clothing

Huffington Post…

I’ve been a runner most of my life. I started running when I was in my teens and was immediately addicted. I’ve always found that running has been a great way to clear my head — I’ve come up with some of my best ideas while jogging along city streets, or on riverside trails. While running started out as just a way to get exercise, it quickly turned into a wonderful personal challenge for me. I began to run longer and longer distances and soon I was training for my first marathon. Training for a marathon is a process that I’ve come to both love and loathe, a process that’s both exhausting and exhilarating. I ran my first marathon in 2006. And I was hooked… You might think of running as a very ‘green activity’ — just you and your running shoes pounding the pavement. Right? Actually, that’s not the case. In 2008, Runner’s World magazine surveyed hundreds of runners and calculated the annual CO2 impact of a typical American runner, which includes everything from clothing and running shoes to traveling to and from marathons. They found that one runner generates approximately 5,449 pounds of CO2 in a year! That’s equivalent to driving an SUV 300 miles every month for a year. As the CEO of a ‘green company’ I found this very troubling. I’d been noticing some trends that weren’t so environmentally appealing. For instance, I saw how along the marathon course runners were tossing off, and abandoning, clothes — a lot of them. As runners warm up we shed layers: warm up jackets and pants, long sleeve T’s, hats, shirts and more. The more races I ran, the more concerned I grew that all that clothing might be thrown in the trash along with cups, water bottles and other discarded items along the race route. This seemed like a huge waste to me, but it also seemed like a problem that I could help fix. In 2008 my company, USAgain , which collects discarded clothes and shoes and puts them back in the use cycle, began partnering with marathons around the country. We have collected at the Twin Cities Marathon since 2008 and partnered with the San Francisco Marathon this year. At every marathon since then we’ve prevented an average of 500-600 pounds of clothing from being dumped in landfills. This is an incredible amount of clothing and almost all of it is perfectly wearable — some of it is even new. About 10.8 million tons of textiles end up in landfills every year. When it comes to marathons, there are hundreds of them annually in the United States, and thousands across the globe. USAgain is growing our reach in the marathon community so that we can do our part to make running just a little bit greener. Some things that you can do as a runner — even if you just jog a few miles a week — to go the extra mile to help lessen your impact on the environment are: recycle your old running shoes by donating them to charity, or giving them to an organization that will reuse or recycle them. Wash your running clothes in cold water, with minimal detergent — it’s gentler on both clothes and environment. Buy organic cotton clothing when possible. Non-organic cotton is grown with tons of fertilizer and pesticides that pose health hazards to people and animals, not just pests.

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Mattias Wallander: Going the Extra Mile

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What Makes Steve Jobs Great

by on August 27, 2011

Huffington Post…

“I think I have five more great products in me,” Steve Jobs said a very long time ago. He was 31 at the time and barreling up Route 101 in Silicon Valley, en route to a meeting in San Francisco. Having been kicked out of Apple, which he’d co-founded a decade before, Jobs was wholly engaged in the act of starting up a new company, which he had named — of course! — NeXT.

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What Makes Steve Jobs Great

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US Express Q2 net income down 43% to USD12.6m

August 25, 2011

(MENAFN) Express’ Inc. CEO, Michael Weiss, said that since the clothing chain’s costs grew faster than its revenue, the US firms’ net income dropped 43 percent in the second quarter reaching USD12.6 …

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Triangle Factory Fire’s Legacy Under Threat

March 25, 2011

“We have been legislated to death.” – James T. Hoyle, Secretary of the Manufacturers’ Association, explaining his opposition to new laws proposed in the wake of the Triangle Shirtwaist Co. factory fire, May 19, 1914 “The regulations are killing us” – Congressional candidate George Pendergrass during the Nevada Republican primary, May 12, 2010. Susan Harris’s voice grows hoarse with emotion when she discusses last year’s BP oil spill and the Upper Big Branch mine disaster, two of the biggest industrial accidents in the nation’s history. But the 62-year-old artist from Los Angeles gets even more passionate expressing her disappointment that the two incidents have not prompted more safety rules, instead lost amid a backlash against government regulations to protect worker safety and health. “How do people become so hard? It’s disgusting,” she says. “What are our priorities as a country? It’s really ironic that this is happening right now on the anniversary of the fire.” Harris is referring to Friday’s 100th anniversary of the Triangle Shirtwaist factory fire , in which 146 workers, mainly young immigrant women, were burned to death or jumped to their deaths. The workplace tragedy, which was caused by dramatically unsafe conditions and blocked exits, inspired dozens of reforms, later helping pave the way for the New Deal, and invigorated the union movement. That tragedy has a special poignancy for Harris — her grandfather, Max Blanck, was the owner of the factory and was tried for manslaughter due to the unsafe conditions, which included a locked door that trapped dozens of young seamstresses in the burning ninth-floor room of the Asch building. Haunted by the tragedy, Harris recalls how she did not even find out about her family’s legacy until she was a young teenager and stumbled across her grandfather’s name in a book — the family changed its name slightly in the wake of the accident. “It has affected me deeply. As I grew up, I reflected more on what was going on in my world,” says Harris, who has met with relatives of victims and created an art exhibit to honor the victims’ memories. “I definitely became more sensitive to workplace conditions — when I see and hear about young women working in sweatshops in Bangladesh, females who are raped on their way out of work, it has an effect on me. Look at what is happening today — people are trying to deregulate all these important workplace protections at an exponential rate.” Harris is referring to an assault that has only grown in the first few months of the Republican-led House of Representatives. The GOP’s budget proposal includes slashing $99 million from the Occupational and Safety Health Administration, a 40 percent reduction in the budget of the federal agency most responsible for making sure the nation’s workplaces are safe — Democrats claim that translates into 8,000 fewer workplace hazard inspections and 740 fewer whistleblower discrimination probes. And the new chairman of the House Oversight and Government Reform Committee, Rep. Darrell Issa (R-Calif.), has vowed to take a tough look at regulations that impede job growth , soliciting suggestions from industry groups that included OSHA regulations. Last month, Rep. Tim Walberg (R-Mich.) led a hearing that largely criticized OSHA’s impact on business, during which the freshman lawmaker thundered about “needless rules and onerous regulations.” During Walberg’s hearing, which was dominated by discussion of the costs of OSHA regulations on corporate bottom lines, one of the most emotional moments came when Tammy Miser, an advocate for worker safety and founder of United Support and Memorial for Workplace Fatalities, undercut the lawmaker’s thesis. Miser said she was there to deliver “a personal story of why OSHA regulations are needed” and cried as she described how her brother, Shawn Boone, was killed in 2003 in an aluminum dust explosion at a factory that produced aluminum wheels, where fires happened on a regular basis and she claimed that workers were instructed not to call the fire department “because it was costing them too much money.” Despite Boone’s death and the tragic dust explosion at the Imperial Sugar refinery in 2008, which killed 13 and injured 42, OSHA has still not issued a final rule to regulate combustible dust. “Some companies choose to gamble with workers’ lives because there are no OSHA standards,” said Miser, in discussing the Imperial Sugar disaster. “The buzz that the regulations kill jobs … that’s just nonsense,” said Miser, noting that only two regulations have been passed by OSHA in the past 10 years. And one of them — applying to cranes and derricks — came too late for Steven Lillicrap, a 21-year-old construction worker who was killed when he was pulled into the cables of a 100-ton crane in 2009 while OSHA was still revising the standards for the rule. “It was finally issued in July and is expected to prevent 22 deaths and 175 injuries and millions of dollars in property damage per year. The benefits far outweigh the costs of this rule.” Miser paused and added, “There’s no price tag that can be put on seeing your husband walk your daughter down the aisle or seeing your baby born. I’ve talked to family members that have had children and their husbands are gone. Their babies are never going to know their father. It’s nothing like seeing your child graduate from college or holding your grandbaby.” Locked Doors, Charred Bodies On Saturday, March 25, 1911 , the end of the workweek, many of the young men and women toiling at sewing machines and cutting cloth at the Triangle Shirtwaist factory near Washington Square Park were getting ready to leave for the day when flames suddenly burst from a trash can on the eighth floor. The fire spread quickly through the factory, which had no sprinklers and where fire drills were not required, consuming the ninth and tenth floors as workers tried in vain to put it out with buckets of water. They quickly unraveled a water hose, but no water came out. Hundreds of workers raced to an exit door where a young man screamed, “The door is locked? The door is locked!” Dozens made their way onto freight elevators, whose operators risked their own lives to save 150 people, but those who were crowded out jumped down the shaft or out of the windows onto the street below. The wet sidewalks were covered with 146 bodies — mainly Jewish and Italian women struggling to earn a living making blouses in the sweatshop — many of them charred beyond recognition. Over 100,000 took part in the funeral procession, which was watched by over 300,000 New Yorkers — many of them expressing rage at the factory owners, who had put profits before safety and prevented the workers from forming a union. Two years earlier, a general strike of garment workers, mostly Jewish women, had led to improved wages and working conditions, but that didn’t change the union status of Triangle workers. It was still a dangerous time to toil in a labor-intensive industry. “About 100 workers were killed on the job every day in 1911 — mine collapses, railroad accidents, steel mill accidents,” says David von Drehle, the author of “Triangle: The Fire That Changed America.” “If you go back and read the newspapers from that period, it’s shocking how common the headlines show up.” At the manslaughter trial of Blanck and factory co-owner Isaac Harris, witnesses were galvanized when one of their employees testified that Harris told him after the fire: “The dead ones are dead and will be buried.  The live ones are alive and they will have to live.  Sure the doors were locked; I wouldn’t let them rob my fortune.” Despite the public outcry, changes were not immediate. A year after the fire, many proposed regulations and laws were clogged in legislative inertia. Though The New York Times ‘s news pages were full of graphic accounts of the tragedy and unsafe conditions at the factory, the paper’s editorial page somberly cautioned against excessive regulation, arguing, “Excited persons rarely accomplish anything … No new laws are needed.” Four years after the tragedy, one letter writer to the Times decried industry-supported amendments that threatened to gut the new laws, including one that would exempt New York City and other cities “altogether from the operation of all safeguards affecting the safety and health of factory operatives.” And factory owners Blanck and Harris were acquitted of manslaughter due to too much conflicting evidence — two years later, Blanck was fined $20 for having the doors locked at another of his garment factories. Shocked and outraged citizens demanded better working conditions, and New York state enacted almost 40 labor laws in the following three years. In 1935, Congress passed the National Labor Relations Act to ease union formation and protect collective bargaining and the rights of striking workers. Though previous tragedies — from the Great Chicago Fire of 1871 to the fire that engulfed the General Slocum steamboat — sparked reforms, the political consequences of the Triangle fire were the most widespread, forming a political alliance between labor, liberals and lawmakers that shaped the Democratic Party for decades to come. “There are a handful of catalytic, galvanizing moments where history really gets a big push to give us the world that we live in today, and the Triangle fire is one of those,” von Drehle said. Unlike the sinking of the Titanic, he said, “Triangle led to changes that influenced the way every American lives .” Still Unsafe To Work A century later — despite the regulations, laws and a more educated workforce — such workplace tragedies continue to happen. Within the last two months in the New York City area, these accidents occurred: Limin Min Huang was crushed to death at the dry-cleaning plant in Jamaica, Queens, where she worked, when her scarf got caught in a flatwork ironer, pulling her into the machine. At least six workers fainted and vomited after being overcome by carbon monoxide poisoning due to the lack of ventilation at a warehouse in South Brunswick, N.J. And construction workers Brett McEnroe and Roy Powell died after falling 65 feet in an elevator shaft inside a building site that lacked several safety precautions on Manhattan’s Upper West Side. Among the clothing and garment industries, there remain potentially unsafe working environments, sometimes due to new hazards that didn’t exist at the time of the Triangle fire. Last September, OSHA cited New Jersey’s Miskeen Originals for numerous workplace safety and health violations, including employee exposure to methylene chloride, a hazardous chemical linked to cancer and adverse effects on the heart. But the penalties remain paltry. For one willful violation, the company was slapped with a $28,000 fine, along with a $15,150 penalty for 12 serious violations. “Even a hundred years later, workplace safety concerns are still a problem,” says Catherine Ruckelshaus, the legal co-director of the National Employment Law Project, which released a report last year concluding that workplace violations are severe and widespread in New York City’s low-wage labor market. “You hear about the locked doors at the Triangle factory and it’s shocking. But to this day, we hear about grocery store workers in Brooklyn who are locked in the stores at night and it’s a very common practice in retail and the garment industry to lock the doors — they say it’s to prevent theft, which is what the Triangle factory owners claimed.” Ruckelshaus says that though there are much better laws and regulations on the books than there were back in 1911, many of them are not being enforced and there are many parallels between now and then. “In many ways, we haven’t made much progress,” she says. “The Triangle fire was a mostly immigrant population in a very competitive business. We have that now with janitorial, home health care, security workers, the garment industry — any labor-intensive industry, you have the same pressures.” Among the NELP report’s findings: only 11 percent of injured workers file a workers’ compensation claim and 16 percent were fired or told not to file a claim when they told their employer about the injury. Every week in the city, $18.4 million is lost to “wage theft,” meaning violations such as paying less than minimum wage. “It happens all over the place — unsafe construction sites, sweatshops tucked away in all corners of NYC, just blocks from the Triangle factory site,” says Leigh Benin, who worked briefly in the garment industry. “The other part of it is, which is just as shameful, is that 95 percent of garment manufacturing is now offshore. Clothes are being made in Bangladesh, where they have very similar conditions to the Triangle factory, where workers are locked in.” Benin , whose grandmother’s cousin Rose died in the Triangle fire, says that “it was routine to lock doors, to search people when they left.” For him, the Triangle tragedy was a living memory and he would hear the details from his grandmother’s lips. “I felt that deep sadness in her and I felt close to her,” he says. “And then it came to me, that there is something I can do, to try and make sure that we will never forget them, that they shall not have died in vain. That they could look back and say, ‘They died, but we did something to make sure that won’t happen again.’” Benin, now a professor at Adelphi University, is taking part in ceremonies to mark the anniversary but says he worries that the fire’s legacy of workplace reform is under threat, partly because so many people have no memory of the fire. He cites the example of Frances Perkins, a young social worker who was having a cup of tea across the park on the day of the fire when she heard the commotion and saw women jumping out of the windows to their deaths. “From that day forward, she made the determination to make that tragedy count for something, that those lives were not in vain,” he said. Perkins, as a member of the Factory Investigating Commission, helped push through dozens of workplace safety laws that became a model for the rest of the country. She later became President Franklin Roosevelt’s first female Cabinet member, serving as Secretary of Labor and helping push through the Social Security Act, laws against child labor, and the Fair Labor Standards Act, which established the first minimum wage and overtime laws. The factory commission report had an enormous impact, says Kirstin Downey, the author of ” The Woman Behind the New Deal ,” a biography of Perkins. Speaking at a recent symposium on the Triangle fire sponsored by the National Consumers League, Downey held up a volume from the 13-volume report, explaining that it revealed unsafe and unsanitary conditions in numerous factories and led to workplace innovations like fire escapes, sprinklers, lighted exit signs, occupancy limits, regular fire drills and bans on smoking in factories that Americans take for granted. At the ceremony to mark the 50th anniversary of the Triangle fire, Perkins and Eleanor Roosevelt were at the podium, says Benin. “They could look back and talk about the legacy of reform, at all the progress that had been made in the decades after the fire. But if you look back at what’s been going on the last few years, it’s been an attempt to undo the reforms and the union movement, to return us to an era before the New Deal, even prior to the progressive era, to some new Gilded Age.” Benin argues that people don’t die of excessive regulation. “Was there too much regulation of the mining industry after 29 people died or BP where 11 people died? Let’s assume that it’s impossible to find a completely reasonable approach to everything and that inevitably we’re going to err on one side — I’d much rather err on the side of too much, because too little ends up harming people or killing people,” he said. Considering the lobbying forces marshaled by corporation and industry groups, Benin says that it’s an unequal fight. “The forces arrayed against regulation are the wealthy and powerful, whose vision doesn’t extend beyond the bottom line,” he said. “The largest question is, ‘Who is responsible for the public good? Corporations are only responsible to their shareholders or to their own egos. So, it can only be government officials.” Similar to the anti-regulatory zeal displayed in the industry response to Rep. Issa’s recent request for lists of burdensome regulations, there was an “incredible litany of business lobbying groups in New York state and New York City who had the exact same arguments as the Chamber [of Commerce] has today,” says Peter Dreier, a professor at Occidental College and HuffPost blogger. Describing the arguments found in transcripts of the factory investigation commission hearings, Dreier recounts: “‘If you make us put fire sprinklers in,  if you require fire escapes’ and other things we now take for granted, ‘industry will leave New York and it will become a ghost town.’” Dreier is alarmed by today’s anti-regulatory climate. “If today’s Chamber of Commerce were around in 1912, they would say fire sprinklers are burdensome government regulations that will drive out jobs,” he said. “They would call for voluntary corporate responsibilities to fix mine safety and oil rigs. … What we learned from the Triangle fire is you have to have a set of rules and standards that protect workers.” The Chamber strongly disputes that characterization. The preeminent business lobby’s executive director of labor law policy, Marc Freedman, says that the group supports OSHA and that workplace safety is a primary concern of employers. Freedman argues that there are valid questions about how OSHA spends its money and whether it overemphasizes enforcement at the expense of efforts to work with employers on compliance assistance. “What I seem to be seeing from a number of voices is to connect the Triangle tragedy with some of the contemporary efforts surrounding unionization or other workplace accidents and disasters,” he says. “Clearly, Triangle Shirtwaist had a deep meaning and resonates as one of the signature events that triggered workplace reforms, and it’s a good thing we’ve moved on since then.” He adds that companies have made serious investments to achieve the goal of no workplace accidents or fatalities, explaining that “there are going to be employers worthy of enforcement by OSHA, but the question is whether the agency is only going after employers who have truly disregarded the safety of their workers.” Freedman argues that the chamber’s focus on regulation is more about what the Obama administration is trying to do and not about the rules and regulations that are already on the books, adding that some of OSHA’s regulatory ideas are not well-founded. The legacy of the Triangle fire is palpable to every American, says Benin. “If you’re sitting in a workplace right now, you’re enjoying safety regulations that came about because of the fire — sprinkler system, fire drills, clear exits,” he says. “Over 30 fire safety laws came about and we are all benefiting from the loss of those 146 lives and what that tragedy did to shake up the country.”

