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Roger Stinnett CPA/PFS, CFP(R), CIMA(R) Joins First Foundation Advisors as Managing Director of Financial Planning

April 27, 2011

IRVINE, CA–(Marketwire – Apr 27, 2011) – Roger Stinnett has joined First Foundation Advisors (FFA) as a Managing Director of financial planning. Stinnett has over twenty years experience in financial planning, most recently with City National Bank, where he developed and implemented the tax and financial planning offerings. FFA is a wholly owned subsidiary of First Foundation Inc. (First Foundation) a 20-year-old private financial firm offering integrated investment management, wealth planning, consulting, trust and banking services.

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Erik Mettala Joins Battelle as Cyber Chief Scientist

April 27, 2011

COLUMBUS, OH–(Marketwire – Apr 27, 2011) – Battelle has hired Erik G. Mettala, Ph.D., as Cyber Chief Scientist in the National Security Global Business Unit, Battelle announced today.

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In Many States, Pensions Gap Continues To Grow, Report Says

April 26, 2011

WASHINGTON (Lisa Lambert) – U.S. states are short $1.26 trillion in paying for public employee pensions and other retirement benefits, a gap that grew 26 percent in one year and will take many more years to wipe out, according to a report released on Tuesday. A total of 31 states had pensions that were underfunded in fiscal 2009, the latest year for which data is available, up from 22 states a year earlier, the Pew Center on the States reported. The financial crisis in 2008 crushed many pension funds’ investments, just as historic budget woes forced governments to cut contributions to those funds. The combination “made a serious problem even worse,” said Susan Urahn, the Pew Center’s managing director. In fiscal 2009, which for most states began in July 2008, states were short $660 billion for future pension payments and $604 billion for other retiree benefits, namely healthcare. Growing unfunded pension liabilities on top of still daunting state budget gaps are a top concern of Wall Street rating agencies and investors in the $2.9 trillion municipal bond market. Most states are legally bound to pay retirees benefits, and they must make up for any investment loss from their already depleted treasuries or by borrowing. Pensions are deemed “underfunded” when they are unable to pay at least 80 percent of liabilities. Preliminary data for fiscal 2010 shows that pension funding levels of 10 states deteriorated further, while just three registered increases, Pew found. “Overall, these results suggest that while states benefited from better returns in fiscal year 2010, the legacy of the financial crisis … will remain an issue for years to come,” Pew said in the report. Last year, Pew found states were short $1 trillion in fiscal 2008 on promises to retirees, using data that came from before the financial crisis. States typically assume an 8 percent annual return and their pension plans suffered a median 19.1 percent drop in their assets’ market value in fiscal 2009, Pew said. One critic said the lagging data does not reflect the improvement in current conditions. “Given where we are in time now, talking about 2009 numbers just isn’t useful. The world has changed in the last 18 months,” said Hank Kim, executive director of the National Conference of Public Employee Retirement Systems. “The market has come roaring back.” On Monday, Kim’s group released a survey of 216 public pension funds showing the average return over the last year was 13.5 percent. Illinois consistently has had the lowest pension funding level among states, one that worsened to 51 percent in fiscal 2009 from 54 percent in fiscal 2008, according to the Pew report. In fiscal 2010 and 2011, the state sold $7.16 billion of taxable bonds to raise money for its annual pension payments. A year ago, Governor Pat Quinn signed into law a pension reform measure reducing benefits for new state workers, which he said would save more than $200 billion over nearly 35 years. The U.S. Securities and Exchange Commission is looking into “communications” by the state regarding potential savings or reduced contributions to pensions resulting from the law. Five other states, including cash-strapped Rhode Island, have funding levels of less than 60 percent, according to Pew. Conversely, New York’s pension is 101 percent funded, followed by Wisconsin at 100 percent and Washington at 99 percent. States must increase their contributions when returns are low. From 2000, when the systems were well funded, to 2009 these payment requirements grew 152 percent, putting pressure on states to take dollars away from other spending areas. Of late, Republicans in the U.S. Congress have pressed states to assume investment return rates closer to 4 percent, which they consider “riskless.” Using assumptions that private pension plans rely on, which are linked to returns on corporate bonds of about 5.22 percent, Pew found the pension shortfall for states could be as much as $1.8 trillion. By relying on a rate based on a 30-year Treasury bond, Pew found the states’ shortfall could be $2.4 trillion. (Additional reporting by Karen Pierog in Chicago. Graphic by Stephen Culp; editing by Leslie Adler) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Minimum Wage Boost Wouldn’t Hurt Job Growth: Study

April 25, 2011

Raising the minimum wage wouldn’t cripple job growth and hurt businesses like some conservative groups have argued , according to a new study . To the contrary, it could pump money into the economy and reduce turnover in low-wage positions, the researchers found. The current federal minimum wage is $7.25, or about $15,000 a year for a full-time job. Until 2007, the minimum wage had been set at $5.15 for over 10 years. Seventeen states currently have a minimum wage set higher than the federal standard, and a number of states are considering giving their standards another boost. The food and retail industries often fight such hikes, arguing that higher wages discourage growth, particularly in down economies. Sylvia Allegretto , an economist at the University of California-Berkeley and the study’s lead author, believes those concerns are unfounded. “A lot of people say we can’t increase the minimum wage during recessions because it’ll have this big negative effect,” said Allegretto, whose study was published in the journal Industrial Relations . “We didn’t find that — in general, or when there were recessions.” Researchers, who focused specifically on teen employment, looked at every federal and state minimum-wage raise over the last twenty years, including during the recession from 2007 to 2009, and found that the effects of wage raises on job growth and unemployment didn’t change with the business cycle. Allegretto said a lot of the benefits of higher minimum wages tend to be overlooked — like higher morale and productivity, and less time spent searching for workers and training them. Advocates of a minimum-wage boost often argue that the extra income for workers functions a lot like unemployment benefits or food stamps, in that it’s money pumped immediately back into local businesses. Jen Kern, who runs the minimum wage campaign at the National Employment Law Project, says a wage hike “could provide a boost to families and the economy, putting money into the hands of people who have no choice but to spend it.” According to the Bureau of Labor Statistics , 1.8 million of the country’s 73 million hourly-paid workers were earning the federal minimum wage during 2010, with another 2.5 million earning even less than that. Minimum-wage earners tend to skew young, with workers under age 25 accounting for roughly half of those making the minimum wage or less. Kern says if the minimum wage had kept pace with inflation since it’s peak in the 1970’s it would now be over $10. A survey conducted last year by the Public Religion Research Institute found that roughly two-thirds of Americans supported raising the federal minimum wage to at least $10 per hour.

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Robert Auerbach: Bernanke’s Press Conferences Will Not Remedy the Fed’s Corrupt and Deceptive Public Records Policies

April 25, 2011

Chairman Ben Bernanke’s public press conferences are intended to open the nation’s central bank, the Federal Reserve, to needed public sunlight. Bernanke may well dodge any questions on Fed policies, the only policies the Fed has authority to alter. He will be eager to talk about fiscal and budget policy over which the Fed has no direct control except for Fed loans. Some of these loans were forced into public view by the recent Fed audit required under the 2010 Chris Dodd-Barney Frank Act. What is needed is a complete record of the discussions at the Fed meetings of the Federal Open Market Committee, FOMC (12 members), and its Board of Governors (7 governors when all seats are filled). These unelected officials determine the size of the nation’s money supply and the payment of billions of dollars of interest to private sector banks that currently (4/20/2011) hold $1.486 trillion in reserves at the Fed. Bernanke has said he may raise the rate of interest on these reserves, as he will be forced to do if market interest rates rise. The transcripts of the FOMC meetings should be published within six months, ending the practice of a five-year delay. The Fed should not destroy the original FOMC transcripts that were formerly sent to the National Archives and Records Administration after 30 years. The Fed does publish minutes of its FOMC meetings with about a month delay. The minutes are a poor and inaccurate substitute for transcripts. The minutes currently released were created by Fed Chairman Arthur Burns in 1976 as a substitute for the transcripts which the Fed publicly said would no longer be made. The 17-year lie ended in 1993. During a House Banking Committee Chairman Henry B. Gonzalez investigation the Fed was forced to show to me the 17 years of transcripts which they had kept secret, avoiding Freedom of Information requests. The transcripts were in an office around the corner from Greenspan’s office. Unlike the FOMC transcripts, the minutes contain no attributions of FOMC members’ views except on final recorded votes where all but an occasional few members display unanimity. The interpreters of the Fed’s minutes should read what Fed Chairman Burns said to his staff about padding the minutes and not giving the public too much information. Researching Burns’ papers at the Gerald R. Ford Presidential Library and Museum, I was able to obtain and include in my book his instructions to the Fed staff about the FOMC minutes. Bernanke’s press conferences will not replace the FOMC transcripts that establish individual accountability for the Fed officials who discuss and vote on important national policies. Bernanke may give some insight into his views but this can be misleading without the transcripts. There is a clear episode in the Greenspan Fed where public statements about monetary policy were completely different from what was said by the chairman at a number of the then secret FOMC meetings. As Bernanke surely knows, a Fed chairman can make a dangerous mistake at a press conference that dramatically affects equity markets and bank customers. This kind of information can be edited from the published FOMC transcripts in conjunction with professional archivists from the National Archives and Records Administration. When it came to public questioning of Fed chairmen, Greenspan was the master of garblements as I well learned from preparing questions for members of the Financial Services Committee to ask Fed Chairmen Arthur Burns, William Miller, Paul Volcker, and Alan Greenspan. Greenspan even told the FOMC (10/5/1993) members how to play the congressional committee members during the very month that the Fed officials were required to be witnesses at a Gonzalez hearing on Fed records: “… it would be quite easy to say: And by the way, this reminds me of an incident in 1936 in Sacramento or something like that.” Some members of the press may be reticent to ask pointed questions on Fed polices and operations because of the need for access to the Fed chairman and to avoid retaliation. The Fed has a history of retaliation to members of the press. My book includes a picture of an internal memo about the treatment of a member of the press, Nicholas von Hoffman who was a columnist at the Washington Post and had segments on 60 Minutes . A Fed official sent an internal memo (12/6/1974) to Fed Chairman Arthur Burns “concerning our conversation yesterday about Nicholas von Hoffman. Bart Rowen [Hobart Rowen, former financial writer at the Washington Post ] thinks it would be an excellent idea for you to discuss the matter with Katherine Graham [Katharine Graham]“, the owner of the Post, apparently to get Hoffman fired or warned. Although this memo may not have played a part in Hoffman leaving the Post , the following warning about the Post editor is an interesting tribute to free journalism. The Fed official warned Burns to be careful of the editor, Ben Bradlee: “Additionally, Ben Bradlee’s reaction to an approach of this nature might be: “Washington’s officialdom is squirming; keep up the good work.”

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A Year Later, Greece Still Struggles

April 23, 2011

ATHENS, Greece — It’s an anniversary few are celebrating. A year ago Saturday, with its faltering economy days away from bankruptcy, Greece ended months of speculation and requested bailout loans. Prime Minister George Papandreou chose the remote island of Kastelorizo, and its tranquil seaside backdrop, to announce the “urgent national need to formally ask our partners to mobilize the support mechanism.” International solidarity, he said in a televised address, would “send a strong signal to markets that the European Union is not to be toyed with, and it will protect our common interests and our common currency.” Twelve months on, there’s little indication that that signal has been received. Greek bonds have been axed to junk status by the three major ratings agencies. And sky-high borrowing costs have roughly doubled, along with the price of insuring debt. Greece would currently have to pay out 15-percent interest on a 10-year bond, compared with the German benchmark of 3.27 percent. At least 160,000 more people have lost their jobs since April 23, 2010, with government austerity accelerating layoffs and business failures. And the national debt is forecast to exceed the emergency level of 150 percent of gross domestic product in 2011. “At the moment we have a very, very difficult situation which requires a rapid response and tough measures,” economic analyst Vangelis Agapitos said. “Of course the markets also realize that there is political fatigue and political cowardice to fully take the tough measures that are necessary.” Despite daily government denials, 47 percent of Greeks now believe the country will have to restructure its debt, while just 24 percent think it won’t be necessary, according to an opinion poll due to be published Sunday. The survey by the Alco research company for the weekly Proto Thema newspaper used data from 1,000 people interviewed April 15-19. No margin of error was quoted but it would normally be around 3 percentage points for a survey of that size. Support for Papandreou’s Socialists has sunk from 34.7 percent to 21.5 percent in the past 15 months, the poll found, though he still maintains a slim lead over rival conservatives. After Papandreou’s call for help from Kastelorizo, a rescue deal was put together in nine days, just ahead of a critical refinancing deadline. Eurozone countries and the International Monetary Fund agreed to lend Greece euro110 billion – equivalent to nearly half the country’s annual output – through 2013. In return for the bailout loans, Papandreou’s Socialist government slashed euro14 billion off the budget deficit in 2010 using salary and pension cuts and a raft of unpopular measures aimed at reducing waste in the public sector and protective market rules. His government has promised debt inspectors that it will start generating a primary surplus in 2012, but fiscal targets have begun slipping this year due to the ongoing recession. And the sharp rise in public discontent is in growing contrast to calls by Greece’s central bank and analysts for bolder cost-cutting measures. “The (national) debt is 150 percent of GDP and rising. Had it been half that amount, maybe these (austerity) measures would suffice,” Agapitos said. “The number of measures is unprecedented. So in a way, Greece is proving that the effort is there. However, the expectations are much higher and keep rising, because of the mess that Greece is in.” Papandreou is unlikely to get much respite this Easter, with school and hospital closures planned this year and a massive privatization program prompting a general strike on May 11. Many of his countrymen, however, are looking forward to a break from the national gloom this holiday weekend. “I just can’t watch the news anymore – it’s so depressing,” said window cleaner Stratis Dervendlis, who is planning a series of day-trips in and around Athens on his days off. “The bad news is constant. It’s like reminding someone in hospital that they’re sick all the time. Instead, they should be giving us courage and telling us how we’re going to get better.” ___ AP writer Elena Becatoros contributed.

