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

February 6, 2011

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

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3 More Banks Shuttered, 14 Failures Already In 2011

February 5, 2011

WASHINGTON — Regulators on Friday shut down three small banks in Georgia and Illinois, bringing to 14 the number of bank failures in 2011 following last year’s tally of 157 amid the sagging economy and mounting bad loans. The Federal Deposit Insurance Corp. seized American Trust Bank, based in Roswell, Ga., with $238.2 million in assets and $222.2 million in deposits; North Georgia Bank of Watkinsville, Ga., with $153.2 million in assets and $139.7 million in deposits; and Chicago-based Community First Bank, with $51.1 million in assets and $49.5 million in deposits. Renasant Bank, based in Tupelo, Miss., agreed to assume $147.4 million of the assets and all the deposits of American Trust Bank. BankSouth, based in Greensboro, Ga., is assuming $123.9 million of the assets and all the deposits of North Georgia Bank. Northbrook Bank and Trust Co., based in Northbrook, Ill., is acquiring the assets and deposits of Community First Bank. In addition, the FDIC and Renasant Bank agreed to share losses on $94.3 million of American Trust Bank’s loans and other assets. The FDIC and BankSouth are sharing losses on $120.1 million of North Georgia Bank’s assets. The agency and Northbrook Bank and Trust are sharing losses on $42.8 million of Community First Bank’s assets. The failure of American Trust Bank is expected to cost the deposit insurance fund $71.5 million. The failure of North Georgia Bank is expected to cost $35.2 million; that of Northbrook Bank and Trust, $11.7 million. The two Georgia banks brought the number of failures in that state this year to four. Georgia has been one of the hardest-hit states for bank failures amid an avalanche of bad loans – especially for commercial real estate. Twenty-one banks were shuttered in the state last year. Other states that have seen large numbers of bank failures are Florida, California and Illinois. The 157 bank closures nationwide last year topped the 140 shuttered in 2009. It was the most in a year since the savings-and-loan crisis two decades ago. The FDIC has said that 2010 likely would be the peak for bank failures. Already this year the pace of closures has slowed: By this time last year, regulators had closed 16 banks. The 2009 failures cost the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were on average smaller. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007. The growing number of bank failures has sapped billions of dollars out of the deposit insurance fund. It fell into the red in 2009, and its deficit stood at $8 billion as of Sept. 30. The number of banks on the FDIC’s confidential “problem” list rose to 860 in the third quarter of last year from 829 three months earlier. The 860 troubled banks is the highest number since 1993, during the savings-and-loan crisis. The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014. Depositors’ money – insured up to $250,000 per account – is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.

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The Psychology Of Lotteries: Feeling Poor Makes People Want To Play, Study Shows

February 5, 2011

What makes people — particularly poor people — play the a lottery when the odds of winning are so low? Jonah Lehrer has an interesting post delving into the psychology of lottery-players. Lehrer notes that lottery has become a deeply regressive tax because the majority of lottery players are poor, and the majority of the money spent on lottery tickets goes to the state. Alicia Hansen, at the Institute for Public Accuracy explains : If a person who makes $15,000 a year purchases $3,000 worth of lottery tickets, she will spend 20 percent of her income on the lottery–quite a large portion (about one-third of that amount will be in the form of implicit lottery taxes). However, if an individual who earns $1,500,000 a year spends the same amount, it will be a drop in the bucket–a mere .2 percent of her income. Taking into account only the dollar amount spent misses the point. Our current federal income tax is progressive, meaning rates rise as income rises–the opposite of regressive. Many experts have argued for a flat tax, with one rate for all, but virtually no one would argue for a regressive income tax, where rates rise as income falls; such a tax would be seen as unfair and unduly burdensome to the poor. Lehrer highlights a paper from 2008 which seeks to explain why the poor buy lottery tickets, even though it’s against their financial interests. “The problem, it turns out, is feeling poor.” Lehrer points to a particularly poignant bit from the study: In two experiments conducted with low-income participants, we examine how implicit comparisons with other income classes increase low-income individuals’ desire to play the lottery. In Experiment 1, participants were more likely to purchase lottery tickets when they were primed to perceive that their own income was low relative to an implicit standard. In Experiment 2, participants purchased more tickets when they considered situations in which rich people or poor people receive advantages, implicitly highlighting the fact that everyone has an equal chance of winning the lottery. Last year, the North American lottery system generated more than $70 billion — more than Americans spent on music and movie tickets combined.

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NY Mets Owners Hit With $300 Million Madoff Lawsuit

February 4, 2011

NEW YORK/DETROIT (By Jonathan Stempel and Ben Klayman) – The owners of the New York Mets turned a blind eye to Bernard Madoff’s Ponzi scheme and should give up roughly $300 million of fictitious profits tied to the now imprisoned swindler, a lawsuit charges. Irving Picard, the court-appointed trustee recovering money for Madoff’s victims, claims the partners at Sterling Equities, including the Mets’ Fred Wilpon, “were simply in too deep — having substantially supported their businesses with Madoff money — to do anything but ignore the gathering clouds. “Despite being on notice and having every resource at their disposal to investigate the litany of legitimate questions surrounding Madoff,” Picard said, “the Sterling partners chose to do nothing.” In his sweeping 365-page complaint unsealed on Friday, Picard also said the baseball team itself had 16 Madoff accounts from which it withdrew more than $90 million of bogus profits to fund day-to-day operations. The litigation has cast its own cloud over the immediate future of the Mets, which has had two straight losing seasons despite having one of the highest payrolls in Major League Baseball. Attendance at its two-year-old ballpark Citi Field fell 19 percent last year. Wilpon, a co-founder at Sterling, repeated that he may sell part of the Mets as a result of Picard’s litigation. The Mets also own a majority of SportsNet New York, better known as SNY, which broadcasts their games, with Time Warner Cable Inc and Comcast Corp also owning stakes. “OUTRAGEOUS STRONG-ARM EFFORT,” WILPON SAYS In a joint statement, he and Sterling co-founder Saul Katz, who is Wilpon’s brother-in-law, called Picard’s lawsuit “an outrageous strong-arm effort” to coerce a settlement and ruin their reputations and businesses. “Not one of the Sterling partners ever knew or suspected that Madoff ran a Ponzi scheme,” they said. “We thought that Madoff was a friend for 25 years. That is why his betrayal was so painful. We should not be made victims twice over — the first time by Madoff, and again by the trustee’s actions.” A Major League Baseball spokesman declined to comment. Madoff’s estimated $65 billion Ponzi scheme was uncovered on December 11, 2008. Now 72, Madoff later pleaded guilty and is now serving a 150-year prison sentence in North Carolina. Picard filed the lawsuit under seal in December. Wilpon had opposed making it public while settlement talks with the trustee were ongoing, but agreed to an unsealing after the talks broke down. OTHER MADOFF LITIGATION According to the complaint, Picard is seeking $295.5 million of fictitious profits from Sterling partners, family members and affiliates; $14.2 million of principal withdrawn in the 90 days prior to the collapse of Madoff’s firm; and $12 million of other “fraudulent” transfers. The lawsuit came one day after Picard unveiled embarrassing accusations in his $6.4 billion lawsuit accusing JPMorgan Chase & Co, once Madoff’s main banker, of turning a blind eye to and being “thoroughly complicit” in Madoff’s fraud so it could do more business with him and protect its investments. Picard has recovered roughly $10 billion from various parties to repay former Madoff clients. Wilpon has said he might sell 20 percent to 25 percent of the Mets, while retaining a majority stake [ID:nN28107090], but a big settlement could force a change in ownership. “Any time you have this kind of noise around a sale, you start at 25 percent, then you sell 50 percent with an option to buy the rest; it seems to be heading in that direction,” said a sports banker who asked not to be identified, citing a lack of authority to discuss specific teams. “At the end of the day, anyone coming in is going to want some kind of voice, is going to want a piece of the whole pie,” the banker added. The case is Picard v. Katz et al, U.S. Bankruptcy Court, Southern District of New York, No. 10-ap-05287. (Reporting by Jonathan Stempel in New York and Ben Klayman in Detroit; Editing by Lisa Von Ahn, Phil Berlowitz) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Video: Coca-Cola’s Perez Says Super Bowl Ads Set Tone for Year

February 3, 2011

Feb. 3 (Bloomberg) — Bea Perez, chief marketing officer for North America at Coca-Cola Co., discusses the advantages of advertising during the Super Bowl and the role of the commercials in the company’s broader marketing plan. Perez speaks with Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Dan Dorfman: Lady Dracula Sees Gobs Of New Jobs

February 2, 2011

For the moment, at least, America’s biggest economic worry — the lofty unemployment rate — may finally be taking a decided turn for the better. In December, 103,000 new jobs were created in non-farm payroll employment. The January number, to be reported Friday by the Bureau of Labor Statistics, could double that with a gain of between 175,000 and 215,000 jobs, according to Madeline Schnapp, the economics chief of West Coast liquidity tracker TrimTabs Research. “We expect the job growth reported by the BLS to surprise on the upside,” she says. Interestingly, Schnapp, who got the moniker “Lady Dracula” in economic circles for being exceptionally bearish on the economy in recent years, has had a change of heart. No longer, like last October, is she warning of a gory jobs story. The reason for her positive shift, she tells me: the trillions of dollars in freshly printed and borrowed money pouring into the system, which she thinks could be a boon for new job creations.. Given her altered economic stance, maybe she should undergo a name change, say to Glinda, who was the good witch of the north in the Wizard of Oz . Why the creation of gobs of new jobs in January? Schnapp offers a slew of reasons, namely: – The TrimTabs online jobs posting index rose 4.5% in January, the biggest monthly gain since October of 2010. – Initial unemployment claims have been trending lower since August of 2010. – Commercial and industrial loan growth accelerated to 1% in the past month. Such strong growth often accompanies a pickup in job growth. – The Federal Reserve’s senior loan officer opinion survey reported the demand for business loans picked up in the fourth quarter of 2010, while demand for commercial and industrial loans was the strongest sine 2006. – Fed manufacturing surveys for New York, Philadelphia, Richmond and Kansas City all reported rising employment. – The Institute of Supply Management business conditions indices for Chicago and New York have both showed job improvements, – The Fed’s “beige book” (a Fed commentary of current economic conditions) reported that labor markets rose in most districts. Temporary staffing firms in six of 12 districts gave positive reports, while eight of 12 said their business contacts planned to hold hiring steady or increase hiring in 2011. – Personal consumption expenditures rose 4.4% in last year’s fourth quarter, the largest hike since the first quarter of 2006. Meanwhile final sales jumped 7.1%, the strongest growth since 1984. – The ISM manufacturing index component surprised on the upside, pointing to strong employment growth. – TrimTabs withholding tax data was strong the last two weeks of January. Because a lot more discouraged workers are coming back into the labor force, Schnapp figures we may not see a sizable improvement in the unemployment rate (presently 9.4%) despite her projected jump in new jobs. In fact, she says, we may even see the unemployment rateactually increase. While bullish now on the economy, Lady Dracula hastens to point out it’s too soon to uncork a fresh bottle of champagne, given her two biggest long-term concerns: the question of whether the economy will be able to grow without extraordinary government support and the additional uncertainty of whether there are sufficient buyers of U.S. treasuries at low yields. What do you think? E-mail me at Dandordan@aol.com

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U.S. Will Hit Debt Limit In April/May, Treasury Says

February 2, 2011

WASHINGTON (By David Lawder) – The United States will hit a $14.3 trillion statutory limit on its debt slightly later than previously estimated, the Treasury said on Wednesday as it unveiled a still-hefty debt auction schedule. Treasury officials said the limit would now be hit between April 5 and May 31, versus a previous estimate of end-March to mid-May. The later time frame reflected an upward revision to estimates of tax receipts and a downward revision to projected borrowing from the Social Security and Medicare trust funds. The officials said they were proceeding with borrowing plans under the assumption Congress will raise the limit without a protracted battle, an assumption financial markets share. How much it should be raised is a question for Congress, they said. “We do not have a have particular figure that we have put to Congress. That is their prerogative to offer that,” Mary Miller, Treasury assistant secretary for financial markets, told a news conference. If Congress does not raise the limit in a timely way, the government could be forced to scale back operations. A failure to lift the limit could raise the specter of a first-ever U.S. debt default and push up interest rates sharply. Financial markets have not yet shown any nervousness over the debt limit, which has typically been raised after political grumbling. Treasury yields rose on Wednesday as higher oil prices fueled inflation concerns, but the 10-year note remained below 3.5 percent resistance level. Still, there will be political skirmishes along the way. A number of Republican lawmakers have raised opposition to increasing the limit without significant concessions on spending cuts from the Obama administration. A contentious debate is expected after the White House unveils its proposed fiscal 2012 budget later this month. “Given the history of debt limit fights, brinkmanship will rule the day, and nothing of significance will happen in February,” said Pierpont Securities analyst Stephen Stanley adding that a resolution could drag out “to the bitter end.” Senate Budget Committee Chairman Kent Conrad said the delay in hitting the debt limit buys more time for Congress to reach consensus on a plan to control long-term deficits — a complex and difficult task. “The increase in the debt limit, the amount of it, is much less important to me than having a plan that over time brings down this debt,” Conrad, a Democrat from North Dakota, told reporters. “That to me is the key.” EMERGENCY ACTION The Treasury can take special measures such as dipping into government pension funds, to delay hitting the limit by up to another eight weeks, potentially pushing the day of reckoning into July. It plans to provide a new estimate on the timing at the start of every month. It already has begun to draw down a $200 billion Federal Reserve supplementary financing account, and Miller said the next step would be to halt issuance of debt to state and local governments, which has totaled $36.4 billion since October. Treasury’s Miller said the government had no plans to selectively cut or delay payments to employees or contractors . That “would in a sense be defaulting on our obligations, so it’s not a path that we want to go down,” she said. She added that accelerating sales of assets held by the government, such as shares in bailed-out companies or mortgage-backed securities, was also not an option that Treasury wanted to consider. On Monday, the Treasury slashed its borrowing estimate for the current quarter by $194 billion due to the drawdown of the Fed account. But overall, it said spending needs are increasing due to the recently enacted package of extended tax cuts and unemployment benefits. The Congressional Budget Office last week estimated a record $1.48 trillion for fiscal 2011, up from $1.29 trillion last year. The Treasury said it intends to meet this funding increase through a rise in short-term bill auction sizes, while keeping longer-term note and bond auctions steady at current levels. As expected, the Treasury announced a $72 billion refunding of its maturing 3-year, 10-year and 30-year debt, unchanged from the last refunding in April. The auctions will raise about $50.2 billion in new cash. The Treasury also disclosed that it had discussed with big bond dealers the possibility of an “ultra-long” bond with a maturity of 40, 50, or 100 years, as one of several options to broaden the investor base for Treasury debt. Miller said no decisions on this front were imminent. (Additional reporting by Rachelle Younglai; Editing by Andrea Ricci and Andrew Hay) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Chevron Leaving Coal Mining Industry

