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Major Political Party Advocates More Corporate Money In Politics

January 11, 2012

WASHINGTON — In the latest GOP effort to accord corporations the same rights as people, the Republican National Committee wants to strike down the century-old ban against direct corporate contributions to candidates and party committees. The ban, part of a 1907 anti-corruption law that helped curb the influence of corporate robber barons, is one of the last bulwarks of campaign finance law left after the Supreme Court’s Citizens United decision two years ago. Despite the explosion of so-called independent super PACs, which can collect unlimited contributions, corporations remain banned from making contributions directly to candidates or party committees. The RNC outlined its position in an amicus brief filed on Tuesday with the Fourth Circuit Court of Appeals — ironically in support of two Virginia Democrats who were charged with reimbursing donors to Hillary Clinton. The RNC has a lot at stake here institutionally, as well as philosophically. Part of its argument to the court was that the current state of affairs isn’t fair to party committees like itself. The brief complains that the corporate ban “artificially disadvantages political party and candidate committees by forcing them to rely on aggregating small-dollar donations from individuals while allowing other political actors, such as independent-expenditure-only political action committees, to receive unlimited corporate donations.” To make its case, the brief cites two Huffington Post articles in which reporter Paul Blumenthal described how money is shifting away from parties and others, creating a two-tiered campaign finance system where “candidates and parties governed by tight regulations and shadow groups that operate with little to no rules.” Advocates of reducing corporate influence in politics were stunned by the RNC’s boldness. “It’s remarkable that the Republican Party is publicly taking the position that there’s not enough corporate money in politics,” said Marge Baker, executive vice president of the liberal group People for the American Way. “It’s amazing.” Fred Wertheimer, president of the reform group Democracy 21, said the ban is one of “the central anti-corruption provisions in federal law” and that without it, corporations could easily funnel $1 million or more to party committees per election cycle. Although corporations would still be subject to the same donation limits as people, that would still allow them to give $30,000 per calendar year to each of the three national party commitees (actually six total, if you include both parties); and $10,000 per calendar year for each of the 50 state party committees — not to mention up to $2,500 per candidate, per election. Unlike people, corporations can spring up with a stroke of the pen, so conceivably big donors could simply create any number of corporations to contribute more than $1 million each a year. The RNC is far from alone in its position. Just last week, the Wall Street Journal approvingly quoted Republican presidential candidate Mitt Romney as saying, “We really ought to let campaigns raise the money they need and just get rid of these super PACs.” * * * * * Dan Froomkin is senior Washington correspondent for The Huffington Post. You can send him an email , bookmark his page ; subscribe to his RSS feed , follow him on Twitter or on Facebook , and/or become a fan and get email alerts when he writes.

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David Macaray: Watchdogs and Underdogs

January 10, 2012

By now most people are aware that while Congress was in recess, President Obama, on January 4, appointed former Ohio Attorney General Richard Cordray to head the Consumer Financial Protection Bureau. The move drew considerable attention, with consumer advocates expressing their delight, and business groups predicting the demise of the free enterprise system. Then, only hours after Cordray, Obama recess-appointed three people to the NLRB (National Labor Relations Board), giving it a full complement of five members for the first time in almost a year. The new faces are Sandra Block, Richard Griffin and Terrence Flynn. They join current members Mark Pearce and Brian Hayes. Block, Griffin and Pearce are Democrats; Flynn and Hayes are Republicans. Despite the hype surrounding these appointments, it’s hard to know how much praise Obama deserves. After all, appointing qualified people to government posts is what a president is supposed to do. Why would it require kudos? And as to the “audacity quotient” of recess-appointments, that’s also been a bit inflated. Consider: Bill Clinton made 139 such appointments; George W. Bush made 171; and in 1903, Teddy Roosevelt made 160 of them… all in the same day. On the other hand — given that Republicans despise regulatory agencies, given that they’ve spent 75 years beating up on the NLRB, given that they’ve purposely kept it understaffed (a labor board with two members isn’t a quorum, and doesn’t have the authority to issue rulings), and given that, even with a 53-47 senate majority poised to approve Obama’s nominees, they’d promised to filibuster — Obama’s moves were, in fact, quite bold. Not only were they bold, they were way overdue. Credit organized labor for keeping the president’s feet to the fire. That reported $400 million they donated to the Democrats in 2008 finally bought them something. While Republicans regard the NLRB as “interfering with” and “restricting” business, the board views itself as providing the underdog with basic safeguards — safeguards, incidentally, that are written into our federal labor laws. The board merely enforces those laws. When people get fired for engaging in union activism, or when a workforce requests a union election but is denied, or when management negotiators refuse to bargain in good faith, it’s the NLRB that comes to the rescue. Although congressional Republicans are already threatening legal action and issuing hysterical statements, there’s not much they can do about it, which means the NLRB, at least through 2012, is going to have a fair amount of latitude in addressing workers’ concerns. One of those concerns will be union membership drives. According to surveys, upwards of 60 percent of American workers have expressed an interest in joining a union, attracted by across-the-board advantages in wages, benefits and working conditions. But national membership stands at barely over 12 percent. While part of that differential can be written off to the unreliability of surveys, the larger part is clearly due to management’s ability to keep the union out through the use of its two favorite weapons: stalling and intimidation. There are hundreds of documented cases of companies illegally attempting to dissuade workers from joining a union. They threaten, they lie, they cajole, they bully, they bribe, they spy, they hire professional goons to assist them. They also use legal tactics. I knew a retired woman who, on a whim, decided to take a part-time job at Walmart to augment her pension. She was astonished by the level of anti-union propaganda. As a new employee, she was immediately shown a 45-minute movie on the evils of labor unions. Consider the FDA (Food and Drug Administration, established way back in 1906). One can only imagine the extent of marketplace mischief if the FDA weren’t there to serve as watchdog. The same applies to the NLRB. Indeed, without the labor board, there would be no way to ensure workplace justice. Employees would be at the mercy of “management tyranny.” A healthy and active NLRB is not a luxury; it’s a necessity. David Macaray, a Los Angeles playwright and author (“It’s Never Been Easy: Essays on Modern Labor”), was a former union rep. He can be reached at dmacaray@earthlink.net

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Report: Fannie Mae CEO Out

January 10, 2012

WASHINGTON — The executive who was appointed to lead mortgage giant Fannie Mae in 2009 after the federal government seized the company plans to step down as its CEO. Michael J. Williams announced Tuesday he will continue as CEO and as a director until a successor is found. “I decided the time is right to turn over the reins to a new leader,” he said in a statement. Williams, 53, has been a Fannie employee since 1991. The government rescued Fannie Mae and Freddie Mac in September 2008 after the two mortgage firms absorbed huge losses on risky loans that threatened to topple them. Since then, a government regulator has controlled the two firms’ financial decisions. Pressure has been building for the government to eliminate or transform the two companies and reduce taxpayers’ exposure to further losses. So far, Fannie and Freddie have cost taxpayers more than $150 billion – the largest bailout of the financial crisis. They could end up costing up to $259 billion, according to their government regulator, the Federal Housing Finance Administration, or FHFA. Williams oversaw the restructuring of Fannie’s foreclosure-prevention efforts and managed the troubled firm’s reorganization and transition to conservatorship. Freddie’s CEO, Charles E. “Ed” Haldeman Jr., announced in October that he would resign within the next year. The departures amount to the biggest leadership shake-up for the agencies since their takeover. Williams, Haldeman and other Fannie and Freddie executives faced intense questioning on Capitol Hill in November over tens of millions of bonuses and compensation they received since 2009. Twelve executives at the firms received roughly $35.4 million in total salary and bonuses in 2009 and 2010. Williams earned about $9.3 million for the two years. Members of Congress are seeking to end those bonuses and align salaries with other federal employees who earn much less. In December, the Securities and Exchange Commission brought civil fraud charges against six former executives at the two firms, including former Fannie CEO Daniel Mudd and former Freddie CEO Richard Syron. The executives were accused of understating the volume of high-risk subprime mortgages Fannie and Freddie held just before the housing bubble burst. No current Fannie or Freddie employees were charged or implicated. Williams’ resignation might also intensify calls for the naming of a new director of FHFA. Edward DeMarco has served as the oversight agency’s acting director since September 2009. But some lawmakers complain that DeMarco hasn’t done enough to address rising foreclosures or to ease industry lending standards that critics call too restrictive. The Obama administration nominated Joseph Smith, a North Carolina banking commissioner, to succeed DeMarco in November 2010. But Smith’s confirmation was stalled by Senate Republicans, and he withdrew from consideration a year ago. Washington-based Fannie and McLean, Va.-based Freddie buy loans from lenders, package them into bonds with a guarantee against default and sell those bonds to investors. Together, the companies own or guarantee about half of all U.S. home mortgages – about 31 million home loans – and nearly all new mortgages. Fannie was created in 1938 in the aftermath of the Great Depression. It was privatized 30 years later to limit budget deficits during the Vietnam War. In 1970, the government formed Freddie.

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Luxury Rickshaw: World’s Tiniest Four Wheeler Car?

January 10, 2012

Over the years a slew of vehicles have fought for the title of “world’s smallest car.” The latest entrant on the scene is the Bajaj Auto’s RE60 , a new vehicle that fits four people and sports a 200cc, water-cooled, fuel-injected engine mounted in the rear. First unveiled at New Dehli’s Auto Expo 2012 , the company says the vehicle isn’t actually a car, but a four-wheeler designed to compete with three-wheel “autorickshaws,” the Economic Times notes. Logging an impressive 82 miles on each gallon of gas, the Indian-made compact urban passenger vehicle will save money on fuel and help eliminate eco-guilt thanks to its minimal carbon emissions of just 37.28 grams per mile , explains Zimbio. CNN takes a moment to compare what AutoDaily calls a “luxury rickshaw,” with America’s largest passenger vehicle, the decked out Cadillac Escalade. Weighing just 881 pounds, the RE60 is expected to cost 40 times less than the 7,100 lb Escalade . Depending on how you classify it, the RE60 now rivals the Nano, produced by India’s Tata Motors, for the title for world’s smallest production automobile.

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Too Little, Too Late: Microsoft’s Ballmer Strains for Consumer Relevance

January 10, 2012

LAS VEGAS — Listening to Microsoft Chief Executive Steve Ballmer last night hyperventilate about the company’s supposedly stupendous future as purveyor of the planet’s life-altering experiences was not unlike watching a heavyset, middle-aged guy strutting through a pulsating club, telling all the slinky, 20-something women how hot he looks in a Speedo. Ballmer was giving the keynote address at the Consumer Electronics Show, the ultimate showcase for gadgetry. The people crammed inside a giant ballroom at the Venetian Hotel took in the spectacle of Ballmer’s famously cornball cheerleading and Tweeted away and captured video clips — most of them using iPhones and various Android models. You could find plenty of Microsoft products in the crowd, yes, but predominantly on the PCs schlepped around by people whose companies issue them as a matter of policy. For more than a decade, Microsoft has been vowing to expand from its preserve in the business world — the supplier of products that scream work — into a hipper consumer company that produces things people might actually be inclined to buy with their own money. As HuffPost’s technology editor Bianca Bosker has pointed out on more than one occasion, this transformation has gone approximately as well as British Petroleum’s labors to burnish its image as a lover of handicapped dolphins. The very fact that Ballmer was, for the last time, giving the keynote at a show whose name is about consumer electronics served as reminder of this mostly failed campaign. To be fair, Microsoft has had some notable successes in this realm. The Xbox has become the gaming platform of choice. A demo last night of new voice-controlled features going into that gizmo drew a healthy share of oohs, as well as vows to go home and get one for the children (even as one had to worry that many of those children — now served up voice control in place of text — are destined to be illiterate.) The latest version of Microsoft’s operating system, Windows 8, due out next month, does indeed look robust and interesting, turning the old home-screen into a buffet of apps that can be managed by pinching and zooming. “I think people will be kind of impressed about how it kind of lights everything up,” Ballmer said, in what for him passes as understatement. The new Windows smartphones seemed like an interesting take on that product, bringing together all the streams of communication — text messages, Facebook chats, e-mails, Twitter updates — into one central repository, sorted out by the people with whom one is communicating. Yet as Ballmer displayed these various wares on two giant screens during his uncomfortably-contrived tete a tete with Ryan Seacrest — the television host whose saccharine ubiquity now rivals that of non-dairy creamer — the scent of desperation hung thick. These are late days to be making a serious play for the smartphone, a device that is in many ways already a commodity. New products may not be enough in an era in which technology is increasingly about the ecosystem of services that surround products — the Kindle as conduit for Amazon’s electronic books, the iPad as platform for countless apps, Google and its full suite of cloud-based software offerings. Among the tech cognoscenti, Microsoft’s very name conjures up the opposite of innovation, with memories of its heavy-handed efforts to use its monopoly hold on the desktop in the 1990s as a portal to similar dominance on the Web. In many minds, Microsoft is seen as a company whose success has less to do with cool products than its unfair wielding of market share to stifle competition. That’s a hard residue to shake. Ballmer has long been seen as the salesman who is trying so hard you can see him sweat. As he called Seacrest “dude,” and indulged every fifty-cent adjective in the vernacular of hype — “stunning,” “amazing” and “exciting as heck” — he presented himself as a guy who knows he probably can’t close the deal, but is certainly not going to be accused of making less than maximum effort. “What’s next?,” Seacrest asked Ballmer as the event mercifully ended. “Windows 8!” Ballmer hollered, before repeating it twice for good measure. The lights came back on along with the music. The crowd filtered into the Las Vegas night, as people switched on their iPhones and their Droids to set up dinner and drinks.

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Intel Readies Biggest Ad Blitz In Nearly A Decade

January 10, 2012

LAS VEGAS — Intel Corp. says it is betting big on its “ultrabook” concept with its largest advertising campaign since 2003. The campaign to push the new thinner and lighter notebook computers will start in April, says Kevin Sellers, Intel’s head of advertising. Sellers didn’t say how much Intel Corp. would spend on the ads and other initiatives. He spoke to the press on Monday, ahead of the opening of the International Consumer Electronics Show in Las Vegas. Intel hasn’t planned a launch this big since the company introduced Centrino chips for Wi-fi-capable laptops eight years ago. Though it chiefly makes processors, Intel often prods PC makers to build their products in certain ways. The “ultrabooks” are similar to Apple’s MacBook Air, which launched three years ago. PC makers have responded well to the ultrabook idea, and Intel says there are 75 models on the way. The Consumer Electronics Association expects 30 to 50 ultrabook models to be on display at CES. More news is expected out of Intel on Tuesday, when CEO Paul Otellini speaks at the show. Intel watchers expect that the news will have something to do with the company’s long-standing ambition to get its chips into smartphones.

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Suze Orman Launches Pre-Paid Debit Card, Talks Life Lessons

January 10, 2012

(NEW YORK) – If you thought personal finance expert Suze Orman just wanted you to change your money behavior, think again. The 60-year-old author, CNBC television host and now financial services entrepreneur stopped by AOL Studios here on January 9 for an interview with Arianna Huffington. Orman unveiled a new pre-paid debit card that she hopes will turn the credit-scoring system upside down. “My job is to educate American and give them the tools they need so they finally have a highway out of poverty,” she said. This week Orman launched The Approved Card , a purple-hued, pre-paid debit card aimed at middle-class folks who want to steer clear of credit cards. They allow someone to load money on the card and then use it for every day transactions. I have reported on these products since their launch more than a decade ago. Initially a solution for the unbanked, the industry began loading the cards with multiple hidden fees, preying on the mostly poor Americans who relied on them. At $3 to obtain the card and $3 a month in fees, The Approved Card rivals the industry’s cheapest product, the Walmart Moneycard. There is no checking account attached to the card, and users must agree to have at least $20/month direct-deposited onto the card. If someone tries to overdraw it, the transaction is denied. Users get a daily email telling them how much they have left to spend. But the most unique feature of The Approved Card is the ability to help consumers build a credit score: TransUnion has agreed to collect aggregate spending data from the cards for a period of 18 to 24 months to test if the system is feasible, Orman said. The card also offers credit monitoring and free assistance with identity theft. “Middle-class Americans…don’t want a credit card in their wallet because don’t want ability to get themselves into trouble again,” she said. “The problem with that is if you spend money on debit or cash, it doesn’t report to the credit bureaus so it doesn’t give you a FICO score.” People without this key score pay the highest interest rates on consumer loans, such as mortgages and auto loans, because lenders have no way to gauge the lending risk. It can also affect their ability to rent an apartment and get a job, as many employers now check credit scores as part of the hiring process. “I wanted to create (a scenario) where people who pay with debit and cash are rewarded,” Orman said. She has invested $1 million of her personal fortune in building the product, and shrugs off ethical concerns raised by observers who suggest that in giving advice to viewers on CNBC, she could tout her for-profit product as a potential solution. “You will have to educate yourselves on prepaid cards now — I’m not going to be talking about (them),” she said. Along with her new card, Orman unveiled the life lessons that permeate her mission. She talked about growing up in a low-income family on the south side of Chicago, in a neighborhood that changed quickly amid white flight. “Every single white person moved out except us; I grew up as a minority and it taught me how to be very, very tough and that I had to work for what I needed to get,” she said. Orman had a speech impediment and trouble in school, where her teacher arranged the seats by reading scores. “They told me I was dumb, so why even try?” she recalled thinking. Throughout grammar school and high school, Orman worked in her father’s deli, and took six years to finish at the University of Illinois at Urbana-Champaign, where “I never got a grade above a C,” she said. She moved to Berkeley and landed a job as a waitress at the Buttercup Bakery making $400 a month. Seven years later, she called her parents asking to borrow $20,000 to open her own diner. They had nothing to offer, and word got out among her loyal customers that she needed backers. They collected $50,000 and offered Orman a 10-year, no-interest loan. She put the funds in a money market account at Merrill Lynch, where they disappeared. “I had a crooked broker,” she said, and figuring she could do better, applied for a job. “I had on white cowboy boots with white Sassoon pants and a blue silk shirt. They didn’t know what to do with me, and before I knew it I was in the manager’s office.” The manager said he would hire her to fill his affirmative action quota, she recalled, but vowed to fire her in six months. As Orman learned the business, she realized what her broker had done with the $50,000 was illegal, and with the encouragement of a friend in the office, sued. By the time the case came to court Orman was the sixth top-producing broker; she won and was able to repay her restaurant backers, with 18% interest. “That’s why I’m the consumer advocate you see today — because one person helped me fight for myself and I’ll never forget that as long as I live,” she said. Orman also revealed her biggest financial mistakes, including a $250,000 foray into credit card debt. She once withdrew money from her 401(k) plan to buy a Cartier watch to impress a wealthy date. “This is how insecure I was,” she said. “I thought other people defined me. I didn’t understand who Suze was — a kid from the south side whose friends abandoned her and went to the north side, and whose parents never had any money. I had no reason to feel I could be more or have more, so when I met people who had things, I thought they would never like me unless I pretended to be like them.” In 1998, when Orman’s book “Nine Steps To Financial Freedom” hit number one on The New York Times best seller list, she gave away the Cartier watch and replaced it with a $200 Michael Kors watch she liked. “You get to the point where money is no longer the goal,” says Orman. “It’s to transform the world and make it a better place for everybody.”

