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Huffington Post…

The Case-Shiller home price index is a powerful way to look at the story of housing in America. You can see the boom and bust all in one simple graph. But when we go on the radio to talk about home prices, a graph isn’t much good to us — nobody can see it. So we converted the Case-Shiller graph into musical notes.

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LISTEN: The Decade’s Home Prices Converted Into Musical Notes

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

NEW HAVEN — There are, it seems, only two major issues that have a set time frame for political brinkmanship between the White House and Congressional Republicans. The Bush tax cuts will make for an interesting election-year dynamic when they expire in two years. Well before that, however, the president will have to persuade GOP leadership to ignore Tea Party insistence and allow for the country’s debt ceiling to be raised. That issue is set to come to a head this spring. So far the administration has been (or perhaps just expressed a sense of being) self-assured that the ceiling will be raised, but on Sunday its rhetoric was noticeably sharper. Appearing on ABC’s “This Week,” Austan Goolsbee, the chairman of the Council of Economic Advisers, laid out the fairly alarming implications of the United States defaulting on its obligations while asking the question: What type of insanity would persuade us to do this? “Well, look, it pains me that we would even be talking about this,” he told co-host Jake Tapper. “This is not a game. You know, the debt ceiling is not something to toy with. If we hit the debt ceiling, that’s essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on the economy would be catastrophic. That would be a worst financial economic crisis than anything we saw in 2008.” “As I say that’s not a game,” Goolsbee went on. “I don’t see why anybody’s talking about playing chicken with the debt ceiling. If we get to the point where you’ve damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity. There would be no reason for us to default other than that would be some kind of game. We shouldn’t even be discussing that. People will get the wrong idea. The United States is not in danger of default. We do not have problems with that. This would be lumping us in with a series of countries throughout history that i don’t think we would want to be lumped in with.” The good news for Goolsbee and the president is that House GOP leadership does seem to see the deficit ceiling debate a bit differently than their incoming Tea Party brethren — as does the intellectual establishment of the Republican Party, including George Will, who, following Goolsbee on ABC, criticized the idea of defaulting simply for symbolic reasons. UPDATE : It’s worth noting, as CBS Radio Mark Knoller does , that “the Debt Ceiling now stands at $14.294-trillion. The National Debt is now $423-billion away at $13.871-trillion and rising.” LATER UPDATE : Huffington Post’s Ryan Grim notes that there is, in fact, a third issue with a set time frame for a showdown. The continuing resolution funding government — which was put into law during the lame duck session — expires in March 2011 , leaving Congress with some tough choices over how to budget going forward.

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Austan Goolsbee: Hitting Debt Ceiling Would Be ‘First Default In History Caused Purely By Insanity’

Video: Shah Says Gap, BJ’s, SAP May Be Targets in 2011

December 31, 2010

Dec. 31 (Bloomberg) — Sachin Shah, a special situations and merger arbitrage strategist at Capstone Global Markets LLC, talks about CVS Caremark Corp.’s agreement to buy the Medicare Part D unit of Universal American Financial Corp. for about $1.25 billion and the outlook for mergers and acquisitions in 2011. Shah, speaking with Melissa Long on Bloomberg Television’s “Bottom Line,” says RadioShack Corp., Gap Inc. and BJ’s Wholesale Club Inc. may be private equity targets in 2011 and SAP AG could be acquired by Microsoft Corp. or Hewlett-Packard Corp. (Excerpt. Source: Bloomberg)

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WATCH: Obama Says Tax Cut Deal Imperfect, But Still Worth It

December 11, 2010

Darlene Superville, Associated Press WASHINGTON – President Barack Obama calls his tax-cut agreement with Republicans far from perfect but a good deal overall for Americans, while acknowledging that many fellow Democrats aren’t happy about what he negotiated with the GOP. Pressing for passage by year’s end, he told lawmakers in his radio and Internet address Saturday that “our recovery will be strengthened or weakened based on the choice that now rests with Congress.” The deal would extend for all earners cuts in income tax rates that are set to expire next month. It would renew jobless benefits for the long-term unemployed and trim Social Security taxes for one year. Republicans support the plan because it would not impose higher taxes on the wealthiest, as Obama long had wanted to do. Democrats object to the pact on grounds that it is too generous to the rich. WATCH: Obama said the agreement will require that both parties accept some things they don’t like. But he said the agreement will help the middle-class families that he and others have argued should be spared further economic hardship. “The opportunity for families to send their kids to college hinges on this debate,” Obama said. “The ability of parents to put food on the table while looking for a job depends on this debate.” He said he was confident that Congress, where voting is expected to begin on the measure next week, “will do the right thing.” Obama won some high-profile backing for the agreement from former President Bill Clinton. The former president told reporters after an Oval Office meeting with Obama on Friday afternoon that “I don’t believe there is a better deal out there.” In their weekly address, Republican Rep.-elect Kristi Noem of South Dakota applauded the deal and said it’s good for small businesses. “With unemployment still rising, the No. 1 thing our family-owned small businesses need right now is certainty,” she said. “They need to know that the government is not going to come in and do anything to jeopardize their ability to keep their doors open. So it’s certainly encouraging to see that President Obama has proposed a potential agreement to stop all the tax hikes scheduled to take effect on Jan. 1.” But she said additional steps will be needed to spur economic growth, including spending cuts, making government smaller and repealing the new health care law.

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Robert Pagliarini: 10 Tips to Save Big Money This Christmas

December 8, 2010

Want to learn how to save money on gifts this Christmas and not feel like a Scrooge? According to this year’s National Retail Federation holiday survey, the average American will spend close to $700 this season on gifts, cards, decorations, and the like. This is one time when you want to be below average — way below. In fact, if you are in debt, just say no to gift buying this holiday. There is absolutely NO reason for you to go further into debt buying gifts for others. There are 13.6 million Americans who are still trying to pay off holiday debt from last year. Don’t join them by digging yourself into a deeper hole. If you are going to buy gifts this year, the key to avoiding a holiday season that drains your bank account is to start planning early. Here are the top 10 money saving tips for steering clear of holiday debt and starting the new year in better financial shape: Plan it. Before you shop online or enter the chaos of the shopping mall, take ten minutes at home to create a spending plan that lists who you need to buy for and how much you will spend. Use discounted gift cards. How would you like100 worth of gifts for80? You can purchase discounted gift cards for hundreds of online/offline retailers including the Apple Store, Radio Shack, Sears, Home Depot, and others. Discounts are usually 5%-30% off the face value of the card. Check out GiftCardRescue.com and GiftCards.com . Use social media. Before you start shopping, start following your favorite retailers on Twitter and Facebook. Many companies offer discounts exclusively to their Twitter followers and Facebook friends. A quick search of their recent posts may reveal money-saving discount codes. Barter via online chat. When you’re shopping online, look for a “chat” or “live help” button. Tell the customer service rep you’d like to shop with them but you want a 15% discount. Ask them to check with their manager or you will abandon your shopping cart and click over to their competitor. This won’t work all of the time, but when it does it will save you money. Find discount codes. I never buy anything online without trying to find a discount code first. I’ve literally saved hundreds of dollars and it doesn’t take more than a minute. Simply go to RetailMeNot.com , SecretPrices.com , and FreeShipping.org to pull up all of the available discounts for your store. Use the discount code during the checkout process to get free shipping or to save 20% or more. Get cash back. If you’re going to spend hundreds of dollars this year on gifts, you might as well try to get a few bucks back. I’ve used ebates.com (affiliate link — all proceeds will go to charity) for some time and have received several rebate checks. Bring on the envelopes, chuck the credit cards. Leave your credit cards and debit cards at home. Allocate an amount of money for each gift, and put that money in separate envelopes marked with the recipients’ names. Give group gifts. When exchanging presents within large groups of people, even “token” gifts can really add up. Try a “white elephant” exchange, a secret Santa strategy, or going in with co-workers on a gift for your boss. Make a promise that you won’t buy anything for yourself. When you’re shopping for gifts, it’s easy to be tempted to buy for yourself. Make this season about others, not you — and remember that the items you want will likely be less expensive during the after-season sales. Avoid the “10% off, buy more” phenomenon. Stores often offer great deals when you sign up for their credit cards, but beware the high rate of interest these cards charge and ask yourself if you’ll really be saving money in the long run. And don’t spend more than you intended just because you’re now getting a discount on your purchase. If you follow these money saving tips, I guarantee you will put more green — and less red — into holiday shopping this year.

