garden

Booming Business: America’s Fireworks Retailers Talk Explosive Sales

by on July 4, 2011

Huffington Post…

This story was reported in collaboration with our partners at Patch.com. When it comes to the American economy, there may not much to celebrate on this Fourth of July. Not unless you sell fireworks. For the past few weeks, the nation’s fireworks peddlers have been hawking their Ghost Ryders and Bone Breakers from parking lots and roadsides around the country — and according to an informal survey, they’ve been doing a brisk business. America’s passion for fireworks appears to be as strong as ever, and no one is more invested in that passion than the people who work in those stands, sometimes without leaving the premises for days at a time. “The money is pretty good, but you’re really working for it,” said Bill St. Ours, who says he stayed at his tent outside St. Petersberg, Fla., for a stretch of 27 days this year . Because he and his partners work off of commission, they sleep inside the tent to make sure nothing gets stolen. St. Ours says it’s a lot of work, but he adds that he loves the product and always has. “As a kid, I lit ‘em off,” he recalls. So did Jaymie Walton . Since 1983, her mom has worked as a manager at Phantom Fireworks , one of the largest fireworks companies in the country. Based in Youngstown, Ohio, Phantom has 1,200 stands around the country. Walton’s mother works at a New Hampshire store, and now Walton does too. When she was growing up, Walton said, she had no interest in embarking on a more conventional career path. “I didn’t want to get into a job that I was going to hold on to because I had waited 18 years to work at the fireworks store,” said Walton, who is now 23. “I have a lot of friends and cousins, too, that wanted to work there our whole life.” She also said she was looking forward to tonight’s festivities. “My uncle comes in and spends so much money and gets an awesome show together,” she said. There are certain perks that come with working a fireworks store, especially today. “We get 60 percent off on the Fourth. So me and all my friends and family that work there put our money together and load up.” Fabio Madeiros, 41, works at Black Dragon Fireworks, a collection of tent-stores based in Fairfield County, Conn. A former banker (he says he’ll “never do that kind of job again”), he travels to China every year to tour the factories that supply his products. While, to make ends meet the rest of the year, he works in construction, his passion is in the tents. Asked to describe his ideal fireworks display, he said would do a “mortar wreck” with “rings in the air and smiley faces.” “I’d do everything in one display,” he added. “Twelve tubes.” Not that he doesn’t also exercise moderation and caution when necessary. “We have two kinds of fire extinguishers,” he said. And even if one of the fireworks were to go off in the tent, he added, “there’s a delay built into the fireworks and I would have time to get everything out of the way.” Madeiros said the season really only lasts four or five days — days filled with “selling, selling, selling.” “People come here from everywhere,” he said. “New York, New Jersey, Massachusetts. But most of our money comes from Connecticut. It’s one of the richest states, and people come in and drop $1,000 or $2,000 on the table.” Madeiros said he got into the business through a friend who owned a stand, but St. Ours got his job through a friend who worked at a carnival. That moment came in the wake of tragedy. In a span of three months in 2002, he lost five family members — including two of his children — to muscular dystrophy. He was living in Rhode Island at the time, and he decided to come down to Florida to start a new life. Fireworks felt familiar to him. “I had lit off fireworks as a kid and pretty much everything is self-explanatory on the packages, like, ‘lay on ground, light fuse and get away,’” he said. “But there are people who don’t know absolutely anything about it and I have to explain everything to them,” he added, “like if it goes in the air or if it’s color.” Some displays, he said, are considered “safe and sane.” They don’t exactly fly off the shelves. “I sell mostly the mortars that everyone watches blow up in the air with the boom,” he said. He says he sees a lot of families with young kids pass through his tent, and that’s his one of his favorite parts of the job . “I buried two children and I like to make these kids happy because of that,” he said. “We’re all kids at heart, and everyone likes to play with fire.”

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Booming Business: America’s Fireworks Retailers Talk Explosive Sales

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Olive Garden, Pizza Hut Top Customer Satisfaction Survey Of Major Chains

by on June 22, 2011

Huffington Post…

Pasta and pizza win again! Just days after taking the cake as the world’s first- and second-favorite foods , the two Italian-cum-American dishes have led Olive Garden and Pizza Hut to victory in this year’s American Customer Satisfaction Index . Olive Garden won the “Full-Service Restaurant” category (just beating number two Red Lobster) with 82/100 points. Pizza Hut had the top score in the “Limited-Service Restaurants” (read: fast food) at 81/100. Experts noted that, as in previous years, full-service restaurants outperformed those with “limited service,” but said that the latter was gaining on the former. The lowest scorer among the major chains surveyed, with just 72 points, was McDonald’s. But even this is a dramatic improvement from last year, when the biggest fast-food chain in the world scored a 64. Maybe it’s time for them to advance their Italian offerings beyond cappuccino and into cheesy starches. Below, the full results of the survey: Full-Service Restaurants Olive Garden—82 Red Lobster—82 Outback Steakhouse—81 Chili’s—79 Limited-Service Restaurants Pizza Hut—81 Little Caesar’s—80 Starbuck’s—80 Papa John’s—79 Domino’s—77 Wendy’s—77 Taco Bell—76 Burger King—75 KFC—75 McDonald’s—72

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Olive Garden, Pizza Hut Top Customer Satisfaction Survey Of Major Chains

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Student Housing Gains Respect » Commercial Real Estate » FeedRE

May 31, 2011

The 28-year commercial real estate broker specializes in the sale and joint venture of retail, office and ground up development in Southern California. Algermissen… Investors Jump Back Into Rebounding Hotel Market …

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Anne Phillips: Suckers in the Garden

May 13, 2011

PT Barnum I guess said it best ” There is a sucker born every minute.” Unfortunately I think we can be much more gullible when times are more difficult. When we get a call from a potential client that has a large project, or one that says they have several properties and is looking for a landscaper to partner with, we want to believe that it isn’t someone looking for free design ideas. Just like the suckers on your roses that drain the plant of energy, these folks looking for suckers to take advantage of take time away from serious clients and work. My goal, as with rose suckers, is to spot them quickly and snip them off before too much time is wasted. I just returned from a meeting I was supposed to have at a firm that billed itself as one that will assist you in getting government contracts. I had my doubts when speaking with them on the phone but when I looked at the website it looked professional. You see chamber associations, Better Business Bureau, and a Forbes link. There weren’t any reviews on any site posted so I thought I would check them out. As I waited for my appointment I looked at all of these framed chamber memberships, and the Forbes piece. It turns out the Forbes piece was a paid advertisement — so not an article on them at all. Nothing that they didn’t pay for was on that wall. All chamber memberships (paid for), the Better Business Bureau (which costs you $300 or so a year), and this advertisement. All of this with the hopes of making them look legitimate. The sad part about this is that many people that don’t have the experience or education will think this makes them a credible company. They are going after contractors that typically don’t have the highest levels of education and fit that category of being the hardest hit in the recession. It turns out of course that they charge you a fee to find this work. This is work that is available to anyone for free on government websites. I left without having the meeting. I do have to say the person that has put this together is slick. They schedule multiple people to come in at once. This way it looks like you are competing with other people. They have desks in the waiting room with folks that look like they are working (if you listen you hear they really aren’t but one of them was playing a game on her computer). They make it seem like you need to be interviewed to qualify but no input was given when questioned what those qualifications really are. Things really haven’t changed much since PT Barnum. The same conman tactics apply. This week I had what seemed like a nice couple contact me about doing some landscaping at a home they were remodeling and going to sell. I was told that they had several investment properties and they were looking for a new landscaper to work with. The one they had been working with was not honest with his pricing. I met with them, produced the estimate with some ideas on plants and hardscape. But instead of questions I got a request for a sketch for their financial partner. This of course is usually explained as just a formality, we really want to go with you because we like your ideas so far. Having been a sucker a few times in my early years as a designer, I recognize this as the I am looking for a free design so I can get some folks that are not licensed or insured to install it for me at half of what you will charge. As I always do now I say ” Great, I look forward to working with you. I will send over my design contract and we can get started. Design fees of course apply towards the installation so you don’t have to worry it won’t be extra for you.” At this point unless I have really misjudged them (unfortunately rarely happens) I don’t hear back. On to the next potential sucker. Looking at it now, I see the same pattern as with this faux government assistance agency: Try to seem legitimate (they took me to a house they were working on), create the impression that only one or a few will be chosen (they kept saying they were interviewing others and of course only one will be chosen), make the mark (con man lingo) believe you like them and are going to select them if they just give you a free design (or wire money etc.), then when the mark gives you what you as a good con man you disappear. So life isn’t that different from what goes on in the garden. There is always a lot of weeding to do and keep the suckers to a minimum.

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Noah Hultgren: Face of a Giant Agribusiness

May 13, 2011

According to some, I am a giant agribusiness — the worst kind of factory farmer. What qualifies me for this dubious distinction? Nothing except that, based on U.S. Department of Agriculture (USDA) figures, my farm falls in the biggest six percent of U.S. farms. And these farms account for the bulk of federal farm policy support. It sounds pretty damning, which is why it is the top talking point used by opponents of farm policy looking to dismantle a system, they say, is too tilted to agribusinesses and oppresses small, family farms. But there’s a lot more to this story than a 10-second sound bite would let on. For example, the USDA considers anyone with sales of more than $1,000 to be a farm, so that six percent figure is a little misleading. The weekend grower on the side of the road selling tomatoes from her garden would be a farmer in the government’s eyes. Ditto for the young retiree trying his hand at wine-making. Ironically, my business is probably more in line with what most of us consider a farm. It is family-run. It was passed down to me from my father and grandfather. It is a full-time effort to support my wife and kids. And, in order to make it my livelihood, it has sales exceeding $500,000. Again, that figure can be spun to sound really bad, since most people don’t know the difference between revenue and profit. But remember, the $500,000 represents gross sales, not how much money the farm or farmer is making. A farmer may produce half-a-million dollars worth of goods but might have to spend just as much to grow the crop, making it a break-even proposition and sometimes a losing one. Seems odd to call these farms corporate titans, especially when you consider that the Small Business Administration classifies most businesses as “small” if their gross sales are under $7 million a year. How much profit could a “giant corporate farm” like mine hope to generate? The USDA puts profit margins in agriculture at 10 to 15 percent. So under favorable circumstances — Mother Nature cooperates, market prices are fair, oil doesn’t spike and you don’t run into any problems like equipment breaking down and needing expensive repairs — that $500,000 in sales could generate between $50,000 and $75,000 in profit a year, according to the USDA’s estimates. No corporate executive in his or her right mind would get into such a risky business with such little profit upside. That’s why 97 percent of U.S. farms are still owned by families, not by corporations like Cargill, or ADM, or Kraft. I recognize that some may construe this article as a complaint about farm profits or an attack on smaller farm operations, but that is not my intent. Farm prices are way up right now and near an all-time high — and as a result, federal spending is way down. And I know that if America is going to meet tomorrow’s food and fiber needs it will take farms of all shapes and sizes. Smaller, organic growers are part of this puzzle, as are larger, conventional operations like mine, which supply more than three-quarters of our country’s food and fiber. As Secretary of State Clinton said this weekend, “We must redouble our commitment to sustainable agriculture and food security.” She’s right. If this nation is going to keep pace with an exploding global population, and if it’s going to do it in a sustainable way, then responsible farmers of all sizes have to come together in supporting and encouraging technology and best management practices. In addition, America needs to urge the next generation to to get involved in farming, despite the low profit margins and risk, to replace aging growers who are retiring. Our farmers and ranchers are a thin green line standing between a prosperous nation and a hungry world. It’s time to refocus on holding all parts of this thin green line instead of tearing it apart with manipulated numbers and disingenuous spin.

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Alan Simpson Rants About ‘Snoopy Snoopy Poop Dogg’

March 7, 2011

Alan Simpson, co-chairman of President Barack Obama’s debt commission, furthered his penchant for colorful commentary Monday when he unleashed a rambling diatribe targeting what he characterized as a generation of disrespectful youth and their confused grandparents. “This is a fakery,” the former Wyoming senator said on Fox News, referring to retirement-age Americans expressing fears about having Social Security funds slashed. “If they care at all about their children or grandchildren, and sometimes I doubt that — I think, you know, grandchildren now don’t write a thank-you for the Christmas presents, they’re walking on their pants with the cap on backwards listening to the enema man and Snoopy Snoopy Poop Dogg, and they don’t like them!” Simpson has been a proponent of considering reforms to entitlement programs such as Medicare, Medicaid and Social Security in the effort to reduce the deficit, suggestions that so far appear to have been ignored in the Obama administration’s budget proposals. In February, Simpson exhibited his flair for the dramatic when he called the White House’s spending cut effort a “sparrow belch in the midst of the typhoon.” The deficit, he later said , was “a stink bomb in the garden party and it’s never going to go away.” The debt commission co-chairman also came under heavy fire last year after it was revealed that he had referred to the nation as “a milk cow with 310 million tits” in an email to the executive director of the Older Women’s League.

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Construction Insurance and Surety Broker Vincent Walsh Joins RFF & Associates as Senior Vice President

March 4, 2011

He Brings 40 Years of Experience to Garden City, NY-Based Firm That Is a National Leader in Construction and Surety Brokerage

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Angela Haines: From Neckties to Nuclear Waste: The U.S. Government Is Open for Business

February 17, 2011

This month it got a little easier to add to your client list the country’s biggest spender: the US Government. The Small Business Administration announced its Women-Owned Small Business Procurement Programs (WOSB) which provides greater access to contracts with 83 industries by allowing procurement officers to set aside contracts for women-owned and economically disadvantaged women-owned businesses (EDWOSB). Federal statute already mandates government contracts over $3000 and under $100,000 be set aside for small businesses, with an additional 5% procurement targeted for women-owned small businesses, but results have never met the mark. While department and agency standards vary, in practice, procurement officers can now exclude other bidders once they receive a minimum of two bids from qualified women business owners. Furthermore, the February ruling requires the set asides go into effect in 2011 government budgets with over $30 billion of contracts available to women. SBA Administrator Karen Mills feels these contracts “can provide women-owned small businesses with the oxygen they need to take their business to the next level.” What’s at stake? Each year the government purchases some $500 billion dollars worth of goods and services. Typically it spends in every category imaginable from goods, such as lab equipment, furniture, office machines, toiletries, clothing, and athletic equipment to services, such as accounting, construction, advertising and janitorial. Occasionally it even wades into unexpected territory. One Army contract totaled $5.6 million for T shirts imprinted with “Go Army.” Another $500,000 contract went for a Spider Man impersonator to entertain troops abroad. Federal contracting consultant Lourdes Martin-Rosa, head of Government Business Solutions , advises business owners “to take advantage of every tool the federal government offers, while making yourself known to the right people within the government.” The Small Business Administration provides requirements on its website; it also offers training and other outreach programs to help small businesses fulfill requirements. Additionally, the Federal Business Opportunities (FedBizOpps) website lists all government contract needs above $25,000. Recently a survey by American Express Open , an initiative that supports small businesses with products, training and educational resources, agrees that given “the government goal of awarding 23% of their spending to small firms — some $115 billion annually — Federal contracting is an important avenue of growth for many small businesses to consider.” Once they win Federal contracts, the report continues, “Women businesses achieve success in equal measure to that of their peers.” But success takes takes time, about 17 months, on average, to land the first contract. Once they bid, the survey concludes, women win 43% of the contracts they seek compared to 40% for men. While becoming contract ready requires extensive research, the steps are relatively straightforward. The first step is to register online in the Central Contractor Registration (CCR). While registration is free, basic identification facts and figure are required. One key is to select your proper product or service classification codes (NAICS) among the 83 categories available for women businesses. Choosing the codes can be one major key to success. Ask small business owner Maureen Borzacchiello, CEO of Creative Display Solutions , an exhibit and events production firm based in Garden City, New York whose blue chip clients include JetBlue, Pfizer and American Express. When the economic slump hit, Maureen decided to explore government contracts, though she admits the project takes dedicated focus. “When I first looked at the categories of industries, I felt we fit two or three, but with more digging I have discovered 43 categories for which we are eligible. One area that turned up unexpected business was storage, a service Creative Display Solutions routinely provides its clients. The government, however, labels storage contracts “general warehousing,” a big budget item at one particular agency which Maureen is currently targeting. Last year she won her first government contract from the Army. Her advice for women seeking government business? Don’t start out with the attitude that you should get these jobs just because you are a woman. Your first goal is to demonstrate you’re a solid company and be willing to provide the financial records they require along with recommendations from other clients. To be a government contractor, you can’t keep your receipts in a shoebox. You need a comprehensive business development strategy. Consultant Lourdes Rosa-Martin, who also advises on government contracting for the American Express Open program, agrees that doing business with the government isn’t a piece of cake. “But,” she adds, “the resources are there because the government provides remarkable transparency.” One website, USASpending.gov , provides details of previously-awarded contracts to help you determine if your prices are competitive. Furthermore, Lourdes adds, “there are 230,000 credit card purchasing officers ready to buy any product or service that costs $3000 or less at any time without further authorization. Just jump in.” One veteran Federal contractor, CEO-Founder Susan Rice of Cavanagh Group Services which provides onsite logistics management for disposal of nuclear, hazardous and toxic wastes to support environmental clean-up, currently derives 85% of her $22 million revenues from government contracts. In some cases, she contracts directly; other times she subcontracts from major companies who routinely develop lists of qualified suppliers. But with ballooning deficits and impending budget cuts, Sue Rice says she now plans to start chasing more private business to achieve a 50-50 split between government and private contracts. “When one sector peaks,” Sue observes, “the other dips. For me the solution is to be nimble enough to ride the waves.”

