July 2011

14 Alternative Titles For The Great Recession

July 27, 2011

Before the current economic downturn ever officially ended, it had already become commonly known as the Great Recession. But two years after its official end, some, including Paul Krugman, are beginning to whisper that it might be time for a name change. On Tuesday, after providing a list of alternative titles suggested by prominent people , we asked you what you thought the current economic downturn should be called. Below are some of the best suggestions by HuffPost readers. Among them: The People’s Awakening, Digital Depression and The Giant Squeeze. Below is a list of suggested alternate names via Twitter (and one comment made on the original article ):

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For-Profit College Chain In Kentucky Accused Of Cheating Students Out Of Financial Aid

July 27, 2011

The Kentucky Attorney General filed suit Wednesday against a chain of for-profit colleges in the state, claiming that administrators at Daymar Colleges have consistently deceived students by making false promises about the ability to transfer course credits and have forced them to purchase textbooks and supplies at substantially marked-up rates. Attorney General Jack Conway (D), who is leading a multi-state investigation into for-profit colleges with top prosecutors from 18 other states, alleged that Daymar Colleges violated state consumer protection laws by engaging in “unfair, false, misleading and deceptive acts and practices” involving financial aid and recruitment of students. The suit seeks damages and restitution for approximately 5,000 students who were allegedly swindled by the schools. The for-profit college industry, which has tripled in size over the past decade, is facing increased scrutiny on a national scale as evidence mounts that some schools are aggressively recruiting unsuspecting students and capturing disproportionate shares of federal student aid dollars as revenues. Many students leave the schools with unmanageable debts and little in the way of job prospects, leading to a high rate of federal student loan defaults . Although Conway has been conferring with other state attorneys general from around the country, the case against Daymar Colleges is confined to Kentucky. Daymar operates 16 campuses in Kentucky, Ohio and Indiana, along with an online program. The schools have among the highest student loan default rates in the state, with nearly 37 percent of students at one of the Daymar schools defaulting on loans within three years of leaving the institution, according to data from the Department of Education. The court filing states that administrators at Daymar purposely force students to purchase textbooks and other supplies from the school itself, instead of through third-party vendors that would charge substantially less. Instructors and other employees tell students that they must purchase textbooks from the school in order to use their financial aid dollars, according to the filing. “We’re alleging that this was a sophisticated and systematic effort on the part of Daymar to deny students access to their financial aid funds so that they could receive the benefit of marking up the books,” Conway said. Administrators tell employees not to provide students with serial numbers or other information about textbooks, intentionally shrink wrapping the books to hide information that students could use to purchase the materials through another bookstore or the Internet. “Defendants are engaged in a sophisticated practice of deceiving and misleading students about their textbooks and financial aid so that students will be forced into purchasing their textbooks and supplies from Daymar College at prices substantially higher than other vendors,” the filing reads. “Defendants have engaged in unconscionable conduct in causing students to incur additional educational costs and interest charges.” A spokesman for Daymar, Tom Nunez, said the company has not had a chance to review the specific allegations in the lawsuit, but said the company will defend itself “vigorously” in court. Conway would not say how much the school was marking up the textbooks for students. Other allegations in the lawsuit involve issues of transparency and misrepresentation during the recruiting process. The investigation found that employees at Daymar are not transparent up front about the amount of tuition and other costs that students will incur. Recruiters also make unfair promises about the value of the courses, according to the complaint, engaging in a practice of “enrolling and retaining students with false assurances that their credits will transfer to public or traditional schools, when, in fact, the credits do not transfer in most circumstances.” In addition to the multi-state probe into for-profit colleges, Conway’s office in Kentucky is investigating six other colleges in the state over potential misrepresentations about job placement and misleading recruiting tactics that violate state consumer protection laws. “We need to make sure that these institutions … are just as interested in taking care of students and finding them a job and educating them as they are in getting their hands on public taxpayer money via student loans,” Conway said.

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Dean Baker: President Obama Doesn’t Understand the Origins of the Deficit

July 27, 2011

That is what he told the country in his address on Monday night. President Obama described a situation in which the government had been perpetually running large deficits since President Clinton left office. The deficit increased even more as a result of the recession. For the last decade, we have spent more money than we take in. In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation’s credit card. As a result, the deficit was on track to top $1 trillion the year I took office. To make matters worse, the recession meant that there was less money coming in, and it required us to spend even more. This is simply not true. In its budget projections from January 2008, the last set before the impact of the collapse of the housing bubble was clear, the Congressional Budget Office (CBO) projected a deficit of just $198 billion for 2009 . This is less than one-fifth of the “on track to top $1 trillion” figure that President Obama gave in his speech. This is a serious error. One trillion is a much bigger number than $198 billion. This difference is central to the budget debate. People can argue that the $198 billion deficit projected for 2008 was too large. But it would be absurd to claim it was out of control or represented any remotely serious threat to the nation’s solvency. In fact, over the five years 2003-2007 the country’s debt to GDP ratio was virtually unchanged, meaning that the country could run deficits of the same size (relative to the economy) literally forever. This changed with the recession caused by the collapse of the housing bubble. It was the recession, and the response to it, that pushed the deficit in 2009 from the $198 billion projected by CBO to the over $1 trillion noted by President Obama in his speech. No one can justify wasting money on wars that should not have been fought, giving away tax breaks to people who don’t need them, or deliberately designing a prescription drug benefit so that it needlessly hands hundreds of billions of dollars to drug companies and insurers. But even with all of this waste, the deficit was still not out of control. This is a central point that needs to be made 300,000 times in the current debate over the budget. The deficits were very much containable until the collapse of the housing bubble sank the economy. It was the economic collapse that gave us large deficits. This should mean that our politicians focus on getting the economy back to normal levels of output. If the unemployment rate was back at the 4.7 percent rate of 2007 the bulk of the deficit would disappear. This point may fall on deaf ears as Congress goes into its budget cutting frenzy, but the public should at least understand that these cuts are not an honest response to the budget situation. The Republicans have invented a phony past where President Obama is somehow spending money like crazy to have a good time. Unfortunately, President Obama has also invented a phony past of out of control spending, but made President Bush the villain. The reality is that if we get big cuts to Social Security, Medicare, Medicaid and other essential programs it will be because the politicians who vote for these cuts want them. It is not because spending or the deficit were out of control and they had no choice. One final point, when push comes to shove, the financial industry will make the Tea Party Republicans vote to keep them in business. Wall Street will suffer more than anyone from a default and it will not let it happen. The public should know this, certainly Wall Street does.

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Anthony Tjan: Learning Optimism With the 24×3 Rule

July 27, 2011

One of my greatest mentors was the late Jay Chiat of TBWA Chiat Day, an iconoclast in the field of advertising with a constant imagination for possibilities in business and life. Jay embodied the three traits of a “lucky attitude” that I described in my last post: humility, intellectual curiosity, and optimism. Of these three characteristics, it was Jay’s optimism which was perhaps his greatest lesson to me. He inspired people to embrace optimism — inside themselves, and also, as importantly, in others. It is a gift to understand how to project, share, and inspire with optimism. It is an even greater act of generosity to be inspired by optimism from others and to be willing to receive it. The capacity to be a natural recipient of ideas and other peoples’ optimism is what makes for the ultimate optimist. You may be open to experimenting with new things, but do you truly see the good in something before the bad? The order of this thought process is critical: to try and see everything good in an idea before seeing anything bad. While most of us like to think we do, and would therefore self-describe ourselves as optimistic, more often (if we are truly honest with ourselves) we are natural critics (even cynics). Experience brings wisdom, but its collateral damage is that it can jade one against new concepts, turning many of us into Pavlovian skeptics. Whether we openly say it or not, we often think of what might be wrong with someone or something before we try to understand what might be right or good. The temptation and reflex for cynicism is usually more common than a natural responsive optimism. Cynicism is indeed the enemy of optimism. Here’s a practical tool for the skeptic or cynic in all of us: the 24×3 rule. The next time you hear an idea for the first time, or meet someone new, try to wait 24 seconds before saying or thinking something negative. This reinforces a foundational skill of good optimists and good leadership. That basic skill is listening. As you gain the ability to listen and pause for a brief 24 seconds before letting the critic in you bubble to the verbal surface, move to the next level and try to do it for 24 minutes. At 24 minutes, you are able to give more considered thought to the idea and think more carefully of the many reasons why it might actually work, why it might be better than what is out there, and why it might just topple conventional wisdom. And yes, you should also work towards the ability to wait 24 hours — one single day — before pondering or verbalizing the cons against something. Of course, most times this will not be possible. Our minds cannot compartmentalize so easily, nor shut off our past experiences. But the 24×3 rule is a type of reflective meditation for developing a more optimistic approach towards people and ideas. The simple guideline of 24x24x24 is just a good reminder that a prerequisite of optimism is to have a willing suspension of disbelief. This is not saying in any way not to be a healthy critic — it is absolutely essential in business leadership to be a critic — but rather that inspirational leadership and effective mentorship require a bite-your-tongue, wait-to-be-a-critic mindset and attitude. Start with the pause button for 24 seconds and stretch it towards being able to ponder positively for 24 hours. Mastering the 24×3 rule will make you a more enjoyable and inspirational leader to be around. In increasing your generosity to receive optimism, you will be rewarded with new possibilities that others have prematurely dismissed. This article first appeared on Harvard Business Publishing on July 26, 2011.

