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Week Ahead: A Flood Of 2Q Earnings

by on July 15, 2011

When they’re not fretting over the nation’s credit rating, investors next week will be dissecting second-quarter earnings reports and keeping tabs on key housing data. Corporate earnings have been strong throughout 2011, fueling stock market growth. But those results  haven’t translated into support for the broader U.S. economy. Companies that stripped down during the worst of the recent financial crisis seem to be doing more with less. Consequently, with the economy still in flux, they’re in no hurry to expand their businesses and hire new employees. Shareholders have benefited and workers’ 401k programs are being replenished, but U.S. unemployment remains stubbornly high. Bellwether companies set to report their quarterly results next week, according to Reuters, include IBM (NYSE:IBM), Halliburton (NYSE:HAL), Charles Schwab ( NASDAQ :SCHW) and Gannett (NYSE:GCI) on Monday; Apple (NASDAQ:AAPL), Bank of America (NYSE:BAC), Bank of New York Mellon (NYSE:BK) Coca-Cola (NYSE:KO), Goldman Sachs (NYSE:GS), Johnson & Johnson (NYSE:JNJ) and Wells Fargo (NYSE:WFC) on Tuesday; American Express (NYSE:AXP), eBay (NASDAQ:EBAY), and Intel (NASDAQ:INTC) on Wednesday; Chubb Corp . (NYSE:CB), Microsoft (NASDAQ:MSFT), and Travelers (NYSE:TRV) on Thursday; and Caterpillar (NYSE:CAT) and General Electric (NYSE:GE) on Friday. On the housing front, the July NAHB/Wells Fargo Housing Market Index is due Monday. The June data on housing starts and permits is due Tuesday. The National Association of Realtors will release data on sales of existing homes on Wednesday. Housing data was dreadful throughout the spring and economists are hoping the numbers start to tick upward, although there’s no pressing reason to believe they will. Housing prices are still tumbling and inventories are still overflowing with foreclosed homes. Potential buyers are sitting on the sidelines wondering how low prices will fall before they should step in. It will be a slow week for economic data, but not barren. The Philadelphia Fed’s Business Outlook for July and the Conference Board’s Leading Economic Indicator for June are both due Thursday. Meanwhile, of course, the debate over raising the debt ceiling and how best to rein in future deficits will go on in Washington, D.C.

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Week Ahead: A Flood Of 2Q Earnings

Olivier Blanchard: What I Learnt in Rio: Discussing Ways to Manage Capital Flows

by on June 3, 2011

Huffington Post…

Last week I traveled to Rio de Janeiro in Brazil to participate in a conference on managing capital flows. Organized jointly by the Brazilian authorities and the IMF, the conference brought together experts from both the demand and supply sides of the issue, including many with a wealth of hands-on experience. The discussion was rich and informative. Clearly we still have a lot to learn about the optimal approach to managing capital flows, about the right policy tools, and the right combination of tools. To start with two general, but important observations. First, while the issue of capital controls is fraught with ideological overtones, it is fundamentally a technical one, indeed a highly technical one. Put simply, governments have five tools to adjust to capital flows: monetary policy, fiscal policy, foreign exchange intervention, prudential tools, and capital controls. The challenge is to find, for each case, the right combination. This is not easy . Second, we need to better understand the costs and benefits of capital flows. The costs depend — more than is generally understood — on the institutional framework in each country: things like the exchange rate regime, the degree of dollarization of the economy, and the credibility of the central bank. Even costs related to ‘ Dutch Disease ‘ — the bogeyman still much in the minds of policy-makers — are in fact not well established. Over the past 18 months, we at the IMF have done some rethinking about the nature of the risks capital flows may bring, and how best to respond. The most recent research attempts to develop a conceptual framework to weigh the benefits of different policy responses, including capital controls. Like the re-examination of many economic principles in the wake of the global crisis, this work is just the beginning of a conversation. The Rio conference highlighted the importance of consulting and debating the issues more broadly, particularly with financial sector experts who understand and influence intermediation, but also with academics and outside researchers. The conference gave me a better appreciation of the universe of issues, and of the outreach and research still to do. I took 32 pages of notes during the conference; I will not impose them on you, but here are some highlights. On the nature of flows… Looking at the relevant set of investors suggests higher flows to emerging markets are here to stay. This is the “new normal,” and is based on a ” fundamental re-rating of global risk ” in favor of emerging market assets with better fundamentals and higher returns. But, it remains to be seen whether, for example, the new appetite of foreign investors for local currency debt comes from a durable shift in demand, or the more temporary expectation of appreciation. The nature of specific investors must inform the policy choices. We often think of inflows and outflows as coming from primarily from decisions by foreign investors. The reality is that many of these inflows and outflows often come from decisions by domestic investors . When this is the case, targeting nonresidents is largely misguided. On the policy options… None of the tools — be they reserve accumulation, prudential measures, or capital controls — are water-tight . So we should move away from strict policy orderings toward a more fluid approach of using “many or most of the tools most of the time” instead of “this now, that later.” It is not clear that the diversity of approaches we observe in practice comes from different circumstances, or from suboptimal responses. It was interesting to observe, for example, that Chile relies on foreign exchange intervention, not on capital controls, but India, instead, relies on capital controls, not on foreign exchange intervention. Are these corner solutions really optimal? There were many other important technical issues beyond these and I’d encourage you to read some of the interesting presentations by the participants and speakers, including remarks by Professor Jagdish Bhagwati, on the Rio conference website . There were some issues that I would like to have seen explored more fully. One was the multilateral angle. As my IMF colleague Min Zhu said in his opening remarks , “ensuring that countries reap the full benefits of capital flows is a shared responsibility between advanced and emerging market economies, between surplus and deficit countries, between capital-exporters and capital-importers.” The challenge is to translate this into practice. What is the actual responsibility of source countries? Should they take it into account in conducting monetary policy, and if so, how? Should we worry about the “beggar thy neighbor” effect of controls? Some of the evidence presented at the conference suggested that these spillovers across recipient countries were not very large. Theoretical and further empirical work is badly needed here. Nor did we have an opportunity to revisit, or even discuss, the current wisdom on capital account openness. In light of new research, what should we be telling policy-makers, those with mostly open and those with mostly closed capital accounts? Should Chile and China eventually converge to the same point along the continuum? And, if so, at what rate? We cannot avoid coming to views on this fundamental issue. Overall, our discussions in Rio were a positive step toward a more constructive, updated approach, away from the contentious legacy of the capital controls debate. We look forward to continuing the conversation as we work with members to find a way toward the right combination of policies. From iMFdirect blog

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Olivier Blanchard: What I Learnt in Rio: Discussing Ways to Manage Capital Flows

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In Weak Economy, Americans Still Avoiding Doctors

June 3, 2011

NEW YORK (Lewis Krauskopf) – Americans’ use of medical services has not yet rebounded during the weak economy, health insurers say, in a trend that keeps the companies’ costs down and could bolster their profits further this year. Low healthcare utilization was a major reason behind the health insurers posting first-quarter profits well above analyst forecasts earlier this year. The companies have been factoring increases into their pricing for their plans, but executives at an investor conference this week said utilization continued to stay low. “Medical costs have not come back to trend levels we anticipated,” UnitedHealth Group Inc CEO Stephen Hemsley told the conference, held by Sanford Bernstein. Hemsley, whose company is the largest U.S. health insurer by market value, said UnitedHealth continued to believe that medical cost trends will return “to more normal levels.” “But to date whether it’s driven by economic trends or whatever, the medical costs continue to trend to be more moderate,” Hemsley said. Since the economic downturn, Humana Inc CEO Mike McCallister said, “utilization dropped a little bit and it has actually stayed there.” Historically, McCallister said, some health insurers have failed to anticipate a rebound in medical costs, and priced plans too low — hurting results and investor confidence. “The utilization is still relatively softer than we would have expected, no one knows when and if it is going to come back,” McCallister said. “We’re basically assuming that it’s coming back because we’re not going to miss that uptick.” Some analysts have suggested that the lower-than-expected utilization is a more fundamental change rather than a fleeting one. Due to structural changes in healthcare plans over the years, such as higher co-pays and other fees, consumers have steadily borne more of the healthcare costs. “You can argue whether this economic situation we’re in is long term and is going to have long-term effects and whether it has fundamentally changed something,” McCallister said. “I don’t know. I’m not an economist.” Jay Gellert, CEO of Health Net Inc, which operates plans in the Western United States, said the extended downturn, and its associated job losses, makes this situation more unusual. “Typically, when people come back to work they then use health care services,” Gellert said. “But in California if you’re at 11.5 percent unemployment, I’m not sure that’s the time you think about getting off your job and doing elective procedures.” “And we’re a long ways at least now it seems, from a single-digit unemployment in California, from sub-7 in the U.S., and so I think we may see a longer period of depressed utilization,” Gellert said. However, Gellert said, “there’s always risk on our side that we misjudge utilization.” “Once you miss it, you’re in big trouble,” he said. (Reporting by Lewis Krauskopf; Editing by Gary Hill) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Online Labor Demand Rises To Pre-Recession Levels As Labor Market Slows

June 2, 2011

NEW YORK — The unemployment rate remains high, but online demand for workers has reached levels not seen since before the recession, according to a new report. Online labor demand, as measured by help-wanted advertisements posted on the Internet, rose in May by 148,800 listings to a high of 4.5 million advertised vacancies. That number hasn’t been reached since May 2005, according to the Conference Board , a global independent business membership and research association. The findings mean that as of April, for every three workers out of a job, there is one advertised vacancy. That stands in contrast to the Bureau of Labor Statistics’ latest ratio , which showed approximately four unemployed workers for every opening in March. “Overall, the trend in online advertised vacancies has been positive this year,” said June Shelp, Vice President at the Conference Board and author of the report. But economists, including Shelp, caution to take the Conference Board’s numbers with a grain of salt. The caveat, Shelp said, is that “while we have now returned to the pre-recession levels of labor demand, the big difference today is the larger number of unemployed workers that are seeking jobs compared to four years ago.” Positions advertised online are not a guarantee of employment, and vacancies can take months to fill. Plus, a given vacancy might not be filled by an unemployed worker. In fact,

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CRU 16th World Aluminium Conference To Be Held On 13-15 June In Barcelona, Spain

May 24, 2011

CRU 16th World Aluminium Conference To Be Held On 13-15 June In Barcelona, Spain

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Week Ahead: Housing, Consumer Confidence, GDP

May 20, 2011

Data related to housing, consumer confidence and economic growth will all be eyed next week by investors looking for signs that the U.S. economy is strengthening. The housing sector has been especially slow to rebound after the worst financial downturn in the U.S. since the Great Depression. Analysts believe a full-fledged recovery won’t occur until the housing market hits a bottom. All signs seem to indicate that that hasn’t happened yet. Sales of new single-family homes in April will be released on Tuesday. These homes are competing with a surplus of existing homes put on the market due to record foreclosures . Housing experts say buyers are sitting on the sidelines waiting for prices to fall further, which is good for individual buyers but bad for the nation’s housing market. The March S&P/Case-Shiller Home Price Index will be released on Tuesday and HFA House Price Index on Wednesday. Both indexes are expected to show that home values are still falling. The National Association of Realtor’s Pending Home Sales Index for April is due Friday. Economists are expecting slight improvements at best. In the Northeast, rainy and unseasonably cold weather has cut into sales. On Wednesday home builder Toll Brothers (NYSE:TOL) is expected to report its quarterly earnings and those figures will certainly have an impact on the broader markets. Meanwhile, on Tuesday two Congressional committees will hold hearings important to U.S. consumers. A Senate committee will discuss the future of the housing finance system, and a House committee will hold a hearing on domestic oil and gas production. The second estimate of first-quarter GDP is due Thursday. The preliminary report placed growth at 1.8%, but that number is expected to be revised higher as a result of an increase in consumer spending. Consumer spending comprises 70% of the U.S. economy. April personal income and spending reports are due Friday and are expected to show that incomes rose modestly, while spending was slightly higher. Consumer spending rose in no small part due to increased costs tied to soaring food and energy prices. Final readings for consumer confidence in May are due Tuesday from the Conference Board’s Consumer Confidence Index, and on Friday for the Reuters/University of Michigan Consumer Sentiment Index. Earlier readings showed improved confidence as labor markets seemed to be gaining traction earlier this spring. But revisions my inch downward as higher gas and food prices eat into consumers’ pocketbooks. Among the bellwether companies reporting earnings next week are:

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Frontier Securities To Hold "Mongolia: Capital Raising And Investment" Conference On June 6-10 In Ulaanbaatar

May 17, 2011

Frontier Securities To Hold “Mongolia: Capital Raising And Investment” Conference On June 6-10 In Ulaanbaatar

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John M. Eger: Business and Education Need to Talk

May 12, 2011

More than two years ago, The Conference Board, a major international business research organization, issued a report called “Ready To Innovate: Are Educators and Executives Aligned on the Creative Readiness of the U.S. Workforce?” The report was the first time that the vital link to a creative and innovative economy was made clear, and the road to America’s success and survival was spelled out for all to see — particularly in the business community. In summary, the report asked three questions: “Are U.S. businesses and K-12 school systems making the link between creative skill sets in the workforce and innovation? Are businesses finding the creative talent they need to generate the innovative solutions and products demanded by the marketplace? And what efforts are both of these groups making to train employees in the needed creative skills?” The survey revealed that “both the superintendents who educate future workers and the employers who hire them agree that creativity is increasingly important in U.S. workplaces (99 percent and 97 percent, respectively), and that arts-training — and, to a lesser degree, communications studies — are crucial to developing creativity. Yet, there is a gap between understanding this truth and putting it into meaningful practice. Our findings indicate that most high schools and employers provide such training and studies only on an elective or ‘as needed’ basis.” It also found that “when the discussion turns to instilling creativity in the workforce, the conversation often begins and ends with education…new curricular and teaching approaches are needed…(and) the results from our survey suggest that this responsibility should in fact be shared broadly — by educators, employers, and other interested individuals.” Because of the worldwide spread of technology — particularly the Internet — and the globalization of markets, it is a new ballgame. As Business Week Magazine said almost six years ago: “The game is changing. It isn’t just about math and science anymore. It’s about creativity, imagination, and, above all, innovation.” The fact is, most of the manufacturing jobs were lost over the last 20 years. Now with globalization in full bloom, America is beginning to see the outlines of yet another out-migration of American jobs. Unlike the earlier shift of manufacturing jobs to less developed East Asian countries, the loss of the latest round of high-tech software and service jobs will have dramatic, some say devastating, impacts on America’s economic wealth and well-being. Twenty years ago, it was fashionable to blame foreign competition and cheap labor markets abroad for the loss of manufacturing jobs in the United States, but the pain of the loss was softened by the emergence of a new services industry. Now, it is the service sector jobs that are being lost. This shift of high tech service jobs will be a permanent feature of economic life in the 21st century. Today, the demand for creativity has outpaced our nation’s ability to create enough workers simply to meet our needs. Our schools and our businesses need to rethink the needs of the nation, and rethink the important roles of creativity and innovation. Are we ready to innovate as the Conference Board asks? Frankly, I have been following these issues for several years — more acutely lately. I have seen some action and heard some concerns but, as they say, the jury is still out. I guess I am one of those “glass-is-half-full” guys and am guardedly optimistic.

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Ben Mangan: Fintech Leaves Fake-o-nomics Behind

May 12, 2011

This week, the future of money came to San Francisco as the conference Finovate Spring 2011 unfolded in SOMA. After two days of hearing many excellent pitches from scores of visionary entrepreneurs in the financial tech (fintech) industry, five things became clear: 1. A seismic shift is underway in the way financial products services will be offered to people and the way in which people will use them. The surge of innovation here in the Bay Area in fintech will radically and permanently change norms around transacting, saving, spending and investing. 2. These innovations tend to be better for consumers, and reflect some new values from financially related businesses that are far more populist than we’ve seen in generations. Like all good entrepreneurs, the folks at Finovate built products and services that fix things that are broken. America knows broken money systems all too well, and we’re still trying to clean up the shattered pieces of our badly flawed financial system. Many of the innovations here represent a much better deal for consumers to save, transact, invest and learn. 3. The vast majority of the new business models pitched at Finovate are actually based in reality. How refreshing! The companies presenting here are not weighed down by the drag of the Rumplestiltskin-style fake-o-nomics that inflate bubbles and generate amusing stories about worthless stock options. 4. Large, old-school financial institutions on Wall Street have a lot to lose to the new wave of consumer friendly offerings, and the new norms emerging at places like Finovate. Wikinvest co-founder Parker Conrad asserted in his pitch that Wikinvest and others might eventually obviate the financial services providers that rely on consumers not paying attention, or having opacity drive revenue in their products. Parker had one of the great quotes of the gathering: “Sunshine is the best antiseptic.” It is certainly toward the top of my list as a way to improve our financial system. 5. Among 850 people attending, there is only one person here from government — from the burgeoning Consumer Financial Protection Bureau — kudos to the CFPB for being here. It’s a big problem that none of their cousins among the regulators, SEC, Treasury and myriad other agencies that care about and influence financial systems, joined them here. If government intends to balance fairness, productivity and opportunity in the marketplace of financial products and services, they need to understand how fintech is changing this marketplace. It’s not too late for them to join the conversation. Finovate gathers again in NYC in the fall.

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Video: Piani Says Allianz May Invest in U.S. Multi-Family Homes

May 3, 2011

May 2 (Bloomberg) — Olivier Piani, chief executive officer of the property unit at Allianz SE, talks about Allianz’s investments in U.S. real estate. He speaks with Carol Massar at the Global Real Estate Markets Conference in New York on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Credit Card Executives Optimistic In Face Of Looming Dodd-Frank Rules

May 2, 2011

MIAMI BEACH, Florida (Maria Aspan) For the first time in years, credit card executives are looking beyond the losses of the financial crisis — and they’re even losing less sleep over the prospect of tighter government oversight. Losses from credit defaults keep falling, an explosion in smartphone payment systems and other technology has raised the prospect of new long-term revenue growth, and executives now believe they can mitigate the effects of the latest regulatory overhaul of the U.S. card industry. “I am optimistic … Nothing has been done that can’t be rolled back quickly,” longtime credit card executive Stephen Eulie said in an interview last week. Eulie, who has worked at JPMorgan Chase & Co and Citigroup Inc, is now the head of First National Bank of Omaha’s card unit, which runs credit card programs for companies, including Chrysler Group LLC. He spoke to Reuters last week on the sidelines of an annual credit card industry conference hosted by the publisher, SourceMedia. As in recent years, much of the conference was dominated by discussion about new regulation — from the lingering effects of a sweeping credit card law passed in 2009, to the so-called Durbin amendment to last year’s Dodd-Frank financial reform law. That provision would slash processing fees merchants pay banks every time a customer uses a debit card to buy something. The fee cuts would cost U.S. banks an estimated $13 billion in annual revenues under rules the Federal Reserve proposed in December. U.S. banks are also struggling to grow other sources of revenue, as consumers resist adding to their credit card balances. Revolving consumer credit fell at an annual rate of 4.1 percent, to $794 billion, in February, according to Fed data. Now banks are increasingly looking to new technology, such as mobile phone and ecommerce payments, to grow businesses in developing countries where people do not regularly use credit and debit cards. Citigroup and American Express Co executives emphasized those opportunities at the conference, using their keynote speeches to discuss new types of payments technology instead of regulation. “We need to figure out ways in which we can grow our business in a way that aligns with what Durbin’s rules are,” former Citigroup credit cards chief Paul Galant, who now runs a new payments group for the bank, told Reuters in an interview. “The cards businesses are incredibly vibrant and power virtually all of us today. These businesses are not going to disappear because of a single law.” CLOUDS CLEARING The Fed was supposed to finalize its rules on debit fee limits a week before the conference, but said in March it needed more time to sort through an overwhelming number of comments on its proposals. The delay has given some bankers and credit card executives hope a broad industry campaign in Washington to repeal or delay the debit fee cuts will ultimately be successful. Opponents of the crackdown are pushing for a vote soon on a proposal from Senator Jon Tester that would delay the rule for two years. While “the odds are looking better for a DC fix, I don’t think it’s something that can be relied upon by the industry, because there are so many procedural hurdles” in Congress, Morgan Stanley analyst Adam Frisch said during a panel discussion at the conference. Key Republican lawmaker Representative Spencer Bachus urged hundreds of small U.S. banks on Monday to “slay the dragons” when they battle Congress over the debit fee crackdown. The debit card fee restrictions are only part of a slew of regulation affecting the payments industry since 2009. A sweeping credit card law passed that year restricted the fees and interest rate changes that lenders could levy on their customers. The Dodd-Frank law of last year also created a new consumer financial protection bureau that is expected to further scrutinize consumer lending practices. Yet the atmosphere — and attendance — at the annual conference was the sunniest in years. About 750 bank employees, consultants and vendors descended on the Fontainebleau resort in Miami Beach, sipping pineapple-flavored water and sharing post-panel cocktails on a patio overlooking the ocean. The crowd included employees of Bank of America Corp, JPMorgan Chase, Citigroup, American Express, MasterCard Inc and Visa Inc, as well as other large U.S. lenders and networks. It was the conference’s best attendance since 2008, when consumers started losing their jobs — and stopped paying credit card bills — in record numbers. As losses surged during the financial crisis, few lenders could afford either the expense or the reputation of sending employees to hobnob at a beach resort with the size and opulence of a French chateau. But last week those employees were eager to talk about new business — and to trade tips for recouping the revenue losses of whatever regulations are finalized. Banks, including JPMorgan Chase and Bank of America, have already started discontinuing perks on debit cards or added fees to checking account services that were once free. As one conference attendee said, the industry is no longer focusing just on how to stop regulations: “Now it’s, ‘How do we get around it?’” The shares of the top six credit card lenders were mixed on Monday, with American Express shares closing up about 1.2 percent and Citigroup closing down about 2.2 percent. (Reporting by Maria Aspan; editing by Andre Grenon) Copyright 2011 Thomson Reuters. Click for Restrictions .

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U.S. Economy Slows To A Crawl — At Least For Now

