indianapolis

Concordia Disaster Could Cost Cruise Industry Millions

by AP on January 17, 2012

Huffington Post…

NEW YORK — The capsizing of the Costa Concordia could not have come at a worse time for the cruise industry – right at the start of the peak booking season. Even if passengers aren’t scared away, the accident will cost hundreds of millions of dollars. It’s too early to tell exactly how much insurance firms will have to pay out to cover the damage to the ship and loss of life, but analysts have estimated that claims could total at least $500 million. One went as far as to say the total bill for insurers could reach $1 billion “We would be surprised if any single player had more than 5%-10% of the risk,” Numis analyst Nicholas Johnson wrote in a note. He said the risk is similar to that of the Deepwater Horizon oil spill, where no one company had more than 2 percent of the total insurance liability. Costa’s parent company, Miami-based Carnival Corp., which operates 101 ships under several brands including Carnival, Cunard, Holland America, Princess and Seabourn, did not respond to requests for an interview about its insurance coverage. But the company is responsible for at least $40 million in insurance deductibles. At least 11 people died in the accident with nearly two dozen others still missing. . The capsizing of the Concordia in the waters off Italy comes at the start of a three-month period that is the busiest time of year for bookings, known in the industry as wave season. Sales now set the tone for the rest of the year, which could be affected if passengers are frightened off by the chilling images of the stricken vessel Although the industry has been slowly recovering from the Great Recession, this incident could further damage bookings. “The publicity is just going to kill them,” said Blake Fleetwood, president of Cook Travel. “They’ll stay quiet for a week or two. Then Carnival will have a blitz of sales. So for the consumer, it’s going to be a great time to buy a cruise.” Other cruise lines will follow, slashing prices, Fleetwood said. “The baby boomer crowd, which the cruise lines are counting on to fill their cabins, is going to be especially spooked by this incident,” he added. But some experts doubt the tragedy, which was extremely rare, will scare off travelers. Stewart Chiron, CEO of CruiseGuy.com, a cruise marketing company, thinks the only group turned off by the accident would be first-time cruisers who were already on the fence about booking. Roughly 19 million people took a cruise last year he said without incident. “People understand that this is an accident,” Chiron said. “I don’t think there will even be a hiccup.” Gauging cruise demand is tricky. Unlike airplane tickets or hotel rooms which are mostly booked online by vacationers themselves, a large bulk of cruises are sold through travel agents who are paid a commission for each stateroom sold. Tour companies also book large blocks of rooms in advance from the lines and then resell them at a profit. The industry is so fragmented that most booking tare just anecdotal. Chiron notes that the only real way to judge demand is to see if cruise lines slash prices. “In a week or two if we are seeing $299 Caribbean cruises, then we’ve got a problem,” he said. An eight-day Carnival cruise in March currently starts at $599. For the insurance companies, it is also too early to tell the extent of their liability. A lot depends on if the ship can be repaired or not. Carnival has two different types of insurance policies that would cover the $500 million to $1 billion in claims from the Concordia. HULL INSURANCE: This insurance covers damage to the ship. Carnival is responsible for the first $30 million in damage. The rest is covered by a network of insurers led by XL Group, an Irish insurer with executive offices in Bermuda. A company spokeswoman refused to comment. German insurer Allianz Global said it has a “minor stake” in the Concordia claims. A third firm, London-based RSA Insurance Group is liable for up to $15 million, according to an industry source. Other yet unnamed companies also will have to pay out claims. Chicago-based Aon Corp. brokered the hull insurance deal but a company spokeswoman refused to comment. “The amount of this hull claim will heavily depend on whether the ship can be salvaged and repaired or whether, in the worst case, the wreck will have to be disassembled on site,” Allianz said on its website. LIABILITY INSURANCE: The second type of insurance coverage purchased by Carnival is for personal injury liability. The company said in a statement Monday that it has a $10 million deductible on that policy. That coverage would include any payments related to injuries and deaths of passengers and crew, the cost to clean up any leaking oil and the loss of cargo. Claims would be paid out even if the ship’s captain is found to be negligent. The cruise company has said that Capt. Francesco Schettino deviated from his approved course. Later, an Italian coast guard officer ordered Schettino back on the ship to assist in the rescue. Cruise lines and shipping companies join together in groups, known as protection and indemnity clubs, to spread out their individual risk. Each member of the club pays in dues and then claims are paid out from the collective funds. Carnival insured the Concordia through two clubs. The first, which has the bulk of the liability, is the Standard Club, according to a spokesman for the group. The second is through a club called Steamship Mutual. After Carnival pays its $10 million deductive, these two clubs are responsible for the next $8 million in combined liability claims. The next $52 million in claims would be paid out by a larger collective called the International Group P&I Clubs, which represents 13 of the clubs, which insure more than 90 percent of the world’s ocean shipping. After that, there is a reinsurance policy taken out with large firms that would cover losses up to $3 billion, according to the Standard Club. Reinsurance companies protect insurance firms against catastrophic losses. Carnival did not take out insurance for loss of use of the ship. The company said it expects lose $85 million to $95 million in bookings. ____ Associated Press business writer David McHugh in Frankfurt, Germany, contributed to this report. ___

Read more from the original source:
Concordia Disaster Could Cost Cruise Industry Millions

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Tagged as: , , , , , , ,

{ 0 comments }

PHOTOS: Artist Takes The Occupy Movement Underwater

by on November 26, 2011

Huffington Post…

First New York, then other cities around the world. Now the Occupy movement has spread underwater and it doesn’t even involve humans. Taiwanese artist Vincent J.F. Huang has created an installation that uses marine animals to examine the burgeoning protest movement. “The Atlantis Project,” which is on exhibit at Artspace in Sydney, Australia, features a number of marine animals “occupying” models of famous world landmarks. Through the course of the exhibit, the aquarium’s coral will continue to grow “until the life-sustaining resources of the aquarium are fully consumed,” and the coral loses its pigment . The aquarium and the life it contains are a microcosm, according to a press release. “The project metaphorically represents the limitations of earth’s resources.” The project’s connection to the occupy movement is also explained: Outrageous affairs are occurring and infuriated marine creatures are occupying icons of human civilization underwater. The spectacles of corruption and aberration in modern Atlantis are exposed! Art imitates life and Occupy Wall Street in other ways beyond this project as well. ARTINFO’s Ann Binlot observed parallels between the current movement and Philip Glass’ opera “Satyagraha,” about Mahatma Gandhi. Earlier this month, an Occupy Wall Street committee reached out to artist Mark di Suvero , whose sculpture “Joie de Vivre” is located in New York’s Zucotti Park. View photos of The Atlantis Project installation below, courtesy of Vincent J.F. Huang: —

Read more:
PHOTOS: Artist Takes The Occupy Movement Underwater

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Tagged as: , , , , , ,

{ 0 comments }

Joan Williams: Is Work-Life Balance an Economic Necessity?

September 2, 2011

Co-authored by Rachel Dempsey. In the debate over work-life balance, there’s one argument we can’t seem to move past: Women have made a choice to have kids. Now they have to live with their decision and all of its consequences. But this argument rests on an underlying assumption that, when challenged, just doesn’t hold up. If faced with a stark choice between work and family, the Jack Welches of the world seem to think women are going to choose family, while men are going to choose work. Otherwise the idea of a workforce that doesn’t need time off for childbearing doesn’t make sense. Kids need to come from somewhere. It follows, therefore, that the expectation is that women will “opt out” to raise families rather than pursue a career. (We’re not even going to talk about the opt-out debate in this post, as Joan’s been over that already .) But what happens if women don’t choose family? What happens if they choose career? The cover story in this week’s Economist illustrates what happens when women are given a stark choice between having children and a having a successful career. It turns out — surprise! — that a lot of them don’t choose children. The article, titled “The Flight from Marriage,” documents a trend among Asian women who marry and have children later in life — or not at all. The article indicates that non-marriage rates for women in their mid-thirties are pushing 20 percent in the wealthiest countries in Asia, including Japan, Taiwan, and Singapore. And unsurprisingly, the non-marriage rate rises with education level. In Thailand, 13 percent of women with a high school education are still single by age 40, compared with 20 percent of university graduates. The decline in marriage rates has also led to a dramatic dip in the fertility rate, to as low as 1.1 in Hong Kong — fully half of the replacement rate. (Unlike in, say, Scandinavia, very few Asian births take place out of wedlock.) The overall fertility rate in East Asia has fallen from 5.3 in 1960 to 1.6 today. That’s obviously not sustainable, and many of the countries affected are scrambling to offer incentives to persuade women to have children. Among the benefits being offered? Better work-life balance, including subsidized childcare and parental leave for both mothers and fathers. As the Wall Street Journal noted a few months ago, affordable child care has a significant effect on a country’s fertility. See that, Mr. Welch? That’s work-life balance –  as an economic necessity . If it comes down to it, career women in the United States could always pull a Lysistrata and stop having babies until the men come around. But come on. We shouldn’t need to get to that point. Now, the reasons for the low marriage and birthrates in Asia are manifold, as the article describes, and include not only poor work-family polices but also inflexible divorce laws and rigid adherence to traditional social roles. (According to the article, the average Japanese woman does 30 hours of housework to a man’s three — talk about Chore Wars !) Because the tradition is for Asian women to “marry up,” it’s more difficult for educated and successful women to find a husband whose status matches or exceeds her own. But the relationship between work-life policy and birthrate holds elsewhere as well. Take a look at Europe. The countries with the worst work-family policies are also, by and large, the countries with the lowest birthrates. Germany, for example, has notoriously bad work-life policies – and a birthrate around 1.41 children per woman . Those countries with the highest birthrates, including Norway, Sweden, and France, tend to provide parents with the most support. Business in a capitalist society has one goal and one goal only: to make money. This is often given as a justification for denying the value of policies that help employees achieve (or even attempt) work-life balance. But fertility trends show that this attitude is hugely shortsighted. There’s no question that a career is now an option for most women. And the trends show that, when given an all-or-nothing choice between career and family, many women will choose career. An aging population is a huge financial burden. It makes no sense to disincentivize reproduction. We simply can’t afford to. Cross-posted from New Deal 2.0. Joan Williams is the author of Reshaping the Work-Family Debate and Unbending Gender . She and Rachel Dempsey are co-writing an upcoming book about gender bias against professional women.

Read the full article →

Al Norman: Dancing on Wal-Mart’s Grave

August 20, 2011

In less than 11 months, Wal-Mart will turn fifty. No longer a company in its adolescent growth spurt, the giant retailer is showing its advancing age. In fiscal year 2011, Wal-Mart’s U.S. store count grew by only 49 units, or 1.3%. In 2010 by only 52 stores, or 1.4%. For some companies that would seem like an enormous expansion — but for Wal-Mart, it’s definitely a powering down mode. Ten years ago, Wal-Mart ‘s U.S. stores division opened 220 new stores — 4.5 times as many units as today. In his August 16th earnings report, Wal-Mart U.S. President Bill Simon admitted that his company was feeling the recession. “We remain concerned about the economic pressure on our customers and the uncertain impact it can have on their shopping behavior.” Some analysts have claimed that the recession was forcing shoppers into the waiting arms of Wal-Mart — but the disappointing comp store sales from the past nine quarters tell a very different story. If you go back to May of 2009 , Wal-Mart’s Chief Financial Officer proclaimed that his company was “in a great financial position.” But even then Wal-Mart was forecasting flat same store sales. But things got worse. By the following quarter , Wal-Mart admitted the sales environment was “more difficult than we expected.” The third quarter “continued to be difficult,” and by the end of fiscal 2010, the company told investors “U.S. sales will be more challenging” in the coming year. By February of 2011 , Wal-Mart was resigned to the reality that “it will take some time to see positive comparable store sales.” Some of Wal-Mart’s woes have been self-inflicted. For many years Wal-Mart has been over-building superstores, packing them in as close as three miles apart. The Ozark-based retailer was cannibalizing its own sales. ‘Old’ stores — sometimes built as recently as the mid-1990s — were being abandoned to build a bigger store down the street. This pattern is still happening today. In Seekonk, Massachusetts , for example, Wal-Mart is proposing a 156,000 s.f. superstore just half a mile from an existing Wal-Mart discount store of almost the same size. This “parking lot hopscotch” is wasteful, and an embarrassment for a company that prides itself on “sustainability.” No surprise then that Wal-Mart Realty currently has 145 empty buildings on its hands — what they call “excess property,” totaling a staggering 12.6 million square feet of dead stores. That’s the equivalent of 217 empty football fields. Based on new store openings in 2011, if Wal-Mart retrofitted the 145 stores it has for sale or lease, it would have enough room to grow in the United States for the next three years — without having to do any new building or engage in ugly site fights with angry neighbors. The other remarkable fact about Wal-Mart as it nears fifty, is that its U.S. division is rapidly shrinking in importance to the overall economic vitality of the company. In 1999 , Wal-Mart’s International segment accounted for only 1.6% of the company’s total net sales. Today, net sales from International stores represents 26% of the company’s total sales. In the past ten years, net sales at Wal-Mart U.S. have doubled — adding $138 billion. But International sales have more than tripled, adding $77 billion. Stores outside of the U.S. have become the beacon for the future of Wal-Mart. While Wal-Mart U.S. sales grew only by .1% in 2011, International sales grew by 12.1%. During the same stores sales slump of the past two years in America, Wal-Mart International has been described by CEO Mike Duke as “an impressive growth engine.” If this International growth is trended forward another ten years, the dominant economic focus for Wal-Mart will have shifted from America to the giant emerging markets of Africa, China and India. The power center will incrementally shift from Bentonville to Beijing. Right before our eyes, Wal-Mart, the erstwhile “Made in America” icon, is year-by-year morphing into China-Mart. As Wal-Mart’s U.S. operation loses momentum, and lack-luster same store sales performance from its overbuilt domestic inventory continues to disappoint, shareholders will suffer from Wal-Mart fatigue, and look for more nimble, faster-growing competitors. At that point in the not too distant future, there will be plenty of people ready to dance on Wal-Mart’s grave. Al Norman is the author of ‘The Case Against Wal-Mart.’ He has been helping communities fight big box stores since 1993. His website is http://www.sprawl-busters.com .

Read the full article →

Who Needs Branding? The Fastest Growing Pizza Chain You’ve Never Heard Of

June 2, 2011

(By Deborah L. Cohen) – When Jack Butorac spotted a sleepy pizza operation in Toledo, Ohio, he saw the makings of a winner, despite confessing he “knew nothing about pizza.” Nearly a decade later Marco’s Pizza is the fastest-growing pizza chain no one has ever heard of. It’s attempting to carve a slice of the saturated U.S. pizza market, bucking sluggish franchising trends and quickly adding new restaurants, even during the recession. “He didn’t brand it, he didn’t distinguish it, he didn’t emphasize the strengths,” said Butorac of Italian-born Marco’s founder Pasquale Giammarco, who established the business more than 30 years ago. “Pat Giammarco is a pizza guy, he’s a real-estate guy. Smart guy, but branding, no.” Giammarco had focused on quality ingredients and consistent operations in growing the business to more than 100 stores. But he didn’t think much about image, said Butorac, whose 35-year career has included stints helping the Chi-Chi’s and Fuddruckers chains expand. Butorac convinced Giammarco to let him form a franchise company to grow the brand. After setting it up in 2004, he recruited industry veterans to run everything from franchise sales to procurement. Butorac, who owns stores in Cleveland and Indianapolis, controls the majority; Giammarco has a smaller stake and owns stores primarily in Toledo, where Marco’s is headquartered. “I knew nothing about pizza,” said Butorac, president of Marco’s Franchising LLC. So he initially worked as a consultant to Giammarco to get a flavor of Marco’s distinguishing characteristics: fresh dough made daily in stores, sauce from an old family recipe and a special blend of three cheeses. “I was retired when I started this,” joked the ebullient Butorac, 62, who commutes from his home in Louisville, Kentucky several times a month. “My wife said, ‘You’re’ driving me crazy, find something to do.’” Marco’s, whose competition includes national rivals Pizza Hut, Domino’s and Pappa John’s, plus regional chains and mom-and-pops, has heady goals for growth that includes opening as many as 90 stores this year. Its aggressive rollout began in 2008 -tough times for the pizza industry – as rising gas prices were squeezing mainstay delivery sales and steep commodity costs pinched operators’ wallets. PIZZA EQUITY To skirt monetary challenges facing potential franchisees, Butorac raised $20 million in private equity funding to assist operators with down payments. He also established a leasing arm to help franchisees upgrade equipment or build entire stores, which typically cost $250,000 and post average annual sales of more than $700,000. About 20 percent of franchisees opted for one of the programs, Butorac said, helping to bring Marco’s current store count to 241 units, more than double the start of the franchise. Another 75 or so are in the pipeline. “It helped us open a lot quicker than it would have if we needed to just come up with more capital,” said Kirk Luchman, a 35-year-old franchisee, who along with partners, recently opened a second Marco’s in Tallahassee, Florida and plans to open more. Despite such rapid expansion, Steve West, a St. Louis-based restaurant analyst with Stifel Nicolaus, said Marco’s faces headwinds in a $30 billion industry with little growth, continued high costs for ingredients such as wheat and increasing national awareness over obesity. The industry grew only slightly last year, he said, on the backs of the bigger chains. “The pizza category is mature,” West said. “It becomes very tough for somebody like that to expand in new markets. They have to be able to educate their consumer that they are a better pizza.” That’s not stopping Butorac, who contends his chain, distinguished by its slogan “Ah!thentic Italian Pizza,” will attract more business from the casual dining sector, where customers are feeling the budgetary pinch. He also hired a seasoned management team, which includes veterans from the likes of Pizza Hut parent Yum! Brands, Little Caesars, Wendy’s and Domino’s, offering them equity and a share of the royalties. “If the company does well in development, there’s an upside,” said Peter Wise, a former Young & Rubicam brand strategist who serves as Marco’s VP of marketing. “That’s been a factor in how we’ve been able to grow quickly, even in a recession.” Of course there were pitfalls, such as figuring out how to maintain consistent ingredients across a range of growing markets; the chain, which is predominantly in Midwestern and Southeast states, is likely next pushing into California. Tight controls are central to Butorac’s vision for Marco’s place in the pantheon of American eating options. “A mushroom is a mushroom? No it isn’t,” insisted Butorac, who established a distribution arm after encountering food consistency problems in some new stores. “The fundamentals as far as the operations go – those were all fundamentals Marco’s had before the takeover.” Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Indianapolis 500 Ticket Prices Didn’t Keep Fans Away

May 29, 2011

— Higher ticket prices and lingering concerns about the economy couldn’t keep Indianapolis 500 fans away from this year’s race. General admission prices rose this year from $20 to $30, but Indianapolis Motor Speedway spokesman Tom Surber says advance ticket sales heading into Sunday’s race were up about 10 percent from 2010. Track officials don’t disclose attendance figures, but the stands had fewer empty seats than in recent years. The 500 draws an estimated 250,000 to 275,000 fans annually. David Humphrey manages Team Penske’s trackside mobile vending unit. He says sales were up over last year but that many fans were still hesitant to buy a T-shirt that cost more than $25. Some fans still worried about the economy said they couldn’t resist souvenirs but found other ways to economize.