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Jason Alderman: With Budgeting, Slow and Steady Wins the Race

July 27, 2011

Budgets are a lot like diets: No single approach works for everyone; overly complicated plans rarely work for long; and sometimes it takes a few tries before you get it right. One stumbling block for many people is thinking of a budget as a form of punishment rather than as a means to achieve their goals in life. Say you dream of buying a house: A budget shouldn’t serve as a constant reminder that you can’t afford a down payment; but rather, as a tool to help identify where the money goes each month so you can adjust your spending — and saving — accordingly. Getting started . If you’re new to budgeting or you haven’t been successful in the past, start slowly. First, for a few months write down every cent you spend: mortgage/rent, utilities, food (including snacks and coffees), gas, medical copayments, birthday presents, credit card interest, children’s allowances — the works. Also, divide annual expenses like insurance and income tax into monthly amounts and add them to the list. To help track what you spend, review your checkbook and credit card statements and hold onto all cash transaction receipts. Don’t feel compelled to categorize expenses at first; just total them up each month. It sounds tedious, but I guarantee you’ll be amazed by the bottom line. Eventually, you can start grouping expenses into categories, which will help identify items to trim. At the same time, track your income. If your pay varies from month to month, average it out for purposes of this exercise. Comparing money coming in versus money going out can be quite enlightening. Breaking even or losing money each month may mean you need to find additional income sources and/or aggressively alter your spending habits. You’ll probably ask yourself, “Do I really want to spend $60 a month on coffee?” and “How can I reduce my utilities bills?” Budgeting tools. Many tools are available to help track income and expenses. You can go the pencil-and-paper route by downloading a budget spreadsheet template (Google “Budget Worksheet” to find one you like). Interactive, online budgeting calculators that can help you plan for a variety of expenses also are widely available. For example, Practical Money Skills for Life , a free personal financial management program run by my employer, Visa Inc., includes budgeting calculators for everything from back-to-school costs to holiday expenses to retirement. Once you’re ready to go to the next level of managing your finances, many software packages and online account management services are available — some are free, while others charge a one-time or monthly fee. Among the more popular products are Quicken , Mint.com , Yodlee , Mvlopes and YNAB (You Need a Budget). Some, like Mint and Yodlee, can be accessed online, including by smart phone; others, like Quicken, must be accessed from a dedicated computer. Commonly available features include: Account aggregation, where you can import transaction information and balances from bank, credit card and investment and other accounts into one common database — this avoids having to go to multiple websites. Transfer money between accounts; some also allow online bill payment. Track, categorize and annotate transactions — also helpful when calculating income taxes. Some offer interactive charts and graphs to help visualize changes in spending and savings habits. Budgeting tools and tips. Setting goals and changing behavior . Start jotting down your short- and long-term financial goals. These might include buying a new car or house, saving for retirement and vacations, paying off debt, financing college and building an emergency fund for expenses like car repairs, broken appliances, unexpected medical bills, etc. Eventually you’ll need to figure out what those things will cost so you’ll know how much to save — and by when. It’s at this “behavioral change” point, when the compilation of so many long-term goals seems overwhelming, that many people give up on budgeting. Think about the tortoise and the hare: Slow and steady wins the race. You won’t solve all your financial challenges at once, but you can start whittling away at them. Over time, you’ll notice gradual improvements and be encouraged to up the ante — it’s like losing weight gradually and keeping it off versus drastic weight reduction. Here are a few suggestions: Once you’ve started categorizing expenses, look for items that stand out as extravagances you can trim or eliminate, at least temporarily (meals out, unused gym memberships or magazine subscriptions, unneeded shopping sprees, etc.) Ask insurance companies how much you can reduce premiums by raising deductibles. Always pay at least the minimum balance on loans and credit cards to avoid late charges. List accounts by interest rate and pay off those with the highest rates first. Create separate savings accounts for different long-term goals and have contributions automatically deducted from your paycheck or checking account — even if it’s only a small amount each month. Online banks and credit unions often will allow multiple accounts with no minimum balance requirements or service charges. Try not to borrow from one “account” to pay expenses in another. Especially don’t raid your retirement accounts — the tax implications alone are daunting. For more budgeting tips, visit MyMoney.gov , the National Foundation for Credit Counseling , Practical Money Skills for Life , or read my previous blog, Go on a Spending Diet . This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation. Follow Jason Alderman on Twitter: http://twitter.com/PracticalMoney

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South Korean economy expands at a slower pace in the second quarter of this year 

July 27, 2011

The South Korean gross domestic product grew in the slowest pace during the second quarter of the year, as exports the main pillar for recovery declined, while domestic demand weakened. Economic …

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Asian Activities Report for July 27, 2011: South American Iron and Steel Corporation Limited (ASX:SAY) to Acquire an Exploration Concession in China

July 27, 2011

http://www.abnnewswire.net/rss2/menafn/abn_menafn_en.asp South American Iron & Steel Corporation Limited (MENAFN)unnan, China. The transaction involves the purchase of 15% of the shares in a Hong …

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Australian Dollar Hits New Record on Higher Q2 CPI

July 27, 2011

THE TAKEAWAY: Higher inflation data > More likely for RBA to raise rates > AUD rallies The Australian dollar rallied immediately after 2nd quarter inflation data were reported higher than …

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Amazon.com Q2 profit down to USD191m

July 27, 2011

(MENAFN) Amazon.com Inc. CEO, Jeff Bezos, said that although the online retailer’s revenue grew 51 percent, in the second quarter, the company’s profit dropped from USD207 million in 2010′s same …

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Oil prices to surge if US defaults on debt

July 27, 2011

(MENAFN) Major analysts in the region are predicting a sharp increase in oil prices if the US defaults on its debt. Although oil producers will benefit from such moves, a crude price increase is not …

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S Korea’s Q2 economy down to 0.8%

July 27, 2011

(MENAFN) South Korea’s central bank said that in spite of high consumer spending and rebounds in capital construction, in the second quarter, the country’s economic growth slipped to 0.8 percent …

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India’s Maruti Q1 net profit up 18%

July 27, 2011

(MENAFN) India’s Maruti Suzuki’s CFO, Ajay Seth, said that the carmaker’s first quarter net profit rose 18 percent reaching USD124 million from USD104 million in 2010, reported Emirates …

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Kodak Q2 loss USD179m

July 27, 2011

(MENAFN) Eastman Kodak Co. said that due to a drop in revenue from digital cameras and film, in the second quarter, the company’s loss grew reaching USD179 million compared with last year’s same …

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Disney offers to purchase India’s UTV for USD451m

July 27, 2011

(MENAFN) India’s UTV Software Communications said that it received an offer from Walt Disney, which owns 50.44 percent of the company, to buy the remaining outstanding shares of UTV for USD451 …

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NALCO sees revenues up by 12%

July 27, 2011

(MENAFN) The Indian National Aluminium Co’s (NALCO) chairman and managing director, B.L. Bagra, said that the company sees growth in its revenues during the current year by 10 to 12 percent …

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Australia’s yearly inflation rate up to 3.6%

July 27, 2011

(MENAFN) The Australian Bureau of Statistics said that in the year ended June; the country’s yearly inflation went up to 3.6 percent, recording the fastest pace in three years, reported Xinhua …

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US 3M Q2 profit up 3.4%

July 27, 2011

(MENAFN) 3M’s Co. Chairman and CEO, George Buckley, said that due to little demand for LCD televisions’ films, in the second quarter, the company’s profit grew just 3.4 percent to USD1.16 billion, …

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US Cummins Q2 profit up to USD505m

July 27, 2011

(MENAFN) Cummins Inc. COO, Tom Linebarger, said that due to a high growth across the firm’s divisions, the diesel engine maker’s second quarter profit grew to USD505 million from USD246 million in …

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Did Republicans Really Watch This Ben Affleck Scene Behind Closed Doors?

July 27, 2011

Amid contentious negotiations taking place in Washington on the issue of raising the debt ceiling, the Washington Post offers a glimpse of what went on behind the scenes during a closed-door meeting among House Republican lawmakers on Tuesday. The gathering took place as some conservative members of the chamber remain at odds with their GOP colleagues on a plan put forth by House Speaker John Boehner to lift the nation’s deficit limit. Rep. Jim Jordan (R-Ohio) said on Tuesday morning that at the time he was confident the proposal did not have sufficient GOP votes to pass. According to the Post , House Majority Whip Kevin McCarthy (R-Calif.) sought to foster a sense of unity among House Republicans at their meeting by playing a clip from The Town , a 2010 crime thriller starring Ben Affleck and Jeremy Renner. In the segment of footage reportedly shown, Doug MacRay, a bank robber played by Affleck, says to his friend Jem Coughlin, played by Renner, “I need your help. I can’t tell you what it is. You can never ask me about it later. And we’re going to hurt some people.” Jem then responds, “Whose car are we gonna take?” Republican aides tell the Post that Rep. Allen West (R-Fla.), a Tea Party-backed lawmaker with a penchant for making eyebrow-raising remarks , told his colleagues after the clip was shown, “I’m ready to drive the car.” (The Chicago Tribune recently reported that the film appeared to inspire a real-life bank robbery.) During a recent appearance on Fox News, West was asked if he would consider supporting a short-term proposal to raise the debt ceiling. “I am a reasonable fellow and I do not want to see the U.S. default on any of its obligations,” he said. “I would be willing to listen to something that makes sure we get past the August 2nd deadline. But long term we have to continue with spending control measures and any type of tax hikes are off the table for me.” McCarthy has played a critical role in facilitating a sense of unity among a House GOP caucus that includes a significant number of staunchly conservative freshman lawmakers. Robert Draper wrote in a New York Times Magazine profile published earlier this month: McCarthy informally polled them when they first came to town in November for orientation. All but four of them said they would vote against raising the ceiling, under any circumstances. Then McCarthy (along with Ryan and the House Ways and Means chairman, Dave Camp) began conducting more listening sessions. The whip recognized that it would be counterproductive to lecture the freshmen about the economic hazards of not raising the debt ceiling. He also realized that it’s one thing to pass a budget — which in the end is a nonbinding political document — and another thing to throw America into default. And so McCarthy has urged them to consider raising the ceiling under certain conditions and thus to view this moment as a golden opportunity to force significant changes from the White House. “We all ran for a reason,” he tells them. “What’s most of concern to you? What is it that we think will change America?” As a result, the freshmen have begun to move away from a hard “no” on raising the debt ceiling to a “yes, if.” In the conference room, several freshmen have said they’ll vote to raise the ceiling only if the president agrees to repeal his health care legislation. Or if Obama signs into law a constitutional amendment to balance the budget, after all 50 states have ratified it… HuffPost’s Sam Stein reports on the proposal introduced by Boehner: The debt ceiling deal introduced by Speaker John Boehner (R-Ohio) would save, by one measure, roughly $850 billion over the course of ten years and just $1 billion in 2012 — two metrics unlikely to satisfy the most conservative members of his conference. The Congressional Budget Office, which is the official scorekeeper of legislation, released its analysis of the Budget Control Act of 2011 on Tuesday afternoon. The findings were damaging enough that an hour later, Boehner’s office told reporters it would rewrite the bill to achieve a more favorable scoring. Hours after that, GOP leadership announced it was delaying a vote on the plan until Thursday. Click here for the latest developments to unfold in ongoing negotiations to raise the debt ceiling. Below, video of the clip reportedly shown to House Republicans by McCarthy. WATCH:

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LTG David H. Ohle (US Army, Ret.) Joins Camber Corporation

July 27, 2011

Slated to Serve as Executive Vice President for Strategy & Business Development

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Action Products Names New Board Member

July 27, 2011

NEW YORK, NY–(Marketwire – Jul 27, 2011) – Action Products, International, Inc. ( PINKSHEETS : APII ) today announced the appointment of Yonghun Kim to the company’s board of directors.