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Detroit Dumps Light Rail Plan For Streetcar

January 10, 2012

Detroit’s proposed light rail system — back from the grave more times than a character on As The World Turns — would be revived as a shorter, 3.4-mile line that doesn’t come close to the city’s suburbs, Michigan Gov. Rick Snyder, Detroit Mayor Dave Bing, and U.S. Transportation Secretary Ray LaHood said on Friday. Instead of a 9.3-mile, $550 million line that would have reached to the Motor City’s 8 Mile Road, the new project is supposed to cost $125 million and terminate in the New Center neighborhood. M1 Rail, a group of private investors and philanthropies that has served as the driving force behind the project, has 90 days to come up with a plan. M1 says it already has $80 million committed. Beyond its shortened length, however, the newest iteration of Detroit light rail comes with a catch: it won’t, technically speaking, be light rail. “I would call it a streetcar system,” M1 executive Matt Cullen told The Huffington Post. Instead of light rail’s dedicated trackbed, streetcars have to vie with traffic to get riders where they’re going. The streetcars will be on a track, but they’ll also be on a roadway. “It’s initially going to be a circulator and a connector to our Amtrak station,” Cullen said. “It won’t be a commuter system for people out in the suburbs.” The streetcar will look much like M1′s original rail proposal , from 2007, that was intended mostly to foster development along Woodward Avenue and not to help suburban commuters get to jobs in the city. That proposal was expanded after pressure from politicians in the city and in the suburbs. Even if a streetcar system is built, commuters in the suburbs will have to rely on a bus rapid transit system , backed by Gov. Snyder as a replacement for the longer light rail corridor, to get into the city. Cullen said he believes it’s possible to extend the streetcar system, “if, over time, density and demand warrants an extension.” In the meantime, he said, the bus rapid transit and streetcar systems “can be designed to operate very synergistically.” But Megan Owens, executive director of transit advocacy group Transportation Riders United , said she was skeptical that a curbside-running train without a dedicated right of way could ever be extended to the suburbs. “We need to make sure that whatever’s built first is built in a way that can be expanded,” Owens said. “And if it’s something that’s going to take 20 minutes just to go three miles, that’s not something that can work as well as regional rapid transit. “The outpouring of support for light rail does give me some hope,” Owens said, pointing to the region’s members of Congress, instrumental in reviving the latest version of light rail. “I just hope we don’t have to start from scratch with both this regional [bus rapid transit] and streetcar.” LaHood told the Detroit News on Monday that M1′s backers would need to apply for federal funding support under the Transportation Investment Generating Economic Recovery grant program, which previously awarded $25 million for the light rail line. LaHood suggested the administration would be receptive to the new applicatiuon. The catch is whether M1 can satisfy critics like Owens who are concerned a streetcar doesn’t provide enough benefits to the region to be worthwhile. “We will be in the room working with them,” LaHood told the News. “We’re just about over the goal line on the light rail — but it has to be part of a regional focus.”

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Amazon Reaches Another Deal On Online Sales Tax

January 10, 2012

INDIANAPOLIS — Amazon.com will begin collecting Indiana’s 7 percent sales tax from customers in the state in 2014, under an agreement announced Monday. The deal with the online sales company could lead to Indiana bringing in at least $20 million more in annual sales tax revenue. Gov. Mitch Daniels’ office said Indiana will become the fourth state with such a tax collection agreement with Seattle-based Amazon. It follows a lawsuit by Indianapolis-based shopping mall owner Simon Property Group against the state over the issue and a lobbying push on state legislators by traditional retailers to end what they call an unfair price advantage for online retailers. The deal doesn’t include any other companies, but Daniels said the state is asking Congress to require all online businesses to collect state sales taxes. Daniels said the status quo of traditional businesses charging sales taxes while few online retailers do so is not fair. Paul Misener, Amazon’s vice president for global public policy, said at a news conference in the governor’s office that the company supported federal legislation requiring all sales tax collections by all online companies. “It’s the only way to level the playing field for all sellers,” Misener said. “It’s the only way for Indiana to obtain all the sales tax revenue that is already owed.” State officials agree that the Amazon agreement will mean the collection only of a portion of the sales tax revenue that Indiana should receive. The State Budget Agency estimates uncollected online sales taxes at $75 million a year, while Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, said it could be as much as $250 million. The state’s current policy dates to a 2007 deal with Amazon for it to open its first warehouse in Indiana with the promise that state lawmakers wouldn’t push for online sales tax collection. Amazon now has three distribution centers open in central Indiana and announced plans last summer for a fourth, but hasn’t given details on how many workers it has. Kenley has testified before a congressional committee in support of a federal law covering online sales tax collections. He said many companies other than Amazon don’t want to give up the competitive advantage in pricing from not collecting the taxes. “This step forward continues to put more pressure on them,” Kenley said. Simon Property Group said it was dropping its lawsuit against the state and that Indiana’s deal with Amazon will improve the competitive fairness between traditional and online retailers. The Indiana Retail Council, which last month launched a legislative lobbying effort on the issue, didn’t immediately respond to a request for comment. Indiana and Amazon officials said the 2014 start of online sales tax collections was meant to give time for Congress to act on the federal proposal. “We want to get it done this year, we’re hopeful,” Misener said. “But we may need 2013 to accomplish it.”

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For Baby Boomer Geri Brin, Fabulous Begins At 50

January 10, 2012

Geri Brin is an Internet entrepreneur who’s confident and chic, with a loyal fan base, an inner circle of hip friends and big plans for her growing digital empire. Not bad for a 64-year-old baby boomer. After a lengthy career in magazine publishing at Fairchild Publications, Brin set out on her own at 50 and started a custom print and publishing business, luring clients like American Express, Citigroup and Liz Claiborne. A go-getter, she says she “loved wearing all the hats: editor, marketing person and publisher.” As she took more control of her life, she realized that she wanted to do something special for her “vibrant” generation. In less than two years, Brin has created a lively, unique online community at FabOverFifty.com, where she inspires boomer women to not only use what they’ve got, but love it, too. At 50 years old, you did something most adults fear — you started over. What motivated you to create your own business? I wanted to do something for women in my demographic, because it’s such an incredible group of women. The women in my generation have done fabulous things and now the world is waking up and realizing we are what we’ve always been. Marketing people, companies are starting to realize how vibrant we are. I spoke to people in the publishing industry and realized that a book or magazine about women in my generation was not the way to go — they said, “Why not do a website?” Here I was, 61 years old, and I was going to start a website. But in fact, if you do anything creative and learn how to research, you can do almost anything in communications, so starting a website was based on the same principles as starting a magazine. I wanted FabOverFifty to have more depth than just a fashion and beauty site. The idea is to celebrate women of my generation, not by patting us on the back but by showing to each other and to the rest of the world what we’ve accomplished and what we’ve yet to accomplish. We find that it’s resonating with women. We cover beauty, fashion and health, but not from the angle of “senior.” When anyone uses the word “senior,” it makes me nauseous. Who are the “founders” of FabOverFifty? There seems to be quite a group of successful women with that title. We call them “founders,” which is a slight misnomer. When I founded the site, I connected with the owners of 25 really cool apparel stores and specialty shops across the country in major cities like Miami, Chicago, L.A., because I knew that the women who shopped in those stores would be unique. I wanted to find women who didn’t necessarily have a lot of money, but who had a lot of taste and accomplishments. Those women — I think I interviewed 80 to 90 when I launched the site — are the original group of founders and they are from all fields, and we keep adding to them. The community is anyone who joins the site, but with the founding people, we do interviews and features on them. What is the most unique feature of the website? I think the section called “Ask an FOF.” We have over 1,000 women across the country that we call “gurus,” and these women are experts in certain categories — they have a passion for different subjects. So you can ask a question about anything, from gardening to health. Let’s say you’re going to your daughter’s wedding and want to know what to wear on a Saturday afternoon ceremony — you plug in your question, and that question gets sent out to all the gurus listed as style experts, and they will answer you. Some women get 45 answers, some get three answers, and you generally get answers pretty quickly. It’s women recommending to other women. I you consider the concept of Angie’s List, where people write reviews, this is really similar, with women in your age group who have passions for different subjects giving advice and recommendations. We find that that section is doing really well and getting a lot of traction, and nobody else has that on their site. Your son Colby played an integral part in launching FabOverFifty. How did he contribute to this women-centered site? In the beginning, Colby helped launch the site by feeding it with content and doing all the PR work, and he’s still involved with it in terms of content and stories. He’ll do interviews and health stories. He’s now in the sports marketing business, but I would call this his satellite job. He’s 32, and he’s worked with me for about seven of the 10 years since he graduated from college. He still spends about two days per week with us working on projects for the website. I love working with him, and he’s a very smart, intuitive guy. I’ve helped him learn things about marketing and he teaches me. That’s what I love about young, smart, passionate people, because you never do stop learning. The idea for your spinoff dating blog — “Date My Single Kid” — really made me laugh. It’s every mom’s dream and every kid’s nightmare, but we’ve all been there. Where did the idea come from? That has truly been a little journey for us. We launched that over a year ago, in July 2010, Every time my editor, Lena, and Colby, who are both 32, transcribed an interview I had done for the site, inevitably part of the transcription would be me and the woman discussing our single kids. “How old is your daughter? Oh, she’s 23! And what does she do? Is she married? Does she have a boyfriend?” My son would laugh because he knows that’s how I am, and all of sudden it popped into my head as we were sitting and brainstorming, what a great idea it would be to start a feature on the site that would reflect what we do in real life anyway. Women are constantly trying to fix up their children — I mean, I’m a Jewish mother, but all mothers do it. So, we launched it, and the goal was just to have another fun feature on the site. Then the New York Post picked up the story in July 2010 and we started getting phone calls from “The Today Show” and “The View,” asking if we’d be on TV. The hosts positioned it that I had started a website to get my son married, which could not be further from the truth. Then we started getting calls from Hollywood producers pitching sitcoms and reality shows, and we are now in conversation to do a reality show. It’s funny — people really respond to the concept because today it’s hard to meet the right person. There is so much going on in all of your lives that we didn’t have to deal with in our lives, and this is just another tool to help young people meet the right person. We’re not replacing your interactions at work or out having fun — this is just another way to help your son, daughter, niece, nephew or grandkid out. It’s been fun, and in fact, if there is a show, it would be great fun and the show would not be a typical reality show — it would really be about moms connecting with other moms to help their kids. We’ve got about 900 kids registered, and we got a real rush of kids after being on “The View” and “The Today Show,” and every week kids get added, but we really don’t promote it. It’s a feature that we’ll always keep on the site because we think it’s cool, but we haven’t really promoted it so instead of there being hundreds of thousands, we’ve got a respectable number for a free service. You gave up a salaried position to launch this site. How do you plan on making it profitable? The whole site is free of charge, and the only thing that is paid on the site at this point is if you want to become a premium member, and that’s $35 for the year. You get a gift and some great perks, it’s a great membership and we have a few hundred people who are premium members. The site isn’t profitable yet, but our business model is constantly evolving. We have a couple of revenue streams. We have a shop with merchandise that is unique to our audience — stuff you won’t find in Bloomingdales or Macy’s — the premium membership and events. We hosted a Beauty Bash this year in New York City and had about 900 women. There were dermatologists, plastic surgeons, one-on-one consultations, L’Oreal was a major player and they had skin damage sessions, we had makeup artists and free haircuts from Mark Garrison, who gives $300 haircuts and consultations. Because my background is in publishing, the way we approach advertising is through content-related programs, and I look at our site as a marketing tool for companies. You won’t see huge banners splashing across the site, but we have 45,000 registered members, and about 25,000 of those are signed up for our email list, so if someone wants to promote to our email list and it’s a product that we like or have serviced before, they will pay us for that. We integrate into editorial content as well — for example, the FDA just approved this company’s product that you strap onto your body several times a day and it helps tone and slim your body, and we have developed this whole program with them to test their product. So we rounded up 1,700 women who wanted to test their product, and we’ve narrowed that down to 21 women, and we’ll follow these women for two months and write up the results in a feature. So we’re promoting the product but in a much more personal, intense, authoritative way than if we just sold this company an ad on the site. It’s really a marketing partnership, and that’s the biggest part of our revenue. L’Oreal wants to do a series of Beauty Bashes this year with us, so that’s going to be another source of revenue beyond the fact that it’s wonderful to have such a prestigious company supporting us because they are very much after this demographic. What are the best and worst parts of being a boomer? The greatest part about being a boomer is that you really can take all of your accumulative experiences in life, whether it’s relationships, your job or friendships, and you can apply all that experience into this new section of your life and feel good about it. When you’re young, you’re going through all the relationship struggles, boyfriends, husbands, friends, all of that goes away when you get older, and yet you have all that experience behind you. Boomers don’t sit and dwell on the bad things, you take what happened to you, some which is great, some which is not so great, and you apply it to what you’re doing in your life now. You apply it without the tension that you had when you were younger. There’s nothing that is the end of the world, other than the end of the world. When you’re young, you want to get married, have kids, have a career — we’ve done all of that. Now it’s time to live life really to its fullest without tensions. Boomers have things in perspective. The bad part of being a boomer is that we’re not going to have enough time to use all our knowledge, which is sad, but it’s true: youth is wasted on the young. I don’t want to be 30, I don’t want to be 20, but I wouldn’t mind being 45 right now. And that’s only because I’d have more time than I do right now. A lot of boomers complain that they feel invisible — “people don’t see me.” I think that’s baloney. When I was 41, construction workers whistled at me because I had a hot body. Well, I don’t have a hot body at 64 but you know what, I don’t care! I don’t want to be 41 again to get whistled at — I want to be 41 again so I’d have more time. I don’t feel invisible at all, in fact, I feel much more visible than I ever did in my life because I feel good about myself, I’ve accomplished things in my career in the last 40 years, I have two great kids, I have a nice apartment, I have great friends, I have my health … I’m lucky! Boomers are so important because they’re the ones spending the money, and companies realize that now. We’re very vibrant and want to look good, and makeup companies want to sell us cosmetics. We, as contemporaries, just have a different mindset. We got into colleges that only males were getting into — Princeton, Yale, Harvard. We forged the way and now we’re running universities, and we’re in science and math and on Wall Street. I’m no female liberator — we women just somehow forged the way. Look at Arianna Huffington — she would have never been Arianna Huffington 40 years ago. It was a man’s world. We’re not what our mothers were. What’s your advice for boomer women who have fallen on hard times, or are having difficulty accepting this new stage in their life? Times have been tough for boomers, and for women who are hitting that 50 mark and may have lost their jobs or are feeling unhappy because of the economy. Fifty is a huge transition in any women’s life. Even if you have a successful career, marriage, kids, everyone goes through a transition at 50. If you’re facing other challenges and extra burdens, I would say that this is truly the best time of your life, because you’re vibrant, you’re still young and you have to look at it as the beginning of something instead of the end of something. There are new men around the corner, you’re talented because you’ve had a job, and you have to apply those talents to the future. You may have to even change your career, but that’s not a bad thing. Women are a resilient bunch. I find women complaining less, even in this economy, than men. I know a women who was a big TV producer that lost her job, and she decided to work for J. Crew during the holiday season. A man would never do that — it’s beneath them. Women find they can survive, and they do. Entrepreneur Spotlight Name: Geri Brin Company: FabOverFifty.com Age: 64 Location: New York Founded: 2010 Employees: 8 Website: www.FabOverFifty.com