April 28, 2011

NEW YORK — At least temporarily, the U.S. economy has slowed to a crawl. U.S. gross domestic product — one of the key gauges of overall economic growth -– fell dramatically to 1.8 percent in the first three months of this year after growing at a rate of 3.1 percent at the end of last year, according to figures released by the Commerce Department on Thursday. While some economists argue the quarterly figure could simply be an economic blip caused by harsh winter weather and spiking gas prices, others warn that the recovery could still be a jobless one. A dramatic drop in consumer spending — which makes up roughly 70 percent of economic activity — weighed GDP in the first part of the year. Bad weather hurt construction and limited consumer spending, keeping many Americans away from winter sales in January and February. As the weather improved, soaring gas prices and higher grocery bills limited spending for many people. Consumer spending fell from 4 percent at the end of last year to 2.7 percent at the beginning of this year, according to the Commerce Department figures. “We think the GDP numbers are a little bit of a fluke,” said Nariman Behravesh, chief economist at IHS Global Insight, a financial and economic analysis firm. “There is a disconnect between the GDP numbers and some of the other data on the U.S. economy,” said Behravesh. “The other numbers we’re seeing are more consistent with 4 percent growth than 1.8 percent growth.” Behravesh said he believes growth is already picking up following the low of the first quarter of 2011. GDP numbers often lag behind other data, and revisions of the data released as the Commerce Department gets more information could reveal growth was stronger than thought, he argued. But some of the dropoff in consumer spending in the first part of 2011 was also a function of its relative height at the end of 2010, when U.S. consumers spent in earnest for the first time since the recession. The holiday season, the fact that many people had saved up during the downturn, looser financing for large purchases and even the Federal Reserve’s quantitative easing program pushed personal consumption expenditures to 4 percent for the last quarter of 2010, said Constance Hunter, chief economist at the investment banking firm Aladdin Capital. For the overall year, however, that spending grew by just 1.7 percent, Hunter added. “So if we can maintain anywhere close to the current 2.7 percent rate of growth in 2011, we will be doing much better than in 2010,” said Hunter. “It’s not all a bed of roses, we have higher gas prices,” Hunter said, adding that she didn’t believe they’d stay high, as many were already cutting down on driving , which she argued, would eventually drive demand, and prices down. But, she cautioned, jobless claims for April didn’t bode well for overall unemployment figures. “The problem is the Fed is coming up against the boundary of their effectiveness in terms of generating jobs growth and Bernanke said as much,” she said, referring to the Federal Reserve’s closely watched Wednesday press conference. During the central bank’s first-ever presser, Fed Chairman Ben Bernanke said growth will lag this year as inflation picks up. The Fed also lowered GDP estimates for the entire year to 3.3 percent from 3.9 percent. Even the Fed’s forecast of growth isn’t enough to create a significant number of new jobs, said Josh Bivens, an economist at the Economic Policy Institute, a Washington think tank. “Just to keep our currently high unemployment rate stable, we’ve actually got to put upward pressure on it,” he said. “What it means for people is that it’s not going to get appreciably easier to find a job any time soon unless we start seeing much higher GDP growth numbers.” Other economists argued that there was enough growth to sustain moderate increases in employment, with manufacturing alone growing by 9 percent in the first part of 2011. Unemployment fell to a two-year low of 8.8 percent in March after the economy added 216,000 jobs. Many employers have wrung all the productivity they can out of employed Americans, said Lynn Reaser, chief economist at Point Loma Nazarene University in San Diego. “Companies do need to take on additional employees because otherwise the huge gains in productivity that we saw in 2010 are not sustainable,” she argued. Reaser also cautioned against directly linking GDP and jobs, explaining that the economic impact of various events often lagged behind, and that both growth and employment fluctuated from quarter to quarter. “We’re seeing growth, it’s just disappointing,” said Kathy Bostjancic, director for macroeconomic analysis at the Conference Board, an economic research group. And what little growth there was would be buffeted by major headwinds, like high unemployment and the depressed housing market, she said. Adding to the strain, state and local governments have drastically cut spending, and the same is about to happen nationally, Bostjancic said, with wrangling over the best way to cut spending in Washington. “We’re going to see more contraction at the federal level,” said Bostjancic. Government spending and hiring will be slashed, and industries and jobs dependent on them will also take a hit, she warned.

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Simon Johnson: Could Goldman Sachs Fail?

April 14, 2011

If Goldman Sachs were to hit a hypothetical financial rock, would they be allowed to fail — to go bankrupt as did Lehman — or would they and their creditors be bailed out? I asked this question on Sunday to four leading experts (Erik Berglof, Claudio Borio, Garry Schinasi, and Andrew Sheng) from various parts of the official sector at the Institute for New Economic Thinking (INET) Conference in Bretton Woods — and to a room full of people who are close to policy thinking both in the United States and in Europe.  In both the public interactions (for which you can review video here) and private conversations later, my interpretation of what was said and not said was unambiguous: Goldman Sachs would be bailed out (again).

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Global Green Building China Focus 2011 Conference To Introduce Siemens (NYSE:SI) Green Building Solutions

April 13, 2011

Global Green Building China Focus 2011 Conference To Introduce Siemens (NYSE:SI) Green Building Solutions

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Carl Pope: The End of Incumbent Capitalism?

March 4, 2011

Santa Barbara — While the “Eco:nomics — Creating Environmental Capital” — conference is hosted by The Wall Street Journal , the anti-government bias that dominates the Journal ‘s editorial page was slammed by speaker after speaker, beginning with venture capitalist Vinod Khosla. Khosla went after what he called “incumbent capitalism,” in which government policy and incentives are designed not to encourage competition and innovation, but to protect entrenched incumbent interests, with coal, oil, nuclear, and utility monopolies being the most spectacular beneficiaries of this bias against innovation. Dow Chemical CEO Andrew Liveris, who would seem to represent a well-entrenched incumbent company, then piled on. Liveris, an Australian, has a new book called Make It In America: The Case for Re-Inventing The Economy, which makes the case for bringing America back as a manufacturing power. Liveris concedes that — for weird historical reasons — the term “industrial policy” is too politically toxic to use, but that’s what he’s talking about. Challenged by the Journal ‘s moderator on whether this won’t simply lead to the government wasting money, Liveris pushes back hard, citing China and Germany today and Japan in the 1960s and 70s as models for government intervention that’s essential for economic vibrancy. “Around the world, countries are acting more and more like companies: competing aggressively against one another for business and progress and wealth. Governments are boosting business, creating a climate that attracts and rewards investment, spurs innovation and job creation, and appeals to companies that are less bound by national borders than ever before.” Meanwhile, in the United States, we operate as if little has changed. Our faith in the wisdom of markets may be shaken, but not at a fundamental level. Liveris is not the only incumbent CEO here calling for massive restructuring of the American economy based on government support for innovation. Dupont’s Ellen Kullman warns skeptics that customer interest in the sustainability and greenness of products soared from 2005-2008, and surprisingly did not fall back with the economic crisis. William Clay Ford envisions a very different automobile market driven by electric vehicles. Clean tech entrepreneurs like Solyndra’s Brian Harrison or Suzlon’s Tulsi Tanti are blunt that unless the U.S. government provides stable policy signals for renewables, the supply chain will be driven overseas even more than it has been to date. The most cautious voice is probably AEP’s Mike Morris, but even he concedes that his current inventory of coal plants will not be added to, and that he will undoubtedly retire his units below 500MW. Even Rio Tinto, a mining company with historical coal roots, has shifted its U.S. portfolio to adjust to a low carbon economy they think is inevitable. Matt Rogers of McKinsey, who worked for two years at Department of Energy managing stimulus grants, says the program works: pace of research innovation in the energy sector is far higher than it was two years ago, but now these innovations face the challenge of working through the energy sector’s historically innovation-resistant supply chains. The sharpest edge to the tension between business and the Wall Street Journal ‘s laissez-faire editorial policies came when Kim Strassel repeated her oft-stated concern that if the federal government acted like a venture capitalist and supported research in a wide variety of important but risky innovations, the public would turn against the program because some innovations would fail to pan out. Ray Lane of Kleiner Perkins shot back: “the American people would be fine with it, if you would write about what’s really happening. It’s the media, not the public, that is the problem.” It would have been most instructive for the new members of Congress to spend the day here, listening — because it is very clear that the mainstream business community and clean tech innovators alike are terrified that the Tea Party’s hostility towards the national government constitutes a serious threat to the American economy and the American future. But wonderful as the conference was, I somehow don’t expect its lessons to make their way to the Tea Party caucus in Congress via the WSJ ‘s editorial pages. Indeed, the Journal greeted the last day of the conference by giving the business leaders assembled here an anti-government raspberry, leading with an editorial attack on EPA’s proposed new regulations to clean up emissions from industrial boilers . Business may be getting it. But reactionary ideologues are not.

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Playfair Mining Ltd. (CVE:PLY) Will be Exhibiting in Booth #2351/2353 at the 2011 PDAC Conference in Toronto

February 26, 2011

Playfair Mining Ltd. (CVE:PLY) Will be Exhibiting in Booth #2351/2353 at the 2011 PDAC Conference in Toronto

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Tony Hsieh: Zappos CEO: In Your Next Speech, Just Wing It

February 18, 2011

Excerpted from #1 NY Times Bestseller Delivering Happiness by Zappos CEO Tony Hsieh In the two years leading up to the announcement of the Amazon acquisition, Zappos started getting more and more media coverage. A lot of people assumed that we must have stepped up our PR efforts, but that wasn’t the case at all. We simply continued doing what we had always done: constantly improving the customer experience while simultaneously strengthening our culture. The funny thing is that a lot of the press we got was for things we had first done several years earlier, such as paying employees to quit during their new hire training or occasionally sending flowers to customers. We didn’t intend for any of the things we were doing to end up in the news or on blogs. But every once in a while, a reporter or popular blogger would pick up on something that we were doing, and the story would spread like wildfire. We were as surprised as anyone else by the publicity because it was never planned for on our end. We learned a great lesson: If you just focus on making sure that your product or service continually wows people, eventually the press will find out about it. You don’t need to put a lot of effort into reaching out to the press if your company naturally creates interesting stories as a by-product of delivering a great product or experience. As our media coverage increased, I started receiving more and more speaking requests for different conferences and industry events. One of my first speeches was at the Footwear News CEO Summit in 2005. I remember I was a nervous wreck, because I hadn’t really done much public speaking before. At the time, I agreed to do it because it would be a good opportunity to tell the Zappos story to a lot of footwear vendors we were still trying to establish relationships with. I wrote out my entire speech beforehand, and then spent a month memorizing it and rehearsing it. I couldn’t sleep the night before my speech. It ended up going okay, and I was relieved when it was finally over so I could catch up on my sleep. Even though I didn’t really enjoy the whole experience, it had a very positive impact on our business, so I was glad I had done it. Over the next year, a few more speaking requests started trickling in. I agreed to all of the with a feeling of dread, but I knew they would help build our business and our brand. I also thought that, as uncomfortable as I was with doing them, they were opportunities for me to grow both personally and professionally. Like anything else in life, I figured that public speaking was just a skill that required practice on a regular basis. Each speech I gave was just another practice session. During my first year of public speaking, I was diligent about writing out my speeches beforehand and memorizing them. It took a lot of time to do, and I would never sleep well the night before my talks. Sometimes, while giving the speech, I would accidentally skip over or forget a sentence or an entire paragraph, which would leave me temporarily flustered on stage as I racked my brain trying to remember the lines I had practiced the night before. With each speech, I found myself slowly improving. But I still didn’t enjoy the actual speaking itself. Even though my speaking was helping build the Zappos brand, I thought that maybe I just wasn’t meant to be a public speaker because I was so uncomfortable with the process, even after having done it for a year. And then one day, I had an epiphany. I realized that nobody knew what I had written down beforehand. Nobody would ever know if I skipped a sentence, a paragraph, or even an entire section. I had also noticed that while people appreciated the content of my speeches, they generally commented about two things afterward. They told me they really enjoyed the personal stories, and they said that, even though many of them had already read about Zappos in the press, it made a huge difference to actually hear it come from me. They told me they could really feel my passion for company culture, customer service, and Zappos in general. So, for my next speech, I tried a completely different approach. I decided not to memorize or rehearse anything. I would just wing it and see what happened. I knew I had a lot of stories I could choose from on the fly to tell, and I knew that as long as I stuck to topics I was passionate and knowledgeable about — customer service and company culture — that I would have plenty of material to draw from to fill the time. When I finally got on stage, I still had some jitters for the first minute or two as I adjusted to the audience and the room. After that, the time just flew by. The audience was more engaged than they had been in my previous talks. I even managed to get some unexpected laughs from moments in my stories when I was just trying to tell a story instead of trying to recite lines from a script I’d written. I would later learn that I had achieved the state of flow . In his book by the same name, researcher Mihaly Csikszentmihalyi describes flow as a type of happiness, in which someone loses sense of time, self-consciousness, and even self. That’s exactly what happened to me. From that point forward, I used the same formula for all of my speeches and found that most of the rest of the stuff that I used to worry about usually just fell into place. I just went by three basic rules for my talks: 1. Be passionate. 2. Tell personal stories. 3. Be real. I made the mistake once of agreeing to speak at a conference about a topic that I wasn’t actually passionate about. Even though I knew all the content inside and out, I wasn’t able to speak passionately, so my performance turned out to be only okay. But it was a good learning experience. Today, whenever I’m invited to speak somewhere, I let them know that I will only speak about certain subjects, which may or may not match the overall theme of the conference. I then leave it up to the conference organizers to decide whether they are okay with that or not. Usually they are fine with it, but occasionally not. In those instances, no matter how much money the conference is offering to pay Zappos and no matter how good an opportunity it would be for Zappos to be exposed to that audience, I always do the same thing. I politely decline.

