August 2011

Scribe Names Microsoft Dynamics Channel Veteran Vice President of Sales

August 18, 2011

Scribe Aligns Management Team With Cloud Platform Growth Strategy in Enterprise, Midsized Business, and Global Markets

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Coca-Cola to invest USD4 bln in China

August 18, 2011

(MENAFN) Coca-Cola’s chairman and CEO, Muhtar Kent, said that the world’s top soft drink producer would invest another USD4 billion in China starting from the year 2012 to 2014 after Coca-Cola …

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UK- Rooney’s tax article complaint rejected

August 18, 2011

(MENAFN – Gulf Times) England striker Wayne Rooney has failed to win his complaint to the press watchdog over a Sunday Times story suggesting he paid only 2% tax. The broadsheet published the …

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Euro continues to decline on concerns over the global recovery

August 18, 2011

The dollar and the Japanese yen returned to rise and control the currency markets, as the drop in Japanese exports during July in addition to the expected decline in the performance of the …

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UK Retail Sales Disappoint As Consumers Turn Wary; GBP/USD Relatively Steady

August 18, 2011

Retail sales in the UK in July expanded by 0.2% from the month prior missing expectations of a 0.3% expansion; the miss was mitigated somewhat by the upward revision to June’s numbers from …

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US Dollar Index to Move Sideways During Summer Trade

August 18, 2011

The Dow Jones FXCM Dollar Index (ticker: USDollar) is looking a little worse off on weekly charts but remains well within recent ranges which have contained trade for the last 4-months. As the …

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U.K. Retail Sales Retreat in July on Rising Unemployment and Inflation

August 18, 2011

U.K. retail sales retreated in July as a result of the rise in unemployment and inflation which weighed on consumer spending and lowered purchasing power.  Retail sales with auto fuel …

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Europe Ahead: Another volatile session for European markets as the outlook continues to worsen amid high uncertainty

August 18, 2011

The negativity is gaining momentum in the market and the downbeat outlook is only gaining strength amid the flow of weak fundamentals and jittery policy makers with the loss of confidence and …

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Frontier: Infrastructure Development Prospects In Mongolia

August 18, 2011

http://www.abnnewswire.net/rss2/menafn/abn_menafn_en.asp Mr. Mendoza, Co-Chief Operating Officer of Frontier Securities, made an opening remark for “Infrastructure Development Prospects in …

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Texon Petroleum Limited (ASX:TXN) Provides Chairmans Letter to Shareholders with Update of Company Projects

August 18, 2011

http://www.abnnewswire.net/rss2/menafn/abn_menafn_en.asp Texon Petroleum Limited (ASX:TXN) releases the following letter to shareholders, which provides an update of the Company’s projects and will …

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Slovakian goverment agrees to euro bailout fund

August 18, 2011

(MENAFN – Saudi Press Agency) The Slovakian government on Wednesday formally agreed to changes in the European Union’s Lisbon treaty which will allow the establishment of a permanent eurozone …

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Oil up on U.S gasoline draw, equities weigh

August 18, 2011

(MENAFN – Saudi Press Agency) Crude oil held gains of nearly 2 percent on Wednesday as a sharp decline in U.S. gasoline stocks offset worries about economic growth, Reuters reported. Prices rose in …

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Japan donates 7.7 million dollars for Palestinian refugees

August 18, 2011

(MENAFN – Saudi Press Agency) Japan is to provide 7.7 million dollars in food aid to the UN agency for Relief and Works Agency of Palestine refugees (UNRWA), according to an agreement signed …

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Portugal’s jobless rate drops slightly

August 18, 2011

(MENAFN – Saudi Press Agency) Portugal’s unemployment rate dropped to 12.1 per cent in the second quarter of the year, down from 12.4 per cent in the first quarter, dpa cited the statistics body …

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Obama set to go beyond $1.5 trin budget cuts-official

August 18, 2011

(MENAFN – Saudi Press Agency) U.S. President Barack Obama is preparing a detailed deficit-cutting plan that goes beyond the $1.5 trillion target a congressional committee is aiming for, Reuters …

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Canada backs Rainbow pipeline restart plan

August 18, 2011

(MENAFN – Saudi Press Agency) More than four months after a failure was reported on an oil pipeline in Alberta, Canada, regulators said they approved of a conditional restart plan, UPI …