January 31, 2011

CHEYENNE, Wyo. — Petroleum giant Chevron Corp. said Friday it plans to get out of the coal industry by the end of the year. The decision came after the company determined that new coal technologies were developing too slowly to make staying in the industry a good strategy, Chevron Mining Inc. spokeswoman Margaret Lejuste said. One of the technologies is known as coal-to-liquids, in which coal is processed into diesel, gasoline or other fuels. “Those technologies are so far into the future, 10 to 15 years in the future, they made the strategic decision to focus on other operations other than mining,” she said of the company. Chevron intends to sell off three coal mines in Wyoming, New Mexico and Alabama. The sites include the company’s open pit mine outside Kemmerer in western Wyoming, which has been on the market for about a week. “It’s my understanding there are a number of interested parties who are looking at the mine,” Lejuste said. The company also is closing a deal with Tampa, Fla.-based Walter Energy to sell its North River underground mine in western Alabama. A tentative agreement with Walter Energy was announced last year. San Ramon, Calif.-based Chevron also may sell reclaimed land from a surface coal mine in northwestern New Mexico that has been closed since 2009. The three mines together produced nearly 10 million tons of coal in 2009. Chevron also intends to sell its 50 percent stake in a proposed coal mine outside Sheridan in northern Wyoming. The Kemmerer mine, which employs about 300 people and produces around 5 million tons of coal a year, is one of the world’s largest open pit coal mines. Even so, it’s a small producer compared with the strip mines of northeast Wyoming, which can yield upward of 100 million tons of coal a year. Wyoming produces 40 percent of the nation’s coal, more than any other state, and has invested heavily in coal technologies. Coal-to-liquids should be viable at today’s oil prices, said Mark Northam, director of the University of Wyoming School of Energy Resources. But questions remain about the performance and long-term viability of coal-to-liquids plants, Northam said. “Some folks can stomach that uncertainty and some can’t,” he said. A company such as Chevron has other business besides coal to fall back on, he said, whereas a company such as St. Louis-based Arch Coal is all about coal. Arch Coal has invested in a planned $2.7 billion coal-to-liquids plant tentatively set to open in southeast Wyoming in 2014. “If you were looking at it from the point of view of Arch Coal, where coal is your product and you’re looking to expand the market and protect its position, you would have a different view,” Northam said.

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Video: CF’s Wilson Says N. American Investment More Attractive

January 28, 2011

Jan. 28 (Bloomberg) — Stephen Wilson, chairman and chief executive officer of CF Industries Holdings Inc., talks about food inflation, grain and natural-gas prices, and his company’s growth strategy. CF Industries is North America’s largest maker of nitrogen fertilizer. Wilson speaks with Julie Hyman on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

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BNP Paribas Expands Coverage of Financial and Official Institutions in North America

January 27, 2011

NEW YORK, NY–(Marketwire – January 27, 2011) – BNP Paribas Corporate and Investment Banking is pleased to announce the growth of its North American Client Coverage Group and establishment of the Official Institutions Coverage team for the Americas.

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How A NY Tax Cut Backfired On The Tea Party

January 27, 2011

MINEOLA, New York (By Edith Honan and Kristina Cooke) – At his January 2010 inauguration, Tea Party-backed Republican Edward Mangano marched up to the podium, pen in hand. Even before being officially declared Nassau County Executive, he signed a repeal of an unpopular home energy tax. The move elicited chants of “Eddie, Eddie, Eddie” from supporters assembled in the auditorium of Mangano’s alma mater, Bethpage High School, 30 miles east of New York City. “This is very cool and quite an honor,” Mangano said as he gave his admirers a thumbs-up. The fiscal consequences, however, were anything but cool. The repeal set Mangano on an immediate collision course with the state-appointed fiscal overseer, the Nassau County Interim Financial Authority, or NIFA. It culminated in NIFA seizing control of the wealthy New York county’s finances on Wednesday. Nassau’s ills exemplify the growing tension across the country as dozens of freshly-elected Tea Party lawmakers, many of whom promised to cut taxes, must find ways to slash record budget gaps as revenues dwindle. “A lot of people who got elected on this type of anti-tax platform are running into the brick wall of fiscal reality,” said Matthew Gardner, executive director of the non-partisan Institute on Taxation and Economic Policy in Washington. Besides being a cautionary tale, the setback in Nassau County is a black eye for the Tea Party, the grassroots movement built around the core principles of constitutionally limited government, free-market ideology and low taxes. Indeed, a close examination reveals that the affluent area’s woes were exacerbated by missteps and miscalculations. Among other things, a Reuters review of dozens of public and private documents showed vague, circular answers to oversight panel queries and basic math errors in budget documents. In a sense, Nassau County’s predicament remains highly unusual. The oversight board created by New York State more than a decade earlier following a financial crisis gave Mangano little margin for error. But in other ways, Nassau County is not unlike many places in the United States today. A June 2010 survey by the National Association of Counties found 65 percent of the 800 counties polled reported budget shortfalls of between $100,000 and $50 million. “It’s a metaphor for what is happening in the Western world,” said Richard Ravitch, who advised New York City during its fiscal crisis in the 1970s. “People don’t want to tax but there is a point below which they don’t want to cut.” TAX REVOLT Mangano’s victory over two-term Democratic incumbent Thomas Suozzi in 2009 was one of the first major upsets that can be chalked up to the Tea Party. His campaign posters avoided the word “Republican” and instead stressed his “tax revolt” message. On that score, his opponent was an easy target. To help close a yawning budget gap, Suozzi had instated the $45 million home energy tax and indicated he would raise property taxes. The home energy tax cost households on average $7.27 each month — a fraction of most tax bills. But in an area already paying some of the highest taxes in the country, it took on symbolic importance. Mangano defeated Suozzi by fewer than 400 votes, stunning the political establishment. With his Long Island accent and a heavy frame, Mangano is often described as genial. He has made much of his blue-collar roots, including his time spent working as a janitor while a high school student. His struggle began almost the minute he repealed the energy tax. “I’m not sure that (Mangano) understood the magnitude of the fiscal problems that he faced and he had promises from the campaign that he had to keep,” said Lawrence Levy, a dean at Hofstra University and a former member of the editorial board at Long Island daily Newsday. Eliminating the energy tax “blew a bigger hole in his budget and added to the problem with really no plan to replace the revenue,” he said Within two working days of Mangano’s inauguration, a letter from NIFA landed on his desk — the opening salvo of what would fast become a testy relationship. In a two-page letter, NIFA’s chairman Ronald Stack requested a revised multi-year plan and asked Mangano how he planned to make up for the lost revenue. He never did provide an answer that satisfied them. On Wednesday, NIFA said the county’s $2.6 billion budget was out of balance by $176 million, meaning it could take control of its finances. Mangano said he would sue NIFA. HEAVEN FOR REPUBLICANS To be sure, Nassau County’s fiscal woes long predate the Tea Party. Known as the “Gold Coast” and dotted with sprawling mansions in America’s Roaring Twenties, the North Shore of Nassau County was the setting for F. Scott Fitzgerald’s “The Great Gatsby.” Following World War Two, the entire county transformed into the quintessential American suburb. Its proximity to New York City, its beaches, good schools and low crime rate led to a rapid population increase. In liberal New York, it was also a rare conservative stronghold. “When a Republican dies and goes to heaven it looks a lot like Nassau County,” former President Ronald Reagan famously said. But by the 1990s, both its economic and population growth had plateaued. At the same time, police salaries had ballooned. By 2000, a Nassau County cop could expect to earn over $100,000, including overtime. In 1999, with bankruptcy a real possibility, the state bailed out Nassau County to the tune of $100 million. NIFA was created the following year to oversee Nassau’s finances and to issue bonds and notes on the county’s behalf. Even a one percent budget gap can prompt a takeover. The county’s financial crisis helped usher in an era of Democratic rule. Suozzi was elected in 2001 and served two terms as county executive before his defeat to Mangano, a 14-year veteran of the Nassau County Legislature. Despite its troubles, the county of 1.4 million people remains one of America’s wealthiest. It has the highest concentration of affluent neighborhoods in the United States, according to Forbes. It also has a median household income of $94,856 almost twice the U.S. median — though it is also one of the country’s most expensive places to live. A shopping strip in Manhasset, known as the Miracle Mile, is a blur of Tiffany’s and Prada and is popular with celebrities including Gwyneth Paltrow and Jennifer Lopez. Although Mangano insists that politics is behind the state’s takeover, the six-member NIFA board is hardly on the same page ideologically, at least according to their voter registration. Three are registered Democrats, one is a Republican, one is a Conservative and one an Independent. The Republican, Thomas Stokes, served as Suozzi’s deputy for finance, while conservative George Marlin publicly backed Mangano during the election campaign. Lately, though, Marlin has become one of Mangano’s most outspoken critics. TALE OF TWO DEFICITS Marlin told a NIFA meeting late last year that Nassau County faced a “tale of two deficits.” “A serious and critical budget deficit that the Mangano administration inherited” and “then there’s the credibility deficit. A lack of candor has been coming from the county. Promises have been made but not kept,” he said. Some problems stemmed from sheer sloppiness. The documents reviewed by Reuters included a number of simple errors. For example, in his review of the county executive’s budget, Comptroller George Maragos, a fellow Republican, incorrectly calculated a gain as a loss in the other revenues column — a $600,000 gain was instead posted as a $500,000 loss. The comptroller’s office said the error was due to a typo. And then there was the chasm between words and actions. Despite his stated mission to slash spending, Mangano did not immediately institute a formal hiring freeze. By far the biggest savings he touted for the 2011 budget were $61 million worth of union concessions. Those never came, and by most accounts were never a serious possibility. The offending home energy tax was part of a three-year deferred-pay deal struck by Suozzi with the unions. Suozzi said the deal would give the county time to get its finances in order as the economy picked up. The thinking was that the home energy tax alongside a promised property tax increase would set up a recurring revenue stream for the county. Among other things, taking on the energy tax hampered Mangano’s ability to negotiate with the unions. “Everybody was supposed to share a little bit of the pain,” said police union President James Carver. “Now the county executive is taking away one of those legs of the three-part plan.” At the end of April, Mangano met with labor leaders at Ruth’s Chris Steak House in Garden City to inform them he would put $61 million in union concessions into his 2011 budget. Union leaders say they remember the dinner as not very substantive, quipping that the main decision of the evening revolved around what to order as a side dish. Carver said Mangano told him the budget item was a mere “place holder” while he pursued a possible Long Island casino project and his revamp of the county’s costly property tax refund system. “He gave me the impression that this was never going to happen,” said Carver, who pointed out that the $61 million reduction would be the equivalent of an 11 percent cut in police salaries. “NO PROPERTY TAX BUDGET” In September, Mangano presented his 2011 budget, which he called a “no property tax budget.” He said it would eliminate 400 county jobs and cut more than $100 million in spending. Both Comptroller George Maragos as well as the county legislature’s Republican majority leader Peter Schmitt deemed the budget was sound. But by NIFA’s calculation, it was off by at least $26 million — the one percent that would spur a control period. “A budget is a plan, it’s a dynamic plan,” the comptroller told Reuters in an interview in his Mineola office. “For NIFA to argue that a one-percent anticipated deficit in a $2.6 billion budget is cause for alarm I think is ludicrous.” But NIFA were not the only one concerned with the 2011 budget. In November, Moody’s Investors Service downgraded the county and put its finances on outlook negative, citing weak liquidity and an over-reliance on nonrecurring revenues. The rating agency singled out the energy tax repeal as problematic. For the next two months, there was constant wrangling between the two sides — with NIFA saying the county had cut taxes without making up the difference and Mangano and Maragos accusing the authority of playing politics. “I thought they were very antagonistic, very assertive … as if they’re in control, they’re running the county,” the comptroller said. Indeed, NIFA sent multiple requests to county officials beginning as early as the summer, asking for back-up for their cost savings as well as a battery of additional contingency plans. When they had questions for the comptroller that August, he was out of the country. Maragos spent nearly six weeks in his native Greece, although he had remote access to email and spoke with his office daily. PERMITTED TO GOVERN As 2010 drew to a close, handling NIFA inquiries had become a full-time job for the county executive and his staff. NIFA called a public meeting at the Long Island Marriott Hotel in Uniondale for December 30. Mangano had not been expected to attend, but in the end he did come — armed with several new contingencies. “There may come a time when I may ask for your help. That time is not now,” Mangano said ahead of the meeting. “We ask that we be permitted to govern.” Following a lengthy closed-door meeting, NIFA decided to hold off declaring a control period, and gave the county three additional weeks to provide further substantiation for the new contingencies. “In an abundance of caution, we’re giving the county one final opportunity to present its case that this budget is balanced,” Stack said, adding this would be its “last chance.” Despite the extra time, a review of all letters sent to NIFA during that period showed few concrete details. When answering questions about labor savings, the county circled back to its extra contingencies, including a land lease deal that had yet to be formally approved. When answering questions about that same land deal, the county looped back to the promised union concessions that have not materialized. Many of the other ideas required some sort of legislative action. In the end, he ran out of time. On Wednesday, NIFA took over. “As is the case elsewhere in New York State and the nation, this is the convergence of anti-tax fervor and a lack of political will to make the expense cuts necessary to balance the budget,” Stokes, the NIFA board member, told Reuters. (Editing by Jim Impoco and Claudia Parsons) Copyright 2010 Thomson Reuters. Click for Restrictions .

