economy

Woman’s Small Claims Court Win Could Rock Entire Auto Industry

by MLive on February 11, 2012

Huffington Post…

Since an improbable victory over Honda last week in a California small-claims court, a woman who sued over the disappointing fuel economy on her Civic hybrid says she has fielded hundreds of inquiries from disgruntled owners asking how they can follow in her footsteps. Heather Peters says she has been happy to answer questions, and she’s curious to see how many file small-claims court cases of their own. She’s not the only one. Automakers, legal experts and consumer-rights advocates are keeping an eye on what happens in the aftermath of her victory. Every car company today must advertise fuel economy to comply with regulation. But many–Ford, Hyundai, Chevy, Toyota and Honda, for example– regularly trumpet fuel economy ratings in an attempt to convey quality and innovation, as well as appeal to pocketbooks when gas prices spike. They’ll all have a clearer idea of what they are facing from disappointed consumers and judges soon.

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Daniel Wagner: China-Bashing Is a Tiresome Sport in American Politics

by Daniel Wagner on February 11, 2012

Huffington Post…

China bashing has become as much a part of the modern American political tradition as criticizing foreign producers of oil, yet it seems few have actually stopped to think about whether it is justified. The American electorate has become accustomed to the predictable torrent of anti-Chinese rhetoric from politicians of a variety of political persuasions — in large part because of a subtle and uncomfortable recognition that China is beating the U.S. at its own game; Some would even say the Chinese are better capitalists than Americans will ever be. Indeed, China has made remarkable economic progress over the past twenty years — in large part because of its embrace of ‘socialism with Chinese characteristics’ — otherwise known elsewhere as capitalism. A decade ago, American politicians bashed China largely for political reasons. Today, it is for primarily economic reasons. With China having become the second largest economy in the world last year, and poised to overtake the U.S. in economic size in the next decade, it is no wonder American politicians are on the offensive. It should be no surprise that Americans may bristle at the notion that capitalism has helped China slowly dominate the global economy. China is, of course, not above criticism, just like any other country, and American politicians do raise some valid points in criticizing China. For example, the Chinese yuan is undoubtedly overvalued, given that it does not freely float in the foreign exchange markets. And the Chinese government does control large parts of the Chinese economy through state-owned enterprises, which distorts the domestic market and gives some Chinese companies unfair competitive advantages. But China must compete in the global marketplace like any other country and it pays a price for supporting companies that should otherwise fail as a result of being poorly run, inefficient, and bloated. If the U.S. does not like the way China does business, it is free to do business somewhere else. What goes left unsaid, however, is that China has become too important for the U.S. do that, and what U.S. politicians fail to acknowledge is that the U.S. is becoming increasingly irrelevant to the economies of Asia, while China has become the cornerstone of Asia’s fantastic economic growth. China’s trade with the ASEAN countries jumped six-fold between 2000 and 2009, to US$193 billion, surpassing that of the U.S. China’s share of Southeast Asia’s total commerce for the period increased to 11.3 percent from 4 percent, whereas the U.S.’s share of trade with the bloc fell to 10.6 percent from 15 percent. Another thing that gets left unsaid is how important China has become as a destination of U.S. exports. According to the U.S. Treasury’s own report, “in the second half of 2009, U.S. exports to China increased by 15 percent on a year-over-year basis, while U.S. exports to the rest of the world fell by 13 percent. In the first quarter of 2010, U.S. goods exports to China rose by more than 40 percent compared to the same period the year before, while U.S. exports to the rest of the world rose by less than 20 percent.” China’s rapidly growing middle class is the single most important factor for the success of President Obama’s Nation Export initiative. The U.S. not only needs to tap China’s vast foreign currency reserves ( in excess of $3 trillion — more than 10 times that of the U.S.) in order to finance its trade deficit and fiscal deficit, it also needs access to China’s vast market in order to sustain its economic recovery and create much needed jobs for American workers. When was the last time you heard a U.S. politician admit that? Of course, both countries have legitimate criticisms of the other, but they know they need each other, and neither country is going to disappear. So instead of following predictable (and boring) scripts, why not turn the page on Cold War-esque rhetoric and find ways to join hands with China so as to mutually benefit from each other’s comparative advantages? The fact is, China needs and wants the U.S. to succeed economically — as the largest holder of U.S. Treasury Bills — and the U.S. should want China to succeed, so that it has a long-term marketplace for its exports. We are not talking here about some starry-eyed vision of utopia, but rather, a realistic and sensible approach to future bilateral economic relations. Rather than bashing China, U.S. politicians would be well advised to forge a stronger relationship with China. President Obama gets it. Last year he said : “I believe there is much to be gained from a closer working relationship with China. Indeed there are very few global challenges, if any, we can address effectively without China’s active cooperation. They are a global economic power, and engagement with China’s government is an important step in stemming the financial crisis that has devastated economies around the world. Both of our nations seek to lay a foundation for sustainable growth and lasting prosperity. My Administration is also working with China on a number of security issues, including stopping North Korea’s nuclear program, rolling back the advance of extremists in Pakistan, and ending the humanitarian crisis in Dar fur. The United States and China share common interests on a host of issues — including energy security and climate change, food safety and public health, and nuclear non-proliferation and counter-terrorism. We want to work with them to address these issues in the years ahead. Improved relations with China will require candor and open discussion about those issues on which we may disagree. We must address human rights, democracy, and free speech. We must also work to ensure that our nations play by the rules in open and transparent economic competition. These important matters will be essential elements of our ongoing dialogue with China.” The only Republican candidate for president we heard that kind of approach from was John Huntsman, who unfortunately failed to connect with American voters. A sustainable economic recovery in the U.S. cannot be achieved by isolating China. The U.S. and China may seem like the odd couple: the leading proponent of democracy and most individually-oriented nation and the leading communist and most communal-oriented nation. But considering what we can achieve together and what we will lose if we are pitted against each other, forming a Sino-American strategic alliance is critical to the future economic viability of both nations. American politicians, and the American people, would be much better off recognizing this, rather than using demagoguery to sow divisiveness between China and the U.S. The 21st century has no place for tiresome dated Cold War rhetoric. President Obama has the right approach. * Daniel Wagner is CEO of Country Risk Solutions, a cross-border risk consulting firm based in Connecticut (USA), Director of Global Strategy with the PRS Group, and author of the new book Managing Country Risk. Dee Woo is a lecturer in economics at the Beijing Royal School.

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White House Proposes Tax The Rich, Chop Medicare, In Election-Year Budget

February 10, 2012

WASHINGTON — The White House will propose deep cuts and modest tax hikes Monday in a budget that aims to stick to last summer’s debt deal by trimming Medicare and other programs while making the well-off pay more. Senior administration officials said the spending blueprint would lower tax rates overall. But it would end the Bush-era tax cuts for the rich enacted in 2001 and 2003. It would do that by cutting tax loopholes — or tax expenditures, as they are called — for high earners and corporations. Part of that is implementing the Buffett rule, named for billionaire investor Warren Buffett, which would ensure that no one earning more than $1 million in a year pays less than 30 percent in taxes, as Buffett does now. Overall, the plan calls for $2.50 in spending cuts for every dollar raised in taxes on people making more than $250,000 a year. The proposal cuts the budget by $1 trillion over 10 years, and trims $4 trillion from the deficit. For the first time in five years, the deficit would fall below $1 trillion, at $901 billion in 2013, according to the proposal. The White House projects that by 2018, the deficit would drop to $575 billion, or 2.7 percent of the nation’s gross domestic product. A large chunk of the deficit reduction over the next decade — $1.5 trillion — would come from still-unspecified tax reforms, although the expiring Bush tax cuts would account for much. The largest cuts would come from the defense budget and Medicare. Defense spending would be slash some $487 billion from the Department of Defense’s projected budget, including savings from winding down wars in Iraq and Afghanistan. Health programs, primarily Medicare, would be targeted for $360 billion in savings, with most expected from cuts to providers, not beneficiaries. Another $278 billion in cuts would come from farm subsidies, federal worker retirement and other programs. The numbers in the White House blueprint would look a lot like the assessment unveiled in September. The budget is likely to get a cold reception from Republicans in an election year, and reads itself like the political message President Obama has been delivering since his speech in Kansas late last year. “We now face a make-or-break moment for the middle class and those trying to reach it,” says the introduction to the “fact sheet” summarizing the plans. “After decades of eroding middle-class security as those at the very top saw their incomes rise as never before and after a historic recession that plunged our economy into a crisis from which we are still fighting to recover, it is time to construct an economy that is built to last,” the document says, repeating the president’s State of the Union theme. Officials said the budget to be proposed on Monday was the third part of a three-act play that started with the Kansas speech and continued with the State of the Union address. “We must transform our economy from one focused on speculating, spending, and borrowing to one constructed on the solid foundation of educating, innovating, and building,” the budget introduction says. “That begins with putting the nation on a path to live within our means –- by cutting wasteful spending, asking all Americans to shoulder their fair share, and making tough choices on some things we cannot afford, while keeping the investments we need to grow the economy and create jobs.” The plan calls for more than $350 billion in short-term spending to spur job growth, including extending the payroll tax cut that Congress is battling over now, $30 billion to modernize 35,000 schools, and $30 billion to help keep and hire new teachers, police and firefighters. There is also a commitment to building research, development and manufacturing, with $140.8 billion slated for research and development. Such spending is a sign the president is not backing off initiatives like the green-energy push that has been tarred by the failure of solar company Solyndra. The budget will recommend boosting spending for the National Science Foundation, the Department of Energy’s Office of Science, and the National Institute of Standards and Technology Laboratories. It also calls for a six-year, $476 billion transportation reauthorization bill that the administration says would “create thousands of new jobs and modernize a critical foundation of our economic growth.”

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S&P Downgrades Huge Number Of Italian Banks

February 10, 2012

MILAN, Feb 10 (Reuters) – Rating agency Standard & Poor’s downgraded 34 Italian banks on Friday, including heavyweights UniCredit and Intesa Sanpaolo, citing a reduced ability to roll over their wholesale debt and expected weak profitability. The move follows S&P’s downgrade of Italy’s sovereign rating last month to BBB+, part of a mass downgrade of nine euro zone countries. In a statement, S&P said its so-called Banking Industry Country Risk Assessment had worsened to group 4 from group 3 — out of 10 groups — reflecting its more negative view on Italy’s banking system. “Italy’s vulnerability to external financing risks has increased, given its high external public debt, resulting in Italian banks’ significantly diminished ability to roll over their wholesale debt,” it said. “We anticipate persistently weak profitability for Italian banks in the next few years, and a risk-adjusted return on core banking products that may not be sufficient for banks to meet their cost of capital. We believe this may be negative for the Italian banking industry’s stability.” Italian banks have borne the brunt of a sell-off in Italian assets since the euro zone’s third-largest economy was dragged into the single currency bloc’s debt crisis last summer. Because of their vast holdings of domestic government bonds, Italy’s top five banks have been asked to find some 15 billion euros by June to meet tougher capital requirements set by the European Bnaking Authority. Lenders have also been effectively shut out of wholesale debt markets and have increased their reliance on cheap funds from the European Central Bank. Italian banks tapped a whopping 116 billion euros of nearly 500 billion euros of three-year funds offered by the ECB last December, easing funding strains. A similar operation will be held at the end of February and analysts expect Italian banks to further increase their borrowing from the ECB. S&P said weak profitability and increased cost of capital could lead Italian banks to write down a large part of the goodwill they booked during a wave of industry consolidation over the past decade. Such writedowns forced UniCredit, Italy’s biggest bank by assets, to announce a 10.6 billion euro loss in the third quarter of 2011. Among the banks downgraded, Banca Monte dei Paschi di Siena and Banco Popolare had their rating cut below that of Italy’s sovereign debt. For a list of the banks affected by S&P’s downgrades, please click on

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Obama’s Approval Rating Keeps Inching Up, Driven By One Factor

February 10, 2012

WASHINGTON — On Thursday, the Gallup Daily tracking poll marked a symbolic milestone. For the first time in more than a month and only the third time since last July, Gallup reported an approval rating for President Barack Obama (49 percent) that was slightly higher than his disapproval rating (46 percent). On Friday, the Rasmussen Reports automated tracking survey marked a similar landmark. It showed Obama’s approval rating at 50 percent or greater nationwide for the fifth consecutive day, a popularity not matched on the Rasmussen poll since January 2011. The two daily tracking surveys are not alone. National telephone polls released in the past week by Fox News , ABC News and the Washington Post , Ipsos/Reuters , and the Democratic Party-affiliated Public Policy Polling (also sponsored by the website DailyKos and the Service Employees International Union) have all found increases in Obama’s approval rating since October. Most of the increases range between 4 and 6 percentage points; the Ipsos/Reuters survey found a smaller rise. The improvement since the fall has also been evident in state polls, including such likely battlegrounds in the general presidential election as Ohio , New Hampshire , North Carolina and Virginia . Given the recent upward blip in the two national daily-tracking polls, some have looked for explanations in the events of the past week , particularly last Friday’s Labor Department report of a rising employment rate . While positive economic news is the most likely reason for Obama’s improving job rating, the upward trend in his ratings did not begin in February. In fact, most of the surveys have tracked a gradual increase in Obama’s ratings that began in late October. The HuffPost Pollster chart , based on all available public polls, shows a slow, steady rise of roughly five percentage points in the president’s job approval rating since it hit its all-time low in early October. The longer-term increase in Obama’s approval rating parallels five months of increases in several survey-based indexes of consumer confidence. Specifically: Gallup reported that its index of consumer confidence has risen for five consecutive months to its highest point since May 2011. The pollster also reports that 22 percent of Americans now say they are satisfied with the way things are going, “higher than at any point since last spring.” The Bloomberg Consumer Comfort Index rose to its highest level in a year this week. The Thompson Reuters University of Michigan Index of Consumer Sentiment was up in December for the fifth straight month. A preliminary estimate for January, based on a smaller sample, is slightly down , but confidence remained higher than in previous months. The Rasmussen Consumer Index stands at its highest level in over a year, although it’s down slightly from a peak earlier in the week. The Consumer Confidence Index of the Conference Board showed a slight decline in January, but its December and January measurements were still significantly higher than those of the three previous months . Of course, the overall economic mood remains gloomy. On the Gallup surveys , for example, far more Americans still say that economic conditions nationwide are getting worse (58 percent) than say they’re getting better (36 percent) — though the positive number has more than doubled, from 18 percent, since the fall. And despite big increases since October, the president continues to receive net negative ratings on “the economy” (44 percent approve, 53 percent disapprove) and “creating jobs” (44 percent approve, 51 percent disapprove) in the most recent ABC News/ Washington Post survey . The main point, however, is that the rising tide of consumer optimism directly parallels the upward trend in Obama’s overall job approval rating. That result underscores the promise and the peril for the Obama administration in 2012. Continuing economic recovery will likely further boost his approval ratings and his chances in the November election. Yet we have seen temporary increases in consumer confidence before — most memorably in January 2010 — that quickly ebbed in the face of later negative economic news. Either way, the economic trends of the next six to eight months are likely the most important factor in determining whether Barack Obama wins a second term in November.

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Mohamed A. El-Erian: "Half-Time in America" Highlights Our Political Dysfunctionality

February 10, 2012

Viewed as a standalone, the controversy generated by the Clint Eastwood Superbowl commercial is really silly. Yet it points to something profound that has and, if left unaddressed, will continue to undermine America’s ability to regain economic dynamism, create ample jobs, and deal with growing inequalities. In the event that you are one of the few who missed it, Clint Eastwood starred on Sunday in a commercial that NBC aired at half time. The message was powerful. Yes, America has stumbled, with people out of work, hurting and scared. But, by pulling together and acting as one, Americans will come from behind and win. “That’s what we do.” The concluding remarks were particularly potent: “This country can’t be knocked out by one punch. We get right back up; and when we do, the world will hear the roar of our engines.” Given that it was financed by Chrysler, the commercial’s direct reference was, of course, to the impressive recovery in Detroit’s car industry. But the intention, and the impact, went well beyond that. What Detroit has done, America as a whole can and will do. Coming on the heels of a series of favorable economic data releases — which will hopefully persist though this is far from certain unfortunately — the ad spoke to the hope that America is recovering and that our economy is building encouraging momentum. This is particularly important for the job market where we need to improve on the 243,000 positions created in January to meaningfully address our unemployment crisis, tackle the problem of long-term joblessness, counter the mounting obstacles to youth employment, and stop the worsening of income and wealth inequalities. You would think that this feel good message would be a unifying one for our political class. Far from it. Several Republicans complained this week that Clint Eastwood was implicitly supporting Barack Obama. After all, the commercial could be interpreted as suggesting that, under President Obama, America has turned the corner and is now embarking on a path to prosperity — something that most Republicans dismiss. Democrats were quick to counter. On the contrary they shouted. If anything, “Half Time in America” was pro-Republican. It could easily be viewed as implying the need for a change in game plan and personnel substitutions — similar to what a losing team would discuss in the locker room at half time in order to regain control of the game and win. This morning on CNBC’s Squawk Box , Clint Eastwood shared his views. His message was direct and unambiguous: Take the commercial for what it is — a message about Americans’ ability to overcome our problems and march forward to a better future. It is easy, indeed tempting, to dismiss all this political squabbling as indicative of the silliness that is inevitable during an election season. I certainly would like to do so. Yet I fear that it goes well beyond that. This is yet another illustration of the deep political dysfunctionality that continuously undermines DC’s willingness and ability to move forward with the much-needed revitalization of the economy. The longer this continues, the greater the costs and the harder the solutions. In the short-term, the cyclical economic bounce of the last few months — powered by large injections of global central bank liquidity and a once-for-all decline in the personnel savings rate — would end up suffering the same fate as in early 2010 and 2011: fizzling out rather than handing off to durable engines of investment, growth and jobs. In the longer-term, America would find it even more challenging to overcome structural impediments that, each day, are getting more deeply embedded in the construct of our economy. For the sake of both current and future generations, let us hope that Clint Eastwood’s “Half Time in America” commercial will be remembered for more than just igniting yet another round of political bickering and finger pointing.

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Jed Kolko: The Robo-Signing Settlement: Breaking the Usual Rules of Housing Policy

February 10, 2012

The robo-signing settlement is the latest — and potentially the largest — piece in the U.S. housing policy puzzle. Even though it’s partly punishment for banks’ wrongdoing, it is also another answer by the government to the question of how it can help the housing market. Our own housing policy survey last December showed strong bipartisan support for two key elements of the robo-signing settlement: refinancing by underwater homeowners (82 percent of Democrats, 69 percent of Republicans), and loan modifications to reduce principal balances (74 percent of Democrats, 61 percent of Republicans). With the robo-signing settlement, as with any housing policy, I look at three questions: 1) Is it big or small? Relative to other housing policies, it’s big. It calls for much more money for loan modifications than HAMP has cost so far, and it could mean money or relief for close to two million current and former homeowners. HAMP and HARP have each helped roughly one million homeowners so far. But relative to the housing crisis, it’s small. The loan modifications could yield tens of billions in principal reductions for one million homeowners — but that’s a sliver compared with the 11 million homeowners today who are over $700 billion underwater. And the cash compensation of $1,500-$2,000 for up to a million people who lost their homes will hardly make them whole. 2) Who pays? Usually it’s good politics to keep quiet about who pays for housing policy, but not with the robo-signing settlement. It’s good politics for the government and the attorneys-general for everyone to know that the banks are paying for their robo-signing sins. In contrast, most housing policy announcements hide — or at least don’t broadcast — who is paying, whether it’s investors who implicitly bear the cost of refinancing or taxpayers who implicitly bear the cost of many other policies. 3) Does it reward risk-taking or bad behavior? Delinquency is a disqualification for refinancing but is almost a requirement for getting a principal reduction. The largest piece of the robo-signing settlement is for principal reduction for borrowers who are “either delinquent or at imminent risk of default.” This is opposite of the refinancing rules laid out in HARP and the State of the Union address , which require borrowers to be current on their payments because that shows they’re “responsible.” So much for a coherent message from the government to homeowners about moral hazard. This issue could be fuel for election debates on housing policy: Republicans are much more bothered by rewarding bad behavior than Democrats are. In our December survey of consumers, 61 percent of Democrats agreed that “helping people keep their homes is the right policy even if it helps some undeserving homeowners,” but only 38 percent of Republicans agreed.