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Senate Debt Timeline Leaves Razor-Thin Margin For Error

July 27, 2011

WASHINGTON — Unless Republicans in the Senate drop opposition to Majority Leader Harry Reid’s (D-Nev.) plan to raise the nation’s debt limit, the soonest the Senate can pass a bill to stave off default will be Sunday — just two days before time is set to run out. That’s because of Senate rules, a senate aide familiar with the planing explained. In order to vote to end debate on a measure, a senator must file for cloture, and the rules require an “intervening day” for the request to “ripen.” In this case, the Senate is planning to use an existing measure already on the floor as a vehicle and attach the debt bill as an amendment. Reid is expected to file for cloture on that motion to proceed to the “substitute amendment” Wednesday, a plan he’s expected to detail at a press conference Wednesday. With an intervening day on Thursday, the Senate could have its first cloture vote — with a 60-vote threshold to end debate on the motion to proceed — on Friday. Senate rules also require 30 hours between each step in the voting process, unless senators unanimously agree to waive the time. That delay would set up an up or down, majority vote on the amendment for Saturday. If the debt amendment passes, the underlying vehicle would then also have to be passed 30 hours later, also by a simple majority, putting that vote somewhere later on Sunday. All the intervening time can be dispensed with if senators agree unanimously to waive it, but several Republicans have declared they oppose raising the debt ceiling at all, making such agreements less likely. While the Treasury Department has warned that its ability to borrow to pay its bills will expire at the end of the day on Aug. 2, some reports suggest that thanks to unexpectedly robust revenue, the government won’t begin defaulting until several days later.

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Walton Family Foundation Gifts Teach for America $49.5 Million

July 27, 2011

NEW YORK — The Walton Family Foundation announced a $49.5 million grant Wednesday to help double the size of Teach for America’s national teaching corps over the next three years. Teach for America is a program for recent college graduates who sign up to teach in some of the nation’s most under-served schools for a period of two years. The Walton Foundation’s gift marks the single largest private donation to Teach for America in the organization’s more than 20-year history. Later this fall, the organization will send 9,300 corps members to 43 regions across the country. Over the next few years, half of the Walton Family Foundation grant will go towards growing that teaching corps to 15,000 by 2015. “With this critical investment, Teach for America will be able to develop more of our talented recent college graduates and professionals to become longterm champions of educational equity and excellence,” said Wendy Kopp, Teach for America’s founder and CEO, in a statement. “The support and partnership is a vital part of Teach for America’s effort to expand our network of corps members and alumni, who are dedicated to improving educational outcomes for children in our urban and rural communities.” In the world of education philanthropy, the donation solidifies Teach for America’s standing as the recipient of the most grant money directed towards the improvement of teaching and learning, according to a report released earlier this month by a team of researchers from the University of Georgia and Kronley & Associates focused on foundation giving to education. Between 2000 and 2008, researchers concluded that philanthropies donated $684 million specifically towards the improvement of teaching and learning. Of this money, 60 percent went towards 10 organizations. According to their analysis, Teach for America received the most, with more than $213 million in grant money. The report also concluded that 10 foundations accounted for exactly half of all grants given. In the world of education philanthropy, three foundations topped the list: the Bill and Melinda Gates Foundation, the Walton Family Foundation and the Broad Foundation. The Walton Family Foundation, which is overseen by Walmart founder Sam Walton’s three children, focuses the bulk of its giving on the issue of education reform. But it also funds conservative groups such as the Cato Foundation, Americans for Tax Reform and the American Enterprise Institute. In 2008, the foundation distributed more than $168 million in grants . Last year, it gave away $157 million. Since 1993, the foundation has donated more than $22 million to Teach for America. Besides helping to expand the organization’s operations, the other half of the new $49.5 million grant will go towards training and support for corps members in seven communities the foundation states are among its priority areas: Denver, Los Angeles, Milwaukee, Newark, New Orleans, Washington, D.C. and the Delta region of Mississippi, where the Bentonville, Arkansas-based foundation is headquartered. Dorian Warren, a professor of political science at Columbia University’s School of International and Public Affairs and author of a forthcoming book about Walmart, believes the seven communities the Walton Family Foundation is targeting with Teach for America are relevant for another reason: they are all potentially overlap with Walmart’s expansion plans. “Besides six of the seven communities being comprised primarily of people of color, I wouldn’t be surprised if these also happen to be their store expansion targets,” Warren told The Huffington Post. “A lot of their giving is related to their expansion efforts, but I don’t know for certain whether this is one of those instances.” Jim Blew, who leads the Walton Family Foundation’s K-12 education reform efforts, was unavailable to comment. Some wonder whether the Teach for America gift signals an ideological shift in the priorities of the Walton Family Foundation. Jeffrey Henig, a professor of political science and education at Columbia University’s Teachers College, sees a pattern of giving by the Walton Family Foundation. Its philanthropy, he says, while initially focused on hard-core conservative issues like vouchers and privatization has since expanded to include initiatives like charter schools. “While groups like Teach for America have done a good job of blurring partisan boundaries, I can’t help but think of this alliance as a pairing of strange bedfellows,” said Henig. “I keep waiting for what I expect are some serious disagreements on core principles to flare up and bring the implicit tension finally out into the open. But so far, it really hasn’t happened yet.” For Diane Ravitch, a New York University education historian and former U.S. Assistant Secretary of Education, the pairing raises more than a few alarm bells. “The Walton Family Foundation is the most conservative-leaning in the education philanthropy business,” she said. “Their giving is almost entirely to charters and vouchers. So now you have charters and vouchers and Teach for America — or the mainstreaming of their right-wing agenda.” But Rob Reich, a professor of political science at Stanford University, is less convinced that Teach for America is being influenced by Walton’s conservative-leaning stance. Rather, Reich wonders whether the size of the foundation’s donation marks a shift in its own giving trajectory — away from the promotion of vouchers and charters to instead devoting a large chunk of its resources toward developing a pipeline of highly effective teachers. “I see the size of their Teach for America donation as a clear departure from their typical grant-making pattern,” said Reich, who also co-directs Stanford’s Center on Philanthropy and Civil Society. “One way of thinking about the grant is that it’s a tacit admission that school choice as the lever for fundamentally changing education is politically fraught and they’re instead choosing to diversify their portfolio.” Sarah Reckhow, an assistant professor of political science at Michigan State University and a 2002 Teach for America corps member, noted that “of the top education funders, the Walton Family Foundation falls the farthest to the right.” But for Reckhow, the grant shows how well-legitimized an organization Teach for America has become, particularly among a certain sector of policymakers and education reformers. “Giving to Teach for America is now about as mainstream a thing as you can do,” she said.

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Rob Delacruz: AOL HD Launches on Boxee, Roku, Yahoo Connected TV and Divx

July 27, 2011

Over the past 2 months, Rob Cabacungan, Rob Gould and I (collectively known as “The Robs” or “R^3″) have been busy building an AOL experience for connected televisions that is entertaining enough for your living room, yet simple enough for your remote control. So we are pleased to introduce AOL HD . AOL HD offers a broad array of video and audio content in a single app and is currently available on Boxee, Roku, Yahoo Connected TV and Divx. AOL HD features the latest news and content from AOL, but only in HD because what else would you want to watch on that brand new flat panel TV of yours? We’ll have three great channels at launch — Entertainment, Technology and Home — which will feature HD video content from some of the web’s most trusted brands like the Huffington Post , Engadget and Moviefone . Plus, we can’t wait to bring more great channels and shows to you in the coming months. After you’ve had your fill of watching the latest celebrity gossip from Huffington Post Entertainment or cooking tips from Curtis Stone and Gail Simmons, then sit back and discover new music with our CD Listening Party, a unique experience that allows you to listen to a weekly selection of newly released albums. So head on over to your connected device’s storefront and install AOL HD . If you’d like to learn more, go to http://hd.aol.com or drop us a note at hd-help@teamaol.com . Enjoy- R^3

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Conflicting Statements On Euro Zone Deal Unsettle Markets

July 27, 2011

(Paul Taylor) – Contrasting statements by euro zone politicians to domestic audiences have underlined the fragility of last week’s deal to rescue Greece and unsettled financial markets already on edge because of the U.S. debt impasse. Greek Prime Minister George Papandreou told lawmakers from his Pasok socialist party on Wednesday that debt-stricken Athens will effectively receive the first joint eurobonds in the form of loans at close to cost price from the euro zone’s rescue fund. “The decision of our European partners to lend us at 3.5 percent, an interest rate just above the one at which Germany itself is borrowing, is in essence tantamount to introducing a European bond, regardless of the fact that this system has not been completed yet,” he said. His comments may inflame critics of euro zone bailouts in Germany and other northern European countries, who vehemently oppose any mutualization of fiscal risk in the 17-nation single currency area. The remarks may also irk Spain and Italy, indebted economies that are paying high yields on their bonds. Germany, which previously insisted on charging an interest rate premium on “deficit sinners” to deter moral hazard, relented at last week’s summit and accepted that the high borrowing rate was counter-productive for countries mired in recession. But common euro zone bonds remain anathema in Berlin, where fiscal conservatives are warning against the euro zone becoming a “transfer union” in which hard-working German taxpayers’ money would be poured into a bottomless pit. German Finance Minister Wolfgang Schaeuble sought to assuage critics in the ruling coalition, assuring lawmakers that the summit did not give the euro zone rescue fund “carte blanche” to buy bonds of states in difficulty. “Even in the future, such purchases should only take place under very strict conditions when the European Central Bank deems there are exceptional circumstances on the financial markets and dangers for financial stability,” Schaeuble said in a letter dated July 26 obtained by Reuters on Wednesday. “The government rejects a ‘carte blanche’ for widespread purchases on the secondary market. COMMON DEBT MANAGEMENT? Schaeuble said one summit would not be enough to solve the euro zone’s problems but the agreed measures could prevent Greece’s debt woes from becoming “a crisis that would endanger the euro zone as a whole, and therefore the euro.” His comments pointed to obstacles to intervention by the European Financial Stability Facility, which may limit its ability to prevent contagion to bigger economies such as Spain and Italy. The summit agreed to allow the EFSF to give precautionary credit lines to states at risk of being shut out of credit markets, to lend governments money to recapitalize banks and to buy bonds on the secondary market in exceptional circumstances. In contrast to Schaeuble, Papandreou highlighted the extent to which those moves put the euro zone on the road to joint debt management. “The bond buybacks in the secondary market are something we sought for a long time to be able to intervene against the appetites of markets and speculation,” he told legislators. “This will be done through the EFSF, which means that in an embryonic form, a truly common debt management practice is beginning in the euro zone,” the Greek leader said. Last week’s political deal has yet to be put into legal form and approved by national parliaments in the euro area — a process that will take at least until late September and could spark revolts in Germany, the Netherlands, Finland or Slovakia. In the meantime, the EFSF has no immediate power to intervene in case of a run on Spanish or Italian debt of the kind that began earlier this month, EU officials say. MARKET JITTERS The cost of insuring Italian and Spanish government debt against default rose after Schaeuble’s comments and yields on most euro zone peripheral sovereign bonds were back around the levels before last week’s emergency summit, partly due to growing jitters about the U.S. debt crisis. Shares in leading Italian banks Intesa Sanpaolo and Unicredit fell sharply as the yield premium on Italian government bonds over benchmark German Bunds widened. “The lack of clarity on the new role of the EFSF and the execution risk involved with the EU plan are weighing on the market,” said Gavan Nolan, an analyst at credit default swap data provider Markit. In addition, traders said uncertainty over the U.S. debt ceiling debate nearing an August 2 deadline was fuelling risk aversion that is hurting the euro zone periphery. Negotiations between Democrats and Republicans to raise the U.S. borrowing limit and agree a multi-year deficit reduction plan are deadlocked over the Republicans’ refusal to accept any tax increases. EU officials say the lack of “verbal discipline” among euro zone policymakers, and the need for governments to reassure divergent domestic audiences, has created a permanent cacophony that has aggravated the euro zone crisis. “Last summer, the crisis cooled partly because euro zone politicians went to the beaches and stopped contradicting each other in public every day,” one senior EU official involved in the Greek rescue negotiations said. “That moment can’t come soon enough this year.” (Additional reporting by George Georgiopoulos and Ingrid Melander in Athens, Gernot Heller and Sarah Marsh in Berlin, Kirsten Donovan and Emelia Sithole-Matarise in London; editing by Janet McBride) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Tea Party-Backed Congressman Fights His Own Party Over Debt Ceiling Deal

