driver

Toyota Pedal Recall May Spur U.S. to Require New Brake Systems

February 5, 2010

By Jeff Green and Margaret Cronin Fisk Feb. 5 (Bloomberg) — Toyota Motor Corp. ’s U.S. recall of 5.6 million vehicles for possible unintended acceleration may spur regulators to require braking technology that prevents such sudden bursts of speed in all future vehicles. So-called brake override systems, which disengage the engine when the brake and throttle are both depressed, are now on many newer autos that use computers instead of cables to control acceleration. Toyota said last month it is adding the equipment on most models, in response to a Sept. 29 recall. “There’s no question,” said Joan Claybrook , a safety advocate and former director of the National Highway Traffic Safety Administration . “We are going to see a brake override system requirement in response to this.” New regulations would build on the government’s history of expanding its safety rules in response to accidents that expose dangerous vehicle defects. Upgrades such as improved fuel tanks, new gearshift designs and air-bag warnings all flowed from federal mandates to automakers since the 1970s. “The most likely outcome of this will be a regulatory catharsis,” said Brian Johnson , a Barclays Plc analyst based in Chicago. “There will probably be some sort of fail-safe system against unintended acceleration.” Cost Estimate Requiring automakers to upgrade braking software may cost $25 to $50 on each vehicle, Johnson said. That expense would rise to a range of $50 to $150 should regulators compel installation of new technology, he said. A NHTSA spokeswoman, Karen Aldana , didn’t respond to a phone call or e-mail seeking comment. Brake override systems work in tandem with the electronic throttle control technology that was unveiled in the late 1980s and is becoming an industry standard as automakers rush to meet safety rules taking effect in 2012. Electronic throttle controls use computer signals, not the mechanical action of cables attached to the accelerator pedal, to adjust a car’s speed. In a conventional auto, releasing the pedal eases the cable pressure, closing the throttle. In vehicles with an electronic control, a brake override unit would cut power to the wheels if the throttle is stuck open. General Motors Co. and Ford Motor Co. now have brake override units on some models, while Honda Motor Co. said it doesn’t have the technology. Chrysler Group LLC said it has override controls on all autos with electronic throttle systems. Toyota’s Response Toyota said Jan. 11 it would install the technology to cover most of its lineup after a 2009 recall. Hyundai Motor Co. and Nissan Motor Co. said they have brake override systems, as do luxury brands such as Daimler AG ’s Mercedes-Benz, which put the units on autos with electronic throttle control. “It would make sense to require a brake override,” said Michael Omotoso , a powertrain analyst at J.D. Power & Associates in Troy, Michigan. “I would be pretty surprised if it didn’t happen soon.” Toyota’s most-recent recall began Jan. 21, covering about 2.57 million vehicles in the U.S. and Canada to fix pedals that may cause the throttle to stick in an open position. The Toyota City, Japan-based automaker halted sales of eight models and shut five North American factories while it rolls out a repair. That followed a separate recall of 5.35 million Toyotas after floor mats in some models interfered with the accelerator pedal and kept the throttle propped open. Pending Lawsuits The world’s largest automaker faces at least 29 lawsuits seeking class action status in the U.S. and Canada, with 17 alleging defects in electronic throttle control systems. At least 10 lawsuits have been filed in the U.S. claiming deaths and injuries caused by sudden acceleration. U.S. Transportation Secretary Ray LaHood said this week the government is investigating whether some sudden speedups can be traced to electronic throttle control systems. Toyota said it has found no unintended-acceleration cases from the technology. “I’m not sure if there are electronic gremlins in these cars that are making them malfunction,” Bill Visnic , a senior editor for auto researcher Edmunds.com in Weirton, West Virginia. “It’s not impossible, but it’s improbable. But, either way, the brake system would prevent it.” After introducing electronic throttle control, Toyota also had a cable on the accelerator pedal as a backup from 1998 to 2002, when it determined the mechanical link was no longer needed, said Brian Lyons , a company spokesman. Override System Had Toyota added a backup system such as a brake override unit to cut power to the wheels, it could have kept most cars from losing control in any unintended acceleration, said attorney Robert Hilliard , who filed a suit on Jan. 29 seeking class action status in Corpus Christi, Texas. He likened the approach to a sky diver wearing an emergency parachute. “Let’s say your first chute doesn’t open,” Hilliard said. “The safety chute doesn’t stop the problem, it just prevents the consequences.” Antony Anderson , a U.K.-based electrical engineering consultant who has testified as an expert witness for plaintiffs in lawsuits, said any federal rule for brake override systems should ensure that the units aren’t run by the computer controlling the electronic throttle system. A case of sudden acceleration may be caused by electronic interference, so brakes guided by the same computer might not work, Anderson said. “If the electronics have malfunctioned, the software is in disarray,” he said. “It won’t accept an additional command.” Regulatory Legacy Regulatory changes spurred a number of the features now taken for granted in modern autos, said John Wolkonowicz , an analyst at IHS Global Insight in Lexington, Massachusetts. Stronger fuel tanks, for example, emerged from the 1978 recall of about 1.5 million Ford Pintos on concern that rear-end collisions could spill gasoline and ignite fires, Wolkonowicz said. So-called shift locks, which require drivers to place a foot on the brake before putting a car with automatic transmission in gear, came in response to sudden-acceleration cases involving Volkswagen AG ’s Audi, Wolkonowicz said. Recalls of Audi 5000 sedans from the 1978 through 1986 model years began in 1982 after more than 1,000 complaints. While NHTSA closed its Audi investigation in 1989, the class action in that case is still pending in Cook County, Illinois. More-recent automotive innovations include monitors to alert motorists to low tire pressure, Wolkonowicz said. Those devices became required after 271 deaths attributed to rollovers of Ford Explorer sport-utility vehicles, which spurred recalls of Firestone tires in 2000 and 2001. Worn, underinflated tires were cited for many of the Explorer crashes. What Next? Claybrook, the NHTSA chief during the Pinto recall, said Toyota’s case may prompt the U.S. to consider criminal penalties for companies that don’t react quickly to safety flaws and boost fines for some infractions to $100 million or more from a cap of $16.4 million. Another likely quick fix is a warning label telling drivers how to stop a vehicle that accelerates unintentionally, said Omotoso, the J.D. Power analyst. Similar advisories were placed in cars after air bags were blamed for deaths of front-seat passengers, he said. “More and more of the direct control of the car is being taken away from the driver, and there is this growing sense of helplessness in the face of technology that’s supposed to help us,” Omotoso said. “You just have to hope it all works.” To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net ; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net .

Read the full article →

Toyota Pedal Recall May Force New Braking System Requirements for All Cars

February 5, 2010

By Jeff Green and Margaret Cronin Fisk Feb. 5 (Bloomberg) — Toyota Motor Corp. ’s U.S. recall of 5.6 million vehicles for possible unintended acceleration may spur regulators to require braking technology that prevents such sudden bursts of speed in all future vehicles. So-called brake override systems, which disengage the engine when the brake and throttle are both depressed, are now on many newer autos that use computers instead of cables to control acceleration. Toyota said last month it is adding the equipment on most models, in response to a Sept. 29 recall. “There’s no question,” said Joan Claybrook , a safety advocate and former director of the National Highway Traffic Safety Administration . “We are going to see a brake override system requirement in response to this.” New regulations would build on the government’s history of expanding its safety rules in response to accidents that expose dangerous vehicle defects. Upgrades such as improved fuel tanks, new gearshift designs and air-bag warnings all flowed from federal mandates to automakers since the 1970s. “The most likely outcome of this will be a regulatory catharsis,” said Brian Johnson , a Barclays Plc analyst based in Chicago. “There will probably be some sort of fail-safe system against unintended acceleration.” Cost Estimate Requiring automakers to upgrade braking software may cost $25 to $50 on each vehicle, Johnson said. That expense would rise to a range of $50 to $150 should regulators compel installation of new technology, he said. A NHTSA spokeswoman, Karen Aldana , didn’t respond to a phone call or e-mail seeking comment. Brake override systems work in tandem with the electronic throttle control technology that was unveiled in the late 1980s and is becoming an industry standard as automakers rush to meet safety rules taking effect in 2012. Electronic throttle controls use computer signals, not the mechanical action of cables attached to the accelerator pedal, to adjust a car’s speed. In a conventional auto, releasing the pedal eases the cable pressure, closing the throttle. In vehicles with an electronic control, a brake override unit would cut power to the wheels if the throttle is stuck open. General Motors Co. and Ford Motor Co. now have brake override units on some models, while Honda Motor Co. said it doesn’t have the technology. Chrysler Group LLC said it has override controls on all autos with electronic throttle systems. Toyota’s Response Toyota said Jan. 11 it would install the technology to cover most of its lineup after a 2009 recall. Hyundai Motor Co. and Nissan Motor Co. said they have brake override systems, as do luxury brands such as Daimler AG ’s Mercedes-Benz, which put the units on autos with electronic throttle control. “It would make sense to require a brake override,” said Michael Omotoso , a powertrain analyst at J.D. Power & Associates in Troy, Michigan. “I would be pretty surprised if it didn’t happen soon.” Toyota’s most-recent recall began Jan. 21, covering about 2.57 million vehicles in the U.S. and Canada to fix pedals that may cause the throttle to stick in an open position. The Toyota City, Japan-based automaker halted sales of eight models and shut five North American factories while it rolls out a repair. That followed a separate recall of 5.35 million Toyotas after floor mats in some models interfered with the accelerator pedal and kept the throttle propped open. Pending Lawsuits The world’s largest automaker faces at least 29 lawsuits seeking class action status in the U.S. and Canada, with 17 alleging defects in electronic throttle control systems. At least 10 lawsuits have been filed in the U.S. claiming deaths and injuries caused by sudden acceleration. U.S. Transportation Secretary Ray LaHood said this week the government is investigating whether some sudden speedups can be traced to electronic throttle control systems. Toyota said it has found no unintended-acceleration cases from the technology. “I’m not sure if there are electronic gremlins in these cars that are making them malfunction,” Bill Visnic , a senior editor for auto researcher Edmunds.com in Weirton, West Virginia. “It’s not impossible, but it’s improbable. But, either way, the brake system would prevent it.” After introducing electronic throttle control, Toyota also had a cable on the accelerator pedal as a backup from 1998 to 2002, when it determined the mechanical link was no longer needed, said Brian Lyons , a company spokesman. Override System Had Toyota added a backup system such as a brake override unit to cut power to the wheels, it could have kept most cars from losing control in any unintended acceleration, said attorney Robert Hilliard , who filed a suit on Jan. 29 seeking class action status in Corpus Christi, Texas. He likened the approach to a sky diver wearing an emergency parachute. “Let’s say your first chute doesn’t open,” Hilliard said. “The safety chute doesn’t stop the problem, it just prevents the consequences.” Antony Anderson , a U.K.-based electrical engineering consultant who has testified as an expert witness for plaintiffs in lawsuits, said any federal rule for brake override systems should ensure that the units aren’t run by the computer controlling the electronic throttle system. A case of sudden acceleration may be caused by electronic interference, so brakes guided by the same computer might not work, Anderson said. “If the electronics have malfunctioned, the software is in disarray,” he said. “It won’t accept an additional command.” Regulatory Legacy Regulatory changes spurred a number of the features now taken for granted in modern autos, said John Wolkonowicz , an analyst at IHS Global Insight in Lexington, Massachusetts. Stronger fuel tanks, for example, emerged from the 1978 recall of about 1.5 million Ford Pintos on concern that rear-end collisions could spill gasoline and ignite fires, Wolkonowicz said. So-called shift locks, which require drivers to place a foot on the brake before putting a car with automatic transmission in gear, came in response to sudden-acceleration cases involving Volkswagen AG ’s Audi, Wolkonowicz said. Recalls of Audi 5000 sedans from the 1978 through 1986 model years began in 1982 after more than 1,000 complaints. While NHTSA closed its Audi investigation in 1989, the class action in that case is still pending in Cook County, Illinois. More-recent automotive innovations include monitors to alert motorists to low tire pressure, Wolkonowicz said. Those devices became required after 271 deaths attributed to rollovers of Ford Explorer sport-utility vehicles, which spurred recalls of Firestone tires in 2000 and 2001. Worn, underinflated tires were cited for many of the Explorer crashes. What Next? Claybrook, the NHTSA chief during the Pinto recall, said Toyota’s case may prompt the U.S. to consider criminal penalties for companies that don’t react quickly to safety flaws and boost fines for some infractions to $100 million or more from a cap of $16.4 million. Another likely quick fix is a warning label telling drivers how to stop a vehicle that accelerates unintentionally, said Omotoso, the J.D. Power analyst. Similar advisories were placed in cars after air bags were blamed for deaths of front-seat passengers, he said. “More and more of the direct control of the car is being taken away from the driver, and there is this growing sense of helplessness in the face of technology that’s supposed to help us,” Omotoso said. “You just have to hope it all works.” To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net ; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net .

