Patel estimated in a research note that each $1 increase in the U.S. retail price of gas results in a 5 percentage-point shift toward lower-margin cars for the industry. Light truck sales, which include pickup trucks and sport utility vehicles, make up a little more than half of U.S. auto sales and account for a disproportionate share of profits at the U.S. automakers because of their higher prices. Gas prices rose more than 3 cents to $3.60 a gallon over the last week, the Energy Department said. The average price of regular gas is 80 cents higher than a year ago as conflict in Libya and rising tensions in the Middle East have sent the cost of crude oil to above $100 a barrel. “I don’t think at these levels it’s going to affect car sales,” said Gary Bradshaw, a portfolio manager with Hodges Capital Management, which owns Ford shares. “The auto recovery is still intact,” he added. “I still think we’ll see 13 (million) to 13-1/2 million cars sold in this country this year, but if oil (hits) $125 a barrel then all bets may be off.” Another focus is the aftermath of the Japanese earthquake and subsequent tsunami earlier this month that caused many supplier plants there to close or cope with power outages. GM, Ford, Toyota, Honda, Nissan and other automakers have all idled plants or scheduled downtime at facilities because of the parts shortages. Even a shortage of a specialty pigment that gives cars a glittering shine prompted Chrysler Group LLC (FIA.MI: Quote, Profile, Research, Stock Buzz) and Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) to temporarily restrict orders on vehicles in certain shades of black, red and other colors. The parts shortages may cut global vehicle output 30 percent within six weeks in a worst-case scenario, research firm IHS Automotive said. Most analysts do not see the shortages affecting March sales much, but if it continues, April or May sales could be hurt because there will be fewer cars on dealer lots to sell. Deals for consumers are already drying up as TrueCar estimated the industry’s average incentive spending per vehicle in March would drop 6 percent from February to $2,432, driven by declines of 17 percent and 11 percent at GM and Toyota, respectively. Edmunds sees a 9.5 percent drop. (Reporting by Ben Klayman in Detroit; Editing by Maureen Bavdek) Copyright 2011 Thomson Reuters. Click for Restrictions

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Marty Zwilling: Women in Business Catch Up After the ‘Mancession’

March 29, 2011

It looks like women have caught up with men in numbers in the workplace. For the first time in history, women in the USA now outnumber men in the workforce, and there are now more women in supervisory positions than there are males. The question is whether they will handle the downside of working any better than men. According to an article by Ella L. J. Edmondson Bell, Ph.D., titled The 21st Century Workplace — Are Women the New Men ?, the economic downturn has hit men harder. They held nearly 80 percent of jobs that have been lost during what is now being called the “mancession.” Will women now inherit the stress, pressure, exhaustion, burn out and heart attacks commonly associated with male leaders in business? Some predict that this new female-dominated workplace will mean a softening of the corporate culture, with more benevolent leaders. Others foresee just the opposite. Ella says many women don’t want to be seen as “soft” — and others simply aren’t. No one would call Carly Fiorina, the head of Hewlett Packard from 1999 to 2005, a wilting lily. According to her memoir, Tough Choices , she was sometimes referred to as Chainsaw Carly. All of this is especially relevant on the entrepreneurial side, since statistics show that women are starting businesses at more than twice the rate of their male counterparts. Some would argue that the growing success rate of women entrepreneurs shows that they are resourceful, and better able to succeed, despite the odds. While I’m sure we will continue to see progress on the female side, I predict that they will struggle with the same major challenges faced today by men. These include: Funding your dream. Raising money is hard, whether you are counting on friends, investors, or banks. I rarely see women at angel investment groups, either asking for money, or offering to fund new ventures. Men seem more focused on this one. Need for increased confidence and mindset skills. Many women and men are paralyzed by perfection, plagued by pessimism, and the need to satisfy others, rather than themselves. We need more women leaders. Motivation to succeed. Every entrepreneur needs to love what they do, and believe so strongly in their product or service that they can weather the tough times. On this one, it’s easy to spot the ones with passion, from either gender. Manage time and priorities. Women, often more than men, try to do too much. It’s hard to balance the continual demands of the business, personal relationships, and home life. Every entrepreneur needs to prioritize the important tasks ahead of urgent tasks. Never stop learning. After you start your business, the learning really begins. True entrepreneurs look at failures as their best learning experiences. Networking, and using your network is the next most important element of learning. I don’t see any challenges which are so gender specific that they can’t be overcome by any entrepreneur. Yet I don’t think women should be convinced that the battle for equality is almost over. There is still the question of why there are so few women in high places, and why the average income for women in business is about 68% of men’s income. What I am hoping is that women will not just be the new men, and suffer from the same maladies and limitations. I’ll be looking for women to create the “new business culture” that every worker wants — better role definitions, more effective and productive leadership, and better work-life balance. That would make women entrepreneurs the new women, rather than the new men!

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Commercial Loan on Florida Retail Shopping Center | Commercial Loan

March 29, 2011

This Commercial Loan collateral has Bed Bath & Beyond, Michael's, Old Navy, Staples and Stein Mart as anchors of this retail shopping center . Also Dick's Sporting Goods is a fairly new Tenant at this net lease property used as …

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Supreme Court Hears Argument In Wal-Mart Sex Bias Lawsuit

March 29, 2011

WASHINGTON — The Supreme Court on Tuesday questioned a massive sex discrimination lawsuit on behalf of at least 500,000 women claiming that Wal-Mart favors men over women in pay and promotions. The justices suggested that they are troubled by lower court decisions allowing the class-action lawsuit to proceed against the world’s largest retailer. Justice Anthony Kennedy, often a key vote on the high court, said he is unsure “what the unlawful policy is” that Wal-Mart engaged in to deprive women of pay increases and promotions comparable to men. Billions of dollars are at stake in the case. Class actions create pressure on businesses to settle claims and create the potential for large judgments. Wal-Mart denies it discriminates against its female employees. But Joseph Sellers, the lawyer for the women, said that lower courts were persuaded by statistical and other evidence put forth so far in the 10-year-old lawsuit. Sellers said a strong corporate culture at Wal-Mart’s Bentonville, Ark., headquarters that stereotyped women as less aggressive than men translated into individual pay and promotions decisions at the more than 3,400 Wal-Mart and Sam’s Clubs stores across the country. “The decisions are informed by the values the company provides,” Sellers said. Justice Antonin Scalia said he felt “whipsawed” by Sellers’ description. “Well, which is it?” Scalia asked. Either individual managers are on their own, “or else a strong corporate culture tells them what to do,” he said. Theodore Boutrous Jr., representing Wal-Mart, said that the class-action nature of the case deprives the company of its legal rights because it is being forced to defend the treatment of women employees regardless of the jobs they hold, or where they work in the Wal-Mart chain. “There is absolutely no way there can be a fair process here,” Boutrous said. He pointed to a group of at least 544 women who serve as store managers who “are alleged to be both discriminators and victims.” Justice Ruth Bader Ginsburg said that at this stage of the lawsuit, the issue is not proving discrimination, but showing enough evidence to go forward. “We’re talking about getting a foot in the door,” Ginsburg said, a standard she called not hard to meet. The 78-year-old justice, who made her name by bringing discrimination claims, said it was possible that Wal-Mart could refute the claims at a trial. But several of her colleagues appeared to agree with Boutrous that even subjecting Wal-Mart to a trial would be unfair. A decision should come by summer. The case is Wal-Mart Stores Inc. v. Dukes, 10-277.