Read the full article →

Video: Bernard Says He Has Asked Patrick to Stay With IndyCar

May 27, 2011

May 27 (Bloomberg) — Randy Bernard, chief executive officer of IndyCar, talks with Bloomberg’s Michele Steele about the state of the racing series, its business model and the likelihood of driver Danica Patrick’s continued participation. Bernard also discusses the outlook for a new television contract for the Indianapolis 500 after the 2012 race. This year’s race takes place May 29 at the Indianapolis Motor Speedway. (Source: Bloomberg)

Read the full article →

Commercial Real Estate’s Race To Loan Maturity

May 25, 2011

As a native of Indiana, every Memorial Day my attention turns to the “Greatest Spectacle in Racing,” the Indianapolis 500. However, as senior commercial real estate strategist with CoStar Group, I have my eyes set on another race — the one between maturing commercial real estate loans and the prices of the underlying properties securing those loans. And in that race, commercial real estate has recently been issued a yellow flag. In CoStar…

Read the full article →

Newt Gingrich Businesses Owed Unpaid State Taxes

May 14, 2011

ATLANTA — Companies run by Republican presidential candidate Newt Gingrich have faced overdue tax bills in four states worth more than $6,000, according to records reviewed by The Associated Press. The tax liens, which generally allow governments to seize assets or property to settle tax bills, ranged in size from a $195 property tax bill in the Atlanta suburbs to $1,969 in unpaid Missouri taxes. Most of the liens were paid shortly after tax authorities filed them. One exception was in Pennsylvania, where Gingrich Holdings Inc. last week paid off a $1,599 lien for unpaid corporate income taxes just days before Gingrich formally announced he would run against Democratic incumbent Barack Obama. Gingrich spokesman Rick Tyler said Gingrich and his firms were unaware of most of the tax liens until being contacted this week by the AP. “When an issue has arisen, we’re anxious to resolve the issue and get the taxes paid,” Tyler said. “We want to be in compliance with all the states.” Georgia State University professor Jack Williams, who teaches multistate taxation, said he most commonly sees liens filed against businesses in financial distress. Other contributing factors could be poor record-keeping or aggressive tax collectors. “The lien stage is about as deep into the process you get before the taxing authority seizes your assets and sells that,” Williams said. Until deciding to run for president, Gingrich was the CEO of Gingrich Holdings Inc., the parent company of firms that manage his book and TV contracts, produce documentary films, offer consulting services and oppose Obama’s health care overhaul. Tyler said Gingrich’s businesses are financially healthy. Last week, Gingrich Holdings paid off a lien worth $1,599 for corporate income taxes that court records show dates back to 2002. Pennsylvania Department of Revenue spokeswoman Elizabeth Brassell said privacy laws forbid her from discussing the case further. Tyler said the problem appears to have started in 2002 when state officials rejected a tax return on a technicality. While the company believed it had satisfied the bill, it paid off the lien earlier this month after learning of the remaining balance, Tyler said. In 2009, a Gingrich Holdings subsidiary paid $2,654 in Missouri tax liens for unpaid withholdings taxes and sales or use tax. Court documents show Gingrich’s company still faces a $688 lien for more withholding taxes, although Tyler said Gingrich’s company previously paid the bill and blamed state officials for failing to note the payment. He said Gingrich’s company expects to receive paperwork from Missouri officials acknowledging the payment in several days. Missouri Department of Revenue spokesman Ted Farnen said privacy laws ban him from discussing the case. One of Gingrich’s now-defunct businesses, Gingrich Enterprises Inc., faced a flurry of tax liens in Indiana. It satisfied some and believes the rest are paperwork problems. In 2002, records show Gingrich Enterprises resolved Indiana tax liens totaling $1,349. Tyler said he did not know Friday what caused those tax bills. Gingrich had delivered speeches in the state before and after the liens were issued and may have received speaking fees. The company filed paperwork in Georgia showing it was dissolving in November 2002. The next month, Indiana officials filed the first of 43 more liens against the company. Tyler said Gingrich officials alerted Indiana this week that the company went out of business in late 2002 and never owed state taxes after that. He said Gingrich expects to receive a letter from Indiana officials acknowledging that decision shortly. Indiana Department of Revenue spokeswoman Stephanie McFarland said she could not discuss the case, citing confidentiality laws. Business records show the mailing address for the firm was a post office box and the home of Gingrich’s ex-wife, Marianne Gingrich. She said she previously alerted Indiana officials that the company closed and supplied them with ways to contact her ex-husband. She now throws away some of the bills. “If Indiana really wanted money from him, they could find him,” she said. ___ Associated Press news researcher Judith Ausuebel in New York and reporter Charles Wilson in Indianapolis contributed to this report. Ray Henry can be reached at . http://twitter.com/rhenryAP

Read the full article →

Judge Refuses To Block Indiana Law Stripping Funds For Planned Parenthood

May 11, 2011

INDIANAPOLIS — Indiana won a key victory in its fight to cut off public funding for Planned Parenthood Wednesday when a federal judge refused to block a tough new abortion law from taking effect, a move that could boost Republican Gov. Mitch Daniels’ image among social conservatives as he considers running for president. U.S. District Judge Tanya Walton Pratt denied Planned Parenthood of Indiana’s request for a temporary restraining order despite arguments that the law jeopardizes health care for thousands of women. Planned Parenthood wanted to keep funds flowing while it challenges the law signed this week by Daniels. The judge’s decision allows the cuts to take effect immediately. Pratt said the state has not had enough time to respond to Planned Parenthood’s complaint and that the group did not show it would suffer irreparable harm without a temporary restraining order. A hearing was scheduled June 6 on the request for a preliminary injunction, and Pratt said she will rule on the matter before July 1, when new abortion restrictions included in the law are set to take effect. “We are deeply disappointed that the judge decided not to stop this unconscionable law from impacting Hoosiers seeking preventive, reproductive health care,” said Betty Cockrum, president of Planned Parenthood of Indiana, in a statement released Wednesday. “The ruling means that Hoosiers who rely on federal funding have lost access to their crucial and lifesaving preventive health care at Planned Parenthood of Indiana.” Sue Swayze, legislative director for Indiana Right to Life, said she was thrilled with the judge’s decision not to issue a temporary restraining order. “This isn’t about health care services,” she said. “This is about abortion.” The funding cuts are part of a new law that also bans abortions after the 20th week of pregnancy unless there is a substantial threat to the woman’s life or health. The law could improve Daniels’ status among social conservatives as he considers standing for president in 2012. Advocates are touting Indiana as the one of the most “pro-life states in the nation” and have praised Daniels for signing the law. The measure wasn’t part of Daniels’ legislative agenda and he didn’t advocate publicly for it. But he said he supported the abortion restrictions all along and that the move to defund Planned Parenthood hadn’t changed his mind. The bill was originally intended to cut all public funding, but Planned Parenthood of Indiana spokeswoman Kate Shepard said the state conceded in court Tuesday that some family planning funds would not be affected. The total amount of funding at issue now is about $1.4 million, Shepard said. Cockrum said Wednesday’s court ruling means that 9,300 Medicaid patients at Planned Parenthood’s 28 locations will lose services from their preferred provider. Planned Parenthood also said it will have to stop providing disease intervention services to hundreds of people in 22 counties. But state Sen. Scott Schneider, a Republican from Indianapolis who sponsored the measure to defund Planned Parenthood, said there are other clinics around the state that can provide health services. “The case made by Planned Parenthood is nothing more than a false alarm and their claims that women will go without health services are false,” Schneider said in a statement Wednesday. “Our new law will allow Planned Parenthood to continue to receive taxpayer funding if they simply stop performing abortions. The decision is now theirs to make.” Indiana’s law may also put the state at risk of losing $4 million a year in separate federal family planning grants. It also bans abortions after the 20th week of pregnancy unless there is a substantial threat to the woman’s life or health. That’s four weeks less than previously allowed. The abortion provisions would take effect July 1.

Read the full article →

Obama Weekly Address Tries To Reassure Public On Economy, Jobs

May 7, 2011

WASHINGTON — President Barack Obama is reassuring the public that jobs and the economy are his top priority. At the end of a historic and emotionally charged week that began with his nationally televised announcement that Osama bin Laden had been killed in Pakistan during a raid by U.S. special forces, Obama on Saturday returned to promoting his energy agenda. U.S. forces raided a compound in Abbottabad, Pakistan, where bin Laden had lived for several years, killing the al-Qaida leader. The news of bin Laden’s demise dominated the week’s headlines. “So although our economy hasn’t been the focus of the news this week, not a day goes by that I’m not focused on your jobs, your hopes and your dreams,” Obama said in his weekly radio and Internet address. He recorded the address Friday while visiting an Indianapolis transmissions plant that makes systems for hybrid vehicles. Obama has been traveling around the country to talk up his plan to reduce U.S. consumption of foreign oil – and the price Americans pay for it – by increasing domestic oil production, encouraging a shift to alternative energy sources and building vehicles that use less fuel. He says shifting to jobs like those at the Indianapolis factory will create more jobs and help the economy grow. “The clean energy jobs at this plant are the jobs of the future, jobs that pay well right here in America,” Obama said. “It’s clean energy companies like this one that will keep our economy growing, create new jobs and make sure America remains the most prosperous nation in the world.” Republicans devoted their weekly message to bin Laden. Massachusetts Sen. Scott Brown praised years of diligent work by the military and by intelligence professionals to pinpoint bin Laden’s location. The al-Qaida leader’s death, Brown said, sends a clear message to others like bin Laden. “The example will not be lost on other terrorists,” Brown said. “Any escape they make will be temporary. Any sanctuary they find will be uncovered. Those who harm or threaten the American people will be dealt with, on our terms, however long it takes.” ___ Online: Obama address: www.whitehouse.gov GOP address: http://www.youtube.com/gopweeklyaddress

Read the full article →

Municipal M&A: Budget Woes May Force Cities To Combine

April 22, 2011

As cities grapple with continuing declines in revenue, some are considering merging with other strapped localities or sharing services in a bid to cut costs. Local officials in Michigan, Indiana, New Jersey, California and other states are considering municipal mergers, which some see as the only way to preserve services amid a historic economic downturn. Zionsville, Ind., combined with two townships last year, and political and economic pressures are pushing other communities in that direction. In California, some cities are outsourcing services to their counties. In Michigan, politicians in Detroit and neighboring Hamtramck say merging the two governments might save the dollars needed to stay afloat. In short, struggling governments are employing a strategy familiar to corporate chiefs and Wall Street investment banks: the merger or acquisition. Just as the recession has spurred companies to pair up, the persistent economic stagnation has made some cities see municipal M&A as a tempting, if incredibly complicated, method of cutting costs while still providing services to taxpayers. Jobs can be lost when such combinations take place, and thickets of obligations have to be reorganized. But municipal experts and local politicians say M&A is some cities’ best hope for fiscal survival. “This is, I think, going to happen nationwide. Not just in Detroit suburbs or New York suburbs or Chicago suburbs, but in effect everywhere,” said veteran municipal strategist Thompson Dyke, founder of the Chicago-based urban planning firm Thompson Dyke & Associates. “They’re approaching the concept of consolidating their governments reluctantly,” he continued. “They don’t want to do it, I don’t think. But they see this as something the electorate is going to increasingly ask for.” The worst economic downturn since the Great Depression has left many governments struggling to perform the most basic of functions. Tax receipts have withered as property values have fallen and residents have cut back on spending. Pension fund assets plunged as the stock market tumbled, with many municipal pension plans now requiring outsized contributions from taxpayers. And with states desperate to fill their own budget holes, many localities have gone without crucial portions of state aid. Awash in red ink, governments have laid off crossing guards and dismissed teachers. Others have delayed repairs to pothole-ridden streets or crumbling buildings. Still others have slashed bus service , preventing residents from accessing tens of thousands of potential jobs. And some of the nation’s statistically most dangerous cities have axed sizable percentages of their police forces. But there may be another way. Over the course of centuries, the U.S. has developed tens of thousands of local governments, designed to be responsive to citizens’ needs. There’s now one local government or public school system for every 3,500 Americans, according to Census data. But in today’s economic slump, not all of these small governments can survive on their own. With politicians reluctant to raise taxes to a level commensurate with other developed countries, localities are casting about for help. Frank Shafroth, director of the State and Local Government Leadership Center at George Mason University, speculated that in the next 20 years, one in four local governments will dissolve or merge into other governments. “It’s going to have to happen, and it’s going to be very, very hard,” said Shafroth, who was formerly director of government relations for Arlington County, Virginia. “There’s going to have to be change. The issue is who can be really creative and innovative in thinking how to make it work.” Local officials will likely look to history for guidance. In 1963, Nashville, Tennessee, merged with Davidson County. Six years later, Indianapolis, Indiana, combined with Marion County. And in 2003, Louisville, Kentucky, consolidated its government with Jefferson County’s. Consolidations are also happening on a service-by-service basis. Last summer, officials in Maywood, California, fired all municipal employees, and outsourced services to Los Angeles county. In Costa Mesa, every firefighter was issued a layoff notice last month, but nearly all of them had been offered jobs by the Orange County Fire Authority. If that deal goes through, Costa Mesa would cede control of its fire department, allowing the county to manage any future labor negotiations. The city would shed payroll costs, but it would pay the county for fire protection. Elsewhere, officials are itching to engage in some outright governmental M&A. Mitch Daniels, the Republican governor of Indiana, has made the elimination of township government one of his priorities. Last fall, Indiana voters approved a constitutional amendment that capped local property taxes. Given that restraint, local governments might be going the way of Zionsville, which combined with its townships last year. With fiscal pressures mounting, such mergers are likely necessary for many localities’ financial survival, said Matt Greller, executive director of the advocacy group Indiana Association of Cities and Towns. Combinations might also be in the works in Michigan, where local officials are mulling over the possibility of a merger of cities. A cluster of municipalities in the Detroit area faces severe strains, and a combination could potentially bring much-needed relief, some politicians say. Last year, Detroit and Hamtramck , an independent city located entirely within Detroit’s borders, were locked in a dispute over tax revenue. A General Motors plant — the one that produces the Chevrolet Volt — straddles the cities’ border, and the two governments agreed decades ago to share that property tax revenue. But then Detroit started withholding payments, critically weakening Hamtramck’s budget, the tiny city claimed. Desperate, the city of 20,000 people attempted to enter bankruptcy. As part of a deal struck last month, Detroit agreed to pay Hamtramck $3.2 million for the lost tax revenue, and Hamtramck agreed to pay Detroit for water and sewer charges it owed. But both cities still face myriad woes. Hamtramck, for its part, will remain solvent only for the next 10 months, estimates Bill Cooper, the city manager. Detroit, too, faces trouble. The decline of automobile manufacturers has put thousands out of work, and an exodus of residents has left the government scrambling to fill its coffers. Whole neighborhoods of buildings are decaying. The most recent Census numbers showed Detroit’s population had dropped by a fourth over the last decade. Making matters worse, Detroit’s population has officially dipped below a legal threshold, now preventing the city from collecting a tax on electricity, heat and phone lines, and forcing the government to reduce its income tax rate. Mayor Dave Bing has taken the matter up with the state, and significant portions of the city’s tax collection now hinge on whether the state legislature passes certain bills. In the meantime, the city stands to lose more than $100 million this year. Residents of Detroit and Hamtramck have talked about a possible merger for years. Last month, Michigan passed a law empowering state-appointed managers to take over the finances of troubled local governments, a scenario that local officials are striving to avoid. With budget strains mounting, local politicians now see a municipal merger as a potential way to resolve fiscal difficulties without state intervention. Outside city hall, Detroit politicians have quietly considered the idea of combining their city with Hamtramck and Highland Park, another municipality surrounded by Detroit. Councilman Kenneth Cockrel informally proposed taking a potential combination even further, merging Detroit with the suburbs of Ecorse and River Rouge. “It would automatically solve the population issue,” Cockrel said. “But it’s not like you can just go out and do an annexation next week. There’s a process you’ve got to undertake, and, I’ll admit, I’m not totally familiar with that process.” Even if a merger could solve some of Detroit’s problems, Hamtramck might resist. Hamtramck residents see their city as a relatively safe haven within Detroit, which, according to an analysis of FBI data, is the nation’s third most dangerous city. The police in Hamtramck pride themselves on fast, thorough service, and some officers and residents doubt that Detroit police would be able to provide the same level of protection. What’s more, a merger would likely require a reworking of payrolls, potentially resulting in layoffs. Dan McNamara, president of the local Detroit firefighters’ union, wouldn’t speculate about what might happen in a merger, but expressed support for the Hamtramck firefighters. The president of the Hamtramck firefighters’ local didn’t respond to requests for comment. But almost certainly, some jobs would be eliminated. At the very least, Cooper, the city manager, would be out of work, he said. “If a community can’t afford to provide the services that it should provide to its citizens, then you’ve got to look for alternatives,” Cooper said. “If that means combining communities, then that may be what has to happen.” Any combination of cities would be complicated, likely requiring the cities to hire outside consultants. Urban planners would serve the role of bankers in a corporate merger, poring over records in search of ways to maximize efficiency. But municipal M&A presents its own set of challenges. In Milwaukee, a local think tank released a study last year examining the consequences of a potential dissolution of Milwaukee County government. A county-city merger could yield efficiencies, the Public Policy Forum’s study noted, but the county’s pension and health care liabilities would present a potentially major challenge. Those benefits have to be paid, but the question is: if the government no longer exists, who will pay them? The study authors proposed a plan where the state would administer the benefits, but only the former county residents — the taxpayers who originally were on the hook — would be responsible for paying them. And, of course, a merger might not succeed in strengthening a city’s budget. Local governments across the nation are saddled with ballooning pension obligations, which are protected by state constitutions. Combining governments might just amount to rearranging the deck chairs. “Talking about merging entities will start to flush out some of the cost problems that you have,” said David Johnson, a partner at the Chicago-based ACM Partners, a boutique financial firm that advises municipalities. “But that’s not going to move the dial nearly as much as restructuring pension obligations would.” A successful merger, moreover, would have to better provide services to residents, said veteran bankruptcy lawyer James Spiotto, who has decades of experience in municipal restructuring. That’s the metric that local officials will use, he said. “The more local you get, the more responsive the government likely will be,” said Spiotto, who heads the bankruptcy division at the law firm Chapman and Cutler. If a merger doesn’t provide residents with the service they’re used to, he added, “it isn’t going to last.”