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Video: MSG’s O’Neil Says Knicks Can Support `Uptick’ in Pricing

December 17, 2010

Dec. 17 (Bloomberg) — Scott O’Neil, president of Madison Square Garden Sports, says the New York Knicks can support an “uptick” in ticket pricing due to fan demand. Bloomberg’s Michele Steele reports. (Source: Bloomberg)

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Why New Jersey Is Still the Worst State for Property Taxes

October 7, 2010

f there is one thing that unifies residents of New Jersey, particularly in these divisive times, it’s property taxes: Everybody hates them. One of the Garden State’s chief claims to fame — besides The Sopranos and The Boss — is the fact that its residents pay the highest property taxes in the country. A recent study from the Tax Foundation confirmed this yet again, finding that New Jerseyeans paid median taxes of $6,579 in 2009. Seven out of the nation’s top 10 counties for property taxes are in New Jersey. This infuriates residents and is a regular topic on talk radio. It should be no surprise that property tax appeals are up 44% in the state, according to the Newark Star-Ledger

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Obama Urges Action On Middle Class Tax Cuts In Speech On Economy

September 15, 2010

WASHINGTON — President Barack Obama is applauding two Republican senators who voted for a small business bill and says he’d welcome that kind of cooperation on the divisive issue of extending tax cuts for the middle class. Obama thanked Republicans George Voinovich of Ohio and George LeMieux of Florida for voting to move the bill closer to final passage. Speaking in the Rose Garden after a Cabinet meeting Wednesday, Obama urged lawmakers to approve an extension of Bush-era tax cuts for middle class families making less than $250,000 a year. Obama says Republicans should stop holding those tax cuts “hostage.” Republicans are insisting that tax cuts be extended for higher-income wage earners, too. Taxes for everyone will rise next year unless Congress acts. THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below. WASHINGTON (AP) – President Barack Obama is applauding two Republican senators who voted for a small business bill and says he’d welcome that kind of cooperation on the divisive issue of extending tax cuts for the middle class. Obama thanked Republicans George Voinovich of Ohio and George LeMieux of Florida for voting to move the bill closer to final passage. Speaking in the Rose Garden after a Cabinet meeting Wednesday, Obama urged lawmakers to approve an extension of Bush-era tax cuts for middle class families making less than $250,000 a year. Obama says Republicans should stop holding those tax cuts “hostage.” Republicans are insisting that tax cuts be extended for higher-income wage earners, too. Taxes for everyone will next year unless Congress acts.

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Obama: New Jobs Numbers ‘Positive’ But ‘Not Nearly Good Enough’

September 3, 2010

WASHINGTON — Eager to jumpstart the economy ahead of crucial midterm elections, President Barack Obama said Friday he intends to unveil a new package of proposals, including tax cuts and targeted spending, to spark job growth. Obama spoke in the Rose Garden after the August jobs report came out better than expected, showing the private sector adding 67,000 new jobs last month and revising upward the numbers from June and July. But unemployment ticked upward to 9.6 percent as more people entered the job market, and the president said it wasn’t good enough. “That’s why we need to take further steps to create jobs and keep the economy growing, including extending tax cuts for the middle class and investing in the areas of our economy where the potential for job growth is greatest,” Obama said. “We are confident that we are moving in the right direction, but we want to keep this recovery moving stronger and accelerate the job growth that’s needed so desperately.” Administration officials say a big new stimulus bill like last year’s $862 billion measure is not in the offing – nervous lawmakers looking to November’s balloting would not be expected to approve an expensive new measure. But Obama said he’d be proposing a new set of ideas next week. He’s likely to detail them during a speech on the economy Wednesday in Cleveland, midway through an economy-focused week capped by a rare White House news conference. Obama’s package could include a number of provisions that have languished in Congress for much of the year, including infrastructure bonds for municipalities and extensions for a series of tax breaks for businesses and individuals that expired at the end of 2009. Democratic leaders are considering making one of the tax breaks permanent, for businesses that invest in research and development. They are also considering extending a law passed in March that exempts companies that hire unemployed workers from paying Social Security taxes on those workers through December. Sen. Charles Schumer, D-N.Y., has proposed extending the exemption an additional six months. Obama is continuing to prod the Senate to pass a bill that calls for about $12 billion in tax breaks for small businesses and a $30 billion fund to help unfreeze small business lending. Republicans have likened the bill to the unpopular bailout of the financial industry. And the president wants to make permanent the portion of George W. Bush’s tax cuts affecting the middle class. The House has already passed many of the provisions, but they have stalled in the Senate because Republicans and Democrats could not agree on how to pay for them. Jim Manley, spokesman for Senate Majority Leader Harry Reid, D-Nev., said Reid hoped to be able to get the small business measure through once the Senate goes back in session later this month but the prospect for other ideas was cloudier. Moreover, some of the ideas are relatively small bore, so even if they did pass in the next month or two it’s unlikely they’d make a real dent in the economy before the elections. Departing White House economist Christina Romer told The Associated Press that the new proposals would be “targeted measures aimed at particular problems or incentivizing a particular area of the economy.” Romer is leaving her post as chair of the president’s Council of Economic Advisers on Friday to return to the University of California, Berkley. ___ Associated Press writers Julie Pace and Stephen Ohlemacher contributed to this report.

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Daniel Krotz: How to Write a Grant

August 19, 2010

I’ve been reviewing a lot of grants applications (for federal agencies and private foundations) over the past year. I’m doing this because I think it will improve my own grant writing skills, and because I am extremely interested in what people “in the field” are thinking about. It is work that I enjoy and I hope to do more of it. My general impression is that organizations chosen for funding have written well about deserving ideas, and they have answered the questions asked by the funding entity in an orderly and logical manner. Naturally, there are successful applications from organizations that are patently self-serving and slipperier than an eel in a barrel of snot. Mostly though, folks who get funded deserve to be funded. Applications that routinely fail are from organizations that don’t seem very connected to the work they propose to do. It is apparent that they haven’t involved a worker bee in planning, designing, or otherwise thinking through how the work will get done, and there is a kind of soullessness in the way that objectives and budgets are developed; they don’t really seem to have a real relationship to the project’s beneficiaries. I have — more often than I care to admit — been guilty of trolling for bucks for the sole purpose of feeding the company’s machinery. I’ve never felt good about it, but I’ve done it because I recognize that the machine has to be fed if it is to be able to “help” folks downstream. But funding development that is done solely for the benefit of the machine is a sign that the organization’s values and ethics are in critical condition. More to the point, grant writers and reviewers, like me, almost always see through these values and ethics challenged organizations at a glance. Sophisticated opportunists use lots and lots of words, pages, charts, graphs, and letters of support that never quite say anything. Simpler opportunists just need a job or a job for a pal — which is okay — but to do what and for whom often remains a mystery. Some of these organizations do slip by and get funding, but the implemented projects are almost always a waste of the funder’s time and money. So what does a deserving application look like? There are five characteristics of a worthwhile project: First, the applicant has a passion for the work it proposes to do — and knows that work intimately. They are able to communicate excitement about the potential rewards and benefits of the project, and how the project contributes to the wider community. Second, the applicant’s enthusiasm is harnessed to thoughtfulness. Their application demonstrates that they have thought for a long time about what it is they want to do, and why, and that their thinking includes ideas and opinions from the people who will do the work, and from the people who will benefit from the work. Third, the applicant’s idea is sustainable and scalable, and that the funding received is just seed capital for a better, brighter, and maybe bigger future for the proposed idea. The application demonstrates that they want to do the work over the long haul; that the work proposed is their “life’s work.” Fourth, the applicant can demonstrate a cost benefit ratio that clearly shows what the good results of the project will cost on an individual beneficiary basis. If the project is a community garden, for example, the applicant should be able to estimate the value of the garden’s production and divide the value by the number of gardeners (beneficiaries). Continue the analysis by comparing the gardener outcome to the overall cost of the project. There are certainly other, non-monetary benefits to a community garden, but these too should be stated in measureable terms. Fifth, the applicant accurately describes the organization’s stage of development — ranging from grassroots and start-up stage to mature, savvy, and institutional — and proposes work that it has the capacity to do, depending on its stage of development. The early stage organization should identify essential helping and mentoring partner agencies, while the well-founded institution should identify how its experience translates into lower administrative costs. There are many other “rules’ for grant writers. Among them are to thoroughly answer the questions asked by the funder, follow the application’s format, and to make sure that the funder is the best target for the project that is proposed. But the ultimate, long-term success of any organization’s development efforts really depends on knowing who it serves, and to passionately care about why.

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Daniel Krotz: How to Write a Grant

August 19, 2010

I’ve been reviewing a lot of grants applications (for federal agencies and private foundations) over the past year. I’m doing this because I think it will improve my own grant writing skills, and because I am extremely interested in what people “in the field” are thinking about. It is work that I enjoy and I hope to do more of it. My general impression is that organizations chosen for funding have written well about deserving ideas, and they have answered the questions asked by the funding entity in an orderly and logical manner. Naturally, there are successful applications from organizations that are patently self-serving and slipperier than an eel in a barrel of snot. Mostly though, folks who get funded deserve to be funded. Applications that routinely fail are from organizations that don’t seem very connected to the work they propose to do. It is apparent that they haven’t involved a worker bee in planning, designing, or otherwise thinking through how the work will get done, and there is a kind of soullessness in the way that objectives and budgets are developed; they don’t really seem to have a real relationship to the project’s beneficiaries. I have — more often than I care to admit — been guilty of trolling for bucks for the sole purpose of feeding the company’s machinery. I’ve never felt good about it, but I’ve done it because I recognize that the machine has to be fed if it is to be able to “help” folks downstream. But funding development that is done solely for the benefit of the machine is a sign that the organization’s values and ethics are in critical condition. More to the point, grant writers and reviewers, like me, almost always see through these values and ethics challenged organizations at a glance. Sophisticated opportunists use lots and lots of words, pages, charts, graphs, and letters of support that never quite say anything. Simpler opportunists just need a job or a job for a pal — which is okay — but to do what and for whom often remains a mystery. Some of these organizations do slip by and get funding, but the implemented projects are almost always a waste of the funder’s time and money. So what does a deserving application look like? There are five characteristics of a worthwhile project: First, the applicant has a passion for the work it proposes to do — and knows that work intimately. They are able to communicate excitement about the potential rewards and benefits of the project, and how the project contributes to the wider community. Second, the applicant’s enthusiasm is harnessed to thoughtfulness. Their application demonstrates that they have thought for a long time about what it is they want to do, and why, and that their thinking includes ideas and opinions from the people who will do the work, and from the people who will benefit from the work. Third, the applicant’s idea is sustainable and scalable, and that the funding received is just seed capital for a better, brighter, and maybe bigger future for the proposed idea. The application demonstrates that they want to do the work over the long haul; that the work proposed is their “life’s work.” Fourth, the applicant can demonstrate a cost benefit ratio that clearly shows what the good results of the project will cost on an individual beneficiary basis. If the project is a community garden, for example, the applicant should be able to estimate the value of the garden’s production and divide the value by the number of gardeners (beneficiaries). Continue the analysis by comparing the gardener outcome to the overall cost of the project. There are certainly other, non-monetary benefits to a community garden, but these too should be stated in measureable terms. Fifth, the applicant accurately describes the organization’s stage of development — ranging from grassroots and start-up stage to mature, savvy, and institutional — and proposes work that it has the capacity to do, depending on its stage of development. The early stage organization should identify essential helping and mentoring partner agencies, while the well-founded institution should identify how its experience translates into lower administrative costs. There are many other “rules’ for grant writers. Among them are to thoroughly answer the questions asked by the funder, follow the application’s format, and to make sure that the funder is the best target for the project that is proposed. But the ultimate, long-term success of any organization’s development efforts really depends on knowing who it serves, and to passionately care about why.

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Unemployment Extension In Spotlight As Obama Blasts GOP Filibuster Of Jobless Aid

July 19, 2010

President Obama used his bully pulpit Monday to blast Republicans for holding up a bill to reauthorize extended unemployment benefits, one day before the Senate will try once again to restore aid to the 2.5 million long-term jobless Americans who have missed checks since May. “A majority of Senators have tried not once, not twice, but three times to extend emergency relief on a temporary basis,” Obama said from the Rose Garden, surrounded by a handful of individuals whose unemployment insurance had run out because of senatorial dithering. “Each time a partisan minority in the Senate has used parliamentary maneuvers to block a vote denying millions of people who are out of work much ended relief. These leaders in the Senate who are advancing a misguided notion that emergency relief somehow discourages people from finding a job should talk to these folks. That attitude, I think, reflects a lack of faith in the American people.” Senate Republicans, with an assist from Nebraska Democrat Ben Nelson, have insisted that the $33 billion cost of reauthorizing the extended benefits not add to the federal budget deficit and have offered alternative bills to pay for the benefits by slashing spending elsewhere. “Democrats have refused over and over again to extend additional unemployment insurance in a way that won’t add to an already unsustainable national debt,” said Don Stewart, a spokesman for Sen. Mitch McConnell (R-Ky.), the Republican leader in the Senate. “Everyone agrees on extending the additional unemployment insurance, but the Democrat way is to insist we add it to the national debt at the same time–while blocking Republican efforts to pass the same extension without the debt. Remember, this is the same crowd that said if we just borrowed a trillion dollars for the stimulus bill, the unemployment rate would be down to 7.5 percent by now.” As Obama and congressional Democrats have been eager to point out, Republicans do not apply the same fiscal discipline when it comes to the Bush administration’s soon-to-expire tax cuts for the wealthy. Letting the tax cuts expire would save $678 billion over ten years, according to the Office of Management and Budget. “After years of championing policies that turned a record surplus into a massive deficit, the same people who didn’t have any problem spending hundreds of billions of dollars on tax breaks for the wealthiest Americans are now saying we shouldn’t offer relief to middle class Americans like Jim, or Leslie, or Denise, who really do need help,” Obama said, referring to three people who joined him in the Rose Garden. A top Senate Republican aide questioned Obama’s timing, since Senate Democrats expect to succeed in breaking the GOP filibuster on Tuesday, thanks to the newly-appointed replacement for the late Sen. Robert Byrd (W.Va.). “What the hell?” the aide asked. “They’re going to get that vote tomorrow at 2:30 now that they will have a new Dem Senator. It’s already scheduled. It’s like the President is going to call for the sun to rise in the east.” The administration’s defenders argued that it was both helpful and productive to have the president draw a contrast between the two parties on this issue. The White House actually saw an entry to engage more aggressively in the debate last week, when Sen. Jon Kyl (R-Ariz.), the second-ranking Republican in the Senate, argued that tax cuts for the wealthy should be passed without offsetting the costs, while UI had to be paid for in full. Aides in the White House’s communications shop immediately jumped on the exchange and emailed it to reporters, distilling it to a simple narrative: “For unemployed, you have to pay. For millionaires you don’t.” By week’s end, Press Secretary Robert Gibbs had mentioned Kyl’s remarks several times, while President Obama himself highlighted the contrast during his weekly radio address. Monday’s speech was supposed put a crest to the campaign, with aides on the Hill acknowledging that the president was deliberately injecting political heat into the discussion. “It’s all about making [Republicans] pay a price,” said a top Senate Democratic aide. Reflecting the politics that have metastasized around the unemployment insurance debate, on Monday morning Florida Senate candidate Marco Rubio scoffed at the idea that an extension would serve as a form of economic stimulus. “I don’t think anyone can say that with a straight face,” said the Tea Party candidate, who also echoed Kyl’s points about paying for unemployment benefits but not tax cuts for the rich. Actually, many serious, straight-faced people have argued for the stimulative effect of jobless aid. The Congressional Budget Office estimated that for every dollar the government spent on aid to the unemployed, the economy would see output rise by between $0.70 to $1.90 — the biggest bang for buck of any government stimulus policy. Reducing income taxes in 2011 (Rubio’s preferred solution) would result in $0.10 to $0.40 in economic output per dollar spent. “[R]educing payroll taxes for firms that increase payroll or increasing aid to the unemployed,” the CBO reported, “would have the largest effects on output and employment per dollar of budgetary cost in 2010 and 2011.” Mark Zandi, the chief economist at Moody’s Analytics and an adviser to Sen. John McCain (R-Ariz.) during the 2008 campaign, said the same thing: “No form of the fiscal stimulus has proved more effective during the past two years than emergency UI benefits,” he said. Several Republicans — and even some Democrats — have suggested that the extended unemployment benefits, which in some states gave the unemployed 99 weeks of benefits, make the jobless lazy. Obama attacked those arguments on Monday. “The Americans I hear from in letters and meet in town halls — Americans like the ones here today — they aren’t looking for a handout,” the president said. “It’s not that they don’t want to work. They desperately do. They just can’t find a job. They’re honest, decent, hardworking folks who’ve fallen on hard times through no fault of their own; who have nowhere else to turn except unemployment benefits; who need emergency relief to help them weather this economic storm.”

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Video: Joyce Says MSG Driven Up by Hopes James May Join Knicks: Video

July 8, 2010

July 8 (Bloomberg) — David Joyce, a media analyst at Miller Tabak & Co LLC, discusses trading of Madison Square Garden Inc. options ahead of today’s announcement by LeBron James at to whether he will leave the Cleveland Cavaliers for the New York Knicks or another basketball team. Joyce spoke with Michele Steele on Bloomberg Television’s “InsideTrack.” (Source: Bloomberg)

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Obama Urges Congress To Help Small Business, Again

June 11, 2010

WASHINGTON — President Barack Obama is again urging Congress to send him a package of tax breaks and other incentives to help small businesses grow and create jobs. The legislation would eliminate capital gains taxes for investments in such companies and encourage people to open businesses by offering tax relief to small startups. Obama says his administration is constantly hearing from small businesses that want to keep the workers they have and hire more employees, but are having trouble getting credit. Obama spoke at a White House Rose Garden event with small business owners, his second such event in recent weeks.