Read the full article →

Toyota Pedal Recall May Spur U.S. Regulators to Require New Brake Systems

February 4, 2010

By Jeff Green and Margaret Cronin Fisk Feb. 5 (Bloomberg) — Toyota Motor Corp. ’s U.S. recall of 5.6 million vehicles for possible unintended acceleration may spur regulators to require braking technology that prevents such sudden bursts of speed in all future vehicles. So-called brake override systems, which disengage the engine when the brake and throttle are both depressed, are now on many newer autos that use computers instead of cables to control acceleration. Toyota said last month it is adding the equipment on most models, in response to a Sept. 29 recall. “There’s no question,” said Joan Claybrook , a safety advocate and former director of the National Highway Traffic Safety Administration . “We are going to see a brake override system requirement in response to this.” New regulations would build on the government’s history of expanding its safety rules in response to accidents that expose dangerous vehicle defects. Upgrades such as improved fuel tanks, new gearshift designs and air-bag warnings all flowed from federal mandates to automakers since the 1970s. “The most likely outcome of this will be a regulatory catharsis,” said Brian Johnson , a Barclays Plc analyst based in Chicago. “There will probably be some sort of fail-safe system against unintended acceleration.” Cost Estimate Requiring automakers to upgrade braking software may cost $25 to $50 on each vehicle, Johnson said. That expense would rise to a range of $50 to $150 should regulators compel installation of new technology, he said. A NHTSA spokeswoman, Karen Aldana , didn’t respond to a phone call or e-mail seeking comment. Brake override systems work in tandem with the electronic throttle control technology that was unveiled in the late 1980s and is becoming an industry standard as automakers rush to meet safety rules taking effect in 2012. Electronic throttle controls use computer signals, not the mechanical action of cables attached to the accelerator pedal, to adjust a car’s speed. In a conventional auto, releasing the pedal eases the cable pressure, closing the throttle. In vehicles with an electronic control, a brake override unit would cut power to the wheels if the throttle is stuck open. General Motors Co. and Ford Motor Co. now have brake override units on some models, while Honda Motor Co. said it doesn’t have the technology. Chrysler Group LLC said it has override controls on all autos with electronic throttle systems. Toyota’s Response Toyota said Jan. 11 it would install the technology to cover most of its lineup after a 2009 recall. Hyundai Motor Co. and Nissan Motor Co. said they have brake override systems, as do luxury brands such as Daimler AG ’s Mercedes-Benz, which put the units on autos with electronic throttle control. “It would make sense to require a brake override,” said Michael Omotoso , a powertrain analyst at J.D. Power & Associates in Troy, Michigan. “I would be pretty surprised if it didn’t happen soon.” Toyota’s most-recent recall began Jan. 21, covering about 2.57 million vehicles in the U.S. and Canada to fix pedals that may cause the throttle to stick in an open position. The Toyota City, Japan-based automaker halted sales of eight models and shut five North American factories while it rolls out a repair. That followed a separate recall of 5.35 million Toyotas after floor mats in some models interfered with the accelerator pedal and kept the throttle propped open. Pending Lawsuits The world’s largest automaker faces at least 29 lawsuits seeking class action status in the U.S. and Canada, with 17 alleging defects in electronic throttle control systems. At least 10 lawsuits have been filed in the U.S. claiming deaths and injuries caused by sudden acceleration. U.S. Transportation Secretary Ray LaHood said this week the government is investigating whether some sudden speedups can be traced to electronic throttle control systems. Toyota said it has found no unintended-acceleration cases from the technology. “I’m not sure if there are electronic gremlins in these cars that are making them malfunction,” Bill Visnic , a senior editor for auto researcher Edmunds.com in Weirton, West Virginia. “It’s not impossible, but it’s improbable. But, either way, the brake system would prevent it.” After introducing electronic throttle control, Toyota also had a cable on the accelerator pedal as a backup from 1998 to 2002, when it determined the mechanical link was no longer needed, said Brian Lyons , a company spokesman. Override System Had Toyota added a backup system such as a brake override unit to cut power to the wheels, it could have kept most cars from losing control in any unintended acceleration, said attorney Robert Hilliard , who filed a suit on Jan. 29 seeking class action status in Corpus Christi, Texas. He likened the approach to a sky diver wearing an emergency parachute. “Let’s say your first chute doesn’t open,” Hilliard said. “The safety chute doesn’t stop the problem, it just prevents the consequences.” Antony Anderson , a U.K.-based electrical engineering consultant who has testified as an expert witness for plaintiffs in lawsuits, said any federal rule for brake override systems should ensure that the units aren’t run by the computer controlling the electronic throttle system. A case of sudden acceleration may be caused by electronic interference, so brakes guided by the same computer might not work, Anderson said. “If the electronics have malfunctioned, the software is in disarray,” he said. “It won’t accept an additional command.” Regulatory Legacy Regulatory changes spurred a number of the features now taken for granted in modern autos, said John Wolkonowicz , an analyst at IHS Global Insight in Lexington, Massachusetts. Stronger fuel tanks, for example, emerged from the 1978 recall of about 1.5 million Ford Pintos on concern that rear-end collisions could spill gasoline and ignite fires, Wolkonowicz said. So-called shift locks, which require drivers to place a foot on the brake before putting a car with automatic transmission in gear, came in response to sudden-acceleration cases involving Volkswagen AG ’s Audi, Wolkonowicz said. Recalls of Audi 5000 sedans from the 1978 through 1986 model years began in 1982 after more than 1,000 complaints. While NHTSA closed its Audi investigation in 1989, the class action in that case is still pending in Cook County, Illinois. More-recent automotive innovations include monitors to alert motorists to low tire pressure, Wolkonowicz said. Those devices became required after 271 deaths attributed to rollovers of Ford Explorer sport-utility vehicles, which spurred recalls of Firestone tires in 2000 and 2001. Worn, underinflated tires were cited for many of the Explorer crashes. What Next? Claybrook, the NHTSA chief during the Pinto recall, said Toyota’s case may prompt the U.S. to consider criminal penalties for companies that don’t react quickly to safety flaws and boost fines for some infractions to $100 million or more from a cap of $16.4 million. Another likely quick fix is a warning label telling drivers how to stop a vehicle that accelerates unintentionally, said Omotoso, the J.D. Power analyst. Similar advisories were placed in cars after air bags were blamed for deaths of front-seat passengers, he said. “More and more of the direct control of the car is being taken away from the driver, and there is this growing sense of helplessness in the face of technology that’s supposed to help us,” Omotoso said. “You just have to hope it all works.” To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net ; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net .

Read the full article →

New York Man Said to Face Terrorism Charge in Alleged Sept. 11 Bomb Plot

January 8, 2010

By Patricia Hurtado and Justin Blum Jan. 8 (Bloomberg) — A New York man arrested in connection with an alleged bomb plot targeting New York faces federal charges after telling authorities he trained at an al-Qaeda camp in Pakistan, two people familiar with the investigation said. Adis Medunjanin, 25, who was arrested with a second suspect today, likely will be charged with conspiracy and with receiving training from a foreign terrorist organization, one of the people said. Medunjanin and Zarein Ahmedzay were arrested early today, said FBI spokesman James Margolin in a phone interview. Ahmedzay, appeared today in federal court in Brooklyn, New York, and pleaded not guilty to one count of making false statements to FBI agents. The two were charged in connection with an investigation of Najibullah Zazi , an Afghan man who authorities said trained at an al-Qaeda terrorist camp and conspired to detonate an improvised explosive device in New York, according to Margolin. Zazi and two other men were arrested in September over an alleged plot to detonate a bomb around the anniversary of the Sept. 11, 2001, terrorist attacks. Medunjanin told authorities he trained in an al-Qaeda camp in Pakistan with Zazi, another law enforcement official said. Medunjanin and Ahmedzay attended Flushing High School with Zazi in Queens, New York, the person said. Robert Gottlieb, a lawyer for Medunjanin, said in an interview at the federal courthouse in Brooklyn that Medunjanin contacted him yesterday to say the FBI was at his apartment asking for his passport. Expected Arraignment Gottlieb, who said he was retained as defense counsel by Medunjanin in September, said he came to court today expecting his client to be arraigned. He said he was told by Assistant U.S. Attorney Jeffrey Knox that Medunjanin no longer wanted him as his lawyer. “They knew I represented him,” said Gottlieb, who said prosecutors wouldn’t let him talk to Medunjanin. “They have flagrantly decided that it’s OK to violate the Constitution and deny him access to his lawyer.” Gottlieb said he would return to court tomorrow for what he expected to be Medunjanin’s arraignment. Ahmedzay was arraigned today before U.S. Magistrate James Orenstein and was charged with making a false statement in an investigation of “international and domestic terrorism.” Ahmedzay, on Sept. 17 and Sept. 18, “falsely stated to special agents of the FBI that he had disclosed to them all of the locations he visited during his trip to Pakistan and Afghanistan, which trip occurred on or about and between Aug. 28, 2008, and Jan. 22, 2009,” the U.S. said. Ahmedzay also allegedly falsely stated that he hadn’t had discussions with a person identified as “John Doe” in court papers “about attending a camp to receive military-type training while in Pakistan,” the U.S. alleged. ‘John Doe’ Prosecutors said Ahmedzay falsely told the FBI that he didn’t “know that John Doe attended a camp to receive military- type training while in Pakistan” when he “did know that John Doe attended a camp.” “I am going to deal with the indictment as I see it,” Ahmedzay’s lawyer, Michael Marinaccio, told reporters after today’s arraignment. “I don’t know who John Doe is,” he said. “This is very early in the case,” he said. “Whether or not the allegations are borne out remains to be seen.” Orenstein set a hearing for Jan. 12 to consider whether Ahmedzay can be released on bail. The men were arrested shortly after midnight by members of the FBI’s and New York Police Department’s Joint Terrorism Task Force, said Margolin of the Federal Bureau of Investigation. Search Warrant New York Police detectives and FBI agents went to Medunjanin’s residence in the Flushing section of Queens yesterday afternoon to execute a search warrant for his passport, said a law enforcement official who requested anonymity. Medunjanin surrendered his passport without incident, the person said. After the search, Medunjanin left the apartment and got into his car and drove away, with detectives conducting surveillance from a distance and not in pursuit, the person said. While driving on the Whitestone Expressway near the Bronx-Whitestone Bridge, Medunjanin sped up and his vehicle collided with the car traveling ahead of him at about 4 p.m., the person said. Medunjanin then fled on foot and was taken into custody by New York City police officers and FBI agents after a brief chase, the person said. Medunjanin suffered minor neck injuries in the crash, and was taken to a hospital, where he was treated and released into the custody of the Joint Terrorism Task Force, the person said. Ahmedzay was taken into custody by police detectives and FBI agents at about 10 p.m. yesterday while driving a cab in Manhattan, Marinaccio said. Van Driver The two men came to the attention of authorities in September during the investigation of Zazi, Margolin said. Zazi, a former Denver airport shuttle-van driver who had moved to Colorado from Queens, drove to New York in early September, prosecutors said in a federal indictment. The U.S. alleges in Zazi’s indictment that he traveled last year to Pakistan, attended an al-Qaeda training camp, and returned to the U.S. with bomb-making instructions. Prosecutors said Zazi returned from Pakistan on Jan. 15, staying in Flushing in Queens. He then moved to Colorado within days. Zazi and three unidentified associates bought components for improvised explosive devices from July to September, the U.S. said in a conspiracy indictment unsealed Sept. 24. When officials searched a residence in Flushing where Zazi stayed, they found an electronic scale that could be used to weigh chemicals and batteries that could be installed in a bomb, according to the indictment. Car Stopped Members of the Joint Terrorism Task Force stopped Zazi in a rental car on Sept. 11 in Queens. They searched Zazi’s vehicle and found a laptop computer. The computer had an image of nine pages of handwritten notes, including a recipe for an explosive used in the 2005 London train bombings and intended for use in the 2001 plot involving “shoe bomber” Richard Reid to blow up an airplane, prosecutors said. Zazi was videotaped on store cameras in Colorado buying products such as acetone and hydrogen peroxide that can be use to make a bomb, officials said. Zazi Arrest FBI agents interviewed Zazi on Sept. 16 in Denver and showed him the handwritten notes, at which point he falsely said he hadn’t written them and had never seen them, according to an affidavit related to Zazi’s arrest. Zazi later admitted to authorities that, during a trip to Pakistan last year, he received training in the use of weapons and explosives at an al-Qaeda facility, according to a Justice Department statement. Zazi has pleaded not guilty to the charges and is awaiting trial. He faces as long as life in prison if convicted. No trial date has been set. His father, Mohammed Wali Zazi, and another man, Ahmad Wais Afzali, were also arrested and were charged with lying to investigators. Both men pleaded not guilty to the charges and are free on bond pending trial. To contact the reporters on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net ; Justin Blum in Washington at Jblum4@bloomberg.net .

Read the full article →

Dean Baker: Yes, Virginia, It Is Bernanke’s Fault

December 7, 2009

As the Senate debates Federal Reserve Board Chairman Ben Bernanke’s reappointment, it is striking how the media view blaming Mr. Bernanke for the Great Recession as being out of bounds. Of course Bernake bears much of the blame for this economic collapse. He was either in, or next to, the driver’s seat for the last 7 years. Bernanke was a member of the Board of Governors of the Federal Reserve Board since the summer of 2002. He served a 6 month stint as head of President Bush’s Council of Economic Advisors beginning in the summer of 2005 and then went back to chair the Fed in January of 2006. This crisis is not a weather disaster like Hurricane Katrina; it is a manmade disaster that was brought about by seriously misguided economic policy. And, after Alan Greenspan, Bernanke was better positioned than any other person in the country to prevent this disaster. The basic argument is very simple. The country had an enormous housing bubble. This bubble drove the economy ever since the last recession in 2001. It propelled the economy directly through a building boom that sent housing construction to record levels. Indirectly, it led to a consumption boom as people spent money based on the $8 trillion in housing equity that was temporarily created by the bubble. When the bubble collapsed it was inevitable that it would lead to the sort of disaster that we are now seeing. We lost close to $500 billion in annual demand due to the collapse of housing construction. The building boom created an enormous glut of housing. There will be little need for new construction for several years in the future. The disappearance of trillions of dollars of bubble generated housing equity led to a plunge in consumption. Annual consumption has fallen by close to $500 billion. If we add in a loss in demand of close to $200 billion associated with the bursting of a bubble in commercial real estate, the collapse of the bubbles led to a fall in annual demand of close to $1.2 trillion. The Fed has nothing in its bag of tricks that allows it quickly replace $1.2 trillion in demand, which is why the country is now mired in double-digit unemployment. In spite of the heroic efforts at obfuscation by many economists, there is not really much to dispute in the above story. Add in the fact that the bubble was both recognizable and preventable and you have a very solid indictment of Bernanke. The bubble was easy to recognize, Bernanke just failed to do so. Nationwide house prices had already experienced an unprecedented 30 percent increase by the summer of 2002. Since there was nothing in the fundamentals of the housing market to justify this run-up and no remotely corresponding increase in rents, Bernanke should have already been aware of the housing bubble by the time he joined the Fed in 2002. The Fed has a large arsenal with which to attack a housing bubble, but the first weapon is simply talk. If Greenspan and Bernanke had used their platform at the Fed to educate Congress, the financial industry, and the public at large about the existence of the housing bubble and the risks it posed, this likely would have been sufficient to rein it. This is not about mumbling “irrational exuberance.” It’s a question of using the Fed’s full research capacities to document the existence of a housing bubble (they actually did the opposite) and then disseminating this research as widely as possible. If this proved inadequate, the Fed also had substantial regulatory powers to curb the deceptive subprime loans that helped inflate the bubble in its later stages. If talk and regulation and failed, then the Fed could have used interest rate hikes. A policy of raising interest rates with the explicit target of bursting the bubble, for example a commitment to raise rates until house prices fall, would almost certainly accomplish its goal in fairly short order. Bernanke and his sidekick, Greenspan, chose to take none of these measures. Instead they insisted everything was fine the whole time. Things were not fine and the country is paying the price. And yes it is very much Bernanke’s fault.

