israel

Zimbabwe Halts Used Underwear

by The Huffington Post on January 10, 2012

Huffington Post…

Zimbabwe may have an 80% unemployment rate, but one thing the country absolutely won’t stand for is its impoverished citizens wearing used undergarments. According to the Zimbabwe Mail , the country’s finance minister Tendai Biti recently announced a total ban on the importation and sale of secondhand underwear . “If you are a husband and you see your wife buying underwear from the flea market, you would have failed. If I was your in-law, I would take my daughter and urge you to first put your house in order if you still want her back,” Biti told the paper. The law went into effect on Dec. 30, 2011 calling for the Zimbabwe Revenue Authority to charge 40 percent duty, 15 percent value added tax and a $3 penalty for every kilogram (2.2 lbs) of imported underwear , according to The Guardian . It is believed the ban will help address health concerns as well as work to protect the country’s domestic textile industry. Zimbabwe ranks among the poorest countries in the world, according to International Monetary Fund data . The Daily Mail explains that Zimbabwe is not the first African country to outlaw the sale of pre-owned underwear. In 1994, Ghana also took a similar measure .

Visit link:
Zimbabwe Halts Used Underwear

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

Huffington Post…

(Adds details about violations in 7th paragraph) By Tim McLaughlin BOSTON, Jan 5 (Reuters) – An exclusive group of funds at Fidelity Investments is seeking shareholder approval to extend the brief tenure of a former executive of MF Global Holdings Ltd on a board that oversees billions of dollars in assets, according to U.S. regulatory filings. Independent trustees for Strategic Advisers Inc, a unit of Fidelity, had appointed Amy Butte Liebowitz, a former MF Global chief financial officer and board member, as a director in September, and want her reelected at a Jan. 20 meeting in Boston. Liebowitz earned plaudits at MF Global for helping raise about $2.9 billion in a July 2007 initial public offering. But just months later, some investors accused the company of misrepresenting its risk management prowess in IPO registration documents she and other top executives signed. Strategic Advisers manages about $98 billion in assets. Its funds are not open to the public, but exclusive to clients enrolled in Fidelity’s customized Portfolio Advisory Service. Liebowitz declined to comment for this story. Fidelity spokesman Vincent Loporchio said she was recruited for her significant experience in business and finance. Liebowitz represents a link to MF Global’s short-lived honeymoon as a publicly traded company. Even before MF Global’s collapse into bankruptcy on Oct. 31, the company had been repeatedly cited for lax risk controls. During her tenure of about 17 months, MF Global and its divisions were ordered to pay more than $75 million in restitution and settlements over regulatory violations. Liebowitz, however, was not personally accused of any violations. In a December 2007 settlement involving the collapse of a Philadelphia hedge fund, the alleged violations happened before Liebowitz joined MF Global and its predecessor company. Just months before Liebowitz became a trustee for Strategic Advisers’ funds, MF Global agreed to pay $2.5 million of a $90 million in a preliminary settlement to resolve a shareholder lawsuit that accused the company of lax risk management over a rogue wheat trader in February 2008. Liebowitz and other former MF Global executives were defendants in the civil case in U.S. District Court in Manhattan. In court papers, they denied any wrongdoing. The dispute preceded Jon Corzine, who became MF Global’s CEO in 2010 and led the company’s collapse with wrong-way bets on European debt. Without explanation, Liebowitz, 43, abruptly quit MF Global in January 2008, just before the rogue trader case helped push the company’s stock down 94 percent that year, wiping out $3 billion in shareholder equity. The trades happened about a month after Liebowitz left the company. But some investors pounced on MF Global with lawsuits, alleging that the company senior management team, including Liebowitz, glossed over a shaky risk management system when they took the company public in 2007. A Wall Street veteran and star financial-stocks analyst at Bear Stearns earlier in her career, Liebowitz joined MF Global in September 2006 to spearhead the spin-off and initial public offering of the former Man Financial from Man Group. As the CFO of the New York Stock Exchange, she helped the Big Board go public with its acquisition of Archipelago Holdings Inc. As part of her separation from MF Global, she received a $3 million transition payment and IPO-related restricted stock worth about $11.5 million at the time, according to filings with the U.S. Securities and Exchange Commission. About a month after Liebowitz left the company, MF Global’s credibility as a risk manager suffered a major blow. On Feb. 27, 2008, an MF Global broker made more than 100 trades from his home computer, placing a bet of nearly $1 billion to buy thousands of wheat futures contracts, according to a lawsuit by several investors. The next day, MF Global said it would take a $141.5 million loss from those trades. At MF Global, Liebowitz’s base salary was $1 million. At Strategic Advisers she would receive about $80,000 a year to attend a handful of meetings for the funds. After leaving MF Global, Liebowitz founded TILE Financial Inc, a financial education firm in Manhattan. The company’s biography on her says she is a new mother and has four stepchildren. (Reporting By Tim McLaughlin; Editing by Richard Chang, and Carol Bishopricu)

Originally posted here:
Ex-MF Global CFO Tapped For Board That Oversees Billions In Assets

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

Retailers Seduced Shoppers With Deals In December, In Spite Of Economy

January 5, 2012

Shoppers didn’t hold back this holiday season — at certain stores, that is. According to data released Thursday, luxury and mid-range retailers seduced customers in December, while discounters like Target missed sales estimates. The 3.4 percent increase in same-store sales reported by Thomson Reuters was better than expected — an optimistic sign in an ailing economy. Still, it’s unclear how often people will shop in the upcoming year, a factor that will depend more on whether they find jobs than on how much retailers innovate or drop prices. “Consumers were feeling better about loosening up purses this holiday season,” said Jharonne Martis, director of research for Thomson Reuters. In particular, big wins in the apparel and teen apparel sectors indicated that shoppers were willing to spend not only on necessities, but on discretionary items like new clothes and shoes, Martis said. Same-store sales, which measure changes in sales at stores open at least one year, are released at the start of each month by 25 of the largest U.S. retailers. Same-store sales of at least 3 percent indicate a healthy U.S. consumer, according to Martis. Nordstrom and Macy’s were among the biggest winners with 8.7 and 6.2 percent sales increases, respectively. Saks and Dillard’s also did well, with 5.8 and 4.0 percent increases. TJX Companies, owner of T.J. Maxx and Marshalls, saw its same-store sales increase by 8 percent. In overall apparel sales, Martis said this was able to counter the miss by Gap Inc., which saw sales decline by 4 percent in December. Victoria’s Secret, part of Limited Brands, also saw one of the largest successes with an 11 percent increase. Not that such successes came easily. It was a “very aggressive, promotional holiday environment,” as Amie Preston, chief investor relations officer of Limited Brands, said on the company’s December sales call. Other retailers, like TJX Companies, made similar comments about the importance of value to this round of holiday shoppers. Successful stores had no choice but to drop prices, extend hours and aggressively advertise to get people in the door — all of which made profits difficult. “It was one of the most promotional seasons we’ve seen in a long time, and very event driven,” said Ken Perkins, president of Retail Metrics, a retail research and consulting firm. “This puts a lot of pressure on margins.” Data showed that consumers held out from hitting stores until the very best deals were offered, or until the last minute before Christmas. According to ShopperTrak, which monitors retail foot traffic, sales jumped 37.8 percent in the last week before Christmas, a much larger increase in that period than in 2010 . Oddly, some of the big discount stores known for consistently low prices weren’t able to attract this year’s shoppers. Target missed estimates by 1.5 percent and Fred’s and Kohl’s actually saw same-store sales decline by 0.4 and 0.1 percent in December, respectively. But this doesn’t necessarily mean that people weren’t looking for discounts. Rather, more kinds of retailers are now competing for the same price-conscious shopper. In addition to traditionally mid-range department stores like Macy’s offering more deals, a growing crop of dollar stores have prices that can beat even those at Walmart. “Discounters, big names like Target and Walmart have lost a lot of market share to dollar stores,” said Martis of Target’s disappointing sales. Walmart, which doesn’t announce monthly results, will release holiday sales data in February with its latest earnings. On Tuesday, Dollar General announced that it will be opening 625 new stores in 2012. On Thursday evening, Family Dollar will announce its latest earnings, which are expected to include strong same-store sales of between 4 and 6 percent . Meanwhile, a struggling Sears Roebuck, once America’s most prominent middle-class retailer, announced last week that it will be closing 100 to 120 of its Sears and Kmart stores. Unfortunately for the economy, healthy December sales numbers don’t necessarily indicate a fertile retail landscape for 2012. With few big shopping holidays or sale days like Christmas or Black Friday in the near future, there’s a potential for retail sales to be soft, according to Perkins. Without the continued addition of jobs, the divide between retail winners and losers — as well as between luxury and middle class spending — is likely to become even sharper than it was in December. “I have deep concerns about the erosion of the middle class and their ability to spend so much,” Perkins said. “Much of the economy ultimately rests on their shoulders.”

Read the full article →

More Than One-Third Of Layoffs At One Big Bank To Hit NYC

December 27, 2011

More than one-third of job cuts at Morgan Stanley will likely hit workers in New York City. Nearly 600 of the 1,600 job cuts that Morgan Stanley announced last month will probably come from New York City, according to a regulatory filing cited by Bloomberg. The Morgan Stanley layoffs are just one part of a wider trend; Wall Street firms have said they will eliminate more than 200,000 jobs around the world this year. Thomas DiNapoli, the New York State Comptroller estimated earlier this year that 10,000 New York-based employees of the securities industry will lose their jobs by 2012, according to The New York Times . Bank of America announced in September that it would slash 30,000 jobs over the next few years to save $5 billion. Since the announcement, BofA employees have been flooding rival banks with resumes , Reuters reported last month. Still, they may be hard-pressed to find a job. Citigroup is planning to cut 4,500 jobs over the next few quarters, while Barclays said in August that it would slash 3,000 jobs. UBS plans to reduce its workforce by one-tenth over the next five years. Though financial industry workers may be plagued by constant layoff announcements, those who survive will likely be handsomely rewarded. Seven big banks’ pay data indicate that Wall Street compensation is on track to exceed 2010 levels , according to an analysis from the Public Accountability Initiative. New hires are also raking it in. Banks also boosted their use of “guaranteed bonuses” — or the practice of guaranteeing employees a bonus before they’ve ever made a trade — in 2010, The Institute for International Finance found. Wall Street workers seem prepared for a boost. Most financial industry employees say they expect to get the same or higher bonus as what they got last year. Still, if last year’s pattern holds true, the workers may not get their wish. Wall Street bonuses dropped 9 percent in 2010 .

Read the full article →

Disgraced Former Journalist Fights To Become California Lawyer

December 27, 2011

SAN FRANCISCO — A former journalist who became the subject of a Hollywood movie after he was caught fabricating articles in the late 1990s is fighting to become a lawyer in California over the objections of a state bar committee. Stephen Glass, whose ethical missteps at The New Republic and other magazines were recounted in the film “Shattered Glass” and an autobiographical novel, has challenged the bar committee’s decision to deny him a license to practice law, the San Francisco Chronicle ( ) reported Monday. http://bit.ly/sfh2je Glass attended law school at Georgetown University and passed California’s bar exam in 2007. His application for an attorney’s license was turned down by the state’s Committee of Bar Examiners, which judged him morally unfit for his new profession. But an independent state bar court ruled in Glass’s favor in July and the California Supreme Court has since agreed to hear the committee’s appeal. No date for oral arguments has been set. The bar association’s lawyers said in written filings that even though Glass’ transgressions occurred when he was in his 20s, his attempts at atonement were inadequate and in some cases coincided with the publication of his novel. They faulted him for never compensating anyone who was hurt by his falsehoods. Law and journalism “share common core values – trust, candor, veracity, honor, respect for others,” Rachel Grunberg, a lawyer for the State Bar of California, told the Chronicle. “He violated every one of them.” The bar court that overruled the committee in July was persuaded, however, that Glass was genuinely repentant and had been rehabilitated. His appeal included character references from 22 witnesses, including two judges who had employed him, two psychiatrists, and Martin Peretz, who owned The New Republic when Glass’ deception occurred. In his own statement to the bar, Glass said he was “greatly ashamed and remorseful about my lying” but “forthright and candid about my years of misconduct.” Glass tried to become a lawyer in New York after he passed that state’s bar exam in 2003, but withdrew his application when his request for moral character approval from the New York bar languished. Now 39, Glass works as a law clerk at a Beverly Hills firm. His lawyers did not immediately respond to telephone and email messages for comment Monday.

Read the full article →

Federal Judge Rudolph Randa Rules SEC Agreement Too Soft

December 22, 2011

A federal judge in Milwaukee has criticized the Securities and Exchange Commission for being too soft with corporate enforcement, marking the second time the agency has been criticized for weak settlements in the past month. Shadowing last month’s decision by U.S. district judge Jed Rakoff to kibosh the agency’s $258 million proposed settlement with Citibank, a federal judge in Milwaukee told the SEC that its proposed settlement with the Koss Corp. is too vague and asked the agency to provide more facts by January 24. In October the SEC charged Koss Corp., a headphone-manufacturer, with accounting fraud. Wednesday’s ruling from U.S. district judge Rudolph Randa is the latest in a string of actions by federal judges to challenge the way the government agency enforces regulations. The decision underscores the significance of the November ruling by Judge Rakoff to toss out the proposed settlement between the SEC and Citigroup that didn’t have enough facts, Rokoff said, and did not force the corporation to admit guilt. After the Citibank settlement, the SEC responded, saying the proposed agreement was business as usual . But Judge Rakoff’s decision — now followed by Judge Randa — suggests the status quo is getting a rethink. Adam C. Pritchard, a law professor at the University of Michigan Law School, told The Huffington Post last month, “Judge Rakoff is saying that he thinks it’s time to figure out what the law is, what the obligations are for these banks.” However, amid criticism that the agency isn’t doing enough to hold executives accountable for the financial crisis, the SEC announced last week that it is suing six former Fannie Mae and Freddie Mac executives for misleading the public about the mortgage giants’ exposure to risky subprime mortgages as the housing bubble deflated. Last February, SEC chairwoman Mary Schapiro said that the agency doesn’t have enough money to satisfactorily police Wall Street or draft new regulations required by the Dodd-Frank financial reform law. Frustration on the bench has been growing elsewhere. In 2010, two federal judges in Washington raised eyebrows over SEC and other government settlements . One federal judge refused to approve a $75 million settlement with Citibank in another case related to subprime mortgages. Another federal judge was critical of a $298 million deal between Barclay’s and the U.S. Department of Justice over charges that the bank had altered records to obscure international money transfers.

Read the full article →

Can You Guess This Future Tech Titan?

December 13, 2011

Before they were billionaires, most billionaires were just people who looked dorky in yearbook photos. Google co-founder Sergey Brin is no exception. The photo below ( courtesy of Snakkle ) was taken in 1990, during what would be Brin’s last year at Eleanor Roosevelt High School. As reported in Moment Magazine, Brin, who was born in Russia, went straight to the University of Maryland after his junior year, where he studied computer science and mathematics. He later enrolled at Stanford where he is currently on leave from his PhD studies, writes Business Week. It was during his doctoral studies at Stanford that Brin met Larry Page. As part of a research project, the two created a search engine that listed results in order of popularity. They named it Google, which is the common spelling of googol, a math term for the number one followed by 100 zeros. The huge number reflected their mission to organize everything on the web, reports Biography.com. Brin and Page would go on to officially launch Google Inc. in 1998. Today, Google is the number-one search engine in the United States, where it commands over 65 percent of the search market share, according to a recent report by comScore. And the geeky kid in that picture? He’s worth $16.7 billion. For more great photos of tech titans before they were billionaires, click over to Snakkle. PHOTO:

Read the full article →

Report: Countries Face A ‘Great Challenge’ Economically For The Foreseeable Future

December 12, 2011

An OECD report due for release this month will say markets and governments face an uphill struggle to fund themselves next year amid extreme uncertainty over the euro zone and the global economy, the Financial Times said on Monday. The report will say that financial stresses are likely to continue with the unpredictability of markets threatening the stability of many governments that need to refinance debt. “(On occasion), market events seem to reflect situations whereby animal spirits dominate market dynamics, thereby pushing up sovereign borrowing rates with serious consequences for the sustainability of sovereign debt,” Hams Blommestein, head of public debt management at the Organisation for Economic Co-operation and Development, is quoted as saying. For the foreseeable future it will be a “great challenge” for a wide range of OECD countries to raise large volumes in the private markets, with so-called rollover risk a big problem for the stability of many governments and economies, the article said. The OECD says, according to the FT, that the gross borrowing needs of OECD governments are expected to reach $10.4 trillion in 2011 and will increase to $10.5 trillion next year – a $1 trillion increase on 2007 and almost twice as much as in 2005. (Reporting by Stephen Mangan; Editing by Nick Macfie) Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

AT&T Defends $39 Billion Deal

December 1, 2011

NEW YORK — AT&T Inc. blasted the Federal Communications Commission on Thursday for compiling what it called an unfair and biased report on what would happen if AT&T were allowed to buy T-Mobile USA. AT&T agreed in March to buy T-Mobile USA for $39 billion, but the deal has encountered opposition, first from the Justice Department and then from the FCC. Analysts now give it only a slim chance of going through. The FCC took the unusual step of releasing its analysis of the merger on Tuesday. It found “questions of fact” about AT&T’s stated justifications for the merger and dismissed most of AT&T’s arguments. It said competition in the industry would suffer if AT&T swallowed T-Mobile, and potentially lead to higher prices for consumers. AT&T immediately attacked the release of the report, saying it was a draft that had never been voted on by the five-member commission. The “questions of fact” would have been addressed at an administrative hearing that now won’t take place, since AT&T has withdrawn its merger application. The company is expected to resubmit the application. On Thursday, AT&T released a more thorough, combative response to the report. It’s an unusual one for a company that spends heavily on lobbying and cultivates close relationships with regulators. “The document is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis,” the Dallas-based company said. The FCC report said the merger would threaten fragile competition in the industry, yet AT&T pointed out that it also cites existing competition from Verizon Wireless as a strong motivator for AT&T to build out its new data network, even without the resources it would gain by buying T-Mobile USA. The FCC report disputed AT&T’s claims that the merger would create jobs rather than eliminate them, as is usual for mergers. AT&T says the expansion of wireless broadband will stimulate job creation, and points out that the FCC itself says its own $4.5 billion broadband fund would create half a million jobs over six years. That’s counting not just phone-company jobs, but jobs created by the availability of broadband. “This notion – that government spending on broadband deployment creates jobs and economic growth, but private investment does not – makes no sense,” AT&T said Thursday. The war of words is unlikely to affect the outcome of AT&T’s quest to buy T-Mobile USA, since the chief hurdle is a suit filed in August by the Justice Department to block the deal.