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Front Porch Center for Technology Innovation and Wellbeing Explores How Innovative Technology Can Empower Older Adults to Live Well

March 29, 2011

Davis Park Appointed as Director

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B. Jeffrey Madoff: An Honest Bank Is Hard to Find

March 29, 2011

In the mid 1990s, Fleet Bank, originally out of Boston, aggressively pursued business in the New York City market. They got mine. In 2003 Fleet was faced with a class action suit involving a bait-and-switch credit card scam where it promised no annual credit card fees then would bill the fees a few months later. An honest bank is hard to find. I should have known better than to sign with a bank named after a bottled enema. Fleet was acquired by Bank of America in 2004. I filled out the requisite papers; my financials were sent to Rochester NY, my account representative was in Boston, the underwriter in Chicago. I had a business line of credit, like I always had, paid the fees as I always had and so it went. I never actually met anyone in person from Bank of America. I was not too big to fail; I was too small to notice. Countrywide, the largest U.S. mortgage lender, misrepresented its financial condition and the soundness of its loans in security filings, the officials said Saturday… The company was forced in August to draw down its entire $11.5 billion credit line from a consortium of banks because it could no longer sell or borrow against home loans it had made. It has laid off about 11,000 employees since the summer. ( From the New York Times , March 2008) Countrywide Financial was valued at $24 billion in 2007. It was taken over by Bank of America in 2008 for $4 billion. At the end of 2009, with the economy going badly and so many businesses doing poorly, my line was reviewed. I was fortunate to have an underwriter assigned to my account that, after several conversations and reviewing my financials, believed in my business. He approved my line, kept the fees reasonable and wished me luck going forward. The underwriter had recently come to Bank of America as a result of one of the many bank acquisitions made with TARP funds. In the fall of 2008 through the federally funded, taxpayer-backed Troubled Asset Relief Program, Bank of America received $25 billion. Bank of America, along with other banks, who also received federal funding, essentially ceased making money available to small businesses. They did go on a spending spree to diminish their competition through acquisition and increase fees on everything else. We taxpayers not only bailed out the banks, they charged us additional funds through those fees to do it. “The major credit-card lender [Bank of America] in mid-January sent letters notifying some responsible cardholders that it would more than double their rates to as high as 28%, without giving an explanation for the increase.” ( BusinessWeek , Feb. 7, 2008) It was a busy fall for Bank of America; they announced their intent to take over Merrill Lynch & Co., saving them from bankruptcy on the same day that Lehman Bros. announced theirs. The Merrill deal closed on January 1, 2009. “Bank of America Corp., the largest U.S. bank by assets, received a $138 billion emergency lifeline from the government to support its acquisition of Merrill Lynch & Co. and prevent the global financial crisis from deepening. ($20 billion in TARP funds, $118 billion in government asset guarantees.)” ( Bloomberg News , Jan. 16, 2009) Although Merrill surprised its new owner by suffering a massive $15 billion loss in their fourth quarter, CEO John Thain doled out bonuses of $4 billion to Merrill executives. “The Securities and Exchange Commission filed charges Monday against Bank of America for misleading investors about billions of dollars in bonuses paid to top executives at Merrill Lynch following its purchase of the brokerage giant.” ( CNNMoney.com , Aug. 3, 2009) In August 2009, without either admitting or denying guilt, Bank of America agreed to pay a $33 million fine, to the U.S. Securities and Exchange Commission. “Bank of America will pay $108 million to settle federal charges that Countrywide Financial Corp., which it acquired nearly two years ago, collected outsized fees from borrowers facing foreclosure. It’s the latest evidence of misconduct at Countrywide, once an industry giant that has since fallen. Last year, three top executives, including former CEO Angelo Mozilo, were charged with civil fraud and insider trading by the Securities and Exchange Commission.” ( Associated Press , June 7, 2010) By the end of 2010, my business improved substantially. I was proud of the fact that I had not laid off any employees, continued to provide health care and never missed any payments to anyone. Like my parents, who owned their own small business, surviving tough times is an accomplishment to feel good about. “Bank of America will pay $137.3 million to settle allegations that it defrauded schools, hospitals and dozens of other state and local government organizations, federal officials said Tuesday. The settlement stems from a long-running investigation into misconduct in the municipal bond business that raises money for localities to pay for public services.” ( Washington Post , Dec. 7, 2010) Don’t worry about those fines hurting Bank of America. Their global banking and markets division made $6.2 billion dollars in 2010. At the end of 2010 I received a letter from Bank of America informing me that my credit line would not be renewed. I immediately called my representative and discovered I had been assigned a new person. “How are you today?” He had an upbeat voice, in total opposition to the downbeat news he was giving me. “When I got your file”, he continued, “I couldn’t help but to notice your last name, Madoff.” He said as if performing a level of detection equal to Sherlock Holmes. “Don’t you always notice the name on your client’s file?” “Well, your name is kind of famous in financial circles.” “I go around in financial circles when I talk to bankers.” “If you don’t mind me asking; are you any relation? Not that it makes a difference.” “Then why are you asking?” “Just curious.” He said. “No, I’m not that Madoff. But I’m curious as to why you are discontinuing my line of credit.” “I’m sorry,” He said as if comforting me about someone’s death, “but it’s not up to me.” He was the messenger and had no authority to do anything other than politely show me the exit. The underwriter I had worked with last year was no longer on the account. I was informed that establishing relationships is what makes bankers susceptible to making bad decisions; the bank was trying to avoid that by constantly switching who works on what account. Maybe they learned something from their acquisitions of Countrywide and Merrill Lynch. I got on a conference call with my new representative in Boston and underwriter in Chicago. They had never met in person and most likely never will. “We assessed your metrics and parameters of your KPI, key performance indicators and made our decisions based on that,” said the underwriter. “I don’t know what that means, but does the fact that I’ve been a client for years, never missed a payment, have no debt and have increased my business with new and long term blue-chip clients in a very challenging economy mean anything?” “How do you know you won’t lose those clients?” she asked. “I don’t know. How do you know you won’t die in your sleep?” I realized the significance of the abbreviation for Bank of America: B-o-a, as in boa-constrictor, it squeezes the life out of its victims by applying constant pressure. I was told I’d get their final decision in a week. During that time I approached two banks, both of which offered me the line of credit I requested at far lower rates than Bank of America. In February of 2011, I signed with a new bank. I had my last conversation with my Bank of America representative: “We value our relationships with our clients.” He said. “If there is anything I can help you with, please don’t hesitate to ask.” An honest bank is hard to find.

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Jerry Jasinowski: Manufacturing Champions

March 29, 2011

Despite what you may have heard to the contrary, the U.S. is still the world’s largest and strongest manufacturing country. In every year since 2004, U.S. manufacturing output has exceeded $2 trillion in constant 2005 dollars, twice the output produced in America’s factories in the 1970s. We produce 21 percent of global manufactured products, well above Japan’s 13 percent and China’s 12 percent. Standing alone, U.S. manufacturing today would rank as the sixth largest economy in the world. We are so successful in large part because so many of our premiere manufacturing companies are true economic champions in every sense of the term — leadership, innovation, global presence, productivity, and profitability. Many of them are among the 30 Dow Jones companies whose performance is the main indicator of the overall market. More than half of the Dow Jones 30 companies are in manufacturing, which means that they make things. Based on historical and continuing performance, here are 10 manufacturing champions from the Dow Jones Industrial Average: Caterpillar – those big yellow machines are all over the world Cisco – the backbone of the global communications network Intel – the chips that power technology and communications Boeing – the world’s most competitive manufacturer of aircraft 3M – born to innovation and stays on the cutting edge Apple – leads the revolution in mobile communications DuPont – the greatest name in chemicals, one of our top export sectors IBM – Big Blue employs 400,000 people in more than 200 countries Alcoa – the world’s third largest producer of aluminum and aluminum products Pfizer – the maker of Viagra has more wonders in the pipeline They are all international companies with vast investments overseas, but that is the reality of world commerce today. We should not have it any other way. A full 95 percent of the world’s customers are not here, and neither is the most dynamic economic growth. To compete successfully in the competitive world marketplace of today, we need great manufacturing champions that can aggressively take advantage of opportunities all over the globe while still producing in the U.S. The good news is — we have such champions, many of them. It is high time we took note of the power of modern manufacturing to compete abroad and lead growth at home. Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.