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Rick Jacobs: The Wall Street Journal Missed the Forest for the Trees on the Millionaires Tax of 2012

January 9, 2012

It takes a lot to get me to write about the opinions of The Wall Street Journal because they are so consistently ideological and out of touch. To find out what they say, I can usually skip a step and just read Karl Rove’s daily talking points. But last Friday, WSJ personal finance columnist Brett Arends wrote a column that just begs for a fact check, so here it is. Mr. Arends, who apparently provides financial advice to all comers, completely misses the point about the proposed Millionaires Tax of 2012 , which would raise taxes on those earning more than a million dollars a year here in California. And just to be clear, the point is that the uber rich can and should pay more to make the society that benefitted them so handsomely last longer and work better. Mr. Arends wrote about the measure only because the 750,000-member Courage Campaign created a video highlighting Kim Kardashian’s $12 million income (2010 Forbes estimate) and promoting the idea that she could pay more in taxes than someone who makes $47,000. That’s a pretty simple premise, incontrovertible we thought. But not to Mr. Arends. Let’s look at his arguments one by one. 1. Mr. Arends says, “the (Courage) campaign has the Californian (sic) tax rates wrong… someone earning $47,000 a year wouldn’t pay ’9.3%’ state income tax. That’s just their marginal rate — the tax on the last dollar earned.” Our ad says that Ms. Kardashian pays a 10.3% tax rate; an average taxpayer who makes $47,000 pays 9.3%. Income tax rates are calculated on “marginal dollars,” meaning that the tax rate in question only applies to each dollar of income over a certain amount. In this case, he’s up in arms because Ms. Kardashian pays 10.3% on every dollar she earns over $1 million, while a middle-class person making $47,000 only pays 9.3% on each dollar over $46,766. (If you’re curious, the term “middle-class” generally applies to an individual making between $19,000 and $91,000 ). I guess Mr. Arends would have preferred a video with this text: “Kim Kardashian’s marginal tax rate for the last 11 million of her 12 million dollars of annual income in 2010 is 10.3%. A middle-class Californian’s marginal tax rate for each dollar of income over $46,766 is 9.3%. Do you think that’s fair?” Of course, we could have done that, but why? It only confuses the issue, and most people (unlike the super rich) pay their fair share in taxes and understand what a marginal tax rate is. We thank Mr. Arends for clarifying and underscoring how much our current system overtaxes the middle class. 2. The Courage Campaign is mixing up two different things: The tax rate and the actual amount of taxes paid… Kim Kardashian would have paid about 56,000% more in taxes than a middle-class Californian, not 1% more. Ms. Kardashian’s total tax bill is bigger than someone who makes less than she does! Well, Ms. Kardashian’s $12 million income is 255.32 times more than the middle-class earner of $47,000! As I told Mr. Arends on the phone, that’s why we have tax rates and not established dollar amounts for taxes. Here’s how tax rates work. If Ms. Kardashian were to buy a $500,000 Rolls Royce, she’d pay $42,500 (at 8.5%) in sales tax. If a middle-class taxpayer bought a 10-year-old Ford for $5,500, he’d pay $467 in sales tax, which — as Mr. Arends points out — is less than the sales tax paid on the Rolls Royce. But here’s the point: that $467 is about 1% of the middle-class guy’s income, but that $42,500 in sales taxes is only about .004% (four hundreds of one percent) of Ms. Kardashian’s income, demonstrating yet again that sales taxes are more regressive than income taxes. 3. But this one is my favorite. Mr. Arends decided to argue about federal taxes when our state ballot measure obviously cannot do anything about federal taxes. We wish it could, but alas, it cannot. So Mr. Arends decided to guess how much in total taxes, largely federal, Ms. Kardashian might pay on her income (as estimated by Forbes magazine) and suggests that we left that out to mislead. I’m still scratching my head over this one, because Mr. Arends quotes me saying, “…as Kim Kardashian pays a higher federal tax rate than a middle-class Californian family, she may be able to write off more of her Californian state taxes, meaning her effective rate might actually be lower.” News flash: State income taxes are deductible against federal income taxes, so the more you make, the lower your effective state tax rate. Who knew? Of course, this only furthers our case that Ms. Kardashian should pay a higher rate of state income tax. 4. Finally, here’s the old-saw argument. “…Presumably she (Ms. Kardashian) can wiggle that asset (her figure) to another state if California hikes its taxes too high. Then the state will get 100% of nothing.” Except that study after study, including this one from Stanford and Princeton, shows that state taxes do not drive the uber rich to relocate. It happens so rarely as to be insignificant. I had never heard of Mr. Arends before he called me on Thursday, so I did some reading of his old columns. He actually seems like a pretty decent guy who dishes up practical advice, things like “Pay off your credit card” and “Don’t take on debt.” In one article, he even suggested that underwater homeowners not pay their mortgages. But, as with anyone who has to get attention for his writing, he goofs sometimes, missing the forest for the trees, as he did with the Kim Kardashian video, with which he wants to pick nits (which he fails to do) rather than attend to reality. It’s noteworthy that this column generated hundreds of comments, not nearly so many as the one he wrote in February 2008 entitled ” Investors Should Step Back and Look at Shaken AIG .” Suggesting that AIG might be a good buy, he said, “The likelihood of serious accounting problems has to be remote, for one very good reason: Eliot Spitzer, the New York governor who was then the attorney general, went in there with a magnifying glass during the corporate governance probe three years ago. The company went through a pretty intensive house-cleaning that cost Mr. Greenberg, longtime CEO, his job.” I hope Mr. Arends will step back and look at what the Millionaires Tax of 2012 is all about, not just try to defend a tax code that helps the uber rich while punishing the very middle class he says he advises. Had he done that with AIG, he might have noticed that the very CEOs who undid an entire economy were the forest, while he busily focused on the trees. Restoring California is a broad coalition of educators, unions and community groups looking to restore critical funding to schools and universities, essential services for children, seniors, and public safety, as well as start rebuilding the state’s crumbling roads and bridges. It asks the wealthiest Californians — people who earn over a million dollars per year — to pay their fair share to help rebuild the state. Follow us on Twitter at @Restore_CA and like us on Facebook at “Restore California — Millionaires Tax of 2012.”

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For Apple CEO, A Rich Stock Award

January 9, 2012

By Alexei Oreskovic (Reuters) – Apple Inc Chief Executive Tim Cook received a one-time stock award worth nearly $400 million, the largest given by a company in a decade. The company’s board granted Cook 1 million restricted stock units (RSUs) to signal its confidence in Cook after Steve Jobs turned over the helm of the iPhone and iPad maker to his long-time lieutenant in August. The stock award, half of which vests in 2016 and the remaining half in 2021, was worth more than $376 million, based on the closing price of Apple’s shares on August 24, 2011, the company said in a Monday proxy filing. “As far as a singular award, we haven’t seen anything this large in a long time,” said Aaron Boyd, head of research at Equilar, an executive compensation data firm. The only one-time stock award in recent memory that was worth more, said Boyd, was the January 2000 stock option package that Apple gave co-founder Steve Jobs. The 40 million options in that award were valued at more than $600 million at the time, Boyd said. Jobs, who was ousted from Apple in the mid-1980s, returned to the company in 1997 and went on to transform Apple into the world’s most valuable technology company with a string of hit products including the iPod, the iPhone and the iPad. Jobs, who died in October after a years-long battle with cancer, owned 5.5 million shares of Apple, according to the filing. Jobs received $1 a year in salary during the past three years, according to the filing, while Cook received a salary of about $900,000 in 2011. Apple said Cook’s award was a retention and promotion tool, as well as recognition for running the company during Jobs’ previous medical leaves of absence. “The Board views his retention as CEO as critical to the Company’s success and smooth leadership transition. The RSU award is intended as a long-term retention incentive,” Apple said in its statement. Shares of Apple closed Monday’s regular trading session down 67 cents at $421.73, after reaching an all-time high of $427.75 earlier in the day. (Reporting By Alexei Oreskovic and Edwin Chan; Editing by Richard Chang and Steve Orlofsky)

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Is It Time To Drop Income Taxes?

January 7, 2012

(The author is a Reuters columnist. The opinions expressed are his own.) By David Cay Johnston Jan 6 (Reuters) – This is America’s 100th year for individual income tax, a system as out of touch with our era as digital music is with the hand-cranked Victrola music players of 1912. It is also the 26th year of the Reagan-era reform for both personal and corporate tax, a grand design now buried under special-interest favors. With U.S. elections in November, and the George W. Bush tax cuts due to expire at the end of 2012, it’s time for a debate that goes beyond ginning up anger over taxes and the superficial issue of tax rates. It’s time to consider whether to get rid of income taxes, personal and corporate. What are the strengths and weaknesses of our current system? Should we tax individual and corporate income — or something else? We need to think about it. Whatever systems we consider, we should weigh up what it takes to raise the necessary revenue along with such other attributes as minimal compliance cost, leakage and economic distortion. Times change. Tax systems must change with them or else their lubricating effect turns to sand, wearing down the gears of commerce. Just as the Industrial Revolution transformed a nation of farmers and mechanics into a land of factory hands and office workers, so too the digital revolution and globalization are fundamentally remaking society. We need for our tax system to serve our 21st century civilization and its needs, including the costs of aging infrastructure and an aging population, costs that will be borne one way or another. 5 PRINCIPLES Five ancient principles that have survived the test of time and are, therefore, profoundly conservative, should guide us. The first is the moral principle of progressive taxation — that the greater the gain you manage to attain, whether through hard work or luck, the greater your duty to pay back the society that made your riches possible so that it will endure. This concept is 2,500 years old, coming to us along with its civil twin, democracy, from ancient Athens. The second is horizontal equity. Each person, or business, with the same ability to pay should pay the same tax. We must not tolerate a system in which one family or company pays far more than another with the same income, thanks to all the fine print in the tax code. Simplicity, transparency and ease of payment should be the last three of the five guiding principles, as Adam Smith taught more than two centuries ago. So what do we do? Narrowly defining what constitutes income for tax purposes bloats the tax code. To the vast majority who earn a paycheck, defining income is simple. For the very rich and for corporations, it is a game. Too many of our most elegant and rigorous minds design techniques for tax avoidance and tax deferral instead of producing new wealth, imposing a huge cost on society. In ancient agrarian societies the ruler took a share of the crop. In the cash economies created by the Industrial Revolution the state taxed incomes. But is income the right tax base for the 21st century, when computer software makes it possible to wrap economic income in a cloak of tax invisibility? And why, in our digital era, must Americans file 140 million tax returns? Digital technology could eliminate 120 million of those tax forms, saving billions of dollars in both private and government spending. QUESTIONS ARISE In a global economy, is taxing corporate profits smart? Or could we devise rules that both promote investment and job creation while preventing the accumulation of unproductive fortunes — the great risk if corporations are tax-exempt. Look at the same question in reverse — is our tax system encouraging unproductive or even counterproductive activities? What else should we call a system that lets hedge-fund and other financial speculators defer paying taxes for years or decades on their carried interest, while discouraging investment in long-term projects that may not pay off for a decade or more? How else to explain our gross overinvestment in housing? And what about corporate tax accounting costs? Under President Barack Obama, business has been able to immediately write off 50 percent of new investment one year and 100 percent in two other years. We need to examine the long-term benefits and costs of full expensing. The White House says full expensing lowers the average cost of capital for business investment by 75 percent. But what other effects are there? More broadly, we need to debate why corporations must keep two sets of books, one for shareholders and one for the IRS. How much more efficient would taxation, and commerce, be with one set of books? With the individual income tax in its 100th year, it’s time to fundamentally rethink how we tax ourselves. Even if we end up keeping the income tax, personal and corporate, surely we can make the system easier and fairer. (Editing by Howard Goller and Eddie Evans)

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The U.S. Cities With The Highest And Lowest Unemployment Rates

January 7, 2012

Unemployment rates fell in three-quarters of large U.S. cities in November. The second straight month of declines for most major markets suggests the modest improvement in the job market is widespread. The Labor Department said Wednesday that unemployment rates fell in 277 metro areas. They rose in 71 and were unchanged in 29. In October, 281 cities reported having lower unemployment rates, the most in seven months. The metro area unemployment data can be volatile because they aren’t adjusted for seasonal variations, such as hiring for the winter holiday. Nationwide, the unemployment rate fell to 8.6 percent in November, the lowest level in 2 ½ years. Employers added about 120,000 net jobs. Still, a big reason the unemployment rate fell was because more people said they have given up on their job searches and dropped out of the work force. Below are the cities with the highest and lowest rates:

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Tweeting On Empty: The Problem With Twitter

January 7, 2012

I recently helped a friend sign up for Twitter, coaching him on the site’s features and how to populate his feed. He is a voracious reader, never leaves home without an Apple device and has an insatiable appetite for news and commentary. In short, he had all the makings of an up-and-coming Twitter addict — or so I thought. He didn’t stick with Twitter, and after scrutinizing his timeline of incoming tweets, I can understand why. It looked nothing like my own Twitter feed, which offers a satisfying mix of commentary, personal updates, photos, news and quality recommendations from an assortment of accounts I’ve spent years curating and tweak almost daily. His Twitter timeline was dominated by generic blathering from various news accounts and institutions. My friend could have groomed his assortment of accounts, but why would he have? Like many others, he was open to trying Twitter, but not especially determined to stay on it, and his initial experience failed to deliver information he couldn’t have found elsewhere in a more efficient way. The time he’d invested in it hadn’t sold him on the service, and he wasn’t keen on investing more. One of Twitter’s greatest strengths is its ability to be anything for anyone. For some users, it’s a way of communicating within small groups of friends. For others, it’s a news site or a source of celebrity gossip or a way to participate in a political movement. What Twitter amounts to — tool, tabloid, messaging service or news feed — depends entirely on whom you follow. Yet the site’s fill-in-the-blank nature also poses problems for some. Twitter greets newcomers with a blank slate that they’re forced to fill out on their own. Being a Twitter newbie is like arriving for dinner at a restaurant that’s received rave reviews — only instead of being offered a menu, diners must make a dish themselves and select all the ingredients, down to the spices and herbs. The experience might be a pleasant one, but it takes work. This initial emptiness, and the effort required to address it, stands between Twitter and the mainstream success it needs to make money. The six-year-old, San Francisco-based company has swallowed more than $800 million in funding and has been valued at $8.4 billion , more than Delta Air Lines or the New York Times. Yet the company is still struggling to prove it has a business model that fits. Its current approach, to sell advertising on its site, will be sustainable only if Twitter can continue to expand its reach and grow far beyond the geek elite. Twitter has more than 100 million active accounts worldwide — an impressive number but one that pales in comparison to Facebook’s over 800 million users. As part of its efforts to attract more diverse users, Twitter has revamped its site to make its hashtag-laden, symbol-spotted lingo more intuitive. Next, it must help users find people to follow. Twitter knows full well it will lose users unless it can deliver a chatty, engaging timeline, without requiring Twitterers to expend too many clicks. “For people to immediately have a compelling, valuable experience on Twitter, one of the most important things we can do is help them build a timeline and find interesting, relevant accounts to follow when they first sign up,” Twitter spokeswoman Carolyn Penner told The Huffington Post in an email. For Twitter users to see the thriving “information network” the site claims to provide , they must do the legwork. They must research people to follow, spend time curating their feed, watch their timelines evolve and experiment with new accounts. But no doubt many people lack the patience to do so. Having to pick through possible accounts can be a chore, and an unlikely one to be taken on by someone not even convinced he wants to stay with the service. Twitter has already made numerous efforts to help users populate their feeds. Individuals can sync their email accounts to find friends on Twitter, and the service offers customized suggestions about “who to follow.” Twitter’s redesigned registration process, introduced last fall, holds users’ hands and nudges them to add accounts to their feed. After claiming a Twitter handle, new users are now shown a curated list of other users, with the recommendation to start off by picking five to follow. This follower-focused signup process is a start but not necessarily effective. I recently created a new Twitter account to give the revamped registration process a go. After dutifully following Twitter’s instructions, I was delivered my first page of tweets, all from one hyperactive tweeter. This would have been a total turnoff to a Twitter newbie. Pressure is mounting. People are losing patience with social media sites and, as the number of social networking sites grows, individuals will be less tolerant of services not delivering instant gratification, warned Shama Kabani, author of “The Zen of Social Media Marketing.” “One of the issues Twitter has to face in 2012 and beyond is social networking fatigue,” Kabani said. “Because there are so many sites, if someone struggles to get into Twitter, their threshold for giving it a shot will be much smaller now than it might have been. Before, they might have given it a few months. Now, if you’re not offering what people want, they can go next door.” What has attracted you to — or turned you off from — from Twitter? Weigh in below.

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What Can You Learn From The Worst Product Launches Ever?