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Athens Burns As Eurozone Rejects Greece Bailout Deal

February 10, 2012

ATHENS, Greece (AP) — Thousands took to the streets of Athens as unions launched a two-day general strike against planned austerity measures on Friday, a day after Greece’s crucial international bailout was put in limbo by its partners in the 17-nation eurozone. Clashes broke out in Syntagma Square, outside Parliament, as dozens of hooded youths threw fire bombs and stones at police, who responded with tear gas. No arrests or injuries were reported. Police said some 7,000 people took part in the demonstration. Another 10,000 Communist supporters held a separate, peaceful march, chanting slogans against cutbacks that include reducing the minimum wage by 22 per cent and cutting one in five government jobs in a country which is in its fifth year of recession. Bailout creditors say Greece has not yet met demands for all the required austerity measures and, frustrated by days of dithering, have given political leaders in Athens until the middle of next week to do so. Otherwise, the country will lose its rescue loan lifeline, go bankrupt next month and likely leave the euro. “We are experiencing tragic moments,” Deputy Prime Minister Theodoros Pangalos told Parliament Friday. “These days are the last acts of a drama that we all hope will lead to a happy conclusion with a voluntary reduction in our public debt and implementation of a framework by 2015 that will allow the economy to stabilize.” The Greek coalition government, led by Prime Minister Lucas Papademos had hoped some of the heat had been taken out of the crisis after leaders agreed Thursday to a raft of austerity measures they hoped would pave the way for the €130 billion ($173 billion) bailout package. However, finance ministers from the other 16 eurozone states put up a roadblock later in the day by insisting that Greece had to save an extra €325 million ($430 million), pass the cuts through a restive parliament and guarantee in writing that they will be implemented even after planned elections in April. A Cabinet meeting has been called for the afternoon, while the majority Socialists and the conservatives were later to hold party meetings to discuss the cutbacks. The new hurdles Greece has to clear to avoid a default that could send shock waves around the global economy dented sentiment in the markets Friday. Stocks were down all over Europe, with the benchmark index in Athens 1.8 per cent lower in early afternoon trading. While facing intense pressure abroad, Greece is having to deal with another strike. The country’s two biggest labour unions stopped railway, ferry and public transport schedules, and hospitals worked on skeleton staff while most public services were disrupted. Unions were planning protests in Athens and other cities around midday. Prime Minister Papademos and heads of the three parties backing his government have already agreed to deep private sector wage cuts, civil service layoffs, and significant reductions in health, social security and military spending. But the party leaders balked at demands for more cuts to already depleted pensions, later issuing nebulous assurances that a solution had been found. “Unfortunately, the eurogroup did not take a final, positive decision,” Finance Minister Evangelos Venizelos said after Thursday’s talks in Brussels. “Many countries expressed objections, based on the fact that we did not fully complete the list of additional measures required to meet our targets for 2012.” “The choice we face is one of sacrifice or even greater sacrifice — on a scale that cannot be compared,” Venizelos added. Once all the demands have been fulfilled, the eurozone will give Greece the green light to start implementing a separate bond swap deal with banks and other private investors designed to slice some €100 billion ($132 billion) off Greece’s debt load. EU Commission President José Manuel Barroso on Friday offered hope a deal could still be struck. “I am confident that a solution will be reached next week as this is critically important for Greece and the Greek citizens first and foremost but also for the whole euro area,” he said during a visit to India. “I therefore call on the responsibility and the leadership of the Greek leaders and all members of the eurozone so that we can obtain this goal that is important for the euro area and indeed for the global economy.” France’s central bank chief Christian Noyer also urged Greece to accept the “reasonable and indispensable” austerity plan. “Greece needs to do what other countries are doing, countries that have been in difficulty but are completely in line with the recovery plans,” Noyer said on Europe-1 radio Friday. “Greece has to accept all of this.” But on the streets of Greece, the mood is grim, after two years of severe income losses, repeated tax hikes and retirement age increases that failed to signally improve the country’s finances. Unemployment is at a record high of 21 per cent — with more than a million people out of work — while the economy is in its fifth year of recession and is expected to contract up to 5 per cent in 2012. The country’s politicians have taken a lot of criticism for the situation, and polls show the majority Socialists, elected in a 2009 landslide are now languishing at around 8 per cent. A Greek Socialist lawmaker resigned his seat Friday to protest the new austerity, a day after the country’s deputy labour ministry stepped down from his position for the same reason. But the resignation of Pavlos Stasinos will not affect the party balance in Parliament, as he will be replaced by another Socialist deputy. “It is unacceptable that right now our politicians’ petty political and public relations manoeuvring should be leading the country to bankruptcy,” respected Kathimerini daily said in an editorial. “The country is tumbling towards a cliff-edge, and a tough European establishment is putting out the view that Greece cannot be saved and lacks credible politicians. Our politicians back that view with their carryings-on.” Ta Nea daily accused Greek politicians of “theatrics and shilly-shallying,” and urged lawmakers to back the new measures in the Parliamentary vote, tentatively planned for Sunday. “Nobody can happily back the painful agreement with the troika,” it said in an editorial. “But neither can anyone shoulder the burden of the consequences, if the agreement is not completed.”

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Seven And A Half Things To Know: Income Gap, Whining Wall Street, Charlie Bit The Interwebs

February 10, 2012

Eight days a week are not enough to show I care, but seven and a half things are all you need to know today. Here they are: Thing One: Income Inequality Feeds Itself: There’s an old saying that you’ve got to have money to make money. It typically means you’ve got to be able to blow some money in order to win big jackpots. But The New York Times today reports on a particularly pernicious aspect of the old adage, pointing out that the children of the wealthy are doing increasingly better in school than their underprivileged counterparts, increasing the chances that they will make even more money later in life. The income gap is creating its own fuel to keep growing, in other words. “Education was historically considered a great equalizer in American society, capable of lifting less advantaged children and improving their chances for success as adults,” writes Sabrina Tavernise. “But a body of recently published scholarship suggests that the achievement gap between rich and poor children is widening, a development that threatens to dilute education’s leveling effects.” Thing Two: Wait, Wait, We Really Don’t Like The Volcker Rule: Goldman Sachs CFO David Viniar raised some eyebrows this week when he suggested Goldman could actually make more money because of the scourge of Wall Street, the Volcker Rule, which forbids banks from taking their own money to Atlantic City and play the slots. Now Goldman is downplaying those comments, reports Politico’s Ben White , who says the bank plans to unveil a 50-page screed against the rule on Monday, explaining why it murders capitalism, turns your teeth yellow and makes puppies cry. Thing Three: Barclays Warning: Yesterday it was Credit Suisse, today it’s Barclays: The banking sector’s pain is international. The British bank today reported its worst quarterly results in three years and warned it might miss its target for a key profitability measure. The reason, as it was for Credit Suisse, is the ongoing euro-zone debt crisis, and not Dodd-Frank or the Volcker Rule, as Matt Taibbi discusses in his new piece, ” Why Wall Street Should Stop Whining .” Thing Four: Bachus In Focus: The independent Office of Congressional Ethics is investigating whether Rep. Spencer Bachus (R-Ala.), chairman of the House Financial Services Committee, violated insider trading laws, the Washington Post reports . This comes as the House has just passed a new law gently reining in lawmakers’ ability to trade on inside information. Bachus told the Post he is cooperating with the OCE. Thing Five: Still Waiting For Greece: European stocks and US stock futures are falling this morning because of — wait for it, this will shock you — Greece. Yes, we’re still waiting for a resolution to the latest round of never-ending Greek debt talks. Euro-zone finance ministers withheld a new loan to Greece yesterday, preferring to wait for the results of weekend votes in Greek parliament on new austerity measures, while Germany wagged a wienerschnitzel disapprovingly in Greece’s direction. It seems Greece is not meeting its budget targets! That tends to happen when your economy is dead in the water, which tends to happen when you pass round after round of austerity measures, causing your populace to constantly go on strike . Rinse, repeat, default already. Thing Six: Mind the Trade Gap: At 8:30 a.m. Eastern time, the Commerce Department is due to report on the international trade balance in December. Economists, on average, think the trade gap widened a bit, to $48 billion, from a wider-than-expected $47.8 billion in November. A bigger trade gap sends mixed signals on growth. If we’re buying more imported stuff, then that means consumers might be feeling a little friskier. But a wider trade gap also subtracts from gross domestic product, for whatever that’s worth. Update: The gap was a bit wider than expected , at $48.8 billion. Thing Seven: Consumer Temperature Read: At 10:00 a.m. ET, Reuters and the University of Michigan release their preliminary consumer sentiment reading for February. Economists think the sentiment index rose to 74 from 75 in January. But given the recent rally in the stock market and better approval ratings for President Obama’s handling of the economy lately, economists might be under-estimating consumer sentiment. Anyway, what’s more important is what consumers do, rather than how they feel. Thing Seven And a Half: Charlie Bit The Interwebs: Back when J.C.R. Linklider was dreaming of an “Intergalactic Computer Network” in the 1960s and developing ARPANET, the precursor to the series of tubes that has delivered this post to your eyes, he probably could not have imagined that the most successful product of his great vision would be a video of one kid biting another kid’s finger . But so it goes. The New York Times does a deep dive on the now-famous family that produced the video, which has been seen nearly 418 million times, and asks the question: What makes a video go viral?

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David Kiley: The Great Debate Over Chrysler’s Super Bowl Ad

February 10, 2012

When I saw Chrysler’s Super Bowl ad at halftime on Feb. 5, I emailed the executive who conceived it, Chrysler marketing chief Olivier Francois, and told him I didn’t like it so much. It was my first viewing of the ad, and thus my initial reaction from the gut. I thought it was too dark. Unlike last year’s Eminem Super Bowl ad, I thought it didn’t do enough to lift Detroit or Chrysler — and wasn’t that the point? But after watching the video perhaps 10 times since that initial viewing, I have warmed to the ad, and recognized that my initial reaction seems to be in the minority. I’ve also come to think my response was tainted by all the election year claptrap and hogwash I watch and listen to on cable TV and satellite radio on a daily basis. Driven by the sharp reactions to the ad communicated via Twitter and in post-game interviews from political pundits and power-brokers like GOP fundraiser and former Bush Administration official Karl Rove , the media seized on the fact that the ad seemed to feature working-class folks from a Midwestern industrial town and the ad copy seemed to be right out of an Obama campaign speechwriter’s notebook, extolling the virtues of the auto industry bailout. The charge that Chrysler was somehow sending an early Valentine to the Obama campaign as thanks for the 44th president green-lighting the federal bailout of Chrysler in 2009 started to take shape on the airwaves. I initially thought the ad was a clever piece of marketing Jiu Jitsu, designed to create maximum buzz and chatter for the Chrysler after the game. Casting well-known Republican libertarian-cum-bailout criticizer Clint Eastwood was supposed to inoculate Chrysler from the pro-Obama charge. How could it be, I asked myself, that all these smart people at Chrysler and the ad agency Wieden & Kennedy had no clue their commercial would be seen through a political lens, especially just a couple weeks before the Michigan GOP primary? Even the line, “It’s Halftime in America,” made me think immediately of Ronald Reagan’s “Its Morning Again in America” spot — and that it’s coming up to “halftime in the Obama two-term presidency.” Francois says a possible political interpretation of the ad never come up in conversations during the two months of its development. He also says “creating buzz and chatter was never even part of the consideration.” Should we believe this very clever, intelligent, French-born executive heading both Fiat and Chrysler’s global marketing? No buzz intended? Olivier says the ad’s aim was to offer a logical sequel to last year’s Eminem ad, which ushered in the “Imported From Detroit” tagline as a slogan for the Chrysler brand. That line, repeated in this year’s ad, is now being used as an umbrella theme for all the company’s brands, including Dodge, Jeep, Ram and Mopar. “We are trying to shine a light on the values we hold in Detroit, values that we are trying to embrace for Chrysler and the values we think our customers identify with,” Francois said. “I know I am French and come from an Italian company, but I feel very much like I am gaining cultural citizenship in America, if not legal citizenship. And our team, which is led by Sergio Marchionne, is very serious about communicating what we think is great about this place and these people to the rest of the country.” Francois said Marchionne, the Fiat and Chrysler CEO, was intimately involved in the creation of this year’s ad, right down to writing and editing copy. Chrysler brand marketing chief Saad Shehab also had a hand in its writing and editing. And Clint Eastwood also had a lot to do with shaping the ad, choosing locations and writing copy. Eastwood was surprised Republican critics and Obama supporters felt that the ad was “pro-Obama.” But Eastwood’s spoken lines tee up, like it or not, an inevitable political discussion that will take place this month in advance of the Michigan GOP primary and into the fall, especially if Michigan native Mitt Romney goes on to face off against President Obama in the general election. Was the bailout the right thing to do? Was it money well spent? Was it fair to industries and companies that did not get bailed out? Was it too generous to the unions? The key lines: “[The people of Detroit] almost lost everything. But we all pulled together. Now, the Motor City is fighting again … but after those trials, we all rallied around what was right, and acted as one, because that’s what we do. We find a way through tough times. And if we can’t find a way, then we make one … how do we come from behind … how do we come together, and how do we win … it’s halftime, America, and our second half is about to begin.” The vast majority of Republicans, including all the current presidential candidates, were against the government-assisted bailout of General Motors and Chrysler. They believed the companies should have been allowed to go into bankruptcy court without aid from Uncle Sam, so that creditors could just pick over the companies, buy or be granted what they thought was valuable — Chevy, Jeep, Ram truck, Cadillac, real estate, etc. — and liquidate the rest. But amid the meltdown of the financial sector, there was no financing for an organized bankruptcy that would have allowed the companies to come out as whole at the end of the process, meaning it would have been a liquidation free-for-all. And as private equity companies usually do, there would have been a fire-sale of assets, followed by an inevitable move to get as much headcount and production out of Michigan and into Southern states and Mexico — as far away from the stronghold of the United Auto Workers as possible. The reason Southeast Michigan is clawing its way back is because hiring is happening. GM is the biggest automaker in the world again, and making billions. Chrysler is in the black and posting solid progress. Ford is making billions. Suppliers are bouncing back financially. The companies did not close or move away. GM and Chrysler have made substantial investments in the city and surrounding suburbs. Communities are still fighting to get back to par, but they haven’t been destroyed. The sentiments and words in Chrysler’s ad reflect the way the automaker’s executives and Eastwood feel about the values they find in the working people who design, engineer, market and sell the vehicles produced by the company. Their words also seem to support the idea that high-value manufacturing, such as automobiles, is an important industry to protect and nurture in the U.S. Those values and thoughts also happen to be shared by Obama’s administration, and they are a cornerstone of his campaign rhetoric and prose as president. It all seems to be a right-cross to the jaws of the GOP presidential candidates and the establishment conservatives who both opposed the auto bailout and regularly express disdain for the UAW. All on the biggest TV day of the year with over 100 million people watching. So it’s not difficult for many people to think the content and timing of Chrysler’s commercial could have been planned and calculated to maximize buzz, the currency on which most successful ads trade these days (no matter what Francois says he was looking for). The Chrysler executives and Eastwood say these political themes some of us think we saw were not in their minds or conversations. They sought to make an ad, they say, that simply touched and engaged everyone, not one party or another. Late Thursday, four days after the game, there were 5.8 million YouTube views of the ad. A cursory patrol of comments left by real people — not pundits or members of the media — shows those of us in the media are, indeed, in the minority of those who found it possibly pro-Democrat or pro-Obama. We won’t see the ad on TV again, says Olivier. Unlike last year’s Eminem ad, it won’t be shown in shorter versions for normal ad break. It was meant as a one-time-only event. My guess is that it will be remembered and talked about for at least a few days more. Then the YouTube hits will slow down, and we will move on to other topics. But the ad — intentionally or not — meshes well with the Obama message for the Midwest and especially Michigan. So it wouldn’t surprise me if we see the ad pointed to by the president and Democrats for months to come as a reminder of the grit, determination and values of Detroiters and Southeast Michiganders — and of just who kept the Michigan economy from falling of a cliff.

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Marc Joseph: Is It Time To Be an Entrepreneur?

February 9, 2012

Open Forum reports that there is an 11% increase in the number of small businesses closing and a 17% decline in the number of small businesses opening. Get Busy Median reports 69% of small businesses survive at least two years, 44% of new firms survive four years and 31% survive at least seven years. The Orange County Register states that new employer businesses has fallen 27% since 2006, which means that startups, which 10 years ago would have created 4.6 million jobs, are only creating 2.5 million jobs now. Also, 10 years ago the average new business opened with 7.5 jobs and today it is 4.9 jobs. Smart Money states that in 2009, there were 552,600 new businesses created while 721,737 small firms closed or went bankrupt. They go on to report that in 2007, 75% of angel funded deals came at the start up stage, while in the first half of 2011 only 39% of companies backed by angels were in the startup phase. This trend is just one more sign of how hard the recession has been on entrepreneurs. This recession has not only hurt sales, sending many small businesses under, it has also obstructed the ability to raise money for the next great idea. So why would anyone in their right mind risk their money and reputation for only one in three chance of being in business after seven years? Bloomberg Businessweek reported this week that the Wal-Mart greeter job, which has been around for 30 years, has been removed from the overnight shift of its stores. Obviously they will be using those hours more productively for tasks like stocking shelves or just eliminating the hours all together. Every generation loses entire job categories — think milkmen. So are today’s entrepreneurs desperate and opening a business because they just can’t find a job? Let’s hope not, because that is almost a guarantee your business will fall into the two thirds that fail. Clearly you need a good idea, product or service before even thinking about opening up your own business. Assuming you have this great idea, then the next hurdle is: do you have the traits to run your own business? Some needed traits include being a self-starter, not getting intimidated easily, being adaptable to change, enjoying competition, being able to address risk, making decisions quickly, and not seeing mistakes as failures. Then you need to overcome the basics of starting a business like cash flow (make sure you have at least six months of savings to live from), time management, a sound business plan and the ability to wear all the hats yourself. Reading all these numbers and knowing you don’t have the equity now in your house to fund a business may be one of the most depressing things you do today. But the optimistic glass half full American entrepreneur doesn’t read these numbers like a normal human being. They say “I am going to be in the one third that succeeds and I am going to make a lot of money doing it”! We are just one small company doing our part to help grow the American dream. The rest of America needs to wake up and bring the small business numbers back to where they were at the beginning of the 21st century. Banks need to actually begin loaning money again to small businesses. The government bailed out the big businesses, and now must focus on building up Main Street again through backing small business loans, giving tax break incentives and giving government contracts to small businesses. The average American needs to support their local small business rather than running to the big box store. The numbers don’t lie. Supporting small businesses is an American team effort and we need to get those numbers back to where they were … together.

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New Users Flocking To LinkedIn

February 9, 2012

SAN FRANCISCO — LinkedIn provided further evidence of online networking’s popularity and moneymaking potential with a fourth-quarter performance that got a glowing review on Wall Street. The results announced Thursday indicate LinkedIn Corp. is playing an increasingly influential role in the employment market as millions more people post their resumes there. The professional-networking service has been turning into a digital rolodex for headhunters and job seekers alike. LinkedIn added another 14 million profiles during the final three months of last year to bring its total membership to 145 million. Meanwhile, more companies have been paying to get additional access to LinkedIn’s membership as the U.S. economy has been steadily adding jobs in recent months. LinkedIn gets more than two-thirds of its revenue from fees it charges companies, recruiting services and other people who want broader access to the profiles and other data on the company’s website. The rest comes from advertising. The trends helped LinkedIn fare far better than the company’s own management and analysts had predicted. The pleasant surprise came a day after online coupon distributor Groupon Inc. raised investor doubts about young, rapidly growing Internet companies by announcing an unexpected fourth-quarter loss. LinkedIn’s numbers seemed to lift spirits; the company’s stock surged more than 8 percent late Thursday. The ebullient reaction may bode well for an upcoming IPO from Facebook Inc., which has built an online network of 845 million users by focusing on family and friendships instead of career advancement. Facebook filed papers last week for an initial public offering of stock. It’s expected to be completed in May or June. The IPO is expected to value Facebook at $75 billion to $100 billion. LinkedIn, which is based in Mountain View, Calif., has emerged as one of the stars from last year’s crop of Internet IPOs. During the first nine months of trading, its stock has remained well above its IPO price of $45 and is moving upward again. The stock rose $6.44, or 8.4 percent, to $82.83 in extended trading Thursday after the release of results. LinkedIn earned $6.9 million, or 6 cents per share, during the final three months of last year. In 2010, the company had income of $1.6 million, or 3 cents per share. It’s not directly comparable because LinkedIn’s outstanding shares have ballooned since its IPO in May. Before figuring the net income credited to shareholders, LinkedIn’s net income for the latest quarter increased 30 percent from $5.3 million If not for certain accounting items unrelated to its ongoing business, LinkedIn said it would have earned 12 cents in the fourth quarter. That figure topped the average estimate of 7 cents per share among analysts polled by FactSet. Revenue more than doubled from the previous year to nearly $168 million – about $8 million above analyst estimates. Management’s projections for the first quarter and full year also called for revenue above analyst forecasts.