July 27, 2011

WASHINGTON — When President Barack Obama complains about House Republicans unwilling to compromise on a deficit reduction package, he’s talking about Rep. Jim Jordan, a former wrestling champion from Ohio who is becoming a driving force in the debt debate on Capitol Hill. Jordan’s district is right next to Speaker John Boehner’s in the western part of Ohio, but ideologically, he is miles apart from the Republican leader. As Boehner and his lieutenants scrambled Tuesday for votes for the speaker’s latest debt bill, Jordan announced at a news conference that he opposed the package, and he boldly predicted the speaker didn’t have enough Republican votes to pass it. Tuesday night, GOP leaders postponed a vote planned for Wednesday as they worked to rewrite the package. “If you look at this, it’s about a $7 billion reduction in spending from what we’re currently at,” Jordan said. “We advocated something much more than that.” Boehner’s plan promised spending cuts in excess of $1 trillion over the next decade in exchange for raising the debt ceiling by a slightly smaller amount. It also would establish a committee of lawmakers to recommend additional budget savings next year in exchange for extending the government’s borrowing authority through 2012. “We also have real concerns about the commission, the idea that on a 12-member commission, six Democrats and one Republican decide they want to raise taxes, you can’t keep that off the floor,” Jordan said. “It comes to the floor, and then there’s a potential tax increase.” A member of the House for only four years, Jordan, 47, won the chairmanship of the Republican Study Committee, the conservative voice of the GOP caucus, after the party wrested control of the House from Democrats in last November’s election. With more than 175 members, the group includes a majority of House Republicans. Jordan has never been shy about pushing his party to the right. He gets high marks from conservative groups for his strong record of opposing abortion and higher taxes, stretching to his days in the Ohio Legislature. “It’s what Ronald Reagan is all about, it’s what our party’s all about: a strong defense, lower taxes, less spending, traditional values,” Jordan said in an interview. “That’s what we fight for every day.” He sees his role as helping Boehner and the entire House GOP stay true to conservative values. “I want to help the speaker,” Jordan said. “I think he’s got a tough job, and like a lot of Americans, we’re praying for him.” House Majority Leader Eric Cantor, R-Va., is often cited as the leader of the conservative wing of the House Republican caucus. His power, however, is bolstered by members like Jordan, who work daily to rally other conservatives, including an 87-member freshman class that is eager to make its mark. Jordan and his compatriots were a driving force behind the bill that the House passed last week that would slice federal spending by $6 trillion and require a constitutional balanced budget amendment to be sent to the states in exchange for averting a threatened government default after Aug. 2. The Democratic-controlled Senate quickly killed the measure with a procedural vote. Jordan’s unwillingness to compromise, however, rubs some fellow Republicans the wrong way. “My experience with things that don’t bend is that they break,” said Rep. Steven LaTourette, a fellow Republican from Ohio, who represents the northeastern corner of the state. LaTourette, who supports Boehner’s debt plan, said he admires Jordan for standing up for what he believes in. But, he added, “I think it’s harmful to the country and it’s certainly harmful to the speaker’s attempt to move legislation.” Jordan grew up in western Ohio and was a four-time state wrestling champion in high school, losing only a single match in four years. He went on to wrestle at the University of Wisconsin, where he won two NCAA titles. He’s not a big man – Jordan wrestled in the 134-pound weight class in college and doesn’t look like he weighs much more than that now. He’s outwardly friendly and quick with a smile, but he doesn’t back down from a political fight. “The reason I got into politics was to affect the things I care about, the things I think the families I get the privilege to represent care about,” Jordan said. “I’m going to fight for those things. I’m going to do it with a smile on my face, I’m going to do it in way that helps our party, but most importantly, I’m going to do it because I think it helps the country.” Obama says Republicans like Jordan are why the government is in danger of defaulting on its obligations next week. “History is scattered with the stories of those who held fast to rigid ideologies and refused to listen to those who disagreed,” Obama said in a national address Monday night. “But those are not the Americans we remember. We remember the Americans who put country above self and set personal grievances aside for the greater good.” Jordan shrugs off Obama’s attempts to vilify House conservatives. “I would look at it this way: If standing firm for a common-sense plan, if the president’s got a problem with that, we’ll, I don’t know how I’m going to help him,” Jordan said.

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Travelocity Founder Terry Jones Joins Luxury Link Travel Group’s Board of Directors, Scott Potter Appointed Chairman

July 27, 2011

LOS ANGELES, CA–(Marketwire – Jul 27, 2011) – The Luxury Link Travel Group announced today that Terry Jones, founder of Travelocity, has been elected to the company’s board of directors. This appointment comes as the company celebrates its 14-year anniversary and now represents more than 1,000 active five-star and upscale hotels across its three luxury travel websites.

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Magnum Hunter Resources Announces Management Changes

July 27, 2011

HOUSTON, TX–(Marketwire – Jul 27, 2011) – Magnum Hunter Resources Corporation ( NYSE : MHR ) ( NYSE Amex : MHR-PrC ) ( NYSE Amex : MHR-PrD ) (the “Company” or “Magnum Hunter”) announced today several management changes in the Company’s finance department. Victor Ponce de Leon is being transferred in a lateral position and will now work at two of the Company’s wholly-owned subsidiaries, Eureka Hunter Pipeline, LLC and Energy Hunter Securities, LLC.

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PivotLink Appoints Richard Nieset as Senior Vice President of Sales & Marketing

July 27, 2011

SAN FRANCISCO, CA–(Marketwire – Jul 27, 2011) – PivotLink , the leading provider of business intelligence (BI) solutions delivered via Software as a Service (SaaS), today announced the appointment of Richard Nieset as senior vice president of sales and marketing. Nieset brings more than 25 years of senior-level experience in marketing, sales and development of technology products and solutions spanning business intelligence, data warehousing and analytic applications.

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Boehner Rewriting Debt Ceiling Plan, Faces Tea Party Opposition

July 27, 2011

WASHINGTON — Legislation aimed at keeping the government’s bill-paying intact is stuck in neutral, putting Congress, the financial markets and the public on edge less than a week before the deadline for heading off a potentially calamitous default. House Speaker John Boehner was forced late Tuesday to postpone a floor vote on his plan, which originally had been scheduled for Wednesday, after nonpartisan congressional scorekeepers said the proposal would cut spending less than advertised. He promised to rewrite the measure, but the move means the House can’t vote on it until Thursday at the earliest. Boehner, R-Ohio, needs to do more than pump up the legislation. He needs to shore up his standing with tea party-backed conservatives demanding deeper spending cuts to accompany an almost $1 trillion increase in the government’s borrowing cap. Many conservatives already had promised to oppose it. “We need more drastic cuts,” said Rep. Jason Chaffetz, R-Utah. “I can’t support it in its current form.” “I’m searching for a path toward yes but having a difficult time finding it,” said Rep Bill Huizenga, R-Mich. Unless he can wrestle the situation under control, Boehner risks losing leverage in his dealing with President Barack Obama and Democrats controlling the Senate. Boehner’s plan was not winning converts among some stalwart conservatives. It prompted Senate Democratic leader Harry Reid to declare that the bill was destined to fail in the Senate and it drew a White House veto threat. But it was framing the debate over how to reduce long-term deficits while raising the debt ceiling. Tuesday’s Congressional Budget Office analysis said the GOP measure would cut the deficit by about $850 billion over 10 years, not the $1.2 trillion originally promised. Even more embarrassing was a CBO finding that the measure, which would provide a $900 billion increase in the nation’s borrowing cap, would generate just a $1 billion deficit cut over the coming year. Boehner’s plan would couple budget savings gleaned from 10 years of curbs on agency budgets with a two-track plan for increasing the government’s borrowing cap by up to $2.7 trillion. The first increase of $900 billion would take effect immediately; the second increase could be awarded only after the recommendations of a special bipartisan congressional panel are enacted into law. The White House says Boehner’s measure would reopen the delicate and crucial debt discussions to unending political pressure during next year’s campaigns and risk more uncertainty in the markets. The White House promised to veto Boehner’s measure if it were to reach Obama’s desk. It’s unlikely to come to that. Reid, D-Nev., promised the measure would never make it through the Democratic-controlled Senate. Reid held back on forcing a vote on his competing measure, which he unveiled Monday to poor reviews from Republicans like Senate Minority Leader Mitch McConnell of Kentucky. Reid appears to hope that his measure, which promises $2.7 trillion in spending cuts and would increase the debt limit enough to keep the government afloat past the 2012 elections, could emerge as the last viable option standing and could be modified with input from Republicans. Those same Republicans blasted Reid’s bill for $1 trillion in war-related savings they say are phony. But McConnell is emerging as a key figure in the endgame, and he sounded a conciliatory note in an appearance Tuesday. “We need to get an outcome. And to get an outcome, a Republican House, a Democratic Senate and a Democratic president would have to reach an agreement,” McConnell said. “So I’m prepared to accept something less than perfect, because perfect is not achievable.” One area of potential compromise could be how to treat the findings of a bipartisan congressional commission to identify further deficit reductions, especially in major health care programs such as Medicare and Medicaid. Both Reid and Boehner support the idea, though Boehner wants to make a future increase in the debt limit contingent on the proposed additional cuts being enacted into law. Meanwhile, the clock was ticking down to next Tuesday’s deadline to continue the government’s borrowing powers and avert possible defaults on U.S. loans and obligations, like $23 billion worth of Social Security payments due Aug. 3. The Capitol’s telephones were jammed after Obama urged the public to contact their representatives in his Monday night address. Conservative bloggers and groups like the Club for Growth, which funds primary campaigns against Republicans it deems too squishy in their conservatism, denounced Boehner’s bill as too weak. The U.S. Chamber of Commerce, closer to the GOP mainstream, urged support. While Boehner searched for votes, some Americans seemed to edge closer to the notion that the Aug. 2 deadline might pass without a solution. The stock market fell again, although not dramatically. California planned to borrow about $5 billion from private investors as a hedge against a possible federal government default. The White House spoke with veterans groups about what might happen to their benefits if a deal isn’t reached. Obama has said he can’t guarantee Social Security checks and payments to veterans and the disabled would go out on schedule. Freshman Rep. Trey Gowdy, R-S.C., bristled at the idea that tea party-influenced newcomers are sheep-like ideologues willing to risk default. “We’re not a bunch of knuckle-dragging, mouth-breathing Neanderthals,” Gowdy said. “We’re interested in answering what we perceive to be the mandate, which is to stop the spending and change the way Washington handles money.” Gowdy said he was leaning against Boehner’s proposal.