January 6, 2012

We all (hopefully) learn from our mistakes. Entrepreneurs, especially, are bound to make them — and it’s those early stumbles that can make (or break) them. Of course, it’s always better to learn from other people’s mistakes. The business world is full of blunders, and watching them can be great sport. As 2011 drew to a close, we saw obituaries for ill-conceived gadgets like the TouchPad , HP’s attempted iPad killer. And who can forget Qwikster, Netflix’s brief, doomed spinoff DVD service? Looking ahead to the coming year, here’s our prediction — products will flop, mergers will fail and ad campaigns will fizzle. We’ve seen it all before. With that in mind, we decided to take a look at some of the worst product launches ever — and pull out the lessons that entrepreneurs of all kinds can learn. 1) The Hula Burger The idea: Back in the 1960s, McDonald’s owner Ray Kroc recognized he wasn’t selling as many burgers on Fridays during Lent. It’s part of McDonald’s lore that the Filet-O-Fish was created as something Catholics could eat, but what’s often forgotten is Kroc’s other idea: the Hula Burger. It was a slice of pineapple between two slices of cheese on a bun. While the Filet-O-Fish is with us to this day, good luck trying to find a Hula Burger. The lesson: Don’t trick your customers. Until the end of his days, Kroc talked about the merits of the Hula Burger, and while it may have been delicious, even he admitted in his memoir that perhaps it should have been called something else — say, the Hula Sandwich? Customers, Kroc reported in his memoir, would say, “I love the hula, but where’s the burger?” 2) Celery Jell-O The idea: Back in the 1960s, someone decided the world was clamoring for celery-flavored Jell-O. Actually, it was part of a line of Jell-O flavors for salads. Apparently, you’d eat the Jell-O on your salad — not only could you get celery Jell-O, but also an Italian Salad flavor, Mixed Vegetable Jell-O and Seasoned Tomato . Yum. The lesson: Know your customers. There was no harm done in giving it a shot, but the misfire might have killed a smaller, less durable company. Jell-O may be universal, but it’s primarily beloved by children and families, and with other flavors available like cherry and grape, what kid in his right mind is going to clamor for flavors like Mixed Vegetable and Celery? 3) Windows Vista The idea: Vista was designed to replace Windows XP and, of course, make scads of money for Microsoft — and it did. But the operating system was clunky and full of bugs and was greeted almost immediately with negative buzz. Vista was released on January 30, 2007, but by April, Microsoft essentially waved the white flag, allowing Dell to keep offering XP on new computers. Meanwhile, not coincidentally, Microsoft sped up the development of its next, much more well-received, offering: Windows 7. The lesson: Customers will buy your product based on your reputation, but they won’t love it solely because of it. Quality counts. 4) Gerber Singles The idea: Gerber had conquered the baby market. Next, it wanted to go after the parents. So in 1974, it came out with these meals in a jar, aimed at college students and single adults living alone. But with the name Gerber attached to these jars, consumers felt they were being asked to essentially buy baby food packaged for grownups. The lesson: Sometimes your brand is so successful, you’re stereotyped and locked into a certain persona. Hey, there are worse fates. 5) Clairol’s “Touch of Yogurt” shampoo The idea: Yogurt has a lot of vitamins and minerals, and yogurt-based shampoos are now actually on the market. However, when this came out in 1979, it thrived in the test marketing phase , but actual consumers weren’t so interested in putting yogurt on their scalp. The lesson: If you’re going to challenge a conception that, say, yogurt is a food and not something you put in your hair, you need to invest a lot into educating the public first. 6) Pepsi A.M. The idea: In the fall of 1989, Pepsi evidently felt it could boost its sales if it served up a reason for drinking soda in the morning. At the time, it was estimated that sodas were only consumed at breakfast in 2 percent of the households across the United States . Pepsi A.M. would try to improve upon that. The breakfast soda would have 28 percent more caffeine per ounce than a regular Pepsi, but it would be 77 percent less per ounce than coffee or tea. In any case, by August 1990, Pepsi began quietly killing this beverage. The lesson: It’s awfully difficult to change a nation’s habits and lifestyle. 7) Spray-on condoms The idea: The reason for creating spray-on condoms is sound. They were invented by German entrepreneur Jan Vinzenz Krause of the Institute for Condom Consultancy. Typical condoms can be difficult to put on. In this case, the male consumer was expected to spray paint on a fast-drying latex liquid. But it took a few minutes for the latex to dry , dampening the moment, and it cost twice as much as a traditional condom. The product never quite made it out of the testing phase. The lesson: As with Pepsi A.M., it’s awfully difficult to change a nation’s habits and lifestyle, and if sex is involved, all bets are off.

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Karen K. Harris: Why Obama Has the Right to Appoint Cordray

January 6, 2012

The Consumer Financial Protection Bureau (CFPB) opened its doors in July of 2011 and after a prolonged partisan political battle, it finally has a director. After Republican Senators made it clear they would continue to block Richard Cordray’s nomination, or anyone else’s, until their demands to restructure the CFPB to make it less powerful were met, President Obama, in a speech on Wednesday in Cleveland with former Ohio Attorney General Richard Cordray, publicly confirmed Cordray’s appointment during Congress’ recess. Although it is very likely that Cordray’s recess confirmation will be challenged, it is clear that President Obama had both the legal authority and moral obligation to make this appointment. Recess appointments are not new, but some legislators are claiming that Cordray’s appointment exceeded the President’s executive powers since Congress was technically in a pro-forma session. Both houses of Congress can hold pro forma sessions at which no formal business is expected to be conducted. Such sessions are usually held to fulfill the Constitution’s requirement “that neither chamber can adjourn for more than three days without the consent of the other.” Over time, pro forma sessions have also been used to prevent presidents from making recess appointments . Yet, such recess appointments have occurred in the past. In 1903, when the first session of the 58th Congress ended, President Theodore Roosevelt made over 160 recess appointments during a recess that lasted only a fraction of a day. Similarly, President Truman twice made recess appointments during recesses that lasted just a handful of days. Additionally, the 11th Circuit Court of Appeals, the highest court to consider the question of when recess appointments can be made, considered whether a George W. Bush appointee to the 11th Circuit was invalid because it occurred during a very short legislative break and held that the Constitution, on its face, does not establish a minimum time that an authorized break in the Senate must last to give legal force to the President’s appointment power under the Recess Appointments Clause. Cordray is also not the first controversial figure to be appointed through a recess appointment. Some familiar names — Thurgood Marshall, Earl Warren and William Brennan — were all, at one time or another, recess appointments. In 1961, President John F. Kennedy appointed Thurgood Marshall to the 2nd Circuit Court of Appeals — he was finally confirmed by the Senate the following year by a vote of 54-16. President Dwight Eisenhower appointed three judges to the Supreme Court during recesses ; including, Warren, Brennan and Potter Stewart. Nor has President Obama overused his powers, having made a total of 28 recess appointments , compared to: • George W. Bush, who made 171 recess appointments • Bill Clinton, who made 139 recess appointments • George H.W. Bush, who made 77 recess appointments • Ronald Reagan, who made 243 over his eight years Challenging Cordray’s appointment means that, once again, Congress is not listening to its constituents nor looking out for their financial well-being. According to a recent AARP and Center for Responsible Lending poll, 74 percent of all respondents (including 73 percent Independents and 68 percent Republicans) responded affirmatively that they support having a single agency with the mission of protecting consumers from financial companies. Unfortunately, even before Cordray’s nomination, some legislators weren’t listening. Forty-four Republican senators sent the President a letter stating that they refused to vote for anyone to become the director unless they got what they want — restructuring of the CFPB to make it less powerful. Specifically, they demanded that instead of a single director there should be a board overseeing the CFPB, that the CFPB should be subject to the Congressional appropriations process, and that prudential financial regulators, who oversee the safety and soundness of financial institutions, be given the right to veto any regulations issued by the CFPB. These are the same restrictions that conservatives had originally wanted in the Dodd-Frank Wall Street Reform and Consumer Protection Act but were unable to get passed. By making its funding contingent on appropriations and putting veto powers on its regulations, the CFPB would essentially have little operating funding and little authority. After forty-four senators blocked Cordray’s nomination in September and again in December, and not because of his qualifications (in fact, several Senators indicated that Cordray’s qualifications were good ) the White House decided to exercise its legal powers and not let Americans’ financial futures hang in the balance. As President Obama stated in his Cleveland speech, “every day that [Cordray] waited to be confirmed was another day when millions of Americans [were] left unprotected.” Although the CFPB has been working hard since it launched in July , without a director, the CFPB could not “exercise its full power” since it could not enforce laws against “non-bank financial intuitions such as pay day lenders” and other members of the predatory fringe financial markets. Now that Cordray has been confirmed, through a perfectly legal recess appointment, the CFPB can fully protect American’s financial futures.

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Restaurant Hurt By Occupy Wall Street Closes, Donald Trump Takes Over

January 6, 2012

A local New York restaurant that saw business drop off as Occupy Wall Street protests erupted nearby has finally shut its doors — and will be taken over by the ultimate 1 Percenter, Donald Trump . The real-estate magnate, who owns the building at 40 Wall Street, where Milk Street Cafe was located, has retained the restaurant hall for “penny’s on the dollar,” according to a source close to the deal, and will turn the all-kosher cafe into a Trump Street Bar & Grille. In early November, Marc Epstein, owner of Milk Street, which had moved into the space in June, claimed that metal barricades police had erected in response to the nearby Occupy Wall Street protests were impeding access to his cafe’s front door. Amid slumping sales, Epstein was forced to lay off 21 of the restaurant’s 120 workers . Though police ultimately removed the barricades in front of the cafe, the barricades on the street remained, creating a “siege mentality” that continued to hurt foot traffic, Epstein said. “In the end we could not continue to lose money while foot traffic had dwindled down to that level,” Epstein recalled. “The barricades, which I’m told are still there, not directly in front of the space, but to the left and right down Broad Street, cut the legs out from underneath us,” he added. “Everyday that they’re still there reaffirms that I made the right decision to close.” Steve Lafiosca, Trump’s director of commercial properties, told the Tribeca Trib, a local news site, that operators of Trump Street Bar & Grille will try to retain as many of the employees as possible . Lafiosca didn’t mention the barricades on Broad Street, but told reporters that he suspects Milk Street Cafe’s all-kosher theme, which Trump will do away with, played a role in the restaurant’s downfall. Epstein, for his part, is now refocusing efforts on Milk Street Cafe’s 30-year old Boston location where he said business is fine. “I have no plans to expand beyond Boston any time soon,” he added.

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The Law Moms All Over Have Been Waiting For

January 6, 2012

As part of Obama’s health care reform legislation, employers are now, for the first time, federally mandated to provide nursing mothers with breaks and a place to pump. If you’re thinking, “Huh? This didn’t exist yet?” you’re not alone. The Affordable Care Act was signed into law in March 2010 (which also seems late in the game, no?), but the government is now cracking down on employers who don’t comply. McDonald’s and Starbucks are among the 23 companies that have been cited by the Department of Labor, Sonia Melendez, a spokeswoman told MSNBC . Hard and fast rules haven’t been finalized yet, but the Wage and Hour Division fact-sheet gives us a sneak preview. According to the document: “[Employers are required to provide] reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child’s birth … [as well as] a place, other than a bathroom , that is shielded from view and free from intrusion from coworkers and the public.” The bold is ours because it bears emphasizing that bathrooms — even private ones — are not considered acceptable locations in which to feed a person. As mothers are fighting to nurse in public without being ridiculed (or worse), these guidelines may be the next step to align directives from doctors about breastfeeding (breast is best!) with the messages they get from employers.

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Jobless Rate Falls To Lowest Since February 2009

January 6, 2012

WASHINGTON — A burst of hiring in December pushed the unemployment rate to its lowest level in nearly three years, giving the economy a boost at the end of 2011. The Labor Department said Friday that employers added a net 200,000 jobs last month and the unemployment rate fell to 8.5 percent, the lowest since February 2009. The rate has dropped for four straight months. The hiring gains cap a six-month stretch in which the economy generated 100,000 jobs or more in each month. That hasn’t happened since April 2006. “There is no question that today’s employment report is a positive and there is also no question that the pace of job growth has accelerated of late,” said Dan Greenhaus, an analyst at BTIG LLC, a brokerage firm A better job market is a positive sign for President Barack Obama, who is bound to face voters with the highest unemployment rate of any sitting president since World War II. Unemployment was 7.8 percent when Obama took office in January 2009. Still, the level may matter less to his re-election chances if the rate continues to fall. History suggests that presidents’ re-election prospects hinge less on the unemployment rate itself than on the rate’s direction during the year or two before Election Day. For all of 2011, the economy added 1.6 million jobs, better than the 940,000 added in 2010. The unemployment rate averaged 8.9 percent last year, down from 9.6 percent the previous year. Economists forecast that the job gains will top 2.1 million this year. The December report painted a picture of a broadly improving job market. Average hourly pay rose, providing consumers with more income to spend. The average work week lengthened, a sign that business is picking up and companies may soon need more workers. And hiring increased across most major industries. Manufacturing added 23,000 jobs, as did the health care industry. Transportation and warehousing added 50,000 jobs. Retailers added 28,000 jobs. Even the beleaguered construction industry added 17,000 workers. Economists cautioned that some of the gains reflected temporary hiring for the holiday season. The government adjusts the figures to account for those seasonal factors, but doesn’t always fully account for them. The gains in transportation and warehousing, for example, reflected a strong increase in hiring for couriers and messengers. That could stem from a big jump in online shopping over the holidays, the department said. The nation’s work force, which includes both people working and those searching for jobs, shrank slightly last months and is little changed from this spring. That’s a concern because a strengthening job market normally draws more applicants. The work force has declined by about 160,000 over the past two months, one reason the unemployment rate has fallen. “You have to take that unemployment rate decline with a grain of salt when you look at the declines in the labor force,” said Marisa DiNatale, an economist at Moody’s Analytics. The government only counts people as unemployed if they are actively searching for jobs. Discouraged workers who have given up on looking are not included in the rate. And some of those who are counted as employed are working part time, but want full-time work. When including those groups, the broader “underemployment” rate was 15.2 percent. That’s down from 15.6 percent the previous month, but still high. The figure has dropped for three straight months. And the job market has a long way to go to recover from the Great Recession. The nation has 6 million fewer jobs that it did in December 2007, when the recession began. More jobs and higher pay are crucial to helping the economy grow. They could enable shoppers to increase spending, which fuels 70 percent of economic activity. The economy likely grew at an annual rate of above 3 percent, a healthy pace. A more robust hiring market coincides with other positive data that show the economy ended the year with some momentum. Weekly applications for unemployment benefits have fallen to levels last seen more than three years ago. Holiday sales were solid. And November and December were the strongest months of 2011 for U.S. auto sales. Many businesses say they are ready to step up hiring in early 2012 after seeing stronger consumer confidence and greater demand for their products.

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Ex-Olympus CEO: ‘I Will Most Definitely Be Suing Olympus’

January 6, 2012

TOKYO — The former Olympus Corp. CEO who blew the whistle on dubious spending at the Japanese camera and medical equipment maker said Friday he is giving up his fight to regain the presidency and plans to sue the company. Michael Woodford said he decided to drop his bid when he realized he didn’t have the support of Japanese institutional investors, whom he blamed for tacitly allowing the current board to stay on despite acknowledging a massive cover-up. “Despite one of the biggest scandals in history, Japanese institutional investors have not spoken one single word of criticism, in complete and utter contrast to overseas shareholders who are demanding accountability from directors,” Woodford told a news conference at the Japan National Press Club in Tokyo. “Even if I win, do I want to come back” to such a situation, the 51-year-old Briton asked. Woodford also said he planned to sue for wrongful dismissal. “I will most definitely be suing Olympus,” he said. He said Japan lags far behind other advanced economies in the area of corporate governance largely because a system of cross-shareholdings at many companies in which corporations to hold stakes in each other to ensure stability. “Cross shareholding keeps everything comfortable, cozy, nice – no confrontation, no challenge, no takeover,” he said. Japan “will go into terminal decline” if this system persists, he said, urging Japanese legislators to pass laws that “stops this incestuous club.” In October, Woodford confronted Olympus management about the excessive spending on questionable acquisitions and fees paid to an obscure Wall Street firm, which later proved to be part of the cover-up. He was quickly fired as president. An independent panel found that the deception at Olympus dated to the 1990s, and involved an elaborate scheme to hide 117.7 billion yen ($1.5 billion) in investment losses. The company had initially denied any wrongdoing. After that, Woodford mounted a campaign for a comeback at Olympus, saying the company needed a new board of directors, mostly outsiders, to make a fresh start, ensure transparency and leave the scandal behind. The fight between Woodford and Olympus management would have come to a head at the next shareholders meeting, the date of which had not been set. In an interview with The Associated Press last month, Woodford sounded upbeat about gaining support for his comeback, with support from non-Japanese investors as well as the Japanese public. But in recent weeks, Woodford said he realized he could not overcome the resistance of institutional investors, such as Olympus’ main creditor bank Sumitomo Mitsui Banking Corp. He said he requested a meeting with the head of the bank, but was turned down. Even if he had won the proxy fight, there would have been a “fracture” between the overseas shareholders and the Japanese institutional shareholders, Woodford said. He said the scandal comes across to the rest of the world as “an Alice in Wonderland, bizarre situation. I get fired and lose my job for doing the right thing. And (the directors) are still there.” Sumitomo Mitsui and Olympus had no immediate comment. The company remains under a criminal investigation. Last month, Japanese prosecutors raided Olympus headquarters and the home of former President Tsuyoshi Kikukawa, who is suspected of helping to orchestrate the cover-up. Woodford said in a statement released Friday that another reason for his decision was the emotional pain suffered by his wife, who wakes up screaming at night. He said his firing and the hammering he has taken were “traumatizing for all those around me.” Woodford, a 30-year employee at Olympus, said some good had come of his effort by drawing attention to what he called a corporate culture that encouraged “yes-men.” Japanese government officials have defended the country’s corporate governance record, with Industry Minister Yukio Edano saying that it was on par or even better than that of the U.S. Edano didn’t elaborate, but notable accounting scandals in the U.S. include those at Enron and WorldCom. Woodford said his fight had not been about an outsider fighting Japanese, but about someone who wanted reform versus those who had resisted it. Woodford said he liked Japan, and will visit often. “The last 12 weeks have showed me the opposite of what I’ve seen in the boardroom. I’ve seen great kindness, support and empathy, the very best of Japan,” he said. Woodford was alternately pessimistic and cautiously optimistic about Japan’s future. “Japan has such ingenuity and human talent. If you look at Olympus, Japanese engineers who designed world-beating medical technology,” he said. “But at the senior level, the checks and balances don’t exist in the same way.” He said he was hopeful that the scandal at Olympus may have stimluted debate in Japan: “It’s only in retrospect, in maybe a year or three years, we look back. Did the Olympus scandal change things?” ___ Associated Press writer Yuri Kageyama contributed to this report.