Read the full article →

CoStar’s People of Note (April 9-16)

April 16, 2011

This week’s People of Note includes the following markets: Atlanta, Dallas/Fort Worth, Indianapolis, National, New York City, Northern New Jersey, Retail, Tampa/St. Petersburg and Washington, DC. NATIONAL, RETAIL Colliers Recruits Keschl to Lead National Retail By Justin Sumner Continuing to expand its U.S. platform, Colliers International has hired Mark Keschl as national director of retail based in Boca Raton, FL. He will be responsible…

Read the full article →

With Lockout Looming, NFL Owners Downplay Economic Benefits Of Football

March 1, 2011

WASHINGTON — In the past two decades, National Football League owners have received at least $5 billion from local governments to build and maintain football stadiums for their lucrative franchises. The argument was almost always the same: With a little taxpayer investment, the city would get a big boost in economic activity. With no investment, the team would up and leave. With three days until the owners lock out the players for refusing to give up their claims to $1 billion of the sport’s $9 billion in annual revenues, local officials and players are raising concerns that a canceled season could deprive cities of needed economic activity — as much as $160 million per city, according to the NFL Players Association — at the worst time possible. But now that the argument is working against it, the NFL calls such concerns “fairy tales.” Economists have debunked claims that a shutdown would devastate a stadium’s host city, or that a new stadium offers the kind of windfall that would justify significant public contributions. But NFL Commissioner Roger Goodell had a different take in 1997, when he was a league executive. “A new stadium provides more than just a new place to watch a game,” Goodell said at the time. “It can revitalize and stabilize both a team and a city.” “For them to be dismissive of the NFLPA’s claims now is sort of ironic,” said Dennis Howard, a business professor at the Lundquist College of Business in Oregon. “Many of them have used the economic benefit argument as a way of extracting significant public support for new stadiums.” Twenty-eight of the league’s 31 stadiums (the Jets and the Giants share the New Meadowlands Stadium) have been built with some amount of public financing, according to the National Sports Law Institute at Marquette University’s law school. Eleven have been 100 percent publicly financed. Taxpayers have put up more than $5 billion since 1990. In Indiana in 2004, the president of the Marion County Capital Improvement Board argued that a new publicly-funded multi-use venue would keep the NFL’s Indianapolis Colts from leaving town, which would “create 1,500 full- and part-time jobs and annually produce $104 million in economic benefit.” The $750 million Lucas Oil stadium went up in 2008, with the public bearing 50 percent of the cost. In Ohio in 1995, a Hamilton County commissioner argued that a study showed the Cincinnati Reds and Bengals were worth $160 million a year to the city’s economy, according to the Pittsburgh Post-Gazette, and that the town should pony up. Paul Brown Stadium was built in 2000 as a $453 million gift from taxpayers. The Maryland Stadium Authority, which successfully poached the Cleveland Browns and renamed them the Baltimore Ravens in the mid-1990s, estimated that a football stadium inhabited by Cleveland’s team would add 1,400 jobs and $123 million annually to the city’s economy. The state of Maryland coughed up $200 million for a stadium, built in 1998. The city of Cleveland, meanwhile, ponied up 76.5 percent of the $315 million used to build a new stadium for a new Browns team in 1999. Now, the NFL’s owners are threatening to scrap the coming season if the players, who currently receive 50 percent of the $9 billion revenue pie, don’t cede $1 billion of that revenue. The owners say they need the money for stadiums, but the players union is skeptical because the owners have refused to open their books to show how they spend the cut of revenue they already receive. Owners also want limits on rookie pay and two additional regular season games. The players, for their part, have been happy with the status quo, and say more regular season games will lead to more players with grievous injuries. The NFL owners’ threats of abandoning host cities or a whole season are probably more trustworthy than the economic arguments in favor of public financing for stadiums or the players’ claims of an economic calamity precipitated by a work stoppage, both of which have been deemed false by academics. Analyzing economic data from local Florida economies during professional sports strikes and lockouts — like the one that may be at hand for the NFL — economists Robert A. Baade, Robert Baumann and Victor A. Matheson concluded in a 2006 paper ( PDF ), that a team’s presence or absence does not have a measurable impact on the surrounding local economy, despite the estimates by “sports leagues, franchises, and civic boosters” using “league and industry-sponsored studies.” “An analysis of taxable sales in Florida cities demonstrates that none of the 6 new franchises or 8 new stadiums and arenas in the state since 1980 have resulted in a statistically significant increase in taxable sales in the host metropolitan area,” they wrote. “In addition, using the numerous work stoppages in professional sports as test cases, again no statistically significant effect on taxable sales is found from the sudden absence of professional sports due to strikes and lockouts.” Mark Rosentraub, a sports management professor at the University of Michigan, told HuffPost that the NFLPA overreached with its $160 million estimate of the economic impact of a lost season. “It fails to account for the fact that people spend money anyway,” Rosentraub said, noting that people will spend their disposable income at places like movies theaters and restaurants if not football stadiums. Rosentraub said, however, that while a canceled game won’t have a big effect on a region as a whole, it could have big effects within that region. And smaller cities would suffer more without a season, he said, than larger cities would. “It’s gonna matter a whole lot to the city of Cleveland,” he said. “It won’t even be perceivable in San Diego.” It could also matter a lot to some of the individual people who work at or near stadiums. John Marler is a beer vendor at professional hockey, baseball and football games, as well as special events, in Detroit. Marler, 25, told HuffPost that if there’s no football season, he’d lose about 15 percent of his income. “Basically, you’re just taking money, you’re taking revenue away from businesses that provide jobs,” said Marler, a member of the AFL-CIO-affiliated union Unite Here, which has partnered with the players’ union to fight the lockout. “The people that lose — it’s the businesses, it’s the people that work in casinos, the people that work in stadiums. Those are the people that lose out.” And Jerry Watson, owner of a bar near Lambeau Field in Green Bay, Wis., told HuffPost that without an NFL season, his business would lose a third of its income. “It’s going to hurt the state of Wisconsin,” he said. The Baltimore Business Journal estimated that the state of Maryland stands to lose $3.8 million in revenues just from ticket sales. When HuffPost first asked the NFL to respond to various mayors’ complaints that a lockout would hurt their cities, a league spokesman sent a link to a story in the Atlanta Journal-Constitution that rate the $160 million claim “false.” The story suggested Baade’s more modest estimate of a $16 million impact would be more accurate. Nevertheless, several experts seemed to find the NFL’s “fairy tales” position deeply ironic in light of the arguments used to win taxpayer dollars for new stadiums. “This is a classic case of the NFL talking out of both sides of its mouth,” Tim Chapin, an associate professor in the department of urban and regional planning at Florida State University, wrote in an email. “The economic benefits are HUGE when the NFL needs a stadium built, but the benefits are minuscule when the numbers don’t reflect well on the league. The truth is that the economic benefits are relatively small, but they are almost certainly in the millions.”

Read the full article →

With Growth in Financial Institutions’ Need for Enterprise Risk Management Solutions, Wolf & Company, P.C. Adds Midwest Sales Executive, Victor Imes, to Meet Strong Demand for Wolfpac Integrated Risk Management(R)

February 28, 2011

BOSTON, MA–(Marketwire – February 28, 2011) – Wolf & Company, P.C. (“Wolf”), a leading CPA and Business Consulting firm, today announces the appointment of Victor L. Imes as Midwest Regional Sales Manager. Based in Indianapolis, Indiana, Mr. Imes will focus on assisting financial institutions with their risk management needs using Wolf’s online risk assessment solution, WolfPAC Integrated Risk Management ® (“WolfPAC ® “).

Read the full article →

CoStar’s People of Note (Feb. 20-26)

February 25, 2011

This week’s People of Note includes the following markets: Austin, Cincinnati, Detroit, Houston, Indianapolis, Inland Empire, National, New York City, Northern New Jersey, Washington, DC and Westchester/South Connecticut. NATIONAL Colliers Appoints Dahlstrom Head of Investment Services Group Twenty-five year commercial real estate industry veteran Warren Dahlstrom joined Colliers International’s Investment Services Group as president. Dahlstrom…

Read the full article →

iTheft: Apple Hit By Crime Spree Using Thousands Of Stolen Credit Cards

February 2, 2011

NEW YORK — Dozens of people have been charged with forming a prolific identity theft ring that used thousands of stolen credit card numbers to shop at Apple stores around the country, according to a court document and a law enforcement official. The group obtained stolen account numbers, forged credit cards and used them to buy laptops, iPhones and other merchandise at Apple stores in locales ranging from New York to Los Angeles to Wauwatosa, Wis. – with a ringleader steering the scheme even while behind bars, according to an indictment charging 18 people with grand larceny. A law enforcement official said the allegations ultimately involve 27 people and roughly $1 million in merchandise. The official spoke on condition of anonymity to discuss the case ahead of an official announcement. The Manhattan district attorney’s office declined to comment Tuesday. DA Cyrus R. Vance Jr. and the U.S. Secret Service were expected to unveil a major cybercrime case Wednesday; the Secret Service didn’t immediately return a telephone call about the matter Tuesday evening. It wasn’t immediately clear how the group is accused of getting the credit card numbers. But leaders created phony cards, provided them to associates and contrived to send the associates “to locations in (Manhattan) and elsewhere to purchase goods, such as laptop computers, iPods, iPhones, other electronic devices, gift cards and clothing products” starting in May 2009, the indictment said. It lists purchases in Apple stores in a roster of major cities, including Las Vegas, Atlanta, Indianapolis and St. Louis, and smaller communities such as Altamonte Springs, Fla., and Stamford, Conn. Members of the group sometimes charged more than $3,000 worth of products in one stop, but other transactions were as small as a $53.45 tab for a laptop case, the indictment says. Cupertino, Calif.-based Apple Inc. didn’t immediately return a call seeking comment Tuesday. Shaheed Bilal, accused of being a leader of the scheme, had thousands of stolen credit card numbers stored in e-mails and boasted via Twitter about using credit cards at restaurants, prosecutors said at his arraignment Tuesday. He continued “to oversee the operations of this conspiracy by communicating instructions via telephone” while incarcerated from last May to December, the indictment said. It’s unclear why he was behind bars at the time. Bilal, 28, was being held on $1 million bail after pleading not guilty at his arraignment Tuesday. His lawyer’s name wasn’t immediately available. The group channeled at least some of the ill-gotten merchandise for below-market prices to a man who then resold it at a profit, the indictment said. The man accused of being the reseller, Gil Einhorn, also pleaded not guilty Tuesday. Defense lawyer Steven Kartagener said Einhorn was “confident in his ultimate vindication.”

Read the full article →

Neighboring States Celebrate Tax Hike, But Will It Really Help Them?

January 13, 2011

SPRINGFIELD, Ill. — While many states consider boosting their economies with tax cuts, Illinois officials are betting on the opposite tactic: dramatically raising taxes to resolve a budget crisis that threatened to cripple state government. Neighboring states gleefully plotted Wednesday to take advantage of what they consider a major economic blunder and lure business away from Illinois. “It’s like living next door to `The Simpsons’ – you know, the dysfunctional family down the block,” Indiana Gov. Mitch Daniels said in an interview on Chicago’s WLS-AM. But economic experts scoffed at images of highways packed with moving vans as businesses leave Illinois. Income taxes are just one piece of the puzzle when businesses decide where to locate or expand, they said, and states should be cooperating instead trying to poach jobs from one another. “The idea of competing on state tax rates is . . . hopelessly out of date,” said Ed Morrison, economic policy advisor at the Purdue Center for Regional Development. “It demonstrates that political leadership is really out of step with what the global competitive realities are.” By going where no other state dares to tread, Illinois could prove itself to be a policy pacesetter or the opposite – a place so dysfunctional that officials created a jaw-dropping budget crisis and then tried to fix it by knee-capping the economy. Illinois faced a budget deficit of $15 billion in the coming year, equivalent to more than half the state’s general fund. Officials warned that state government might not be able to pay its employees. It certainly would fall further behind in paying the businesses, charities and schools that provide services on the state’s behalf. To avoid that, the Democrat-controlled General Assembly voted to temporarily raise personal income taxes 66 percent, from 3 percent to 5 percent. Corporate rates will rise, too – from 4.8 percent to 7 percent – when Democratic Gov. Pat Quinn signs the measure. The increase is expected to produce $6.8 billion a year for the four years it’s in full effect. That should be enough to balance Illinois’ annual budget and begin chipping away at a backlog of roughly $8 billion in old bills. The tax move inspired a day of taunts across state borders and finger-pointing between parties. “Years ago Wisconsin had a tourism advertising campaign targeted to Illinois with the motto, `Escape to Wisconsin,’” Wisconsin Gov. Scott Walker said in a statement. “Today we renew that call to Illinois businesses, `Escape to Wisconsin.’ You are welcome here.” Illinois state Sen. Dan Duffy, a Republican, labeled the tax increase “the nuclear bomb of jobs bills.” There was even some carping from Illinois Democrats. Chicago Mayor Richard Daley predicted jobs will start trickling out of Illinois with little fanfare. “Businesses don’t have press conferences like this and announce they’re moving 50 people out, 60 people out, 70 people,” Daley said at an event in Chicago. But Illinois’ governor rejected the idea that the increase would allow other states to lure jobs away. “Lots of luck to them, but that’s not going to happen,” Quinn said at a news conference Wednesday. Businesses look at more than taxes when making financial decisions, Quinn said. They also look at whether state government is stable and able to provide good roads and schools. “It’s important for their state government not to be a fiscal basket case,” Quinn said. A Wisconsin company seemed to prove his point. Train-maker Talgo Inc. is threatening to leave Milwaukee because Wisconsin rejected federal funds for high-speed rail. Talgo still considers Illinois a strong possibility for its new the company’s new home, despite the tax increase, said spokeswoman Nora Friend. The tax increase “would not weigh in as a positive, but it’s difficult to say whether it’s the deciding factor,” Friend said. “It would be one more factor that gets weighed in.” Illinois Democrats note that even after the increase takes effect, the 5 percent personal income tax rate will still be lower than many nearby states’. The top personal rate in Wisconsin is 7.75 percent, for example, and Iowa’s is 8.98 percent. Indiana and Michigan will have lower rates, however – 3.4 percent and 4.35 percent. Bill Ecton, 54, owns Ecton’s True Value Hardware in Robinson, Ill., just a few miles from the Indiana border. He was resigned to the fact that Illinois ultimately would raise taxes to repair the budget, but he said the taxes will take a toll. “If I have to pay more to the state, it’s money that I can’t pay out in wages,” Ecton said. “I’m not saying I’m laying people off, but maybe I’m going to look twice at adding another one.” ___ Associated Press writers David Mercer in Champaign, Ill., Scott Bauer in Madison, Wis., Dinesh Ramde in Milwaukee and Charles Wilson in Indianapolis, Ind., contributed to this report.

Read the full article →

Holiday Shoppers Sprint To End; Retail Revenue Up

December 23, 2010

NEW YORK — Holiday shoppers are racing to the end of the season at a more feverish pace this year, with retail revenue up 5.5 percent during the last weekend before Christmas. The figure, released by ShopperTrak on Wednesday, is a drastic improvement from the same weekend last year, when revenue dropped 6.2 percent because a big East Coast snowstorm closed malls and kept shoppers at home. This year’s improvement is especially encouraging for retailers, for whom a big weekend all but sealed a shopping season of healthy revenue gains. ShopperTrak reported shoppers spent $18.83 billion Dec. 17-19. That includes $7.58 billion spent on what retailers call “Super Saturday” – the Saturday before Christmas. The number of shoppers rose 3 percent over the weekend before Christmas last year. ShopperTrak expects retail spending to rise 4 percent for the holiday season. It fell 0.4 percent during the 2009 season. Anything over 4 percent is considered a healthy gain. The final days leading up to Christmas are important for retailers. Some do a third of their annual business during the season. The final countdown to Christmas is especially important. ShopperTrak estimates that the 10 days before Christmas usually make up 31 percent to 34 percent of holiday-season retail revenue. Consumers appeared to be in the mood to hit just one location for their shopping needs, with Thomson Reuters reporting that traffic at malls was higher on Super Saturday than a year ago. But ShopperTrak anticipates this Thursday will likely edge out Super Saturday to become the second-biggest sales day this season behind Black Friday, as last-minute shoppers scramble to pick up gifts. Black Friday sales were $10.69 billion, according to ShopperTrak. The Walking Co. store at Circle Centre Mall in downtown Indianapolis has seen a steady flow of customers. “We’re at least breaking even with where we were last year, if not better,” manager Robert Stapleton said. Recent data from MasterCard Advisors’ SpendingPulse, which tracks spending across all transactions including cash, shows Americans were spending more on clothing, luxury goods and even furniture during the period from Oct. 31 through Saturday. Online spending has also been strong. As of Friday, shoppers have spent $27.46 billion online since Nov. 1, up 12 percent from a year ago, according to research firm comScore Inc. Improved spending is also a sign that the economy may be regaining its footing. The Commerce Department reported earlier this month that November retail sales rose 0.8 percent, marking the fifth straight monthly gain. Department stores led the way with a 2.8 percent gain, the biggest for this category since a 3 percent increase in November 2008. Retailers are expected to have a strong December, with Thomson Reuters predicting that revenue at stores open at least a year will be up 3.6 percent on average for the month. Discount stores like Target Corp. and BJ’s Wholesale Club Inc. are expected to do well, along with teen clothing retailers like Abercrombie & Fitch Co. and Zumiez Inc. This figure is a key gauge of a retailer’s health because it measures results at existing stores instead of newly opened ones. ___ AP Business Writer Tom Murphy contributed to this story from Indianapolis.

Read the full article →

Brookside Welcomes New Central Regional President

October 20, 2010

TAMPA, FL–(Marketwire – October 20, 2010) –  Brookside Technology Holdings Corp. (“Brookside” or the “Company”) ( OTCBB : BKSD ) through its President George Pacinelli, announced the recent appointment of Jim Hogan as President of its North Central Region under their U.S. Voice & Data banner with offices in Louisville, Lexington, KY and Indianapolis, IN.