Read the full article →

America Got Access To Some Medications Ahead Of Europe In Past Year: FDA

November 4, 2011

Americans in the past year got access to 24 new medicines before they became available anywhere else, U.S. drug regulators said as they seek to show they are doing enough to promote medical innovation. Releasing a report on the approvals in the year ended on September 30, the Food and Drug Administration also said it had approved 35 drugs, the second-highest number in the past decade after 37 new treatments reached the U.S. market in 2009. The FDA also used the report to highlight how user fees from brand-name drugmakers such as Pfizer and AstraZeneca have helped it speed up review times. The agency has drawn fire from some manufacturers for being too cautious in reviewing medical products, hindering U.S. innovation and competitiveness with unnecessarily tough requirements. In the past, the FDA has attributed lower approval numbers to a decline in applications from drugmakers. Janet Woodcock, the head of the FDA’s drugs center, said there had not been significantly more applications recently, but they had been of higher quality, making approval more likely. The report showed 22 of the 35 drugs were approved in their first review cycle, meaning manufacturers provided enough data right away, without the FDA having to ask for more information that could delay the process. “The point we’re trying to make is that when high-quality science, good applications come before us, we are able to act swiftly and surely, and we are able to apply considerable regulatory flexibility in our application review process,” FDA Commissioner Margaret Hamburg told reporters on a call. The FDA report said about half the drugs were “significant therapeutic advances” over existing medicines, including seven treatments for cancer and 10 for rare diseases. The agency report mirrors a similar finding in June from the nonprofit advocacy group Friends of Cancer Research, which found new cancer drugs reach the U.S. market several months before they go on sale in Europe. Much of the recent criticism of the agency, however, has come from the medical device industry, which has said the FDA is driving companies to Europe, where developers and investors see a quick path to market. Consumer advocates, meanwhile, say the FDA may sacrifice safety for speed and should demand more data from companies. The report comes as the FDA is in negotiations with the medical device industry over user fees that help pay for product reviews. Device makers have said higher fees in the past have not led to speedier review times. But in the report, the FDA said fees from brand-name drugmakers helped it approve 34 of the 35 drugs on schedule. “At the present time, MDUFA (medical device user fees) is a younger program, and it pays for a much smaller percentage of the overall device review program, and I think that makes a difference as well,” Hamburg said, when comparing device fees to those from the pharmaceutical industry. Copyright 2011 Thomson Reuters. Click for Restrictions .

Read the full article →

Anthony Tjan: Don’t Send That Email. Pick up the Phone!

November 4, 2011

Around this time last year, I wrote about how we need to get back to allowing conversation to occur without texting, emailing, browsing, Tweeting, Facebooking, or doing whatever else zeros and ones can do these days on smart phones, iPads, notebooks, etc. I am as guilty as the next person of falling for the perception that any response latency is unacceptable. As 2012 fast approaches, this needs to go on top of my New Year’s resolution list: focus on the live conversations at hand, rather than parallel conversations on the Blackberry screen. But the bigger need is just for more live conversations to occur, period. This is especially true when people are trying to resolve a conflict or communicate an important business decision. There is a rising and unproductive trend towards people trying to do digital conflict resolution. The de facto path for issue resolution seems to be increasingly via email. More accurately, email has become a convenient mechanism for issue-avoidance. It is easier, quicker, less stressful, and less confrontational to have critical or challenging issues sent over email versus a live one-on-one with a counterpart. Like many readers, I have experienced too many unproductive strings of back-and-forth emails or texts that should have stopped in round two, but continue. The problems with trying to resolve sensitive matters over email or text are quite obvious: 1. It is hard to get the EQ (emotional intelligence) right in email. The biggest drawback and danger with email is that the tone and context are easy to misread. In a live conversation, how one says something, with modulations and intonations, is as important as what they are saying. With email it is hard to get the feelings behind the words. 2. Email and text often promote reactive responses, as opposed to progress and action to move forward. Going back to the zero latency expectation in digital communications, it is hard for people to pause and think about what they should say. One of my colleagues suggests not reacting to any incendiary message until you have at least had a night to sleep on it, and always trying to take the higher ground over email. While by definition reactive responses occur in live discourse, they are usually more productive. The irony is that while email, as an asynchronous channel, has the potential to be more thoughtful, it often promotes the opposite tendency to be immediately reactive. Why? Because the bark is almost always bigger than the bite behind remote digital shields. 3. Email prolongs debate. Because of the two reasons above, I have seen too many debates continue well beyond the point of usefulness. Worse, I have experienced situations which start relatively benignly over email, only to escalate because intentions and interests are easily misunderstood online. When I ask people if they have called or asked to meet the counterpart to try and reach a resolution, there is usually a pause, then a sad answer of “no.” Email is one of the greatest productivity contributors of the past two decades, and social communication platforms such as Twitter and Facebook have fundamentally changed and positively enriched the means and reach with which we are able to interact. Yet we have to recognize when such digital channels cannot substitute for a live conversation. Email and social networking modes of communications have created a generation of casually convenient new connections, and even helped us deepen existing relationships, but they can rarely replace the real world. As digital communication accelerates the pace at which people form and broaden relationships, it is also decreasing the rate at which people are willing to resolve issues professionally and directly in-person. The next time you experience an issue over email, ask yourself if it is something that would be better served by a real conversation. Then have the courage to stop emailing and pick up the phone. Or even better: have a meeting. This article first appeared on Harvard Business Publishing on November 11, 2011.

Read the full article →

Many Cities Leaving Occupy Protesters Alone

October 29, 2011

By ERIKA NIEDOWSKI and MEGHAN BARR, The Associated Press NEW YORK (AP) — While more U.S. cities are resorting to force to break up the Wall Street protests, many others – Philadelphia, New York, Minneapolis and Portland, Ore., among them – are content to let the demonstrations go on for now. (CLICK HERE OR SCROLL DOWN FOR LATEST UPDATES ) New York Mayor Michael Bloomberg, for example, said Friday that the several hundred protesters sleeping in Zuccotti Park, the unofficial headquarters of the movement that began in mid-September, can stay as long as they obey the law. “I can’t talk about other cities,” he said. “Our responsibilities are protect your rights and your safety. And I think we’re trying to do that. We’re trying to act responsibly and safely.” Still, the city made life a lot harder for the demonstrators: Fire authorities seized a dozen cans of gasoline and six generators that powered lights, cooking equipment and computers, saying they were safety hazards. In the span of three days this week, police broke up protest encampments in Oakland, Calif., Atlanta and, early Friday, San Diego and Nashville, Tenn. Nashville police cracked down after authorities imposed a curfew on the protest. Twenty-nine people were arrested and later released after a judge said the demonstrators were not given enough time to comply with the brand-new rule. They received citations for trespassing instead. Fifty-one people were arrested in San Diego, where authorities descended on a three-week-old encampment at the Civic Center Plaza and Children’s Park and removed tents, canopies, tables and other furniture. Officials there cited numerous complaints about human and animal feces, urination, drug use and littering, as well as damage to city property – the same problems reported in many other cities. Police said the San Diego demonstrators can return without their tents and other belongings after the park is cleaned up. Earlier this week, in the most serious clashes of the movement so far, more than 100 people were arrested and a 24-year-old Iraq War veteran suffered a skull fracture after Oakland police armed with tear gas and bean bag rounds broke up a 15-day encampment and repulsed an effort by demonstrators to retake the site. But other cities have rejected aggressive tactics, at least so far, some of them because they want to avoid the violence seen in Oakland or, as some have speculated, because they are expecting the protests to wither anyway with the onset of cold weather. Officials are watching the encampments for health and safety problems but say that protesters exercising their rights to free speech and assembly will be allowed to stay as long as they are peaceful and law-abiding. “We’re accommodating a free speech event as part of normal business and we’re going to continue to enforce city rules,” said Aaron Pickus, a spokesman for the mayor of Seattle, where about 40 protesters are camping at City Hall. “They have the right to peacefully assemble. Ultimately what the mayor is doing is strike a balance.” Authorities have similarly taken a largely hands-off approach in Portland, Ore., where about 300 demonstrators are occupying two parks downtown; Memphis, Tenn., where the number of protesters near City Hall has ranged from about a dozen to about 100; and in Salt Lake City, where activists actually held a vigil outside police headquarters this week to thank the department for not using force against them. In the nation’s capital, U.S. Park Police distributed fliers this week at two encampments totaling more than 150 tents near the White House. And while the fliers listed the park service regulations that protesters were violating, including a ban on camping, a park police spokesman said the notices should not be considered warnings. In Providence, R.I., Public Safety Commissioner Steven Pare said the protesters will not be forcibly removed even after the Sunday afternoon deadline he set for them. He said he intends to seek their ouster by way of court action, something that could take several weeks. “When you see police having to quell disturbances with tear gas or other means, it’s not what the police want and it’s not what we want to see in our society,” Pare said. Similarly, in London, church and local government authorities are going to court to evict protesters camped outside St. Paul’s Cathedral – though officials acknowledged Friday it could take weeks or months to get an order to remove the tent city. Several hundred protesters against economic inequality and corporate excesses have been camped outside the building since Oct. 15. On Oct. 21 cathedral officials shut the building, saying the campsite represented a health and safety hazard. It was the first time the 300-year-old church, one of London’s best-known buildings, had closed since German planes bombed the city during World War II. In Minneapolis, where dozens have been sleeping overnight on a government plaza between a county building and City Hall, the three-week-old occupation has been far tamer than those in other cities, with only a few arrests. Sheriff Rich Stanek has made it a practice to meet with protesters daily to talk about their issues and the day ahead, and he has refused to engage what he called “the 1 percent” who want to cause trouble. “We decided that’s not the tactic we want to take. Doing that sometimes requires biting your tongue,” he said. He added: “Some people have said that’s `Minnesota nice.’ It’s a balance.” ___ Niedowski reported from Providence, R.I. ___ Associated Press Writers Doug Glass in Minneapolis; Lucas L. Johnson II in Nashville, Tenn.; Samantha Gross in New York; Terry Collins in Oakland, Calif.; Jonathan J. Cooper in Portland, Ore.; Josh Loftin in Salt Lake City; Julie Watson in San Diego; Chris Grygiel in Seattle; Ben Nuckols in Washington; and Laura Crimaldi in Providence, R.I., contributed to this story.

Read the full article →

Republican Presidential Candidates Misfire On Big Issues

October 19, 2011

WASHINGTON — Herman Cain’s 9-9-9 tax plan ignited plenty of sparks in the Republican presidential debate Tuesday night, as did testy exchanges between Mitt Romney and Rick Perry. In those instances and more, the facts took a bit of a beating. A look at the accuracy of some of the claims in the Las Vegas debate: HERMAN CAIN: “It does not raise taxes on those that are making the least.” THE FACTS: An independent analysis of his tax plan, released Tuesday, concluded otherwise. The Tax Policy Center, a Washington think tank, said Cain’s plan would increase taxes on 84 percent of U.S. households, hitting low- and medium-income households the hardest. The analysis said that households making $10,000 to $20,000 would see whopping tax increases averaging $2,705 – an increase of nearly 950 percent. The rich, however, would get big tax cuts, the analysis said. Cain’s plan would scrap current taxes on income, payroll, capital gains and corporate profits. He would replace them with a 9 percent tax on income, a 9 percent business tax and a 9 percent national sales tax. The study is in line with economic theorists – whether on the left or right – who note that sales taxes tend to hit low-income families the hardest because they spend more of their income than wealthier families do. Unlike most states, Cain’s plan would not exempt food or medicine from sales taxes. Used items, however, would be exempt. Cain said his plan would create zones where people and businesses could get additional tax deductions, which would reduce taxes for low-income people. The Tax Policy Center said it did not take the zones into account because the Cain campaign did not provide any details on how they would work. ___ RICK PERRY: “Mitt, you lose all of your standing, from my perspective, because you hired illegals in your home and you knew about it for a year. And the idea that you stand here before us and talk about that you’re strong on immigration is on its face the height of hypocrisy.” MITT ROMNEY: “I don’t think I’ve ever hired an illegal in my life.” THE FACTS: The truth is that Romney, former Massachusetts governor, never directly hired an illegal immigrant. But he hired a landscaping company that employed them. In bringing up the matter, Texas Gov. Perry resurrected a charge that has dogged Romney since his last presidential bid. In 2006, Romney learned that the landscaper of his suburban Boston home had employed illegal immigrants. He gave the company a second chance under the condition that it would no longer employ undocumented workers. But in 2007, during the height of his first Republican presidential campaign, the same company was caught employing illegal immigrants at Romney’s home. Romney then fired the landscaper. At the time, and again Tuesday night, Romney said there’s only so much an individual can do when hiring a legitimate company. ___ ROMNEY to PERRY: “You were the chairman of Al Gore’s campaign.” THE FACTS: Romney’s claim was misleading, at best. He neglected to mention that Perry’s role in Gore’s failed 1988 campaign for the Democratic nomination was limited to Texas. It was also marginal. Perry was a Democrat serving in the state legislature at the time and had no significant leadership role in Gore’s third-place finish in Texas. He was one of 28 Democratic Texas lawmakers who endorsed Gore. In any event, he was far from being “the chairman” of Gore’s campaign. Perry switched parties in 1989 and successfully ran for state agriculture commissioner as a Republican. ___ RICK SANTORUM: “(Perry) sent a letter the day of the vote on the floor of the House saying, pass the economic plan. There was only one plan, and that was the plan that was voted on the floor. It was TARP.” PERRY: “I’m just telling you I know what we sent, I know what the intention was. You can read it any way you want, but the fact of the matter, I wasn’t for TARP, and have talked about it for years since then.” THE FACTS: In October 2008, Perry appeared to be both for and against the Troubled Asset Relief Program in the same week. As chairman of the Republican Governors Association, he co-wrote a letter to Congress with his Democratic counterpart that is hard to interpret as anything other than a call to pass the bailout that became known as TARP. “We strongly urge Congress to leave partisanship at the door and pass an economic recovery package,” said the letter. It was dated Oct. 1, just after the House rejected an initial version of the economic recovery bill. That vote triggered an 800-point drop in the Dow Jones industrial average. But the next day, Perry was quoted in The Dallas Morning News as saying that he while favored some kind of economic recovery plan to help taxpayers, “In a free-market economy, government should not be in the business of using taxpayer dollars to bail out corporate America.” Within days, a new version of the bailout was passed by the Senate, then the House, and signed into law by Republican President George W. Bush. ___ MICHELE BACHMANN: “Even the Obama administration chose to reject part of Obamacare. … Now the administration is arguing with itself.” THE FACTS: True, the administration is moving to scrap a long-term insurance program that was part of Obama’s health care law. But it would be wrong to take that as a sign the administration is losing faith in the overhaul. Quite the contrary. Unlike the central provisions of the health care law, the long-term insurance plan, called CLASS, was voluntary. From an accounting viewpoint, that was its fatal weakness. Without some reason for large numbers of healthy people to sign up, experts warned all along that CLASS would attract too many people in frail health. Rising benefit costs would send premiums spiraling upward. Healthier people would drop out, and eventually taxpayers would have to bail CLASS out. Obama’s health insurance mandate, requiring nearly everyone to have insurance, protects his overhaul from a similar fate. “You have to have a broad risk pool,” said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates cutting the federal deficit. “By mandating coverage, (the health care law) creates a broad risk pool and that makes the system much more sustainable.” ___ ROMNEY to PERRY: “You probably also ought to tell people that if you look over the last several years, 40 percent, almost half the jobs created in Texas were created for illegal aliens, illegal immigrants.” THE FACTS: There’s some basis for the assertion that significant numbers of jobs were taken by immigrants, but it’s a stretch to try to pinpoint how many of them may have been in the country illegally. A September report from the conservative-leaning Center for Immigration Studies concluded that 81 percent of new Texas jobs were taken by newly arrived immigrants, basing that on a government survey used to calculate the unemployment rate. The group also estimated that about half of those jobs were taken by illegal immigrants. The government survey that is the source of the numbers asks people whether they are foreign or native born, but doesn’t ask about their legal status. The center’s estimate was an extrapolation based on other government estimates of illegal immigrant populations. ___ BACHMANN: “The biggest problem with this administration and foreign policy is that President Obama is the first president since Israel declared her sovereignty (to) put daylight between the United States and Israel.” THE FACTS: Israel and the U.S. have had their disagreements and have showed them – often in far starker contrast than today. And the consequences have been far greater, too. While the Obama administration has criticized Israeli settlement construction on disputed lands, President George H.W. Bush actually punished the Jewish state for the policy by docking housing loan guarantees. President Jimmy Carter experienced tensions with the Israeli government over his public support for a Palestinian homeland, and President Ronald Reagan harshly criticized Israel for a military attack on an Iraqi nuclear plant in the 1980s. Even in times of war, the U.S. and Israel have differed publicly. The worst disagreement came in 1956 when the United States demanded that Israel, Britain and France end their joint war against Egypt. ___ Associated Press writers Ricardo Alonso-Zaldivar, Stephen Ohlemacher, Jim Drinkard, Bradley Klapper and Steve Peoples, Tom Raum, Alicia Caldwell and Chris Rugaber in Washington; and Chris Tomlinson in Austin, Texas; contributed to this report.