Read the full article →

Rick Smith: Why is Tiger Woods in the Deep Rough

December 2, 2009

“I am dragged along by a strange new force. Desire and reason are pulling in different directions. I see the right way and approve it, but follow the wrong.” – Ovid Why is the irrational often more powerful than the rational? What leads us to do really stupid things? Locked up in his estate, this is certainly a question Tiger Woods is now asking himself. Why risk it all for a simple trist (or a series of them)? Why is lust so often more powerful than logic? What’s the difference between a golf ball and an Escalade? TIGER CAN DRIVE A GOLF BALL 400 YARDS. I offer no moral explanation, nor moral condemnation for Tiger Wood’s apparent extracurricular activities. But as we are all once again exposed to what appears to be an incredibly costly tradeoff of seduction and sacrifice, I find it helpful to look to modern psychological for possible explanations. Police asked Tiger’s wife how many times she hit him…She said 
”I DON’T KNOW, 5 OR 6…PUT ME DOWN FOR A 5″ In his wonderful book, The Happiness Hypothesis, John Haidt writes about the conflicting systems of the brain. Specifically, there are two competing systems at work in the brain at all times. The automatic system is derived from the oldest part of the brain, and triggers simple reflex (like sex and passion). The more sophisticated, controlled system manages processes like planning, weighing the pro’s and con’s of different paths. When presented with certain stimulus, like a beautiful hostess in a romantic place, far away from home, the war between the automatic and controlled systems begins to rage. The controlled system confronts with logic – “Hey, Idiot – Over here! You can’t be serious! Do you have any idea of the consequences?!” But the automatic system fights back. “Wow….hot!….martini…. REALLY HOT! ” WHAT WERE TIGER AND HIS WIFE DOING OUT AT 2:30 IN THE MORNING? THEY WENT CLUBBING The automatic system, powered by millions of years of evolution, runs automatically, effortlessly, and endlessly. The logical controlled system is powerful, but it has an endurance problem. Like a tired muscle, it eventually wears down and caves in. As Plato once said, “Reason is, and ought only to be the slave of the passions, and can never pretend to any other office than to serve and obey them.” DID YOU HEAR PHIL MICKELSON CALLED TIGER’S WIFE ASKING HOW TO BEAT HIM? Tiger is in the deep rough, that is for sure. But we cannot fault his logic or his reasoning. It was the oldest part of his brain that fought harder and longer, and eventually sent Tiger’s tee-shot deep into the woods… and his driver into the bushes.

Read the full article →

Tiger Woods to Get Third Chance to Tell Police About Car Accident, Injury

November 29, 2009

By Nancy Kercheval Nov. 28 (Bloomberg) — Tiger Woods refused to meet with Florida police for the second day after he was injured in a car accident that caused as much as $8,000 damage to his sport- utility vehicle. Officers from the Florida State Highway Patrol haven’t seen Woods since he crashed into a fire hydrant and tree as he left his driveway at 2:25 a.m. local time yesterday, Sgt. Kim Montes said. Woods, the No. 1 player in the World Golf Rankings , was taken to a hospital for treatment of facial cuts before the investigating officer arrived. “We were asked by his agent to come back (Sunday),” Montes said in a telephone interview. “The law does not require him to make a statement, but this is an opportunity to give his side to move the investigation forward.” Montes said police action on these types of minor crashes routinely is completed in one day. Investigators will review the Orange County Sheriff’s office 911 tapes, which may be released as early as tomorrow if they are deemed to be not pertinent to the probe, Montes said. Woods’s 2009 Cadillac Escalade was towed from the scene of the crash in his community of Windermere, Florida, for “safekeeping” and awaits pickup, Montes said. The left front hit the fire hydrant, while the right front struck the tree. Total damages were set at $5,000 to $8,000, she said. Police want to know how both back passenger windows were shattered, Montes said. Neither the front window nor the driver’s side windows were damaged. Golf Club Woods’s wife, Elin, used a golf club to break out windows in the car to free her husband, Windermere police told the Associated Press yesterday. The back window of the car wasn’t broken as previously reported, Montes said. Woods’s playing status is unknown. He is scheduled to play in the Chevron World Challenge in Thousand Oaks, California, next week. Woods is host of the tournament, which is not part of the U.S. PGA Tour’s regular season and attracts most of golf’s top players. He last played two weeks ago, winning the Australian Masters in his first appearance in that country since 1998. This season, Woods, 33, won six times in 17 events after undergoing reconstructive surgery on his left knee following his 2008 U.S. Open victory. He also had three runner-up finishes among his 14 top 10s in a year in which he failed to win one of golf’s four major titles for the first time in five years. Woods led the U.S. Tour with $10.5 million in earnings, and ended the season by capturing the yearlong FedEx Cup title for the second time. The championship also included a $10 million bonus. $1 Billion With that bonus, Woods became the first athlete to surpass the $1 billion mark in career earnings, Forbes magazine reported in October, citing its own calculations of Woods’s golf and endorsement earnings. In this year’s majors, Woods tied for sixth at the Masters Tournament and U.S. Open. He then missed the cut for weekend play at the British Open, only his second missed cut at a major in his professional career. His best chance to add to his list of 14 major titles came at the PGA Championship in August. While Woods led the field after 54 holes at Minnesota’s Hazeltine National Golf Club, he wasn’t able to fend off Y.E. Yang and lost for the first time as a pro when holding the lead going into the final round. Woods lives in the Windermere community in Orange County, Florida, with his wife and two children. He is building a new home on Florida’s Jupiter Island. To contact the reporter on this story: Nancy Kercheval in Washington at nkercheval@bloomberg.net .

Read the full article →

FDIC’s 20% Shorter `Merit’ Examinations Preceded Failures of Three Banks

November 10, 2009

By James Sterngold Nov. 10 (Bloomberg) — At least three U.S. banks failed in the past year after the Federal Deposit Insurance Corp. deemed them healthy enough to qualify for a program that reduced the time examiners spent on reviews by at least 20 percent. The three lenders — FirstCity Bank in Stockbridge, Georgia, Security Pacific Bank in Los Angeles and 1st Centennial Bank in Redlands, California — were among the banks included in the agency’s Merit program , designed to increase efficiency by focusing examiners’ attention on weaker firms. The program, launched in 2002, was terminated in March 2008 after examiners complained that the guidelines usurped their judgment. “The program was misconceived from the beginning,” said Colleen Kelley , president of the National Treasury Employees Union , which represents the examiners. “Employees believed the procedures were directed more at reducing examination hours than at ensuring proper supervision.” Participation in the program by the three banks was mentioned in reports that the FDIC’s Office of Inspector General issues on most institutions it closes. More banks subject to Merit exams may have been among the 120 institutions closed by the FDIC this year, the most since 1992 , according to Deputy Inspector General Fred W. Gibson. Some reports may not have mentioned that the failed banks were included in the program and others haven’t been released yet, he said. ‘Missed a Lot’ More than 40 percent of all bank examinations conducted by the FDIC between 2004 and 2007 were shorter Merit reviews, according to Greg Hernandez , a spokesman for the agency. “It’s a reasonable supposition that a lot more of the banks that failed were in the program if you just look at the percentages,” said Bert Ely , a banking consultant and chief executive of Alexandria, Virginia-based Bert Ely & Co. “It’s also clear that they missed a lot of things at the Merit banks if you look at how much those banks lost.” The three banks that failed caused losses to the agency’s insurance fund of $535 million. FDIC officials said the bank failures were the result of a decline in real estate prices rather than lax supervision. “Economic conditions are the driver of banking conditions, not the examination process,” said Steven Fritts, associate director for risk management and policy at the agency. Merit Program The Merit program — the name is an acronym for Maximum Efficiency, Risk-focused, Institution Targeted — initially covered banks with $250 million or less in assets, high ratings from regulators and capital ratios of at least 10 percent. The program was expanded in 2004 to include banks with up to $1 billion in assets. Examiners were told to reduce the time spent reviewing banks and to scrutinize fewer loan documents. The 2005 audit by the FDIC’s watchdog found that examiners spent 27 percent fewer hours reviewing the 818 banks that qualified the previous year than they did before the program began. They also examined fewer loans and loan documents — between 21 percent and 25 percent of the total, down from 36 percent to 50 percent — according to a paper by Christopher Straw published in New York University Law School’s Journal of Legislation and Public Policy in 2007 citing FDIC data. “Over the last 10 years, the FDIC’s ability to ensure the safety and soundness of the U.S. banking industry has once again been significantly undermined,” wrote Straw, at the time a law clerk to Maine Supreme Judicial Court Judge Jon D. Levy . “Bowing to pressure from the banking industry, Congress and the FDIC have instituted high-risk policies that threaten the integrity of the U.S. financial system.” Straw, now an attorney at Wilmer Cutler Pickering Hale & Dorr in Boston, declined to comment. FirstCity Bank Edward Kane , a professor of finance at Boston College, said that reduced supervision allowed some banks to build dangerous concentrations of real estate and construction loans. “A lot of what went on in those good years was called deregulation,” said Kane, who consults for the World Bank and is a senior fellow at the FDIC’s Center for Financial Research . “That was not really correct. It was de-supervision.” FirstCity Bank, with four branches in Georgia, had real estate construction and development loans equal to 711 percent of its capital at the end of 2006, compared with 101 percent at its peers. The bank qualified for a Merit exam in January 2007, according to the inspector general’s report about the lender. Examiners reviewed 18 percent of the bank’s loans that year compared with 37 percent in 2005, before it qualified for the Merit program, the report said. Exam hours fell to 457 from 776. When FirstCity failed on March 20 with $297 million in assets, it cost the FDIC’s insurance fund $100 million. Real Estate Loans Regulators should be concerned any time real estate development loans surpass 100 percent of a bank’s capital, said Walter J. Mix III , a managing director at Emeryville, California-based LECG LLC , a financial services advisory company, and a former commissioner of the California Department of Financial Institutions . “That’s the stuff that goes first when the cycle turns,” Mix said. Security Pacific Bank , which qualified for a Merit review in 2006, was closed on Nov. 7, 2008. Substandard and non-current loans at the bank, which had four branches in or near Los Angeles, went from none in 2006, the year of the Merit exam, to $133 million in August 2008, according to an inspector general’s report , which said the agency had failed to take “timely supervisory action” after identifying problems at the lender. Security Pacific had assets of $540 million and caused $208 million in losses to the FDIC’s insurance fund. 1st Centennial At 1st Centennial Bank, which underwent Merit exams in 2004 and 2006, construction and development loans were more than 600 percent of its capital, according to the agency’s watchdog . Non- current loans soared to $110 million in 2008 from $2.2 million in 2004. The bank, owned by 1st Centennial Bancorp. , had six branches in southern California. When it was closed on Jan. 23, it had assets of $784 million. Losses to the insurance fund were $227 million. The parent company filed for bankruptcy protection on March 25. Executives at the three banks couldn’t be reached for comment. “If you take shortcuts during the good times, you’re going to pay for it in the bad times,” said Nicholas Ketcha , a former director of the FDIC’s division of supervision and now a managing director with FinPro Inc ., a bank consulting company in Liberty Corner, New Jersey. “I don’t think there’s any substitute for the examiners doing full-scope exams regularly. You build up a framework of knowledge so that when you have these problem situations you know how to respond.” Kelley, the union president, voiced a similar concern. ‘Wrong Direction’ “Substituting Merit exams for full-scope examinations made it less likely that FDIC employees would be in a position to see if a previously strong bank was beginning to slide in the wrong direction,” Kelley said in an e-mail. When the Merit program began in 2002, the FDIC staff had shrunk to 5,430 people from 6,452 in 2000 and 22,586 in 1991, near the end of the savings and loan crisis. After bottoming at 4,500 in 2007, the number has been increased to more than 6,000. The decision to reduce examination hours for some banks “was independent” of staffing levels, the FDIC’s Fritts said. Instead, the program was designed to improve efficiency by focusing reviews on banks and bank functions that posed the greatest risk, according to the 2005 inspector general’s report. ‘Box-Checkers’ Examiners were told they needed to justify doing more loan reviews than specified by the Merit program, according to a Jan. 27, 2004, memo to regional directors from Michael Zamorski , the agency’s director of bank supervision. They were also encouraged to reduce scrutiny of banks that didn’t qualify for the program when appropriate, the memo said. The program was halted because of declining staff morale and because the guidelines were no longer needed, according to Fritts. “The primary reason was that the examiners feel that the holy grail of supervision is using their judgment,” said Fritts. “They felt they were being turned into rigid box- checkers. It was a morale issue.” While other bank regulators focus more on weak institutions than stronger ones, they haven’t codified reductions in examination hours, officials at the agencies said. OCC, OTS Kevin Mukri , a spokesman for the Office of the Comptroller of the Currency , which oversees about 1,650 nationally chartered banks, and William Ruberry , a spokesman for the Office of Thrift Supervision , which supervises about 800 thrifts, said that examiners can exercise their judgment on how much attention each institution requires. The Merit program still has supporters. “I can understand why it was suspended last year, but I hope they reinstate it,” said Christopher Cole, a lawyer for the Independent Community Bankers of America, an organization that represents smaller banks and which pressed for the program as a way of easing regulatory burdens. “We were a strong proponent of Merit, and we argued for it. Let’s give a pass to more well-capitalized banks.” That view is shared by Robert Clarke , comptroller of the currency from December 1985 to February 1992 and now a senior partner at Bracewell & Giuliani , a New York law firm. “Risk-based supervision is exactly the way it ought to be done,” Clarke said. “Ninety-five percent of the banks could fix their problems on their own, and they should be allowed to do that.” ‘Public Policy Failure’ The FDIC’s division of research and statistics reached a different conclusion in a 1997 book titled “History of the Eighties — Lessons for the Future.” The study examined the causes of the financial crisis that led to the collapse of more than 1,600 banks and 1,300 thrifts between 1980 and 1994. Before 1976, the FDIC gave all banks a full exam every year. By the mid-1980s, as a result of deregulation, some highly rated banks were examined every five years, and lower-rated banks could go as long as three years between exams. By the end of 1986, more than 1,800 commercial banks under the agency’s supervision hadn’t been examined in three years, the study said. “The decisions that caused examiner levels to be reduced during the first half of the 1980s were a public policy failure,” the book said. “It is reasonable to assume, although impossible to demonstrate empirically, that if examination frequency had not been reduced, problems would have been detected earlier and losses to the insurer reduced.” To contact the reporter on this story: James Sterngold in New York at jsterngold2@bloomberg.net