Read the full article →

Buckingham To Pursue "Transformative" $150M Mixed Use Project

October 6, 2010

Confirming that it plans to move forward with the City of Indianapolis on a $150 million “transformative development” that will include a large business hotel, 320 high-end apartments, 40,000 square feet of restaurants and retail space and a proposed…

Read the full article →

CoStar’s People of Note (Sept. 19-25)

September 23, 2010

This week’s People of Note includes the following markets: East Bay, Houston, Indianapolis, Philadelphia and San Francisco. EAST BAY, SAN FRANCISCO Cassidy Turley Names New Head of S.F. Office Cassidy Turley BT Commercial appointed Greg Moss as…

Read the full article →

Video: Peyton Manning Waiting for New Contract, Salary Details: Video

August 23, 2010

Aug. 23 (Bloomberg) — Indianapolis Colts quarterback Peyton Manning remains in contract talks with the National Football League team. Bloomberg’s Michele Steele reports. (Source: Bloomberg)

Read the full article →

Lilly’s Erbitux Cancer Drug Fails to Stop Colon Tumors From Spreading

June 6, 2010

By Tom Randall June 6 (Bloomberg) — Eli Lilly & Co. and Merck KGaA’s Erbitux, approved for advanced colon cancer, failed to slow tumors in a study designed to expand the medicine’s use to patients whose disease is in an earlier stage. Erbitux, used to treat aggressive colorectal tumors that have reached other areas of the body, didn’t help stop the spread when added to chemotherapy, according to a study reported today at the American Society of Clinical Oncology meeting in Chicago. Erbitux added to the side effects of chemotherapy. The finding is the latest of at least three studies that have narrowed the scope of a drug that was the first of its kind for colon cancer when approved in 2004. Last year, Erbitux’s prescribing information was changed to say that patients whose tumors have a mutation to a gene called KRAS –found in about 40 percent of colon cancer cases — aren’t helped by the treatment. “Unfortunately with cancer, things that are hoped to work don’t always end up working,” said Herbert Hurwitz , associate professor of medicine at Duke University Medical Center in Durham, North Carolina, who wasn’t involved in the study. “This was a well-run study that asked a good clean question and got a good clean answer.” Erbitux had sales of about $1.4 billion last year, according to IMS Health, a drug research company. It continues to be a useful drug for patients with tumors that have spread, said Hurwitz, who spoke in a telephone interview. In those patients, Erbitux competes with Roche Holding AG’s Avastin, which has shown similarly poor performance in studies for mid- stage colon cancer that hasn’t spread. Expected to Work “From a market-share perspective, this would have been a big group of new patients and would have distinguished it from” Avastin, Hurwitz said. “Most people would probably have expected this drug to work as well or better” in earlier stages as later stages, he said in a phone interview. The trial involved about 1,800 participants. About half were given Erbitux along with a chemotherapy called Folfox, while 858 patients were given Folfox alone. After a follow-up of 16 months, both groups had a similar number of patients who didn’t show signs of their cancer returning. Patients taking Erbitux were actually slightly less likely to survive, with 82 percent still alive at follow-up compared with 87 percent taking chemotherapy alone. About 147,000 Americans are diagnosed with colon cancer every year, making it one of the most common forms of tumors, according to the National Cancer Institute . Cancer That’s Spread About 25 percent of patients are first identified with so- called metastatic cancer, which means the disease has already spread to multiple areas of the body, said Steven Alberts , lead researcher on today’s study and professor of oncology at the Mayo Clinic College of Medicine in Rochester, Minnesota. Another third of colon cancer patients are diagnosed with stage 3 tumors, meaning the cancer has begun to reach nearby lymph nodes but haven’t yet established themselves in new regions of the body, Alberts said. The Erbitux study was aimed at stage 3 colon cancer patients. “Maybe it didn’t live up to some of the initial hopes or expectations, but at the end of the day it still is an important drug that clearly is benefiting a proportion of patients,” Alberts said in an interview at the conference. “It is a meaningful drug in the metastatic setting; just not in the earlier setting. “The hard part is to figure out why it happened. That’s the focus of our research now,” Alberts said. KRAS Mutation Erbitux is a man-made antibody, a substance naturally produced by the immune system in response to infection. The drug works by latching onto cancerous cells and blocking replication. The flaw in the KRAS gene, which holds the blueprint for part of a messaging system inside the cell, is thought to render Erbitux ineffective. As many as 40 percent of patients with colorectal cancer have the mutation, according to previous research . Among those without the gene mutation, only about a third to half of patients respond to treatment, Alberts said. In September, a study known as the COIN study found that Erbitux failed to improve the outcomes even for its target group of metastatic colon-cancer patients with normal KRAS genes. Researchers are still examining results from that study to determine why they contradicted other studies. Part of the difference may be due to a different type of chemotherapy and lower doses of treatment used in the COIN study, Alberts said. Lilly, based in Indianapolis, and New York-based Bristol Myers market Erbitux in the U.S., while Merck KGaA, of Darmstadt, Germany, sells it elsewhere. It’s approved for use in colorectal as well as head and neck tumors. The European Union in July rejected the drug as a treatment for a form of lung cancer. To contact the reporter on this story: Tom Randall in New York at trandall6@bloomberg.net .

Read the full article →

Steve Parker: Indy 500 weekend brings out special radio show guests

May 28, 2010

Very special guests this weekend on www.TalkRadioOne.com! Join us Saturday at 11am Pacific /2pm Eastern for THE CAR NUT SHOW and Sunday at 5pm Pacific/8pm Eastern for WORLD RACING ROUNDUP on www.TalkRadioOne.com! It’s just us and it’s all LIVE! Steve Parker’s The Car Nut Show Saturday starting at 5pm Pacific It’s an all-LA Times weekend for www.TalkRadioOne.com listeners! Special guest: Ken Bensinger, staff writer for the LA Times, who, months ago, broke the original story on Toyota’s unintended acceleration and other problems throughout the Toyota and Lexus line. Ken joins us for an exclusive one-on-one with YOU and all Car Nut Show listeners! Please join in! The call-in number is: 213-291-9410. Lexus ES300 sedans from 2002 to 2006 are the latest problem childs from Toyota Steve Parker’s World Racing Roundup Sunday starting at 5pm Sunday, Sunday, Sunday! World’s best-known race – The Indianapolis 500 at 10am (PST) on ABC! Sprint Cup Coca-Cola 600 at Charlotte, NASCAR’s home town, starting at noon (PST). The day before, Saturday, the Nationwide Series at Charlotte, the Tech-Net Auto Service 300 starting at 11am PST on ABC! Very special guest Jim Peltz, motorsports writer for the Los Angeles Times, joins us LIVE from the Indianapolis Motor Speedway! Join us! The call-in number is: 213-291-9410. Join in! Podcasts of the shows are available one-hour-or-so after the live programs’ conclusion. That’s this Saturday at 11am Pacific and 2pm Eastern and Sunday at 5pm Pacific/8pm Eastern on www.TalkRadioOne.com! Mario Andretti wins the 1969 Indy 500 and gets the kiss-heard-round-the-world from STP’s Andy Granatelli Follow Steve Parker on Twitter: www.twitter.com/autojourno

Read the full article →

Steve Parker: Breaking – Formula 1 returns to America!

May 25, 2010

Purpose-built track in Austin, TX will host from 2012 through 2021; as we predicted, with Tony George out of the way of F1 and Indianapolis Motor Speedway, an agreement is finally signed. Courtesy FORMULA1.COM: Formula One World Championship Limited and Formula One Administration Limited (together, the F1 Commercial Rights Holder) and Full Throttle Productions, LP, promoter of the Formula 1 United States Grand Prix™, announce that a historic agreement has been reached for Austin, Texas to serve as the host city of the Formula 1 United States Grand Prix™ for years 2012 through 2021. Ferrari at speed at 2009′s Japan Grand Prix “We are extremely honoured and proud to reach an agreement with the F1 Commercial Rights Holder. We have been diligently working together for several years to bring this great event to Austin, the State of Texas and back to the United States. All parties involved have a great amount of trust and confidence in each other and are committed to establishing the Formula 1 United States Grand Prix™ in Austin, Texas as a prestigious global event,” stated Tavo Hellmund, Managing Partner of Full Throttle Productions, LP. Bernie Ecclestone, President and CEO of the Formula One Group stated: “For the first time in the history of Formula One in the United States, a world-class facility will be purpose-built to host the event. It was thirty years ago that the Formula 1 United States Grand Prix™ was last held on a purpose-built permanent road course circuit in Watkins Glen, NY (1961-1980), which enjoyed great success. Since then, Formula One has been hosted by Long Beach, Las Vegas, Detroit, Dallas and Phoenix all on temporary street circuits. Indianapolis joined the ranks of host cities in 2000 when they added a road course inside the famed oval. Lewis Hamilton won the last Formula 1 United States Grand Prix™ in 2007, signalling the end to eight years at Indianapolis Motor Speedway. This however, will be the first time a facility is constructed from the ground up specifically for Formula One in the US.” www.JamesAllenOnF1.com says: “There is a major push to bring the USA under the F1 umbrella. The failure of the USF1 team was an embarrassment, but now it seems that there are efforts to resurrect the idea of an American team and You Tube founder Chad Hurley is still linked with this. Ferrari president Luca di Montezemolo has a better idea, he believes. He said in an interview today that he dreams of a third Ferrari in the stars and stripes colors.” Comments?

Read the full article →

`Radical Break’ in Shape of Fed Banks May Leave Lenders Absent From Boards

May 22, 2010

By Vivien Lou Chen May 22 (Bloomberg) — As a director at the Federal Reserve Bank of Chicago, Stephen Goodenow said he goes into board meetings reporting on his visits with manufacturing companies, farmers and car dealers to help gauge the Midwestern economy. “I’m taking that information to the board room in Chicago and saying, ‘This is what I’m hearing on the street,’” said the 44-year-old head of Bank Midwest in Spirit Lake, Iowa. The Fed’s successful effort to keep oversight of 5,000 banks comes with a twist: It might lose voices like Goodenow’s. Under the Senate’s financial overhaul bill passed two days ago, employees of Fed-supervised banks are barred from serving on the central bank’s regional boards to prevent potential conflicts of interest. The Senate bill, which would create a new consumer protection agency, impose restrictions on proprietary trading by banks and create a council of regulators to monitor threats to the economy, must now be reconciled with a House measure approved in December, which doesn’t change Fed governance. Cornelius Hurley , a former assistant general counsel to the Fed, called the provision banning bankers from serving on regional Fed boards “a radical break in the model that has characterized the Federal Reserve System since its founding.” The Federal Reserve Act of 1913 requires bank representation on the boards. Goodenow is one of three bankers on a nine-member board who influence monetary policy and act as eyes and ears for the Fed by delivering economic assessments at in-person meetings seven times a year. The others are Frederick Waddell , chief executive of Chicago-based Northern Trust Corp., and Mark Hewitt , CEO of Clear Lake Bank & Trust Co. in Clear Lake, Iowa. Under Fire The central bank came under fire last year when it granted a waiver allowing a Goldman Sachs Group Inc. board member to stay on as the New York Fed’s chairman after Goldman Sachs became a bank holding company. The change to a bank holding company put Goldman Sachs under the New York Fed’s supervision. The director, Stephen Friedman , bought additional stock in Goldman Sachs after receiving the waiver. Friedman, who was selected by the Fed’s Washington-based Board of Governors and not banks, resigned in May of last year, saying he was “in compliance with the rules.” “I know the public perceives that we’re a bunch of greedy bankers, and that bankers on a Fed board have an unfair advantage,” said Goodenow, a fifth-generation community banker. “I can tell you it’s just not how it is.” Restoring Confidence Changing the Fed board selection process is about “restoring confidence,” and creating “a structure that makes sense in the 21st century,” Senate Banking Committee Chairman Christopher Dodd , the Connecticut Democrat who introduced the regulatory-reform bill, said in an interview last month. There are inherent conflicts with a supervised institution being “responsible for choosing the supervisor.” Tom Schlesinger , executive director of Financial Markets Center in Howardsville, Virginia, which follows the Fed, said the Dodd bill raises the “legitimate concern that reserve banks, as front-line supervisors, have been guilty of being asleep at the switch.” “We don’t know anything about what reserve directors were or were not providing in the way of useful information before the crisis, and the type of influence they may have exerted over the supervisory process,” Schlesinger said. Senate Amendment On May 12, the Senate approved an amendment offered by Kay Bailey Hutchison , a Texas Republican, and Amy Klobuchar , a Minnesota Democrat, preserving the Fed’s power to oversee banks like Bank Midwest, which has about $575 million in assets, and Hewitt’s Clear Lake Bank, with $240 million. Senate Banking Committee spokeswoman Kirstin Brost said lawmakers are “looking at ways” to address the proposed ban on bankers serving on Fed boards. The Chicago Fed “can’t speculate on what impact pending legislation might have on the makeup of our board,” said spokesman Daniel Wassmann. Besides Goodenow, Hewitt and Waddell, the Chicago board includes the CEOs of Allstate Corp. , Manpower Inc., USG Corp., AES Corp.’s Indianapolis Power & Light, and Chicago’s second- largest charitable foundation. A ninth seat is open. Fed directors aren’t discussing the congressional proposals at their three-hour board meetings, said Hewitt, 46, who was elected by small banks to the Chicago Fed. “The irony is that we as board members aren’t expected to get involved in politics, even though we are in the best position to talk about these things,” he said. “It’s an awkward situation.” Drug Store With an office on Clear Lake’s Main Avenue, near Larson’s Mercantile and Thrifty White Drug store, Hewitt says his role on the board is clear: “I represent small banks and small communities and make sure there’s a flavor of that at these board meetings.” The U.S. central bank consists of the Board of Governors plus 12 regional reserve banks. The presidents of the regional banks rotate onto the Federal Open Market Committee, which conducts monetary policy. Each regional Fed board is usually made up of three bankers, three non-bankers selected by banks, and three non- bankers chosen by Fed governors in Washington. While banks elect most of the directors, the board’s majority represents the borrowing public. The chairman and deputy chairman are always non-bankers. “We represent important, but not all, segments of the economy,” said William Foote , 59, CEO of building-materials maker USG and the Chicago’s Fed chair, who was appointed by Fed governors in Washington. Three-Year Terms Board members serve three-year terms and get paid retainers of $2,000 to $5,000 a year, along with $100 for each telephone conference and $200 to $300 for in-person meetings. They choose the Fed bank’s president, oversee operations, and participate in policy by voting every 14 days on the discount rate the Fed charges banks for direct loans. Yet they don’t have a role in supervising firms. Terry Mazany , 53, was chosen by banks to serve the public on the Chicago board. He called the current debate over the Fed’s structure a “unique moment in time.” “In normal times, as directors, we would be just going about the business of the board,” said Mazany, head of the Chicago Community Trust, the city’s second-largest charitable foundation behind the MacArthur Foundation. “Now, there’s a growing recognition that we need to be effective in communicating what the Federal Reserve does, why it’s able to do that, and why that is important.” To contact the reporter on this story: Vivien Lou Chen in San Francisco at vchen1@bloomberg.net

Read the full article →

Steve Parker: Weekend automotive radio shows

May 14, 2010

STEVE PARKER’S THE CAR NUT SHOW Saturday, 2/27, LIVE @ 11am Pacific/2pm Eastern on www.TalkRadioOne.com Ford’s 2010 Taurus breaks new ground with a car considered revolutionary when it hit the market for the first time in 1985 as a 1986 model. Ford’s all-new 2010 Taurus and Fusion hybrid… Steve’s driven them both extensively and he’ll talk about them on today’s show! Like low-production number cars built by small companies for high-performance? A new California law would allow more of them on the highway. And the United States Senate has declared July 9, 2010 as “Collector Car Appreciation Day.” So, uh, what’s up with that? Plus your calls — 213-291-9410! STEVE PARKER’S WORLD RACING ROUNDUP Sunday, 2/28, LIVE @ 5pm Pacific/8pm Eastern on www.TalkRadioOne.com Steve’s special guest: Motorsports journalist and ex-IndyCar driver Kurt Hansen. He knows whereof he speaketh … Plus: Gearing-up for the Indy 500, the Monaco Grand Prix, F1′s signature event, and all of NASCAR is at Dover! Plenty more so you be sure to join in at 213-291-9410! Defending World Driving Champion Jenson Button takes a lap in a BAR Honda a few years ago at Monaco. This week marks the 60th anniversary of the very first round of the FIA Formula One World Championship, which was held at Silverstone (UK) on May 13, 1950. The British Grand Prix, which also had the title of ‘Grand Prix d’Europe’ bestowed upon it that year, was the first event in a seven-race season, which also featured rounds in Monaco, Switzerland, Belgium, France and Italy, plus the Indianapolis 500.

Read the full article →

Walgreens Will Not Stock Genetic Test By Pathway Genomics Without ‘Further Clarity’

May 13, 2010

WASHINGTON — The largest U.S. drugstore chain, Walgreen Co., said Wednesday it will hold off selling what was poised to be the first over-the-counter genetic test, after the Food and Drug Administration said the kit has not been proven effective. Pathway Genomics announced Tuesday that its saliva swab would be on Walgreen’s shelves later this month, offering millions of Americans the chance peek into their genetic code for signs of inheritable diseases like Alzheimer’s. But within 24 hours the company’s plan was met with stiff response from FDA regulators who said the products may run afoul of federal laws governing medical tests. On Wednesday, the FDA posted a letter to Pathways online, indicating the San Diego-based company never submitted its product for federal review, a requirement for medical devices. “These kits have not been proven safe, effective or accurate and patients could be making medical decisions based on data from a test that hasn’t been validated by the FDA,” said agency spokeswoman Erica Jefferson, in an earlier statement Wednesday. Walgreen said late Wednesday that the Deerfield, Ill., company had decided not to stock the tests until it has “further clarity” on the issue. Pathway’s test would have been the first low-cost, mass-marketed version of kits that screen for genes associated with diseases like prostate cancer, cystic fibrosis and diabetes. A saliva collection kit plus full genetic analysis from Pathway was slated to cost about $275. Companies like 23andMe and Navigenics have sold similar kits online for years, with prices ranging between $400 and $1,000. Those products have never been reviewed by the FDA, even though the agency has the power to regulate all such laboratory-developed medical tests. But agency officials said Wednesday that Pathway crossed “sanctioned boundaries” for such products by seeking to sell its products in retail pharmacies. The agency’s letter to Pathways, dated May 10, requests a response within 15 days. “We give them a chance to respond and tell us why do you think that this is, in fact, actually a legal product,” said Dr. Alberto Gutierrez, the FDA’s director of diagnostic testing. Pathways said in a statement it is communicating with the FDA and respects Walgreen’s decision to hold off stocking the product. The proliferation of consumer-marketed genetic tests has troubled many public health officials and doctors who worry that the products are built on flimsy data. “The problem with all of these products is they’re based on incomplete, invalidated data and we don’t know what the impact on consumers will be,” said Dr. Muin Khoury, director of the National Office of Public Health Genomics at the Centers for Disease Control and Prevention. The biology of how DNA variations actually lead to certain diseases is still poorly understood, although a number of public and private institutions have been racing to find answers. Khoury said that knowing a patient’s medical history – including whether diabetes or heart disease run in their family – is actually more useful than current genetic testing. He and other experts worry that increasing prevalence of genomic tests could pressure doctors to order unnecessary tests and treatment. “I think it’s going to be a headache for both primary care physicians and for consumers themselves who are going to get these reports back and not know what to do with the information,” said Dr. Peter Kraft, professor of epidemiology at Harvard School of Public Health. But the prospect of millions of patients walking into their doctor’s office with DNA test results may be unrealistic. A CDC survey found that just 22 percent of Americans were aware of genomic testing. And a sampling of consumers interviewed by The Associated Press found that they have real concerns about the cost and potential misuses of such information. Deon Green, 36, of Indianapolis, said he might consider getting a genetic test, though the prices seem steep to him. “I couldn’t see myself spending $200,” he said. Although, he added, “$100 would be more suitable to my budget.” David Jones, 60, said he sees many good uses for genetic testing, but has no interest in taking one himself because of how the information might be used. Specifically, he worries that an insurer might cancel coverage because of test results, and he doesn’t trust laws that aim to prevent such discrimination. “I don’t care how many laws you have, laws don’t stop abuses from happening,” he said. ____ AP Business Writers Tom Murphy in Indianapolis and Richard Jacobsen in San Francisco contributed to this story.