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U.S. Manufacturing Profits Suggest Stronger Economy

January 27, 2011

NEW YORK/CHICAGO (By Nick Zieminski and James B. Kelleher) – U.S. manufacturing companies posted higher-than-expected results, as sharply improved margins boosted profits amid strong industrial demand and growth in emerging markets. Companies including Caterpillar Inc, Tyco International Ltd (TYC.N: Quote, Profile, Research, Stock Buzz) and Eaton Corp reported strong sales and earnings, and investors were looking ahead for signs the industrial rebound would begin to affect the wider economy and boost employment. Caterpillar provided an encouraging sign for U.S. jobs but also showed that employment remains one of the main ways companies can control profit margins. The machinery maker, which slashed nearly 30,000 full-time and contract jobs worldwide during the recession, said it had rehired about 8,200 workers worldwide in 2010, and hired another 11,000 temporary contract workers, half in the United States. “A lot of that driven by export demand, so that was an increase in employment,” Caterpillar’s head of investor relations, Mike DeWalt, said on a conference call. “But if you look at sales, sales went up quite a bit more than that.” Caterpillar’s operating margins jumped from 2 percent a year ago to 10 percent in the fourth quarter. Other large industrial names also expanded margins. Caterpillar shares were up 1.7 percent at $97.33, an all-time high for the industrial bellwether. Caterpillar reported a stronger-than-expected quarterly profit, lifted by increased sales of its machines in Asia and Latin America and a sharp rebound in demand in North America, especially from mining customers. The company also forecast it would post a 2011 profit near $6.00 per share, which is above the market consensus. ADDING JOBS “So far so good,” said Oliver Pursche, president of Gary Goldberg Financial Services, about the earnings season for manufacturing companies. He added that corporate comments on jobs were one of the key factors he was listening for as an investor. “The more they talk about hiring, the more comfortable we’re going to be with that company. If you’re hiring people, your business is growing.” Eaton is likely to grow its workforce by a few percentage points this year as markets such as autos, aerospace and nonresidential construction recover from recession, the diversified industrial company’s CEO said. “You’ll see hiring here in the U.S. as well as around the world,” Sandy Cutler told Reuters. Eaton’s quarterly profit beat expectations on a strong truck market and higher demand for its electrical systems. The maker of hydraulics, truck transmissions and other industrial products forecast record 2011 earnings, set a stock split and announced a 17 percent dividend increase. Tyco’s quarterly earnings more than doubled, beating Wall Street expectations amid sharply higher profits at the conglomerate’s security business, which includes the former ADT Worldwide service. Tyco, which said it was close to finalizing acquisitions worth around $500 million, also raised its full-year forecast. Its shares were up 0.8 percent at $45 in afternoon trading. It was one of many stocks trading near multiyear highs. Industrial shares rose 24 percent last year, lagging only the consumer discretionary sector, according to Standard & Poor’s, which recommends investors stay “overweight” in industrials amid expectations of continued global expansion. The sector has also outrun the broader stock market in 2011, and a correction could be imminent, S&P said. As companies keyed to industrial demand continued a trend of beating Wall Street forecasts, investors took profits in some names, like Kennametal Inc and Timken Co. Tool maker Kennametal, considered a pure play on industrial production, raised its full-year forecast above Street estimates amid strong demand from industrial and transportation markets. Profit at Timken, maker of bearings and specialty steel, was helped by auto and truck production and an ability to push through higher prices. Electrical and electronics products maker Hubbell Inc also beat, as did Harsco, which provides products to metals producers. Conglomerate Danaher Corp showed sharply higher profits in its industrial components and test-and-measurement segments. It affirmed 2011 earnings targets. “We expect the global economy to continue to improve in 2011, lead by the emerging markets,” Danaher CEO Larry Culp said on the company’s conference call. WIDESPREAD OPTIMISM Optimism among manufacturing executives is widespread. Sixty-three percent are upbeat about U.S. economic prospects over the next 12 months, according to a quarterly survey by PricewaterhouseCoopers. [ID:nPnNY36849] That marked a 28-point increase over the prior quarter. Still, fewer than half — 48 percent — plan to add employees over the next year, PwC found, partly reflecting concerns about taxes, regulation and soft demand. Worries about corporate taxes, especially, may keep U.S. companies from significantly boosting capacity until the second half of 2011, said analyst Brian Langenberg of Langenberg & Co. U.S. consumers remain constrained by the housing market. A reminder that not all is well on the housing front came from the No. 1 homebuilder, DR Horton Inc (DHI.N: Quote, Profile, Research, Stock Buzz), which posted a wider-than-expected loss. “Industrial production is increasing on a global basis,” Langenberg said. “(Manufacturers) need to increase capital spending. “When do they have to boost capacity? Now. Where? Not necessarily in the U.S.” (Reporting by Nick Zieminski and James B. Kelleher; Additional reporting by Scott Malone in Boston; Editing by John Wallace, Matthew Lewis, Phil Berlowitz) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Robert Gates: Congress Dumping ‘Crisis On My Doorstep’

January 27, 2011

OTTAWA, Ontario — Defense Secretary Robert Gates is accusing Congress of dumping a “crisis on my doorstep” by holding the Pentagon to last year’s spending levels and creating a potential $23 billion gap that could weaken a wartime military. “That’s how you hollow out a military,” Gates said Thursday. Gates said it looks increasingly likely that Congress will not act on the Pentagon’s 2011 budget request even as lawmakers argue over Gates’ proposal to slow the rate of increase in defense spending next year and freeze it by 2015. Gates was in Canada for North American defense talks. In an interview as he traveled to the Canadian capital, the Pentagon chief said he understands that his proposal for $78 billion in cuts in future spending has run into opposition among lawmakers. The opposition is bipartisan – from Republicans who oppose any reductions and Democrats along with some Republicans backed by the tea party who say Gates isn’t cutting enough. Rhetoric on all sides ignores “the real world that I live in,” Gates said. He warned of emergency cuts if the Pentagon is forced to live within last year’s means when it had planned for more. Congress has not acted on the $549 billion request for the budget year that began on Oct. 1. Congress last fall passed a stop-gap government spending measure that keeps budgets at the previous year’s levels. For the Pentagon, that means a budget of about $526 billion, officials say, not counting war funding. Gates said the separate request for spending on the wars in Iraq and Afghanistan will fall to about $120 billion for 2012 from about $159 billion this year, reflecting the planned final troop withdrawal from Iraq. Gates said lawmakers appear so eager to fight over the longer-range Pentagon spending proposal that they are ignoring the near-term effects of not passing a new budget for the current year. If the stop-gap approach is not replaced by a new budget, the Pentagon will face a money pinch that “could have an impact on training across the entire force,” and in other areas, Gates said. One example: After years of concern that the fast pace of wars in Iraq and Afghanistan prevented the Army and Marine Corps from doing a full range of training at home, they finally are in position to correct that shortcoming, Gates said. But the training may be unaffordable for the remainder of this year unless Congress replaces the stop-gap budget, known as a continuing resolution, with a new budget by March. “It’s one thing to talk about 2012 and then to express concerns about something that may or may not happen in four or five years,” he said, such as Gates’ proposal to reduce the size of the Army and the Marine Corps starting in 2015. “But I have a crisis on my doorstep. And I want them to deal with the crisis on my doorstep before we start arguing about the levels (of spending) in 2012.” The Pentagon’s proposed spending plan for 2012-16 will be part of the budget President Barack Obama submits to Congress the week of Feb. 14. The debate over defense spending next year and beyond was on full display Wednesday at a House Armed Services Committee hearing, where Republicans posed tough questions about the risks of slashing too deep and shortchanging U.S. forces. Rep. Buck McKeon, R-Calif., the committee’s new chairman, took the lead by declaring, “I will not support any measures that stress our forces and jeopardize the lives of our men and women in uniform.” Steering the 2012 defense budget through congressional criticism that it is either too ambitious or too meek is likely to be one of Gates’ final campaigns before retiring. If he quits this summer, as many believe likely, he will have been one of the longest-serving defense secretaries since the post was created in 1947. He started in December 2006, succeeding Donald H. Rumsfeld, who resigned amid heavy criticism over the Iraq war. In the interview Wednesday, Gates was vague about his retirement plans. “My lips are sealed,” the former CIA chief said when asked when he intends to leave. “I’m going to be around for a number of months,” including during the budget hearings on Capitol Hill in February and March, Gates said. Last year he said he planned to quit sometime in 2011. Gates has fashioned himself into a guardian of the U.S. military’s global pre-eminence, but he also has cautioned that military muscle can be an illusion. “Possessing the ability to annihilate other militaries is no guarantee we can achieve our strategic goals,” he told Army officers in May. In that same vein, he launched his current effort to preserve military strength while accepting that the nation’s grim financial condition means the days of big annual raises for the Pentagon are over. He demanded that the Army, Navy, Air Force and Marine Corps find $100 billion in budget savings over the coming five years, while allowing them to keep most of that savings for other needs. The military services responded with investments in a modernized fleet of Army tanks, more strike and surveillance drone aircraft for the Navy and Air Force, and more missile interceptors for use in an expanded missile defense system in Europe.

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Halliburton Profit Soars On Jump In Oil Revenue

January 24, 2011

NEW YORK/SAN FRANCISCO (By Matt Daily and Braden Reddall) – Oilfield service company Halliburton Co. posted higher-than-expected profits, boosted by oil projects in North America, and forecast steady growth elsewhere, but said pricing competition could be tough. Shares of the world’s second-largest oilfield services company, which have long traded at a discount to those of larger rival Schlumberger Ltd (SLB.N: Quote, Profile, Research, Stock Buzz), outperformed the sector on Monday in response to the more than doubling of fourth-quarter profit. The rise in oil prices to near $90 a barrel during the period spurred a bout of spending on new wells, overshadowing a decline in natural gas projects, as prices for that fuel remained weak. An 80 percent jump in Halliburton’s North American revenue in the fourth quarter was driven by robust onshore activity, though offshore activity in the Gulf of Mexico remained slack. Graphic on earnings/rig count: r.reuters.com/kym67r On Friday, Schlumberger posted higher-than-expected profits and said it expected client spending to grow. Shares of Halliburton were up 0.5 percent at $39.37 on the New York Stock Exchange in early afternoon trading, off an earlier high of $40.31. The Philadelphia Stock Exchange’s Oil Service index was down 0.2 percent. Halliburton shares are up 25 percent in the last 12 months, but remain a bargain compared with those of peers, analysts said. “It’s still the cheapest of the large-cap diversified (oilfield service) companies,” said RBC Capital Markets analyst Kurt Hallead. Halliburton was trading at a 20 percent discount to rivals based on 2012 earnings forecasts, according to UBS analyst Angie Sedita, who has a price target of $48 on the shares. BEAT THE MARKET Halliburton’s fourth-quarter net profit rose to $605 million, or 66 cents per share, from $243 million or 27 cents per share, a year earlier. Excluding a 2 cent-per-share charge related to former subsidiary KBR Inc’s (KBR.N: Quote, Profile, Research, Stock Buzz) settlement with Nigeria, earnings per share were 68 cents, topping the 63 cents that analysts had forecast on average, according to Thomson Reuters I/B/E/S. Revenue jumped 40 percent to $5.16 billion, while analysts had expected $4.88 billion. Houston-based Halliburton is looking abroad for growth in the year ahead, but margins are likely to remain under pressure as its rivals are chasing growth in the very same markets. “We do see activity increases happening throughout 2011,” Chief Executive Dave Lesar told analysts on a conference call. “The big wild card is just how tough the pricing environment continues to be.” The company said it recently won a 15-well package in Iraq, on top of three deals announced there last year, and it will double its employee headcount in the country to 1,200 in 2011. Lesar sees steady demand in North America this year, helped by the 3,200 uncompleted wells in the region — a number higher than he had expected, and that he sees rising this quarter. Gulf of Mexico activity is moribund as companies struggle to obtain drilling permits in the wake of BP Plc’s (BP.L: Quote, Profile, Research, Stock Buzz) oil spill last April after a blowout that killed 11 workers — for which Halliburton, a BP contractor, could face legal liability. Halliburton is maintaining its staffing in the Gulf even though activity looks likely to stay subdued in the first half of 2011, and possibly for the rest of the year, Lesar said. Halliburton will expand deepwater operations in the Eastern Hemisphere, but did not specify how much it would spend. Competitors Baker Hughes Inc (BHI.N: Quote, Profile, Research, Stock Buzz) and Weatherford International Ltd (WFT.N: Quote, Profile, Research, Stock Buzz) WFT.S report results on Tuesday. (Reporting by Matt Daily in New York and Braden Reddall in San Francisco; Editing by Gerald E. McCormick and Matthew Lewis) Copyright 2010 Thomson Reuters. Click for Restrictions .

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U.S. Point Man On Sanctions Leaving At Critical Time

January 24, 2011

The point man for the Obama administration’s financial wars on Iran, North Korea and al Qaeda, Stuart Levey, has decided to leave his senior U.S. Treasury Department post at what is turning out to be a particularly critical time. Mr. Levey’s departure will leave President Barack Obama without the principal architect of Washington’s economic-sanctions campaign against Tehran, just as that campaign is likely to be ramped up following the breakdown of talks among Iran, the U.S. and a bloc of global powers on Saturday.