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Moguls Do L.A. Courtside Deals Off-Camera as Lakers Battle for NBA Title

June 9, 2010

By Peter J. Brennan June 9 (Bloomberg) — Los Angeles Lakers home-game broadcasts often show close-ups of Jack Nicholson while ignoring the man to his right, Lou Adler. He produced “Up in Smoke” and “The Rocky Horror Picture Show.” Glenn Frey , co-founder of the Eagles rock band, was showcased on ABC in Game 1 of the Lakers’ National Basketball Association finals matchup with the Boston Celtics, though not the band’s longtime manager, Live Nation Entertainment Inc. Chairman Irving Azoff . Nearby in anonymity sat Joe Smith, who helped make stars of musicians Garth Brooks and Bonnie Raitt . The power brokers rubbing shoulders with entertainers possess the ultimate status symbol in a city that trades in celebrity, and often they are far richer. As the Lakers battle for the title, the business elite looking on from courtside range from Hollywood dealmaker David Geffen to drug-company billionaire Patrick Soon-Shiong . The mix of wealth and fame creates a “kind of fraternity,” Azoff said. “There isn’t any more prestigious possession in this town than a Lakers courtside seat,” said Azoff, 62, who said he has held his for almost 40 years. The location “is only slightly more prestigious than owning your own plane.” Season tickets at courtside have changed hands for millions of dollars, Azoff said. Holders include Norman Pattiz , founder of Westwood One Inc. , the New York-based producer and distributor of news and programming to radio stations. His two seats between the Lakers bench and the scorer’s table “are the difference between being at the game and being in the game,” he said. ‘They Sweat on Us’ “You hear everything, the players and the coaches, the grunts and the groans,” Pattiz said. “They sweat on us. It’s like sitting ringside at a championship fight.” Pattiz said he recently sold two of his season tickets to Geffen, a co-founder of DreamWorks SKG. Among about 30 executives with season tickets is another DreamWorks co-founder, Jeffrey Katzenberg , who runs publicly held DreamWorks Animation SKG Inc. , based in Glendale, California. Also representing Hollywood: former United Artists Chief Executive Officer Jerry Weintraub, “The Matrix” producer Joel Silver and former Yahoo! Inc. CEO Terry Semel . Soon-Shiong, CEO of Abraxis Health Inc. and executive chairman of Los Angeles-based Abraxis BioScience , has a net worth estimated at $5 billion this year by Forbes and has committed $100 million to help reopen troubled Martin Luther King hospital. Broadcom Corp. co-founder Henry Nicholas , worth $1.5 billion as estimated by Forbes, is another ticket holder. “We all know each other,” said Soon-Shiong, who has gone to Lakers games for 25 years and has six seats. ‘Grown Ups’ Los Angeles leads the best-of-seven series 2-1 after last night’s 91-84 victory in Boston . Ratings for each of the first three games have been at least 10 percent higher than last year, Burbank, California-based Walt Disney Co. ’s ABC said, citing data from researcher Nielsen Co. Access to courtside seats at Staples Center gives Hollywood studios and agencies a way to get air time for stars. At the June 3 opener between the Lakers and the Celtics, ABC showed comedian Chris Rock trying to talk to the Lakers’ Kobe Bryant during a break. Nearby were David Spade , Kevin James and Adam Sandler . They star together in “Grown Ups,” the comedy being released on June 25 by Sony Corp. ’s Columbia Pictures. Talent agency William Morris Endeavor Entertainment holds the seats and represents Spade, James and Sandler, said Marie Sheehy, a spokeswoman. Affleck, Wahlbergs In Boston, where the team recently began to offer fireworks and state-of-the-art video, the crowd has a working-class image. New England Patriots Coach Bill Belichick is a recognizable face. Red Sox first baseman Kevin Youkilis also attends games. The smattering of celebrities at TD Garden on a given night may include Matt Damon and Ben Affleck . The Wahlberg brothers, Mark and Donnie , are seen regularly during the playoffs. From the business community, the names tend to emanate from the private equity world of team owners Wycliffe Grousbeck and Stephen Pagliuca , from Highland Capital Partners and Bain Capital, respectively. They include Harrah’s Entertainment Inc. CEO Gary Loveman , said Heather Walker, a team spokeswoman. Two second-row tickets for last night’s game were offered for $14,768 at Razorgator Tickets, the Boston Herald reported. For Lakers season-ticket holders, a courtside seat in the finals costs $4,500, according to spokesman John Black . Pattiz, 67, estimated his seats might fetch as much as $40,000 each through private brokers. “Clients enjoy sitting in those seats,” Pattiz said. “It’s easier to get a deal done there than sitting across from someone in an office.” Azoff said he often takes clients to games to do business. During the first game of the series, he said his goal was to convince Frey to go on tour in Australia. He said he doesn’t mind when the TV camera ignores him. “What are they going to show me for?” Azoff said. To contact the reporter on this story: Peter J. Brennan in Los Angeles at pbrennan3@bloomberg.net

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BP Spill Shows a Profit Buying 2018 Oil, Selling Spot

June 7, 2010

By Alexander Kwiatkowski and Margot Habiby June 7 (Bloomberg) — The oil market is signaling that prices have nowhere to go but up as the biggest spill in U.S. history curbs drilling and makes it more expensive to develop new fields. Crude’s premium for delivery in eight years compared with today’s price rose 86 percent since the BP Plc -leased Deepwater Horizon rig in the Gulf of Mexico exploded April 20. Oil for December 2018 is $21 a barrel more than next month, compared with $11 before the disaster. More regulation may add $5 to the contracts in coming years, according to Deutsche Bank AG. President Barack Obama extended a ban on new deepwater permits and exploration by Royal Dutch Shell Plc in the Alaskan Arctic for six months, putting off-limits as much as 23.2 billion barrels of potential resources, equal to 76 percent of all reserves proven in the U.S. The number of rigs drilling in the Gulf of Mexico plunged 50 percent last week to the lowest level in 16 years, Baker Hughes Inc. reported June 4. “The president said stop drilling, and now we are seeing the result,” said Adam Sieminski , chief energy economist at Deutsche Bank in Washington. “Before all is said and done, we’re going to lose more rigs in the Gulf.” A one-year worldwide delay in deepwater drilling may cut 500,000 barrels a day from 2013 supply, according to Sanford C. Bernstein analysts. While that’s less than 3 percent of daily U.S. consumption, it’s almost enough to fuel Argentina, Latin America’s third-biggest economy. Future Oil Costly Oil for delivery in December 2018 traded at $92.78 a barrel on the New York Mercantile Exchange on June 4, compared with $71.51 for July 2010 delivery, a premium of $21.27. That spread has grown by $9.82, or 86 percent, since April 19, the day before the accident. To profit from a wider premium, investors would need to buy a December 2018 futures contract and sell one for nearer delivery, and then reverse those trades once the spread expands. As prices approach $100 for delivery in 2018, the latest contract on the Nymex, crude for this year is sinking on concern Europe’s debt crisis will derail the global economic recovery. July oil fell 14 percent in May, the most for one month since December 2008. Prices tumbled 4.2 percent on June 4 after a government report showed that the U.S. added fewer jobs than forecast last month and as the euro fell to a four-year low against the dollar, reducing the appeal of commodities. Share Slump BP shares have collapsed, losing 33 percent of their value since April 19 amid mounting costs of the clean-up and damage to the company’s reputation. The slump has been felt across the industry , leading to a 14 percent decline so far this year in the MSCI World Energy index. The prospect of higher costs and a crackdown on drilling are driving up future prices because world demand in 2015 will rise 2.3 percent from now to 88.4 million barrels a day, according to the International Energy Agency in Paris. “Definitely there’s going to be greater regulatory scrutiny over offshore operations in the deepwater, and that would likely lead to increased costs for the industry,” David Greely, chief commodities strategist at Goldman Sachs, said today at the Asia Oil & Gas Conference in Kuala Lumpur. U.S. output may be cut by 150,000 to 200,000 barrels a day next year because of new limits, Deutsche Bank’s Sieminski said. The total can feed as much as 35 percent of Exxon Mobil Corp.’s refinery in Baytown , Texas, the largest in the U.S. BP estimates its production may be reduced by 75,000 barrels a day in 2015 because of delays. Too Little Those amounts are too little to drive up the cost of crude, said Mike Wittner , head of oil research at Societe Generale SA in London. “In the big picture, I don’t think a half million barrels a day of more or less non-OPEC production is really going to change the global balance,” Wittner said in a telephone interview. “It is still going to be Asian-led demand growth bumping up against a maturing supply base. The big picture does not really change.” Wittner forecasts oil averaging $101 a barrel next year. Brazil has given no signs that limits will be placed on Tupi and related deepwater oil fields, the biggest discovery in the Americas since Mexico’s Cantarell in 1976. The fewer barrels pumped in the U.S., the more refiners need to turn to the 12-nation Organization of Petroleum Exporting Countries and other foreign suppliers. To meet rising demand, OPEC would activate unused fields, curtailing capacity the world needs during times of disruptions, such as wars and hurricanes. A 500,000 barrel-a-day drop in global output in 2013 would put a greater burden on OPEC, Bernstein analyst Neil McMahon said in a May 28 report. Global Context “Although this may seem small in a global context, such a situation would decrease OPEC spare capacity, especially in the second half of the decade, which would lead to an increase in the oil price,” according to the report. The world is growing more dependent on deepwater finds, focusing attention on hard-to-access fields such as Brazil’s Tupi and BP’s Thunder Horse in the Gulf of Mexico. Reservoirs lying more than 1,000 meters (3,280 feet) below the sea surface will make up almost 4 million barrels of daily global production by 2018, more than six times the level this year, according to Bernstein estimates. Offshore production growth may be slower than expected, pushing up prices, said Fatih Birol , IEA chief economist. “There could be definitely a negative impact on the offshore product growth, which may in turn mean upward pressure on prices,” Birol said in a telephone interview. Higher oil prices may provide an incentive to look at alternatives to oil. Environmental Risks OPEC accounted for 41 percent of U.S. imports last year, down from 46 percent in 2008, according to the Energy Department, in keeping with the goals of Obama and previous American presidents to curb dependence on foreign nations. “Much of our future supplies were supposed to come from deepwater drilling,” David Hufton , managing director of London’s PVM Oil Associates Ltd., the world’s largest broker of over-the-counter crude trading, said in a note. “The environmental risks are now all too apparent.” The spill has dumped as much as 19,000 barrels a day into the Gulf, according to government scientists, after the initial explosion killed 11 workers and sank a $365 million rig. BP has spent about $1.25 billion to stop the flow and scour crude from the Gulf, it said today. “We owe all those who’ve been harmed, as well as future generations, a full and vigorous accounting of the events that led to what has now become the worst oil spill in U.S. history,” Obama said in the White House Rose Garden on June 1. Stricter Regulation Oil producers around the world are preparing for stricter regulation. Norwegian government members are calling for an immediate stop to deepwater drilling offshore, while Russia may tighten its rules, according to Energy Minister Sergei Shmatko . “We need to guard against premature changes to regulations that may not turn out to be the right thing,” Andrew Swiger , senior vice president at Exxon Mobil Corp. said in Kuala Lumpur. More regulation means more expenses to consumers through higher commodity prices. Insurers are charging 50 percent more for policies covering oil rigs following the explosion, according to Moody’s Investors Service. “The marginal costs for new supplies have taken a big upturn,” said PVM’s Hufton. “It is surprising that forward oil prices have not reacted more aggressively.” To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net ; Margot Habiby in Dallas at mhabiby@bloomberg.net .

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China Real Estate Bubble Bursts in Bond Market Credit Markets

May 30, 2010

By Katrina Nicholas May 31 (Bloomberg) — Dollar bonds sold by China real estate companies this year are the worst performers among Asian non-financial corporate debt denominated in the U.S. currency amid concern the nation’s property market is overheating. Yields on the $3.9 billion of bonds issued by Kaisa Group Holdings Ltd. , Country Garden Holdings Co. and seven other developers since January widened by an average 2.26 percentage points relative to Treasuries as of last week, according to data compiled by Bloomberg. That’s more than the 2.05 percentage- point increase in spreads for the seven dollar-denominated bonds sold by other companies in Asia outside Japan. Investors are demanding greater yields to lend to China property firms, a sign they expect borrowers will have a harder time meeting debt payments amid a government clampdown down on lending. Goldman Sachs Group Inc. and Credit Suisse Group AG cut their profit estimates for Chinese real estate companies after a 12.8 percent jump in real estate prices in April from a year earlier spurred the state to increase regulation. “New issues by Chinese developers will stall for the time being,” Vince Chan , the Hong Kong-based chief credit strategist with Amias Berman & Co. LLP, a fixed-income advisory and brokerage firm founded by two former Citigroup Inc. bankers, said in a phone interview. “Investors need handsome rewards for getting exposed to weaker fundamentals.” Widening Spreads The amount of dollar bonds issued by China developers represents 45 percent of all corporate dollar debt sales in Asia outside Japan this year, Bloomberg data show. The yield spread on $350 million of 13.5 percent notes sold by Shenzhen-based Kaisa last month widened the most of the nine issues, expanding to 16.52 percentage points from 11.07 percentage points, Nomura Holdings Inc. prices on Bloomberg show. Kaisa is developing 18 projects in Shenzhen, Dongguan and other cities in the Pearl River Delta, most of them high-rise residential complexes that combine recreational and commercial space, according to its website . An investor who bought the company’s 2015 bonds at par would have lost 15.5 percent. Elsewhere in credit markets, the extra yield investors demand to own company debt instead of Treasuries widened 5 basis points last week to 193 basis points, or 1.93 percentage points, Bank of America Merrill Lynch index data show. The spread, which peaked at 511 on March 30, 2009, is up from this year’s low of 142 on April 21. Average yields rose to 4.06 percent, the highest based on weekly closes since the period ended March 5. Sales Slow Corporate bond issuance worldwide slowed this month to $66.1 billion, down from $183 billion in April and the least since December 2000, according to data compiled by Bloomberg. “Companies have to be prepared to strike and strike quickly,” Rick Martin, the London-based director of treasury at Virgin Media Inc. , the U.K.’s second-largest pay-television company, said at a May 28 briefing in London. “The key is to have the team ready and primed and able to pull the trigger at short notice. I can’t think of a time when the forces have been so polarizing.” The cost to insure U.S. corporate debt against default rose last week. Credit-default swaps on the Markit CDX North America Investment Grade Index Series 14, which investors use to hedge against losses or to speculate on creditworthiness, increased 25.1 basis points this month to a mid-price of 117.2 basis points. The index typically rises as investor confidence deteriorates and falls as it improves. Bond risk rose in Asia today, with the Markit iTraxx Asia index up 4 basis points, according to Royal Bank of Scotland Group Plc. The Markit iTraxx Japan index rose 5 basis points, Morgan Stanley prices show. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements. A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year. Emerging Market In emerging markets, spreads narrowed 16 basis points last week to 321 basis points, trimming the monthly increase to 63, according to the JPMorgan Emerging Market Bond Index. China has added to regulations designed to cool the property market several times this year, including raising banks’ reserve requirements three times since January, restricting pre-sales by developers and curbing loans for third- home purchases. It also raised minimum mortgage rates and tightened down-payment requirements for second homes. Shanghai’s plan to begin a property tax on residential real estate was submitted to the central government for review, the China Securities Journal reported today, citing unidentified people. Demand ‘Premium’ Goldman Sachs lowered its 2010 net income estimates for Chinese developers by an average 13 percent and reduced earnings forecasts for the next two years by 25 percent, analysts led by Yi Wang wrote in a May 19 report. Credit Suisse pared earnings- per-share estimates by as much as 15 percent for 2010 and 20 percent for 2011, citing the government’s clampdown. “With the negative headlines coming out of this sector, investors are less likely to be drawn to participate in new issues because of a high coupon,” Tan Chew May , a credit analyst for Aberdeen Asset Management Asia Ltd., which oversees $1.5 billion of Asian dollar debt, said in a phone interview from Singapore. “With the trend of widening spreads, new names are forced to come at premium.” China property developers paid coupons as high as 14 percent to issue dollar debt this year, compared with an average 9.2 percent for other companies in Asia and 6.2 percent for U.S. property companies. On average, Chinese property companies are paying a 10.875 percent coupon. Renhe’s Delayed Sale Glorious Property Holdings Ltd ., which has 26 real estate projects in cities including Shanghai, Beijing, Harbin and Changchun, postponed its first sale of dollar-denominated bonds in April. The Hong Kong-listed company cited poor credit market conditions for the delay. Renhe Commercial Holdings Co ., a developer of underground shopping centers based in Harbin, China, sold five-year, 11.75 percent dollar notes on May 18 to yield 974 basis points more than Treasuries after delaying the sale for two weeks. The relatively strong finances of China developers means some companies can afford to pay double-digit coupons, according to Andy Mantel , Hong Kong-based founder of hedge fund manager Pacific Sun Investment Management Ltd. Country Garden , which builds villas, townhouses and apartments in China, sold bonds in April with an 11.25 percent coupon. The company, controlled by China’s second-richest woman, Yang Huiyan , said contracted revenue in the first quarter rose 82 percent on sales in the Guangdong area. Fantasia’s Coupon “The sector is relatively better financed than it was two years ago when there were serious liquidity issues,” Mantel said in a phone interview. “Investors might not make any money on the actual bond, but they’ll get their interest payments.” Fantasia Holdings Group Co .’s $120 million of five-year bonds pay the highest coupon at 14 percent. The company develops commercial and residential complexes in China’s Pearl River Delta and Chengdu-Chongqing Economic Zone regions. It raised HK$3.18 billion ($408 million) from an initial share sale in Hong Kong in November, boosting cash reserves to $497 million from a deficit, Bloomberg data show. “Sales and pre-sales have increased cash balances for most companies by over 20 to 30 percent while fresh debt issuance has extended maturity profiles,” analysts led by Raghav Bhandari at CreditSights Asia Research Ltd. wrote in a note to clients May 20. “Companies are in a much better position to handle this period of strain than they were a year ago.” High Yield “People are attracted by the high coupons of the sector, but are fearful of the regulatory announcements and how it might affect the credits,” Sean Henderson , head of Asia debt syndication at HSBC Holdings Plc, said in a phone interview from Hong Kong. “More recently, the overall market backdrop has taken the whole high-yield sector lower.” The yield spread on speculative-grade company dollar bonds in Asia rose 174 basis points this month as of May 28, compared with 50 basis points for investment-grade companies, JPMorgan indexes show. High-yield debt is rated below Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s. Credit-default swaps insuring against Country Garden defaulting on its debt rose 343 basis points to 10.39 percentage point this month through May 18. The contracts suggest investors are pricing in a 50 percent chance of default. Similar contracts insuring Agile’s debt have soared 3.85 percentage points since mid-April, when China’s central bank pledged to implement new lending rules to cool real estate “madness.” At current rates investors are pricing in a 48 percent chance of default. Chinese property bonds are unlikely “to recover meaningfully anytime soon,” Amias Berman’s Chan said. “If we start to see the regulatory measures taking effect in the next few months then there may be a reversal of fortunes. But optimistically I think it’ll be the third or fourth quarter before things stabilize.” To contact the reporter on this story: Katrina Nicholas in Singapore at knicholas2@bloomberg.net