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Recent College Graduates Not Only Move Back Home, But Stay There

April 22, 2011

NEW YORK — Ashley Moore never planned on moving back in with her parents. Nearly a year after graduating from college, Moore, 22, also never expected to still be waking up in her old twin bed every morning. “It’s been difficult because not only was I on my own, I was really far away,” explains Moore, a St. Louis, Mo., native who graduated from Pace University in New York City. At one point, she spent an entire year away. “What I miss most is my freedom and having my own space.” We spoke yesterday via Skype. You can see Moore describe what it’s been like to move back home: Like many 20-somethings, Moore is experiencing what it’s like to not only move back home, but stay there . Despite a recent report released by the National Association of Colleges and Employers, which predicts that 2011 graduates may enter into an improved job market, many remain skeptical. Andrew Sum, an economist at Northeastern University, concedes that while “it’s better to be plus than minus, we’ve still got a really long way to go until we restore things back to the way they used to be.” Sum calls it the war against the young. Specifically, he’s seen a record number of college graduates forced to move home. Using data from the U.S. Bureau of Labor Statistics, Sum reports that 12.8 million college graduates under the age of 30 are either unemployed, working part-time or working at a job that doesn’t require a college degree. Such jobs can make it difficult for young people to establish a steady stream of income — to get the money required to not only move out of their parents’ house, but stay out. Further, Sum finds that young adults without a college degree have been pushed out of the labor market entirely and are finding work at a lower rate than anytime since the end of World War II. “The kids not working today will have a difficult time working tomorrow,” concludes Sum. “The evidence is overwhelming.” Since moving back home last June, Moore has been unsuccessful in securing a full-time job . She works part-time as a teaching assistant at a nearby pre-school. Her mother is an in vitro technician; her father owns a small carpentry business. For others forced into a similar situation, Moore stresses that communication is key to making the living arrangement work as best it can. “Your parents might regress and start treating you like you’re back in high school because, well, you’re back in their house.” Moore also advises to save, not spend. “Just because you’re not paying rent, doesn’t mean it’s a good time to go shopping.” The financial burden of going to college has always been her own. Moore is carrying $45,000 in undergraduate student loans and another $5,000 of debt split between two credit cards. Each month, she puts $250 of her part-time paycheck toward paying each of them down. Moore wants to attend law school and someday run for political office. In the meantime, she is keen on first getting her own apartment. Recently, Moore set a new deadline for herself: Come August, her goal is to finally be out from under her parents’ roof. “I know they love me, but it’s time for me to go,” says Moore. “I just hope that I can.”

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Jerry Jasinowski: The S&P Wakeup Call

April 22, 2011

Standard & Poor’s decision to change the nation’s long-term credit outlook from stable to negative should be seen as a wakeup call to Congress and the White House that we simply must find a credible solution to the fiscal crisis, and soon. This is not strictly a domestic issue. Our government’s credit worthiness underpins the world economy. Foreign governments invest trillions in U.S. debt instruments because they believe our credit is good. The mere possibility that Congress will not extend the debt limit is enough to send shivers throughout the world financial system. The prospect of losing our credit worthiness in the not too distant future is even more disconcerting. Our ability to borrow vast sums of money at reasonable rates — and the acceptance of the U.S. dollar as the world currency of choice — confers upon us innumerable advantages. If we let these advantages slip away, the cost of credit will be higher, economic growth will be slower and our standard of living will be reduced. The reason for S&P’s change in outlook is not hard to understand. Our government is spending much more money than it takes in. Roughly 40 cents of every dollar that Uncle Sam spends is borrowed. We have had back-to-back deficits of $1.5 trillion and have almost reached our self-imposed debt limit. In the absence of a credible debt reduction plan, Congress may not be able to summon enough votes to raise the debt limit. If that happens, no one will need S&P to question our credit worthiness. It will be gone with the wind. The budget plan offered by Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, was politically bold in that it proposed real reductions in entitlement spending. There is no question that is where the real problem is. Spending as a percentage of GDP has grown from 19 percent in 2000 to 25 percent of GDP in 2010, and almost all of that was due to the growth of Social Security, Medicare, Medicaid and Defense. Any viable solution will of course include increased revenues, but there is not enough money in the world to plug that hole. Spending is the central problem that must be dealt with. Two bi-partisan deficit commissions, including the one created by President Obama, also made serious recommendations to reduce the deficit. One can quibble about specifics, but they did put everything on the table. Instead of criticizing Ryan, President Obama should focus on the recommendations of his own deficit commission. We need leadership to define the tough decisions that must be made and bring us all together to do what must be done. We urge the President to provide the leadership the country so urgently needs. Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. You can quote from this with attribution. Let me know if you want to talk to Jerry.

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SLICK OPERATOR: BP Spent $2 Million Lobbying On Offshore Drilling, Spill Liability, Other Regulations In First Quarter Of 2011

April 21, 2011

NEW YORK — On the first anniversary of the Deepwater Horizon oil spill that killed 11 workers, oil giant BP revealed via mandatory disclosure forms that it spent at least $2 million on federal lobbying in the first quarter of 2011 on a wide range of issues, from advocating for an end to the offshore drilling moratorium imposed by President Barack Obama in the wake of the spill to caps on its contributions to the restoration of the Gulf Coast. BP tapped five well-connected lobbying firms — Alpine Group; Fierce, Isakowitz & Blalock; the Podesta Group; Stuntz Davis & Staffier; and the Duberstein Group — to ply their influence on Capitol Hill and at federal agencies in the wake of the four-month-long spill, which devastated the environment and leaked more than 205 million gallons of oil into the Gulf of Mexico. Executive-branch agencies targeted by the beleaguered oil behemoth, which faces a criminal probe by the Justice Department, included the Environmental Protection Agency and the State and Treasury departments. In addition to the drilling moratorium and coastal restoration contributions, BP lobbied heavily regarding implementation of the presidential oil spill commission’s recommendations , which included stricter oversight of offshore drilling. BP also lobbied Congress on the Put the Gulf Back to Work Act, the legislation passed last week by the House Natural Resources Committee under the leadership of chairman Doc Hastings (R-Wash.) which speeds up the approval process for new drilling permits. That bill prompted Interior Secretary Ken Salazar to accuse House Republicans of having “amnesia” about the oil spill. Among other issues of interest to BP: the Restoring American Offshore Leasing Now Act, which requires Salazar to conduct certain offshore oil and gas lease sales; financial reform legislation and proposed rules; and liability protection for producing and retailing motor fuel that contains 15 percent ethanol. In addition, the oil company lobbied on several proposed EPA rules relating to greenhouse gas emissions and ambient air quality standards, and lobbied Congress on energy tax issues, corporate tax reform and the export of Caspian gas into European markets. Earlier this week, it was revealed that BP broke its self-imposed moratorium on political donations in the wake of the spill. The oil giant gave $5,000 contributions to House Speaker John Boehner (R-Ohio), House Majority Whip Kevin McCarthy (R-Calif.), and House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), among others. On March 1, BP’s political action committee also doled out $5,000 to both the National Republican Congressional Committee and the National Republican Senatorial Committee, according to the Center for Responsive Politics .

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Selloffs, Tax Credits Shift Makeup of Top Apartment Owners

April 20, 2011

The apartment industry staged a strong recovery from the Great Recession last year, and that recovery is reflected in the 2011 NMHC 50, the National Multi Housing Council’s annual ranking of the 50 largest apartment owners and 50 largest managers. The NMHC 50 documents the apartment industry’s evolution over time and helps identify trends within the sector and up-and-coming new players. “The recovery also spurred a rebound in apartment prices…

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BP Greases Palms: Spill’s One-Year Anniversary Marked With Campaign Contributions

April 19, 2011

WASHINGTON — A year after BP’s catastrophic Gulf oil spill, the petroleum giant is easing its way back into the political money race — and the stain of shame candidates originally felt about accepting the company’s contributions appears to have evaporated. The gas and oil giant’s North America Political Action Committee filed its latest report with the Federal Election Commission Tuesday, which revealed $29,000 doled out to federal campaigns on its behalf. These figures mark the first contributions BP made that were not returned by federal office candidates since its drilling platform exploded on April 20, 2010, killing 11 people. “BP’s political action committee had gone completely off the radar for the past year,” noted Dave Levinthal of the Center for Responsive Politics. “It appears they’re back in the political game.” For many years before the spill, BP had been a “heavy hitter” by CRP’s standards, Levinthal said. The company regularly gave more than $200,000 to candidates each year, spreading the wealth to both Democrats and Republicans. But BP seems to be showing more of a partisan tilt upon its re-entry into the money game. “Although they were donors to both Democrats and Republicans before, their initial foray back into the political fray is targeted towards Republicans,” Levinthal said. House Speaker John Boehner (R-Ohio), House Majority Whip Kevin McCarthy (R-Calif.), Energy and Commerce Committee Chairman Fred Upton (R-Mich.), the National Republican Senatorial Committee and the National Republican Congressional Committee each received $5,000 from BP last month. Indiana Democratic Rep. Pete Visclosky got $3,000, and Ways and Means Committee Chairman Dave Camp (R-Mich.) bagged $1,000. Campaigns that accepted the money did so without blushing. “Our employee PAC contributions are a matter of public record and speak for themselves,” the company said in a statement. “From day one, Speaker Boehner has been clear in his position that BP should be accountable for every dime of the Gulf cleanup,” said Boehner campaign spokesman Cory Fritz. “We appreciate the support of all of our donors,” said the NRSC’s Brian Walsh. “Of course when it comes to BP, every Republican is still playing catch-up to President Obama, who is the largest recipient of BP PAC and individual money over the past 20 years,” said Walsh. Obama netted $77,000 in BP-related contributions for his senatorial and presidential campaigns combined, mostly from individual employees. The BP PAC gave him $1,000 during his senate run in 2004, and his White House campaign took no PAC money. The NRSC’s equivalent, the Democratic Senatorial Campaign Committee, received money from BP in the past, but none since the spill. While campaigns starting to accept donations from the oil giant again, it’s too soon to tell how voters feel about it. “The public and the candidates themselves will ultimately be the ones to determine whether enough time has passed for BP to emerge from political purgatory,” Levinthal said.

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Altitude Digital Partners Names New COO; Appoints Industry Veterans to Lead Sales & Ad Operations Teams

April 18, 2011

Devin Yeager Promoted to COO; Don Jankowski Named Director of National Sales; Kelly McMahon Darnall Named Ad Operations Director

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America’s Richest Taxpayers See Federal Taxes Dramatically Drop

April 17, 2011

WASHINGTON — As millions of procrastinators scramble to meet Monday’s tax filing deadline, ponder this: The super rich pay a lot less taxes than they did a couple of decades ago, and nearly half of U.S. households pay no income taxes at all. The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992. Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent. The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation’s tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent. There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank. “It’s the fact that we are using the tax code both to collect revenue, which is its primary purpose, and to deliver these spending benefits that we run into the situation where so many people are paying no taxes,” said Roberton Williams, a senior fellow at the center, which generated the estimate of people who pay no income taxes. The sheer volume of credits, deductions and exemptions has both Democrats and Republicans calling for tax laws to be overhauled. House Republicans want to eliminate breaks to pay for lower overall rates, reducing the top tax rate from 35 percent to 25 percent. Republicans oppose raising taxes, but they argue that a more efficient tax code would increase economic activity, generating additional tax revenue. President Barack Obama said last week he wants to do away with tax breaks to lower the rates and to reduce government borrowing. Obama’s proposal would result in $1 trillion in tax increases over the next 12 years. Neither proposal included many details, putting off hard choices about which tax breaks to eliminate. In all, the tax code is filled with a total of $1.1 trillion in credits, deductions and exemptions, an average of about $8,000 per taxpayer, according to an analysis by the National Taxpayer Advocate, an independent watchdog within the IRS. More than half of the nation’s tax revenue came from the top 10 percent of earners in 2007. More than 44 percent came from the top 5 percent. Still, the wealthy have access to much more lucrative tax breaks than people with lower incomes. Obama wants the wealthy to pay so “the amount of taxes you pay isn’t determined by what kind of accountant you can afford.” Eric Schoenberg says to sign him up for paying higher taxes. Schoenberg, who inherited money and has a healthy portfolio from his days as an investment banker, has joined a group of other wealthy Americans called United for a Fair Economy. Their goal: Raise taxes on rich people like themselves. Shoenberg, who now teaches a business class at Columbia University, said his income is usually “north of half a million a year.” But 2009 was a bad year for investments, so his income dropped to a little over $200,000. His federal income tax bill was a little more than $2,000. “I simply point out to people, `Do you think this is reasonable, that somebody in my circumstances should only be paying 1 percent of their income in tax?’” Schoenberg said. Sen. Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, said he has a solution for rich people who want to pay more in taxes: Write a check to the IRS. There’s nothing stopping you. “There’s still time before the filing deadline for them to give Uncle Sam some more money,” Hatch said. Schoenberg said Hatch’s suggestion misses the point. “This voluntary idea clearly represents a mindset that basically pretends there’s no such things as collective goods that we produce,” Schoenberg said. “Are you going to let people volunteer to build the road system? Are you going to let them volunteer to pay for education?” The law is packed with tax breaks that help narrow special interests. But many of the biggest tax breaks benefit millions of American families at just about every income level, making them difficult for politicians to touch. The vast majority of those who escape federal income taxes have low and medium incomes, and most of them pay other taxes, including Social Security and Medicare taxes, property taxes and retail sales taxes. The share of people paying no federal income tax has dropped slightly the past two years. It was 47 percent for 2009. The main difference for 2010 was the expiration of a tax break that exempted the first $2,400 of unemployment benefits from taxation, Williams said. In 2009, nearly 35 million taxpayers got a tax break for paying interest on their home mortgages, and nearly 36 million taxpayers took the $1,000-per-child tax credit. About 41 million households reduced their federal income taxes by deducting state and local income and sales taxes from their taxable income. About 36 million families cut their taxes by nearly $35 billion by deducting charitable donations, and 28 million taxpayers saved a total of $24 billion because their income from Social Security and railroad pensions was untaxed. “As a matter of policy, there would be a lot of ways to save money and actually make these things work better,” said Leonard Burman, a public affairs professor at Syracuse University. “As a matter of politics, it’s really, really difficult.” ___ Online: Tax Policy Center: http://www.taxpolicycenter.org National Taxpayer Advocate: http://www.irs.gov/advocate United for a Fair Economy: http://www.faireconomy.org