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FDIC Closes 4 Small Banks, Bringing 2011 Failures To 7

January 22, 2011

WASHINGTON (Reuters) – U.S. authorities closed four banks — one in Denver and three in the U.S. Southeast — on Friday with total assets of $2.7 billion, bringing the number of failures in 2011 so far to seven. The pace of bank failures is expected to decrease in 2011 as the economy recovers and the impact of the 2007-2009 financial crisis fades. In 2010, 157 banks failed, following 140 failures in 2009. FDIC Chairman Sheila Bair has said the agency expects the number of failures to drop in 2011. “You will still have elevated bank failures in 2011 but based on our current projections it will be significantly lower than what we had last year,” she said on Jan. 13. Smaller banks, those with less than a billion dollars in assets, continue to struggle and have made up the bulk of recent closures. Many are having trouble dealing with the sluggish real estate market, particularly its effect on loans they made for commercial property. The FDIC announced the following closures on Friday: * United Western Bank (UWB.BO), of Denver. It had assets of $2.05 billion. First Citizens Bank & Trust Company (FCNCA.O), of Raleigh, North Carolina, will assume the deposits. United Western Bank had eight branches, including in Boulder and Fort Collins. First Citizens already had three branches in the Denver area operated by its IronStone Bank division. First Citizens has purchased assets of four other banks, in Florida, California and Washington state, in the past 18 months. * CommunitySouth Bank and Trust, of Easley, South Carolina. Had $440.6 million in assets. CertusBank, National Association, of Easley, South Carolina, a newly-chartered bank subsidiary of Blue Ridge Holdings Inc, Charlotte, North Carolina, assumed the deposits. * Bank of Asheville, North Carolina. It had assets of $195.1 million. First Bank, Troy, North Carolina, to assume the deposits. * Enterprise Banking Company, of McDonough, Georgia. It had assets of $100.9 million. FDIC created Deposit Insurance National Bank of McDonough, which will remain open until Jan. 28, to allow depositors access to insured deposits and time to open accounts elsewhere. On Nov. 23 the FDIC released its latest quarterly report on the state of the banking industry. It showed that the industry overall continues to recover from the financial crisis but that large banks are doing better than smaller institutions. The net income for the banking industry was $14.5 billion for the third quarter, which compares to $21.4 billion in the second quarter and $2 billion in the third quarter of 2009, according to the FDIC. The agency said that third-quarter earnings would have reached a three-year high had it not been for a $10.4 billion goodwill charge taken by Bank of America (BAC.N) during the quarter for its card business. The banking industry has been setting aside less money to guard against losses, helping to boost earnings in recent quarters. Bair has cautioned against banks reducing these reserves too quickly given the state of the economy. Despite the improving revenue numbers for the industry as a whole, community banks continue to be hit hard by the weak economy and the amount of bad loans on their books, particularly in the commercial real estate sector. For instance, the number of banks on the agency’s “problem list” grew to 860 from 829, to reach the highest number since March of 1993 when there were 928 institutions on the list. Most of these institutions will not fail but the list provides an indication of how many banks are struggling. (Reporting by Charles Abbott; Editing by Tim Dobbyn, Bernard Orr) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Video: Coronado Says Rate Increase by Fed Is Still `A Ways Off’: Video

January 21, 2011

Jan. 21 (Bloomberg) — Julia Coronado, chief economist for North America at BNP Paribas, and Michael Cloherty, head of U.S. interest-rate strategy for fixed income and currencies at RBC Capital Markets, talk about the outlook for Federal Reserve monetary policy. Coronado and Cloherty also discuss the U.S. budget deficit, economy and Treasury market. They talk with Tom Keene on Bloomberg Television’s “Surveillance Midday.” (Source: Bloomberg)

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Chinese President Hu Jintao In Chicago: Visit Focuses On Business

January 21, 2011

CHICAGO — Mayor Richard Daley’s long effort to build ties with the world’s second-largest economy seemed to pay off Thursday as Chinese President Hu Jintao made his first visit to Chicago, his only stop outside Washington during this trip. Hu was expected to focus on economic ties between China and Chicago during his whirlwind overnight visit to the city. Experts said the attention from China has been the envy of other U.S. cities and could mark a gigantic – and profitable – step forward for both parties, despite the sometimes rocky U.S.-China relationship. Many credited Daley’s efforts. The mayor has traveled to China four times since 2004, touting Chicago as a global transportation hub with large manufacturing and industrial sectors friendly to Chinese business. “Chicago deserves some kudos. It’s clear that he’s (Daley) cultivated the China relationship and he’s learned how to do that very well,” said Kenneth Lieberthal, director of the John L. Thornton China Center at the Brookings Institution. “Mayors and governors around the country, regardless of their politics, see China as a source of potential capital, markets and jobs. So you better be ones looking to have the president of China come here.” Hu planned to attend a Thursday dinner with Daley, Gov. Pat Quinn and business leaders. On Friday, he was expected to visit a unique Chinese language institute Daley helped develop and a Chinese business expo in the suburbs. Daley characterized the visit as a “big, big, big, big, big deal,” at a news conference last week. The retiring Democratic mayor has focused on business and largely stayed away from politics in developing a relationship with China. He went to Shanghai last year to headline “Chicago Days” at the 2010 World Expo. In 2008, he went to the Beijing Olympics to look for lessons for Chicago’s 2016 Summer Olympics bid. He has avoided criticizing China for human rights issues and stayed away U.S. manufacturers’ claims that China undervalues its currency to make its exports cheaper than U.S. products, contributing to high unemployment here. In 2006, Daley pushed for the development of the Confucius Institute in Chicago, a language and cultural center that started as a small parent-driven Chinese language program. It’s now one of the largest institutes of its kind in North America; about 12,000 Chicago public school students take Chinese and the institute offers community classes and international exchanges for teachers. While the institute doesn’t have direct ties to business, leaders in Chicago’s Chinatown say it helps forge a connection. “It creates a whole generation of younger students and future leaders to understand Chinese culture and language. It will help the business transaction,” said Tony Shu, president of the Chinatown Chamber of Commerce. “If you know the language, you’ll find it so much easier.” City leaders say Chicago’s sister cities program also has helped. Shanghai and Shenyang have been Chicago sister cities since 1985, and Daley has met mayors of both cities. He met Hu at a White House state dinner in 2006, a Daley spokeswoman said. Tom Bartkoski, a director at World Business Chicago, also said Daley deserves much of the credit for the growing economic ties between China and Chicago. Chicago-area businesses such as Boeing, Motorola, Abbott and Wrigley have expanded operations in China. On Wednesday, Obama announced new business deals with China worth $45 million, including a highly sought $19 billion deal for 200 Boeing airplanes. At least 40 Chinese businesses now have operations in the Chicago area, and the number is growing. For example, Wanxiang America Corp., which makes solar panels, has opened plants and a headquarters around Chicago in the last two years. While Daley deserves much credit for Hu’s visit, some experts say it also was a natural progression. Hu visited much of the West Coast in 2006, with stops in Los Angeles and Seattle. There’s also been some precedent for Chinese presidents to see the U.S. president’s hometown. In 2002, former President Jiang Zemin went to former President George W. Bush’s Crawford, Texas, ranch. Others see the Chicago visit as a bit of a surprise since the Chicago area hardly has the largest Chinese population in the U.S. Roughly 1 percent of the metro area’s approximately 9.6 million people are of Chinese descent, according to the U.S. census. Six other metro areas – New York, Los Angeles, San Francisco, San Jose, Calif., Honolulu and Boston – have larger Chinese populations. Aside from business, Hu’s visit was expected to help increase awareness of Chicago and tourism. “It gives us much greater visibility in China. They remember cultural icons,” said Dali Yang, a political scientist and faculty director at the University of Chicago Center in Beijing. “We are at a critical turning point. This is to establish the image of Chicago as that destination in their consciousness.” Daley, who was in Washington for a mayor’s conference, declined interview requests before Hu’s visit. An election for his replacement is Feb. 22. Candidates include former White House chief of staff Rahm Emanuel and former U.S. Sen. Carol Moseley Braun.

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Black Diamond Awarded Oil Sands Contract

January 19, 2011

CALGARY, ALBERTA–(Marketwire – Jan. 18, 2011) – Black Diamond Group Limited (“Black Diamond” or “the Company”) (TSX:BDI), a leading provider of modular accommodation and energy services in North America, is pleased to announce BOXX Modular, the Company’s modular workspace division, has secured a contract to supply and install 101 modular units at a major Canadian oil sands site. BOXX Modular will be supplying and installing lunchroom complexes, locker rooms, self-contained lavatories, security units and other workspaces for the remote site. The new units are currently being manufactured with installation expected to commence in late spring, 2011. The total project value exceeds $8.5 million and the contract is BOXX Modular’s largest single award to date.

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Ellen Brown: The Fed Has Spoken: No Bailout for Main Street

January 13, 2011

The Federal Reserve was set up by bankers for bankers, and it has served them well. Out of the blue, it came up with $12.3 trillion in nearly interest-free credit to bail the banks out of a credit crunch they created. That same credit crisis has plunged state and local governments into insolvency, but the Fed has now delivered its ultimatum: there will be no “quantitative easing” for municipal governments. On January 7, according to the Wall Street Journal , Federal Reserve Chairman Ben Bernanke announced that the Fed had ruled out a central bank bailout of state and local governments. “We have no expectation or intention to get involved in state and local finance,” he said in testimony before the Senate Budget Committee. The states “should not expect loans from the Fed.” So much for the proposal of President Barack Obama, reported in Reuters a year ago, to have the Fed buy municipal bonds to cut the heavy borrowing costs of cash-strapped cities and states. The credit woes of state and municipal governments are a direct result of Wall Street’s malfeasance. Their borrowing costs first shot up in 2008, when the “monoline” bond insurers lost their own credit ratings after gambling in derivatives. The Fed’s low-interest facilities could have been used to restore local government credit, just as it was used to restore the credit of the banks. But Chairman Bernanke has now vetoed that plan. Why? It can hardly be argued that the Fed doesn’t have the money. The collective budget deficit of the states for 2011 is projected at $140 billion, a mere drop in the bucket compared to the sums the Fed managed to come up with to bail out the banks. According to data recently released, the central bank provided roughly $3.3 trillion in liquidity and $9 trillion in short-term loans and other financial arrangements to banks, multinational corporations, and foreign financial institutions following the credit crisis of 2008. The argument may be that continuing the Fed’s controversial “quantitative easing” program (easing credit conditions by creating money with accounting entries) will drive the economy into hyperinflation. But creating $12.3 trillion for the banks — nearly 100 times the sum needed by state governments — did not have that dire effect. Rather, the money supply is shrinking – by some estimates, at the fastest rate since the Great Depression. Creating another $140 billion would hardly affect the money supply at all. Why didn’t the $12.3 trillion drive the economy into hyperinflation? Because, contrary to popular belief, when the Fed engages in “quantitative easing,” it is not simply printing money and giving it away. It is merely extending CREDIT, creating an overdraft on the account of the borrower to be paid back in due course. The Fed is simply replacing expensive credit from private banks (which also create the loan money on their books) with cheap credit from the central bank. So why isn’t the Fed open to advancing this cheap credit to the states? According to Mr. Bernanke, its hands are tied. He says the Fed is limited by statute to buying municipal government debt with maturities of six months or less that is directly backed by tax or other assured revenue, a form of debt that makes up less than 2% of the overall muni market. Congress imposed that restriction, and only Congress can change it. That may sound like he is passing the buck, but he is probably right. Bailing out state and local governments IS outside the Fed’s mandate. The Federal Reserve Act was drafted by bankers to create a banker’s bank that would serve their interests. No others need apply. The Federal Reserve is the bankers’ own private club, and its legal structure keeps all non-members out. Earlier Central Bank Ventures into Commercial Lending That is how the Fed is structured today, but it hasn’t always been that way. In 1934, Section 13(b) was added to the Federal Reserve Act, authorizing the Fed to “make credit available for the purpose of supplying working capital to established industrial and commercial businesses.” This long-forgotten section was implemented and remained in effect for 24 years. In a 2002 article called “Lender of More Than Last Resort” posted on the Minneapolis Fed’s website, David Fettig summarized its provisions as follows: • [Federal] Reserve banks could make loans to any established businesses, including businesses begun that year (a change from earlier legislation that limited funds to more established enterprises). • Reserve banks were permitted to participate [share in loans] with lending institutions, but only if the latter assumed 20 percent of the risk. • No limitation was placed on the amount of a single loan. • A Reserve bank could make a direct loan only to a business in its district. Today, that venture into commercial banking sounds like a radical departure from the Fed’s given role; but at the time it evidently seemed like a reasonable alternative. Fettig notes that “the Fed was still less than 20 years old and many likely remembered the arguments put forth during the System’s founding, when some advocated that the discount window should be open to all comers, not just member banks.” In Australia and other countries, the central bank was then assuming commercial as well as central bank functions. Section 13(b) was repealed in 1958, but one state has kept its memory alive. In North Dakota, the publicly owned Bank of North Dakota (BND) acts as a “mini-Fed” for the state. Like the Federal Reserve of the 1930s and 1940s, the BND makes loans to local businesses and participates in loans made by local banks. The BND has helped North Dakota escape the credit crisis. In 2009, when other states were teetering on bankruptcy, North Dakota sported the largest surplus it had ever had. Other states, prompted by their own budget crises to explore alternatives, are now looking to North Dakota for inspiration. The “Unusual and Exigent Circumstances” Exception Although Section 13(b) was repealed, the Federal Reserve Act retained enough vestiges of it in 2008 to allow the Fed to intervene to save a variety of non-bank entities from bankruptcy. The problem was that the tool was applied selectively. The recipients were major corporate players, not local businesses or local governments. Fettig writes: Section 13(b) may be a memory, . . . but Section 13 paragraph 3 . . . is alive and well in the Federal Reserve Act. . . . [T]his amendment allows, “in unusual and exigent circumstances,” a Reserve bank to advance credit to individuals, partnerships and corporations that are not depository institutions. In 2008, the Fed bailed out investment company Bear Stearns and insurer AIG, neither of which was a bank. John Nichols reports in The Nation that Bear Stearns got almost $1 trillion in short-term loans, with interest rates as low as 0.5%. The Fed also made loans to other corporations, including GE, McDonald’s, and Verizon. In 2010, Section 13(3) was modified by the Dodd-Frank bill, which replaced the phrase “individuals, partnerships and corporations” with the vaguer phrase “any program or facility with broad-based eligibility.” As explained in the notes to the bill: Only Broad-Based Facilities Permitted . Section 13(3) is modified to remove the authority to extend credit to specific individuals, partnerships and corporations. Instead, the Board may authorize credit under section 13(3) only under a program or facility with “broad-based eligibility.” What programs have “broad-based eligibility” isn’t clear from a reading of the Section, but long-term municipal bonds are evidently excluded. Mr. Bernanke said that if municipal defaults became a problem, it would be in Congress’ hands, not his. Congress could change the law, just as it did in 1934, 1958, and 2010. It could change the law to allow the Fed to help Main Street just as it helped Wall Street. But as Senator Dick Durbin blurted ou t on a radio program in April 2009, Congress is owned by the banks. Changes in the law today are more likely to go the other way. Mike Whitney, writing in December 2010, noted : So far, not one CEO or CFO of a major investment bank or financial institution has been charged, arrested, prosecuted, or convicted in what amounts to the largest incident of securities fraud in history. In the much-smaller Savings and Loan investigation, more than 1,000 people were charged and convicted. . . . [T]he system is broken and the old rules no longer apply. The old rules no longer apply because they have been changed to suit the moneyed interests that hold Congress and the Fed captive. The law has been changed not only to keep the guilty out of jail but to preserve their exorbitant profits and bonuses at the expense of their victims. To do this, the Federal Reserve had to take “extraordinary measures.” They were extraordinary but not illegal, because the Fed’s congressional mandate made them legal. Nobody’s permission even had to be sought. Section 13(3) of the Federal Reserve Act allows it to do what it needs to do in “unusual and exigent circumstances” to save its constituents. If you’re a bank, it seems, anything goes. If you’re not a bank, you’re on your own. So Who Will Save the States? Highlighting the immediacy of the local government budget crisis, The Wall Street Journal quoted Meredith Whitney, a banking analyst who recently turned to analyzing state and local finances. She said on a recent broadcast of CBS’s “60 Minutes” that the U.S. could see “50 to 100 sizable defaults” in 2011 among its local governments, amounting to “hundreds of billions of dollars.” If the Fed could so easily come up with 12.3 trillion dollars to save the banks, why can’t it find a few hundred billion under the mattress to save the states? Obviously it could, if Congress were inclined to put non-bank lending back into the Fed’s job description. Then why isn’t that being done? The cynical view is that the states are purposely being kept on the edge of bankruptcy, because the banks that hold Congress hostage want the interest income and the control. Whatever the reason, Congress is standing down while the nation is sinking. Congress must summon the courage to take needed action; and that action is not to impose “austerity” by cutting services, at a time when an already-squeezed populace most needs them. Rather, it is to create the jobs that will generate real productivity. To do this, Congress would not even have to go through the Federal Reserve. It could issue its own debt-free money and spend it on repairing and modernizing our decaying infrastructure, among other needed works. Congress’ task will become easier if the people stand with them in demanding action, but Congress is now so gridlocked that change may still be long in coming. In the meantime, the states could take matters in their own hands and set up their own state-owned banks, on the model of the Bank of North Dakota. They could then have their own very-low-interest credit lines, just as the Wall Street banks do. Rather than spending or selling off valuable public assets, or hoarding them in massive rainy day funds made necessary by the lack of ready credit, states could LEVERAGE their assets into a very strong and abundant local credit system, following the accepted business practices of the Wall Street banks themselves. The Public Banking Institute is being launched January 13 to explore that alternative. For more information, see http://PublicBankingInstitute.org .