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Marks & Spencer reports 16.4% rise in first-half profit on higher clothing and food sales 

November 9, 2010

Marks & Spencer

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William S. Lerach: Blame the Wall Street Bankers and Corporate CEOs for the "Jobless" Recovery

September 30, 2010

Now that President Obama’s “recovery summer” has fizzled and it’s clear we are in for a “jobless” recovery, it is worth examining who bears the responsibility for this predicament — near 10% unemployment (with millions more so discouraged they have given up looking for work and are not even counted anymore) despite a trillion-dollar stimulus. The manufacturing jobs which were once the backbone of the American economy and fueled the job growth that pulled America out of prior recessions just aren’t here anymore. In the name of “free trade,” millions of those jobs got shipped overseas to unregulated markets where cheap labor is abundant, environmental restrictions are lax and working conditions are abysmal — making the costs of corporate production there much lower. Who bears the responsibility for this structural impairment of the American economy? The Wall Street banks and the multinational corporations, along with those who have done their bidding in Washington for the past few decades are responsible. The Republican politicians that these financial interests own — and the corporate Democrats they have “seduced” with campaign money — have been their willing instruments. While millions of ordinary Americans cannot find a decent job and our nation’s economy sputters, the Wall Street bankers still make gobs of money, the multinational corporations are as profitable as ever and their political friends in Washington sit on top of stuffed campaign coffers. Capital is liquid. Without restrictions money flows to where it can earn the highest returns, regardless of any burden its flow inflicts on those left behind, or the hardship inflicted upon the humans who will toil to create the return on that newly placed capital. If a corporation can build a factory in a Third World country where workers are not organized, wages are low and the cost of worker safety and environmental protections are nil and still sell its products here and in other wealthy countries, it will do so. The executives who decide to take capital to remote locations suffer no personal hardship from the fact that a factory that could have been built in America won’t be — or a factory that was in America will be closed and replaced by a Third World site. This is equally true of Wall Street bankers. It makes no difference to them if a factory in Iowa is closed and the lives of the well-paid workers there are destroyed so that their multinational corporate client can build a replacement factory in Bangladesh. The rapacious bankers pocket the same huge fees for raising the capital required to fund the replacement factory regardless of where it is built, the new workers are located or what happens to the American workers left in the dust. Over two million American manufacturing jobs have been lost to overseas sites in recent years. No one can count how many jobs that could have been created here have not been. Over time a nefarious bargain was struck between the politicians and financial interests that helped lead to our present predicament. Republicans — doing the bidding of Wall Street and their corporate masters — pushed relentlessly for “free trade” agreements, the real purpose of which was to facilitate replacement of American manufacturing facilities with cheap overseas production. It happened with steel and auto workers and their supply chains; the clothing and carpet manufacturers — the garment workers — you can go on and on. The Americans who held these good jobs were thrown away. But the Wall Street bankers and corporate executives enjoy even better lives than before. They benefit from goods being manufactured in Third World countries. That boosts the profits they use to pay themselves excessive salaries and outlandish bonuses. Unfortunately, Democrats who were in a position to prevent the actions that gutted our manufacturing base did not do so. The “enterprise” Democrats who serve Wall Street and corporate interests went along with these disastrous policies. Republicans in turn tolerated the massive growth of the Democratic favorites Fannie Mae and Freddie Mac. This furthered the Democratic goal of fostering increasing home ownership by lower income people and had the convenient impact of benefiting the bankers who made gargantuan profits by packaging up tons of dubious mortgages being generated by the housing boom and peddling them to pension funds all over the world. This arrangement also benefited the corporate-financial complex as the gigantic housing bubble masked the true negative economic impact of America’s diminishing manufacturing base resulting from the globalization they wanted. The bankers made gobs of money from financing industrial relocation to the Third World and home mortgage securitization. The campaign coffers of their political enablers were kept filled. But then the music stopped. There were only so many houses to be built and sold with 100% mortgages to under-qualified buyers. When the house of cards collapsed the financial system imploded and came to the edge of a complete collapse. The United States and most of the world plunged into the worst economic decline in the past 50 years. Unemployment here skyrocketed to 10%. Over eight million jobs were lost. Unemployment is really over 20% when the millions of other workers who are so defeated they have given up looking for a job are figured in. The Wall Street banks, of course, were rescued by their Washington allies who funneled hundreds of billions of taxpayer dollars to them to save them from the “free market” consequences of their own greedy folly. The world’s central bankers also responded by flooding banking systems with liquidity – “free” money in unlimited amounts to the bankers. The economic decline was stabilized — at least enough to prevent a repeat of the Great Depression of the 1930s — for now. But look at the end result. The “bailed-out” Wall Street banks are making tons of money again – but not by lending to American businesses to stimulate economic recovery here — but by arbitraging the money “loaned” them by the government at near 0% into interest-paying government bonds — pocketing billions of dollars in risk-free profits and then paying themselves gargantuan bonuses. Multinational corporate profits are back at record levels. The politicians who arranged for the bank bailout and serve these again prospering financial and corporate interests are having no difficulty filling their campaign chests. But where are the jobs? Where are the new factories? What about ordinary people? America remains a great nation and the vast majority of its citizens, even though they vehemently disagree with each other on many issues, love their country. Their allegiance is unquestioned. But I don’t think that’s true of a great many of the masters of capital that reside here. Their real allegiance is not to any country, but to mammon. These bankers and corporate CEOs are “men and women of the world.” If the legal and economic rules of the game permit them to make more money for themselves at the cost of ordinary Americans, they will do so. While they may sit in office towers here, their ultimate economic commitment is not to our country or its workers — their loyalty is to lining their own pockets, regardless of the impact on ordinary Americans. To be fair to them — they are really the obliging tools of capitalism’s “invisible hand” — if the incentives permit, indeed favor, the flow of capital to places that hurt the American economy — then so be it. It’s the incentives as much as the people. These harsh words only reflect the reality of raw capitalism. Capitalism was never meant to be pretty or kind. Unregulated, it allocates capital — and the jobs and the wealth that flow from capital — in an efficient (ruthless) manner, inexorably seeking the lowest cost of production so as to obtain the highest return. The enormous improvements in computer technology, transportation and communications that have “shrunk the globe” in recent decades have served to greatly emphasize this aspect of under-regulated capitalism — and accelerate its harmful impact on our developed, regulated economy, with its attendant worker and environmental protections, i.e., costs. For many years, we created buffers to protect our people from the impact of unregulated free-market capitalism. And, in the not-too-distant past, we had countless numbers of manufacturing facilities, which employed workers who received good wages and benefits – either because they were organized or were collateral beneficiaries of a large, organized American workforce that “raised the bar” for all. And it was those factories and those workers who time and again helped the American economy recover from inevitable periodic economic downturns. But no more. Often major trends unfold in front of us but we do not recognize them. America is stagnating — at the tipping point of heading toward becoming a Second — even a Third World country. Much of the anger we see among people in our country is because they sense it. Bad news for them — and their children. But grieve not for the financial and corporate elite – even in the worst Third World countries, the economic elite survive — they thrive — behind gates and guards in enclaves of luxurious wealth. So it may be in the post-industrial America. Our factories are gone. Our recovery is anemic. Our economy has suffered structural damage in the name of globalization, which has benefited only the economic elite. But what do they really care if America is in decline? These “people of the world” will continue to profit, no matter that the economic policies they use their power to achieve come at the expense of millions of loyal, ordinary Americans, who are but pawns in a bigger game of international economic exploitation.