Read the full article →

Stocks Keep Falling As Traders Worry About Looming Recession

August 20, 2011

NEW YORK — A growing belief that the U.S. economy may be headed toward recession gave the stock market its fourth straight week of losses. The anxiety in the market was obvious Friday as the major indexes went from moderate gains early in the day to another sharp loss. The Dow Jones industrial average had its 10th move of more than 100 points in 15 trading days this month. “We just don’t know whether we’re going to have a recession,” said John Burke, head of Burke Financial Strategies. There was little news to help investors determine their next moves. However, JPMorgan Chase & Co. joined other financial firms and cut its forecast for economic growth during the fourth quarter. It’s now predicting growth at annual rate of just 1 percent, down from an earlier forecast of 2.5 percent. That added to the recession fears. Investors disliked the news late Thursday that Hewlett-Packard Co. is planning to exit most of its consumer businesses, including PCs. HP fell 20 percent to a six-year low. HP plans to transform itself into a company that caters to corporations. After the market rose early, some investors sold in case bad news comes out of Europe over the weekend. European investors were also cautious – banking stocks fell near two-and-a-half-year lows, dragged down by rumors about banks’ potential losses on bonds issued by heavily indebted governments. “These things usually break out over the weekend and then you have a mad dash Monday to react to them,” said Mike McGervey, the head of McGervey Wealth Management. The drop late in the day recalled the 2008 financial crisis. Then, many investors stepped up their selling in the afternoon out of fears about news that might break overnight – or on weekends. Lehman Brothers failed on Sunday, Sept. 15. The government took over mortgage companies Fannie Mae and Freddie Mac the previous weekend. The Dow lost 172.93, or 1.6 percent, and closed at 10,817.65. It was down 4 percent for the week. Since July 21 – four weeks and one day – the Dow is down 15 percent. Companies that rely on an expanding economy for higher revenue fell. Caterpillar Inc., International Business Machines and Alcoa Inc. each fell more than 2 percent. The Standard & Poor’s 500 stock index fell 17.12, or 1.5 percent, to 1,123.53. It was down 4.7 percent for the week. All 10 industry groups that make up the index fell. The Nasdaq composite fell 38.59, or 1.6 percent, to 2,341.84. It was down 6.6 percent for the week. Although stocks fell, investors did not continue pushing the price of Treasurys, as they have the last three weeks. The yield on the benchmark 10-year Treasury note was almost unchanged at 2.07 percent, compared with late Thursday’s 2.06 percent. It had been up to 2.11 percent earlier in the day. The yield fell below 2 percent Thursday for the first time as heavy demand sent its price sharply higher. Investors began the week confident after last week’s volatility, the worst the market has had since the 2008 financial crisis. The Dow rose nearly 215 points on Monday when Google, Time Warner Cable and Cargill were among companies announcing multi-billion deals. The market remained relatively calm the next two days. But on Thursday, a stream of bad economic news in the U.S. combined with worries about Europe’s debt problems and sent the Dow plunging 419 points. Since July 21, the market has gone from one crisis to another, and the weakening U.S. economy has been at the heart of the selling. In late July, the concern was the debt debate going on in Washington. In early August, it was the downgrade of the U.S. debt rating by Standard & Poor’s. Since then, worries about the impact of the downgrade have faded, and growing evidence that the economy is slowing has driven stocks down. Signs of a slower economy around the world have only made investors more pessimistic about the U.S. Earlier this week, Germany said its economy grew just 0.1 percent in the second quarter. And Germany is the strongest economy in Europe. Stocks fell Thursday on news of another drop in home sales, weaker manufacturing in the mid-Atlantic states and an increase in the number of people who applied for unemployment benefits. The stock market tends to reflect the expectations that investors have for the economy and company earnings six to nine months in the future. So traders are interpreting the numbers they’re seeing as part of a slide in the economy that will continue for some time. A recession is generally thought of as two consecutive quarters in which the economy contracts, as measured by a country’s gross domestic product. With expectations of growth in the U.S. already low, investors worry that the economy can’t withstand another unexpected event like the earthquake in Japan or the string of bad weather that ravaged the South earlier this year. JPMorgan analyst Michael Feroli said business confidence, household wealth and global growth all look worse than just a few weeks ago. He expects economic growth to be nearly flat into the first quarter of 2012. Next week is likely to bring more volatility. On Friday, the government will give its second estimate of how the economy did during the second quarter. It said a month ago that the GDP grew at an annual rate of just 1.3 percent during the quarter. Economists expect the government to announce a lower reading: 1.1 percent. The GDP report July 29 contributed to the market’s heavy losses. So did the government’s revised estimate for the first quarter: 0.4 percent. Next Friday also brings the Federal Reserve’s annual retreat at Jackson Hole, Wyo. It was a year ago at Jackson Hole that Fed Chairman Ben Bernanke hinted that the central bank would begin buying $600 billion in Treasury securities to stimulate the economy. The buying ended June 30. Now investors want to know if the Fed will act again. But some analysts think that the U.S. economy will continue to grow on its own, although slowly. “The market is thinking that we’re going into a recession, but the data is telling you that we’re not,” said Jonathan Golub, chief U.S. market strategist for UBS. He pointed to an increase Thursday in an index of economic leading indicators that suggested the economy is expanding slowly.

Read the full article →

Markets Shrink On World Recession Fears

August 20, 2011

PRESS ASSOCIATION — Global recession fears have continued to haunt world markets, sparking another volatile day of trading. The FTSE 100 Index slumped by up to 3% at times, pushing it below the 5000 barrier, as banking stocks tumbled amid fears that they were running out of cash and borrowers would not repay debts. Markets were also dogged by worries that the US and eurozone economies would slide back into recession, crippled by the weight of their debts, while emerging markets such as China would also suffer. London’s leading share index clawed back most of its gains in late trading but still closed down 1%, or 51.5 points, at 5040.8. Its performance was boosted by early gains made by the Dow Jones Industrial Average in the US, which helped to settle traders’ nerves. London’s benchmark index also slumped 4.5% on Thursday after the biggest points fall in its history for nearly three years. Thursday’s rout followed a downgrade of global growth forecasts by investment bank Morgan Stanley and poor economic data from the US. Friday’s falls mean the London market has now lost 5% of its value in the week, wiping £72.7 billion from the value of the UK’s biggest companies. The banking sector saw further falls on Friday. It bore the brunt of the losses on Thursday amid reports that US regulators are checking the American operations of European banks for possible contagion from the eurozone debt crisis. Lloyds Banking was down another 5% on Friday after a 9% fall on Thursday, with Barclays following up an 11% fall with a 2% decline. Taxpayer-backed Royal Bank of Scotland was also down 5%. Its shares are now at 20.8p – less than half the 50p-per-share price the Government paid for its 81% stake in the bank. Shares in Lloyds are at 28.4p, compared with the 63p paid for by the Government for its 41% stake.

Read the full article →

Groupon doubles users, will drop controversial metric

August 6, 2011

By Alistair Barr SAN FRANCISCO (Reuters) – Groupon Inc, which more than doubled subscribers this year to 115 million, plans to abandon the use of a controversial financial measure it once touted as a good indicator of performance, two sources with knowledge of the situation said. The No. 1 daily deals website, which now dwarfs closest rival LivingSocial’s membership base, caved to pressure from investors and will stop referring to a metric called Adjusted Consolidated Segment Operating Income (ACSOI) that excludes marketing costs, one of the sources told Reuters. Groupon, speeding toward one of 2011′s most highly anticipated IPOs, plans to file amended S-1 IPO documents next week giving an update of its performance, both sources said. The phenomenal pace of growth will be unveiled in that filing and likely give its IPO a boost, despite fears about its need to spend heavily to lure new users and worries of another dotcom bubble brewing reminiscent of the late 1990s. “There are few growth opportunities on the scale of companies like Groupon,” said Lou Kerner, vice president in equity research at Wedbush Securities. “That’s really what a lot of investors are seeking today.” Founded by Northwestern music major Andrew Mason in 2008, Groupon filed to raise $750 million in an IPO this year. In April, a source said Groupon could raise $1 billion, valuing it at $15 billion to $20 billion. Social media firms like LinkedIn Corp have had spectacular debuts, stoking interest for offerings by the likes of Facebook and Twitter. But doubt is growing on Wall Street about whether the buzz surrounding the new Web generation is justified, with the hype recalling the atmosphere prior to the dotcom collapse of 2001. That caution may have led some to question Groupon’s use of “ACSOI”, which excludes not just online marketing expenses but also stock-based compensation and acquisition-related items. Other investors question whether Groupon will be able to cut marketing spending in future. In the first quarter of 2011, Groupon reported a $117 million operating loss, but ACSOI was almost $82 million. That’s because some $180 million of online marketing spending — plus more than $18 million of stock-based employee compensation — had been stripped out. Tech blog All Things D first reported that Groupon would drop all references to ACSOI in future IPO filings. The news comes after reports the U.S. Securities and Exchange Commission was taking a closer look at Groupon’s IPO — and ACSOI. A spokesman for the company declined to comment. DOUBTS GROWING Groupon offers discounts on everything from dining to sky-diving excursions. The “group” in its name refers to the fact that many deals are activated only when a certain number of people sign up. Discounts often run from 50 to 70 percent. It had 50.58 million subscribers at end-2010. That jumped 64 percent to 83.1 million at the end of the first quarter. Since March 31, that number of subscribers climbed about 38 percent to 115 million — several times LivingSocial’s. Revenue surged to $713 million last year from $30 million in 2009. In the first quarter of this year alone, revenue topped $644 million. Most of the recent growth came organically rather than through acquisitions, a second source added, noting that Groupon has not bought many companies lately. Despite a sizzling pace of growth, some critics remain wary about piling into a business — essentially a coupon service — that can be easily replicated both by startups and existing Web powerhouses. Google has already begun such a service. And while it shares the spotlight trained on social media companies such as Zynga, it needs resources others don’t: a huge sales staff to enlist merchants and handle customer service. Groupon has spent a lot to lure subscribers and generate revenue growth. It shelled out $208 million on marketing alone during the first quarter of this year, up from $4 million in the same period a year earlier. “The key question is how much money are they spending per new subscriber, and how much revenue are they generating per existing subscriber?” asked David Sinsky of Yipit, which aggregates daily deals and tracks the industry. “If you assume that revenue per subscriber has held flat and costs for new subscribers were also the same, then profitability may look better.” (Additional reporting by Edwin Chan; Editing by Phil Berlowitz, Bernard Orr)

Read the full article →

Paul Sylvester: Big Infrastructure Projects Have High Risks but High Rewards

July 7, 2011

Commentators in the United States often lament the country’s seeming loss of will to take on the kinds of big infrastructure projects that made the nation great in the first place; founding the Tennessee Valley Authority in the 1930s to provide electricity and economic development to Tennessee and six neighboring states; providing long distance road travel throughout the lower 48 states by constructing the Interstate Highway System beginning in 1950s; and, of course, landing men on the Moon in the Apollo program of the 1960s, which spurred scientific and technological innovations that continue to today, just to name a few. China meanwhile seems to be getting on with the business of building a 21st century country. A new, $5 billion US, 2,525 kilometer (1,575 mile) railway between Beijing and Hong Kong was completed in 1997, and there are plans to spend $100 billion US to lay down tracks for a 12,000 kilometer (7,500 mile) high-speed railroad, running trains at speeds up to 300 kilometers (185 miles) per hour. The Three Gorges Dam is the world’s largest and costliest ( estimated at $30 billion US or more) hydro power project ever undertaken, with a capacity to produce of 18,000 megawatts of electricity. The reality of a non-democratic country boldly building big things intended to service a large modern state challenges the paradigm taught for decades that only democracies can produce such successes. It is with this background that news reached us on Canada Day (July 1) that the Innu Nation of Labrador ratified the New Dawn Agreement , marking another step toward the start of the Lower Churchill Project, a hydroelectric development that will transmit electrical power from Labrador, across the Strait of Belle Isle, down to the island of Newfoundland, and then across the Cabot Strait into Nova Scotia, with the possibility of exporting excess power to the rest of the Maritimes and New England. It is an audacious plan undertaken by two Canadian provinces, Newfoundland and Labrador and Nova Scotia, with a combined population of only about 1.5 million people. It should remind us that the ability to tackle big infrastructure projects is still alive in North America, and inspire us to embrace similar projects elsewhere. The project in Atlantic Canada is estimated to cost between $6-$9 billion CAD (the Canadian and US dollars are approximately at parity at present) for construction of a 824-megawatt generating facility at Muskrat Falls on the lower Churchill River in Labrador; a 1,100-kilometer (680 mile) transmission link to the island of Newfoundland, including 30 kilometers (19 miles) of submarine cable; a maritime link to Nova Scotia including 180 kilometers (112 miles) of submarine cable; and other transmission infrastructure. The New Dawn Agreement includes provisions for native peoples in Labrador to receive a royalty of five per cent of net project revenue and payments of $2 million CAD per year until the project first begins generating commercial power, expected to be in 2017. Forty per cent of the electricity output will be sold to customers in Newfoundland, replacing the current oil-burning facility that generates electricity on the island; 20 per cent will provided to Nova Scotia customers, representing almost 10 per cent of the province’s domestic needs; and the remaining 40 per cent will be available for sales to other parts of the Maritimes or in the United States. There is an option to expand the development significantly later, by building a 2,250-megawatt hydroelectric plant at Gull Island, further upstream on the lower Churchill River. The project is not without its challenges or critics. Taxpayers in Newfoundland and Labrador will be burdened with the capital costs of the development and electricity prices for customers will inevitably increase. Even Nalcor Energy , the provincial crown corporation power utility responsible for the project in Newfoundland and Labrador estimates that customers in the province will pay about 15 cents per kilowatt hour for electricity in 2017 compared to about 10 per cent today. Some have argued that the total project costs are likely to be closer to $15 billion CAD so the costs to taxpayers may be much more than those predicted now. The project is already behind schedule and it is unclear if power will really begin flowing by 2017. Some have doubted that markers for electricity generated by the project will exist in New England and other eastern U.S. states in the coming decades if local sources of energy continue to be available, particularly natural gas hosted by shale rocks, which seems much more abundant than was thought even just a few years ago. While many of these concerns may be true, what many miss is that big infrastructure projects are, by their very nature, high risk, high reward enterprises. One does not go into them lightly but, at the same time, one should not let their uncertainties provide cover for a lack of courage to take them on. Intangibles play a role in predicting the future. In this case, hydroelectric power generation has a small carbon footprint compared to many other energy sources, and it is very possible that in the years to come, this source of energy will become highly valued in a world struggling mightily to reduce greenhouse warming. This is not to say that damming rivers and flooding lands does not have adverse environmental impacts and perhaps other technologies such as wind and solar power seen as even more “environmentally-friendly” will be more appropriate for some regions than hydroelectric plants. Which leads to the final point — debating when and where to tackle big infrastructure projects, and which ones, is still an advantage held by democracies.

Read the full article →

Gregory C. Pappas: What Greece Really Needs From Us Right Now

July 1, 2011

An article I read on CNN.com prompted me to take stylus to iPad and begin writing this commentary. The article talked about Greek Americans to the rescue — organizing to help the homeland in her time of need.

 The headline was intriguing enough to warrant a click through from my Facebook newsfeed. Unfortunately, the story itself was not. Instead of a story about Greek American innovators, investors, entrepreneurs and old fashioned business people organizing to use their knowledge, resources and skills to help, I read about people planning their summer holidays to “go and spend their dollars in Greece” and not elsewhere. 

That’s just baloney. Or in the spirit of this story, loukaniko.

 A couple of thousand Greek Americans flying USAirways, Continental or worse yet Lufthansa… Staying with yiayia or Theia Marika in the village outside Tripoli, and dropping a few hundred euros (and later complaining about the cost) for a bottle of whiskey at the bouzoukia isn’t going to help Greece. 

No. Greece needs more than that right now.