Read the full article →

Kate Moss No Guarantee Topshop Billionaire Beats U.S. Hex on U.K. Chains

November 2, 2009

By Richard Tomlinson Nov. 2 (Bloomberg) — Philip Green has a problem with four purple crushed-velvet dresses hanging from a display stand. “Here’s one of my pet hates: too many garments on a rack,” Green says, thrusting the frocks at Becky Bateman, manager of U.K. fashion chain Topshop’s flagship London store. It’s a Thursday morning in early October, and Green, 57, has strolled down London’s Oxford Street from the head office of Arcadia Group Ltd. , his privately held retail clothing company, for a store inspection. That’s the kind of attention Green has also lavished on Topshop’s first U.S. outlet. In April, he flew supermodel Kate Moss to New York to open the 25,000-square-foot (2,323-square- meter) emporium in Manhattan’s SoHo neighborhood that he says cost $25 million to prepare. The British billionaire is rolling out Topshop at a time when Americans are holding tightly onto their wallets. Total U.S. apparel sales dropped 7 percent in the first six months of 2009 to $85 billion compared with the same period last year, according to NPD Group Inc., a New York-based industry research firm. Green has the cash to back the expansion in a country that has been a graveyard for British retailers. Since 2000, his family has taken about 1.8 billion pounds ($2.8 billion) in dividends from Arcadia and Bhs Ltd., his privately held U.K. department store chain. Green owns Arcadia through Taveta Ltd., a holding company registered in the British offshore tax haven of Jersey in the Channel Islands, and his personal fortune is estimated by the Sunday Times of London to be 3.83 billion pounds. Bond St. Bandit Arcadia has all of the resources it needs to make acquisitions, Green says. The group made a profit of 164.7 million pounds on sales of 1.9 billion pounds in the year ended on Aug. 29, 2009. Topshop and Topman , a so-called brother brand for young men, contributed more than a third of the group’s revenue for that period. In the same year, Arcadia’s bank debt fell 23 percent to 535.8 million pounds, the company said on Oct.22. Green’s dealmaking over the past three decades has transformed him from the Bond Street Bandit — the name of an early store — into a billionaire tycoon with a knighthood and a roster of celebrity pals that includes American Idol judge Simon Cowell. He spends his weekends in a Monaco penthouse apartment or on the Lionheart, his 164-foot (50-meter) luxury yacht, and uses a private Gulfstream jet to shuttle between London and the French Riviera. Today, the kid from the drab south London suburb of Croydon has the cash to hire Beyonce to sing at his son’s 2005 bar mitzvah — and the chutzpah to try to conquer the American retail market. New York Debut “Green’s New York store is a statement of his intent that Topshop will become a global fashion brand,” says Greg Hodge, an analyst at London-based industry research firm Planet Retail Ltd. Munching a blueberry muffin in the cafeteria of Bhs’s Oxford Street store, Green says Topshop is ready to take on its multiple competitors in the U.S. One rival: Stockholm, Sweden- based Hennes & Mauritz AB , known as H&M, which opened its first New York outlet in 2000. H&M now has 175 stores across the U.S. The group’s total U.S. sales in local currency fell 5 percent to $789 million in the nine months to Aug. 31. Green is trying to succeed in a U.S. market that has brought down bigger British rivals, including Marks & Spencer Group Plc , Britain’s No. 1 clothes retailer and the target of two Green takeover attempts. The risk is that Green’s single New York outlet won’t generate enough buzz — or revenue — to compete with the more-established rivals such as H&M. Fast Fashion In 1988, M&S bought Brooks Brothers Inc. , the New York men’s store established in 1818 that has clothed generations of U.S. bankers and lawyers, for $750 million. The U.K. retailer foundered as it tampered with Brooks Brothers’ conservative stylings and sold the venerable clothier for a fire sale price of $225 million in 2001. To succeed in the fickle world of young women’s fashion, retailers must combine glamour with speed to deliver fast fashion. “Topshop is bringing new merchandise into its SoHo store every four to six weeks, and because Green has knocked out so many middlemen, he’s able to deliver the clothes at a more affordable price,” says Kathryn Deane, president of Tobe, a fashion research firm in New York. That means New York teens can get their hands on suede culottes from Moss’s collection for $170 soon after they spot her wearing them in the pages of fashion magazines. Some “Limited Edition” items from the Moss collection can’t be returned to the shop for a refund. Two Mobiles Green says he’s always ready to grab a good deal. “We could do a deal this afternoon for $1 billion without any stress,” says Green, who does business on two Nokia mobile phones-one exclusively for incoming calls and the other for his outgoing conversations. In New York, Green has replicated popular features such as free in-house style advisers found in Topshop’s flagship Oxford Street store to lure fashion-crazy teenagers. And then there’s Moss, who also hails from Croydon. In 2005, a London tabloid published a front-page photo of the supermodel purportedly snorting cocaine. In the wake of the scandal, in which she was dubbed “Cocaine Kate,” Moss lost contracts with companies such as Burberry Group Plc , Chanel SA and H&M. Police questioned her over the incident but didn’t bring any charges. Moss Rebounds The following year, Green hired her to lend her name to a Topshop designer collection. Since then, Moss, 35, has returned to fashion’s A-list-often appearing with her patron Green at her side. “She needed somebody at that moment, and I felt I could manage her,” Green said in late September over a lunch of poached salmon at Arcadia’s head office. Green’s incoming mobile phone rings. It’s Moss, wanting advice about what to wear for the 50th birthday party Green is hosting in two days for his friend Cowell. “Hello; we’ve just been talking about you,” Green says as he saunters out of the sixth-floor meeting room to discuss Moss’s wardrobe conundrum in private. For all of his jet setting, the heart of Green’s business empire is still central London’s retail district around Oxford Street, where he started out in the rag trade. Jean Jeanie Green’s father, Simon, who died when Green was 12, ran several electronics shops, while his mother, Alma, operated self-service gas stations. In 1968, Green quit Carmel College , a private boarding school for Jewish boys in rural Oxfordshire, before receiving the equivalent of a high school diploma. He then got a job with a shoe importer in London, and in the 1970s became a middleman, buying clothes from wholesalers and selling to U.K. retail chains. In 1981, he opened Bond Street Bandit, where he sold liquidated stock from designers such as Giorgio Armani SpA and Hugo Boss AG and flogged the out- of-date fashion in his shop. His first big step up the rag trade ladder came in the mid- 1980s, when he bought Jean Jeanie, a debt-ridden denim retail chain based in Slough, England, for 65,000 pounds. In just a few months, he slashed costs by cutting deals directly with Asian manufacturers. In 1986, Green sold Jean Jeanie to U.K. competitor Lee Cooper Jeans for 7 million pounds. In 1988, Green became chief executive officer of Amber Day Holdings Plc, a publicly traded fashion retail group in London, after buying 16 percent of the company. He resigned in September 1992 when Amber Day reported annual profit of 7.5 million pounds, a 26 percent fall from a year earlier. Green had forecast that profit would rise. In April 1993, Green sold his Amber Day stake for about 7.7 million pounds. Go-Between That cash propelled another round of dealmaking. In 1995, Tom Hunter, a Scottish retail entrepreneur, asked Green for help in buying Olympus Sports, a designer sporting goods company. Olympus competed with Hunter’s Sports Division stores and was owned by Sears Plc , a London-based shoes and department store group. Sears — which wasn’t affiliated with the U.S. retailer — rejected the then 34-year-old Hunter’s first bid because he seemed too young to be serious, the Scot says. Green stepped in to lead the negotiations, and in November 1995 Hunter bought Olympus for 25 million pounds. As Green negotiated the reward for the Olympus deal, his lawyer kept interrupting him, Hunter recalls. “The lawyer said, ‘Philip, I know what you’re going to say.’ And Philip-in his usual style-said, ‘I don’t know what I’m going to say, so how the f— do you?’” In return, Green got a 13 percent stake in Sports Division, which now included Olympus, and became the company’s chairman. Big Target Three years later, Green assembled a consortium to buy the rest of Sears with a group that included twin-brother real estate investors David and Frederick Barclay. Green pledged as much as 20 million pounds of his own cash, while Edinburgh-based Bank of Scotland Plc helped organize a credit line for the 548 million pound deal completed in January 1999. As Sears CEO, Green sold off all of the company’s holdings to competitors, including then-rival Arcadia, for about 800 million pounds. Flush with cash, Green looked around for another retail acquisition — and set his sights on the biggest clothing retailer in the U.K. In 1999, Green approached Marks & Spencer about making a bid. After the M&S board rebuffed him, he targeted department store chain Bhs, which he bought in 2000 for 200 million pounds. In 2002, he acquired Arcadia, the owner of Topshop, for 850 million pounds. Marks & Spencer Investors looking to buy into Green’s businesses are out of luck. After Amber Day, Green vowed never to work again for a publicly traded retailer that needed to please investors every quarter. When Green sets out to buy a stock-market-listed business, shareholders sometimes benefit because of the premium he’s willing to pay. The price he paid for Arcadia was 36 percent higher than the shares were worth when he announced his bid. Those earlier deals were peanuts compared with Green’s hostile 9.1 billion-pound bid for Marks & Spencer in July 2004, including 1.6 billion pounds of his own cash. The offer valued the company at about 40 percent more than its share price at the time. Green’s bid hit trouble when Stuart Rose, Arcadia’s former CEO and part of Green’s prospective Marks & Spencer management team, defected to the enemy to become Marks & Spencer CEO in May 2004. Confrontation Four days after Rose’s appointment, Green was walking past M&S’s head office on London’s Baker Street when he spotted Rose’s car. “I opened the car door and his driver went this color,” he says, pointing at his white shirt. “So I said, ‘I thought you wanted to be an owner?’ Stuart said, ‘We both couldn’t be boss.’” The following month, Rose persuaded M&S shareholders to reject Green’s offer. In 2006, Green was knighted for services to the retail industry by Queen Elizabeth II and is now known as Sir Philip. His wife, Tina; son, Brandon; and daughter, Chloe, live in Monaco. Green still drops by Marks & Spencer’s stores to monitor displays and foot traffic, and he says he’s patched things up with Rose. In March, Green organized a joint birthday party for himself and Rose at Annabel’s , a London nightclub, with Diana Ross as the surprise performer. “One of the reasons I get on with Philip Green so well is the fact that I don’t work for him,” Rose says. Star Power Green has a habit of hiring stars for his private entertainment. Ricky Martin and George Michael performed at his 55th birthday party in the Maldives, while Paul Anka sang at his mother’s 90th in London in 2008. In June, Green announced a possible television entertainment joint venture with his friend Cowell. Green told students at London’s Fashion Retail Academy on Oct. 15 that he planned to help Cowell transform the talent shows into global merchandising brands. Cowell could not be reached for comment. Green says Topshop’s U.S. outlet will be profitable in its first year thanks in part to his retailing flair. “If you’ve got my feely-touchy, I think America’s our sort of market,” he says, rubbing his index finger and thumb together. The instincts that have served the Bond Street Bandit on his home turf will have to make the transfer to Broadway — and beyond. — Editors: David Ellis , Gail Roche To contact the reporter on this story: Richard Tomlinson in London at rtomlinson1@bloomberg.net .