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Video: Shoppers Face Rise in Clothing Prices as Cotton Rallies

September 16, 2010

Sept. 16 (Bloomberg) — Bloomberg’s Olivia Sterns reports on the impact of a rise in cotton prices on the clothing industry.

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Candy Spelling: No Burkas in the Boardroom

July 21, 2010

I’m not a big fan of quotas, so I was surprised that I initially liked the idea that France wanted to increase the number of women on corporate boards. Statistics showed that only nine-and-a-half percent of members of corporate boards were women. So, someone came up with the idea of legislating a quota, where women would make up 40 percent of corporate boards. I liked the idea of more women, but was queasy about the idea that corporations had to fulfill quotas. The boards would have to be 40 percent women in six years, or no male board members could be added. Norway had similar legislation, and the number of women on boards in Norway has increased to over 30 percent. Sounds good, but I have no idea if those companies are doing better. I lost my mixed feelings about legislating women and was stopped in my tracks by another headline of a story from France. French back burka ban as only one MP votes against move to outlaw Islamic ‘walking coffins’ Huh? One expert said the garments are seen as undermining women’s rights and a threat to France’s secular status. Others said women who covered themselves up were security threats. The proposed legislation, which is colloquially referred to as the anti-burka law, translates in English to “the bill to forbid concealing one’s face in public.” One legislator stated it affects only 2,000 women in France. That sounds close to the number of women the board quota legislation would affect. Neither of these issues should just dictate numbers to legislate what to wear or what voices should be heard. We’re not talking about banning film of Elvis shaking his hips or my classmates in school having the length of their mini-skirts measured. This isn’t a frivolous statement about wardrobe. It’s an all-out assault on religious freedom and women. It relates to the burkas and niqab worn by some of the most-religious women to conceal either all but their eyes or their identity completely. Should the French be worried about security? Of course. Everyone is, and we all should be. But, to strike out at a small religious group of Muslim women in France in case someone planning to do harm will emulate their clothing is not the way to go. No one banned shoes or underwear on airplanes after the attempts by shoe or underwear bombers. I believe corporate boards do need more women, but not through legislation. I do not believe that religious garments should be banned and a group of innocent people should be prevented from appearing as they wish and believe. I’ll try to remember this the next time our Congress tries to pass some outrageous legislation. It will probably be soon.

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Peter Crawfurd: Why Customization Could End Amazon

July 6, 2010

For many years e-tailers have been relying on the Amazon-style model of online commerce, whereby a ready-made, in-stock item is shipped to the customer upon purchase. While other methods – like groupon.com, which allows customers to get together and buy products at a lower price – have come along and become successful, few have really challenged the basic Amazon concept. Over the past two years, online shopping and consumer habits have been evolving. Many shoppers now want products they can say no one else has, and they want them at an affordable price. While online stores can offer lower prices by avoiding certain overhead fees and other expenses, traditional e-commerce sites lack the personal touch today’s customers are craving. In response to this demand, a slew of new start-up companies have rushed to carve out a niche in the expanding market for customized products. With the help of some clever web development, customers now have a never-before-seen level of creative control over the products they purchase. The Start Ups Among Amazon’s extensive clothing range are a great number of mass produced and uninspired dress shirts. ShirtsMyWay.com is one of the clothing companies which have filled the personalization void by allowing shoppers the chance to design their own custom made shirts ; including choice of collar, fabrics, buttons, buttonhole color, monograms and a host of other options. Customers can also input their measurements to ensure a great fit. This model solves two problems shoppers face when buying clothing: the fit and lack of flexibility when it comes to the design and style. ShirtsMyWay.com offers shoppers complete customization at a price well below many off-the-rack brand name dress shirts sold through online retailers. ShirtsMyWay.com has so far sold mens shirts to over 30 countries and has garnered worldwide attention from the press. Another interesting company, focused on food, is Chocomize.com . This site allows customers to design and purchase their own personal milk, white or dark chocolate bars by mixing and matching dozens of ingredients – like chocolate chips, bacon, nuts, sesame seeds, coconut flakes and cinnamon to name just a few. Chocomize.com has received attention from O! – The Oprah Magazine as well as numerous newspapers and food-oriented websites. So far, the same degree of customization has yet to make its way to Nestle’s Kit Kat or Hershey’s Almond Joy. The Giants Of course, some of the world’s largest brands have also embraced customization to branch out to a wider market. This is especially true in the world of footwear. Several years ago, Nike launched Nike ID, their own online store that allows customers to design their own sneakers in minute detail. Other giants like Puma and Adidas followed suit into the realm of customized products. Another company, Zazzle.com , managed to make it big through customization. Of all the companies and websites offering customized products, this one perhaps comes closest to Amazon in terms of the range of products it offers – everything from clothes, mugs, hats, postage stamps, stationary and calendars. Already Zazzle.com has managed to rack up more than 50 million dollars in capital and now visited by nearly 3 million unique visitors every month. When so much is happening in the online customization space, it’s surprising Amazon has not taken a more aggressive stance to this angle of e-tailing (although they have attempted to make one acquisition of a some what customization focused start up). Soon the day may come when the giant e-tailers of the world may need to stop resting on their low-priced/ready-made laurels and respond to ever growing demands for unique, one of a kind goods. If they don’t, they may be loosing out on a big part of the online retailer market and weakening their position as the main player.

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U.S. Stocks Retreat, Led by Banks on Mortgage-Bond Probe; Cisco Declines

May 13, 2010

By Elizabeth Stanton (Corrects to say “trillion” in second paragraph after “Banks Probed” subhead.) May 13 (Bloomberg) — U.S. stocks fell as banks declined on reports that more mortgage-bond deals are being scrutinized by federal and New York prosecutors and Cisco Systems Inc. retreated after its sales forecast disappointed some investors. Citigroup Inc. and Deutsche Bank AG led declines in financial shares. New York prosecutors are probing eight firms over whether they misled ratings companies about mortgage-backed securities, according to a person familiar with the matter. Cisco, the biggest maker of networking equipment, fell 4.5 percent. Sybase Inc. surged 14 percent on a takeover bid, spurring speculation other technology companies will be bought. The Standard & Poor’s 500 Index dropped 1 percent to 1,160.54 at 3:29 p.m. in New York. The Dow Jones Industrial Average declined 89.55 points, or 0.8 percent, to 10,807.36. The benchmarks yesterday recovered the remainder of their losses on May 6, when the S&P 500 fell as much as 8.6 percent amid a widening sovereign-debt crisis in Europe. “It’s a dichotomy between tech and telecom, which are being held up by Sybase and rumors of takeovers, and financials, which are being dragged down by the criminal investigation and continuing uncertainty around the euro,” said Richard Campagna , chief executive officer of 300 North Capital LLC in Pasadena, California, which manages $600 million. Last week’s 6.4 percent decline by the S&P 500 was the biggest in 14 months, and it pared the index’s rebound from a 12-year low in March 2009 to 64 percent. The European Central Bank unveiled an almost $1 trillion financial-aid package this week, including a plan to buy government and private debt, after downgrades of Greece, Spain and Portugal made investors wary of investing in the region. Banks Probed Citigroup , the bank 27 percent owned by the U.S. government, fell 1.7 percent to $4.11. U.S. shares of Deutsche Bank AG dropped 2.9 percent to $63.16. New York Attorney General Andrew Cuomo is investigating eight banks over whether they misled the agencies that rated mortgage securities, a person familiar with the matter said. Bank losses stemming from the collapse of the U.S. subprime mortgage market beginning in 2007 totaled about $1.78 trillion globally, according to Bloomberg data. Federal prosecutors and the Securities and Exchange Commission are investigating whether banks misled investors about mortgage-bond deals, the Wall Street Journal reported. ‘More Cautious’ Cisco retreated 4.6 percent to $25.52. The company forecast sales of at least $10.7 billion in the current period, following record revenue last quarter. While that beat the $10.6 billion average prediction of analysts surveyed by Bloomberg, estimates ranged as high as $11 billion. “When the stock market falls 10 percent in one day, every investor becomes more cautious,” said Robert Lutts , president of Cabot Money Management in Salem, Massachusetts, which oversees $500 million. “We’re probably in a trading range until there is more guidance from companies that will move up to a substantially higher level of earnings. We’re not seeing that from many companies.” S&P 500 energy companies declined 0.6 percent as a group as a drop in the euro to a 14-month low against the dollar helped push crude oil under $74 a barrel for the first time since Feb. 16. Chevron Corp. , the second biggest U.S. energy company, dropped 1 percent to $79.27. Sybase surged 14 percent to $64.26, adding to a 35 percent jump yesterday after Bloomberg News reported a takeover bid by SAP AG of Germany was in the works. Sybase stockholders will receive $65 a share, SAP said after the close of trading yesterday. Bloomberg earlier reported that SAP was close to paying about $6 billion for Sybase to help it fend off competition from Oracle Corp. Takeover Potential The Sybase acquisition emboldened investors to buy shares of other potential targets, 300 North’s Campagna said, including data-storage software company Teradata Corp. , which had the third-biggest advance in the S&P 500. “The Sybase news is putting a bid under a lot of the small- and medium-sized tech names that could be tuck-ins for larger companies,” he said. Teradata rose 4.8 percent to $33.04. Other companies that benefited from takeover speculation included Netflix Inc. , Equinix Inc. and Human Genome Sciences Inc., Campagna said. Whole Foods Market Inc. rose 5.7 percent to $42.56 for the second-biggest gain in the S&P 500. The organic-foods grocer boosted its forecast for profit this fiscal year to at least $1.33 a share, compared with an average analyst estimate of $1.25. Earnings Watch A full 77 percent of S&P 500 companies that released results so far beat analyst profit estimates as the earnings recovery extended into the first quarter. After declining from the year-earlier period for a record nine straight quarters, profit from continuing operations more than doubled in the fourth quarter on a share-weighted basis, and is up about 55 percent in the first quarter, based on reports by 456 companies, according to Bloomberg data. Kohl’s Corp. fell 5.6 percent to $53.96 for the second- biggest drop in the S&P 500. The company raised its target for full-year profit to as much as $3.75 a share, trailing the $3.77 average of estimates compiled by Bloomberg. Urban Outfitters Inc., the clothing and housewares retailer, fell 6.5 percent to $36.84 for the biggest drop in the index after reporting first- quarter sales in line with the average estimate. Alcoa Inc. rose most in the Dow average after China discontinued energy subsidies to domestic producers of aluminum. Alcoa, the biggest U.S. producer, gained 3.5 percent to $12.90. To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net

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U.S. Stocks Advance in Longest Winning Streak for S&P 500 Since April 2009