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Sarkozy, Merkel want to cut EU aid to profligate spenders

August 18, 2011

(MENAFN – Saudi Press Agency) More than four months after a failure was reported on an oil pipeline in Alberta, Canada, regulators said they approved of a conditional restart plan, UPI …

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President Obama speaks of new approach to boost US economic recovery

August 18, 2011

(MENAFN – Saudi Press Agency) .S. President Barack Obama said on Tuesday a plan to boost economic recovery that he will unveil in September will not include creating a new jobs department. ‘We’re …

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California July home sales down 11%

August 17, 2011

(MENAFN) DataQuick, the US real estate tracking firm, said that due to economic worries that drove buyers away, last month, sales in the state of California dropped 11 percent from June and 1.4 …

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Slowdown likely, recession not

August 17, 2011

(MENAFN – Khaleej Times) Investors predicted that the global economy would slow significantly in the coming 12 months, but ruled out the scary scenario of a double-dip recession in 2012 as warned of …

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Oil Falls to Near $87 in Asia

August 17, 2011

(MENAFN – Qatar News Agency) Oil prices fell slightly to near $87 a barrel Tuesday in Asia, pausing a weeklong rally amid investor optimism the global economy may not slow in the second half as much …

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Apple faces privacy law suit in S. Korea

August 17, 2011

(MENAFN) An attorney representing 27,612 South Koreans in a joint suit against Apple said that his clients are demanding USD26 million in compensation of privacy violations damage, reported …

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Qantas Airways adds two new airlines in Asia

August 17, 2011

(MENAFN) Australian Qantas Airways’ chief executive, Alan Joyce, said that the company is setting up two new airlines in Asia and ordering USD9 billion of new Airbus aircraft as part of a do-or-die …

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US July industrial output up 0.9%

August 17, 2011

(MENAFN) The US Federal Reserve said that in July, industrial output in its all three sectors, utilities, mines and factories, grew 0.9 percent, recording the biggest increase in 2011, reported Arab …

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NetApp Executive Vice President and CFO Steve Gomo to Retire

August 17, 2011

In a Planned Transition, Gomo to Retire December 31, 2011

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Stubborn Analysts May Be Driving Markets Down: Study

August 17, 2011

Financial analysts don’t just predict market crises — they may actually make them worse, according to recently published research from Stanford University. The study looked at why analysts stick to “extreme” forecasts on such things as earnings, even after they’re wrong, and suggests their stubbornness can affect markets.

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Wall Street Bankers ‘Answer Call’ Of New Careers

August 17, 2011

(Reuters) – In his 23 years as a banker, Adam Greene trotted the globe, closing billions of dollars’ worth of deals for some of the world’s biggest banks, and starting his own advisory firm. Then, in 2006, he traded in his BlackBerry and fancy suits for a Bible and clerical collar.

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Jared Bernstein: Texas and the Government: Better Friends Than You’d Think

August 17, 2011

At least better than you’d think listening to Gov Perry’s anti-government rhetoric. When he announced his candidacy for president the other day, he growled that his goal as president would be to make Washington “as inconsequential in your lives as I can.” Except when it comes to job creation. Over the last few years, government jobs have been awfully consequential in Texas: 47% of all government jobs added in the US between 2007 and 2010 were added in Texas. The chart shows that Texas employment wasn’t down much at all in these years, as the state lost only 53,000 jobs. But looming behind that number are large losses in the private sector (down 178,000) and large gains (up 125,000) in government jobs. Source: BLS Now, this was a period when the nation lost close to eight million jobs, so this churning in Texas is a very small drop in that bucket. But it sure doesn’t match the Governor’s anti-government rhetoric. In fact, as the table below shows, the nation as a whole added 264,000 government jobs, 2007-10, meaning public-sector jobs added in Texas account for almost half of the nation’s public-sector jobs over these years. How did that happen? Well, Gov Perry has a funny way of going about that “inconsequential” thing. According to many news accounts from back in the Recovery Act days: Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures. Now, I’ve got no problem with a state government using Recovery Act funds to retain or create jobs. In fact, the figure and quote above shows Texas to be following a traditional Keynesian game plan: as the private sector contracts, turn to the public sector to temporarily make up part of the difference. So, no disrespect Governor, but when you’re getting your Keynes on like that, no need to hide it behind all that anti-government rhetoric. This post originally appeared at Jared Bernstein’s On The Economy blog.