Read the full article →

Walgreens Will Not Stock Genetic Test By Pathway Genomics Without ‘Further Clarity’

May 13, 2010

WASHINGTON — The largest U.S. drugstore chain, Walgreen Co., said Wednesday it will hold off selling what was poised to be the first over-the-counter genetic test, after the Food and Drug Administration said the kit has not been proven effective. Pathway Genomics announced Tuesday that its saliva swab would be on Walgreen’s shelves later this month, offering millions of Americans the chance peek into their genetic code for signs of inheritable diseases like Alzheimer’s. But within 24 hours the company’s plan was met with stiff response from FDA regulators who said the products may run afoul of federal laws governing medical tests. On Wednesday, the FDA posted a letter to Pathways online, indicating the San Diego-based company never submitted its product for federal review, a requirement for medical devices. “These kits have not been proven safe, effective or accurate and patients could be making medical decisions based on data from a test that hasn’t been validated by the FDA,” said agency spokeswoman Erica Jefferson, in an earlier statement Wednesday. Walgreen said late Wednesday that the Deerfield, Ill., company had decided not to stock the tests until it has “further clarity” on the issue. Pathway’s test would have been the first low-cost, mass-marketed version of kits that screen for genes associated with diseases like prostate cancer, cystic fibrosis and diabetes. A saliva collection kit plus full genetic analysis from Pathway was slated to cost about $275. Companies like 23andMe and Navigenics have sold similar kits online for years, with prices ranging between $400 and $1,000. Those products have never been reviewed by the FDA, even though the agency has the power to regulate all such laboratory-developed medical tests. But agency officials said Wednesday that Pathway crossed “sanctioned boundaries” for such products by seeking to sell its products in retail pharmacies. The agency’s letter to Pathways, dated May 10, requests a response within 15 days. “We give them a chance to respond and tell us why do you think that this is, in fact, actually a legal product,” said Dr. Alberto Gutierrez, the FDA’s director of diagnostic testing. Pathways said in a statement it is communicating with the FDA and respects Walgreen’s decision to hold off stocking the product. The proliferation of consumer-marketed genetic tests has troubled many public health officials and doctors who worry that the products are built on flimsy data. “The problem with all of these products is they’re based on incomplete, invalidated data and we don’t know what the impact on consumers will be,” said Dr. Muin Khoury, director of the National Office of Public Health Genomics at the Centers for Disease Control and Prevention. The biology of how DNA variations actually lead to certain diseases is still poorly understood, although a number of public and private institutions have been racing to find answers. Khoury said that knowing a patient’s medical history – including whether diabetes or heart disease run in their family – is actually more useful than current genetic testing. He and other experts worry that increasing prevalence of genomic tests could pressure doctors to order unnecessary tests and treatment. “I think it’s going to be a headache for both primary care physicians and for consumers themselves who are going to get these reports back and not know what to do with the information,” said Dr. Peter Kraft, professor of epidemiology at Harvard School of Public Health. But the prospect of millions of patients walking into their doctor’s office with DNA test results may be unrealistic. A CDC survey found that just 22 percent of Americans were aware of genomic testing. And a sampling of consumers interviewed by The Associated Press found that they have real concerns about the cost and potential misuses of such information. Deon Green, 36, of Indianapolis, said he might consider getting a genetic test, though the prices seem steep to him. “I couldn’t see myself spending $200,” he said. Although, he added, “$100 would be more suitable to my budget.” David Jones, 60, said he sees many good uses for genetic testing, but has no interest in taking one himself because of how the information might be used. Specifically, he worries that an insurer might cancel coverage because of test results, and he doesn’t trust laws that aim to prevent such discrimination. “I don’t care how many laws you have, laws don’t stop abuses from happening,” he said. ____ AP Business Writers Tom Murphy in Indianapolis and Richard Jacobsen in San Francisco contributed to this story.

Read the full article →

Health Insurers Say They’ll End Rescission Policy Dropping Sick Patients

April 29, 2010

By Drew Armstrong April 29 (Bloomberg) — Health-insurance customers won’t risk losing their coverage when they become sick under an industrywide ban beginning in May on the practice known as “rescissions.” WellPoint Inc. and UnitedHealth Group Inc. , the biggest U.S. health insurer by sales, said earlier this week they would no longer cancel customer policies without evidence of fraud or intentional misrepresentation. Companies will end the practice beginning in May, Karen Ignagni , chief executive officer of America’s Health Insurance Plans, the industry’s lobbying group, said yesterday in a letter. The health law signed by President Obama in March would have required insurers to stop all rescissions in September. “Our community is committed to implementing the new standard in May 2010 to ensure that individuals and families will have greater peace of mind when purchasing coverage on their own,” Ignagni said. This is the second time in a month that health-insurance companies have opted to act before the law’s requirements and implement new regulations from the health care overhaul. Earlier in April, insurers announced that they would immediately begin a policy letting dependents under the age of 26 stay on their parents’ plans. White House Push The companies have done so partly at the prodding of Democrats in Congress and the Obama administration. On April 27, Democratic chairmen of three House health committees wrote a letter asking the insurers “to end any such abusive practices immediately.” The letter went to WellPoint, based in Indianapolis, Indiana, UnitedHealth Group, based in Minnetonka, Minnesota, Kaiser Permanente, based in Oakland, California, Assurant Inc. , based in New York, Humana Inc. , based in Louisville, Kentucky, the Blue Cross Blue Shield Association, based in Chicago, and Aetna Inc. , based in Hartford, Connecticut. House Ways and Means Committee Chairman Sander Levin , a Michigan Democrat, was one of the lawmakers who urged insurers to stop rescissions early. “There is a lesson to be learned here. These companies have seen the writing on the wall and decided to align their practices with the law of the land even before they are required to do so,” Levin said in a statement responding to insurers’ announcement. The White House applauded the move, as well. “It’s heartening to see that the insurance companies who employed these terrible practices — and fought reform — are coming around doing the right thing by instituting the ban right away,” Nancy-Ann DeParle , director of the White House Office of Health Reform, said in an e-mailed statement. “We’ll be watching closely and holding them to their word.” To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net .

Read the full article →

Stadiums Beat Stocks After Public Colleges Bet Football Is Recession-Proof

April 29, 2010

By Curtis Eichelberger April 29 (Bloomberg) — The University of Texas is profiting from a decision to renovate its football stadium four years ago instead of investing in securities. As the worst recession since the Great Depression beat down the S&P 500 Index 41 percent between July 2, 2007, and July 1, 2009, and caused more than 8 million job losses, athletic departments such as Texas and Louisiana State University used their on-field success to drive increases in operating revenue. Among the largest schools — the nine with at least $90 million in operating revenue — the biggest winners were Texas, up 32 percent to $138.5 million; LSU, up 32 percent to $100.9 million; and Texas A&M , up 33 percent to $98.1 million, according to a review of athletic department financial records. “Good grief, who is in charge down there?” asked Texas Athletic Director DeLoss Dodds , making a joke on his own behalf. “He needs a raise.” Dodds, 72, said the school’s annual debt payment from the football stadium construction is about $14 million, while revenue from the renovation is about $24 million a year. He said placing the money in endowments would have produced a 30 percent drop. Texas played for the national football championship twice in the past five years, winning in 2005, and has sold out 59 straight home football games dating to Sept. 9, 2000. Records Request Bloomberg News received financial statements for the fiscal years ending in 2007 through 2009 from 51 public universities in the Atlantic Coast, Big East, Big Ten, Big 12, Southeastern and Pacific 10 conferences after filing open-records requests. The average increase in operating revenue — money from things like tickets, concessions and program sales, but excluding items such as interest on investments — was 11 percent. Jim Isch , interim president of the Indianapolis-based National Collegiate Athletic Association, said the significance of revenue gains at schools such as Texas and LSU will become more apparent when this year’s data is available this fall. All but the most successful athletic departments probably will show declines in ticket revenue, contributions and endowment income, he said. “These schools are the anomalies,” Isch said in a telephone interview. “They are playing for national football championships, they have tradition, people know if they don’t keep their tickets, someone else is standing in line to get them. “But the average programs are going to see declines.” Stadium Renovation In Austin, Texas, the Longhorns renovated their football stadium in stages between 2006 and 2009, adding 13,000 seats priced from $65 to $95 depending on the game; 2,200 club seats starting at a minimum $2,000 annual donation, plus the cost of the ticket; 2,450 chairback seats priced at a minimum $750 annual donation, plus the ticket; 47 suites priced from $62,000 to $75,000 plus the tickets and catering; an $8 million, 55- foot-by-134-foot video scoreboard; and ribbon scoreboards that offer more opportunities for advertisers. At their baseball field, they added 19 suites priced from $32,000 to $40,000 plus catering; 400 club seats at field level priced at a minimum $750 annual donation, plus the tickets; and a video board. The bricks-and-mortar investment paid off, according to Texas’s athletic director. “Had we gone with endowments, we’d be down 30 percent,” Dodds said. “This is a huge success.” LSU’s Championship LSU Athletic Director Joe Alleva , 56, said the Tigers’ 2007 national football title is still driving revenue increases. “Everything stems from the championship,” he said in a telephone interview from his office. “We increased ticket prices, we increased seat-licensing revenue, and we had a lot of licensing revenue generated by the championship that spilled over into subsequent years.” Alleva said that while New Orleans is just an hour’s drive from the school’s Baton Rouge campus, LSU sports are everything to the hometown community. “I have never seen passion like LSU fans have for Tiger football and our other sports,” said Alleva, who was Duke University’s athletic director from 1998 to 2008. “I’ve had people tell me they’d rather give up a vacation and other luxury items before they’d give up their tickets to Tiger Stadium.” Michigan’s Boost Michigan increased its sponsorship and licensing revenue by 43 percent to $17.3 million after exiting an apparel sponsorship with Nike Inc. for a new agreement with Adidas AG in June 2007. In August 2008, the Ann Arbor-based school bundled most of its athletic sponsorship accounts and outsourced them to closely held IMG Worldwide Inc., the U.S.’s largest collegiate licensing and multimedia rights agency, representing more than 200 properties. “We had fortuitous timing,” said Jason Winters, the chief financial officer for Michigan’s athletic department. “It’s a challenging market. But our brand is sustainable. We have a long history and tradition of success.” Isch said schools may begin showing the recession’s effects when financial results are calculated for the fiscal year ending in 2010. Some schools close their books in June, others wait until August. “I believe you will see that intercollegiate athletics is not recession-proof,” Isch said. Revenue Skids Nineteen of the 51 schools in the Bloomberg survey showed declines in operating revenue in the final year of the three- year survey. Andrew Zimbalist , an economics professor at Smith College in Northampton, Massachusetts, said when 2009-10 data becomes available later this year, it will probably show back- to-back years of revenue declines for many schools. “The sharp impact of the downturn happens around the beginning of October 2008,” he said. “By that time, many of the season tickets, the booster donations, the catering functions have already been booked for the 2008-09 year.” Schools that had drops in operating revenue between fiscal 2007 and 2009 include the University of Florida, down 11 percent to $96.8 million; Arizona State, down 5 percent to $51.9 million; and the University of Washington, down 9 percent to $54 million. A separate Bloomberg survey in November showed that 45 of the largest U.S. college athletic programs lost a combined $209 million in their investment portfolios between June 30, 2007, and June 30, 2009, with the University of North Carolina experiencing the biggest loss — $52 million, dropping the market value of its endowment fund to $148 million, according to the school. More to Come Meanwhile, in Austin, the athletic department’s finances promise even greater success in the future. “I’ve just spent 20 minutes with the (Longhorns) Foundation to check on donor levels, and they tell me we are going to be up this year on donations,” said Dodds. “It’s our football success. It’s the passion people have for football in Texas.” To contact the reporter on this story: Curtis Eichelberger in Washington at ceichelberge@bloomberg.net

Read the full article →

Simon Is in Talks With Blackstone About Joining General Growth Investment

April 27, 2010

By Daniel Taub and Prashant Gopal April 27 (Bloomberg) — Simon Property Group Inc. , the mall owner bidding to bring General Growth Properties Inc. out of bankruptcy, is in talks to add Blackstone Group LP as a partner in its investment, Chief Executive Officer David Simon said. “Blackstone is interested in working with us,” Simon said in an interview today at the Milken Institute Global Conference in Beverly Hills, California. “We have ongoing discussions with them.” Simon has already lined up Paulson & Co., ING Clarion Real Estate Securities, Taconic Capital Advisors, Oak Hill Advisors LP and Deutsche Bank AG’s RREEF as co-investors. General Growth, the biggest U.S. mall owner after Simon, has endorsed a rival bankruptcy exit plan led by Brookfield Asset Management Inc. Simon, based in Indianapolis, made its investment proposal after General Growth rejected a $10 billion takeover offer in February. Blackstone had been interested in teaming with Simon on a complete buyout, David Simon said today. “Their No. 1 focus has been on being our partner if we’re able to buy the company,” he said. “But I think they are considering whether they want to buy some stock as part of a recap as well.” Christine Anderson , a spokeswoman for New York-based Blackstone, couldn’t immediately be reached for comment. To contact the reporter on this story: Daniel Taub in Los Angeles at dtaub@bloomberg.net ; Prashant Gopal in New York at pgopal2@bloomberg.net .

Read the full article →

UnitedHealth, WellPoint Fight Obama’s Mandate on Medical Costs

April 13, 2010

By Drew Armstrong April 13 (Bloomberg) — A U.S. mandate forcing insurers led by UnitedHealth Group Inc. and WellPoint Inc. to spend 85 percent of revenue from premiums on medical care is the newest front in the battle between the Obama administration and companies over industry profits. In 2009, UnitedHealth spent 82.3 percent of revenue from premiums to pay customers’ medical expenses and WellPoint spent 82.6 percent, according to company filings. While individual insurers now decide what categories to include in this ratio, the health law signed in March demands that all companies define medical costs the same way beginning in 2011. Many insurers include only customer claims in their current ratios. They want to keep the number low to impress investors, said Sandy Praeger , of the National Association of Insurance Commissioners . Under the new law, lobbyists would include technology expenses, wellness programs and pay-for-performance incentives. That would make it easier to reach the 85 percent threshold, and free up revenue to boost profit. “This has the potential to be a big issue for the industry next year,” said Carl McDonald , an analyst at Oppenheimer & Co. in New York, in an April 8 note to clients. “Because the details of the calculation are left up to an administration that has been blatantly anti-managed care, it will be difficult for many commercial plans to outperform until this is cleared up.” The law sets two thresholds for 2011: 85 percent for policies involving large companies, and 80 percent for small groups and individuals. Input From States State officials represented by the Kansas City, Missouri- based insurance commissioners’ group, or NAIC, were initially asked by U.S. regulators to recommend by the end of 2010 what should be covered under the thresholds. That timing was shortened yesterday to June 1. Lobbyist organizations led by America’s Health Insurance Plans, or AHIP, a Washington-based group representing 1,300 insurers, and the Chicago-based Blue Cross and Blue Shield Association, with 39 members, are negotiating over how to shape the bill, Praeger said. “We’ve begun the discussions with some of the industry, or they’ve begun the discussion with us, because they’re nervous about how this is going to be defined,” Praeger said in a telephone interview. “They want to be able to say — when they go to Wall Street — that they’re really reserving a lot for profit. When they come to us they want to say the reverse, that they’re paying a lot for medical.” Final regulations for the provision will be approved by Health and Human Services Secretary Kathleen Sebelius . Company Shares UnitedHealth, based in Minnetonka, Minnesota, was unchanged at $32.26 in New York Stock Exchange composite trading yesterday. The company, the biggest U.S. insurer by sales, jumped 35 percent in the last year, boosted by the law’s promise to add millions of customers. WellPoint rose 8 cents to $61.34. Insurers believe wellness programs and technology systems to manage records should be categorized as medical care because they help improve overall health, said Justine Handelman, executive director for policy for the Blue Cross group. Robert Zirkelbach , a spokesman for AHIP, said his group’s members are concerned that refusing to include wellness programs under the thresholds may lower interest among companies in supporting these efforts, hurting consumers rather helping them. “We want to make sure that, however the regulations are structured, they aren’t going to disrupt those types of initiatives,” Zirkelbach said. Insurers have already made some changes in how they classify costs on their own. WellPoint Change WellPoint , the largest U.S. insurer by enrollment, last month announced it would count nurse call-in centers and wellness programs as medical costs. That move increased the Indianapolis-based company’s projected ratio to 84.3 percent in 2010 from 82.6 percent in 2009, the company said. Kristin Binns , a spokeswoman for WellPoint, said in an e- mail that company officials are “closely watching the NAIC recommendation process, and are looking at the impacts depending on how various expenses are classified.” UnitedHealth spokesman Tyler Mason said the insurer was “following discussions closely.’ He declined further comment.      Cigna CEO David Cordani said he was confident the administration will allow insurers to count spending on nurses who advise customers as a medical expense. Sebelius and congressional staff indicated a willingness to do so in conversations over the past six weeks, Cordani said in an interview yesterday. More Patient Value Democrats want to use the new rules to deliver on their promise that patients will get more value from their premiums, Senator Jay Rockefeller , a West Virginia Democrat, has said. President Barack Obama and Democrats in Congress repeatedly criticized insurers in the run-up to the law’s signing last month. They attacked WellPoint’s proposed 39 percent premium increase on some California customers as a preview of what might happen if the overhaul wasn’t passed. The regulations will require “insurance companies to dedicate more of the premiums dollars they collect to actual care instead of profits, bonuses, advertising and other overhead costs,” said Nicholas Papas, a Sebelius spokesman, in an e- mailed statement. Robert Laszewski , a Washington, D.C. policy analyst who consults with the industry, predicts that the insurance commissioners’ recommendations won’t put excessive pressure on industry profits. “This medical-cost ratio is a game,” he said. “What the regulators are now going to do is come up with rules of the game,” Laszewski said. “Hire some lobbyists and make some really good arguments.” No Political Pressure Praeger said there has been no political pressure from the Obama administration to squeeze insurers. “We would not do that,” she said. “We want to be accurate and the authority and the expert. We can’t get caught up in the political side.” The insurance commissioners will focus their recommendations on making sure there is a consistent and fair definition, she said, that “doesn’t get gamed.” To contact the reporters on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net .

Read the full article →

Fortune’s Stanley Bing: In God We Trust (All others pay cash)

April 5, 2010

I flew into Los Angeles from Indianapolis yesterday. You guys must think I’m on the plane all the time, and to some extent that’s true. In general, I’m not complaining as long as things go smoothly, which most of the time they do. In this case, it was a little bumpy during our layover in Dallas. American Airlines, which is hubbed there, couldn’t find a crew to clean the “new equipment” that had been assigned to our flight. That’s really frustrating. “We’d be ready to board,” said the announcement, “But we have a 767 instead of a 757 and they haven’t assigned a cleaning crew yet and so we’re not authorized to let you on the plane.” Several hundred people groaned. My phone rang. It was the Executive Platinum desk giving me a courtesy call to inform me of what I already knew. “You want to provide a real service here?” I politely asked the nice lady at the other end of the line. She seemed flummoxed. Her perception of her job, I could tell, was limited to calling people to tell them information that they probably already knew, end of story. “Okay?” she replied. I could tell that she was nervous. Suppose I asked her to come over and tie my shoe? “Why don’t you call your supervisors and tell them to send somebody to clean our plane?” I said with tremendous gentleness. “Then we could leave and you wouldn’t have to make any more phone calls.” I’m not claiming any credit here, but I will note that the cleaning crew showed up five minutes later and we left only 20 minutes late. While we were circling LA, the pilot got on to make a TMI Announcement. You know what that is. Sam Elliot’s voice gets on the horn to tell you something you really don’t want to know, thus providing Too Much Information. In this case, it was sort of disquieting. “There was some kind of earthquake in LA and we’re going to circle for a while to make sure that the runways are okay to land on,” he said in his upbeat Texas twang. After a while he came back. “Flight attendants prepare for landing,” he said. And so we landed. Later it turned out that there was a 6.3 level earthquake in the area, an echo of a larger quake that had taken place in nearby Mexico. So the runways didn’t melt or explode, and everything was basically okay. It occurs to me this morning how many assumptions we make that enable us to keep on going without, you know, screaming, or drinking at breakfast. We assume, in spite of all evidence to the contrary, that California will not slide into the ocean, as the mystics and statistics say it will. We assume that the planes, trains and rented automobiles that we enter will be relatively clean, and that we will not find somebody’s half-eaten peanut butter and jelly sandwich tucked into a seat pocket. We assume that certain efforts to stablize the world will make it possible for our buildings to remain standing. We assume that hedge fund managers who make $4 billion a year in personal income are not a symptom of a horrendous bubbling tumor eating away at the cell structure of our economy. We assume that because the economy is coming back a bit that it will continue to do so. At least I do. Some of us assume that the market has sufficient brains and mechanisms to correct itself. Of course, I don’t. And we assume that debt is still a really good way to buy things we can’t afford. We need our assumptions. Without them, we might have consider the possibility that one day, while we’re up in the air, we won’t have a place to land, and might have to be diverted to hell, or Bakersfield, whichever is closer.