 For starters, you can stop feeding the stereotype beast. And we are all guilty. Your cousin Niko might be lazy and sit in coffee shops all day drinking his frappe (or freddo if he’s hip) — but this is not a fair description of the vast, vast majority of Greeks.

 In fact, the Organization for Economic Cooperation and Development (OECD) ranks the Greeks second in the world — that’s right, the entire world and that includes the USA in it — as the second hardest working people after the South Koreans. If you don’t believe me, take it from Forbes .

 That would make your cousin Mitso in Astoria or on Halsted Street much lazier than cousin Niko — the one in the village back in Greece.

 Secondly, I’ve heard over and over again that the “coffee shops are full and the bouzoukia are jammed.” Yes, they very well might be — and no one’s saying that everyone in Greece is suffering and that some people can’t afford a cup of coffee or a night out, but the simple truth of the matter is there are less coffee shops today than there were a year ago. 

And with regards to the ubiquitous bouzoukia… At one time in Greece’s recent memory, a night out on the town could have meant a weekday. Today, you’re lucky to find open bouzoukia even on a Friday night, making the few clubs that are still operating full and “jamming” on a Saturday — the only night of the week they are probably working.

 Finally, enough with the jokes about Greeks not paying taxes. The truth is (and statistics prove it) that it’s the richest of the rich Greeks who don’t pay their taxes, not the average citizen. Unfortunately, the violations of these doctors, lawyers, nightclub singers and others in high society are so egregious that it’s their antics that make the front pages of the New York Times and soon — we all start fanning the rumors and start to believe that no Greeks pay taxes.

 Besides, let’s see what happens when the role of the IRS is diminished in this country. Watch — just watch — how law-abiding taxpayers quickly become tax-evading lawbreakers. And how about all those Greek-owned cash businesses… Diners in New Jersey, restaurants in Chicago, donut shops in Boston… Are we naive enough to believe that all (Greek) Americans pay all of their (our) taxes? Who are we kidding? Furthermore — remove highway patrol from America’s roads and see how quickly they turn into the autobahn. It’s human nature, folks — Greeks are breaking the law because they can. They are evading taxes, and driving like madmen, and parking on sidewalks, and smoking in no-smoking areas — because they can. Because they know there is no fear of prosecution. I’m not becoming an apologist for Greece and Greeks. There are definitely problems and I’ll be the first to admit that Andreas Papandreou started a huge party that is now coming to an end and someone’s got to pay for it. Napoleon Linardatos talks about the party eloquently here. It’s definitely worth a read. And yes — the public sector is out of control, the entitlements, pensions, retirement age requirements are insane — to the point that an entire generation of people have been indoctrinated (brainwashed) into believing that this is normal that the government is there to take care of its citizens from cradle to grave. But again — I don’t blame the average citizenry. I blame the corrupt politicians vying for votes and the corrupt union bosses who lobbied for more, more, more to fuel their populist flames and increase their own unions’ membership ranks and power. It’s a sick and vicious cycle that ensnared common people by feeding them a sweet tasting fruit that was too good to say no to. That fruit was a job for life — stability for a son or daughter in exchange for a vote in an uncertain world. It’s a fruit that any vulnerable person would taste — Greek or non-Greek.

 What Greece really needs right now from the Diaspora — (and I’m tugging at your philotimo strings right now) — is a series of serious initiatives that are both possible (given our ingenuity and success), and realistic. A trust fund for our cultural heritage. Let’s gather the wealthiest Greeks in America and the world and the financial whiz kids that populate Wall Street — there are about a dozen billionaires I can name off the top of my head right now — and engage their expertise to create a revenue-generating fund to serve both as collateral and support for the Parthenon, the Palace of Knossos, the Akrotiri settlement on Santorini and other sites critical to Greece’s cultural heritage. A $100 million fund (owned and managed by the donors) per site could generate $5 million annually at 5% interest — enough to preserve the sites, keep them open with experienced, private staff — and out of the grasp of the public sector that is often subject to civil strife, strikes and shortages in staff and resources. A venture capital fund to support Greek entrepreneurs. Israel does it. India does it. And their diaspora communities are nothing compared to ours and the passion, love and dedication we have for our homeland. Let’s gather some of the nation’s top Greek American venture capitalists–and here too, I can name a dozen or so — to create a fund called Greece Future — because we believe in the future of Greece and we want to invest in the future of Greece. This fund could seek out the great Greek innovators and encourage them to stay and build their businesses in Greece and not be forced to re-locate to Silicon Valley or London. A real Diaspora Bond mechanism for low and high level investors to support the future of Greece Again, other diaspora communities of nations like Israel and India have a bond mechanism that allows average citizens to support their homelands with shares as low as $1,000. Why can’t we do this? The truth is, it was proposed already — by the Greek Government. The problem is that it’s the same, corrupt Greek government bureaucrats that got the country into this mess in the first place that want to the run this proposed “Diaspora Bond.” Message to the Ministers who propose this: When hell freezes over I’ll give you my hard-earned money to build your villa and buy your apartment overlooking the Acropolis. (You know who you are). What I propose is something like Israel Bonds. Supported primarily from U.S.-based Jews, the Development Corporation for Israel/State of Israel Bonds is one of the world’s most dependable economic financial vehicles with 60 years of success. Worldwide sales have exceeded $30 billion and proceeds have played a vital role in transforming Israel into a regional superpower with unparalleled infrastructure. The key to the success of this proposal: diaspora involvement in the investment and management of the fund. *** These are but three ideas — and certainly there are others. Of course, in order for any of these ideas to materialize, you need stability in Greece and a government willing to support the change that is necessary. Although I have a lot of faith in the conviction and dedication of the country’s current Prime Minister George Papandreou, it is those around him who I fear will be most resistant to change. What I know about Papandreou is that he cares about his country deeply. When he speaks, his passion for Greece is evident. Unlike his father, he appears not to have a corrupt bone in his body. I may be wrong — or I don’t know enough to offer a valid opinion. Of course, it’s easy for me to speak (or write this) from my apartment on Michigan Avenue in Chicago, where I look out the window and see the streets bustling with traffic, people on their way to work.

It’s easy for me to speak about Papandreou — without feeling the pain that so many Greeks have felt from the austerity measures that his government has passed; or to feel the burning of the tear gas that his police forces have lobbed at crowds who were merely there expressing their inalienable democratic rights. And I do apologize to the Greeks who might be offended by my simplistic opinion of their Prime Minister, which is based solely on what I see and read — primarily in the international media — that he is a forward-thinker, an internationalist and a product of a global upbringing who has a big picture approach to Greece and is making important decisions today, that will be written about in the history books a century from now. I want to believe that his decisions will be right for Greece — albeit a difficult pill for many already impoverished citizens to swallow. I should also note that my opinion is not one that is supporting the political party Pasok, or its socialist tendencies and policies, which I believe were the cause of Greece’s demise. My opinion is in support of an individual who I believe is “big” enough to realize that it was his own father’s policies that resulted in the Greece of 2011 and that he must stare the ghosts of the past in the face, tell them he is no longer afraid of them and create the new Greece. Something else I believe in is the spirit of Greece and the ultimate force that brings her people together in times of crisis and need. Anyone who doubts me need only read the last hundred years of this tiny nation’s history and its ability to not only reinvent itself, but to play an important role in the history of the entire world. Furthermore, I do believe that what Greece faces today is child’s play compared to the trials and tribulations of the earth-shattering events of 1922 when the humanitarian crisis in Asia Minor spilled into the Greek islands and mainland and millions of impoverished Greeks who fled war were sleeping amidst the ruins of the Parthenon and housed temporarily in theaters and other public buildings. Furthermore, Greece was again tested a few decades later during the German occupation and ensuing Civil War during which time one eighth of the entire population perished and over 3000 towns and villages were burned to the ground. Mark Mazower, the Columbia University historian and expert on Modern Greece said it much more eloquently than I ever will in his New York Times editorial . Yes, these are trying times, but Greece will prevail.

Read the full article →

Turkish, Israeli Nationals Trafficked Organs, E.U. Claims

June 13, 2011

PRISTINA, Kosovo — A European Union prosecutor in Kosovo has indicted a Turkish and an Israeli national for involvement in an international network that falsely promised poor people money for their kidneys and then transplanted the organs into rich buyers, the bloc’s rule of law mission said Monday. Turkish citizen Yusuf Sonmez, and Israel’s Moshe Harel were charged last week for “trafficking in persons, organized crime and unlawful exercise of medical activity,” the mission, known as EULEX, said in a statement. Sonmez and Harel are considered at large by EU authorities and Interpol has issued a warrant for their arrest. The indictments are part of a larger investigation into allegations that an organized criminal group conducted operations in a clinic outside of the capital Pristina where the victims’ organs were transplanted into the buyers. EU prosecutor Jonathan Ratel – who brought the charges in 2010 – said victims were promised up to $20,000 (euro14,000) for their kidneys, but were never paid, while recipients were required to pay between euro80,000 and euro100,000 euros ($115,000-$143,000). The victims came from Moldova, Kazakhstan, Russia and Turkey, and lived in “extreme poverty or acute financial distress,” EULEX said. Kosovo law forbids the removal and transplant of organs. The case was brought to the attention of authorities in 2008 when Kosovo police acted upon information from a Turkish national who said his kidney had been stolen. Since then seven Kosovars, including doctors and a senior official in the Health Ministry, have been charged and are standing trial. Sonmez and Harel were indicted separately after EU investigators located Harel in Israel and an EU prosecutor interviewed Sonmez in Turkey earlier this year. Harel was detained in 2008, but later allowed to leave Kosovo upon the promise of return pending legal proceedings.

Read the full article →

Bank Of America Faces New Probe; New York Attorney General Launches Investigation Into Mortgage Securitization

June 13, 2011

New York Attorney General Eric Schneiderman has targeted Bank of America, the biggest U.S. bank by assets, in a new probe that questions the validity of potentially thousands of mortgage securities and their associated foreclosures, two people familiar with the matter said. The investigation, which began quietly in recent weeks, is part of a larger inquiry that is scrutinizing whether mortgage companies and Wall Street firms took the necessary steps under New York state law when creating mortgage-backed securities, these people said, who requested anonymity because they weren’t authorized to speak publicly about the probe. Court testimony and independent studies have raised questions over whether banks and other financial firms passed along the required documents to trusts, the independent entities that oversee securities for investors. In some cases where trusts moved to seize borrowers’ homes, judges have determined the trusts lacked legal standing due to faulty documentation. The inquiry could prove explosive: Wall Street’s great mortgage securitization machine took millions of home loans and bundled them into securities for sale to investors. If the legal steps that guide securitization — like taking mortgage documents from one party to another, a critical step under New York law — were not undertaken, then the investors who bought the bundled loans could force the companies to buy them back, compelling them to eat enormous losses. New York state investigators could also find that those securities aren’t valid financial instruments at all and take action under state law. The probe is part of a comprehensive investigation into Wall Street’s activities before and after the credit crisis undertaken by New York’s top cop. Schneiderman, a Democrat who rode to office by pointing out Wall Street’s misdeeds, requested documents earlier this year from Bank of America, the largest lender and mortgage servicer, Goldman Sachs and Morgan Stanley regarding their mortgage operations. But an investigation into whether the securities these companies created are even valid represents a new front in his ongoing probe and raises fresh questions into the potential liability sellers of these mortgage instruments face. Last November , the Congressional Oversight Panel, a federal watchdog created to keep tabs on the bailout, said widespread paperwork problems involving mortgage securities could cause the largest U.S. banks to swallow unknown billions in losses, threatening the stability of the financial system. “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever,” Adam J. Levitin, a bankruptcy expert and professor at Georgetown University Law Center, said at a House panel last November . Levitin said the problem could “cloud title to nearly every property in the United States” and could lead to trillions of dollars in losses. The six largest U.S. banks, including Bank of America, Goldman and Morgan, currently hold nearly $668 billion in so-called Tier 1 capital, cash banks are required to hold as a backstop against unforeseen losses, Federal Reserve data as of March 31 show. All six companies are defined as “well capitalized” by federal bank regulators. Schneiderman’s inquiry also raises questions about the speed the Obama administration and a coalition of state attorneys general and bank regulators are moving towards a settlement agreement to resolve claims of widespread foreclosure abuse. The states’ top cops and representatives of the Department of Justice, Federal Trade Commission, Department of Housing and Urban Development and the Treasury Department are pushing the nation’s largest mortgage companies to pay about $20 billion in a deal to end the months-long probes into shoddy and possibly illegal practices employed by Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial. While several investigations remain ongoing at the state and federal level, no agency has systematically examined loan-level documents to ensure the creation of mortgage securities complied with state laws or to examine the scope of sloppy paperwork in foreclosure proceedings, like the so-called “robo-signing” fiasco. In its November report, the bailout watchdog said that the “robo-signing of affidavits served to cover up the fact that loan servicers cannot demonstrate the facts required to conduct a lawful foreclosure.” “In essence, banks may be unable to prove that they own the mortgage loans they claim to own,” the panel said. Sheila Bair, the chairman of the Federal Deposit Insurance Corporation, said at a Senate panel last month that ” flawed mortgage banking processes have potentially infected millions of foreclosures .” “The extent of the loss cannot be determined until there is a comprehensive review of the loan files and documentation of the process dealing with problem loans,” she added. Despite that appraisal, Bair, along with Treasury Secretary Timothy Geithner and Shaun Donovan, secretary of Housing and Urban Development, have said they want a quick settlement. Schneiderman’s investigation of defective mortgage practices comes on the heels of public reports that Bank of America systematically failed to transfer essential documents to other entities in the daisy chain that turned home loans into securities to be sold on Wall Street. A review of 104 New York foreclosure cases between 2006 and 2010 where Countrywide Financial made the original loan found that the nation’s once-biggest home lender did not follow proper procedures in securitizing the mortgages, according to Abigail C. Field , a New York-based attorney who wrote a column about her findings for Fortune . Bank of America purchased Countrywide in 2008. The review “calls into question the securitization of these loans,” Field wrote. She added that the findings also raise questions over the right of investors to foreclose on the borrowers who defaulted on their loans since the mortgage securities may be invalid. In a New Jersey bankruptcy case last November , a Bank of America executive, Linda DeMartini, testified that Countrywide routinely did not convey crucial documents for loans sold to investors. The judge cited the testimony in dismissing the bank’s claim against the borrower. Bank of America later said DeMartini essentially did not know what she was talking about. The case caused an uproar in mortgage banking and securitization circles because if Countrywide held onto essential documents — rather than pass them onto the entity representing investors who bought their securities — then investors could question whether the security was legal and force Bank of America to buy the investments back. Investors in mortgage securities, which include pension funds and insurance companies, are currently embroiled in numerous lawsuits and private actions to compel banks to repurchase faulty mortgages. Some of the lawsuits raise questions over such paperwork problems. Danny Kanner, a spokesman for Schneiderman, declined to comment. * * * * * Shahien Nasiripour is a senior business reporter for The Huffington Post. You can send him an email ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 917-267-2335.