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Ford Unveils ‘Car Of The Future’

January 8, 2011

NEW YORK–The car of the future is here, at least according to Ford, which unveiled its first all-electric car today with glitzy events here in New York and in Las Vegas. Unlike its competitors, Ford will roll out its electric vehicle as a new version of an existing model, the popular Ford Focus. In a further move to distinguish itself from the field, the Focus will be available not just as an all-electric car, but also as a hybrid, a plug-in hybrid, and as a conventional gas engine vehicle. At New York’s Altman building, frenetic dance music geared up the crowd of auto journalists, car dealers and executives. As the lights dimmed, a smooth-voiced announcer directed the audience to take their seats. This was no mere car announcement. It was automotive theater. In fact, some analysts suggest that a performance is all the product release really amounts to. Electric cars are still an extremely minor part of the auto market–only about 2 percent of cars sold are even hybrids. Building an all-electric car provides extraordinary fuel economy credits for automakers looking to comply with nationally mandated fuel efficiency standards, as well as boosting a progressive, green-minded company image. Skeptics suggest the electric Focus is more about satisfying those requirements than making money. “There wouldn’t be any automaker making electric cars if not for fuel economy regulations,” said Aaron Bragman senior analyst for IHS Global Insight. “They’re not a moneymaker.” Even if Ford has genuinely ambitious plans for its latest cars, it is taking on enormous obstacles that could prevent electric vehicles from penetrating the consumer market. Not only are electric cars substantially more expensive than ordinary gas automobiles, but the lack of an overall U.S. infrastructure to charge electric car batteries induces major anxiety for drivers looking to drive more than 100 miles at a time. But in New York on Friday, the mood was distinctly triumphant as the company still associated with the earliest roots of the American auto industry took aim at capturing a slice of its next iteration. “This really is a milestone for Ford Motor Company,” proclaimed Bill Ford, the company’s executive chairman of the board and the great-grandson of the automotive pioneer, Henry Ford. “The future has arrived and you are the first to witness it.” Everyone cheered as a fake garage door ascended and a gleaming electric Focus pulled out of the mock-garage (complete with mulch, shovel and sled). Ford posed by the lit-up circle where a driver might ordinarily pump his gas. But of course, this car had instead a long cord connecting the car’s electric battery to a small charging station. Unlike the Nissan Leaf or the Chevrolet Volt–the company’s primary competitors in the electric car market– Ford has chosen to capitalize on the popularity of the Focus name rather than produce a new brand for their all-electric car. The electric Focus looks almost exactly like its gas predecessor. “Frankly, why mess with something that’s great?” asked Ford, praising the Focus as “gorgeous,” “good-looking” and “attractive.” Rolling out its line of electrics under an established name is part of Ford’s tactic to bring electric cars to the average consumer. “It’s part of an overall strategy of trying to consolidate brands and model names,” said Jesse Toprak, VP of Industry Trends at TrueCar.com. “They’ll spend money on a few brands and just a few models.” The Focus is a compact car, the most popular variety in the world. “To make this the electric vehicle for them means just about anyone can sell it just about anywhere,” said Bragman. “They’re going to build off the Focus name and simply make it an additional option.” For Ford, offering a wide range of electric options is a matter of catering to different consumers’ needs. They will build the hybrids, plug-in hybrids, all-electrics and conventional Fords in one factory in Wayne, Mich. Depending on demand, this will allow Ford to ramp up production of whichever flavor of electric proves to be the most successful more easily than if they had to separate production locations. “Each automaker is going for their core competency,” said Brandon Mason, lead powertrain analyst at Autofacts of PricewaterhouseCoopers, of the electric market. “Ford is taking the path that we’re going to offer a bit of everything.” While an all-electric runs purely on an electric battery charged through an at-home charging station, a plug-in hybrid switches from an electric battery to a gas engine once the battery is depleted, while a hybrid combines an internal combustion engine with an electric propulsion system. “One size doesn’t fit all,” said Ford. “Customers have different needs.” But green is far from mainstream. Electric vehicles–hybrids, plug-ins, and all-electrics combined–make up only about two percent of the actual market. Ford Director of Global Electrification Nancy Gioia’s confident prediction that market share will jump to ten to 25 percent by 2020 is not matched by more conservative analysts. “We predict sales of 1.4 million units annually in 2017,” said Mason. “That’s about one and a half percent market share.” Two issues confront prospective buyers: affordability and range anxiety. Even with the $7,500 tax credit buyers can receive for buying electric, such vehicles still cost much more than conventional cars. “Cost is a huge prohibiting factor to make it a better business case for consumers,” said Mason. “[Electric cars] are 10 to 15 thousand dollars higher now and mainstream consumers aren’t willing to pay that kind of premium.” Ford has not yet revealed how expensive the new Focus will be, though they let slip a coy remark that it would be priced better than the Chevrolet Volt, and competitively with others. The Volt, a hybrid plug-in, currently sells for $41,000, while the Nissan Leaf, an all-electric, goes for $32,780, pre-credit. And even though drivers can certainly save on gasoline money by going electric, George Peterson, President of AutoPacific, estimates that it still takes something like 12 years to pay back the electric price premium. “Unless gasoline goes up to 5 or 6 dollars a gallon, you can’t really economically decide that it pays back,” said Peterson. Aside from cost, range anxiety about the distance a car can drive on a single full charge is the major prohibiting factor of the all-electric vehicle. Though hybrids and plug-ins address the range issue by combining traditional gas engines with the electric component, all-electric cars mainly suit the lifestyle of urban drivers who have only short distances to go. Though Ford has not released their exact efficiency statistics, they have said the all-electric Focus will be competitive with the Nissan Leaf, which provides about 100 miles on a full charge. This will remain the case until a national infrastructure for electric charging is built. The owner of an all-electric car that runs out of charge on the side of the highway can’t exactly expect a fellow driver to pull up with a portable charging station they way they might with a cup of gas. “The electric infrastructure still has a long way to go in the U.S.,” said Peterson. “There are not enough public chargers out there to fulfill the requirements of a broad-base infrastructure for an electric vehicle.” For now at least, early adopters of these new electric cars are likely to be green-minded citizens for whom affordability is not the main concern. “Is it being viewed as a toy by people who want something cool, or is it really going to be sustainable transportation?” asked Bragman, “I think it’s somewhere in the middle of that.” AutoPacific’s research shows that only 2 to 3 percent of consumers today would consider buying an electric car. “It’s easy to sell 2000 units of any technology to early adopters,” said Toprak. “The challenge is to sell them to Middle America who will buy on financial reasons and not because they look cool or for environmental factors.” Of course, looking cool isn’t exactly a bad thing. Ford’s decision to unveil the electric Focus at the tech mecca that is the Consumer Electronics Show, rather than at next week’s North American International Auto Show, is a sign of increasing confluence between the automotive and electronics worlds. The Focus is CES’s official car, a two-peat for Ford, whose Taurus bore the honor in 2010. Ford has also led the way in automotive infotainment with their wildly popular Sync system, which lets users control music and hear audio text messages. It has been installed in 3 million cars since its introduction in 2007. Toyota just announced their version of Sync, called Entune, at CES this week. Ford’s ability to establish itself as a leaders of technology has been one important part of their astonishing recovery since the auto industry’s major crisis in 2008. Ford was the only one of the Big Three domestic automakers not to take bailout money, and recently topped Toyota both in sales and in consumer preference . “Their tech is two generations more advanced than any other automaker,” said Bragman. “They’ve done a lot of things that have been very painful, but they’ve done them well, and now they’re starting to reap the rewards.”