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Youth Radio — Youth Media International: Future of Business, Millennial-Style

November 11, 2010

Originally published on Youthradio.org , the premier source for youth generated news throughout the globe. By Robyn Gee Youth Radio recently profiled a company called Mr. Youth , a marketing agency targeting youth consumers. They claim to be experts in engaging young people, which includes enticing young people to remain on their own payroll for long periods of time. They were recently voted one of the best places to work in New York City by Crain’s magazine. Mr. Youth recently collaborated with Intrepid , to conduct a study with the goal of finding out how Millennials, or people born in the 1980s, would design and manage a company. The results of the study provide insight into the minds of young people today, and how our companies will be run in the near future.

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Jim Worth: Is the Chamber of Commerce a Subversive Organization?

November 1, 2010

“The U.S. Chamber of Commerce campaigns against democracy and America!” With elections only days away this headline should run everyday in newspapers, magazines, on television and cable and shouted on the radio, accompanied by articles and segments naming the corporations like Dow Chemical, Prudential Insurance, Chevron Texaco, Goldman Sachs, and Aegon, exposing the millions of dollars they’ve given to the Chamber which has been converted to partisan ads, many of them dishonestly negative. Recent actions of the Chamber of Commerce risk causing irreversible damage to our economy and our precious democracy. Thanks to the Citizens United ruling by the Supreme Court nine months ago the Chamber of Commerce is pumping millions of dollars into mid-term campaigns — dollars meant to influence close races throughout the country — without having to name the donors. Their actions are negatively affecting the very democracy they claim to embrace and instead of helping small businesses the candidates they’re supporting could destroy them. Outsourcing of jobs for the past 10 years has been one of the major factors in our high unemployment levels of the last few years. The economy is near the breaking point under the weight of these unsustainable unemployment and underemployed numbers. The Chamber of Commerce is the leading advocate of outsourcing and one of the major reasons unemployment remains near 10%. It is also the reason so many small businesses are failing. The Chamber of Commerce’s global approach to business and advocacy of outsourcing is killing small business in the United States. It is in direct contradiction to the Chamber’s mission statement which reads: ” To advance human progress through an economic, political and social system based on individual freedom, incentive, opportunity, and responsibility .” The change of political focus under Thomas Donohue in favor of huge corporations has irresponsibly destroyed the economy for small business which negatively affects most of their 300,000 members nationwide. Ninety-six percent of their membership are small businesses with 100 employees or less. A corporate agenda is in stark opposition to the needs of small business. Small businesses’ problem is one of demand . The Chamber’s divisive political activities do nothing to address member’s needs. In the New York Times article by Eric Lipton, Mike McIntire, and Don Van Natta, ” Top Corporations Aid U.S. Chamber of Commerce Campaign ,” the authors expose the breadth of secret donations from giant corporations, including foreign contributors, to undermine federal regulations — even those that would favor American citizens and small business over corporate interests. Mr. Donohue, who received $3.7 million last year while member businesses across the nation struggled, announced that the Chamber is intending to spend as much as $75 million “to carry out the largest, most aggressive voter education and issue advocacy effort in our country in our nearly 100 years,” while Republicans on Capitol Hill filibuster, stalling small business legislation that would help those businesses survive the economic morass that the Republicans caused. But, to many observers, it is neither education nor issue advocacy. It is merely propaganda, spreading a tainted message with lies and half-truths. The Chamber has abandoned its pro-business principals and shunned its initial charge of enhancing a healthy small business environment by trying to subvert good legislation for its members in favor of a corporatist position. While Chamber CEO and executives argue that government stimulus fails to create jobs they spend millions in support of candidates that consistently vote against helpful small business tax relief and job creating legislation aimed at small businesses. The Chamber hierarchy believe that gifts from national and foreign corporations are necessary to ‘ remake Congress ‘ on Election Day to make it friendlier to business, while creating a negative political environment with vitriolic ads that undermine the integrity of the Chamber and bring its principals into question. The current direction and arrogance of the Chamber’s executive board risks alienating its members. Local organizations are being told by national political director William C. Miller Jr, “it’s been a long and ugly campaign season, filled with partisan and political squabbling.” What he doesn’t tell members is that most of it has been created by them. He further exclaims, “we are so close to bringing about historic change to Capitol Hill.” Miller may be right about change, but it will be change its membership will not like. Most of the candidates the Chamber has supported are unqualified to govern but the Chamber is more interested in their malleability; pliable candidates obligated under the weight of the Chamber’s unconventional support. Local affiliates should be deeply concerned by the partisanship of the national arm of the organization, 90% of the $75 million directed to Republican candidates. They should aggressively question whether supported candidates are committed to a small business agenda. But, more disturbing should be the Chamber’s destructive use of lies, innuendo, and hatred in their ads against candidates throughout the country. The Supreme Court’s heinous Citizen’s United decision did not give the Chamber free rein to spew hatred and lies. Their decision has unleashed a level of hatred from which this country may never recover. The Chamber’s national office is far removed from the good works of the local Chambers of Commerce. Local chapters would do well to reject the Chamber’s subversive activities by shedding the national body and continuing their good work with members in their own communities. Write the U.S. Chamber of Commerce and tell them to end their destructive agenda, NOW!

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Nine Great Brands That Had To Change Their Names

October 28, 2010

lightly (Apple Inc. was once Apple Computer), but hardly enough for most people to notice. Some of the world’s largest companies have changed their names out of necessity, often due to mergers. Sirius XM Radio (NASDAQ: SIRI) is the combination of two companies-Sirius Satellite Radio and XM Satellite Radio. Time Warner Inc. (NYSE: TWX) was once AOL Time Warner and owned Time Warner Cable (NYSE: TWC) and online portal AOL (NYSE: AOL). Both of those companies are gone and so is the firm’s former name. As part of 24/7 Wall St.’s ongoing look at brands, the value of brands, and the purchase and sale of brands, we looked at nine large companies that changed their names. Usually, particularly for corporations that have been in business for decades, the decision carries substantial risks. Tens of millions if not billions of dollars are put into creating brand identities and visibility, often over a long period – over a century, in the case of Coca-Cola (NYSE: KO) or J.C. Penney (NYSE: JCP).

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Anne Hill: Technology, Innovation, and the Future of Government

October 21, 2010

I took Dream Talk Radio to Silicon Valley recently for a very interesting multi-media event about e-government; the idea that advances in technology and information processing can help local, state, and national agencies be more efficient, responsive, and effective in the process of governing. It is an idea championed by attorney Bill Fenwick, of Fenwick & West , and is being addressed by Bill and others through the group  Program for the Future . With me on the trip was Eileen Clegg of Visual Insight and Program for the Future . Eileen is a visual journalist who creates graphic renderings of conversations in real time. As I interviewed Bill about the history and vision of e-government, Eileen created a mural of the landscape we discussed, to show the challenges and the promise of e-government initiatives. Bill Daul, of NextNow and PFTF took the photos you see here and videotaped Eileen’s mural creation. Bill Fenwick’s passion for e-government initiatives springs from over 40 years of working with the judicial system, which processes overwhelming amounts of information every day. As Bill explained at one point in our discussion, the courts are charged with storing and sharing essential documents, records that can make or break lives, businesses, and laws–and yet they do so using technology that is decades behind private industry in terms of speed, efficiency, and usability. The idea of e-government is essentially non-partisan, in that it is concerned with improving the information systems that underlie all government agencies and functions, so that they can do their job better, whatever that job may be. There are many efforts toward this goal already in motion, most notably through the Gov 2.0 project , but also in small, important changes occurring in public agencies across the country. Bill sees Program for the Future’s role as “improving the improvers,” sharing best practices and preventing duplication of efforts among those working toward the goal of making government run better. This is in keeping with PFTF’s understanding of the vision of Doug Engelbart , inventor of the computer mouse and proponent of ” collective intelligence ,” the idea that we are smarter working and thinking together than we can be working by ourselves. My interview with Bill Fenwick aired on Dream Talk Radio September 9, 2010. Listen or download the podcast here . Here is Eileen’s complete Visual Insight e-government mural. When I asked Bill about the push-back against e-government efforts, he cited people’s fear of change, and the security of the status quo. Eileen’s mural clearly shows the situation facing our society today, with the onslaught of too much information and the challenge of too little time, combined with a resistance to change. Here is a video capturing her spoken summary of that landscape, along with the mural creation. It was a fascinating, exciting day in the Valley, and has given me much food for thought. The American Dream looms large in our psyches, whether we acknowledge it or not. E-government is one way to fulfill the promise of our country: to be an intelligent, flexible, responsive democracy by using wisely the power of our own great inventions and innovations. This article was originally published at annehill.org .