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UK’s CB to inject another USD79b into economy

February 9, 2012

(MENAFN) The Bank of England said that it would pump an additional USD79 billion into the country’s economy, reported AP. The central bank added that the step came as part of a program that …

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Occupy Y’All Street: Occupy Charlotte Activist Gambles Everything On The Movement

February 9, 2012

This is the fourth in a series of stories and short films on under-publicized Occupy sites. The first is here , the second is here , and the third is here . Stay tuned in the coming days for more from our road trip through the South. CHARLOTTE, N.C. — Vic Suter is looking for Ghost. She sloshes through the slick grass and soggy leaves matting the grounds of the Old City Hall. She and the rest of Occupy Charlotte have called the property home since early October. She knows every sign, every tent in this place. But it’s Ghost’s tent that she wants. A cold rain begins to fall steadily on a camp that’s all but deserted. Vic, 22, doesn’t care. Vic motors past tents sagging under layers of tarp and other jerry-rigged, middle-of-the-night weatherproofing. Dragging a cardboard sign with a bitten corner, she ignores all those tents before finally stopping at a giant beige orb, outfitted with a mesh enclosure that gives off a screened-in porch effect. There’s room for three chairs and what look like wind chimes. Ghost has his shit together. “Hey Ghost?” she shouts, a few feet from his tent. Vic leans into the orb’s entrance. Her face, curtained by her brown hoodie, is pale and expectant. Even at 11 a.m. in early November, she looks game. “Hey Ghost! You in there?” The orb shows no signs of life. “You got to Godzilla people’s tents — shake them, nag them to get up and go on a march,” she explains later. Vic lets out one long “Ghooouuuust!” in a nagging sing-song. She thinks this is funny. She stoner-laughs to herself. The rain sounds like it’s hitting the trees a little harder. Vic fiddles with the orb’s flaps. “Let’s see.” The tent is locked. “No, he’s not here.” Vic finally has to give up. She trudges past the orb in her untied black army boots — shitkickers her stepfather wore when he turned 18 in Vietnam. She says she’s worn them every day since high school. Instead of lockers and jocks, she has to stomp past an empty bucket, empty plastic chairs and more empty tents. Ghost is a memory. She’s looking for James and Bobby, and somebody named Peanut. Vic hits on the last of the tents located at the outer edge of the camp. They’re quiet, too. “Where is everybody?” she asks. A month earlier, the Occupy activists in Charlotte had drawn more than 500 to their first march uptown, a noisy success that included a stop at Bank of America’s North Tryon Street headquarters, where the throngs chanted up its 60 stories. The building — the tallest in the state and a dominant spear in the city’s skyline — had been a force for civic pride. But since the Great Recession, the bank has become one of the country’s great villains. The Wall Street of the South now had its own potent occupation. The early general assemblies could number in the hundreds. The meeting participants were drawn by growing income disparities, rising college tuition costs, the region’s environmental decay. They were among the metro area’s double-digit unemployment rate. They realized they were everybody. Vic had joined on the first night and had been charged with welcoming newcomers and teaching them the movement’s hand signals. Soon she began organizing three marches each day to one spot. This was her work week. Charlotte’s downtown had grown rich with examples of injustice wrapped in glass and outfitted with bad public art. Vic filled up to-do lists with ideas for future marches. For years, she had searched for her place. She tattooed “Restless” in black cursive script on her shoulder. But at Occupy, she thought she might have found her calling, and her very own tribe in the buckle of the bible belt. She fell hard. “When you’re throwing yourself into something,” she explained to us, “you don’t have a lunch break. You don’t have time off. You don’t get a vacation from a long-term protest.” The movement proved it could inspire people like Vic to produce Pastebin manifestos, YouTube gotchas, and a working kitchen. But a month or so in, Occupy began facing an important dilemma that they have yet to resolve. How does a non-hierarchical movement avoid arguing itself into oblivion? How does it sustain the true believers? As the days got colder, and inertia seeped in, the general assemblies got smaller and so did the press stories. Even before the big city camps were razed, a lot of activists had already burned out. But Vic never did. The problem for Vic was that the chants never got old. Vic wants Ghost and Peanut for a march that will begin in a half hour and lead her — and as many willing activists as she can cajole — from their camp, through downtown Charlotte to Duke Energy’s headquarters. Vic chose the energy mega-company for its planned rate hike ; its environmental record and its hold on power in the region and beyond — planners for the Democratic National Convention, to be held in Charlotte, rely on a $10 million line of credit from the company. She is still exuberant about this march — even if it means chanting in the rain to stone-faced security guards in Charlotte’s bank-building canyon. Not everyone in Occupy Charlotte is as charged up. Last night, Vic says she begged three fellow activists to get her up on time for the morning march. Her cell was dying and she couldn’t depend on its alarm. “None of them wake up,” she explains of her neighboring activists. “Thanks guys.” She ended up oversleeping. Vic trudges back toward the camp’s center, first stopping at the information desk’s uncovered table and filing cabinet. A fellow activist shows her his sign — it’s the state outline with a fight-the-power fist punching up through its midsection. Vic approves. “That’s awesome. Right on. Hell yeah.” A small group of guys are standing by a cluster of tents near the kitchen and storage spot where the activists keep their signs. Earlier that morning, the kitchen’s tent started collecting water and nearly caved in. It had to be held up by a broom. The guys watch her. As one of the only female campers, she stands out — a girlie gutter punk with piercings (tribal) and tattoos (personal), a sea-green streak manic-panicked through a mess of matted, light-brown curls piled high above her round face. You don’t want to mess with that. You want to follow that. The guys are waiting for her orders. One is wearing a dress. “You guys want to mic check?” she hollers down toward them. They want to mic check. “IF YOU’RE GOING TO MARCH, WE’RE LEAVING NOW!” Suddenly, stragglers appear and grab signs. They display them for Vic to sign off on. Vic asks for a cigarette. A guy rolls one for her. Vic asks for a light. She leans into the flame and exhales a fat cloud. She eats a banana that someone drops on the ground. She laces up her stepfather’s boots. She tells everyone that marching in untied boots is lazy. Fifteen Occupy Charlotte activists — all men — are ready to join her. And then Vic asks the question she’s been wanting to ask all morning: “Why are we still here?” * * * * * Occupy Wall Street’s most effective recruitment tools were not testimonials from the unemployed or income-inequality charts. The movement grew exponentially with each video that captured police actions against demonstrators. The mass arrest on the Brooklyn Bridge, the maiming of Iraq War Vet Scott Olsen in Oakland, the UC Davis cop pepper-spraying seated students — each jolted the movement’s sense of outrage, and gave the mainstream media fresh footage to endlessly loop. The resulting demonstrations were some of the bigger, more effective marches. None had more impact on Occupy than the videos capturing NYPD Deputy Inspector Anthony Bologna’s close-range pepper-spraying of a group of women penned behind orange police netting. One YouTube video of the incident racked up more than 800,000 views. Another attracted more than 1.5 million. Vic had seen the clips: the white-shirt official firing the stinging spray, the women cooped in, shrieking in horror before crumbling to the pavement. “It was just a catalyst,” Vic says. “It got me going. For the following week after that, I was just sitting there like obsessive at the computer just trying to find out more and more and more.” How long is this going to last? Are they serious? Vic wanted to know. Vic began calling around to the few activists she knew in Charlotte, hoping for any signs that a local occupation might be starting. The odds were against her. The city had no reputation as a rowdy place of political dissent. The big banks held sway over the local economy, the southern conservative mindset over the political discourse. Just days before the occupation started, Mayor Anthony Foxx, a Democrat, defended Bank of America against criticism for wanting to charge customers a $5 monthly fee for using its services: “People who live in this community know how generous our financial institutions have been.” Vic’s last activism had been a silent protest, helping with a letter writing campaign against Monsanto, an agri-business giant. She couldn’t remember the last time she marched or attended a rally. As soon as she heard that Occupy Charlotte would start, she put in her two-weeks notice at the earthy grocery store where she did food prep for $9 an hour. The first day that Occupy Charlotte began its encampment — Oct. 8 — was Vic’s last at the grocery. After her final shift, Vic said goodbye to the group house she’d rented for about $252 per month. Her roommate gave her a ride downtown. She forgot to pack a sleeping bag or pillow. But she did remember to stuff in her backpack a couple journals and books (Emma Goldman, George Orwell, Noam Chomsky, Nietzsche), a re-useable water bottle, extra clothes and a couple blankets. She also packed nonperishable food like granola bars and sunflower seeds, along with a few pieces of fruit. She did not plan on leaving. That first night, Vic joined maybe a dozen strangers. They formed a circle and introduced themselves: the high school dropout, the injured iron worker, the local musician, the college student. They talked about what the movement would mean to them. Vic said she was glad to see people in Charlotte finally not “turning a blind eye to things.” She says she didn’t go to sleep for two days. “It was awesome,” she says. “It came at a good point in her life,” says Vic’s stepfather, Danny Hill, 59. “She needed something to latch onto that would get her focused again … It was just get up and go to work. She didn’t really have much time for herself. This has been her passion all along but she just didn’t know how to go about doing it.” A month before she joined Occupy Charlotte, Vic wasn’t sure where she belonged. She wrote in her journal: “The world is changing quickly or maybe I’m not adapting fast enough. Maybe it’s not changing fast enough for me — or perhaps I’m not changing fast enough for me.” In Charlotte, Vic had a difficult time finding her way. Her beloved older brother Nick moved out before she hit middle school. Her parents put her in a small, private, Christian high school. She graduated an expert on what it felt to be shunned by your own peers. “Being the only out gay person in your school, being someone who graduated from a Christian school who never believed any of it, I was alone,” she says. She’d had to sit through Bible study every day for two years. Vic moved a little more than 90 minutes away, across the South Carolina border, and enrolled in Columbia College. But she quickly found that the all-women’s school wasn’t for her either. “All my peers were busy reading Vogue,” she says. “They were in school to meet their husband and their bridesmaids. I was starving to learn more.” Vic dropped out after her freshman year. For three months, Vic bounced around the Southeast: Athens, Atlanta, Savannah. “I’d hang around somewhere for a week, get bored and then leave,” she says. She’d walk or hitch or jump trains. In Tallahassee she joined up with a friend’s band. In Tampa, she squatted in a warehouse covered in black mold. Her itinerary ended with a return trip to her parents’ house. After a short stint at a community college, Vic enrolled at Winthrop University. But all that came to a chaotic end in October 2009 when she contracted swine flu. That December, she lost her grandfather. She felt overwhelmed and depressed. She decided to withdraw. Vic tried to re-enroll but says Winthrop wouldn’t accept all of her old credits. It became too much of a financial burden. “I was heartbroken that I couldn’t go back,” she says. Instead, she took the grocery job. “It was hard to live one block from my school and walk through campus on my way to work. It was a daily reminder.” Her mother Karen Hill says they couldn’t pay for Vic’s college; they had persistent health problems, and barely enough money to eat on their fixed incomes. Danny Hill has shoulder and lung issues, as well as post-traumatic stress disorder from his tours in Vietnam and the first Gulf War. It is hard for him to walk without having to catch his breath. Karen Hill handled baggage for US Airways, loading and unloading up to 20,000 pounds of luggage per shift, she estimates. After 23 years on the job, she had to have carpel tunnel surgery. She says her doctors soon rushed her back to work; she ended up with nerve damage in both hands. She never was able to get worker’s comp, she says. Her hands swelled up so bad, Vic had to dial for her and cradle the receiver. Vic had racked up her own share of medical debts. She had grown up with lungs weakened by a stubborn asthma that left her immune system vulnerable to attack. Hospital stays were common annoyances. In her journals, she taped a hospital bracelet from this past June. In the corner of the page, she wrote in black: “DIE YOUNG AND SAVE YOURSELF.” As the start of the occupation grew closer, she wrote in her journal: “Clean slate in front of me, bumpy road both behind and before — I’m bursting … I must become as strong as stone.” During the first week Vic lived at Occupy Charlotte, she says someone stole her clothes, her jacket and her ID. She eventually got a tent and a lock. She says she was afraid to leave the camp. She’d only leave for an hour or two a day. “I was always scared — What’s going to happen while I’m gone? What am I going to come back to?” she recalls thinking. “I was just scared that somebody was going to do something stupid and get us shut down and I was going to come back and tents were going to be destroyed.” Despite the setbacks, Vic confessed to her mom just how meaningful it all was. “She told me that this is the most important thing she’s ever done in her life,” Karen Hill says of her finally grown up daughter. “I had to let her go.” It was hard to fathom that this was the same daughter who had come out to her by handing her a note. Hill made sure to drop off an entire wardrobe of clothes. Hill couldn’t march, but she could open her home to her daughter’s new friends. As the seasons changed, she supplied the activists with vitamin c and cold meds. When they needed a break, she invited them over to the house for a hot meal and the use of their washer, dryer and shower. They hardly disturbed the household. “Usually, they would sit on the floor with their computers — and it was Occupy, Occupy, Occupy,” Hill says. But their victories went beyond blog posts and tweets. A group of Latino tenants were facing eviction when the camp decided to take up their cause. The landlord soon backed down. “That’s a concrete thing that they can point to and say ‘Look, this is what we did,’” says Mark Kemp, editor in chief of Creative Loafing, the Charlotte weekly. Luis Rodriguez , a former organizer with Occupy Charlotte, describes Vic as pivotal to whatever success the camp had. “She’s a big motivator,” Rodriguez explains. “She’s very charismatic and she has a way of rallying support to her … You look at her and you see the hair and the piercings and then you get to talking to her and she’s really, really passionate. She does not suffer idleness and she wants everyone else to be constantly moving.” The marches were addictive. Vic says she yelled so much that no one heard her real voice for long stretches. For the first three weeks, her voice was constantly hoarse. But it wasn’t powerful enough to silence the camp’s in-fighting that sometimes got physical. On a few occasions, people got caught bringing drugs into the camp. One leader left in a well-publicized dispute over the direction of the camp. Restraining orders were exchanged, the scope of which banned one of the main organizers from the camp and from participating “directly or indirectly” in general assemblies. There was a fight over who controls the camp’s website. The ousted activist turned one site into an anti-Occupy Charlotte missive. The remaining occupiers had to start a new site. General assemblies became a grind even for Vic. After a particularly intense session, Vic walked away in tears. She thought about quitting. She’d been occupying for about a month. She was tired of seeing too many activists sitting around. She’d sometimes had to barter with them to march: I’ll give you a cigarette if you get out of your tent . She and others even had to march on their own camp to motivate the laziest camp squatters. They’d tromp through the haphazard rows of tents shouting, “Out of the tents and into the streets!” More than once, Vic complained about the camp going slack. Not everyone appreciated her bluntness. Some tent dwellers had taken to calling Vic a “stuck-up bitch.” If an activist quit the camp, others blamed her. She didn’t miss the quitters. There was always the next march to organize. She didn’t care if she could only get a half dozen to march with her. They were an escape from the camp’s drama and bad vibes. The morning of the march on Duke Energy, one man sits in the rain in front of a chess board, expressionless. Later, an activist shouts down a young girl. She doesn’t look old enough to drive. She’d been at the camp before. She had runaway from home and ended up there. She left in a police car that time. The activist isn’t happy that she came back. He bellows at her loud enough for the whole camp to hear. He calls her a “fucking bitch.” The girl asks to borrow one of our cellphones. She needs to get a ride home. That night, the camp is partly illuminated by the city’s police headquarters across Trade. The Occupiers are only a short walk from the heart of downtown Charlotte’s decade-and-a-half building boom, but the tents feel a world away from the gleaming hotels and loud bars. One activist describes it as “a bubble.” It’s kind of quiet inside the bubble. There are no drummers, or old heads moderating debates over the ” Pedagogy Of The Oppressed .” Instead of a friendship circle, there are small cliques hanging by the information desk and around the kitchen smoking cigarettes. They all look young and tired, shivering in jean jackets and hoodies. At the previous night’s general assembly, several activists debated whether another should be allowed to wear a ball cap emblazoned with the words “Fuck the Police.” Zuccotti Park inspired more than a hundred camps just like this one. The tents and general assembly hand gestures may be the same. But camps like Occupy Charlotte’s have had to make their way very much in the dark, without the correctives that constant media attention can bring, without the steady flow of donations and celebrity cameos. Russell Simmons and Michael Moore have not stopped by. Here, it’s up to Vic and her ability to get Peanut to wake up and march. The night before Vic had sat at the information desk until 4:30 a.m. in the hopes of pitching the movement to any stranger that happened to stumble down to this darkened block of Trade. Tonight, she just wants sleep. Vic slinks away from her group and walks carefully past the tree line running along Trade and into the pathless dark, looking for her one-person tent. She unwraps her tent tarp and fiddles with the combination on her padlock. “The weather is ruining this lock,” she complains. Her voice is a rasp. It’s about 10 p.m. when she finally takes her boots off. After little sleep, she wakes up at 7:30 a.m. feeling sick. The first march to a military recruiting center to highlight the plight of veterans will have to be put on hold. Vic wants more sleep. At 10:30 a.m., Vic’s speech is groggy, her eyes bloodshot. “You’re catching me like just waking up,” she says, laughing. “Sorry.” She decided to join a friend’s tent for the conversation and the platonic body warmth. “When it gets cold, you make friends with your neighbors,” she says. “Body heat is a necessity.” Vic spies the camp from the tent’s entrance. Not a soul in sight. “I wish more people were up and moving about,” she says. She insists she will be ready for the next march: “Put my boots on and go.” Vic had one advantage over all the other Occupy activists: her older brother Nick. From an early age, he introduced her to Orwell and Zinn and radical punk bands like Crass and the Dead Kennedys. He’d stand in the doorway to her bedroom and roll his eyes at her record collection. “What is this except for a waste of record space?” he’d sneer. He was eight years older. He left home when she was 10. Even when he moved out to the Midwest, he made sure to heckle her long distance — pushing her toward more alternative culture. “I’ve always looked up to him,” Vic explains. “He never led me astray … He was always there to give me that hint.” Nick had been a part of the anti-globalization protests a decade earlier. He marched against the World Bank and the International Monetary Fund in Washington, D.C. While the movement’s message, tactics and global analysis animated the Occupiers, Nick’s generation faced an ambivalent public and brutal police. Pepper spray was the least of their worries. The press corps only seemed to accept the kettling tactics as a justified use of force. After one infamous mass arrest, The Washington Post headlined its editorial ” Hail to the Chief–and His Cops .” The preemptive roundup would ultimately cost taxpayers millions in civil-suit settlements . No activist got famous on Twitter or ended up as a talking head on MSNBC. Nick remembers the tear gassing and pepper spraying, the times when the police beat him with their nightsticks and stomped on him with their heavy boots. None of it ended up on YouTube. But he could share his war stories with Vic. “I guess I wanted to try to pass on values, a willingness to stand up for what you believe in,” he says. “I didn’t really want to pass on a lot of the stuff I was doing. Nightsticks hurt. And tear gas isn’t fun. I wouldn’t want her to experience that part of things.” Vic had sought counsel from her brother before her planned arrest. Nick recalls telling her to not piss off the cops. Make them work for her arrest but not too much. “Make them pick you up,” he told her. “Ride that fine line between being cooperative and resisting.” Five days after we met her, Vic and three others formed a human blockade in front of the entrance to Bank of America’s headquarters. They stretched out a banner that said “Bank of Coal.” The Charlotte cops didn’t really know what to do at first. The blockade lasted maybe five minutes. “But it felt like an hour,” Vic says. Vic and seven other activists were arrested for blocking the entrance and climbing the flag pole for another banner drop. Vic made sure, her mother says, to take off her piercings, so she’d look more respectable. But Nick had to call to critique her mugshot. “I was kind of let down she wasn’t smiling,” he says. “I thought she would have smiled for it. When I talked to her, I gave her a hard time about it.” He said he was surprised how easy her arrest went down, that the cops didn’t get rough. He had to admit, though, that he was impressed with her commitment — especially her decision to quit her job for Occupy. “I was actually pretty proud of that,” he says. “I wish I had been at a place where I could do the same and join her. It’s an admirable thing. You find something that means that much to you and you’re willing to give up what you have to be a part of it … It’s kind of her taking it to where I wanted to be.” The Bush Administration and its two wars would consume the energy of the U.S.-based anti-globalization movement. As Nick got older, he says the activists organizing the most aggressive actions appeared to migrate overseas. “It kind of hit a point where nothing was happening,” he recalls. “All the meetings started taking place in Europe. You got punk kid from Charlotte — you can’t go over to Italy or those places.” Especially not a punk kid with growing financial debts. Nick, 30, says he needed to find steady employment, which eventually led him to railroad work as a track laborer in Wisconsin. He currently is a train conductor based in Duluth, Minn. — far from his old activist friends. He’s getting married in June. The closest he gets to protesting is participating in union meetings, and calling and texting his sister. When Vic first started, Nick called with some advice. He still remembers the conversation, that he cautioned her not to let Occupy become all consuming. “I didn’t really know what all to say at the time,” he explains. “Just tried to tell her to be careful and don’t make it like work, like a job. I’d seen a lot of people … taking it to a point where it becomes too much work, too stressful.” When the activists deserted the camp during the Thanksgiving holiday, Vic insisted on remaining behind, her mother recalls. “Somebody had to be there,” Vic explains. “I didn’t trust leaving. I was scared. If I left and everyone else did, anything could happen.” What would the media say if they found a ghost town? she wondered. On Nov. 26 she wrote in her journal: “As of today I have been protesting for 50 days straight. Not one day I haven’t marched.” She had watched the camp grow from six tents to more than 40. In mid-December, Vic learned that a friend — not affiliated with Occupy — had died from a heroin overdose. She says she couldn’t handle the funeral. When word spread about a ride to Occupy DC, she took it. She left behind both her tent and an ambitious schedule of marches. She brought with her a backpack full of clothes and $3. Vic says she needed to step away from Charlotte’s small, intense group. She wanted to witness up close how a big city’s Occupy force handles things. She made sure to take a few Occupy Charlotte friends with her. Vic says she spent her first night with Freedom Plaza’s Occupy faction. There was no friendly circle, no introductions, and no all-night bonding session. “It was cold shoulders everywhere I went,” she says. “It was an ‘I’m too busy’ type thing. That was disappointing.” The next day, Vic and a friend moved their shared tent to Occupy DC at McPherson Square, just off K Street. She found a spot under a giant tarp that made up the neighborhood named after Malcolm X. She’d jump into people’s faces: “Hey, I’m Vic.” Vic’s voice eventually grew hoarse in D.C., too. She participated in marches against the National Defense Authorization Act — the recently signed law that allows for indefinite detention of American citizens. She screamed in front of the White House. She’d loved watching others do the same. “You could see it and it was beautiful,” she gushes, when we catch up with her in D.C. But there are fights at the camp nearly every night, she says. There are fights over missing money. There are fights over a missing laptop. There are drunken fights. Even worse than the fights — some days, there aren’t any marches at all, just rumors of marches. Sometimes, when they march, Vic says the organizers seem to get lost. We go to a used bookstore a short drive from the camp. She says she could spend hours there. She could fall asleep in a corner of the literature section. We walk around a bit, looking for a place to eat. Vic seems oblivious to the stores and restaurants. None of it matters. She isn’t protesting them. Vic admits that it had maybe been 24 hours since her last real meal. She is still an outsider at the camp, just an Occupy tourist. She only mentions one Occupy DC activist — a painter she had met on her first day. Her deeper connection is still with Occupy Charlotte. “I was really down about Charlotte and the state of things,” she says. “Coming here helped me get a little respect back for my hometown’s occupation.” Ten days into her stay, Vic develops a cough. “You lay down at night to go to sleep,” she explains, “and it’s just like a chorus of coughing.” We are sitting in a sandwich shop, the closest warm place to the camp that afternoon. Outside, it looks like it might rain. She admits: “I’ve been terrified … If I hear people coughing, I might put my bandanna up.” Vic gives her cough a funny name. She calls it her “Occu-Cough.” She thinks there’s another anti-NDAA march. Maybe it’s at 6 p.m. Maybe it’s at 8. She doesn’t know but she does want to join it. By 6:30, she texts: “No ones marching yet!,” then, “Im trying to see if anyones wanting to march at 8 against the ndaa.” Whatever plans there are wash away with the night’s heavy rains. We find her in her tent in the back of Fort Malcolm. A battery-powered lantern illuminates the small space filled with old clothes, half-empty sugar cereal boxes, and tangles of adapter wires. Vic would rather be marching. “Everybody’s pussing out, man,” she complains, curling up in a fuzzy blanket next to a new friend named Kiki. Even without the march, Vic has a lot on her mind — including her other Occupy Charlotte transplants. “My to-do list keeps growing,” she says. “I have to write three press releases. I have to call my lawyer tomorrow. I have to get Tate to call the lawyer tomorrow because he’s not doing it on his own, same with Jesse. Fucking babysit. I have to find out what’s going on tomorrow as far as marches. I’ve got two meetings tomorrow. It just doesn’t stop.” * * * * * Shortly before Christmas, Vic returns to Occupy Charlotte to address her court case and add a New Year’s Eve march to her to-do list. The planning hits a snag when police catch a couple activists burning American flags late one night and charge them with careless use of fire . One of the culprits claims that the flag burning was done as an attempt to motivate the camp. Instead, they receive a lot of bad publicity, and two well-attended but drama-filled general assemblies that fail to resolve the matter. A small faction of activists who don’t reside at the park walk into Occupy Charlotte and read a declaration that they are no longer working with the campers. Vic finds that the activists have done very little in her absence. They respond with laughter when she asks whether they had kept up the marches. “Is there a purpose in me doing this?” she worries. “I don’t know.” Vic was not on the scene at the time of the flag burning, but at her parents’ house. “We are the pissed off white kids. We need to be so much more,” she complains after hearing the news. “It’s now tarnished everything.” She then utters the previously-unthinkable: “I’m going later today to get my tent.” But Vic decides to keep her holiday march on schedule. She and about two dozen other activists read off her New Year’s resolutions in front of Wells Fargo, Bank of America and Duke Energy. They all begin the same way: “We the people of 600 E. Trade St. as a part of Occupy Charlotte, stand in protest of the injustices brought upon the city of Charlotte.” It is her last march through her hometown. Even before her return, she had planned her exit strategy, what she calls out her “Occu-Hop” — a nine-month tour of still-standing Occupy camps, with visits to friends and family along the way. The first stop would be a return trip to Occupy DC, then she’d travel to Chicago and maybe stop in on her biological father, and then to Duluth to see Nick. Eventually, she’d make her way to Oakland before returning east to Charlotte, in time for the Democratic National Convention in September. Before she leaves for D.C., her stepfather Danny Hill presents her with his Marine duffel bag, which he’d had since 1970. It fits with the boots and the Vietnam-era gas mask he’d given her. When she isn’t looking, he stuffs a $100 into her belongings. “It is different with her in D.C.,” Hill says. “You get a little more worried. You watch things going on there. You can tell it’s on a whole different level … We’d rather her stay here. But at the same time, we understand that’s what she was wanting to do.” On Jan. 4, Vic and her ride leave Charlotte. As they head out through the city, Vic stops at the Occupy site one last time. She still needs to get her old tent. She makes her rounds, too, saying her goodbyes. Some are sad, some are angry that she is leaving. They all tell her to “be safe.” Vic knows the camp may be gone by the time she returns. By the end of the month, it will be — police clear the site after the city passes an ordinance banning camping on public property. It is 1:40 p.m. when Vic finally gets going. “I’ll certainly be worried about the occupation as well as my family within and outside of it,” she texts, “but I’m ready for the road …”