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CoStar’s People of Note (April 9-16)

April 16, 2011

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

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Mortgage Debt Relief For Distressed Homeowners Won’t Hurt Big Banks, IMF Says

April 15, 2011

NEW YORK — A broad mortgage debt-relief program for distressed homeowners would not significantly impact the nation’s four biggest banks, according to a report released this week by the International Monetary Fund. Bank of America, JPMorgan Chase, Citigroup and Wells Fargo have enough money to withstand the resulting losses, IMF economists projected in their report . The findings cast doubt on the notion that a broad-based program to reduce troubled homeowners’ mortgage debt would hurt the nation’s financial system. If the four lenders established a year-and-a-half long program to reduce debt on first mortgages by 15 percent for borrowers at risk of foreclosure, and also worked to lower loan balances by 30 percent until 2015 for seriously-delinquent borrowers and those in foreclosure, they’d face little consequence, the IMF said. “Our stress tests highlight the capital strength of U.S. banks,” the organization said in its report, noting the lenders’ ability to manage “even under a severe shock.” State attorneys general and some federal agencies are seeking to penalize the nation’s five biggest banks for abusing homeowners and breaking federal rules and state laws during the foreclosure process. Officials are pursuing as much as $30 billion in fines. Federal bank regulators at the Office of the Comptroller of the Currency object to those efforts, instead pursuing modest fines and a redesign of how mortgage firms treat borrowers to ensure abuses don’t occur going forward. Some Republicans in Congress have argued that a broad-based mortgage relief program would hurt banks’ balance sheets and impede lending. The costs associated with a widespread principal reduction effort — which would impact millions of homeowners — as forecast by the IMF is significantly greater than what is currently under discussion by state and federal officials in the foreclosure abuse probes. The nation’s five largest mortgage firms have saved more than $20 billion since the housing crisis began in 2007 by taking shortcuts in processing troubled borrowers’ home loans, according to a confidential presentation prepared for state attorneys general by the nascent consumer bureau inside the Treasury Department and obtained by The Huffington Post . The report, prepared by the Bureau of Consumer Financial Protection, suggests the $20 billion figure should be used as a starting point in settlement discussions with the targeted firms. Many more billions would likely have to be levied as penalties to discourage the firms from taking a similar approach in the future and compensate homeowners for abuses, including reducing distressed borrowers’ loan balances, some officials have argued. The IMF’s projections came as part of a report that touched on the problems afflicting the nation’s housing market. Purchases of new U.S. homes dropped in February to the slowest pace on record, according to the Commerce Department. Prices declined to the lowest level since 2003, according to the National Association of Realtors. About 6.9 million homeowners were either delinquent or in foreclosure proceedings in February, according to Lender Processing Services, a Florida-based data provider. More than 2.8 million homes received a foreclosure filing in 2009, and nearly 2.9 million residences received a foreclosure filing last year, according to RealtyTrac, a California-based data provider. Government programs designed to reduce monthly mortgage payments — like the Obama administration’s signature effort, the Home Affordable Modification Program — have had limited success. Industry programs to mitigate foreclosures have had a similarly lackluster result. “The primary shortcoming has been the inability to induce the payment reductions needed to address borrowers’ high-debt profiles and/or the principal reductions to address the large negative equity position of many homeowners,” the IMF said in its report. Nearly a quarter of homeowners with a mortgage owe more on that debt than their homes are worth, according to CoreLogic, another real estate data provider. Underwater homeowners collectively owe $751 billion more than their homes are worth. “As a result, modified loans have had high redefault rates, slowing homeowners’ efforts to de-leverage and restore their credit scores and lengthening the foreclosure process,” the IMF wrote in its report. The average borrower in foreclosure has been delinquent for 537 days before eviction, up from 319 days in January 2009, according to LPS. “These considerations suggest that more structural policies, such as renegotiation or some form of debt reduction — including writedowns of mortgage principal by banks — may be needed,” the IMF wrote in its report. The international organization said its analysis “suggests that banks in the United States have room to take such measures, which could help relieve some of the problems in residential real estate markets.” Representatives from 10 state attorneys general offices, along with officials from the Justice Department and the Department of Housing and Urban Development, met with banks again this week, the second time they’ve discussed the ongoing investigation with bank representatives, Associate U.S. Attorney General Tom Perrelli said on a conference call with reporters on Wednesday. A settlement that includes reducing distressed homeowners’ mortgage balances is still on the table, officials said, despite banks’ objections.

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Video: Urban League’s Morial Says Ryan Budget Plan Is Anti-Jobs

April 15, 2011

April 15 (Bloomberg) — Marc Morial, president and chief executive officer of the National Urban League, talks about House Budget Committee Chairman Paul Ryan’s budget proposal. The House today passed the measure that would cut U.S. spending by more than $6 trillion over a decade and privatize Medicare. Morial speaks with Mark Crumpton on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

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Flavia Colgan: The Cost of Construction

April 15, 2011

I have come on as a producer of a project I feel very strongly about and I know this community will as well. It is about worker safety and the unnecessary deaths that occur every day across America and what we can do to change it. I have teamed up with Cavelight Films to finish Cost of Construction . The film uncovers the national scandal surrounding a series of controversial deaths that happened on the most expensive commercial construction project in United States history — all happening on the Las Vegas Strip, called CityCenter. The film investigates a pattern of hazardous deregulations, overturned violations, and dangerous negligence at the highest corporate and governmental levels exposing a national safety system in crisis. This story is untold and effects many Americans. We have been working on the documentary for three years and it is almost done. We are just looking for some finishing funds to update, get the interviews folks were to scared to give a few years back, and make sure it can look as great and be as powerful as the story deserves. We already have interest in terms of distribution and placement so the film will be seen. Please check out our kick-starter page . An average of 16 workers continue to die each day in America. In the wake of the BP oil rig explosion and the high profile 2008 crane accidents in New York City, this production comes at a critical time. Currently in production, the film features Pulitzer Prize winning journalist Alexandra Berzon, Congressman and former Chair of the House Committee on Education and Labor George Miller, various national and local officials, union leaders as well as families of deceased construction workers. The Story On June 26, 2006, cameras roll as the MGM Mirage Corporation demolished one of the oldest hotels on the Las Vegas Strip to make way for the largest and most innovative project ever attempted called CityCenter. Six skyscrapers designed by world-renowned architects comprised of cutting-edge hotels, casinos, restaurants, spas and luxury condos, CityCenter is redefining the Las Vegas Strip: 9.2 Billion dollars spent. 6,000 rooms created. 65 acres of land developed. But being the biggest comes at a price: 6 construction workers dead. 1000 injured. 1 national safety system in crisis. Why Now: Have we learned our lesson? Cost of Construction’s in-depth look at the issues surrounding the CityCenter project has implications that reach beyond the construction industry. At its core, this is a story about the complexity of corporate and personal responsibility during an era of massive government deregulation. The construction fatalities at CityCenter were not isolated events. From the recent wave of deadly crane accidents in New York City to the devastating oil spill in the Gulf, it is clear that our national safety system is in crisis. Cost of Construction will lead us to present day and examine what President Obama’s administration is doing to ensure worker safety. Are President Obama’s new Labor Department and OSHA appointees a step in the right direction? What new laws and regulations are being enacted? Are the current state and federal regulators equipped to manage the next CityCenter-sized project? Or are we in for another heartbreaking lesson in the true Cost of Construction? It is important for all OHS professionals to watch OHS regulation and programs that operate and develop in the United States for the spread of US culture is, in many countries, introducing a perspective on the law that increasingly is out of sync with the laws and values in one’s local country. It could be argued that Lord Young’s recent review of OHS and the “compensation culture” in the UK is an example of the US cultural spread. Please help us bring this story to the nation and be a voice for those who should have been heard for years. These deaths do not need to happen and those responsible should be called to task. Our laws must change to save lives and do what is right! Thank you in advance for anything you can do.

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Gemma Godfrey: Libya — Oil, Water, Gold Are the Real Issues

April 15, 2011

The oil price has skyrocketed over the past few months. The finger has been pointed at the troubles in Libya and claims of supply disruptions have dominated the press. However, are these claims grounded in fact or are we watching yet another sentiment driven bubble? What are the issues we should be aware of and how should we best invest in the face of such turmoil? Expectations are often more damaging than reality Libya’s contribution to global oil production is in stark contrast to the column inches it has been awarded in the press. As quoted by the National Journal, the country produces around 2% of the world’s oil. OPEC (Organization of the Petroleum Exporting Countries) has claimed that they have managed to “accommodate most of the shortfall” and instead attribute the rise in the oil price to fears of a shortage rather than any genuine supply issues . Oil reached a 2.5 year high last Friday . This is against a flattish demand side dynamic. Paris-based International Energy Agency and the U.S. government’s Energy Information Administration left fuel demand growth for this year unchanged and OPEC only raised their forecast by a relatively small amount ( to 87.9m b/d from 87.8m b/d ) . EU Sanction: A further boost for the oil bulls On Tuesday, the EU extended sanctions against Libya to include energy companies, freezing assets in an attempt to force leader Muammar Gaddafi to relinquish power. Phrased another way, by the German Foreign Minister, this is a ” de facto embargo on oil and gas ” . Approximately 85% of exports are for delivery to Europe and importers will now have the task of finding potentially more distant and/or expensive alternative sources. The pent-up downside risk Nevertheless, many are not paying attention to the downside risk to the oil price as we move forward. Libya has Africa’s largest proven oil reserves but 75% of the country’s petrol needs are met with imports because of limited refinery capacity . Any improvement on this front, if a regime change is eventually secured, could therefore significantly reduce imports and boost global supplies. Is water the next oil? In addition to oil reserves, one asset belonging to the Libyan government which is rarely mentioned is an ability to bring water to the desert. With the largest and most expensive irrigation project in history, the $33bn GMMR (Great Man-Made River) project, Libya is able to provide 70% of the population with water for drinking and irrigation . The United Nations estimates that by 2050 more than two billion people in 48 countries will lack sufficient water , making this an enviable asset indeed . How can the US pay for the Libya intervention? It is interesting to note, with all the claims being made that the intervention is oil motivated that, Libya has another form of ‘liquidity’. According to the International Monetary Fund (IMF), the country’s central bank has nearly 144 tonnes of gold in its vaults … How to best invest: Retain context The tide is starting to turn, Goldman Sachs has called the top for commodities in the near-term and oil fell by 4.5% on Monday and Tuesday alone (Source Bloomberg) . With this amount of volatility, short term noise can sometimes overwhelm. For a long term investor, looking for steady and stable returns, an ability to cut through the sentiment (whilst acknowledging it’s importance in driving returns in the shorter term) is valuable. Often many factors are at play and it will ‘pay dividends’ to be well-informed as they become wider known and priced in by the markets. Knowledge may be king but preparation will come up trumps .

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LCS(TM) Financial Names New Senior Vice President of National Sales

April 14, 2011

CENTENNIAL, CO–(Marketwire – April 14, 2011) – LCST Financial Services Corporation (LCS Financial), a leading nationwide provider of receivables management for mortgage, student loan and auto lenders, announced today that Jordan Stastny has joined the company as Senior Vice President of National Sales. In this role, Mr. Stastny will develop and execute sales strategies to grow all lines of business within the company.

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Pace of Bank Failures Slows, But Distressed CRE Still Taking its Toll

April 13, 2011

The FDIC sold two failed banks in the first such action so far this month. City National Bank in Los Angeles acquired substantially all of the assets and deposits of Las Vegas-based Nevada Commerce Bank; and Heartland Bank and Trust Co. in Bloomington, IL, acquired Western Springs National Bank and Trust in Western Springs, IL. Only three banks failed in March, making the recent pace of closures the slowest since December 2008, when three banks…

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Pace of Bank Failures Slows, But Distressed CRE Still Taking its Toll

April 13, 2011

The FDIC sold two failed banks in the first such action so far this month. City National Bank in Los Angeles acquired substantially all of the assets and deposits of Las Vegas-based Nevada Commerce Bank; and Heartland Bank and Trust Co. in Bloomington, IL, acquired Western Springs National Bank and Trust in Western Springs, IL. Only three banks failed in March, making the recent pace of closures the slowest since December 2008, when three banks…

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Mark Roozen Joins STACK Media as Senior Content Manager

April 11, 2011

NEW YORK, NY–(Marketwire – April 11, 2011) – Mark Roozen, an experienced strength and conditioning specialist, owner and founder of Performance Edge Training Systems (Colorado Springs), and former Director of Certification and member of the Board of Directors of the National Strength and Conditioning Association (NSCA), has joined STACK Media, the nation’s leading producer and distributor of sports training, performance, and lifestyle content for active sports participants. As STACK’s Senior Content Manager, Roozen will be responsible for developing editorial strategies and content concepts to serve the needs of athletes, coaches and others concerned with safe and effective athletic training.