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Global healthcare excess face risks with complex changes ahead

August 17, 2011

(MENAFN – Emirates News Agency (WAM)) Healthcare executives in the U.S., Europe and Asia are seeing both risks and opportunities as the pace of change in the healthcare industry accelerates …

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China increases US Treasury holdings

August 17, 2011

(MENAFN – Kuwait News Agency (KUNA)) China, the largest foreign holder of US Treasuries, continued to increase its purchases in June as its holdings rose by USD 5.7 billion to USD 1.17 trillion, the …

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M 5.2 quake hits northeastern Japan, no injuries

August 17, 2011

(MENAFN – Kuwait News Agency (KUNA)) A moderate earthquake with a preliminary magnitude of 5.2 on the Richter scale shook northeastern Japan on Wednesday, the Japan Meteorological Agency …

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Finland, Greece reach collateral agreement

August 17, 2011

(MENAFN) Finland’s Finance Minister, Jutta Urpilainen, said that since her country didn’t approve any form of joint regional liability including selling common euro bonds regarding the Greek debt …

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Tobacco Companies Sue Federal Government Over Graphic Cigarette Warning Labels

August 17, 2011

COLUMBIA, S.C. — Four of the five largest U.S. tobacco companies sued the federal government Tuesday over new graphic cigarette labels that include the sewn-up corpse of a smoker and a picture of diseased lungs, saying the warnings violate their free speech rights and will cost millions of dollars to print. The companies, led by R.J. Reynolds Tobacco Co., Lorillard Tobacco Co., said the warnings no longer simply convey facts to allow people to make a decision whether to smoke. They instead force them to put government anti-smoking advocacy more prominently on their packs than their own brands, the companies say. They want a judge to stop the labels. “Never before in the United States have producers of a lawful product been required to use their own packaging and advertising to convey an emotionally-charged government message urging adult consumers to shun their products,” the companies wrote in the lawsuit filed in federal court in Washington, D.C. The FDA refused to comment, saying the agency does not discuss pending litigation. But when she announced the new labels in June, Health and Human Services Secretary Kathleen Sebelius called them frank and honest warnings about the dangers of smoking. The FDA approved nine new warnings to rotate on cigarette packs. They will be printed on the entire top half, front and back, of the packaging. The new warnings also must constitute 20 percent of any cigarette advertising. They also all include a number for stop-smoking hotline One warning label is a picture of a corpse with its chest sewed up and the words: “Smoking can kill you.” Another label has a picture of a healthy pair of lungs beside a yellow and black pair with a warning that smoking causes fatal lung disease. The lawsuit said the images were manipulated to be especially emotional. The tobacco companies said the corpse photo is actually an actor with a fake scar, while the healthy lungs were sanitized to make the diseased organ look worse. The companies also said the new labels will cost them millions of dollars for new equipment so they can frequently change from warning to warning and designers to make sure the labels meet federal requirements while maintaining some distinction among brands. Joining R.J. Reynolds and Lorillard in the suit are Commonwealth Brands Inc., Liggett Group LLC and Santa Fe Natural Tobacco Company Inc. Altria Group Inc., parent company of the nation’s largest cigarette maker, Philip Morris USA, is not a part of the lawsuit. The free speech lawsuit is a different action than a suit by several of the same companies over the Family Smoking Prevention and Tobacco Control Act. The law, which took affect two years ago, cleared the way for the more graphic warning labels, but also allowed the FDA to limit nicotine. The law also banned tobacco companies from sponsoring athletic or social events and prevented them from giving away free samples or branded merchandise. A federal judge upheld many parts of the law, but the companies are appealing.