April 10, 2010

By Joanna Ossinger April 10 (Bloomberg) — U.S. stocks rose for a sixth week , giving the Standard & Poor’s 500 Index its longest winning streak since April 2009, as reports showed the fastest job growth in three years and higher-than-estimated retail sales. Banks and retailers led the advance in the S&P 500, with Regions Financial Corp. and Macy’s Inc. rising 5.2 percent or more following the economic reports. American Express Co. and Microsoft Corp. rallied at least 4 percent, leading the Dow Jones Industrial Average, as European Central Bank President Jean-Claude Trichet saying he doesn’t expect Greece to default on debts bolstered optimism a financial crisis will be averted. The S&P 500 advanced 1.4 percent to 1,194.37 this week, building on its biggest first-quarter rally since 1998. The Dow climbed 70.28 points, or 0.6 percent, to 10,997.35. It exceeded 11,000 for about 10 seconds yesterday, crossing that threshold for the first time since September 2008. Stocks “remain in a powerful bull market,” said Michael Sheldon , chief market strategist at RDM Financial Group in Westport, Connecticut, which oversees $650 million. “Until something changes, it seems unlikely we’re going to have a substantial pullback.” Alcoa Inc. becomes the first Dow company to report quarterly results on April 12. Combined profit for S&P 500 companies will increase 30 percent from a year earlier, according to analyst estimates compiled by Bloomberg. Intel Corp., JPMorgan Chase & Co., Bank of America Corp. and General Electric Co. also post results next week. Jobs, Retail Sales Economic reports helped drive this week’s rally by stocks. U.S. employers added 162,000 jobs last month, the most since March 2007, figures from the U.S. Labor Department showed on April 2, which stock exchanges were closed for Good Friday. March sales at 31 chain stores rose 9 percent, the biggest one- month gain since March 1999, the New York-based International Council of Shopping Centers said April 8. The Institute for Supply Management’s index of service industries, which make up about 90 percent of the economy, showed the fastest growth since May 2006. Inventories at U.S. wholesalers rose 0.6 percent in February, a sign companies are ramping up orders as sales climbed to the highest level in more than a year. Measures of S&P 500 banks and retailers advanced 4.4 percent, 3.7 percent and 3.4 percent, the most among 24 industries in the index. Takeover Speculation Regions Financial climbed 11 percent to $8.59. SunTrust Banks Inc. rallied 5.5 percent to $28.65 after Credit Suisse Group AG said it may be a takeover target for overseas financial companies. Goldman Sachs Group Inc. rose 5.2 percent to $179.12. Bank of America Corp. increased 3.1 percent to $18.59. Gap Inc. gained 5.2 percent to $24.85 after March sales at the clothing seller rose 11 percent, about three times the estimate by Retail Metrics. Target Corp. , the second-largest U.S. discount chain, climbed 4.8 percent to $55.67 after exceeding estimates for March sales and saying first-quarter profit will top forecasts. US Airways pared its weekly retreat to 1.1 after surging 11 percent on April 8 amid speculation it would purchase UAL Corp. The tie-up probably would be an all-stock transaction, with the smaller US Airways as the acquirer, said two people familiar with the matter, who asked not to be identified because the negotiations are private. Spokesmen for the companies declined to comment. UAL, the owner of United Airlines, rose 5.1 percent to $20.50. Casinos Surge Wynn Resorts Ltd. advanced 13 percent to $87.17, MGM Mirage surged 23 percent to $14.80 and Las Vegas Sands Corp. advanced 13 percent to $24.12. A Nevada report showed gaming revenue statewide rose almost 14 percent in February from the same month a year earlier. Las Vegas Strip revenue increased 33 percent. The S&P 500 rallied 4.9 percent during the first quarter, the biggest advance to start a year since 1998. The index is up 2.1 percent in the second quarter. “We’ve come back from the brink fairly meaningfully, we’ve seen huge recovery in the value of risk assets,” Tobias Levkovich , New York-based Citigroup Inc.’s top U.S. equity strategist, said in a Bloomberg Radio interview. “What we still have are intermediate and justifiable concerns around sovereign credit, around the structural unemployment issues.” Massey Energy Co. slid 12 percent to $46.72. An April 5 explosion at the company’s Upper Big Branch mine in Montcoal, West Virginia, killed 25 people in the worst U.S. mining disaster since 1970. The mine was issued two citations on the day of the explosion. One was given because inspectors found that mine maps were out-of-date. A similar situation contributed to the deaths of two Massey miners in January 2006 at the Aracoma Coal Co. Alma Number 1 mine fire. To contact the reporter on this story: Joanna Ossinger in New York at jossinger@bloomberg.net .

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Robert Creamer: What the Iconic Labor Battle at Hugo Boss Means for Our Economic Future

February 8, 2010

It’s the red carpet season in Hollywood. That means high-end apparel companies like Hugo Boss are promoting iconic celebrities to wear their clothing line at the Oscars and other award ceremonies. But for the workers who make these suits in Cleveland, Ohio, it’s a season of a different shade — that of the pink slip. And the result is an iconic labor battle that is emblematic of many of the most important issues facing our economy. Just after Christmas, Germany-based Hugo Boss messengered pink slips to the 400 employees at its Cleveland, Ohio manufacturing facility. The employees were told that they were being laid off and the plant was being closed. Hugo Boss was not closing the facility because it was losing money — or, for that matter, because the company was in bad financial condition. Quite the contrary. Its annual report says that: “Despite the global economic crisis… HUGO BOSS held its ground over the course of the year. In particular, toward the end of the year some initial positive trends were visible. In the fourth quarter sales revenues were slightly above the previous year’s …” Not only is the whole company profitable, there is every indication that the Cleveland plant is profitable as well. So why is Hugo Boss shuttering its Cleveland operation and sending 400 American workers onto unemployment lines? Simple. The workers at the plant refused a company demand that their wages be cut by almost a third — from $12 per hour to $8 and change. The company refused to discuss counter-offers, and rejected out of hand a package of incentives proposed by state and local officials to save the plant. Now let’s remember that these workers weren’t making exorbitant incomes to begin with. Twelve dollars an hour is only about $25,000 a year. The average CEO of a large American corporation (making $10.5 million per year) earns that much in the first five hours of the first work day of the year. No matter, the executives at Hugo Boss think they can make more money if they move the jobs of the Cleveland workers to Turkey and China, where they can get workers to manufacture their suits for even less. If something isn’t done to alter their decision, the Hugo Boss plant in Cleveland will stop making suits in April of this year. There are four key lessons for the American economy from the Hugo Boss story: Lesson # 1. Every time we allow the executives of international corporations to maximize their own wealth by paying their workers less and less, we allow them to place all of us in economic jeopardy. The root of the current Great Recession was the reckless speculation of a bloated financial sector that was swimming in the money it has squeezed from ordinary Americans who actually produce things for a living. That shift of income from everyday people to corporate CEO’s, insurance companies and Wall Street banks left wages stagnant for the last decade. All of the economic growth of the Bush years went to the top two percent of the population. That left consumers without expanding incomes to buy new products, forcing the economy to rely on growing consumer debt and a housing bubble to finance its relatively anemic expansion. The fruits of increased productivity must be widely shared in order to sustain long-term economic growth. A high wage economy is the foundation of a bright economic future – not a Bush era economy where income is concentrated in the hands of a few. The evidence is crystal clear. Economist Paul Krugman has noted, at the beginning of the Great Depression, income inequality, and inequality in the control of wealth, was very high. Then came the “the great compression” between 1929 and 1947. Real wages for workers in manufacturing rose 67% while real income for the richest 1% of Americans fell 17%. This period marked the birth of the American middle class. Two major forces drove these trends — unionization of major manufacturing sectors, and the public policies of the New Deal that were sparked by the Great Depression. The growing spending power of everyday Americans spurred the postwar boom from 1947 to 1973. Real wages rose 81% and the income of the richest 1% rose 38%. Growth was widely shared, but income inequality continued to drop. Compare that to the Republican policies of the Bush years — trade policies that allowed corporations to send manufacturing jobs abroad, and to lower wages at home; policies making it harder to organize unions; and tax cuts for the wealthy. Of course, throughout the heyday of Reagan’s “supply side revolution” and Bush’s tax cuts, the Republicans and the right wing intellectual establishment have held fast to their foundational belief that these policies — and especially tax cuts for upper income Americans — would create private sector jobs. Well, the great experiment in “trickle down economics” is over and the results are in. The New York Times reports that, “For the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period. The total number of jobs has grown a bit, but that is only because of government hiring.” These Republican economic policies didn’t just produce fewer jobs than advertised. They didn’t produce any private sector jobs at all. The whole experiment in handing over money to the wealthiest people in America so they could use it to benefit the rest of us was a colossal — empirically verifiable — failure. But our economy is not doomed to have more and more low-paying jobs, greater income inequality and economic stagnation. There’s a great deal that can be done to prevent corporations from lowering the incomes of American workers in the future — and to stop Hugo Boss from laying off 400 workers in Cleveland right now. Lesson #2. America’s trade policies have to change . The international rules of the economic road must and can be changed. Fundamentally, the rules of international trade must require that wages for employees are not solely subject to market forces. Human beings are not commodities like beans and corn. Most people agree that we need child labor laws, health and safety laws, laws protecting the right to organize, and the minimum wage. That’s because without them, “the market” — left to its own devices — would force companies to drive down wages, and incentivize unsafe working conditions. The same is true of the international market place. The international rules of the economic game that are reflected in trade agreements need to be changed to recognize that human beings are the point of the economic system — not just an “economic input.” Labor agreements must have labor and environmental protections — not just protections for the rights of capital and “intellectual property.” Lesson #3. Our tax and regulatory policies need to be changed to reward true economic production and discourage the reckless speculation of the financial sector. It is the exploding financial sector that insists that a profitable company like Hugo Boss produce even more short-term profits — even though it damages the American manufacturing base. We’ve seen this movie over and over again. A few months ago Simmons — a 133-year-old profitable bedding maker — was forced to file for bankruptcy protection because it has been milked dry by a succession of buyers and Wall Street investment banks. The investment banks made millions through leveraged buyouts that made good financial sense for Wall Street, but left the manufacturing firm deeper and deeper in debt. The New York Times reports that “the financiers borrowed more and more money to pay ever-higher prices for the company, enabling each previous owner to cash out profitably.” This time, Hugo Boss is being milked by a private equity firm called Permira. The changes in financial regulation proposed by the Obama administration would be a start in the right direction. But everything from tax policies to compensation practices need to change if we are going to re-establish the priority of productive work — including manufacturing — over the needs of the “Masters of the Universe” on Wall Street. Lesson #4. We have to remember: it ain’t over ’til it’s over. It’s up to all of us to use our collective political and economic power not only to make changes in our economic policies, but to stop the destruction of 400 productive jobs at Cleveland’s Hugo Boss. Workers at Republic Windows and Doors in Chicago sat down on the job in order to preserve their jobs — and with the help of public officials like Congressman Luis Gutierrez and my wife, Congresswoman Jan Schakowsky — they won. Last year workers at another apparel company, Chicago-based Hartmarx, which makes President Obama’s suits, faced their own fight. Thousands of jobs were put in jeopardy when the company’s bankers sought to liquidate the company entirely. The workers fought the banks again — and with the help of Illinois State Treasurer and current Senate candidate Alexi Giannoulias they won, too. The workers in Cleveland realize they must engage in that same type of fight against the corporate greed of Hugo Boss, and they need all of our help. We should demand that each of the glitterati that attends the Oscars publicly refuse to wear Hugo Boss clothes, so long as the company continues to put its own greed over the interests of American workers. Each of us should foreswear Hugo Boss clothes until the workers at the Cleveland plant get back their jobs. Retailers should be asked to stop carrying Hugo Boss products. Investors in the private pension fund Permira should sell their holdings. All of us should stand shoulder to shoulder with the members of Workers United, an affiliate of Service Employees International Union, and help them demonstrate to America, once again, why a strong labor movement is our country’s principal defense against a low-wage economy and economic stagnation. Robert Creamer is a long-time political organizer and strategist, and author of the recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com .