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HBO Swipes At Netflix In Latest Move

January 5, 2012

The complicated relationship between Netflix and HBO just got a bit more complicated. The New York Times’ Brian Stelter is reporting that HBO is no longer selling its DVDs at a discount to Netflix as of January 1, a move that continues the battle between the two entertainment giants for the eyes of paid content buyers. Though Netflix will certainly lose money having to buy its DVDs of HBO series from retail outlets, HBO’s non-cooperation here is perhaps more important as a further declaration of war between Netflix and HBO, two companies that often name-check each other in public as both rivals and potential partners, true frenemies in the big entertainment world. Recent highlights of the HBO-Netflix feud include HBO co-president Eric Kessler telling an audience in December that Netflix would never get its shows for streaming, which followed by six months HBO’s decision to hook up with Dish Network’s Internet streaming service DishOnline rather than Netflix in April (with, as a bonus, a Dish Network exec taking a shot at Netflix’s service model in the press release); a Time Warner exec anonymously telling the Hollywood Reporter in January that HBO might consider listening to Netflix’s overtures if the company started charging $20 per month; and Netflix CEO Reed Hastings saying that the show he wants most on Netflix streaming is HBO’s narco-drama “The Wire” in April and that the direct competitor his company is most concerned with is HBO, whose streaming service HBO GO is included for most customers who pay for HBO with their cable and satellite subscriptions. Of HBO as a rival, Hastings said the following in December : The competitor we fear the most is HBO Go. They aren’t competing directly with us now, but they can. HBO is becoming much more Netflix-like, and we’re becoming much more HBO-like. That Netflix and HBO aren’t directly competing is not quite true, in fact, as the two previously battled over the upcoming drama “House of Cards,” created by David Fincher and starring Kevin Spacey. Netflix eventually won that battle , securing exclusive rights to “House of Cards” for a reported 100+ million dollars . It was the first original programming deal for Netflix; the company soon followed up with exclusives for a fourth season of cult classic “Arrested Development” and the Steven Van Zandt mobster drama “Lilyhammer”, which debuts next month . HBO is indeed becoming more Netflix-like, however, with its HBO GO streaming service and its agreement with Dish. Netflix, meanwhile, is also becoming more HBO-like, with its content deals for premium shows. The HBO-Netflix War certainly escalated in 2011, and this latest monetary swipe by HBO once again puts the two at odds in 2012.

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Monsanto Profits Surge Due To Strength Of GMO Seed Business

January 5, 2012

ST. LOUIS — Monsanto Co. said Thursday its fiscal first-quarter earnings soared on strength of its seed business. The company also brightened its outlook for the full fiscal year. Its shares rose more than 5 percent in late morning trading. Monsanto said its net income rose to $126 million, or 23 cents per share, for the three months ended Nov. 30. That’s up from $9 million, or 2 cents per share, a year earlier. Revenue leaped 33 percent to $2.44 billion from $1.84 billion a year earlier. Monsanto said growth was driven by demand for corn throughout Latin America. Sales in Monsanto’s seeds and genomics segment increased 32 percent to $1.5 billion, reflecting the strength in Latin America and some timing benefits from its Australian cotton business. Overall, sales of corn seed and traits rose 46 percent, while sales of cotton seeds and traits jumped 73 percent. “We’ve seen a very strong start to the year, with real growth in Latin America and early orders in the United States that underscore our sustained momentum carrying into 2012,” Chairman, President and CEO Hugh Grant said. FactSet says analysts expected earnings of 16 cents per share on revenue of $2.05 billion. For all of fiscal 2012, the St. Louis company expects earnings per share of between $3.39 and $3.44, which is at the high end of its previous expectation of a growth percentage in the “mid-teens.” Analysts expect earnings of $3.47 per share. Its shares rose $4.09, or 5.6 percent, to $76.76 in midday trading. Its 52-week high of $78.71 was set in late October.

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Nokia May Have Found Its Next Chairman

January 5, 2012

By Tarmo Virki and Jonathan Standing HELSINKI/TAIPEI (Reuters) – Struggling phone maker Nokia Oyj basked in brightening prospects for its much-hyped Windows phone on Thursday as it prepared to strengthen the hand of new boss Stephen Elop by replacing its old-guard chairman. Shares in the Finnish company, which has been losing ground to rivals in the fast moving market for “smart” mobile phones, topped the gainers board in the FTSEurofirst 300 index, standing 4.8 percent higher at 4.076 euros by 1415 GMT. Encouraging December figures from a Taiwan-based supplier of the phones provided fresh impetus for the stock, along with broker upgrades citing an improving outlook for the software tie-up with Microsoft on which it gambled its future last year. Compal Communications, a provider of Nokia handsets, said December sales grew 275 percent from a year earlier to NT$4.51 billion ($149 million) from 1.2 billion, according to a Taiwan Stock Exchange website posting. In another report, the Commercial Times cited the company’s chairman saying the business could turn profitable this year as sales could more than double, although the company later said it had made no forecasts about 2012. Trade web site Digitimes, citing Taiwan-based supply chain makers, said Compal and fellow supplier Foxconn were expected to ship over 10 million smartphones in 2012. Credit Suisse upgraded the stock to “outperform” from “underperform” on hopes of smartphone recovery. “We fundamentally believe that Nokia’s focus on Windows will allow the company to drive a recovery through 2012 in both its top-line and earnings,” analyst Kulbinder Garcha said in a note. Pohjola Bank analyst Hannu Rauhala added; “The market has been worrying over Nokia Windows Phone deliveries in the fourth quarter. Compal’s strong comments relieve some of these worries.” WHO IS NEW CHAIRMAN? The stock price rise came as a Finnish newspaper Helsingin Sanomat reported the board would propose Risto Siilasmaa as its next chairman to replace long-time leader, Jorma Ollila, who is due to step down in May. Siilasmaa, a 45-year old entrepreneur, has been a Nokia board member since 2008 and is known in Finland as the founder of software security company F-Secure. He also chairs the board of Finnish telecom operator Elisa, but is little known outside the country. The appointment of Siilasmaa could indicate that Nokia has struggled to find a big hitter for the role, analysts said, although they said it also underlines Elop’s determination to turn the company around. Ollila, 61, led Nokia’s transformation from a rubber boots and TVs conglomerate into a giant mobile phone company in the 1990s, but in recent years the company has lost out to newcomers Apple and Google in the smartphone market. Elop, the first non-Finn to run the company, has overseen a halving of Nokia’s share price since the group dumped its own smartphone software platforms 11 months ago in favor of Microsoft Corp’s Windows Phone. (Reporting By Jussi Rosendahl and Tarmo Virki in Helsinki; Jonathan Standing in Taiwan; Editing by Mike Nesbit and Andrew Callus)

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American Dream More Accessible In Canada

January 5, 2012

WASHINGTON — Benjamin Franklin did it. Henry Ford did it. And American life is built on the faith that others can do it, too: rise from humble origins to economic heights. “Movin’ on up,” George Jefferson-style, is not only a sitcom song but a civil religion. But many researchers have reached a conclusion that turns conventional wisdom on its head: Americans enjoy less economic mobility than their peers in Canada and much of Western Europe.

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Kanye’s Epic Twitter Rant: Wants To Be New Steve Jobs, Change The World

January 5, 2012

Forget album sales and glitzy awards. Kanye West’s new goal is nothing short of changing the entire world. The mad scientist tastemaker of hip hop went on an epic Twitter rant on Wednesday night, discussing his new clothing line, his musical plans and, most significantly, his new company, which he says will “pick up where Steve Jobs left off.” Called Donda, after his late mother, West revealed that its goal will be to “make products and experiences that people want and can afford,” “to help simplify and aesthetically improve everything we see hear, touch, taste and feel,” and ” dream of, create , advertise and produce products driven equally by emotional want and utilitarian need.. To marry our wants and needs.” It will be comprised, West tweeted, of over 22 divisions staffed by “architects, graphic designers, directors musicians, producers, AnRs, writers, publicist, social media experts, app guys, managers, car designers, clothing designers, DJs, video game designers, publishers, tech guys, lawyers, bankers, nutritionists, doctors, scientists and teachers.” Specifically, West wrote that one of Donda’s “projects to be released this year [is] called 2016 OLYMPIC’s … It’s a semi sic-fi since 2016 is only 4 years away,” which presumably means that it will be a movie. West also disclosed that he was in talks to become the creative director of the “Jetsons” movie, and wants to design the MTV Awards, which probably means the VMAs. In addition, West wrote that he wants to help reshape the American school system, which he says was “designed to turn people into factory workers.” That includes starting a summer school with director Spike Jonze. “There are so many broken systems from the economy to school systems jail systems… we need experts for this,” he later said , promising that his creativity and ability to bring experts together would be of service in the effort to solve intractable problems.

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CDC Scientist: More Tests Needed To Determine Gas Drilling Impact On Health

January 4, 2012

PITTSBURGH — One of the government’s top scientists says much more research is needed to determine the possible impacts of shale gas drilling on human health and the environment. “Studies should include all the ways people can be exposed, such as through air, water, soil, plants and animals,” Dr. Christopher Portier wrote to The Associated Press in an email. Portier is director of the National Center for Environmental Health at the federal Centers for Disease Control and Prevention in Atlanta. While other federal and state regulators are already studying the impacts of gas drilling on air and water, Portier said research should also include “livestock on farmed lands consuming potentially impacted surface waters; and recreational fish from potentially impacted surface waters.” Portier made clear that the science on the issue isn’t settled yet. “We do not have enough information to say with certainty whether shale gas drilling poses a threat to public health,” he wrote. “More research is needed for us to understand public health impacts from natural gas drilling and new gas drilling technologies.” He also suggested pre- and post-testing of private drinking water wells near drilling sites. Another prominent scientist said the answers won’t come quickly. “I think it will take three to five years to sort through this,” Duke University researcher Rob Jackson told AP in an email. Jackson said that doesn’t mean there isn’t evidence of water contamination by drilling in some communities_ Wyoming, for example, or Dimock, Pa. “On the other hand a handful of cases of contamination is not enough to shut down an industry,” he said. Jackson was part of a team behind a much-discussed study last spring on possible water well contamination from drilling in Pennsylvania. Environmentalists hailed the study, while others, including the head of the state Department of Environmental Protection, criticized it. The question of whether gas drilling causes health impacts has led to angry debates. Some environmentalists and people in communities where drilling is occurring say there are clear and major risks, while the industry says those fears are exaggerated, and that the process been used safely on tens of thousands of wells nationwide. And though regulatory agencies in some states have determined the practice is safe, other states – and recently, the Environmental Protection Agency – have found evidence of contamination from either methane or the fluids used in fracking. Jackson said both sides in the debate should be prepared for mixed news. “I suspect what you’ll see over the next year or two are new papers that won’t find significant evidence of contamination and new papers that will. The best response would be to try and understand what causes the difference,” he wrote, adding that extremists on both sides will try and spin all the news. “Many people outside of the scientific community won’t want to accept a mixed message. They’ll dismiss one set of papers outright as biased and latch on to the other set that upholds their belief system_on both sides of the issue,” Jackson said. Jackson said researchers may find that drilling is overwhelmingly safe in one area, but not everywhere. “What’s safe in Oklahoma might not be an acceptable risk somewhere else, where the population density is higher. And you have different geology,” he said. Vast deposits of natural gas that couldn’t be produced economically just a decade ago are now being unlocked by hydraulic fracturing, or fracking, which involves pumping pressurized water, sand and chemicals underground to open fissures and improve the flow of oil or gas to the surface. Thousands of the deep wells have been drilled across the nation in recent years, and the shale gas boom is expanding to more and more states. It’s generating jobs and enormous profits and is helping to keep energy costs down. Adding to the confusion, some water wells in Pennsylvania and other states were contaminated with naturally existing methane gas even before drilling began. Portier said one huge issue is that there is no accepted medical standard for the symptoms that may come from exposure to gas drilling activities. “This poses an extremely complex problem for epidemiology researchers, given the range of possible environmental exposures that are currently not well defined,” he said. In layman’s terms, that means that if a person who lives near a gas drilling site gets sick, doctors don’t have enough information to say whether the drilling or other environmental or physical factors are to blame. But Jackson said the complexity doesn’t mean waiting is the only answer. He’s working on a list of recommendations that could help researchers and industry answer some of the key questions about possible methane contamination of drinking water. In December, the U.S. EPA announced that fracking may be to blame for groundwater pollution in a Wyoming community. But the agency said the findings are preliminary and need more review, and that the fracking that occurred there differed from methods used in other regions with different geological characteristics. EPA is also working on a nationwide review of fracking, with plans to examine drilling sites in Pennsylvania, Colorado, Louisiana, North Dakota and Texas. The earliest results will be available this year. EPA has already taken steps recently to boost federal regulation of fracking, announcing it will develop national standards for the disposal of the briny, chemical-laced wastewater and proposing controls on air pollution at oil and gas wells, particularly where fracking is used. Drillers and many states have resisted enhanced federal regulation, saying it should be left up to individual states.

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Michael Bociurkiw: ‘Occupy’ Protests Become Major Challenge to Nigerian Government

January 4, 2012

Whether commuting to and from my job to my office in the Nigerian capital, Abuja, or racing down the back roads of the country’s parched and neglected North, I would often shake my head in amazement at the lack of any display of discontent from ordinary Nigerians. Power outages that drag on, in some cases, for days; crumbling roads; rampant corruption and rising food costs — these are common complaints among the tens of millions of Nigerians that have been left behind by the country’s oil wealth. My bewilderment came from the knowledge that Nigeria is among the ten largest oil exporters globally, and yet it can hardly manage to power the street lamps in the showcase, man-made capital city of Abuja. Most people live on less than $2 a day; malnutrition and even cases of polio can be found in the northern states. During national elections last year, government workers had to use candles and flashlights to check voters’ IDs. “Nigerians will just sit back and tolerate whatever fate that is handed to them,” said a driver for an international NGO. “They will say it is God’s will — or they will lean on their extended family members for help.” I spent several months in Nigeria last year — just as the “Arab Spring” was sending convulsions through the precincts of many North African and Middle Eastern power centers. I even travelled to Cairo to see empowered protesters staring down armed riot police in Tahrir Square. Yet even though Nigeria is just a few hours flight from Egypt or Libya, no one believed for a moment that the winds of change would reach Africa’s most populous nation. But that all changed on January 1, when the Nigerian Government moved ahead after months of deliberation and removed a long-cherished fuel subsidy that more than doubles the price of fuel and transport fares. The impact has been so great that many ordinary Nigerians can no longer afford to get to work. Over the past few days Nigerians have been taking to the streets in great numbers, in the first mass protests against the relatively new government of Goodluck Jonathan and his powerful PDP ruling party. “The subsidy was the only benefit that we have been getting from the oil wealth and now that is gone,” tweeted one angry Nigerian. (Because of the subsidy Nigerians have the cheapest pump prices in Africa; but many use the petrol to power generators that have been made necessary by shoddy infrastructure). To be sure, there are few parallels between the ‘Arab Spring’ protests and what is now transpiring in Nigeria. But one significant similarity is the use of social media to share feelings of outrage and to mobilize people. One brief, revolting video of a young man being beaten by Lagos police during a protest went viral as soon as it was posted on YouTube. So paranoid is the government of the situation galloping out of control that it is reportedly considering a move to shut down Blackberry messenger services in the country. The service has been a vital link for protest organizers and supporters. In many cities there are reports of police arrested and beating protesters. Just yesterday indications were that the massive and powerful trade unions will join the protests, a move which could effectively bring the country to a standstill. Even though Nigeria is the continent’s biggest oil producer, it imports refined oil. Plans to install refinery capacity have never gotten off the ground, due to corruption and mismanagement. Most Nigerians harbor well-grounded suspicions that billions of dollars in oil wealth have been salted away in the offshore accounts of current and past leaders. The International Monetary Fund (IMF) has reportedly been pressuring the government to remove the subsidy, which costs the treasury an estimated $8 billion a year. If this is indeed the case, the IMF could be repeating the horrendous mistake of the last 1990s, when pressure on countries like Indonesia to remove subsidies and devalue their currencies triggered the East Asian financial crisis. A general strike has been declared for Monday and on Twitter and Facebook the outrage is palpable. Said one Tweet posted by a Nigerian: “Nigeria is a fool at 51 (years old) and a fool forever. No electricity, no transportation, no fuel, no education, no good governance, no nothing.” Even members of the Diaspora are in awe at the growing ‘Occupy’ protests. “I’d like to see Nigerians truly have a revolution and be willing to die for what they believe in,” said Oluwa Uduak, a Nigerian-American lawyer, on her Facebook page. To be sure, Jonathan is not the first president to try to do away with the cherished fuel subsidy — his predecessors tried but quickly backed down in the face of widespread opposition. Promises to plow the extra $7.5 billion of revenue from the scrapping of the subsidy into health, education and infrastructure have been poorly communicated and met with skepticism by ordinary Nigerians. In order to quell unrest, promises could be made to install additional refineries, which could help to bring down the real cost of fuel. But such actions take months if not years and, with anger past the boiling point, the Jonathan administration may not have the luxury of time to bring about major reforms.