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Parsons Appoints McMorrow as Executive Vice President Parsons Enterprises

March 29, 2011

PASADENA, CA–(Marketwire – March 29, 2011) – Parsons is pleased to announce that Ruth McMorrow has joined the firm as Executive Vice President, Parsons Enterprises, a new entity that will form part of the Strategy and Development organization reporting to Jim Shappell, Parsons Group Executive, Development/Strategy. Ms. McMorrow will be responsible for leading Parsons’ efforts in Public-Private Partnerships, project financing opportunities, and project investment initiatives.

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Delucchi Plus, a National Marketing and Communications Firm, Hires Kim Hart as Director of Production and Operations

March 29, 2011

WASHINGTON, DC–(Marketwire – March 29, 2011) – Christine Delucchi, Owner, Delucchi Plus , a strategic marketing communications firm specializing in the real estate, travel and resort, retail and financial services industries, announces today the appointment of Kim Hart as Director of Production and Operations. In this role, Ms. Hart will oversee the firm’s traditional creative services including workflow, scheduling and employee retention. In additional, Kim will direct vendor negotiations, project estimating and budgets. 

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Peggy McColl: Success or Failure: Which Fear Is Really Holding You Back?

March 29, 2011

You are months, or even weeks away from launching your product or services online and you are ready to abolish the entire idea. Yikes! You might be surprised at how many other internet marketers, authors and solo-preneurs share your same doubts and fears. Many of my clients and I have experienced these negative issues associated with putting ourselves out there in the marketplace and wondering what will happen if…. if we fail, and if we succeed. Do these thoughts sound familiar? It’s not going to work I’ve spent all of this time and money building it and what if no one wants it? Why would anyone want to buy anything from me? My content is on X and I am not a perfect example of X Once I launch and it’s successful, the microscope will be on me to walk the talk and I may not be able to keep up with demand. One of my clients candidly confessed, “I don’t know if I am afraid of failure or afraid of success.” This is natural. There is a fear to fail because you’ve put so much into it, including your name, your brand and your reputation. The other side of the coin is what if it is a big success? Is it going to take her away from her family more than she’d like? If she’s feeling overwhelmed now, even before it launches, what will her life look like if it does take off? This coaching call reminded me of similar experiences I’ve had with feeling overwhelmed. In my earlier days of releasing some of my first books I felt like pulling the plug on the entire concept because I questioned who cares what I have to say. It brought back memories of my own fears. I wasn’t as concerned about failing as I was about succeeding and what that meant because then I’d have to step up, follow through and consistently deliver. That was a lot of pressure and I didn’t know if I wanted to set myself up for it. Is the fear of success better or easier to overcome than the fear of failure? Not really. Fear of any kind can be an immobilizer and you have to be able to stare it in the face and go for it anywhere. Here are the recommendations I made to my client and the strategy that can work for you: Understand your fears are natural so don’t be upset with yourself because these thoughts come up – it’s okay to feel it. Some of the most successful people in the world had that experience. Come from your heart, remember why you are doing it and reconnect to the passion that started the whole process in the first place. Continue to give the best of who you are Don’t worry that you are not perfect at what you are teaching others -you are human and that will resonate with your customers. Think about when a high-profile golfer has a tough match and when he is interviewed, he admits to not playing his best. We don’t fault him for that, we know how difficult it is to be on top of your game at all times. Don’t be afraid of sharing your own challenges – people will connect and respect your vulnerability. Let them see the real you. Make a conscious choice to put the fun back in to the process. There is tremendous value in asking yourself great questions such as: What do I like or enjoy about this? How will I make this more enjoyable? What am I grateful for in this experience? What am I most grateful for in my life right now? (This is a Biggie!) Put a reminder in front of you to stay connected to what you are enjoying most about this experience What am I learning? How am I growing? There will always be the one moment in time when you want to throw up your hands and give up. Remember it is just a moment, a day or a week and it is a temporary feeling. Take a break and do something else for a while until the feeling passes. I remember when I sent my first manuscript to my editor and when she said it was a great book my response was, “Really???” She laughed and said, “Oh you authors are so insecure.” We are all very similar when it comes to taking a risk and putting ourselves out there. Two decades ago Susan Jeffers published her book, Feel the Fear and Do it Anyway . It is still true to this day!

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Government Shutdown Could Slow Tax Refunds, Crimp Use Of Largest Federal Anti-Poverty Program

March 29, 2011

WASHINGTON — A prolonged government shutdown could deliver a blow to many poor American families by limiting or delaying access to the federal government’s largest anti-poverty program, the Earned Income Tax Credit. Last year, 26 million families received about $59 billion from the EITC, according to the Treasury Department . While a broad majority of recipients may be unaffected by a possible government shutdown, which at the earliest could come little over a week from this year’s April 18 deadline for individual tax returns, the sheer scope of EITC recipients means a vast number of households can still be hurt by any problems with poverty-relief payments. Such pain could throw a wrench into federal efforts to fight poverty during the worst economic downturn since the Great Depression. The details of a potential shutdown — including its possible duration and effects — remain unclear . And even if Congress cannot strike a deal to continue government operations, some programs would still be designated as “essential” functions and permitted to continue running. But it remains to be seen exactly which programs would be considered essential, and some operations of the Internal Revenue Service may not be. The IRS and the Treasury Department declined to comment for this report, but policy observers say that while it is very unlikely that a shutdown would prevent the government from collecting tax money, other key IRS functions — including the delivery of billions in tax refunds — could be affected. “Our expectations are … taxes will be processed as if there was no shutdown,” said Cristina Martin Firvida, the director for economic security for AARP’s government-relations division. “We’re unclear whether or not there would be significant delays in refunds, including refunds that involve the EITC.” For many citizens, their tax refund from the EITC program represents a critical component of their annual income, sometimes as much as 30 percent of their household finances. The average EITC benefit is around $2,250, but some families receive as much as $5,666, depending on their circumstances. Benefits are scaled to the number of children a family has and the family’s annual income. Individuals making $13,460 or less can receive $467 from the EITC, while families with up to three children can receive the $5,666 benefit if they make less than $48,362. For families at the lower end of the economic spectrum, the EITC can be essential for paying their bills. Fortunately, most poor families file their refunds relatively early in tax season, hoping to receive government checks sooner rather than later. But many families still wait until the mid-April tax filing deadline, and roughly one-fourth of American households who qualify for the EITC never actually apply for it, according to Adam Perry, an organizer for Capital Area Asset Builders ‘ DC EITC assistance program . Those unaware citizens often file much later in tax season, since they do not realize they are eligible for anti-poverty benefits in earlier months. DC EITC provides free tax preparation and advice to low-income residents of the nation’s capital, avoiding expensive tax preparation services , some of which have been flagged as predatory by consumer advocates. Perry says his group’s efforts to reach out to potential EITC recipients continue right up to the filing deadline. “The good news is that since its April 8, it’s almost the end of tax time, so the majority of people will have it done,” he said. “The bad news is, a lot of people still wait to the last date.” The consequences of a delayed refund for poor households can be devastating. “If that check was to be delayed, that would cause a problem, much more so than for families making $100,000 a year,” said Lee Davenport of OneEconomy Corp. , a global nonprofit that attempts to advance the interests of low-income households through techonology. OneEconomy is currently promoting software that helps low-income households file their taxes online for free. Perry said he is also concerned that the IRS may not be available to answer questions from taxpayers, noting that his volunteer advocates frequently confer with IRS experts about individual cases. “The problem is, if the IRS call centers are classified as ‘not essential’ and they’re not able to answer questions, the folks who need help the most are going to be the ones left to try and figure things out on their own,” Perry said. The peculiar funding specifics of the local Washington, D.C. government could also create hurdles for poor taxpayers living in the nation’s capital. Local government funds rely on congressional approval, and if they don’t get it, many local buildings will be forced to close. DC EITC offers help at 11 locations in the city, including one at the public Martin Luther King, Jr. Memorial Library. Perry estimated that between 400 and 500 people who planned on filing with his organization during the last week before tax day will have to make alternative plans if the library closes for the second week in April.