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JPMorgan’s 64% Note Tied to Tivo Stock Shows Risks of Reverse Convertibles

May 17, 2010

By Zeke Faux May 17 (Bloomberg) — A JPMorgan Chase & Co. reverse- convertible note paying 64 percent annualized interest plunged in value on May 14, three days after being sold, showing the risks of these products usually bought by individual investors. The structured notes offered 10.7 percent in interest payments over their two-month term and a return of principal, as long as shares of TiVo Inc. didn’t fall more than 25 percent, according to a prospectus. TiVo dropped 42 percent on May 14 after an adverse court ruling, triggering a provision that will leave investors holding the possibly depressed stock at maturity. Banks including JPMorgan, Morgan Stanley and Barclays Plc sold $656 million of reverse convertibles in the U.S. last month, according to data compiled by Bloomberg. The securities, which combine features of bonds and stock options, are often sold to individuals who don’t understand the risks, said Jake Zamansky , a New York-based attorney who represents investors. “It’s being sold as a bond, an income-generating product, and I don’t think it’s being explained to people that you can get stuck with the stock,” the securities lawyer at Zamansky & Associates said in a telephone interview on May 14. He has represented investors in lawsuits related to the products. Justin Perras , a JPMorgan spokesman, declined to comment. The prospectus’s listing of risk considerations includes the statements “your investment in the notes may result in a loss” and “your protection may terminate on any day.” “Protection” refers to the feature where the principal is returned unless, on any day, the stock closes 25 percent below its initial price. Receiving Stock Because that level was breached, noteholders will receive at maturity as many shares of the stock as their investment would have bought at the initial price, hence the name “reverse convertible.” “Individuals should be buying reverse convertibles on stocks that they otherwise would consider owning outright,” said Keith Styrcula , chairman of the New York-based Structured Products Association, in a telephone interview today. Investors in JPMorgan’s notes could make money if TiVo’s share price recovers. The stock was up 5.8 percent , to $10.75, at 1:09 p.m. today in trading on the Nasdaq Stock Exchange, compared with $16.88 when the notes were issued. JPMorgan sold $800,000 of the TiVo-linked products, it said in the prospectus. The 64 percent interest rate was the highest offered on any reverse convertible in months, according to Craig McCann , a Fairfax, Virginia-based litigation consultant who’s preparing a study of the market. ‘Ridiculous’ Commission The price of the securities included a 1.75 percent sales commission, of which JPMorgan received 0.75 percentage point, according to the prospectus. That’s 10.5 percent on an annualized basis, which is much higher than the commission charged on comparable investments, according to Seth Lipner , a Garden City, New York-based attorney. “A 10.5 percent commission is ridiculous,” Lipner said in a telephone interview on May 14. “The cost would be much lower” for investors to make the same kind of market bet using various options rather than reverse convertibles, he said. Structured notes generally include other costs, such as to offset risks related to the security, as well as a profit for the issuer. The built-in costs of the TiVo-linked note were limited to the 1.75 percent commission, according to the prospectus. Each $1,000 TiVo note was worth $945 on the day it was offered, according to Bloomberg’s reverse-convertible pricing model. McCann said his model came up with an initial value of $960. Prices generated by the models vary based on the source of market data and assumptions about liquidity and volatility. Court Case TiVo’s decline came after an appeals court said on May 14 it would reconsider the company’s victory over Dish Network Corp. and EchoStar Corp. in a digital-video recording patent case. Dish and EchoStar had asked on April 5 for the full panel of the appeals court to rehear the case. “I don’t think something with a major development about to take place, positive or negative, should be put into a reverse convertible,” Zamansky said. “There’s just too much volatility.” JPMorgan’s prospectus states that TiVo’s stock “has experienced significant fluctuations.” It doesn’t mention the pending patent case. Many investors who lost money on reverse convertibles have filed arbitration claims against their brokers, according to Zamansky. The Financial Industry Regulatory Authority, a trade group, said in a February letter to its members that reverse convertibles can be “difficult for retail investors and registered representatives to evaluate.” Brokers’ sales pitches must be “fair and balanced,” it said. Brokers often market reverse convertibles as a way for individuals to take advantage of the sophisticated derivatives trading that banks use, according to Chris Vernon, a Naples, Florida-based attorney who represents structured-note investors. “The pitch with these complex structured products is that this is what the big boys are doing and now you can do it too,” Vernon said in a telephone interview on May 14. “But the big boys aren’t paying 10 percent-plus commission per year.” To contact the reporter on this story: Zeke Faux in New York at zfaux@bloomberg.net .

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Linda Keenan: Shadow Elite: Think BP’s The Bad Guy? Think Bigger, Way Bigger

May 13, 2010

By Linda Keenan and Janine R. Wedel Coast Guard Captain leading hearings Wednesday: “It’s my understanding that [a blowout preventer is] designed to industry standard … manufactured by the industry, installed by the industry, with no government witnessing or oversight of the construction or installation. Is that correct?” Regional supervisor, federal regulator MMS: “That is correct…” That staggering statement of regulatory impotence was characterized this way by Sen. Bill Nelson in the Wall Street Journal : “If MMS wasn’t asleep at the wheel, it sure was letting Big Oil do most of the driving.” It is tempting to hope that Big Oil’s days in the driver’s seat are over, now that the Obama administration has ordered that the Minerals Management Service, which oversees offshore drilling, be split up, after critics said the agency was too close to the industry and had an inherent conflict of interest. Realists are highly skeptical. And in our view, it is shortsighted to focus public ire on one business and one massive, deadly disaster, even as HuffPost yesterday spoke to another whistle-blower alleging egregious practices. This story lays bare the far-reaching (and largely unnoticed) emasculation of government regulatory power, as it has succumbed to corporate agendas over the past several decades. Janines examines this, and other disturbing trends, in her book Shadow Elite . And it’s imperative that we dissect the modus operandi of BP, its elite hired guns, assorted patrons, and compromised, enfeebled regulators, to better spot their tactics being used across government, corporate America, and Wall Street. This pernicious M.O. could be detected in both the recent Upper Big Branch Mine disaster, the bank industry collapse and the bailout that followed. So we should ask ourselves not just “how did these catastrophes happen?” but also, “how do we spot the next one waiting to happen?” There was much finger-pointing during Congressional grillings this week: politicians pointing fingers at executives from the 3 companies involved in the disaster, and the executives pointing fingers at each other. But those politicians, and our entire leadership, should also point a finger at themselves , for allowing private industry to increasingly devour public power, and gut regulatory responsibility. It traces back at least to the Reagan era, but soon politicians from both parties would seek to redesign governing, including adopting the push for “small government”, and often deregulation. Ironically, this drive led them to create a bigger, far less transparent “shadow government” — by steadily passing government work, cache — and, crucially, power — over to business interests. One result: the lines between business and government have blurred, making it hard to figure out who’s in charge, or what an agency even is. Case in point: the MMS. Was MMS a government regulator or an arm of the industry? You be the judge of this description , from the Wall Street Journal . It is supposed to be a watchdog that halts drilling when it spots unsafe behavior. But it is also supposed …. to generate government revenue from drilling on government lands…..Of MMS’s fiscal 2010 budget of $342 million, nearly half comes from the oil industry…. It’s this conflicted mandate the White House is trying to clear up, with the move this week to split those oversight and revenue functions. Another result of shadow government’s rise is the drain of the government’s “brain”. The expertise a civil servant should possess has been increasingly privatized, and regulatory power is decimated. More to the point, businesses aren’t just sidestepping or fighting regulators. Their M.O. is to try to make themselves the de facto regulators of their own self- interested conduct, the result of which is made devastatingly clear in that exchange at the beginning of this post. More from the Journal : The agency… –”doesn’t write or implement most safety regulations, having gradually shifted such responsibilities to the oil industry itself for more than a decade.” –said offshore drilling is so complicated that only industry can really regulate itself. –let the industry devise its own solutions to problems. –let a trade group take over the role of “telling companies what training was necessary for workers involved in keeping wells from gushing out of control”. In its defense, the agency “pointed to a 1996 law that encouraged federal agencies to ‘benefit from the expertise of the private sector’ by adopting industry standards.” This is a classic case of “reinventing government” gone awry. With government power gutted, a new breed of power broker has stepped in to help companies like BP push their interests, and, at the same time, flex their own agendas. These are not mere “lobbyists”. They have far more access than your garden variety K-Street operator – and they can be found in both political parties. In Shadow Elite , Janine calls them ” flexians “, top players who move in and out of government, corporate, and think-tank roles, gathering exclusive information at each stop, and using that privileged asset to benefit themselves and their allies. BP boasts a high-wattage roster of flexians (or near-flexians) who’ve served on advisory boards and panels. Some were reportedly paid $120,000 a year to … “advise”? The Washington Post lists former House majority leader Thomas Daschle (D); two former GOP senators, Warren Rudman and Alan Simpson; Bush EPA administrator Christie Whitman; Clinton deputy attorney general Jamie Gorelick; Leon Panetta, [before becoming] – President Obama’s CIA director. Newsweek adds George Mitchell, now Obama’s Middle East envoy. These are perhaps the most relevant titles, but a complete accounting of all the roles that these players have held in government, businesses and think tanks would run a good three dozen long. So what does a company get when it hires someone at the level of say, Tom Daschle? The fact is that this kind of influence is incalculable and largely unaccountable. And what’s the effect of these boards,”independent” panels and advisory councils anyway? They might give BP a way to have power brokers on board without the appearance of actual lobbying. And they also might help make BP look like the model corporate citizen, when the record suggests significant lapses. Newsweek reports that BP took some of their high-powered advisory board members on a helicopter ride out to the Gulf of Mexico to “demonstrate safeguards”. Christie Whitman told the magazine: “we got a sense they were really committed to ensuring they got it right..” Having such a repertoire of appearances – and the ambiguity surrounding these players’ activities – lends cover. This way of doing business is a hallmark of the shadow elite. This playing with appearances augments an ongoing strategy by BP to rebrand itself as “Beyond Petroleum”. For more than a decade, they have been promoting bold marketing campaigns, eco-friendly-seeming logos, and co-opting, critics say , environmental language. It worked – Mother Jones cites a 2007 survey that found that people thought BP was “more green” than any other oil company. But even though they have indeed plowed money into solar energy, activists say they can’t greenwash away their spotty safety record and aggressive exploration efforts. A few government officials or investigators did try to demand truth – and consequences from BP. One EPA official a few years back threatened to “debar” BP from government contracts if it didn’t submit to tougher regulation. The problem: Newsweek says BP is a top Pentagon fuel supplier for Mideast military operations. This is yet another result of the gutting of government power: the increasing, and quite possibly dangerous reliance on multinational businesses for mission-critical government functions. Various industries consolidated over the 80′s and 90′s, and that’s left a handful of enormous companies contracting in countless corners of the government, crucial corners. As Newsweek puts it, BP was “the oil-company equivalent of “too big to fail”. And that official was well aware of BP’s insider power. She said “‘when a major economic and political giant tells you it has direct access to the White House, it’s very intimidating.’” She felt powerless, because she assumed no matter what she did, BP would just get a national-security exception to keep selling the oil. This civil servant and a handful of other standouts lost in their bid to clamp down on BP, hobbled by a system that is so clearly tilted in favor of business, and to unaccountable power brokers. In the era of the shadow elite, they learned an unfortunate truth: that some companies are not just “too big to fail”, but also “too untouchable to punish”.

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Obama Calls for Immigration-Law Overhaul After `Misguided’ Arizona Action

April 23, 2010

By Roger Runningen April 23 (Bloomberg) — President Barack Obama called anew for overhauling the nation’s immigration laws, saying a failure to do so will lead to “misguided” efforts such as legislation passed in Arizona. “Our failure to act responsibly at the federal level will only open the door to irresponsibility by others,” Obama said at a Rose Garden naturalization ceremony for 24 members of the U.S. military. “That includes, for example, the recent efforts in Arizona.” The state legislature passed a bill that would make it a state crime to be in the U.S. illegally and require local police to determine the immigration status of anyone an officer suspects of being in the country without proper documentation. Arizona Governor Jan Brewer , who is running for a new term this year, signed the bill into law at a ceremony attended by several state officials hours after Obama’s comments. Brewer said she expects the measure to face constitutional challenges. The measure has sparked protests in the state, where Census Bureau figures show about a quarter of the population is of Hispanic descent. It also shares a border with Mexico and has an estimated 460,000 residents living there illegally, the seventh highest total in the country, according to the Department of Homeland Security . ‘Notions of Fairness’ The actions by the Arizona legislature threaten “to undermine basic notions of fairness that we cherish as Americans,” Obama said. It also may hamper trust between residents and law enforcement authorities, he said. He said he has instructed U.S. authorities to monitor the state’s actions and to “examine the civil rights and other implications” of the legislation. The president’s comments came at a naturalization ceremony for 24 U.S. soldiers from 16 countries who took the oath to become citizens. Democratic congressional leaders have said an overhaul of U.S. immigration law could advance through Congress this year if Senate Majority Leader Harry Reid can pick up enough Republican support to get it through the chamber. The last try at revamping the law to create a guest worker program and provide a path to citizenship for some of those living in the U.S. illegally was in 2007. That was blocked amid opposition from Republicans and some Democrats. Call for Solution “Surely we can all agree that when 11 million people in our country are living here illegally, outside the system, that’s unacceptable,” Obama said. “The American people demand and deserve a solution.” Obama lauded the work of Senators Charles Schumer , a New York Democrat, and Lindsey Graham , a South Carolina Republican, to come up with a framework for legislation that can win bipartisan support. Graham has said he’ll introduce legislation only after it’s finished and at least one other Republican signs on. He said this week that any effort to move immigration this year will fail badly because both parties need to “lay the groundwork” politically with tough border-control approaches first. The president has been making calls to members of Congress, including Republicans, to win support for tackling an immigration law overhaul, White House press secretary Robert Gibbs said. To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net ;

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Moscow Suicide Bombers Kill 38 in Two Subway Attacks, Deadliest Since 2004

March 29, 2010

By Lyubov Pronina and Lucian Kim March 29 (Bloomberg) — Suicide bombers killed at least 36 people in two attacks on Moscow subway stations, including one near the headquarters of the successor to the Soviet-era KGB, in the deadliest terrorist assaults on the capital in six years. The remains of two female suicide bombers from the North Caucasus region were found at the blast sites, Federal Security Service Director Alexander Bortnikov told President Dmitry Medvedev at an emergency meeting in the Kremlin today. The two bombs went off within in an hour of each other during the morning rush hour, killing 36 people and injuring 37, Bortnikov said. The blasts are the deadliest since 2004, when bombs detonated by suicide attackers exploded in the metro on two separate occasions. Authorities boosted security at airports across the country, according to Sergei Izvolsky, a spokesman for Russia’s air-transport agency. “Russia will fight terrorism without hesitation and to the end,” Medvedev told the country’s Security Council. The president has increased efforts to root out Islamist rebels in the North Caucasus by killing their leaders and promoting economic development in the impoverished region. Prime Minister Vladimir Putin , in Siberia on a working visit, is being kept abreast of events, state television reported. ‘More’ Attacks “It does look like we’re set to see more of these kinds of attacks in Moscow, perhaps St. Petersburg,” Carlo Gallo , Russia analyst at Control Risks, said in interview with Bloomberg Television. One bomber blew herself up at the Lubyanka station, less than a kilometer from Red Square , at 7:56 a.m. local time. The second detonated her device at 8:37 a.m. at Park Kultury station on the Garden Ring Road, according to the Emergency Situations Ministry, which puts today’s death toll at 37, with 65 wounded. “The train was totally crowded. I heard the bang and saw the flash,” an eyewitness, who declined to be identified, said outside Park Kultury station. “People started screaming. Everybody started moving up the stairs.” The ruble depreciated as much as 1.1 percent against the euro, the biggest intraday drop since Jan. 25, and was 0.8 percent weaker at 39.8733 per euro by 1:32 p.m. in Moscow. It weakened as much as 0.6 percent to 29.7300 per dollar, a three- week low, before trading 0.1 percent lower at 29.5917. ‘Terrorist Scum’ The benchmark Micex Index of 30 stocks fell 0.3 percent to 1,411.91 at the open and was 1 percent higher at 1,430.25. The dollar-denominated RTS Index dropped 0.4 percent before rising 1.1 percent to 1,537.74. Medvedev last June called for a crackdown on “terrorist scum,” amid a spate of attacks in the mainly Muslim North Caucasus region. Medvedev ordered security increased again in August, after a suicide truck bombing killed two dozen people in Ingushetia, which borders Chechnya. “It’s tricky because in the past, the attacks perpetrated by Islamist terrorists have boosted support for Putin when he was president,” Gallo said. “But now, after so many years of ongoing efforts, this may actually dent his authority.” Federal forces fought two wars against separatists in Chechnya after the collapse of the Soviet Union in 1991. Chechen militants were responsible for the worst act of terrorism in Russian history, the Beslan school hostage-taking in North Ossetia in September 2004, which left 350 people dead, half of them children. Chechen insurgents also carried out the deadliest attack ever in Moscow, the Dubrovka theater hostage-taking in October 2002 that left 130 people dead. To contact the reporter on this story: Lyubov Pronina in Moscow at lpronina@bloomberg.net ; Lucian Kim in Moscow at lkim3@bloomberg.net

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Moscow Suicide Bombers Kill 38 in Two Subway Attacks, Deadliest Since 2004