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Video: Karmazin Says Subscribers More Vital Than Advertisers: Video

October 19, 2010

Oct. 19 (Bloomberg) — Mel Karmazin, chief executive officer of Sirius XM Radio Inc., talks with Bloomberg’s Betty Liu about the company’s business model and the future of internet radio. (Source: Bloomberg)

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Video: Karmazin Says Subscribers More Vital Than Advertisers: Video

October 19, 2010

Oct. 19 (Bloomberg) — Mel Karmazin, chief executive officer of Sirius XM Radio Inc., talks with Bloomberg’s Betty Liu about the company’s business model and the future of internet radio. (Source: Bloomberg)

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Robyn Greenspan: 2010 World Business Forum: Al Gore’s Slides Can Save the Planet

October 8, 2010

Not on stage at Radio City Music Hall during the two days of the World Business Forum but omnipresent, was the economy, and with an upcoming election, President Obama took a few jabs from Jack Welch and political advisor David Gergen . The former CEO of GE, who openly endorsed John McCain at the 2008 World Business Forum, criticized the President as being anti-business and improperly handling the auto bailout by “cutting the throats of investors.” Gergen accused the White House as suffering from groupthink and alienating the business community, which, he said, is hurting the recovery. “He needs to bring some CEOs in. They are sitting on cash.” Obama might also want to invite Al Gore in for another look at his awesome PowerPoint, too. The former Vice President — or as he said, “he used to be the next President of the United States” — again expertly connected the dots between the climate crisis, sustainable capitalism and opportunity for global environmental and economic improvement. While he avoided reopening the debate on reasons for invading Iraq, Gore began by affirming the global economy’s dependence on an oil market dominated by the Persian Gulf, and “the thought of it being disrupted or under control of those who could use it as a geopolitical weapon is something not easily dismissed.” Abandoning the polluting 100-year-old technologies of the past to prepare for a sustainable 21st century could break our dependence, put people to work and save the economy, asserts the former Vice President, but we collectively suffer from inertia, which works as the enemy of change. It’s partially because we can’t wrap our heads around something that’s unprecedented. “We have a tendency to think if it didn’t happen in the past, it’s not likely to happen in the future. We never had to think about the relationship between us and the environment.” Gore cites three major contributors to the climate crisis: the global population explosion, which taxes resources; the dramatic expansion of the power-draining technologies we use; and finally, the way we think about capitalism. “Capitalism is the most efficient form of organizing economic activity the world has ever seen. It unlocks the human potential. It has a set of organic and ubiquitous incentives. It’s great that capitalism is our system,” asserted the Nobel Prize winner, however, he argued, it is long past time to address the structural problems that distorted the way we operate. It’s the short-term thinking that recently brought down the financial system and how that same lack of vision prevents long-range environmental solution planning. We’re entering a period of consequences, he said, leading to eventual collapse. Michael Liebreich, chief executive of Bloomberg New Energy Finance, asked Gore why there was so much polarization around global warming in the U.S. “There is a disinformation campaign going on. Large carbon polluters spend money to create false doubts on things that are real. The ship is bearing down, but large carbon polluters are in the boat saying it’s not real.” Gore urged World Business Forum delegates to affect change through political action, and press the Senate to release their stranglehold on policies through filibusters, which, he said, are influenced by special interest groups. “It’s important to change light bulbs, but it’s more important to change the laws.” Economist and Nobel Prize winner Joseph Stiglitz advocated for political action of another kind — more stimulus money, as the initial package was too small and not well-designed, he said. “If it hadn’t been for the stimulus, the unemployment would have peaked. Millions of Americans who had jobs otherwise would not. It’s clear, that with the end of the stimulus the economy is getting weaker. Something has to be done.” Unfortunately, the optimal time may have passed, as Obama had opportunity after the election. Today he is more politically constrained. “When you hear we can’t afford another stimulus, it’s not true. We can’t afford not to.” Stiglitz didn’t rule out the dreaded “double dip,” as there are too many potential influencers, but he did say with certainty there was not enough job creation. With 1-in-6 Americans out of work and a labor force growing at one percent per year, a large number of long-term unemployed is likely. “Getting back into the market is much more difficult. The new normal will be high unemployment.”

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Dean Baker: Dana Milbank Pays Homage to Alan Simpson’s Sexism and Ignorance

September 4, 2010

The Washington Post insists that its columnists either produce top quality work or toe the company line. Dana Milbank falls into the latter group of columnists as he showed once again with his warm praise for former Wyoming Senator Alan Simpson’s sexism and ignorance. Senator Simpson has been in the news lately for writing crank letters to his critics in his capacity as a co-chair of President Obama’s deficit commission. In one of these letters he compared Social Security to a cow with 310 million tits. This letter was sent to Ashley Carson, then the executive director of the Older Women’s League. Apparently Mr. Milbank does not even understand why Simpson was widely denounced for sexism over this letter. Mr. Simpson’s lack of understanding of bovine anatomy is humorous, his contempt for Social Security, and those dependent on it, somewhat less so. But the sexism in the letter was his clear implication that the director of a major national woman’s organization could not read a simple graph. He also concluded the letter by telling Ms. Carson to contact him when she “finds honest work,” implying that representing the interests of tens of millions of older women is not honest work. Is Mr. Simpson equally “blunt” with the lobbyists who represent the interests of Goldman Sachs and British Petroleum? Or, does he view their work as more honest? If Senator Simpson brought great insights to the debate then perhaps we should overlook his rudeness and sexism, but there is zero evidence that he has advanced beyond the silly platitudes that pass for profundity in the pages of the Washington Post . In his letter he referred Ms. Carson to a presentation prepared by the chief actuary of Social Security for the deficit commission. Simpson seemed to believe that this presentation would be a real eye-opener to Ms. Carson. In fact, the presentation contained no information that would not be well known to anyone involved in the Social Security debate. All of the information in the presentation is readily available in the Social Security trustees report and other public documents. If the presentation was news to Simpson, then it suggests that he is seriously ill-equipped for his current job. This is not the first time that Simpson has indicated that he is totally clueless in debates over the deficit and Social Security. I was on a radio show with Senator Simpson back in the mid-90s when the hot fashion in policy circles was cutting the cost of living adjustment for Social Security. The cost of living adjustment is tied to the rate of inflation, as measured by the consumer price index (CPI). At that time, story went that the CPI hugely overstated the true rate of inflation. Therefore, the Social Security cutters wanted to reduce the annual cost of living adjustment to at least 1 percentage point below the rate of inflation shown by the CPI. This meant that if the CPI showed 3 percent inflation then the cost of living adjustment would be just 2 percent. This might seem like a small cut but it adds up over time. After 10 years the benefit cut would be about 10 percent, after 30 years it would be almost 30 percent. (Compounding reduces the effect slightly.) Senator Simpson was a big proponent of these cuts, hurling his usual lines about greedy geezers and high-living seniors. When he was on the radio show with me he argued that the CPI’s overstatement of inflation was well over 1 percentage point and could even be over 2 percentage points. He then said that our children would be living in chicken coops. Okay, now let’s imagine that Senator Simpson had learned arithmetic in third grade like the rest of us. We know how fast nominal wages/income is rising. Let’s say this averages 3.0 percent a year. If the rate of inflation as shown by the CPI is 2.0 percent, then real wages/income are rising by 1.0 percent a year (3-2 = 1). This would be the rate that we are getting richer. Now suppose the Social Security cutters of that era were right and the CPI overstates the true rate of inflation by 1 percentage point. Then real wages/income would be rising by 2.0 percent a year. Since the true rate of inflation would be just 1 percent a year, then a 3.0 percent rate of nominal wage and income growth would translate into a 2.0 percent rate of real wage/income growth (3-1 = 2). Suppose that Senator Simpson’s sources were right and that the CPI overstated inflation by 2.0 percentage points. Then the true rate of inflation in this story would be zero. In this case the 3 percent rate of wage/income growth would translate into a 3.0 percent rate of real wage/income growth. This would lead to a conclusion 180 degrees at odds with Senator Simpson’s assertion. Instead of describing a situation where our children and grandchildren would be living in chicken coops, the Senator was describing a situation in which they would all be rich. But, he was so clueless on logic and arithmetic that he did not even understand this simple point. Yet, he can still count on getting praised by Dana Milbank and the Washington Post . See, if you give the company line — knowledge of arithmetic is optional, and you can still be a co-chair of President Obama’s deficit commission.

