general

In March of 2005, the Small Business Administration (SBA) Office of Inspector General found large businesses had fraudulently represented themselves as small businesses to illegally receive federal small business contracts. Report 5-16, stated large businesses had committed fraud by making “false certifications,” and “improper certifications.” ( http://www.asbl.com/documents/05-16.pdf ) On Friday, March 12, the General Services Administration (GSA) destroyed all of the information that had been used in that investigation. Since 2003, over a dozen federal investigations have found that Fortune 500 firms have received federal small business contracts. In 2004, the SBA Office of Advocacy found large businesses had received federal small business contracts fraudulently through what they referred to as “vendor deception.” As a result of the deletion of the data it will be significantly more difficult, if not impossible, for federal investigators to conduct investigations into fraud and abuse in federal small business contracting programs. Despite public outcry over the proposed changes, the GSA has eliminated the data under the guise of upgrading the system and making it easier to search. The American Small Business League (ASBL) maintains that the GSA eliminated the data to destroy evidence, which clearly shows that some of the nation’s largest contractors, primarily in the defense and aerospace industry, have committed felony federal contracting fraud. Section 16(d) of the Small Business Act prescribes a penalty of up to 10 years in prison, a $500,000 fine per occurrence and debarment from federal contracting programs for such abuses. In February of 2008, the ASBL sued the SBA for the release of the names of Fortune 500 firms and other large businesses that had received billions of dollars in federal small business contracts. The SBA withheld the information until directed to release it by United States District Judge Marilyn H. Patel. In the court’s ruling Patel stated, “The court finds it curious the SBA’s argument that it does not ‘control’ the very information it needs to carry out its duties and functions.” ( www.asbl.com/documents/26-2.pdf ) At some point in the near future it is going to be clear that the GSA destroyed evidence of hundreds of billions of dollars in fraud. I think Congress and the FBI need to investigate the GSA’s role in this matter. When it does come out that evidence of fraud was destroyed, the GSA officials responsible need to be prosecuted.

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Lloyd Chapman: Obama Administration Destroys Incriminating Contracting Data

Investors Seeking a General Direction in Trading

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Investors Seeking a General Direction in Trading

General Growth Backers Add $3.9 Billion to Boost Brookfield’s Revival Plan

March 9, 2010

By Daniel Taub March 9 (Bloomberg) — General Growth Properties Inc. said its biggest debt and equity holders offered to jointly invest $3.93 billion in the company, bolstering a plan with Brookfield Asset Management Inc. to bring the mall owner out of bankruptcy. The investments from Bruce Berkowitz’s Fairholme Capital Management LLC and William Ackman’s Pershing Square Capital Management LP would allow unsecured creditors to be paid in full with cash, General Growth said in a statement last night. Their funds are in addition to $2.63 billion pledged by Brookfield. The cash payment matches a provision of a competing bid by Simon Property Group Inc. , which has offered to buy its biggest competitor for more than $10 billion and pay all unsecured creditors. Chicago-based General Growth rejected that bid and lined up the Brookfield investment last month with plans to split into two companies — part of a proposal that creditors called risky because of a reliance on debt and equity sales. “If BAM moves ahead with this structure, it removes most if not all uncertainty from their previous bid, and removes any doubt to whether it’s credible or not,” said Jim Sullivan , an analyst at Green Street Advisors in Newport Beach, California. New York-based Pershing Square is General Growth’s biggest equity investor, with a 25 percent economic interest, including 7.5 percent of its shares. Fairholme is the largest creditor with about $1.9 billion of General Growth debt, while Brookfield has about $500 million and Pershing Square owns about $434 million, according to a person familiar with the investments. New Shares Brookfield’s new plan calls for Fairholme and Pershing to buy about 380 million new General Growth shares at $10 each. The investments would combine with 250 million shares Brookfield would buy, $1.5 billion in new debt Brookfield is raising, and a $250 million rights offering for a new company, General Growth Opportunities. Brookfield will backstop $125 million of that sale, and Fairholme and Pershing Square will backstop the rest. Combined, more than $8 billion would be raised. “The proposal from Fairholme and Pershing Square builds on the significant momentum we have created to return GGP to a strong financial foundation for the future,” General Growth Chief Executive Officer Adam Metz said in the statement. “Our goal is to raise capital in the most cost-efficient way to maximize value for all of our stakeholders. We are pleased with the support shown by one of our largest unsecured debt holders and one of our largest equity holders.” The proposal must be approved by General Growth’s board and the bankruptcy court, and better offers may still emerge, the company said. Also, General Growth would have the right to reduce the $3.8 billion investment by $1.9 billion should it be able to raise equity capital on better terms. ‘Significant Contributions’ Ackman stepped down from General Growth’s board as part of the plan, the company said. “Bill Ackman has made significant contributions to GGP during his time on the Board,” Metz said. “We understand his decision to resign to facilitate Pershing Square’s participation in this proposal.” Simon Property spokesman Les Morris declined to comment. Brookfield’s plan gives General Growth equity holders $15 a share, compared with about $9 a share under Simon’s offer. The previous version of Brookfield’s plan called for General Growth to raise as much as $5.8 billion by issuing shares and new debt and through the sale of properties. The new plan “would, if accepted, deliver substantially all of the cash required to fulfill the company’s capital needs in connection with its emergence from bankruptcy and provide unsecured creditors with par plus accrued interest in cash,” General Growth said. Previous Plan Unsecured creditors said in a March 2 bankruptcy-court filing that the previous plan was too risky. Indianapolis-based Simon, in a separate filing, supported the creditors. “While Simon has offered to pay unsecured creditors in full in cash, the consideration to be offered to unsecured creditors under the ‘recapitalization’ is entirely subject to market risk,” David C. Bryan , Eric M. Rosof and Emil A. Kleinhaus, Simon’s attorneys, wrote in the filing. “If General Growth does not raise enough money to pay unsecured creditors, they will be stuck with the equity securities of a highly leveraged company.” David Fick , an analyst with Stifel Nicolaus & Co. in Baltimore, said the new plan is likely an effort to compel Simon to boost its offer. “These guys don’t have the ability to run these assets without the existing GGP management,” he said. “The Pershing Square and Brookfield interests are best aligned with getting a sale done.” General Growth, owner of New York’s South Street Seaport and Boston’s Faneuil Hall, filed the largest real-estate bankruptcy in U.S. history in April after amassing $27 billion in debt making acquisitions. Under its plan with Brookfield, General Growth would split into a company owning shopping malls and another that would own buildings and land with redevelopment possibilities. To contact the reporter on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net .