March 29, 2010

By Lyubov Pronina and Lucian Kim March 29 (Bloomberg) — Suicide bombers killed at least 36 people in two attacks on Moscow subway stations, including one near the headquarters of the successor to the Soviet-era KGB, in the deadliest terrorist assaults on the capital in six years. The remains of two female suicide bombers from the North Caucasus region were found at the blast sites, Federal Security Service Director Alexander Bortnikov told President Dmitry Medvedev at an emergency meeting in the Kremlin today. The two bombs went off within in an hour of each other during the morning rush hour, killing 36 people and injuring 37, Bortnikov said. The blasts are the deadliest since 2004, when bombs detonated by suicide attackers exploded in the metro on two separate occasions. Authorities boosted security at airports across the country, according to Sergei Izvolsky, a spokesman for Russia’s air-transport agency. “Russia will fight terrorism without hesitation and to the end,” Medvedev told the country’s Security Council. The president has increased efforts to root out Islamist rebels in the North Caucasus by killing their leaders and promoting economic development in the impoverished region. Prime Minister Vladimir Putin , in Siberia on a working visit, is being kept abreast of events, state television reported. ‘More’ Attacks “It does look like we’re set to see more of these kinds of attacks in Moscow, perhaps St. Petersburg,” Carlo Gallo , Russia analyst at Control Risks, said in interview with Bloomberg Television. One bomber blew herself up at the Lubyanka station, less than a kilometer from Red Square , at 7:56 a.m. local time. The second detonated her device at 8:37 a.m. at Park Kultury station on the Garden Ring Road, according to the Emergency Situations Ministry, which puts today’s death toll at 37, with 65 wounded. “The train was totally crowded. I heard the bang and saw the flash,” an eyewitness, who declined to be identified, said outside Park Kultury station. “People started screaming. Everybody started moving up the stairs.” The ruble depreciated as much as 1.1 percent against the euro, the biggest intraday drop since Jan. 25, and was 0.8 percent weaker at 39.8733 per euro by 1:32 p.m. in Moscow. It weakened as much as 0.6 percent to 29.7300 per dollar, a three- week low, before trading 0.1 percent lower at 29.5917. ‘Terrorist Scum’ The benchmark Micex Index of 30 stocks fell 0.3 percent to 1,411.91 at the open and was 1 percent higher at 1,430.25. The dollar-denominated RTS Index dropped 0.4 percent before rising 1.1 percent to 1,537.74. Medvedev last June called for a crackdown on “terrorist scum,” amid a spate of attacks in the mainly Muslim North Caucasus region. Medvedev ordered security increased again in August, after a suicide truck bombing killed two dozen people in Ingushetia, which borders Chechnya. “It’s tricky because in the past, the attacks perpetrated by Islamist terrorists have boosted support for Putin when he was president,” Gallo said. “But now, after so many years of ongoing efforts, this may actually dent his authority.” Federal forces fought two wars against separatists in Chechnya after the collapse of the Soviet Union in 1991. Chechen militants were responsible for the worst act of terrorism in Russian history, the Beslan school hostage-taking in North Ossetia in September 2004, which left 350 people dead, half of them children. Chechen insurgents also carried out the deadliest attack ever in Moscow, the Dubrovka theater hostage-taking in October 2002 that left 130 people dead. To contact the reporter on this story: Lyubov Pronina in Moscow at lpronina@bloomberg.net ; Lucian Kim in Moscow at lkim3@bloomberg.net

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Moscow Suicide Bombers Kill 36 in Two Subway Attacks, Deadliest Since 2004

March 29, 2010

By Lyubov Pronina and Lucian Kim March 29 (Bloomberg) — Suicide bombers killed at least 36 people in two subway bombings in Moscow, including one near the headquarters of the successor to the Soviet-era KGB, in the deadliest terrorist attacks on the Russian capital in six years. The remains of two female suicide bombers from the North Caucasus region were found at the blast sites, Federal Security Service Director Alexander Bortnikov told President Dmitry Medvedev at an emergency meeting in the Kremlin today. The two bombs went off within in an hour of each other during the morning rush hour, killing 36 people and injuring 37, Bortnikov said. The blasts are the deadliest since 2004, when bombs detonated by suicide attackers exploded in the metro on two separate occasions. Authorities boosted security at airports across the country, according to Sergei Izvolsky, a spokesman for Russia’s air-transport agency. “Russia will fight terrorism without hesitation and to the end,” Medvedev told the country’s Security Council. The president has increased efforts to root out Islamist rebels in the North Caucasus by killing their leaders and promoting economic development in the impoverished region. Prime Minister Vladimir Putin , in Siberia on a working visit, is being kept abreast of events, state television reported. ‘More’ Attacks “It does look like we’re set to see more of these kinds of attacks in Moscow, perhaps St. Petersburg,” Carlo Gallo , Russia analyst at Control Risks, said in interview with Bloomberg Television. One bomber blew herself up at the Lubyanka station, less than a kilometer from Red Square , at 7:56 a.m. local time. The second detonated her device at 8:37 a.m. at Park Kultury station on the Garden Ring Road, according to the Emergency Situations Ministry, which puts today’s death toll at 37, with 65 wounded. “The train was totally crowded. I heard the bang and saw the flash,” an eyewitness, who declined to be identified, said outside Park Kultury station. “People started screaming. Everybody started moving up the stairs.” The ruble depreciated as much as 1.1 percent against the euro, the biggest intraday drop since Jan. 25, and was 0.8 percent weaker at 39.8733 per euro by 1:32 p.m. in Moscow. It weakened as much as 0.6 percent to 29.7300 per dollar, a three- week low, before trading 0.1 percent lower at 29.5917. ‘Terrorist Scum’ The benchmark Micex Index of 30 stocks fell 0.3 percent to 1,411.91 at the open and was 1 percent higher at 1,430.25. The dollar-denominated RTS Index dropped 0.4 percent before rising 1.1 percent to 1,537.74. Medvedev last June called for a crackdown on “terrorist scum,” amid a spate of attacks in the mainly Muslim North Caucasus region. Medvedev ordered security increased again in August, after a suicide truck bombing killed two dozen people in Ingushetia, which borders Chechnya. “It’s tricky because in the past, the attacks perpetrated by Islamist terrorists have boosted support for Putin when he was president,” Gallo said. “But now, after so many years of ongoing efforts, this may actually dent his authority.” Federal forces fought two wars against separatists in Chechnya after the collapse of the Soviet Union in 1991. Chechen militants were responsible for the worst act of terrorism in Russian history, the Beslan school hostage-taking in North Ossetia in September 2004, which left 350 people dead, half of them children. Chechen insurgents also carried out the deadliest attack ever in Moscow, the Dubrovka theater hostage-taking in October 2002 that left 130 people dead. To contact the reporter on this story: Lyubov Pronina in Moscow at lpronina@bloomberg.net ; Lucian Kim in Moscow at lkim3@bloomberg.net

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Corzine Returns to Wall Street as MF Global Chief, Partner at J.C. Flowers

March 23, 2010

By Terrence Dopp and Matthew Leising March 23 (Bloomberg) — Former New Jersey Governor Jon Corzine , who ran Goldman Sachs Group Inc. from 1994 to 1999, has accepted offers to lead the futures and options broker MF Global Holdings Ltd. and become an operating partner of buyout firm J.C. Flowers & Co. Corzine, 63, becomes chairman and chief executive officer immediately, MF Global said in a statement today. He takes over from Bernard W. Dan , 50, who is leaving for personal reasons and will stay until May 16 to aid in Corzine’s transition, the New York-based company said. The former Goldman Sachs chief said MF Global’s plans to become a primary dealer in government securities are a major part of his strategy to increase revenue. “A lot of the strategic possibilities with MF Global are really exciting and this gets to my desire to play in a more entrepreneurial environment,” Corzine said in a conference call today. Corzine, a Democrat, was defeated in the November election by Republican Chris Christie , 47, amid voter anger over the state’s finances and the U.S. recession. Corzine had said he was interested in returning to Wall Street after leaving office. J.C. Flowers announced Corzine’s appointment today in a statement. The firm, which invested at least $300 million in MF Global in May 2008, recommended Corzine for the position, the statement said. It controls two seats on MF Global’s nine-member board. ‘Earnings Profile’ MF Global, the former brokerage unit of London-based Man Group Plc , provides execution and clearing services for exchange-traded and over-the-counter derivatives and foreign exchange products. The firm has lost more than 76 percent of its value since it reached $31.47 at the end of 2007. The company rose 15 cents to $7.32 on the New York Stock Exchange today. “No one is happy with the earnings profile,” Corzine said on the conference call. Dan was paid more than $3 million in salary and compensation last year, according to data compiled by Bloomberg. Alison J. Carnwath , 57, whom Corzine will also replace as chairman, earned $1.8 million. Jeremy Skule , a spokesman for MF Global, said Corzine’s compensation is still being set. The Illinois-born son of a farmer and schoolteacher, Corzine graduated from the University of Illinois at Urbana- Champaign in 1969 and received his Master of Business Administration from the University of Chicago in 1973. Goldman Bond Trader Corzine moved to New Jersey after he was recruited to be a bond trader in 1975 by New York-based Goldman. He became chairman and CEO in 1994 and left in 1999 as the firm went public. Corzine was elected to the U.S. Senate the following year and became governor in 2006. MF Global became a public company in 2007 and soon saw its shares plunge after questions arose over its risk management practices. The stock fell 45 percent in two days in February 2008 after the company disclosed that a broker lost $141 million on what it said were unauthorized wheat futures trades. The company lost more than 90 percent of its value in 2008 after earnings fell short of forecasts and amid confusion over financing deals that were done to repay debt. The chief executive at the time, Kevin Davis , resigned in October 2008 and Dan, the former CEO of the Chicago Board of Trade, took over. Since entering politics, Corzine has spent more than $130 million of his own money seeking office, according to state and federal elections records. Divorced in 2003, Corzine currently lives in Hoboken, New Jersey, and has three grown children. During his first year as governor, Corzine ordered a weeklong government shutdown after lawmakers in his own party resisted his calls to increase the sales tax to help close a budget deficit. Legislators later passed Corzine’s $1.1 billion sales-tax increase after he agreed to a compromise that dedicated half the proceeds to reducing New Jersey’s highest-in- the-nation property taxes. Corzine spent more than two weeks in a Camden hospital in 2007 after the State Police-driven sport utility vehicle in which he was riding without a seatbelt crashed into a guard rail along the Garden State Parkway. He sustained a broken thigh bone, sternum and 12 ribs in the collision, which happened as the vehicle was travelling 91 miles per hour (147 kph). To contact the reporters on this story: Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net ; Matthew Leising in New York at mleising@bloomberg.net .

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Corzine Returns to Wall Street as MF Global Chief, Partner at J.C. Flowers

March 23, 2010

By Terrence Dopp and Matthew Leising March 23 (Bloomberg) — Former New Jersey Governor Jon Corzine , who ran Goldman Sachs Group Inc. from 1994 to 1999, has accepted offers to lead the futures and options broker MF Global Holdings Ltd. and become an operating partner of buyout firm J.C. Flowers & Co. Corzine, 63, becomes chairman and chief executive officer immediately, MF Global said in a statement today. He takes over from Bernard W. Dan , 50, who is leaving for personal reasons and will stay until May 16 to aid in Corzine’s transition, the New York-based company said. The former Goldman Sachs chief said MF Global’s plans to become a primary dealer in government securities are a major part of his strategy to increase revenue. “A lot of the strategic possibilities with MF Global are really exciting and this gets to my desire to play in a more entrepreneurial environment,” Corzine said in a conference call today. Corzine, a Democrat, was defeated in the November election by Republican Chris Christie , 47, amid voter anger over the state’s finances and the U.S. recession. Corzine had said he was interested in returning to Wall Street after leaving office. J.C. Flowers announced Corzine’s appointment today in a statement. The firm, which invested at least $300 million in MF Global in May 2008, recommended Corzine for the position, the statement said. It controls two seats on MF Global’s nine-member board. ‘Earnings Profile’ MF Global, the former brokerage unit of London-based Man Group Plc , provides execution and clearing services for exchange-traded and over-the-counter derivatives and foreign exchange products. The firm has lost more than 76 percent of its value since it reached $31.47 at the end of 2007. The company rose 15 cents to $7.32 on the New York Stock Exchange today. “No one is happy with the earnings profile,” Corzine said on the conference call. Dan was paid more than $3 million in salary and compensation last year, according to data compiled by Bloomberg. Alison J. Carnwath , 57, whom Corzine will also replace as chairman, earned $1.8 million. Jeremy Skule , a spokesman for MF Global, said Corzine’s compensation is still being set. The Illinois-born son of a farmer and schoolteacher, Corzine graduated from the University of Illinois at Urbana- Champaign in 1969 and received his Master of Business Administration from the University of Chicago in 1973. Goldman Bond Trader Corzine moved to New Jersey after he was recruited to be a bond trader in 1975 by New York-based Goldman. He became chairman and CEO in 1994 and left in 1999 as the firm went public. Corzine was elected to the U.S. Senate the following year and became governor in 2006. MF Global became a public company in 2007 and soon saw its shares plunge after questions arose over its risk management practices. The stock fell 45 percent in two days in February 2008 after the company disclosed that a broker lost $141 million on what it said were unauthorized wheat futures trades. The company lost more than 90 percent of its value in 2008 after earnings fell short of forecasts and amid confusion over financing deals that were done to repay debt. The chief executive at the time, Kevin Davis , resigned in October 2008 and Dan, the former CEO of the Chicago Board of Trade, took over. Since entering politics, Corzine has spent more than $130 million of his own money seeking office, according to state and federal elections records. Divorced in 2003, Corzine currently lives in Hoboken, New Jersey, and has three grown children. During his first year as governor, Corzine ordered a weeklong government shutdown after lawmakers in his own party resisted his calls to increase the sales tax to help close a budget deficit. Legislators later passed Corzine’s $1.1 billion sales-tax increase after he agreed to a compromise that dedicated half the proceeds to reducing New Jersey’s highest-in- the-nation property taxes. Corzine spent more than two weeks in a Camden hospital in 2007 after the State Police-driven sport utility vehicle in which he was riding without a seatbelt crashed into a guard rail along the Garden State Parkway. He sustained a broken thigh bone, sternum and 12 ribs in the collision, which happened as the vehicle was travelling 91 miles per hour (147 kph). To contact the reporters on this story: Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net ; Matthew Leising in New York at mleising@bloomberg.net .

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Indicted Ex-Governor Blagojevich Lectures on Government Ethics in Illinois

March 2, 2010

By John McCormick March 2 (Bloomberg) — Rod Blagojevich , the former Illinois governor who faces a June trial on federal corruption charges, proclaimed his innocence at a college campus appearance tonight where he lectured on government ethics. He also took note of the oddity of the speech he was making. “Many of you must think it’s kind of ironic that I would agree and accept an opportunity to come here and talk to you about ethics in government,” he said. “For all the courage and testicular virility you think you have, if I did the things they said I did, and I did wrong things like they want you to believe I did, I’d be nowhere near this event.” Blagojevich, 53, spoke in front of about 1,000 people at an event billed as “Ethics in Politics: An Evening with Former Governor Rod Blagojevich,” sponsored by student Democrats at Northwestern University , in Evanston, Illinois. The former governor, a Democrat, started his speech by echoing remarks made by one of his heroes, Elvis Presley , at a press conference at Madison Square Garden in 1972. “I want to quote Elvis and tell you: I am innocent of all charges,” he said, adding that he was “illegally and unethically hijacked from office.” Blagojevich, who received an undergraduate degree from Northwestern, said he recently learned that federal agents have subpoenaed his school records for his trial. “That was 30 years ago,” he said. “They subpoenaed all the financial records. They subpoenaed, evidently, my classroom participation, my grades.” High Profile Blagojevich has maintained a high profile since the December 2008 arrest that cost him his governorship. He has made numerous television appearances to promote a book he authored last year and debuts as a contestant later this month on NBC’s “ The Celebrity Apprentice ,” a reality television program that features Donald Trump . Jeffrey Cramer , a former federal prosecutor in Chicago, said lawyers typically encourage defendants to keep a low profile in advance of their trials. “He’s doing the exact opposite,” said Cramer, a managing director and head of the Chicago office of Kroll Inc. , the New York-based risk consulting company. “Anything he says could possibly be used against him, so it is unusual that a criminal defendant would go out there and be so public.” Influence Jurors Cramer said Blagojevich may be motivated by money or trying to influence future jurors. “It does seem like he needs money,” Cramer said. Among other charges, Blagojevich is accused of trying to trade President Barack Obama’s vacated U.S. Senate seat for campaign cash or other favors. Blagojevich, who was impeached by state legislators and then removed from office following a January 2009 trial in the state Senate, is scheduled to stand trial June 3. He and his brother Robert, 54, who was chairman of his campaign finance committee, were first indicted April 2, along with two former chiefs of staff, Alonzo “Lon” Monk , 51, and John Harris , 47. The four were re-indicted Feb. 4 and are accused of plotting to use the governor’s powers to enrich themselves. Blagojevich told reporters earlier this month that he plans to testify at his trial. The ex-governor has also said he would waive his constitutional right to seek suppression of any of the more than 500 hours of eavesdropping and wiretap recordings collected by the government during its investigation of him. ‘Anti-Nixon’ “I’m the anti-Nixon,” he said at Northwestern, referring to former President Richard Nixon and the White House tapes that helped drive him from office in the Watergate scandal. “Play the tapes, they will prove me innocent,” Blagojevich said. Political observers have said the spectacle of his trial may cast a shadow over other Illinois Democrats, including Illinois Treasurer Alexi Giannoulias who is in a U.S. Senate race with Mark Kirk , a five-term Republican congressman from Chicago’s northern suburbs. Blagojevich faces charges that include racketeering, bribery and attempted extortion. Conviction on any of the most serious counts, including racketeering or attempted extortion, could result in a prison sentence of as long as 20 years. Jordan Fein, 20, president of the Northwestern University College Democrats , declined to disclose how much Blagojevich was paid for the appearance. He said the money came from student activity fees. Fein said the goal for the evening was for students and faculty to get a “greater understanding of what’s happened in Illinois the last few years.” Blagojevich is the fourth of the past eight Illinois governors to face criminal charges. His predecessor, Republican George Ryan , was convicted in 2006 of trading political favors for trips and cash and is serving a 6 1/2-year sentence at a federal prison in Terre Haute, Indiana. Democrat Otto Kerner , who held the office from 1961 to 1968, was convicted on corruption charges after being appointed a federal judge. Democrat Dan Walker , who held the job from 1973 to 1977, was found guilty of crimes committed after he left office in 1987. To contact the reporters on this story: John McCormick in Chicago at jmccormick16@bloomberg.net ;