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Sony cuts price of PlayStation 3

August 17, 2011

(MENAFN – Saudi Press Agency) Sony said it is cutting the price of its PlayStation 3 gaming console by $50 in an attempt to drum up demand for the 5-year-old video game console, AP reported. It’s …

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Oil falls on concern about Germany economy

August 17, 2011

(MENAFN – Saudi Press Agency) Oil fell Tuesday on renewed concerns about Europe’s biggest economy, AP reported. Benchmark West Texas Intermediate crude for September delivery gave up $1.23 to …

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Gold prices climb on mounting economic concerns

August 17, 2011

(MENAFN – Saudi Press Agency) Gold prices are climbing as concerns deepen about the European economy, AP reported. Gold rose $27 Tuesday to finish at $1,785 an ounce. The price is up about 10 …

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Inflation rose in UK

August 17, 2011

(MENAFN – Kuwait News Agency (KUNA)) The rate of Consumer Prices Index (CPI) inflation in the UK rose to 4.4 percent from 4.2 percent in June, according to official figures released …

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Boieng eyes building factories in Poland

August 17, 2011

(MENAFN – Saudi Press Agency) Aircraft producer Boeing is eying potential sites in Poland to build a factory there to produce aircraft components, dpa cited the daily Puls Biznesu as reporting …

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South korean shares rise 4.8 Per cent

August 17, 2011

(MENAFN – Saudi Press Agency) Shares rebounded strongly Tuesday on the Seoul stock exchange after recent heavy losses, as foreign investors ended their selling streak in response to gains in US and …

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European stocks futures fall after German GDP data

August 17, 2011

(MENAFN – Saudi Press Agency) European stock index futures fell in early trade on Tuesday, pointing to a drop in equities, after data showed German gross domestic product growth slowed more than …

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Japan stocks rise on US gains

August 17, 2011

(MENAFN – Saudi Press Agency) Japanese shares climbed Tuesday led by technology issues following overnight rallies on Wall Street. The benchmark Nikkei 225 Stock Average added 21.02 points, or …

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Wall street closing

August 17, 2011

(MENAFN – Saudi Press Agency) U.S. stocks finished higher on Monday, with all three major indexes rising about 2 percent, as investors received a positive report on merger activity. In world …

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US Analog Devices net income up 10%

August 17, 2011

(MENAFN) Analog Devices’ Inc. CEO, Jerald Fishman, said that due to high demand for the company’s automotive, communication and industrial division’s products, in the third quarter, the chipmaker’s …

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WATCH: Starbucks CEO Discusses His Boycott On Campaign Contributions

August 17, 2011

Starbucks CEO Howard Schultz spoke to CNN Money on Tuesday about what he hopes to accomplish with his recently announced boycott on political contributions. As reported by The Huffington Post’s Dan Froomkin , Schultz is calling on Americans and fellow business leaders to halt all campaign donations until politicians stop squabbling and demonstrate a capacity to work toward compromise on long-term fiscal issues. New York Times columnist Joe Nocera recently wrote in an op-ed : In effect, Schultz thinks the country should go on strike against its politicians. “The fundamental problem,” he said, “is that the lens through which Congress approaches issues is re-election. The lifeblood of their re-election campaigns is political contributions.” The message from the Starbucks CEO comes on the heels of the protracted debate over raising the nation’s debt ceiling. He reiterated the sentiment on Tuesday. “All it seems people are interested in is re-election,” Schultz explained. “And that re-election — the lifeblood of it is fundraising.” He urged employers to “grow their companies, start hiring and stop waiting for Washington.” He added, “We can spread a felling of confidence in America.” WATCH (via CNN): RELATED VIDEO:

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HuffPost TV: WATCH: Zach Carter Discusses Controversial Panama Trade Deal With Dylan Ratigan

August 17, 2011

HuffPost’s Zach Carter appeared on MSNBC’s ‘The Dylan Ratigan Show’ to discuss the controversial trade agreement between the U.S. and Panama. Carter recently reported that the deal could provide wealthy Americans with a tax loophole by allowing them to “hide” their money in Panama-based companies and banks. “It’s just very easy to set up an offshore corporation and bank account in Panama,” he said. “It only costs about $2000 and it takes about three or four days for that process to be complete.” Criticizing the trade agreement as irresponsible, he said, “Panama’s got some of the most secretive and restrictive bank secrecy laws in the world and … a very long history of refusing to cooperate with tax authorities in the U.S. so it’s very perplexing that you’d want to even engage with this country in a trade deal to begin with.” WATCH (via MSNBC ): Visit msnbc.com for breaking news , world news , and news about the economy

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BJ Gallagher: Don’t Make Sales Calls… Make Service Calls