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France Q1 growth at zero GDP: CB

February 9, 2012

(MENAFN) The French Central Bank said that the country’s economy in 2012′s first quarter would be expected to record a zero growth, reported Xinhua News. Banque de France added that at the end of …

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Stanley A. Dashew: How to Succeed in Small Business Even During Hard Times

February 8, 2012

I entered the job market at the height of the Great Depression, and launched my first business in 1950 — five years after the end of World War II. Points of reference: Boomers, this was before color TV and rock ‘n’ roll. Gen Xers, this was before video games and the Internet. Millennials, a “smart mob” would have been an oxymoron. Since then, I have launched a half-dozen successful businesses and been responsible for a score of inventions (and more than 40 patents) in fields as diverse as credit card processing, mining, mass transit, medical equipment and off-shore oil transportation. I’ve also weathered a dozen recessions. You could say that when it comes to free enterprise, I’ve been around the block. A few times. My first piece of advice for those thinking about starting a small business: Don’t wait. There’s never a right time. You might think that the current hard times would be the time to hunker and wait for the passing storm before testing your entrepreneurial mettle. Don’t fool yourself. A tough economy can present as many opportunities for a great — and profitable — business idea as when the good times are rollin’. Here, then, are my five sure-fire steps for becoming a successful entrepreneur, even during hard times: 1. Identify The Problem : What bothers you? I mean, what really grates on your nerves? Chances are, whatever the problem, others feel the same way. I made my first fortune in starting a company that automated the credit card industry, because paper cards were very problematic and really grated on the nerves of bankers. Now, I knew nothing about high finance much less retail, but beginning in 1957 I began reading about new-fangled “charge cards” that some banks were beginning to offer their customers. And when I began talking to bankers who were offering the cards, what really bothered them was what they were made of: paper. The paper cards would tear and fray, and become difficult to read both at the merchant and bank-processing levels. Yep, I had an early Diner’s Card made of paper and they were exactly right. Rightly so, banks also were predicting a huge market for credit cards so they wanted a way to issue cards in large volume at low-cost and then be able to maintain faster files and accounts on the state-of-the-art technology at the time: IBM punch cards. Bing! Problem identified. 2. Find The Fix : In the case of credit cards, the solution was clear: Create durable credit cards with data lines such as account number and expiration dates, name, street, address, city and state. Like the Dustin Hoffman character in the movie The Graduate , it was revealed to me that the answer to all my problems — well, at least this one – was “plastic.” I had to find a way of creating a plastic credit card. About that time, I had heard through my old contacts at Addressograph-Multigraph (the company that gave me my first job during the Great Depression), that a young man, Dunstan Sheldon, had come up with a plastic material that could be embossed upon. Fortunately for me, my ex-employer was sitting on the idea. I tracked down the material, which hadn’t been patented, and next, set to work devising a way to fulfill the banks’ other requirement. 3. Connect The Dots : OK, problem identified. Check. Material (emboss-able plastic) found. Check. Now what about all that data processing the bankers were wanting for their customers’ credit cards? Here’s where I had to really jump into the skin of a banker and see why this whole processing thing was so important to them. After doing more research, I learned that the flow of credit card paperwork began with the merchant at the point of sales. If that starting point couldn’t be automated, the entire system would fall like a house of (credit) cards. 4. Gather The Troops : OK, I’m not an engineer, but I have some engineering genes in me. Also, I knew some very talented engineers. This is why it is so important to form strategic partnerships with people who have skills which you lack. I hired then to work with me on reproducing and embossing a keyboard embosser that embossed plastic credit cards with their name, account number, and expiration date. This machine was operated by punch cards, one for each customer. It was able to emboss 1,000 cards per hour. We also developed an imprinting machine which imprinted all the information on a plastic card, which was inserted into the imprinter and printed out all the info on the card, and was then signed by the customer. These machines printed account numbers, dollar amount, merchant number and date onto a sales draft that could later be scanned and read by optical character readers. The results were not only faster but foolproof. The problem of human error — caused by sales clerks writing down the wrong information or bank clerks misreading the right information — was eliminated. We used existing technology to build these machines. However, it was the application of this technology in a new way that met the bankers needs that proved decisive. In 1958, Dashew Business Machines received an initial order from 300,000 BankAmericard plastic credit cards and 3,000 imprinters and 1 electronic Databosser to emboss the credit card information on the plastic credit card and from the IBM punch cards. Here’s the takeaway: When you lack the skills or experience to overcome a roadblock to your success, don’t be afraid to ask — you friends, family, existing clients, vendors or colleagues — for help. 5. Roll With The Punches : Business looked good for Dashew Business Machines in 1958, if only all the players remained in place. Of course, they did not. Joe, the Bank of America executive who had helped me secure my deal, was out. He lost his bid to be president and along with his departure, we were shown the door. And the final kick in the pants was that we had just ordered costly parts for 10,000 credit-card imprinters in anticipation of the millions of BankAmericards we were going to be making. Rather than throw in the towel (and I did think about it, more than once), I eventually came up with what I thought was a pretty original strategy. I hired Joe, now newly unemployed, to find a way of creating an entirely new credit card that could be used nationwide — an ‘unheard of’ concept at a time when bank charge cards, like banks themselves, were restricted by law to do business in only one state. It was an enormous undertaking and truth be told, we never accomplished it. (The first “national” credit card would not emerge until 1966 with MasterCharge, which would later become MasterCard.) But something even better happened. While speaking with Chase Manhattan Bank (now Chase Morgan), Joe got us a deal to take over its failing charge card operations. Chase was, and is today, such a blue-chip brand name in the banking industry, that it was relatively easy to raise financing on Wall Street to cover the deal. And here’s the cherry on top: Soon, American Express came calling and bought the company we had created to handle the Chase operations. The deal called for cash and a generous amount of Amex stock. Within a year, following the successful conclusion of a lawsuit, Amex stock skyrocketed. It was now 1965, and I was in the thick of the revolutionizing the financial habits of middle America. It was BIG and we knew it.

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Dennis M. Kelleher: More Unconscionable Wall Street Whining

February 8, 2012

I can barely write this as tears for the poor, picked-on Wall Street bankers fill my eyes as they are comforted by Obama’s campaign manager, who reportedly met yesterday with his big donors on Wall Street. Until we fix the sickening campaign finance system, I don’t like, but I understand that all fundraising politicians have to raise money and meet with donors and I understand why the campaign manager did, but how anyone on Wall Street could feel picked-on by Obama is beyond reason. Every single Wall Street bank would have been bankrupt, broken up and/or liquidated in 2008-2009 due to their recklessness, greed, incompetence and arrogance. The only reason that didn’t happen is because the US government, with taxpayer dollars, bailed them all out and, indefensibly, did so with no strings attached so they quickly began stuffing their pockets with billions in bonuses in mere months. Most of these “demoralized” Wall Streeters would have lost everything: their bank accounts, their multiple homes at the world’s hottest locations, their many sports cars, Italian designed wardrobes, yachts, club memberships, jets, helicopters, cooks and legions of house help and personal assistants and everything else they purchased with the tens of billions of dollars they sucked out of the economy as they created the bubble of toxic, worthless assets in the years before the financial collapse that they caused. True, they didn’t create it alone, but, in the hierarchy of those who caused the financial crisis, any fair-minded, unbiased list would put them at the top. That is particularly true if one looked at who benefited the most from the bubble and who was treated the best once the bubble popped. No one was treated better before, during and after the crisis that Wall Street. The government didn’t open the treasury and taxpayer pockets with no strings attached for anyone other than the financial industry (compare the demands and concessions forced on the auto industry). Anyone not directly or indirectly on the payroll of Wall Street or their ideological fellow travelers (who are almost all coincidentally also on the payroll) sees this and understands this. They see that no accountability only applies on Wall Street. They see that no-strings bailouts only apply to the already-rich Wall Street bankers. They see the unlevel playing field created and sustained by a federal safety net that looks a lot like a hammock for the filthy rich. (The Wall Streeters and their allies like to say such criticism is an attack on wealth, entrepreneurs and capitalism itself. That baseless, self-serving attempt to distract and distort the debate is laughable. No one is attacking Silicon Valley, Bill Gates, Apple, Caterpillar, Procter and Gamble, Hewlett-Packard, AT&A, IBM or the rest of the Fortune 500 — or celebrities, athletes or other super-wealthy people. No — the criticism is focused on the biggest Wall Street banks and bankers that enriched and engorged themselves at the expense of the rest of the country, that caused the crisis, got bailout out by taxpayers and just can’t stop claiming they are picked on, and that still benefit from a taxpayer-funded federal safety net that subsidizes their current too-big-to-fail operations.) It is also obvious to see that Main Street, not Wall Street, has paid and is paying for the costs of the financial crisis . They see a hollowed-out middle class struggling just to get by, having lost most of their stock value, home value, savings and retirement funds. These are the people living paycheck to paycheck with gnawing insecurity that at any moment it can all disappear and they too could join the ranks of the unemployed and, even, the homeless. Food stamp use is at an all time high and, most tellingly, the ramp up in use is in what used to be solid middle class neighborhoods. The same is true for free and subsidized school lunches. The distinction between the poor and the middle class is evaporating in far too many communities in America. Sadly, hope and the American Dream are also slowly receding from the horizons of too many hard-working American families. And, yet, in the midst of all this pain, suffering and wreckage, Obama’s campaign manager has to go to the oh-so-exclusive “Core Club in Manhatten” to reassure the bonus-bloated bankers that “Obama won’t demonize Wall Street as he emphasizes populist appeals in his re-election campaign ….” As if that wasn’t enough, this was reported to be “the latest in a series of hand-holding sessions.” It was also reported that one anonymous banker stopped going to these meetings because “the actual White House message of locking up fat cat bankers and raising their taxes never actually changes.” Er, ok, could anyone, please, identify a fat cat banker that got locked up? Nooooooooooooooo. There have been none. Not one. THAT actually is part of the problem . They are almost all still right where they were when they were creating the bubble or have departed Wall Street to the comfort of their billions or millions. (And, their taxes remain historically low.) Every single sane employed person on Wall Street should be sending a check to Obama — they would all be an empty shell of themselves but for him and the actions his administration took to stop the collapse of the financial system and our economy. Yet, ignoring all evidence and facts, Wall Street is reported to be “an industry that the White House has thoroughly and repeatedly demonized and demoralized” — what? That’s so ludicrous that it could be a “Seriously” skit on Saturday Night Live . Or an Onion headline. But, no, Wall Street, its bankers and its allies everywhere, including in the media, actually think that Obama has “thoroughly and repeatedly demonized and demoralized” Wall Street. Can they really be that thin-skinned? Can they really be that out of touch with reality? Can they really be that narcissistic to not see their “plight” relative to what is happening to the rest of the country ? Sadly, the answer to all those questions is yes. Wall Street and those who make fact-free assertions from their mahogany-line corner offices, 30,000 square foot mansions and spacious limousines about their plight live in a parallel universe that begins and ends in the mirror they gaze in and apparently mistake for the entire world. Until they look beyond their reflection in the mirror and until one of the titans on Wall Street actually becomes a statesman , then Wall Street’s whining won’t end and no amount of “hand-holding” meetings will satisfy them.