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Real Men in Maine Have a Wife Who’s a Teacher: Amity Shlaes

March 2, 2010

Commentary by Amity Shlaes March 2 (Bloomberg) — Last November, bosses at a certain company in Marlboro, New Jersey, went to employees asking for help. It was a tough stretch, and the unemployment rate had just exceeded 10 percent for the first time since April 1983. Management told the staff it just couldn’t pay rising health-care costs without some financial give from the workers. The employees refused to help. In the end it was the employer that gave ground, committing to a raise of 23 percent over five years. The Newark Star-Ledger, which reported the story of this surrender in detail, noted that the company even promised to spend more on health-care benefits by extending family coverage. Employers at other, similar offices throughout the Garden State caved as well. How could this happen? It happened because the workers were teachers, public-sector employees, not workers in the private sector. Well, duh, would have been the typical response until recently. Police, firefighters, and teachers are holy. So until now, even if you wanted to complain about what was going on in a place like prosperous Marlboro, you couldn’t. There was nothing you could do to alter the situation, so why even raise the issue? But that’s changing, as evidenced by the Star-Ledger’s decision to shame the Marlboro educators. The public is beginning to question the legitimacy of public unions’ power because taxpayers know that commitments for worker health care and pensions are busting state budgets all over the country. For those who recoil at these unions and their entrenched power, it is perhaps useful to go back to their history. It reveals that there was nothing inevitable about strong unions in the American public sector. Firework Envy At the end of World War I, workers in the U.S. watched the fireworks in the new Soviet Union with envy. They too wanted big unions, both in the private and public sectors. The Boston police were most hopeful. After all, the working conditions for these men were terrible. An author who toured a police station behind City Hall noted that “the bugs were so voracious that they ate the leather on the police helmets and belts.” The policemen joined a union and went on strike. The Massachusetts governor, Calvin Coolidge , was slow to respond, deeming strike management the job of police Commissioner Edwin Curtis. Curtis fired the men. Afterward, Coolidge weighed in with a line that inspired Ronald Reagan : “There is no right to strike against the public safety by anybody, anywhere, any time.” The policemen never got their jobs back. Coolidge’s declaration catapulted him to national fame and a slot as vice presidential candidate on the 1920 Republican ticket. Workers’ Champion What about Franklin Roosevelt , that champion of the worker? FDR, after all, was the president who signed the Wagner Act of 1935, which gave us modern collective bargaining in private industry. But when it came to the public employees, FDR stayed close to Coolidge. In 1937, a year when industrial unions were striking furiously, FDR penned a letter to the head of the National Federation of Federal Employees, arguing that when the question regarded pay, hours and grievances, civil servants ought to be no different from those in the private sector. But collective bargaining, FDR wrote, was an exception. It couldn’t, he said, “be transplanted into the public service.” He particularly disapproved of “militant tactics” and reminded Luther Steward, president of the organization, that his own association’s charter banned strikes. The president who finally did give public unions their modern powers was John F. Kennedy . In 1962, Kennedy signed Executive Order 10988 , which allowed collective bargaining and gave unions other powers. Union Tool The same year Kennedy also gave public-sector unions a tool to justify higher wages by signing the Salary Reform Act of 1962, which established that there be “comparability” of public-sector pay to pay in the private sector. One senses that even Kennedy wasn’t sure he was right. The executive order, for example, excluded the Federal Bureau of Investigation, the Central Intelligence Agency, and any other office performing security functions should its head deem that collective bargaining would endanger national security. One of the slowest federal agencies to obey the order and extend recognition to unions was the Justice Department, headed by President Kennedy’s brother Robert. Observers understood what Kennedy had done. Later presidents might move against public unions — as Reagan did against PATCO, the air traffic controllers’ union. But they couldn’t stop the growth. Airport Security This reluctance to allow union bargaining in sensitive areas is germane now because the American Federation of Government Employees is petitioning for the right to organize the 40,000 airport-security workers across the country. The public-sector unions recently surpassed private-sector unions in membership. And the lengths to which Americans have gone to accommodate public-sector unions is extensive and artful. In rural New England, a joke circulates about one such accommodation. “What makes a real man?” the joke starts. “Well, a real man is independent. A real man has a pickup,” goes the next line. And the joke proceeds: “A real man has a dog. A real man has a rifle. A real man has a pickup, a dog, a rifle, and — a wife who’s a teacher.” This may work for some, but the more general marriage between the country’s public-sector workers and the private economy isn’t a good deal for the economy. Pretty soon we will see states rewriting contracts with employees, dialing down pensions and pay so they line up with the rest of us. The process will feel nasty, but the states have to do it — even when it involves a teacher. ( Amity Shlaes , senior fellow in economic history at the Council on Foreign Relations, is a Bloomberg News columnist. The opinions expressed are her own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Amity Shlaes at amityshlaes@hotmail.com

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Regis Resources significant gold discovery at Garden Well Prospect

February 15, 2010

Regis Resources significant gold discovery at Garden Well Prospect

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Bubble Wrap Celebrates 50th Birthday

January 24, 2010

SADDLE BROOK, N.J. — People have walked to the altar dressed in it, protected their garden plants with it, even put it on display at highbrow art museums. Mostly, they like the sound it makes when they destroy it, piece by piece, which largely explains the appeal of Bubble Wrap, the stress reducer disguised as package cushioning that maintains an inexplicable hold on pop culture. The product once envisioned as a new type of wallpaper turns 50 this month, and enthusiasts’ obsession with it has spawned more than 250 Facebook pages devoted to Bubble Wrap. Ken Aurichio, communications director for Sealed Air, the Elmwood Park-based company that manufactures Bubble Wrap, thought he’d witnessed every form of Bubble Wrap mania until he received a wedding invitation last year from a woman in Ohio who said she would wear the product on her trip down the aisle. “I’d never, never met her before,” Aurichio said. “She must have gotten my name off the Web site.” (No, he didn’t attend.) Like many innovations, Bubble Wrap initially was conceived for an entirely different purpose. According to Aurichio, a New York City designer approached inventors Marc Chavannes and Al Fielding in the late 1950s with a proposal for creating textured wallpaper. That idea stalled, but the product the two men had created in a small lab in New Jersey found its niche when, according to company lore, Fielding was flying into Newark Airport and noticed the fluffy clouds that seemed to cushion the plane’s descent. Fifty years later, Sealed Air has global revenues of more than $4 billion and legions of fans who have come up with myriad uses for Bubble Wrap (It’s a wig! It’s a mobile home! It’s a sleeping bag! It’s a flotation device!). “It seems like every day there’s something new,” said Rohn Shellenberger, the company’s business manager for air cellular products. Sealed Air’s 100,000-square-foot warehouse, just off Interstate 80 about 15 miles west of Manhattan, is an obsessive-compulsive’s dream, with row upon row of stacked rolls of Bubble Wrap as big as seven feet in diameter. The temperature is sweat-inducing, caused by the machines that process millions of granules of resin (one box is labeled “Munchy Resin”) into clear plastic sheets at temperatures up to 560 degrees. Shellenberger pops one myth about Bubble Wrap; namely, that air is injected into all those tiny bubbles. Instead, it is trapped between the sheets after they pass over several rollers, one of which creates the indentations for the bubbles. Two apparently disparate forces conspired to shape Bubble Wrap’s growth: The advent of the transistor – and later the personal computer with all its accessories – which made the shipping of delicate electronic components a multibillion-dollar industry; and the Internet, which provided a forum for fanatics to swap stories and cement Bubble Wrap as a cultural icon. Katherine Howard, a Massachusetts artist, tied Bubble Wrap bows to the chairs for her wedding last May and had guests participate in a popping contest. Not surprising for a woman who put up a virtual Bubble Wrap site in 1996 and is known as the Web’s unofficial “Bubble Wrap Lady.” “We tried to find the most useless thing we could put on the Internet, and Bubble Wrap is a completely tactile experience,” Howard said with a chuckle. “But it’s something that everybody enjoys.” It’s difficult to imagine Chavannes and Fielding, both now deceased, having any inkling that their invention would inspire such silliness or find its way into movies (Wall-E, Ace Ventura: Pet Detective), television (Monk) and high culture (Museum of Modern Art exhibit, 2009). Then there’s the true badge of hipness (for now, at least): A bubble-popping application for Apple’s iPhone.

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Cold Snap of 2010 to Ease in U.S. as Britain, China Gird for More Snowfall

January 11, 2010

By Randall Hackley Jan. 11 (Bloomberg) — European transport was delayed following weekend snow in the U.K. and Germany while China curbed its power use because of extreme cold. Australia warned of “catastrophic” brushfires as temperatures soared. Eurostar Group Ltd. operated a reduced service as wintry weather in Europe snarled transportation, with plans for 15 trains to London instead of 26 and 15 to the continent instead of 27. Airlines in the U.K., France and Germany, including British Airways PLC , reported scattered delays and cancellations as hundreds of weather-related road accidents in Germany followed two days of heavier-than-usual snow. Frankfurt airport canceled about 60 flights and in southeastern France, Lyon airport briefly shut, stranding 800 passengers. Weather-related accidents left at least 26 dead in Britain, including a 90-year-old woman who fell and froze to death in her garden, the Press Association news agency said. Crude oil rose to a 15-month high on speculation that fuel demand will increase amid freezing temperatures in the Northern Hemisphere. Futures have risen in 11 of the past 12 sessions as cold in the U.S., Europe and Asia boosted heating fuel demand. “Weather is always a wildcard for energy demand,” said Victor Shum , a Singapore-based senior principle at the energy consultant Purvin & Gertz Inc. “In general, the winter season will boost overall demand unless there is so much snow that transportation is disrupted and industries get shut down.” German Growth Affected Germany’s first-quarter economic growth might be reduced as a winter storm over the weekend and the continued cold hobbled construction and shipping, said Volker Treier , chief economist at the DIHK chambers of trade and commerce. If the cold snap persists through January, the DIHK’s forecast for as much as 0.7 percent growth in the first three months could be cut, he said. “Right now this is a concern,” Treier told Bloomberg Television today in an interview in Berlin. “The construction sector is hit, the transport sector is hit and a lot of building installations are also hit by this weather.” Freezing temperatures in China have led to the worst sea ice off Shandong province’s coast in three decades, the Xinhua news agency reported . Some 200 fishing boats were frozen at a port in Dongying by ice as thick as 30 centimeters (12 inches). In the U.S., the National Weather Service issued a “hard- freeze warning” for parts of Florida this morning. Florida Crop Damage Florida, the biggest orange grower after Brazil, may have suffered at least 5 percent damage to its orange crop from what was likely the coldest night of the current spell of unusually low temperatures, AccuWeather Inc. said. Orange-juice futures rose to a two-year high on Jan. 8 on concern that the cold will reduce output already expected to be the lowest in three years. The futures have climbed 95 percent in the past 12 months on ICE Futures U.S. in New York. The Met Office today warned Wales and much of central, western and southern England to expect widespread icy roads while “heavy snow” was predicted for the Yorkshire and Humber region. Low supplies of salt and grit for de-icing walkways and roads to hospitals prompted the diversion of loads of salt meant for export. U.K. highway authorities and local governments have been told by ministers to cut salt usage by one-fourth. “Councils will focus more on gritting the most important roads so hospitals stay open and essential supplies of food and fuel get through,” the Local Government Association said in a statement. “Ministers have decided that reducing salt use by a quarter will ensure that all councils have enough salt to last, providing they prioritize appropriately.” Prolonged Cold Snap The country is in the grips of its most prolonged cold snap since 1981, according to the government forecaster. Hundreds of schools opened their doors today after being forced to close last week because of the icy conditions. In London, the subway system was running a “good service” with minor delays affecting only the Metropolitan line, according to the Transport for London Web site. Snow and floods are easing in Germany after bringing northern parts of the nation to a standstill yesterday, leaving cars and trains stranded and cutting off coastal villages. “We’ve got extra workers on standby but so far there have been no disturbances on the high voltage grid,” said Marian Rappl , spokesman for RWE AG’s Amprion power-grid unit in Dortmund. “Some pictures of the snow look dramatic but there has been no impact.” Storm Winds, Snow Dikes remained intact and storm winds abated though parts of Luebeck’s old city were left submerged and waves tore off parts of the pier in the seaside resort of Travemuende, Spiegel Online reported today, citing police and local officials. Snowfall let up in France after forcing Lyon’s airport to shut over the weekend, stranding hundreds of passengers. The national French electrical grid asked households in the Brittany area where storms hit Jan. 9 to curb power use. French electrical demand may rise to a record today as power prices jumped to the highest in a year, grid operator Reseau de Transport d’Electricite said on its Web site. In Switzerland, where the Gotthard tunnel, a main north- south artery to Italy, was briefly closed by storm conditions, the St. Moritz ski resort reported fresh snow and sunny skies. In the Southern Hemisphere, Australia issued “catastrophic” fire warnings amid forecasts for soaring temperatures. Code Red The Australian state of Victoria activated its Code Red warning, the highest level, for the first time today as South Australia yesterday issued a statewide “catastrophic” fire danger warning after temperatures passed 40 degrees Celsius (104 degrees Fahrenheit). The alert system was introduced after the Black Saturday fires killed 173 people in Victoria last year. More than 40 people were reported to have collapsed from the heat in Melbourne, Australia’s second-most populous city. Electric demand in South Australia is expected to reach a summer record today as the heat wave that started Jan. 5 enters its second week, the Australian Energy Market Operator said. Blizzards in China’s westernmost province of Xinjiang, meanwhile, killed one and forced authorities to evacuate 5,000 residents, the Ministry of Civil Affairs said. More snow is forecast for Xinjiang today and tomorrow, the China Meteorological Administration said. Freezing weather in China is also forcing cities including Beijing and Shanghai to ration the use of natural gas and electricity to ensure sufficient energy for heating as temperatures fall. Blizzards in China Blizzards in the Tacheng and Altay regions of Xinjiang also destroyed 799 homes, according to the Ministry of Civil Affairs. Beijing will limit the supply of natural gas to industrial users to guarantee supplies for residential needs as daily consumption is close to maximum capacity, Xinhua reported yesterday. Temperatures in the Chinese capital are forecast to fall to as low as minus-12 degrees Celsius. Electricity is also being rationed in portions of China including Shanghai and the southwestern municipality of Chongqing. Snow fell in parts of Shanghai today, with temperatures as low as zero Celsius, the weather bureau said. To contact the reporter for this story: Randall Hackley in Zurich at rhackley@bloomberg.net

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Lush Bangalore Spa Welcomes Toxic Americans, De-Stressing Iranian: Travel

December 22, 2009

Travel by Vibhuti Patel Dec. 22 (Bloomberg) — I landed in Bangalore at the new international airport that attests to the city’s role in India’s outsourcing industry. A 90-minute flight on Kingfisher Airlines had taken me from Mumbai, still called Bombay by denizens who reject the nationalists’ vernacular. Bangalore, too, was recently rechristened Bengaluru. A chauffeur handed me a welcome note from the resident manager of Soukya , Bangalore’s holistic health center, before ushering me into his air-conditioned Mercedes . I had come to sample the Ayurvedic treatments that Soukya (Sanskrit for “health, well-being”) specializes in, along with other alternative therapies such as homeopathy and naturopathy. In a preview of the spa’s elegance, a bottle of drinking water nestled in a small antique chest on the seat beside me. We drove out of town along a road that ran through scenic countryside. Orchards of banana and coconut palms, fields of wheat, corn, cabbages and cauliflowers — all in shades of lush, luminous green — testified to Bangalore’s other role as the garden capital of South India. In the fast-deepening tropical twilight, which locals call “the hour of cow dust,” we stopped to let bell-clanging cattle make their way home. Dimly lit shops in tiny roadside villages were selling fruit, vegetables, car parts and bicycles. People milled about making the day’s last purchases. A church standing beside an engineering college announced South India’s priorities: old religion and modern technology — in that order. Coconut Water At Soukya, a smiling, sari-clad receptionist handed me a green coconut, the south’s ubiquitous natural drink. I held the shell, sipping coconut water through a straw. Since dinner was about to be served, I was shown to my room to freshen up. The standard bedroom I had chosen was large, well-appointed and air-conditioned. The spacious modern bathroom held a basketful of natural toiletries. French doors led to a patio with rattan furniture and a small private garden. Soukya’s deluxe rooms are larger, with gardens that wrap around the suite and include an outdoor shower, shaded by lush greenery. My room faced a vegetable garden, neatly planted with red and green cabbage, spinach, cauliflower, celery, broccoli — each bed carefully labeled. These organically grown vegetables were used daily by the chefs for meals prepared in accordance with Ayurvedic principles . Detox Diet At dinner that night, I discovered how delicious low-fat, low-spice, low-sodium, vegetarian meals could be: Indian food is rarely so understated. Here the delicate flavors came not from overpowering seasonings but from the freshness of the produce, which was undercooked to retain its brilliant natural colors, and garnished with grated coconut and fresh herbs. Soup and salad preceded each meal, portions were small, second helpings were served on request, dessert was fresh fruit. Fruit juices were plentiful and an essential part of the Ayurvedic detox diet that is often prescribed. Coffee, alcohol and tobacco are banned. Silence is recommended while dining, yet everyone talked and avidly discussed treatments. On my first night, I met a Virginian who had been coming regularly to see Dr. Issac Mathai, Soukya’s founder and chief physician since long before he set up the center. Since she had no medical insurance, she had dental work and annual physicals affordably done in Bangalore hospitals. With only 25 rooms, Soukya creates an intimate community. I got to know an artist from Texas, a New York couple working in public relations, an events planner who comes every summer from Dubai with her 10-year-old, a cancer patient from Singapore who was detoxing after chemotherapy, and a young Iranian who was there to de-stress. Conversation was upbeat and focused on the joys of being pampered. Some stole away on occasional shopping sprees, others kept to the cocoon. Massages, Yoga The morning after my arrival, I met with Dr. Mathai, who worked with his team of physicians to map out a treatment plan for my arthritic knee and elevated blood pressure: therapeutic Ayurvedic massages, yoga and diet were prescribed with natural herbal remedies and homeopathic supplements. The massages were administered in a gender-segregated treatment center. Every session was supervised by a doctor who explained the procedure in the quiet, temperature-controlled comfort of a darkened room with soothing music. The heated massage oil was infused with varying herbs and spices. Some massages were done with hot stones, others with spice- filled poultices, on different parts of the body for different cures. Each massage was customized and monitored in a way I’d never experienced elsewhere. Face-Down Flowers Fresh-cut blooms in gleaming brass bowls were everywhere, even under massage tables, giving face-down patients a floral eyeful. Twice a day there was yoga and meditation; evenings brought live arts performances, lectures and cooking demonstrations. Soukya’s 30-acre landscaped garden is planted with colorful flowers, some chosen specifically to attract butterflies. At one end of the garden, which is centered on a swimming pool, there’s a factory where herbal oils are brewed in huge vats beside a storeroom full of exotic ingredients. At night, the property became magical, with garden lamps lining each pathway. No television, no mobile phones intrude on this peaceful retreat. Soukya offers an aesthetic experience that soothes the senses and calms the mind. Rejuvenated Three weeks later, I emerged unprepared for the noise and jarring brashness of Bangalore, Mumbai, New York. Friends told me I looked relaxed. My blood pressure had dropped, my knee was better. I felt rejuvenated. Most international airlines fly to Mumbai, and from there many connections to Bangalore are available on several domestic carriers. Air France has direct Paris-Bangalore flights. Soukya will arrange complimentary rides to and from Bangalore airport. Soukya’s costs start at $400 a day, which includes a standard room, all meals, a consultation and some basic treatments. Additional special treatments and deluxe accommodations are extra. (Vibhuti Patel is a travel writer. The opinions expressed are her own.) To contact the writer of this column: Vibhuti Patel at vpatel@gmail.com .