Read the full article →

Investors Sense Rout in Stocks After 8-Month Rally

October 31, 2009

By Rich Miller Oct. 29 (Bloomberg) — An eight-month, 68 percent rally in global stocks failed to convince investors and analysts that it’s time to take on more risk or dispel their concerns about U.S. economic policies and its banking system. Only 31 percent of respondents to a poll of investors and analysts who are Bloomberg subscribers in the U.S., Europe and Asia see investment opportunities, down from 35 percent in the previous survey in July. Almost 40 percent in the latest quarterly survey, the Bloomberg Global Poll, say they are still hunkering down. U.S. investors are even more cautious, with more than 50 percent saying they are in a defensive crouch. “The doubt and the pessimism just won’t go away,” says James Paulsen , who helps oversee $375 billion as chief investment strategist at Wells Capital Management in Minneapolis. “They’re still so shell-shocked by what they went through despite the improvement in the market and the economy.” Stock markets have slid in the past week after bounding higher since March as the economic outlook improved. The MSCI AC World Index of emerging and developed markets has risen by 68 percent since March. It fell 0.4 percent as of 1:30 p.m. in Tokyo, an eighth day of declines. The S&P 500 index, which has gained 54 percent since March, closed below its 50-day moving average level for the first time since July yesterday after a 2 percent drop. Worldwide, investors and analysts now view the U.S. as the weak link in the global economy, with its markets seen as among the riskiest by a plurality of those surveyed. One in four respondents expects an unemployment rate of 11 percent or more a year from now, compared with a U.S. administration forecast of 9.7 percent. The jobless rate now is 9.8 percent, a 26-year high. Dollar’s Decline The skepticism about the U.S. is taking a toll on the dollar, with a plurality of respondents saying it will weaken against most other currencies in the next year, the yen being the major exception among the 11 currencies tested. Thirty-seven percent say the dollar should not continue as the world’s reserve currency in 10 years. The yen fetched 90.32 per dollar as of 1:45 p.m. in Tokyo from 90.75 in New York. The poll is based on interviews conducted Oct. 23-27 with a random sample of 1,452 Bloomberg subscribers, representing decision makers in markets, finance and economics on six continents. It has a margin of error of plus or minus 2.6 percentage points. “The stock market has had quite a run since July when more Bloomberg customers thought the Standard & Poor’s 500 index would rally than predicted a downturn,” says J. Ann Selzer , president of Selzer & Co., the Des Moines, Iowa-based firm that conducted the polls. “That rally may have dampened views of what to expect next. They may also think that there are better markets now for investments than the U.S.” Emerging Markets Respondents see China, Brazil and India as the markets with the most potential, and commodities as the asset of choice, replacing stocks as the most desirable investment class in last quarter’s survey. Real estate and bonds are out of favor, with 40 percent saying bonds will have the worst returns over the next year. “Asia is the best place to put money as there are not mountains of consumer debt, bad mortgage lending, trade deficits or high unemployment,” says Peter J. Emblin , a fund executive at Thai Strategic Capital Management Co. in Bangkok who took part in the poll. Investors and analysts in Asia are the most bullish, while those in the U.S. are the most cautious. A majority of Asian investors expect their country’s benchmark stock index to rise while a plurality of U.S. and European respondents thought their benchmarks would fall in the next six months. Equity Rebound “A lot of people have been surprised by the speed of the equity rebound,” says Dan Greenhaus , chief economic strategist at Miller Tabak & Co. in New York, adding that the rally has probably been fueled by buying from hedge funds and traders. “It caught them off guard and they don’t believe it.” Fund manager Paulsen thinks the stock markets rose largely because of the disappearance of panicked sellers. “I don’t think the market has gone up because of heavy buying. You only need a little bit of buying when there are no sellers.” Asia’s optimism is understandable. The region is leading the global economy out of the worst recession since World War II, according to the Washington-based International Monetary Fund. The IMF said on Oct. 1 that the world economy will expand 3.1 percent next year after shrinking 1.1 percent this year, with China growing by 9 percent and India by 6.4 percent. Global investors and analysts agree that the world economy is on the mend. Almost 75 percent describe the global economy as stable or improving, up from just over 60 percent in July. Higher Rates The worldwide recovery is seen as pushing up long-term interest rates, with 55 percent of those surveyed forecasting higher rates in their respective countries in the next six months. As a result, only 9 percent surveyed thought bonds were the best place to invest over the next year, half the number who favored bonds in July. More than half of respondents see the yield on the 10-year Treasury note rising in the next half year, up from 47 percent in the July poll. In Asia, where some of the biggest holders of Treasury securities are located, led by China with almost $800 billion, investors are less convinced that yields will rise. Forty-five percent of those surveyed in the region think that. The yield on the 10-year note was little changed at 3.41 percent as of 1:45 p.m. in Tokyo today. Commodities are expected to benefit from an Asian-led worldwide economic expansion, according to the survey. More than one in three investors say commodities will offer the highest return over the next year. Oil, gold, copper, corn and soybean prices are all seen rising in the next six months. $100 Oil “It’s an emerging-market story,” says Matthew Johnson , director of interest rate strategy for UBS AG in Sydney and a poll participant. “It’s all about inelastic supply and fast- growing demand.” He sees oil prices rising to $100 per barrel in the coming months from around $77 now. China garnered the most votes from investors when they were asked to pick which one or two markets would offer the best opportunities over the next year. Brazil came in second, followed by India. By contrast, a majority of investors worldwide are pessimistic about the investment climate in the U.S. and the European Union, according to the poll, though the gloom about Europe was less pronounced than it was in July. Downside Risk “The U.S. market has the most downside risk in the coming year,” says Marty Beskow , a poll participant and portfolio manager for Blue Water Capital Advisors in Duluth, Minnesota, formed in January. “Although the U.S. may experience a quarter or more of growth, the driver is not real demand but rather stimulus from the Federal Reserve and government spending that is unsustainable.” Investors have turned more pessimistic about the U.S. government’s economic plan since the last poll, with more than 60 percent saying they feel that way, compared with 55 percent in July. Almost 20 percent expect U.S. banks to be in worse shape a year from now, about double the number who felt that way in July. Two in three say the banks will improve over the next year but will still have problems. Billionaire investor George Soros said on Oct. 5 in Istanbul that the U.S. recovery will be sluggish as “basically bankrupt” financial companies and indebted consumers impede it. Worldwide, investors see large budget deficits as the biggest threat to the U.S. economy over the next year. The deficit hit a record $1.4 trillion in the year ended Sept. 30. Persistently high unemployment is seen as the next biggest threat. More than three-quarters of respondents expect the U.S. unemployment rate to be 9.5 percent or more a year from now. Tax Increases Unlike investors elsewhere, those in the U.S. see higher taxes as the biggest danger. “The increase in taxes is going to slow the growth rate of our economy to below 2 percent for the next 25 years,” says Gary Singleterry , who participated in the poll and is president of Singleterry Mansley Asset Management in Summit, New Jersey, which manages about $200 million. Three-quarters of U.S. investors think the dollar should remain the world’s reserve currency over the next decade. No more than half their counterparts in Europe and Asia feel that way. “I heard a story the other day from an old French lady who was in her 100’s when she died,” says Ben Watson , director of quantitative analytics for RBS Group (Australia) Pty Limited in Sydney and a poll participant. “In the 1920’s she remembers the U.S. being an emerging market very much like China is today. The 19th century was the European century, the 20th was the American century and the 21st will be China’s century.” Click here for additional information on methodology and a full list of survey questions. To contact the reporters on this story: Rich Miller in Washington rmiller28@bloomberg.net

Read the full article →

Derivatives Bill Amended To Let Big Banks Keep Some Contracts Secret

October 21, 2009

The House Agriculture Committee approved legislation Wednesday beefing up regulation of the kind of opaque derivatives many blame for causing the financial crisis, but while proponents celebrate, critics say the bill exempts some transactions involving the very institutions — big banks — most responsible for the collapse. Over-the-counter (OTC) derivatives — essentially privately-negotiated derivatives contracts — aren’t traded on exchanges nor do they pass through clearinghouses. These contracts, which can act either as insurance (to transfer risk) or as a simple bet (like what many say brought down AIG), have been blamed for accelerating what was a credit crisis into a full-blown financial crisis and subsequent recession. They brought down the likes of AIG and the Wall Street investment houses Bear Stearns and Lehman Brothers. There’s been a big push by Democrats in Congress, reform advocates and the Obama administration to bring federal regulation to these deals. At the very least, advocates wants these contracts to go through clearinghouses or be traded on exchanges in order to make their terms public. The Agriculture Committee’s bill, shepherded by Chairman Collin Peterson (D-Minn.), does increase oversight of these previously mysterious and exotic financial instruments, experts say. Many derivatives trades would now have to go through clearinghouses or an exchange. But there are exemptions. In an effort to protect companies like airlines and manufacturers that use derivatives to hedge against things like price fluctuations and currency exchange rates, these so-called end-users would not be required to make public the terms of their contracts. Rather, they would continue to operate in the dark. But Peterson on Wednesday amended the bill to extend the exemption to big banks and financial institutions, as long as their contracts were with these end-users. Friday’s bill said contracts are exempt from the new requirements if, among other things, none of the counterparties is a “Tier 1 financial holding company” — essentially a big bank. Peterson’s amendment this week eliminated that line. So as long as a firm like Goldman Sachs enters into a contract with a company that’s hedging against some kind of commercial risk (like rising oil prices), the terms of that contract don’t have to be publicly disclosed. Peterson’s amendment “fatally weakens the bill,” said Barbara Roper, director of investor protection at the Consumer Federation of America. “[Peterson's] amendment now provides a broad exemption for contracts where one party to the contract is using the derivative to ‘manage risk.’ Mandatory central clearing is the basic reform that is essential to eliminate the potential for the failure of a single institution – such as Lehman Brothers or AIG – to bring down the entire financial system,” Roper said in a statement. During Wednesday’s debate of the bill, Bloomberg News reported that Peterson said that the “target for greater regulation and oversight is not the end-user but their swap dealer or major swap participant counterparty. End-users did not get a bailout of billions of dollars. End-users are not responsible for what happened in markets last year.” Peterson’s spokespersons did not immediately return repeated calls for comment. In a Wednesday speech , the chairman of the Commodity Futures Trading Commission (CFTC) — the federal agency that regulates derivatives — said that banks should not benefit from the exemption. “If Congress decides to exempt end-users from a clearing requirement, that exception should be very narrowly defined to include only nonfinancial entities that use swaps as an incidental part of their business to hedge actual commercial risks,” CFTC Chairman Gary Gensler said. “I do not believe that hedge funds, financial firms or other investment funds should be exempted from a clearing requirement.” The Obama administration said much the same thing in its proposed bill that it sent up to Capitol Hill. Before Wednesday’s debate, Peterson himself criticized efforts by big banks to evade further regulation of their derivatives activity. “If it were up to me, a bill to regulate these markets would have been signed into law a long time ago,” Peterson said in opening remarks . “However, large banks have a long history of using their financial and political advantage to try to gum up and slow down reform efforts by sowing discord between members and Committees.” That seems to be exactly what happened with Peterson’s amendment. “With Wall Street pulling out the stops to gut the bill, Congress appears all too willing to renege on the promise it made when it called on American taxpayers to bail out the big banks: that in return it would adopt the comprehensive reform that was needed to prevent a recurrence,” Roper said. “After all we have been through, mandatory central clearing of standardized derivatives should be a given. In the immediate wake of the market’s collapse, it looked as though the only debate would be over whether we would also get mandatory exchange trading of standardized contracts (a must for meaningful price competition) and how big the exemption for customized contracts would be,” she continued. The Treasury Department declined to comment. “Now, we are back to square one, the big banks are back in the driver’s seat, and the prospects for meaningful reform grow dimmer every day,” Roper said.

Read the full article →

Microsoft Stuns With New Windows That Works: Tech by Rich Jaroslovsky

October 16, 2009

Commentary by Rich Jaroslovsky Oct. 16 (Bloomberg) — Windows 7 is here. Thank God. It isn’t often one feels the need to praise the Almighty over a computer operating system, particularly one from Microsoft Corp. Then again, Windows 7 is polished, stable and smooth — in short, everything its unlamented predecessor, Windows Vista, wasn’t. Personal computers preloaded with Windows 7, along with boxed and upgrade versions of the new software, go on sale Oct. 22. While the global economic turmoil makes predictions chancy, Windows 7 deserves to be a hit, and a stimulus to PC sales worldwide. When I first began using Windows 7, my reaction was: This is just like Vista , except that it works. The user interface, called Aero, carries over from Vista, meaning that a computer running Win 7 more or less does things the same way. The more I’ve used the new software, though, the more I’ve concluded my initial reaction was unfair. Windows 7 incorporates enough new features and improvements to be something you’ll want on its own merits, not just because it fixes old problems. An example is what Microsoft calls Aero Peek. In Windows Vista, hovering the cursor over an item in the task bar — the strip across the bottom of the screen that lets you keep track of what’s open — would generate a small image of the window’s contents. In Windows 7, resting your cursor on the small image opens a full-sized one; click your mouse, and the larger window instantly becomes live. See-Through Windows Another nice touch: Move your mouse to the far right of the taskbar, and all the open windows turn transparent to let you see what’s on your desktop. And if you have a bunch of windows open but only want one on the desktop, grab its title bar with the mouse and give it a shake; all the other windows minimize. You can also now permanently pin items to the task bar for fast access — no more fumbling with menus to find the calculator accessory — and jump to frequently or recently used functions and files. A reworked Windows Explorer makes it easier to find and organize files. Other enhancements may be more relevant in the future than they are today. Chief among them is Windows 7’s extensive built- in support for touch screen devices. These days, touch is still a relative rarity on personal computers — but it’s likely to play a much larger role someday. Sticking With Vista One critical decision Microsoft made with Windows 7 was to hew as much as possible to the Vista model for device drivers — the software that allows printers, external hard disks and other add-ons to communicate with the operating system. This is one case where carrying over from Vista is a good thing. Drivers were my own personal hell when I upgraded my home computer to Vista from its predecessor, Windows XP , a couple years back, and the decision to maintain the driver model means I’ve largely already paid my dues on that front. In fact, on the three Windows 7 machines I’m running presently, I’ve only encountered one conflict, involving a several-years-old Hewlett-Packard Co. LaserJet printer/fax. Unlike Vista, which required more memory and better graphics than its predecessor, the new software should run fine on just about any recent-model computer, including many XP machines. The toughest part of upgrading may be deciding which of the multiple flavors of Windows 7 you need. The software comes in both 32-bit and 64-bit versions — they differ in how much memory and computing power you can make use of — and you generally can’t move from 32-bit Vista or XP to 64-bit Windows 7. To see what you’re running if you’re currently using Vista, you can right-click on Computer and choose Properties, or click on your Start button, choose Run and type “winver” without the quotation marks. Various Packages Then there are the various packages: Home Premium ($119.99 for the upgrade version); Professional ($199.99), which adds additional backup, connectivity and compatibility features; and Ultimate ($219.99), which adds more security and multilanguage support. Upgrading a Vista computer is time-consuming, if not labor- intensive. It took me an hour and 27 minutes on a recent-model Hewlett-Packard desktop PC, plus another 15 minutes to reconfigure network and Internet access. An older Sony Vaio took about two hours, though it didn’t require the network fiddling. Neither required much hands-on intervention, and data and most settings came through unscathed. Deferred Pain Windows XP users have a tougher path. For one thing, there’s the matter of those device drivers; if you never upgraded to Vista, you may not have avoided the pain, just delayed it. For another, you’ll need to use an external drive and a Windows 7 program called “Easy Transfer” to offload your data and settings during the process, then put them back where they belong. Finally, you’ll need to reinstall all your programs. Now, where is that Quicken disk? Not surprisingly, other companies see an opportunity to simplify the process, for a price. Laplink Software Inc. is offering a $15 program called PCmover Windows 7 Upgrade Assistant that it says will save your programs and negate the need for an external drive. For $39.99, iYogi , an India-based support provider, will have a Microsoft- certified technician remotely access your computer and migrate your applications, data and settings for you. How good is Windows 7? It still isn’t nearly as elegant or intuitive as Snow Leopard, the current version of Apple Inc. ’s Mac operating system. The upgrade path for XP users is ugly, and any endorsement must be tempered by the knowledge that even Vista didn’t seem so bad when it was first released. Still, there should be huge sighs of relief around Microsoft’s Redmond, Washington, headquarters. The only louder ones will be coming from Windows users. ( Rich Jaroslovsky is a columnist for Bloomberg News. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Rich Jaroslovsky in New York at rjaroslovsky@bloomberg.net .