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Applications For Home Mortgages Slip After Sharp Jump

July 27, 2011

Applications for U.S. home mortgages slipped last week after a sharp jump the week before and as interest rates edged up, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 5.0 percent in the week ended July 22. The MBA’s seasonally adjusted index of refinancing applications lost 5.5 percent after a 23.1 percent jump the previous week. The gauge of loan requests for home purchases was down 3.8 percent. The refinance share of mortgage activity dipped to 69.6 percent of total applications from 70.1 percent the week before. Fixed 30-year mortgage rates averaged 4.57 percent, rising from 4.54 percent. (Reporting by Leah Schnurr; Editing by Leslie Adler) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Tix Corporation Announces Resolution of Election Contest With Baker Street Capital

July 27, 2011

STUDIO CITY, CA–(Marketwire – Jul 27, 2011) – Tix Corporation (the “Company” or “Tix”) ( OTCQX : TIXC ) ( PINKSHEETS : TIXC ), a leading entertainment company providing discount ticketing services and branded event merchandising, today announced that it has reached an agreement with stockholder Baker Street Capital, L.P.

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Nyxio Technologies Appoints COO and Engages National PR Firm

July 27, 2011

PORTLAND, OR–(Marketwire – Jul 27, 2011) – Nyxio Technologies Corporation ( OTCBB : NYXO ) (“Nyxio” or the “Company”), an innovative developer of revolutionary consumer electronics products encompassing Smart TVs, Tablet PCs, All-in-One PCs, including Nyxio’s Flagship product the VioSphere flat screen TV with integrated PC, is very pleased to announce several key engagements critical to the future success of the Company.

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U.S. Credit Rating Downgrade Looking Likely Even If Debt Ceiling Deal Is Reached

July 27, 2011

NEW YORK — Could the U.S. lose its top credit rating even if a deal is reached to raise the debt limit? Market analysts and investors increasingly say yes. The outcome won’t be quite as scary as a default, but financial markets would still take a blow. Mortgage rates could rise. States and cities, already strapped, could find it more difficult to borrow. Stocks could lose their gains for the year. “At this point, we’re more concerned about the risk of a downgrade than a default,” said Terry Belton, global head of fixed income strategy at JPMorgan Chase. In a conference call with reporters Tuesday, Belton said the loss of the country’s AAA rating may rattle markets, but it’s “better than missing an interest payment.” Even with a deadline to raise the U.S. debt limit less than a week away, many investors still believe Washington will pull off a last-minute deal to avoid a catastrophic default. Washington has until Aug. 2 to raise the country’s $14.3 trillion borrowing limit or risk missing a payment on its debt. President Barack Obama and Congressional Republicans have failed to reach an agreement to raise the debt ceiling and pass a larger budget-cutting package. Politicians have tied raising the debt limit and spending cuts together. But at least one credit rating agency has already made it clear that unless that agreement includes at least $4 trillion in budget cuts over the next decade, the country’s AAA rating could be lost. Right now, the proposals under discussion cut around $2 trillion or less. Standard & Poor’s warned earlier this month that there was a 50-50 chance of a downgrade, if Congress and President Obama failed to find a “credible solution to the rising U.S. government debt burden.” S&P said it may cut the U.S. rating to AA within 90 days. Passing a $4 trillion agreement could prevent a downgrade, S&P said. The other chief rating agency, Moody’s Investors Service, said the U.S. government would likely keep its top rating if it avoids a default. Spokesmen from both Moody’s and S&P said they wouldn’t comment beyond their recent reports. JPMorgan’s Belton said clients have started asking how markets will respond if the U.S. loses its AAA rating. A drop to AA will mean permanently higher borrowing costs for the U.S. government, he said. And because government lending rates act as a floor for other lending rates, mortgages, student loans, corporate debt and other types of loans will become more expensive. Belton estimates that borrowing costs would rise between 0.60 to 0.70 points. That may not sound like much. But mortgage interest rates, which have hovered around 4.5 percent for the last several weeks, could rise by at least that amount, to more than 5.1 percent. And for the federal government, it eventually means an extra $100 billion in interest payments to Treasury holders like China each year. “That’s a huge number,” Belton said. That $100 billion a year that could be spent elsewhere on everything from education to infrastructure. An increase in interest rates could soon become a drag on other parts of the economy, experts say. State governments and insurance agencies would also be downgraded – and states are already having financial troubles. Business confidence could sink again, leading to prolonged high unemployment. But some investors aren’t unhappy about the thought of a U.S. debt downgrade. Don Quigley, manager of the $1.5 billion Artio Total Return Bond fund reasons that such a move could provide a buying opportunity. He believes that a downgrade would immediately send the yield of the 10-year bond up to 3.15 percent from its current level of about 3 percent. If the economy sinks further in part because of higher interest rates, investors would very likely return to buying bonds, Quigley said. That’s what they’ve done during the last several years both during the financial crisis and recession, and again the last several months as the economic recovery has slowed. Treasurys would keep their allure, in part, because there are few alternatives for large foreign buyers looking for a market big enough to handle massive investments. “The German market is not big enough and Japan has its own problems,” Quigley said. A cut to the U.S. credit rating could hit stocks harder than bonds. A study by Janney Montgomery Scott looked at rating changes to countries over the past decade. After Spain was downgraded in 2009, Spain’s stock market fell 8 percent in three months. A cut to Japan’s credit rating in 2011 knocked the country’s stock market down 3.4 percent in three months. The study, released in April, suggested the S&P 500 would fall 6 percent after a U.S. downgrade, erasing all its gains for the year.

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How Do You Like Them Apples? McDonald’s In Health Food Push

July 27, 2011

TORONTO – McDonald’s Canada is adding dairy and trimming some of the fat from its Happy Meals as part of a broader health push. By the beginning of next year, the children’s meal boxes will come with a serving of strawberry yogurt and a smaller, 31-gram serving of fries that contains 100 calories. The changes come as the fast food industry faces criticism from health officials and others, who blame the chains for childhood obesity and other health-related problems. Louis Payette, a spokesman for McDonald’s Canada, said the initiative will be tested in the fall and rolled out at the end of the year. “It’s all part of our menu evolution, which is an ongoing process,” said Payette. “We’re continuing to listen to our customers and trying to meet their needs. People are asking us for more variety, more choice, and we’re glad to provide it to them.” McDonald’s Corp. in the U.S. also announced changes to its Happy Meal on Tuesday. It plans to include a half-order of apples and a half-order of fries, with all fries or all apples available on request. Customers can already choose between apples and fries, but only about 11 per cent of U.S. customers were ordering apples, the restaurant said. Michelle Obama applauded the restaurant for taking a positive step toward solving childhood obesity. But critics wasted no time complaining that the U.S. changes don’t go far enough. Kelle Louaillier, executive director of a group called Corporate Accountability International, said McDonald’s is just trying to get ahead of impending regulations that will restrict the marketing of junk food to children and require restaurants to post nutrition information on menus, among other changes. “McDonald’s is taking steps in the right direction, but we should be careful in heaping praise on corporations for simply reducing the scope of the problem they continue to create,” said Louaillier. McDonald’s says the new directives are “absolutely not” related to impending U.S. regulations that will force the industry to curb the marketing of junk food to children and post nutrition information on menus. Rather, the changes are a response to what customers were asking for, said Cindy Goody, McDonald’s senior director of nutrition. “We’ve been in the nutrition game for over 30 years in providing nutrition information to our customers,” Goody said. “Now what we’re doing is we’re adding more food groups and … creating nutritional awareness.” McDonald’s in the U.S. is also launching a nutrition-focused mobile phone app and pledging to reduce sugars, saturated fats, sodium and calories in its menu items by 2020. By 2015, it will reduce sodium by 15 per cent. But the fast food giant did not provide details on how it will do so, saying only that it will use “varied portion sizes, reformulations and innovations.” The nutrition talk also has helped McDonald’s grab business from other fast-food restaurants, even as the recession forced people to cut back on eating out. McDonald’s has worked to paint itself as a healthy, hip place to eat, offering wireless access in restaurants and introducing smoothies and oatmeal, moves that other fast-food companies are now trying to replicate. Goody said the change is indicative of “incremental lifestyle modifications.” Asked why McDonald’s didn’t eliminate fries, she said that “all foods fit when consumed in moderation.” This isn’t the first time the world’s largest burger chain has tried to paint itself as an emissary of nutrition. In the ’80s it created a fitness program for middle schoolers featuring gymnast Mary Lou Retton. A decade ago, McDonald’s used spokesclown Ronald McDonald to encourage parents to get their children immunized and to tell kids to drink milk. In 2004, McDonald’s christened Ronald a “balanced, active lifestyles ambassador” and passed out pedometers to encourage exercise.

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Should Obama Pull Constitutional Move, Legal Experts Suggest It’d Prove Difficult To Challenge In Court