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World Elites Gather For Davos Conference

January 23, 2011

Amid high unemployment and concerns over a mounting sovereign debt crisis, some of the world’s top leaders, thinkers and business titans are gathering once again in Davos, Switzerland for the World Economic Forum’s annual meeting. We’ll be compiling the latest updates from the Davos meetings here, including the best tweets, video, news from the conference and blog posts. Check back here regularly for updates from the event which runs from Jan. 26 – 30.

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Avalon Rare Metals Inc. (TSE:AVL) Presenting At Vancouver Critical Metals Investment Symposium And Resource Investment Conference

January 20, 2011

Avalon Rare Metals Inc. (TSE:AVL) Presenting At Vancouver Critical Metals Investment Symposium And Resource Investment Conference

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Mesoblast (ASX:MSB) And Cephalon (NASDAQ:CEPH) Alliance Highlighted At JP Morgan Healthcare Conference

January 11, 2011

Mesoblast (ASX:MSB) And Cephalon (NASDAQ:CEPH) Alliance Highlighted At JP Morgan Healthcare Conference

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Stocks Are Surging Since Announcement Of Fed’s Plan

December 17, 2010

Is the Fed’s latest gamble working? The stock market’s 17% rise since Federal Reserve chairman Ben Bernanke announced his plans for a second round of quantitative easing in late August has sparked further speculation that the economy may be on its way to recovery. Bernanke’s push to reinvigorate the economy through a massive, $600 billion series of government debt purchases has been met with mixed responses. Though the move (dubbed QE2, for quantitative easing) is meant to boost employment and lower interest rates, others fear the possibility that it will instead fuel inflation. As its doubled its pre-crisis balance sheet to more than $2.3 trillion , the Fed’s low interest rates and debt-buying programs have done much to enrich corporate coffers. But the program’s effect on the larger economy is less clear. Still, the stock market has surged. This week, the S&P rose to its highest level since September 2008, hitting 1,242.87, which has prompted optimism in some analysts. “The market has positive momentum and it really has been a momentum story since late August,” said Katie Stockton, the chief market technician at MKM Partners , an institutional equity research, sales and trading firm. Stockton noted that her estimate for the S&P’s next high was 1315, if momentum continued. However, the rise in interest rates since QE2 was unveiled has others less convinced. It’s not clear, for one, whether or not the stock market’s rise is due to merely to sentiment — or an economy that’s actually on the mend. “It provides some support to growth,” said Dean Baker, the co-director of the Center for Economic and Policy Research , of quantitative easing. “The recent runup has been slightly more positive news.” But Baker did not take the recent stock market climb to be a major positive indicator for the economy. “There’s always a fair degree of indeterminacy of where the market should be,” he said. “The market is relatively low level in the scheme of things.” Holiday spending, however, is up, a sign that consumers may be ready to spend again. A spokesperson for the National Retail Federation predicted that there will be a 3.3% growth in retail sector this November and December. Further, a survey of leading economic indicators by the Conference Board , a private industry group, rose by 1.1 percent, its highest rate in eight months. “The U.S. economy is showing some sparks of life in late 2010,” said Ken Goldstein, an economist at The Conference Board. Yet despite positive trends in the stock market and spending, unemployment numbers remain high. The nationwide unemployment rate rose to 9.8 percent from 9.6 percent in November, according to the Department of Labor .

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Stocks Are Surging Since Announcement Of Fed’s Plan

December 17, 2010

Is the Fed’s latest gamble working? The stock market’s 17% rise since Federal Reserve chairman Ben Bernanke announced his plans for a second round of quantitative easing in late August has sparked further speculation that the economy may be on its way to recovery. Bernanke’s push to reinvigorate the economy through a massive, $600 billion series of government debt purchases has been met with mixed responses. Though the move (dubbed QE2, for quantitative easing) is meant to boost employment and lower interest rates, others fear the possibility that it will instead fuel inflation. As its doubled its pre-crisis balance sheet to more than $2.3 trillion , the Fed’s low interest rates and debt-buying programs have done much to enrich corporate coffers. But the program’s effect on the larger economy is less clear. Still, the stock market has surged. This week, the S&P rose to its highest level since September 2008, hitting 1,242.87, which has prompted optimism in some analysts. “The market has positive momentum and it really has been a momentum story since late August,” said Katie Stockton, the chief market technician at MKM Partners , an institutional equity research, sales and trading firm. Stockton noted that her estimate for the S&P’s next high was 1315, if momentum continued. However, the rise in interest rates since QE2 was unveiled has others less convinced. It’s not clear, for one, whether or not the stock market’s rise is due to merely to sentiment — or an economy that’s actually on the mend. “It provides some support to growth,” said Dean Baker, the co-director of the Center for Economic and Policy Research , of quantitative easing. “The recent runup has been slightly more positive news.” But Baker did not take the recent stock market climb to be a major positive indicator for the economy. “There’s always a fair degree of indeterminacy of where the market should be,” he said. “The market is relatively low level in the scheme of things.” Holiday spending, however, is up, a sign that consumers may be ready to spend again. A spokesperson for the National Retail Federation predicted that there will be a 3.3% growth in retail sector this November and December. Further, a survey of leading economic indicators by the Conference Board , a private industry group, rose by 1.1 percent, its highest rate in eight months. “The U.S. economy is showing some sparks of life in late 2010,” said Ken Goldstein, an economist at The Conference Board. Yet despite positive trends in the stock market and spending, unemployment numbers remain high. The nationwide unemployment rate rose to 9.8 percent from 9.6 percent in November, according to the Department of Labor .

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EURUSD Capped by the 200-Day SMA Ahead of the ECB Rate Decision, Trichet Press Conference

December 1, 2010

EURUSD Capped by the 200-Day SMA Ahead of the ECB Rate Decision, Trichet Press Conference

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Avalon Rare Metals (TSE:AVL) Exhibiting at The San Francisco Hard Assets Investment Conference November 21 and 22, 2010

November 21, 2010

Avalon Rare Metals (TSE:AVL) Exhibiting at The San Francisco Hard Assets Investment Conference November 21 and 22, 2010

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Hannah Peaker: If Women Ran the World

October 23, 2010

What’s the one thing that could bring ExxonMobil, Harvard University, Pfizer, and the former Prime Minister of Canada together? I know this sounds like the start of a bad joke, but the answer is no joke: they came together to discuss how to tap into the now better-educated half of the population — women. Nearly 150 years since Elizabeth Cady Stanton warned at the Women’s Suffrage Convention in Washington that “society is but the reflection of man himself,” 150 people gathered at the Harvard Kennedy School this weekend to be told the very same thing. Although women outperform men in education, they continue to be under-represented in positions of power. Women make up 47% of the US labor force but only 3% of Fortune500 CEOs, and more than half of the US population but only 17% of elected representatives in Congress. Far from dwelling on the persistence of the global gender gap, however, this conference * sought to close it. Marie Wilson, founder and Director of The White House Project, called on participants to “come up with things that can be done.” With that she passed the baton from our slightly tired and weary change veterans to the men and boys in India who are ringing the door bells of their neighbors to interrupt the domestic violence they hear through the walls, and the female entrepreneur in Norway who is pairing experienced women with corporate boards. Against the backdrop of 90′s power ballad Wind of Change, Professor Iris Bohnet, Director of the Women and Public Policy Program at Harvard Kennedy School, asserted that the business case is ripe. She declared that we are now armed with an arsenal of interventions that go beyond the purely moral claim and focus instead on the social and economic value of diversity. This resonated with me. As a young student I have analyzed the Gender Gap from every available angle and carved it up into such small segments that I am in danger of trivializing it. Therefore, the opportunity to be able to say, simply, “there is a greater return on investment in women” is not to be taken lightly. At the least, it invites a new audience — the conference was packed full of private sector representatives, eager to hear how their businesses might access this emerging talent pool. The business case is comprised of social, political and economic evidence, and applies to individuals, groups and organizations. There are elements that are more intuitive — increased gender equality in households, markets and society leads to poverty reduction and economic growth for everyone. And some striking new evidence too — having women on boards is related to the financial performance of companies, and diversity can lead to better performance and decision-making in groups. Certainly, the research points quite clearly to a “diversity bonus” where companies and government alike can no longer afford not to hire the best talent — and that includes women too. The conference explored a range of new and innovative ways to help companies close their gender gaps. For example, a study by Iris Bohnet, Alexandra van Geen and Max Bazerman of Harvard showed that if you evaluate male and female candidates for a given job at the same time (rather than one at a time), interviewers are less likely to focus on gender than past performance. The result is that the more qualified candidate is selected, regardless of their gender. Gender equality nudges such as these have great appeal because they are cheaper and less intrusive than government or market interventions. A stickler for the moral argument, I admittedly found it hard to get into the flow of these almost callous efficiency arguments. Reluctant to surrender to those who want women because its smart institutional design rather than because it’s the right thing to do, I wondered what would happen to feminism if we departed from the ethical standpoint. But there was something in those women that took the stage and implored us to hurry history, who asked us not to be sitting here in three years time asking what we can do. Addressing the conference, Professor Rosabeth Moss Kanter of Harvard Business School asserted that “if women ran the world, the world would already have changed to allow women to run it.” We now have measurements that we didn’t have before, we have the success stories, we have the initiatives and are analyzing their impact. This year the US climbed 12 places to enter the top 20 in the Global Gender Gap Report for the first time. Our world is ever-changing, and it is up to us to “nudge” it in the right direction. * Closing the Gender Gap: The Business Case for Organizations, Politics and Society, hosted by the Women and Public Policy Program at Harvard Kennedy School in partnership with Council of Women World Leaders and World Economic Forum.

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Mesoblast Limited (ASX:MSB) Presented Positive Results From Phase 2 Lumbar Fusion Trial At International Investor Conference

October 20, 2010

Mesoblast Limited (ASX:MSB) Presented Positive Results From Phase 2 Lumbar Fusion Trial At International Investor Conference

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Mesoblast Limited (ASX:MSB) Presented Positive Results From Phase 2 Lumbar Fusion Trial At International Investor Conference

October 20, 2010

Mesoblast Limited (ASX:MSB) Presented Positive Results From Phase 2 Lumbar Fusion Trial At International Investor Conference

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Video: Greenspan Says U.S. Dollar Still Strong Despite Economy: Video

October 8, 2010

Oct. 8 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said the U.S. would have to do “very considerable damage” to the dollar as a unit of exchange to threaten its investment appeal. Greenspan spoke yesterday at the FX10 Conference in New York sponsored by Bloomberg LP, the parent of Bloomberg News. Erik Schatzker reports. (This is an excerpt. Source: Bloomberg)

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Video: Greenspan Says U.S. Playing `Dangerous Game’ on Stimulus: Video

October 8, 2010

Oct. 8 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said the U.S. is involved in a “dangerous game” with its stimulus strategy. Greenspan spoke yesterday at the foreign-exchange FX10 Conference in New York sponsored by Bloomberg LP, the parent of Bloomberg News. Erik Schatzker and Deirdre Bolton report. (Source: Bloomberg)

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Peter Shankman: Five Ways to Not Screw up Your Networking Attempts