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Mine Workers Tipped Off Before ‘Surprise’ Inspections, Federal Regulator Says

August 26, 2010

WASHINGTON — Some mine companies are tipping off their underground workers before federal officials make surprise inspections, an illegal practice that has become more prevalent since a West Virginia explosion killed 29 miners, the nation’s top mine official said Thursday. “We’re looking at this as a chronic problem without question,” Mine Safety and Health Administration director Joe Main told The Associated Press. “We have found enough evidence to know that we need to act to beef-up enforcement of the law to prevent this advance notice.” Main’s comments came as his agency issued a special guidance bulletin to mines around the country clarifying the ban on giving advance notice of inspections. The government has stepped up surprise inspections nationwide in the wake of the April explosion at Massey Energy’s Upper Big Branch mine in West Virginia. Some workers at the mine testified that managers found ways to tip off miners ahead of time so they could pass inspections. Massey officials have denied issuing any illegal warnings, but the company faces civil and criminal investigations. Advance notice could give miners anywhere from 10 minutes to more than an hour to hide safety problems such as improper ventilation or disabled methane monitors while inspectors make their way from the main office to locations thousands of feet underground. MSHA has already issued 28 citations for advance notice violations this year. It issued 31 for all of last year – the highest number in a decade. To combat the problem, MSHA has turned to more aggressive tactics like commandeering the phones as soon as inspectors arrive or driving up in cars the mine company won’t immediately recognize. But it’s become a dangerous cat-and-mouse game as some mines post lookouts or install infrared beams that alert them when anyone enters the property. “At some of these mines, there’s just one long dirt road where they can see you coming,” said Eddie Sparks, MSHA’s acting assistant district manager for enforcement in Barbourville, Ky. “Some of the coal truck drivers can get on the radio and call ahead before you ever get to the mine.” Sparks said that’s what happened on April 19 when inspectors drove up to Manalapan Mining Co.’s RB No. 12 mine in Harlan County, Ky. Inspectors monitoring CB radio heard truck drivers alerting the company. At another inspection the same day, MSHA officials seized control of phone lines as soon as they arrived at Left Fork Mining Co.’s Straight Creek No. 1 mine in Bell County, Ky. But Sparks said inspectors still overheard a mine employee on another phone calling down to workers to shut the belts off because inspectors were outside. “It’s a problem because there’s a lot of phones at a mine, like the guard shack and various mine offices,” Sparks said. “You can get to different phones that you try to monitor, but before you get to the other ones, they can call in ahead of you.” Both of the Kentucky cases were part of a 57-mine inspection blitz launched in the days following the April 5 Upper Big Branch disaster. The agency has targeted mines with ventilation problems, high methane levels and buildup of coal dust – factors believed to have triggered the massive explosion at Upper Big Branch. That theory was bolstered on Thursday when MSHA said a handheld meter found deep inside the Upper Big Branch detected explosive levels of methane before the blast. The meter detected 5 percent methane in the mine’s atmosphere, according to Kevin Stricklin, MSHA’s chief of coal mine safety. Carol Raulston, a spokeswoman at the National Mining Association, said MSHA’s response has been overly aggressive considering that most mines have a safe track record. “MSHA’s high public profile on this inspection technique is offensive to the vast majority of U.S. mines that are trying their best to comply with all safety requirements and to improve miner safety,” Raulston said. “The conditions we’re finding when we’re able to circumvent some of these intended advance notices are just appalling,” Main said. In some cases, ventilation curtains had been removed, miners had not removed dangerous piles of rock dust or workers were mining in areas where they were not permitted, Main said. Current law provides for up to a $1,000 fine and imprisonment up to six months for anyone giving advance notice of an inspection. A mine safety bill working its way through the House would boost the prison term up to five years and raise the fine up to $250,000 for individuals and $500,000 for corporations that knowingly give advance notice to impede an investigation. In the meantime, MSHA is working to “change the culture in the mining industry,” Main said. “Showing up when we’re least expected is a tool that’s been used and will continue to be used.” ___ Associated Press writer Tim Huber in Charleston, W.Va., contributed to this report.

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Video: Ireland Has Long-Term Sovereign Credit Rating Cut by S&P: Video

August 24, 2010

Aug. 24 (Bloomberg) — Bloomberg’s Matt Miller, Dominic Chu and Julie Hyman discuss today’s decision by Standard and Poor’s to cut Ireland’s long-term sovereign credit rating to AA- from AA. Nobel Prize-winning economist Joseph Stiglitz told Dublin-based RTE Radio in an interview broadcast today that the European economy is at risk of sliding back into a recession as governments cut spending to reduce their budget deficits. They talk on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: China’s Film Industry Faces Domestic, Foreign Challenges: Video

August 9, 2010

Aug. 9 (Bloomberg) — Bloomberg’s Stephen Engle reports on the challenges facing China’s film industry. China is encouraging the development of its film industry to help local movie makers compete with overseas producers such as Time Warner Inc. China’s box office receipts are projected to rise 61 percent to 10 billion yuan this year, the State Administration of Radio, Film and Television projected in May. (Source: Bloomberg)

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Mike Elk: A Fat Dog Simply Can’t Hunt

July 21, 2010

The California’s Nurse Association (CNA) is known as one of the most progressive unions in the country. It endorsed Ralph Nader in 2000 and campaigned steadily for single-payer healthcare when other unions were advocating for the watered down public option. It created a powerful base in California through democratic rank-and-file trade unionism and refused to give into concessionary deals when other nurses unions in California were. And the CNA hasn’t shied away from the state’s November gubernatorial election, spending about $300,000 since last year to oppose GOP California Gubernatorial Candidate Meg Whitman and support Democratic candidate Jerry Brown, the AP reports . So perhaps we shouldn’t be surprised that Whitman has now put the CNA on the defensive for alleged nepotism and excessive union salaries. Last week, Whitman sent out a four-page flyer to all of California’s nearly 300,000 nurses blasting CNA/National Nurses Organizing Committee Executive Director, Rose Ann DeMoro, for earning more than $293,000 per year, nearly five times more than the median salary of a nurse in the United States. And DeMoro’s husband Robert, who heads the union’s research arm, is paid nearly $142,254 each year. (You can find all these details at the Whitman campaign’s ” Truth for Nurses ” website.) The flyer points to state records showing that there are 99 staffers at the CNA who make more than $100,000 a year, while the average salary of nurses in the United States is only $62,400. (The average Cailfornia RN salary in 2009 was $85,080, according to the Labor Department .) Responding in the LA Times , DeMoro said: “It’s again this corporate boss telling the nurses how much they should pay their executive director. She thinks that she should be able to tell nurses what they should pay their staff.” Regardless of why CNA’s 86,000 members decided to pay their leaders high salaries, by doing so they open themselves up to right-wing attacks. As I’ve written on this blog before , if labor leaders in all U.S. unions capped their salaries at $150,000 a year, the country’s labor movement could save $143 million a year. Usually when I mention this I am attacked in private by some labor activists, who say I am reinforcing right-wing talking points about unions. But the Whitman-CNA controversy shows that if labor doesn’t address these issues internally, then even a progressive militant union like CNA can be attacked by right-wing forces for being out of touch with its members. Bloated union salaries epitomize the stereotype of union officials doing little to help the workers they represent. Of course, CNA is growing and calling strikes to defend its members’ interests. But it’s also true that when union leaders make such high salaries, they lead lives drastically different than their members. It’s important that labor leaders make something close to the members they represent so they understand what it is to have angst over paying the mortgage and paying bills. My father has been a union organizer for 33 years with United Electrical, Radio, and Machine Workers of America (UE), which caps its union official’s salaries at $56,000 a year. I grew up in a modest house in a good neighborhood, went to public school, and struggled to pay for college, like a lot of kids.