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Kodak Prepares To File For Bankruptcy

January 4, 2012

(Reuters) – Eastman Kodak is preparing a Chapter 11 bankruptcy protection filing in case it is unable to sell its digital patents to raise capital, The Wall Street Journal reported on Wednesday. The once-iconic photographic film pioneer is in talks with potential lenders to secure about $1 billion in debtor-in possession financing to sustain Kodak through bankruptcy proceedings, the Journal reported citing unidentified sources. The Chapter 11 filing could come as soon as this month or early February, the newspaper said. Kodak shares fell about 28 percent to 47 cents on the New York Stock Exchange following the online report, which dampened investors’ hopes that the company could arrange a quick sale of its patents or a financing lifeline to keep it afloat. A spokesman for Kodak declined to comment, saying its policy is not to comment on market rumors or speculation. Kodak warned in November that it might not survive 2012 if it was unable to secure $500 million in new debt or sell its patents. The company’s cash had been shrinking as sales of its consumer products have failed to keep up with its heavy cost base, which includes employees and offices around the globe. Kodak invented the digital camera in 1975 when one of its engineers developed a prototype that was as big as a toaster and captured black and white images. But it failed to capitalize on that innovation, and it was only when Kodak’s film business began to decline a decade ago that it tried to catch up with rivals by launching a mass-market line of digital cameras. The company has been beset by bankruptcy speculation since it drew down a credit line last September. It also hired restructuring firm FTI and confirmed that a law firm known for dealing with bankruptcy was doing work for it. Last week, Kodak announced the resignation of three directors, including two representatives of private equity firm KKR & Co and a professor from the University of California, leading some industry experts to speculate that a Chapter 11 filing was imminent. On Tuesday, Kodak said its stock may be removed from the New York Stock Exchange if the company cannot boost its share price over the next six months. Kodak, which had $862 million in cash at the end of September, down from $1.4 billion a year earlier, is scheduled to report fourth-quarter results on January 26. As part of its efforts to raise cash, Kodak has been looking since last July for a buyer for its 1,100 digital patents, with the help of investment bank Lazard Ltd. The Journal said Kodak is still trying to sell the patents, which could help it stave off a bankruptcy filing. If Kodak does seek Chapter 11 protection, it could try to sell its patents through a bankruptcy auction supervised by a court. (Reporting By Liana B. Baker; editing by Mark Porter and Carol Bishopric)

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Bill Gross Gives A ‘Paranormal’ Prediction

January 4, 2012

NEW YORK (Katya Wachtel) – Bill Gross, the manager of the world’s largest bond fund, is sounding like a Wall Street ghost-hunter in his latest investment letter. Calling the current market environment “paranormal,” Gross said this year will be characterized by “credit and zero-bound interest rate risk” and less incentives for lenders to extend credit. Gross, who managers PIMCO’s $244 billion Total Return bond fund, said the financial markets this year will continue to delever but sees a gloomy future ahead. “It’s as if the Earth now has two moons instead of one and both are growing in size like a cancerous tumor that may threaten the financial tides, oceans and economic life as we have known it for the past half century,” Gross said in an investment letter released on PIMCO’s website on Wednesday. “Welcome to 2012.” Last year was a humbling one for the PIMCO chief, as a bad bet against U.S. Treasuries led to an unusual “mea culpa” letter to investors. Treasuries were the best-performing bond class in 2011. His fund saw redemptions of $5 billion in 2011, one of the first times investors pulled money from Gross’s portfolio. In the letter, Gross said “paranormal” was a more fitting description for the current economic environment than the phrase “New Normal,” coined several years ago by his chief co-investment officer Mohamed El-Erian to describe a world of low-growth and high unemployment. This year, Gross argues that process will get messier. “We are left with zero-bound yields and creditors that trust no one and very few countries. The financial markets are slowly imploding – delevering – because there’s too much paper and too little trust,” he said. Those factors may lead financial markets to experience “the fat-left-tailed possibility of unforeseen – delevering – or the fat-right-tailed possibility of central bank inflationary expansion.” Gross told investors they should lower their return expectations for 2012, predicting 2 percent to 5 percent returns on investments in stocks, bonds and commodities. (Reporting By Katya Wachtel; editing by Jeffrey Benkoe) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Dan Solin: Einstein’s Theory… of Investing

January 3, 2012

As legend has it, when Einstein died, he met two men and a woman outside the pearly gates. Always one to strike up a conversation, he asked them about their IQs. The woman said her IQ was 190. Einstein was excited. He said: “We can discuss my theory of relativity”. The first man said his IQ was 150. “Good,” said Einstein. “We can discuss global warming and arms reduction.” The second man sheepishly said: “I’m sorry, but my IQ is only 100. I’m afraid I won’t have anything to discuss with you.” Unfazed, Einstein looked at him intently and said: “That’s not a problem at all. Where do you think the market is headed?” Okay. I made that up. It is extracted from my book, The Smartest Portfolio You’ll Ever Own . Here’s real wisdom from Einstein. He defined insanity as doing the same thing over and over again and expecting different results. Welcome to the world of investing where brokers and financial pundits start each year hoping you are as uninformed as you were last year. They depend on your lack of familiarity with the overwhelming data indicating they are emperors with no clothes, whose real expertise is separating you from your money by pretending to have the ability to predict the unpredictable and to bring order to random events. Around this time last year, the respected journal Pension & Investments published an article titled: For 2011, it’ll be all about equities. A survey of 2,007 responding institutional investors picked “winning” asset classes for 2011. Stocks garnered the most votes with 40%. Commodities were next and bonds came in last. James W. Paulsen, chief investment strategist at Wells Capital, predicted the S&P 500 index would reach 1425 and achieve “possibly” a 15% total return. The reality was quite different. The S&P 500 closed the year at 1,257 — almost exactly where it was a year ago. The winning asset class was fixed income. A broad index of Treasury bonds was up 9.6% . Let’s give this some perspective: The biggest, best, brightest, most sophisticated and highly compensated institutional fund managers can’t predict whether stocks will outperform bonds in a given year. How do you like the chances of your broker picking stocks, timing the markets or picking outperforming mutual funds? My New Years wish for all of you is this: Fundamentally change the way you invest. Cancel your retail brokerage accounts. Eliminate all individual stocks, bonds and actively managed mutual funds from your portfolio. Don’t listen to anyone who tells you they can add “alpha” by “beating the market” or predicting whether it will rise or fall. Ignore the financial media with their breathless predictions about the impact of yesterday’s news on tomorrow’s prices. Don’t succumb to the sense of urgency which causes fear and panic. Stop the transfer of wealth from your pockets into those who “advise” you. Follow Einstein’s advice and don’t repeat your mistakes. Do that and I like your chances of having a happy and prosperous New Year. Dan Solin is a senior vice president of Index Funds Advisors. He is the New York Times bestselling author of The Smartest Investment Book You’ll Ever Read, The Smartest 401(k) Book You’ll Ever Read, The Smartest Retirement Book You’ll Ever Read and The Smartest Portfolio You’ll Ever Own. His new book, The Smartest Money Book You’ll Ever Read, was published December 27, 2011.The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog.

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Las Vegas Hilton Officially Changes Its Name

January 3, 2012

LAS VEGAS — The Las Vegas Hilton hotel-casino officially changed its name to drop its hotel chain moniker on Tuesday after a license agreement expired at the start of 2012. Workers changed the hotel marquee to reflect the new name for the property east of the Las Vegas Strip: The Las Vegas Hotel & Casino. Its new motto: “Same Fame. New Name.” It’s the second time Elvis Presley’s former haunt has changed its name. Billionaire investor Kirk Kerkorian opened the property in 1969 as the International Hotel, then sold it to the Hilton chain. It became the Las Vegas Hilton in 1971. The hotel-casino sought to end the agreement last year as the property contended with financial troubles. It defaulted on a $252 million loan in 2010 and used operational expenses to make payments during three months last year while it tried to restructure debt. Casino name changes are uncommon, though not unprecedented in Sin City, said Michael Green, a College of Southern Nevada history professor who specializes in Sin City’s history. “Generally, the icons of the past, the name isn’t changed – it’s blown up,” Green said Tuesday. “Name changes like that are not too common, especially because most hotel-casinos do develop some cachet with their customers.” Other casinos that have changed their names include the Aladdin becoming Planet Hollywood, and the MGM Grand becoming Bally’s, Green said. It’s more common for casinos to make small adjustments to their names rather than wholesale changes, he added. Green said the hotel-casino, in addition to Presley performing more than 800 sold-out shows, was distinctive in Las Vegas history for its location off the Strip, and a youth hostel that served as a precursor to other family-friendly resorts in the adult destination. The change means the property won’t be connected with Hilton’s hotel loyalty program, though hotel officials say it’ll keep its player rewards program and amenities. It is owned by investors including Colony Capital LLC. ___ Oskar Garcia can be reached on Twitter at . http://twitter.com/oskargarcia

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Canadian Uses iPad Passport Scan To Enter U.S.

January 3, 2012

MONTREAL – A Canadian man has found an unusual way to get through U.S. Customs — by flashing an iPad. Martin Reisch says a border officer let him cross into the United States from Quebec after he presented only a scanned copy of his passport on the computer tablet. Reisch’s entrance into the U.S. without a hard copy travel document hints how stricter rules at the American border may still have some flexibility, at least in certain cases. The Montrealer said he was about a half-an-hour drive from the Vermont border last week when he realized he had forgotten his passport at home. Reisch remembered he had stored a scanned copy of the document on his iPad and decided to attempt to cross, instead of turning his car around for the two-hour drive home. “I figured I’d try, and in the worst case, I would have to go home,” he said Tuesday. Reisch, 33, said he explained his situation to the customs agent, who seemed mildly annoyed when he handed him the iPad. “He kind of gave me a stare, like neither impressed nor amused,” Reisch said of their exchange last Friday in southern Quebec. The officer took the iPad into the border office for five minutes before coming back out to give Reisch the green light and wish him happy holidays. “He was very nice about it,” he said of the officer. “I think a good part of it had to do with the fact that it was the holidays and I seem like a nice-enough person.” U.S. Customs and Border Protection says it will accept documentation such as a passport, an enhanced driver’s licence or a Nexus pass from Canadian citizens entering at land crossings. The list doesn’t mention facsimiles, like scans and photocopies. A spokeswoman for the department did not immediately respond to questions Tuesday on whether scanned passports are also commonly accepted at U.S. points of entry. Reisch, who went to Vermont to see friends and take landscape photos, said he also successfully used the passport on his iPad to get through Canadian Customs on the way home later that day. He hopes border officials eventually make digital identification an official form of travel document. “I like the idea of things being catalysts for change,” said the freelance photographer and videographer, who noted that many airlines now accept digital boarding passes stored on smartphones. “It’s a recognized form of checking in (on airlines), so I see the future as 100-per-cent being able to cross with your identity on a digital device — it’s just a matter of time.”

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BP Says Halliburton Owes Money From Spill

January 3, 2012

NEW ORLEANS — BP is reiterating claims first made last April that it is entitled to payment from contractor Halliburton Energy Services for expenses and lost profits resulting from the 2010 Deepwater Horizon offshore oil well disaster. BP’s latest filing was made Monday in federal court in New Orleans, where complex litigation involving various companies involved in the disaster is playing out. BP has accused Houston-based Halliburton of botching the cement job meant to seal the well. Halliburton says BP is trying to saddle Halliburton with far more than its share of the legal burden. In Monday’s filing, BP said Halliburton has made inaccurate statements about BP’s legal claims. And BP, quoting from its own filing made last April, emphasized it is seeking damages from Halliburton, including costs and expenses for oil cleanup and remediation, lost profits and other costs. The April 20, 2010, explosion off Louisiana killed 11 rig workers and led to more than 200 million gallons of oil spewing from a well a mile beneath the sea, according to government estimates. London-based BP PLC owned the well and was leasing the Deepwater Horizon rig from Swiss-based Transocean Ltd. Amid numerous claims and counter-claims made by various parties since the well blew out, a federal civil trial in the case is set to begin in February to assign shares of fault to the companies involved in the worst offshore oil spill in U.S. history. Monday’s filing comes as Halliburton and BP argue over the extent of BP’s indemnification of Halliburton. The Houston-based company says BP wants to avoid its legal responsibility to cover costs related to the spill. BP argues that “gross negligence” by Halliburton eliminates BP’s indemnity obligation.

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Starbucks To Raise Prices

January 3, 2012

Are you one of those people who constantly grumbles about $4 lattes? Brace yourself: Starbucks, patient zero of that particular fiduciary epidemic, just announced that it’s raising prices once again. The latest Starbucks price hike primarily affects Northeastern and Southern states, and will see menu prices rise by about one percent overall, reports Reuters. But the increase in prices will not be an even one percent across the board. The cost of a “tall” latte in New York City, for example, will go up by 10 cents, but prices for “grande” lattes will stay where they are. Starbucks attributed the move to a variety of factors , but one of them is surely commodity prices, which remain high. Another factor may be the New Year’s increase in the minimum wage in several states. If some prognosticators are right, though, this latest price hike could be just a taste of trends to come. In October, the Sustainability Director of Starbucks warned that climate change could harm coffee plants’ growing conditions down the line — which could make a $4 the late 21st-century’s equivalent of penny candy.