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General Growth Granted Extension to File Reorganization Plan

March 4, 2010

U.S. Bankruptcy Court Judge Allan Gropper granted General Growth Properties an additional 120-day exclusive window to file its bankruptcy reorganization plan. The four-month extension is less than the 180 days that General Growth requested, but is significantly…

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Why Today’s Lenders Need a Solid Borrower Plan

February 27, 2010

must look at the general and local economies and particularly at local employment trends, which directly correlate to real estate values. We also must consider the massive wave of maturing commercial loans. When this wave begins, borrowers will face a

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Video: Gamco’s Haverty Sees Revival of NBC Under Comcast: Video

February 26, 2010

Feb. 26 (Bloomberg) — Lawrence Haverty, portfolio manager at Gamco Investors Inc. talks with Bloomberg’s Betty Liu about the outlook for General Electric Co.’s NBC Universal unit following a proposed takeover by Comcast Corp. Brian Roberts, chief executive officer of Comcast and Jeff Zucker, chief executive officer of NBC Universal, testfified about the takeover plan before a congressional committee yesterday. (Source: Bloomberg)

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General Motors to Wind Down Hummer After Sale to Sichuan Tengzhong Fails

February 24, 2010

By Bill Koenig Feb. 24 (Bloomberg) — General Motors Co. said Sichuan Tengzhong Heavy Industrial Machines Co. was unable to complete the acquisition of the Hummer brand. GM said it will “begin the orderly wind-down of the Hummer operations.” The information was on GM’s Web site.

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Blackstone Said to Be in Talks to Join Simon Property’s General Growth Bid

February 18, 2010

By Dan Levy and Jonathan Keehner Feb. 18 (Bloomberg) — Blackstone Group LP , the world’s largest private-equity firm, may join Simon Property Group Inc.’s bid to buy bankrupt General Growth Properties Inc., according to two people with knowledge of the discussions. Blackstone is in talks with Simon, the biggest U.S. mall owner, said the people, who declined to be identified because the negotiations are private. Simon offered more than $10 billion to buy General Growth out of bankruptcy in a bid it made public Feb. 16. General Growth Chief Executive Officer Adam Metz said the offer was too low and that Simon’s goals are “not aligned” with those of his Chicago-based company. “Blackstone has a lot of capital to put to work and large investors feel there may be more opportunity at the entity-level as opposed to competing for individual properties,’’ Dan Fasulo , managing director of research firm Real Capital Analytics Inc. in New York, said in an interview. “This is a unique portfolio and there will be other interested parties.’’ Blackstone, based in New York, managed more than $23 billion in real estate assets as of Sept. 30. Its real estate funds had more than $12 billion of equity to invest as of June 30, according to the firm’s Web site. General Growth filed for Chapter 11 protection in the biggest real estate bankruptcy in U.S. history in April after amassing $27 billion in debt making acquisitions. The mall owner may raise $1 billion to $2 billion from public markets to fund its exit from bankruptcy, Reuters reported today, citing a person familiar with the situation that it didn’t identify. Les Morris , a spokesman for Indianapolis-based Simon, and David Keating , a General Growth spokesman, declined to comment on Blackstone’s interest. A Blackstone spokeswoman didn’t immediately return a telephone call seeking comment. To contact the reporters on this story: Dan Levy in San Francisco at Dlevy13@bloomberg.net ; Jonathan Keehner in New York at jkeehner@bloomberg.net

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Simon Properties bids $10b for General Growth

February 17, 2010

Simon Properties bids $10b for General Growth

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Army Humvee: Indiana-Made Vehicle Could Be Phased Out By Military