July 27, 2011

NEW YORK (Reuters) – President Barack Obama says he will not bypass Congress and cite an obscure part of the U.S. Constitution to prevent a government debt default, but legal experts say it would prove difficult to challenge him in court should he change his mind. Former President Bill Clinton argued last week that the 14th Amendment that states the “validity” of government debt ”shall not be questioned” means that Obama could simply ignore the congressionally imposed debt ceiling and go on borrowing. Obama has indicated he considered the possibility, but on Tuesday his spokesman, Jay Carney, appeared to rule it out. “The Constitution makes clear that Congress has the authority, not the president, to borrow money and only Congress can increase the statutory debt ceiling. That is just a reality,” Carney told reporters. But if the country is about to go into default, the temptation to act to avert calamity will grow. Legal experts say if the president were tempted to act unilaterally he might escape without his actions being overturned in court. Regardless of how controversial a 14th Amendment maneuver might be, a legal challenge would be very hard to mount and so far, no one has stepped forward to say they would challenge him in court. Nor has anyone said they would sue him if he took the alternative, equally controversial, step of using his broad authorities as guardian of the constitutional order to unilaterally raise the borrowing threshold. Theoretically, there are aggrieved parties who might consider legal action, including Congress, individual citizens or interest groups, and investors such as foreign governments. NOT UNPRECEDENTED A successful lawsuit against the executive branch of the United States would not be unprecedented. In 1952, during the Korean War, the country’s steel companies successfully sued President Harry Truman and prevented him from seizing mills in Ohio. In 1971, The New York Times Company and the Washington Post Company took President Richard Nixon to court over the right to publish the Department of Defense’s Pentagon Papers, detailing U.S. involvement in Vietnam. The Supreme Court prevented Nixon from obtaining an injunction to block publication. The plaintiffs in those cases were able to demonstrate standing, the legal doctrine under which parties must show they are harmed in order to bring a case in court. Anyone suing Obama over the debt ceiling would confront that same burden. It wouldn’t be enough for a plaintiff to claim that Obama is overstepping his authority or acting illegally. “In order to sue, you have to have injury in fact. The touchstone issue is, can someone get to court?” said Jonathan Zasloff, a law professor at the University of California, Los Angeles. That same standard would apply if a party pre-emptively filed a lawsuit to stop Obama invoking the 14th Amendment. Challengers might argue that relying on the 14th Amendment to raise the debt ceiling qualified as an abuse of executive power. But it would be extremely difficult for them to show that they would suffer specific harm such as lost money, property or rights, legal experts said. The anti-tax group Club for Growth, which opposes increased federal borrowing, does not consider a legal challenge over the 14th Amendment likely, said executive director David Keating. ”It’s difficult to get standing,” Keating said. Individual members of Congress, congressional leaders, or Congress itself might have better luck suing, by claiming their constitutional authority to handle appropriations was violated by the President’s move. TAKE PRESIDENT TO COURT Members of Congress have taken presidents to court before. In 1996, President Clinton signed the line-item veto act, allowing the president to veto separate parts of a spending bill. Six members of Congress who opposed the law sued the treasury secretary and the director of the Office of Management and Budget, claiming the law was an unconstitutional over-reach of executive power. But in 1997 the Supreme Court said the lawmakers did not have standing to sue, ruling they did not allege personal injury or that the institution of Congress was harmed. A third potential aggrieved party — the kind that typically shows up in court — is a jilted investor, whether an individual holding U.S. treasury bonds or, perhaps, a foreign country that buys U.S. government debt. But if Obama were to raise the debt limit himself, he’d be paying bondholders back — the opposite of a government default. Instead of abrogating bond deals the President would be ensuring that obligations to creditors were met. The best option for critics of an eventual 14th Amendment move by Obama may also be a longshot: Impeachment. Already one Republican House member, Representative Tim Scott of South Carolina, has said that if Obama bypasses Congress and raises borrowing on his own, it would be an “impeachable offense.” (Reporting by Carlyn Kolker; editing by Eileen Daspin, Eric Effron and David Storey)

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Boehner’s Debt Ceiling Plan Falls Short, CBO Finds

July 27, 2011

WASHINGTON — The debt ceiling deal introduced by Speaker John Boehner (R-Ohio) would save, by one measure, roughly $850 billion over the course of ten years and just $1 billion in 2012 — two metrics unlikely to satisfy the most conservative members of his conference. The Congressional Budget Office, which is the official scorekeeper of legislation, released its analysis of the Budget Control Act of 2011 on Tuesday afternoon. The findings were damaging enough that an hour later, Boehner’s office told reporters it would rewrite the bill to achieve a more favorable scoring. Measured against March 2011 government expenditure levels, the proposal, as currently written, would reduce the deficit by $850 billion during the next decade, according to the CBO. Measured against January 2011 government spending levels, the bill would reduce budget deficits by roughly $1.1 trillion during that same time period. The findings are a setback of sorts for the speaker, who was hoping to present a package of steep cuts to a skeptical GOP. In the end, however, he is a victim of his own success. The reason that the CBO adjusted its baseline is, in part, because of the spending cuts that Boehner was able to secure during the government shut down debate during the spring. Potentially more problematic for Boehner is the finding that his debt ceiling package will only reduce federal spending by $1 billion in 2012, and $16 billion in 2013. House Republicans have demanded that deep cuts be felt immediately as a condition for their support. “Americans deserve immediate spending cuts that demonstrate that we are charting a swift path toward a balanced budget. We must implement discretionary and mandatory spending reductions that would cut the deficit in half next year,” read a May 2011 letter from the conservative Republican Study Committee. “[A]ny move to raise the debt limit must be accompanied by immediate spending cuts and binding reforms so that we don’t continue to push our country down the road to bankruptcy,” House Majority Leader Eric Cantor (R-Va.) said in early May . Boehner himself has repeatedly echoed those statements. Earlier this month, he specifically pushed back against a suggestion by Democrats that the majority of spending cuts could be concentrated in future years, rather than begin immediately. Yet the Budget Control Act of 2011 appears to falls short of that bar. “We’re here to change Washington – no more smoke-and-mirrors, no more ‘phantom cuts.’ We promised that we will cut spending more than we increase the debt limit – with no tax hikes – and we will keep that promise,” Boehner spokesperson Michael Steel said in a statement after the CBO analysis was released. “As we speak, Congressional staff are looking at options to re-write the legislation to meet our pledge. This is what can happen when you have an actual plan and submit it for independent review – which the Democrats who run Washington have refused to do.” While actual budgeting makes it nearly impossible to achieve immediate cuts in programs already up and running, another problem Boehner’s legislation runs into is that it actually spends money in two areas. According to the CBO, $17 billion is spent on Pell Grants from 2012 to 2015 –- an unexpected addition to a deficit-reduction measure. The bill makes other changes to the Federal Student Loan Program to bring that expenditure closer to being deficit neutral. But between 2012 to 2016, the government will still be spending $7.4 billion more on this subsection of the budget. Boehner’s bill also devotes $1 billion to “program integrity activities,” which are, more or less, enforcement mechanisms to snuff out abuse and waste in government programs. That expenditure will presumably save Congress in the long term. But for the purposes of budgeting, it counts as an expenditure in the short term. The vast majority of savings in Boehner’s bill, which would require the creation of a committee to find an additional $1.8 trillion in cuts in exchange for a future raising of the debt ceiling, comes from discretionary spending caps that will take tens of billions of dollars out of the budget on a yearly basis starting in 2013. But that might not be enough to satisfy the party’s most conservative members who will note, rightly, that $1 billion in cuts in 2012 represents 0.03 percent of current spending. boehnerCBO

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Dr. Sasha Galbraith: The Debate Continues: Do You Prefer Superstar Individuals or Effective Teams?

July 26, 2011

The blogosphere has been all abuzz lately over whether the super-smart individual contributor is better than a great team. Mark Zuckerberg, CEO of Facebook, was quoted in a New York Times article saying, “Someone who is exceptional in their role is not just a little better than someone who is pretty good. They are 100 times better.” This prompted Bill Taylor, co-founder of Fast Company , to argue in a recent HBR blog that superstar individuals are overrated. How paradoxical since Bill heads up a magazine that encourages people to build their own brand and standout among the crowd. Taylor’s post sparked a down and dirty discussion over the relative value of a stellar software engineer, for example, versus 1,000 mediocre engineers. It also prompted a rebuttal from Jeff Stibel who argued he would take the stellar engineer any day over a mediocre team, and that there’s a reason why CEOs of giant corporations are paid so handsomely. What I found most interesting, however, was that it was men who posted the majority of the comments in response to these two blogs and a follow-on post by Taylor. The discussion is a living example of the point that men — or certainly many of these men — are indeed from Mars: combative, argumentative and desperately wanting to establish their own dominance in the pecking order. The whole argument is a little bizarre. The use of teams versus individual contributors is completely dependent on the nature of the work. If the work can be done singularly and efficiently by a talented individual, then why set up a team? But if the work is dependent on a number of people playing their part on a larger stage and ensuring that other disparate groups are in on the final product, then you want to assemble the best team. Let’s look at this from a female perspective. All of the women entrepreneurs I’ve studied embrace teamwork and absolutely depend on it to run their organizations. But more importantly, they know that in order to ignite the creative spark that gets teams to produce value, they must build a culture and value system that treats the individual with respect. This means not blindly applying rules to all in an equal, unbending and algorithmic fashion. It means focusing on removing barriers to effective communication. It means recognizing people have lives outside of work and allowing them the flexibility to manage both worlds — often one in the context of the other. It means expecting each person to produce results above and beyond what he or she thinks is possible. It means creating an organization that respects and celebrates differences in people and leveraging those differences to achieve a superior product or service. It means hiring primarily for “cultural fit” rather than skills, which can be trained. And it means being the humble, emotionally intelligent leader who is not afraid to get her or his hands dirty in the trenches. So what does women’s penchant for teamwork boil down to from a performance perspective? A growing body of research indicates that when there is a critical mass of women in the senior management team, companies are more profitable , share prices are higher , R+D teams are more innovative and new ventures are less likely to fail . Moreover, an article in the June edition of Harvard Business Review summarized research indicating a team’s collective intelligence rises when more women are included. But if you’re still considering hiring that star, you might want to think again. Boris Groysberg , Professor of Business Administration at Harvard Business School, found that male stars who were hired away by another firm suffered nearly a one percent performance drop after moving. In contrast, female stars experienced a modest performance boost at their new firm. However, entire teams that were hired away intact experienced no performance decline. As the research shows, here’s yet another reason to bank on women — whether it’s the superstars or female-populated teams.

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Why The U.S. Won’t Default On August 2

July 26, 2011

The only thing that matters for global markets over the coming days is whether a deal can be struck in Washington over the debt ceiling. That said, there is one major misconception – fostered by politicians – about what the stakes actually are. On August 2, the U.S. government will reach the limit of its statutory borrowing authority as determined by the Treasury Department. It will not, however, default on its debts even if a deal isn’t reached.

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Joan Williams: Four Steps to Workplace Flexibility and Smart Scheduling