August 16, 2011

Each week I meet with a group of Los Angeles business owners and entrepreneurs — men and women from very different fields who share a common vision of being self-supporting through self-employment. Among the group are doctors, accountants, attorneys, real estate agents, writers, architects, artists, actors, PR agents, personal trainers, professional speakers, headhunters, musicians, construction contractors, literary agents, photographers, landscapers and more. The topic for this week’s meeting was: “What are you doing to keep your business going in these crazy-making economic times?” Several people said they have upped the number of cold calls they’re making; others talked about creative ways they’re using social networking to market themselves. Some are revamping their web sites and blogs; a few are exploring new business ideas, as they worry that their current businesses might not survive. When it was my turn to speak, I said, “I’ve stopped making sales calls. I make service calls instead.” The group looked at me, their faces registering everything from confusion to curiosity to disbelief to disdain. So I explained what I had learned from Chuck Chamberlain. Chuck was a successful businessman in commercial real estate development (specifically, grocery stores) in Los Angeles. Some years ago, he gave a series of lectures entitled “A New Pair of Glasses” ( published in a book by the same title). Recently, I listened to those lectures, now available on CDs. Chuck explained how he became successful … and very wealthy. He said he did not make sales calls — he made service calls. He was in the business of helping others be successful in their businesses. When Chuck called on a potential customer, he viewed it as no different from helping a neighbor with a project, visiting a friend in the hospital, or reaching out to help someone struggling with a serious personal problem — it was an opportunity to be of service. “How can I help you?” Chuck would ask. “How’s your business doing? What’s working? What isn’t working? Tell me about your challenges and problems.” He would listen with no agenda. He would listen with an open mind and an open heart — with a genuine desire to help the other guy build his business. If Chuck could help the other guy, he would. If he didn’t have the right service to offer, he would do his best to think if he knew anyone who could; then he’d refer the prospective customer to that other person. In his lecture, Chuck related how, on two or three occasions, he had a different motivation in calling on prospective customers… he was broke, and desperate to make a sale. “Whenever I went on a call feeling like ‘I NEED this sale; I HAVE to make some money today; I HAVE to close this deal’ — I came away empty-handed. I never once made a sale that way.” In other words, when Chuck called on people in order to GET something from them, he failed. When he called on people in order to SERVE them, he always got the sale. That was his “secret” to success. People are smart and intuitive. They can pick up on your energy and they know when you’re trying to get something from them. When people resist sales pitches, it’s because they know the real agenda is all about YOU. And … people also know when your intent is to help, to be of service, to contribute, to assist them in achieving their goals. When you approach them with that intent, they welcome you. They trust you… and they give you their business. I knew exactly what Chuck was talking about. For many years, fear had been the co-owner of my business. I ran scared, worried about where my next check was coming from. I did tons of PR, built several websites, chased down leads and curried favor with important people I thought could help me. I was always strategizing and scheming about how to become rich and famous. When I did get a big chunk of money or land on a national TV show, It made me happy – but not for long. The euphoria quickly wore off and I had to start chasing again — almost like an addiction. What’s more, in the chase for fame and fortune, I generated enormous stress, unhappiness, frustration, and anxiety for myself … as well as resentment toward those who had what I was chasing. This was a no-win game, for sure. I always said that my work was about service and contribution – and my mission statement said so, too. But it was only partially true. I did want to help others — but I often wanted recognition and money even more. My motives were mixed at best. I ran my business from a place of fear and scarcity … the same place millions of business people are operating from today. Chuck Chamberlain’s “new pair of glasses” reminded me of something I used to know, but had forgotten. The goal of business is to provide products and services that others need and want. The goal of business is to serve and contribute to others’ well-being. Money is the happy by-product. Money is one of the ways (but not the only way) we measure how well we’re doing. But in our culture today, it’s easy to lose sight of the true goal of business and get seduced into pursuing only money. I’m as guilty of this as anyone. Fear makes us chase after what we think will keep us safe. Fear makes us turn money into our god. When I finally stopped looking for what I could get and started looking for what I could give , everything changed. The recession didn’t go away, but my stress and anxiety did. Money started to flow in, often from unexpected places. I heeded Chuck’s example and followed his lead; it made me feel good about my work and optimistic about the future. Chuck taught me to build my business on a foundation of service and contribution. When I do my work well, the result is not just freedom from want … but also freedom from fear. After sharing Chuck’s ideas with my business group this week, I began wondering … What would business be like if everyone made service calls instead of sales calls? What would happen if business people adopted an attitude of “How can I serve?” instead of “What can I get?” What would Wall Street be like? What would Main Street be like? What would the world be like?