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Steve Parker: Exclusive First Drive! Nissan’s 2011 Leaf EV

July 16, 2010

We have driven the future, and you can, too, sometime after the beginning of the new year. We took some short road test drives recently and one of the cars we flogged was Nissan’s 2011 Leaf EV. And while Toyota’s Prius gas/electric hybrid has been the Official State Car of Santa Monica for some years now, Leaf is definitely worthy of taking a shot at the title and could well prove successful in its efforts. In fact, the latest Leaf press preview was hosted at the Sheraton Miramar Hotel, smack in the center of the beach town. The challenge to Toyota has been made, and it might get ugly. Turns out all the excitement isn’t so much about the car’s performance, technology, styling or even interior design. It’s the car itself — the fact that it comes to life at a time so many other EVs, hybrids, extended-range hybrids and alternative fuel vehicles are hitting the marketplace. Customers will have a lot of info, maybe too much, to sort through when making their next vehicle choice. It’s bound to be shunned by some of the “holier than thou” who think cars should be banned entirely. But Leaf will be embraced by others, especially the so-called “hyper-milers,” who spend their days coming up with ways to suck even more energy out of every last atom in their batteries. Leaf is, without doubt, a history-making car. In terms of performance Leaf is about what we expected but it’s still, by default, a revolutionary and historic vehicle, the first EV to be mass-produced by a major car company in the “modern era” (post-WWII) and sold worldwide. Weighing in at a hefty 3,500 pounds (the battery pack alone is 600), Leaf will begin its U.S. sales sometime around the end of this year. Nissan announced this past week that Leaf’s on-board battery will be warranted for 8 years or 100,000 miles, whichever comes first. Nissan, along with Japanese battery-maker NEC, has formed a new corporation specifically to make Leaf’s batteries in Japan. For model year 2013, Nissan has plans to officially open its own dedicated battery-making facility in Tennessee for cars built in the U.S. Using laminated Lithium Ion batteries (Li-Ons for short), these batteries have been highly-developed by Nissan engineers to keep Leaf going for 100 miles after a charge, with a top speed of about 94 miles per hour. Now sit down, listen and learn something. Sorry, just wanted to see if you were still paying attention. There are three different charging methods for Leaf including “portable” charging, which uses a standard 110-volt wall plug-in charger which comes with the car. The portable method takes about 18 to 20 hours to make Leaf’s battery go from 0 to 100 per cent filled. “Installed charging” is the second method. When buying the Leaf, customers can also order an installed home charging unit. This method, using a 220-volt receptacle, takes around 8 hours to fully recharge Leaf. The home unit costs about $2,200, installed, but there are rebates and tax credits which can pay up to $2,000 of the total cost to encourage this option. Now, just as in auto racing, how fast you want to go depends on how much you want to spend, and this next option will be expensive, especially for Nissan and Aerovironment, the company working with Nissan on charger development and installation. “Quick charging” plans call for Leaf’s battery to be charged up to 80 per cent of capacity in only 30 minutes. Nissan engineers envision these quick chargers installed in busy shopping mall and office building parking lots, on major routes between cities ala truck stops and wherever else there might be a burgeoning population of EVs and plug-in hybrids needing a little love from the electric gods. We’ve gone over some of these specs before so let’s get down to it: How is Leaf on the streets? The Leaf we drove delivered about what we expected. The car is very intuitive; Nissan knows what we’re thinking when we get into the driver’s seat. All controls are in familiar places and operate accordingly, though, as on almost all the hybrids we’ve driven so far, there are some gimmicky eco-gauges and -controls that don’t seem altogether necessary (one allows the driver to “build a tree” as their eco-friendly driving style continues and improves for a period of time). The battery is under the car, as near the center as possible to help locate the center of gravity and help with handling. Nissan was smart to do this because they are going to catch a lot of hell for the car’s heft; perhaps Valerie Bertinelli and Jason Alexander can take fellow Jenny Craig clients to meetings and help Leaf lose a little bulk, too. Nissan Leaf interior Our test Leaf was, Nissan told us, about 90 per cent of what the final production version will look, feel and sound like. And the news is good in those areas: the car has an extreme style and much of that comes from use of a wind tunnel to design the car and cut down on that nemesis of EVs, wind noise. For instance, the highly-stylized headlamps with curves and lines that appear to go every which way are functionally manipulating oncoming air so it goes above and below the side mirrors, not right smack into it as on most cars and trucks. Even the radio antennae is specially shaped to cut noise and add to the vortex pushing the car along from the rear. These little things pay off as Leaf is very, very quiet; it’s like the local library. It’s so quiet, Nissan engineers tell us, that they had to engineer-in a certain amount of noise so pedestrians know there’s a car coming their way. We’re not kidding. The interior has a surprising amount of head room and that makes the entire car seem taller and wider than it really is from a passenger’s point of view. It’s a nice visual trick. Both front and rear seats do not offer what we would call “generous” legroom, but by no means would you think you’d be calling the chiropractor after a trip to Las Vegas in any seat on Leaf. You’ll have to go to a dealer to see the instrument panel up close and personal. Words simply can not do it justice. It’s colorful, animated and I understand the next-generation Leaf will come with 3D glasses. Well, it isn’t really that involved, so let’s just say the dash is, uh, “busy”. A single center tunnel mounted joystick-like appendage keeps Leaf in or out of its single forward gear. Leaf uses Nissan’s start system which allows engine start/stop by touching the brake and pushing a dash-mounted button with the key still in your pocket (or pocket book). Fit-and-finish inside and out was better than in most prototypes we’ve seen through the years. And with our test car not being a complete, sale-able Leaf, that bodes well for the car’s quality when it does go into production. As another Nissan engineer told us, “We’re still not through with it yet.” Steering is electrically boosted and was a little light for my tastes. I like to feel more connected to the road. Brakes are four-wheel anti-lock discs and seem up to the job, at least on the streets of Santa Monica. It is a bit surprising, though, the first time in the car, that due to the car’s heavyweight stance, drivers have to hit the brakes harder than they might in their previous compact car to slow or stop Leaf. That ABS braking system also creates battery-charging power through regenerative braking. Leaf gets off the line well as do all EVs and gas/electric hybrids. That’s because electric motors exhibit all their torque instantly, while a gas engine has a “torque curve” which brings the torque up gradually as the revs get higher. So Leaf drivers, like Prius owners before them, know that at the daily “Stop Light Grand Prix” they can take-on and beat just about any other car on the road. For the first 200 feet, at least. The audio system is superior for a car of this size and price (after tax credits and etc.) and allows plugging-in your iPod and all the other latest gizmos. Leaf has everything from 3D nav (not kidding this time) to Bluetooth. Let’s talk price. There are two Leaf models, a base (SV) and a step-up model called SL. Because SL is only $940 more than the SV, it seems the best bargain of the two. The SV is $25,280 while the SL rings the bell at $26,220. For both cars, there is a one-time $7,500 federal tax credit available (do the math yourself; I’m terrible at it), and, in California, the State Air Resources Board makes available another $5,000 tax credit. Your state may also offer similar credits, so check with your local Department of Motor Vehicles before buying an EV or hybrid to see what’s available. And $2,000 of the $2,200 cost of the installed home charger can be deferred; your dealer will fill you in. Similar to what Toyota did when their Prius first went on-sale, Nissan is using the Web to take “reservations” (a $99 “down payment” holds one for you) and let you stay in-touch with Leaf enthusiasts, get the latest news on technical highlights and Leaf availability, etc. Check-out www.NissanUSA.com and cruise around until you find “Leaf”. Finally, there’s an anomaly which not only Nissan but all companies making any kind of plug-in EV or hybrid need to think about: after a car-maker sells 200,000 units of whatever plug-in they’re making, that federal tax credit goes away. It’s almost a given that the new Prius plug-in hybrid and certainly the Leaf plug-in EV will fall victim to this rule. Nissan assures us their top execs are brainstorming to come up with a solution, so the woman who buys a Leaf one day and gets the $7,500 credit finds that her friend who bought one the next day does not get that credit. Nissan’s Leaf, GM’s Volt, Toyota’s plug-in gas/electric hybrid Prius and several other zero- or ultra-low-emission cars are about to go on-sale, all within about a year of each other. It’s an exciting time for those who are fascinated by the technology of these cars as well as their future possibilities, and Leaf will not be the butt of jokes using the words “glorified golf cart,” Leaf is a real car which will generate intense interest among the public worldwide.