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Video: El-Gamaty Says NATO, Rebel Communications Broke Down

April 8, 2011

April 8 (Bloomberg) – Guma El-Gamaty, U.K. representative of the Libyan Transitional National Council, talks about the fighting in Libya. He speaks with Maryam Nemazee on Bloomberg Television’s “Last Word.”

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Government Shutdown Could Hit Federal Workers In Wallet

April 8, 2011

WASHINGTON — Last time there was a government shutdown, furloughed federal workers were able to recover their lost pay. They may not be so lucky this time. Congress would have to decide whether an estimated 800,000 government employees could recoup back wages if they are forced to stay out of work. When workers were sidelined during the most recent partial shutdowns of 1995 and 1996, Congress quickly voted to make them whole. But that was during flush economic times and before tea party conservatives wielded influence over GOP lawmakers, seeking smaller government and deeper spending cuts. “It was a very different economic time back then, and a very different Congress,” said Colleen Kelley, president of the National Treasury Employees Union. “I think there is such a vocalized hostility by too many in Congress today against the federal work force and federal agencies.” That warning was echoed by Rep. Jim Moran, D-Va., who predicts it’s “highly unlikely” government workers would be reimbursed by Congress this time. “There are going to be disruptions to our economy all the way down the line,” said Moran, whose suburban Washington district includes thousands of federal employees. At least one House Republican dismissed those fears. Rep. Dennis Ross, R-Fla., said he has no interest in penalizing federal workers and would vote to reimburse lost pay. “In my opinion, federal workers, their children and families, should not suffer because (Senate Majority Leader) Harry Reid and President Barack Obama think a shutdown is good politics,” said Ross, who considers himself a tea party Republican. A spokesman for House Speaker John Boehner, R-Ohio, did not respond to a request for comment. The disparate effects of a shutdown, depending on where government workers are employed, have drawn criticism. By law, Obama and lawmakers will continue to draw salaries even if the government shuts down. Sen. Joe Manchin, D-W.Va., said lawmakers shouldn’t be paid if the impasse between Obama and Congress forces a shutdown. He’s vowed to donate his salary to charity or give it back to the U.S. Treasury. And Sen. Sherrod Brown, D-Ohio, said he would not accept his federal salary during a shutdown. According to the federal Office of Professional Management, nearly all government employees will be furloughed in a shutdown, except for certain workers who conduct emergency services or perform other work deemed essential. Those employees who keep working under an exception would recover pay for hours worked once Congress passes – and the president signs – new legislation to fund the government. But Congress would have to make a separate determination whether nonessential workers could get back pay. After the 1995 and 1996 shutdowns ended, Congress approved back pay so quickly that federal employees never missed a paycheck. The shutdown, in November 1995, lasted six days and furloughed about 800,000 federal employees. The next, a partial shutdown, lasted three weeks, from mid-December 1995 to early January 1996, and furloughed about 240,000 workers. Thousands of state government employees have been furloughed without pay in recent years to help ease state budget woes. In California, for example, Gov. Arnold Schwarzenegger ordered state workers to take two unpaid days off each month in 2009 and later extended the furloughs to three days a month. Why shouldn’t government workers take a similar hit? Kelley, the federal employee union president, says federal workers are simply bystanders caught in the middle of a political dispute, not part of a calculated plan to save money. “This is not about a budget that is attempting to cut costs through furloughs,” she said. “This is a situation where the parties cannot come to an agreement on a budget. Rather than stepping up and doing their jobs, they are just choosing to do nothing and shutting the government down.”

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CoStar’s People of Note (April 2-8)

April 8, 2011

This week’s People of Note includes the following markets: Cincinnati, Indianapolis, Long Island, Nashville, National, New York City, Northern New Jersey, Seattle and Washington, DC. WASHINGTON, DC Berk-Millard Leasing Team Joins Avison Young in NoVa Avison Young recruited top commercial real estate veterans Peter Berk, far left, and Dave Millard, left, as principals in the firm’s Tysons Corner, VA, office. The leasing team, formerly of Cushman

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On The National Mall, Worries Over Lost Business

April 7, 2011

WASHINGTON — As many speculate the economic implications of a government shutdown, here in the capital, jitters are felt by one economy in particular–the one that trades in hot dogs, snow cones, and CIA t-shirts down on the National Mall. Washington’s vendors, it turns out, are feeling pretty “non-essential” amidst all the politicking. “If they shut down, there’s no business,” said Abdul Bangura, who shuttles a van loaded with ice cream up and down the Mall each day. “Nobody’s gonna come down here.” A federal shutdown would include much of the National Park Service, which runs the Mall and its monuments, as well as the Smithsonian’s museum network, which draws 3.8 million tourists to the area in April alone, according to the Washington Post . If the White House and Congressional leaders can’t hammer out an agreement, the vendors and other small businesses that cluster around the Mall stand to be hit with a double whammy. No tourists and no federal workers, the two demographics they rely on most. “Ninety-nine percent of my customers work here,” said Tony, pointing to the Environmental Protection Agency offices across the street from his hot dog stand. Tony’s been manning a cart in this spot for a decade and knows many of the EPA employees personally. He explained moving his cart to another part of town isn’t an option; it would violate D.C. vending rules. Tony doesn’t normally follow politics on the Hill, but the standoff has certainly caught his attention. “It will affect my life,” he said. In the event of a shutdown, he said he would simply stay home rather than waste money on gas. Downtown tour companies stand to take a hit, too. Over at the Bike and Roll kiosk, a bicycle rental company, manager Jeff Holliday said higher-ups had convened to discuss what they might do differently in the event of a shutdown. He said he’d gotten a call from a tourist who said she’d already changed her vacation plans because of the shutdown possibility. Rather than head to D.C., she was visiting– gasp –Colonial Williamsburg. Holliday estimated that 75 percent of Bike and Roll’s rentals go to tourists, many of whom may not be there next week. “But we’ll figure it out,” he added optimistically. Dave Cohen, general manager at Historic Tours of America , said his company’s Washington vessels, the Old Town Trolley and the D.C. Duck boats, would continue their amphibious tours of downtown Washington. But he’s wondering if the tourists will still come if they can’t hop on and off and see the monuments and museums along the Mall like normal. “I don’t think it’s sunk in around the country yet,” Cohen said, explaining they hadn’t received any cancellations. “Naturally, we’re concerned. I’m just hoping it doesn’t happen.” Suong Xuan Le, 71, has been hawking hot dogs and egg rolls around town ten hours a day for 34 years, spending last seven of them across from the National Museum of American History. A prolonged shutdown, he said, could devastate his business. “My customers, they’re tourist people,” he said. “If the White House and Congress don’t have an agreement, that’s terrible.” Rob Milford, here on business, said his local high school in Fairhope, Ala., had raised roughly $80,000 to send its marching band to the Cherry Blossom Festival, a costly expedition that’s now uncertain . “For those of us from outside of Washington, it’s a tremendous disappointment that Congress can’t make a decision. They had every opportunity,” said Milford, poking around the Mall vendor trucks in search of an “Obama: One and Done” t-shirt. Down near the monuments, it isn’t just vendors worried about a drop in wages. A group of five contractors working a construction job at the Department of Commerce said they don’t know if they’ll have any work next week. A landscaper whose company has a contract with the EPA said he thinks he’ll still have a job in the event of a shutdown, but only because he’s salaried; his colleagues classified as “laborers” will probably be out of a gig. And Chris Armstrong, a busker who’s been playing his trumpet at 14th and Constitution for seven years, said he expects an empty bucket at his feet next week if the museums are shuttered. “And it’s just politics,” he said. The overriding feeling on the Mall is one of uncertainty – and that extends to the very workers who keep it running. One National Park Service maintenance employee, clad in the agency’s trademark forest green and a pair of protective knee pads, said all the workers in his shop are “worried,” not knowing what their status is and whether they can expect a paycheck come next week. “These are America’s treasures,” he said, gesturing to the Washington Monument while on a hot dog break. “We’re here to keep these treasures going.” As for the possibility of a shutdown, “I just don’t get it,” he said.

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Obama: Gas Prices Will Continue To Fluctuate Until Broader Changes Are Made

April 6, 2011

FAIRLESS HILLS, Pa. — Pitching the promise of energy independence, President Barack Obama cautioned Wednesday that it’s going to be tough to transition from America’s oil-dependent economy and acknowledged there’s little he can do to lower gas prices over the short term. “I’m just going to be honest with you. There’s not much we can do next week or two weeks from now,” the president told workers at a wind turbine plant. It’s a theme Obama’s struck before as he tries to show voters he’s attuned to a top economic concern with gas prices pushing toward $4 a gallon. Obama said he wants to move toward “a future where America is less dependent on foreign oil, more reliant on clean energy produced by workers like you.” That will happen by reducing oil imports, tapping domestic energy sources and shifting the nation to renewable and less polluting sources of energy, such as wind, the president says. He has set a goal of reducing oil imports by one-third by 2025. But the president said it won’t happen overnight and if any politician says it’s easy, “they’re not telling the truth.” “Gas prices? They’re going to still fluctuate until we can start making these broader changes, and that’s going to take a couple of years to have serious effect,” Obama said. Obama needled one questioner who asked about gas prices, now averaging close to $3.70 a gallon nationwide, and suggested that the gentleman consider getting rid of his gas-guzzling vehicle. “If you’re complaining about the price of gas and you’re only getting 8 miles a gallon, you know,” Obama said laughingly. “You might want to think about a trade-in.” The president spoke at a town hall meeting at Gamesa Technology Corp., a Spanish company that makes giant turbines that use wind to generate electricity. According to the White House, it is the first overseas company of its kind to set up shop in the U.S. Back in Washington, negotiations continued on a budget deal to avert a government shutdown Friday and Obama urged lawmakers to get it done. The president said he wants to cut spending, but not at the expense of cutting priorities like energy and education. As fuel prices rise because of growing demand worldwide and political unrest in oil-producing nations in North Africa and the Middle East, drivers are feeling pinched at the pump. Republicans blame Obama and his policies and he, in turn, is striving to show the public that he gets it. Gasoline prices rose another 2 cents Tuesday to a new national average of just over $3.68 a gallon, according to AAA and other sources. Obama’s visit to Gamesa was his fourth energy event since March 11. He’s scheduled a fifth for Friday in Indianapolis. Obama argues that shifting to cleaner and domestic energy sources will help create jobs and boost U.S. competitiveness. Education is another item on Obama’s competitiveness agenda. That issue was to be the focus of a speech he was giving later Wednesday to the Rev. Al Sharpton’s civil rights group in New York City. Obama’s appearance keeps a promise he made to the National Action Network when he spoke there as a presidential candidate in 2007. Obama pledged to return, win or lose. He returns just two days after launching his re-election bid. He is facing a key constituency that at times has scolded him for not being attentive enough to certain issues, such as double-digit black unemployment, but continues to hold him in high regard. Obama deflects such criticism by arguing that his polices to expand the economy, create jobs and improve the education system, among other goals, will help the country as a whole, blacks included. Ninety-five percent of blacks who voted, opted for Obama in 2008. A Gallup poll released last week showed his job approval among blacks holding at 84 percent, about the same as six months earlier. ___ AP National Writer Jesse Washington contributed to this report.

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What Happened To Entrepreneurship During The Recession?

April 5, 2011

They were among the recession’s most inspiring stories: laid-off workers who went on to start their own businesses rather than dropping out of the labor force or crawling back to corporate America. But a recent analysis of Census data calls into question the popular belief that the financial crisis spurred American entrepreneurship. Instead, entrepreneurial activity took a nosedive during the downturn, according to a new paper from the Federal Reserve Bank of Cleveland. The new report challenges another study that used identical Census data. According to a widely-circulated study by the Kauffman Foundation, a Kansas City-based entrepreneurship advocacy group, new business creation spiked during the recession. Released last May, the study found the monthly rate of people transitioning into self-employment steadily rose from late 2007 to a 14-year high in 2009 . “Kauffman’s findings give only half the picture,” says Scott Shane, the new paper’s author and entrepreneurship professor at Case Western Reserve University. “Sure, the number of Americans who became self-employed grew. But that number was dwarfed by the amount of US entrepreneurs whose businesses failed during the recession, and who were forced to exit self-employment.” As a result, the total number of self-employed Americans shrank to 9.8 million in June 2009 from 10.2 million in November 2007, Census data show. All told, 68,490 more businesses closed in 2009 than in 2007, an 11.6 percent increase in the business closure rate. “If you have more people giving up than going in, I can’t see how entrepreneurship went up,” says Shane. The main point of contention between the two reports is which measure does a better job of capturing entrepreneurial activity: the net change in the total number of self-employed workers or the rate by which people become self-employed. One thing both studies can agree on is that the majority of the businesses formed during the recession are not hiring employees in the short term. But Dane Stangler, research manager at Kauffman, is bullish over the long term. Even though they have not yet hired an employee, “non-employer firms started during the most recent recession will become the employer firms of the next decade,” Stangler says. So will the hoards of new businesses created since the downturn began — many of which still don’t employ workers — boost the economy? Even though only three percent of new businesses created without employees eventually evolve into businesses with employees, a 2007 study by the National Bureau of Economic Research found that those three percent made up over a fourth of “young businesses,” or companies under three years old with employees. That three percent also accounted for 20 percent of the revenue generated by young businesses. And relatively young businesses — not small businesses — are the biggest engines of job growth, according to Census economists . ‪If these trends are still valid in the post-recession economy, then Kauffman may have been right to focus on the flow of entrepreneurs into the economy during the recession, rather than the total stock.‬

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Texas Instruments Makes $6.5 Billion Buy