October 4, 2010

I was at a conference this weekend in Las Vegas — It’s bad enough to fight with the recycled air, the perfumed-at-50-degrees conference rooms, and the endless fried foods that pass for “healthy,” but you add in 200 people who have absolutely no clue how to network, and it’s enough to make you pull an Ocean’s Eleven and sneak out of the hotel in an ambulance. Here are the top five ways to not screw up your next networking opportunity. 1) Networking doesn’t begin when you get to the conference, it begins the second you leave your house. Anyone is a potential hiring manager, client, or customer. True story: I was behind a real jackass at a ticket counter for an international flight last year. At one point, he actually had the nerve to say “Well, I work for company XYZ (A big global company), and I can make sure that we never give you any business again if you don’t fix my problem,” or something just as arrogant. At that point, the person behind me walked up to him, and said quietly “What’s your name?” The arrogant slob said “Why do you care, pal?” To which the first gentleman said “Because I’m senior executive vice president at [said big global company,] and I won’t have anyone sullying our good name with their petty bullshit.” I’m pretty sure the arrogant guy doesn’t work for the company anymore. In today’s world, you’ve simply got to be on your best behavior. I can promise you, if you’re a screaming jerk at check-in, or on the rental car bus, or virtually anywhere, and I happen to be there, I’ll be the guy with the FlipCam, posting your idiot rant onto YouTube. Why? Because I can. You don’t want to be the guy in the video. Besides — I know a lot of people — What if I know your boss? Or what if you find me one day as the guy doing the hiring? 2) Turns out, “It doesn’t always have to be about you!” is actually a good comment. As we sit down at the conference lunch, I don’t need to know what you do, how well you do it, how many awards you’ve received for doing it, and how you’re pretty sure you can do it for me if I’d simply pay you to, all before I’ve had sip one of my watered down iced tea. Here’s a thought — Try making it about someone else for a change — Instead of sitting down and launching into your pre-rehearsed litany of how great you are, what about shutting up and listening once in a while? Put the business-card-Uzi away, and don’t rapid fire them to anyone within range. You know how it seems how some people are only listening to find a break in the conversation so they can talk? Don’t be that person. Ask questions! It’s the ultimate way to learn, and allows you the opportunity to actually contribute something of value to the conversation, as opposed to the spiel of your latest victory. Remember: Value gets remembered, verbal diarrhea simply gets recalled — and not in a good way. 3) Going up to the speaker at the end of her speech ensures only one thing: You’ll be one of a hundred people going up to the speaker at the end of her speech. So rather than giving yourself the opportunity to not get noticed in the slightest, why not buck the crowd? Find the speaker twenty minutes before they go on stage, and introduce yourself. On your business card, write “I’m the one who met you before your speech. You’ll be remembered. 4) Do something different : My business card is a poker chip. You can’t scan it in, you don’t want to throw it out. You keep it on your desk and play with it. I’ve seen other business cards that were actual credit cards, bottle openers — Anything but a boring piece of cardboard. Try and be original. If you’re creative enough to give me something I’ll remember, chances are I’ll want to do some business with you. 5) Finally — Be wary of making the leap from “Met you at the conference” to “Friending you on Facebook so you can see photos of me in my speedo.” Until Facebook becomes the norm and networking is ubiquitous with it, (probably 24 months) there are still people wary of it. And until you learn what to post online and what not to post, remember that not everyone is going to assume that a FB connection request is either a) acceptable or b) worth their time. We’ll get there, but we’re not there yet. We’ll eventually learn what’s acceptable and what’s not — because in the end, we’ll only have one network — It’ll have everyone in our lives, both business and professional, and we’ll have to be smart enough to know that what we post can be seen by everyone, forever. Until we are, asking a potential business contact who doesn’t know you that well to till your crops on Farmville is just asking for trouble. (And massive ridicule.) 6) Bonus rule : It’s no one’s fault but your own if your personal or professional brand isn’t seen as you want it. It’s not Facebook’s fault, it’s not Twitter’s fault, it’s not LinkedIn’s fault — It’s your fault. Make sure to keep up appearances as you want them to be. Otherwise, you’ve got no one to blame but yourself. Peter Shankman sold his social media company HARO (http://helpareporter.com) to Vocus, Inc. in June of this year. He spends the majority of his time tweeting as @petershankman, and doesn’t take his Blackberry with him if he’s going to be drinking. He blogs at http://shankman.com

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Jobless Claims Rise For The First Time In 5 Weeks

September 23, 2010

WASHINGTON — The tally of newly laid-off workers requesting unemployment benefits rose last week for the first time in five weeks as the job market remains sluggish. Initial claims for jobless aid rose by 12,000 to a seasonally adjusted 465,000, the Labor Department said Thursday. Many economists had expected a flat reading or small drop. The rise suggests that jobs remain scarce and some companies are still cutting workers amid weak economic growth. Initial claims have fallen from a recent spike above a half-million last month. But they have been stuck above 450,000 for most of this year. “What’s becoming increasing clear is that this isn’t a normal recovery,” said Dan Greenhaus, chief economic strategist at Miller Tabak. “There’s little we can do to create jobs until demand returns, and demand isn’t returning.” Separately, the National Association of Realtors said sales of previously occupied homes rose 7.6 percent in August from July, to a seasonally adjusted annual rate of 4.13 million. Still, it was the second-worst month for sales in more than a decade. July was the worst month for sales in 15 years, a factor unchanged by a slightly upward revision. And the Conference Board, a private research group, said its index of leading economic indicators rose modestly in August, more evidence that the economy will keep growing at a slow pace through the fall. Jobless claims typically fall below 400,000 when hiring is robust and the economy is growing. The four-week average of claims, a less volatile measure, declined by 3,250 to 463,250. That’s the lowest level since the end of July, but down by only 4,000 since January. Initial claims, while volatile, are considered a real-time snapshot of the job market. The weekly claims figures are considered a measure of the pace of layoffs and an indication of companies’ willingness to hire. New requests for jobless benefits have fallen sharply since June 2009, the month the recession ended. They topped 600,000 at the end of that month. But most of the decline took place last year. Economic growth has slowed considerably in recent months, and many employers are reluctant to add new employees. The economy grew at a 1.6 percent annual rate in the second quarter, an anemic pace that isn’t fast enough to reduce the jobless rate, now at 9.6 percent. Growth in the current July-September quarter isn’t expected to be much faster. While layoffs have eased since the recession ended, hiring hasn’t picked up much. Businesses added a net total of only 67,000 jobs in August. The Federal Reserve Bank of San Francisco estimated earlier this month that the economy will need to generate as many as 300,000 net jobs every month to reduce the unemployment rate to 8 percent over the next two years. The number of people continuing to receive jobless benefits fell by 48,000 to 4.49 million, the department said. But that doesn’t include several million people who are receiving unemployment aid under extended programs approved by Congress during the recession. The extended benefit rolls rose by about 200,000 to nearly 5.2 million in the week ending Sept. 4, the latest data available. Some companies are still cutting jobs. Cessna Aircraft said Tuesday that it will lay off 700 workers because the economy hasn’t recovered as strongly as the company had hoped earlier this year. The latest reductions are on top of 8,000 jobs the company has shed since late 2008, reducing its work force by half.

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Dov Seidman: Why We Can’t ‘Motivate’ Engagement

August 24, 2010

Chief executive officers are concerned about employee engagement — and rightfully so. Senior management teams are investing great time, effort and money in improving their workforce-engagement numbers. They shouldn’t be — at least not until they are prepared to harness the full energy of an engaged workforce. Despite significant effort to improve employee engagement, it remains at an all-time low among the U.S. workforce. This has sparked a surge in valuable guidance on how to transform disengaged workers into engaged employees . Unfortunately, the majority of engagement-improvement initiatives continue to treat employee engagement as an end goal. Employee engagement is a condition — manifested by the inspiration an employee unleashes in his or her work when he or she is deeply connected to a mission, purpose and the values that connect us. What Masquerades as Engagement This problem was illustrated in a recent IBM television commercial , in which a motivational speaker decked out in an “Innovation Man” costume struts in front of a line of office workers standing at attention. Innovation Man singles out one of the professionals and peppers him with repeated taunts and questions as to whether he is “fired up” to innovate. The worker dutifully responds, “Sir! Yes, sir!” Innovation Man then questions the employee’s commitment: “Why are you fired up?!” The befuddled employee pauses before replying, “I don’t have any idea.” We cannot “motivate” engagement (or innovation, growth, or succession for that matter); instead, we must inspire the kind of outcomes we want by rooting ourselves in a set of values, being in the grip of an idea worthy of dedication and commitment, connecting around a meaningful and shared purpose, and aligning around a common, deep and sustainable set of human, societal and environmental values. Why? Because sustainably engaged employees generate ideas, innovation, creativity, processes and other outcomes that deliver long-term competitive advantages, and they also collaborate with others to make progress. How well do you think other companies fare in developing cultures based on thick rule books and other carrots and sticks? Not too well, as I’ve written about before and according to new research. Pay and benefits figure as only one of the four key drivers of job dissatisfaction, according to a recent study by the Conference Board, and compensation barely rates a mention in the study’s engagement-improvement steps. And a 2008 study by Duke University’s Fuqua School of Business examined the relationship between financial performance and senior leadership skills. Inspirational and ethical leaders were most strongly associated with stronger financial performance. The Duke study identifies specific behaviors that exemplify inspirational leadership: “engaging employees in the company’s vision”; “inspiring employees to raise their goal”; and “promoting an environment in which employees have a sense of responsibility for the whole organization, its mission and constituencies.” A Valuable, and Values-Based, Alternative This is the new frontier, where companies work in a systemic manner to ensure alignment of their purpose and mission to their business strategies and vision, and then cascade this inspiration through their core values into specific leadership behaviors. Only when observable leadership behaviors are identified, communicated, measured, tracked, managed and integrated into business processes and talent-management systems can an organization evolve on its cultural journey. Through our work with some of the world’s largest and most progressive organizations, helping them build sustainable cultures infused and inspired by sustainable values, we know firsthand that many business leaders are beginning to understand the need to commence this journey. In one large, global company we partner with, we found that 70 percent of employees agreed that a strong mission and purpose drive their organization. However, we also discovered that the company’s mission and purpose were disconnected from everyday decisions and behaviors: 50 percent of the same employees indicated that personal achievement and success was a more important driver of their behavior than the organization’s purpose and values; and 60 percent of employees thought that supporting a peer who acted within their company values and purpose but in conflict with a policy would result in management disapproval or possible punishment by the organization. Armed with this evidence and other related insights, this Fortune 100 company and its leaders are now working on how they can connect employees to the shared mission and purpose through values, rather than through rules, so that it manifests in more of the behaviors they want, e.g. more engagement and more innovation. This ability to harmonize a company’s values and a company’s policies is an important piece in ensuring a company’s human operating system is functioning for the benefit of the organization — something I hope to write more about in a future column. As leaders, we all should recognize that there is work to be done in encouraging behavior that shifts the focus from governing toward developing leaders who inspire principled performance. (I’ll show what such work looks like and how it operates in my next column.) We still need rules (along with carrots and sticks), but they are no longer sufficient in an era when organizational success, over the long term, depends on out-behaving the competition . Improving employee engagement does not require executives to don their motivational capes and work on improving employee engagement. Instead, the process begins with a simple question about the workforce, a query whose answer leaders should act upon: Are our employees inspired? * This story appeared in, and was written for, Bloomberg BusinessWeek .