Read the full article →

Steve Parker: Exclusive First Drive! Nissan’s 2011 Leaf EV

July 16, 2010

We have driven the future, and you can, too, sometime after the beginning of the new year. We took some short road test drives recently and one of the cars we flogged was Nissan’s 2011 Leaf EV. And while Toyota’s Prius gas/electric hybrid has been the Official State Car of Santa Monica for some years now, Leaf is definitely worthy of taking a shot at the title and could well prove successful in its efforts. In fact, the latest Leaf press preview was hosted at the Sheraton Miramar Hotel, smack in the center of the beach town. The challenge to Toyota has been made, and it might get ugly. Turns out all the excitement isn’t so much about the car’s performance, technology, styling or even interior design. It’s the car itself — the fact that it comes to life at a time so many other EVs, hybrids, extended-range hybrids and alternative fuel vehicles are hitting the marketplace. Customers will have a lot of info, maybe too much, to sort through when making their next vehicle choice. It’s bound to be shunned by some of the “holier than thou” who think cars should be banned entirely. But Leaf will be embraced by others, especially the so-called “hyper-milers,” who spend their days coming up with ways to suck even more energy out of every last atom in their batteries. Leaf is, without doubt, a history-making car. In terms of performance Leaf is about what we expected but it’s still, by default, a revolutionary and historic vehicle, the first EV to be mass-produced by a major car company in the “modern era” (post-WWII) and sold worldwide. Weighing in at a hefty 3,500 pounds (the battery pack alone is 600), Leaf will begin its U.S. sales sometime around the end of this year. Nissan announced this past week that Leaf’s on-board battery will be warranted for 8 years or 100,000 miles, whichever comes first. Nissan, along with Japanese battery-maker NEC, has formed a new corporation specifically to make Leaf’s batteries in Japan. For model year 2013, Nissan has plans to officially open its own dedicated battery-making facility in Tennessee for cars built in the U.S. Using laminated Lithium Ion batteries (Li-Ons for short), these batteries have been highly-developed by Nissan engineers to keep Leaf going for 100 miles after a charge, with a top speed of about 94 miles per hour. Now sit down, listen and learn something. Sorry, just wanted to see if you were still paying attention. There are three different charging methods for Leaf including “portable” charging, which uses a standard 110-volt wall plug-in charger which comes with the car. The portable method takes about 18 to 20 hours to make Leaf’s battery go from 0 to 100 per cent filled. “Installed charging” is the second method. When buying the Leaf, customers can also order an installed home charging unit. This method, using a 220-volt receptacle, takes around 8 hours to fully recharge Leaf. The home unit costs about $2,200, installed, but there are rebates and tax credits which can pay up to $2,000 of the total cost to encourage this option. Now, just as in auto racing, how fast you want to go depends on how much you want to spend, and this next option will be expensive, especially for Nissan and Aerovironment, the company working with Nissan on charger development and installation. “Quick charging” plans call for Leaf’s battery to be charged up to 80 per cent of capacity in only 30 minutes. Nissan engineers envision these quick chargers installed in busy shopping mall and office building parking lots, on major routes between cities ala truck stops and wherever else there might be a burgeoning population of EVs and plug-in hybrids needing a little love from the electric gods. We’ve gone over some of these specs before so let’s get down to it: How is Leaf on the streets? The Leaf we drove delivered about what we expected. The car is very intuitive; Nissan knows what we’re thinking when we get into the driver’s seat. All controls are in familiar places and operate accordingly, though, as on almost all the hybrids we’ve driven so far, there are some gimmicky eco-gauges and -controls that don’t seem altogether necessary (one allows the driver to “build a tree” as their eco-friendly driving style continues and improves for a period of time). The battery is under the car, as near the center as possible to help locate the center of gravity and help with handling. Nissan was smart to do this because they are going to catch a lot of hell for the car’s heft; perhaps Valerie Bertinelli and Jason Alexander can take fellow Jenny Craig clients to meetings and help Leaf lose a little bulk, too. Nissan Leaf interior Our test Leaf was, Nissan told us, about 90 per cent of what the final production version will look, feel and sound like. And the news is good in those areas: the car has an extreme style and much of that comes from use of a wind tunnel to design the car and cut down on that nemesis of EVs, wind noise. For instance, the highly-stylized headlamps with curves and lines that appear to go every which way are functionally manipulating oncoming air so it goes above and below the side mirrors, not right smack into it as on most cars and trucks. Even the radio antennae is specially shaped to cut noise and add to the vortex pushing the car along from the rear. These little things pay off as Leaf is very, very quiet; it’s like the local library. It’s so quiet, Nissan engineers tell us, that they had to engineer-in a certain amount of noise so pedestrians know there’s a car coming their way. We’re not kidding. The interior has a surprising amount of head room and that makes the entire car seem taller and wider than it really is from a passenger’s point of view. It’s a nice visual trick. Both front and rear seats do not offer what we would call “generous” legroom, but by no means would you think you’d be calling the chiropractor after a trip to Las Vegas in any seat on Leaf. You’ll have to go to a dealer to see the instrument panel up close and personal. Words simply can not do it justice. It’s colorful, animated and I understand the next-generation Leaf will come with 3D glasses. Well, it isn’t really that involved, so let’s just say the dash is, uh, “busy”. A single center tunnel mounted joystick-like appendage keeps Leaf in or out of its single forward gear. Leaf uses Nissan’s start system which allows engine start/stop by touching the brake and pushing a dash-mounted button with the key still in your pocket (or pocket book). Fit-and-finish inside and out was better than in most prototypes we’ve seen through the years. And with our test car not being a complete, sale-able Leaf, that bodes well for the car’s quality when it does go into production. As another Nissan engineer told us, “We’re still not through with it yet.” Steering is electrically boosted and was a little light for my tastes. I like to feel more connected to the road. Brakes are four-wheel anti-lock discs and seem up to the job, at least on the streets of Santa Monica. It is a bit surprising, though, the first time in the car, that due to the car’s heavyweight stance, drivers have to hit the brakes harder than they might in their previous compact car to slow or stop Leaf. That ABS braking system also creates battery-charging power through regenerative braking. Leaf gets off the line well as do all EVs and gas/electric hybrids. That’s because electric motors exhibit all their torque instantly, while a gas engine has a “torque curve” which brings the torque up gradually as the revs get higher. So Leaf drivers, like Prius owners before them, know that at the daily “Stop Light Grand Prix” they can take-on and beat just about any other car on the road. For the first 200 feet, at least. The audio system is superior for a car of this size and price (after tax credits and etc.) and allows plugging-in your iPod and all the other latest gizmos. Leaf has everything from 3D nav (not kidding this time) to Bluetooth. Let’s talk price. There are two Leaf models, a base (SV) and a step-up model called SL. Because SL is only $940 more than the SV, it seems the best bargain of the two. The SV is $25,280 while the SL rings the bell at $26,220. For both cars, there is a one-time $7,500 federal tax credit available (do the math yourself; I’m terrible at it), and, in California, the State Air Resources Board makes available another $5,000 tax credit. Your state may also offer similar credits, so check with your local Department of Motor Vehicles before buying an EV or hybrid to see what’s available. And $2,000 of the $2,200 cost of the installed home charger can be deferred; your dealer will fill you in. Similar to what Toyota did when their Prius first went on-sale, Nissan is using the Web to take “reservations” (a $99 “down payment” holds one for you) and let you stay in-touch with Leaf enthusiasts, get the latest news on technical highlights and Leaf availability, etc. Check-out www.NissanUSA.com and cruise around until you find “Leaf”. Finally, there’s an anomaly which not only Nissan but all companies making any kind of plug-in EV or hybrid need to think about: after a car-maker sells 200,000 units of whatever plug-in they’re making, that federal tax credit goes away. It’s almost a given that the new Prius plug-in hybrid and certainly the Leaf plug-in EV will fall victim to this rule. Nissan assures us their top execs are brainstorming to come up with a solution, so the woman who buys a Leaf one day and gets the $7,500 credit finds that her friend who bought one the next day does not get that credit. Nissan’s Leaf, GM’s Volt, Toyota’s plug-in gas/electric hybrid Prius and several other zero- or ultra-low-emission cars are about to go on-sale, all within about a year of each other. It’s an exciting time for those who are fascinated by the technology of these cars as well as their future possibilities, and Leaf will not be the butt of jokes using the words “glorified golf cart,” Leaf is a real car which will generate intense interest among the public worldwide.