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Obama Sets Mission For New Team: Accelerate Economic Growth

January 7, 2011

WASHINGTON — His presidency tied to the fate of the economy, Barack Obama is revamping his economic policy team and signaling cooperation to ascendant Republicans and the business community at a pivotal moment in the nation’s recovery and Washington politics. The president is surrounding himself with veterans of the Clinton administration. Chief of staff William Daley, economic overseer Gene Sperling and recently confirmed budget director Jacob Lew form an inner circle with a history of bipartisanship and experience in the art of the deal. “Our mission has to be to accelerate hiring and accelerate growth,” the president declared Friday at a window manufacturing plant in suburban Maryland. It’s a mission facing political and economic crosscurrents, underscored Friday by a mixed bag of an unemployment report and a relatively upbeat but cautionary assessment of the economy from Federal Reserve Chairman Ben Bernanke. The Labor Department said unemployment dropped to 9.4 percent from 9.8 percent and private employers added a net total of 113,000 jobs last month. But the drop in unemployment was due partly to people who stopped looking for work. Bernanke told the Senate Budget Committee that there’s rising evidence that a self-sustaining recovery is taking hold. “Overall, the pace of economic recovery seems likely to be moderately stronger in 2011 than it was in 2010,” he said. Continued high unemployment and slow growth into 2012 would certainly haunt Obama’s reelection campaign. But the ability to shape an economic policy is complicated by a divided Congress where Republicans are demanding deficit reductions while many Democrats seek more spending to spur the economy. Obama has moved to have it both ways, and to appeal to Republicans and business leaders who find value in international trade deals. To that end, he is wielding an economic message centered on competitiveness that spends on education initiatives to retool the workforce, embraces trade and provides tax breaks to businesses. At the same time, with a new chief of staff and a new director of the National Economic Council in place at the White House, Obama also is turning his focus toward tackling the deficit and debt. “Everybody knows that the long-run fiscal situation facing the country is one that we’ve got to address, and the president’s not afraid of that,” White House economist Austan Goolsbee said. “You will see when the president releases his budget in the coming weeks that he’s got a tough-minded approach.” With Daley, Sperling and Lew, Obama enters the second two years of his presidency counseled by Clinton era officials who have worked across party lines to cut economic deals. They recall a happier time, when unemployment was low, budgets were balanced and the economy was humming. Sperling was a key player in the bipartisan negotiations in December that extended Bush era tax rates for all taxpayers, including the wealthy – a Republican priority – but also included Obama priorities such as an extension of a refundable earned income tax credit and a 2 percent, year-long payroll tax cut. As director of the White House National Economic Council, Sperling will have a hand in shaping the course of nearly all of the administration’s economic policies, including looming battles with Republican lawmakers on spending cuts and raising the debt ceiling. “He’s a public servant who has devoted his life to making this economy work – and making it work, specifically, for middle-class families,” Obama said. Daley, a member of the Chicago political family dynasty, brings his record as a banker and political insider to the White House. As Clinton’s Commerce Secretary, he was a champion of the North American Free Trade Agreement – a pact that left a legacy of bitterness among some sectors of the Democratic Party. Before joining the White House Daley has advocated a moderate path for Obama and is a board member of the centrist group Third Way. On Friday, Obama also nominated Katharine G. Abraham to his Council of Economic Advisers and Heather Higginbottom as deputy director of the Office of Management and Budget. Those two posts require Senate confirmation. Obama also elevated economic adviser Jason Furman to assistant to the president for economic policy. The changes set the stage for Obama’s State of the Union speech later this month. Expected to emphasize economic themes, it will be a blueprint not only for governing but an initial marker of his reelection campaign. But first, the president is engaging in some high-profile outreach to the business community. On Tuesday, he will go to Schenectady, N.Y., to tour a future GE battery manufacturing plant with GE CEO Jeffrey Immelt. In four weeks, he will cross Lafayette Park in front of the White House to address the U.S. Chamber of Commerce, a trade group that has battled his top policy initiatives on health care and financial regulation. But the Chamber can also be a potential partner for Obama, supporting greater spending on infrastructure and helping push trade deals in Congress. The president also has been prodding businesses to shake loose untapped corporate cash and create more jobs. At the Thompson Creek Window Company in Landover, Md., on Friday, Obama took note of the recent tax deal that allows businesses to expense 100 percent of their investments in 2011. The president made a direct appeal to other companies, telling them now is the time to capitalize on that opportunity. “If you are planning or thinking about making investments sometime in the future, make those investments now, and you’re going to make money,” Obama said. —– Associated Press writers Julie Pace and Darlene Superville contributed to this report.

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Electric Ford Focus Will Go On Sale This Year

January 7, 2011

DETROIT — Ford Motor Co. said Friday that an electric version of its Ford Focus sedan will go on sale in North America by the end of this year. Ford introduced the electric Focus at the Consumer Electronics Show in Las Vegas. The car is expected to go up to 100 miles on an electric charge. The automaker says the Focus can be fully charged in three to four hours using a 240-volt outlet. That’s half the time it takes to charge the Nissan Leaf, a competitor that went on sale last month. Ford also said its fuel efficiency numbers will be competitive with the Leaf. Late last year, the U.S. Environmental Protection Agency estimated the Leaf would get the equivalent of 106 miles per gallon in city driving and 92 miles per gallon on the highway. The EPA determined the figures by estimating it will cost $561 per year in electricity to charge the car. Ford said the Focus will have a unique, Microsoft-designed powering feature that will charge the vehicle during off-peak hours, when utility rates are cheapest, to save on electric bills. It also has a touchscreen with information such as the amount of charge left, the distance to the next charging station and the amount of gasoline saved. Pricing wasn’t announced. The Leaf starts at $32,780, but it is eligible for a $7,500 federal tax credit that drops the price to $25,780. The electric Focus will be Ford’s first electric car on the market. It began selling an electric version of the Transit Connect van last year. The Chevrolet Volt, an electric car with a small gas engine that takes over if the charge runs out, is the only other electric car on sale in the U.S. right now, but other competitors are planning to introduce electrics soon. In 2012, Toyota plans to begin selling an electric RAV4 crossover, Chrysler plans an electric Fiat 500 minicar and Honda will sell an electric version of the Fit subcompact. Ford said it plans to introduce four other electric vehicles in North America and Europe over the next two years. The electric Focus will go on sale in Europe next year.

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Brown & Brown, Inc. Names Scott Penny as Chief Acquisitions Officer

January 6, 2011

DAYTONA BEACH, FL and TAMPA, FL–(Marketwire – January 6, 2011) – The Board of Directors of Brown & Brown, Inc. ( NYSE : BRO ) today announced that J. Scott Penny, CIC, Regional President, has been named to the position of Chief Acquisitions Officer. Mr. Penny, who has served as one of the Company’s Regional Presidents since July 2010 and previously served as a Regional Executive Vice President since 2002, will continue to be responsible for oversight of retail profit center operations of certain of the Company’s subsidiaries in Connecticut, Illinois, Indiana, Kentucky, Massachusetts, New Hampshire, New Jersey, Pennsylvania and Washington. Mr. Penny will also continue to oversee the operations of Axiom Re, Inc. in Florida and North Carolina, and will assume responsibility for the oversight of Florida Intracoastal Underwriters, LLC. 

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AlaskaDispatch.com: Alaska’s Oil Future May Lie With Independent Upstarts

January 4, 2011

What was the biggest trend in the Alaska oil industry in the last decade? Despite the hype, it wasn’t declining production, aging infrastructure or changes to the tax code, because all of those were merely accelerations of earlier trends. The biggest trend unique to the ’00s was the rise of independent oil companies on the North Slope. While BP, ConocoPhillips and ExxonMobil made headlines over the past decade, smaller oil companies leased hundreds of thousands of acres across the North Slope and drilled dozens of exploratory wells, leading to the first independently operated oil production in the history of the North Slope. If that trend continues, Alaska will become home to many smaller oil companies this decade, fundamentally changing how the North Slope works. “When we can produce a barrel, and prove to everybody else that we can produce a barrel, I think there’s going to be a flood of independents coming to the North Slope,” said Jim Winegarner, vice president of land for Brooks Range Petroleum Corp., an independent operator leading a joint venture of small companies on the North Slope. After years of exploration work, Brooks Range Petroleum is evaluating a prospect in Gwydyr Bay, the stretch of coast north of Prudhoe Bay. If the company sanctions the project, it would become the smallest oil producer on the North Slope. In the 2000s, Alaska proved it could be profitable for large independents, but Winegarner believes the same can be said for small independents, tiny players looking to compete on a big field. Indies large and small The term “independent” covers a lot of ground. They are usually “upstream” companies that focus exclusively on producing oil and natural gas, unlike the vertically integrated “majors” that also own pipelines, refineries, gas stations and research divisions. Independents cover a broad spectrum that includes multibillion-dollar international companies as well as domestic “mom-and-pop” oil producers. The two most prominent independents in Alaska are on the larger end of that spectrum. Anadarko Petroleum is one of the largest independents in the world, earning $9 billion in revenue last year and employing thousands. Since arriving in Alaska in the early 1990s, the Houston-based company helped bring the large Colville River unit online and drilled numerous exploration wells, including the first to target natural gas on the North Slope. Pioneer Natural Resources produces more than 100,000 barrels of oil per day on two continents. The Dallas company arrived in Alaska in 2002 and brought the Oooguruk field online in 2008, becoming the first independent producer in North Slope history. Brooks Range Petroleum, which only operates in Alaska and employs just a few people full time, is at the smaller end of the spectrum, alongside other independents active in Alaska, companies like Armstrong Oil and Gas, Savant Resources, UltraStar Exploration and various small companies that have all drilled wells on the North Slope since 2000. Independents are not entirely a recent phenomenon in Alaska. Prospectors drilled wells across the state in the first decade of the 20th century. That trend expanded after Congress passed the Mineral Leasing Act of 1920, opening almost the entire territory to drilling and making access to land much easier: a matter of paperwork, rather than on-site staking. “This first-come-first-served method of leasing gave everyone, including the little guys, a chance to play in Alaska’s oil and gas leasing game,” Jack Roderick wrote in “Crude Dreams,” his history of the Alaska oil industry. Drilling is still difficult and expensive in Cook Inlet – though not quite as a difficult or expensive as the North Slope – yet it’s home to several independent companies. But since the discovery of Prudhoe Bay in 1968, majors have ruled the North Slope: BP, Chevron, ConocoPhillips, ExxonMobil and their predecessors drilled most of the wells, made all the largest oil discoveries and built all the major infrastructure projects. Those majors have grown substantially since the 1960s, and the influx of independents in Alaska over the past decade can be traced to industry consolidation at the turn of the century. The gigantic companies created by those megamergers passed over many relatively large oil fields in favor of huge discoveries to replace their reserves. In Alaska, those mergers led to the Charter for the Development of the North Slope. While the Charter primarily outlined divestments needed to alleviate State of Alaska antitrust concerns, it also opened the door for independents to come to the North Slope, according to Jim Weeks, a former ARCO Alaska executive and managing member of the independent UltraStar Exploration, one of the smallest companies ever to explore for oil on the North Slope. “If it weren’t for the charter, I don’t think we’d be hanging around,” Weeks said. The Charter gave independents access. Today, it obligates ConocoPhillips and BP to license proprietary North Slope seismic data, to buy crude oil from small producers at a predetermined formula and to grant access to processing facilities “on reasonable terms.” It also created provisions for arbitration to keep disputes from getting out of control. In the first half of the ’00s, Denver-based Armstrong Oil and Gas brought a new business strategy to Alaska, drilling exploration wells to establish prospects like Oooguruk and Nikaitchuq that it then sold to larger companies to develop. Rising oil prices in the second half of the decade made more independents willing to risk the high cost of Alaska exploration. The Palin administration sweetened the deal by increasing tax credits for exploration, but also pursued other small-business-friendly avenues that did not make headlines, like pursuing legal cases to keep pipeline shipping rates low, which benefits independent producers. Smarter and faster So what will the next decade hold? Weeks doesn’t think independents will ever fill the trans-Alaska oil pipeline, which is already two-thirds empty, but he sees opportunity for job creation and economic growth. Winegarner quantified that economic impact. In 2008, Brooks Range Petroleum employed more than 400 people by running two drilling rigs and a seismic operation. But he also believes independents can collectively be important producers. “If we can go after these smaller reserves sizes that the major can’t justify, that’s going to add to the resource base and ultimately get much more oil out,” Winegarner said. In its most recent forecast, the Alaska Department of Revenue projected that North Slope oil production will fall from 616,000 barrels per day next year to 520,000 barrels per day in 2020, but shows new production increasing from about 5 percent to 51 percent of total oil production over the course of the decade. Independents bringing new production online could mean a new chapter in North Slope history. And if the smaller outfits continue arriving, the biggest change will be for the state, according to Alaska Division of Oil and Gas director Kevin Banks. “We’re going to have to be able to work smarter and faster,” said Banks, who oversees the state agency dealing most directly with oil companies. The current system for managing state lands – from holding lease sales to permitting wells to forming units – is the result of five decades of dealing with a few major oil companies developing several giant oil fields, not dozens of smaller companies spread across a huge area, exploring and developing a broad array of prospects. The system designed to promote responsible development at Prudhoe Bay and Kuparuk may not work for new arrivals like Great Bear Petroleum, which wants to drill into oil source rocks, or GMT Exploration, which holds leases in the White Hills and Beaufort Sea, or Savant, which helped BP bring the Badami unit back online. The first four decades of North Slope production played out simply: several large companies developing several large fields. Banks expect the next few decades to be more complex, with the majors pursuing big plays like offshore fields and heavy oil, larger independents bringing new production online, and smaller independents proving up plays, like Armstrong, or targeting overlooked prospects, like Brooks Range Petroleum.

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EXCLUSIVE: Obama Team Dysfunction Hurt Economic Policy, Says New Epilogue To Book

December 30, 2010

Some revelations about the Obama administration detailed in the new epilogue to the upcoming paperback release of Jonathan Alter’s bestseller, “The Promise,” probably won’t please too many folks at the White House. Alter claims that a dysfunctional relationship between top White House aides hurt the administration’s policy on job creation, the Consumer Financial Protection Bureau was almost dropped from financial reform legislation and was only reinstated after complaints by Elizabeth Warren, and Bill Clinton continually grumbles about being disrespected by the administration. The Obama administration’s perceived failure to take laser-like aim at the unemployment crisis was partly due to the dysfunctional relationship between White House chief of staff Rahm Emanuel, top economic adviser Larry Summers and senior adviser David Axelrod, specifically the intransigence of Summers, according to Alter: “The inability to pivot in 2010 to a single-minded focus on jobs was a by-product of what one senior aide called “dysfunction” between Emanuel, Summers, and Axelrod. Rahm had always admired Larry, but he was becoming exasperated with his failure to give him a jobs plan he could sell. ‘Week after week, Rahm would say, ‘Let’s explore this’ or ‘How about that?’ and Larry would slow-walk everything,’ recalled one senior advisor. ‘He basically doesn’t believe in the government helping small business’.” Alter writes that the CFPB survived certain death only because of Warren’s commitment: “The most popular provision of Dodd-Frank almost didn’t happen. In late 2009 Elizabeth Warren learned that a proposed bureau of consumer financial protection had been dropped from the bill. She went to the White House to object, and the bureau, to the dismay of predatory lenders, was reinstated.” Obama’s relationship with the Clintons remains strained and Bill Clinton constantly complains in private about how he’s been disrespected by the administration, writes Alter. Though they talk frequently, the former president was annoyed that Obama didn’t give him credit for helping to negotiate a spy swap that led to the release from Russian jails of four Russians who had been working for the CIA (in the wake of the bust of Russian spies living in American suburbs six months ago), Clinton’s aides tell Alter. In addition, Clinton was miffed that Samantha Power, who insulted Hillary during the 2008 campaign, was chosen as an emissary to Bosnia in July. (“Bill Clinton might not have accepted the job, but he wanted to be asked,” Alter writes.) “An old friend compared him [Clinton] to a big puppy dog who just needed some attention to be happy and helpful.” Clinton felt dissed because, after negotiating the release by North Korea of two imprisoned American journalists, he was told to travel on a separate plane so as not to overshadow the arrival of the women. “Some of these guys in the White House act small,” one aide told Alter. And Clinton’s team was angry that former protégés like Rahm Emanuel didn’t show the former president proper respect. After Clinton “worked like a nerd” to prepare a detailed 30-page memo on how to incentivize banks with loan guarantees to spur job creation, the White House ignored the memo for a few months, and then treated Clinton like a “prop” during Obama’s meeting with CEOs. When a Clinton aide complained to Emanuel, “Are you serious?”, the chief of staff replied that Clinton should be grateful he was on the president’s schedule at all, writes Alter. “Clinton felt better disposed toward his 1992 opponent, George H.W. Bush… one senior aide described Bush as a ‘father figure’ to Clinton, who never knew his natural father…” Tough media coverage continued to annoy the administration. When the New York Times reported in August that BP was rising to the challenge of cleaning up the oil spill but hardly noted the administration’s role, Obama snapped, “I’m getting pounded for not pushing BP hard enough and now they turn around and say BP did an acceptable job in spite of Obama. We can’t win.” Alter details Obama’s poisonous relationship with Congressional Republican leaders John Boehner and Mitch McConnell — though the president talked to John McCain in spite of his 2008 rival’s anti-Obama rhetoric, he refused for months to meet one-on-one with McConnell, because he thought it was unfair to Senate Majority Leader Harry Reid. After a frustrating mid-summer meeting with Republican leadership at the White House, Obama expressed his annoyance at Boehner’s insistence on extending tax cuts for the wealthy despite the budget deficit. The president told friends: “All I want for Christmas is an opposition I can negotiate with.” The White House has not yet responded to a late-afternoon request for comment.