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Is Your CEO Lying? Watch Out For Use Of The Third Person

August 13, 2010

The next time you hear a CEO refer to him or herself in the third person, you may want to make sure you don’t own any of their company’s stock. Using phrases like “the team” and “the company” over “I” and “we” is one of a number of linguistic cues that an executive could be lying, according to a new study by David F. Larcher, professor of accounting at Stanford University, and his team at the university’s Rock Center for Corporate Governance . ( hat tip Wall Street Journal ) The study, titled ” Detecting Deceptive Discussions in Conference Calls ,” found that executives who later revised their firm’s financial statements displayed distinct styles of speech in analyst calls, including language that “disassociates themselves from their subject matter.” Less than truthful execs also tended to speak in generalities rather than specifics, and replaced common adjectives like “good” and “respectable” with effusive adjectives like “incredible.” Larcher told the HuffPost that he hadn’t yet investigated which companies were found to display the most frequent signs of deceitful language — though he added that deceit tended to occur most often in “high-litigation industries like tobacco and oil.” As a part of the study, Larcher’s team loaded 30,000 transcripts of public conference calls from 2003 to 2007 onto an electronic document, which they then culled for verbal patterns psychologists and linguists usually associate with deception. Fourteen percent of executives, they found, said something that raised a red flag. One such transcript Larcher’s team looked at was a conference call with Erin Callan, the former Lehman Brothers CFO, just months before the firm’s collapse. In it, she used the word “great” 14 times, “strong” 24 times and “incredibly” eight times to describe the bank’s recent performance. She used the word “challenging” six times and “tough” only once. To most linguists and psychologists, such an overtly positive tone as Callan’s is a dead giveaway that a person is being less than candid. “These ideas have been around for a long time,” says Larcher. “What we’re trying to do is put the linguistic model and the accounting model together.” READ the study, “Detecting Deceptive Discussions in Conference Calls,” below: Deceit

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Tax Holidays: States Gamble On Back-to-School Shopping Deals To Stimulate Consumer Spending

July 30, 2010

Today kicks off the first tax holiday for the back-to-school shopping season, but low consumer morale may end up causing a further drain on state governments instead of stimulating the retail industry. With the lure of 7-percent savings on clothing and footwear, Mississippians will head to the malls today and tomorrow to stock up on fall clothes and new shoes, but several municipalities opted out of the holiday this year due to economic concerns over lost sales tax revenue. According to Kathy Waterbury, spokesperson at the Mississippi Department of Revenue, the holiday is intended to “give a break to consumers” right before the start of the school year, but the waived tax may not be enough to rev up shopping. “I think consumers are still being very cautious,” said Lynn Franco, Director of Consumer Research Center at the Conference Board. “They will weigh those spending decisions very carefully.” The Conference Board’s Consumer Confidence Index had been increasing since a low in February, but confidence in the economy started to slip due to low job growth. The index dropped from 54.3 to 50.4 in July, which is only a slight improvement over last July’s level of consumer confidence. When asked whether the back-to-school tax break would spur shopping, Franco replied, “while it will definitely help sales, I don’t think, in of itself, it will be sufficient.” About a decade ago, states began to suspend taxes on school-related items at the end of the summer to help residents out with school expenses, and now more than ever consumers need all of the help that they can get. In fact, Maryland and Illinois have hopped on the bandwagon this year by designating tax-free days in August, and Florida is reviving their event after a two-year lapse. “Illinois has a high unemployment rate, and people have lost wages because their hours have been cut,” said Susan Hofer, Communications Manager for Governor Quinn. “We’ve seen retail stores throughout the summer really suffering with low traffic.” Governor Quinn coordinated with the Illinois Retail Merchants Association to encourage retailers to offer additional discounts during the tax break to incentivize consumers to spend even more during the holiday. Though offering discounts may lure reluctant shoppers to the mall, there is concern among state governments that the loss of tax revenue may hurt their ailing budgets. After several years of hosting a back-to-school tax break holiday, the Georgia legislature opted not to renew it. According to Bert Brantley, spokesperson for Governor Perdue, the state “loses” approximately $13 million in tax revenue during the holiday. “There is a decent argument to be made that people do all of their shopping in that one weekend,” said Brantly. “I don’t know that they really spend any more. People may even spend less to get the same.” Some analysts, however, are more optimistic about the back-to-school shopping season in the wake of last year’s massive spending cutback. The National Retail Federation’s annual Consumer Intentions and Actions Back to School survey predicts that each American household will spend on average $606.40 on back-to-school items, compared to the estimated $548.72 spent last year. “Most parents just ‘made do’ with the supplies that they had last year,” said Ellen Davis, Vice President and Spokesperson at the NRF. “Parents can’t make do with everything again this year. There is more of a pent-up demand situation.” Regardless of the level of success of the back-to-school shopping this coming month, even minimal increases in spending will be a positive sign of recovery and improvement in the retail industry; after all, “we are not looking to break any retail records this year,” added Davis.

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Craig S. Lowenthal of Glatfelter Insurance Group Elected IASA President

July 8, 2010

DURHAM, NC–(Marketwire – July 8, 2010) –    At the 2010 IASA Annual Educational Conference & Business Show, the association’s members elected Craig S. Lowenthal of Glatfelter Insurance Group (Glatfelter) as president of the association for the 2010-2011 fiscal year.

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Scott Brown’s Sweetheart FinReg Deal Needs A Snappy Nickname

June 28, 2010

Over at the Wonk Room, Pat Garofalo takes a moment this morning to discuss the sweetheart deal that Senator Scott Brown (R-Mass.) carved out of the financial regulatory reform negotiations to benefit banks in his home state: As the conference committee reconciling the House and Senate versions of financial regulatory reform went through its marathon 20 hour negotiating session on Thursday night, an exception to the Volcker rule — which prevents banks from trading for their own benefit with federally insured dollars — was added at the behest of Sen. Scott Brown (R-MA). The exception, which was pushed by large Massachusetts-based financial firms State Street Corp. and Mass Mutual, allows banks to invest up to three percent of their capital in risky hedge funds and private equity firms and to continue managing those funds. These exemptions could undermine the effectiveness of the rule, as State Street is a great example of a financial firm that specialized in relatively benign financial practices, but then became systemically important by building up a huge amount of credit risk and engaging in risky trading. Ultimately, it needed to be rescued by federal intervention. Garofalo has more about how this “strikes at the very heart of the Volcker rule, so get thee hence to learn more. What I’d like to know is why we don’t yet have a snappy, headline-ready nickname for this little bit of chicanery, like “Cornhusker Kickback” or “Louisiana Purchase.” If you have any suggestions, feel free to leave it in the comments. RELATED: Scott Brown Receives Special Deal In Financial Reform Bill, But Still May Vote Against It [Wonk Room] [Would you like to follow me on Twitter ? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here .]

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Sen. Blanche Lincoln: The Time Is Now

June 25, 2010

My constituents want Washington to work for us, not the special interests like Wall Street banks. That’s why I stood up for Main Street banks, small businesses and working families in my home state by proposing the toughest reforms for Wall Street of anyone in either party, including the administration. One of my reform proposals would make the $600 trillion over-the-counter derivatives market fully transparent where today it is completely in the dark, with no regulation, no oversight and no public disclosure. Early this morning, the Senate-House Conference Committee on Financial Regulation passed landmark legislation that included the most important provisions of my original proposal. When I first unveiled my plan in mid-April, it was dismissed by many as a political stunt that would never see the light of day. Well, I’ve been underestimated before. What matters to me, and to the retirees, small businesses and local bankers that I represent, is that we expose risky trading by the big Wall Street banks to the light of day. Now my colleagues in the Senate and the House need to know that you stand behind this reform. I have launched a petition and I hope you’ll add your voice to the growing chorus of Americans who support strong financial reform. When my committee, the Senate Committee on Agriculture, Nutrition and Forestry, adopted my bill with bipartisan support, the big banks sent hundreds of lobbyists to Capitol Hill. Most of them promised it wouldn’t be included in the overall Senate Financial Reform bill. When Senate reform became the Dodd-Lincoln Substitute with my derivatives provision intact, there were numerous articles predicting that my provision did not have enough support to defeat amendments to strip it from the bill. However, it’s most significant threat failed with only 39 votes. When the Senate passed comprehensive financial reform with my provision unchanged, the headlines predicted that it would be removed in the conference committee of Senate and House members. This morning, the conference committee ended an all-night session by adopting historic financial reform that offers unprecedented protections for consumers and includes the bulk of my provision. The riskiest trading practices by Wall Street banks that nearly blew up the world economy will have to be moved to an affiliate within two years. While we are changing the way Wall Street does business, the real story is how reform will benefit Main Street by helping families save for college, protect retirees, ensure that small businesses can get loans and most importantly create new jobs. We are not over the finish line. You may still hear opponents using the same tired claims and worn out, catch-all defenses of “unintended consequences” or “driving business overseas” in an attempt to stop our reform efforts. But with momentum on our side, the strong reform that America’s small businesses, community banks, and families need is within our grasp. It’s time we proved the naysayers wrong once again and pass historic financial reform. I hope you add your name to the petition today so that my colleagues in Washington know you want to change the financial system so families have the protections they deserve.

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Steven R. Loranger: How Do We Fund the Future of Infrastructure?

June 21, 2010

I recently wrote about the importance of channeling infrastructure funding and attention toward water and air traffic management systems . As awareness of the need for infrastructure investment broadens, the natural question is “how do we pay for it?” This question of who should foot the bill has been a barrier to progress in the U.S. and other Western nations. I believe the path forward is through partnerships among government, business and consumers, which I addressed at The Milken Institute Global Conference in April. For years, Western governments have been unable to provide the funds necessary to build and upgrade infrastructure at a sufficient level. During the conference, Martin Koffel, Chairman and CEO, URS Corp, pointed out that over the past decade, China has invested 5 percent of its GDP in non-residential infrastructure, while the U.S. has invested less than 1.5 percent. This deficit may ultimately affect our ability to compete on a global stage. During the past few years, some governments have begun to recognize the need for a renewed investment in infrastructure. Consider NextGen, the new GPS-based air traffic control system here in the United States. This project is among the most ambitious and important aviation infrastructure investments in U.S. history, as evidenced by the massive investment the FAA is making to fund this wholesale revamping of the U.S. National Airspace System. But as national debts grow in Western nations, government financing of infrastructure is forecast to become even more challenging. I believe public-private partnerships can play a key role. Here also, we can look to NextGen as an example. The program requires a long-term investment for which the FAA required a great deal of initial capital. To address this challenge, ITT is investing more than $200 million of its own capital to help make U.S. air traffic management modernization a reality. In exchange for that investment, the FAA has granted ITT the rights to manage the NextGen program’s ADS-B ground infrastructure during the next 10 years. Consumers must also play a significant role. In regards to water, most Americans do not pay the full cost for their water consumption. In Germany, on the other hand, water tariffs are nearly three times the U.S. average and closer to the true cost-of-service. Until we are willing to broadly raise tariffs, our funding structure will remain unsustainable. This inadequate investment for maintenance and growth is unfortunately not restricted to the U.S., and is a prime contributor to the growing global crisis of water scarcity. Another issue raised at the conference was the process by which infrastructure projects are prioritized for funding. Failure to measure and demonstrate return on investment is one of the major speed limits in allocating government and private capital toward infrastructure investment. We run our business such that every dollar of investment goes through a rigorous analysis that measures not only empirical returns and cash flows but also social benefits. Proposals for infrastructure projects should be measured by the same yardstick. Determining how to measure both the financial and social rates of return, from providing safe drinking water to having peace of mind when flying, is critical. While these are challenges, I am optimistic that through strategic partnerships, we can achieve a consensus on how to invest in these vital needs and unlock the right level of funding needed to do so. This approach is critical. We need government and business and citizenry to work together so the critical networks in our skies–and under our feet–will meet the needs of generations to come.

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Franken Battling Frank On Wall Street Reform

June 15, 2010

Al Franken is battling Barney Frank to save the life of a credit rating agency amendment that the freshman Minnesota Democrat was able to include in the Senate’s Wall Street reform bill. Franken would bar banks from choosing which rating agency can rate which product — the current system creates conflicts of interest leading to artificially rosy ratings. Under Franken’s proposed system, raters would be assigned randomly to a financial institution, leaving them with the freedom to issue a poor rating without fear of losing business — raters who are more accurate will get more business. The House bill does not contain a similar measure and Frank, chairman of the House Financial Services Committee, says the amendment is untested and is offering Franken a study of the issue instead. Franken thinks a study isn’t needed. Debate on Franken’s measure begins at 11:00 a.m. Tuesday, when the conference committee convenes. “The House language is very concerning. We don’t believe a study is necessary,” said Franken spokeswoman Jess McIntosh. “We know what went wrong with Wall Street’s credit rating system — conflicts of interest eroded it by rewarding cozy relationships instead of accuracy. And we know how to fix it — the Franken amendment that passed the Senate with broad bipartisan support. The upside of a study is that they usually end with findings. And you can be sure that if such a study came back, it would confirm the conflicts of interest. It just makes more sense to end the delay and instate the reform now.” Steve Adamske, spokesman for Frank’s committee, reacted sharply to McIntosh’s defense. “The time for debate will be tomorrow at 11:00 am, not through the press by spokespeople protecting the people who sign their paycheck. Mr. Franken needs to talk to his Senate colleagues,” Adamske told HuffPost Hill Monday evening. Franken, notes McIntosh, did send a letter, also signed by Sen. Carl Levin (D-Mich.) and Roger Wicker (D-Miss.), addressed to conference committee leaders, including Frank (D-Mass.) and Sen. Chris Dodd (D-Conn.). “As the Permanent Subcommittee on Investigations clearly revealed in its April 23, 2010, hearing, the credit rating industry is plagued by conflicts of interest, in which the issuing banks pay credit rating agencies to rate their financial products. In order to retain clients, credit rating agencies have an incentive to provide inflated rating to even the riskiest products,” reads the letter. Levin is chairman of the investigations committee. Heather Booth, head of Americans for Financial Reform, said that her group is urging the conference to adopt Franken’s measure, which has bipartisan support.