Read the full article →

Steve Parker: Exclusive First Drive! Nissan’s 2011 Leaf EV

July 16, 2010

We have driven the future, and you can, too, sometime after the beginning of the new year. We took some short road test drives recently and one of the cars we flogged was Nissan’s 2011 Leaf EV. And while Toyota’s Prius gas/electric hybrid has been the Official State Car of Santa Monica for some years now, Leaf is definitely worthy of taking a shot at the title and could well prove successful in its efforts. In fact, the latest Leaf press preview was hosted at the Sheraton Miramar Hotel, smack in the center of the beach town. The challenge to Toyota has been made, and it might get ugly. Turns out all the excitement isn’t so much about the car’s performance, technology, styling or even interior design. It’s the car itself — the fact that it comes to life at a time so many other EVs, hybrids, extended-range hybrids and alternative fuel vehicles are hitting the marketplace. Customers will have a lot of info, maybe too much, to sort through when making their next vehicle choice. It’s bound to be shunned by some of the “holier than thou” who think cars should be banned entirely. But Leaf will be embraced by others, especially the so-called “hyper-milers,” who spend their days coming up with ways to suck even more energy out of every last atom in their batteries. Leaf is, without doubt, a history-making car. In terms of performance Leaf is about what we expected but it’s still, by default, a revolutionary and historic vehicle, the first EV to be mass-produced by a major car company in the “modern era” (post-WWII) and sold worldwide. Weighing in at a hefty 3,500 pounds (the battery pack alone is 600), Leaf will begin its U.S. sales sometime around the end of this year. Nissan announced this past week that Leaf’s on-board battery will be warranted for 8 years or 100,000 miles, whichever comes first. Nissan, along with Japanese battery-maker NEC, has formed a new corporation specifically to make Leaf’s batteries in Japan. For model year 2013, Nissan has plans to officially open its own dedicated battery-making facility in Tennessee for cars built in the U.S. Using laminated Lithium Ion batteries (Li-Ons for short), these batteries have been highly-developed by Nissan engineers to keep Leaf going for 100 miles after a charge, with a top speed of about 94 miles per hour. Now sit down, listen and learn something. Sorry, just wanted to see if you were still paying attention. There are three different charging methods for Leaf including “portable” charging, which uses a standard 110-volt wall plug-in charger which comes with the car. The portable method takes about 18 to 20 hours to make Leaf’s battery go from 0 to 100 per cent filled. “Installed charging” is the second method. When buying the Leaf, customers can also order an installed home charging unit. This method, using a 220-volt receptacle, takes around 8 hours to fully recharge Leaf. The home unit costs about $2,200, installed, but there are rebates and tax credits which can pay up to $2,000 of the total cost to encourage this option. Now, just as in auto racing, how fast you want to go depends on how much you want to spend, and this next option will be expensive, especially for Nissan and Aerovironment, the company working with Nissan on charger development and installation. “Quick charging” plans call for Leaf’s battery to be charged up to 80 per cent of capacity in only 30 minutes. Nissan engineers envision these quick chargers installed in busy shopping mall and office building parking lots, on major routes between cities ala truck stops and wherever else there might be a burgeoning population of EVs and plug-in hybrids needing a little love from the electric gods. We’ve gone over some of these specs before so let’s get down to it: How is Leaf on the streets? The Leaf we drove delivered about what we expected. The car is very intuitive; Nissan knows what we’re thinking when we get into the driver’s seat. All controls are in familiar places and operate accordingly, though, as on almost all the hybrids we’ve driven so far, there are some gimmicky eco-gauges and -controls that don’t seem altogether necessary (one allows the driver to “build a tree” as their eco-friendly driving style continues and improves for a period of time). The battery is under the car, as near the center as possible to help locate the center of gravity and help with handling. Nissan was smart to do this because they are going to catch a lot of hell for the car’s heft; perhaps Valerie Bertinelli and Jason Alexander can take fellow Jenny Craig clients to meetings and help Leaf lose a little bulk, too. Nissan Leaf interior Our test Leaf was, Nissan told us, about 90 per cent of what the final production version will look, feel and sound like. And the news is good in those areas: the car has an extreme style and much of that comes from use of a wind tunnel to design the car and cut down on that nemesis of EVs, wind noise. For instance, the highly-stylized headlamps with curves and lines that appear to go every which way are functionally manipulating oncoming air so it goes above and below the side mirrors, not right smack into it as on most cars and trucks. Even the radio antennae is specially shaped to cut noise and add to the vortex pushing the car along from the rear. These little things pay off as Leaf is very, very quiet; it’s like the local library. It’s so quiet, Nissan engineers tell us, that they had to engineer-in a certain amount of noise so pedestrians know there’s a car coming their way. We’re not kidding. The interior has a surprising amount of head room and that makes the entire car seem taller and wider than it really is from a passenger’s point of view. It’s a nice visual trick. Both front and rear seats do not offer what we would call “generous” legroom, but by no means would you think you’d be calling the chiropractor after a trip to Las Vegas in any seat on Leaf. You’ll have to go to a dealer to see the instrument panel up close and personal. Words simply can not do it justice. It’s colorful, animated and I understand the next-generation Leaf will come with 3D glasses. Well, it isn’t really that involved, so let’s just say the dash is, uh, “busy”. A single center tunnel mounted joystick-like appendage keeps Leaf in or out of its single forward gear. Leaf uses Nissan’s start system which allows engine start/stop by touching the brake and pushing a dash-mounted button with the key still in your pocket (or pocket book). Fit-and-finish inside and out was better than in most prototypes we’ve seen through the years. And with our test car not being a complete, sale-able Leaf, that bodes well for the car’s quality when it does go into production. As another Nissan engineer told us, “We’re still not through with it yet.” Steering is electrically boosted and was a little light for my tastes. I like to feel more connected to the road. Brakes are four-wheel anti-lock discs and seem up to the job, at least on the streets of Santa Monica. It is a bit surprising, though, the first time in the car, that due to the car’s heavyweight stance, drivers have to hit the brakes harder than they might in their previous compact car to slow or stop Leaf. That ABS braking system also creates battery-charging power through regenerative braking. Leaf gets off the line well as do all EVs and gas/electric hybrids. That’s because electric motors exhibit all their torque instantly, while a gas engine has a “torque curve” which brings the torque up gradually as the revs get higher. So Leaf drivers, like Prius owners before them, know that at the daily “Stop Light Grand Prix” they can take-on and beat just about any other car on the road. For the first 200 feet, at least. The audio system is superior for a car of this size and price (after tax credits and etc.) and allows plugging-in your iPod and all the other latest gizmos. Leaf has everything from 3D nav (not kidding this time) to Bluetooth. Let’s talk price. There are two Leaf models, a base (SV) and a step-up model called SL. Because SL is only $940 more than the SV, it seems the best bargain of the two. The SV is $25,280 while the SL rings the bell at $26,220. For both cars, there is a one-time $7,500 federal tax credit available (do the math yourself; I’m terrible at it), and, in California, the State Air Resources Board makes available another $5,000 tax credit. Your state may also offer similar credits, so check with your local Department of Motor Vehicles before buying an EV or hybrid to see what’s available. And $2,000 of the $2,200 cost of the installed home charger can be deferred; your dealer will fill you in. Similar to what Toyota did when their Prius first went on-sale, Nissan is using the Web to take “reservations” (a $99 “down payment” holds one for you) and let you stay in-touch with Leaf enthusiasts, get the latest news on technical highlights and Leaf availability, etc. Check-out www.NissanUSA.com and cruise around until you find “Leaf”. Finally, there’s an anomaly which not only Nissan but all companies making any kind of plug-in EV or hybrid need to think about: after a car-maker sells 200,000 units of whatever plug-in they’re making, that federal tax credit goes away. It’s almost a given that the new Prius plug-in hybrid and certainly the Leaf plug-in EV will fall victim to this rule. Nissan assures us their top execs are brainstorming to come up with a solution, so the woman who buys a Leaf one day and gets the $7,500 credit finds that her friend who bought one the next day does not get that credit. Nissan’s Leaf, GM’s Volt, Toyota’s plug-in gas/electric hybrid Prius and several other zero- or ultra-low-emission cars are about to go on-sale, all within about a year of each other. It’s an exciting time for those who are fascinated by the technology of these cars as well as their future possibilities, and Leaf will not be the butt of jokes using the words “glorified golf cart,” Leaf is a real car which will generate intense interest among the public worldwide.