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German exports grow USD1.3tr in 2011

February 8, 2012

(MENAFN) German exports rose 11.4 percent to USD1.3 trillion last year, but it may decline this year on slower economy, AP reported. The Federal Statistical Office said that Germany exported …

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Melissa Richer: How Millennials Are Shaping the Future of Social Entrepreneurship and Technology

February 7, 2012

In 2011, the terms ‘social entrepreneurship’ and ‘social business’ began to make weekly appearances in mainstream media (see recent Huffington Post coverage here , here , and here ). These startups are at the forefront of the ‘new economy.’ They make money by solving social and environmental problems, and they do not fit into the traditional nonprofit or for-profit mold. When I entered the workforce 5 years ago, I mostly heard that my generation was ‘difficult to work with,’ ‘savvy with that social media thing,’ and ‘free-spirited.’ Now people see us differently. In 2011, we were the entrepreneurs, survivors, and ‘ generation sell .’ Oftentimes people ask me about the future of social entrepreneurship. This is because I founded Ayllu , an organization that tracks social businesses in 80+ developing countries and reports on market trends. I tell them that right now social entrepreneurship is a hot trend and there are funders, conferences, university departments and newspaper sections devoted to it. I believe that in the not-too-distant future, social entrepreneurship will become so prevalent that it will no longer be a niche sector. It will simply be part of the new economy that emerges from today’s convalescent markets. In the years ahead, social entrepreneurs will take advantage of innovations in the technology sector. Here are technology-related trends that have major social change potential in 2012 and beyond: Crowd-based Models : Crowd-funding brings people together online, and pools their money to finance a project. It is a big social entrepreneurship trend, which Kiva made famous a few years ago. Now many social entrepreneurs have innovated on this concept. Solar Mosaic makes it possible for anyone to fund community solar installations in places like schools or hospitals. inVenture realized small businesses in developing countries need growth capital, so they created a crowd-investing platform. And One Percent Foundation innovated on the giving circle concept by pooling 1 percent of its members’ income and donating it to charities. In the future, as technology becomes cheaper and more prevalent, social entrepreneurs will move beyond crowd-funding. They will use other crowd-based models to create social change. This trend is already manifesting itself in the mobile technology space. Mobile Technology: Today, nearly 70 percent of people in developing countries have mobile phones. In just a few short years, more than 1 billion people who were formerly ‘off the map’ are on it. This market opportunity is tremendous in terms of size and scale, as are possibilities for social innovation. Social entrepreneurs are building new models: Labor Voices combats human trafficking with a ‘yelp model’ where migrant workers can rate and review their employers anonymously. In developing countries, Medic Mobile uses mobile technology to help rural health workers coordinate with clinics and patients. In Kenya, people use their cell phones like credit cards, and Kopo Kopo helps business owners accept mobile payments from customers. Health Technology: Healthcare is one of the most diverse areas for social entrepreneurship. Lumoback , a mobile healthcare startup, designed a smart phone-powered device that improves posture and chronic back pain. Embrace developed a low-cost baby incubator to save premature infants in the developing world. And BioSense created a device that tests pregnant women for anemia in rural India, and can save thousands of lives each year. These trends are part of the big data and collaborative consumption movements. With so much information at our fingertips, solutions are emerging to analyze and organize information (big data). And thanks to the Internet, online collaboration is creating new kinds of marketplaces (collaborative consumption). In the past 10 years, we humans have become dependent on technology and it’s difficult to navigate life without it. Sometimes it feels as if our devices are in control of us, and not vice versa. But, in the next 10 years technology will become ‘smarter.’ It will adapt to us and become more integrated with our daily activities. Millennials will play a large role in evolving technology to create social end environmental benefits. Social entrepreneurship is our way of addressing the immense global challenges we inherited (see here and here ). We will use it to shift the global economy in a positive direction.

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Many With Only High School Degree Laid Off During Weak Recovery

February 7, 2012

For many in the United States, the two years since the end of the recession have been worse than the downturn itself. Among those Americans with only a high school degree who have lost a job since 2007, a third became unemployed after the official end of the recession, according to The Washington Post . It’s a troubling statistic in its own right — job seekers without a college degree are having serious difficulty finding work in the current market, and the unemployment rate for high school graduates is more than twice that of college grads — but it also underscores the fact that, for many Americans, the recovery hasn’t felt very different from the recession that preceded it. Economists consider the Great Recession to have ended in the summer of 2009, nearly three years ago. That’s the point when the economy stopped outright shrinking and began growing again . But the subsequent period of modest expansion has been marked by job cuts, uncertainty and a gradual erosion of financial security for many Americans. These conditions are expected to remain pronounced for a long time to come. U.S. employers cut 529,973 jobs in 2010 , according to the outplacement company Challenger, Gray & Christmas. In 2011, that number rose to 606,082 . At the same time, wages and benefits barely grew , with the high jobless rate giving employers little incentive to pay workers more. Today, there are still nearly 13 million Americans looking for work. It’s not that life has gotten much better for those with a job either. All together, median household incomes have now fallen more in the recovery than they did during the recession. Meanwhile, as many as 49 million Americans live in poverty — a record high — and almost half the households in the country lack the kind of savings necessary to weather a financial emergency. People without a college degree are having a particularly difficult time finding work , but they’re not the only demographic hard hit by the crisis. The unemployment rate among very recent college graduates is well above the national average . While Baby Boomers account for a huge percentage of the long-term unemployed . And African-Americans have a jobless rate of 13.6 percent — more than five percentage points above the national level.

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Consumer Borrowing Spree May Not Be Healthiest Economic Sign

February 7, 2012

Consumer credit posted a second straight eye-popping monthly gain in December, according to a new Fed report, which some are taking as a sign of a new surge in the economy. There are a couple of reasons to not get too excited just yet. First, the $19.3 billion jump in consumer credit in December was driven mainly by a $16.5 billion surge in “non-revolving” credit, which includes student and auto loans. “Revolving” credit, or credit cards, grew by a more modest $2.8 billion. To the extent that people are using credit cards and taking out auto loans more, that’s a positive sign for economic growth — although maybe not the healthiest growth. More on that later. But the biggest gain in “non-revolving” credit in December came from lending by the “federal government,” which is student lending. That grew by $8.8 billion. A surge in student lending is not always a wholly positive sign for the economy, warns IHS Global Insight U.S. economist Gregory Daco. “It may indicate people are finding it more difficult to finance their kids’ education,” Daco said in a phone interview. “That may not be such a good thing.” The number might also have been skewed by seasonal adjustment factors. December is not typically a big month for student lending, so some unusually large increase in borrowing in the month, for whatever reason, might have thrown the seasonal adjustment off and amplified the increase. These numbers are volatile and can be revised dramatically. Clearly, consumer credit is on the rebound. November posted another ridiculously huge jump in consumer credit — $20.4 billion. Together, November and December’s growth in credit was the biggest two-month increase since 2001. And November’s credit gain was more heavily weighted toward credit cards and auto loans, and so was a better sign of real consumer spending. Of course, we knew about that already, having seen a 2 percent gain in consumer spending in fourth-quarter GDP data released last month. Given the big skew toward student loans in December, it is still too early to declare that consumers are feeling so frisky about the recovery that they’re out racking up debt to finance spending sprees. It is also possible that they are using credit more because wages aren’t rising enough to allow them to pay for stuff they need without going into hock. In any event, we probably do not want another economic recovery driven by consumers going into hock. Given the lingering sting of the debt-fueled financial crisis, it seems unlikely we will get one soon. “Consumers are slowly returning to the use of credit, but it’s a very cautious return,” said Daco.

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Endeavour Press: Even in a Bear Market, You Can Still Get Rich

February 7, 2012

By John Carlucci, author of Ashes to Riches: How to Profit Spectacularly During the Economic Collapse of 2012 to 2022 . In 2008, the financial world was hit by its own version of the meteorite that killed off the dinosaurs. Huge investment banks disappeared into thin air, the stock market went into a terrifying plunge and shell-shocked politicians warned that the world economy was within days of imminent collapse. Millions of ordinary investors saw their world turned upside down as years of planning and saving, years of accumulated wealth were suddenly vaporized. But catastrophe clears the field for new opportunities and whoever can adapt to the new world thrives. To be a successful investor in our post-meteorite world, you need to embrace several key ideas. First, realize that much of what you are told by financial “experts” is deliberately incomplete and blatantly self-serving. The truth is, their primary interest is looking out for their income stream, not you. They make money kneading and rolling “Assets Under Management” – your dough. If your account does well, they make money on service fees. And if your account crashes, as in 2008, they’ll beg and plead that you stay in the market because they still collect fees servicing the little you have left. What they don’t make money on is you selling all your stocks and going to cash or other safe haven. With that unsettling thought in mind, their conventional “Buy and Hold” strategy has not just become obsolete, but absolutely lethal. That’s because in 2000, the market fundamentally transformed from a long term or “secular” bull to a secular bear. The steady upward trend in the market, averaging 18.6% per year from 1982 to 1999, suddenly flat-lined. Since 2000, the S&P has averaged a paltry 0.46% gain per year and there are strong indications we’re in for a downward trend that won’t be over for at least another decade. Not surprisingly, most financial “advisers” are still recommending the long term “Buy and Hold” zombie strategy because it guarantees their income as long as you stay invested. But to survive and thrive in a multi-decade-long bear market you must zero in on the short term ups and downs that last for only a few years at most. What are referred to as the “cyclical” bull and bear swings — within the larger long term secular bear period. Instead of buying and holding for decades on end, you buy at the bottom of a cyclical swing and sell at the top. It’s the only strategy with any hope of getting you through this secular bear intact. It isn’t good for your broker’s income, but you have to put your own interest first — just like he does. Likewise, learn how to protect yourself. No sane person would get onto an elevator that didn’t have an emergency brake. Likewise, no rational person should invest a dollar without attaching a “stop loss” order to it. What’s a “stop loss”? It’s a standing order that protects your investments just like an elevator emergency brake. If your stock price drops to a pre-determined level, either a percentage drop or a dollar amount drop that you choose in advance, the stop loss order automatically executes, selling your stock at the exact price you ordered or as close to it as possible. Your broker never told you about stop loss orders? You’re not alone. From the market peak in 2007 until it hit bottom in March 2009, investors lost approximately $11 trillion in asset value. The entire GDP of the United States in 2008 was $13 trillion. This occurred because very few average investors were protected by stop loss orders. They followed their financial advisers’ advice to hold and rode the catastrophe all the way to rock bottom. It was like holding tight to the walls of the elevator as it fell through space. It’s likely to get pretty rough over the next few years but if you keep these few simple ideas in mind at least you won’t be as surprised as you would have been, and as millions of others are going to be. In fact, there’s even a very good chance you’ll thrive in our brave new financial world. Ashes to Riches: How to Profit Spectacularly during the Economic Collapse of 2012 to 2022 , by John F. Carlucci, is published by Endeavour Press Ltd.

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German industrial production falls the most since 2009

February 7, 2012

(MENAFN) A report, issued by German Economy Ministry, showed that the nation’s industrial output declined the most since 2009 in December, Reuters reported. The official data showed 2.9 percent …

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S Korea’s Jan IT exports down 12.8%

February 7, 2012

(MENAFN) South Korea’s Ministry of Knowledge Economy said that as a result of the drop in prices of key items including memory chips and display panels, in January, exports of information technology …

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IMF lowers China’s 2012 economic growth to 8.25%

February 7, 2012

(MENAFN) The International Monetary Fund (IMF) said that it lowered its growth forecast for China’s economy in 2012 to 8.25 percent from earlier forecasts of 9 percent, reported Xinhua News. The …

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Daniel Burrus: How to Save the Manufacturing Sector

February 6, 2012

Like most industries, the manufacturing sector is transforming rapidly. Because of recent technological advances and globalization, U.S. manufacturing is facing intense international competition, increasing market volatility and complexity, a declining workforce, and a host of other challenges. Yet we know that in order to have a strong economy, we need a strong manufacturing base. So what’s the answer? Today’s manufacturers must transform along with the rest of the world by adopting six advanced next generation manufacturing principles. They are: Anticipate customer needs: Look at your customers’ future and focus on what you DO know rather than what you don’t know. Ask, “What are the hard trends, the things that will happen, versus the things that might happen? What are the industries that are converging around our customers that our customers currently don’t see?” Then you can start seeing both needs and opportunities before they happen. Innovate around the core: What are your core competencies? Are you still using your core competencies? In the past, manufacturers could go decades between innovations. That strategy doesn’t work anymore. Today you cannot just innovate now and then: to survive and thrive in a time of vertical change, you have to be innovating around your core competencies continuously . So what is your core, and are you using it? Focus on collaboration: Collaboration is much different than cooperation. Cooperation is based on scarcity and it contains within it the assumption that your interests and mine are inherently in conflict; however, we will temporarily set aside those cross-purposes to find some cautious tactical common ground. In contrast, collaboration is when we co-create the future together. It’s about working with everyone else, even your competitors, to make a bigger pie for all. It’s based on abundance and requires working together under higher levels of trust and connectivity. Pre-solve problems: The best way to avoid problems is to predict and pre-solve them. How? Use hard trends to look into the visible future and ask, “What are the problems that we can see based on anticipating customer needs?” Get that down to a short list that’s aligned with your core competencies. Then that’s where you focus because you can see which problems are coming. Additionally, look at your own company in the same manner to determine the problems you’re about to face. Solve them before they happen so they don’t occur in the midst of rapid change and transformation. That’s the only way to stay ahead of the curve. Inform and communicate: Informing is one-way. It’s static and doesn’t always cause action. Communicating is two-way. It’s dynamic and usually causes action. Social media is a good example of engagement in communication, which is why it’s spreading so rapidly and becoming a business tool. Next generation manufacturers understand that you don’t just inform; you also communicate, develop that strategy, and move it out internally as well as externally. Do continuous de-commoditization: The minute you come up with something new, a competitor will copy it. As they do so, your innovative product or service slowly becomes a commodity. The margins get thinner as time goes on. But instead of letting the margins get thinner and riding them down, you can wrap a service around a product or wrap a service around a service to add new value. You can think creatively about your product or service so you can repackage it, redefine it, revamp it, or somehow make it unique in the marketplace again. When you do continuous de-commoditization, you’ll find yourself with good margins and a growing business. In a competitive global economy that is becoming more tightly connected every day, U.S. manufacturers can no longer do things the way they’ve always been done. Adopting these next generation manufacturing principles is the only way to obtain the talents, capabilities, and resources necessary to build a highly effective enterprise that thrives in a global marketplace.

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Dennis Santiago: Banking 2012: Maneuvering to Survive the Desert Landscape of Zero Interest Rates

February 6, 2012

Maybe that Mayan calendar is right and the world will be ending shortly after the presidential election. You’d certainly think so by the furor of deck chair arranging going on in the banking industry. I’m told the buzz of the 2012 season of meetings is all about “Who’s buying whom?” and “Who’s for sale?” The stage seems set for a round of consolidations that will take America’s 7,500 plus FDIC insured institutions down to a much smaller number. The big will get bigger and consumer choices — and their ability to get decent financial terms — will get fewer. The root problem I hear about over and over is Zero Interest Rate Policy (ZIRP). Simply put, with zero interest rates pushing operating margins down to nothing, the only thing starving bankers have left to do to survive the drought is cannibalize the industry. It’s another sign of the handcuffed wealth of the U.S. economy. And it’s not for lack of money. As I pointed out previously in the article “Investors Stuff Mattresses and Wait for U.S. Economy to Find Direction” , there’s a glut of idled deposits distributed throughout the banking system. But the economics of lending are lacking in vigor. Bankers cope with this in two ways. Some have just abandoned lending and have given in to taking deposits and putting it into low yield government securities. They’ve effectively become conservative mutual funds. Yes that does mean we have a situation where consumers stuff their money into a bank mattress and then the banks in turn stuff another government bonds mattress. Talk about draining Main Street of energy… times two. For all you people who “Moved Your Money,” you might want to ask you banker or credit union if they are playing the “double stuffed mattress” game with your cash. If they are, maybe you need to make noise about moving again. Nothing says that grass-roots activism has to be static. The above “money parking lot” game can buy you time but it’s not an operational business proposition bankers like. Clearly they should not. Other more proactive bankers tenuously attempt to find productive uses for these deposits despite the difficulties of selling services under a cloud of doubt about the future direction of the economy. The “lending engine that could” conversations I hear from these large and small bankers have three distinct themes. Theme One: If there’s a good deal out there, we’re all going to bid on it and compete with as many incentives as we can pile in there to outmaneuver the competition. It is cut throat and it means thinner margins on fewer successful asset deployments. Theme Two: If it’s not a quality deal, we’re not touching it with a 10-foot pole. We just can’t do it. Not with the uncertainty about this economy. This is most true for banks fighting to regain solid footing for the asset quality portion of their CAMELS* ratings. It’s also, by the way, an area where I’m told the old sub-prime mortgage crowd is coming around trying to sell loans to sub-quality commercial and industrial borrowers. The people who laid waste to our mortgage market haven’t gone away. They’re morphing. Well at least they’re no longer unemployed. Is that a good thing? Theme Three: If it’s a big company, forget it. They complain the Fed’s ZIRP — there it is again — means it’s an invitation only game for the 1% club. The implication is that large C&I companies are being driven like sheep into the waiting arms of the cabal on Wall Street by U.S. fiscal policy. When I talk to corporate treasurers about the issue, they pretty much concur. The smaller bankers who live well off the radar screens of Wall Street also complain about one other insult to injury. They complain about role of “ratings” in impeding business. The big Nationally Recognized Statistical Ratings Organizations (NRSRO’s) aka the big ratings agencies — who are viewed as members in good standing of the Wall Street insider’s club — only cover the biggest banks who can afford their services for doing ratings on multi-billion dollar debentures. It simply costs too much for the smaller banks to go “buy” a rating from these companies. It hurts community banks two ways. First, they are sometimes forced to go through a TBTF to issue a standby line of credit (LOC) using their money to pledge to one of their direct clients. So when it comes time to issue an LOC to a corporate borrower, they too often have to send that money over to a big bank that acts as a credit facility manager — with service fees of course — to funnel the money to the bank’s own customer. It raises the cost of the transaction somewhere around 75 to 150 basis points. That’s actually a lot. To make the deal work, the smaller bank eats the cost which, of course, cuts in to operating margin and causes yet more systemic malnutrition. For these smaller banks it can happen for as few as 1 out of 20 deals to as many as all of them. Second, many corporations and funds now have risk management controls that specify that all deposits in financial institutions be insured. This includes super large deposits. The way that works is that the depositor buys a private insurance for the amount beyond the FDIC insured amount. The insurance companies in turn ask for a rating from an NRSRO which the smaller bank won’t have because the deposit size is nowhere near big enough to justify paying for such a rating so they lose the deal to one of the TBTF’s. That effect is very much in evidence when you look at how much deposit accumulation has happened at the big banks versus the smaller ones in the past two years. This is particularly macabre when you consider that in many cases, the smaller institution actually has better safety and soundness properties than the bigger one acting as a conduit or “NRSRO rated” recipient of the large deposit. We know this because other more specialized bank analytics companies that do analysis on the safety and soundness of the bank industry indicate so. IRA is one of those analysis providers. The company delivers ratings indicators on 100% of the active banking industry in a timely fashion for compliance, monitoring and counterparty evaluation purposes. IRA isn’t the only company doing so. There are others. Among IRA’s business niche cohorts, the analysis not only aligns well, the various services have nuances that when taken as a set provide users with far better illustration of the bank’s condition. The banks don’t hire these firms to make ratings. They assess all of them because that’s how you’re actually supposed to analyze an industry channel. It begs the question, if you can make more direct measurements and you don’t, who’s being the fool? Banks do argue that these alternative ratings are very valid because they know the numbers align with their regulatory examination CAMELS ratings. The bank regulators have had their own trouble with relying on NRSRO data by the way. The FDIC mandated that ratings agency data would no longer be used to computing bank insurance assessments last year and rules about stress testing under the Dodd-Frank Act say banks are not to rely on these external ratings going forward either. This, of course, asks the second question, “If bank regulators are in fact shifting to better objective standards to manage down future systemic risk, why are capital markets lagging behind?” So here’s the “think outside the box” finance policy question of the day. What if all those line of credit and large deposit deals relied on direct measurement analytics sources instead, bypassing the need to process LOC’s though an NRSRO rated manager or parking hard-earned deposits in a TBTF. How many basis points could this shave out of the economy’s systemic cost of capital? What would it mean in terms of creating vigor in the 7,000+ smaller banks in this country to be a greater part of America’s economic recovery? Will this help change the direction of discussions when bankers get together from starvation and consolidation towards competition and growth? I think these are questions worthy of the banking and the insurance industry exploring. Not a bad thing for policy makers and candidates to be pondering as well. Clearing the decks for Main Street of unneeded furniture is what I’m trying to explore here. Ultimately this is a search to find a way to bring our industrial system back into sustainable balance. I wrote about this last October in “Economic Recovery Means Learning to Export Unemployment” where I floated the notion that repatriating as little as five-percent (5%) of the U.S. industrial base would go a long way towards getting our corner of the world back to the good side of the systemic tipping point. I mention this in closing because President Obama also made this very point in his State of the Union address. He left it at encouraging business to “think about what you can do.” So I am. *CAMELS ratings are how bank regulators assign safety and soundness ratings to banks. The acronym stands for Capital Adequacy, Asset Quality, Management, Earnings, Liquidity and Sensitivity to Market Risk.