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Production Probably Rose, Prices Fell U.S. Economy Preview

June 13, 2010

By Timothy R. Homan June 13 (Bloomberg) — Factories kept churning out more goods last month, while prices and home construction fell, pointing to a manufacturing-led U.S. recovery that is not generating inflation, economists said before reports this week. Production at factories, mines and utilities increased 0.8 percent in May, the 10th gain in the past 11 months, according to the median estimate of 63 economists surveyed by Bloomberg News ahead of Federal Reserve figures due June 16. The cost of living declined for a second month and work began on fewer houses, other data may show. “It’s really a sweet spot in terms of continuing growth without inflation,” said Brian Bethune , chief U.S. financial economist at IHS Global Insight in Lexington, Massachusetts. “Manufacturing is still in pretty good shape.” The need to replenish depleted inventories, growing sales overseas and business investment in new equipment are putting American factories at the forefront of the rebound from the worst recession since the 1930s. A lack of inflation means the Fed has scope to keep the target interest rate near zero in coming months to spur growth. Manufacturers added 29,000 workers to payrolls in May, a fifth consecutive gain, the workweek lengthened and the average amount of overtime climbed to the highest level in two years, pointing to an acceleration on factory floors, data from the Labor Department showed earlier this month. Factory Gains Regional reports may show manufacturing kept driving the recovery this month. Factories in the New York Fed district expanded for an 11th month, a June 15 report will show, while data from the Philadelphia Fed two days later will say those in its area grew for a 10th month, according to economists surveyed. Deere & Co ., the world’s largest farm-equipment maker, said on its website last week that sales of utility tractors rose in the “double digits” in May, compared with a 6 percent increase for the industry overall. Growing global demand for agricultural commodities, housing and infrastructure are driving sales, Samuel Allen , chief executive officer of the Moline, Illinois-based company, said last month in a statement. Deere last month raised earnings and sales forecasts for a second time this year after second-quarter profit top analysts’ estimates. Manufacturing shares are outperforming the broader market. The Standard & Poor’s Supercomposite Machinery Index , which includes Deere and Peoria, Illinois-based Caterpillar Inc., is up 7 percent so far this year, compared with a 2.1 decline in the S&P 500 Index on growing concern that the European debt crisis will slow global growth. Less Inflation Three reports from the Labor Department this week will show the plunge in fuel prices precipitated by the turmoil in financial markets is tamping inflation. The import-price index , due on June 15, dropped 1.3 percent in May, after an increase of 0.9 percent the prior month. The producer-price index, issued the following day, declined 0.5 percent after a 0.1 percent decrease in April, according to the survey median. Consumer prices in May are forecast to drop 0.2 percent, after declining 0.1 percent the previous month, the survey median showed. Excluding food and fuel, the so-called core rate rose 0.1 percent after no change the previous month, economists projected. The lack of inflation validates the Fed’s strategy to maintain the benchmark lending rates on overnight loans between banks near zero to spur growth. Their next decision on interest rates is due June 23. Home Construction One area that may not fare well in coming months is housing. Work began on 648,000 houses at an annual pace last month, down from a 672,000 rate in April, according to the median forecast of economists surveyed before Commerce Department figures June 16. The end of a government tax credit at the end of the month will cool sales and construction in the second half of the year, economists said. The incentive for first-time homebuyers worth as much as $8,000, which was extended in November to include some current owners, required contracts be signed by April 30 and settled by June 30. Finally, a report from the Conference Board, a New York- based research group, will show growth outlook brightened last month. The group’s index of leading economic indicators, due on June 17, increased 0.4 percent in May, according to economists surveyed. The measure had climbed for 12 consecutive months before declining 0.1 percent in April. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

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Production Probably Rose, Prices Fell as U.S. Recovers Without Inflation

June 12, 2010

By Timothy R. Homan June 13 (Bloomberg) — Factories kept churning out more goods last month, while prices and home construction fell, pointing to a manufacturing-led U.S. recovery that is not generating inflation, economists said before reports this week. Production at factories, mines and utilities increased 0.8 percent in May, the 10th gain in the past 11 months, according to the median estimate of 63 economists surveyed by Bloomberg News ahead of Federal Reserve figures due June 16. The cost of living declined for a second month and work began on fewer houses, other data may show. “It’s really a sweet spot in terms of continuing growth without inflation,” said Brian Bethune , chief U.S. financial economist at IHS Global Insight in Lexington, Massachusetts. “Manufacturing is still in pretty good shape.” The need to replenish depleted inventories, growing sales overseas and business investment in new equipment are putting American factories at the forefront of the rebound from the worst recession since the 1930s. A lack of inflation means the Fed has scope to keep the target interest rate near zero in coming months to spur growth. Manufacturers added 29,000 workers to payrolls in May, a fifth consecutive gain, the workweek lengthened and the average amount of overtime climbed to the highest level in two years, pointing to an acceleration on factory floors, data from the Labor Department showed earlier this month. Factory Gains Regional reports may show manufacturing kept driving the recovery this month. Factories in the New York Fed district expanded for an 11th month, a June 15 report will show, while data from the Philadelphia Fed two days later will say those in its area grew for a 10th month, according to economists surveyed. Deere & Co ., the world’s largest farm-equipment maker, said on its website last week that sales of utility tractors rose in the “double digits” in May, compared with a 6 percent increase for the industry overall. Growing global demand for agricultural commodities, housing and infrastructure are driving sales, Samuel Allen , chief executive officer of the Moline, Illinois-based company, said last month in a statement. Deere last month raised earnings and sales forecasts for a second time this year after second-quarter profit top analysts’ estimates. Manufacturing shares are outperforming the broader market. The Standard & Poor’s Supercomposite Machinery Index , which includes Deere and Peoria, Illinois-based Caterpillar Inc., is up 7 percent so far this year, compared with a 2.1 decline in the S&P 500 Index on growing concern that the European debt crisis will slow global growth. Less Inflation Three reports from the Labor Department this week will show the plunge in fuel prices precipitated by the turmoil in financial markets is tamping inflation. The import-price index , due on June 15, dropped 1.3 percent in May, after an increase of 0.9 percent the prior month. The producer-price index, issued the following day, declined 0.5 percent after a 0.1 percent decrease in April, according to the survey median. Consumer prices in May are forecast to drop 0.2 percent, after declining 0.1 percent the previous month, the survey median showed. Excluding food and fuel, the so-called core rate rose 0.1 percent after no change the previous month, economists projected. The lack of inflation validates the Fed’s strategy to maintain the benchmark lending rates on overnight loans between banks near zero to spur growth. Their next decision on interest rates is due June 23. Home Construction One area that may not fare well in coming months is housing. Work began on 648,000 houses at an annual pace last month, down from a 672,000 rate in April, according to the median forecast of economists surveyed before Commerce Department figures June 16. The end of a government tax credit at the end of the month will cool sales and construction in the second half of the year, economists said. The incentive for first-time homebuyers worth as much as $8,000, which was extended in November to include some current owners, required contracts be signed by April 30 and settled by June 30. Finally, a report from the Conference Board, a New York- based research group, will show growth outlook brightened last month. The group’s index of leading economic indicators, due on June 17, increased 0.4 percent in May, according to economists surveyed. The measure had climbed for 12 consecutive months before declining 0.1 percent in April. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

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Michael Wolff: Why Economists Are Sexy and the Euro Won’t be Worth a Dollar

June 7, 2010

At the Festival Economia in Trento, Italy, yesterday, Nouriel Roubini, the New York-based globe-trotting economist, who has been a mighty and consistent voice of financial apocalypse, said that the only way Europe could save itself from certain catastrophe (which would, in turn, double dip the rest of the world) was to let the euro fall to below parity with the dollar. Roubini noted, not disapprovingly, the euro’s historic low of 82 cents–compared to its recent high of $1.50.

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Apple’s Jobs Unveils IPhone 4 to Fend Off Gains of Google’s Android System

June 7, 2010

By Connie Guglielmo June 7 (Bloomberg) — Apple Inc. ’s Steve Jobs introduced a new iPhone today, delivering a refashioned chassis and 100 added features as mobile competitors including Google Inc. work to usurp the device’s popularity. “Believe me, you ain’t seen this,” Jobs said today at Apple’s Worldwide Developers Conference in San Francisco. Apple has updated the iPhone each summer since the smartphone’s debut in June 2007. He called the device the “most precise, beautiful thing.” The iPhone is now one of Apple’s most important products, raking in more sales than the Macintosh computer last quarter. The new model comes to market as HTC Corp. and Motorola Inc. work to deliver iPhone rivals based on Android, the mobile- operating system software created by Google . The iPhone accounts for 40 percent of Apple’s revenue. Apple has sold more than 50 million iPhones in the past three years. Jobs, 55, counts on updates to entice new customers as well as convince current owners to trade up to the latest model. Cupertino, California-based Apple released the iPhone 3G in July 2008, which added support for third-generation wireless networks. A faster version, called the iPhone 3GS, went on sale in June 2009. The company now has more than 225,000 tools, games and other applications available for downloading, Jobs said today. That compares with about 50,000 for Android, according to Toni Sacconaghi , an analyst at Sanford C. Bernstein & Co. in New York. More than 5 billion programs have been downloaded from Apple’s App Store, Jobs said. Apple rose 96 cents to $256.92 at 1:37 p.m. in Nasdaq Stock Market trading. The shares had gained 21 percent this year before today. Lost Prototype The new iPhone 4 adds a front-facing camera and is about 25 percent thinner than the previous 3GS model, Jobs said. Jobs said Activision Blizzard Inc. released an iPhone application for its “Guitar Hero” game today for $2.99 and that Netflix Inc. , the online movie subscription service, will unveil a free program for the iPhone this summer. Speculation about what the fourth-generation iPhone will include escalated in April after an unreleased prototype, lost by an Apple engineer at a bar in March, was disassembled and photographed by technology blog Gizmodo.com . That prototype showed a front-facing camera that enables video conferencing, a camera flash, a higher-resolution screen, longer battery life and a boxier design than the iPhone 3GS, according to Gizmodo’s analysis. As Jobs, 55, dressed in his trademark jeans and black turtleneck appeared at the conference, an attendee yelled out “We love you, Steve!” His response drew applause too: “Thanks, I think.” To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

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Video: Apple’s Jobs Unveils New IPhone With 100 New Features: Video

June 7, 2010

June 7 (Bloomberg) — Steve Jobs, chief executive officer of Apple Inc., introduces the new iPhone at the company’s Worldwide Developers Conference in San Francisco. The phone delivers a refashioned chassis and 100 new features. (This is an excerpt. Source: Bloomberg)

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Robert Kuttner: The Banking Showdown