February 12, 2010

INDIANAPOLIS — Army Staff Sgt. Tom Davis never saw the bomb that destroyed his Humvee as he rounded a corner in Ramadi just a week into his second tour in Iraq in 2006. Davis lost a leg and broke his back and both arms and can no longer walk or work. He’ll never know whether he would have been less severely injured if he’d been in a different vehicle. But his experience, and those of thousands of other Americans wounded in bomb-shredded Humvees in Iraq and Afghanistan in recent years, foretold what now appears to be the official demise of the hulking all-terrain vehicles that came to symbolize the military as much as the rugged Jeeps they replaced. The Army provided no new money for the Humvee in the service’s recent budget proposal. Lt. Col. Jimmie Cummings, an Army spokesman, says the 2,620 vehicles ordered from Mishawaka, Ind.-based AM General will be the last as the Army moves on to newer designs. Unless the decision is reversed, the Humvee will end a remarkable 30-year run that extended beyond the battlefield into popular culture. The High Mobility Multipurpose Wheeled Vehicle, dubbed the Humvee by soldiers, got its start when the Army began looking to replace the latest version of the Jeep in the late 1970s. AM General won a prototype contract in 1981 and the company, a spinoff of Jeep, created the boxy vehicle that was more than seven feet wide and made up in utility for what it lacked in aesthetics. Since 1985, AM General has produced 240,000 Humvees. The vehicle attracted attention during the 1991 Gulf War, but not just in the war zone. Then-actor Arnold Schwarzenegger became so enamored that he persuaded AM General to make a civilian version, and it became a must-have status symbol for car lovers until rising gas prices and the recession sent sales plummeting. “Everybody points at a Hummer,” said Eric Sitterle of Cincinnati, who serves on the board of Hummer Club Inc., the vehicle’s fan club. The group organizes off-road events all over the country. “It’s the most exciting thing you’ve ever been on – at three miles per hour.” Few would use the word “exciting” to describe the military Hummer. It was developed as a light utility vehicle and not intended as an armored car, said James Atwater, assistant curator at the U.S. Army Transportation Museum in Fort Eustis, Va. The lumbering, low-riding vehicles became an easy target for insurgents, who attacked U.S. troops in Iraq and Afghanistan with increasingly powerful improvised explosive devices, or IEDs, hidden along roadsides. A mounting death toll from IEDs – more than 1,700 in Iraq alone as of January 2010 – sparked calls for better protection for soldiers. The Army ordered armored versions of the Humvee, but “there were shortcomings when you added armor to a vehicle like this that’s not designed from the ground up for that,” said Atwater. Davis, of Angola, Ind., said the Humvees were fine during his first deployment in 2003. “We rode in the back of the open Humvee at night because the IEDs weren’t a real threat,” he said. But that began to change. The powerful IED that detonated under the passenger seat of his Humvee in 2006 hurled the vehicle two stories into the air, killing the vehicle’s gunner and badly injuring Davis. “Maybe if I’d been in a Bradley, I wouldn’t have been hurt as much,” said Davis, 32, a father of four. Cummings, the Army spokesman, said the Army is moving to the larger and more heavily armored Mine Resistant Ambush Protected vehicles, or MRAPs. The Army budget released last week still includes $989 million for maintaining the existing Humvee fleet. And Atwater said he thinks the Army will still use Humvees for missions on which it is impractical to drive a massive MRAP, which has huge tires more often seen on trucks in demolition derbies. AM General, the sole manufacturer of the Humvee, says it is talking with the Army and hopes to maintains vehicle production into 2011. Congressional representatives including Indiana Democrat Joe Donnelly, who represents the area, have pledged to try to maintain a military role for the Humvee. The Army purchases more than half the Humvees AM General produces, but the Marine Corps, Air Force and Navy also buy some. AM General also makes the Humvee’s civilian counterpart, the H2 Hummer, as a contract assembler for General Motors. Hummer sales peaked at 71,524 in 2006 but dropped to 9,046 in 2009. GM plans to sell the brand to a Chinese company.

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Salem Communications Announces Two New General Managers

February 8, 2010

CAMARILLO, CA–(Marketwire – February 8, 2010) – Salem Communications ( NASDAQ : SALM ) today announced the appointment of two new general managers. Jeff Reisman has been named General Manager for its Chicago cluster, AM 1160 WYLL and AM 560 WIND. For the past 5 years Jeff has served as General Sales Manager of WIND and in November of 2008 was promoted to Director of Sales for the Chicago cluster.

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Gates Pledges Better Protection, Intelligence for NATO Afghanistan Allies

February 5, 2010

By Viola Gienger Feb. 5 (Bloomberg) — U.S. Defense Secretary Robert Gates promised to provide intelligence and technology such as blast- proof trucks to NATO allies in Afghanistan, to protect their forces better and help maintain public support for the war. The trucks have been the most effective way to prevent casualties, “certainly better than our allies have now,” Gates told reporters in Istanbul today after a meeting of defense ministers from the North Atlantic Treaty Organization and other allies fighting the war in Afghanistan. President Barack Obama is trying to win more support from allies in the Afghan war by helping them counter the threat of roadside bombs that cause most of the casualties. U.S. and NATO leaders are pressing allies to step up their contributions of combat troops, trainers and equipment after Obama authorized 30,000 additional American forces in December. Commitments from allies since then ensures that the top commander in the war, U.S. Army General Stanley McChrystal , “will soon have nearly all the combat forces he asked for,” Gates said. The surge in troop numbers aims to reverse Taliban gains, protect civilians and train Afghan soldiers and police officers to start taking over by July 2011. NATO aims to increase the size of the Afghan army and police, which together now number 195,000, to 243,000 by December and 305,600 by October 2011. The coalition is still short about 1,500 instructors and 2,500 mentors to train Afghan security forces, especially the police. ‘Into the Fight’ “I pressed the alliance to meet the long-standing demand for thousands of more instructors and mentors for the Afghan army and police,” Gates said. “As more Afghans joint their nation’s security forces, we have to be able to train them in order to get them into the fight as quickly as possible.” Some NATO members have stalled on promising more support for the Afghan mission, citing domestic public opposition to the war. NATO plans a conference later this month where countries will make specific pledges on numbers and types of added forces. Gates is due to travel to the Turkish capital, Ankara, later today for meetings with Prime Minister Recep Tayyip Erdogan and defense officials, before visits to Rome and Paris. Gates said the U.S. will provide surplus blast-proof trucks as it draws down troops in Iraq in a withdrawal due to begin this year. To contact the reporter on this story: Viola Gienger in Istanbul at vgienger@bloomberg.net .

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CoStar’s Retail News Roundup: January 17-30, 2010

January 25, 2010

This week in the Retail Roundup, CoStar reports on expansions or new concepts at Bloomingdale’s, BabuSan, Target, and Edible Arrangements; closings, cutbacks, bankruptcy, default, receivership or foreclosure news at General Growth, Movie Gallery and…

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Lloyd Chapman: Obama Administration Obscures Federal Contracting Data