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Google, Facebook Cave To India’s Demands For Web Censorship

February 6, 2012

NEW DELHI (AP) — Google India has removed web pages deemed offensive to Indian political and religious leaders to comply with a court case that has raised censorship fears in the world’s largest democracy, media reported Monday. The action follows weeks of intense government pressure for 22 Internet giants to remove photographs, videos or text considered “anti-religious” or “anti-social.” A New Delhi court Monday gave Facebook, Google, YouTube and Blogspot and the other sites two weeks to present further plans for policing their networks, according to the Press Trust of India. For India’s more than 100 million Internet users, the government says, U.S. Internet standards are not acceptable. The case highlights the difficulty India faces in balancing conservative religious and political sentiments with its hope that freewheeling Internet discourse and technology will help spur the economy and boost living standards for its 1.2 billion people. Google India did not say Monday which sites were removed but had said it would be willing to go after anything that violated local law or its own standards. Indian officials have been incensed by material insulting to Prime Minister Manmohan Singh, ruling Congress party leader Sonia Gandhi and religious groups, including illustrations showing Singh and Gandhi in compromising positions and pigs running through Mecca, Islam’s holiest city. “There is no question of any censorship,” Communications Minister Sachin Pilot said in Bangalore. “They all have to operate within the laws of the country. … There must be responsible behaviour on both sides.” Anyone hurt by online content should be able to seek legal redress, he said. The government has warned it has evidence to prosecute 21 sites for offences of “promoting enmity between classes and causing prejudice to national integration.” The government has asked the sites to set a voluntary framework to keep offensive material off the Internet. Facebook India submitted a compliance report to the court Monday, but it also joined Yahoo and Microsoft in questioning its inclusion in the case, saying no specific complaints had been presented against them, PTI reported. The sites did not immediately comment after the hearing. Prosecutors, who sued on behalf of a Muslim religious leader who accused companies of hosting pages that disparage Islam, said they would provide the companies with all relevant documents. The court gave the companies 15 more days to report back. India is Facebook’s third-fastest growing market, after the U.S. and Indonesia. The California-based company, with $3.7 billion in revenues last year, has seen its hoped-for launch in China held back by rules requiring censorship of material seen by the Chinese government as objectionable or obscene. The issue of country-specific censorship sparked global outcry in recent weeks, after Twitter said it would allow tweets to be deleted in countries where the content breaks local law. Twitter insisted the new policy would help freedom of expression and transparency by preventing the entire site from being blocked. But dissidents and activists who have embraced Twitter in their campaigns accused the site of betraying free speech. Katy Daigle, The Associated Press

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Gains in Asia on US jobs data; Greece’s talks in focus

February 6, 2012

Investors in Asia widened their appetite for risk on Monday as the US economy provided on Friday more signs of recovery which improved hopes for Asian companies, while Greek debt restructuring talks …

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Japan’s Dec oil imports from Iran reach 10.28m barrels

February 6, 2012

(MENAFN) Japan Ministry of Economy, Trade and Industry (METI) said that in December, the country imported 10.28 million barrels of crude oil from Iran, reported Tehran Times. The ministry added …

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Mike Lux: A Healthy Skepticism

February 5, 2012

The struggles around a potential settlement with the bankers over crimes they committed have been fascinating. Beyond the immediate settlement talks on robo-signing, the bigger saga about whether Wall Street will be held accountable, and whether the housing market recovers any time soon, is going to take as long to resolve itself as President Obama is in office — although the short-term resolution will have a lot to do with whether that is for one more year or five. The immediate debate is on the settlement — state attorneys general have been instructed that they need to decide by Monday whether to sign on it. The issues remain exactly the same today as it has been throughout the time the settlement talks have been going. Administration officials arguing for a settlement say that on robo-signing alone that it would be a long laborious process to prosecute all these claims, that not that many attorneys general would do aggressive prosecution, and that even if prosecutors won all the potential cases, the amount of money that would be awarded wouldn’t be all that much more than what the settlement is calling for. They argue that the money from the settlement would not only write down a lot of underwater mortgages but would provide money for desperately needed legal services that would help lots of hard pressed people who have been screwed by bankers. Those attorneys general who have been reluctant to sign on, and progressive activists like me who have been against a settlement, have been concerned that no investigations are being done to determine the full extent of the crimes committed, and that any legal release would be drawn far too broadly allowing the big banks to once again get off without being held accountable for their crimes. I have always been of the view that there are two supremely important things in this whole fight over the settlement. The first is a much more comprehensive and aggressive investigation of the biggest banks, one that, done right, would result in indictments of bank executives for fraud, along with the possibility for a far bigger amount of money from the banks for mortgage writedowns. The second is the legal release issue, because if that release is broadly drawn, any investigations going further — whether they are federal or state — could be rendered moot before ever getting out the door. Beyond those two things are a whole set of relatively more modest but still significant issues in terms of how a settlement would be structured, including the actual amount of money involved. On the first issue, the task force gives some hope, and the administration deserves credit for appointing it, but many issues remain including whether it will have the needed staffing resources, and whether the Department of Justice and Securities and Exchange Commission officials who have seemed reluctant in the past to support more aggressive investigation will support New York Attorney Genral Eric Schneiderman in his efforts to push strongly ahead. On the second issue, I remain hopeful the release will be narrow, but also have confidence that Schneiderman, California Attorney General Kamala Harris, Nevada Attorney General Catherine Cortez Masto, Delaware Attorney General Beau Biden, and perhaps some other important attorneys general will refuse to sign on to a settlement with bad release language — and those are four incredibly important states not to be in a settlement. On the final set of issues, I have less confidence at the moment that I and other progressives will be happy with all or even most of the details, although I’m sure there will be a mix of good and bad. One bit of good news: according to Housing and Urban Development Secretary Shaun Donovan in a blogger call Saturday, it looks like there may end up being as much as $40 billion in mortgage writedown money involved in the settlement deal, as opposed to the $25 billion that had been reported previously. There is one other factor on all this which is a great sign: Schneiderman’s lawsuit filed against the big banks is a sign he is going to continue to be aggressive and independent in pursuit of justice on Wall Street. If, as I suspect, DOJ needs prodding, I think this kind of lawsuit is a good shot across the bow, as well as incredibly significant legal work in its own right. Here’s a great report from Rachel Maddow Friday night about the lawsuit: Visit msnbc.com for breaking news , world news , and news about the economy Side note before I go on: I am delighted to see Maddow doing such a good job of digging into this subject (in addition to this segment, she did a very knowledgeable interview with Schneiderman a few days ago). One of the key parts to the all-important task of holding the new task force accountable is good reporting from high-profile reporters like Rachel. In addition to good reporters continuing to pay attention to what happens next with the task force, the broader progressive movement needs to be very focused on holding that task force accountable. I know there has been a lot of debate and division among progressives over how optimistic to be, with some arguing that the administration’s history re investigating financial fraud and holding the big banks accountable in general has been very weak, that this new task force doesn’t have enough resources assigned to it, and that some of the players in the task force have not been inclined to investigate Wall Street fraud in the last three years. Some of us have been more optimistic given Schneiderman’s role and a sense that the political tides are shifting, although even a relative optimist like me is unhappy with the still relatively small amount of DOJ resources allocated and the continuing drip of rumors that key DOJ players want to slow this task force down. However we think on this, though, I think progressive optimists and pessimists need to be firmly united in one thing: we need to be singularly focused in the months to come on scrutinizing everything going on — and especially not going on — at the task force, and holding it absolutely accountable. Any report of a road block in the investigation, any information about a DOJ or SEC player holding things up, any inkling that Schneiderman is being held back, and I think we should raise holy hell. And if the weeks and months go by with few subpoenas and depositions, and with no or very few lawsuits or indictments of major financial industry players, we should be asking- with our outdoor voices, not our indoor voices- what the hell is going on. Having said all that, let me close on an optimistic note. Healthy skepticism is a good activist’s best asset, especially in this case with an opponent so powerful who has yet to be held accountable by anyone. And this administration has been a disappointment on too many banking industry related things. But political dynamics do actually change things, and effective political organizing and communications do too. Progressives won a strong, independent Consumer Financial Protection Bureau because we fought side by side with a great champion Elizabeth Warren to make it happen, and I hope and believe that in working with Eric Schneiderman and other progressive attorneys general we can do the same thing with this investigation. In the last few months, Obama did recess appointments of strong progressive nominees for CFPB and the National Labor Relations Board; he has gone from cutting deals with Republicans on the budget to fighting strongly for new jobs programs paid for by tax increases on the 1 percent; he has rejected the Keystone pipeline. On housing itself, he has announced a progressive new policy to develop new rental property, forced bankers to adhere to standards making it tougher to foreclose on unemployed people, and adapted a new homeowners’ bill of rights that has the potential to be significant. And in the course of these settlement talks, progressives allied with Schneiderman and other progressive attorneys general have fundamentally changed the nature of the deal, with this new task force not even on the table a couple of months ago. If it turns out the release language in the settlement is narrow, and we get $40 billion in write-down money instead of the $15, $20, or $25 billion discussed a couple months back, that would also be the result of great organizing by progressives and a new responsiveness by this administration. I’ll say it again: a healthy skepticism is an activist’s best asset, and we need to keep banging away to hold the administration accountable. But to ignore the fact that some important things are changing, and that hope is a real possibility, is to ignore our own success as organizers, and to ignore that the underlying political circumstances are shifting in our favor and that we should take advantage of that fact. President Obama is responding to us. We should keep the heat on, but we should also recognize that we are capable of winning some victories.

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Car Prices Expected To Go Up If Economy Improves

February 5, 2012

LAS VEGAS — Car buyers will likely pay more for new and used cars this year as the economy improves. That’s according to the National Automobile Dealers Association, which predicts the average price of a new car will rise 6 percent to $30,000. Used prices will jump as much as 8 percent for pickups and SUVs. The average price of a used small car, like the Honda Civic, will increase 1 percent to $9,475. More people are expected to splurge on new luxury cars as the economy improves. By contrast, used cars are in tight supply because so few people bought cars during the recession. NADA chief economist Paul Taylor expects U.S. vehicle sales to rise 9 percent to 13.9 million this year. New products and low interest rates should help boost sales.

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10 Retailers With The Most Sales Worldwide

February 5, 2012

Regardless of the number of mom and pops around the world, a small number of retailers continue to dominate the industry as a whole. Of the top 250 global retailers in 2010, 10 alone accounted for 29.4 percent of the all sales, according to a new report from Deloitte Touche Tohmatsu Limited and STORES Media . All together, sales for the world’s top 250 retailers were up 5.9 percent in 2010, compared to just 1.2 percent the year before, the report found. Whether an individual retailer thrives or dies still seems largely based on the individual outlet. Take Home Depot, coming in at eighth in sales, which plans to hire 70,000 additional workers to cover expected increased demand this spring. That’s more than can be said for Kmart and Sears, which announced they would be closing 100 to 120 stores this year due to revenue shortages. Yet larger economic forces still play some role in retail trends. In the U.S., where consumer spending accounts for roughly 70 percent of the economy, 2011 saw signs of momentum. Despite shopping over the holiday shopping not providing the boost many expected , sales experienced the largest percentage increase since 1999 . Europe has not been so fortunate as of late. In the face of a sovereign debt crisis that threatens the very existence of its currency, retail sales on the continent have been sluggish . Even so, Europe-based retailers like France’s Carrefour and the U.K.’s Tesco remained among the top 10 strongest retailers in 2010, according to Deloitte’s report . Here are the top 10 retailers with the most sales in 2010, according to Deloitte Touche Tohmatsu Limited and STORES Media .

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Australian retail sales unexpectedly declines in December

February 5, 2012

The Australian retail sales surprisingly dropped in December, which is the first drop in six months, as consumers spent less at grocers and on dining out in an economy where employment growth …

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Iran approves USD5b in foreign investments in 10 months

February 5, 2012

(MENAFN) Iran’s deputy minister of economy, Behrouz Alishiri, said that in the last ten months, the country gave its approvals to USD5 billion worth of foreign investments, reported Tehran …

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The Stock Rally That Nobody Believes Hits New Highs

February 3, 2012

The stock market’s recent wild run is like one of those mass UFO sightings: Everybody sees it, but nobody believes it. The Dow Jones industrial average closed Friday at 12,862.23, jumping 156.82 points to its highest close since May 2008, back when Lehman Brothers was still a going concern. The Nasdaq composite index jumped 1.65 percent to 2905.66, its highest close since December 2000 — that’s almost within shouting distance of the peak of the tech-stock bubble. The broader S&P 500 index, which probably makes up the biggest chunk of the average person’s 401(k), jumped 1.5 percent to 1,344.90, but has no sexy historical comparison to brag about. It’s still a little lower than it was last July. Nevertheless, this is a big rally, resulting a 16 percent rise of the S&P since Thanksgiving, and it has been driven largely by better-than-expected economic data, the biggest of which was this morning’s jobs report for January. We at The Huffington Post did as much context-placing as we possibly could with that report, reminding people of the millions still out of work and the depths from which the economy still has to climb . But as single economic reports go, it was a good report. Some on Wall Street even think it’s a game changer, the signal of a new phase in the recovery. Of course, head fakes have appeared before: Eonomic data improved dramatically early in 2011, too, before Japan’s earthquake and Europe’s debt-quake brought the recovery to a screeching halt. Meanwhile, corporate profits in the fourth quarter have not been the strongest , particularly if Apple’s surprisingly strong results are excluded. And Europe still has the potential to disrupt everything. Greece still hasn’t reached agreement with its private creditors, and Portugal’s sovereign debt is increasingly under pressure. Such concerns have kept many Wall Street analysts from believing in the rally, trading volumes light and many retail investors from throwing cash at the rising market. Mutual fund investors have tiptoed back in the past three weeks, putting more than $2.1 billion into equity mutual funds during that time, according to the Investment Company Institute. But that follows two weeks with investors yanking nearly $14 billion out of stock funds. That has been the pattern for much of the past three years: Stocks have had hair-melting rallies, and mutual-fund investors have been reluctantly dragged back into the market. Will mom-and-pop investors be a little more willing to believe this time?

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Michele Nash-Hoff: Why We Don’t Need a New Program to Train America’s Manufacturing Workers

February 3, 2012

In his State of the Union address, President Obama placed American manufacturing at the center of a “blueprint” for bringing back jobs and strengthening our economy. After years of being one of the “voices in the wilderness” urging our elected leaders to “save American manufacturing,” it was gratifying to hear manufacturing being given such prominence. I am concerned, though, that his idea of “one program, one website, and one place to go for all the information and help” American workers need for training or retraining for jobs would result in more government control and more deficit funding, adding to the burden of debt for American taxpayers. We don’t need to wait for government to come up with a new program and spend taxpayer dollars developing new curricula for training for manufacturing jobs. We don’t need to wash years of work and collaborations between industry, trade and professional organizations, colleges, and universities down the drain. A great deal has already been done and is being done to train and retrain today’s workers and prepare the next generation of manufacturing workers. When considering training, we need to understand the difference between certification versus a certificate. Certificate programs are training based on proprietary criteria/curriculum and sometimes include an exam without any recertification requirements. Numerous training companies, educational institutions, and individual training consultants compete to sell training courses that purportedly include “certification.” In many cases, these are not based on a standard body of knowledge as developed by objective third-party entities, but rather paper certificates awarded for specific training. Certificate programs are useful to prepare workers for entry-level positions in many industries. Certifications are based upon profession and competency. Certifications are independent, third-party assessments of knowledge, skills, and experience based upon a known publicly available standard overseen by industry. The exam includes legally defensible content and can be referenced back to widely available industry accepted references. Recertification is a key component and ensures individuals show evidence of continued learning. Professional certification is a designation earned by a person to assure they meet the minimum knowledge requirements of the profession and is transferable from state to state and company to company. For example, the National Institute for Metalworking Skills (NIMS) was formed in 1995 by the metalworking trade associations to develop and maintain a globally competitive American workforce. NIMS sets skills standards for the industry, certifies individual skills against the standards, and accredits training programs that meet NIMS quality requirements. NIMS operates under rigorous and highly disciplined processes as the only developer of American National Standards for the nation’s metalworking industry accredited by the American National Standards Institute (ANSI). NIMS has a stakeholder base of over 6,000 metalworking companies. The major trade associations in the industry — the Association for Manufacturing Technology, the American Machine Tool Distributors’ Association, the National Tooling & Machining Association, the Precision Machine Products Association, the Precision Metalforming Association, and the Tooling and Manufacturing Association have invested over $7.5 million in private funds for the development of the NIMS standards and its credentials. The associations also contribute annually to sustain NIMS operations and are committed to the upgrading and maintenance of the standards. NIMS has developed skills standards in 24 operational areas covering the breadth of metalworking operations including metalforming (Stamping, Press Brake, Roll Forming, Laser Cutting) and machining (Machining, Tool and Die Making, Mold Making, Screw Machining, Machine Building and Machine Maintenance, Service and Repair). The Standards range from entry (Level I) to a master level (Level III). All NIMS standards are industry-written and industry-validated, and are subject to regular, periodic reviews under the procedures accredited and audited by ANSI. NIMS certifies individual skills against the national standards. The NIMS credentialing program requires that the candidate meet both performance and theory requirements. Both the performance and knowledge examinations are industry-designed and industry-piloted. There are 52 distinct NIMS skill certifications. Industry uses the credentials to recruit, hire, place and promote individual workers. Training programs use the credentials as performance measures of attainment, often incorporating the credentials as completion requirements and as the basis for articulation among training programs. NIMS accredits training programs that meet its quality requirements. The NIMS accreditation requirements include an on-site audit and evaluation by a NIMS industry team that reviews and conducts on-site inspections of all aspects of the training programs, including administrative support, curriculum, plant, equipment and tooling, student and trainee progress, industry involvement, instructor qualifications and safety. Officials governing NIMS accredited programs report annually on progress and are subject to re-accreditation on a five year cycle. NIMS has launched a new Competency-based Apprenticeship System for the nation’s metalworking industry. The NIMS system represents a dramatic departure from the time based system and integrates the NIMS national standards and skill certifications in defining and measuring required competencies. Developed in partnership with the United States Department of Labor, the new system is the result of two years of work. Over 300 companies participated in the deliberations and design. The new National Guideline Standards for NIMS Competency-based Apprenticeship have been approved by the Department of Labor. NIMS has trained Department of Labor apprenticeship staff at the national and state level in the new system. Another professional organization that provides certification is the Society of Manufacturing Engineers (SME), the world’s leading professional society advancing manufacturing knowledge and influencing more than half a million manufacturing practitioners annually. Through its local chapters, technical communities, publications, expositions, and professional development resources, SME promotes an increased awareness of manufacturing engineering and keeps manufacturing professionals up to date on leading trends and technologies. SME provides the following professional certifications: Manufacturing Technologist, Manufacturing Engineering, Engineering Manager, Lean Certification (Bronze, Silver, and Gold), and Six Sigma. SME’s Certified Manufacturing Technologist program is utilized as an outcome assessment by numerous colleges and universities with Manufacturing, Manufacturing Engineering or Engineering Technology programs. Students who successfully earn the certification demonstrate broad knowledge and its application as related to the fundamentals of manufacturing, which sets them apart from other potential job candidates. In addition, the SME Education Foundation has the mission to prepare the next generation of manufacturing engineers and technologists through outreach programs to encourage students to study Science, Technology, Engineering, and Mathematics (STEM) as well as Computer Integrated Manufacturing (CIM) education. Over its 30-year history, SME has invested $17.3 million in grants to 35 colleges and universities to develop industry-driven curricula. In 2010, the Society of Manufacturing acquired Tooling University LLC ( Tooling U ) based in Cleveland, Ohio to provide online, onsite, and webinar training for manufacturing companies and educational institutions. With more than 400 unique titles, Tooling U offers a full range of content to train machine operators, welders, assemblers, inspectors, and maintenance professionals. These classes are delivered through a custom learning management system (LMS), which provides extensive tracking and reporting capabilities. The competencies tie the online curriculum to matching hands-on tasks that put the theory to practice. The Fabricators and Manufacturers Association , International (FMA) champions the success of the metal processing, forming, and fabricating industry. FMA educates the industry through the following programs: FabCast — FMA’s webinar platform utilizes Internet connection and telephone to deliver live, interactive technical education programs directly to manufacturers on such topics as laser cutting, roll forming, metal stamping, etc. Companies can train their whole team at once, even from multiple locations. Companies can break up full days of instruction into modules and spread out over a period of time (i.e. two hours/ four days a week, four hours/ once a week for a month, etc.). Precision Sheet Metal Operator (PSMO) Certification — FMA’s PSMO Certification is the metal fabricating industry’s only comprehensive exam designed to assess a candidate’s knowledge of fundamental precision sheet metal operations. Fabrication processes covered in the exam include shearing, sawing, press brake, turret punch press, laser cutting, and mechanical finishing. FMA offers on-site, live training conducted at companies on their equipment as well as on-line training (e-Fab) that allows a company to get the training that they need, when they need it. E-Fab courses combine a full day’s worth of instruction by FMA’s leading subject matter experts with the flexibility of online delivery, available 24/7, 365 days a year. Finally, there is ASQ , which is a global community of people passionate about quality who use the tools, the ideas, and their expertise to make the world work better. ASQ certification is a formal recognition that an individual has demonstrated a proficiency within, and comprehension of, a specific body of knowledge. ASQ certification crosses industry lines, ranging from Biomedical Auditor, Quality Technician, Inspector, and Engineer, Reliability Engineer, Six Sigma Black Belt to Software Quality Engineer. Nearly 150,000 certifications have been issued to dedicated professionals worldwide. Training and retraining workers who are unemployed or underemployed are critical for the health and growth of the manufacturing industry, which will create good-paying jobs. The focus of a one-stop website for employment should be to distribute the training and certifications provided by the above-listed organizations at the national level down to the local level.