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Cooper Tire Names New President of Its North America Tire Operations

December 30, 2010

FINDLAY, OH–(Marketwire – December 30, 2010) – COOPER TIRE & RUBBER COMPANY ( NYSE : CTB ) announced today the appointment of Christopher E. Ostrander to President, North America Tire Operations (NATO) effective January 17, 2011. Ostrander, who assumes leadership of NATO from Cooper’s Chairman, President and CEO Roy Armes, will also serve on the company’s Executive Committee and as an officer of Cooper Tire & Rubber Company. 

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China To Cut Crucial Rare Earths Export Quotas

December 29, 2010

BEIJING — China said it is reducing the amount of rare earths it will export for the first half of the year by more than 10 percent – likely to be an unpopular move worldwide since the minerals are vital to the manufacture of high-tech products. China accounts for 97 percent of the global production of rare earths, which are essential to devices as varied as cell phones, computer drives and hybrid cars. Countries were alarmed when Beijing blocked shipments of the minerals to Japan earlier this year amid a dispute over islands claimed by both countries. Concerns over China’s grip on rare earths has led countries on a hunt for alternative sources. A number of companies in North America – notably Molycorp Inc. in the U.S. and Thompson Creek Metals Co. in Canada – are hurrying to open or reopen rare earth mines. Two Australian companies are also preparing to mine rare earths. China has been reducing export quotas of rare earths over the past several years to cope with growing demand at home. A Commerce Ministry spokesman has also said that China is cutting its exploration, production and exports out of environmental concerns. Numbers released Tuesday by China’s Commerce Ministry show export quotas of the rare minerals will be down 11 percent next year as compared to the same period this year. China usually issues a second batch of quotas during the year, and it is not known how the figures will change later in 2011. The new numbers say China is allocating 14,446 tons (13,105 metric tons) of rare earths among 31 companies. China allocated 16,304 tons (14,790 metric tons) among 22 companies in the first batch of quotas this year. The ministry said in a online statement late Tuesday that the quotas for the rest of the year were still under discussion and would be released later. The statement also cautioned that it wasn’t appropriate to guess the trend of future quotas based on the first allocation. Earlier this month, state media reported that China plans to raise duties on some rare earth exports starting next year, but it did not say which minerals would be affected or how much the tax would be. A state media report Tuesday said China is preparing to set up a rare earths association that would include nearly all of the country’s leading rare earth companies, and could help them to coordinate their negotiating position. The report posted on the Sina Corp. portal said the association should be set up in May. The United States last week threatened to go to the World Trade Organization with its concerns over China and rare earths. When asked for comment during a regular press briefing Tuesday, China Foreign Ministry spokeswoman Jiang Yu declined to answer. But China has had to address the global concerns numerous times since the spat with Japan. “China is not using rare earth as a bargaining chip,” Wen Jiabao, China’s top economic official, told a China-European Union business summit in Brussels in October.

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Could China’s Latest Decision Lead To More U.S. Mining?

December 28, 2010

BEIJING — China said Tuesday it is reducing the amount of rare earths it will export next year by more than 10 percent – likely to be an unpopular move worldwide since the minerals are vital to the manufacture of high-tech products. China accounts for 97 percent of the global production of rare earths, which are essential to devices as varied as cell phones, computer drives and hybrid cars. Countries were alarmed when Beijing blocked shipments of the minerals to Japan earlier this year amid a dispute over disputed islands. Concerns over China’s grip on rare earths has led countries on a hunt for alternative sources. A number of companies in North America – notably Molycorp Inc. in the U.S. and Thompson Creek Metals Co. in Canada – are hurrying to open or reopen rare earth mines. Two Australian companies are also preparing to mine rare earths. Numbers released Tuesday by China’s Commerce Ministry show export quotas of the rare minerals will be down 11 percent next year as compared to the same period this year. China usually issues a second batch of quotas during the year, and it is not known how the figures will change later in 2011. The new numbers say China is allocating 14,446 tons (13,105 metric tons) of rare earths among 31 companies. China allocated 16,304 tons (14,790 metric tons) among 22 companies in the first batch of quotas this year. China has been reducing export quotas of rare earths over the past several years to cope with growing demand at home. A Commerce Ministry spokesman has also said that China is cutting its exploration, production and exports out of environmental concerns. Earlier this month, state media reported that China plans to raise duties on some rare earth exports starting next year, but it did not say which minerals would be affected or how much the tax would be. A state media report Tuesday said China is preparing to set up a rare earths association that would include nearly all of the country’s leading rare earth companies, and could help them to coordinate their negotiating position. The report posted on the Sina Corp. portal said the association should be set up in May. The United States last week threatened to go to the World Trade Organization with its concerns over China and rare earths. When asked for comment during a regular press briefing Tuesday, China Foreign Ministry spokeswoman Jiang Yu declined to answer. But China has had to address the global concerns numerous times since the spat with Japan. “China is not using rare earth as a bargaining chip,” Wen Jiabao, China’s top economic official, told a China-European Union business summit in Brussels in October.

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Jeffrey Rubin: Will Car Sales Ever Rebound to Meet US Ethanol Targets?

December 28, 2010

Just as the fiscal crisis sweeping through the major oil-consuming nations of the world is cutting funding for green energy, one of the most expensive yet least efficient of green fuels, corn-based ethanol, has been given another year of generous taxpayer support in the US. The promotion of corn-based ethanol has been America’s principal policy response to its growing dependence on ever more costly foreign oil. Fuelled by a federal tax credit of 45 cents per gallon and a crippling 54 cent per gallon tariff against competing Brazilian sugar-based ethanol , American ethanol production has grown exponentially over the course of the last decade to around 12 billion gallons per year in 2010. And it’s targeted to grow to as much as 36 billion gallons by 2022. Food inflation, particularly with respect to corn prices, has moved in step. Thanks in large measure to ethanol demand, US corn prices are up some 40 per cent this year. Food inflation aside, Congress had lots of other good reasons not to extend further subsidies. The net energy content from ethanol, after allowing for all the hydrocarbon inputs (ranging from fertilizers to diesel fuel for the tractors to coal for the processing plants), is marginal at best. And its carbon footprint isn’t materially better than burning fossil fuels, given how much of the latter is embodied in its very production. Despite a last-ditch attempt by Senator Dianne Feinstein and others to end the subsidies, the Senate decided to fork out more pork barrel funds to corn farmers and, by extension, to firms like Monsanto and Archer Daniels Midland for another year. But don’t count on American ethanol production’s ever coming even close to reaching that lofty target of 36 billion gallons per year. If the return of fiscal sanity to Washington doesn’t undercut its life-sustaining subsidies, an aborted recovery in motor vehicle sales will soon put the kibosh on future production growth. Car manufacturers and ethanol producers both hope that an economic recovery will return vehicle sales to their pre-recession levels. Unfortunately, the recovery they are counting on so heavily is a double-edged sword. An economic rebound will very quickly push pump prices beyond most drivers’ reach. They’re already hovering around $3 per gallon, and with triple-digit oil prices around the corner, we’re sure to see prices of $4 per gallon or higher by next spring. The last time we saw those prices, in the summer of 2008, scooters were outselling SUVs by a margin of three to one, and no one was keen to scoop up car-leasing firms and make acquisitions like Toronto-Dominion Bank’s recent $6.3 billion purchase of Chrysler Financial. Four-dollar gas crunched the North American vehicle market back in 2008, and it will likely do the same in 2011. And when it does, American farmers can go back to growing corn for food and, in the process, save taxpayers some $7 billion a year in ill-conceived ethanol subsidies.

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Tongxin International Ltd. Announces New Appointments to Global Management Team

December 22, 2010

CHANGSHA, CHINA–(Marketwire – December 22, 2010) – Tongxin International Ltd., ( PINKSHEETS : TXIC ), a China-based manufacturer of engineered vehicle body structures (“EVBS”) and stamped parts for the commercial automotive industry, today announced the appointment of Arthur Tu as Vice President of Finance of its China Operations and Tom Chang as Vice President of Finance of its North America Operations. 

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Video: South Koreans Rush to Join Marines After North’s Attack

December 22, 2010

Dec. 22 (Bloomberg) — Anger at North Korea’s killing of civilians in an artillery barrage last month has spurred applications to join South Korea’s Marine Corps. Almost 3,500 men are competing for 977 openings in the elite corps this month, a 37 percent increase on December last year, according to figures from the Military Manpower Administration. There were about 2,800 applicants for November’s monthly intake. Bloomberg’s Mike Firn reports from Seoul. (Source: Bloomberg)

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Parsons Appoints Zaghw as Executive Director, Middle East and North Africa

December 21, 2010

PASADENA, CA–(Marketwire – December 21, 2010) – Parsons announces the appointment of Hamed I. Zaghw as Executive Director of the MENA (Middle East and North Africa) region.

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Squires Appointed to New Parsons Post; Robbins Named Successor

December 21, 2010

PASADENA, CA–(Marketwire – December 21, 2010) –  Parsons today announced that Major General (USAF Ret.) Earnest O. (Earnie) Robbins II has been appointed President, Parsons MENA+ (Middle East, North Africa, and the northern Mediterranean Sea border countries). General Robbins will succeed Jeffrey F. Squires who served as the founding President of the MENA+ region. Mr. Squires will be taking on a new assignment reporting to the Group Executive for Strategy/Development.

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Bob Meighan: Year-End Tax Savings Tips

December 16, 2010

While the tax debate continues in Washington, the more immediate challenge for taxpayers is finding ways to reduce their tax bill for 2010. Fortunately, there are still some smart moves you can make now to potentially reduce your tax bill come April 15 (or earlier!). Following these tips before the New Year arrives can boost your chances of maximizing your refund at tax time: Donate to charity: ‘Tis the season for giving, and donating to your favorite charities is good for the community and good for boosting your tax refund. Contributions made before year’s end to qualifying organizations are tax deductible. Check with the IRS to make sure that your donation qualifies to receive tax-deductible contributions. Don’t forget that donated items, including clothing, furniture and toys qualify – as does mileage, if it’s part of your charitable work. Make sure you keep receipts to prove the amount and date of your contribution. Use free online tools like It’s Deductible to accurately value your donated items. Consider selling investments: The first3000 of your losses is deductible against ordinary income. Any losses in excess are carried over to 2011 where you can again write off up to3000. Speed up your retirement contributions: Participants in 401(k) retirement plans can contribute16,500 in 2010. If you aren’t going to reach that limit and can afford to, additional contributions will save you at tax time. Participants 50 years and older can contribute up to an additional5500. Investing in your retirement plan now allows you to grow your retirement nest egg tax free and get a tax savings now. Prepay deductible expenses: Paying your January 2011 mortgage bill by December 31 gives you an extra month’s worth of mortgage interest to deduct in your 2010 tax return. The same applies to property taxes if you normally pay those in January. Benefit from tax credits: Investing in making your home more energy efficient saves on your monthly utility bills and may qualify for up to1500 in tax credits. So insulating the attic, replacing those drafty windows or purchasing a new furnace may qualify, but don’t wait long, this credit ends this year. You can read more at EnergyStar.gov . Gifting: Each year Uncle Sam allows you to give any individual a13,000 tax-free gift. If you’re married, you and your spouse can combine your gift for a total of26,000. Give to your children and grandchildren and you can actively reduce your future estate taxes, which are scheduled to increase in 2011. Review Medical Expenses: You can deduct out-of-pocket medical expenses, including medical insurance premiums, as long as they add up to 7.5% or more of your adjusted gross income. So if you earn75,000, for instance, that’s5,625. If you’re thinking of getting any elective surgery, that expense, plus other out-of-pocket medical care you paid this year for, could help reduce your taxable income. Any or all of these simple tips can provide the average taxpayer with real savings on their 2010 tax bill. Despite the temptation to put off tax matters until W-2s arrive in the mail, taking some time before the holidays can provide taxpayers with big savings. As vice president for consumer advocacy for Intuit’s TurboTax business, Bob Meighan works with customers to help ensure TurboTax products meet their needs. A Certified Public Accountant, Meighan holds a bachelor’s degree in business administration from the University of North Carolina.