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Jim Schuchart: 4 Steps To Pricing Like A Pro

March 29, 2011

“Nowadays people know the price of everything and the value of nothing.” -Oscar Wilde Too often startups take a dangerous route to setting price by just looking at how much a product or service costs to provide and how much competitors are charging, and then setting the price in between. The ambitious may even include a “willingness to pay” survey to justify the numbers ( but we now know better than that .) While costs and the competitive alternatives are certainly relevant inputs to pricing decisions, these companies are missing a critical component of pricing that causes them to leak profits. The reality is, if you’re having trouble understanding and estimating your economic value, more than likely you’re facing the bigger problem of not understanding how your product positively affects your customers financially . Follow these four steps to quantifying customer value and you’ll be on the path to pricing like the pros. Step One: Identify the Alternative Better pricing is achieved by understanding how much more or less economic value you drive relative to the other options that are available. Accordingly, the first step to understanding your value is to identify, from the customer’s point of view, the competition (the Next Best Competitive Alternative, also known as the NBCA). Let’s say we are in the software business, and one potential customer is currently using IBM’s solution which costs $250 per month, while another customer is doing “nothing” (or managing in house, depending on how you look at it). In the first case, we’ll need to look for ways we can provide differentiated value above and beyond IBM’s $250 solution in order to capture a premium. In the second example, our story needs to illustrate how we are better than doing nothing and illustrate the value we provide above current practices in order to get customers to sign up. There are two important lessons here. First, the competition is your friend! We will build upon the NBCA’s offer and identify ways we deliver more value. It is much easier to find small additional value above the IBM offer than it is to find a ton of value from the ground up, as is the case when the NBCA is “do nothing.” This is a major challenge for startups in a new space. Try to overcome it by looking for realistic but favorable NBCAs for your product. For example, instead of “do nothing,” are they really managing internally? What does that cost them in salary? Second, as we see in this example, different customers have different NBCAs, so your value story will change from customer to customer. You may be 5 percent better than IBM but 50 percent better than in-house, which leads to different levels of differentiated value. Identifying your competition may seem like a no-brainer, but it has big implications for segmentation, offer design, customer targeting, and sales proposition (all topics for another day). So put some thought into this and pick an NBCA that is relevant to a current sale and will be useful down the road. Step Two: Quantify Your Superiority This is where it gets fun. We are ready to really dig into how your product is better than what is happening today (the NBCA). Back to the software example: our product helps our customers’ systems work 5 percent faster than if they use the IBM solution. But what does faster mean? Why do companies want faster? In 2008 at eBay, faster systems meant more revenue per listing. The site was loading too slowly and eBay was losing out on buyer bids in the final seconds of an auction. A faster system captured more last second bids in time, creating higher sell prices, happier sellers, and a higher fee for eBay. In a call center, faster systems might lower call time and reduce telecomm and labor costs. The same feature can drive different amounts, and different types, of value for different customers. Let’s dig into the eBay example. How do we put a number to this value? The simpler the math, the better. You will want to show your customers how you came up with the number, so it’s best to avoid partial differential equations and other forms of analytical confusion. Start with some reasonably conservative assumptions and basic customer knowledge. Let’s say a system that is 5 percent faster than the IBM offer means there is a 1 percent better chance an additional bid is placed on any given auction item (compared to the performance with IBM’s solution), and the average bid increment is $1.00. eBay gets a 5 percent commission on sales, and handles 10 million auctions per month. These assumptions let us roughly quantify the performance above and beyond IBM, the NBCA. There is always more than one way to quantify this value, so consider how your customer will think about it, what data you have, and what data you can easily provide potential customers with. Feature: System runs 5% faster than IBM Probability of additional bid: 1% (source: performance tests, assumption) Average incremental bid: $1.00 (source: customer research) eBay commission (%): 5% (source: customer website) eBay auctions per month: 10,000,000 (source: customer research) Value delivered: $5,000 per month (source: calculated) Based on this math, we believe we add $5,000/month of positive differential value (what is above and beyond what IBM offers for $250/month). This demonstrates that we are impacting such a massively important value driver to eBay that even a slight performance advantage over IBM allows us to justify a significant price premium. At this point, don’t worry too much about perfecting the numbers, just be conservative. Roughly right is better than precisely wrong. As you move forward, customer conversations, annual reports, pilot programs, and field tests will help refine the inputs. The important thing is to understand how we are driving value, and roughly how much it is worth. Step Three: Acknowledge Your Deficiencies Your story must be fair and believable to gain any traction with the customer, and a key step is to acknowledge that the NBCA does have some economic advantages. If a customer thinks we didn’t look at the entire picture, they may think we’re cooking the books in our favor and not providing a real view of the world. I have never seen a situation where there is no negative differential value, so be careful skipping this step. If the NBCA has superior performance on a different feature, you can replicate math like we used above. Another very common negative differentiator is the switching cost from the current solution, often in the form of installation time or employee training. Let’s look at how we may quantify the installation cost in our example: Feature: Installation & Training Cost (Negative) IT Man hours to install and train: 120 (source: assumption) Fully loaded IT staff cost per hour: $50 (source: market research) Amortization period (months): 36 (source: assumption) Negative Differential Value: $166 per month (source: calculated) Just like in our calculations on positive differential value, we want to use numbers that make a conservative case. The value here is very small compared to the positives, so use numbers your customer will believe. Step Four: Put it Together and Capture Your Value In most cases, you’ll have multiple positive and negative drivers to consider, but for now we’re keeping it simple. We have our NBCA identified as the $250/month IBM solution. We have determined that we provide an additional $5,000/month in positive value, but have a negative differentiation of $166/month. So now what? Our net differentiated value (positive value minus negative value, in this case $5,000 – $166) is $4,834/month. Since we are more valuable than the IBM offer, their price of $250/month becomes a hard floor for our pricing. Anything below this number can be very dangerous. Our ceiling is that differentiation plus the price of the NBCA, or $5,084 ($5,000 -$166 + $250). Above this price you are asking your customer to make an economically irrational decision. So here we have created our pricing band – from $250 to $5,084 per month. Decisions on how to share that value creation band with your customers (e.g. where to set your price) depend on your company’s strategy, the industry dynamics, and degree of innovation. In mature and highly competitive markets where innovation happens on the fringes, I typically see companies capture 10 percent of that differential value. In this case, that would mean 10 percent of $4,834 (net differentiation) on top of the NBCA price, or roughly $733/month ($250 + $483). More aggressive companies who focus on profit or operate in younger markets often captured roughly 30 percent of the net differential value. In some cases, such as highly innovative products where psychological drivers are in play or unquantifiable pain points exist, nearly 100 percent of that value can be captured. With this analysis in hand, your company can make informed commercial strategy decisions. Value-based pricing is not just about coming up with a price. It can help expose the core value of your business and provide a deeper understanding of how you are affecting your customer base, and how that effect varies from customer to customer. It will change the way you think about your competition, marketing and sales and product development. At a minimum, you can maybe prove Oscar Wilde wrong and understand the value of at least one thing – your own product. This post originally appeared on the MIT Entrepreneurship Review .