April 5, 2011

SAN FRANCISCO — Texas Instruments Inc. is buying National Semiconductor for $6.5 billion in a marriage of two of the world’s premier makers of analog chips, which are widely used in electronics to transform signals such as sound into digital form that computers can understand. In scooping up National Semiconductor, TI is getting a storied Silicon Valley company whose history stretches back more than 50 years and is known for its power-management chips. The deal is the latest example of consolidation among big players in the technology world as trends such as the explosion in smartphones have shaken up the competitive landscape. Longtime foes have joined forces while friendships have frayed as the boundaries between companies’ business lines have blurred. TI has agreed to pay $25 per share. The all-cash transaction represents a 78 percent premium over National Semiconductor’s stock price before the deal was announced. TI and National Semiconductor have been long-running rivals. TI, a leader in chips for cellphones, said swallowing National Semiconductor would be good for both companies’ sales. TI’s CEO Rich Templeton said the combined companies’ sales team will be 10 times bigger than National Semiconductor’s current sales force. “This acquisition is about strength and growth,” Templeton said in a statement. “National has an excellent development team, and its products combined with our own can offer customers an analog portfolio of unmatched depth and breadth.” Dallas-based TI noted that it makes some 30,000 types of analog chips, while National, based in Santa Clara, Calif., makes 12,000. TI said that it owned about 14 percent of the $42 billion analog market last year, while National Semiconductor owned about 3 percent. TI said the analog business will rise to about 50 percent of the company’s overall revenue when the deal closes, which TI expects will be within the next six to nine months. Last year, they made up about 43 percent of the company’s $14 billion in revenue. The rest was made up of various different kinds of chips. Ashok Kumar, an analyst with Collins Stewart, said he expects the deal will clear antitrust scrutiny because despite consolidation in the analog chip market, “the market is pretty brutal” and pricing is aggressive. He said Texas Instruments’ recent decision to exit the mobile-phone “baseband” business (chips that help phones connect to cellular networks) has put pressure on TI to find ways to replace the lost revenue. The baseband segment brought in $1.7 billion in revenue last year, and is expected to go to zero by next year. TI will continue to make “applications processors,” a different kind of chip that acts as the central brain of cellphones. Kumar called the deal “a match of mutual necessity – for National more than TI.” “National has been lost for quite some time – they didn’t appear to have critical share in any market of consequence,” he said. “TI is not without its own set of problems, but they can more than survive. But the issue they’re facing longer-term is they’re being squeezed out of the handset in the post-PC environment.” TI executives have touted the untapped opportunities for TI in the analog market as a key reason to expand in that area while shrinking parts of the wireless business. Shares of National Semiconductor surged $10.20, or 72.5 percent, to $24.27 in extended trading, after the deal was announced. TI shares fell 65 cents, or 1.9 percent, to $33.46. In the regular session National Semiconductor shares lost 16 cents to close at $14.07, while TI lost 12 cents to $34.11.

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CoStar’s People of Note (March 27-April 1)

April 1, 2011

This week’s People of Note includes the following markets: Atlanta, Boston, Chicago, Denver, Los Angeles, National, New York City, Northern New Jersey, Orange County, Orlando, Sacramento and Washington, DC. LOS ANGELES NKF Taps Rothstein as Managing Director Investment sales veteran Barry Rothstein joined Newmark Knight Frank’s Capital Group in Los Angeles as a managing director. Rothstein’s specialty is brokering complex commercial real estate…

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Missouri Unemployment Benefits Extension To Be Dropped

March 31, 2011

JEFFERSON CITY, Mo. — Thousands of people in Missouri who have been unemployed for more than a year soon will lose their jobless benefits, marking a significant victory for Republican fiscal hawks who are crusading against government spending. When eligibility ends Saturday, Missouri will become the only state to voluntarily quit a federal stimulus program that offers extended benefits. Michigan, Arkansas and Florida also recently took steps to cut back on money going to the unemployed, although they targeted state benefits instead. “We have to take a stand and say, `When is enough enough?’ and send a message to the federal government, and hopefully shame them into doing the right thing and quit spending money that they don’t have,” said state Sen. Jim Lembke, a Republican from St. Louis. Lembke has led a coalition of four filibustering senators who have blocked legislation necessary to reauthorize Missouri’s participation in a federal program offering long-term unemployment benefits. It’s been a stunning setback for a bill that had passed the Republican-led House 123-14 two months ago and had the support of GOP Senate leaders and Democratic Gov. Jay Nixon. As a result, more than 34,000 unemployed residents in Missouri could miss out on $105 million in benefits over the next nine months. Unlike some other stimulus programs, Missouri’s unclaimed money would not be redistributed by the federal government to other states. It simply would remain unspent. At issue is a provision in the 2009 federal stimulus act that allowed residents in states with high unemployment rates to receive up to 20 additional weeks of federally funded jobless benefits after exhausting the 79 weeks authorized under other federal laws. At least three dozen states, including Missouri, enacted laws to participate. Although their unemployment rates were high enough to qualify, seven other states – Arkansas, Louisiana, Maryland, Mississippi, Montana, Oklahoma and Utah – never passed laws to join in, according to the U.S. Department of Labor. Maryland is now pursuing participation, but many of the other states seem content to remain out of the program. Much like his Missouri counterparts, Utah Senate President Michael Waddoups said the states need to set an example of self-sufficiency. “Somebody has to start pulling back from the federal government somewhere,” said Waddoups, a Republican from Taylorsville. That federal backlash is particularly strong in Missouri, where voters were the first in the nation to pass a measure challenging the new federal health care mandate and where Republican senators also are holding up federal stimulus money for education. Missouri’s unemployment rate has remained above 9 percent for nearly two years. Yet it is poised to become the first state to take the additional federal unemployment money, then later voluntarily stop doing so, according to officials at the federal Labor Department and the National Employment Law Project, a New York-based advocacy group for employment rights that has been urging Missouri to remain in the program. Several other states could have been in the same situation. But the governors of Massachusetts, Michigan and Oregon all signed laws within the past week continuing participation. Michigan’s action came with catch, also cutting state jobless benefits from 26 to 20 weeks starting in 2012. The Florida House has passed a similar state benefits reduction. Arkansas’ legislature this week gave final approval to a bill shaving off one week of eligibility for state jobless benefits. In Missouri, about 10,000 people would immediately be cut off from additional jobless payments, according to the state department of labor. And extended unemployment benefits would be denied to about 24,000 additional residents who otherwise are projected to become eligible. St. Louis resident Peter Gordon, who has been unemployed for a little over a year, is among those who could miss out. A former patient care coordinator at a hearing aid company, Gordon has been searching for jobs over the Internet but said he can’t travel far because he can’t afford to license his car. He fears he could eventually be evicted from his apartment. “They can provide money for government programs to take care of the elite and rich,” Gordon said. “But when it comes to a small person like me – people who are just trying to make ends meet – it seems like the rights are being taken away.” Kimberly Clark, a laid off union organizer, says her post-tax unemployment benefit of $275 a week already is consumed by her rent, utility and phone bills. She’s been searching for work since November 2009, and she’s only a couple of months away from needing the extended benefits that Missouri is poised to reject. “The mentality is we’re just creating a bunch of lazy people, and that is not true,” said Clark, 48 of St. Louis. The National Employment Law Project says its supporters sent 15,000 emails in a roughly 24-hour period from Tuesday to Wednesday urging Missouri senators to allow a vote on the legislation reauthorizing the extended jobless benefits. But Sen. Brian Nieves, a Republican from Washington, Mo., who is popular among tea party activists, said he has no intention of compromising his position. “The people have been crystal clear for about the last two years in saying that they expect us to at least start the process of weaning ourselves off of the federal government,” Nieves said. ___ Associated Press writers Wes Duplantier in Jefferson City, Josh Loftin in Salt Lake City, Brian Witte in Annapolis, Md., Sean Murphy in Oklahoma City, Emily Wagster Pettus in Jackson, Miss., Nomaan Merchant in Little Rock, Ark., Melinda Deslatte in Baton Rouge, La., and Matt Gouras in Helena, Mont., contributed to this report.

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Plane Controversy Dogs Democratic Senator’s Reelection Bid

March 30, 2011

WASHINGTON — Sen. Claire McCaskill once turned a political opponent’s use of a plane to her advantage. Now she’s seeing the issue from a different vantage point. With a tough re-election race in 2012, the Missouri Democrat has come under heavy criticism for her use of a plane she owns with her husband. First it was revealed that McCaskill, among the wealthiest members of the Senate, had received approximately $79,000 in federal reimbursements for her flights, including at least one to a political event. A few days later, McCaskill revealed that she and her husband had also failed to pay about $320,000 in state taxes on the plane. The revelations have embarrassed McCaskill, who was elected in 2006 as a champion of good government. They have also emboldened GOP opponents eager to puncture her image as a plainspoken woman of the people. Republicans believe McCaskill’s plane can serve as just one example of what they see as her straying from the will of Missouri voters. “I think voters will hold against her that she said she was fighting government waste, talking about how there shouldn’t be two sets of rules, and on the other hand she wasn’t paying her property taxes,” said Lloyd Smith, the executive director of the Missouri Republican Party. “That in and of itself rubs people the wrong way.” McCaskill’s frustrated supporters agree. “The fact that a lot more people in the state know that she and her husband have a private jet, it’s not the best thing that could happen,” said Steve Glorioso, a Kansas City, Mo., media consultant who has worked with McCaskill in the past. “But she is very good at communicating with average Missourians, and campaigns make a difference.” McCaskill wraps the plane revelations up in a single phrase. “A serious, sloppy mistake,” she told The Associated Press on Tuesday. She is adamant that she has not lost a common connection with Missouri voters. “My husband’s wealth is something that’s been relatively new in my life,” she said. “I do not feel disconnected to folks in Missouri. As somebody who was a single mom with three kids for much of a decade without really any support from anyone else, someone who worked my way through school – I don’t feel the fact that my husband has been very successful has changed how I view my priorities in my job.” National Democrats certainly hope so. With the party clinging to a majority in the Senate after Republican gains in 2010, few races highlight the fragility of Democrats’ majority more than McCaskill’s. She was already a top GOP target in 2012, after she was elected by a slim margin in 2006, a good year for Democrats. In 2008, Missouri was one of the few swing states that President Barack Obama lost – even as McCaskill campaigned relentlessly for him. Since 2008, the president’s poll numbers in the Show Me State have been well below his national averages. It’s against this backdrop that McCaskill has been hit with the fallout over the plane she owns with her husband, Joseph Shepard, through one of his business subsidiaries, even before she begins her re-election campaign in earnest. McCaskill certainly knows how much damage the controversy could cause. In 2004, when she ran against incumbent Democratic Gov. Bob Holden in the primary election, she put up television ads showing an airplane circling around an outline of the state of Missouri, while an announcer criticized Holden for flying on “300 taxpayer-funded trips.” The ads helped her defeat Holden, though she went on to lose the general election. Asked about her ads against Holden, McCaskill dodged the question. “I know everyone wants to get into political this and that,” she said. “I’m trying to keep this simple. I found a mistake. I owned the mistake.” Her critics, though, say it shows her to be a hypocrite and fits a pattern of behavior. Brian Walsh, a spokesman the National Republican Senatorial Campaign Committee, said McCaskill has spent her time demanding more transparency in Congress while holding herself to a different standard. “Her refusal to engage in the same level of transparency she’s demanded of others has left more and more voters wondering if they can trust what she says,” Walsh said. McCaskill has spent her four years in the Senate working on initiatives to curb government waste and abuse and was among the few Senate Democrats to shun earmarks. Republicans say that image has been irreparably damaged by the plane episode. McCaskill argues that she’s been forthright and addressed the issues surrounding her plane straight on since they came to her attention. She has paid her back taxes, she said, and has written a reimbursement check to the U.S. Treasury Department. Her own situation has redoubled her commitment to transparency, she said. But she acknowledges the political damage is tough to calculate. “The voters are going to have to decide here,” she said. “I’m not going to shy away from who I am.” Mike Zweifel, a Republican from Columbia, Mo., said he is skeptical that the plane alone could doom McCaskill. Next year is a long way off, he said, and the plane might not be the most important thing to voters. But he says it offers Republicans an important talking point. “If the (former) state auditor can’t pay her taxes on time, what does that say about her credibility?” he said. Missouri Republicans say the plane is the first crack in an image McCaskill has crafted over more than 30 years in state and local politics. They have long sought to raise awareness about McCaskill’s fortune – she is among the wealthiest members of the U.S. Senate – and the business ties of her husband. McCaskill, though, has some factors in her favor. Besides the early timing of the plane revelations, Missouri Republicans have not settled on a consensus candidate. A potentially bruising primary is likely. And then there is the candidate herself, a proven fundraiser and dogged campaigner who has earned a reputation for surviving bizarre and difficult developments in her past campaigns. When McCaskill was a county prosecutor in Jackson County, Mo., her then-husband was arrested for marijuana possession. She still won re-election. (She divorced her husband, now deceased.) In both the 2004 gubernatorial race and her 2006 Senate race, her opponents made an issue out of Shepard’s extensive business ties. “I have had some very tough campaigns,” McCaskill said. “In fact, most of my campaigns have been very tough. There have been all kinds of attacks on me, on my husband. So this doesn’t surprise me.” ___ Associated Press writer Alan Scher Zagier in Columbia, Mo., contributed to this report.