January 24, 2010

The Obama Administration has removed a critical field from the Federal Procurement Data System – Next Generation (FPDS – NG) that has been used by federal contractors to indicate their status as a small or large business. Obama officials at the General Services Administration (GSA) removed the “small business flag” on all future and historical data. Over a dozen federal investigations and numerous investigative stories by organizations such as ABC, CBS and CNN have used the small business flag to uncover billions of dollars in federal small business contracts that were fraudulently diverted to large businesses. (Report 5-15, http://www.asbl.com/documents/05-15.pdf ; ABC, http://www.asbl.com/abc_evening_news.wmv ; CBS, http://www.asbl.com/cbs.wmv ; CNN, http://www.asbl.com/showmedia.php?id=1170 ) The removal of the “small business flag” will make it difficult if not impossible for any future federal investigations to uncover large businesses that have fraudulently claimed to be small businesses prior to 2009. In addition to removing the small business flag, the GSA has forced all firms that obtain federal contracting data from the GSA for dissemination to the public, to sign an agreement, which severely restricts their release of the data. The GSA’s “GETLIST RULES OF BEHAVIOR” warns, “parties failing to sign the agreement and comply with the terms will be denied access to this service.”( http://www.fpds-ng.com/downloads/FPDS-NG%20getList%20Rules%20of%20Behavior.pdf ) In one example, the agreement stipulates a firm would be in violation of the agreement if they create a report that “show[s] socio-economic information but which contains none of the requisite SBA rules of exclusion.” The American Small Business League (ASBL) has challenged the SBA’s “rules of exclusion” since there is no basis in the law for the practice. The Small Business Act stipulates a minimum of 23 percent of the “total value of all prime contract awards for each fiscal year” shall be awarded to small businesses. ( http://www.sba.gov/regulations/sbaact/sbaact.html ) The ASBL believes the SBA has arbitrarily created the “rules of exclusion” to artificially inflate the percentage of federal contracts awarded to small businesses by removing billions of dollars in major prime contracts from their calculations. The GSA’s “GETLIST RULES OF BEHAVIOR” would prevent firms from releasing accurate data on the actual percentage of all federal contracts awarded to small businesses. In the past, information released by private firms on the percentage of all federal contracts awarded to legitimate small businesses has been significantly lower than the percentage claimed by the Small Business Administration.

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Carbon Energy Limited (ASX:CNX) Appoints A General Manager Of Technical Services To Pursue New Coal Resources In Australia And Overseas

January 22, 2010

Carbon Energy Limited (ASX:CNX) Appoints A General Manager Of Technical Services To Pursue New Coal Resources In Australia And Overseas

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Video: Saab Loyalists Seek to Preserve 72-Year-Old Brand: Video

January 7, 2010

Jan. 8 (Bloomberg) — Bloomberg’s John Cookson reports on the history of General Motors Co.’s Saab unit and fans’ efforts to preserve the brand. Formula One tycoon Bernie Ecclestone and partner Genii Capital emerged as a rival to Dutch super-car maker Spyker Cars NV in making last-ditch efforts to buy the 72-year-old Saab brand from GM. (Source: Bloomberg)

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General Motors extends Saab deadline to Jan. 7 (Worcester Telegram …

January 3, 2010

Yahoo! News Search Results for Distressed Commercial Real Estate : General Motors Co.

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What We're Reading ~ 01/01/10 ~ market folly

January 1, 2010

A further look at the General Growth Properties situation [ Distressed Debt Investing] The worst SEC filing footnote of 2009 [footnoted] An interesting banking idea, a call to arms [MoveYourMoney] Hedge fund legend Julian Robertson …

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Advanced Distressed Debt Lesson #4: General Growth Properties …

December 31, 2009

By Hunter. It has been a few months since we had our last advanced distressed debt lesson The rest is here: Advanced Distressed Debt Lesson #4: General Growth Properties (Guru Focus). Read the original: Advanced Distressed Debt Lesson …

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Homes Prices Are NOT ‘Cheap’: Calculated Risk

December 30, 2009

But the real key is to focus on supply and demand, and on the general fundamentals of price-to-income and price-to-rent (not perfect measures). House prices are not currently “cheap”. They just aren’t outrageously expensive nationally anymore.

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Dollar General to Open 600 New Stores in 2010

December 23, 2009

Dollar General Corporation (NYSE: DG) recently reported that for the first nine months of this year, the company reported a 296% increase in net income from 2008 to $63.7 million. Dollar General said a significant increase in customer traffic and average…