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Jobless Mom To Son: ‘Santa Had To Cut Back At The North Pole This Year’

December 14, 2010

At first, Samara McAuliffe thought of her layoff earlier this year as a good thing. “I kind of saw the layoff as an opportunity to find a dream job,” McAuliffe told HuffPost. “I didn’t realize how long it would take to find a job.” Now all she wants is a job, any job. She said she’s applying for all kinds — she used to do HR for a big bank — and nobody’s responding except Starbucks. “They were kind enough to send an email that I didn’t meet their qualifications.” McAuliffe, 30, said her husband is still working and that the family of four is better off than many in similar situation. Nevertheless, they’re still “feeling the pinch” because of her reduced income. “My son is four. He’s at that age where Santa is a big deal,” she said. “We did have a talk because he remembers Christmas last year. He can list almost every gift he received. I told him, ‘Santa was cutting back in the North Pole this year, the focus was going to be more on family.’ He doesn’t understand, but I tried.” McAuliffe, who lives in central New Jersey, said she will receive her final unemployment check next week unless Congress reauthorizes Emergency Unemployment Compensation and Extended Benefits programs, which provide up to 73 weeks of federally-funded aid for people who exhaust 26 weeks of state benefits without finding work. Congress will probably reauthorize the benefits this month by attaching them to a reauthorization of tax cuts for the rich. More than a million people have already been cut off since the EUC and EB programs lapsed two weeks ago. McAuliffe said the debate in Congress over reauthorizing the benefits hits home. She takes it personally when politicians insinuate, as the frequently do, that the unemployed don’t want to work and would rather receive benefits worth a fraction of their former pay. “What is frustrating for me the idea that people on unemployment are making a living off of being on unemployment. I don’t think that’s the case,” McAuliffe said. “It’s embarrassing and demoralizing not being able to find a job.” A major expense is health insurance. McAuliffe said she’s been able to continue her former employer’s health insurance policy thanks to COBRA, but she lost her job one month too late to be eligible for a 65 percent COBRA subsidy that expired in May. The monthly premium is more than $1,350 — almost as much as she takes in unemployment benefits. “I feel like now we’re sort of those people they’re talking about in the news — relatively comfortable middle class, now still middle class but less comfortable.”

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Gene Cattani to Lead ista North America’s East Region

December 14, 2010

ATLANTA, GA–(Marketwire – December 14, 2010) – ista North America, one of the world’s largest providers of submetering, utility expense management, and retail energy services, announced that Gene Cattani has joined the company as the Vice President for the East Region. Gene previously held a Vice President of Sales position with ista from October 1996 through February 2009.

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Bernie Madoff Won’t Attend Son’s Funeral

December 13, 2010

NEW YORK — Imprisoned financier Bernard Madoff won’t seek to attend his son’s funeral out of consideration for the privacy of his son’s wife and four children, his lawyer said Monday. Attorney Ira Sorkin said Madoff instead will mourn privately at the North Carolina prison where he’s serving a 150-year sentence for his fraud conviction in what authorities have called history’s largest Ponzi scheme. Madoff’s older son, Mark Madoff, 46, hanged himself early Saturday in his Manhattan apartment two years after his father was arrested on charges that he cheated thousands of people out of tens of billions of dollars. Sorkin declined to say whether Madoff considered asking to attend his son’s funeral. The lawyer would say only: “Mr. Madoff will not be attending the funeral out of consideration for his daughter-in-law’s and grandchildren’s privacy. He will be conducting a private service on his own where he is presently incarcerated.” Sorkin commented a day after the city medical examiner’s office formally ruled Mark Madoff’s death a suicide. Madoff was found hanging from a dog leash in his apartment. His 2-year-old son was found asleep in an adjacent room. Madoff’s body hadn’t been picked up from the medical examiner’s office for burial as of Monday, office spokeswoman Ellen Borakove said. The death came while the Madoff family faced increased scrutiny in the days before the two-year anniversary of Bernard Madoff’s arrest as a court-appointed trustee trying to recover money for investors filed dozens of lawsuits to meet a filing deadline. The actions of Mark Madoff, along with those of his brother, Andrew Madoff, and his uncle Peter Madoff, have been studied by investigators trying to learn how Bernard Madoff was able to carry out such a large fraud without a wider circle of people knowing about it. Madoff’s brother and sons all held management positions at the family investment business. In November 2008, Madoff informed investors that their initial investment of roughly $20 billion had more than tripled in value. Just days later, Madoff confessed to his sons that the investment business was a sham and that he had only several hundred million dollars of investors’ money left. In court papers, a lawyer for the sons has portrayed his clients as whistle-blowers who alerted authorities as soon as their father revealed the fraud to them. Neither son, nor Madoff’s brother, was charged criminally, and authorities have said no charges are imminent. Mark Madoff was remembered fondly by former classmates Monday. Lev Seltzer, reached by telephone in Israel, where he now lives, recalled working with Madoff on a sixth-grade assignment at a Long Island school to create a fake television commercial. He said the ad mocked a long-running Life cereal commercial that featured a boy named Mikey who hated everything else but liked the cereal. “Instead of Mikey, we had Marky,” Seltzer said. Doreen Hebron said Madoff was “very popular,” dressed well and had a good attitude. ___ Associated Press writer Frank Eltman contributed to this report.

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MMRGlobal Names Sunil Singhal Executive Vice President and Adds Two Members to Board of Advisors

December 13, 2010

LOS ANGELES, CA–(Marketwire – December 13, 2010) –   MMRGlobal, Inc . ( OTCBB : MMRF ) (“MMR”) today announced that Sunil Singhil has been named Executive Vice President and a member of the Executive Committee, succeeding Rich Teich, who will focus on the sales, marketing and installation support for MMRPro and MMRPatientView, the Company’s professional health IT products for physicians, small hospitals and healthcare professionals. Mr. Singhal was introduced to the Company by Nihilent Technologies, where he was Co-founder and served as Chief Operating Officer of North America. In addition, Michael J. Finley, Vice President, Worldwide Carrier Relations at Qualcomm, and John R. Seitz, CEO of Spalding Surgical Center of Beverly Hills, have agreed to join MMRGlobal’s Board of Advisors. 

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Dan Dorfman: 2011 Battleground: UBS Versus the Dorfman Indicator

December 12, 2010

One of Yogi Berra’s more famous Yogi-isms: “It’s difficult to make predictions, especially about the future.” That’s worth keeping in mind since Wall Street’s bulls, bears and buffoons will soon be blitzing us with their traditional year-end bombardment of forecasts on what’s ahead for the stock market in 2011. In fact, the blitz is already under way. The problem is the overwhelming number of forecasters are notoriously inept. Just check the year-end market predictions of your favorite TV business shows and financial publications at any time over the past 10 years, look a year out and you’ll see how consistently wrong the supposed experts have been. In most cases, the self-proclaimed Wall Street and media experts would have probably fared a lot better simply tossing a coin. As far as 2011 goes, one thing seems certain. Clearly, a tug of war lies ahead, what with many hedge fund managers I talk to solidly downbeat for all the reasons everybody knows, while Wall Street is predominantly bullish, again for all the reasons everybody knows. So who and what are we supposed to believe? And is it time to get excited about stocks again? UBS Financial Securities, just out with its new year’s outlook for its wealth management clients, offers what strikes me as a sane look-head. First though, it’s worth your knowing about the Dorfman indicator, one of my favorite market barometers, which has proven infallible as far back as I can remember. A creation of mine, it’s a contrarian view based on the repeated forecasts of a veteran Wall Street trader, who has an incredible knack of consistently being wrong whenever he tries to predict the direction of the market. In this respect, in fact, I can’t ever recall him being right. So whatever he thinks, just do the opposite. The last time I caught up with our trader was in early August with the Dow at around 10,000. He was very bearish, and, in fact, told me he was shorting stocks (a bet they would fall in price). What a mistake! True to form, the market went higher, with the Dow, now at around 11,400, turning in a nifty 14% gain. What does he think now? Bad news, I’m sorry to say. Unequivocally, he tells me, 2011 will be a winning year for investors. “The economic recovery is for real,” he says. “The evidence is all around us. The unemployment and housing problems are not about to be resolved in the next 12 minutes, but we should see some progress in both areas next year, and the stock market should respond positively.” An essentially similar view is held by UBS Financial Services, Looking a year out, Stephen Freedman, the head of investment strategy is convinced being moderately bullish is the way to go. His reasoning: The global economic recovery is on track and equities are set to outperform while fiscal risks remain at the forefront. One key plus, as he sees it, is that global stocks are sporting below-average price-earnings multiples of 12 to 13, versus an average 16.5 over the past 20 years. In terms of better than average 2011 returns, say on the order of 15% to 20%, he favors four fast growing emerging markets, notably Brazil, Russia, China and Taiwan. As far as the U.S. goes, Freedman sees a 2011 combo of a modest economic recovery (2.7% GDP growth), a tailing off in the jobless rate to 9%, continuing earnings gains of 8% to 10%, versus an estimated 35%-40% this year, paltry bond yields, making equities more attractive, and those below-average P/Es producing general 2011 stock returns of about 10% to 12%. Over the near term, though, he feels the recent sharp runup in equity markets, concerns over European sovereign debt and election uncertainties associated with a new Congress could spur a temporary pullback. He also worries about geopolitical risks, namely flare ups between the U.S. and China, new challenges from nuclear-minded Iran, heightened tensions between North and South Korea and renewed debt problems in Europe. Where should U.S. equity investors put their money to work here? Freedman favors information technology, consumer staples, energy, gold and industrials, mainly transportation. At the same time, he would shun the telecom, consumer discretionary, materials and health care sectors. His wrapup: “Economically, it’s going to take the U.S. longer to catch up, but nonetheless “it’s a good time to buy stocks.” Costa Rican money manager Felix Heligmann disagrees. There are lots of cheap U.S. stocks out there, he says, but notes “I’m not a buyer.” His reasoning: “I expect 2011 to be a very difficult year for the U.S market.” In particular, Heligmann sees growing friction between China and the U.S., increasing Washington gridlock, meaning little if anything will be done legislatively to beef up the ailing economy and appreciably lower the high unemployment rate, and a worsening European debt crisis. What do you think? E-mail me at Dandordan@aol.com.

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Mark Madoff Suicide: Bernie Madoff’s Son Found Hanged In NYC Apartment

December 11, 2010

NEW YORK — One of Bernard Madoff’s sons was found dead of an apparent suicide Saturday on the second anniversary of his father’s arrest, according to police and a lawyer for the family. Mark Madoff, 46, was found dead in his apartment in Manhattan’s fashionable SoHo section, according to police department spokesman Paul Browne. A relative notified police around 7:30 a.m. “Mark Madoff took his own life today. This is a terrible and unnecessary tragedy,” his lawyer, Martin Flumenbaum, said in a written statement. His body was found hanging from a dog leash that had been fashioned into a noose and strung over a pipe in the ceiling of his living room, according to a law enforcement official. The official was not authorized to speak publicly about the case and spoke to The Associated Press on the condition of anonymity. “Mark was an innocent victim of his father’s monstrous crime who succumbed to two years of unrelenting pressure from false accusations and innuendo. We are all deeply saddened by this shocking turn of events,” Flumenbaum said. Mark Madoff and his brother, Andrew, were under investigation but hadn’t faced any criminal charges in the massive Ponzi scheme that led to their father’s jailing. Bernard Madoff swindled a long list of investors out of billions of dollars and is serving a 150-year prison term in North Carolina. He was arrested on Dec. 11, 2008, after confessing his crimes to his family. Madoff’s sons, according to the family’s attorneys, were the ones who turned him in. The scandal put a harsh light on members of the family. The financier’s brother, Peter, played a prominent role in the family’s company. Mark and Andrew Madoff both worked on a trading desk at the firm, on a side of the business that wasn’t directly involved in the Ponzi scheme. In February, Mark Madoff’s wife, Stephanie, petitioned a court to change her last name and the last names of their two children, saying her family had gotten threats and was humiliated by the scandal. Law enforcement officials told The Associated Press that Mark Madoff’s wife, who is in Florida, became concerned about her husband after getting a communication from her husband either Friday night or early Saturday morning suggesting that someone should check on their two-year-old child. She asked her father to check on the home. When he arrived, he found the two-year-old sleeping safely in his bedroom, as well as the body. A dog in the apartment was also unharmed. A call to Bernard Madoff’s attorney was not immediately returned Saturday. Calls to the FBI and U.S. Attorney’s office were also not immediately returned. Previously, spokespeople for the brothers had repeatedly denied that they had any knowledge of their father’s crimes. A year ago, the court-appointed trustee trying to unravel Madoff’s financial affairs sued several relatives, including Peter, Mark and Andrew, accusing them of failing to detect the fraud while living lavish lifestyles financed with the family’s ill-gotten fortune. The lawsuit accused Mark Madoff of using $66 million he received improperly to buy luxury homes in New York City, Nantucket and Connecticut. Police investigators were at Madoff’s apartment Saturday morning, along with officials from the medical examiner’s office, which will determine the cause of death. ___ Associated Press writers Tom Hays and Verena Dobnik contributed to this report.

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BP plans to sell assets in North Sea to cover clean up costs of Gulf of Mexico oil spill

December 7, 2010

BP

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CalPERS Transitions $1.9 Bil. U.S. Industrial Real Estate Portfolio to GI Partners

December 2, 2010

The California Public Employees’ Retirement System (CalPERS) has shifted the North American assets of its CalEast Global Logistics LLC, valued at $1.9 billion, to GI Partners. In addition, it has transitioned its European industrial assets, valued at…

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