Read the full article →

Angela Braly: WellPoint CEO Pay Jumps By 51 Percent

April 2, 2010

NEW YORK — The president and CEO of health insurer WellPoint Inc. received a 51 percent boost in compensation in 2009, mainly on larger grants of stock options and a performance bonus as profit and shares gained ground. Angela Braly’s overall compensation rose to $13.1 million from $8.7 million in 2008, according to a filing with the Securities and Exchange Commission on Friday. Her salary rose less than 1 percent to just over $1.1 million. She received a performance bonus of $1.5 million, a sharp jump from $73,810 a year prior. The bulk of her compensation came from a 40 percent boost in restricted stock and stock options, totaling just under $10.2 million. The boost came as the company’s stock price steadily gained ground over the year, closing 38 percent higher at $58.29. Profit also surged in 2009 to $4.75 billion, or $9.88 per share, from $2.49 billion, or $4.76 per share, because of the sale of its NextRx subsidiary to Express Scripts. Even without the sale, the company said it would have earned $6.09 per share. During the year, the value of Braly’s perks rose 72 percent to $292,036, mainly on higher security costs for Braly as the debate over the health care overhaul became more and more heated. WellPoint, based in Indianapolis, became a focal point for debate in February after complaints spread about planned rate hikes that average around 25 percent for individual insurance policies sold by the insurer’s Anthem Blue Cross subsidiary in California. The Obama administration criticized the increases and used them to re-ignite its push for reform, which passed Congress and was signed into law last month. Administration officials criticized the insurer for asking for such steep rate increases when it made a profit of $2.7 billion in the final quarter of 2009. Braly, who testified before Congress about the rate hikes, and other WellPoint officials have said the soaring cost of medical care and the weak economy, which pushes healthy people to drop coverage, spurred the rate increases. They said WellPoint actually lost money on its California individual insurance business. The company also noted that its profitable 2009 was stoked by the $2.2 billion it received from the sale of NextRx. Braly has been CEO of WellPoint since May 2007. WellPoint, the largest health insurer based on enrollment, operates Blue Cross Blue Shield plans in 14 states and Unicare plans in several others. The Associated Press formula for compensation is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.

Read the full article →

Video: Saints’ Brees Says Defending Title to Be Tough Challenge: Video

April 2, 2010

April 2 (Bloomberg) — New Orleans Saints quarterback Drew Brees talks with Bloomberg’s Betty Liu and Michele Steele about the outlook for defending the team’s Super Bowl title next season. The Saints beat the Indianapolis Colts 31-17 in February’s championship matchup for the franchises’s first National Football League title. (Source: Bloomberg)

Read the full article →

Congress Passes Final Changes to Landmark U.S. Health-Care Overhaul Plan

March 25, 2010

By James Rowley and Brian Faler March 25 (Bloomberg) — Congress passed the final part of the landmark U.S. health-care overhaul, capping a partisan battle to deliver the top domestic goal of President Barack Obama ’s first 14 months in office. The House voted 220-207 with no Republican support for a package of revisions to the plan signed March 23 by Obama that is intended to insure tens of millions of Americans, cut costs and bar insurers from rejecting customers with pre-existing medical conditions. The Senate passed the revisions earlier today on a 56-43 vote, and the measure now goes to Obama for his signature. “Americans who wait on tables, pump gas and clean our offices at night” now will be able to give thanks that “every American finally has affordable access to health insurance,” said New Jersey Democrat Robert Andrews . The partisan rift created by the health-care debate promises to be a central issue in the November elections to determine control of Congress. It also threatens to thwart cooperation between the two parties on Obama’s other legislative priorities, such as immigration overhaul, climate change and new financial rules. Republicans continued to denounce the health plan. “Job creators are assessing how much damage has been done to them” by new taxes in the legislation, said California Republican David Dreier . ‘This could not be a worse time to impose job killing tax increases.” 32 Democrats Thirty-two Democrats joined the Republicans in voting against the plan. “The administration and some in Congress would like to think this debate is over,” said Senate Republican leader Mitch McConnell of Kentucky. “We will continue to fight until this bill is repealed and replaced.” Democrats are hailing the health-care law as a historic followup to the 1965 creation of the Medicare program for the elderly and as a way to help tame rising medical costs that comprise a sixth of the U.S. economy. “We all know the importance of this legislation,” Majority Leader Harry Reid said on the Senate floor. “This has been a legislative fight that will be in the record books.” Senate Finance Committee Chairman Max Baucus of Montana said the health plan will create an “income shift” and a “leveling toward lower-income Americans.” Americans’ income distribution has been thrown off in recent years, he said. “The wealthy are getting way too wealthy.” Uninsured Americans The law will require all Americans to get health insurance or pay a penalty. With the revisions, it will expand coverage to 32 million uninsured Americans, according to the Congressional Budget Office. Companies such as health insurer WellPoint Inc. of Indianapolis, medical-device maker Medtronic Inc . of Minneapolis and drugmaker Pfizer Inc. of New York will get millions of new customers with the extension of coverage. Their industries also face billions of dollars in new fees. Under the overhaul, insurers will no longer be able to reject new customers with pre-existing medical conditions. It will place restrictions on insurers’ ability to set premiums. Patients will have greater access to preventive care and young adults can stay on their parents’ insurance until age 26. Taken together, the overhaul and the revisions will cost $940 billion over 10 years, the CBO estimated. The cost is more than made up with a new tax on the highest earners, fees on health-care companies and hundreds of billions of dollars in Medicare savings, which will reduce the federal deficit , according to the CBO. Opinion Polls Republicans universally opposed the legislation, arguing that the Democrats underestimated the cost and pushed through policies that polls show Americans oppose. The revisions passed today add a new tax on investment income and revamp the college student-loan program. The changes were demanded by House Democrats. During more than two days of debate, Senate Democrats fought off dozens of Republican amendments and efforts to derail the revisions . In a move that infuriated Republicans, Democrats used a budget process called reconciliation that enabled them to pass the changes with no Republican votes. Baucus said Republican amendments were nothing more than an attempt to block improvements to the overhaul. ‘Kill Health-Care Reform’ “Make no mistake, the intent of every single amendment on the other side of the aisle is to kill health-care reform,” Baucus said. Three Democrats voted against the measure: Mark Pryor and Blanche Lincoln of Arkansas and Ben Nelson of Nebraska. Republican Johnny Isakson of Georgia was absent. The changes would add a 3.8 percent Medicare tax on investment income, such as dividends, for individuals who earn more than $200,000 a year and joint tax filers who have more than $250,000 in earnings. That adds to a higher Medicare payroll tax already in the law. The reconciliation bill also scales back a tax on high-end insurance plans. Labor unions said the levy would affect too many workers; the reconciliation bill reduces the revenue from the tax by 80 percent by raising the thresholds at which it would apply. The measure also delays the tax until 2018. In revamping the college student-loan program, the legislation would end subsidies to lenders such as Reston, Virginia-based SLM Corp. , commonly known as Sallie Mae, and instead have all students borrow directly from the federal government. Pell Grants Democrats plan to use most of the anticipated savings to expand Pell college tuition grants. The savings also proved critical to meeting the requirement that any health-care reconciliation bill save at least $2 billion over the first five years, the CBO analysis shows. The two separate bills, one on the overhaul itself and the second that included the revisions, became necessary after Democrats lost the 60th vote in the Senate generally needed to push through major legislation. Just weeks after the Senate’s party-line 60-39 vote to approve the overhaul, Democrats were almost finished drafting a House-Senate compromise when Massachusetts Republican Scott Brown won a Jan. 19 special election to fill the seat left vacant by the death of Democrat Edward M. Kennedy . Democratic leaders then agreed the House would pass the Senate’s health-care bill and that both houses would pass the revisions. The budget reconciliation tool allowed the Senate to pass the changes with a simple majority of 51 votes. To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net ; Brian Faler in Washington at bfaler@bloomberg.net .

Read the full article →

Health-Care Fight Will Shift to U.S. Regulators, States After Senate Vote

March 22, 2010

By Alex Nussbaum March 22 (Bloomberg) — Health legislation passed yesterday by the U.S. House changes some rules immediately on insurance coverage while leaving much of the fight over how to remake the medical system to federal regulators, states and courts. Insurers led by UnitedHealth Group Inc. and WellPoint Inc. must cover children with pre-existing health problems within the first year of the legislation and let parents keep children on their insurance plans through age 26. The insurers will also be banned from revoking coverage because of severe illness and from limiting lifetime or annual benefits. Beyond those changes, it will be up to U.S. regulators and state lawmakers to structure the marketplaces where health plans will compete, write the rules governing their profit and decide which medical benefits must be covered. While insurers may gain as many as 32 million customers, the potential for pumped-up profits remains unclear, said Sheryl Skolnick , a health-industry analyst at CRT Capital Group LLC. “There’s going to be a whole other round of uncertainty associated with the implementation of this,” she said in a telephone interview March 19. “There’ll be much, much more to fight on and much, much more to write on.” The U.S. Health and Human Services Department will have two years to set penalties on hospitals with high readmission rates and longer to test new payment systems for Franklin, Tennessee- based Community Health Systems Inc. , the largest U.S. chain, and its rivals. State Challenges At least a dozen states plan to challenge the overhaul in court. Florida Attorney General Bill McCollum said the mandate for individuals to obtain insurance is unconstitutional and that the case will be joined by Alabama, Nebraska, North Dakota, Pennsylvania, South Dakota, South Carolina, Texas, Utah and Washington. Michigan also will join the lawsuit, the state’s Attorney General Mike Cox said today in a statement . Virginia Attorney General Kenneth T. Cuccinelli also announced plans for a lawsuit, saying in a prepared statement that the legislation is an “unconstitutional overreach” of federal authority. Officials in Idaho have also promised legal challenges. The cases will be filed once President Barack Obama signs the revamp into law. Democrats must shepherd an additional package of changes through the U.S. Senate to complete the $940 billion overhaul. The bills subsidize coverage for uninsured Americans, financed by Medicare cuts to hospitals and fees or taxes on insurers, drugmakers, medical-device companies and Americans earning more than $200,000 a year. The tax on those earners begins in 2013. High-Risk Pools The subsidies and the expansion of Medicaid, the joint federal-state program for the poor, won’t kick in until 2014. The legislation initially bans insurers from barring coverage for children with pre-existing conditions, and adults won’t be protected until 2014. Until then, they’ll be eligible to join high-risk pools funded by $5 billion in federal grants. The drug industry, led by New York-based Pfizer Inc. , will begin offering discounted drugs to elderly Medicare patients next year, part of $80 billion in concessions agreed to by pharmaceutical companies. Generic copies of biotechnology drugs will be allowed for the first time, though the Food and Drug Administration must draft rules governing the process. Insurers also will have to reveal how much of members’ premiums they spend on medical care, as opposed to executive salaries or other administrative costs. Next year, they’ll owe a rebate to customers if the insurers spend less than 80 percent on benefits for people in individual or small-group plans. Agency Power How heavy a burden that imposes on industry will depend on the health and human services department, said Carl McDonald , an Oppenheimer & Co. analyst in New York, in a March 17 note to clients. The cap will be easier to meet if it’s applied companywide rather than to individual lines of business, he said. The agency also will set formulas for Medicare payments, define the “essential benefits” that insurers must provide and draft rules on how carriers verify claims and pay doctors. Health and Human Services Secretary Kathleen Sebelius , who has spent weeks criticizing insurers’ “jaw-dropping” rate increases, will have the final verdict, McDonald said. “Over the next couple of years, HHS will be consistently churning out regulations and documents explaining exactly how health reform will be implemented,” he said. “Given the stance of this administration toward health insurers over the past year, it’s hard to see how much of this will be favorable.” Out of Spotlight Insurers may benefit by exiting the spotlight of the current political debate, said Len Nichols , a health economist at George Mason University in Fairfax, Virginia. Their arguments that premiums are rising because medical costs are outpacing inflation may hold more sway with government actuaries, he said in a telephone interview. “It’ll get out of the blatantly political and into the hands of folks who are more used to dealing with these issues,” he said. “It will move the conversation from the headlines to the arena of the actuarial gladiators, which is probably where it should be.” Health insurance company shares have gained 71 percent in the past 12 months, as measured by the six-member Standard & Poor’s 500 Managed-Care Index , led by the 124 percent increase for Coventry Health Care Inc. of Bethesda, Maryland. WellPoint, based in Indianapolis, is the biggest U.S. health plan by enrollment, and its shares have gained 80 percent. UnitedHealth , of Minnetonka, Minnesota, is second. Its shares have gained 61 percent over 12 months. Insurance Exchanges Starting in 2014, states have their say. The legislation leaves it to them to set up and run the online marketplaces, known as exchanges, where customers will comparison-shop for coverage. Among other powers, the exchanges will be able to banish plans for premium increases deemed to be unjustified. Lawmakers may merge exchanges with neighboring states, exposing carriers to more competition. They could set up government-run insurance plans for low-income buyers ineligible for Medicaid to pool their bargaining power or apply for federal waivers to impose stricter rules on insurers. The legislation also creates an Independent Payment Advisory Board to suggest cuts in spending by Medicare, the government health program for the elderly and disabled, that could threaten payments for drug and device-makers. Starting in 2014, the panel’s recommendations would take effect unless federal lawmakers substitute their own reductions. A tax on high-cost “Cadillac” policies offered by health plans begins in 2018. The industry also faces about $60 billion in additional fees under the health bill through 2018, and more beyond, though it was able to postpone the levy until 2014. “We suspect that over time, the industry lobby may find ways to chip away at those payments,” said Dave Shove , a BMO Capital Markets analyst, in a March 19 note. “For now, we consider this a successful exercise in kicking the can further down the road.” To contact the reporter on this story: Alex Nussbaum in New York anussbaum1@bloomberg.net .

Read the full article →

Health-Care Fight Shifts to States, Agencies

March 22, 2010

By Alex Nussbaum March 22 (Bloomberg) — Health legislation passed yesterday by the U.S. House changes some rules immediately on insurance coverage while leaving much of the fight over how to remake the medical system to federal regulators, states and courts. Insurers led by UnitedHealth Group Inc. and WellPoint Inc. must cover children with pre-existing health problems within the first year of the legislation and let parents keep children on their insurance plans through age 26. The insurers will also be banned from revoking coverage because of severe illness and from limiting lifetime or annual benefits. Beyond those changes, it will be up to U.S. regulators and state lawmakers to structure the marketplaces where health plans will compete, write the rules governing their profit and decide which medical benefits must be covered. While insurers may gain as many as 32 million customers, the potential for pumped-up profits remains unclear, said Sheryl Skolnick , a health-industry analyst at CRT Capital Group LLC. “There’s going to be a whole other round of uncertainty associated with the implementation of this,” she said in a telephone interview March 19. “There’ll be much, much more to fight on and much, much more to write on.” The U.S. Health and Human Services Department will have two years to set penalties on hospitals with high readmission rates and longer to test new payment systems for Franklin, Tennessee- based Community Health Systems Inc. , the largest U.S. chain, and its rivals. State Challenges At least a dozen states plan to challenge the overhaul in court. Florida Attorney General Bill McCollum said the mandate for individuals to obtain insurance is unconstitutional and that the case will be joined by Alabama, Nebraska, North Dakota, Pennsylvania, South Dakota, South Carolina, Texas, Utah and Washington. Michigan also will join the lawsuit, the state’s Attorney General Mike Cox said today in a statement . Virginia Attorney General Kenneth T. Cuccinelli also announced plans for a lawsuit, saying in a prepared statement that the legislation is an “unconstitutional overreach” of federal authority. Officials in Idaho have also promised legal challenges. The cases will be filed once President Barack Obama signs the revamp into law. Democrats must shepherd an additional package of changes through the U.S. Senate to complete the $940 billion overhaul. The bills subsidize coverage for uninsured Americans, financed by Medicare cuts to hospitals and fees or taxes on insurers, drugmakers, medical-device companies and Americans earning more than $200,000 a year. The tax on those earners begins in 2013. High-Risk Pools The subsidies and the expansion of Medicaid, the joint federal-state program for the poor, won’t kick in until 2014. The legislation initially bans insurers from barring coverage for children with pre-existing conditions, and adults won’t be protected until 2014. Until then, they’ll be eligible to join high-risk pools funded by $5 billion in federal grants. The drug industry, led by New York-based Pfizer Inc. , will begin offering discounted drugs to elderly Medicare patients next year, part of $80 billion in concessions agreed to by pharmaceutical companies. Generic copies of biotechnology drugs will be allowed for the first time, though the Food and Drug Administration must draft rules governing the process. Insurers also will have to reveal how much of members’ premiums they spend on medical care, as opposed to executive salaries or other administrative costs. Next year, they’ll owe a rebate to customers if the insurers spend less than 80 percent on benefits for people in individual or small-group plans. Agency Power How heavy a burden that imposes on industry will depend on the health and human services department, said Carl McDonald , an Oppenheimer & Co. analyst in New York, in a March 17 note to clients. The cap will be easier to meet if it’s applied companywide rather than to individual lines of business, he said. The agency also will set formulas for Medicare payments, define the “essential benefits” that insurers must provide and draft rules on how carriers verify claims and pay doctors. Health and Human Services Secretary Kathleen Sebelius , who has spent weeks criticizing insurers’ “jaw-dropping” rate increases, will have the final verdict, McDonald said. “Over the next couple of years, HHS will be consistently churning out regulations and documents explaining exactly how health reform will be implemented,” he said. “Given the stance of this administration toward health insurers over the past year, it’s hard to see how much of this will be favorable.” Out of Spotlight Insurers may benefit by exiting the spotlight of the current political debate, said Len Nichols , a health economist at George Mason University in Fairfax, Virginia. Their arguments that premiums are rising because medical costs are outpacing inflation may hold more sway with government actuaries, he said in a telephone interview. “It’ll get out of the blatantly political and into the hands of folks who are more used to dealing with these issues,” he said. “It will move the conversation from the headlines to the arena of the actuarial gladiators, which is probably where it should be.” Health insurance company shares have gained 71 percent in the past 12 months, as measured by the six-member Standard & Poor’s 500 Managed-Care Index , led by the 124 percent increase for Coventry Health Care Inc. of Bethesda, Maryland. WellPoint, based in Indianapolis, is the biggest U.S. health plan by enrollment, and its shares have gained 80 percent. UnitedHealth , of Minnetonka, Minnesota, is second. Its shares have gained 61 percent over 12 months. Insurance Exchanges Starting in 2014, states have their say. The legislation leaves it to them to set up and run the online marketplaces, known as exchanges, where customers will comparison-shop for coverage. Among other powers, the exchanges will be able to banish plans for premium increases deemed to be unjustified. Lawmakers may merge exchanges with neighboring states, exposing carriers to more competition. They could set up government-run insurance plans for low-income buyers ineligible for Medicaid to pool their bargaining power or apply for federal waivers to impose stricter rules on insurers. The legislation also creates an Independent Payment Advisory Board to suggest cuts in spending by Medicare, the government health program for the elderly and disabled, that could threaten payments for drug and device-makers. Starting in 2014, the panel’s recommendations would take effect unless federal lawmakers substitute their own reductions. A tax on high-cost “Cadillac” policies offered by health plans begins in 2018. The industry also faces about $60 billion in additional fees under the health bill through 2018, and more beyond, though it was able to postpone the levy until 2014. “We suspect that over time, the industry lobby may find ways to chip away at those payments,” said Dave Shove , a BMO Capital Markets analyst, in a March 19 note. “For now, we consider this a successful exercise in kicking the can further down the road.” To contact the reporter on this story: Alex Nussbaum in New York anussbaum1@bloomberg.net .