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Nelson Davis: Brand America

December 23, 2009

Each year, a number of previously well known commercial brands simply disappear, and as I gaze into the rear view mirror of 2009, it seems that the dead brand list has swelled. We need to make the point that signs and slogans do not make a brand as many young marketing students think. A brand’s true meaning is established by whatever your experience with the product or service has been over a period of time. Steadfast consistency and time are big factors in successful brand building. For example, category leading Coca Cola has been in the marketplace since 1886, and they still successfully offer the same core product: a carbonated beverage in containers that were designed in 1915. Their logo has become the most famous in the world and is among the oldest. Businesses both large and small, and even our country itself, need to apply smart lessons in brand building. Some brands survive by appearing to remain the same while others drive over the cliff by seeming to be static, but it is clear that for significant success, you must stand for something. We can take some lessons from brands that signed off in 2009. Kodachrome film from Kodak made a final colorful story as it died by the digital camera sword and was buried in the vault of memories. Several of the electronic devices in my office came from Circuit City where they were burned out by a tough market and iffy management. Pontiac cars were a muscular brand from my youth when gasoline was under 50 cents per gallon, and in waving bye-bye to that brand, I have fond memories of experiences in my copper colored Firebird. Their niche shrank, but their vision for the brand didn’t grow. And right now the death watch is on for Saab, the Swedish auto maker. They were another niche brand, but they got lost in the bureaucracy when General Motors purchased the company. Without a clearly delineated brand identity and strategy, any brand’s time in the sun will be limited. Just what is America’s brand? Switzerland stands for mountain scenery, a discreet banking system, and a conservative approach to all things. China has spent decades building an identity as the manufacturer to the world. Italy’s brand is having created one of the world’s favorite cuisines, making the wine to wash it down, and throwing out a welcome mat to come sample it all. America reached greatness because a century ago we stood for unbridled opportunity, upward mobility with hard work, and government with a light hand. Today, our national brand managers (politicians) don’t seem to have a clear idea of what the country’s shared brand is, and if they do know, they are keeping it a secret. I’m afraid that like those venerable dead and dying brands I mentioned previously, bad management and short term thinking can harm a country just as badly as it did General Motors. It is ironic that in 1952, Charles Wilson, long time General Motors president, was quoted as saying, “For years I thought what was good for the country was good for General Motors and vice versa.” GM made unrealistic long term promises based on short term strategies and spent itself into bankruptcy – watch out America! When I look in on the ongoing media cyclone blowing around Tiger Woods, I find it to be an interesting example of how public perceptions drive a brand image. Woods has been whacked with a club (maybe even literally by wife Elin) for his admitted dalliances with a host of women while still being married. That appears to have sullied and perhaps even broken his brand. Over in the Holmby Hills, neighborhood here in Los Angeles, we have the contrasting brand of Hugh Hefner, founder, publisher, and the living mascot of Playboy Magazine. Married twice, Hefner has seemingly had intimate contact with enough women to populate a Victoria’s Secret catalog! His brand is pretty clearly defined, and fifty years of success has depended on him being a playboy. Maybe Tiger will take a page from modern marketing 101 and shift his brand from being the #1 family man golfer to being the top playboy golfer. In addition to lowering the age profile among spectators on the PGA Tour, there might be some fresh and lucrative endorsements just waiting for that brand category to be created. Let me get back to looking for similar clarity in a brand identity for our country. I liked it when America could claim the turf of being the world’s leading manufacturing and educational system franchise. We were cranking out ideas, factories, and the people who designed and operated them like we now roll out fast food meals. However, there is one category of American superiority that I never hear U.S. Presidents and officials brag about. We are by a gaping margin the largest manufacturer of weapons on the planet, sort of a “Bombs ‘R Us.” Why won’t we publicly and loudly claim that distinction and unique identity as our 21st century brand? It may not sound as nice as computer maker to the world, but the fact is that crown is ours alone. It is a strange and often corrupt business, but we have a long line of cash customers anxious to sign up for our products. According to Richard Grimmett and the CRS Report for Congress, we make 41% of the arms sales in the world while Russia is a very distant second at 17% . Do we want that to be our current brand identity? I think most Americans would say no. The current wrestling match in Washington over the health care legislation and the fact that all levels of government have gone into the begging business, certainly lets us know that we’ve misplaced the American brand DNA. However, I am hopeful based on my faith in the irrepressible nature of the human spirit and the entrepreneurial thinkers in our midst. I do believe in capitalism and agree with Forbes Magazine’s Steve Forbes that the principles of capitalism will save us. I like reading the history of America when our brand was built around opportunities and not entitlements. As I talk to people from previous generations, I’m impressed that no matter how poor they were, or how tough the circumstances, there was a genuine belief that they could move up by their own resourcefulness and focused hard work. They wanted government to build infrastructure, maintain the rule of law, defend our borders, and then get out of the way. Like all great brands who’ve built long term success, we have to honor the original brand and reject ideas that dissipate or break it. Be sure to visit www.MakingItTV.com

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Video: GM to Close Saab After Ending Sale Talks With Spyker: Video

December 18, 2009

Dec. 18 (Bloomberg) — General Motors Co. said it can’t conclude the sale of its Saab Automobile division to Spyker Cars NV, and plans to wind down the money-losing Swedish brand. The companies encountered “certain issues” that couldn’t be resolved during talks on a sale, Detroit-based GM said today in an e-mailed statement. Bloomberg’s Jeff Green reports. (Source: Bloomberg)

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Swaps Nightmares Become Real for Amateur Financiers: Joe Mysak

December 15, 2009

Commentary by Joe Mysak Dec. 16 (Bloomberg) — A report by Pennsylvania’s auditor general shows what the nation might have looked like if all municipalities had embraced swaps and derivatives as those in the state did. Two examples show the challenges facing citizen financiers across the nation. Some Pennsylvania school board officials thought that a synthetic fixed-interest rate, a term used by bankers selling them on a variable-rate bond coupled with a swap, was just as safe as a regular old fixed-rate bond. “As it turns out,” the report says, “the ‘synthetic fixed-interest rate’ created by the Qualified Interest Rate Management Agreement was only accurate if several variables in the financial markets behaved appropriately.” The auditor general wrote that the use of the swaps on one issue has already cost one school district $10.2 million more than if it had used fixed-rate bonds, and $15.5 million more than a variable-rate structure. Then there’s the matter of termination payments, which so many municipalities and other institutions, in Pennsylvania and elsewhere, are making right now to get out of interest rate swaps. One school district superintendent said a termination payment wasn’t a loss; it was the cost of refunding underlying debt. The auditor general disagreed: Had the district not exposed itself to risk by entering into the swap, it wouldn’t have had to pay $12.3 million to terminate the agreement. How It Works Take that synthetic fixed-interest rate. What the term really means is a fake fixed-interest rate. There’s nothing “fixed” about it. A municipality sells debt whose interest rate changes every week or month. It then enters into a swap with a bank. The municipality pays the bank a fixed rate, and receives a floating rate in return. The idea here is that the two floating rates will cancel each other out, leaving the municipality with a loan that costs even less than borrowing with a traditional long-term bond. So let’s say a municipality sells insured, variable-rate debt at 1 percent. It then enters into a swap with a bank, under which it will pay the bank a fixed 3 percent, and receive a variable payment, now also, let us say, 1 percent. The two variable payments (almost always tied to different indexes) cancel each other, and the municipality pays 3 percent at a time when it might have had to pay 4 percent to borrow in the conventional bond market. The banker on this deal tells the municipal officials that they are “locking in” the long-term rate. “Locking in” was a favorite expression of the bankers putting together these transactions. Disaster Strikes So far, so good. But then let’s say the bond insurance company backing the municipality’s variable-rate debt is downgraded. The variable rate shoots up to 2 percent from 1 percent. Then something else happens. As the financial world collapses, governments cut interest rates to nothing. This is reflected in the floating rate the bank pays the municipality. Now the municipality pays the fixed 3 percent to the bank, and the 2 percent to the holders of its variable-rate bonds, and receives, say, one-quarter of 1 percent from the bank on its swap. The municipality is no longer paying 3 percent to borrow money. It is paying 4.75 percent, and there goes the budget. As the Pennsylvania auditor general pointed out, municipalities rarely budget for financial-instrument catastrophe. This is a simplified version of what happened across the country in 2008 and 2009. ‘Impenetrably Complex’ As for concealing those swap termination payments in new bond issues designed to refund the old deals, this was going on for years. You could never get issuers or their bankers to say that they had lost a bet on a swap, because they never wanted to treat a swap as a discrete thing. It was part of an endless stream of financings. The Pennsylvania Auditor General, Jack Wagner , is no fan of swaps. His report concluded that they are “highly risky and impenetrably complex transactions that, quite simply, amount to gambling with public money.” He asked the state to forbid their use, recommended municipalities avoid them “from this day forward,” and advised those who did use them to terminate the things immediately. Just so nobody would misunderstand, Wagner asked the General Assembly to prohibit the state’s municipalities from using swaps “or any of the specific devices and techniques encompassed therein currently in existence or yet to be invented in connection with the issuance of public debt.” ‘Yet to be Invented’ Got that? I have never seen such language used in a case study involving municipal bonds: “Yet to be invented.” Wagner knows his investment bankers all too well, it seems. In Pennsylvania, the bankers pushing these products were very successful. The result is that local governments and school districts across the state are faced with higher debt service costs or multimillion-dollar termination payments. Public officials, most of them, didn’t quite understand what they were getting into. Not all states allow their municipalities to purchase such financial products. Some states are silent on the matter. Others prohibit their use. In 2003, Pennsylvania passed a law authorizing local governments to engage in swaps. It did so with gusto. Of the 501 school districts in the state, 107 entered into at least one Qualified Interest Rate Management Agreement, the state’s term for swaps and derivatives. Another 86 local governments did the same. Between October 2003 and June 2009, these 193 entities made 626 filings related to $14.9 billion in debt, according to the Wagner report. Popular in Pennsylvania To put this into context, Pennsylvania leads the nation in the use of these instruments, according to one rating company’s estimate. Of the 500 issuers Moody’s Investors Service rates that use swaps and variable-rate debt, Pennsylvania accounts for 22 percent (or 110) of them. California and Texas share second place, at 17 percent, with Tennessee third, at 13 percent. There are lots of lessons to be learned here. The first one is that municipalities are best served by simplicity. Introducing more and more moving parts into bond finance also introduces more risk. The second lesson is even simpler. You can’t educate the changing cast of citizen financiers in charge of the municipal market to the Wharton or MIT level necessary to understand some of the things Wall Street wants to sell to Main Street. ( Joe Mysak is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Joe Mysak in New York at jmysakjr@bloomberg.net