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Amy Chan: Defined by Ego

August 16, 2011

My whole life I’ve defined myself through the roles I’ve had — the academic, the girlfriend, the party girl… As long as I had a role to fit within, I would have an understanding of my sense of “self”. The role that felt the most empowering of all was the fast paced, over-achiever. The woman climbing the corporate ladder, with a fancy title and a high salary that afforded nice material things. That role gave me a lot of validation and was a large part of my identity. That is, until recently. A month ago the company I worked for told me that they were downsizing and relocating, and within two weeks, my title and salary would be gone. Little did I know my sense of identity would go right along with it, only to be replaced by a conflicted relationship with my ego. I spent the last 15 years of my life focused on achieving the things that society defined as successful. Thus, not having that role to hide behind has been a challenge to my sense of self. However, I am learning that I’m no less or more of a person because of “what I do”, and that my job does not equate to “who I am”. I realize that true success stretches far beyond the professional realm. Your values, the way you treat others and make them feel, your contribution to society, your relationships — these are all factors that define a person. Here is a quote that sums it up nicely: “To laugh often and much; to win the respect of intelligent people and the affection of children; to earn the appreciation of honest critics and endure the betrayal of false friends; to appreciate beauty; to find the best in others; to leave the world a bit better, whether by a healthy child, a garden patch or a redeemed social condition; to know even one life has breathed easier because you have lived. This is to have succeeded.” -Ralph Waldo Emerson The next chapter for me is about personal growth. Sure, I’ll probably make another move in my career, but I’m going to stop having that role become me and define me. While it’s definitely going to be an evolutionary process, I’m excited for the journey.

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Low Home Prices Mean It’s Cheaper To Buy Than To Rent In Many Cities

August 16, 2011

As the national real estate slump deepens, home prices in many cities have crossed a worrisome milestone. It’s cheaper to buy a home than to rent one in 74 percent of the country’s largest 50 cities, according to the real estate site Trulia — findings that confirm the national epidemic of depressed housing prices remains in full swing. Trulia’s research, which compared the median list price and median rent for two-bedroom apartments, condos and townhomes in America’s 50 largest cities, found that renting is more expensive than buying in dozens of markets, particularly in Miami and Las Vegas, as well as Mesa, New Mexico, and Arlington, Texas. In a minority of cities, including New York, Seattle, Kansas City and San Francisco, it’s still more expensive to buy than to rent. A spate of recent studies have shown that home prices remain low throughout the U.S. Earlier this month, the real-estate company Zillow reported that average prices were down 6.2 percent from a year before , and aren’t expected to touch bottom until 2012. Data from CoreLogic and Case-Shiller showed similar declines between 2010 and 2011. Low home prices are seen as delaying a recovery in the housing market, and by extension a turnaround in the broader national economy. When home values are low, homeowner wealth sinks accordingly, and many consumers end up spending less money than they might in a more prosperous market. Meanwhile, prospective homebuyers are more likely to delay a purchase if they believe prices will continue to fall. On Tuesday, figures from the Commerce Department showed that construction on new homes fell 1.5 percent in July — not as sharp a decline as economists had expected, but still an indication that the housing sector is far from rehabilitated. A number of forces stand in the way of a housing recovery, including high unemployment, falling wages and a growing inclination among homeowners to save for retirement, rather than try to upgrade to a better house. Last month, Morgan Stanley released data showing that the U.S. home-ownership rate is only 59.7 percent if delinquent borrowers are excluded from the count — an all-time low, and one that may herald a nationwide shift toward becoming a “rentership society” instead of an ownership society, a Morgan Stanley strategist said at the time.