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Lynn Parramore: Vampire Squid Watch: 4 Scary Economic Trends for 2012

January 2, 2012

Having been seen to twitch – ever so slightly – in the 2011 tidal wave of global protests, the vampire squid is stirring in its evil lair. Reports of sucking noises and new tentacles sprouting in every direction tell us that the global financial monster is poised to steal yet more wealth and resources from the public in the coming year. Top economic thinkers have shared their forecasts, and the focus is clear: 2012 will be a year of continued – and escalating – predation by financiers. Their influence over political, financial, and economic activity is likely to grow – along with potential for harm. 1. Back-door Bailout of the Eurozone Would you like more of your hard-earned money to flow to fatcats? Wish granted! Attorney Walker Todd, who spent two decades in the legal departments of the Federal Reserve Banks of New York and Cleveland, names the back-door bailout of the eurozone banking system by our very own Federal Reserve as the top economic story of the upcoming year – or, at least one of the most outrageous. In a nutshell, the Fed is helping European banks by opening up the short-term ‘emergency’ lending pipeline, which means that U.S. taxpayers are indirectly bailing out private European capitalists. This is being done through a bit of financial hocus pocus called “swaps” – essentially the trading of dollars for euros. Such a maneuver allows the Fed to prop up European banks while claiming that it is not ‘technically’ directly lending. In other words, swaps are an attempt to hide the truth from the public. As Gerald O’Driscoll put it in the Wall Street Journal: “This Byzantine financial arrangement could hardly be better designed to confuse observers, and it has largely succeeded on this side of the Atlantic, where press coverage has been light.” O’Driscoll observes that the Fed has no authority to bail out European banks and warns of what economists call “moral hazard” – the nasty habit of banks to engage in even riskier behavior when they get bailed out. Why is this happening? Well, because the squid is strangling morality, democracy, and the rule of law. We pay, they play. “This is an attempt by our own governing elites to maintain a false vision of how the world works, or how ‘we’ think it should work,” Todd explained. “This comes at the expense of many people who never will go to Europe, who know no European bankers, and who have no European bank accounts.” You may not know a European banker, but you can be sure that one is just now raising a glass of bubbly in your honor. After all, you paid for it. 2. Record-breaking Political Finance What does corporate dough buy? Newspapers and elections and presidents, oh my! Thomas Ferguson of the University of Massachusetts, Boston and the Institute for New Economic Thinking suggested that next year’s very biggest stories could well be about corporate money influencing politics. He told me he saw a real possibility that a serious third party candidate for president might emerge; if one does, it will be bankrolled from the right while promoted in public as representing the political “center.” And it will also be designed to give corporate America many of the policies it has long sought, such a trimming Social Security and eviscerating the social safety net. “People are going to be astonished at how lethal the combination of secret money and corporate mass media will be to the public’s interest,” said Ferguson. Ferguson was confident that the 2012 elections would break all records for political finance, but he did add a sobering qualification. He thought there was an outside chance that the world economic slowdown would provoke really serious unrest in China or Europe on a scale that would put American developments in the shade. 3. Executive Pay Explosion Since the Great Recession of 2008-2009, the prime beneficiaries of the sluggish recovery have been…you guessed it!….top corporate executives. And it looks like the good times will keep rolling – for them. William Lazonick, professor of economics at the University of Massachusetts, Lowell, predicts an escalation of the harmful practice of corporate stock buybacks, which produces the explosion in executive pay. As Lazonick explained, corporate honchos have enjoyed a windfall as they have cashed in their stock options in a generally rising stock market. This kind of thing does absolutely zilch for the economy. But here’s what it does do: spending on buybacks makes executives rich and results in manipulative boosts to stock prices in the short-term at the cost of investments in innovation and job creation. “Look for buybacks to continue to increase in 2012, perhaps surpassing the record $600 billion done by S&P 500 companies in 2007,” predicted Lazonick. What to do? Maybe it’s time for Congress to confront the reality of that predatory monster, the financialized business corporation. Lazonick suggests that a ban on buybacks (which is already in the purview of the Securities Exchange Act) would be a good start. Unfortunately this idea is at odds with prediction #2. 4. Pathological Corporate Leadership Jamie Dimon never seems to seize an opportunity to keep his mouth shut. JP Morgan’s CEO, who happens to be the highest-paid chief executive officer among the six biggest U.S. banks, has consequently regaled us with his worldview, in which bank regulations are “anti-American” and ordinary folks have no right to be mad at rich people. He has become the poster-boy for Wall Street greed and has earned the especial ire of the Occupy movement, which recently marched to his digs on Park Avenue to offer to help him pack his bags and go wreak havoc somewhere else. In his universe, defrauding investors, spreading lies to manipulate markets, and foreclosing on military families are all part of a good day’s work. Dimon is a particularly nasty customer, but he is part of a new breed of sociopathic financiers. And his kind of distorted ‘vision’ has harmed the country’s prospects and created a gap in America between the richest and the poorest that puts us in close range of Rwanda and Serbia. When those at the top of the corporate pyramid are this tone-deaf and lacking in any sense of public responsibility, we are in treacherous waters. “The biggest danger to America is that the people in the financial sector and corporate leadership convey no awareness of what is needed to create a coherent and prosperous society,” economist Rob Johnson, head of the Institute for New Economic Thinking, told AlterNet. “Leadership is not simply about how much money one makes.” Many dollars. Very little sense. Ultimately, hoarding everything at the top is not sustainable, and bankers like Dimon will end up destroying the very society that makes their enormous wealth possible. If we let them. And that, Reader, is what’s on the horizon. As a friend of mine is fond of saying, if you want a happy ending, see a Disney movie. *Cross-posted from AlterNet .

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Goldman Advisor Defends Controversial Bond Program

January 2, 2012

* Western banks increasingly interested in sukuk * But controversy could affect their entry into sector * Advisor mounts detailed defence in Reuters column * Says funds will not be used for interest-base lending * Argues Goldman’s entry could help solve industry’s problems By Andrew Torchia DUBAI, Jan 2 (Reuters) – An advisor to Goldman Sachs has defended the U.S. bank’s $2 billion Islamic bond programme against criticism it may contravene religious principles, in a controversy that could affect Western banks’ ability to enter the Islamic debt market. In October, Goldman registered the sukuk programme with the Irish Stock Exchange. It set up a Cayman Islands-registered special purpose vehicle, Global Sukuk Co Ltd, to issue a sukuk based on murabaha, a cost-plus-profit arrangement which complies with Islamic law. Some analysts however have suggested Goldman might use the proceeds of the issue to lend money to clients for interest, which would be against Islamic law, and that the issue might not trade at par value on the Irish exchange, which would also contravene sharia law. Asim Khan, managing director at Islamic finance advisory firm Dar Al Istithmar, said such speculation was groundless. “Bulge-bracket banks such as Goldman Sachs can bring to Islamic finance their sophistication and depth of experience in liquidity management and equity/quasi-equity investment, which can take Islamic finance closer to its true ideals, so long as they adhere to the generally accepted sharia principles,” Khan said. “So far there is no basis to speculate otherwise,” Khan, whose London- and Dubai-based company advised Goldman on the sukuk, wrote in a column contributed to Reuters. (For the full column, click on ). As the euro zone debt crisis poisoned conventional debt markets last year, several big Western banks considered raising money through Islamic finance, which is based on religious principles and bans the payment of interest and pure monetary speculation. The Arab Gulf, home to billions of dollars of Islamic investment funds, has been relatively untouched by the financial crisis. HSBC’s Middle East unit became the first Western bank to issue a sukuk last May with a $500 million Islamic bond carrying a maturity of five years. French bank Credit Agricole has said it is considering issuing an Islamic bond or creating a wider sukuk programme that could lead to several issues. Unlike HSBC with its HSBC Amanah brand, however, Goldman does not have an established presence in the Islamic banking sector, and its entry into the market has caused controversy. Mohammed Khnifer, an Islamic finance analyst in Saudi Arabia, wrote that Goldman might use the proceeds of the sukuk to fund conventional banking activities. He suggested the sukuk might trade on the Irish exchange at levels other than par value, which would be impermissible under sharia law, and that the underlying structure of the sukuk might not be murabaha but reverse tawarruq, which has been ruled unacceptable by some Islamic scholars as an effort to hide the use of interest. In his column, Khan wrote that the prospectus clearly showed the proceeds of the sukuk would not be used to lend money to Goldman clients for interest. “Goldman Sachs, as an investment bank and as a proprietary commodity trader, has invested billions of dollars in commodities and will use the murabaha commodities in its commodity trading business, which will partly replace the conventional funding with Islamic finance,” he wrote. Khan said the prospectus had informed investors that the sukuk should only be traded at par value, and had warned investors there was not expected to be a secondary market in the instrument. He argued that the Goldman deal had a legitimate murabaha structure. “One would have to stretch one’s imagination a bit too far to label such a vanilla murabaha transaction as a tawarruq,” he wrote. Khan also suggested Goldman’s entry into Islamic finance could help the industry overcome obstacles hindering its expansion, including a shortage of tools to help banks manage their liquidity, and a lack of sufficient involvement by institutional funds. “The benefits of a large investment bank’s foray into Islamic banking could be significant,” he wrote. Controversies over the permissibility of financial instruments, which can affect investors’ willingness to put money into them, have characterised Islamic finance since it was born in its modern form in the 1970s. A range of scholars and industry bodies set product standards which are sometimes contradictory and act as guidelines rather than firm, enforceable rules. Goldman has said its sukuk could be denominated in United Arab Emirates dirhams, U.S. dollars, Saudi riyals or Singapore dollars. It has not disclosed a time frame for issuance, but has insisted that Islamic scholars have given the programme adequate certification that it complies with sharia principles.

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Raymond J. Learsy: The New York Times Continues to Pump Up the Price of Oil to the Oil Industry’s Joy

January 2, 2012

No critical commodity moves as much on rhetoric and supply and demand fundamentals, as does crude oil. Over the years few news services, perceived as being disinterested purveyors of news and information, have lent their imprimatur more to the upward distortion of oil prices than the New York Times . In keeping with what now has become a sorry tradition, the New York Times on Thursday gave the oil patch and its allied interests good reason to pop champagne corks two days early in celebration of the New Year. Assuming a mantle of authority, conveying to us as received wisdom from on high, the New York Times presented to is readership, packaged in the babble of well honed oil industry mantra, illuminations, the likes of which a well oiled oil industry flack would have been embarrassed to disseminate. We were to be instructed by the good scribes of the Times , in their lead story in the Business Section, that “Oil Prices Predicted to Stay Above $100 a Barrel Through Next Year.” The article ends “Consumers have this belief that prices will either go up or they will remain at elevated levels.” The reportage fills three quarters of a New York Times page in regaling us with reasons that at the very least “elevated levels” will remain, with the subtext that we should celebrate such an outcome, as prices might very well go higher. It was the kind of reporting that had the oil gang cheering, having recently reported bottom line record earnings with those oil prices at “current” levels (while the rest of the country is still in a deep funk). The article also made us feel better by pointing out that “The United States economy managed to cope this year despite triple digit prices for barrels of oil.” Such is the information we are fed by the New York Times ‘ scribes, seemingly safe at their business desk sinecures, frighteningly oblivious of a near nine percent unemployment rate throughout the land, the millions out of work not to speak of the millions evicted from their foreclosed homes, and not coping in the least. Other than references to foreign policy issues being played out, such as Iran’s threat to blockade the Strait of Hormuz and all that would entail, the Times hastens to instruct us that oil prices have an innate right to hover at their current astronomical heights. This by citing that “Many governments in the Middle East spent heavily on social assistance programs in response to the unrest of the Arab Spring and are depending on higher prices to meet their budgets.” Now, does that make you feel warmer up there in Maine? And when it comes to higher prices no mention is made of the breakdown of our oversight agencies such as the Commodity Futures Trading Commission (CFTC) and its failure to rein in excessive speculation in oil prices. (Please see “Time to Dismiss The CFTC Chairman And His Commissioners” 12.27.11). It is not just my layman’s opinion, but much more significantly that of Rex Tillerson, CEO of the world’s largest oil giant, ExxonMobil, who to his great credit, in testimony before the Senate Finance Committee in May 2011 expressed his exasperation that the then current price of oil at $100/bbl incorporated some thirty to forty dollars in its price resulting from speculation (Please see “Are Our Leaders Hearing ExxonMobil CEO Rex Tillerson 05.17.11) Nor did the article make any reference to that fundamental game changer, the vast deposits being discovered of low cost natural gas. Through new drilling techniques such as environmentally aware fracking, enormous reservoirs of shale gas have been identified in dimensions barely understood just a few years ago- enough to meet domestic needs for the next 150 years. The potential is so large, a consensus is building that it will lead to American energy independence. In years past, oil and natural gas prices moved up and down in near lockstep. Such was the case when oil prices peaked at $147/bbl in the summer of 2008 (helping to bring on the housing crisis and the financial meltdown in September of that year). The price of natural gas at that time was near $15 mmbtu. Today, while the price of oil rests near $100/bbl, as quoted on the New York Mercantile Exchange for West Texas Intermediate (WTI), the price of natural has dropped to under $3 per mmbtu. At that price for natural gas the comparable energy quotient in a barrel of oil would bring its price down to less than $20 a barrel. Clearly, with a differential of this magnitude, and natural gas being environmentally friendlier than oil based commodities such as gasoline, some substitution will begin to weigh on the consumption of oil, whether in home heating or starting with the conversion of trucks to being powered by natural gas rather than gasoline/diesel. It is a trend only beginning now, that will have major impact on the need for, and consumption of crude oil in the years ahead. Yet here again, instead of reporting clearly on this development and its enormous potential, the New York Times engaged in reportage bordering on yellow journalism (Please see “New York Times Flays Natural Gas…”06.28.11) with two articles filled with conjecture bordering on disinformation: “Insiders Sound Alarm Amid a Natural Gas Rush 06.25.11,” and “Behind Veneer, Doubt on Future of Natural Gas” 06.26.11 placing the entire shale gas revolution into question, interjecting terminology such as ‘Ponzi Scheme’ ‘Dot-Com Bubble’ and on. This in the face of billions of dollars investment into the shale gas and shale oil plays by such ‘doubters’ as ExxonMobil, Shell, Chevron, the Norwegian national oil company Statoil, the Chinese government owned CNOOC, and Total, the French oil behemoth. The list goes on. But the Times instructed us otherwise, thereby helping to keep oil prices on the ascent by vesting us with the ignorance needed to accept high and manipulated oil prices unquestioningly. It has been a tradition of distortion or misinformation dating back years whether sweeping the manipulations of OPEC under the rug, or heralding the pronouncements of that oil price manipulator par excellence and OPEC’s premier protagonist Saudi Arabia, without a questioning eye. (Please see “The New York Times Continues Its Fawning Coverage of Saudi Oil Policies” 03.22.10) Sadly, the New York Times , on the issue of how oil prices are determined has become a leading apologist of industry excess, government connivance, seemingly oblivious to the distortion of pricing instigated by OPEC, the commodity exchanges with their nurturing of excess speculation, Wall Street and its feckless proprietary trading financed in large measure through beneficent government programs. Given its standing and the thrust of its coverage, the Times has become an important contributor to the public’s baleful acceptance of having its pockets picked by the oil interests the world over.

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Major Fishing Cuts To Protect Dwindling Cod Could Ruin Fishermen

January 1, 2012

BOSTON (AP) — In an industry where agreement comes slowly, the sudden prospect of huge fishing cuts to protect New England’s codfish inspired a quick consensus: Scores of fishermen will be ruined if those cuts are passed. But it’s not clear how or if that pain can be avoided, weeks after new scientific numbers indicated cod in the Gulf of Maine is much weaker than thought. “We really haven’t heard of something that works right now,” said Gib Brogan, of the environmental group Oceana. Fishery science and law present major obstacles to preserving both cod and fishermen. The law requires scientists to set a limit on how hard fishermen can fish for any species. If they exceed it, they’re illegally overfishing and regulators are charged with “immediately” stopping it. That means, given the grim new estimate of cod’s health, fishermen would have to accept a debilitating cut of about 90 percent in their cod catch next year, and there’s little wiggle room to avoid it. Meanwhile, the new data — though attacked from the outset by skeptical fishermen — has survived an initial review, and scientists say it likely won’t change much. Several lawmakers, starting with U.S. Sen. John Kerry, are now asking the U.S. Commerce Secretary to order a new assessment of the cod’s health in hopes of getting better data, but prospects are uncertain. Still, there’s optimism a solution can be found, if only because the alternative is devastating cuts that could sweep away remaining fishermen from Provincetown to northern Maine. “I’m not a betting man, but I’m optimistic to a fault,” said fisheries scientist Steve Cadrin, who works at the University of Massachusetts at Dartmouth. He added, “Someone up high (in government) is going to have to make a bold move to allow a common-sense solution.” For centuries, Gulf of Maine cod has been the key species for small-boat fishermen on day trips from northern New England ports, including historic Gloucester. In 2010, cod brought in $15.8 million, second-most among the valuable bottom-dwelling groundfish species fishermen have long chased, such as flounder and haddock. Cod’s future looked great in 2008, when a major assessment indicated the Gulf of Maine species was headed for full recovery. But the new data, released this fall, said cod was actually so badly overfished that even if fishermen completely stop catching it, it can’t recover to a federally mandated level of abundance by a 2014 deadline. The new numbers are still being verified. If they hold up, onerous cutbacks on the cod catch are certain, and that would also mean tight limits on many other valuable groundfish off New England, to protect the cod that swim among them. But cod aren’t scarce and anyone who fishes the Gulf of Maine knows it, New Hampshire fishermen David Goethel said. He said the gap between the new estimate and reality demands a complete reworking of the new cod assessment, just as lawmakers have requested. That includes rethinking the numerous assumptions that go into the various population models, including such complexities as how well the federal boat that catches fish population samples scoops up older cod. “We need a do-over,” Goethel said. Absent new science that leads to a drastically different outlook for cod, another hope is that regulators will interpret fishery law differently than they ever have. Right now, fishermen are boxed in by the requirement to stay under that maximum rate at which they can catch codfish without overfishing it. In essence, the rate allows fishermen to haul home a safe fraction of a species. But in the case of Gulf of Maine cod, the new stock estimate is so low that that fraction shrinks to a pittance the fishing industry can’t survive on. And since the rate is determined by such basic biological factors as a species’ growth, reproductive and natural death rates, political pressure can’t do much to budge it. But Cadrin sees one possibility for fishermen to get some help. He hopes for new flexibility in how regulators react after they determine there’s overfishing on cod. He said that regulators have traditionally acted as if the law requires them to “immediately” stop overfishing on any species, but the actual law doesn’t require that — the word “immediately” is contained in a guideline to the law. Cadrin said if fishery managers want to be bold, they could give fishermen a short amount of time to stop overfishing, rather than “immediately” enforcing lethal restrictions when the new fishing year starts in May. More time would mean less severe cuts now, and a chance for more fishermen to survive. There is some sign from the top levels of U.S. fishery management that regulators are ready to do something different about codfish, even if they don’t know what. At a quickly called meeting last month to deal with the cod crisis, Eric Schwaab, the head of the National Oceanic and Atmospheric Administration Fisheries Service spoke of undiscovered solutions outside the traditional channels of government bureaucracy. The situation is so serious, Schwaab said, “those kind of extraordinary options ought to be on the table.”