Read the full article →

On the net Unsecured Loans – Acceptable Medium to have Money

June 4, 2011

Raanana Israel Apartment Guide. Living in Raanana Israel. Skip to content. ← Loans – How To Prevent Them By Budgeting. On the net Unsecured Loans – Acceptable Medium to have Money. Posted on June 3, 2011 by guest …

Read the full article →

Why Medicare Will Be The Issue Of 2012

May 25, 2011

WASHINGTON — The 2012 election found its defining issue on Tuesday night, with an insurgent Democrat upsetting a well-financed Republican in a deeply red district in New York state. The GOP paved the way for the Democrat’s victory by voting earlier this year to end the current Medicare program that guarantees health coverage to seniors and replace it with a voucher system that provides premium support for the elderly to purchase private health insurance. The Republican in the race, Jane Corwin, fully endorsed the GOP plan to alter Medicare, while the Democrat, Kathy Hochul, defended the social safety net. The race’s polling trends point to Medicare as the defining issue, while the conversation has played out on a national level. Former House Speaker Nancy Pelosi (D-Calif.) summed up the Democratic position: “We have a plan –- it’s called Medicare.” With some exceptions, Democrats have ranged from reluctant defenders of government spending to outright hawkish assailants of social funds. But nothing focuses the mind like political calculation, and the upset in upstate New York has sent a message so clear that not even the highest priced Democratic consultant could miss it. “Kathy Hochul’s victory tonight is a tribute to Democrats’ commitment to preserve and strengthen Medicare, create jobs and grow our economy. And it sends a clear message that will echo nationwide: Republicans will be held accountable for their vote to end Medicare,” Pelosi said in a statement after the election. The race began turning toward the Democrat when Corwin embraced the GOP’s Medicare plan in mid-April. The campaigns had already been communicating with voters, airing television spots for nearly a month. Corwin attacked Hochul on the airwaves in late March for having sought property tax increases and attempted to link Hochul to Pelosi, following the playbook Republicans applied with success during 2010. Hochul responded with a series of ads beginning in early April, but none mentioned Medicare. That changed on April 26 when the Hochul campaign began airing an ad that hit Corwin for saying “she would vote for the 2012 Republican budget that would essentially end Medicare,” that would have seniors “pay $6,400 more for the same coverage” and would “cut taxes for the wealthiest Americans.” WATCH : Just before Hochul’s television campaign shifted to Medicare, a Siena Research survey showed Corwin leading Hochul by a surprisingly narrow margin, 36 percent to 31 percent. But ten days later, an automated survey conducted by Democratic firm Public Policy Polling and sponsored by SEIU showed Hochul leading by four points (35 percent to 31 percent). And in the final week, two more surveys, one from PPP and one from Siena College, both showed Hochul leading by similar margins. Jef Pollock, Hochul’s pollster, told HuffPost that the numbers showed the Democrat winning among seniors and independents, two groups that broke heavily for Republicans in 2010. “This race was won, in a significant way, because of the disastrous decision by the GOP to dismantle Medicare as we know it,” he said. “Kathy Hochul was a great candidate. And credit is due to her for running a great race as well as credit to the campaign for making Medicare a central issue — that’s why Hochul was winning 74 percent of the voters who said that Medicare was the most important issue to them in the most recent Siena poll conducted just a few days ago,” he said. Steve Murphy, Hochul’s media consultant, argued that his candidate persuaded voters she was concerned about the deficit without needing to cut Medicare. “A Democrat in a competitive district can win on the Ryan budget and Medicare issue as long as they first demonstrate to voters that they are tough on spending and serious about the problem of rising deficits,” he suggested. “Five of our seven ads had a strong fiscal component, not just Medicare.” Democrats highlighted the serious money the Republicans put into the election. “Today, the Republican plan to end Medicare cost Republicans $3.4 million and a seat in Congress. And this is only the first seat,” said Rep. Steve Israel (D-N.Y.), head of the Democrats’ House campaign arm. House Republicans pinned blame for Corwin’s loss on a quirky third-party candidate, Jack Davis, who ran under the Tea Party despite an eclectic and sometimes liberal political past. “Republican Jane Corwin ran a hard-fought campaign against two well-funded Democrats, including one masquerading under the Tea Party name,” said Rep. Pete Sessions (R-Texas), head of the House GOP campaign operation. “Obviously, each side would rather win a special election than lose, but to predict the future based on the results of this unusual race is naive and risky.” American Crossroads, a GOP group that spent heavily in the race, said that the race indicates a resurgent Democratic party, whether the third-party candidate tipped it or not. “The debate over whether Medicare mattered more than a third-party candidate who split the Republican vote is mostly a partisan Rorschach Test,” said American Crossroad’s Jonathan Collegio. “What is clear is that this election is a wake-up call for anyone who thinks that 2012 will be just like 2010. It’s going to be a tougher environment, Democrats will be more competitive, and we need to play at the top of our game to win big next year.” The GOP can’t and won’t retreat from the Medicare valley it has occupied. “We know that bell can’t be un-rung, and we wouldn’t want to,” said a well-placed GOP aide. “We’re on the right side of history. If President Obama wants to be ‘the grown-up in the room,’ he’s going to have to grapple with grown-up problems. We have.” Indeed, the GOP has been doing plenty of grappling lately, but it’s been mostly with constituents and members of the party. Presidential candidate Newt Gingrich was browbeaten by his party for calling the Medicare plan “right-wing social engineering” and endorsing Paul Ryan’s budget, which includes Medicare reform as its signature component and has become a litmus test for candidates. At home, Republicans have faced hostile town halls with seniors questioning how they’ll be able to purchase private insurance with a voucher that doesn’t rise at the rate of health care costs. At a recent town hall, a constituent of Rep. Rob Woodall (R-Ga.) raised a practical obstacle to obtaining coverage in the private market within the confines of an employer-based health insurance system: What happens when you retire? “The private corporation that I retired from does not give medical benefits to retirees,” the woman told the congressman in video captured a local Patch reporter in Dacula, Ga. “Hear yourself, ma’am. Hear yourself,” Woodall told the woman. “You want the government to take care of you, because your employer decided not to take care of you. My question is, ‘When do I decide I’m going to take care of me?’” Sen. Chuck Schumer (D-N.Y.) pounced on the remark, telling the Washington Post that it typifies Republican ideology. Tuesday’s special election was held to fill the seat of Chris Lee, who resigned after topless photographs he sent of himself to a woman on Craigslist surfaced.

Read the full article →

Video: Djerejian Says Pakistan Will `Always Hedge Its Bets’

May 2, 2011

May 2 (Bloomberg) — Edward Djerejian, former U.S. ambassador to Israel and Syria, talks about the outlook for U.S.-Pakistan relations following the killing of al-Qaeda leader Osama bin Laden in the country yesterday. He speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

Read the full article →

10 Countries Where Unemployment Has Soared

April 30, 2011

Since the financial crisis first pulled the world into the Great Recession, unemployment has become a global problem. A new report released by the Paris-based Organisation for Economic Co-operation and Development entitled “Society at a Glance 2011 – OECD Social Indicators” includes data on the rising levels of global unemployment between 2007-2009, the years where the recession peaked. Many countries on the list have seen high unemployment rates for years, most notably Spain, whose unemployment rate recently hit a Eurozone record at 21.3 percent, with 4.9 million Spaniards now jobless. Other countries have trended in the opposite direction, however. Germany, for one, has watched its unemployment rate fall to 7.1 percent from 7.8 percent at the time of the report’s publication. The United States has also seen some recent improvement, albeit notably less steep than Germany’s drop. Despite these improvements, the OECD’s report finds that unemployment rates overall have increased across the globe, with the fews exceptions including Israel, Poland and South Africa. Below are the nations whose unemployment rates have risen most since the Great Recession:

Read the full article →

Judge’s Conflict, And A Hospitalization, The Day Of Pension Fund Sentencing

March 28, 2011

NEW YORK — Disgraced ex-state Comptroller Alan Hevesi was in a hospital Monday as he faced sentencing for influence-peddling at the state’s massive pension fund, his lawyers said. With Hevesi absent, his judge angrily stepped out of the case amid what he called baseless claims from Hevesi’s lawyers that the judge had a conflict of interest. It’s now unclear when Hevesi, a Democrat, will be sentenced for accepting free travel and campaign contributions in exchange for awarding hundreds of millions of dollars in pension fund money to a certain investment manager. Hevesi, 71, has a court date April 4 with a new judge. Hevesi never made it to court Monday. He was in a hospital with internal bleeding and was to undergo an endoscopy later in the day, lawyer Bradley D. Simon said. It’s a procedure in which lets doctors insert an instrument into the body so they can see internal organs. Hevesi pleaded guilty in October to a corruption charge. Once the state’s chief financial officer, he was the highest-ranking official in a pay-to-play scandal that has brought guilty pleas and civil settlements from a roster of politicians, financiers and firms. He could face up to four years in prison or no jail time at all. The decision is up to a judge. Until now, it’s been a judge who happens to have close ties to Simon’s estranged father. Simon asked state Supreme Court Justice Lewis Bart Stone to recuse himself. The request came after an uncomfortable March 1 hearing in which Simon said he learned that his parents’ wills have disinherited him – and that the judge is the executor of those wills, as well as a trustee of a trust the parents had set up. Simon called that a conflict of interest. Stone had previously said he didn’t see a conflict, saying he and Simon’s father had never discussed the discord between father and son. The judge blasted Simon Monday for raising what he called a “meritless” issue that got media attention, saying his involvement in the parents’ financial affairs had long been known to their son. “The effect of this publicity has been to create a counter-story . to the real story here” of Hevesi’s crime, the judge said. But he said the controversy and ensuing coverage “dims the clarity of this sentencing,” so he would transfer the case. Stone has presided for two years over other cases stemming from the pension fund probe, but Hevesi and then-state Attorney General Andrew Cuomo’s office had already reached a plea deal by the time Hevesi’s case went to the judge. Cuomo, a Democrat, is now governor. The office of current Attorney General Eric Schneiderman, also a Democrat, said in court papers there was no reason for the judge to recuse himself from the sentencing. Hevesi resigned in 2006 after pleading guilty to a felony for using state workers to chauffeur his wife. The pension case emerged after he left office. He ultimately admitted letting a California venture capitalist pay for the comptroller and his family to take five trips to Israel and one to Italy, at a total cost of about $75,000. The investor, Elliott Broidy, also arranged for $500,000 in campaign contributions directed by Hevesi or his staff. And Broidy paid $380,000 in bogus consulting fees to a friend of Hevesi’s chief political adviser, Henry “Hank” Morris. Around the same time, Hevesi awarded Broidy’s company, Markstone Capital Partners, a $250 million pension fund investment. Broidy pleaded guilty to a felony charge of rewarding official misconduct. Eight people, in all, have pleaded guilty to criminal charges in the case. The only one sentenced so far, Morris, got 16 months to four years in prison; the range reflects the possibility of parole. Morris admitted using his connections to Hevesi and other pension fund officials to extract $19 million in personal payouts from firms hoping to manage some of the money. At $141 billion, New York’s retirement pool is one of the world’s largest government pension funds and a rich source of investment dollars. Several financial players paid more than $170 million in civil penalties in connection with the pension fund investigation. They include such politically connected firms as the Carlyle Group and such prominent financiers as Steven Rattner, who helped lead the Obama administration’s bailout and restructuring of Chrysler and General Motors. Before Hevesi became the state’s chief financial officer, he held the same office for New York City and was a longtime state assemblyman in a Queens district now represented by his son, Andrew Hevesi.

Read the full article →

Bill Aulet: Do Innovation Ecosystems Need Universities?

March 4, 2011

In my role at the head of the MIT Entrepreneurship Center , I have the great opportunity, at times, to travel the world and learn about entrepreneurship on a global scale, and to gain knowledge and perspective to help us be more effective in our mission at home. This past week was such an experience. There is an underlying assumption that to have an innovation-based entrepreneurial ecosystem, there has to be an “MIT-like” anchor university in the ecosystem (Technion in Israel, Stanford in Silicon Valley, IIT in India). The presence of such an institution that attracts, trains, and continually feeds skilled and talented workers into the ecosystem makes perfect sense. What if I told you of a place where there is a growing and vibrant IT entrepreneurial community, and yet it is in a country that lacks a single university in the top 500 in the world? This is exactly what I found in Romania these past few days. As I met dynamic entrepreneurs and heard stories of their friends, a pattern emerged. Most have never studied computer science at a university; they said they did have time to do so, and that it was better to get real experience (some did not even graduate from high school). Romania is a poor country, but it is also an industrious and diverse society (both of which are important). Since people don’t have much and life is hard, they have to be creative to get by and get ahead. Necessity is the mother of invention and, in this case, entrepreneurship. There is also optimism in the air, partly a result of Romania joining the EU four years ago. That is helpful, but for now let’s focus instead on the “adjita” (an Italian-American word for stomach agitation) driving things in this situation. The Romanians are learning programming without formal institutions to train them, which seems perfectly natural to them. They are driven and they have no choice. They note that Bill Gates, Steve Jobs, and Mark Zuckerberg didn’t graduate from college, either (Not a great analogy, but that’s how they see it). In my recent travels I have also found thriving, robust entrepreneurship in Scotland and Finland as well. Interestingly, if you ask people in any of these three countries if they are good at = entrepreneurship, their answer is “Oh, no.” This very humility and scrappiness is what makes these regional groups have a higher propensity for entrepreneurship than their counterparts in, say, Germany, Russia, England, France, or Spain. Should this surprise us? Not really, because here in the United States, the studies of MIT professor Ed Roberts show that immigrants are more likely to start companies than more comfortable, long-term American residents. As Eva Peron, who rose from the lowest levels of Argentine society and power to the very top, is described by narrator Che Guevarra in the immortalizing musical and film ‘Evita’, “Eva Peron had every disadvantage you need if you’re going to succeed. No money, no cash, no father, no bright light.” So the moral of the Romanian tale is to reinforce a point made in an earlier article , that while other factors like the presence of a world class research institute close to MIT’s caliber is extremely valuable, never underestimate the importance of culture in creation of an entrepreneurial ecosystem. In descriptions of such a culture, you should not see the words like “comfortable —you should see words synonymous with scrappy. Just remember Evita. [Note: Special thanks to my colleague Howard Anderson at the MIT Sloan School of Management with whom I discussed this topic and who also first pointed out the "Evita" quote].

Read the full article →

Dan Dorfman: Worrisome Words From Jordan

February 12, 2011

As an independent trader of stocks, bonds and commodities who tells me he was up more than 100% last year and is humming again in 2011, Caise Hassan’s thoughts on the financial markets would seem to be worth a lot more than his views on the Mideast turmoil. Maybe not. Chicago-born Hassan, the 38-year-old son of Palestinian-born parents, makes a point of keeping close tabs on what’s happening throughout the Persian Gulf. And he doesn’t have to travel too far to do it since he and his family live in Amman, Jordan. The ouster of Egyptian president Hosni Mubarak may be good news for the country’s 80-million populace, but is it good news for the U.S. stock market? Or bad news? And what about the Mideast, in general? While there are some worriers, it all seems to be an irrelevant issue for now as far as most of Wall Street goes. Except for a one-day drop of 166 points on January 28 in response to the Egyptian riots, the market has pretty much been on an upswing throughout the revolution. In other words, the Egyptian uprising was a ho-hum and most Wall Streeters seem to think it will likely to remain that way despite the unknowns of what’s ahead. In particular, no one knows what the country’s new leadership will look like, whether it may be infiltrated by Islamic radicals and the Israeli-hating Muslim Brotherhood and if Egypt’s peace treaty with Israel will remain intact. Hassan thinks it would be foolhardy for Wall Street to assume that all is now okay in Egypt since he believes it will likely take a year to form a stabilized government. Like many Mideast watchers, he sees aftershocks and a good deal more turmoil ahead in the region, given the economic plight of many of its residents. One down, more to come! That’s basically his view of the change in Egypt’s leadership. His outlook calls for more Mideast strife from uprisings in a number of other countries, notably Bahrain, Syria, Jordan and Algeria. He believes this cleansing process — as some call it — of the region’s dictators could seriously impact the U.S. market on a number of counts. In particular, Hassan points to possible interruptions in the steady flow of oil from the Mideast and the ability of the U.S. to sell its products, such as military hardware and consulting services, to Gulf countries whose monarchs may be overthrown and provide us with about 18% of our oil. For starters, he sees the prospects that Jordan — beset by poverty, lack of jobs and a vicious secret police — is highly vulnerable to deep social unrest, and, in fact, thinks we could see the same kind of riots that plagued Egypt in a matter of months. In this case, he believes, they would be bloodier since there are a lot of unhappy armed groups there. “Moderate” Jordan, observes Hassan, is receiving more than $400 million in aid that ostensibly is going toward the development and democratization of a country that is, more realistically, he contends, is being used to tame its people and shield from accountability a heinous monarch (King Abdullah, the 11) whose most notable achievements are blowing tens of millions in Vegas casinos and adding luxury cars to the billion-dollar collection begun by his equally reckless father. He also notes that if the popular forces in Egypt (unions. professional associations and the Muslim Brotherhood) form a government, it is unlikely the new regime will keep buying $2 billion in military goods and services from the U.S. and that could cause a tinge on arms contractors’ balance sheets. An even greater profit danger, he points out, looms if revolutions spread. That is, if governments from Morocco to the Gulf stop buying planes and bullets, the tech sector will be reeling. What about the assorted financial markets? Hassan thinks the U.S. stock market has more to go, especially with Bernanke hinting he will print more money. The commodity markets, he believes, are nowhere near oversold in the long term, and that certain commodities, like gold and silver, have a lot of room to run over the next few years no matter what happens. He notes that if governments in the Middle East get overthrown, oil will go up. And if they don’t, the Chinese will buy it at $80 a barrel. So what’s the bottom line on the Mideast. Maybe Samuel Morse of Morse code fame sums it up best with his observation “What hath God wrought?” What do you think? E-mail me at Dandordan@aol.com.

Read the full article →

Video: Djerejian Says Egypt Part of `Tectonic Shift’ in Mideast

February 11, 2011

Feb. 11 (Bloomberg) — Edward Djerejian, former U.S. ambassador to Israel and Syria, talks about the legacy of former Egyptian President Hosni Mubarak and the outlook for a transition of power in the nation and the political landscape of the Middle East. Mubarak resigned his position as president after more than two weeks of protests in the streets of Egypt. He handed over power to the military while a transitional structure is established. Djerejian speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

Read the full article →

Egypt Unrest May Cause Big Rise In Oil Prices: Kuwait Official

February 6, 2011

Global oil prices could exceed $110 a barrel if political unrest in Egypt continues, a member of Kuwait’s Supreme Petroleum Council said on Sunday. Oil prices have spiked due to tension in Egypt. Brent crude hit $100 per barrel for the first time since 2008 on fears instability could spread through the Middle East, which together with North Africa pumps over a third of the world’s oil. “I expect oil prices to reach $110 during the first half of 2011, however, it could go above that level if Egypt’s current crisis continues,” Imad al-Atiqi, a member of the OPEC member’s highest oil policy body, told Reuters in a telephone interview. “A huge amount of oil passes through the Suez Canal and the country’s stability is essential for the Middle East’s stability, particularly Israel,” he said. Egypt is a small oil and gas exporter and the main danger of the unrest is seen as the closure of the Suez Canal or the Suez-Mediterranean (SUMED) oil pipeline which passes near Cairo. The canal ships 1.5 million barrels per day (bpd) of crude and the pipeline carries 1 million bpd. Together they account for nearly 3 percent of daily global oil demand. On Thursday, Egypt’s Prime Minister Ahmed Shafiq said the Suez Canal was operating normally despite the unrest. Some oil-focused bankers and fund managers say that even if unrest in Egypt cuts flows along the strategic pipeline and the Suez Canal, the oil price spike would likely be short-lived and flows would resume quickly, regardless of whoever is in power. OPEC members are comfortable with an oil price ranging between $90 to $100 a barrel, Atiqi said, adding the group could meet before their scheduled meeting in June if prices continued rising quickly above $110 a barrel. OPEC ministers and consumers will discuss oil output policy on the sidelines of an international energy conference in Saudi Arabia on February 22, but a formal decision there was unlikely, the OPEC secretary general had said. OPEC says it has spare capacity of 6 million barrels to meet lost output but would do it only when it sees a shortage in the market rather than speculator-driven rallies. (Reporting by Kuwait newsroom; Editing by Rania El Gamal; Editing by David Holmes) Copyright 2010 Thomson Reuters. Click for Restrictions .