Read the full article →

Scott Burgess: Honda Element Adds Ruff Styling for 2010

October 13, 2009

Think automotive sales have gone to the dogs? Just wait. Now Honda Motor Co. is trying to appeal to car buyers’ best friends to help spur sales. The Honda Element, the boxy little people and things hauler will now come with a few doggone accessories that will certainly garner a few ooos and ahhhhs. Honda introduced the 2010 model year canine friendly features last week as a way to impress owners and lure a few more people into dealerships. It may seem a little much, unless, of course, you own a dog — then it’s just not enough. It’s never enough. People will be dying to get their paws on this super kennel created from seat-belt grade materials, and who wouldn’t want a little paw stamp on their Element? The pooch palace comes complete with spill proof water dish and electric fan to keep the kennel cool while on the road. The importance to any kennel is two-fold. While it may seem natural to let a dog roam in the back, an unsecure dog is a danger to himself and the driver. Imagine trying to steer with a 100 pounds of love crossing over your lap to look out the driver’s window. And if you’re in an accident, not only will the dog be less likely to survive a crash if not restrained, but he could fly into you — making it less likely you will survive the crash, even if you are strapped in. Now there are companies that provide dog seat straps for big animals, but they are kind of goofy and I’ve yet to find one that will work well on my 90 pound shepherd. However, having used the Element, it’s about as dog friendly a vehicle as you’ll come across — and now its even friendlier. According to Honda, major features include: • a soft-sided cargo area car kennel made from seat belt-grade netting; • a cushioned pet bed in the cargo area with an elevated platform; • a 12V DC rear ventilation fan; • second-row seat covers with a dog pattern design (matches the bed fabric); • an extendable ramp (stores under the pet bed platform); • all-season rubber floor mats with a toy-bone pattern; • a spill-resistant water bowl; • and dog friendly exterior emblems (driver’s side and rear). Most dogs don’t need the ramp, due to the low loading space — though a control jump may be a little difficult for some. Most Elements also come with a urethane floor that makes it easy to clean. (No, Honda tells me this often, you should not hose out your Element – a mop might work, but spraying a garden hose through your Element can lead to electrical wiring shorting out, as water can seep through some of the openings, such as where the gas and brake pedals are and short out the wiring.) Also, the folding back seats make the Element ideal for someone who has more stuff than people to carry. The dog friendly features may create more press than customers, but it if you don’t love dogs, well, you’re evil. E-mail Scott Burgess at sburgess@detnews.com Still not convinced, check out this video of the debut of the concept Element from the New York Auto Show earlier this year.

Read the full article →

Jen Grisanti: Authentic Persuasion – The Art of Woo

October 12, 2009

What is the best way to sell your ideas? Why do some people seem to be able to sell their ideas so easily and get further up the ladder, while others are left at the bottom? When I think about this with television and features, I often wonder what specifically happens in meetings that leads to the sell. Is it the value of the idea, or is it the art of the persuader? When you look at the percentage of what works and what does not work, it makes you wonder. In the book The Art of Woo authors G. Richard Shell and Mario Moussa, Directors of the Wharton School’s Strategic Persuasion Workshop, give very insightful tips on how to authentically woo through self-awareness. The authors explore many practical approaches including how Woo works: The Four Steps, Survey Your Situation, Confront the Five Barriers (negative relationships, poor credibility, communication mismatches, hostile belief systems, and conflicting interests), Make Your Pitch and Secure Your Commitments. The authors also discuss different approaches to persuasion: Driver, Commander, Promoter, Chess Player and Advocate. Their book draws from many other brilliant authors and expertly highlights the value of authenticity and self-awareness in your ability to persuade and influence. We are going through a very difficult economic time. Yet, there is no greater time than now to educate yourself on how to succeed in your endeavors. Through reading books like The Art of Woo that are focused on the broader business audience, you learn about the power of the pitch and how your own personal attributes can get you further in the game of life. We all use persuasion and influence on a daily basis in our personal and professional lives, yet do we do it consciously? The key is better understanding the tools you have inside and how to use them to get the results you desire. You hold the key.

Read the full article →

Stephen Viscusi: Keeping Your Job While Not Worrying About the Friendship

October 2, 2009

The quantity of people losing their jobs is still on the rise. Economists predict the national unemployment number to reach 11 percent (which is such a fake number, because regionally the numbers are much, much higher and don’t even reflect those who have stopped looking for work). Readers of my books and blogs and viewers of my TV appearances have been telling me that when the word “recession” or “economic turndown” is used in conjunction with anyone being laid off, down-sized, “offered a package,” or simply fired, the word “recession” gives a boss any excuse to fire almost any worker, and blame it on the economy. Let’s face it–it’s easy for employers today to find someone, almost anyone to do your job, for less money. Who do you think makes the most amount of money where you work? Probably your direct boss, so bosses are often let go before the subordinates are let go. One of my golden “Viscusi Bulletproof Rules” is to “know your boss’ boss as well as to know your own direct boss.” These “Bulletproof Rules” are mentioned in my HarperCollins’ book Bulletproof Your Job: 4 Simple Strategies to Ride Out the Rough Times and Come Out On Top at Work . My book will help you keep the job you have or land a new one in less than 30 days. Believe it or not, bosses are essentially very disposable. Their boss–be it an “owner,” another manager or an HR executive–usually thinks they can save money by putting in a “caretaker” boss or maybe a subordinate of the boss just fired, as the new boss. After all, in today’s market, title is as valuable as money and if the alternative is out the door, who is going to say no to the promotion, even if it’s for very little more money? The company gets two jobs done for the price of one! Well, what if that person who is promoted is not you but your close friend? Perhaps he/she is your equal at work, and maybe sits in the next cubical. It may be a friend from another department, or even worse, someone you helped get a job at the company. It could even be a manager that you were already friends with, but did not report to in the past. Now, under this consolidation, they have been given several departments to manage. So now, you are reporting to your friend who never managed your department before. Think television’s “Ugly Betty.” In today’s dog-eat-dog economic environment, reporting to a friend may not be as easy as it would have been in easier economic times. Why is this? Well, remember that the closer you are to the top of the chain, usually the closer you are to the door. So, that new boss does not want to be next one out. They may be doing two or more jobs, and they will be counting on your friendship and more importantly, loyalty. You may not want peers in the same department to even know you have a personal relationship. It can get very sticky. Here are my “Bulletproof” ground rules for dealing with a friend that just became a boss. You can find more on my website www.BulletproofYourResume.com and of course in my HarperCollins’ book, “Bulletproof Your Job”. Stephen Viscusi’s rules for dealing with a “friend” who is now your boss: (For simplicity sake, I’m going to refer to this close friend as a “she” in this article) 1. Remember this person is now your boss and has her own job on the line. “Friendship” is just a word. It’s like the saying “blood is thicker than water.” They now have “boss blood,” and you still have subordinate “water in your veins.” Always keep that in mind. 2. Don’t “flaunt” your friendship with your new boss to your fellow colleagues. They will resent it, and it will backfire on both of you. Don’t ask for special favors. 3. Congratulate her as soon as possible. Let her know how “proud” you are of her and that you want to see her shine. Ask what you can do to make her job easier and her transition faster. 4. Let your friend, now your boss, “take the lead” on what her priorities are- your friendship- or her being the new boss. After all, she is now in the driver’s seat. Your opinion is fine, but she’s now the “new boss” and calling the shots. 5. Maybe just maybe, give her a copy of your resume. This would apply, even if the person who is the new boss is not your friend. Often, we are at a company for a long time and even our bosses, new or not, really don’t remember our experience. Having an up-to-date resume at all times helps people understand how you have grown in your position. In this case, your friend may know your children’s birthdays and that your mother-in-law is a pain, but they may not know that you have two masters’ degrees as well as experience managing a team from a previous job. The resume is subtle and key. 6. Last but not least, if you notice a change in your friendship, from your friend-now-your-boss, and you need your job but you miss your friendship, or even if you no longer like your friend as much as before, take my advice, and suck it up and be a good employee. Stephen Viscusi’s conventional wisdom for today’s job market is: New friends are far easier to come by today than are new jobs. ________________________________________ You’re always welcome to write me with your career dilemmas, and I’ll answer you on this column. Follow me on Twitter (@WorkplaceGuru) and add me on Facebook or email me at: stephen@viscusi.com. Disclaimer: The scenarios and events portrayed in this article are products of the author’s imagination. (c) Stephen Viscusi. All rights reserved. Article can be duplicated in part of full without author’s permission. ________________________________________ Stephen Viscusi is the author of two books about jobs and the workplace. Charles Gibson from ABC’s World News calls Viscusi, “America’s Workplace Guru”. Viscusi is a TV broadcast journalist on jobs, a headhunter and resume spin doctor. His latest book, Bulletproof Your Job: 4 Simple Strategies to Ride Out the Rough Times and Come Out On Top at Work (HarperCollins) has been published around the globe in at least 9 languages including Chinese, Korean, Spanish and Portuguese. Viscusi is also the founder of www.BulletproofYourResume.com . Viscusi’s headhunting and workplace advice is usually considered counter-intuitive to the conventional wisdom. Viscusi is not a career or life coach. To the contrary, his current book, Bulletproof Your Job has been described as the New Millennium’s The Art of War, by Sun Tzu, and that’s how Viscusi sees the workplace. He’s your workplace General. Each week, Stephen Viscusi volunteers his headhunting career advice to the world. His disciples can be celebrities, politico, world leaders, heads of industry, and some are just ordinary people who write him for advice. It’s like Tony Robbins advising Al Gore or Deepak Chopra advising Michael Jackson (wait, scratch that one). You can get your own advice by writing to Stephen at stephen@viscusi.com or Facebook him or Twitter him at WorkplaceGuru.

Read the full article →

Chicago Cab Vomit Fee Would Be First Of Its Kind

September 25, 2009

Chicago could become the first major city in the country with a puking ordinance if cab drivers get their way. Chicago taxi drivers proposed a package of fee and fare hikes Thursday designed to offset their plunging income during the recession. Among the more controversial revenue-boosting ideas brought to the City Council is charging customers $50 for vomiting in cabs. If enacted, Chicago would become one of America’s least friendly cities for drunks and people who eat bad shellfish. Customers who barf in cabs in New York, Los Angeles, Boston, Washington, D.C., Houston or San Francisco may face the driver’s wrath, but they won’t see any additional charges. “No, we do not have a puking fee,” Boston Police spokesman Joe Zanoli told the Huffington Post. “To my knowledge it’s free to puke in a cab.” Raymond Turner, president of Yellow Cab Houston, said Friday that of the nearly 3.7 million cab trips his company makes yearly only a fraction involve incidents of reverse peristalsis. “It’s a fairly rare event,” Turner said. “From my perspective, putting a city ordinance that applies to all cab rides for something that happens only three or four times a month is not very prudent.” Turner added that while Houston has no law allowing for a fee, drivers often work out arrangements with customers who ralph while in transit. Some passengers agree to pay for a car wash, while others give larger tips. But proponents of the mandatory barfing surcharge argue that such arrangements leave drivers at the mercy of crabby and sometimes incoherent customers. Plus, even if they do get compensated extra, drivers still must stop to clean up the mess, wasting time that could be spent getting additional fares. Dena Reed, general counsel for the District of Columbia Taxicab Commission, agreed that drivers often strike deals with customers to clean up their puke but said that such deals are, nonetheless, not allowed. “No official fee can be imposed on a customer for throwing up in the cab,” Reed said. “You can’t unofficially do that, either.” Even in the hilly city of San Francisco, puking cab customers face no penalty. “There appears not to be a fee for throwing up,” said Mariana Valdez of the San Francisco Taxicab Commission. “I couldn’t tell you about giving birth or cutting off your own finger.”

Read the full article →

Group of 20 Countries to Replace G-8 as Primary Forum for Global Economy

September 25, 2009

By Hans Nichols and Simon Kennedy Sept. 25 (Bloomberg) — World leaders will today announce the Group of 20 nations is replacing the G-8 as the main forum for global economic coordination, reflecting a shift in power from rich countries to emerging markets. The decision, unveiled in a White House statement late yesterday, comes as President Barack Obama , Chinese President Hu Jintao and other leaders gather in Pittsburgh for their third summit in a year to reshape the governance of the world economy following the worst financial crisis since the Great Depression. The G-8 will still exist and may meet on separate matters such as security, a U.S. official said earlier. The transfer of influence to the broader group, whose membership ranges from the U.S. to China to Saudi Arabia, symbolizes the fact that the richest industrial nations now lack the sway to govern the world economy alone after their excesses sparked the turmoil that tipped the globe into recession. “The G-20 needs to prove it can make the tough calls and implement agreed outcomes in a timely fashion,” said Tim Adams , who served as the U.S. Treasury’s top international official under former Secretaries John Snow and Henry M. Paulson and is now managing director of the Lindsey Group. “I think it will succeed, but the G-20 must prove skeptics wrong and that will take time and effort.” The G-20 accounts for about 85 percent of global gross domestic product and was created after a spate of currency devaluations plagued emerging markets from Russia to Thailand in the 1990s. The G-8 oversees about two thirds of global GDP. ‘One Chance’ “What we are trying to do is create a system for economic cooperation across the world,” U.K. Prime Minister Gordon Brown said yesterday. “We have this one chance to make a huge success of international cooperation.” Originally a forum for finance chiefs, G-20 leaders met for the first time in Washington last November and again in April in London as they sought to rescue the global economy from its deepest slump in seven decades. The financial crisis has thrust greater responsibility on to the G-20. At the onset of the turmoil, central bankers used talks near Cape Town in November 2007 to hatch a plan to inject more dollars into markets. The G-20’s new-found power reflects how the recent slump was led by housing and financial market busts in major economies and the recovery is now being driven by countries such as China. That’s a reversal from previous crises when the G-8 was in the driver’s seat of the recovery effort. China’s Role China has already overtaken Germany to become the world’s third-largest economy and may soon be named the biggest exporter. It passed Japan a year ago as the main foreign investor in U.S. government debt. China, Russia, Brazil and India together hold about 42 percent of international reserve assets, excluding gold. “You can’t possibly have a mechanism” for sustaining global economic stability without including China, said Laura D’Andrea Tyson , an outside adviser to President Barack Obama and former chairman of the White House Council of Economic Advisers under President Bill Clinton . “It’s too big a player in trade and investment.” Economists at JPMorgan Chase & Co. predict developed economies will shrink 3.3 percent this year and grow 2.8 percent in 2010, compared with growth of 0.5 percent and 5.8 percent in emerging markets. G-20 leaders meeting today are discussing an agenda aimed at tackling global imbalances, restraining banker pay, raising capital at financial companies and revamping control of the International Monetary Fund. Bretton Woods The need for economic policy makers to convene regularly grew out of the turmoil that followed the abandonment of the Bretton Woods system of fixed currencies and the oil shock of the 1970s. In 1975, French President Valery Giscard d’Estaing gathered the leaders of West Germany, Italy, Japan, the U.K. and the U.S. at a summit in Rambouillet, France. The group soon expanded to seven and its influence reached its zenith through the Louvre and Plaza currency accords of the 1980s and with its responses to financial crises in Asia, Latin America and Russia in the 1990s. It hasn’t intervened in foreign exchange markets since a rescue of the euro in September 2000. Russia joined after the end of the Cold War to expand it to the G-8, although its officials are still not invited to finance and economic talks. The G-20’s new formal role may prompt some investors who had dismissed the G-7 as irrelevant to pay more attention to international gatherings. “On G-7 meeting weekends now I go fishing, no reporters call and writing up summaries of the G-7 for the most part is pointless as there is no news,” David Gilmore , a partner at Foreign Exchange Analytics, wrote in a report to clients today. The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union. To contact the reporters on this story: Simon Kennedy in Pittsburgh at skennedy4@bloomberg.net