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Republicans Pooh-Pooh Increase In Jobs, Cite High Unemployment

February 3, 2012

WASHINGTON — Congressional Republicans pooh-poohed the latest jobs report on Friday, saying that while the decline in the unemployment rate might be good, it would have been better if they were in charge. The Labor Department announced Friday morning that the economy had added 243,000 jobs in January and that the national unemployment rate had continued to decline, from 8.5 percent to 8.3 percent. While this is the 16th straight month of job growth, House Speaker John Boehner (R-Ohio) joined several other House Republicans in a press conference to point out it’s the 36th consecutive month with an unemployment rate above 8 percent. “There are flickers of hope in our recovery, and certainly they are welcome,” Boehner said. “But the American people were promised by the president that unemployment would not exceed 8 percent, and here we are at 36 straight months with unemployment over 8 percent.” Of course, politicians always spin the monthly jobs update. But Friday’s announcement, notwithstanding concerns about long-term joblessness and the shrunken size of the labor force, is the latest of several broadly positive reports . A reporter at the conference asked Boehner if he really thought it was so bad: “This has been a very negative news conference despite the good news this morning. Aren’t the numbers some indication that the economy is headed in the right direction under the president’s policies?” “I think I made it clear there’s certainly some positive news here,” Boehner said. “But the point we’re making is that we could do a lot better. If the president would work with us on the bills that have passed the House that are awaiting action in the Senate, the American economy could do better.” Another reporter seemed baffled by the negativity: “You’ve been in control for a year. You’ve had some success in controlling spending. Why don’t you take credit for some of the good news in the economy instead of talking down what most people see as good news?” “What I’m suggesting to you to you today is that we could do better,” Boehner said. “The American people are still asking the question, Where are the jobs? While the unemployment rate is down slightly, and a few more Americans are at work, we still have millions of Americans that are looking for work.” He’s right about that: Nearly 13 million people were out of work in January, and 5.5 million had been jobless for six months or longer. Both numbers are smaller than they were last year, but they’re still huge numbers. Not to be outspun, White House communications director Dan Pfeiffer tweeted a link to a press release from Boehner’s office in 2004, when he was chairman of the House Committee on Education and Workforce. The Labor Department had just announced the economy added 288,000 jobs that April, and that the unemployment rate had fallen to 5.6 percent. Pfeiffer tweaked Boehner for touting consecutive months of job growth then but not now. “Eight consecutive months of positive job growth shows the Republican plan for economic prosperity is working and more and more Americans are finding work everyday,” Boehner’s release said.

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Jared Bernstein: January Jobs Report, First Impressions

February 3, 2012

Well, how about that? A hefty upside surprise from the jobs report. Employers added 243,000 jobs last month — 257,000 in the private sector — with gains across most industries. And the unemployment rate ticked down from 8.5% to 8.3%, the lowest it has been since Feb 2009. Technical issues having to do with fun stuff like revisions and seasonal adjustments are playing a role in the monthly numbers right now so it’s good to average over a few months. Over the last three months, the average rate of job growth has been 200,000, compared to about half that if you go back a few months. As I stress below, today’s report contains a critical message for policy makers; we’ve got some real momentum here on the most important economic issue to the American people-JOBS… let’s not screw it up. As shown in the charts — with apologies for the lame-looking arrows — the trend is our friend both on the unemployment rate and net job growth. Source: BLS, with my arrows, obviously. Now, for some caveats. 8.3% unemployment is still evidence of a very slack labor market, with 12.8 million unemployed and millions more underemployed. Long-term unemployment is still historically very high, over 40%. 243K is a good number, but it’s a good number in the context of a slow recovery. Historically, it’s not been at all unusual to see gains of this magnitude coming out of a downturn. Weekly earnings are up 2.5% over the past year. That’s a bit of an acceleration reflecting the improving job market, but it’s still probably behind inflation, which has been running at around 3% (we don’t yet have inflation for January). The payroll graph shows we’ve been here before. Friendly trends can be obliterated by bad shocks — Europe, oil, and especially fiscal drag are still very real downside threats. Re: that last point, as I wrote yesterday, this is your unemployment rate under fiscal drag. While policy makers are very unlikely to follow current law — full sunset of Bush tax cuts — in the near term, they’re also unlikely to go the other way — to add a fiscal boost to the recovering job market. Even extending the payroll tax cut and UI benefits is proving — predictably — to be a heavy lift. This jobs report, which clearly shows positive momentum, should force Congress to absolutely seal that deal immediately. From the perspective of working families, the most important part of the economy is showing some improvement. We’re not talking banks, GDP, industrial production, credit flows, deficits, interest rates — we’re talking JOBS. Let’s not screw this up. This post originally appeared at Jared Bernstein’s On The Economy blog.

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Phil Lempert: Are Increased Food Prices at Odds With Increasing Innovation?

February 3, 2012

Earlier in the week, I attended the Food Marketing Institute’s Midwinter Executive Conference in Orlando. It is the annual gathering of the top tier management of supermarkets, wholesalers and food manufacturers who meet to discuss the most important issues facing the industry. Health and wellness, sustainability, job creation, the economy, the opportunity of social networks and meeting shopper needs were certainly discussed at length — but probably the most important discussions overheard everywhere was about the impacts of rising food costs. In 2011 we saw food price inflation at the retail level at 4.8 percent for the year and the USDA’s Economic Research Service is projecting no more than a 3.5 percent rise this year. To the average shopper that is a bit hard to fathom as they have been stretching their budgets to pay those double digit increases on everyday essentials like beef, pork, coffee, cooking and salad oils and peanut butter. In fact, recent headlines have been blaring how beef prices will continue to rise and the cattle supply is down. The USDA’s annual numbers as you would sense, are based on averages across many food types and at times may hide the real strain on shoppers’ budgets. Or the strain on the supermarket and food company budgets. Both have been absorbing increases of both raw materials and fuel costs, then late last year they started to pass them on to consumers. Supermarkets are cautious to advance their pricing. They painfully remember how when the economy took a nosedive, their customers started shopping around and found lower food prices at more unconventional outlets including dollar stores — and their sales suffered, and some shoppers never came back. At the Conference, in one of the keynote addresses, John Compton, the CEO of PepsiCo Americas Foods and Global Snacks Group called for retailers to focus on repurposing money that is being wasted on excess inventory (which he said would generate $30 million per day of savings for each day inventory is reduced — which now stands at 60 plus days for the industry) and to “repurpose slotting fees against understanding shoppers and building loyalty” (slotting fees are the monies paid to retailers by food companies to secure placement in their warehouses and store shelves). For retailers, this is a controversial suggestion, as it further chips away at the retailers’ bottom line (the average net profit for supermarkets is between one and two percent). Compton also wants these savings to fund innovation at food companies, i.e., to create better, healthier, more exciting new foods and beverages. Sounds vaguely familiar to many of the Congressional rants I witness on C-SPAN — essentially moving money from one pot to another with a lackluster result (sometimes for both pots). Innovation is key to growth for food companies, and adds excitement and many benefits for the purchasers of these products. However, I question whether repurposing funds is the way to go. Perhaps it is time for both retailers and the brands they carry to look at the store shelves. Way too often there are tens, or even hundreds of me — to items with similar ingredients and tastes in particular categories. I agree about reducing inventories — but how about a look first at inventories on the shelf at the products that just don’t sell. Shoppers now have the ability to buy specialty or limited availability food items online from companies like Amazon, and that’s where some of these products should be sold. In some cases it is even a more convenient shop. Compton warned the retailers in the room to take note what happened in the diaper category, which has seen an unprecedented shift from retail sales to online sales. What he did not mention was the ability to schedule regular automatic deliveries (you DO NOT want to run out!), avoid carrying cumbersome packages and oh yes, the lower prices. There is a move towards smaller food stores (Walmart Express, Fresh & Easy, Trader Joe’s, Aldi’s, etc.) with greatly reduced operational overheads and far fewer ‘me-too’ products on their shelves; apparently retailers are figuring out how to serve shoppers better and reduce their costs at the same time. Perhaps the brands should follow the same path and look to shoulder innovation themselves.

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Mayor Bloomberg Unveils Budget Without Layoffs

February 2, 2012

By Joan Gralla Feb 2 (Reuters) – New York City Mayor Michael Bloomberg on Thursday unveiled a $68.7 billion preliminary budget, closing a $2 billion gap without raising taxes or laying off teachers or uniformed workers. “We will spend less in virtually every area except schools” in fiscal 2013, Bloomberg said in a televised address that stressed the urgency of slicing soaring pension costs while continuing to make the long-term investments that keep the city safe and growing. The mayor, a political independent now in his third and final term, has regularly demanded that city agencies “do more with less,” and the new budget plan is partly balanced with $1 billion of cuts he ordered in November. Bloomberg, who took office in 2002, says his 11 rounds of spending cuts over the last few years have not impaired the quality of city services. “It would be pretty hard to find many agencies that are not doing a heck of a lot of a better job than they did in 2002,” he said. Some non-uniformed workers likely will be laid off under the proposed budget, he said, adding the vast majority of the 20,500 positions reduced since 2002 were achieved through attrition. The city’s tax revenue is slowly recovering from recession lows, but the mayor is wary of overly optimistic forecasts. “The uncertainty of our economy demands our vigilance,” he said. New York City likely will only get an extra $111 million in the current fiscal year, he said, while revenue should rise $278 million the following year. “We expect the recovery of all the jobs lost in 2008 by the end of 2012,” Bloomberg said. The city-funded $50.7 billion part of the budget plan is down 1.9 percent on a year-over year basis. The remainder of the budget, funded by the state and federal governments, will rise by $2 billion. (Reporting By Joan Gralla)

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Kumi Naidoo: Davos Failed to Address Fundamentals — Will the Next Earth Summit in Rio?

February 2, 2012

At the World Economics Forum in Davos last week, no one was denying that we face serious economic, social and environmental crises. When even the Financial Times runs a series of articles on ” Capitalism in crisis ,” it’s obvious that it’s not just the “Occupy WEF” protesters, who I joined in their igloos outside the meeting, that are asking fundamental questions about how we do business. What Davos failed to do, however, is provide adequate answers. The talk was mainly about symptoms, not the core of the problem. No question, issues such as the size of the Euro firewall or bankers’ bonuses are important. But if we are to deliver an economy that brings prosperity for all without destroying the planet, we need to achieve a much more fundamental change than putting together few hundred extra millions for a firewall, or a little less greed by the 1%. When I suggested fundamental changes, such as making corporations liable for their impacts on society and the environment, the reaction was often a nervous laugh. While I was freezing in snowy Davos, the Brazilian President Dilma was at the World Social Forum in Porto Alegre calling for the fostering of “new model” of development that can be discussed at this June’s Rio Earth Summit. Greenpeace has some concrete proposals on how governments could use the Rio meeting to change course and not simply acknowledge the crises we face, as is happening in Davos. The Earth Summit should, for example, agree on strong regulation of financial markets, including a Financial Transaction Tax, agree the end of environmentally and socially harmful subsidies, and commit to sustainable energy for all and zero deforestation by 2020. But if President Dilma wants to lead the world in a great transformation, she first has to put her own house in order. Unless she vetoes it, Brazil will soon adopt changes to its the Forest Code, the main law in Brazil that protects the forests, that would allow an amnesty for past forest crimes and lead to an increase in deforestation. This is unacceptable. If Brazil wants to credibly discuss “new models” of development at the Earth Summit in June , it must urgently commit to a new model of sustainable prosperity based on zero deforestation. It can be done. Deforestation in the Brazilian Amazon has declined year on year and in 2011 reached its lowest ever level. But unless Dilma acts, Brazil will be the nation that showed that deforestation could be halted, but failed to do so, in order to cater to short-term special interests. Unless she vetos the Forest Code changes, President Dilma will have as little credibility to talk of fundamental change as the “Davos Man” come June. The warm climate of Rio will certainly suit me better than the mountains of snow in Davos. But will I leave Rio with more hope that the fundamental changes we need can finally be implemented?

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US manufacturing sector expands in January – report

February 2, 2012

(MENAFN – Kuwait News Agency (KUNA)) US economic activity in the manufacturing sector expanded in January for the 30th consecutive month, and the overall economy grew for the 32nd consecutive month, …

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Facebook Files For IPO — Thanks To You

February 1, 2012

Long before Facebook emerged as a ubiquitous web giant, its co-founder and CEO Mark Zuckerberg wondered if his fledgling website would ever amount to anything . “I still don’t know if we have something,” Zuckerberg said in 2005 . “Whether we have something that will last for a really long time or is just a cool toy for people to play with now, we’ll see.” After Facebook filed for an initial public offering on Wednesday, it’s clear Zuckerberg requires no further reassurance: Facebook boasts 845 million users, made over $3 billion last year, and is estimated to be worth as much as $100 billion. Though Facebook is not the first social networking site to go public, it is by far the largest. Facebook’s public offering, which seeks to raise $5 billion, will be the biggest IPO by an Internet company since Google, and caps off a year of IPOs by other Silicon Valley stalwarts such as Pandora, Groupon, LinkedIn and Zynga. The sheer size of Facebook’s offering makes it a momentous event on Wall Street, where investors are salivating for a piece of the company, and its debut on the public market promises to reshape the startup landscape by infusing Silicon Valley with billions of dollars. Yet Facebook’s IPO touches not only the site’s investors and employees, but also the hundreds of millions of users whose personal disclosures on Facebook have fueled the site’s growth. Their engagement with the site has helped it attract billions of dollars in revenue from advertisers eager to target individuals based on intimate data about their likes and dislikes. The hours Facebook’s members dedicate to the site and the personal details they divulge rank among the social network’s most valuable assets, and perhaps more than any company before it, Facebook’s public offering involves the public. “As a general rule, if it’s on the Internet and it’s free, you’re the product, the user is the product,” said Max Wolff, chief economist at GreenCrest Capital, a private equity firm. “To some extent, Facebook is a user-generated product going public, so 800 million people are about to watch their intimate life go public.” Facebook’s ascent over the past eight years has all the hallmarks of the typical Silicon Valley success story. It was launched in a dorm room at Harvard University’s Straus Hall by a college dropout, Zuckerberg, who displayed the headstrong hubris of a Bill Gates or a Steve Jobs and resisted cashing out early (Zuckerberg turned down a $1 billion offer from Yahoo in 2006 , followed by a $15 billion bid by Microsoft ). And just as Google co-founders Larry Page and Sergey Brin tapped the more experienced Eric Schmidt to be the company’s “adult supervision,” Zuckerberg appointed former Google executive Sheryl Sandberg to be Facebook’s chief operating officer and grown-up in residence — a decision some experts say was one of the most important the company made. Facebook’s S-1 filing with the Securities and Exchange Commission tells the story of a company that has enjoyed enviable growth over the past several years. Facebook says it has 845 million active users, 483 million of whom return to the site daily, and has captured more than 100 petabytes, or 100 quadrillion bytes, worth of photos and videos. The company reported a $1 billion profit last year on revenues just over $3.7 billion, an 88 percent increase in revenue over the previous year. Yet Facebook’s prospects looked far less certain when it launched in 2004, one of numerous social networking sites seeking to emulate the success of services such as Friendster and Myspace. In 2006, while Facebook was still open only to students, Myspace overtook Google and Yahoo Mail as the most popular website in the U.S. And just four years ago, Myspace still boasted more visitors than Facebook . Zuckerberg’s genius was creating a site where people wanted to share real information about themselves — and, of course, refusing Yahoo’s and Microsoft’s 10- and 11-figure offers, respectively. Unlike rival sites like Myspace, Zuckerberg required Facebook members to use their real names, effectively linking their online and offline identities in a way that has allowed users to bring their social circles with them throughout the web. Now, Facebook is leveraging the information people have offered up about themselves — from the music they enjoy to the people they’re friends with — to deliver more targeted advertising and personalize the sites its members visit. “If Facebook had not been identity based and had not had privacy settings, it would not have been able to articulate the social graph that made everything possible,” said David Kirkpatrick, author of “The Facebook Effect.” The real name-requirement also helped keep the social setting on Facebook civil and clean — attributes attractive to both users and advertisers — while Myspace developed a reputation among many for being a cesspool of stalkers, strangers and pedophiles. “Having people use their real names means there’s light and air in the platform. People trust it more, they know who they’re dealing with, and they can choose who not to deal with,” said Rebecca Lieb, an analyst with the Altimeter Group. “It proved openness is better than creepiness.” Zuckerberg designed Facebook to be a conduit for its users’ stories, allowing it to tap into the public’s narcissistic tendencies and voyeuristic inclinations. Over the past several years, Facebook has also evolved beyond a platform for individuals into one that hosts third-party companies, from the Wall Street Journal to Zynga, and allows these firms to add even more content to the site. Browsing Facebook today offers up not only photos from ex-boyfriends and musings from college roommates, but songs from music streaming services, articles from the Washington Post , TV shows from Hulu and coupons from Sephora. These partnerships have been so successful that Facebook’s applications help create nearly 200,000 jobs in the U.S. alone, according to a study by University of Maryland’s Robert H. Smith School of Business . “Facebook came out and said, ‘We’re not a content site, we’re a platform. We want to make it easy for people to put content on our site,’” said Forrester Research analyst Nate Elliott. “They quickly had lots of photos and information on the site, and that’s the content that keeps people coming back.” The social network both features its users’ data and continuously learns from it. Facebook gathers copious information about its members’ clicks, then dissects it for feedback on how to make the site more compelling. It has shifted away from listening to what its users say, and instead watches how they behave, which often delivers far more accurate data. When Facebook introduced the News Feed, for example, users staged a revolt, railed against the tool, and swore they would delete their accounts. In fact, their engagement with the site doubled, according to Facebook engineer Ruchi Sanghvi. “Facebook has been very, very brave about experimenting, and when things have seriously not worked, like Beacon, they’ve pulled back,” Lieb said. “But a lot of the things people complain about are the things they use the most.” Facebook has proven itself a cultural phenomenon, a powerful rival to tech industry incumbents, and a disruptive influence that has forced companies to rethink their strategies. The eight years leading up to its IPO are merely the warm-up for its biggest act, however: completing Facebook’s transition from online distraction to business behemoth, and demonstrating that it can continue to attract both users and vast sums of cash. “As a consumer behavior, social media came of age a long time before this. As a business, it still hasn’t come of age,” Elliott said. “Facebook is still having trouble manifesting value to the people who pay their bills. Everyone is struggling to unlock that opportunity.” Though Facebook’s growth has been nothing short of spectacular, analysts say the company must now demonstrate it can evolve its offerings and innovate on its business model, while also doing a better job of satisfying the advertisers that keep the company afloat. “Facebook is basically a one-trick pony,” said Vivek Wadhwa, a visiting scholar at UC Berkeley’s School of Information. “Facebook hasn’t diversified the way Google has. What is Facebook? A social network. What else are they? Nothing.” Elliott concurs that Facebook must show it can mature its business model to move beyond advertising, which made up 85 percent of its revenue last year. “Facebook has a very 1970′s business model and it needs to get to a 2012 model. This means using data in powerful and transformative ways, and it means following Google’s path,” Elliott said. “There are bigger business opportunities here, but Facebook seems to be struggling to find them.” And what does the IPO mean for users? Expect to see more scrutiny of the company’s practices, more attempts to squeeze money out of the data that members share with the site, and more changes to the social network’s interface, analysts say. They also predict Facebook will use the funds raised in its IPO to bring other companies into the fold and improve the Facebook user experience on mobile devices. Facebook noted in its S-1 filing that it plans to “continue expanding our operations abroad” and to “continue to make acquisitions.” “I think that there will be more scrutiny as to how Facebook operates, so they will have to be more prudent and socially aware because they will be monitored that much more closely as a public firm. It will help ensure that the user experience is improved,” said Mark Cannice, a University of San Francisco professor who focuses on entrepreneurship strategy and international business. “They’ll have to adhere to an even higher bar of expectations and how they treat their customers, and that includes privacy issues.”