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Vranos Becomes Latest IPO Casualty as Ellington Financial Shelves Offering

December 11, 2009

By Michael Tsang Dec. 11 (Bloomberg) — Ellington Financial LLC, run by Michael Vranos’s $2.5 billion hedge-fund firm, shelved its initial public offering as investors refused to finance its plan to buy bonds backed by the type of home loans that helped spur the biggest housing bust since the Great Depression. Old Greenwich, Connecticut-based Ellington Financial and two funds controlled by Vranos pulled their $208 million sale yesterday after underwriters including Credit Suisse Group AG of Zurich and Frankfurt-based Deutsche Bank AG failed to drum up enough interest in the 7.7 million-share offering at $25 to $27 each, according to Bloomberg data and a prospectus filed with the U.S. Securities and Exchange Commission. Vranos, the former head of mortgage-securities trading at Kidder Peabody & Co., planned to use as much as 95 percent of the net proceeds to buy subprime, Alt-A, or prime loans that lack guarantees from government-supported agencies such as Fannie Mae, according to the prospectus . Prices for some securities have recovered more than 50 percent since March after the collapse of the subprime market in 2007 triggered a credit- market freeze and a 33 percent decline in home values. “The question really was, ‘what are you getting?’” said Matt Therian , a Greenwich, Connecticut-based analyst at Renaissance Capital LLC, which has specialized in IPO research since 1991. “At the end of the day, they were going to do more trading. One month, three months from now, it could be completely different from the portfolio that generated the returns in the prospectus.” Postponed IPOs Steve Bruce , a spokesman for Ellington Financial, declined to comment. Vranos’s fund followed Fairfield, New Jersey-based Chesapeake Lodging Trust in postponing its initial-share sale this week, bringing the total shelved since Oct. 29 to six. While sellers have raised more than $10 billion unloading shares since the start of September, investors have shunned the offerings of some funds established to buy real-estate assets. Ellington Financial, which returned 42 percent this year, was asking investors to pay 6.1 percent more than the value of its net assets, based on the midpoint IPO price of $26. The average fund that invests in mortgage-related securities traded at 74 cents to the dollar last week, Bloomberg data show. The fund estimated that it would have a so-called book value, or its assets minus liabilities, of $24.51 per share, after the offering and assuming an IPO price of $26, according to the filing. At that price, the shares would be 1.06 times shareholder equity, compared with the average of 0.74 times the net assets for 36 U.S. real estate investment trusts that invest in mortgages last week, data compiled by Bloomberg show. Shareholder Equity Ellington Financial had increased shareholder equity, which is the basis of performance fees paid to Vranos and his firm, by 29 percent this year through Sept. 30 on a per-share basis, the prospectus showed. That compared with the average mortgage REIT’s gain of 28 percent, Bloomberg data show. Net income from Ellington’s investments declined by 48 percent to $2.24 million last quarter from the previous year, as the fund paid out 57 percent of its interest income to Vranos’s firm in performance fees. Vranos, 48, came to Wall Street more than two decades ago after winning the 1981 teenage Mr. Connecticut title as a bodybuilder and weightlifter and graduating with a magna cum laude degree in mathematics from Cambridge, Massachusetts-based Harvard University in 1983. ‘Captain Iron’ He made Kidder one of the biggest underwriters of mortgage bonds in the early 1990s after being put in charge of the mortgage desk. The unit earned hundreds of millions of dollars under Vranos, in some years bringing in as much as half of the firm’s profit. Vranos, who earned the nickname “Captain Iron” at Harvard for the long hours he spent in the gym, once stripped to the waist and performed muscle poses to catcalls from the trading floor at Kidder, according to a Wall Street Journal story from Dec. 29, 1994. Kidder lost $40 million in the first half of 1994 due to mortgage-backed securities, according to Fairfield, Connecticut- based General Electric Co., which owned Kidder at the time. Vranos was forced to sell into a falling market after the firm said government-bond trader Joseph Jett created $350 million of phantom profits. In 1994, GE’s Chairman Jack Welch said Vranos “has done a better job than 99 percent of the managers at GE at managing a cycle.” ‘Hall of Famers’ He left Kidder in 1994 to start Ellington Management Group LLC, named after the Connecticut town where he grew up, helped by $100 million from Ziff Brothers Investments. “Mike Vranos is one of the mortgage Hall of Famers,” Steve Harris , a 22-year veteran of New York-based Goldman Sachs Group Inc.’s mortgage business who joined Garden City, New York- based Rafferty Capital Markets LLC this year to start an asset- backed trading unit, said last week. Vranos prospered until 1998, when the collapse of Greenwich, Connecticut-based Long-Term Capital Management LP contributed to an average 15 percent decline in Ellington’s funds and forced him to conduct a Columbus Day auction of $900 million in mortgage-backed securities to meet margin calls. In 2007, Ellington suspended client redemptions from its New Ellington Credit Overseas Ltd. and New Ellington Credit Partners LP funds as limited trading in securities backed by subprime loans made it too hard to value their assets. The firm last year placed hard-to-sell assets from its flagship hedge fund, Ellington Overseas Partners Ltd., into a separate fund to be sold over time, people familiar with the matter said. Credit Crisis The IPO wasn’t the first time Vranos asked investors for money for the fund. Ellington Financial was established in August 2007, the month the credit crisis began, after raising $239.7 million in a private sale to institutional buyers. From its inception through the end of last year, the fund returned 0.52 percent, before a 42 percent gain in 2009. The market for mortgage bonds without government backing was roiled from 2007 by the record number of foreclosures and declines in home prices. That led some debt to fall from 100 cents on the dollar to pennies over the next two years, as writedowns and credit losses on subprime and other debt at the world’s largest financial companies swelled to $1.7 trillion. Prices have climbed this year as investors accepted lower potential yields amid a rally across debt markets and traders anticipated demand from investment funds pairing private capital with taxpayer equity and loans. Chesapeake, Ladder Capital Investors have spurned the IPOs of other funds that have raised money to buy real-estate assets. Chesapeake Lodging , which invests in hotel properties, postponed its $250 million offering on Dec. 8, while Ladder Capital Realty Finance Inc., formed in New York to buy commercial mortgages as default rates rise, shelved its $400 million IPO in October. Leon Black’s New York-based Apollo Commercial Real Estate Finance Inc. and Colony Financial Inc. of Los Angeles cut their offerings by half in September and are trading below their listing prices. KAR Auction Services Inc., the Carmel, Indiana-based auctioneer of used automobiles controlled by private-equity funds, yesterday raised $300 million after cutting the price of its IPO to $12 a share from as much as $17. To contact the reporter on this story: Michael Tsang in New York at mtsang1@bloomberg.net .

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Four Seasons Hotel Sweeps Michelin 3-Star Restaurant Awards in Hong Kong

November 26, 2009

By Mark McCord Nov. 26 (Bloomberg) — The Michelin Guide gave top honors to three restaurants in Hong Kong and Macau, all housed in top- tier hotels, in the sophomore edition of the annual review of the southern Chinese cities’ eateries. French restaurant Caprice added one star this year to score the best-possible three-star rating, joining Cantonese eatery Lung King Heen at the Four Seasons Hotel as Michelin’s top- ranked Hong Kong restaurants in the guide’s 2010 edition. Veteran chef Joel Robuchon retained his five Michelin stars, including three for his Galera a Robuchon in Macau, based in the casino haven’s Hotel Lisboa. Awarding top honors to hotel restaurants showed the “mentality of the business in Hong Kong, where named chefs are not found in stand-alone street restaurants, like in North America or Europe,” said Allan Zeman , chairman of Lan Kwai Fong Holdings Ltd., which manages properties in Hong Kong’s largest bar and nightlife district. “Reviewers from overseas tend to gravitate first to restaurants in the hotels they stay in. If you really get into the local culture you will find that Hong Kong has the best Chinese restaurants in the world.” This edition reviewed 245 restaurants and 53 in Macau, 86 more than its debut publication, and awarded nine establishments with two-star awards and 39 with one-star gongs, compared to eight and 18, respectively, in the 2009 debut edition. Expanded Review The expanded review comes after Hong Kong emerged from a yearlong recession in the second quarter when the economy grew 3.3 percent. The city’s benchmark Hang Seng Index is also climbing, spurred by China’s record lending and its 4 trillion yuan ($586 billion) stimulus package. Two-thirds of the 51 star-rated venues in Hong Kong and Macau are housed in hotels or high-end shopping centers and just over half serve Cantonese cuisine. Among the new inclusions in Macau are Lei Garden in Las Vegas Sands Corp.’s sprawling 3,000- room Venetian Macau Resort-Hotel, and Wing Lei in Wynn Resorts Ltd.’s Wynn Macau casino and hotel. Zeman said he hoped that as the Michelin Guide became more established in the cities, it would include more local restaurants. “Last year’s guide attracted criticism from managers of Chinese restaurants who said not enough were included,” Zeman said. “Until it gets recognized by the Chinese-restaurant community, a Michelin award will remain just another award.” Three Asian Editions After launching its first Asian guide in Tokyo in 2007, Michelin now publishes three Asian editions, the Osaka/Kyoto version launched this year being the newest. The 2010 guide to Tokyo, published Nov. 17, established the Japanese capital as the most-starred city, with 11 three-star restaurants, overtaking Paris, whose 2010 edition will be published in March. The guide’s top-rated venues bring to 82 the number of eateries worldwide awarded Michelin’s highest accolade. Caprice is the newest addition to the exclusive club after it won two stars last year. It serves modern French cuisine, with dishes such as Duck Foie Gras Terrine and Normandy Sole Fillet with Baby Artichoke and Winkle Fricassee. Main courses cost upward of HK$400 ($52). Michelin says it rates restaurants for their food and drink based on a set of “unpublished criteria.” One star indicates a very good restaurant, two means excellent cuisine worthy of a detour, while three denotes exceptional cuisine deserving of a “special journey,” Michelin says. Michelin & Cie., the world’s largest tiremaker, has been publishing its restaurant and hotel guides since 1900, at the start of the automotive era. Distributed for free until 1920, the guide was originally meant for chauffeurs and included tips on using and repairing tires. To contact the reporters on this story: Mark McCord in Hong Kong at Mmcord2@bloomberg.net

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Princess Diana’s London Palace to Get $20 Million Revamp to Enhance Visit

November 18, 2009

By Farah Nayeri Nov. 19 (Bloomberg) — Princess Diana’s dark-blue, figure- hugging gown is on show more than two decades after she wore it to spin around the White House ballroom with John Travolta . The outfit was much admired in 1985 when the 24-year-old, married to the Prince of Wales, danced with the “Saturday Night Fever” disco star. It can be seen at Kensington Palace — a London royal residence now getting a 12-million-pound ($20 million) revamp, of which 8 million pounds have been raised. The memory of the princess, who died aged 36 in a Paris car crash in 1997, has revived interest in the palace where she lived. While the residence has housed other royals — Queen Mary II, Queen Victoria (when she was still a princess), and the late Princess Margaret (sister of Queen Elizabeth II ) — Diana is the biggest draw, and curators don’t seem to mind. “We’re delighted by it,” says Lee Prosser, a curator at Historic Royal Palaces , the charity that manages five royal abodes in London. “You can’t expect people to have an interest in some of these more remote figures in history.” Also on view is a tweed suit that Diana took on her honeymoon with Prince Charles in Balmoral, Scotland. The outfits are part of a show that runs until mid-March 2010, and is illustrated with images of the functions where they were worn. “You can’t see the apartment where she lived,” Prosser explains. “It’s on the private side of the palace, and getting to it would mean going through other private areas which are currently occupied.” Underground Hub Once the refurbishment is complete, tourists will access the grounds more easily. An underground hub with a cafe, cloakroom and shop will be built, not unlike the one beneath the Louvre Pyramid in Paris. Displays will be updated, education rooms will be opened, children will get in free, and barriers between the palace and park will come down. “The building has become divorced from its landscape,” explains Prosser. Now that “high-profile” residents such as Diana and Margaret have passed away, he says, “there’s less of a need for high railings and the foliage screening.” Kensington Palace was originally a country home, bought for 20,000 pounds in 1689 by King William III and Queen Mary II; the king was asthmatic and wanted something less damp than Whitehall. Architect Christopher Wren built new wings, and the royal couple moved in at the end of 1689. Kensington was the royals’ main home for seven decades until Buckingham Palace replaced it in 1760. Victoria’s Room A highlight of the modern-day visit is the room where Victoria was awakened in June 1837 to be told that she was now queen. It has one of her beds, her writing desk, and paintings that she and husband Prince Albert gave each other on special occasions. Once the revamp is complete, visitors, who currently must snake their way through the whole palace to see any one part of it, will be able to pick and choose which section to view. One trail will be inspired by princesses who’ve lived in the palace, including Diana and Margaret. Parts of Princess Margaret’s former apartments are now open to the public, though they have been emptied of their furnishings. The apartments were handed over to Historic Royal Palaces by the Queen on condition that they not be turned into a shrine to her sister. Off-limits is Margaret’s large and airy bedroom, currently undergoing refurbishment. It lies empty, with three bay windows overlooking her private garden, a beautiful enclosure with chamomile grass and sculpted trees. Park Gate To the left of her garden wall is a gate to Kensington Park that people used even while the princess still lived. “She could see them, but they couldn’t see her,” says Prosser. Margaret’s former living quarters are being used for an amusing exhibition on debutantes — those young girls who were presented to the Queen before becoming well-to-do wives and mothers. The Queen’s last debutante ball was held in 1958. “Once you’d come out at court, you had arrived in society,” says Prosser. “Until you’d been presented, you were nobody.” Displays — all loans from ex-debutantes — include dresses, stilettos, corsets, petticoats and wax depilatory refills. Debutantes spent their days shopping, learning to curtsey and dance, and getting their hair done. A video in the next room teaches viewers how to curtsey. Footsteps traced on the parquet of what was once Princess Margaret’s apartment indicate dancing steps. In the funniest section, we crack the codes used by debutantes and their mothers to describe potential prospects: “FU” (“financially unsound”), “MTF” (“must touch flesh”), and “NSIT” (“not safe in taxis”). When will Diana’s apartments become part of the visit? “It’s still rather too close to us in terms of time,” replies Prosser. “Perhaps in the future, that apartment may be opened to the public, but who can say at the moment?” To contact the writer on this story: Farah Nayeri in London at Farahn@bloomberg.net .

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Belichick’s Fourth-Down Call Brings Another Kind of Unity to Patriots Fans

November 16, 2009

By Tom Moroney Nov. 16 (Bloomberg) — Boston sports fans learned that even Bill Belichick , who directed the New England Patriots to three Super Bowl championships, can make a mistake. With 2:08 left in the game and a 34-28 lead against the Indianapolis Colts last night, the Patriots coach elected to go for the first down on fourth and two from New England’s 28-yard line. They failed, the Colts took possession of the ball and scored four plays later to win 35-34. “People are incredulous,” said Richard Johnson, 54, curator of the New England Sports Museum located in TD Garden where the Boston Celtics and Bruins play. “It’s like Laurence Olivier flubbing a line in Hamlet, very uncharacteristic for the great clock-controlling mind of football that is Belichick.” The Colts, led by quarterback Peyton Manning , remain undefeated at 9-0. The Patriots, at 6-3, still lead their division. “Of course it was the wrong call but even Babe Ruth struck out,” said Johnson who calls himself a loyal member of the “In Bill We Trust ” club. “I’m sure Beethoven wrote a bad piano sonata and Picasso made a lousy drawing.” Not all Boston fans were as charitable. “Belichick thinks he has an aura of invincibility and that’s disappeared,” said Scott Black , 62, president of Delphi Management Inc., a Boston investment firm. “That was one of the stupidest plays I’ve seen and I’ve been watching pro football since the 1950s.” Team First Belichick defended his decision at a press conference this morning at the Gillette Stadium in Foxboro, Massachusetts. He said he believed his decision to go for the first down, which would have allowed his team to keep the ball and run out the clock gave his team a better chance at winning than to punt the ball away, he said. “I put my team first,” he told reporters. For some, Belichick’s decision last night was too painful for words. Richard Schmalensee , former dean of the Massachusetts Institute of Technology’s Sloan Business School, said he was so depressed he couldn’t comment. — With assistance from Brian K. Sullivan in Boston. Editor: Michael Sillup To contact the reporter on this story: Tom Moroney in Boston at tmorrone@bloomberg.net

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Kidnapped Irish Priest Is Freed by Muslim Rebels in Southern Philippines

November 11, 2009

By Ed Johnson and Francisco Alcuaz Jr. Nov. 12 (Bloomberg) — A 79-year-old Irish priest kidnapped in the southern Philippines has been freed, Ireland’s Foreign Minister said today. Michael Sinnott of the Columban Missionaries was seized by armed men while taking an evening stroll in the garden of his home in Pagadian City, Zamboanga del Sur province last month. Ireland’s Foreign Minister Micheal Martin said the priest “has been freed by his captives and handed over to the Philippine authorities.” No ransom was paid by the Irish government, he added in an e-mailed statement. The Muslim-majority southern Philippines is home to the al- Qaeda-linked militant group Abu Sayyaf, which the government blames for dozens of bombings and kidnappings. The separatist Moro Islamic Liberation Front is also active in the region. Mohagher Iqbal, chief peace negotiator for the MILF, said in a telephone interview today his group secured the release of Sinnott from bandits led by a Commander Inggo by applying “moral force.” The Philippine military said last month that Inggo, an alleged pirate whose real name is Guingona Samal, was an accomplice in the kidnapping and whisked the priest away in a high-powered boat. Major General Ben Dolorfino said at the time the captors probably belonged to a “kidnap-for-ransom” group and had taken Sinnott to an area dominated by MILF rebels so they couldn’t be reached by government troops. Ransom Demand The kidnappers demanded a $2 million ransom for Sinnott, who suffers from a heart condition, the military said last month. Martin said Sinnott’s release was the result of a “major diplomatic effort” by the Irish and Philippine governments and he thanked the European Union, the U.S. and the International Committee of the Red Cross for their support. “It has been a tough 32 days for everybody concerned, but particularly so for those who were waiting anxiously at the end of the phone for news of their loved one,” he said. Abu Sayyaf abducted three Red Cross workers on the island of Jolo nine months ago. They were released one by one in a hostage crisis that lasted for six months. The group was also blamed for kidnapping Italian priest Giancarlo Bossi, who was held for more than a month in 2007. To contact the reporters on this story: Ed Johnson in Sydney at ejohnson28@bloomberg.net ; Francisco Alcuaz Jr . in Manila at falcuaz@bloomberg.net .