Read the full article →

Jewish Partisans Flub Revenge on Germans in Holocaust Drama: John Simon

September 22, 2009

Review by John Simon Sept. 22 (Bloomberg) — Very distantly related to facts, Daniel Goldfarb’s “The Retributionists,” at New York’s Playwrights Horizons , concerns a group of Jews dedicated to avenging the Holocaust. 1946: Anika resides in a Paris hotel room with no chair but a fine view of Notre Dame. Out of nowhere, Jascha, her ex-lover, irrupts at night with a box of her favorite macaroons. Though now engaged to Dov, Anika is charmed by the pastries into bed. Next, Dov is seen on a train to Germany, entering the compartment of Dinchka, a fellow conspirator. Hot sex ensues as he convinces the girl that though he’s marrying Anika, she is his eternal love. His suitcase, for the conspirators’ Plan A, is full of cyanide, with which they intend to poison a river and kill as many Germans as they killed Jews. In the ghetto, Dov, who is great with words and women, had romped in bed with both Anika and Dinchka. In the forest, he organizes Jewish guerrillas into Retributionists with his rousing oratory: “When you kill Jews, there are consequences.” On the train, however, he is apprehended; it seems Anika snitched on him to prevent exposing him to Plan A. Plan B takes over, whereby Jascha gets a job at the Nuremberg bakery that provides bread for 1,900 German prisoners of war, and poisons it with arsenic. They sicken, but do not die. Polish Forest 1943: The Retributionists are lurking in a Polish forest. Dinchka is asleep on the pillowless ground while Dov and Anika heroically wave their guns about. Dinchka wakes from a frightening nightmare, but the other two kiss her passionately and assure her they’ll always stay together in an implied menage-a-trois. Now for the dialogue. In the Paris hotel, Anika reflects, “I like the drizzle in Paris. There is something melancholy and romantic and doomed and just right about it.” She further declares that “sleep is like a dream,” and also that “good weather is good,” though presumably less romantic than drizzle. Jascha relates: “Today I had a croissant filled with warm bitter chocolate. I’m eating like a horse.” Where does he get the money? How does anyone in the play earn his or her living? My favorite line comes when Jascha mentions having lost a couple of fingers. “To lose only fingers is an accomplishment,” Anika says by way of consolation. “Maybe even a miracle.” Lemon Trees At play’s end, Dinchka, on a kibbutz, plants lemon trees in the desert. Jascha returns from the failed Plan B with an even bigger box of macaroons, only to find Anika married to Dov. He leaves, calling Dov disgusting. Dov, now apprised of Anika’s affair with Jascha, tearfully exclaims, “Get away from me.” She stops dead mid-macaroon. As Dov, Adam Driver is an unlikely love object for one woman, let alone two and as Dinchka, described as radiant, Cristin Milioti isn’t. Margarita Levieva and Adam Rothenberg are better, but not enough to overcome the script. Leigh Silverman’s chief directorial contribution is an unscripted sexy lesbian kiss. Susan Hilferty’s costumes and Peter Kaczorowski’s lighting will do, but the reliably brilliant set designer Derek McLane has come up with lackluster decor — not so shocking, perhaps, as losing a couple of fingers, but no miracle, either. Through Sept. 27 at Playwrights Horizons, 416 W. 42nd St. Information: +1-212-564-1235; http://www.playwrightshorizons.org . Rating: (No stars). ( John Simon is the New York drama critic for Bloomberg News. The opinions expressed are his own.) To contact the writer of this column: John Simon in New York at jis1925@aol.com .

Read the full article →

Buffett-Backed BYD Seeks Subsidies From China After Selling 31 Hybrid Cars

September 7, 2009

By Bloomberg News Sept. 7 (Bloomberg) — BYD Co., the Chinese automaker backed by billionaire Warren Buffett , is seeking government support for hybrid sales after selling 31 F3DM plug-ins nationwide in the first seven months of the year. “We hope the local and central governments will work together to provide subsidies to consumers,” BYD Chairman Wang Chuanfu said at an automotive conference in Tianjin yesterday. That would “definitely” help boost demand, he added. Hybrid and electric vehicles have missed out on a boom in Chinese auto sales this year as higher prices damp demand, undermining government attempts to cut oil imports and pollution. Overall vehicle sales may rise 28 percent this year, based on a state forecast, likely enough to surpass the U.S. as the world’s biggest auto market. “People think they can buy two regular cars for the price of one electric car,” said Chery Automobile Co. Vice President Fang Yunzhou. “There are very few people who think about the environment” when picking a new car. Chery, China’s largest maker of own-brand cars, will introduce its first plug-in electric car, the S18, next year. A plug-in car can be recharged from a regular household socket. Hybrids account for about 0.01 percent of China passenger- vehicle sales, according to JD Power & Associates China. BYD U.S. Goal Support for hybrids may be unpopular, said Chen Jianguo, deputy head of industry coordination at the National Development and Reform Commission, the government’s top planning agency. “Some may say it’s unfair to offer subsidies using taxpayers’ money for car buyers who are relatively rich even if that helps the industry grow,” he said. It would be “very difficult to introduce” such a policy. BYD’s F3DM plug-in starts at 149,800 yuan ($22,000), compared with 59,800 yuan or more for a similar-sized gasoline- powered F3. The automaker , part-owned by Buffett’s Berkshire Hathaway Inc., plans to start selling hybrids in the U.S. next year. It more than doubled first-half vehicle sales on rising demand for its gasoline models. The company rose as much as 8.5 percent in Hong Kong trading today and was up 5.5 percent at HK$58.00 as of 12:16 p.m. It has jumped more than fourfold this year. China’s overall vehicle sales surged 23 percent in the first seven months of this year to 7.2 million. Sales of Toyota Motor Corp.’s Prius, the world’s bestselling hybrid, fell 32 percent to 271. By contrast, in the U.S., hybrids have outperformed the wider market this year, boosting their share to 2.8 percent. Sales fell 16 percent through August to 200,796, compared with a 28 percent drop in the overall market. Long Way to Go Full-year U.S. auto sales will likely total around 10.5 million, according to both General Motors Co. and Ford Motor Co. In China, the government says sales may reach 12 million. China is backing hybrids and electric vehicles as it strives to develop a globally competitive auto industry. Widespread use of electric vehicles could also cut the nation’s projected demand for imported oil in 2030 by as much as 40 percent, McKinsey & Co. said earlier this year. “China and the automakers are certainly heading in the right direction, but there’s a long way to go,” said Vivien Chan , an analyst at SinoPac Securities Asia Ltd. in Hong Kong. “The government needs more concrete and clearer policies.” Research Funding The government has given automakers funding for research and offered subsidies to bus companies, taxi operators and state agencies in 13 cities to boost sales. The government wants hybrids and battery-powered passenger vehicles to account for 5 percent of the market by 2011. “If private individuals could get subsidies, that would be a great help,” said Xu Liuping , chairman of Chongqing Changan Automobile Co., China’s fourth-largest automaker. “Just helping public agencies is not enough.” Changan is building a plant with capacity to make as many as 600,000 low-emission and hybrid vehicles a year. Chongqing city, where the company is based, is giving 20 million yuan to help fund research. Developing recharging infrastructure is also vital in ensuring that electric cars can be used for longer trips without the driver being forced to return home to power up the vehicle’s batteries. “Infrastructure for charging is a must,” said Fu Zhenxing, chief engineer of Shanghai E-Propulsion Auto Technology Co., a unit of SAIC Motor Corp., China’s biggest automaker “The whole industry is talking to the government about this.” SAIC has said it’s investing 2 billion yuan in developing hybrids and electric vehicles. It plans to unveil the first hybrid Roewe 750 sedan by the end of next year, followed by a plug-in hybrid Roewe 550 and a pure electric car in 2012. “China will definitely continue to promote this area,” said Chen Liang , a Huatai Securities Co. analyst based in Nanjing. “Even so, it’ll take as long as 10 years for the industry to take shape.” For Related News and Information: Top transportation stories: TOP TRN China auto news: TNI CHINA AUT Alternative-energy stories: NI ALTNRG

Read the full article →

Steve Parker: African-American Wendell Scott should be in NASCAR’s Hall of Fame!

August 28, 2009

NASCAR has a fabulous chance to grab some positive, international public attention as insiders and fans vote on the first five members of the sport’s new Hall of Fame, but, as they’ve done before, the powers-that-be have blown it. Five top vote-getters of 25 nominated drivers, owners and wrenches will be honored in the sport’s multi-zillion dollar Hall of Fame being built in Charlotte, NC. See the nominated group and find out more about the Hall of Fame by clicking anywhere on this line. NASCAR’s first and best-known Black race-winner, Wendell Scott, isn’t among those eligible for the Hall. He didn’t even make the top 25; voters for the final five couldn’t pick Wendell Scott if they wanted to. And … some cynics (and probably realists) ask … who can blame NASCAR for the “omission”? Wendell Scott in 1977 The sport’s TV ratings and attendance have dropped as its popularity has reached a plateau, coincidentally much like the Republican Party’s, with its major base of support in the nation’s southeast and those fans being overwhelming male and White. Why risk the enmity of some of those fans, it’s probably asked by the sport’s leadership and top sponsors, by nominating Scott for that first Hall of Fame group? Scott was the first African-American to compete regularly in and certainly the only one to win a NASCAR Grand National race, now known as Sprint Cup, the sport’s top national series. And this was in the American south of the 1960s, not the 21st century. Scott’s life story was portrayed in the 1977 film Greased Lightning, the driver played by Richard Pryor. NASCAR Hall of Fame is being built in Charlotte, NC It isn’t as if, the sport’s sponsors and owners know, there would be some massive increase in minority NASCAR fans if Scott were nominated. For too many at the top in NASCAR, Scott’s nomination or his entry into the Hall must be thought of as a lose/lose for the sport. And I’m basing this on NASCAR’s so-far feeble attempts to bring minorities into the sport as fans and/or participants, their “Drive for Diversity” program seeming to be talked about more in court cases than realistically-displayed on the tracks and in the pits and garages. Talk about cynical: the sport’s attempt to label current Sprint Cup driver Juan Pablo Montoya and his success as a product of their diversity program was worse than laughable; Montoya was born in Colombia and is the only driver to have won the CART championship, the Indy 500 and the 24 Hours of Daytona all at his first attempt. “Hard Driving” by Pulitzer-winning author Brian Donovan recounts Scott’s career And NASCAR apparently still doesn’t discourage the display of the “rebel” flag at their events while it quietly settles, out-of-court, discrimination lawsuits. For those who want to defend that flag-waving, think for a moment of the Nazi flag and other Third Reich symbols being paraded by crazy white supremist and anti-Semitic groups. Would you feel comfortable and welcome at their events? Any patriotic American knows the rebel flag for what it is: a symbol of racism, the phony call for “states’ rights” and a fondness for the dissolution of the Union. Some might wonder: what does it all matter? It’s “only” a sport. Here’s why: this sport is bought-and-paid-for with hundreds of millions of dollars from America’s largest corporations and, thus, from the American people. NASCAR founder Bill France Sr., in 1953, founded International Speedway Corp. to construct and manage tracks and promote races. ISC also owns several major NASCAR-related businesses and is now a publicly-traded company. In other words, NASCAR is no private country club, university or so-called civic organization. Almost every consumer in America has a money stake in NASCAR. And “Big” Bill France ran his sport his way, threatening and taking action against anyone espousing organizing drivers or anyone else into any sort of union which might threaten his absolute control. This is probably the reason many big NASCAR veterans now speak openly about Scott being treated poorly, but during his NASCAR career never spoke-out in his favor. This “tradition” continues in today’s NASCAR, still run with a heavy hand by the France family. NASCAR tried to pass-off Juan Pablo Montoya as a product of their “Drive for Diversity” program Those who ask, “Should Scott be in the Hall of Fame simply because he was the first consistently top-running Black driver in NASCAR?” are raising the old red herring which claims racism is over in America. Using that same argument, we can ask if Jackie Robinson should be in baseball’s Hall of Fame “just because” he was Black or if there’s something historic about Barack Obama being an African-American; of course Robinson should be in the HOF and Obama is special because of their ethnicity. How can that be ignored? But like Robinson and Obama, Scott was a winner, too. He was often in NASCAR’s top ten in national points, won a major national event (which NASCAR awarded to the runner-up so the local white beauty queen wouldn’t have to kiss him) and seemingly took it all in stride, never lashing-out at the sport during his career even though he seemed to have every right to do so. Scott raced a few years after after this Tucker competed in NASCAR events Click here for an opinion from an Alabama newspaper website. Based on his combination of grit, courage and driving and wrenching skills, and his race, especially in that place and in that time, Wendell Scott should be a member of NASCAR’s inaugural class Hall of Fame. What do you think? Remember, top executives of many NASCAR-supporting car-makers, other sport sponsors (and potential sponsors) and officials stop by this blog on a regular basis, so let them hear your voice. And let’s hear from all the sport’s fans, here, too … and I’m one of them.