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American Business Media Announces New Business Plan and Management Team

March 29, 2011

Enhanced Member Services Add Impact in Evolving Media Environment

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Rick Santorum Blames Abortion For Social Security Woes

March 29, 2011

CONCORD, N.H. — In his latest trip to New Hampshire, Republican Rick Santorum says the Social Security system would be in much better shape if there were fewer abortions. The former Pennsylvania senator and potential presidential candidate was asked about Social Security during an interview on WESZ-AM radio in Laconia on Tuesday morning. He says the system has design flaws, but the reason it is in big trouble is that there aren’t enough workers to support retirees. He blamed that on what he called the nation’s abortion culture. He says that culture, coupled with policies that do not support families, deny America what it needs – more people. Santorum has been a frequent visitor to New Hampshire, which holds the earliest presidential primary.

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Nataly Kelly: The Translator Takes Center Stage

March 29, 2011

“We labor in obscurity.” These are the words of a literary translator who contacted Nina Sankovitch recently, as reported in her excellent post, ” Found in Translation: Honoring Literary Translators .” If you can’t name the Swedish-to-English translator of “The Girl Who Played with Fire,” just imagine who’s behind the translation of Apple’s latest slogan for the South Korean launch of the iPad 2 . The vast majority of translators don’t just labor in obscurity — they’re invisible. Here’s the typical scenario: Buyer needs words translated. Buyer sends words to translation firm. Translation firm sends words to translators. Translators send translation back to translation firm. Translation firm sends words back to buyer. Buyer publishes words. The file format, number of languages, output type, and other items vary, but the process remains fairly simple. The translator is usually left completely behind the scenes, unable to ask the source author any questions about the original text, even when doing so would facilitate a translation of better quality. The distance between the buyer of translation services and the translator is vast. But oh, how things are changing. At a Common Sense Advisory event held for buyers of translation at Google’s headquarters last year on the topic of translation quality measurement, an individual from one large organization complained, “Even though I have no contact with the translators, I can always tell when one of them goes on vacation.” She went on to share that the quality degraded, because the replacement translators were less familiar with her company’s work. I also noticed this trend in some recent research on life sciences translation . One interviewee explained, “For the first time ever, we’re bringing the translators on-site so we can train them ourselves and be absolutely sure they’re familiar with our brand and proprietary terminology.” When I was conducting research on translation quality , one buyer told me that when he is selecting a translation firm, he logs onto some of the online communities where translators congregate to see what they are writing about the vendors. “I don’t want to work with any company that doesn’t treat its translators as its most valuable asset,” he said. “Our brand is in their hands.” Most translators are not looking for glory. They don’t expect to see their names in lights, or on the cover of a book. They simply want the ability to do the best job they can. They want to be proud of the difficult work they do. Giving them a closer relationship with the buyer facilitates that. Slowly but surely, technology is bridging the gap between buyers of translation and the translators themselves. Delivering multilingual content is never truly a solo act. So, it isn’t that the translator will ever take center stage alone. But it’s becoming more common for the translator to join the rehearsals and be seen as part of the crew. And maybe just once in awhile, she can join the rest of the cast onstage, not because she needs to be seen, but so she, too, can see the faces of the people who applaud and appreciate her work.

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Jeffrey Sachs: Stop This Race to the Bottom on Corporate Tax

March 29, 2011

With a quarter of a million people on the streets of London protesting against the UK budget cuts , and with the US government days away from a potential shutdown , the social divisions over fiscal policy are deepening. It is not hard to see why. Both the US and UK have experienced a profound shift of income distribution from the poor and the middle-class to the rich in the past 30 years yet the fiscal adjustments are dominated by sharp cuts on public services combined with reductions on corporate tax rates. The social contract is under threat. Only international co-operation can now solve what is becoming a runaway social crisis in many high-income countries. Continue reading at the Financial Times.

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Washington Federal Announces Appointment of Mark N. Tabbutt to Its Board of Directors

March 29, 2011

SEATTLE, WA–(Marketwire – March 29, 2011) – Washington Federal, Inc. ( NASDAQ : WFSL ) today announced the appointment of Mark N. Tabbutt to its board of directors. Tabbutt, age 46, is the chairman of Saltchuk Resources, a privately-held, diversified family of companies engaged primarily in the transportation, real estate and energy industries. Headquartered in Seattle, Saltchuk is a family of companies that employs 5,000 in its operations located on the east and west coasts of the mainland U.S., Alaska, Hawaii, Puerto Rico, South America and the Persian Gulf. His studies include a B.A from Whitman College, a J.D. from the University of Puget Sound and the Owner/President Executive Education Program at Harvard University.

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Elaine Edgcomb: Budget Cuts Threaten America’s Smallest Businesses

March 29, 2011

Budget cuts can have a very real effect on our nation’s smallest businesses and the organization’s that serve them. I’m not referring to the well-off entrepreneurs, those with high incomes who might run a small office. Rather, I’m referring to the estimated 10 million mom-and-pop businesses whose owners have low-to-moderate incomes. These companies with five or fewer employees, also known as “microenterprises,” often generate significant employment in many of the regions hardest hit by the most recent recession. According to a recent census conducted by FIELD at the Aspen Institute, there are an estimated 696 microenterprise organizations across the U.S. Two-hundred and sixty-three of those organizations provide loans to microenterprises that, for a myriad of reasons, cannot access credit from traditional sources to start or grow their businesses. So what’s on the table in the budget proposals of both parties? Substantial cuts to key programs serving microenterprises both through the Small Business Administration (SBA) and the Community Development Financial Institution Fund (CDFI Fund) are proposed. Specifically, President Obama’s budget proposes to eliminate PRIME (Program for Investment in Micro-Entrepreneurs) funds that go towards the training of micro-entrepreneurs, and a 50 percent reduction in training dollars linked to the provision of capital under the SBA Microloan program. Proposals for cuts at the CDFI Fund could be just as dramatic. The bill proposed by the House contains reductions in funding for the agency by 81 percent, curtailing programs that provide funding and low-cost capital to lenders across the U.S. A recent report released on the scale and scope of the microlending industry speaks to the ripple effect that deep cuts to this area can have on small businesses. Of those microlenders surveyed in the report, federal funding makes up 31 percent of their aggregate operating budgets. So what does this country give up by not investing in these small enterprises? For starters, consider the diversity of businesses supported by microlenders. While they include street vendors and daycare providers, food producers and artisans, they also include retail and wholesale businesses of a wide variety, transportation companies, construction and health care companies, arts and entertainment professionals, manufacturers, educational companies, and scientific and technical services startups, among others. Data from 2009 , which documents the outcomes reported by the clients of 24 microenterprise development organizations, included firms in 18 different sectors. While many may be modest in size and ambitions, others have the potential for high growth and significant employment generation. Also, consider the jobs the sector produces . The 2009 data indicated that, on average, for every microenterprise supported, there were 3.1 paid workers. While the majority of these jobs were part-time, they provided hourly earnings higher than minimum wage and were an important contribution to household incomes. And these jobs were sustained in 2008 as the economic and financial crises broke across the nation. In an economy that has yet to feel a full-fledged recovery, with a national unemployment rate that remains elevated, those jobs would seem invaluable to its eventual recovery. Given that banks are still struggling to boost their commercial lending, especially for businesses that need loans under $50,000, microlenders can be the only source of funding for America’s smallest businesses. As both parties continue to battle over spending and the budget, one hopes that rather than weaken the microlending sector in the short-term, they will see the return on investment the sector can produce in the long-run.