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Major Milestones In Facebook’s History

February 1, 2012

Some key developments in the eight years since Facebook’s creation: February 2004: Mark Zuckerberg starts Facebook as a sophomore at Harvard University. March 2004: Facebook begins expansion to other colleges and universities. June 2004: Facebook moves headquarters to Palo Alto, Calif. September 2004: Facebook introduces the Wall, which allows people to write personal musings and other tidbits on profile pages. Lawsuit filed against Facebook claiming that Zuckerberg stole the idea for Facebook from a company co-founded by twins Cameron and Tyler Winklevoss and a third person at Harvard. September 2005: Facebook expands to include high schools. May 2006: Facebook introduces work networks, allowing people with a corporate email address to join. September 2006: Facebook begins letting anyone over 13 join. It also introduces News Feed, which collects friends’ Wall posts in one place. Although that led to complaints about privacy, News Feed became one of Facebook’s most popular features. May 2007: Facebook launches Platform, a system for letting outside programmers develop tools for sharing photos, taking quizzes and playing games. The system creates a Facebook economy and allows companies such as game maker Zynga Inc. to thrive. October 2007: Facebook agrees to sell a 1.6 percent stake to Microsoft for $240 million and forges advertising partnership. November 2007: Facebook unveils its Beacon program, a feature that broadcasts people’s activities on dozens of outside sites. Yet another privacy backlash led Facebook to give people more control over Beacon, before Facebook ultimately scrapped it as part of a legal settlement. March 2008: Facebook hires Sheryl Sandberg as chief operating officer, snatching the savvy, high-profile executive from Google Inc. April 2008: Facebook Chat introduced. February 2009: Facebook introduces “Like,” allowing people to endorse other people’s posts. June 2009: Facebook surpasses News Corp.’s Myspace as the leading online social network in the U.S. August 2010: Facebook launches location feature, allowing people to share where they are with their friends and strangers. October 2010: Release of “The Social Network,” a movie about Zuckerberg and the legal battles over Facebook’s founding. It gets eight Academy Awards nominations and wins three. June 2011: Google launches rival social network called Plus. The Winklevoss twins end their legal battle over the idea behind Facebook. They had settled with Facebook for $65 million in 2008, but later sought more money. September 2011: Facebook introduces Timeline, a new version of the profile page. It shows highlights from a person’s entire Facebook life rather than recent posts. November 2011: Facebook agrees to settle federal charges that it violated users’ privacy by getting people to share more information than they agreed to when they signed up to the site. As part of a settlement, Facebook will allow independent auditors to review its privacy practices for two years. It also agrees to get approval from users before changing how the company handles their data. December 2011: Facebook completes its move to Menlo Park, Calif. Its address is 1 Hacker Way. January 2012: Facebook begins making Timeline mandatory. February 2012: Facebook files for an initial public offering of stock.

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Mark Zuckerberg’s Letter To Investors

February 1, 2012

SAN FRANCISCO (Reuters) – Facebook filed papers on Wednesday to raise at least $5 billion in one of the most hotly anticipated IPOs of the decade. Below is the letter from Facebook Founder and CEO Mark Zuckerberg to prospective investors: Facebook was not originally created to be a company. It was built to accomplish a social mission – to make the world more open and connected. We think it’s important that everyone who invests in Facebook understands what this mission means to us, how we make decisions and why we do the things we do. I will try to outline our approach in this letter. At Facebook, we’re inspired by technologies that have revolutionized how people spread and consume information. We often talk about inventions like the printing press and the television – by simply making communication more efficient, they led to a complete transformation of many important parts of society. They gave more people a voice. They encouraged progress. They changed the way society was organized. They brought us closer together. Today, our society has reached another tipping point. We live at a moment when the majority of people in the world have access to the internet or mobile phones – the raw tools necessary to start sharing what they’re thinking, feeling and doing with whomever they want. Facebook aspires to build the services that give people the power to share and help them once again transform many of our core institutions and industries. There is a huge need and a huge opportunity to get everyone in the world connected, to give everyone a voice and to help transform society for the future. The scale of the technology and infrastructure that must be built is unprecedented, and we believe this is the most important problem we can focus on. We hope to strengthen how people relate to each other. Even if our mission sounds big, it starts small – with the relationship between two people. Personal relationships are the fundamental unit of our society. Relationships are how we discover new ideas, understand our world and ultimately derive long-term happiness. At Facebook, we build tools to help people connect with the people they want and share what they want, and by doing this we are extending people’s capacity to build and maintain relationships. People sharing more – even if just with their close friends or families – creates a more open culture and leads to a better understanding of the lives and perspectives of others. We believe that this creates a greater number of stronger relationships between people, and that it helps people get exposed to a greater number of diverse perspectives. By helping people form these connections, we hope to rewire the way people spread and consume information. We think the world’s information infrastructure should resemble the social graph – a network built from the bottom up or peer-to-peer, rather than the monolithic, top-down structure that has existed to date. We also believe that giving people control over what they share is a fundamental principle of this rewiring. We have already helped more than 800 million people map out more than 100 billion connections so far, and our goal is to help this rewiring accelerate. We hope to improve how people connect to businesses and the economy. We think a more open and connected world will help create a stronger economy with more authentic businesses that build better products and services. As people share more, they have access to more opinions from the people they trust about the products and services they use. This makes it easier to discover the best products and improve the quality and efficiency of their lives. One result of making it easier to find better products is that businesses will be rewarded for building better products – ones that are personalized and designed around people. We have found that products that are “social by design” tend to be more engaging than their traditional counterparts, and we look forward to seeing more of the world’s products move in this direction. Our developer platform has already enabled hundreds of thousands of businesses to build higher-quality and more social products. We have seen disruptive new approaches in industries like games, music and news, and we expect to see similar disruption in more industries by new approaches that are social by design. In addition to building better products, a more open world will also encourage businesses to engage with their customers directly and authentically. More than four million businesses have Pages on Facebook that they use to have a dialogue with their customers. We expect this trend to grow as well. We hope to change how people relate to their governments and social institutions. We believe building tools to help people share can bring a more honest and transparent dialogue around government that could lead to more direct empowerment of people, more accountability for officials and better solutions to some of the biggest problems of our time. By giving people the power to share, we are starting to see people make their voices heard on a different scale from what has historically been possible. These voices will increase in number and volume. They cannot be ignored. Over time, we expect governments will become more responsive to issues and concerns raised directly by all their people rather than through intermediaries controlled by a select few. Through this process, we believe that leaders will emerge across all countries who are pro-internet and fight for the rights of their people, including the right to share what they want and the right to access all information that people want to share with them. Finally, as more of the economy moves towards higher-quality products that are personalized, we also expect to see the emergence of new services that are social by design to address the large worldwide problems we face in job creation, education and health care. We look forward to doing what we can to help this progress. Our Mission and Our Business As I said above, Facebook was not originally founded to be a company. We’ve always cared primarily about our social mission, the services we’re building and the people who use them. This is a different approach for a public company to take, so I want to explain why I think it works. I started off by writing the first version of Facebook myself because it was something I wanted to exist. Since then, most of the ideas and code that have gone into Facebook have come from the great people we’ve attracted to our team. Most great people care primarily about building and being a part of great things, but they also want to make money. Through the process of building a team – and also building a developer community, advertising market and investor base – I’ve developed a deep appreciation for how building a strong company with a strong economic engine and strong growth can be the best way to align many people to solve important problems. Simply put: we don’t build services to make money; we make money to build better services. And we think this is a good way to build something. These days I think more and more people want to use services from companies that believe in something beyond simply maximizing profits. By focusing on our mission and building great services, we believe we will create the most value for our shareholders and partners over the long term – and this in turn will enable us to keep attracting the best people and building more great services. We don’t wake up in the morning with the primary goal of making money, but we understand that the best way to achieve our mission is to build a strong and valuable company. This is how we think about our IPO as well. We’re going public for our employees and our investors. We made a commitment to them when we gave them equity that we’d work hard to make it worth a lot and make it liquid, and this IPO is fulfilling our commitment. As we become a public company, we’re making a similar commitment to our new investors and we will work just as hard to fulfill it. The Hacker Way As part of building a strong company, we work hard at making Facebook the best place for great people to have a big impact on the world and learn from other great people. We have cultivated a unique culture and management approach that we call the Hacker Way. The word “hacker” has an unfairly negative connotation from being portrayed in the media as people who break into computers. In reality, hacking just means building something quickly or testing the boundaries of what can be done. Like most things, it can be used for good or bad, but the vast majority of hackers I’ve met tend to be idealistic people who want to have a positive impact on the world. The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better, and that nothing is ever complete. They just have to go fix it – often in the face of people who say it’s impossible or are content with the status quo. Hackers try to build the best services over the long term by quickly releasing and learning from smaller iterations rather than trying to get everything right all at once. To support this, we have built a testing framework that at any given time can try out thousands of versions of Facebook. We have the words “Done is better than perfect” painted on our walls to remind ourselves to always keep shipping. Hacking is also an inherently hands-on and active discipline. Instead of debating for days whether a new idea is possible or what the best way to build something is, hackers would rather just prototype something and see what works. There’s a hacker mantra that you’ll hear a lot around Facebook offices: “Code wins arguments.” Hacker culture is also extremely open and meritocratic. Hackers believe that the best idea and implementation should always win – not the person who is best at lobbying for an idea or the person who manages the most people. To encourage this approach, every few months we have a hackathon, where everyone builds prototypes for new ideas they have. At the end, the whole team gets together and looks at everything that has been built. Many of our most successful products came out of hackathons, including Timeline, chat, video, our mobile development framework and some of our most important infrastructure like the HipHop compiler. To make sure all our engineers share this approach, we require all new engineers – even managers whose primary job will not be to write code – to go through a program called Bootcamp where they learn our codebase, our tools and our approach. There are a lot of folks in the industry who manage engineers and don’t want to code themselves, but the type of hands-on people we’re looking for are willing and able to go through Bootcamp. The examples above all relate to engineering, but we have distilled these principles into five core values for how we run Facebook: Focus on Impact If we want to have the biggest impact, the best way to do this is to make sure we always focus on solving the most important problems. It sounds simple, but we think most companies do this poorly and waste a lot of time. We expect everyone at Facebook to be good at finding the biggest problems to work on. Move Fast Moving fast enables us to build more things and learn faster. However, as most companies grow, they slow down too much because they’re more afraid of making mistakes than they are of losing opportunities by moving too slowly. We have a saying: “Move fast and break things.” The idea is that if you never break anything, you’re probably not moving fast enough. Be Bold Building great things means taking risks. This can be scary and prevents most companies from doing the bold things they should. However, in a world that’s changing so quickly, you’re guaranteed to fail if you don’t take any risks. We have another saying: “The riskiest thing is to take no risks.” We encourage everyone to make bold decisions, even if that means being wrong some of the time. Be Open We believe that a more open world is a better world because people with more information can make better decisions and have a greater impact. That goes for running our company as well. We work hard to make sure everyone at Facebook has access to as much information as possible about every part of the company so they can make the best decisions and have the greatest impact. Build Social Value Once again, Facebook exists to make the world more open and connected, and not just to build a company. We expect everyone at Facebook to focus every day on how to build real value for the world in everything they do. Thanks for taking the time to read this letter. We believe that we have an opportunity to have an important impact on the world and build a lasting company in the process. I look forward to building something great together. Mark Zuckerberg (Reporting By Gerry Shih; Editing by Gary Hill)

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Small Business Borrowing Hits 4-Year High In December

February 1, 2012

(Reuters – By Ann Saphir) Borrowing by U.S. small businesses rose in December to the highest level in more than four years, pointing to continued strength in an important corner of the economy. The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, jumped 19 percent in December, its 17th consecutive double-digit rise, PayNet said on Wednesday. At 112.6, the index matched the level registered in November 2007; it was last higher in August of that year, as the subprime mortgage bubble was bursting. “The data show there’s some underlying strength,” PayNet founder Bill Phelan said in an interview. “When you get these capital project investments, you can really move the needle on the economy.” The U.S. economy grew at its fastest pace in 1-1/2 years last quarter, despite a beleaguered housing market and lackluster consumer spending. The PayNet survey suggests growth could continue, at least for the next few months. PayNet tracks borrowing by millions of small U.S. businesses, and the index is correlated with changes in U.S. gross domestic product a quarter or two in the future. Small businesses historically account for a disproportionate share of jobs growth. Separate PayNet data suggested one worrisome sign in the financial picture at small businesses: some are having a bit more trouble paying back their debt. Accounts in moderate delinquency, or those behind by 30 days or more, rose to 1.56 percent in December, from 1.53 percent in November, the first increase in nearly two years. “I don’t think this is Paul Revere making the call about impending invasion, but it certainly is something to keep an eye on,” Phelan said. Accounts 90 days or more behind in payments, or in severe delinquency, fell to 0.38 percent in December, a record low, from 0.40 percent in November. Accounts behind 180 days or more, or in default and unlikely ever to be paid, fell to 0.53 percent in December, from 0.58 percent in November, according to PayNet. PayNet collects real-time loan information, such as originations and delinquencies, from more than 250 leading U.S. capital equipment lenders. It also provides risk-management tools to the commercial lending industry (More on Thomson Reuters/PayNet Small Business Lending Index is available at http://financial.thomsonreuters.com/economic_indicators) (By Ann Saphir; Editing by Leslie Adler) Copyright 2012 Thomson Reuters. Click for Restrictions .

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Carlo Cottarelli: Fiscal Adjustment: Too Much of a Good Thing?

February 1, 2012

The IMF has argued for some time that the very high public debt ratios in many advanced economies should be brought down to safer levels through a gradual and steady process . Doing either too little or too much both involve risks: not enough fiscal adjustment could lead to a loss of market confidence and a fiscal crisis, potentially killing growth; but too much adjustment will hurt growth directly. At times over the last couple of years we called on countries to step up the pace of adjustment when we thought they were moving too slowly. Instead, in the current environment, I worry that some might be going too fast. The latest update of the Fiscal Monitor shows that fiscal adjustment is proceeding pretty quickly in the advanced economies — on average the deficit is projected to fall by a total of 2 percentage points of GDP in 2011-12. The decline is even larger in the euro area — about 3 percentage points of GDP. In a reasonably good growth environment this pace of adjustment would be fine. But in the current weaker macroeconomic environment bringing deficits down this quickly could pose a risk for the economic recovery. Some might argue that adjusting is like taking a bitter medicine, and that it’s always best to get it over with as quickly as possible. Aggressive fiscal adjustment will surely be rewarded by markets through lower interest rates, and any cost to growth is simply the price paid to ensure that fiscal credibility is won or maintained. But market behavior is much more complex than this, at least in the current crisis. For sure, markets don’t like large debt and fiscal deficits, but they also don’t like low growth. Take the recent downgrades of several European countries. Were they purely the result of fiscal problems? No. Look at the words used by Standard and Poor’s : ” a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues .” Some of our analytical work at the IMF makes this point clearly. It shows that lower debt ratios and deficits lead to lower interest rates on government bonds, but so too does faster short-term growth. So, when countries tighten fiscal policy and the economy slows, some of the gains from better fiscal fundamentals will be lost through lower growth . We also see some evidence of a nonlinear relationship between growth and sovereign bond spreads: spreads are more likely to increase when growth is already lower and the fiscal tightening is larger (see chart). If growth falls enough as a result of a fiscal tightening, interest rates could actually rise as the deficit falls. So how should fiscal policy respond if growth slows more than expected? For some advanced economies, limited access to financing leaves them no option but to stick to their deficit reduction plans this year. But fiscal tightening cannot be the only tool to restore market confidence. Structural reforms to boost competitiveness and growth are also critical, but even reforms started today will take time to yield results. So it will be critical to support countries that are adjusting at an appropriate pace by making adequate financing available to them — in the euro area, through the European Financial Stability Facility and the European Stability Mechanism — to provide a boost to confidence while market perceptions adjust. Markets eventually respond to improved economic fundamentals like stronger medium-term growth and lower future deficits, but on occasion this takes a while. There are many other advanced economies, however, where fiscal policy has more freedom. If growth slows, these countries should avoid further fiscal tightening. They should allow the impact of an economic downturn on revenues and spending on things like unemployment benefits to raise the deficit temporarily. Among those countries with more flexibility, there are some — including in the euro area — where very low interest rates or other factors are creating adequate fiscal space to allow them to reconsider the pace of deficit reduction this year. Take for example the United States. Based on current policies, the deficit would decline by over two percentage points of GDP in 2012, the largest single year adjustment in four decades. That’s too much. Renewing the payroll tax cut and extending unemployment compensation for the long-term unemployed — two measures set to expire this year — would provide welcome support to the economy. Actions like these would be greatly facilitated by the adoption of credible medium-term adjustment plans, which are still missing in some key economies. Government debt remains very high in many advanced economies, and fiscal adjustment to bring debt down over the medium term is essential. Nearly all advanced economies plan to reduce their deficits this year. But if growth slows more than expected, some may feel inclined to preserve their short-term plans through additional tightening, even if hurts growth more. My bottom line for them: unless you have to, you shouldn’t. From iMFdirect blog

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Germany’s Jan jobless rate contracts to 6.7%

February 1, 2012

(MENAFN) Germany’s economy ministry said that in January, the country’s jobless rate shrank to 6.7 percent, compared with 6.8 percent in December, recording the lowest point in 20 years, reported …

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S Korea’s Jan exports down 6.6%

February 1, 2012

(MENAFN) South Korea’s Ministry of Knowledge Economy said that in January, exports fell 6.6 percent, recording the first drop since October 2009, reported Reuters. The ministry added that new …

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