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Randy Whattoff: Never Stop Suing: The Case of the North Face v. Little Jimmy Winkelmann

January 20, 2010

Early last month, outdoor apparel manufacturer the North Face sued college freshman Jimmy Winkelmann and his company, the South Butt, for selling a line of clothing that parodies that of the North Face. Winkelmann sells t-shirts, fleeces, and hats — many of which closely resemble the t-shirts, fleeces, and hats sold by the North Face — featuring a logo that mocks the North Face’s outdoor aspirations. While the North Face logo is “a stylized silhouette of Yosemite’s Half Dome peak,” the South Butt logo, called the “half ass,” is a “stylized silhouette of a rump.” While the North Face’s motto is “Never Stop Exploring,” the South Butt encourages its customers to “Never Stop Relaxing.” The earnest Winkelmann claims he came up with the clothing line in response to the North Face’s ubiquity at his high school. Jimmy found this phenomenon to be rather curious given that his classmates were not of the exploring ilk, purportedly being the market targeted by North Face. He found the sudden collective movement by his peers to own North Face products to be symptomatic of the modern consumer culture. Thus, as an antithesis to North Face, The South Butt was born. The last two weeks have seen a flurry of activity in the case. The North Face, which is represented by two prominent international law firms, is currently seeking a preliminary injunction that would shut down the South Butt until after the case is decided. The South Butt, which is represented by a St. Louis firm specializing in personal injury and securities cases, is moving to have some of the North Face’s allegations stricken from the case. But all this activity begs the question: Why did the North Face sue Winkelmann for his sophomoric clothing line in the first place? As a trademark lawyer, I recognize better than many that trademarks are an important and integral part of our economy and that they need to be protected from infringement. That’s why courts have instituted careful tests to determine when parodies cross the line into trademark infringement. But even when a parody crosses that line, it’s not always a good idea to file a lawsuit. Every lawyer practicing in the Internet age knows that a party must carefully consider the publicity risks when instituting a lawsuit — especially one with facts that are as press-friendly as these. Sure, the South Butt clothing line may inspire an initial guffaw, but it’s a one-note joke that is unlikely to outlive Winkelmann’s junior year. By suing Winkelmann, the North Face has given Winkelmann tremendous publicity — the lawsuit brought so many new people to the South Butt’s online store that the website crashed. And not only is the North Face’s lawsuit driving customers to the South Butt, it’s also alienating North Face’s own customer base. Does the North Face really want to inspire comments like the following from Winkelmann’s blog: SUPPORTIVE MOM OF A COLLEGE STUDENT ALSO IN MISSOURI. HANG IN THERE! THIS IS SO GREAT… HEARD ABOUT IT ON THE NEWS THIS A.M. AND I AM GOING TO BUY ONE FOR EVERYONE IN MY FAMILY! That’s at least one Mom who won’t be sending her college students back to school with backpacks from the North Face. Putting aside whether the North Face made the right decision when it initiated this lawsuit, the North Face has not helped itself my taking several legal missteps along the way. First, the North Face has clearly taken the wrong tone in its legal papers. For instance, their Complaint reads like a PR brochure: The North Face is a company built from the dreams of two young hiking enthusiasts. In 1966, they founded a small store in San Francisco where they designed and sold mountaineering equipment and apparel. They named their store “The North Face” — evoking a mountain’s north face, generally considered the most difficult face to climb. This sort of press-friendly language is common in high-profile complaints — but the North Face took this way too far. This PR language only sets up the North Face as even more of a Goliath. Winkelmann, not to be outdone in the rhetoric department, has fired back: The parties in this case are a subsidiary of a self-described “$7,000,000,000.00 plus powerhouse” and a college freshman. Plaintiff states in its Motion that Jimmy stands to lose “nothing more than profits.” Pursuit of the American Dream, freedom of speech, freedom of choice for consumers, and marketplace competition are all at stake. Apparently Winkelmann can get carried away too. But not only did the North Face’s papers take the wrong tone, they also had awful timing. According to Winkelmann: Plaintiffs filing of its Complaint on December 10, 2009 proved to be the most opportune time to file in order to generate the most pre-holiday media attention for Defendants during what is traditionally the busiest shopping season of the year. In effect, Plaintiff generated a market demand for The South Butt products. Do these missteps mean the South Butt is likely to prevail in the case? At least the first round — the preliminary injunction hearing — will probably belong to the South Butt. As a general matter, courts dislike granting preliminary injunctions because injunctions can have devastating effects before any trial on the merits. For instance, the North Face’s requested injunction would shut down the South Butt for months, and the South Butt might never recover. Courts thus require a party seeking a preliminary injunction to show, among other things, (1) a threat of irreparable harm if the injunction is not granted, and (2) a likelihood that the moving party will eventually prevail on the merits of the case. In trademark cases, irreparable harm is often presumed by the Court because of the nature of trademarks. But here the South Butt has a powerful argument that the presumption should not apply: although the North Face filed suit in December, it apparently knew about the South Butt products for months beforehand. This delay substantially undermines the North Face’s argument that it is now being irreparably harmed.

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Abdulmutallab Was Singled Out for Questioning Upon Landing, Official Says

January 7, 2010

By Jeff Bliss and Roger Runningen Jan. 7 (Bloomberg) — U.S. border agents spotted possible extremist links of the Nigerian man accused of trying to blow up a Detroit-bound airliner and had singled him out to be questioned when the plane landed, an administration official said. In a routine check of passengers scheduled to arrive in the country, Customs and Border Protection officers discovered Umar Farouk Abdulmutallab was in a federal database of people who may have ties to terrorists and decided to interview him before allowing him admission to the U.S., said the official, who spoke on condition of anonymity. Still, Abdulmutallab wasn’t on the terrorist watch list or among the individuals the U.S. bars from flying, which is why he wasn’t stopped before he got on the Northwest airlines plane in Amsterdam on Dec. 25, the official said. The failure to put Abdulmutallab on the “no-fly” list even though other information about him was known to intelligence agencies is one of the missteps President Barack Obama said resulted in authorities not detecting the 23-year-old as a threat. Changes Promised The administration plans to release a preliminary report today prepared by Obama’s counterterrorism adviser, John Brennan , and Homeland Security Secretary Janet Napolitano about the government’s mistakes in the case. Obama has promised changes in security and intelligence procedures. He is scheduled to give remarks on the security review this afternoon. The president’s statement, originally scheduled for 1 p.m. Washington time, was delayed twice and now is planned for 4:30 p.m. The public will feel “a certain shock” when the report is made public, White House National Security Adviser James Jones said in an interview with USA Today. White House Press Secretary Robert Gibbs in an interview said the “president will talk about systemic failures and take responsibility for it” in his remarks today. Obama said on Jan. 5 that everyone on his security team has “taken responsibility” for the failure to “integrate and understand” the available intelligence. No one has resigned or been fired so far, and Gibbs said yesterday that no personnel changes were imminent. Abdulmutallab was indicted yesterday by a federal grand jury in Detroit on six counts, including attempted murder. Authorities said he tried to destroy the plane carrying 290 people by using chemicals hidden under his clothing. The material failed to explode. Collecting Information The Central Intelligence Agency said it learned about Abdulmutallab in November when his father went to the U.S. Embassy in Nigeria to seek help in finding him. Obama said Jan. 5 that some parts of the U.S. intelligence community were aware that Abdulmutallab had traveled to Yemen and linked up with extremists there. Other elements of the U.S. intelligence network knew that an al-Qaeda-affiliated group in Yemen was working with an individual to strike American targets, he said. Abdulmutallab was on the government’s Terrorist Identities Datamart Environment, or TIDE , list which has about 550,000 names of those with possible terrorist links. That was what prompted customs officials to decide to question him upon arrival. He hadn’t been moved to a terrorist watch list, or to the “selectee” list of about 14,000 names that triggers additional screening at airports, or to the “no-fly” list, which has about 4,000 names. U.S. lawmakers have questioned why Abdulmutallab’s visa wasn’t revoked after he was first linked to terrorist groups. Yemeni Account Yemeni and U.K. officials are trading charges over where Abdulmutallab was recruited by extremists. A senior Yemeni official said “deficiencies” in intelligence-sharing by the U.S. and Britain allowed Abdulmutallab to return to the country last August and where he went to an al-Qaeda camp in the Rafadh Valley in the southern province of Shabwa. Deputy Premier for Defense and Security Affairs Rashad al- Alimi said Yemeni authorities weren’t aware that Abdulmutallab was listed in a U.S. database of people with possible extremist links or on a U.K. watch list. “If we had information about his extremist connections, he would have been placed on the blacklist and consequently would not be allowed to enter Yemen,” the Yemeni minister told reporters during a news conference in the capital, Sana’a. Time in Yemen The Nigerian spent one year studying Arabic in Sana’a between 2004 and 2005, al-Alimi said. He wasn’t part of any extremist group at the time and didn’t show “any tendencies or behavior reflecting extremist ideas,” he said. He lived in Britain from 2005 to 2008, where he studied engineering and business at University College London . He returned to Yemen last August and went to the al-Qaeda camp, al- Alimi said. The camp was bombed in an air strike on Dec. 24, according to the minister. Obama has said Abdulmutallab was trained and equipped by an al-Qaeda group in Yemen. Al-Alimi said Abdulmutallab was recruited by the extremist group while he was in London, an allegation disputed by British officials as well as Abdulmutallab’s family and friends. In addition to ordering the report, Obama said he has directed department and agency chiefs to provide specific recommendation to fix the shortcomings exposed by the attempted terrorist attack. The U.S. also is stepping up screening of air passengers bound for America from 14 countries including Algeria, Pakistan, Saudi Arabia and Nigeria, putting more explosives detection teams at airports, and dispatching more air marshals on flights. As part of the new procedures, visa information will be included in State Department warnings on people with suspected terrorist ties. To contact the reporter on this story: Jeff Bliss in Washington jbliss@bloomberg.net ; Roger Runningen in Washington at Runningen@bloomberg.net

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Abdulmutallab Indicted on Six Charges in Christmas Day Airline Bomb Plot

January 6, 2010

By Andrew M. Harris and Margaret Cronin Fisk Jan. 6 (Bloomberg) — Umar Farouk Abdulmutallab , the Nigerian man accused of trying to destroy a Northwest Airlines plane carrying 290 people on Christmas Day, was indicted by a federal grand jury on six counts including attempted murder. The U.S. said Abdulmutallab, 23, tried to trigger an explosion on Flight 253 from Amsterdam using chemicals hidden under his clothing as it approached Detroit Dec. 25. Passengers and crew restrained him until the aircraft landed. Failure to stop the attack before it happened prompted U.S. President Barack Obama to order a review of the nation’s intelligence gathering and sharing, as well as a tightening of airport security measures. In addition to attempted murder, Abdulmutallab is accused in today’s indictment of attempting to use a weapon of mass destruction, willfully trying to wreck an aircraft, placing a destructive device upon an aircraft, and two counts of possession of a firearm in furtherance of a crime of violence. Miriam Siefer, Abdulmutallab’s attorney, declined to comment. Jonathan Tukel, federal prosecutor on the case, said an arraignment date hasn’t been set. A bond hearing scheduled for Jan. 8 may be postponed, he said in an interview. He declined to comment further. The U.S. Central Intelligence Agency said it learned about Abdulmutallab in November when his father went to the U.S. Embassy in Nigeria to seek help in finding him. Government List Abdulmutallab was on the government’s Terrorist Identities Datamart Environment, or TIDE, list which names about 550,000 individuals with possible terrorist links. He hadn’t been moved to a terrorism watch list, or to the “selectee” list of about 14,000 names that triggers additional screening at airports, or to the “No Fly” list of about 4,000 names, according to Janet Napolitano , the U.S. Secretary of Homeland Security. U.S. lawmakers have questioned why Abdulmutallab’s visa allowing him to travel to the U.S. wasn’t revoked after he was first linked to terrorist groups. Obama said the nation’s intelligence agencies should have thwarted the attack before Abdulmutallab smuggled explosives onto the jet at Amsterdam’s Schiphol Airport. “This was not a failure to collect intelligence, it was a failure to integrate and understand the intelligence that we already had,” the president said after a Jan. 5 meeting with top advisers at the White House. Evidence indicates that Abdulmutallab was trained and equipped by a Yemeni group affiliated with the al-Qaeda terrorist network, the president said. Obama’s administration has ordered additional screening for air passengers bound for the U.S. from 14 countries including Algeria, Pakistan, Saudi Arabia and Nigeria. He also said the government will increase explosives-detection teams at airports and air marshals on flights. Other new procedures include visa information included in State Department warnings it sends about people with suspected terrorist ties. The case is U.S. v. Adbulmutallab, 10-cr-20005, U.S. District Court, Eastern District of Michigan (Detroit). To contact the reporters on this story: Andrew M. Harris at the U.S. Courthouse in Detroit at aharris16@bloomberg.net ; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net .