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Video: Caterpillar’s Owens Sees Sales Up 10%-25% in 2010: Video

December 11, 2009

Dec. 11 (Bloomberg) — Jim Owens, chief executive officer of Caterpillar Inc., talks with Bloomberg’s Betty Liu about the company’s sales growth prospects in 2010 and General Motors Co.’s search for a new CEO. Owens also discusses the outlook for emerging markets and his work on President Barack Obama’s Economic Recovery Advisory Board. (Source: Bloomberg)

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U.N. Secretary General appeals to donors to contribute to emergency fund

December 10, 2009

U.N. Secretary General appeals to donors to contribute to emergency fund

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Rivals maneuver for bankrupt mall owner, sources say

December 4, 2009

commercial-property owners, and Simon Property Group, the largest mall owner in the U.S., have been buying the debt of bankrupt General Growth Properties, sources said. Brookfield has accumulated nearly $1 billion in unsecured debt, possibly preparing a

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Video: Comcast Expected to Use NBC to Boost Ad Revenue: Video

December 4, 2009

Dec. 4 (Bloomberg) — NBC has struggled, coming in last place against the other major networks in the race to attract prime-time viewers. So how does Comcast Corp., which agreed to acquire a majority stake in NBC Universal from General Electric Co., plan to leverage the asset? Bloomberg’s Deirdre Bolton reports. (Source: Bloomberg)

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US Army awards $2.2b contract to General Dynamics unit

November 25, 2009

US Army awards $2.2b contract to General Dynamics unit

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Video: Kramer Says NBC Universal Deal Would `Test’ Regulators: Video

November 19, 2009

Nov. 19 (Bloomberg) — Larry Kramer, an adviser to Polaris Venture Partners, talks with Bloomberg’s Betty Liu about plans by General Electric Co. to form a venture with Comcast Corp. that would include the assets of NBC Universal. (Source: Bloomberg)

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UPDATED: Simon Hires Advisers to Consider General Growth Acquisition Possibilities

November 17, 2009

The country’s largest retail REIT, Simon Property Group (NYSE:SPG), is considering a bid for its bankrupt competitor, General Growth Properties. Simon media representative, Les Morris, confirmed for CoStar Group this morning that Simon hired investment…

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Video: Steven Rattner Discusses GM’s Leadership Change: Video

November 13, 2009

Nov. 13 (Bloomberg) — Steven Rattner, former head of the U.S. government’s auto task force, speaks at the Bloomberg Washington Summit about replacing the chief executive officer at General Motors Co. Fritz Henderson was named GM’s CEO in March after the auto task force told former chief Rick Wagoner to step aside. (Source: Bloomberg)

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Video: Dreiling Says Dollar General Plans to Add Stores, Jobs: Video

November 13, 2009

Nov. 13 (Bloomberg) — Richard Dreiling, chief executive officer at Dollar General Corp., talks with Bloomberg’s Suzanne O’Halloran about the company’s plans to open new stores and add jobs. Dollar General began trading today on the New York Stock Exchange. (Source: Bloomberg)

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Trading Outlook for General Growth Properties Inc. Issued by InvestorSoup.com

November 9, 2009

DALLAS, Nov. 9, 2009 (GLOBE NEWSWIRE) — InvestorSoup.com announces an investment report featuring General Growth Properties Inc. (Pink Sheets:GGWPQ). The report includes financial, comparative and investment analyses, and pertinent industry information you need to know to make an educated investment decision.