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NetEnrich Names Jennifer Anaya to Lead Corporate Marketing

March 29, 2011

Global IT Services Company Invests in IT Channel Marketing Leadership to Build Greater Brand Awareness and Partner Marketing Value

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InsideView Names Ralf VonSosen Vice President of Marketing

March 29, 2011

Veteran CRM and Cloud Technology Executive Joins to Expand Sales Intelligence Leadership and Growth

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RALLY Marketing Group Expands Client Services Team

March 29, 2011

SEATTLE, WA–(Marketwire – March 29, 2011) – RALLY Marketing Group , an Integrated Marketing and Promotions Agency, is pleased to announce the addition of Oliver Weisert as Group Account Director, and Scott Mitchell as an Account Executive to the agency’s client services team.

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Nathan Newman: You’re Not Google’s Customer — You’re the Product: Antitrust in a Web 2.0 World

March 29, 2011

You think Google’s search engine is great. Gmail is easy to use. YouTube gives you instant access to funny pictures of dogs and music videos. And Google maps helps you find where you are and the nearest pizza place. And it’s all free. So you’re a happy customer and don’t understand why anyone would think antitrust action is needed against Google . Or why government officials from Europe to the U.S. Congress and, just last week, U.S. state governments are bringing antitrust investigations against Google. Except remember — it’s free! Google doesn’t make a dime of profit from you, so you aren’t the customer. In fact, all those cool products are just bait to get your information in the Google ecosystem so your attention and eyeballs can be sold to Google’s advertisers. The pleasant experience of using Google products is little different (in any economic analysis) from the pleasant massage administered to Kobe beef cattle in Japan; each is just a tool to increase the quality of the product delivered up to the real customers. What is Google’s Market in a Web 2.0 World? So here’s the key place to start in understanding proper technology policy for Google: there is no market for search engines; there is no market for online geolocation mapping software; there is no market for online video. Google, by making these products free, has destroyed those markets in favor of an alternative economic model of selling individual attention and precise information about those users to advertisers. You are the product, not the customer. That market between Google and its advertisers is where antitrust authorities ultimately have to look to understand what public policy is needed. As law professor Siva Vaidhyanathan describes in his just-published The Googlization of Everything (and Why We Should Worry) , “Google’s method of generating and selling advertisement placement is brilliant.” Through user queries and searches, as well as personal information about those users, Google can deliver a product to advertisers tailored to their exact needs — people looking for shoes are delivered to shoe sellers, people located in a certain town are delivered to local restaurants, and so on. And while individual users may think the brilliance of Google is in the technical design of its search engines, as a company, its profit is driven by its brilliance in nearly monopolizing the online search marketplace serving these advertising companies. And what profits! With revenue coming overwhelmingly from its advertising monopoly, in 2010, Google’s net income was $8.51bn, up 30 percent from 2009 on total revenue that grew 24 percent to $29.32bn. And to understand Google’s dominance, look at this chart of data from E-marketer , which shows Google’s overwhelming dominance over its competitors in delivering search advertising: Note that Google’s dominance is growing and is projected to grow more. In mobile phone advertising, Google has established a phenomenal 97 percent of paid mobile search advertising , which by itself is projected to be worth $1.1 billion by the end of 2011 and is likely to skyrocket as a percentage of advertising. And this dominance cannot easily be overcome by some alternative upstart website, even by well-capitalized competitors, since underlying Google’s enterprise is, in Vaidhyanathan’s words, a “monumental collection of physical sites such as research labs, server farms, data networks and sales offices.” Given the interplay of different Google services and customization of results based on having so many users involved in its ecosystem, there are so-called “network effects” from being dominant that any competitor has too large a challenge in displacing Google. So what are all the cool new Google products like Android, Chrome and Apps for? First, they are more ways to collect the personal information to target advertising to individuals (and new threats to personal privacy as described below). But they also serve a sinister role from an antitrust perspective. They help destroy any alternative economic base for a competitor to challenge Google’s dominance of online search advertising. Citing Warren Buffet’s observation that strong businesses are “economic castles” protected by “moats,” analyst Bill Gurley describes these free products as moats to drown any competitor who “stands between the user and Google”: Android, as well as Chrome and Chrome OS for that matter, are not “products” in the classic business sense. They have no plan to become their own “economic castles.” Rather they are very expensive and very aggressive “moats,” funded by the height and magnitude of Google’s castle… Google is also scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. To understand how this plays out in antitrust analysis, look at a top current focus of the Justice Department’s Antitrust division, namely Google’s proposed acquisition of travel software provider ITA Software. ITA provides the underlying technology used by online travel agents, travel websites and airline websites. Now, some analysts worry that Google could use its position to unfairly price access to the database to potential competitors in the travel search market or skew search results to favor key partners. But if it just destroys the business model for competing travel agents and websites by absorbing the service into its overall search system, it will undermine a whole set of potential competitors for advertising dollars. Tim Wu, a law professor and author of the book The Master Switch , argues of such a deal , “In the longer term, however, the risk is that this deal could give Google such an advantage that travel search becomes like other forms of search, dominated by one engine, which could eventually stifle innovation.” (And of course, Google may just flat out skew results in travel, given complaints across a wide range of areas by businesses involved in its search and advertising market, as I detailed in my post, The Case for Antitrust Action Against Google .) How Privacy is Threatened by Google’s Business Model: So why should individual users care about any of this if they are still getting the goodies for free? The reason this is not a dry economic issue of whether Google is cutting into the profits of a few competitors or deciding a few winners and losers desperate for a higher ranking in its search results is that Google is not giving anything away for free. Google’s whole business model is based on systematically stripping away user’s privacy to trade Google’s knowledge about you to advertisers. A former Federal Trade Commissioner, Pamela Jones Harbour , highlighted the problem of this model for both privacy and antitrust policy in the American Bar Association’s Antitrust Law Journal . Harbour, who served at the FTC from 2003 to 2009, dissented from the FTC decision to allow Google to take over the online ad display company, Doubleclick. If you understood that the relevant market was “data used for behavioral marketing,” the merger brought together two companies already controlling large amounts of personal data, so the merger left Google even more dominant in this sector. Harbour emphasizes the point made above that you miss the ball if you look at “search engine markets” or “map software markets”, but instead you have to understand that the product is aggregated personal data where: …[revenue] derives from the accumulation of data, which can then be put to myriad commercial uses… The sites are subsidized, in effect, by trading on the value of accumulated data. In many instances, the data come from individual consumers, who may or may not realize that they are paying for “free” information or services by disclosing their personal information. Companies like Google with the most specific personal data can better target ads and thus dominate these advertising markets. What this also means is that non-price factors, such as privacy decisions by consumers, can easily be distorted in a non-competitive online environment. If companies’ real constituencies are advertisers, they then have a strong incentive to violate privacy if it serves their behavioral targeting goals. Thus you end up with Google continually breaching consumer privacy, even going as far as the wi-fi spying through their Street View project , without too much worry about losing consumer support. Some neoliberal doubters of the need for antitrust and other regulatory action on Google might argue that market competition will protect privacy, but if you understand that the relevant customers are the advertisers — and it’s the advertisers who want privacy violated to better target advertising — you’ll understand that the “market”, such as it is, is driving the destruction of personal privacy online. There may be a “market” for convincing customers that companies are trying to protect individual privacy, but, to return to the Kobe beef metaphor, that’s the same incentive for hiding the slaughterhouse from the cattle. It’s only a cosmetic change in a business model driving to the same result. Why Active Regulation is Needed: What’s clear is that “the market” is not going to solve either the antitrust or the privacy problems from Google or comparable actors in other sectors of the online world. A Web 2.0 world requires new tools and analyses, where a company like Google with such dominance needs to be treated a bit more like a public utility — delivering important public benefits but also requiring public accountability to protect the public interest. Mergers by Google deserve more skepticism — and the privacy and antitrust implications of its actions need sharper scrutiny (something the judge who blocked the Google Books settlement this past week thankfully engaged in ). But that’s just the first step. More active regulation is needed to protect privacy and keep competition alive to maintain pressure for innovation on even as dominant a player as Google. One flip side of understanding how critical violations of privacy are to Google’s economic model is that enacting stronger privacy protection also will, in former FTC Commissioner Harbour’s words “directly influence how much competition is able to emerge in related technology markets.” Harbour points to strengthening the ability of consumers to port data from one service to another as an example. While it looks like a consumer protection practice, it also service competition policy as well: Imagine that a given legal regime were to encourage greater consumer control over data (e.g., through open standards), such that a market emerged to accommodate the porting of data relatively easily among applications. In that entry-friendly environment, if consumers were unhappy with the level of privacy protection offered by a popular application or service, consumers would be better able to “vote with their feet” (or, more accurately, their data) and switch to competing providers, without losing the accrued value of their personal datasets. Still, even data portability is not enough in a world where users often don’t know how companies are misusing their data. Analyst and Seton Hall Professor Frank Pasquale argues that data portability and other market-based regulations will fail: “privacy regulators’ monitoring of oligopolistic online entities will be more effective than waiting for the elusive concept of ‘privacy competition.’” That’s one reason I do think U.S. policymakers need to look at policy innovations in Europe that are demanding specific rights for consumers and even promoting key technologies that bypass the privacy-destroying process of many current online practices. They are moving towards policies that give individuals the right to remove personal data from online databases, require transparency in what data has been collected, and require explicit consent to collect personal data in the first place. Germany, for example , is requiring new central online sites where individuals can track exactly what data is being collected on them — and be able to remove it — and even promoting alternative online mapping software that eliminates the requirement by consumers to share their location to access it. Beyond Neoliberal Economics Online: Whatever the salience of the neoliberal economic argument that regulation is not needed and markets will protect consumers — and the bloody financial meltdown should make anyone question the general doctrine — what’s clear is that the Web 2.0 world has its own dynamics that make even the basic assumptions of neoliberal economics invalid. Markets online are odd multi-party affairs, where individuals (often unknowingly) trade off their private information to intermediaries like Google, which in turn market that information to advertisers, who in turn try to market products or services often from other companies back to individuals. Individual interests in privacy are at war with the interests of advertisers in obliterating that privacy and “network effects” allow a company like Google to attain greater and greater dominance, even as it uses giving away free products to undermine the business model of potential competitors. Waving the magic “market” wand seems a very weak and uncertain tool in achieving what we want as a society. Instead, what is needed are clearer mandates on all online companies to deliver what is promised — whether products, searches or social connections — while severely limiting how those companies can resell or market based on personal data without explicit consent. People deserve to be back in control of their online experience, not merely a data point in a product marketed to advertisers. Crossposted from Tech-Progress.org