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Housing Starts in U.S. Increased 8.9% in November to 574,000 Annual Pace

December 16, 2009

By Bob Willis and Timothy R. Homan Dec. 16 (Bloomberg) — Housing starts in the U.S. rose in November and a gauge of consumer prices was unchanged, supporting forecasts for an economic recovery that will generate little inflation. Builders broke ground on 574,000 homes at an annual rate in November, an 8.9 percent increase from the prior month, the Commerce Department said in Washington. A Labor Department report showed consumer prices excluding food and energy were unchanged, compared with a median forecast for a 0.1 percent increase in a Bloomberg News survey of 79 economists. Permits for future construction climbed to the highest level in a year, signaling builders expect sales to rise as homebuyers are lured by lower prices, tax credits and mortgage rates near record lows. Federal Reserve policy makers meeting today indicated the recovery is gaining strength and repeated a pledge to keep the benchmark interest rate almost at zero for an “extended period.” “The housing market is stabilizing at very low levels, which of course is better than plunging,” said Harm Bandholz , an economist at UniCredit Research in New York who correctly forecast no change in the so-called core consumer-price index. “Core inflation will continue to trend lower. The Fed does not want mortgage rates to rise right now or in the near future.” The Standard & Poor’s 500 Index was up 0.4 percent to 1,112.58 at 2:42 p.m. in New York. The S&P’s Supercomposite Homebuilding Index rose 4.3 percent to 240.56. Projected Gain Housing starts matched the median estimate of 78 economists surveyed by Bloomberg News and followed a 10 percent drop the prior month. The government revised October’s reading down to a 527,000 pace from the 529,000 previously estimated. Building permits increased to a 584,000 pace, the highest level since November 2008, from 551,000 the prior month. Permits were forecast to rise to 570,000. Toll Brothers Inc. , the largest U.S. luxury homebuilder which reported a 42 percent surge in fiscal fourth-quarter orders, is anticipating a gradual recovery in the market, said Chief Executive Officer Robert Toll during a Bloomberg Television interview on Dec. 11. “There is a pretty good reservoir of pent-up demand,” he said in New York City. “We don’t know how fast we’re coming back, but we do know we’re coming back.” Weather Factor Favorable weather may have played a role in boosting construction last month, said Patrick Newport , an economist at IHS Global Insight in Lexington, Massachusetts. November was the third warmest in 115 years of record keeping, according to the National Climatic Data Center, giving builders an opportunity to keep working. By contrast, October was the wettest in the past century. President Barack Obama’s extension last month of a first- time homebuyers’ tax credit of as much as $8,000 until April 30 will also give builders reason to speed up projects over the next couple of months. Any sustained recovery will require gains in employment, economists said. The economy has lost 7.2 million jobs since the recession began, and economists surveyed by Bloomberg early this month forecast joblessness will average 10 percent next year. Fed Chairman Ben S. Bernanke , in comments Dec. 7 at the Economic Club of Washington, listed a weak labor market and tight credit as among the “formidable headwinds” that he said would probably “keep the pace of expansion moderate.” Fed policy makers today kept their benchmark overnight lending rate between banks in range of zero and 0.25 percent, where it has been for a year. Shelter, Clothing The so-called core consumer price index that excludes food and energy showed no increase last month for the first time this year, restrained by a drop in rents and cheaper clothing. Overall, consumer prices rose 0.4 percent, matching economists’ forecasts and up from a 0.3 percent gain in October, today’s Labor Department report showed. Compared with a year earlier, consumer prices were up 1.8 percent. Core prices rose 1.7 percent from November 2008, matching the year-over-year gain in October. After rising 4.1 percent in November, fuel costs have retreated so far this month, and comments from companies such as Best Buy Co. indicate unemployment close to a 26-year high is prompting retailers to discount merchandise. Computer Discounts Best Buy, the largest electronics retailer, said yesterday that its fourth-quarter gross profit rate will be lower than anticipated because of discounted laptop computers and $299.99 flat-screen TVs to attract customers. Construction of single-family houses, which accounted for 84 percent of the industry last month, increased 2.1 percent to a 482,000 rate. Work on multifamily homes, such as townhouses and apartment buildings, jumped 67 percent to an annual rate of 92,000. All four regions showed a gain in starts in November, led by a 16 percent increase in the Northeast. A separate Commerce Department report today showed the U.S. current-account deficit widened to $108 billion in the third quarter from a seven-year low of $98 billion in the previous three months, reflecting a larger shortfall in trade as imports rose faster than exports. To contact the reporters on this story: Bob Willis in Washington bwillis@bloomberg.net ; Timothy R. Homan in Washington at thoman1@bloomberg.net

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Mike Bonifer: Tiger’s Unplayable Lie

December 16, 2009

Six years ago, after playing hooky from work on a Friday to watch The Best Golfer in the World play nine holes at Riviera Country Club, I wrote this about him for my company’s blog: Tiger hit one shot that I will remember for a long time, one of the best I’ve ever seen. 220 yards from the green after an errant drive, out of deep rough, he hit a high draw inches to the right of a big tree ten yards in front of him, inches to the left of two bigger trees 30 yards farther up, a couple of feet over a bunker fronting the green, to within ten feet of the pin. People in the gallery ooohed and aaahed and applauded, then gathered around the divot he made in the rough like so many TV cops peering down at a murder victim. “Look at how long it is,” they muttered of the divot. “Look how wide he took his swing path.” “Did you see how hard he went down after it? Damn!” And… His focus is the most intimidating thing about his game. There is an unshakeable calmness to him that you don’t see in the other pros. Earl named him well, because he plays golf like a big cat stalking its prey. The confidence he has in the inevitability of his success is absolute. And… And yet…and yet…it’s strange to stand near another human being and not sense any more humanity in him than you would in a thoroughbred in the paddock at Santa Anita. What makes us vital–all that brawling, longing, laughing, crying, hurting and loving–all that bitching and moaning and mucking around most of us do on a daily basis-is bad for a person’s golf game. And so none of it seems to be part of Tiger’s make-up. He is, on the golf course anyway, inhuman. Today, the Eldrick “Tiger” Woods story, scripted for him by his father, Earl, since before he was born, is falling apart quicker than a 20-handicapper’s swing on the back nine of the club championship. In two weeks, Tiger has gone from paragon to pariah, and has proved beyond a shadow of a doubt that a brand can no longer script the humanity out of its narrative and expect the world to play along. In the billion-channel cosmos of the Networked World, sooner or later reality will outflank any brand’s ability to script and control its story the way brands could when there were three TV networks and a couple of major newspapers to be reckoned with, and story material was limited to what happened inside the ropes at Riviera. As this is written, the Tiger Woods brand burns out of control like a California wildfire, and embers from Tiger’s Inferno have landed on the roofs of Nike, Gatorade, Gillette and Accenture, and they’re in flames, too. Buick’s house of straw (did anybody ever really believe Tiger drove a Buick?) is probably burned beyond salvaging. What’s fueling this fire isn’t the the commonplace tabloid fodder of marital infidelity, it’s not about whether you side with a justly aggrieved wife or forgive a superstar his transgressions. This story is much bigger than that. It is a story as old as Achilles, the story of a hero’s fall from grace. It’s in our nature to want to see a story completed. Tiger’s story will hold the audience’s attention at least until the downfall is assured, the disgrace complete. The light at the end of Tiger’s tunnel–and the hope for any brand that has lost its way–is that the journey does not have to not end with the fall from grace. It may be impossible for the audience to turn away from a tragedy, but what the audience turns to of its own volition, and embraces more fervently than anything, is the hero’s return. As Joseph Campbell chronicles in Hero With A Thousand Faces , ‘falling to the Temptress(es)’ is one of many twists in the journey toward true heroism. Tiger Woods can redeem himself in the eyes of his audience, but he’s got to want to be an authentic hero, not one playing a role that has been scripted for him. Here are five productive moves he (or any other burning brand) can make in that direction: 1. Accept the Unplayable Lie. For you non-golfers, a Lie is Unplayable when the ball is in a position where not even Tiger Woods can take a productive swing at it. At that point, you’ve just got to accept the penalty and play on. This is the situation in which Tiger finds himself today. There is no excuse that will satisfy. No spin that can put the scandal to rest. He’s got no swing at this one. He’s got to cop to being a pig and a dog and apologize with more than words for whatever hurt his family, and get on with whatever’s next. Too many brands waste time talking about how or whether to play the unplayable lie, instead of quickly agreeing that it’s unplayable. They will consult with caddies and seek ruling from judges. They will pull different clubs out of the bag. They will check the wind. They will roll up their pants legs and walk into the hazard. Sometimes, they will even go all Van De Velde (for you golf fans) and take a stupid swing at the ball and make things much, much worse. And all along, the best thing would’ve been to simply accept the penalty and play on. 2. Be entrepreneurial. I always thought Tiger missed an opportunity when he signed with Nike for so much of his gear. Nothing against signing with Nike for the clubs, shoes and whatever, but giving them the clothing line, too, turned him into their mannequin. Nike dresses him like a second grader in a private school. His golf clothes are billboards with swooshes. He could be wearing clothes designed by people like Bill Johnson’s Transient label in D.C., or eco-friendly brands like Nau or Vital Hemptations . Small businesses of all kinds need help these days, and Tiger is just the guy to give it to them. He can help take a small minority-owned solar energy company national. He can sign with up-and-coming companies as sponsors, and not charge them a dime. Instead, he can own equity in them. This will have the added benefit of re-energizing the fan base, as pulling for Tiger will mean that you are pulling for a host of deserving upstart companies, too. The hero’s journey requires allies along the way. 3. Embrace your Cablinasianism. Tiger has made a big deal about being what the brand calls ‘Cablinasian.’ Caucasian-Black-Indian-Asian. Okay cool. But the scripted Tiger only explores a very narrow strand of that, the strand that is privileged, plays a lot of golf, owns a yacht and apparently hits on anyone carrying a cocktail tray. All brands can tap creative energy by exploring their multiculturalism. Tiger’s ethnic makeup is one thing besides being a great golfer that can differentiate the brand, but he has to show the audience what Cablinasian means beyond the clever cosmetic of a made-up word. 4. Be a supporting player for a change. From the time he was born, Tiger Woods has seldom been in a scene in which he was not the star. His father basically abandoned his other children to focus on young Eldrick. By age two, Tiger was on national television hitting golf balls. When he was a junior, he played with the grown-ups, when he was in college, he played with the pros, as a pro, he plays against the history of the game itself. That is a pretty lonely path. He needs to focus on sharing the narrative with others for awhile. This does not mean going into hiding. It means consciously taking a backseat in someone else’s scene. Raise your children. Work with your charities. Find a protégé to coach. In the Networked World, we are measured every bit as much by what we contribute to others as by what we amass for ourselves. No brand is an island. 5. Get better at something you’re bad at. We all develop go-to moves. If you are good at something, and receive a ton of approval and money for doing it, what is your motivation for doing anything else? Here is your motivation: In the Networked World, the narrative is not only multi-channel, it is multi-dimensional. Relying on your go-to move has the effect of limiting your brand’s value, because it limits the dimensions of the brand that have the potential to improve and grow. When you have won the Masters by 12 strokes and the U.S. Open by 15 and are probably The Greatest Golfer Who Ever Lived, golf is not an area of growth. It is a flat line at best. The growth areas are the dimensions of the brand that have not yet been explored. For Tiger Woods, this could probably mean just about anything other than playing golf and getting girls’ numbers, so there is a lot of room for growth. And growth is the only way out of this. Mike Bonifer is the author of GameChangers–Improvisation for Business in the Networked World .