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GMAC posts smaller net loss in 3rd quarter on improved results in …

November 4, 2009

May 9th, 2009 How could a government-run GMAC reshape car sales ?DETROIT — With the federal government almost certain to take control of GMAC Financial Services, analysts suggest it could become a loan machine that gives General Motors and Chrysler a … GMAC says 1st -qtr loss widens to $675M as credit markets weigh on auto, mortgage businesses. May 6th, 2009 GMAC won’t necessarily follow GM to Chapter 11NEW YORK — GMAC Financial Services said Tuesday that it will not be …

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Jeff Burns Named Director of Kenco Toyota-Lift, a Member of the Kenco Family of Companies

November 3, 2009

CHATTANOOGA, TN–(Marketwire – November 3, 2009) – Kenco Toyota-Lift ( www.kencotoyotalift.com ) major distributor of materials handling vehicles, equipment and parts, has appointed Jeff Burns Director of Kenco Toyota-Lift (KTL). According to Gary Mayfield, Kenco Toyota-Lift President, “Prior to his promotion, Jeff held the position of Northeast Regional Manager of KTL and has been serving as interim General Manager of KTL for the last 6 months.

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Video: GM’s Lutz Sees U.S. Growth Boosting Consumer Confidence: Video

October 29, 2009

Oct. 29 (Bloomberg) — Bob Lutz, vice chairman of General Motors Co., talks with Bloomberg’s Greg Miles about a report today showing the U.S. economy returned to growth in the third quarter. Lutz also discusses today’s race between GM’s Cadillac CTS-V and rival sedans. (Source: Bloomberg)

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Video: GM’s Lutz Sees U.S. Growth Boosting Consumer Confidence: Video

October 29, 2009

Oct. 29 (Bloomberg) — Bob Lutz, vice chairman of General Motors Co., talks with Bloomberg’s Greg Miles about a report today showing the U.S. economy returned to growth in the third quarter. Lutz also discusses today’s race between GM’s Cadillac CTS-V and rival sedans. (Source: Bloomberg)

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Commercial Real Estate lender Capmark files for bankruptcy …

October 25, 2009

Capmark, which was created in March of 2006 through a leveraged buyout of the commercial real estate assets of General Motors’ finance arm GMAC, had said earlier this year that it might file for bankruptcy. …

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Lloyds, L&G seen in real estate talks  (Reuters via Yahoo! UK & Ireland News)

October 23, 2009

The real estate arm of insurer Legal & General is in talks to cherry-pick troubled assets from Lloyds Banking Group Plc in deals that could generate hundreds of millions of pounds for the lender, sources close to discussions told Reuters.

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Lloyds, L&G seen in real estate talks

October 23, 2009

LONDON (Reuters) – The real estate arm of Legal & General (LGEN.L) is in talks to cherry-pick troubled assets from Lloyds Banking Group (LLOY.L) in deals that could generate millions of pounds for

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GE Real Estate Revenue Falls 46% from 2008

October 16, 2009

Revenue from General Electric?s (GE: 15.9604 -4.94%) real estate division for the first nine months of 2009 declined 46% compared to 2008, the company said in its Q309 report. GE Capital Real Estate, which creates real estate debt

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Video: Gov. Stifles GM Car Plans

October 9, 2009

The U.S. government stifles General Motors plans to sell hydrogen-powered electric cars within five years. (Bloomberg News)

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Gates Says Military Advice to Obama on Afghanistan Should Be Kept Private

October 5, 2009

By Tony Capaccio Oct. 5 (Bloomberg) — Defense Secretary Robert Gates said today the U.S. military’s advice to President Barack Obama on Afghanistan should be given privately, an implicit rebuke to the commander who has discussed openly his own views on war strategy. Referring to the debate within the administration over troop levels in Afghanistan, Gates said “it is imperative that all of us taking part in these deliberations, civilians and military alike, provide our best advice to the president, candidly but privately.” Army General Stanley McChrystal , the commander of U.S. and NATO forces in Afghanistan, said in media interviews and a speech last week in London that the Taliban insurgency is gathering strength and the U.S. risks failure without doing more to protect the local population. Obama is examining options for the Afghan war after McChrystal, in a private Aug. 30 assessment, said more international troops would be needed to provide security and train Afghan forces. Gates’s comments today, in a speech opening the annual convention of the Association of the U.S. Army in Washington, echoed criticism from retired Marine Corps General Jim Jones , Obama’s national security adviser. “It is better for military advice to come up through the chain of command,” Jones said in an interview yesterday on CNN. Obama is to have a closed-door meeting later today with Gates and is scheduled to conduct the third of at least five strategy sessions on Afghanistan Oct. 7 with his top foreign policy, national security and military advisers. McChrystal Meeting The president met with McChrystal Oct. 2 aboard Air Force One while Obama was in Copenhagen as part of the unsuccessful U.S. bid to bring the 2016 Olympic Games to Chicago. Gates said today in his speech that decisions Obama will make on the next stage of the Afghanistan campaign “will be among the most important of his presidency, so it is important that we take our time to do all we can to get this right.” “And speaking for the Department of Defense,” Gates said, “once the commander-in-chief makes his decisions, we will salute and execute those decisions faithfully and to the best of our ability.” Gates said violence levels in Iraq are “up some 60 percent from last year, a “worrisome trajectory.” Eight U.S. soldiers were killed over the weekend when militants attacked two outposts in eastern Nuristan province. Senator John McCain of Arizona, the top Republican on the Armed Services Committee, has said McChrystal is seeking 30,000 to 40,000 additional troops, and Republican Senator Lindsey Graham of South Carolina said the situation in the country will worsen without an increase. The president will brief Republican and Democratic congressional leaders tomorrow about his review of U.S. strategy in Afghanistan, White House press secretary Robert Gibbs said. The meeting at the White House is intended to “walk them through where we are in the process,” Gibbs said today. To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net .