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Video: Falkenrath Says NSA Probe Shows Nasdaq Worry Over Hacker

March 30, 2011

March 30 (Bloomberg) — Richard Falkenrath, a principal at the Chertoff Group and a Bloomberg Television contributing editor, discusses the October cyber attack on Nasdaq OMX Group Inc. The National Security Agency has joined the investigation of the attack amid evidence the intrusion by hackers was more severe than first disclosed. Falkenrath speaks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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Bill Cheney: Debit Interchange: Those Who Can Least Afford It Will Be Hurt Most

March 29, 2011

It’s easy and popular to demonize the big banks of Wall Street. In many cases, they deserve it. But the attempt by retailers, big and small, to cast the current political battle over debit card interchange as a fight between Wall Street and Main Street (with merchants, of course, claiming the Main Street mantle), is grossly inaccurate and misleading. When smaller card issuers — like the credit unions my association represents — express their deep concern about the impact of interchange, we are painted by proponents of the new law restricting interchange fees as fronting for the big Wall Street banks that they say are the true targets of the legislation and related rules proposed by the Federal Reserve Board. Credit unions are cooperatives, locally based and owned by their 93 million members — the people who do the saving and borrowing. Many are teachers, firefighters, police officers, members of the military. That’s as Main Street as you can get. Our industry has no allegiance to the banks, which have a history of opposing pretty much everything credit unions try to do. We are only aligned with the banks on interchange because in this case our members will be harmed by the effects of the legislation and pending Fed proposal. What’s the concern? Well, you’ve heard the old line about the businessman who is selling a product for less than it cost him to produce it, and when asked what he plans to do, responds: “Don’t worry, we’ll make it up on volume.” That encapsulates what’s going to happen if the Fed’s interchange proposal is allowed to take effect. Credit unions receive on average about 44 cents per debit card transaction as interchange revenue. The Fed proposal would chop that to 12 cents, a figure that doesn’t begin to account for the actual debit card service costs, such as those related to fraud and systems support. The 12-cent rate puts us in the same boat as that businessman trying to make up his losses on volume. We estimate that up to two out of every three credit unions would lose money on their debit card programs if the interchange regulations reduced interchange-related revenue by 40 percent. Remember, credit unions are member-owned cooperatives. Their business model is all about passing savings onto their consumer-members. Last year, for example, consumers saved $6.5 billion using credit unions rather than banks. In this case, however, credit unions will have absolutely no choice but to pass the higher interchange costs on to their members, most likely by adding fees to debit cards or other services. And the people who can afford it least are the ones likely to be hurt most. “No worries!” say the merchants and their supporter on Capitol Hill. “The interchange law exempts most community banks and credit unions” (those with assets under $10 billion). But the exemption is fatally flawed. Larger institutions account for the majority of debit transactions. Over time, smaller institutions will lose out, too. Market pressures will force the interchange price that smaller institutions receive toward the lower, 12-cent rate. Influential regulators like Fed Chairman Ben Bernanke and FDIC Chairman Sheila Bair have voiced doubts about the efficacy of the small institution exemption. The need to address the inherent flaws in the exemption is why Sen. Jon Tester (D-MT) and Rep. Shelley Moore Capito (R-WV) have introduced legislation to delay and further study the Fed’s implementation of interchange. And the call for delay, further study or both is coming from other quarters, too: The National Community Reinvestment Coalition, the Hispanic Chamber of Commerce, the NAACP, and most recently, the National Education Association. All share a concern that the ones who can least afford it — low- and moderate-income consumers — will be hurt the most by added fees. Those of us working to help Sen. Tester and Rep. Capito to delay and study this troubling issue are admittedly, as the Wall Street Journal terms us , a “collection of strange bedfellows.” But it is a grouping brought together by shared concern about the unintended yet potentially harmful consequences of the interchange restrictions. And this unlikely conglomeration demonstrates that attempting to narrowly cast interchange as some type of deserved comeuppance for Wall Street banks misses a much broader and consumer-oriented picture. Put another way: In the zeal to reform interchange, don’t hurt consumers and the financial institutions that they own in the process.

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What’s At Stake In The Massive Walmart Anti-Discrimination Case Before The Supreme Court

March 29, 2011

Walmart Stores, the

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Vangent Promotes Bohling to Senior Vice President

March 29, 2011

Bohling to Lead Vangent’s Growth in Federal Business Lines Including Education, Civilian and National Security

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Magnetic Announces Seven New Hires to Meet Growing Client Demand

March 29, 2011

Jonathan Penn Joins as Vice President of National Sales

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Craig K. Comstock: After the American Dream

March 29, 2011

Over breakfast with a client who had a $90 million fortune, I asked a hypothetical question: would it decrease your motivation as an entrepreneur if it were understood that each year people with big incomes would be celebrated and, as if at a potlatch, would give back to the community all but some small multiple of the average family income? After a forkful of Spanish omelette, he told me, “no, it wouldn’t decrease my motivation or my business creativity: what other game would I play?” As my client knew, a potlatch was a Native American custom in the Northwest, a feast at which prosperous members of the community sought prestige not by having wealth, but by giving it away. Let’s plug in figures for a conservative yield on my client’s fortune and for the average family income. Even allowing no deductions at all, he would be giving away the equivalent of an income tax even higher than the 91%* charged under Eisenhower for the biggest incomes. (It’s now down to 35% on whatever portion is taxable after the accountants get done.) The sample size of my breakfast survey was just one, and the respondent was unusual: as a philanthropist, he was already giving some of his fortune away and he had a broad worldview. He took seriously the claim that, above a certain level, money is only a way keeping score. I thought of his reply when reading the results of a survey of a representative sample of more than 5,000 U.S. residents commissioned by a Michael I. Norton, professor at the Harvard Business School, and Dan Ariely, a colleague at Duke University. They found that the average U.S. citizen radically underestimates the actual U.S. inequality, and regards as ideal even less inequality than he or she mistakenly thinks now prevails. Here are the figures from their survey: The sample regarded as fair a 32% share of the national wealth for the top fifth of the population (“quintile”). What they thought is now the share of this same group: 59% The actual share at the time of the survey: 84% The gaps here are so extreme as to raise the question: in a country proud of its democracy, how does the top fifth get away with owning 84% of the national wealth? Even more startling, how is the top 1% of people allowed to own nearly 50% of the wealth? In the last 30 years, since around the start of the 1980s, we have witnessed, apart from the rich, only a “stagnation” of income. So far, this “plateau” has been disguised by more than one member of the household working, by the availability of cheap goods from abroad, and by the magic of inflation (when dollar income rises; but purchasing power does not). We could find many explanations for toleration of the present disparity, but they probably rely on the “little people” not suffering a noticeable decline in purchasing power. In other words, I suggest that the American dream can tolerate shifting from “will be better off than the prior generation” (rise) to “will be no worse off” (plateau), but perhaps not to “will have notably less” (fall). After college my first job was teaching assistant in a course on “American character and social structure” given by the social observer David Riesman, author of The Lonely Crowd. We examined the distinction between economic equality of result (claimed by our enemy of that time) and what this country allegedly had or at least sought, which was “equality of opportunity.” Ambition, ingenuity, and hard work would be “rewarded” by whatever money could be extracted from “the free market.” As much as possible, we were supposed to have a “level playing field,” on which merit and energy would seek to score. People who did well “deserved” everything they got: why should they pay taxes for anything but the military and a few other essentials? Let everything else be “privatized.” According to Erin Currier of the Economic Mobility Project, “There is not equality of opportunity in the way we as a nation imagine there is.” In his view, based on research, “the American dream is struggling.” The Motion Picture Academy just gave an Oscar for best documentary to Inside Job , an expose of what its director regards as “systemic corruption” in what is called the “financial services industry.” However, most Americans still don’t want to inquire too deeply into the financial system, any more than they want to draw conclusions from findings about climate change or the peak of petroleum production. Yet we continue to barrel ahead despite the prospect of declining global production of oil, and a growing demand for it, and evidence that the price of oil above a certain amount leads to severe recession. In a previous article I have suggested that revolts in so-called developing countries can be predicted not only by the fraction of educated youth who are unemployed and other factors, but also by the fraction of household budget spent for food. Now we might ask of developed countries: to what extent will voters tolerate extreme inequality if the standard of living of a large majority of them no longer gradually rises or at least seems to remain stable, but actually declines noticeably?

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More Americans Signed Contracts To Buy Homes In February

March 28, 2011

WASHINGTON — More Americans signed contracts to buy homes in February, but sales were uneven across the country and not enough to signal a rebound in the housing market. Sales agreements for homes rose 2.1 percent last month to a reading of 90.8, according to the National Association of Realtors’ pending home sales index released Monday. Sales rose in every region but the Northeast. Signings were 19.6 percent above June’s index reading, the low point since the housing bust. Still, the index is below 100, which is considered a healthy level. The last time it reached that point was in April, the final month people could qualify for a home-buying tax credit. Contract signings are usually a good indicator of where the housing market is heading. That’s because there’s usually a one- to two-month lag between a sales contract and a completed deal. But the Realtors group also noted “a measurable level of contract cancellations” that also occurred in February. Many buyers canceled after appraisals showed the properties were valued much lower than their initial bids. A sale is not final until a mortgage is closed. “Therefore, the latest pickup in pending home sales and mortgage applications might not necessarily end up in a measurable pickup in mortgage closings and translate into an increase in existing home sales,” said Yelena Shulyatyeva, an analyst at BNP Paribas. The pace of sales varied from region to region. Signings fell 10.9 percent in the Northeast. They rose 2.7 percent in the South, 4 percent in Midwest and 7 percent in the West. High unemployment, strict lending standards, and a record number of foreclosures are deterring would-be buyers, who fear home prices haven’t reached the bottom. Sales of previously owned homes fell last year to the lowest level in 13 years. Economists say it will be years before the housing market fully recovers. The rise in foreclosures has pushed the median price of previously occupied homes to its lowest point in nearly 9 years. New-home sales have fared even worse. Americans are on track to buy fewer new homes than in any year since the government began keeping data almost a half-century ago. Sales are now just half the pace of 1963 – even though there are 120 million more people in the United States now.

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TBA Global Names Andre Mika Senior Vice President, Digital Creative

March 28, 2011

NEW YORK, NY–(Marketwire – March 28, 2011) – TBA Global , a leading engagement marketing and communications agency, today announced André Mika has joined as Senior Vice President, Digital Creative and will head its digital practice. Mika joins TBA Global from the National Hockey League, where he redesigned and re-launched NHL.com , NHL Network Online and NHL GameCenter LIVE apps, increasing the brand’s online and mobile engagement by nearly 400%.

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Nuclear Industry Insists New Reactors Are Safe

March 28, 2011

OLKILUOTO, Finland — Halfway around the globe from Japan’s atomic emergency, engineers building a cutting-edge nuclear reactor along Finland’s icy shores insist the same crisis could never happen here. And that’s not only because Finland is seismically stable. The 1,600-megawatt European Pressurized Reactor projected to come online in 2013 in Olkiluoto, 195 miles (315 kilometers) northwest of Helsinki, is the first of its kind expected to begin operating after the Japanese disaster. It has walls thick enough to withstand an airplane crash, components designed to tolerate the extreme cold of the Nordic winter, and decades worth of new safety systems. “(We have) so many backup systems that the kind of accident like in Japan could not happen,” said project manager Jouni Silvennoinen. With the renaissance of nuclear power at stake, the atomic industry faces the challenge of persuading an increasingly skeptical public that new reactors like the EPR units being built by French company Areva in Finland, France and China are not just safer than the old ones but are virtually disaster-proof. The state-controlled company has marketed its expensive new-generation reactor technology to the United States and developing countries from India to Saudi Arabia and Brazil. Since news of Japan’s catastrophe, Areva’s shares have fallen 12.4 percent, trading at euro31.49 midday Friday. Areva CEO Anne Lauvergeon has said an EPR plant would have survived the earthquake and tsunami without radiation leaks. And French Energy Minister Eric Besson, whose country gets up to 80 percent of its electricity from nuclear power, insisted last week it was his “profound conviction that nuclear energy will stay in Europe and the world and be one of the core energies in the 21st century.” But that’s a tough message to sell, with explosions and radiation leaks at the Fukushima Dai-ichi plant in Japan eroding confidence in nuclear power. That confidence took decades to rebuild following the Soviet Chernobyl disaster in 1986 and the 1979 Three Mile Island accident in Pennsylvania. Shocked by the Japanese crisis, the European Union has called for “stress tests” for its 143 reactors. Germany – the EU’s biggest economy – has temporarily suspended plans to prolong the life of its aging nuclear plants and had already planned to abandon nuclear power altogether over the next 25 years. President Barack Obama, while expressing support for nuclear power, requested a comprehensive review of the safety of U.S. plants. Even China, which plans a massive expansion of nuclear energy, has said it will hold off on approving new nuclear plants to allow for a revision in safety standards. Suggesting that third-generation reactors like the EPR would have withstood the shock that crippled the Japanese plant is “sheer arrogance,” said Mycle Schneider, an independent researcher on France’s nuclear industry. “There’s no way we can say today that any plant in the world would have survived what happened in Japan,” he said. At the Fukushima plant, which began operating in 1971, the massive earthquake and tsunami damaged the critical cooling system, which overheated and began spewing radiation into the environment. For the first time, nuclear engineers were forced to head off a total reactor meltdown at three reactors simultaneously as well as dealing with overheating fuel rods in a damaged storage pool at a fourth reactor. So how could a modern reactor have avoided those problems? The principle of power generation is the same as in older high-pressure water reactors like the ones at Fukushima: nuclear reaction heats water to create steam that turns turbines to generate electricity. But technological advances have improved efficiency and stricter safety precautions have made the third-generation reactors more secure, industry officials say. New EPR plants have backup systems like diesel generators that are housed in separate buildings to protect them from any accident that might occur in the main reactor building. The plant must also have access to other sources of electricity, like gas turbines or the national grid, if the diesel generators fail to work. At Olkiluoto, four large diesel generators act as a backup if the first step of connecting to the national grid proves unsuccessful. If they don’t work, two smaller diesel generators kick in, and failing that, the new reactor can be connected to the joint backup systems of two older reactors at Olkiluoto. There are also new “protective barriers” shielding the environment from radioactive products used in the reactor. These include encasing the fuel rods in thick metal containers and having a double concrete cover and walls over the containment vessel that houses the reactor. Besides natural disasters, modern reactors worldwide must be able to withstand terror strikes and – since 9/11 – even a large airliner crash, Silvennoinen said. Situated just 200 yards (meters) from the frozen Baltic Sea, the Olkiluoto nuclear plant is elevated so that it can withstand storm surges of up to 11 feet (3.5 meters), which is considered a worst-case scenario. During a recent visit, dozens of workers in yellow vests clambered up and down stairs of the concrete buildings bordering the cylinder-shaped reactor as construction cranes swerved over its domed roof. Since Olkiluoto is the first EPR scheduled to become operational, it has been seen as a flagship for the latest generation of nuclear reactors. But the project has been plagued by faulty materials and planning problems since construction began in 2005, and it’s now running four years behind schedule. The nearby town of Eurajoki, population 6,000, in the middle of Finland’s sparsely populated countryside, has welcomed the project. It has created 4,000 jobs, even though 70 percent of them went to foreign workers. Teijo Jantunen, who lives near the town, 10 miles (16 kilometers) from Olkiluoto, conceded that the problems at Fukushima had made him think about the possibility of a nuclear accident. “But I’m not really very worried. I’m confident it will be a good plant,” said Jantunen, a 57-year-old construction manager. “I trust them despite everything.” Leo Mantymaki, who lives 6 miles (10 kilometers) away, doesn’t quite know what to believe. “They tell us that a Japan-like accident couldn’t happen here, but I’m not so sure,” the retired welder said, sitting on a tractor as he took a break from clearing snow. “What if they press the wrong button?” Jukka Laaksonen, director of Finland’s Radiation and Nuclear Safety Authority, stressed that safety features must be designed according to local conditions, and said a major flaw at Fukushima was that its seawall was too low. “EPR has much better safety systems than old similar plants but having a good plant is not enough,” Laaksonen said. “You also have to pay attention to the site conditions. If the EPR is not properly protected against a tsunami … then you never know what will happen.” _______ Associated Press writer Angela Charlton in Paris contributed to this report.