Read the full article →

Biggest U.S. Health Overhaul in 45 Years Passes House in Victory for Obama

March 22, 2010

By Laura Litvan, James Rowley and Kristin Jensen March 22 (Bloomberg) — The U.S. House passed the most sweeping health-care legislation in four decades, rewriting the rules governing medical industries and ensuring that tens of millions of uninsured Americans will get medical coverage. Yesterday’s 219-212 vote marks the biggest victory for President Barack Obama , who will sign the bill into law. Only Democrats voted for the legislation, underscoring a partisan divide that promises to make health care the defining issue in November’s congressional elections. Lawmakers hailed the action as a historic follow-on to the 1965 creation of the Medicare program for the elderly and a way to mitigate soaring health costs that make up a sixth of the U.S. economy. It came after a last-minute deal with anti- abortion Democrats and a lobbying trip by Obama to the Capitol. “It’s a victory for the American people,” Obama told reporters at the White House just before midnight. “This legislation will not fix everything that ails our health-care system but it moves us decisively in the right direction. This is what change looks like.” House Speaker Nancy Pelosi described passage as “history for our country and progress for the American people.” Two Bills To finish their work on health care, House Democrats approved a Senate bill passed in December and then voted 220-211 to pass a measure that would amend the Senate legislation to fix provisions they don’t like. The Senate must also pass this second bill under a budget process called reconciliation that requires a simple majority vote. While Senate Democrats plan to act this week on the second bill, they face a host of challenges from Republicans that may hold up their work or force a new vote in the House. The two bills together will cost $940 billion over 10 years and cover 32 million uninsured Americans, the Congressional Budget Office estimated. That’s more than made up for with a new tax on the highest earners, fees on health-care companies and hundreds of billions of dollars in Medicare savings, which will reduce the federal deficit , the CBO said . Companies such as health insurer WellPoint Inc. of Indianapolis, medical-device maker Medtronic Inc. of Minneapolis and drugmaker Pfizer Inc. of New York will get millions of new customers with the extension of coverage. Their industries will also face billions of dollars in new fees. WellPoint Reacts As part of the overhaul, drugmakers agreed to help the elderly more easily afford medicines. Insurers , which opposed the legislation, will have to take all customers, regardless of pre- existing conditions, and face limits on how much revenue can be spent beyond covering medical expenses. “WellPoint is disappointed that after more than a year of debate, Congress has approved health-care legislation that does little to reduce cost and improve quality,” company spokeswoman Kristin Binns said in an e-mail to reporters. Under the bill, Americans will have to buy insurance or pay a penalty, with the possibility of tapping new purchasing exchanges and government aid for lower-income Americans. Republicans said the costs will balloon, criticized the increases in government programs and held out the possibility that private insurance and medical care would be hurt. “We are looking at a health-care bill that nobody in this body believes is satisfactory,” House Minority Leader John Boehner said prior to the vote. “We have failed to reflect the will of our constituents.” Business Groups Business groups, including the U.S. Chamber of Commerce, also lobbied against the legislation, and Peoria, Illinois-based Caterpillar Inc. sent a letter to leaders saying the bills would raise its costs by $100 million in the first year alone. The House’s two-step process became necessary after Democrats lost the 60th vote in the Senate generally needed to push through major legislation. Just weeks after the Senate’s party-line 60-39 vote, Democrats were almost finished drafting a House-Senate compromise bill when Massachusetts Republican Scott Brown won a Jan. 19 special election to fill the seat left vacant by the death of Democrat Edward M. Kennedy . The use of the budget-reconciliation tool opens the door for the Senate to pass the second bill with 51 votes, as long as it can withstand Republican challenges and the rulings of a parliamentarian, who will take out any provision he decides have only an incidental impact on the federal budget. ‘Massive’ Amendments New Hampshire Senator Judd Gregg , who will help coordinate the Republicans’ efforts, said his party can put forth “massive amounts” of amendments on unrelated issues from gun control to immigration. They can also challenge provisions such as the scaling back of a tax on high-end, or so-called Cadillac, insurance plans because it would affect money flowing into Social Security, he said. Any changes in the Senate would force a new House vote on the reconciliation bill, further complicating the effort. House Democrats particularly wanted to change the Cadillac tax because they say it would affect too many workers. “If those people think they’re only going to vote on this once, they’re nuts,” Senator Orrin Hatch , a Utah Republican, said in a Bloomberg Television interview last week. Illinois Senator Richard Durbin , a member of the Democratic leadership, said yesterday his party is prepared for challenges and any amendments Republicans might file. ‘Ready to Tackle’ “We’re ready to tackle that if that’s what they want to do,” Durbin said on CBS’s “Face the Nation” program. “We’re ready to deal with honest amendments. There will come a time when the American people say enough, this is about politics.” Obama, who faced criticism for largely leaving the drafting of the legislation to Congress, swung into high gear in recent weeks. He hosted a Feb. 25 bipartisan summit at the White House, proposed detailed final compromises and lobbied dozens of undecided Democrats. He postponed a trip to Asia to remain in Washington for yesterday’s vote. Obama benefited in part from the votes of Democrats who are leaving Congress and who were willing to switch sides after voting “no” on a House version in November. He also won support from Democrats, including Representative Dennis Kucinich of Ohio, who had threatened to oppose the final measure because it didn’t include a new government program, or public option, to compete against private insurers. Expanding Medicaid The legislation will expand the Medicaid government program for the poor to cover those making up to 133 percent of the federal poverty level, and offer subsidies for millions of other Americans to buy insurance through an online exchange offering policies at more-affordable group rates. Many employers with more than 50 workers that don’t offer coverage will be subject to a penalty. The reconciliation bill will change the penalty to $2,000 per worker, from $750 in the Senate bill, and subtract out the first 30 employees. The overhaul is financed in large part through new taxes. The reconciliation bill would add a 3.8 percent Medicare tax on investment income imposed on individuals who earn more than $200,000 a year and joint tax filers who have more than $250,000 in earnings. That adds to a higher Medicare payroll tax already in the Senate bill. To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net ; James Rowley in Washington at jarowley@bloomberg.net ; Kristin Jensen in Washington at kjensen@bloomberg.net

Read the full article →

Tenet Gains, WellPoint Falls in Early Trades as Industry Overhaul Approved

March 22, 2010

By Nick Baker March 22 (Bloomberg) — Tenet Healthcare Corp., Aetna Inc. and Health Management Associates Inc. advanced while WellPoint Inc. and UnitedHealth Group Inc. declined in early stock trading after the U.S. House passed the most sweeping industry overhaul in four decades. Tenet , a Dallas-based hospital chain, rose 7.8 percent to $6.20 as of 9:11 a.m. in New York. Hartford, Connecticut-based insurer Aetna climbed 0.4 percent to $34.61. Health Management Associates of Naples, Florida, increased 3.2 percent to $8.39. WellPoint of Indianapolis, the biggest U.S. health insurer by enrollment, lost 0.3 percent to $64.90. UnitedHealth, an insurer based in Minnetonka, Minnesota, fell 0.4 percent to $34.25. Hospital stocks rallied after congressional passage of the health-care bill spurred speculation they will gain business as coverage is extended to 32 million uninsured Americans. Health- care stocks in the Standard & Poor’s 500 Index have risen 3.4 percent in 2010, trailing the 4 percent gain by the entire measure as investors awaited resolution President Barack Obama ’s reform proposals. “We continue to believe money will rotate back into healthcare stocks now that the uncertainty of ‘reform’ is lifted,” Charles Boorady , an analyst at Citigroup Inc. in New York, wrote in a report sent to clients today. 220-211 Vote The House rewrote the rules governing medical industries and ensuring that tens of millions of uninsured Americans will get medical coverage. To finish their work on health care, House Democrats approved a Senate bill passed in December and then voted 220-211 to pass a measure that would amend the Senate legislation to fix provisions they don’t like. The Senate must also pass this second bill under a budget process called reconciliation that requires a simple majority vote. The approval of the health-care legislation by the U.S. House removes a significant “overhang” from the industry and will be viewed positively, Credit Suisse Group AG analyst Ralph Giacobbe said today. While Senate Democrats plan to act this week on the second bill, they face a host of challenges from Republicans that may hold up their work or force a new vote in the House. The two bills together will cost $940 billion over 10 years, the Congressional Budget Office estimated. That’s more than made up for with a new tax on the highest earners, fees on health-care companies and hundreds of billions of dollars in Medicare savings, which will reduce the federal deficit, the CBO said. To contact the reporter on this story: Nick Baker in New York at nbaker7@bloomberg.net .

Read the full article →

Landmark Health-Care Overhaul Passes House

March 22, 2010

By Laura Litvan, James Rowley and Kristin Jensen March 22 (Bloomberg) — The U.S. House passed the most sweeping health-care legislation in four decades, rewriting the rules governing medical industries and ensuring that tens of millions of uninsured Americans will get medical coverage. Yesterday’s 219-212 vote marks the biggest victory for President Barack Obama , who will sign the bill into law. Only Democrats voted for the legislation, underscoring a partisan divide that promises to make health care the defining issue in November’s congressional elections. Lawmakers hailed the action as a historic follow-on to the 1965 creation of the Medicare program for the elderly and a way to mitigate soaring health costs that make up a sixth of the U.S. economy. It came after a last-minute deal with anti- abortion Democrats and a lobbying trip by Obama to the Capitol. “It’s a victory for the American people,” Obama told reporters at the White House just before midnight. “This legislation will not fix everything that ails our health-care system but it moves us decisively in the right direction. This is what change looks like.” House Speaker Nancy Pelosi described passage as “history for our country and progress for the American people.” Two Bills To finish their work on health care, House Democrats approved a Senate bill passed in December and then voted 220-211 to pass a measure that would amend the Senate legislation to fix provisions they don’t like. The Senate must also pass this second bill under a budget process called reconciliation that requires a simple majority vote. While Senate Democrats plan to act this week on the second bill, they face a host of challenges from Republicans that may hold up their work or force a new vote in the House. The two bills together will cost $940 billion over 10 years and cover 32 million uninsured Americans, the Congressional Budget Office estimated. That’s more than made up for with a new tax on the highest earners, fees on health-care companies and hundreds of billions of dollars in Medicare savings, which will reduce the federal deficit , the CBO said . Companies such as health insurer WellPoint Inc. of Indianapolis, medical-device maker Medtronic Inc. of Minneapolis and drugmaker Pfizer Inc. of New York will get millions of new customers with the extension of coverage. Their industries will also face billions of dollars in new fees. WellPoint Reacts As part of the overhaul, drugmakers agreed to help the elderly more easily afford medicines. Insurers , who opposed the legislation, will have to take all customers, regardless of pre- existing conditions, and face limits on how much revenue can be spent beyond covering medical expenses. “WellPoint is disappointed that after more than a year of debate, Congress has approved health-care legislation that does little to reduce cost and improve quality,” company spokeswoman Kristin Binns said in an e-mail to reporters. Under the bill, Americans will have to buy insurance or pay a penalty, with the possibility of tapping new purchasing exchanges and government aid for lower-income Americans. Republicans said the costs will balloon, criticized the increases in government programs and held out the possibility that private insurance and medical care would be hurt. “We are looking at a health-care bill that nobody in this body believes is satisfactory,” House Minority Leader John Boehner said prior to the vote. “We have failed to reflect the will of our constituents.” Business Groups Business groups including the U.S. Chamber of Commerce also lobbied against the legislation, and Peoria, Illinois-based Caterpillar Inc. sent a letter to leaders saying the bills would raise its costs by $100 million in the first year alone. The House’s two-step process became necessary after Democrats lost the 60th vote in the Senate generally needed to push through major legislation. Just weeks after the Senate’s party-line 60-39 vote, Democrats were almost finished drafting a House-Senate compromise bill when Massachusetts Republican Scott Brown won a Jan. 19 special election to fill the seat left vacant by the death of Democrat Edward M. Kennedy . The use of the budget-reconciliation tool opens the door for the Senate to pass the second bill with 51 votes, as long as it can withstand Republican challenges and the rulings of a parliamentarian, who will take out any provision he decides have only an incidental impact on the federal budget. ‘Massive’ Amendments New Hampshire Senator Judd Gregg , who will help coordinate the Republicans’ efforts, said his party can put forth “massive amounts” of amendments on unrelated issues from gun control to immigration. They can also challenge provisions such as the scaling back of a tax on high-end, or so-called Cadillac, insurance plans because it would affect money flowing into Social Security, he said. Any changes in the Senate would force a new House vote on the reconciliation bill, further complicating the effort. House Democrats particularly wanted to change the Cadillac tax because they say it would affect too many workers. “If those people think they’re only going to vote on this once, they’re nuts,” Senator Orrin Hatch , a Utah Republican, said in a Bloomberg Television interview last week. Illinois Senator Richard Durbin , a member of the Democratic leadership, said yesterday his party is prepared for challenges and any amendments Republicans might file. ‘Ready to Tackle’ “We’re ready to tackle that if that’s what they want to do,” Durbin said on CBS’s “Face the Nation” program. “We’re ready to deal with honest amendments. There will come a time when the American people say enough, this is about politics.” Obama, who faced criticism for largely leaving the drafting of the legislation to Congress, swung into high gear in recent weeks. He hosted a Feb. 25 bipartisan summit at the White House, proposed detailed final compromises and lobbied dozens of undecided Democrats. He postponed a trip to Asia to remain in Washington for yesterday’s vote. Obama benefited in part from the votes of Democrats who are leaving Congress and who were willing to switch sides after voting “no” on a House version in November. He also won support from Democrats including Representative Dennis Kucinich of Ohio, who had threatened to oppose the final measure because it didn’t include a new government program, or public option, to compete against private insurers. Expanding Medicaid The legislation will expand the Medicaid government program for the poor to cover those making up to 133 percent of the federal poverty level, and offer subsidies for millions of other Americans to buy insurance through an online exchange offering policies at more-affordable group rates. Many employers with more than 50 workers that don’t offer coverage will be subject to a penalty. The reconciliation bill will change the penalty to $2,000 per worker, from $750 in the Senate bill, and subtract out the first 30 employees. The overhaul is financed in large part through new taxes. The reconciliation bill would add a 3.8 percent Medicare tax on investment income imposed on individuals who earn more than $200,000 a year and joint tax filers who have more than $250,000 in earnings. That adds to a higher Medicare payroll tax already in the Senate bill. To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net ; James Rowley in Washington at jarowley@bloomberg.net ; Kristin Jensen in Washington at kjensen@bloomberg.net

Read the full article →

Health-Care Fight Shifts to U.S. Regulators, Statehouses After House Vote

March 22, 2010

By Alex Nussbaum March 22 (Bloomberg) — Health legislation passed yesterday by the U.S. House changes some rules immediately on insurance coverage while leaving much of the fight over how to remake the medical system to federal regulators, states and courts. Insurers led by UnitedHealth Group Inc. and WellPoint Inc. must cover children with pre-existing health problems at once under the legislation, headed for a Senate vote, and let parents keep children on their insurance plans through age 26. The insurers will also be banned from revoking coverage because of severe illness and from limiting lifetime or annual benefits. Beyond those changes, it will be up to U.S. regulators and state lawmakers to structure the marketplaces where health plans will compete, write the rules governing their profit and decide which medical benefits must be covered. While insurers may gain as many as 32 million customers, the potential for pumped-up profits remains unclear, said Sheryl Skolnick , a health-industry analyst at CRT Capital Group LLC. “There’s going to be a whole other round of uncertainty associated with the implementation of this,” she said in a telephone interview March 19. “There’ll be much, much more to fight on and much, much more to write on.” The U.S. Health and Human Services Department will have two years to set penalties on hospitals with high readmission rates and longer to test new payment systems for Franklin, Tennessee- based Community Health Systems Inc. , the largest U.S. chain, and its rivals. Officials in Idaho and Virginia have promised lawsuits over the bills’ mandate that all Americans get insured. Senate, Obama Democrats must shepherd the package of changes through the U.S. Senate before President Barack Obama can sign their $940 billion health-care overhaul, one of his top domestic priorities, into law. The measures subsidize coverage for uninsured Americans, financed by Medicare cuts to hospitals and fees or taxes on insurers, drugmakers, medical-device companies and Americans earning more than $200,000 a year. The tax on those earners begins in 2013. The subsidies and the expansion of Medicaid, the joint federal-state program for the poor, won’t kick in until 2014. Other changes will take effect with Obama’s pen stroke. While the measure immediately bans insurers from barring coverage for children with pre-existing conditions, adults won’t be protected until 2014. Until then, they’ll be eligible to join high-risk pools funded by $5 billion in federal grants. The drug industry, led by New York-based Pfizer Inc. , will begin offering discounted drugs to elderly Medicare patients next year, part of $80 billion in concessions agreed to by pharmaceutical companies. Generic copies of biotechnology drugs will be allowed for the first time, though the Food and Drug Administration must draft rules governing the process. Revealing Costs Insurers also will have to reveal how much of members’ premiums they spend on medical care, as opposed to executive salaries or other administrative costs. Next year, they’ll owe a rebate to customers if the insurers spend less than 80 percent on benefits for people in individual or small-group plans. How heavy a burden that imposes on industry will depend on the health and human services department, said Carl McDonald , an Oppenheimer & Co. analyst in New York, in a March 17 note to clients. The cap will be easier to meet if it’s applied companywide rather than to individual lines of business, he said. The agency also will set formulas for Medicare payments, define the “essential benefits” that insurers must provide and draft rules on how carriers verify claims and pay doctors. Health and Human Services Secretary Kathleen Sebelius , who has spent weeks criticizing insurers’ “jaw-dropping” rate increases, will have the final verdict, McDonald said. Out From Spotlight “Over the next couple of years, HHS will be consistently churning out regulations and documents explaining exactly how health reform will be implemented,” he said. “Given the stance of this administration toward health insurers over the past year, it’s hard to see how much of this will be favorable.” Insurers may benefit by exiting the spotlight of the current political debate, said Len Nichols , a health economist at George Mason University in Fairfax, Virginia. Their arguments that premiums are rising because medical costs are outpacing inflation may hold more sway with government actuaries, he said in a telephone interview. “It’ll get out of the blatantly political and into the hands of folks who are more used to dealing with these issues,” he said. “It will move the conversation from the headlines to the arena of the actuarial gladiators, which is probably where it should be.” Health Shares Health insurance company shares have gained 71 percent in the past 12 months, as measured by the six-member Standard & Poor’s 500 Managed-Care Index , led by the 124 percent increase for Coventry Health Care Inc. of Bethesda, Maryland. WellPoint, based in Indianapolis, is the biggest U.S. health plan by enrollment, and its shares have gained 80 percent. UnitedHealth , of Minnetonka, Minnesota, is second. Its shares have gained 61 percent over 12 months. Starting in 2014, states have their say. The legislation leaves it to them to set up and run the online marketplaces, known as exchanges, where customers will comparison-shop for coverage. Among other powers, the exchanges will be able to banish plans for premium increases deemed to be unjustified. Lawmakers may merge exchanges with neighboring states, exposing carriers to more competition. They could set up government-run insurance plans for low-income buyers ineligible for Medicaid to pool their bargaining power or apply for federal waivers to impose stricter rules on insurers. The legislation also creates an Independent Payment Advisory Board to suggest cuts in spending by Medicare, the government health program for the elderly and disabled, that could threaten payments for drug and device-makers. Starting in 2014, the panel’s recommendations would take effect unless federal lawmakers substitute their own reductions. A tax on high-cost “Cadillac” policies offered by health plans kicks in in 2018. The industry also faces about $60 billion in additional fees under the health bill through 2018, and more beyond, though it was able to postpone the levy until 2014. “We suspect that over time, the industry lobby may find ways to chip away at those payments,” said Dave Shove , a BMO Capital Markets analyst, in a March 19 note. “For now, we consider this a successful exercise in kicking the can further down the road.” To contact the reporter on this story: Alex Nussbaum in New York anussbaum1@bloomberg.net .