Read the full article →

Video: Senor Says Israel Boosting Incentives for Innovation

February 4, 2011

Feb. 4 (Bloomberg) — Dan Senor, author of “Start-up Nation: The Story of Israel’s Economic Miracle,” and Alan Patricof, managing director of Greycroft Partners LLC, talk about Israel’s ability to attract venture capital. They speak with Matt Miller and Carol Massar on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Read the full article →

Video: Alan Patricof Says Obama in `Delicate Position’ on Egypt

February 4, 2011

Feb. 4 (Bloomberg) — Alan Patricof, managing director of Greycroft Partners LLC, and Dan Senor, author of “Start-up Nation: The Story of Israel’s Economic Miracle,” talk about protests against Egyptian President Hosni Mubarak. They speak with Matt Miller and Carol Massar on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

Read the full article →

Video: Schueftan Says Democracy Offers Middle East No Stability

February 4, 2011

Feb. 4 (Bloomberg) — Dan Schueftan, deputy director of Haifa University’s National Security Studies Center in Israel, talks about the consequences of the protests against Egyptian President Hosni Mubarak for other countries in the region. He speaks with Maryam Nemazee on Bloomberg Television’s “Countdown.”

Read the full article →

Video: Edward Djerejian Hopes for a Political Opening in Egypt

January 28, 2011

Jan. 28 (Bloomberg) — Edward Djerejian, former U.S. ambassador to Israel and Syria, talks about the anti-government protests in Egypt and the outlook for a political solution to the unrest. Djerejian speaks with Lisa Murphy on Bloomberg Television’s “Fast Forward.” (Source: Bloomberg)

Read the full article →

Israel’s house price bubble inflates further

January 27, 2011

Despite tighter lending policies and repeated warnings from the Central Bank, house prices continue to rise in Israel at double-digit rates.

Read the full article →

Dorie Clark: Lessons From an Inefficient Costa Rican Airport

January 7, 2011

Almost anyone would agree Costa Rica is a beautiful country, replete with rainforests, volcanoes, a perfect climate, and picturesque vistas. It’s also home to a hopelessly inefficient airport that dampens any joy a traveler might feel upon arrival. Since breaking onto the international scene in 2002 with the arrival of Delta Airlines, the Daniel Oduber Quiros International Airport in Liberia has opened up a new world for Costa Rican tourism. The sandy beaches of the northwestern Guanacaste province were suddenly accessible from the airport (previously, it was an arduous five-hour drive from the capital, San Jose). Let’s hope the airport’s current expansion project helps it improve. But in the interim, there are three major marketing lessons we can learn from it. 1. Customers Hate to Be Confused . The roof is tin. There’s no air conditioning, and the building appears to be a sort of open-to-the-elements warehouse. That’s cool. It’s all part of the charm of exploring new places. There are many things travelers can enjoy, even ones that in our home countries might be bizarre or annoying. But one thing no traveler can countenance is confusion. Waiting in line isn’t too much of a problem if you can read a book or chat with your companions. That isn’t possible, however, when you’re jockeying for position in the customs line against a horde of people surging forward from 10 different directions. Relaxation isn’t an option. Similarly, we need to look at our own companies and ask ourselves: are our processes clear for customers? How can we simplify things? What’s confusing, and how can we remedy it? 2. Customers Hate Needless Bureaucracy . We understand: there are procedures when you enter a new country, and it takes time to go through them. But to wait for over an hour in a customs line — only to be waived through at the end with nary a question or a bag search — feels like time completely wasted. Yes, I suppose I should be thankful my underwear wasn’t riffled through in front of 500 other travelers. But as behavioral psychology demonstrates, what really drives people insane over time is the feeling that their efforts and exertions have been pointless. Why make me wait unless there’s a legitimate reason (preventing me from secretly importing drugs, guns, or mad-cow-disease-infected beef)? Ask yourself: are there any procedures you follow (or you make your customers follow) that have outlived their usefulness? Change them or eliminate them. 3. Customers Hate Needless Repetition . Sadly, leaving the Liberia Airport isn’t much better than arriving. Warned to arrive three hours in advance (just as in Israel, where they legitimately need it to interrogate you and search every pore of your body), we duly complied…and ended up sitting in the overheated airport lounge for 2 ½ hours. Again, perhaps it’s better to be safe than sorry, but I could have used that extra hour by the pool. And why did they now insist on searching every passenger’s bags twice (once at security and once at the gate, prior to boarding)? I’m sure TSA types will insist this is an “international best practice” – but it seems rather hollow when we were simply shrugged through upon entry. What’s the line between a legitimate security need and bad customer service that forces you into redundant steps? When we all come home from our travels, that’s another question we can ponder. How can we streamline operations to reduce inefficiency and still provide excellent, high-quality work? What are your suggestions? And what else do customers hate? Dorie Clark is a marketing strategy consultant who has worked with clients including Google, Yale University, and the National Park Service. Read her blog , listen to her podcasts or follow her on Twitter

Read the full article →

Dinkar Jain: Show Them the Money: Why Restructuring US Investing Mechanisms Is a Necessity for Clean Technology Innovation

November 10, 2010

Two things all entrepreneurs will agree with: Capital is good and more capital is better. Healthy levels of capital have been critical for enabling the biotech and digital revolutions in the US. The clean technology (cleantech) innovation system is different. It also consumes capital differently. The US significantly risks missing out on critical opportunities (primarily to China) if the special needs of cleantech are not recognized by institutions that have traditionally funded innovation. In the US, these are the 5 financing mechanisms that have historically funded innovation: Profit-seeking capital sources: 1. Venture Capital Funds & Angels 2. Corporations Goals-focused capital sources: 3. Governments 4. Foundations 5. Universities These 5 mechanisms have evolved practices and systems through which to assess, evaluate, and invest in innovative initiatives based on their experience with biotech and digital technologies. These practices now need to adapt to enable clean technologies. The critical differences between cleantech, biotech, and digital technologies are outlined below. These differences need to be taken into account as these 5 mechanisms adapt to the needs of the cleantech industry. Time to market for clean technologies is longer. Companies like Facebook or Google could open their portals to the public in months if not weeks. In contrast, as Navin Chaddha (Mayfield Fund) recently stated at VentureBeat’s GreenBeat conference, “[Cleantech] is a marathon. This is not a sprint.” The time it takes to develop a clean technology, refine it, and bring it to market is significantly longer than digital technologies for most sectors within cleantech. VCs and angels, who typically like to invest in companies with a viable exit strategy spanning 3-5 years, find longer time horizons discomforting. Externalities, though valuable, don’t generate returns. Unless cleantech companies are able to translate their large positive externalities into positive returns, they will remain unattractive for profit-seeking capital sources. VCs and corporations are legally mandated to maximize returns for their investors and shareholders respectively. Neither biotech nor digital technologies were externality-focused to the extent cleantech is (Figure 1). Your browser may not support display of this image. For the first time we are faced with a necessary innovation need which generates much of its value in the form of externalities. There needs to be a way for investors to realize returns based on these externalities, and market mechanisms and regulations need to be crafted to achieve this. Cleantech companies need a lot of money to make money. To manufacture photovoltaic cells, setup wind farms or install geothermal equipment, takes a significant amount of capital. Further, marginal costs remain significant even as these installations scale. In sharp contrast, once Genentech made a drug, to replicate it for thousands of patients is relatively cheap. Once Amazon.com had established its platform, to load in new SKUs and start to sell them was relatively straightforward. This difference in scalability combined with the capital intensity of cleantech businesses (with exceptions such as EnerNOC) makes these ventures unattractive to VCs and angels. No student discounts for cleantech entrepreneurs. Cleantech substitutes in exact shapes and forms what consumers have already. Wind farms, for example, will generate the exact same electricity flowing through the same plugs in our houses that coal currently generates. In comparison, when Hotmail launched, it was fundamentally new and offered advantages that far exceeded mere substitution of snail mail. Hence came widespread consumer adoption. Further, the Pentium could evolve from the 286 machine because consumers were willing to buy 286, 386, and 486 processors and help Intel scale up, learn, and lower costs of manufacturing these chips. This was like a “student discount” for Intel – as consumers were paying for Intel to learn. This consumer-based assistance is not going to be available for cleantech – as these products are mere substitutes as opposed to the 286 which offered something fundamentally new that customers were willing to pay for. Deeper into the madding crowd. Today VCs, angels and corporations have the possibility of investing in businesses in India, Israel, and China and continued innovations in biotech and digital technologies. The landscape for raising capital is much more competitive than it was just 10 years ago and cleantech is a relatively newer and riskier asset class for most investment firms – making it very competitive for cleantech entrepreneurs to raise money. Entrepreneurs in biotech and digital technologies faced lesser competition when these sectors were emerging 10-20 years ago. So, what’s the solution? Basically, there’s a China model where the government is pouring money where it deems fit. That model is just not a good fit for the fundamentals of how innovation works in the US. What you really want is a regulatory framework that encourages and incentivizes profit-seeking capital to flow into cleantech. This could take the form of targets and quotas for corporations and VCs to allocate funds to clean technology ventures, or tax breaks and subsidies for investments made in clean technologies by such funds and companies. What one must also try and avoid is a scenario in which the government allocates capital and picks winners. Whichever form the solution takes, it is clear that the 5 existing mechanisms for financing innovation in the US need substantial prodding to take on the challenges that face cleantech innovation. In the absence of such adjustments, a country such as China, that is able to orchestrate a large quantum of financial resources from a central autocratic regime, might gain an unmatched edge in this critical industry. Dinkar Jain holds a Bachelors in Computer Science Engineering from University of Michigan, Ann Arbor and an MBA from Harvard Business School.

Read the full article →

Video: Abu-Libdeh Says Palestinians Are ‘Ready For Statehood’

October 27, 2010

Oct. 27 (Bloomberg) — Palestinian Economy Minister Hasan Abu-Libdeh talks about the outlook for the region’s economy and political relations with Israel and prospects for the formation of a Palestinian state in 2011. He speaks from Marrakech with Maryam Nemazee on Bloomberg Television’s “The Pulse.”

Read the full article →

Video: Gat Says El Al Will Add Two `Major’ Destinations in U.S.: Video

September 30, 2010

Sept. 29 (Bloomberg) — Offer Gat, chief executive officer of El Al Israel Airlines Ltd.’s North American operations, talks about the carrier’s plans to add destinations in the U.S. Gat also discusses El Al’s performance, freight business and partnerships with U.S. airlines. He talks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

Read the full article →

Richard Laermer: Seven Signs The Recession’s Still Ramming Us

September 1, 2010

This is not a rant. It’s a reintroduction to something you knew in 2009 all too well: The Great Recession. People tried to tell us it was over. I, like you, was skeptical. Here is a look at how to recognize that we are back in the throes of a tough time, when we need to rely on our own instincts. What follows is information that might help you get through these difficult months. Deep breath. Most of us are going to make it just fine when this is over — even if it’s years. And incidentally, you should be proud of each of your gray hairs, earned by stress and success. The best indicators of The Recession That Would Not Depart? I see them daily, especially as I lead RLM Public Relations through this, dare I say it, quagmire. 1.) Clients say they need to stop paying for services for budgetary reasons, but they request a pass from the agreement terms. Their idea: “We thought you would want to help us.” We what? 2.) A so-called friend (SCF) says please do a presentation/in-person project/bit of work they don’t want to do — which will take lots of your time — for free because “it’ll be good for you.” Really? Oh, and I doubt the SCF says please either. 3.) When you ask someone how he or she is doing, this person changes the subject, and you both laugh. 4.) You read a post like this and nod like a bobble head doll. When you woke up to this recently, no one around you wanted to admit it! Now you say, “Damn it, I was right.” 5.) Having insufficient funds suddenly is neither painful nor shocking. You can’t complain because everyone has these pains. What can you do? Do you have un-payable bills? Send them back with a let-me-tell-you-why note — respectful but explanatory. (Writing thoughtful notes about your money woes will get a response that will surprise you. Communication is key in recessionary times.) 6.) A regular gig is less accessible and interesting. You start to wonder how you can get paid for your honed skills — whether it be “migrant working” (term for a worker freelancing for a company that once paid you a salary), setting up shop and making it official via incorporation or LLC, or picking up the killer app (or the telephone) and asking everyone you know what they have for you. Keep in mind that…. …Flexibility is key during this period. Don’t be quick to say no to anything And 7.) People are really surprised when you ask for a fee! Someone in Israel actually said that even though Ernst & Young is a huge corporation and was bringing in all their clients to see me speak, well, let’s hear it from the horse’s mouth: “The fact they are giving the stage and the publicity without asking for a sponsorship fee is not uncommon.” Yeah, whatever. I have to say, based on research, doing whatever is necessary is how earlier societies made it through tougher times than this. (And also by ignoring the ignoramuses who feed us the above BS.) In the past, folks didn’t think of themselves as being on the hunt for a job. They just thought it was a break between chapters! So, 2010 and 2011 will be “survival of the fittest “. Man, that Darwin and Spencer knew their stuff Remember that being fit means “being in the know” about topics way outside your field so you can jump in and help where others are clueless. That’s how you earn money where others fail: You are so IN on what’s happening that people who interview you for freelance jobs really want to spend time with you. The following is self-promotional and worthwhile. That’s what my book 2011 is about. If you are broke just write me; I’ll just send you the chapters you need to read! I also highly recommend Sally Hogshead’s Fascinate for more on how to “fascinate” others–now, when they need it most. But this isn’t a book review. You got tough times. I got tough times. But I have one request: I would like it if Americans stopped focusing for a bit on the trivial like the JetBlue guy, Levi Johnston, and the girls who ran from the Playboy Palace. We get through with nonstop focus and non-distracted concentration. A constant discussion of what’s unimportant is problematic in an era of dribbled shit, and it explains why the celebrity magazines are down more than 10 percent. (Good riddance, In Touch Weekly . Enough about Jessica Simpson already.) A recession brings out the best in people. Did you know that Aug. 25 was the National Day of Action to help the folks most hurt by the BP disaster? That day my friend Geoff Livingston (co-host of my weekly podcast “The El Show” ) and I co-hosted a benefit in New York at the Village Pourhouse (they donated the place and 15 percent of the bar total!). This was for families who lost their livelihoods in full part due to British Petroleum… And it was our way of giving back. You can donate too! If you would like to help, here’s a link . I hope you enjoy the rest of your summer. Hey, do you think Justin Timberlake will do a song called RecessionBack ? Just askin’. Comments, questions, or compliments? Tweet @laermer . Let’s get this party stopped!