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Simon Horne Appointed Chief Financial Officer, General Manager & Senior Vice President of Hearst Magazines International

March 28, 2011

NEW YORK, NY–(Marketwire – March 28, 2011) – Simon Horne has been appointed chief financial officer, general manager and senior vice president of Hearst Magazines International (HMI) it was announced today by Duncan Edwards, HMI’s president and CEO. For the last 10 years, Horne has filled the role of CFO and GM at The National Magazine Company (NatMag), a Hearst subsidiary in Great Britain. In this new position, he will take responsibility for all financial and administrative aspects of Hearst’s international magazine business and will work with Edwards on strategy and business development. Horne will be based in London.

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Ohio Funeral Home Stopped From Liquefying Bodies

March 23, 2011

COLUMBUS, Ohio — An Ohio funeral home that is the first in the nation to use a cremation alternative that dissolves bodies with lye and heat has effectively been blocked from using the procedure by state regulators. Edwards Funeral Service in Columbus is the only U.S. funeral business offering the procedure called alkaline hydrolysis to the public, according to Jessica Koth, a spokeswoman for the National Funeral Directors Association. The process is touted by proponents as being better for the environment than cremation. While funeral homes in other states are moving toward the method, Edwards’ owner, Jeff Edwards, told The Columbus Dispatch that he has used the method on 19 bodies since January. But a memo issued last week by the Ohio Department of Health has left Edwards unable to continue using the procedure. The health department’s memo directed local officials not to issue permits required for disposing of bodies or accept death certificates when bodies are to be disposed of through alkaline hydrolysis. Edwards told the newspaper he is considering legal action. “There’s no law that says you can’t do this,” he said. The health department cited a Feb. 16 statement from the Ohio Board of Embalmers and Funeral Directors that alkaline hydrolysis “is not an authorized form of disposition of a dead human body.” The health department directive was based solely on the statement of the board, which advises the department on what methods of disposal are approved, spokeswoman Jennifer House said Wednesday. She said the department has reviewed the process and found that it does not pose any risk to public health. An official with the funeral directors board did not immediately return a message seeking further information. Alkaline hydrolysis was developed in the U.S. in the early 1990s as a means to get rid of animal carcasses and has been used to dispose of human cadavers at the Mayo Clinic in Minnesota and at the University of Florida in Gainesville. Also known as resomation, alkaline hydrolysis uses a solution of water and lye, 300-plus degree heat and 60 pounds of pressure per square inch to destroy bodies in big stainless-steel cylinders. Left behind is a coffee-colored liquid that has the consistency of motor oil and a strong ammonia smell. Proponents say in most cases it can be safely poured down the drain and that, unlike cremation, the process does not involve fossil fuels or emissions. The remaining bone and bone fragments can be ground into a powder and given to a family, similar to the remains left from a cremation, the funeral directors association said. New Hampshire in 2008 reversed a two-year-old law that allowed the process. State lawmakers upheld the ban in 2009. The procedure merely speeds up the body’s natural decomposition process into a matter of hours, James Olson, chairman of the National Funeral Directors Association’s green burial work group, told The Associated Press. Olson said alkaline hydrolysis gives families who’ve lost a loved one another option and said anyone feeling squeamish about the method need only think closely about what’s involved in cremation. “I think burning a body at 2,000 degrees has more of a ‘yuck factor’ to it than putting it into a solution where it’s just naturally going to break down,” said Olson, owner of the Lippert-Olson Funeral Home in Sheboygan, Wis. Olson said his funeral business is relatively small and is not using alkaline hydrolysis because it would not be cost-effective to buy the equipment. The Roman Catholic Diocese of Columbus has not studied Edwards’ use of alkaline hydrolysis, but it would appear that flushing away the liquid would go against church teaching that persons should be handled respectfully after they die, said Deacon Tom Berg Jr., a diocese spokesman. “We don’t call for the separation of a person’s remains, that they should all be kept together and buried together,” he told the AP. ___ Associated Press writer Kantele Franko in Columbus, Ohio, contributed to this story.

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New Home Sales Plunge To Record Low In February

March 23, 2011

WASHINGTON — Sales of new homes plunged in February to the slowest pace on records dating back nearly half a century, a dismal sign for an already-weak housing market. New-home sales fell 16.9 percent last month to a seasonally adjusted annual rate of 250,000 homes, the Commerce Department said Wednesday. It’s the third straight monthly decline and far below the 700,000-a-year pace that economists view as healthy. New-home sales now account for just 5 percent of total home sales so far this year. They typically represent closer to 15 percent in healthier housing markets. There were just 186,000 new homes available for sale in February, the lowest inventory in more than four decades. The median price of a new home dropped nearly 14 percent to $202,100, the lowest since December 2003. The median is now 30 percent higher than the median price of resold homes – twice the typical markup. In response, homebuilders are cutting their selling prices and building more inexpensive homes, pushing down sales prices. They are struggling to compete with a wave of foreclosures, which has lowered the price of previously occupied homes. High unemployment, tight credit and uncertainty over prices have also kept many potential buyers from making purchases. “Falling housing prices of existing homes are robbing demand for new houses and until that changes, the housing market will be in trouble,” said Yelena Shulyatyeva, an analyst at BNP Paribas. Last year was the fifth straight year of declines for new-home sales after they reached record highs during the housing boom. Economists say it could take years before sales return to a healthy pace. Poor sales of new homes mean fewer jobs in the construction industry, which normally powers economic recoveries. Each new home creates an average of three jobs for a year and $90,000 in taxes, according to the National Association of Home Builders. Many builders are waiting for new-home sales to pick up and for the glut of foreclosures to be reduced. But with 3 million foreclosures forecast this year nationwide, a turnaround isn’t expected for at least three years. “We fully expect further price declines in order to help clear inventory from the market although this problem is more acute in the existing home market than the new home market,” said Dan Greenhaus, chief economic strategist for Miller Tabak + Co. Homebuilders have taken notice. Residential construction has all but halted. Builders broke ground last month on the fewest homes in nearly two years. And building permits, a gauge of future construction, sank to their lowest in more than 50 years. By contrast, sales of previously occupied homes have fallen by a more modest 3 percent in the past year. Prices have dropped more than 5 percent. In February, the median price for a resale was $156,100, according to the National Association of Realtors. New-home sales fell to record lows last month in almost every region of the country. Sales dropped 57.1 percent in the Northeast, 27.5 percent in the Midwest, 14.7 percent in the West and 6.3 percent in the South. Those are record lows in each region except the West, which recorded its lowest sales pace in October. Harsh winter weather that dumped record amounts of snowfall over much of the Northeast and Midwest, along with rare snowstorms in Texas, had an impact on February sales. Given the pace of new-home sales, it would take nearly 9 months to clear them off the market. Economists say a six-month supply of homes is healthy.

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Buying A New Home Makes Less Sense After Foreclosure Crisis

March 23, 2011

WASHINGTON — A new home, the dream of many would-be buyers, makes less and less financial sense in many places. A wave of foreclosures has driven down the cost of previously occupied homes and made them even more of a comparative bargain. By contrast, new homes have become more expensive. The median price of a new home in the United States is now 48 percent higher than that of a home being resold, more than three times the gap in a healthy housing market. Such a disparity can be a drag on the economy. New homes represent a small fraction of sales, but they cause economic ripples, bringing business to construction and other industries. Sluggish new-home sales deprive the economy of strength. “A lot of people are saying, ‘If I can get a great deal on a home already on the market, why go through the headaches of getting a new home?’” says Mark Vitner, a senior economist with Wells Fargo. “There’s a relatively small group of people who have the credit, have the down payment and are secure in their jobs that can go out and buy new.” The gap is widening because prices of previously occupied homes are falling fast, pulled down by waves of foreclosures and short sales. A short sale occurs when a lender lets a homeowner sell for less than is owed on the mortgage. New homes aren’t directly affected by such sales. The median price of a new home – the price at which half the homes sell for more and half sell for less – has risen almost 6 percent in the past year to $230,600, even though last year was the worst for sales in nearly a half-century. Slowed by those higher prices, new-home sales have plummeted over the past year to the lowest level since records began being kept in 1963. The government provides fresh data on new-home sales Wednesday. By contrast, sales of previously occupied homes have fallen almost 3 percent in the past year. Prices have dropped more than 5 percent. In February, the median price for a resale was $156,100, according to the National Association of Realtors. That adds up to a price difference of $74,500, or 48 percent, the highest markup in at least a decade. In healthier markets, a new home typically runs about 15 percent more, according to government data. Home prices and sales still vary sharply among metro areas. Cities with more foreclosures tend to have more resale homes that have languished on the market and are priced at a bargain. That makes new homes in those areas comparatively expensive. In Atlanta, for instance, where foreclosures accounted for one in every 23 homes sold last year, the median price of a previously occupied single-family home was $109,900, about 12 percent lower than a year ago, according to the Georgia data firm Smart Numbers. The median price of a new home was more than twice that. “That’s as much of a difference as we’ve ever seen,” said Steve Palm, president of Smart Numbers. “New homes can’t compete, and that means jobs.” An average of three jobs and $90,000 in taxes are created for each home built, according to the National Association of Home Builders. In some areas, older homes were more expensive before the housing market bust. That was especially true in urban neighborhoods with little or no room left to build on. But now, buyers get their pick even in some of the trendiest places. That’s what Robert Rost is finding in central Phoenix. Rost doesn’t want to commute far to his job. He’s been looking for a home for about five months but can’t find new properties in the neighborhoods where he wants to live. “I don’t want to commute 45 minutes to an hour a day one-way,” the 38-year-old computer engineer says. Homebuilders have taken notice. Residential construction has all but come to a halt. Builders broke ground last month on the fewest homes in nearly two years. And building permits, a gauge of future construction, sank to their lowest in more than 50 years. Many builders are waiting for new-home sales to pick up and for the glut of foreclosures and other distressed properties to be reduced. But with 3 million foreclosures forecast this year nationwide, a turnaround isn’t expected for at least three years. Don Eyler, who has owned E and R Construction in Terre Haute, Ind., for three decades, blames the banks. He says people are still interested in having a custom-built home but can’t finance the purchase. Tighter credit has made it harder to get larger loans. Eyler typically built eight homes a year before the housing boom and bust. Now, he’s averaging just about five. And he’s making less profit on each. “We hope we can stay in business until it gets better, but the turning point is this year,” Eyler says. “If it doesn’t change, we’ll have to do something different.” Contributing to higher new-home prices is the rising cost of building materials. Fewer new homes sold means fewer jobs added to an economy struggling with 8.9 percent unemployment. About 2.2 million overall construction jobs have disappeared since the housing boom went bust. That’s nearly a third of the people the industry employed in January 2007. Workers in residential construction have fared even worse than other construction employees. Homebuilders cut nearly 1.3 million jobs in that time, or 39 percent of total payrolls. Besides generating jobs in construction and other fields, new-home purchases tend to help the economy because buyers are more likely to buy new furniture, appliances and other amenities. There’s also the psychological factor. In good times, most homes rise in value. But new homes historically have risen faster – by an additional 1.5 percent a year, according to Realtors and census data. When homes appreciate in value, people feel they have more money. So they spend more. “When you have more net worth, especially in your home, you feel richer,” says Chris G. Christopher Jr., senior principal economist at IHS Global Insight. ___ AP Business Writers Christopher S. Rugaber in Washington and Alex Veiga in Los Angeles contributed to this report.