July 26, 2011

On July 18, unions and employers came together to make work-life balance a reality for hourly workers. The common assumption is that workplace flexibility is impractical for hourly workers. Not so: On that Monday, models emerged to offer workplace flexibility in three contexts where it might seem impossible: health care, restaurants and small business. Jennifer Piallat, owner of Zazie Restaurant in San Francisco, is busy inventing a new model of the restaurant business. The classic model gives servers unstable schedules that change from day to day and week to week. There are good reasons for this: much of servers’ compensation comes from tips, and a “bad” shift (Monday night) can yield $50 in tips, whereas a “good” one (Saturday night) can yield $300 in tips. So the instinct is to shift people in and out of the more lucrative shifts by having them work different days on different weeks. But that doesn’t fit with many workers’ lives. Low-income families are more likely than other families to be tag teaming, where Mom works one shift and Dad works a different shift. That means that, if Dad’s schedule is unstable (or vice versa), Mom may be unable to show up for her shift — and may lose her job. Low-income families also are much more likely than other Americans to be caring for an elder 30 or more hours a week, and much more likely to be caring for ill relatives — that’s often one reason these families are poor. So Piallat sets up a permanent, long-term schedule that gives each server some high-tip and some low-tip shifts. That’s the first step for employers of hourly workers. Virtually any job can be restructured to achieve a more stable schedule. A related issue was addressed by Connie Leyva, president, California Labor Federation & UFCW Local 1428, who represents grocery and drug store employees. Her union negotiated more notice of weekly schedules, requiring that schedules for the following week be posted by Friday at noon. “It doesn’t seem like a big deal. It’s a huge deal,” she noted. Leyva’s union also negotiated a contract that guarantees four hours of work once employees report to the workplace. This addresses one of the big problems with just-in-time schedules — often, workers show up on a slow day only to be sent home for lack of customers. Creating a dependable schedule is only the first step. The second step is to set up a formal system for handling schedule changes. At Zazie, Piallat puts up a big Office Depot calendar. If you can’t make your 9 a.m. shift, you just write your name by that shift; the first person who signs their name by yours gets the shift. The third step is to address the issue of overtime. Netsy Firestein of the Labor Project on Working Families, who sat on the labor panel at the conference, reported that some unions have negotiated contracts in which employers rely on voluntary instead of mandatory overtime. My report ” Improving Work-Life Fit in Hourly Jobs ” found two additional tools for scheduling overtime that accommodate the reality of employees’ lives. One is to separate the workforce into four groups, and assign each group one week a month for which they need to be available for overtime. (Piallat of Zazie commented she was going to adopt this system.) Another is to give employees vouchers that allow them either to bid for overtime, or to avoid overtime. The final step is to offer hourly workers short periods of time off work. A key issue is allowing employees to take time off in two- or four-hour segments. This is vital for low-wage workers who cannot afford to attend a school conference or doctor’s appointment if they need to take an entire vacation day in order to do so. Marianne Giordano, president of OPEIU Local 30 and labor rep on Kaiser’s labor-management partnership, reported that Kaiser Permanente — a hotbed of best practices thanks to its labor-management partnership — has already instituted this policy successfully. Giordano described a call center that had once had extraordinarily high turnover and low morale. “There has been a complete turnaround,” she reported, as a result of workplace flexibility initiatives. “If it can be done in a call center, it can be done anywhere.” Barbara Grimm, senior vice president at the Kaiser Office of Labor Management Partnership, reported marked success with self-scheduling, and noted the importance of cross-training. Kaiser actually offers business training to workers to give them the tools they need to help work with managers to deliver the best possible patient care. “The person who is doing the job knows best how to do it,” said Grimm. “Teams come up with their own staffing solutions. It usually works better that way. They can come up with better solutions in terms of work satisfaction, patient satisfaction and affordability.” If flexibility is impossible in any industry, it would seem to be the moving industry. But it isn’t, reported Lori Tubaya of Johnson Moving & Storage. Jim Johnson, the company owner, heard me speak in 1995, and went home and offered telecommuting for everyone in the company. “That not only changed my life… it has benefited five generations of my family,” said Tubaya. She discussed the near-zero turnover at her company among employees in charge of collections — typically a high-turnover job. The company also offers flexibility to the movers themselves. She told the story of one mover who was a divorced father with custody of a child. He kept arriving late. “Instead of making excuses, saying the bus was late, he could just tell us he needed to come in later so he could drop his child off from school,” Lori said. Bottom line: If these employers can improve the work-life balance for movers, health care workers and retail and restaurant staff, this can be done anywhere, in any job.

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State Borrowing Billions To Stave Off Debt Crisis

July 26, 2011

SACRAMENTO, Calif. — California borrowed $5.4 billion from private investors Tuesday as a hedge against a possible default by the federal government. State Treasurer Bill Lockyer secured the package of short-term loans from a group of banks, credit unions and investment funds so the state can avoid a potential cash shortage if the federal government fails to extend its debt ceiling. If that happens, the government could shortchange states on health care and education funding. The treasurer said he took the step as a precaution if the federal government can’t meet all its obligations. “California had to obtain this interim financing to protect the state from the immediate, drastic consequences of a failure by Washington to resolve the debt ceiling impasse by the Aug. 2 deadline,” Lockyer, a Democrat, said in a statement. “I’m hopeful Congress and the president will do the responsible thing, solve the problem before it’s too late, and not risk pushing the country into a financial and economic abyss.” California typically borrows money in the late summer to pay operating expenses until most income tax receipts arrive in the spring. Lockyer secured the so-called bridge loan because it’s unclear whether California would be able to borrow that much money if the credit markets are thrown into turmoil. Democrats and Republicans in Washington are clashing over plans to slash spending and raise the debt ceiling ahead of the Aug. 2 deadline – the day the White House said the federal government will exhaust its ability to borrow and meet all its obligations. That could force the federal government to default on loan obligations or prioritize payments to conserve cash and avoid a default. Payments could be halted to states for Medicare, Medicaid and some public school programs. Medicaid, the federal-state health program for low-income families, is known in California as Medi-Cal. Medicare is the health insurance program for seniors and the disabled. California received loans from eight banks and private investment firms. Goldman Sachs and Wells Fargo & Co. provided the largest amounts, at more than $1.4 billion each. The state, which currently has the lowest credit rating among the 50 states at A-, plans to repay the loans later this summer through routine borrowing notes to be issued in late August. Lockyer appeared to obtain a good interest rate based on the state changing the way it calculates how much money it has in reserve this year. The treasurer’s office said the yield on the notes is 0.237 percent, compared with 1.4 percent the state paid for short-term borrowing in 2010. The latest notes mature on Nov. 22, but the state could pay them off ahead of time. The treasurer also warned that a default would trigger a downgrade of the federal government’s triple-A bond rating. It would not only raise interest rates but negatively affect state and local government borrowing costs because some states’ rates are linked to Treasury rates. “The ripple effects on state and local finance for the whole country are very substantial,” Lockyer said earlier this month.

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Dan Solin: Court Rules Kraft’s 401(k) Plan May Have Holes

July 26, 2011

A recent ruling from the United States District Court, Northern District of Illinois, Eastern Division ( George v. Kraft Foods Global, Inc. , No. 08 C 3799), should strike fear in the hearts of trustees and plan administrators for both defined benefit plans and defined contribution plans (typically 401[k] plans). The plaintiffs are participants in Kraft’s defined contribution plan, which had assets ranging from $1.5 billion to $5.4 billion between 1994 and 2010. They brought a class action alleging that Kraft and others breached their fiduciary duty by including two actively managed funds, a Growth Equity Fund and a Balanced Fund, among the investment options available to plan participants. The consultants to the plan only considered funds with a minimum seven year track record, with at least $500 million under management. They focused on the past returns of the funds selected, which were the primary determinant. This focus on past performance is typical of the way actively managed funds are selected, even though (as everyone except consultants to benefit plans is aware) past performance is not predictive of future performance. One study looked at hiring and firing decisions by 3,700 plan sponsors (public and corporate pension plan, unions, foundations and endowments) over a 10 year period from 1994 to 2003. Three years prior to hiring, the fund managers selected all had stellar records of beating their benchmarks. Post hiring excess returns were zero or less. Notwithstanding the utter stupidly of selecting funds on the basis of past returns, this charade continues all over the country every day. Plan consultants pour over data trying to pick the next fund winner, blissfully ignorant or willfully blind to the data indicating this process makes no sense. Here’s the problem: Those in charge of Kraft’s defined benefit plan had already seen the light. They limited the investment options in the plan to fixed income and an S&P 500 index fund. The defined benefit plan had no actively managed funds based on the finding of the Investment Committee of “…the challenges of selecting consistently successful active managers, low costs of indexing, performance of indexing in down markets, and composition of the popular S&P 500 index.” In their lawsuit, the plaintiffs asserted the retention of two actively managed funds in the defined contribution plan violated Kraft’s duty of prudence. They claimed the plan administrators in this plan should have followed the lead of the trustees in the defined benefit plan and dumped all actively managed funds. In a stunning decision, Judge Ruben Castillo agreed to let this issue proceed to a jury trial. He held that, based on the conclusion of the Investment Committee for the defined benefit plan to drop all actively managed funds, a jury could conclude that the decision of the plan administrator and consultants to the defined contribution plan to retain two actively managed funds was a breach of fiduciary duty. The ramifications of this holding are broad. A bevy of consultants, advisers, fund managers and insurance companies extol the merits of actively managed funds to retirement plan administrators. The cost to plan participants caused by the failure of most of these funds to equal the return of their benchmark index is in the hundreds of billions of dollars over time. This decision should be a wake-up call to all trustees and plan administrators of retirement plans. Either they should pay attention to the data and replace actively managed funds with index funds, or risk the possibility of being liable for the shortfall. The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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iMFdirect: Christine Lagarde on Sovereign Debt, Growth and Social Instability

July 26, 2011

The IMF chief gave a speech in New York City today that sets out how the IMF can help countries tackle this troika of challenges to the global economy. Watch the speech From iMFdirect blog

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Wall Street ‘Bad Boy’ Convicted Of Multi-Million Dollar Fraud

July 26, 2011

NEW YORK — A former investment manager known as Wall Street’s “bad boy” was convicted Tuesday in a $140 million scheme after a trial that featured testimony about prostitutes, strippers and a hard-charging lifestyle that consumed whatever came along. Ross Mandell, 53, shook his head throughout the reading of the verdict that convicted him of conspiracy and securities fraud charges. The jury also convicted a co-defendant, Adam Harrington of Miami. The Brooklyn born-Mandell was the former chief executive officer of the brokerage firm Sky Capital. Harrington was a senior broker for the firm. The jury had deliberated over parts of three days during a five-week trial. After jurors left the courtroom, Mandell’s sobbing wife hugged him for several minutes. U.S. District Judge Paul A. Crotty did not immediately rule on a request by prosecutors to jail Mandell as a threat to flee, leaving him free on $5 million bail. Defense attorney Jeffrey C. Hoffman promised to appeal, saying there were significant issues that must be resolved regarding stocks on foreign exchanges that became significant during the trial. He said the $140 million scope of the alleged fraud would mean federal sentencing guidelines would recommend a significant jail term, though he had not yet calculated how long. The top charge, securities fraud, alone carries a potential sentence of up to 20 years in prison. The trial captured the hard-partying lifestyle brokers enjoyed during the dot-com boom of the late 1990s and early 2000s. An exhibit introduced at trial by prosecutors showed that Mandell charged $162,000 on credit cards at adult entertainment clubs from May 2001 through January 2006. Prosecutors portrayed Mandell and Harrington as con men, saying they capitalized on the excitement over Internet tech stocks by using their broker-dealer operation to solicit private investments in startups. Prosecutors said the defendants spent some of investor money living lavishly with private jets, expensive vacations, fancy cars and flashy watches. The scheme came to an end when one of the brokers was caught lying to an FBI undercover officer. The broker agreed to secretly tape record conversations with Mandell. Mandell, who has homes in Manhattan and Boca Raton, Fla., with his wife and two young daughters, was arrested in 2009. He has said he is a recovering alcoholic, fitness maven and family man who quit the fast lifestyle of the late 1990s and early years of the new century. He has embraced his “bad boy” image and says he overindulged in fast-lane excesses before getting sober and becoming rich. An admitted co-conspirator who testified against Mandell at trial testified that money raised from investors was spent on “strip clubs and prostitutes.” During the prosecution, Mandell has maintained a high profile. He has promoted his cause on his personal website, rossmandell.com, Facebook, YouTube and a guest spot on a cable talk show. “I’m coming to you live, uncut, unedited, uncensored, unfiltered and … I am still under arrest,” he says in of several pretrial clips posted on his website. Mandell left court quietly, clutching his wife.