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Dan Solin: A Walk on the Wild Side at CNBC

August 16, 2011

On August 10, 2011, after a tumultuous day on Wall Street, I appeared on CNBC , along with another guest, Natalie Pace . According to her web site, Ms. Pace’s vision is “to spread wealth by sharing wisdom and to add a splash of green (and pink) to Wall Street.” Her mission is to “demystify the markets” and “…make investing as much fun as shopping.” This had potential. You could feel the excitement in the CNBC studio, even from the satellite feed. There was a lot of ground to cover in under five minutes. The volatility of the markets had obviously rattled investors. We were there to make sense of it all. Ms. Pace was asked to “please be a voice of wisdom and reason right now for us. We need it.” Here was her advice: 1. Buy and hold doesn’t work; 2. “America does work. Companies are doing well.” 3. Add “hot industries” to your portfolio 4. Look at “modern portfolio theory which is as easy as a pie chart” and rebalance annually so you “capture any gains you have.” Sound advice? Buy and hold is not dead. Proponents of the “buy and hold is dead” theory rely on the flat performance of the S&P 500 index over the last decade. This makes no sense. I know of no competent advisor who tells her clients to invest 100% of their portfolios in an S&P 500 fund. Investors in a globally diversified portfolio of three index funds (like those I recommended in 2006 in the Smartest Investment Book You’ll Ever Read ) had a fine decade. They invested in a domestic stock index fund that tracked the Wilshire 5000 (not the S&P 500), an international stock index fund and a domestic bond index fund. If they were in a typical asset allocation of 60% stocks and 40% bonds, they had an annualized rate of return of approximately 6% for the past decade. Allan Roth totally demolished the myth of the “lost decade” in this excellent blog . America does “work”, but that won’t help investors Maybe U.S. based companies are doing “well” (whatever that means), but we live in a global economy. Limiting investments to U.S. based companies deprives investors of opportunities in other countries and reduces their ability to diversify risk. Investors should have a globally diversified portfolio. Adding “hot” industries to your portfolio is bad advice Ms. Pace did not offer examples of industries she believes are “hot.” There is no evidence anyone has the expertise to predict which industries will outperform in the future. Ms. Pace’s “hot industry” picks (whatever they may be) may turn out to be good or bad, but relying on them is gambling and not investing. Her crystal ball was cloudy in January, 2011. She saw “a dismal January and February” (the S&P gained 41 points), a “spring rally” beginning in March, ending with the NASDAQ increasing in value by 20% year end and the DJIA increasing by 5% . These predictions may end up being accurate, but it will be a long haul. The NASDAQ is down 7.61% year-to-date and the DJIA has lost 5.16%. Relying on the predictions of Ms. Pace or any market “guru” is speculating. Confusion over Modern Portfolio Theory and Rebalancing Modern portfolio theory shows investors how to maximize expected return for a given level of market risk. It doesn’t “work” to protect investors exposed to stock market risk against losses in all market conditions. Nor does annual rebalancing permit you to “capture any gains you may have.” The purpose of rebalancing is to ensure that a portfolio continues to reflect the level of risk an investor has the capacity to withstand. The combination of MPT and rebalancing would not have “…kept your gains this year before this big market downturn” as Ms. Pace stated. All of the portfolios offered by Index Funds Advisors (with whom I am affiliated) follow MPT. In fact, Harry Markowitz, who is widely known as the father of MPT, and a 1990 Nobel Prize Winner, is an academic consultant to IFA. IFA regularly rebalances the portfolios it manages, which aggregate approximately $1.5 billion of assets. All of IFA’s portfolios, from very conservative to aggressive, were impacted by the recent market declines. Sound advice — Lost in the hype As I stated on CNBC, you should be in a portfolio with a suitable asset allocation. If you have less than a 3 year time horizon, you should have no stock market exposure. If you have a three-fifteen year time horizon, you should ignore the financial news and the current market volatility. No “expert” can “make sense” of the market, predict the future direction of the market, pick hot stocks, hot industries”, or funds that will outperform. Stick to your guns. Invest in a risk-appropriate, globally diversified portfolio of low management fee index funds. As one pundit said: Don’t just stand there, do nothing!” Dan Solin is a Senior Vice President of Index Funds Advisors (ifa.com). He is the author of the New York Times best sellers The Smartest Investment Book You’ll Ever Read , The Smartest 401(k) Book You’ll Ever Read , and The Smartest Retirement Book You’ll Ever Read . His new book, The Smartest Portfolio You’ll Ever Own , will be released in September, 2011. 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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Glenn B. Manishin: Patent Wars and Blackmail in Silicon Valley