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Video: Portes Says U.K. Inflation May Decline `Quite Sharply’

March 23, 2011

March 23 (Bloomberg) — Jonathan Portes, head of the National Institute of Economic and Social Research in London, talks about the outlook for inflation this year and the U.K. government’s budget. He speaks with Maryam Nemazee on Bloomberg Television’s “The Pulse.”

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Walmart Will Urge Supreme Court To Reject Record Sex-Discrimination Lawsuit

March 22, 2011

WASHINGTON (Reuters) – Wal-Mart Stores Inc will urge the Supreme Court next week to reject the largest class-action sex-discrimination lawsuit in history, brought by female employees who seek billion of dollars. The top U.S. court hears arguments on March 29 in a lawsuit against the world’s largest retailer for allegedly giving women less pay and fewer promotions at 3,400 U.S. stores since late 1998. Lawyers for the two sides will spar over whether the small group of women who began the lawsuit 10 years ago can represent a huge nationwide class of current and former employees that could total millions of women. The case has pitted women’s and employees’ rights against business interests, with Robin Conrad of the U.S. Chamber of Commerce calling it “the most important class-action case facing the court in over a decade.” The case will have far-reaching implications for working women who challenge discrimination, women’s rights advocate Marcia Greenberger of the National Women’s Law Center said. “The ability of women to be treated fairly in the workplace hangs in the balance,” Greenberger said. The ruling, expected by late June, could change the legal landscape for workplace class-action lawsuits and affect many cases, including a similar one against Costco Wholesale Corp. Large class-action lawsuits make it easier for big groups of plaintiffs to sue corporations and they have yielded huge payouts by tobacco, oil and food companies. Companies have sought to limit such lawsuits to individual or small groups of plaintiffs. The Supreme Court, with a conservative majority that has often ruled for businesses, has already limited large class-action securities fraud lawsuits and asbestos cases. If Wal-Mart wins, the huge class would be undone, though the company still could face individual discrimination lawsuits. If the workers win, they would be able to pursue their lawsuit as a collective group at trial. Legal experts and financial analysts said Wal-Mart, with more than $400 billion in sales and $16 billion in net income last year, has enough cash to make even a big payout if it loses at trial. “It would take a seismic ruling against the company to have an impact on the valuation,” said R.J. Hottovy, equity analyst at the Chicago-based Morningstar Inc investment research firm. MANAGERS ACCUSED OF GOING STRIP CLUBS The Wal-Mart lawsuit has produced testimony that managers held business meetings at Hooters restaurants, attended strip clubs and referred to female employees as “girls,” in what plaintiffs lawyers said was a corporate culture rife with stereotypes demeaning to women. Wal-Mart, founded in 1962 and based in Bentonville, Arkansas, has denied the allegations and said it has operated under a policy barring discrimination. The discount retailer said the claims involving current and former female workers, hourly employees and salaried managers, and stores across the country are too different to proceed as a single class-action lawsuit. Lawyer Theodore Boutrous, who will argue for Wal-Mart, said bundling together all the diverse claims is unfair, making it impossible for the company to defend itself. “Class actions can be helpful for efficiency, and there’s an attraction to that. But at some point, they can start chopping away rights. I think that’s what happened here,” Boutrous told reporters. Jocelyn Larkin and other lawyers for the employees disagreed. They said overwhelming evidence supported the judge’s decision, upheld by a U.S. appeals court, to certify the nationwide class for trial. “Wal-Mart is attempting to dismantle the Supreme Court’s employment discrimination class-action jurisprudence,” Larkin said. “Such far-reaching changes to the law would require the court to overrule 45 years of civil rights and class-action precedent. This would rule out certification of all but the smallest employment discrimination cases,” Larkin said. The Obama administration did not take a position in the dispute, even though the federal government’s Equal Employment Opportunity Commission previously supported the workers. Legal briefs filed with the Supreme Court split largely along predictable lines, with Wal-Mart supported by business groups and big corporations, including retailer Costco, tobacco company Altria Group Inc and software giant Microsoft Corp. Women’s rights groups backed the employees. The Supreme Court case is Wal-Mart Stores Inc v. Betty Dukes, No. 10-277. (Additional reporting by Jessica Wohl in Chicago; Editing by Will Dunham) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Matt Cohen: Four Market Research Mistakes to Avoid

March 21, 2011

Somebody in my family was recently sent a direct-mail survey from the National Republican Senatorial Committee (NRSC). The survey’s purpose, according to the accompanying letter from NRSC Chairman Senator John Cornyn (R-TX), is to help Republicans in the Senate “fight for the interests and issues that matter to our grassroots base…” That’s a legitimate reason to put a survey in the field, but the questionnaire — like so many others — has a variety of flaws that prevent it from accurately collecting and reflecting the views of the respondents. Whether it’s for political, business, or academic purposes, proper survey design should help market researchers to reveal truths that will enable better decision-making. With that in mind, I’d like to look at some of the flaws in this particular survey with the goal of demonstrating how surveys should actually be constructed. To begin, look at the format of the following questions: Note that the Very important/Somewhat important/Not important answer format doesn’t allow for negative responses. You have to either agree that the prompts represent issues that are important to you (“Very important” and “Somewhat important”) or state that you are indifferent (“Not important”). There is no way for anybody to express that they disagree with a party platform. Suppose you’re a Republican voter who thinks we need amnesty for illegal immigrants. Saying the issue is “Not important” will not accurately reflect your opposition to one of the party platforms. This entire section could have more accurately captured the opinions of the respondents if a five-point Likert scale had been used. For example, the immigration question could have been written as: The Senate should stop passage of amnesty for illegal immigrants. __ Strongly Agree __ Somewhat Agree __ Neither Agree Nor Disagree __ Somewhat Disagree __ Strongly Disagree Of course, this suggestion assumes that the purpose of the survey is to accurately reflect the opinions of Republican voters. There are, however, some questions on the survey that suggest that may not be the case. For example, look at this item from the same section: The prompt is worded to intentionally bias the reader. “ObamaCare” is a weighted term that was coined to make the listener feel negative feelings against health care reform. Here’s the most blatant example of bias being built into the questions: That’s not a question — it’s a lecture. Are the creators of the survey anticipating that anybody will check the “No” box? Here’s an important rule to remember about survey design: never ask a question if the response will not influence your decision-making process. Otherwise, the data you collect will be useless. This survey has many questions where the responses are unlikely to have any impact on how the NRSC behaves either in terms of the legislative agenda or their campaign marketing strategy. So why did they ask that last question? Just as some earlier questions were meant to remind readers about how they should feel about key issues, this final question is meant to act as a pledge . The survey is asking you to confirm your party loyalty. It should come as no surprise that this pledge (disguised as a survey question) is used to segue to the final section of the document: It may look like a survey — but this mailing is really a fundraising effort. Combining market research and fundraising into a single mailing is an ethically questionable practice that violates the trust of the participants. When people choose to complete a survey, they believe that they are helping the researcher and having their voice heard. If the survey turns out to be nothing more than a fundraising campaign, then the participants waste their time and their good intentions. Hypothetically, if this poll really did have the dual purpose of collecting data and raising funds, what effect would the donation or fee requirement have on the results of the survey? The survey’s stated purpose is to take the pulse of all Republicans. The fundraising effort would have the effect of making sure that the sample represents only Republican donors . (There is no check box for completing the survey but not sending money.) This would introduce a selection bias and corrupt the results. If you’re a Democrat, I hope this case study doesn’t make you feel superior: I’m sure there are progressive and liberal organizations that use similar fundraising tactics. If you’re a Republican, I hope you’re able to look past politics to see that the purpose of market research is to collect accurate data that represents your target population, not to persuade people. It doesn’t matter whether a survey is being conducted by political fundraisers or by businesses — the basic standards of responsible market research must remain absolute.

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Kit Yarrow, Ph.D.: The Behavioral Economics of Tax Refunds

March 21, 2011

If you were about to get a check for $3,000, what would you do with it? If you’ve already thought about it, you’re not alone. It’s tax refund time and two thirds of Americans have received or are anticipating a refund. Last year 119 million Americans received refunds totaling more than $358 billion. So far this year the average tax refund is close to $3,200. Obviously a large refund means you’ve overpaid your taxes during the year. Yet only 19 percent of Americans receiving refunds plan to reduce their withholdings. Why? Some overpay out of fear they’ll owe money at tax time. A few are surprised to be getting a refund. But most use Uncle Sam as a savings enforcer. Debt reduction seems more dramatic when it happens all at once, savings feel more meaningful in large chunks and vacations are easier to save for if the money’s automatically set aside. Having money deducted from your paycheck before you can spend it is a tried and true savings method. But with all that technology has brought to banking, it’s easier than ever to do it yourself and gain the advantage of making the savings work for you in the meantime. Here’s how Americans plan to use their tax refunds this year, and why they should have withheld less instead. Spend It Tanya admits that she looks forward to “splurging” when she gets her refund. “It’s always gone before I know it, it seems like so much money — but after dinner out, a couple bills paid and a little shopping, it’s gone.” While most people logically understand that a tax refund is simply the return of their own money, emotionally it can feel like a windfall. And windfalls are typically spent more frivolously and extravagantly than hard-earned cash. Over half of those getting refunds plan to spend it. Stacy is getting a new iPad. “Perfect timing,” she says. Rudy is getting his dog’s teeth cleaned, and Jay just bought a bigger television. According to a study conducted by BIGresearch for the National Retail Federation, 12 percent plan to use their refunds for a vacation. The same survey finds that 30 percent plan to spend their checks on “everyday expenses” and 13.2 percent on big ticket items like furniture or electronics. Save It But 42 percent plan to sock it away. That percentage has been growing since the start of the recession. In 2007, 38 percent planned to save their refund. Savers could have saved even more if they’d been tucking it away (with interest) or investing part of a bigger paycheck all year long. Pay Down Debt A “tax refund savings plan” makes the least sense of all for the 42 percent of Americans who plan to use their refunds to pay down debt. “I usually use my tax refund to pay any leftover holiday bills,” says Carrie. But if Carrie had withheld less and paid her bills when they arrived, she would have avoided finance charges. Debt reduction is normally the top pick in annual tax refund surveys. This year the lowest percentage since 2006 are using their refunds to pay off debt. Which might mean that survey-takers are getting more honest. Federal Reserve statistics show that credit debt is typically reduced or slowed around refund time but it’s nowhere near the numbers you’d anticipate by the percentage found on previous year’s surveys. BONUS STAT: Wondering if you’ll get audited? Last year the IRS examined 1.5 million individual tax returns. Sources: IRS 2010 Data Book National Retail Federation 2011 Tax Survey Federal Reserve Statistical Release on Consumer Credit IRS Tax Stats Bankrate.com 2010 Tax Survey

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Edward R. Hamberger: Freight Rail Investments Helping America Meet the Challenges Ahead

March 17, 2011

When I witnessed President Obama address the U.S. Chamber of Commerce last month, he issued a call to American businesses to invest private capital reserves and begin hiring again in an effort to boost lagging employment rates. For the past 30 years, the nation’s freight railroads have been doing exactly that: investing record amounts of private capital in the national rail network and supporting jobs across the country. That is because, unlike any other mode of transportation, freight railroads operate across infrastructure they themselves build, maintain and grow with private dollars. Last week, we announced that freight railroads once again are projected to spend a record $12 billion on capital expenditures in 2011, up from $10.7 billion in 2010. On the whole, freight railroads invest five-times more than the average U.S. manufacturer, and since 1980 have invested $480 billion to build, maintain and grow the national rail network. So, freight rail has been and will continue to meet the President’s call in the critical years ahead. However, we must recognize the reality that these multi-billion dollar investments made by the freight railroads — which enable the movement of one third of the nation’s exports — are both dependent on and supported by sensible government regulation. Acknowledging the role business has to play in expediting our nation’s economic recovery, the President in January issued an Executive Order pledging to seek out and remove regulations that are needlessly stifling capital investment, job creation and subsequent economic growth. It is upon this critical point that freight rail’s continued success, and continued private capital investments, depend. Let me be specific. Recently, the Federal Railroad Administration (FRA) agreed to review its regulations for implementing positive train control, the most expensive federal safety mandate in railroad history. This is a regulation that Cass Sunstein, administrator of the White House Office of Information and Regulatory Affairs, when prompted to offer an example of any rules where the benefits don’t justify the costs, cited PTC as a stand-out example. By taking steps to review the PTC rule, FRA has an opportunity to revise a federal mandate that according to the Administration’s own estimates has a cost-benefit ratio of nearly 20 to one. While these steps by FRA are laudable, there remain other challenges from both legislation and regulations that threaten to undermine railroad infrastructure investments. Despite broad acknowledgment of the importance of continued private rail investments amidst federal, state and local budget cuts, there are those in the executive and legislative branches of government that continue to pursue fundamental changes to the very economic regulations that have spurred rail’s growth and have allowed it to serve as an economic engine for the country. Whether through legislation or regulation, these proposals are creating an air of uncertainty in the marketplace, potentially harming those businesses that rely on rail to get their goods to the global market, and ultimately consumers. Uncertainty has a chilling effect on investments, which could in turn reduce railroads’ ability to sustain record spending on rail infrastructure and equipment. That means existing track and equipment would deteriorate and plans for new capacity eliminated. Inevitably, rail service would become slower, less responsive, less affordable and less efficient. This could not come at a worse time. President Obama and Congress have great expectations for the freight rail industry — whether that’s to help American business double exports by 2015, or to provide the literal foundation for increased intercity and high-speed passenger rail. Now is the time to revisit what regulations stand in the way of reaching our goals, while preserving those that help ensure continued success and economic growth. This will allow freight rail to continue to meet the great expectations America has for meeting the needs of business and consumers and help keep propelling U.S. economic recovery.

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