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Mike Bonifer: Tiger’s Unplayable Lie

December 16, 2009

Six years ago, after playing hooky from work on a Friday to watch The Best Golfer in the World play nine holes at Riviera Country Club, I wrote this about him for my company’s blog: Tiger hit one shot that I will remember for a long time, one of the best I’ve ever seen. 220 yards from the green after an errant drive, out of deep rough, he hit a high draw inches to the right of a big tree ten yards in front of him, inches to the left of two bigger trees 30 yards farther up, a couple of feet over a bunker fronting the green, to within ten feet of the pin. People in the gallery ooohed and aaahed and applauded, then gathered around the divot he made in the rough like so many TV cops peering down at a murder victim. “Look at how long it is,” they muttered of the divot. “Look how wide he took his swing path.” “Did you see how hard he went down after it? Damn!” And… His focus is the most intimidating thing about his game. There is an unshakeable calmness to him that you don’t see in the other pros. Earl named him well, because he plays golf like a big cat stalking its prey. The confidence he has in the inevitability of his success is absolute. And… And yet…and yet…it’s strange to stand near another human being and not sense any more humanity in him than you would in a thoroughbred in the paddock at Santa Anita. What makes us vital–all that brawling, longing, laughing, crying, hurting and loving–all that bitching and moaning and mucking around most of us do on a daily basis-is bad for a person’s golf game. And so none of it seems to be part of Tiger’s make-up. He is, on the golf course anyway, inhuman. Today, the Eldrick “Tiger” Woods story, scripted for him by his father, Earl, since before he was born, is falling apart quicker than a 20-handicapper’s swing on the back nine of the club championship. In two weeks, Tiger has gone from paragon to pariah, and has proved beyond a shadow of a doubt that a brand can no longer script the humanity out of its narrative and expect the world to play along. In the billion-channel cosmos of the Networked World, sooner or later reality will outflank any brand’s ability to script and control its story the way brands could when there were three TV networks and a couple of major newspapers to be reckoned with, and story material was limited to what happened inside the ropes at Riviera. As this is written, the Tiger Woods brand burns out of control like a California wildfire, and embers from Tiger’s Inferno have landed on the roofs of Nike, Gatorade, Gillette and Accenture, and they’re in flames, too. Buick’s house of straw (did anybody ever really believe Tiger drove a Buick?) is probably burned beyond salvaging. What’s fueling this fire isn’t the the commonplace tabloid fodder of marital infidelity, it’s not about whether you side with a justly aggrieved wife or forgive a superstar his transgressions. This story is much bigger than that. It is a story as old as Achilles, the story of a hero’s fall from grace. It’s in our nature to want to see a story completed. Tiger’s story will hold the audience’s attention at least until the downfall is assured, the disgrace complete. The light at the end of Tiger’s tunnel–and the hope for any brand that has lost its way–is that the journey does not have to not end with the fall from grace. It may be impossible for the audience to turn away from a tragedy, but what the audience turns to of its own volition, and embraces more fervently than anything, is the hero’s return. As Joseph Campbell chronicles in Hero With A Thousand Faces , ‘falling to the Temptress(es)’ is one of many twists in the journey toward true heroism. Tiger Woods can redeem himself in the eyes of his audience, but he’s got to want to be an authentic hero, not one playing a role that has been scripted for him. Here are five productive moves he (or any other burning brand) can make in that direction: 1. Accept the Unplayable Lie. For you non-golfers, a Lie is Unplayable when the ball is in a position where not even Tiger Woods can take a productive swing at it. At that point, you’ve just got to accept the penalty and play on. This is the situation in which Tiger finds himself today. There is no excuse that will satisfy. No spin that can put the scandal to rest. He’s got no swing at this one. He’s got to cop to being a pig and a dog and apologize with more than words for whatever hurt his family, and get on with whatever’s next. Too many brands waste time talking about how or whether to play the unplayable lie, instead of quickly agreeing that it’s unplayable. They will consult with caddies and seek ruling from judges. They will pull different clubs out of the bag. They will check the wind. They will roll up their pants legs and walk into the hazard. Sometimes, they will even go all Van De Velde (for you golf fans) and take a stupid swing at the ball and make things much, much worse. And all along, the best thing would’ve been to simply accept the penalty and play on. 2. Be entrepreneurial. I always thought Tiger missed an opportunity when he signed with Nike for so much of his gear. Nothing against signing with Nike for the clubs, shoes and whatever, but giving them the clothing line, too, turned him into their mannequin. Nike dresses him like a second grader in a private school. His golf clothes are billboards with swooshes. He could be wearing clothes designed by people like Bill Johnson’s Transient label in D.C., or eco-friendly brands like Nau or Vital Hemptations . Small businesses of all kinds need help these days, and Tiger is just the guy to give it to them. He can help take a small minority-owned solar energy company national. He can sign with up-and-coming companies as sponsors, and not charge them a dime. Instead, he can own equity in them. This will have the added benefit of re-energizing the fan base, as pulling for Tiger will mean that you are pulling for a host of deserving upstart companies, too. The hero’s journey requires allies along the way. 3. Embrace your Cablinasianism. Tiger has made a big deal about being what the brand calls ‘Cablinasian.’ Caucasian-Black-Indian-Asian. Okay cool. But the scripted Tiger only explores a very narrow strand of that, the strand that is privileged, plays a lot of golf, owns a yacht and apparently hits on anyone carrying a cocktail tray. All brands can tap creative energy by exploring their multiculturalism. Tiger’s ethnic makeup is one thing besides being a great golfer that can differentiate the brand, but he has to show the audience what Cablinasian means beyond the clever cosmetic of a made-up word. 4. Be a supporting player for a change. From the time he was born, Tiger Woods has seldom been in a scene in which he was not the star. His father basically abandoned his other children to focus on young Eldrick. By age two, Tiger was on national television hitting golf balls. When he was a junior, he played with the grown-ups, when he was in college, he played with the pros, as a pro, he plays against the history of the game itself. That is a pretty lonely path. He needs to focus on sharing the narrative with others for awhile. This does not mean going into hiding. It means consciously taking a backseat in someone else’s scene. Raise your children. Work with your charities. Find a protégé to coach. In the Networked World, we are measured every bit as much by what we contribute to others as by what we amass for ourselves. No brand is an island. 5. Get better at something you’re bad at. We all develop go-to moves. If you are good at something, and receive a ton of approval and money for doing it, what is your motivation for doing anything else? Here is your motivation: In the Networked World, the narrative is not only multi-channel, it is multi-dimensional. Relying on your go-to move has the effect of limiting your brand’s value, because it limits the dimensions of the brand that have the potential to improve and grow. When you have won the Masters by 12 strokes and the U.S. Open by 15 and are probably The Greatest Golfer Who Ever Lived, golf is not an area of growth. It is a flat line at best. The growth areas are the dimensions of the brand that have not yet been explored. For Tiger Woods, this could probably mean just about anything other than playing golf and getting girls’ numbers, so there is a lot of room for growth. And growth is the only way out of this. Mike Bonifer is the author of GameChangers–Improvisation for Business in the Networked World .

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CIT Group Bankruptcy Approaches After Striking Icahn, Goldman Sachs Deals

October 30, 2009

By Pierre Paulden and Linda Shen Oct. 31 (Bloomberg) — CIT Group Inc. , the 101-year old commercial lender seeking to avoid collapse, may file for a prepackaged bankruptcy as soon as this weekend after striking deals with billionaire Carl Icahn and Goldman Sachs Group Inc. A prepackaged bankruptcy “is probably going to go through,” Icahn said yesterday. He will supply a $1 billion loan for “supplemental liquidity” that can be used as bankruptcy financing, the New York-based company said. CIT also said it reached an agreement with Goldman Sachs to keep a credit line open should the lender file for court protection. The accords were disclosed the day after a deadline passed for CIT to solicit votes in support of either a $30 billion out- of-court debt exchange or a prepackaged bankruptcy . CIT is seeking to reduce debt by at least $5.7 billion after being locked out of credit markets it relies on for funding and posting nine quarters of losses totaling more than $5 billion. “CIT has gotten its ducks in a row for filing,” Adam Steer , an analyst with CreditSights Inc. in New York, said in a telephone interview. “They can hopefully get out of the bankruptcy court faster, which may be better for debt recoveries.” Under the prepackaged plan, CIT bondholders will get 70 cents on the dollar in the form of new notes and equity in the reorganized company. If CIT is forced into a “free-fall” bankruptcy, unsecured claims may fetch as little as 6 cents on the dollar, according to Jeffrey Peek , the company’s chief executive officer. $4.5 Billion Loan CIT arranged a $4.5 billion term loan that can be used in bankruptcy, the company said Oct. 28. The lender said “through the substantial deleveraging featured in CIT’s restructuring plan, whether completed in or out of court, the company is confident that CIT will emerge as a strong bank-holding company with improved capital, liquidity and earnings potential.” CIT spokesman Curt Ritter declined to comment yesterday. While CIT said it’s still counting the more than 150,000 ballots, bond and credit-default swap prices show that investors are betting the lender will file for court protection. Since Peek started the debt swap Oct. 1, the company’s notes due Nov. 3 dropped 12 cents to 68 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Holders of the $500 million in notes were offered 90 cents on the dollar in new debt and equity in an out-of-court exchange that expired at 11:59 p.m. in New York on Oct. 29. Bondholder Protection The cost to protect CIT debt against default for five years has risen 4.5 percentage points to 38.5 percent upfront since Sept. 30, according to CMA DataVision. That means it would cost $3.85 million initially and $500,000 annually to protect $10 million of CIT bonds from default for five years. The cost of the credit-default swaps implies that traders have priced in an 85.5 percent chance that the company will default within five years, a standard pricing model used by Bloomberg shows. The model assumes investors could recover 40 cents on the dollar in a bankruptcy proceeding. CIT dropped 23 cents, or 24 percent, to 72 cents in New York Stock Exchange composite trading yesterday. The shares, which traded at more than $61 each in February 2007, have declined 84 percent this year. If the prepackaged plan is approved, the company plans to file for bankruptcy before $800 million of bonds mature next week, according to people familiar with the situation who declined to be identified because the talks are private. Noteholder Control Icahn, 73, who says he’s CIT largest bondholder with $2 billion of its debt, initially opposed CIT’s plan, contending the investments were worth more in a traditional bankruptcy. The New York-based investor proposed this week to buy CIT holders’ bonds for 60 cents on the dollar in a tender offer lasting 30 days if they rejected the plan. CIT’s agreement to “give control to the noteholders” and an accelerated process for appointing directors “significantly improve corporate governance and cash flow protections, and are positive for the company and all noteholders,” Icahn said in a statement yesterday, explaining why he changed his vote in favor of the prepackaged bankruptcy. “The board in general acted responsibly by saying, ‘We’re willing to do this.” Icahn said in a telephone interview. Icahn also said he’s changing the terms of the tender offer for bondholders who voted against the prepackaged bankruptcy. “Whether or not the Exchange Offer/Prepackaged Plan fails, they will still be protected at $600 per note for 30 days,” the statement said. Icahn’s Goals “Icahn had two goals in mind: Influence over the board and participation in the expansion loan facility,” said Kevin Starke , an analyst at CRT Capital Group LLC in Stamford, Connecticut, said in a telephone interview. “He’s won on both counts.” CIT finances about 1 million businesses from Dunkin’ Brands Inc. in Canton, Massachusetts, to Eddie Bauer Holdings Inc., the clothing chain in Bellevue, Washington, that’s operating under bankruptcy protection. The company says it’s the third-largest U.S. railcar-leasing firm and the world’s third-biggest aircraft financier. Icahn Associates Corp. is the largest shareholder of American Railcar Industries Inc. , which depended on CIT for 31 percent of its business as of June 30, according to data compiled by Bloomberg. Icahn is chairman of the St. Charles, Missouri-based railcar maker. CIT’s agreement with New York-based Goldman Sachs will reduce a $3 billion credit facility to $2.13 billion and keep the line open should CIT file for bankruptcy. Goldman Sachs Agreement In exchange, Goldman Sachs received $285 million in termination fees, CIT said yesterday in a filing with the U.S. Securities and Exchange Commission. Under the terms of the two companies’ original agreement, Goldman Sachs would have been due a $1 billion termination payment to close the credit line after a CIT bankruptcy. The agreements should make the bankruptcy process easier by removing opposition to the bondholder plan, Michael Taiano , an analyst at Sandler O’Neill & Partners LP said in a telephone interview. “They’re effectively in control and there’s not really a bankruptcy judge that has to approve everything,” he said. “It creates less disruption to the business because you’re in bankruptcy a shorter period of time.” To contact the reporters on this story: Pierre Paulden in New York at ppaulden@bloomberg.net ; Linda Shen in New York at lshen21@bloomberg.net

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CIT Accords With Icahn, Goldman Sachs Pave Way for Prepackaged Bankruptcy