August 16, 2011

With reality television all the rage, viewers may wonder why there’s been no reality series about the inbred high-tech ecosystem of Silicon Valley. There should be, because the reality of how our technology bastion really competes today — namely by patent litigation and acquisitions — is astonishing. Last year Google, Apple, Intel and other leading Silicon Valley companies were targeted by federal antitrust enforcers for tacitly agreeing not to hire each other’s key employees. Such a conspiracy could have landed top executives in jail. This year Apple, Samsung, Google, Nokia and others have all been battling over back-and-forth claims that smartphones and wireless tablets infringe each others’ U.S. patents. Now, just weeks after Google’s general counsel objected that patents are gumming up innovation, the search behemoth has announced its own $12.6 billion acquisition of Motorola Mobility, and with it their own portfolio of wireless patents, just a fortnight after purchasing a relatively few (“only” 1,000 or so ) wireless patents from IBM. While the executives at Google have nothing to fear personally from these patent wars, others seem to have a lot at risk. That is because, according to the Wall Street Journal , the U.S. Justice Department’s Antitrust Division is investigating another possible conspiracy among Silicon Valley companies. This one arises out of the collective bid in the late spring of nearly every wireless phone operating system manufacturer, except Google, for a portfolio of 6,000 cell phone patents formerly held by bankrupt Canadian company Nortel. Simply put, Google started the bidding at about $1 billion, but the others joined forces to lift the price to an astounding $4.5 billion and win the prize. That’s the legal background to Google’s just-announced Motorola Mobility acquisition, and it’s one that could have serious anticompetitive consequences. If the curiously named “Rockstar Bidco” consortium — which includes Microsoft, Apple, RIM, EMC, Ericsson and Sony — refuses to license the erstwhile Nortel patents to Google for its Android wireless operating system, they will be agreeing as “horizontal” competitors not to deal with a rival. Classically such group boycotts are treated as a serious antitrust no-no, and a criminal offense. If the group licenses the patents, on the other hand, they could be guilty of price fixing (also a possible criminal offense), since a common royalty price was not essential to the joint bid and would eliminate competition among the members for licensing fees. If the Rockstar Bidco companies decide to enforce the patents by bringing infringement litigation against Google, things could be even worse. Patent suits themselves, unless totally bogus, are usually protected from antitrust liability so as not to deter legitimate protection of intellectual property assets. (That does not mean they’re competitively good, since patent suits are often just a means of keeping rivals out of the marketplace.) Nonetheless, a multi-plaintiff lawsuit by common owners of patents would have those same horizontal competitors agreeing on lots of joint conduct, well beyond mere license rates. For starters, is the objective of such an initiative to kill Android by impeding its market share expansion? That’s a valid competitive strategy, standing alone, for any one company; it takes on a totally different dimension when firms collectively controlling a dominant share of the market gang up on one specific rival. Google’s broader complaint that patent litigation in the United States is too expensive, too uncertain and too long may well be right. This bigger issue is being debated in Washington, DC as part of what insiders call “patent reform.” The high-stakes competitive battles being waged today in the wireless space under the guise of esoteric patent law issues like “anticipation” by “prior art” suggest a thoroughly Machiavellian approach to the legal process, just as war is merely diplomacy by other means. They inevitably color the perspective of policy makers, who watch with regret as a system designed to foster innovation gets progressively buried with expensive suits, devious procedural maneuvering and legalized judicial blackmail. Even the biggest companies, though, would find it hard to compete if their largest rivals were allowed to form a members-only club around essential technologies to which only they had access. Microsoft’s own general counsel countered two weeks ago that Google was invited to join an earlier consortium bid but declined before the Nortel auction. Embarrassing, yes; dispositive, no. If the offer were still open, now that it is clear Google’s principal wireless rivals are all members, things would be different. Indeed, there’s even an opposite problem of antitrust over-inclusiveness where patents and patent pools are concerned. If everyone in an industry shares joint ownership of the same basic inventions, where’s the innovation competition? Google’s defensive purchase of Motorola is a desperate, catch-up move that does not really change this “everyone-but-Android” reality. Silicon Valley’s patent wars are for good reason not nearly as popular as Bridezillas or So You Think You Can Dance . Yet they are far more important, economically, to Americans addicted today to their smartphones and spending hundreds of dollars monthly on wireless apps and services. Whether the Justice Department will challenge the Rockstar Bidco consortium or give it a free pass remains to be seen. From a legal perspective, it is just a shame the subject is too arcane, and certainly way too dull, to make a reality TV series. *Neither Manishin nor his law firm represents Google.

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