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Church-state Groups Slam Obama On Hiring Issue

July 26, 2011

By Adelle M. Banks Religion News Service WASHINGTON (RNS) President Obama’s status-quo stance on the controversial issue of faith-based hiring has drawn criticism from atheists and church-state watchdogs. Responding to an atheist at a town hall last week at the University of Maryland, College Park, the president discussed whether religious groups receiving government funds should be permitted to make religion-related hiring decisions. “I think that the balance we’ve tried to strike is to say that … if you have set up a nonprofit that is disassociated from your core religious functions and is out there in the public doing all kinds of work, then you have to abide generally with the nondiscrimination hiring practices,” he said Friday (July 22). “If, on the other hand, it is closer to your core functions as a synagogue or a mosque or a church, then there may be more leeway for you to hire somebody who is a believer of that particular religious faith.” The Rev. C. Welton Gaddy, president of the Interfaith Alliance , called Obama’s response “a departure from the opposition to such discrimination he unequivocally stated while on the campaign trail” in 2008. The person who questioned the president, Amanda Knief of the Secular Coalition for America , also criticized Obama’s comment. “Unfortunately, the president didn’t address the most egregious aspect of this policy — that religious discrimination is occurring on the taxpayer’s dime,” she said. A coalition of two dozen leaders who support the current policy recently sent a letter to Obama asking him to retain it. Stanley Carlson-Thies of the Institutional Religious Freedom Alliance , one of the signatories, was pleased with the president’s defense of some faith-based hiring. “That’s allowed government partnerships with religious groups to flourish, for the good of those served and the good of our society,” he said.

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Reid Cramer: Taking Asset Building to Scale in Federal Housing Policy

July 26, 2011

Today, we spend roughly $30 billion dollars a year in rental housing assistance to benefit almost 5 million households . It is a primary part of our social safety net. But millions of eligible families don’t receive any support. To get the most out of our resources, we should be looking for more effective ways to encourage those receiving assistance to increase their earnings and transition toward self sufficiency. Housing assistance should be a foundation for this process, especially if it can be re-made to more effectively promote income and asset growth. Currently, families that receive housing assistance are required to pay 30 percent of their income for rent. This means that for every extra $100 they earn, their rent goes up $30 automatically, which is not a very good incentive structure to maximize work effort. But what if this additional rent could be diverted into a savings account that the recipient could eventually gain access to if they pursued a program focused on gaining long-term independence. We actually know that this approach holds promise, thanks to a small program HUD runs in select housing authorities across the country. The Family Self Sufficiency Program offers a model for reforming the larger housing assistance delivery system. My colleague, Jeffrey Lubell of the Center for Housing Policy , and I argue that we can use this model to take asset building and earnings incentives to scale in HUD-assisted rental housing. In a recently-released paper , we present the case for developing and evaluating the next generation of economic security policies that would incorporate earnings incentives and asset-building objectives into the basic structure of rental housing assistance. We believe this can work for all families in subsidized housing. Central to this approach would be to offer every recipient of housing assistance the ability to build assets through a Rental Assistance Asset Account (RAAA) that would grow as the family’s earnings rise. The papers explains how this approach might work and explores various ways to implement this policy that could make it cost neutral or even save money for the government and local housing authorities. In today’s political climate, this should be an especially attractive approach for a wide range of stakeholders.

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WATCH: IMF Chief Discusses Organization’s Shifting Role

July 26, 2011

The International Monetary Fund’s newly-appointed chief sat down for an exclusive Reuters interview to discuss growing concerns over U.S. and Eurozone debt as well as the shifting role of her organization. Christine Lagarde, who stepped into her new role after Dominique Strauss-Kahn’s resignation in May, says that “fiscal consolidation needs to take place” both in the U.S. and elsewhere around the world. “The IMF is extremely relevant in times of crisis,” she notes. “It has to constantly enhance its services…its ability to serve the membership.” Watch Lagarde’s Reuters interview, courtesy of the Council on Foreign Relations , below:

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Peggy McColl: Are You Serving Time Instead of Serving Yourself?

July 26, 2011

When you think about launching a product, venturing out on your own as an entrepreneur or even trying to lose those last 10 pounds, what holds you back? It’s not simply a lack of willpower or fear of taking risks that stands in your way. I would challenge you by asking the question, “Are you serving time?” When I say “serving time” I am referring to the prison you have put yourself in. Let me explain. 33 years ago I was in prison. I know if you’ve read any of my books or been through any of my programs, I share the story of how I was locked away in an emotional prison, and I didn’t even know I was in one. Chances are you haven’t recognized it about yourself either. What was going on for me 33 years ago is I was a very insecure, unhappy, angry, frustrated, broke young woman. I was in my late teens and I was going through this incredibly challenging time, to the point where I lost the will to live. I was working for this company that hired a gentleman by the name of Bob Proctor to be a keynote speaker at a company event. I was not into personal development at the time. I had never read a personal development book in my life. I didn’t even understand the whole concept that we are creative beings and that we’ve got the ability to create. Because I had never even been open to any of this material, I had an attitude about it. So when Bob Proctor came in to address the company, I looked for a seat in the back of the room because I thought it was a waste of time. Of course, as fate would have it, the only seat left was in the front row, directly in front of him. That day Bob Proctor said something that changed my life forever. “You cannot escape from a prison unless you know you’re in one.” Just as I was back then, and many people are right now, you could be serving time in a prison of emotions that are holding you back from manifesting or creating the life that you desire. I didn’t even realize it, and the first step to all of creation is really becoming aware. Becoming aware that we are creative, that we have the ability to make changes in our life, and that we can choose to do something about it. So are you in an emotional prison? Do you put limitations on yourself because you believe things about yourself that are untrue or unfounded? Perhaps you think you need to know how your goals will be accomplished, and if you don’t know the how, you don’t believe it’s possible. That’s not true at all. Not every desire you have or goal you set has a logical, organized method of accomplishment tied to it. Many times it is more about setting the intention than it is about knowing what steps to take at each stage. Remember the old adage, “Where there is a will (desire, intention) there is a way.” Another lesson I learned from Bob Proctor was the only reason why someone who makes $50,000 a year isn’t making $50,000 a month is because they haven’t chosen to do that. I thought, “Whoa!” Now, there’s a stretch, right? Maybe that’s a goal that you’re going to set for yourself. It’s possible. It starts with the desire. The first thing you have to do is set the intention, using only positive language to describe your desires and then believe you deserve it and that’s already yours. The rest will come. God (the Universe) will acknowledge your beliefs and will help you put your intentions into actions. If you are aware that you are in an emotional prison and you would like to do something about it, join me on my Manifestation Creation Program . I have created a 10-week program that may change your life forever. We will do it together. We will co-create taking your life to the next level. You have the ability within you to create whatever it is you want for your life, for your family and for your business. I hope you will join me in the Manifestation Creation Program .

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Rodrigo Valdés: Between a Rock and a Hard Place: U.S. Fiscal Policy

July 26, 2011

The United States faces two pressing challenges to fiscal policy: raise the debt ceiling, and begin the arduous process of reducing deficits and debt. And, right now, this leaves U.S. fiscal policy between a rock and a hard place. How much savings should be found and in what form are crucial questions. So is when to put those savings in effect. Simply unsustainable By the end of this year, federal debt held by the public will represent 70 percent of the U.S. economy, almost double the 36 percent it was in 2007. The federal fiscal deficit will be 9.3 percent of GDP this year. That, quite simply, is not sustainable. If left on automatic pilot, debt would continue to increase faster than the economy, until financial markets say “no more.” Credit rating agencies have issued their warnings and, as part of the debt ceiling discussions, the political system has been trying to decide where to find the savings. Unemployment worries At the same time, too much fiscal retrenchment in the short run could unduly weaken an economy that was recovering very gradually and has lately lost momentum. In the first half of 2011, output appears to have grown at an average annual rate of less than 2 percent. That pace is just not enough to significantly reduce today’s very high unemployment. Persistently weak conditions in the labor market can threaten the long run prospects of the economy. A person who is unemployed for too long can gradually lose his or her work skills and find it increasingly difficult to find a job. Another headwind to economic activity is certainly not welcome at this juncture. Difficult balancing acts The fiscal problem was center stage in the IMF’s 2011 annual assessment — or Article IV consultation — of the United States’ economy. Discussions centered on the need to balance long-term adjustment and short-term support for the recovery. A loss of fiscal credibility in the United States is too dangerous a scenario to be tested. So, the top priority is reaching political agreement on a comprehensive adjustment plan that begins the consolidation process in FY 2012. The plan should be an appropriate size. Ideally, the consolidation should be spread over several years to avoid overly tight policies in 2012-13. The plan has to be balanced to include cuts in discretionary spending, higher revenues — for example by closing tax loopholes — and entitlement reforms. The latter should focus on containing the rate of growth entitlements — namely, social security and health care — and the changes may kick in later, but they have to be agreed and legislated now. Curbing non-defense discretionary spending alone is not sufficient because this type of spending is simply not large enough to achieve the required deficit reduction. No crash dieting, but the diet has to start now A somewhat crude analogy is dieting and losing weight. An overweight person who urgently needs to shed pounds must start to diet immediately. A simple announcement that he or she will start soon is not credible. By the same token, slashing the calorie intake too quickly is dangerous, risking the proverbial yo-yo dieting or, worse still, long term damage to your health. A gradual and enduring process is better. And the appropriate balance also requires relying on more than one lever: the dieter should not only eat less, but exercise too. Putting public debt on a sustainable path — say, stabilizing its ratio to the size of the economy by mid-decade and then lowering it gradually — requires a fiscal adjustment whose size and scope depends on two key variables: the pace at which the economy grows, and interest rates in the next several years. If the economy expands, the benefits multiply. Not only do revenues grow more rapidly, but debt also represents a smaller part of the economy, which reduces the need for savings. On the other hand, higher interest rates increase the amount of adjustment required because the interest bill will eat more of the available revenue. And complicating matters, higher debt tends to lift interest rates, raising the interest bill, and so on. So, where does all of that leave us? Active polices to lower the fiscal deficit of the order of 5 percent of GDP in the next several years would do the trick based on official U.S. projections. That amount is broadly equivalent to the $4 trillion savings over 10 years publicly discussed by policymakers during debt ceiling negotiations. Under our more conservative economic projections, the United States needs to find savings of approximately $6 trillion. That $4 trillion would be a very good first step. If you want to crawl out from between a rock and a hard place, you have to start now. From iMFdirect blog.

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China’s Baidu April-June profit grows 95%

July 26, 2011

(MENAFN) Baidu’s Inc. chairman and CEO, Robin Li, said that due to high traffic growth and increasing spending by ad clients, the Chinese company’s pr

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