Read the full article →

Lilly CEO Tests Assembly-Line Drug Search to Offset $10 Billion Sales Loss

February 25, 2010

By Arlene Weintraub and Meg Tirrell Feb. 25 (Bloomberg) — Shortly after he became chief executive officer of Eli Lilly & Co. in April 2008, John Lechleiter , a former lab scientist, sent his senior executives a gift. It was a small digital clock counting down, second-by- second, to Oct. 23, 2011. That’s the day the drugmaker’s $5- billion-a-year schizophrenia pill, Zyprexa, goes off patent. Next to the countdown were four words: “Do what we do.” The message: Lilly must pick up the pace of drug development so it can replace revenue lost when three top- selling medicines lose patent protection in the next few years, Lechleiter said in an interview in his Indianapolis office. The company stands to lose $10 billion in annual sales to generic competition by the end of 2016, almost half of its 2009 revenue, one of the steepest percentage losses resulting from patent expirations among the six biggest U.S. drugmakers . Pfizer Inc. , the buyer of Wyeth, and Merck & Co. , which acquired Schering-Plough Corp., turned to consolidation to help solve their patent issues, to mixed reviews from investors. Lechleiter said he’s taking a different path, even as Lilly’s stock fell 11 percent last year. His push isn’t to get bigger, it’s to get faster, he said. When Lilly faced challenges before, “each and every time the answer has been new, innovative products,” said Lechleiter, whose office wall displays the Periodic Table of Elements, the foundation tool for chemists, his first career as a Ph.D. from Harvard University in Cambridge, Massachusetts. Two-Product Mission Lechleiter’s mission is to introduce two new products a year starting in 2013, helped by a restructured development process based on an assembly line of tasks, roughly akin to the automobile manufacturing process. Each step is designed to work in concert to make the final product quickly and efficiently. Shareholders say they aren’t convinced, an opinion supported by the stock’s worst-in-the-industry performance last year in the Standard & Poor’s 500 Pharmaceuticals Index , which rose 14.2 percent in 2009. “Investors seem to price Lilly’s stock as if it will never develop another drug,” said Michael P. Krensavage , manager of Krensavage Partners LP, a hedge fund that owns Lilly shares, in a telephone interview. Lilly rose 8 cents to $34.04 yesterday in New York Stock Exchange composite trading. The shares have dropped 4.7 percent in 2010. Lilly suffered two high-profile failures in July and August, when a multiple sclerosis drug candidate and an osteoporosis product fell short of expectations in clinical trials. Lilly’s blood-thinner Effient, approved in July, only pulled in $27 million in revenue in 2009, competing against Bristol-Myers Squibb Co. ’s $6 billion-a-year Plavix. ‘Late-Stage Research’ Lechleiter’s efficiency-focused initiative is “clever, but how much money will it save?” said Tony Butler , an analyst at Barclays Capital in New York who recommends holding Lilly stock. “We need to see the fruits of late-stage research in risky areas like Alzheimer’s.” Butler is one of 12 analysts who rate Lilly as a hold, according to Bloomberg data. Six recommend selling the stock, and five rate it as a buy, the data show. “There’s always the risk — will these molecules make it or not?” Lechleiter said, referring to Lilly’s 64 drugs in development. “But my response and, I believe, Lilly’s has to be, ‘Where do we find and how do we bring forth new innovation as quickly and cost-effectively as possible?’ That’s what we’re working on.” As a first step, Lechleiter in September placed every department that plays a role in turning molecules into medicines under one roof, from the people who assess side effects to those who deal with the U.S. Food & Drug Administration in getting final marketing approval. Intent on Speed The unit, dubbed the Development Center of Excellence, is intent on speed and willing to try new strategies, Lechleiter said. While testing drugs is usually carried out in three phases, Lilly plans to use just two in some cases. Last year, instead of having one clinical trial determine the best dose for a new diabetes drug, then a second to determine effectiveness, Lilly tested several doses at once. Statisticians assessed the data in real time, allowing researchers to drop dosages that weren’t working. Once the best dose was known, researchers tested it on the same group of patients, rather than recruiting new ones for a separate study. The company may save 14 months on projects streamlined in this manner, said Timothy J. Garnett , Lilly’s chief medical officer. ‘Critical Chain’ Lilly is also adopting a technique known in industrial manufacturing as “critical chain,” which prioritizes individual tasks to save time, Garnett said in an interview. Previously, people working on a 30-page report might also be involved in other projects at the same time, so they might be given three weeks to return a finished project. Now, they may get seven days to complete the task, with specific instructions on their schedule and which person in the chain they need to pass the project along to next. “If we say, ‘you only have a week, but that’s your No. 1 priority,’ it will only take a week. There’s a self-fulfilling element to it,” Garnett said. In the past, Lilly’s drug-development process worked under a single umbrella system. Lechleiter has created five independent business units with top managers of each responsible for data and determining whether they want to bring products through clinical development. In this, Lilly is joining Pfizer and Bristol-Myers, both based in New York, in trying to narrow potential product targets. Lilly’s units focus on cancer, diabetes, established markets, emerging markets and animal health. ‘Giving License’ “We’re trying to give license to our discovery and development scientists to really think about how you do these things in different ways,” Lechleiter said. “We’ve got to see timelines speed up.” Critics say critical chain may be a bad fit with drugmaking. Assembly line processes “work better in jobs that are predictable,” said Richard “Erik” M. Gordon , assistant professor at the University of Michigan’s Ross School of Business in Ann Arbor. The process of developing a medicine is filled with uncertainties, and timelines can be thrown off- kilter by external forces, such as delays at the FDA. For Lechleiter, the changes at Lilly reflect a lifetime built around his fascination with the promise of science. He received his bachelor’s degree from Xavier University in Cincinnati, graduating summa cum laude with a degree in chemistry in 1975. He received his doctorate in 1980. ‘Loved Problem Solving’ Paul A. Wender , now a chemistry professor at Stanford University near Palo Alto, California, was Lechleiter’s mentor and Ph.D. adviser at Harvard. He remembers a young man who “loved problem-solving.” Wender’s lab was focused on reducing the number of steps needed to make new compounds — experience Lechleiter found useful when straight out of graduate school he joined Lilly’s agricultural division making herbicides. One of Lechleiter’s first challenges was to develop a more cost-effective way to make a particular molecule, Wender recalled. “He solved that problem, and simultaneously developed an enabling technology that allowed others to progress with their research,” Wender said. Three years after he joined Lilly, Lechleiter’s career path changed. He was pegged as a budding manager and placed on a track designed to broaden his skills. Built Persona Since becoming CEO, Lechleiter has developed a persona as a communicator within the company. He maintains two blogs on Lilly’s intranet and attends Wednesday morning meetings where Lilly scientists present their work. Though it has been more than two decades since he worked at a lab bench, he said he’s not afraid to ask a question or two. “Usually I preface it by saying something like, ‘Excuse me if I’m really ignorant,’” Lechleiter said. Tall (6 feet, 1 inch) and affable, Lechleiter uses his hands when making a point, and smiles as he touts Lilly’s pipeline. He’s a devoted fan of the Indianapolis Colts , sharing that passion with many of his employees. The company dyed the water in the fountain in front of its headquarters the hometown team’s shade of blue the week before the Feb. 7 Super Bowl in support of the Colts’ effort to win a National Football League championship. Lilly Endowment Lechleiter’s Indianapolis pride may put him in good stead with the company’s No. 1 shareholder: the Lilly Endowment , a foundation that supports the city and state through charitable grants. The Endowment, founded in 1937 by the Lilly family through gifts of company stock, owns 135.7 million shares, or about 12 percent of Lilly, according to Bloomberg data. The CEO is also unafraid to challenge Wall Street. Lilly spent 21 percent of revenue on research and development in the most recent quarter — outpacing the industry’s average R&D spend, which is closer to the mid-teens. “A lot of investors say: ‘Unless you cut back, you may be spending 24 percent of sales on R&D,’” Lechleiter said. “I say: ‘So what? That’s what we’re here to do.’” Meanwhile, Lechleiter’s Zyprexa countdown clock keeps ticking. He’s got about 600 days to prove his strategy will help cushion Lilly when it hits the patent cliff. To contact the reporters on this story: Meg Tirrell in New York at mtirrell@bloomberg.net ; Arlene Weintraub in New York at Aweintraub1@bloomberg.net

Read the full article →

Indiana’s Senator Evan Bayh Won’t Seek Another Term in Blow to Democrats

February 15, 2010

By Kim Chipman and Heidi Przybyla Feb. 15 (Bloomberg) — U.S. Senator Evan Bayh , an Indiana Democrat, announced he won’t seek re-election this year in a blow to a Democratic Party struggling to maintain its majority in November’s elections. Bayh, 54, a former Indiana governor in his second six-year term as a senator, said at a press conference in Indianapolis that his decision was motivated by disillusionment over partisanship in Congress. “Congress is not operating as it should,” Bayh said. “There is much too much partisanship and not enough progress; too much narrow ideology and not enough practical problem- solving.” Bayh cited lawmakers’ failure to create a bipartisan commission to address the national deficit. His decision leaves Democrats scrambling to find a candidate and puts the party in danger of losing what had been considered a “relatively safe” seat in the Senate, said Brian Howey , author of Howey Politics Indiana, a nonpartisan newsletter. Bayh will be the third unappointed Democratic senator to announce plans not to seek re-election this year, in addition to Connecticut’s Christopher Dodd and Byron Dorgan of North Dakota. “This is an absolute stunner,” Howey said in an interview. Democrats, who also control the House of Representatives, have been particularly on edge since Republican Scott Brown last month won the Massachusetts Senate seat occupied by the late Edward Kennedy , a Democrat, for almost a half-century. That cost Democrats the 60th vote they need to break Republican filibusters. Eight Seats Stu Rothenberg , editor of the nonpartisan Rothenberg Political Report, said Democrats now may lose up to eight Senate seats this November. Republicans would need to capture 10 to regain control. Regardless, the losses will “dramatically change the legislative dynamic on Capitol Hill,” said Rothenberg. “There really will be an incentive for bipartisanship certainly by the White House and the Democratic leadership.” White House aides tried to persuade Bayh to seek re- election, according to a senior administration official who asked not to be identified. Bayh “likely would have won re-election,” said Thomas Mann , a congressional expert at the Brookings Institution in Washington. Bayh is the son of former U.S. Senator Birch Bayh of Indiana. Republican former Indiana Senator Dan Coats is gathering petition signatures needed to officially declare his candidacy for the seat. “I don’t see another Democrat who could hold the seat in this political environment,” said Mann. Health Care The political climate is putting President Barack Obama’s goals of revamping the U.S. health-care system and overhauling energy laws in question. White House spokesman Robert Gibbs said today the news about Bayh was “not a surprise.” Bayh’s decision stems from frustration over the ability to get “things done” in the Senate, said Anita Dunn , a Democratic strategist who has advised Bayh for a decade. “He’s been looking to find another way, another forum, for public service,” she said today in a telephone interview. Bayh made his final decision not to run this past weekend, she said. “He’s been leaning toward this and has been talking to friends and close advisers all year.” “Capitol Hill is not a happy place these days,” said Charlie Cook , publisher of the independent Cook Political Report. Cook said that while Bayh’s announcement was a “total surprise,” some Democratic operatives had said the Indiana Democrat was approaching the prospect of six more years in the Senate with “a lack of enthusiasm.” ‘Razor Thin’ Democrats’ majority in the Senate after November “will likely be razor thin,” Cook said. In addition, he said, “there is an increasing likelihood that Democrats will lose the House.” Dorgan and Dodd announced last month they weren’t seeking re-election this year. Republicans also are in a position to gain the Delaware seat occupied for almost four decades by Vice President Joseph Biden , according to the Cook Report. Bayh, in a Jan. 22 interview on Bloomberg Television’s “Political Capital with Al Hunt ,” said he was confident he would win re-election in November. “It’s a more challenging environment for every incumbent,” and “probably more for Democrats than Republicans,” Bayh said. “But the reports of my poll numbers having declined are not accurate.” To contact the reporters on this story: Kim Chipman in Washington at kchipman@bloomberg.net ; Heidi Przybyla in Washington at hprzybyla@blooomberg.net ;

Read the full article →

Indiana’s Democratic Senator Bayh Said Not to Seek Re-Election This Year

February 15, 2010

By Kim Chipman Feb. 15 (Bloomberg) — U.S. Senator Evan Bayh , an Indiana Democrat, will announce today he won’t seek re-election this year, a person close to the senator said. Bayh, 54, a former Indiana governor in his second term as a senator, will make public his plans to retire this afternoon at a press conference in Indianapolis, the person said. The news will leave Democrats scrambling to find a candidate and put the party in danger of losing what had been considered a “relatively safe” seat in the U.S. Senate, according to Brian Howey , author of Howey Politics Indiana, a nonpartisan newsletter. “This is an absolute stunner,” Howey said in an interview. “In a year in which we’ve had nothing but stunners, this tops them all.” To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net

Read the full article →

What Dat? Is Better Question for NFL Champions: Scott Soshnick

February 8, 2010

Commentary by Scott Soshnick Feb. 8 (Bloomberg) — No one did more to elevate his stature in Super Bowl XLIV than New Orleans Saints coach Sean Payton . It was Payton who used halftime to hatch a plan of surprise when conventional wisdom called for safe. He played to win. Imagine that. He did something that no other Super Bowl participant had dared. The Indianapolis Colts didn’t see that onside kick coming, which is why the Saints are going home champions. Let’s hope that coaches in all sports take note of the result, of Payton earning the ultimate honor, a celebratory ride on the shoulders of his players. Let’s hope those coaches take note of Saints quarterback Drew Brees carrying his son under a shower of red confetti, tears of jubilation covering his cheeks. Let’s hope they saw the images emanating from New Orleans, where they’re less than five years removed from devastation. “Louisiana, by way of New Orleans, is back,” said Saints owner Tom Benson , who didn’t need to explain. “And this shows the whole world.” There are feel-good stories and then there’s this. It’s hard to fathom anyone who doesn’t fancy himself a Hoosier pulling for quarterback Peyton Manning and the Colts, who were denied their second championship in four seasons. Shockey Silenced These Saints are the perfect antidote for difficult times, for reminding us that anything is, indeed, possible. It was the kind of game that left even loudmouth Jeremy Shockey searching for words. “I’m kind of at a loss,” is what Shockey came up with. If anyone knows about loss it’s the residents of New Orleans, where lives were lost, homes were lost and even hope was lost after Hurricane Katrina. No, a football game can’t repair damaged homes and psyches. But anyone who thinks it’s just a game needs a reminder of what a group of college hockey players did for the U.S. when they beat the Russians in the 1980 Olympics. Sports, at its best, can uplift. And that euphoria can linger. “We played for so much more than just ourselves; we played for our city,” said Brees, the game’s Most Valuable Player. “Eight-five percent of the city was under water.” And now 100 percent of the city is over the moon. Taking a Chance Make no mistake, unconventional wisdom is most responsible for the Saints beating the Colts, 31-17, last night at Sun Life Stadium in Miami. Saints fans used to wear brown paper bags over their heads. Last night those clad in black and gold, those who for more than an hour after the game kept chanting, wore nothing but smiles. They danced in the aisles, bopping as Iko Iko blasted from the loudspeakers. All season the fans of New Orleans asked Who Dat?, as in Who Dat Say Dey Gonna Beat Dem Saints. A more appropriate question last night would’ve been What Dat? Regretful is the fan at the refrigerator — or elsewhere — who missed the second-half kickoff because, well, what are the odds of anything of consequence happening? It’s just a kickoff. Well, something did happen. Something big. Something unexpected. Something memorable. Something wonderful. Hopefully something that changes the safety-first paradigm. A coach with everything to lose took a chance. The Saints trailed 10-6 at halftime, and the Colts would get the ball to start the second half. Payton knew that a touchdown might be too much to overcome, even for the highest- scoring team in the National Football League. Onside Kick So he called for an onside kick. Coaches usually order that low-percentage play because they have to, not because they want to, which explains why we’ve never seen one in the Super Bowl prior to the fourth quarter. This time it worked. Six plays and 58 yards later Pierre Thomas ran 16 yards into the end zone. “We were going to be aggressive,” said Payton, who earlier passed on a field goal for an unsuccessful fourth-and- goal attempt. “When you do something like that you put it on the players and they were able to execute.” Payton was able to take a chance because he, like Bill Belichick against the Colts earlier this season, didn’t fear the consequences of failure. How many other coaches do you suppose have thought about doing the same thing only to ponder the repercussions of being wrong. Risk versus reward, which this time was considerable. “The onside kick was huge,” said Melvin Bullitt , one of Indy’s special teams captains. Earlier this week Brees said the Saints, a five-point underdog, had a chance to lift their city, to give the fans hope. A chance. Payton took one. And because of it you’ll never miss the second-half kickoff again. (Scott Soshnick is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Scott Soshnick in New York at ssoshnick@bloomberg.net

Read the full article →

Video: Forbes’s Van Riper Discusses Super Bowl Gambling Trends: Video

February 5, 2010

Feb. 5 (Bloomberg) — Tom Van Riper, a reporter for Forbes, talks with Bloomberg’s Carol Massar and Matt Miller about betting on the National Football League’s Super Bowl championship between the New Orleans Saints and Indianapolis Colts on Feb. 7. (Source: Bloomberg)

Read the full article →

← Previous Entries