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Indiana Democrats Return After ‘Softening’ GOP Agenda

March 29, 2011

INDIANAPOLIS — Indiana House Democrats are back at work after a five-week boycott to protest a Republican agenda they consider an assault on labor unions and public education, but whether their efforts will ultimately change the outcome of the legislation they opposed is unclear. Republicans agreed to rejigger – but not completely overhaul – their plans as lawmakers resume work in the House. The Senate had already started working around the Democrats by holding separate hearings on bills stalled in the walkout. Still, Democrats insist concessions they’ve received on several issues, including school vouchers and labor legislation, made their boycott worthwhile. “We’re coming back after softening the radical agenda,” said House Minority Leader Patrick Bauer, D-South Bend, whose Statehouse return Monday was greeted by cheering union workers. “We won a battle, but we recognize the war goes on.” The victories Democrats claim are likely more than they would have gained had they not boycotted, but they won’t stop the agenda pushed by Republicans who won sweeping control of the House in last year’s elections. Republican Gov. Mitch Daniels said bills aimed at improving education and keeping spending low are mainstream Hoosier ideas. “The only thing ‘radical’ about this session has been the decision by one caucus to walk off the job for five weeks,” Daniels said. Republicans had vowed throughout the standoff that they wouldn’t remove items from their agenda – and by and large they won’t have to. The only bill killed by the boycott was a “right-to-work” proposal that would prohibit union representation fees from being a condition of employment. GOP legislators agreed to some changes on several other bills. For example, they will cap for two years the number of students who could participate in a voucher program using taxpayer money to attend private schools, but it would still be among the nation’s most expansive use of vouchers when the limits expire. Another bill that would exempt certain government projects from the state’s prevailing construction wage law was changed so that fewer projects would be exempt. The Democrats’ most significant achievement may be that people across the state are talking about these issues. Bauer said the public needed a “timeout” to learn about the agenda being pushed by Republicans. Thousands of people attended Statehouse rallies during the walkout, and hundreds attended local town hall meetings. Many teachers said they didn’t realize Republicans supported vouchers and other measures they think will erode public education, and some union members said they wished they had voted. Tom Case, a union worker from Fort Wayne who was at the Statehouse protesting Monday, said he was glad Democrats staged the boycott. “Republicans are going way out of bounds with what they’re doing right now,” he said. In one sense, Democrats “punched above their weight,” said Robert Dion, who teaches politics at the University of Evansville. “They got the attention of the state, and they were able to finagle some meaningful concessions that I don’t think were necessarily offered all that willingly,” Dion said. On the other hand, Dion said, Democrats have a bit of a black eye because the walkout lasted so long. House Democrats had fled to Illinois on Feb. 22 to protest 11 pieces of legislation, denying the House the two-thirds of members present needed to do business as required by the state constitution. The move had the potential to force a special session or even a government shutdown if a new budget wasn’t adopted before July 1. Indiana’s boycott began a week after Wisconsin’s Democratic senators left for Illinois in their three-week boycott against a law barring most public employees from collective bargaining. Wisconsin Republicans used a parliamentary maneuver to pass the law without them, and the matter is now headed to court. The Indiana standoff became one of the longest legislative walkouts in recent U.S. history. The impasse got a bit nasty at times – with name-calling, scathing political ads, rowdy rallies and fines totaling more than $3,000 for most absent Democrats. But Republicans and Democrats seemed to tone down the rhetoric last week as they discussed possible changes to bills. Lawmakers began making up for five weeks of lost time Monday. Republican House Speaker Brian Bosma gaveled in the chamber early Monday evening, and lawmakers began working on bills in earnest. Lawmakers worked their way through a large chunk of the House calendar, which was the same as the day Democrats left. Bosma predicted lawmakers would have plenty of late nights as they work toward the scheduled end of the regular legislative session April 29. “It’s long past time to get to the people’s business,” Bosma said. “Hopefully we can make this work in five short weeks.”