October 30, 2009

By Linda Shen and Pierre Paulden Oct. 30 (Bloomberg) — CIT Group Inc. , the 101-year old commercial lender seeking to avoid collapse, paved the way for a pre-packaged bankruptcy after reaching agreements with billionaire Carl Icahn and Goldman Sachs Group Inc. Icahn, who says he’s CIT largest bondholder, will supply a $1 billion loan to provide “supplemental liquidity” for CIT’s restructuring that can be used as bankruptcy financing, the New York-based company said today in a statement. Earlier today, CIT said it reached a deal with Goldman Sachs to keep a credit line open should the lender file for court protection. A deadline passed last night for CIT to solicit votes in support of a $30 billion out-of-court debt exchange, or pre- packaged bankruptcy. Under the pre-packaged plan, CIT bondholders will get 70 cents on the dollar in the form of new notes and equity in the reorganized company. If CIT is forced into a “free-fall” bankruptcy, unsecured claims may fetch as little as 6 cents on the dollar, according to CIT Chief Executive Officer Jeffrey Peek . The prepackaged bankruptcy “is probably going to go through now,” Icahn, who says he owns $2 billion of CIT debt, said today in a telephone interview. “The board in general acted responsibly by saying, ‘We’re willing to do this.’” CIT arranged a $4.5 billion term loan that can be used as bankruptcy financing, the company said Oct. 28. While CIT said it’s still counting ballots, bond and credit-default swap prices show that investors are betting the lender will file for court protection. Notes Fall Since Peek started the debt swap Oct. 1, the company’s notes due Nov. 3 dropped 12 cents to 68 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Holders of the $500 million in notes were offered 90 cents on the dollar in new debt and equity in an out-of-court exchange that expired at 11:59 p.m. yesterday in New York. The cost to protect CIT debt against default for five years has risen 4.5 percentage points to 38.5 percent upfront since Sept. 30, according to CMA DataVision. That means it would cost $3.85 million initially and $500,000 annually to protect $10 million of CIT bonds from default for five years. The cost of the credit-default swaps implies that traders have priced in an 85.5 percent chance that the company will default within five years, a standard pricing model used by Bloomberg shows. The model assumes investors could recover 40 cents on the dollar in a bankruptcy proceeding. Icahn initially opposed CIT’s plan, contending the investments were worth more in a traditional bankruptcy. The New York-based investor proposed this week to buy CIT holders’ bonds for 60 cents on the dollar in a tender offer lasting 30 days if they rejected the plan. Still Protected CIT’s agreement to “give control to the noteholders” and accelerated process for appointing directors “significantly improve corporate governance and cash flow protections, and are positive for the company and all noteholders,” Icahn said in a statement today, explaining why he changed his vote in favor of the pre-packaged bankruptcy. Icahn also said he’s changing the terms of the tender offer for bondholders who voted against the pre-packaged bankruptcy. “Whether or not the Exchange Offer/Prepackaged Plan fails, they will still be protected at $600 per note for 30 days,” the statement said. Dunkin’ Brands “Icahn had two goals in mind: Influence over the board and participation in the expansion loan facility,” said Kevin Starke , an analyst at CRT Capital Group LLC in Stamford, Connecticut, said in a telephone interview. “He’s won on both counts.” CIT finances about 1 million businesses from Dunkin’ Brands Inc. in Canton, Massachusetts, to Eddie Bauer Holdings Inc., the clothing chain in Bellevue, Washington, that’s operating under bankruptcy protection. The company says it’s the third-largest U.S. railcar-leasing firm and the world’s third-biggest aircraft financier. Icahn Associates Corp. is the largest shareholder of American Railcar Industries Inc., which depended on CIT for 31 percent of its business as of June 30, according to data compiled by Bloomberg. Icahn is chairman of the St. Charles, Missouri-based railcar maker. CIT shares dropped 23 cents, or 24 percent, to 72 cents as of 4:01 p.m. in New York Stock Exchange composite trading. The shares have declined 84 percent this year. Goldman Sachs Agreement CIT’s agreement with New York-based Goldman Sachs will reduce a $3 billion credit facility to $2.13 billion and keep the line open should CIT file for bankruptcy. In exchange, Goldman Sachs received $285 million in termination fees, CIT said today in a filing with the U.S. Securities and Exchange Commission. Under the terms of the two companies’ original agreement, Goldman Sachs would have been due a $1 billion termination payment to close the credit line after a CIT bankruptcy. The agreements should make the bankruptcy process easier, Michael Taiano , an analyst at Sandler O’Neill & Partners LP said in a telephone interview. “They’re effectively in control and there’s not really a bankruptcy judge that has to approve everything,” he said. “It creates less disruption to the business because you’re in bankruptcy a shorter period of time.” To contact the reporters on this story: Pierre Paulden in New York at ppaulden@bloomberg.net ; Linda Shen in New York at lshen21@bloomberg.net

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Stocks in U.S. Decline as Merck’s Drop Outweighs Rising Technology Shares

August 28, 2009

By Elizabeth Stanton Aug. 28 (Bloomberg) — U.S. stocks declined as investors sold companies whose earnings are least tied to the economy and falling oil prices dragged down energy shares. Wal-Mart Stores Inc., AT&T Inc. and McDonald’s Corp. declined as makers of consumer goods, drugmakers and phone companies posted some of the steepest drops in the Standard & Poor’s 500 Index. Exxon Mobil Corp. was the biggest drag on the index as crude erased earlier gains. Intel Corp. and Dell Inc. led technology shares to the only gain among 10 industries in the S&P 500. The S&P 500 lost 0.6 percent to 1,024.52 at 12:59 p.m. in New York after rising as much as 0.8 percent amid a rally in global stocks. The main benchmark for American equities gained seven of the past eight days and closed yesterday at the highest since Oct. 6. The Dow Jones Industrial Average fell 72.33 points, or 0.8 percent, to 9,508.3, dropping for the first time in nine days. “People are perhaps considering shifting from playing defense to playing offense,” said Lawrence Creatura , a money manager at Federated Clover Investment Advisors, which oversees $2 billion in Rochester, New York. “The offensive playbook says sell staples, sell safety, sell large-caps generically.” Makers of telephone equipment and drugs and suppliers of household goods failed to keep pace with the S&P 500 as it rebounded from a 12-year low on March 9, according to data compiled by Bloomberg. They also trailed the benchmark gauge for U.S. equities as it doubled between 2002 and 2007, with so- called consumer-staples providers climbing 40 percent and drugmakers increasing by 41 percent. Worst Performers McDonalds , the world’s largest restaurant company, fell 1.3 percent to $55.95. AT&T, the biggest U.S. phone company, dropped 0.9 percent to $26.19. Wal-Mart, the world’s largest retailer, declined 0.4 percent to $51.02. The companies are among the six worst-performing stocks in the Dow average during its six-month, 46 percent rally. Merck, maker of the asthma and allergy treatment Singulair, fell 2 percent to $32.22, leading healthcare companies to the biggest decline among the 10 industry groups in the S&P 500. “What’s doing poorly is what I’d consider defensive-type names,” said Nick Kalivas , a market analyst at MF Global Ltd. in Chicago. Exxon Mobil fell 1.1 percent to $70.09. Crude oil for October delivery fell as much as 1 percent to $71.78 a barrel. Intel Rises Intel rose 4 percent to $20.25, the biggest percentage gain in the Dow average , and had the biggest positive influence on the S&P 500. Third-quarter sales will be at least $8.8 billion, Intel said in a statement today. That compares with at least $8.1 billion the company projected last month. The company also increased its gross-margin forecast for the period. Dell, the world’s second-biggest maker of personal computers, climbed 2 percent to $15.96, a 10-month high. Dell reported second-quarter profit excluding some item of 28 cents a share on $12.76 billion of revenue. The average analyst estimates in a Bloomberg survey were profit of 22 cents a share on $12.59 billion of sales. Dell’s gross margin also beat estimates. Tiffany & Co. and J. Crew Group Inc. also beat analyst estimates for profit and sales. Tiffany, the world’s second- largest luxury jeweler, rose 8.5 percent to $36.61. J.Crew Group, the clothing retailer, advanced 6 percent to $34.74. “You have companies truly showing improvement, not just earnings getting better because of cost-cutting, but showing top-line revenue growth,” said Michael Mullaney , a money manager at Fiduciary Trust Co. in Boston, which manages $9 billion. More than 72 percent of S&P 500 companies have beat the average analyst estimate for second-quarter earnings, matching the highest proportion since Bloomberg began tracking the data in 1993. Novell Inc. fell the most in the S&P 500, losing 6.6 percent to $4.40. The maker of Linux operating-system software posted adjusted quarterly profit of 7 cents a share, missing the average analyst estimates by 4.1 percent, according to data compiled by Bloomberg News. To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net .

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Natalie Holder-Winfield: When Comedy Meets Workplace Diversity

August 18, 2009

Last week, as I was piecing together a diversity training presentation, I came across my “Two Wongs Don’t Make a White” slide. This corny play on words was used as a t-shirt graphic by the clothing company Abercrombie & Fitch in the earlier part of this decade. Thank goodness those t-shirts didn’t get much play and were dragged off of the market, along with Abercrombie’s image as an equal opportunity employer. (The retailer has also faced failure to hire and promote discrimination lawsuits.) Although the retailer, today, is making an effort to redeem itself, I couldn’t help but wonder what they were thinking when they exposed the market to those t-shirts. Have the lines of culturally insensitive jokes been so drastically moved that even a large retailer doesn’t know the difference between wrong and right? With the advent of diversity and multi-culturalism, many of the invisible racial barriers in society are slowly fading away thanks, in part, to entertainment. With Justin Timberlake and Amy Winehouse producing some of the best R&B music, it’s hard to have white radio stations and black radio stations. Reality television shows openly parade mixed race-couples, making them less of a taboo or head turner. Comedians, especially, have been the greatest catalysts for making other cultures less mysterious by lifting the lid off of what were once private inside jokes. You have Rex Navarrette openly joking about Filipino time (that is, being 20 minutes late to everything). George Lopez pokes fun at his Latino brothers and sisters on HBO specials and his network television show. Larry the Cable Guy gives Northern urbanites comedic insight to redneck life. What happens when people at work decide to re-tell a joke they heard from Navarrette, Lopez, or Larry? Is it ok to laugh at or make a joke about another race, culture, or religion? These were the questions underlying my reasons for not watching the Dave Chappelle show. Now, I never started a mass boycott against the show, but I was vocal about why I didn’t tune in. While I never judged anyone for watching the show, I just couldn’t support a show that profusely overuses the “N” word on national television. I felt that his show, which was written by a multi-racial staff, could be used to defend the use of the “N” word. I knew that some would argue that the word had evolved to the point where it was no longer an offensive racial epithet to denigrate black people and could be used by any and everyone. I was not ready for that level of evolution. Comedy is tricky. The same slurs, epithets, and offensive language that comics use to get laughs, can create disrespect in the workplace, school and in other social settings. I’m sure that some snarky designer at Abercrombie & Fitch probably thought he or she was appealing to the public’s sense of humor about Asians with the hideous “Wong” t-shirts. As Abercrombie reminds us, context matters. Material that works in a nightclub often falls flat in the office.

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Video: Harvard Sells Name to Designer Clothing Line

August 7, 2009

“Harvard Yard” Will Feature $200 Trousers and Other Luxury Clothing Items (Bloomberg News)

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Video: Harvard Sells Name to Designer Clothing Line

August 7, 2009

“Harvard Yard” Will Feature $200 Trousers and Other Luxury Clothing Items (Bloomberg News)

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Inflation-Fighting May Stay Focus of South Africa’s Central Banker Marcus

July 19, 2009

By Nasreen Seria and Janice Kew July 20 (Bloomberg) — Gill Marcus , who will replace Tito Mboweni as South African central bank governor, is likely to keep the inflation-targeting policy that led labor unions to demand Mboweni’s removal. President Jacob Zuma yesterday named Marcus to replace Mboweni, 50, who has led the South African Reserve Bank since 1999. Marcus, 59, will take over Nov

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Urban Outfitters Will Consider Lending to Its Vendors Should CIT Collapse

July 19, 2009

By Allison Abell Schwartz July 17 (Bloomberg) — Urban Outfitters Inc. , the clothing and housewares retailer, may consider providing short-term financing to some of its vendors should CIT Group Inc

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