Read the full article →

David Dagan: Kibbutz Diary: Business savvy? These socialists have plenty

July 14, 2010

A few dozen socialists in the north of Israel met recently to raise glasses of wine and toast their latest business success. The residents of Kibbutz Mishmar Ha’emek were celebrating the returns of another strong year for Tama , their plastics company. As I explained in my last post , the kibbutz is a thoroughly socialist place. All assets are communally owned. Everybody makes the same amount of money. But the people of Mishmar Ha’emek understand that socialism needs to be paid for – and the only way to make that money is through hardheaded capitalism. So they built Tama, a partnership between Mishmar Ha’emek and another kibbutz with a minority stake. The firm manufactures plastic netting that farmers use to bundle their crops. As people here like to joke, they sell holes. It’s a tougher job than you may think: The plastic has to be strong but flexible, protective without being sticky. Tama is by the far the biggest player in the worldwide market for this product, and that is serious business. The company, which works together with equipment makers such as John Deere , has factories in three countries and about 900 workers. The see-saw between socialist and capitalist principles has profoundly shaped this thriving company. And while the philosophical contortions may seem painful, the results are better than what we often get with the standard models of business ownership. “The main goal of Tama is to bring profits to the owner [the kibbutz]. I have no other goal,” human resources manager Chen Tsur told me. But she hastened to add: “My way is different.” That different way starts with the pay scales. About 250 of Tama’s employees, more than a quarter, are members of the kibbutz. That means they all make the same amount, whether they are on the factory floor or in the executive offices. This equality of pay scales would be hard to maintain at most small firms, let alone a booming business like Tama. The company’s engineers and executives could surely break away for bigger paychecks elsewhere. So why don’t they bolt? Ideology is a factor: Tsur, for example, is genuinely committed to the kibbutz’s way of life. In addition, hometown pride plays a big role, she told me. Tsur did not grow up on the kibbutz, but many Tama leaders did. “They’re connected in their gut (to the kibbutz),” Tsur said. Photo: Akiva Kaminski Finally, Tsur pointed to Israeli workplace culture as an explanation. In the U.S., people work for money; in Europe, they want security; and in Israel, ego is a big motivator, she told me. It’s not that Tama leaders walk around with their chests puffed out, she said, but knowing they are in key roles for their community is a source of satisfaction. The non-kibbutzniks at Tama are paid following capitalist principles, though even here, the company tries to take some of the edge off. Tama gives its lowest-paid workers more than the average wage for similar jobs in their areas – as much as 20 percent more. Meanwhile, the highest-paid workers make the average for their jobs. The idea is to avoid huge pay differentials. The socialist ethos also infuses Tama’s decision making, on a large and small scale. All of Tama’s major decisions are brought before the weekly assembly of kibbutz members, which can overrule management. It is easy to envision scenarios in which this much democracy could hamstring a company. But so far that has not happened, probably because Tama’s managers enjoy a great deal of trust from their community. After all, they are making lots of money – and they’re local. Tama is similarly democratic on the inside, with many decisions made by committee and only after long deliberation, Tsur told me. It takes a lot of time, but it means decisions have broader support once they are made. Notably, this does not mean Tama cannot make tough decisions. For example, it closed a plant in England in January for economic reasons. There is plenty of fodder here for a management textbook. But the more interesting issue is how the people of Mishmar Haemek reconcile their socialist ideals with their capitalist practice. This is an old dilemma for Israel’s kibbutzim. As small communes, they simply never had the scale to be completely socialist. But they still argued about where to draw the line. At Israel’s founding, the movement debated whether it should employ new immigrants as hired laborers, for example. In the end, realism won. Israel did not become the socialist state many of the kibbutz movement’s founders dreamed about. Photo: David Dagan And if that first generation was willing to live in grinding poverty, its successors are not. You can call them hypocrites, but in a sense that line of attack says more about the outside world than it does about the kibbutz. Distant onlookers sometimes demand more purity from the kibbutz than the kibbutzniks. As Mishmar Ha’emek member Ran Golan told me: “People outside the kibbutz look at it as some kind of ideal they did not manage to realize – but it’s a good thing that someone else is trying to do it.” So, rather than smugly declaring that the kibbutz has caved in to capitalism, we might consider what capitalism can learn from the kibbutz. Tama shows us that cooperative businesses can work, and often achieve better results than those with hierarchical ownership. You do not have to be a Marxist to believe in that idea. In the U.S., for example, many companies have discovered the benefits of becoming partly or completely owned by an employee stock ownership plan, or ESOP . More broadly, in an era that saw finance executives chase bonuses off a cliff, Tama serves a reminder that we should ask whether the people running our economic engines are guided by values and incentives we can support. Corporate culture should be connected to a real-world community rather than a cloistered elite; compensation for investors and management should privilege long-term stability over the fast money. I worry that financial reform, with all its regulation and restructuring, has not focused on these fundamental principles. Sure, these are abstractions, ideals that need to be translated into actual business decisions. But Tama is proof that such a thing can be done.

Read the full article →

David Dagan: Kibbutz Diary: Business savvy? These socialists have plenty

July 14, 2010

A few dozen socialists in the north of Israel met recently to raise glasses of wine and toast their latest business success. The residents of Kibbutz Mishmar Ha’emek were celebrating the returns of another strong year for Tama , their plastics company. As I explained in my last post , the kibbutz is a thoroughly socialist place. All assets are communally owned. Everybody makes the same amount of money. But the people of Mishmar Ha’emek understand that socialism needs to be paid for – and the only way to make that money is through hardheaded capitalism. So they built Tama, a partnership between Mishmar Ha’emek and another kibbutz with a minority stake. The firm manufactures plastic netting that farmers use to bundle their crops. As people here like to joke, they sell holes. It’s a tougher job than you may think: The plastic has to be strong but flexible, protective without being sticky. Tama is by the far the biggest player in the worldwide market for this product, and that is serious business. The company, which works together with equipment makers such as John Deere , has factories in three countries and about 900 workers. The see-saw between socialist and capitalist principles has profoundly shaped this thriving company. And while the philosophical contortions may seem painful, the results are better than what we often get with the standard models of business ownership. “The main goal of Tama is to bring profits to the owner [the kibbutz]. I have no other goal,” human resources manager Chen Tsur told me. But she hastened to add: “My way is different.” That different way starts with the pay scales. About 250 of Tama’s employees, more than a quarter, are members of the kibbutz. That means they all make the same amount, whether they are on the factory floor or in the executive offices. This equality of pay scales would be hard to maintain at most small firms, let alone a booming business like Tama. The company’s engineers and executives could surely break away for bigger paychecks elsewhere. So why don’t they bolt? Ideology is a factor: Tsur, for example, is genuinely committed to the kibbutz’s way of life. In addition, hometown pride plays a big role, she told me. Tsur did not grow up on the kibbutz, but many Tama leaders did. “They’re connected in their gut (to the kibbutz),” Tsur said. Photo: Akiva Kaminski Finally, Tsur pointed to Israeli workplace culture as an explanation. In the U.S., people work for money; in Europe, they want security; and in Israel, ego is a big motivator, she told me. It’s not that Tama leaders walk around with their chests puffed out, she said, but knowing they are in key roles for their community is a source of satisfaction. The non-kibbutzniks at Tama are paid following capitalist principles, though even here, the company tries to take some of the edge off. Tama gives its lowest-paid workers more than the average wage for similar jobs in their areas – as much as 20 percent more. Meanwhile, the highest-paid workers make the average for their jobs. The idea is to avoid huge pay differentials. The socialist ethos also infuses Tama’s decision making, on a large and small scale. All of Tama’s major decisions are brought before the weekly assembly of kibbutz members, which can overrule management. It is easy to envision scenarios in which this much democracy could hamstring a company. But so far that has not happened, probably because Tama’s managers enjoy a great deal of trust from their community. After all, they are making lots of money – and they’re local. Tama is similarly democratic on the inside, with many decisions made by committee and only after long deliberation, Tsur told me. It takes a lot of time, but it means decisions have broader support once they are made. Notably, this does not mean Tama cannot make tough decisions. For example, it closed a plant in England in January for economic reasons. There is plenty of fodder here for a management textbook. But the more interesting issue is how the people of Mishmar Haemek reconcile their socialist ideals with their capitalist practice. This is an old dilemma for Israel’s kibbutzim. As small communes, they simply never had the scale to be completely socialist. But they still argued about where to draw the line. At Israel’s founding, the movement debated whether it should employ new immigrants as hired laborers, for example. In the end, realism won. Israel did not become the socialist state many of the kibbutz movement’s founders dreamed about. Photo: David Dagan And if that first generation was willing to live in grinding poverty, its successors are not. You can call them hypocrites, but in a sense that line of attack says more about the outside world than it does about the kibbutz. Distant onlookers sometimes demand more purity from the kibbutz than the kibbutzniks. As Mishmar Ha’emek member Ran Golan told me: “People outside the kibbutz look at it as some kind of ideal they did not manage to realize – but it’s a good thing that someone else is trying to do it.” So, rather than smugly declaring that the kibbutz has caved in to capitalism, we might consider what capitalism can learn from the kibbutz. Tama shows us that cooperative businesses can work, and often achieve better results than those with hierarchical ownership. You do not have to be a Marxist to believe in that idea. In the U.S., for example, many companies have discovered the benefits of becoming partly or completely owned by an employee stock ownership plan, or ESOP . More broadly, in an era that saw finance executives chase bonuses off a cliff, Tama serves a reminder that we should ask whether the people running our economic engines are guided by values and incentives we can support. Corporate culture should be connected to a real-world community rather than a cloistered elite; compensation for investors and management should privilege long-term stability over the fast money. I worry that financial reform, with all its regulation and restructuring, has not focused on these fundamental principles. Sure, these are abstractions, ideals that need to be translated into actual business decisions. But Tama is proof that such a thing can be done.

Read the full article →

Daniel Isenberg: Dear President Medvedev: Stop Emulating Silicon Valley

July 2, 2010

So you say you want a revolution? Let a thousand flowers bloom (Chairman Mao)? Reduce Russia’s dependence on oil (like King Abdullah and KAUST)? Instead of hobnobbing for the cameras with Steve Jobs and Eric Schmidt, you should be talking — and listening — to Natalya Kasperskaya (Kaspersky Lab), Arkhady Volozh (Yandex), Victoria Livschitz (Grid Systems), Sasha Galitsky (serial entrepreneur), and Serguie Beloussov (Parallels). These great Russian entrepreneurs are right under your nose. With brains, determination, leadership, and a little je ne sais quoi , they are navigating the maze of the Russian environment. If you want to build a healthy entrepreneurship ecosystem for sustained economic prosperity, you should learn from those who know how to make it work now, and how to make it work better in the future. Back in the USSR. President Medvedev, your Skolkovo Valley smacks like a repackaging of top-down industrial and economic planning. If it is entrepreneurship you are after, you cannot dictate it top down. Moscow can’t emulate Silicon Valley. Kigali can’t emulate Silicon Valley. Cali can’t emulate Silicon Valley. Guess what: Silicon Valley can’t emulate Silicon Valley. Rather than wasting time and resources trying to recreate the ideal and impossible, consider these rules to jumpstart Russia’s next entrepreneurial revolution : 1. Identify and over-celebrate the entrepreneurs who have made it. I have been all over the world looking, and I have yet to see a society without entrepreneurs: like art and music, entrepreneurship in part expresses something fundamental in the human spirit. Sometimes a societies’ entrepreneurs are flying under the radar, but you have the ability to sniff them out. 2. Talk with them and listen to them . Create a candid, informal, bidirectional dialog. Not the big company talking heads show of this month’s St. Petersburg International Economic Forum, but an ongoing discussion where you can learn the real entrepreneurs’ perspectives. Use them to help you figure out how to practically change the ecosystem to make it conducive to entrepreneurship, big time. Remember, these are Russia’s best and brightest. And remember, Russia has an amazing scientific and technological legacy to build on. 3. Put Russia’s Diaspora to work . Form a group of the best ex-patriate Russian entrepreneurs living in the U.S., Europe, and Israel. They would be intrigued, if not downright proud, to be consulted. Tear a page out of Taiwan’s book when the newly elected Premier Sun created the “foreign monk” Science and Technology Advisory Group. STAG had an incredible impact, and was one of the root causes of the brain gain of 40,000 US-trained high tech entrepreneurs and executives flooding back to Taiwan in the 1990s. 4. Remain sectorally agnostic . For three decades, Israel’s vaunted Chief Scientist program adamantly avoided prioritizing sectors to promote. Sectoral agnosticism sends a strong message because it encourages entrepreneurs to identify and realize what THEY think are opportunities. This is part of letting the thousand flowers bloom. Remember that entrepreneurship is inherently a contrarian activity: you need to let loose the hounds, and let them sniff out the opportunities. 5. Don’t paint the zebra . You cannot take a white donkey, paint it with black stripes, and call it a zebra. Help entrepreneurship grow organically . Create conditions for zebras to breed. A lot of that involves removing the obstacles that prevent them from doing so. Remember that removing bureaucratic obstacles is more impactful than creating incentives, all else being equal. 6. Intervene holistically . There are 13 distinct, but interrelated elements which compose an entrepreneurship ecosystem. All 13 of these have to line up eventually in order for there to be sustainable entrepreneurship. Is there capital and technology? Bolster these with diaspora networks and entrepreneurship education. Are their success stories? Use them to encourage large companies to become customers to small suppliers. Does the culture support risk taking and honest failure? Encourage support services to help reduce the failure rate. Russia’s next revolution won’t happen overnight, but the key is to look inside. You should emulate yourself, not Silicon Valley. And if you want to do international benchmarking, instead of visiting San Jose and Cupertino, you should be visiting Hsinchu City, Herziliya and Reykjavik. Daniel Isenberg is the Professor of Management Practice at Babson College, Founder and Executive Director of the Babson Entrepreneurship Ecosystem Project , and author of the Harvard Business Review article, ” How to Start an Entrepreneurial Revolution ” (June 2010).

Read the full article →

This Week in Retail: Israeli Fund Looks To Step into U.S. Retail Property-Buying Void

June 30, 2010

Elbit Imaging Ltd. in Tel Aviv, Israel, completed an investment of approximately $116 million in Macquarie DDR Trust, an Australian publicly traded trust that holds and manages two US REIT portfolios of approximately 78 retail properties and 13.2 million…

Read the full article →

Jack Buffington: What Do We Mean When We Assert That Our Economic Salvation Is ‘Innovation?’

June 22, 2010

‘Innovation’ is commonly cited as an American economic strength. At the same time, there is disturbingly powerful evidence that too many Americans lack a clear understanding of the innovation process. Although in America there has been a remarkable confluence of innovation and industrial economic growth, the process itself is in no way haphazard. Today, the American model of industrial innovation is being deployed very effectively in Europe and Asia, just as the system atrophies in the U.S. I know this to be true first hand as a corporate manager for a Fortune 500 U.S. company, a doctoral researcher for a university in Sweden, and someone competing largely against Asian researchers in my study of discontinuous innovation. Sweden is second only to Israel in its public funding of R&D per capita, and China has doubled its investment in its university system over the past ten years while at the same time, the U.S. has declined in both measures. I see firsthand how innovation is stimulated by a necessary set of interactive factors, and that it is simply not possible to specialize in R&D. It is misguided for anyone to believe that America can position itself as the world’s expert and specialist in R&D for the global economy; there is no historical evidence to justify this viewpoint for any nation. Instead, America’s industrial domination was built upon a model that tightly linked R&D and production, in the public and private sectors. After World War II, research was linked between the public sector (government and academic institutions) who were largely responsible for pure science , and the private sector that was often responsible for the applications effort that we often define today as ‘research and development’. Pure science is often misunderstood, but is a most critical initiative, leading to radical or discontinuous innovation – true drivers of economic growth. After World War II, noted scientists as Vannevar Bush helped to establish a model linking the usefulness of science to socioeconomic progress through the consortium of private firm, academic, and government institutions. One of Bush’s students, Frederick Terman, is largely credited for being the Father of Silicon Valley, an example of the benefits of linking the private sector, government, and academia in the development of innovation. Today, this American innovation model has been repackaged and is now being called the triple helix model of innovation. Lack of American understanding of this triple helix approach is illustrated by the dot-com boom of the late 1990′s. While most Americans would associate the free market heyday as an illustration of American innovation, most of us would struggle in believing that it was collaboration between government, academia, and the private sector that actually originated it. I believe this is due to our generalization that anything related to the private sector can lead to innovation, even the outsourcing of production and R&D, while anything associated with the government and/or academic institutions cannot. As a result, America’s unbalanced model of R&D and production is actually moving us away from innovation instead of closer to it. With academic research finding that it takes 3,000 raw ideas, 100 exploratory projects, 10 well funded projects, and 2 product launches to create one successful innovation, few corporations will put itself through this process due to a lack of positive return on investment. However, it’s in the best interest of the public sector enable private sector research within its national boundaries to become a possible engine of economic growth. Countries such as Sweden, Norway, and Denmark are utilizing this model of innovation successfully, while Americans commonly consider these countries to be less innovative. Asian economies are beginning to understand this public – private approach as well – the old American innovation process, not the new. Through outsourcing production and ignoring the role of the public sector in the innovation process, America is misappropriating something of its own invention. The evidence is overwhelming that America is heading in the wrong direction: our history tells us we are misguided, and the rest of the world is following a different course. I see this first-hand in conducting innovation research in Europe and in competition with increasingly competent Asian researchers. Politics aside, failing to see that the rest of the world has adopted an approach that American pioneered, and from which we have veered, will without question reduce the likelihood of the next Silicon Valley being in California rather than Stockholm, Bangalore or Shanghai. In my mind, there is no more critical issue facing the U.S. economy than the need to fix our approach to innovation.