June 6, 2010

With public attention focused on everything from the oil disaster, the diplomatic isolation of Israel, to Al and Tipper’s separation, the final legislative push for financial reform begins this week as House and Senate conferees commence their work. This is the moment when lobbyists for the banking industry hope to kill provisions that they were unable to block in the House or Senate. This is no time for reformers to relent. Much of the conference will be in public session–a break with recent practice–but backroom deals are likely to determine the final outcome. Efforts by progressives and friendly media are desperately needed to keep the pressure on to strengthen, rather than weaken, reform. According to the Center for Responsive Politics, more than 1,400 former legislators and Hill staff now work for the banking lobby. http://www.washingtonpost.com/wp-dyn/content/article/2010/06/03/AR2010060302740.html?wpisrc=nl_cuzhead. The industry has about 1,800 paid lobbyists in all, compared to about 60 mostly volunteer lobbyists from several dozen consumer and labor organizations working (on their own time) under the banner of Americans for Financial Reform (AFR). Here is a brief user’s guide to the proceedings. The House and Senate conferees will formally be appointed on Tuesday, and the conference’s real work will begin Thursday. Financial Services Chairman Barney Frank has promised that debates will be open and televised, and that key votes will be recorded. That’s a good start, but invariably a lot of the deals will be struck in private after consultation with administration officials and industry lobbyists. Americans for Financial Reform has requested that key proposed amendments be posted for public review, and Frank agrees in principle. However, excessive delay works to the benefit of industry lobbyists. There is concern that despite the transparency of the process, the industry will work with Republicans and conservative Democrats to stretch out the conference beyond the deadline target of July 4, and use the delay to weaken the bill. Despite the David-Goliath nature of this fight, a lot of good provisions are in either the House or Senate bills, and the challenge will be to make sure that the final law includes the stronger rather than the weaker version. Among the key fights: Derivatives: Senator Blanche Lincoln’s language requiring that all derivatives trades be cleared on public exchanges, that no banking company with deposit insurance may also trade derivatives, and that sundry other loopholes be closed, survived fierce industry opposition and only lukewarm support from the administration. Whether or not Lincoln wins her own primary Tuesday, this measure has increasing support of House and Senate progressives. A companion measure by Sen. Maria Cantwell, which did not make it into the senate bill, would close more loopholes and require adequate capital for all such trades. This approach now appears to have the support of both Senate Banking Chair Chris Dodd and House Chair Barney Frank, as well as Gary Gensler on behalf of the administration. Banks want to continue their gambling games, and this is the number one target of the big banks to kill. Consumer Protection: The House bill includes a free standing consumer financial protection agency, but it would be hobbled by the requirement that it report to a committee as well as limits on its jurisdiction. The Senate version nests the proposed agency as an independent body inside the Federal Reserve, but without many of the restrictions. This is one of the few provisions that enjoys the hands-on personal support of President Obama. The challenge of the conference is to retain the best features of both bills. Credit Rating Agencies: It was the corruption of credit rating agencies that made possible the sub-prime meltdown. Reform of these private agencies, such as Moody’s and Standard and Poors, was not even part of the original legislation. But a surprise amendment by Sen. Al Franken requiring random assignment of agency ratings rather than payment of the agencies by clients narrowly passed the Senate and was included in the bill. There is no House counterpart, and industry is gunning for this one. But the House does provide that credit rating agencies are legally liable for deceptive practices. Cover Auto Dealers: New and used car dealers are among the most notorious purveyors of deceptive bait-and-switch financing. But the auto industry, which operates in every congressional district, worked with Senate Republicans on a parliamentary maneuver to win an exemption for car dealers; a similar provision is in the House bill. There is an outside chance that this could be reversed. Both Dodd and Frank are sympathetic to reversing this outrageous carve-out. Bring Back Glass-Steagall: Among the crucially important provisions that did not make it into either final bill is the Merkley-Levin amendment which would draw a bright line separating taxpayer-insured commercial banks from financial firms that gamble and trade derivatives and other risky other securities for their own accounts (the “Volcker Rule.”) There is still a decent chance that this could make it into the final bill. Break up the Biggest Banks: Another key provision that developed significant support but that was defeated in a floor right was the Brown-Kaufman amendment to limit the percent of deposits held by any one bank, and thereby break up the biggest banks. But this measure will be back another day. Duty to Clients: Among the most instructive revelations of the hearings, investigations and debates was the disclosure that big Wall Street houses routinely bet against their own customers. An amendment providing that investment banks have a fiduciary duty to their clients was not included in the final senate bill, but has increasing support. Fix the Mortgage Mess: The House and Senate bills both have modest reforms to tighten mortgage standards but no major breakthrough to end the logjam on refinancing distressed mortgages so that besieged homeowners can keep their homes. This is also a fight for another day. Despite its limitations, the financial bill is a start that progressives need to defend. Given where we began, this process has come a long way. At the outset, the administration was backing a far weaker bill. House Financial Services Chairman Barney Frank was hobbled by the presence of fifteen pro-industry “New Democrats” on his committee who weakened the bill at every opportunity. As recently as March, Senate Banking Chairman Chris Dodd was on the verge of making a bipartisan deal with Committee Republicans for a measure that would have been reform in name only. But as the public has begun paying more attention, as AFR has grown into the most effective financial reform coalition ever; and as heroic progressive legislators have moved their colleagues, the bill has gotten better over time. Other progressive leaders such as Elizabeth Warren and AFL-CIO President Rich Trumka have pushed public opinion, key legislators, and the Obama Administration. All of this is no small achievement, given how esoteric most of these issues are to most voters. The big fight to secure these gains begins this week. As I’ve observed before, even Roosevelt took seven years and several pieces of legislation before the New Deal structure of financial reform was completed. One thing is certain: Wall Street will continue pulling out all the stops to preserve its corrupted and discredited business model. Reformers need to redouble their own efforts. Robert Kuttner is author of “A Presidency in Peril,” co-editor of The American Prospect , and a senior fellow at Demos.

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GM, Ford U.S. Sales Top Estimates as Gasoline Prices Boost Demand for SUVs

June 2, 2010

By Doron Levin and Keith Naughton June 2 (Bloomberg) — General Motors Co. and Ford Motor Co. posted U.S. sales increases in May that topped analysts’ estimates as customers bought more Chevrolet Equinox and Ford Edge sport utility vehicles. GM’s deliveries rose 17 percent from a year earlier to 223,822, the Detroit-based automaker said today in a statement. GM was expected to report a 5.9 percent increase, the average estimate of five analysts surveyed by Bloomberg. Ford sales rose 22 percent, topping the average estimate for a 16 percent gain. The two biggest U.S. automakers are benefiting from increased consumer confidence and gas prices that have remained lower than $3 a gallon for more than 18 months, boosting demand for sport utility vehicles and pickups. Sales of Chevrolet’s Equinox more than tripled, while Ford increased deliveries of the Edge 43 percent. Chrysler Group LLC and Nissan Motor Co. also topped analysts’ sales estimates for the month. “It’s definitely a truck and SUV market — they’ve done really well,” Jessica Caldwell , an analyst for researcher Edmunds.com, said today in an interview. “There have been incentives on both of them, and some of these sales are going to commercial and daily-rental fleets. People have gone so long without buying, there’s a lot of pent-up demand.” Industrywide sales may have risen to an annualized rate of 11.2 million cars and light trucks for May, the average estimate of eight analysts. That would mark the eighth straight month of year-over-year gains, the longest streak of increases in a decade, according to Bloomberg data. Memorial Day Sales The seasonally adjusted sales rate may match the rate in April as Ford, Honda Motor Co. and Nissan added incentives for the U.S. Memorial Day holiday weekend. The pace in May 2009 was 9.9 million. Manufacturers, dealers and investors use the annualized rate to compare monthly totals by taking into account seasonal buying patterns. The sales show GM may be rebounding after last year’s bankruptcy. GM kept the Chevrolet, Cadillac, Buick and GMC brands in the U.S., while it sold or closed Saab, Hummer, Saturn and Pontiac as part a plan to return to sustained profitability after the government-backed restructuring. Total sales of Chevrolet vehicles gained 31 percent from a year earlier to 167,235 vehicles, and GMC brand deliveries increased 26 percent to 30,160. Equinox sales rose to 13,134 vehicles. GM’s Progress “The May results are at least a clear view of the progress of GM since the reorganization,” Jeff Schuster , executive director of J.D. Power & Associates in Troy, Michigan, said today in a telephone interview before the figures were released. “The consumer has come back to GM and the product machine is engaged, bringing out new vehicles this year and beyond.” Ford, based in Dearborn, Michigan, increased sales to 196,912 vehicles from 161,531 a year earlier. Deliveries of the F-Series pickups rose 49 percent to 49,858, and Edge sales increased to 13,660, the company said in a statement. Ford rose 29 cents, or 2.5 percent, to $11.70 at 2 p.m. in New York Stock Exchange composite trading. The shares gained 14 percent this year through yesterday. Chrysler’s sales rose 33 percent, the Auburn Hills, Michigan-based company said today in a statement. The average of five analysts’ estimates for Chrysler was a 21 percent increase. Toyota Motor Corp. , the world’s largest automaker, said in an e-mailed statement that U.S. sales of Toyota, Lexus and Scion Brand autos rose 6.7 percent in May. The Toyota City, Japan- based company sold 162,813 vehicles last month, up from 152,583 a year ago. Edmunds forecast a 7.5 percent gain for Toyota. The company’s sales had a “pretty sluggish start” in May due to reduced incentives, according to a May 27 research note by Christopher Ceraso , a Credit Suisse analyst in New York. Honda Deliveries Honda, Japan’s second-largest automaker, said sales of its Honda and Acura brands rose 19 percent to 117,173 vehicles. Edmunds estimated the company would post a 22 percent increase in sales. Nissan, the country’s third-largest, said May sales rose 24 percent to 83,764 vehicles, topping Edmunds’ estimate for an 11 percent gain. South Korea’s Hyundai Motor Co. reported sales of 49,045 vehicles, a 33 percent increase from a year earlier. The company was expected to post a 28 percent increase, according to Edmunds. Annual U.S. deliveries averaged 16.8 million in the decade through 2007. The 2008 total was 13.2 million, and the 2009 tally of 10.4 million was the fewest in 27 years, according to industry researcher Autodata Corp. of Woodcliff Lake, New Jersey. Rebates and other discounts fell to an average of $2,603 per vehicle in May, 1.1 percent lower than in April and 12 percent less than a year earlier, according to Edmunds. GM’s average incentives for the month rose to $3,739 per vehicle from $3,301 in April and from $3,678 per vehicle a year earlier, Edmunds said. Consumer confidence in May rose to the highest level since March 2008, based on the Conference Board’s index. GM was in bankruptcy protection for 39 days starting on June 1, 2009, while Chrysler was in bankruptcy for all of May 2009. Neither of those automakers, nor Toyota, announced nationwide promotions during the Memorial Day weekend. To contact the reporters on this story: Doron Levin in Southfield, Michigan, at dlevin5@bloomberg.net ; Keith Naughton in Southfield, Michigan, at knaughton3@bloomberg.net .

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Frontier Securities Present The Mongolia: Capital Raising Conference, June 15-16, 2010

June 2, 2010

Frontier Securities Present The Mongolia: Capital Raising Conference, June 15-16, 2010

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Apple’s Jobs Says Company Is Probing `Troubling’ Challenges Foxconn Faces

June 1, 2010

By Connie Guglielmo and Joseph Galante June 1 (Bloomberg) — Apple Inc. Chief Executive Officer Steve Jobs said his company is taking pains to understand the challenges facing Foxconn Technology Group, a maker of Apple products that has been plagued by suicides. “It’s very troubling,” Jobs said during an on-stage interview at a technology conference in Los Angeles. “We’re all over this.” At least 10 people have died this year at Foxconn’s Chinese operations. Apple said last week that it is investigating practices at the company, also known as Hon Hai Group, which makes iPhones and other electronics. Jobs also defended the manufacturer. Foxconn “is not a sweatshop,” Jobs said. Apple “does one of the best jobs” inspecting suppliers, he said. During the conference, Jobs took jabs at Adobe Systems Inc.’s Flash online video software, saying the technology is on the wane. Flash looks as though “it’s had its day,” Jobs said. “The way we’ve succeeded is by choosing which horses to ride, technically,” he said. Jobs added that “if you choose wisely, you can save yourself an enormous amount of work.” Jobs is in the midst of a public dispute with Adobe over which software is best for making video run smoothly on his company’s mobile devices. Apple has faulted Flash as slow, power hungry and unsuitable for some of Apple’s products. Apple recently overtook Microsoft Corp. to become the world’s most valuable technology company. The gain in Apple’s share price is “surreal,” Jobs said. To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net ; Joseph Galante in San Francisco at jgalante3@bloomberg.net .

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