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QR2.5bn real estate project deal signed

October 4, 2009

By Santhosh V Perumal Qatar General Insurance and Reinsurance (QGRI), Al-Sari Trading and Ezdan Real Estate are jointly developing a real estate project in Qatar with an investment of QR2.5bn, billed as the largest of its kind announced for the year. A

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Chris Ancliff Named as General Counsel – International, Warner Music Group

September 28, 2009

NEW YORK, NY–(Marketwire – September 28, 2009) – Warner Music Group Corp. ( NYSE : WMG ) today announced that Chris Ancliff, formerly General Counsel, EMI Group, has been appointed General Counsel – International, Warner Music Group. In this newly created position, Ancliff will report to Paul Robinson, WMG’s Executive Vice President and General Counsel, and will have responsibility for all of the Group’s legal and business affairs activities outside the U.S. He will be based in London and will work closely with WMG’s recorded music and music publishing affiliates throughout Europe, Asia and Latin America.

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Jim Gaughan Joins Metron Aviation to Lead Advanced Research and Engineering Services

September 25, 2009

DULLES, VA–(Marketwire – September 25, 2009) – Metron Aviation, a leading provider of advanced research, engineering services and Air Traffic Flow Management (ATFM) solutions, announces the appointment of Jim Gaughan as Senior Vice President and General Manager of Advanced Research and Engineering Services. Mr. Gaughan has over 25 years of experience in Air Traffic Management (ATM), systems engineering, software development and product integration with a long track record of success in managing large, complex programs for the FAA and other customers.

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Iran Urged by UN Powers, Germany to Show Nuclear Arms Development Not Goal

September 23, 2009

By Janine Zacharia Sept. 23 (Bloomberg) — Iran should demonstrate that its nuclear program is aimed at peaceful purposes and isn’t intended for development of a weapon, the five veto-holding nations at the United Nations along with Germany said late today. “We urge Iran to implement all measures required by the IAEA and the Security Council to build confidence,” a statement read by British Foreign Secretary David Miliband said. The International Atomic Energy Agency is a UN organization that inspects Iranian facilities. The U.S., China, France, Russia and U.K., which have permanent seats on the Security Council, and Germany produced the statement on the sidelines of the General Assembly meeting. They also called on Iran to give a “serious response” in talks set for Oct. 1. The meeting in Geneva will be the first opportunity for the group to talk to Iranian officials since the June election there, which drew criticism from the international community because of the crackdown on opposition members. U.S. Secretary of State Hillary Clinton said it was now Iran’s choice on how to proceed. Iran should recognize that it is at “a turning point,” she said. President Barack Obama said earlier today Iran may face new sanctions if it doesn’t halt its nuclear development program, and Russian President Dmitry Medvedev said additional penalties may be “inevitable.” To contact the reporter on this story: Janine Zacharia in New York at jzacharia@bloomberg.net

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Obama Calls for New Era of World Cooperation in UN General Assembly Speech

September 23, 2009

By Nicholas Johnston and Kate Andersen Brower Sept. 23 (Bloomberg) — President Barack Obama, in his first address to the United Nations General Assembly, sought to set a new tone for U.S. relations with other countries and called for a new era of cooperation. “I am well aware of the expectations that accompany my presidency around the world,” Obama said. “These expectations are not about me, rather they are rooted I believe in the discontent of the status quo.” He said while the U.S. is taking a new direction, other countries must give up their “almost reflexive anti- Americanism” that has served as an excuse for inaction on issues from terrorism to fighting poverty. Obama’s speech to the General Assembly today comes amid a series of meetings with world leaders, including Chinese President Hu Jintao yesterday, and Japanese Prime Minister Yukio Hatoyama and Russian President Dmitry Medvedev today. To contact the reporter on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net

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Obama to Ask UN for Global Cooperation to Tackle Terror, Poverty, Climate

September 23, 2009

By Nicholas Johnston Sept. 23 (Bloomberg) — President Barack Obama , in his first address to the United Nations General Assembly, will urge global cooperation on issues from terrorism to climate change. In his remarks later today at UN headquarters in New York, Obama will call on all nations to take action again terrorism, genocide, climate change, poverty and the spread of nuclear weapons, according to excerpts released by the White House. “This cannot be solely America’s endeavor,” Obama is to tell world leaders gathered for the international body’s annual meeting. “Now is the time for all of us to take our share of responsibility for a global response to global challenges.” Obama has already pressed for international efforts to fight climate change, telling a UN conference yesterday that both rich nations and emerging economies must “do what we can when we can” to promote economic growth without damaging the planet. Today, he will expand his call for nations to work with the U.S. on other crises facing the world. “Those who used to chastise America for acting alone in the world cannot now stand by and wait for America to solve the world’s problems alone,” Obama will say. “We have sought, in word and deed, a new era of engagement with the world.” He also echoed the theme of global cooperation last night when he told an audience of government leaders, executives and celebrities at the Clinton Global Initiative that the U.S. is striving to build a “new spirit of global partnership.” The forum, founded by former President Bill Clinton , secured $8 billion in commitments last year to fight global poverty and disease. Lofty Goals “You can’t just preach lofty goals and wait for somebody to act,” Obama said last night. ’’You have to step up. You have to serve.’’ Obama’s speech to the General Assembly today comes in the midst of a series of meetings with world leaders, including Chinese President Hu Jintao yesterday, and Japanese Prime Minister Yukio Hatoyama and Russian President Dmitry Medvedev today. In today’s remarks, Obama will warn of the consequences of failing to take action, including the spread of nuclear weapons and terrorism, “melting ice caps and ravaged populations,” and “persistent poverty and pandemic disease.” “I say this not to sow fear, but to state a fact: the magnitude of our challenges has yet to be met by the measure of our action,” he is to say. After this morning’s speech, Obama will participate in a wreath laying at the UN for staff members killed in the line of duty and then attend a lunch hosted by Secretary General Ban Ki- moon. This evening, the president and First Lady Michelle Obama will host a reception for world leaders at the Metropolitan Museum of Art. To contact the reporter on this story: Nicholas Johnston in New York at njohnston3@bloomberg.net .

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