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Fondue, Oxtail Ravioli Feed Hungry Trail Runners in French Alps: Travel

October 19, 2009

Review by Yvette Fernandez Oct. 19 (Bloomberg) — At the foot of snow-capped Mont- Blanc is the small French town of Chamonix , a haven for climbers, skiers, hikers, and other outdoors enthusiasts. Sedentary folks will appreciate the spectacular view and the food. Friends had flown 18 hours from Manila to trek through steep Alpine trails linking France and Italy. I met them there to give them moral support (via mobile phone as I lazed by the hotel pool), and to eat, though they took some time before their trek to do a little sampling on their own. At the top of the list was Albert 1er, a quiet, wood- paneled restaurant with well-spaced tables and unobtrusive servers. When the sommelier learned why we were in town, he didn’t push his wine. Instead, he offered to have the kitchen come up with a special pasta dish so my dining companion could load up on carbohydrates before his trek. It’s the meticulously prepared regional fare coupled with such personal touches that’s earned the restaurant its two Michelin stars. I started off with intensely flavored oxtail ravioli. For our main courses, we had a moist, flaky local whitefish from Lake Geneva with chanterelles and brown butter; and juicy slabs of rib-eye, flanked by a marrow-filled beef bone and crisp potato puffs. Desserts included a cream tart studded with almonds, a raspberry napoleon, roasted figs, and a selection of cheeses from across the continent. A three-course lunch menu is 39 euros ($58); a four- course prix-fixe dinner is 76 euros. Nine courses of dishes from three regions (Piedmont, Comte de Nice and Savoie) are 137.50 euros. The Albert 1er restaurant is at Hameau Albert 1er at 38 route du Bouchet. Information: +33-4-50-53-05-09; http://www.hameaualbert.fr/en Poolside Restaurant Le A at Les Aiglons Resort and Spa offers breakfast (unlimited continental buffet, 17 euros) and lunch (22 euros) packages that include access to the spa’s sauna and hammam. Our meal included a rich mushroom soup and intriguing escargot-filled ravioli. Dine poolside, with a view of the ice- tipped summit of the Aiguille du Midi. Restaurant Le A at Les Aiglons Resort & Spa is at 270, Avenue de Courmayeur. Information: +33-4-50-55-90-93; http://www.aiglons.com/en Foie Gras A couple of blocks away, Le Flore served us a plate of meaty tagliatelle Bolognese for just 8 euros. The three-course prix-fixe menu (31 euros) was a bargain, because it included its priciest menu selections such as a generous portion of seared foie gras with berries, duck breast drizzled with honey, and a luxurious chocolate souffle. Le Flore is at 75 avenue de l’Aiguille du Midi. Information: +33-4-50-53-31-23. Glass Noodles While pasta dishes from neighboring Italy were available throughout town, we hankered for rice, and were pleasantly surprised to discover Sanmaru, a Korean restaurant in Chamonix Sud. We ordered the 26 euro meal which started with a salad of greens and tomatoes dressed with miso. Next, chunky seafood pancakes and jap chae, glass noodles glistening with sesame oil garnished with carrots, onions and mushrooms. For the main course, we had a platter of beef marinated in sesame oil and garlic that we cooked on a grill built into our table, paired with bowls of steaming rice. It was such a satisfying meal we returned twice more during our week-long visit. Sanmaru is at 538 Rue du Lyret. Information: +33-4-50-53- 61-10. Flower Garden Chez Yang, a Chinese-Thai restaurant, looked nondescript from the main entrance, but had a quiet flower-filled back garden with a stunning view of the French Alps. Western-style generic Asian food (most items below 15 euros) included tom yum soup, shrimp dumplings, beef with broccoli, chop suey and egg foo yong. Chez Yang is at 17 Rue du Dr. Paccard. Information: +33-4- 50-53-18-35; http://chezyang.com Raclette For other meals, we mingled with thousands of visitors in the center of town, the energy electric, with a Babel of conversations in a variety of languages. At Le National, we enjoyed a huge wedge of the traditional Raclette, attached to a heating element that slowly melted it into a fine goop that we scraped off with a wooden spatula and ate with potatoes, cornichons and a variety of cured meats (19 euros per person). Le National is at 3 rue du Dr. Paccard. Information: +33-4 50-53-02-23. Fondue Across the way, we sampled La Potiniere’s fondue — hunks of bread dipped into a mix of molten Comte, Beaufort, Emmental cheeses (13.50 euros per person), garlicky escargots still in their shells and thin slices of beef, duck and chicken we seared over a heated stone (21.90 euros). Restaurant La Potiniere is at 38 Place Balmat. Information: +33-4-50-53-02-84. http://www.lapotiniere-chamonix.com Sandwich and Fries Customers waited patiently in line at Midnight Express, a modest sandwich stall, for what’s probably the best bargain meal in the town center (about 5 euros a sandwich). We liked the hot, crusty baguettes with thinly sliced ham and cheese, and fries that came, not on the side, but interestingly enough, inside the actual sandwich, adding a salty texture. Open till 2 a.m. Midnight Express is at 23 Rue du Dr. Paccard. Information: +33-4-50-53-44-10. ( Yvette Fernandez is an editor for Bloomberg News. The opinions expressed are her own.) To contact the writer on the story: Yvette Fernandez in New York at yferreol@bloomberg.net .

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Rockefeller Takes on Kennedy’s Liberal Cause: Margaret Carlson

October 15, 2009

Commentary by Margaret Carlson Oct. 15 (Bloomberg) — In the No Drama Obama administration there is plenty of it. I’m not referring to the Senate Finance Committee vote this week that was certain to pass. The only surprise there would have been if Republican Senator Olympia Snowe hadn’t joined with the Democrats after being offered everything but a Nobel Peace Prize to do so. The real shocker this week, at least to the credulous committee Chairman Max Baucus and the White House, was the insurance industry balking at the bill hours before it was to be voted on. Karen Ignagni , the lead lobbyist for insurers, waving a quickie study by PricewaterhouseCoopers, announced that contrary to what the Congressional Budget Office said, the committee’s bill would cause health-care costs to rise much faster and higher than they would under the current system. Almost as she spoke, PWC pointed out it had only been asked to analyze four provisions of the bill, not the whole thing, and none of the cost-saving measures. But never mind. Ignagni just needed a basis for attacking a bill no longer to her liking because of what she called “the decoupling of market reforms and personal responsibility.” Falling Short When asked on a conference call how high the enrollment rate would have to be in order for the industry to stick with its promise to stop cherry-picking, purging sick people and frivolously denying claims on the basis of pre-existing conditions, Ignagni said it would have to reach “the high- 90s.” Only 83 percent of the potential market is likely to sign up under the current bill. Baucus wouldn’t have been surprised by Ignagni’s about-face if he hadn’t been so enthralled by everyone getting along in a haze of corporate good citizenship encouraged by the White House. Baucus was so happy having insurers at the table — holding off unleashing Harry and Louise, the yuppies in the million-dollar ad campaign that helped kill HillaryCare — he didn’t notice they were walking off with doggie bags bulging with goodies and silverware in their pockets. But insurers were only playing as long as the government was serving up 40 million new customers on a silver platter, tax and tip included. When a little air seeped out of that windfall because the government wasn’t quite as willing to force new customers into a flawed system with the threat of draconian penalties, Ignangi stood up from the table loudly scraping her chair. Start Listening In fact, if Baucus had listened to Senator John D. Rockefeller — not hard given that they sit next to each other on the committee everyday — he wouldn’t have been surprised. Rockefeller has been fairly shouting that the insurance companies would take their impenetrable explanation of benefits forms and go home if the prospect of all those new premium- payers was jeopardized. When word of Ignagni’s statement came out, Rockefeller said, “The industry stands today as the greatest impediment to real health-care reform,” adding that “the idea that anyone’s concern should be whether the insurance companies make enough money is absurd.” At 6 feet 6 inches, thin as a pinstripe and lacking a reflex to race for a camera, Rockefeller has stepped into the void left by the death of Senator Ted Kennedy as the unapologetic liberal. In 1993 Rockefeller was an ardent but behind-the-scenes supporter of the Clintons’ sweeping health- care reform package, hosting the first closed-door strategy session at his Rock Creek Park estate but letting Kennedy take the lead. Squandered Chance The senator from West Virginia, who went to that poor state 45 years ago as a Vista volunteer and never left, is the skunk at the garden party as he pleads to the point of tears with fellow Democrats not to squander this once-in-a-lifetime opportunity to fix health care. Mollycoddling the industry to stop doing what it shouldn’t have been doing anyway and rewarding it with a bonanza of new customers is a fool’s errand. Tough penalties for not enrolling in insurance made more sense when there was a safe alternative in the form of a public option. In an increasingly concentrated industry, where many states are dominated by a single insurer, a public option offering better coverage and lower premiums is the only way to keep insurers honest. As an indication of how fearful Democrats have become of real reform, when Rockefeller forced a vote on the public option, they defeated it. In explaining his “no” vote, Baucus said it was because he knew a bill with a public program would eventually lose. So he decided to hasten that day. Money Talks It’s hard for the rest of the Senate to even hear Rockefeller, so overwhelmed are they by industry lobbyists becoming rich as Rockefeller. There are enough of them for every member to have six lobbyists to call his or her very own. Almost $400 million has been spent on advertising, lobbying and direct contributions to stop anything that would threaten their profits. With the Obama White House and many Democrats pulling back from the public option, they’ve succeeded. But Ignagni may have just revived the public option by stiffing Baucus’s valiant effort to please her with a bill crafted without one on the eve of the vote. By showing that the industry is only a friend when it is getting everything it wants, she’s proved Rockefeller right. ( Margaret Carlson , author of “Anyone Can Grow Up: How George Bush and I Made It to the White House” and former White House correspondent for Time magazine, is a Bloomberg News columnist. The opinions expressed are her own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Margaret Carlson in Washington at mcarlson3@bloomberg.net

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Emerging-Market Junk Bond Sales Crimp Rally Fueled by `Short-Term Memory’

September 3, 2009

By Lester Pimentel Sept. 4 (Bloomberg) — Developing-nation junk bonds are gaining at the slowest pace in six months after the lowest-rated companies sold more international debt in seven weeks than during the whole previous year. Companies issued $6.5 billion of below investment-grade debt since July 16 after selling $4.95 billion in the prior 12 months, data compiled by Bloomberg show. The yield premium compared with Treasuries narrowed 71 basis points, or 0.71 percentage point, in August to 11.45 points, the smallest monthly contraction since spreads widened in February, according to JPMorgan Chase & Co. Junk bond sales surged even as the default rate for the securities jumped eight-fold in the past year amid the global financial crisis, according to ING Groep NV. The U.S. jobless rate reached a 26-year high of 9.5 percent in June, curbing demand in the world’s biggest economy for developing-nation exports. Growth in emerging-market economies will slow to 1.5 percent this year from 6 percent in 2008, the International Monetary Fund forecasts. “The market has such a short-term memory,” said Juan Cruz , a corporate debt analyst in New York at Barclays Plc, whose fixed-income research group was voted best in an annual survey by Institutional Investor magazine published Sept. 1. “People are reaching for yield because spreads have come down so much. If we have a major upset with regard to the U.S. recovery, then you will have a global re-pricing of risk.” Javer, Cosan Latin American companies with sub-investment grade ratings — below Standard & Poor’s BBB- and Moody’s Investors Service’s Baa3 — accounted for seven of the 13 such sales in emerging markets in the past seven weeks. There were 53 junk bond sales in the U.S. over that period, totaling $20.1 billion. Mexican homebuilder Servicios Corporativos Javer S.A.P.I. de C.V. in Monterrey sold $180 million of five-year bonds with a 13 percent yield. Cosan SA Industria & Comercio, a Brazilian sugar processor in Piracicaba, agreed to pay about 9.6 percent on $350 million of bonds maturing in 2014. Both are rated BB- by S&P, three levels below investment grade. “The market has been surprisingly open to a wide variety of credits in a way that would have been absolutely shocking six months ago,” said David Bessey , who manages more than $8 billion of emerging-market debt at Prudential Financial in Newark, New Jersey. Six-Month Freeze Developing-nation companies were frozen out of international markets after the global credit crisis prompted investors to shun all but the safest securities. There were no emerging-market junk bond sales in the six months through March 2, according to data compiled by Bloomberg. Yields jumped to as much as 22.8 percentage points over Treasuries in December from 801 points on Sept. 12, the last trading day before Lehman Brothers Holdings Inc. collapsed in the world’s biggest bankruptcy, JPMorgan data show. The gap narrowed on Aug. 7 to 11.35 points, its smallest in 10 months, before widening back out to 11.60 points on Sept. 2. Emerging-market corporate junk bonds returned 4.8 percent in August, the worst monthly performance since they tumbled 7.2 percent in February, according to JPMorgan. Of the $129.8 billion of emerging-market junk debt outstanding during the 12 months through July, 7.23 percent fell into default, up from 0.81 percent in December, according to ING. Sixteen Latin American companies defaulted in 2009’s first half, including Monterrey-based glassmaker Vitro SAB, according to Moody’s. The global default rate for junk-rated companies was 10.7 percent over that time, Moody’s data show. U.S. Junk The pace of defaults in developing nations has eased since April, when missed payments peaked at $2.45 billion, ING said. In August, emerging-market junk bond defaults totaled $540 million. David Spegel , head of emerging-market strategy at ING in New York, said the slowdown in defaults will sustain investor demand, pushing borrowing costs down further. He predicts developing-nation companies will sell another $10 billion in junk bonds by year-end. “There’s a lot of money on the sidelines,” said Cristina Panait , an emerging-market strategist at Los Angeles-based Payden & Rygel, which manages $1 billion of emerging-market debt. “We’re going to see more companies come to market.” The increase followed a pickup in U.S. high-yield debt that began in April. Speculative-grade sales in the U.S. jumped to $50.3 billion in the second quarter from $11.9 billion in the first three months of the year, Bloomberg data show. A total $86.8 billion of U.S. junk-rated debt has been sold this year. ‘Pull Back’ Sappi Ltd., a Johannesburg-based glossy paper maker rated BB by S&P, took advantage of the decline in borrowing costs to tap overseas markets in July. The company sold $300 million of bonds at a 13.375 percent yield and 350 million euros of notes ($497 million) at 13.125 percent. Country Garden Holdings Co., the Foshan, Guangdong-based property developer rated BB- by S&P, sold $300 million of bonds this week to yield 9.42 percentage points more than Treasuries. With junk spreads over Treasuries still 4.37 percentage points above the 7.23-point average for the six years ending in 2007, Bevan Rosenbloom , a corporate debt analyst at RBS Securities Inc., said bond sales will taper off. “There are not many companies that are willing to pay 13 percent to 14 percent,” Rosenbloom said in a telephone interview from Greenwich, Connecticut. “There’s definitely room to pull back.” To contact the reporters on this story: Lester Pimentel at lpimentel1@bloomberg.net

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Cablevision Said to Be Preparing Spinoff of Madison Square Garden Division

July 30, 2009

By Kelly Riddell July 30 (Bloomberg) — Cablevision Systems Corp. is preparing to spin off its Madison Square Garden assets, including the New York Knicks basketball team and Radio City Music Hall, according to a person familiar with the matter.

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Eric Dezenhall: "Corruption Shtick" in the Garden State

July 29, 2009

When last week’s sweeping FBI roundup netted a handful of venal New Jersey politicians and kidney-pilfering, Prada handbag-counterfeiting rabbis, Governor John Corzine let loose with an equally sweeping condemnation: “Any corruption is unacceptable – anywhere, anytime, by anybody. The scale of corruption we’re seeing as this unfolds is simply outrageous and cannot be tolerated.” This kind of blanket judgment may be all right from a moral and civic perspective, but, to borrow from another politician’s recent gaffe, Corzine “acted stupidly” by ignoring the sensitivities of the small-but-needy constituency to which I belong: Novelists, screenwriters and satirists whose livelihoods depend upon New Jersey being faithful to its core tenets of slapstick mendacity. If Manhattan brought us “radical chic,” the Turnpike brought us “corruption shtick.” We writers need material, primarily that which validates archetypes because we prefer to traffic in existing prejudices, not baffle our audience with too much irony and nuance.

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