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New Year’s Eve Revival: Dozens Arrested In NYC

January 1, 2012

NEW YORK — Authorities say dozens of Occupy Wall Street protesters were arrested as they tore down the barricades surrounding New York City’s Zuccotti Park just before midnight on New Year’s Eve. Police say 68 people were arrested during the scuffle. At least one person was accused of assaulting a police officer, who suffered cuts on one hand. Other charges include trespassing, disorderly conduct and reckless endangerment. Protester Jason Amadi says he was pepper-sprayed when police tried to prevent the crowd of about 500 demonstrators from taking down the barricades. Amadi says the crowd piled the barricade pieces in the center of the park and stood on top of them, chanting and singing. Police are still processing arrests but say some protesters have been released. No other details were available Sunday.

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4.0 Quake Rattles Northeast Ohio

January 1, 2012

McDONALD, Ohio (AP) — Officials said Saturday they believe the latest earthquake activity in northeast Ohio is related to the injection of wastewater into the ground near a fault line, creating enough pressure to cause seismic activity. The brine wastewater comes from drilling operations that use the so-called fracking process to extract gas from underground shale. But Ohio Department of Natural Resources Director Jim Zehringer said during a news teleconference that fracking is not causing the quakes. “The seismic events are not a direct result of fracking,” he said. Environmentalists and property owners who live near gas drilling wells have questioned the safety of fracking to the environment and public health. Federal regulators have declared the technology safe, however. Zehringer said four injection wells within a 5-mile (8-kilometer) radius of an already shuttered well in Youngstown will remain inactive while further scientific research is conducted. A 4.0 magnitude quake Saturday afternoon in McDonald, outside of Youngstown, was the 11th in a series of minor earthquakes in area, many of which have struck near the Youngstown injection well. The quake caused no serious injuries or property damage, Zehringer said. Thousands of gallons of brine were injected into the well daily until its owner, Northstar Disposal Services LLC, agreed Friday to stop injecting brine into the earth as a precaution while authorities assess any potential links to the quakes. Michael Hansen of the Ohio Seismic Network said Saturday that more quakes are possible, most likely small ones, until the pressure at the fault line has been completely relieved. The temblor Saturday appeared to be stronger than others, which generally had a magnitude of 2.7 or lower. Some residents reported feeling trembling farther south into Columbiana County and east into western Pennsylvania. Area residents said a loud boom accompanied the shaking. It sent some stunned residents running for cover as bookshelves shook and pictures and lamps fell from tables. A few miles from the epicenter, Charles Kihm said he was preparing food in his kitchen when he heard a noise and thought a vehicle had hit his Austintown home. “It really shook, and it rumbled, like there was a sound,” said Kihm, 82. “It was loud. It didn’t last long. But it really scared me.” There are 177 similar injection wells around the state, and the Youngstown-area well has been the only site with seismic activity, the department said. Zehringer said that to shut down all of the wells because of seismic activity near one would be an overreaction.

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The Global Economy Depends On China’s Rural Population

December 31, 2011

Two weeks ago peasants in Wukan, a fishing village in the prosperous southern Chinese province of Guangdong, took over their village, throwing out local leaders. Because of long unanswered grievances, they risked their lives, barricading roads into the village and facing down the police. Their central concern was the sale of collectively owned village land to property developers, which has impoverished most residents while enriching their leaders.

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Getting A Job Not Always The Last Hurdle For Long-Term Jobless

December 30, 2011

For the long-term unemployed, getting a job isn’t always the end of the story. Randy Howland spent most of this past year working at a $10-an-hour customer service job. He used to make six figures. With this job, he was settling, just so he could have the satisfaction of working. It was essentially a call-center job.

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10 Most Embarrassing Quotes From The Letter That Led To A Huge CEO’s Resignation

December 30, 2011

For Mark Hurd , the former CEO of Hewlett-Packard, life surely just got a lot more embarrassing. The Supreme Court of Delaware ruled Wednesday that a letter from celebrity attorney Gloria Allred detailing Hurd’s alleged sexual advances towards her client, Jodie Fisher, a former HP contract employee, could be made public. The letter spawned an internal investigation at HP last year, ultimately leading to Hurd’s resignation in August 2010. The letter alleges that Hurd made a number of unwanted sexual advances towards Fisher. In addition, it features some bizarre anecdotes including an incident where Hurd allegedly took Fisher to an ATM and attempted to impress her by showing his $1 million balance. He also allegedly told Fisher that the singer Sheryl Crow was crazy about him. Hurd, now the CEO of Oracle, had tried to keep the letter private, saying that he was protected by California privacy laws. But the court ultimately found that though the letter contained “mildly embarrassing” information , it isn’t protected in the same way as financial information or trade secrets. The internal investigation that the letter sparked didn’t find evidence of sexual harassment, but it did uncover inaccurate expense reports , according to Reuters. The question of whether the letter should be released has been the subject of much controversy, particularly because Alldred’s client, Jodie Fisher, has said some of it is untrue. The week that he resigned, Hurd settled with Fisher , according to Bloomberg. Here are some of the most embarrassing alleged moments from the letter:

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VIDEO: GOP Candidates Play Up Their Poor Backgrounds

December 30, 2011

It is a staple of modern political campaigning to play up your humble roots to connect with voters. Perhaps seeking to draw a contrast with President Barack Obama, who some have deemed “elitist,” GOP presidential candidates took many opportunities to mention their simple beginnings in 2011. The mashup above of campaign moments features Michele Bachmann, Rick Perry, Rick Santorum, Tim Pawlenty, Newt Gingrich, Ron Paul, Herman Cain, Jon Huntsman and Mitt Romney. Romney and Huntsman, however, grew up in very wealthy families. But, like their fellow candidates, both of them speak of families who are having trouble “making ends meet” and the pain of the middle class. Check out this recap of the campaign so far to see many of the candidates speak of poorer backgrounds and discuss how people are hurting because of the recession.

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Cable TV Bills Have Nearly Tripled In The Past 10 Years

December 30, 2011

Do you feel like your cable bill is significantly higher than it used to be? That’s probably because it is. The average cable TV subscriber pays nearly three times as much for cable now as they did in 2001, according to research by SNL Kagan cited by the Wall Street Journal . The jump in average prices — to about $128 per month from $48 — may not be good for cable providers; executives have said publicly that they’re worried that a boost in bills will push customers away. But while the cost of cable service has risen, the costs of the televisions themselves continues to trend downward. Indeed, an early television cost nearly $10,000 once adjusted to modern-day prices. That price decline unfortunately hasn’t been enough to offset the costs of even the most basic of necessities for many struggling Americans: Nearly half of all households today are economically insecure, according to a recent report by Wider Opportunities for Women. And higher television bills aren’t helping. An increase in the costs for original cable programming as well as a boost in sports fees may be in large part responsible for the hike in bills, according to the Los Angeles Times . As cable companies see their costs rise , they pass them on to consumers. Still, the squeeze doesn’t seem to be hurting the cable providers too much — for many media companies, cable channels are their most profitable sector. The battle over who is to blame for high cable costs has grown increasingly heated in recent months. The NFL and ESPN inked a controversial deal earlier this year, prompting many media executives to blame the league and the network for rising cable costs , according to a separate report in the WSJ . Liberty Media Corp. CEO Greg Maffai called the boost in the cost of ESPN a “tax on every American household.” But it’s not only increasing sports programming fees that have cable providers worried. Some cable executives have expressed concern that with the availability of television on the internet, viewers will stop signing up for cable , according to The New York Times . Some cable providers, such as Time Warner Cable, are considering charging data usage fee s in an effort to make money off of the rising use of services like Hulu and Netflix, Bloomberg reports. Still, cable executives’ fears that rising internet viewership would turn customers away from cable doesn’t seem to have materialized. Most Americans that decide to cancel their cable bills do so because of poverty, not because they’re choosing to watch on the internet , the NYT reports.

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Court Grants Telecom Companies Freedom To Aid Wiretaps

December 29, 2011

SAN FRANCISCO (AP) — A federal appeals court says a law granting telecommunications companies legal immunity for helping the National Security Agency with an email and telephone eavesdropping program is constitutional. The 9th U.S. Circuit Court of Appeals issued its opinion Thursday, affirming a lower court ruling that the Foreign Intelligence Surveillance Act, or FISA, passes constitutional muster. The appeal consolidated 33 cases filed against various telecom companies, including AT&T, Sprint Nextel and Verizon Communications Inc. filed on behalf of these companies’ consumers. The ruling continues a legal case stemming from new surveillance rules passed by Congress in 2009 that included protection from legal liability for telecommunications companies that allegedly helped the U.S. spy on Americans without warrants.

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All Eyes On German Renewable Energy Efforts

December 29, 2011

FELDHEIM, Germany — This tiny village of 37 gray homes and farm buildings clustered along the main road in a wind-swept corner of rural eastern Germany seems an unlikely place for a revolution. Yet environmentalists, experts and politicians from El Salvador to Japan to South Africa have flocked here in the past year to learn how Feldheim, a village of just 145 people, is already putting into practice Germany’s vision of a future powered entirely by renewable energy. Chancellor Angela Merkel’s government passed legislation in June setting the country on course to generate a third of its power through renewable sources – such as wind, solar, geothermal and bioenergy – within a decade, reaching 80 percent by 2050, while creating jobs, increasing energy security and reducing harmful emissions. The goals are among the world’s most ambitious, and expensive, and other industrialized nations from the U.S. to Japan are watching to see whether transforming into a nation powered by renewable energy sources can really work. “Germany can’t afford to fail, because the whole world is looking at the German model and asking, can Germany move us to new business models, new infrastructure?,” said Jeremy Rifkin, a U.S. economist who has advised the European Union and Merkel. In June, the nation passed the 20 percent mark for drawing electric power from a mix of wind, solar and other renewables. That compares with about 9 percent in the United States or Japan – both of which rely heavily on hydroelectric power, an energy source that has long been used. Expanding renewables depends on the right mix of resources, as well as government subsidies and investment incentive – and a willingness by taxpayers to shoulder their share of the burden. Germans currently pay a 3.5 euro cent per kilowatt-hour tax, roughly euro157 ($205) per year for a typical family of four, to support research and investment in and subsidize the production and consumption of energy from renewable sources. That allows for homeowners who install solar panels on their rooftops, or communities like Feldheim that build their own biogas plants, to be paid above-market prices for selling back to the grid, to ensure that their investment at least breaks even. Critics, like the Institute for Energy Research, based in Washington, D.C., maintain such tariffs put an unfair burden of expanding renewables squarely on the taxpayer. At the same time, to make renewable energy work on the larger scale, Germany will have to pour billions into infrastructure, including updating its grid. Key to success of the transformation will be getting the nation’s powerful industries on board, to drive innovation in technology and create jobs. According to the Environment Ministry, overall investment in renewable energy production equipment more than doubled to euro29.4 billion ($38.44 billion) in 2011. Solid growth in the sector is projected through the next decade. Some 370,000 people in Germany now have jobs in the renewable sector, more than double the number in 2004, a point used as proof that tax payers’ investment is paying off. Feldheim has zero unemployment – despite its tiny size – compared with roughly 30 percent in other villages in the economically depressed state of Brandenburg, which views investments in renewables as a ticket for a brighter future. Most residents work in the plant that produces biogas – fuel made by the breakdown of organic material such as plants or food waste – or maintain the wind and solar parks that provide the village’s electricity. “The energy revolution is already taking place right here,” says Werner Frohwitter, spokesman for the Energiequelle company that helped set up and run Feldheim’s energy concept. But it’s not only in the country. Earlier this month in Berlin, officials unveiled a prototype of a self-sustaining, energy-efficient home, built from recycled materials and complete with electric vehicles that can be charged in its garage. The aim of the prototype home is to produce twice as much energy as is used by a family of four – chosen from a willing pool of volunteers who will be selected to live in the home for 15 months – through a combination of solar photovoltaics and energy management technology, in order to show the technology already exists to allow people to be energy self-sufficient. “We want to show people that already today it is possible to live completely from renewable energy,” said German Transport Minister Peter Ramsauer as the project, dubbed “Efficiency House Plus,” was unveiled. The house is part of a wider euro1.2 million ($1.57 million) project investing in energy-efficient buildings. “The Efficiency House Plus will set standards that can be adopted by the majority in the short term,” Ramsauer told The Associated Press. “The basic principle is that the house produces more energy than needed to live. The extra energy is then used to charge electric-powered cars and bicycles or sold back to the public grid.” Germany’s four leading car makers are also participating in the project with BMW AG, Daimler AG, Volkswagen AG and Opel, which is part of Buick’s parent company, General Motors Co., each making an E-car for use by in the home. Such strong cooperation between Germany’s industrial sector coupled with a political landscape that emphasizes stability and a heightened public ecological sensibility makes Germany fertile ground to lead the way in the transformation from a post-carbon economy to one run on renewable energy. “Germany has the most robust industrial economy per capita. When you talk about industrial revolution, that’s Germany. It’s German technology, it’s German IT, it’s German commutation,” said Rifkin, who outlines what he calls the “The Third Industrial Revolution,” in a newly released book of the same title that explains how the economies in the future could swap fossil fuels for renewable energies and still maintain growth. Robert Pottmann, an asset manager with Munich Re, one of the world’s biggest reinsurers, says the company seeks to invest about euro2.5 billion ($3.27 billion) in the next few years in renewable energy assets such as “wind farms, solar projects or maybe new electricity grids.” Alan Simpson, an independent energy and climate adviser from Britain who visited Feldheim as part of a wider tour of Germany last month to see what the renewable revolution looks like up close said it was inspiring to view what is being accomplished on the ground. “It’s great to think about Germany delivering on everything that we are being told in Great Britain is impossible,” Simpson said. Amid the excitement, there is also an awareness of the real need for the German experiment to succeed. “If Germany can’t pull this off,” said Rifkin. “We don’t have a plan B.” ___ Associated Press writer Juergen Baetz contributed to this story from Berlin. ___ On the Internet:

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Michigan Wants To Drug Test Welfare Applicants

December 29, 2011

Officials in Michigan’s Department of Human Services want to bring back drug testing of welfare recipients, a controversial practice that Michigan courts struck down more than a decade ago. The new policy would differ from the one enacted under Republican Gov. John Engler in 1999, which required a urine test to apply for benefits and would have subjected recipients to random drug screenings. The new screenings would target those applying for benefits from the Family Independence Agency (FIA). DHS Director of Marketing and Public Relations David Akerly told the Detroit News the department has already conducted a feasibility study and plans to work with the legislature to overcome potential legal challenges. “Our research shows it can be done. We have people in prominent roles here in the department who feel it should be done,” Akerly told the News . “Exactly how and when that would happen is to be determined. It is very early in the process.” Michigan state Rep. Jeff Farrington (R-Utica) introduced a bill on Dec. 13 that would require applicants take a drug test to qualify for FIA benefits . Under the proposed bill, which is still up for discussion, recipients who passed a drug screening would have the cost of the test deducted from their first benefits payment. Not surprisingly, the American Civil Liberties Union, which challenged Michigan’s original drug-screening measures in court, opposes the effort to resurrect the practice. Michael J. Steinberg, legal director for the Michigan ACLU, gave the Detroit News his evaluation of the renewed drug testing effort. “In some ways, it’s better in that it requires some degree of reasonable suspicion before they make people pee in a cup,” he said. “In other ways, it’s actually more harsh. Welfare recipients would have to pay for their own testing. If they can’t afford to pay, they’re cut off [from financial assistance] completely.” Demanding drug screening for government benefits has become a popular talking point for Republicans around the country. Florida Gov. Rick Scott began enforcing mandatory urine testing for all the state’s welfare applicants in July, until a federal judge blocked the move with an injunction in October. Scott’s crusade sparked similar legislation in other states, including Rep. Farrington in Michigan. And as HuffPost’s Arthur Delany has reported, Republican lawmakers in a dozen state legislatures also want to tie drug screening to unemployment benefits , even though little data supports their argument that drug use among unemployed workers is a major problem. Current federal law prevents most states from denying unemployment benefits for reasons not tied to the basis of a worker’s unemployment. But Republicans in the U.S. House, led by Michigan Rep. Dave Camp, are fighting to change the law. Part of the GOP jobs package passed this month allows states to determine their own drug testing guidelines . The bill is unlikely to become law however, because Democrats in the Senate are unreceptive to the measure.

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How Cash Has Corrupted Congress

December 29, 2011

It’s always been about the money. Occupy Wall Street chose to set up its 24-hour outpost of political dissent on the doorstep of the finance industry primarily to underscore the simple fact that money has corrupted our political process so completely that the seat of power in the U.S. isn’t even in Washington, D.C. any more. That said, the Capitol continues collecting its cut, as evidenced in this week’s double-barreled dispatches, in the Washington Post and the New York Times, on the exploding wealth gap between our ever-more affluent representatives in Congress and the financially flat-lined citizens they represent.

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