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A Major Risk To U.S. Nuclear Reactors

March 29, 2011

WASHINGTON — Long before the nuclear emergency in Japan, U.S. regulators knew that a power failure lasting for days at an American nuclear plant, whatever the cause, could lead to a radioactive leak. Even so, they have only required the nation’s 104 nuclear reactors to develop plans for dealing with much shorter blackouts on the assumption that power would be restored quickly. In one nightmare simulation presented by the Nuclear Regulatory Commission in 2009, it would take less than a day for radiation to escape from a reactor at a Pennsylvania nuclear power plant after an earthquake, flood or fire knocked out all electrical power and there was no way to keep the reactors cool after backup battery power ran out. That plant, the Peach Bottom Atomic Power Station outside Lancaster, has reactors of the same older make and model as those releasing radiation at Japan’s Fukushima Dai-ichi plant, which is using other means to try to cool the reactors. And like Fukushima Dai-ichi, the Peach Bottom plant has enough battery power on site to power emergency cooling systems for eight hours. In Japan, that wasn’t enough time for power to be restored. According to the International Atomic Energy Agency and the Nuclear Energy Institute trade association, three of the six reactors at the plant still can’t get power to operate the emergency cooling systems. Two were shut down at the time. In the sixth, the fuel was removed completely and put in the spent fuel pool when it was shut down for maintenance at the time of the disaster. A week after the March 11 earthquake, diesel generators started supplying power to two other two reactors, Units 5 and 6, the groups said. The risk of a blackout leading to core damage, while extremely remote, exists at all U.S. nuclear power plants, and some are more susceptible than others, according to an Associated Press investigation. While regulators say they have confidence that measures adopted in the U.S. will prevent or significantly delay a core from melting and threatening a radioactive release, the events in Japan raise questions about whether U.S. power plants are as prepared as they could and should be. “We didn’t address a tsunami and an earthquake, but clearly we have known for some time that one of the weak links that makes accidents a little more likely is losing power,” said Alan Kolaczkowski, a retired nuclear engineer who worked on a federal risk analysis of Peach Bottom released in 1990 and is familiar with the updated risk analysis. Risk analyses conducted by the plants in 1991-94 and published by the commission in 2003 show that the chances of such an event striking a U.S. power plant are remote, even at the plant where the risk is the highest, the Beaver Valley Power Station in Pennsylvania. These long odds are among the reasons why the United States since the late 1980s has only required nuclear power plants to cope with blackouts for four or eight hours, depending on the risk. That’s about how much time batteries would last. After that, it is assumed that power would be restored. And so far, that’s been the case. Equipment put in place after the Sept. 11, 2001, terrorist attacks could buy more time. Otherwise, the reactor’s radioactive core could begin to melt unless alternative cooling methods were employed. In Japan, the utility has tried using portable generators and dumped tons of seawater, among other things, on the reactors in an attempt to keep them cool. A 2003 federal analysis looking at how to estimate the risk of containment failure said that should power be knocked out by an earthquake or tornado it “would be unlikely that power will be recovered in the time frame to prevent core meltdown.” In Japan, it was a one-two punch: first the earthquake, then the tsunami. Tokyo Electric Power Co., the operator of the crippled plant, found other ways to cool the reactor core and so far avert a full-scale meltdown without electricity. “Clearly the coping duration is an issue on the table now,” said Biff Bradley, director of risk assessment for the Nuclear Energy Institute. “The industry and the Nuclear Regulatory Commission will have to go back in light of what we just observed and rethink station blackout duration.” David Lochbaum, a former plant engineer and nuclear safety director at the advocacy group Union of Concerned Scientists, put it another way: “Japan shows what happens when you play beat-the-clock and lose.” Lochbaum plans to use the Japan disaster to press lawmakers and the nuclear power industry to do more when it comes to coping with prolonged blackouts, such as having temporary generators on site that can recharge batteries. A complete loss of electrical power, generally speaking, poses a major problem for a nuclear power plant because the reactor core must be kept cool, and back-up cooling systems – mostly pumps that replenish the core with water_ require massive amounts of power to work. Without the electrical grid, or diesel generators, batteries can be used for a time, but they will not last long with the power demands. And when the batteries die, the systems that control and monitor the plant can also go dark, making it difficult to ascertain water levels and the condition of the core. One variable not considered in the NRC risk assessments of severe blackouts was cooling water in spent fuel pools, where rods once used in the reactor are placed. With limited resources, the commission decided to focus its analysis on the reactor fuel, which has the potential to release more radiation. An analysis of individual plant risks released in 2003 by the NRC shows that for 39 of the 104 nuclear reactors, the risk of core damage from a blackout was greater than 1 in 100,000. At 45 other plants the risk is greater than 1 in 1 million, the threshold NRC is using to determine which severe accidents should be evaluated in its latest analysis. The Beaver Valley Power Station, Unit 1, in Pennsylvania had the greatest risk of core melt – 6.5 in 100,000, according to the analysis. But that risk may have been reduced in subsequent years as NRC regulations required plants to do more to cope with blackouts. Todd Schneider, a spokesman for FirstEnergy Nuclear Operating Co., which runs Beaver Creek, told the AP that batteries on site would last less than a week. In 1988, eight years after labeling blackouts “an unresolved safety issue,” the NRC required nuclear power plants to improve the reliability of their diesel generators, have more backup generators on site, and better train personnel to restore power. These steps would allow them to keep the core cool for four to eight hours if they lost all electrical power. By contrast, the newest generation of nuclear power plant, which is still awaiting approval, can last 72 hours without taking any action, and a minimum of seven days if water is supplied by other means to cooling pools. Despite the added safety measures, a 1997 report found that blackouts – the loss of on-site and off-site electrical power – remained “a dominant contributor to the risk of core melt at some plants.” The events of Sept. 11, 2001, further solidified that nuclear reactors might have to keep the core cool for a longer period without power. After 9/11, the commission issued regulations requiring that plants have portable power supplies for relief valves and be able to manually operate an emergency reactor cooling system when batteries go out. The NRC says these steps, and others, have reduced the risk of core melt from station blackouts from the current fleet of nuclear plants. For instance, preliminary results of the latest analysis of the risks to the Peach Bottom plant show that any release caused by a blackout there would be far less rapid and would release less radiation than previously thought, even without any actions being taken. With more time, people can be evacuated. The NRC says improved computer models, coupled with up-to-date information about the plant, resulted in the rosier outlook. “When you simplify, you always err towards the worst possible circumstance,” Scott Burnell, a spokesman for the Nuclear Regulatory Commission, said of the earlier studies. The latest work shows that “even in situations where everything is broken and you can’t do anything else, these events take a long time to play out,” he said. “Even when you get to releasing into environment, much less of it is released than actually thought.” Exelon Corp., the operator of the Peach Bottom plant, referred all detailed questions about its preparedness and the risk analysis back to the NRC. In a news release issued earlier this month, the company, which operates 10 nuclear power plants, said “all Exelon nuclear plants are able to safely shut down and keep the fuel cooled even without electricity from the grid.” Other people, looking at the crisis unfolding in Japan, aren’t so sure. In the worst-case scenario, the NRC’s 1990 risk assessment predicted that a core melt at Peach Bottom could begin in one hour if electrical power on- and off-site were lost, the diesel generators – the main back-up source of power for the pumps that keep the core cool with water – failed to work and other mitigating steps weren’t taken. “It is not a question that those things are definitely effective in this kind of scenario,” said Richard Denning, a professor of nuclear engineering at Ohio State University, referring to the steps NRC has taken to prevent incidents. Denning had done work as a contractor on severe accident analyses for the NRC since 1975. He retired from Battelle Memorial Institute in 1995. “They certainly could have made all the difference in this particular case,” he said, referring to Japan. “That’s assuming you have stored these things in a place that would not have been swept away by tsunami.”

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Nikki Haley Addresses Questions About Past Job Amid Scrutiny

March 29, 2011

Gov. Nikki Haley says she was only doing the same thing every other member of the Lexington County legislative delegation was doing in pushing for a heart center at Lexington Medical Center, not doing something special for her employer.

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