Read the full article →

US students: Americans divided over US policies on Israel

June 21, 2010

US students: Americans divided over US policies on Israel

Read the full article →

Medvedev Pushes Ruble Reserve Currency to Cut Dollar Dominance

June 19, 2010

By Paul Abelsky June 19 (Bloomberg) — Russia wants the ruble to be one of the world’s reserve currencies as President Dmitry Medvedev renews his push to reduce the dollar’s dominance and make Moscow a global financial hub. “Only three, five years ago it seemed like a fantasy” to create a new reserve currency, Medvedev said yesterday in a speech in St. Petersburg, Russia. “Now we are seriously discussing it.” Medvedev, who has repeatedly called for a supranational currency to match the dollar, said discussions with China are continuing on broadening the global options. Russia sold U.S. Treasuries for a fifth consecutive month in April, the U.S. Treasury Department said June 15. The world may need as many as six reserve currencies, Medvedev said. “It’s something that’s obviously needed,” he said at the St. Petersburg International Economic Forum. “Developing a financial center in Moscow will considerably help to strengthen the ruble’s position as one of the reserve currencies.” Medvedev’s comments underline Russia’s ambition to reassert its global power following the financial crisis. Gross domestic product shrank 7.9 percent last year, the worst contraction since the fall of communism in 1991, after the credit crunch sent commodity prices plunging. If a country wants to alter the world economic order, including the number of reserve currencies, it must become an international financial center, Bank of Israel Governor Stanley Fischer said in an interview yesterday. ‘Don’t Emerge by Fiat’ “For a currency to be a reserve currency, you have to have capital markets in which you can sell it and buy it very easily,” Fischer said. “New reserve currencies don’t emerge by fiat. They emerge as countries change.” Medvedev said he envisages a new economic hierarchy allowing emerging-market giants such as Russia and China to drive the global agenda as the world emerges from the first global recession since the 1930s. “We really live at a unique time, and we should use it to build a modern, prosperous and stron Russia, a Russia that will be a co-founder of the new world economic order,” he said. The BRIC countries — Brazil, Russia, India and China — were net sellers of U.S. assets in April, driven mainly by Russian divestments, Brown Brothers Harriman & Co. Senior Currency Strategist Win Thin said in a June 15 note. Russia may add the Australian and Canadian dollars to its international reserves as the central bank diversifies the world’s third-largest stockpile away from the greenback, central bank First Deputy Chairman Alexei Ulyukayev said in a June 16 interview. Though Russia is “very carefully monitoring what’s happening in the euro zone,” the emergence of the euro as a currency to rival the dollar’s dominance helped soften the impact of the global crisis, Medvedev said. “If the world depended completely on the dollar, the situation would have been more difficult,” Medvedev said. To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@bloomberg.net

Read the full article →

Medvedev Pushes Ruble Reserve Currency to Cut Dollar Dominance

June 19, 2010

By Paul Abelsky June 19 (Bloomberg) — Russia wants the ruble to be one of the world’s reserve currencies as President Dmitry Medvedev renews his push to reduce the dollar’s dominance and make Moscow a global financial hub. “Only three, five years ago it seemed like a fantasy” to create a new reserve currency, Medvedev said yesterday in a speech in St. Petersburg, Russia. “Now we are seriously discussing it.” Medvedev, who has repeatedly called for a supranational currency to match the dollar, said discussions with China are continuing on broadening the global options. Russia sold U.S. Treasuries for a fifth consecutive month in April, the U.S. Treasury Department said June 15. The world may need as many as six reserve currencies, Medvedev said. “It’s something that’s obviously needed,” he said at the St. Petersburg International Economic Forum. “Developing a financial center in Moscow will considerably help to strengthen the ruble’s position as one of the reserve currencies.” Medvedev’s comments underline Russia’s ambition to reassert its global power following the financial crisis. Gross domestic product shrank 7.9 percent last year, the worst contraction since the fall of communism in 1991, after the credit crunch sent commodity prices plunging. If a country wants to alter the world economic order, including the number of reserve currencies, it must become an international financial center, Bank of Israel Governor Stanley Fischer said in an interview yesterday. ‘Don’t Emerge by Fiat’ “For a currency to be a reserve currency, you have to have capital markets in which you can sell it and buy it very easily,” Fischer said. “New reserve currencies don’t emerge by fiat. They emerge as countries change.” Medvedev said he envisages a new economic hierarchy allowing emerging-market giants such as Russia and China to drive the global agenda as the world emerges from the first global recession since the 1930s. “We really live at a unique time, and we should use it to build a modern, prosperous and stron Russia, a Russia that will be a co-founder of the new world economic order,” he said. The BRIC countries — Brazil, Russia, India and China — were net sellers of U.S. assets in April, driven mainly by Russian divestments, Brown Brothers Harriman & Co. Senior Currency Strategist Win Thin said in a June 15 note. Russia may add the Australian and Canadian dollars to its international reserves as the central bank diversifies the world’s third-largest stockpile away from the greenback, central bank First Deputy Chairman Alexei Ulyukayev said in a June 16 interview. Though Russia is “very carefully monitoring what’s happening in the euro zone,” the emergence of the euro as a currency to rival the dollar’s dominance helped soften the impact of the global crisis, Medvedev said. “If the world depended completely on the dollar, the situation would have been more difficult,” Medvedev said. To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@bloomberg.net

Read the full article →

Medvedev Promotes Ruble as World Reserve Currency to Cut Dollar Dominance

June 18, 2010

By Paul Abelsky June 19 (Bloomberg) — Russia wants the ruble to be one of the world’s reserve currencies as President Dmitry Medvedev renews his push to reduce the dollar’s dominance and make Moscow a global financial hub. “Only three, five years ago it seemed like a fantasy” to create a new reserve currency, Medvedev said yesterday in a speech in St. Petersburg, Russia. “Now we are seriously discussing it.” Medvedev, who has repeatedly called for a supranational currency to match the dollar, said discussions with China are continuing on broadening the global options. Russia sold U.S. Treasuries for a fifth consecutive month in April, the U.S. Treasury Department said June 15. The world may need as many as six reserve currencies, Medvedev said. “It’s something that’s obviously needed,” he said at the St. Petersburg International Economic Forum. “Developing a financial center in Moscow will considerably help to strengthen the ruble’s position as one of the reserve currencies.” Medvedev’s comments underline Russia’s ambition to reassert its global power following the financial crisis. Gross domestic product shrank 7.9 percent last year, the worst contraction since the fall of communism in 1991, after the credit crunch sent commodity prices plunging. If a country wants to alter the world economic order, including the number of reserve currencies, it must become an international financial center, Bank of Israel Governor Stanley Fischer said in an interview yesterday. ‘Don’t Emerge by Fiat’ “For a currency to be a reserve currency, you have to have capital markets in which you can sell it and buy it very easily,” Fischer said. “New reserve currencies don’t emerge by fiat. They emerge as countries change.” Medvedev said he envisages a new economic hierarchy allowing emerging-market giants such as Russia and China to drive the global agenda as the world emerges from the first global recession since the 1930s. “We really live at a unique time, and we should use it to build a modern, prosperous and stron Russia, a Russia that will be a co-founder of the new world economic order,” he said. The BRIC countries — Brazil, Russia, India and China — were net sellers of U.S. assets in April, driven mainly by Russian divestments, Brown Brothers Harriman & Co. Senior Currency Strategist Win Thin said in a June 15 note. Russia may add the Australian and Canadian dollars to its international reserves as the central bank diversifies the world’s third-largest stockpile away from the greenback, central bank First Deputy Chairman Alexei Ulyukayev said in a June 16 interview. Though Russia is “very carefully monitoring what’s happening in the euro zone,” the emergence of the euro as a currency to rival the dollar’s dominance helped soften the impact of the global crisis, Medvedev said. “If the world depended completely on the dollar, the situation would have been more difficult,” Medvedev said. To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@bloomberg.net

Read the full article →

Gazans Say Israeli Blockade Keeps Homes in Decay, Fails to Undermine Hamas

June 17, 2010

By Jonathan Ferziger and Saud Abu Ramadan June 18 (Bloomberg) — Half of Mohammed Abed Rabbo’s extended family of 23 lives in a tent next to the rubble of his two-story house in Gaza’s Jabalia refugee camp, while the rest is crowded into a small rented home nearby. Abed Rabbo says his house was destroyed 17 months ago by Israeli bulldozers after Palestinian militants hid nearby and fired at soldiers. The 55-year-old potato farmer says he can’t get material needed to rebuild because Israel restricts most construction supplies from entering Hamas-ruled Gaza. His is one of more than 3,000 homes that the United Nations reported were destroyed during the 22-day military offensive Israel says it initiated in December 2008 to stop Hamas and other groups from firing rockets at its southern towns. Israel clamped restrictions on goods entering Gaza after Hamas seized control there in 2007 and has begun relaxing them after facing international pressure in the wake of its May 31 raid on an aid flotilla that left nine pro-Palestinian activists dead. “The siege has affected everything in Gaza,” Abed Rabbo, whose farm is near Gaza’s northern border, said in an interview before yesterday’s Israeli decision to loosen the blockade. “It’s destroyed our lives.” The lives of Abed Rabbo and the 1.5 million other residents of Gaza have become hostage to a three-cornered political struggle pitting Hamas — which Israel, the U.S. and the European Union have branded as terrorist — against both the Jewish state and the Palestinian Authority government that controls the West Bank. ‘Pressuring the Population’ While Israel saw the blockade as a way to undermine Hamas’s hold on Gaza by turning the population against it, the strategy hasn’t worked, said Mohsen Adnan, director of the Arab Center for Agricultural Development in Gaza City. “Israel hoped that by pressuring the population in Gaza, Hamas would be uprooted, but Hamas is still strong and the people have been exhausted by the siege,” Adnan said in a telephone interview. Human rights groups, including Amnesty International, say restrictions on food imports and building materials have created a humanitarian crisis. Israeli Prime Minister Benjamin Netanyahu said June 2 that each week “an average of ten thousand tons of goods enter Gaza” and that “there’s no shortage of food. There’s no shortage of medicine.” Israel says it restricts imports of construction materials to Gaza because they can be used to build rockets, bunkers or bombs. Officials said they were also concerned about weapons being hidden in food packaging. Job Losses More than 1,100 Palestinians and 13 Israelis were killed in the Gaza conflict. Since then, more than 400 rockets and mortars have been fired into Israel, killing one foreign worker last March, the Israeli army said. Israel’s top ministers decided yesterday to loosen the blockade, changing the system in which goods enter Gaza and expanding the import of “material for civilian projects under international supervision,” the prime minister’s office said in a statement. German Foreign Minister Guido Westerwelle said the decision was a “first step” that must be followed by “swift, concrete and noticeable improvements in access to the Gaza Strip.” Egypt has also largely kept its Gaza border closed since Hamas took over because it says it doesn’t recognize the Islamic movement’s administration. After the flotilla raid, it opened the Rafah crossing, which is used mainly by people. Hamas, which won parliamentary elections in 2006, ousted troops loyal to Palestinian Authority President Mahmoud Abbas the following year and took full control of Gaza. ‘Food Insecure’ At least 3,540 homes in Gaza were destroyed in the conflict with Israel and 2,870 were severely damaged, the UN Office for the Coordination of Humanitarian Affairs said in an August 2009 report . Restrictions on imports and exports resulted in the loss of some 120,000 jobs, the report said. Haytham Khudeir, 30, who runs an import business out of an office in downtown Gaza City, estimates he’s lost some $500,000 in sales since Israel cut off most shipments into the territory. He buys coffee, mineral water and cooking oil at increased prices that come through smuggling tunnels from Egypt, built to circumvent the blockade, and can’t get the quantities once available through Israel. “It’s very difficult to get quality products and people don’t have money to buy them,” Khudeir said. “Running a business in Gaza these days is almost impossible.” The UN classifies 75 percent of Gaza’s population as “food insecure,” meaning they lack access to sufficient safe and nutritious food. It cited a shift in the diet of Gazans from more expensive foods, such as fruit, vegetables and animal products, to cheap and high-carbohydrate foods such as cereals, sugar and oil. ‘Vegetables and Bread’ “My children see fruit in the grocery stores, but we can’t afford it,” Walid Mushtaha, a 45-year-old unemployed father of nine, said in an interview. His family depends on food supplies from the United Nations Relief and Works Agency that include flour, olive oil, rice, sugar and canned beef. His family’s diet consists largely of “vegetables and bread,” he said. “On weekends we open the cans of processed beef. Fresh meat, maybe once a month.” Restricted goods ranging from computers to live cattle and motorcycles have been available at twice to four times their market price through the tunnels, which are licensed and taxed by Hamas. Weapons are also smuggled in via the tunnels. Full-Fledged War Israel says its blockade is legal because it is in “a state of armed conflict” with Hamas. Legal scholars such as Robin Churchill , a professor of international law at the University of Dundee in Scotland, say the legality turns on whether the conflict is a full-fledged war and whether the military benefit is proportionate to civilian suffering. Sitting in his tent and offering tea, Abed Rabbo said he rushed his family from their house when Israel started bombing and headed south, away from the area where fighting was most intense. After the war ended with a cease-fire on Jan. 18, 2009, Abed Rabbo said, he and his family returned to find their home destroyed. “I thought we might be able to get some cement from the flotilla, but look what happened,” he said. To contact the reporters on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net ; Saud Abu Ramadan in Gaza City at sramadan@bloomberg.net

Read the full article →

Israel Investing In Arab Sector

June 17, 2010

NAZARETH, Israel — In the year since he graduated from Israel’s top technical college, Samer Kablawi has sent out over 50 resumes to high-tech companies – and had one interview. It’s a predicament that may seem typical for young graduates in a world still emerging from recession. But Kablawi notes one discrepancy: While his fellow Arab classmates have struggled to find work, most of his Jewish classmates landed high-tech jobs months ago. “I don’t want to use the excuse that because I’m Arab, they’re not taking me,” said Kablawi, 29, who is fluent in Hebrew, Arabic and English, and says he did better in school than many of his now-employed classmates. “But when you think about the numbers, it will hit you very hard.” It’s a refrain long sounded by Arabs citizens of Israel, who argue they face widespread discrimination in the workplace. The Israeli government says it now wants to do something about it, with a $250 million initiative with local venture capitalists to boost the Arab sector. The aim, say backers – among them President Shimon Peres – is to create jobs, while improving public infrastructure and housing in predominantly Arab areas. Arab leaders, however, are skeptical, pointing to past promises that fell through and saying the money falls short of what’s needed. “We want to start a New Deal for the Arab population,” said Avishay Braverman, Israel’s minister for minority affairs, who is leading the initiative, in a reference to the New Deal domestic reform program of the U.S. in the 1930s. “It’s moral and right, and independent of that, it’s also wise.” But a long legacy of ethnic divisions will be hard to overcome. Decades of neglect and discrimination have fueled ever-worsening tensions, and the Arab sector is largely uncharted territory for Israeli lenders and employers. In Nazareth’s industrial zone – the main hub for enterprise in Israel’s unofficial Arab capital – modest, roughly constructed buildings and cluttered storage yards stand in sharp contrast to the glittering corporate towers of Tel Aviv, or even the modern factories of Upper Nazareth, the Jewish development town next door. Like most Arab towns in Israel, Nazareth’s industry is mainly small businesses – meaning there are few chances for Arabs like Kablawi and his friends to find jobs in their fields. There are early plans to help that change – a private investor has announced plans to build Nazareth’s first-ever joint Jewish-Arab industrial park to give local workers easy access to the global high-tech scene. And the government’s revitalization program envisions filling such workspaces through a $200 million investment in Nazareth and nine other Arab communities that’s mostly directed toward helping companies create jobs. The government is also providing almost half of a $50 million private fund run by Peres’ son, whose venture capital firm, Pitango, won a competitive bid to bankroll 25 to 30 Arab-owned firms in high-tech and service industries, presently being selected. But to Israeli Arabs, the funding plans are nothing to bank on. “Any additional budget is welcomed, but it’s still very far from the real needs,” said Ramiz Jaraisy, Nazareth’s mayor. The real test, he said, “will be according to the implementation of the plan.” He and other Arab leaders point to past promises such as a 2000 pledge to invest about $1 billion in the Arab sector that failed to materialize. Arabs citizens of Israel make up one-fifth of the country’s population and many have a complex relationship with the Jewish state. While Israeli law gives them the same rights as Jewish Israelis, they identify strongly with their brethren in the West Bank and Gaza who are not citizens. Most identify themselves as Palestinian. In practice, they are an underclass, receiving less-than-equal services and treatment – which fans the flames of mutual distrust with the Jews. Israel’s 1.3 million Arabs account for only about 8 percent of economic activity, according to Israeli government statistics. Arabs lag far behind the Jewish population in income and employment levels, while poverty rates are much higher. According to a recent parliamentary study, Arabs hold only 6 percent of public sector jobs in Israel – and less than 2 percent of the positions in most of Israel’s government ministries and parliament. In the private sector, Arab entrepreneurs have traditionally struggled to get loans from Israeli banks due to discrimination or property laws that favor Jewish ownership, said Ayman Saif, director of the government’s economic development authority for minorities. In recent years, government funding for Arab Israeli towns was reduced, according to the Mossawa Center, an advocacy group for Arab Israelis. Many Arab leaders wonder whether the money they are being promised under the new initiative isn’t simply a trade for funds lost elsewhere. “We have no reason to believe that everything is going to be better,” said Mohammed Darawshe, co-director of the Abraham Fund, a nonprofit group that promotes coexistence projects. In fact, recent events suggest that Arab-Jewish relations in Israel are worsening. In the past few weeks, two prominent Arab-Israeli activists have been arrested on charges of spying for the Lebanese guerrilla group Hezbollah, and the community is presently fending off calls to strip one of their few parliament members, Hanin Zoabi, of her Israeli citizenship for joining a Gaza-bound flotilla that tried to breach Israel’s blockade of Gaza. Zoabi was on board the ship on which nine activists were killed in a clash with Israeli naval commandos. A new study shows that almost half of Arab citizens are dissatisfied with life in Israel and that about 40 percent don’t believe in Israel’s judicial system and support boycotting parliament elections – a rise over the approximately one-third of Arab Israelis who held similar opinions in 2003. “At the end of the day, equality doesn’t come from a special plan,” Darawshe said, but only if Arab communities get “the same budget, the same criteria, the same national policy” as Jews. Saif, the government development official, said banks appear to be waking up to the potential in the Arab sector. In June, Israel’s premier venture capital association is gathering business leaders to push investments toward the Arab sector. At that time, Pitango’s Arab-focused subsidiary is expected to give its first report on its new investment portfolio. “The private sector has seen that there is potential in the Arab sector,” said Saif. “Hopefully, in the future, the private sector will tap this potential without the help of the government.”

Read the full article →