Read the full article →

Trevor Traina: Post Clunker Blues: New Study Shows Car Owners Have Work to Do

August 25, 2009

With the pyrotechnic end to Cash For Clunkers last night, we are all confronting the reality that whatever car is sitting in our garage is going to be there for a while. A new study released today gives little comfort. It shows that, while 90% of us think we do a great job maintaining our cars, only about a quarter actually make the grade. (See the DriverSide/Kelton survey .) At the same time, another recent study showed that, due to the recession, 82% of all US drivers now plan to keep their cars longer. These surveys show that we lack basic skills to care for our cars just as we are keeping them longer. So, what are we to do? Gone are the days when dad kept binders of service records, washed his car on weekends, or took it out for a regular tire rotation. It is about as quaint and outdated an image as retirement at 60 or American car companies with growing market share. I can’t think of many of my admittedly urban friends nosing through an owner’s manual or calendaring automotive service. In fact, most of us do not proactively manage our cars the way we might other assets like a stock portfolio or a home. Rather, we treat our cars like those 1980′s sitcom guys who discover a baby in a basket on their stoop. However, instead of changing diapers, we are learning to change the oil. In fact, only 41% of car owners follow the manufacturer’s service schedule (the most basic and important step in maintenance.) Among women, that number is even worse — 37%! What gives? How have we lost our ability to care for our most important asset (after our home)? Is it that hard? The truth is that cars are much more complicated, if more durable and reliable, than they used to be. Instead of popping the hood and seeing familiar areas of an engine, most people watch their mechanic attach a computer to an otherwise unrecognizable jumble of mechanical components. And, many of the leasers who were recently flipping cars, sans servicing, every couple years, are now confronting a new timeline which will require, yes, maintenance! The good news is that it is not impossible, or even that hard to keep your car on the road. It just takes a little determination. Start with the basics. Service the car according to the manufacturer’s suggested schedule. Read the owner’s manual and look for the recommended intervals for oil changes, tire rotations and other elective service. Put approximate appointment dates in your calendar or use an online service to set car service reminders for yourself. Maintain the interior and exterior so that they do not degrade. Only 31% of people say they get their cars waxed and only 16% get a scratch or ding fixed in a timely fashion. Failure to protect the paint job will jeopardize it and will hurt your car’s resale value. (You don’t want it looking like something from the opening credits of the Beverly Hillbillies.) On that topic, keep the service records since a car with a complete service history is more valuable. Make use of online tools as much as possible. Does your car’s manufacturer have an owner’s website? Sign yourself up for free recall alerts and service reminders at DriverSide.com. Do you like and trust your mechanic? If not, find another auto mechanic rated and reviewed in your town. If you really don’t like yours, review him or her on Yelp so others are forewarned. Whoever you pick, you should consider talking proactively with them about your plans for your car. Tell them how long you hope to own it and ask what you need to do to keep it on the road. Keep track of your car’s value over time. Remember it is an investment. Treat it as such. I often tell people to frequent AutoTrader to see what similar cars are currently selling for. Understand what your residual value is on your car if you lease it and make sure you don’t find yourself “underwater.” While your car is always depreciating, the rate is somewhat up to you. If you really had an old gas-guzzling clunker, you have probably unloaded it. If your car is newer, there is good news since it can last a really long time with proper servicing and maintenance. Just be sure you don’t become a statistic. In this economy, nobody is going to be retiring at 60 but that doesn’t mean we can’t re-learn how to care for our cars.

Read the full article →

Housing sales up sharply

August 22, 2009

… price was the highest since September. But distressed sales remain in the driver’s seat; they … set to expire on Nov. 30. The real estate industry is lobbying heavily to have the …

Read the full article →

Jamie Court: Mercury Insurance Launches Attack On Middle Class With Initiative To Raise Rates For Drivers Who Don’t Cause Accidents

August 15, 2009

Every major economic downtown has its Scrooge, the opportunistic capitalist who preys on working people when they are hurting the worst. A ballot measure cleared for circulation by California Attorney General Jerry Brown moves Mercury Insurance CEO and founder George Joseph high up on the list of America’s Top Corporate Predators. Brown has released the official title and summary of the proposed Mercury Insurance ballot initiative that will allow insurance companies to raise rates when motorists who stopped driving for a time restart their coverage; when they file a claim, even if an accident is not their fault; or when they are late on a payment. The anti-consumer measure is sponsored by auto insurance giant Mercury Insurance and its billionaire Chairman George Joseph, who over the years has funded numerous attempts to undermine Proposition 103, the voter-approved measure that bans unfair rate increases. Joseph has been been listed as among the top 400 richest men in the world, but I suppose you can never be too rich when there’s opportunity to hit the middle class where it hurts in the name of profit.

Read the full article →

Noordin Top Is at Large After Indonesia Police Kill Terrorist’s Accomplice

August 12, 2009

By Achmad Sukarsono Aug. 12 (Bloomberg) — Noordin Mohammad Top , Southeast Asia’s most wanted terrorist, wasn’t killed in a shootout with Indonesian police last week, said Eddy Saparwoko , head of the victim identification unit. Police killed militants in two separate raids on Java island Aug. 8, thwarting a plot to attack President Susilo Bambang Yudhoyono ’s residence. Noordin is suspected of planning the July 17 attacks at the JW Marriott and Ritz Carlton hotels in Jakarta that killed nine people including two suicide bombers. The Malaysia-born Noordin, who had escaped from a police shootout four years ago, and his team may be plotting more attacks in Asia’s third-most populated nation, police said. The 41-year-old terrorist is suspected to be involved in strikes that have killed almost 300 people in Indonesia since 2002, when bombers attacked nightclubs in the resort island of Bali, killing 202 people. “There are not that many people who have the capability to plan such attacks, so definitely as long as he is out there he poses a risk,” said James Van Zorge , of risk consultants Van Zorge, Heffernan & Associates. “He’s public enemy No. 1.” Local television station TVOne reported that during the Aug. 8 raid, a suspected militant shouted, “I am Noordin Top,” as officers carrying steel shields prepared to enter a house in Temanggung, Central Java, 360 kilometers (224 miles) east of the capital. The man killed was Ibrohim, who worked for a flower vendor at the Ritz Carlton and Marriott hotels in Jakarta, and helped plan the July 17 hotel bombings, police spokesman Nanan Soekarna said today. Ibrohim was set to be the next suicide bomber, Soekarna said, declining to elaborate. The same Marriott hotel was hit by terrorists in 2003. Security Camera Footage Police today showed Marriott security camera footage taken July 16 that showed Ibrohim unloading materials to make the bombs from a pickup truck at the hotel’s goods entrance. Ibrohim didn’t allow the driver of the pick-up truck to help unload the package, Soekarna said. “The security at front is good; the back side and the loading docks were not covered,” Soekarna said at the briefing today. “I call upon businesses to tighten security at service entrances.” Ibrohim, a member of Jemaah Islamiyah, a terrorist organization linked to al-Qaeda, was also seen in July 8 footage showing a suicide bomber the targeted restaurant at the Ritz Carlton. “The modus operandi tells us that there is a new level of sophistication,” Martin Hughes , director at PT Business Risk Indonesia, who advises companies operating in the country. “The terrorists thought ‘why not create a little more fear by hitting people who have been hit before.’” Suicide Bombers Two other men were shot dead on Aug. 8 in Bekasi, 20 kilometers (12 miles) east of Jakarta, near a building that may have been a safe house for Noordin, National Police Chief Bambang Hendarso Danuri has said. Terrorists planned to load a pickup truck with explosives and use it to attack Yudhoyono’s home, about 10 kilometers from that house, he said. Dani Dwi Permana was the suicide bomber at the Marriott, while a man identified as Nana blew himself up at the Ritz Carlton, Saparwoko said. Noordin began planning the attack on Yudhoyono’s residence in April to avenge the execution of the three bombers who carried out the Bali attacks, police said. The terrorists were executed last year. The government should close down publishers of books such as “Awaiting the Destruction of America and Europe,” and “Judging the Status of Rulers Who Reject Sharia,” as well as enact stricter legislation to discourage people from joining terror organizations, said Rohan Gunaratna , head of Singapore- based International Centre for Political Violence and Terrorism Research. Al-Mukmin Some 17 people involved in Indonesia’s spate of terror attacks graduated from the al-Mukmin Islamic school in Ngruki, Sukoharjo, according to the Brussels-based International Crisis Group. Most of the radical books including one written by a terrorist executed for his role in the 2002 Bali bombings are sold near the school. Gunaratna said Noordin is getting support from Jemaah Islamiyah, a terror organization linked to al-Qaeda, which wants to eliminate the Indonesian president, he said. Noordin allegedly was involved in a 2003 bombing at the Marriott hotel that killed 12 people and a 2004 blast outside the Australian Embassy in Jakarta that killed at least nine, and another attack in Bali in 2005 when three suicide bombers killed themselves and 20 others. The U.S. Federal Bureau of Investigation added Noordin’s name to its “Seeking Terrorism Information” list in 2006. ‘Call God’ Noordin split from Jemaah Islamiyah and formed a group to carry on attacks after leaders of the group were caught or killed by Detachment 88, Indonesia’s counter-terrorism squad. Authorities in 2005 killed Azhari Husin , Noordin’s accomplice. Noordin escaped during that raid. Abu Dujana , one of Jemaah Islamiyah’s suspected leaders, was arrested in 2007. The three terrorists convicted for the 2002 Bali bombings, Amrozi, Imam Samudra and Ali Ghufron, were executed by a firing squad in November last year. Riduan bin Isomuddin, also known as Hambali, the suspected leader of al- Qaeda in Southeast Asia, was captured in Thailand in 2003. Indonesian authorities don’t know if Noordin is in Indonesia, said I Ketut Yoga Ana, a police spokesman. “Call God, he will know where Noordin is,” he said. To contact the reporter on this story: Achmad Sukarsono in Jakarta asukarsono@bloomberg.net

Read the full article →

Aaron Greenspan: Comcast Meets Kafka: A Multimedia Essay for the FTC

August 9, 2009

I reported previously that I had encountered some trouble with my Comcast Internet connection. After three months I couldn’t stand it anymore and I switched to AT&T u-Verse. (No, contrary to some people’s beliefs, I am not being paid by anyone to write this. I’m sure I’ll have something to say about AT&T eventually, too. The Electronic Frontier Foundation certainly does.) My new service works just fine, but I sadly have not been able to escape the grasp of Comcast’s truly Herculean incompetence. Rather than write about it forever, which I easily could, I’ll just let you and the Federal Trade Commission listen in. After all, my calls were recorded for training and quality assurance purposes; we might as well rest assured of their quality. What could Comcast possibly have done to make me go through the bother of recording, editing and posting eight telephone customer service telephone calls? The answer is surprisingly simple: they asked me to send a copy of my driver’s license to an e-mail address that didn’t even belong to Comcast, and then refused to admit the error. (That, and they also deliberately withheld my own billing information for months on end, which they continue to do.) The following calls have been edited to remove my personal information and shorten some of the more insane hold times. Call 1 (2:09 Edited) – May 26, 2009 – I attempt to finally cancel my Comcast service. The phone system routes me to a busy signal. Call 2 – May 26, 2009 – I actually do cancel my Comcast service. Unfortunately, the recording is cut short by my computer. Call 3 (4:10 Edited) – July 27, 2009 – I call Comcast’s President’s office to get my latest billing statements e-mailed to me. Per Comcast company policy, I can’t sign into the comcast.com web site to pay my bill anymore because my service has been terminated. I also haven’t received my statements in the mail as promised. Five days after the fact, I also have been charged $350.00 for “unreturned equipment” that UPS tracking confirms has been returned. Call 4 (5:24 Edited) – August 1, 2009 – I call Comcast customer service again to get my latest billing statements e-mailed to me. This customer service representative is actually understanding and helpful — but only because she makes false promises. The e-mail I ask for that she assures me will come in an hour never actually arrives. Side Note: Now you can pay Comcast using an automated system — FOR FREE! (It’s $3.99 to make a payment otherwise.) This particularly abhorrent practice was the subject of debate in the recent financial industry reform discussions in Congress, but apparently it’s still okay for telecommunications companies to charge people for the privilege of paying their bills. Call 5 (4:00 Edited) – August 1, 2009 – I call Comcast again to get my latest billing statements e-mailed to me. Why hasn’t the e-mail arrived? The systems are down. Of course. Call 6 (2:18 Edited) – August 2, 2009 – As instructed, I call Comcast again the next day to get my latest billing statements e-mailed to me. The adventure continues, or it would, if Comcast were actually open. Call 7 (1:51 Edited) – August 3, 2009 – I call Comcast again to get my latest billing statements e-mailed to me. I’m starting to get the hang of the phone system! Or maybe not. Comcast is too busy wasting other people’s time to waste any more of mine. Call 8 (16:39 Edited) – August 3, 2009 – I call Comcast again to get my latest billing statements e-mailed to me. Things start to get interesting. Call 9 (12:12 Edited) – August 7, 2009 – I call Comcast again to get my latest billing statements e-mailed to me. Aside from being wrong about her own company’s e-mail address scheme, Comcast’s customer service supervisor exhibits an all-too-common (among arrogant corporations) misunderstanding of California’s call recording statutes. According to Davis Wright Tremaine LLP , California Penal Code § 632 states that “[e]very person who, intentionally and without the consent of all parties to a confidential communication, by means of any electronic amplifying or recording device, … records the confidential communication” may be held criminally or civilly liable. Comcast can record calls nonetheless because (again, according to the article) “a business that advises all parties of its intent to record a telephone call at the outset of the conversation does not violate Section 632.” Simultaneously, situations where there is a reasonable expectation that a recording could be made are excluded from the statute. Given that Comcast greets all of its customer service callers with a disclaimer about calls being recorded within seconds, and that there’s already a reasonable expectation that customer service calls will be recorded in this day and age, it’s absurd for Comcast to claim that it, but not the customer, can record calls. I did try sending a test e-mail to the address I was told, and received this error (as I expected): The original message was received at Fri, 7 Aug 2009 18:08:10 -0400 from X-X-X-X.lightspeed.sntcca.sbcglobal.net [X.X.X.X] —– The following addresses had permanent fatal errors —– (reason: 553 5.3.0 … No forwarding information. Try the phone.) —– Transcript of session follows —– … while talking to mail.it.ca.: > > > > > > DATA

Read the full article →

Diane Francis: Auto giants reposition globally

July 24, 2009

Here come the Big 12 The world’s auto industry is transforming rapidly into a dozen geopolitical coalitions with political as well as business agendas. Put another way, the globalization of free trade in autos, plus the economic meltdown, is accelerating the globalization of ownership. This opens up opportunities to smaller players which is why it is not surprising that two Canadians are among the new auto business superstars, Magna International’s Frank Stronach and Fiat’s Sergio Marchionne.

Read the full article →

Harvard Professor Gates in Handcuffs Sounds a Familiar Note to Black Men

July 22, 2009

By John Lauerman and Tom Moroney July 22 (Bloomberg) — The arrest of Henry Louis Gates Jr. , Harvard University’s top expert on African-American history and culture, sounded a familiar note to professors and social scientists, who said black men at all levels of U.S.

Read the full article →

Next Entries →