Read the full article →

Rob Rubin: Credit Unions Must Win Young Consumers

July 12, 2010

A colleague of mine was recently at an industry conference for credit unions ( CUNA ) and was startled by all the white hair in the audience. It doesn’t surprise me because I speak (loudly) to many of these folks during the course of my day. A 2005 study by Filene Research Institute found only 6% of credit union board members were under 40 while 42% were over 60. Five years probably hasn’t changed this picture. The average age of a credit union member is 47 – nearly 10 years older than the median age of people in the US (Source: US Census). This older average age means many of their members are past their prime borrowing years. Importantly, over 27% of the US population is under 20 (Source: US Census). Just because you’re old, doesn’t mean you need to be old-fashioned. How do you think today’s kids will learn about financial products and services? On the radio? By reading the newspaper? Credit unions’ survival requires that they attract younger consumers. That’s why I’m mystified by how many credit union executives are unable to articulate an online strategy for their organization. They all have websites, but many are third-rate and do not appeal to younger consumers. Credit unions are not moving quickly enough. The financial crisis and the attention given to the greed and hubris of big banks has created a window of opportunity for smaller institutions to win some customers – especially younger consumers who aren’t heavily invested with a bank. But most credit unions are blowing it because they’re not winning this younger set. Here’s my to-do list for credit unions: Make appealing to younger consumers a primary part of your mission — even if it alienates some of your older members. Update your websites (seriously, most are horrible). Offer features that younger consumers want – for example, mobile banking, ATM fee rebates, remote deposit, expedited bill payment, online chat for customer service, online account opening. Start “socializing” online. Yes, many credit unions have Twitter accounts and Facebook pages, but most of those are used to broadcast information. Have 2-way conversations. Reach people who use the Internet to do research. People can be drawn to you from other online resources (like FindABetterBank ). Signing younger consumers up as members is essential for credit unions to survive. Therefore, failing to recognize that a coherent online strategy is mission-critical does not serve the long-term needs of your membership. That’s my 2-cents.

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Scarlett Johansson, `Memphis,’ Green Day Rock Opera Win Early Tony Awards

June 13, 2010

By Philip Boroff June 13 (Bloomberg) — Scarlett Johansson won a Tony Award for best supporting actress in a play, for the hit $2.3 million revival of Arthur Miller’s “A View From the Bridge,” tonight in New York. “Ever since I was a little girl I wanted to be on Broadway,” she said. “And here I am.” She thanked the late playwright Miller, and her costar Liev Schreiber , “for teaching me never to anticipate anything, and through that finding magic in the unexpected.” “ Memphis ,” a crowd-pleasing, roughly $12 million show about a white disc jockey in the 1950s and a black female R&B singer he champions, won three awards early in the show. It took Tonys for original score (Joe DiPietro and Bon Jovi keyboardist David Bryan), book (DiPietro) and orchestration (Bryan and Daryl Waters). “American Idiot,” the rock opera by the band Green Day, won for lighting and set design and “Fela!” won for sound design. John Logan’s drama about the painter Mark Rothko , “ Red ,” won for lighting and sound design and for supporting actor Eddie Redmayne. Michael Grandage also won for best direction of “Red.” Green Day Performs The show at Radio City Music Hall opened with “Blue Suede Shoes,” performed by the cast of “Million Dollar Quartet,” a best-musical nominee, accompanied on piano by Tony host Sean Hayes . That led to musical selections from a half-dozen nominated musicals and two songs from Green Day itself, replete with explosions. Katie Finneran won for featured actress in a musical for “Promises, Promises.” The Tonys exclude off-Broadway, home to some of the city’s best drama. On Broadway, 39 shows opened last season, from May 2009 to May 2010. They collectively grossed $1 billion, about the same as the year earlier. The average ticket sold for $85.78, up from $67 five years ago, thanks to “premium seats” that retail for as much as $350. CBS television is broadcasting three hours of the four-hour show. The first hour on cable channel NY1 dispensed with the “creative arts” categories: book, original score, orchestrations and costumes, sound, lighting and scenic design. The Tonys are a product of the trade association Broadway League and nonprofit American Theatre Wing . They’re selected by 769 voters. In July 2009, the Tony Awards Management Committee dropped about 100 journalists and critics from voting, citing the “possible conflicts of interest” of critics voting for shows they champion. After an outcry from journalists, who said they were more independent than producers who have financial interests in shows, the Tonys restored about two dozen critics as voters, beginning next season. To contact the writer on this story: Philip Boroff in New York at pboroff@bloomberg.net .

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Australia Adds More-Than-Estimated 26,900 Jobs on Mining Currency Gains

June 9, 2010

By Jacob Greber June 10 (Bloomberg) — Australian employers added workers in May for a third straight month, underscoring the central bank’s assessment that economic growth will accelerate this year as a mining investment boom stokes hiring. The number of people employed gained 26,900 from April, the statistics bureau said in Sydney today. The median estimate of 23 economists surveyed by Bloomberg News was for an increase of 20,000. The jobless rate fell to 5.2 percent from 5.4 percent. Australia’s currency rose as investors increased bets on when Governor Glenn Stevens may resume the Group of 20’s most aggressive round of monetary policy tightening. A rebound in demand from China for resources is spurring hiring at companies including Chevron Corp. as it expands energy projects in Western Australia, keeping the nation’s jobless rate at almost half the level of the U.S. and Europe. “There is no stopping the Australian labor market,” said Helen Kevans , an economist at JPMorgan Chase & Co. in Sydney. “With existing shortages already a problem, upward pressures on wages will continue to build,” posing a “significant threat to the RBA’s official inflation forecasts.” The Australian dollar rose to 83.36 U.S. cents at noon in Sydney from 82.86 cents just before the report was released. The two-year government bond yield was unchanged at 4.48 percent. Australia’s benchmark S&P/ASX 200 increased 1 percent to 4429.90 at 12:18 p.m. in Sydney. Full-Time Positions Some 283,600 jobs have been created since August, when the jobless rate was 5.8 percent. The number of full-time jobs gained 36,400 in May and part-time employment decreased 9,400, today’s report showed. Robust demand for workers may prompt Stevens to resume increasing borrowing costs later this year to prevent wage pressures from stoking inflation. The governor kept the benchmark lending rate at 4.5 percent last week, saying monetary policy is “appropriate for the near term.” Australia has led most developed nations in boosting borrowing costs as evidence mounts of an economic rebound, partly stoked by rising demand in Asia for iron ore, coal and energy. China’s exports jumped 48.5 percent in May from a year earlier, the biggest gain in more than six years, a report showed today. New Zealand, Canada New Zealand’s central bank today raised its benchmark interest rate for the first time in three years, signaling that faster inflation is a bigger threat to growth than further gains in the nation’s currency. The Bank of Canada on June 1 increased its target interest rate to 0.5 percent from a record-low 0.25 percent, the first Group of Seven country to do so since last year’s global recession. The Reserve Bank of Australia predicts the nation’s economic growth rate will almost double in the next two years to 4 percent, pushing underlying inflation toward the top of its 2 percent to 3 percent target range. Inflation pressures may build as projects such as the A$43 billion ($36 billion) Chevron Corp. -led Gorgon natural gas project in Western Australia increases demand for skilled workers. More than A$100 billion of resources projects in Western Australia are likely to generate about 40,000 construction jobs and 12,500 permanent positions, a state government report released last year forecast. ‘Great Figures’ Employment rose 1.1 percent in Western Australia, pushing the jobless rate down to 4.1 percent from 4.6 percent, and payrolls gained 0.7 percent in Queensland, today’s report showed. New South Wales posted a 0.1 percent decline in employment. “These are great figures for Australia,” Treasurer Wayne Swan told Radio 6PR in Perth. “Australia’s unemployment rate is further evidence of a very strong economy.” Australian job advertisements in newspapers and the internet climbed 4.3 percent in May, rebounding from the first drop in three months, a report by Australia & New Zealand Banking Group Ltd. showed June 7. Higher employment will also help offset the impact on household spending of the central bank’s 150 basis points of interest rate increases since October, according to a report published today by research company Access Economics. “The broader economic story is one of recovery,” Access Director David Rumbens said today. “Over 250,000 new jobs have been created between August 2009 and April 2010, and over 70 percent of these have been full-time positions. That is providing a significant boost to consumer incomes.” Still, there are signs that the central bank’s interest rate moves have prompted some consumers to cut spending. Retail sales almost stagnated in the first quarter, when gross domestic product growth slowed to 0.5 percent from 1.1 percent in the fourth quarter. Home-loan approvals fell in April for a seventh month, and surveys of business and consumer confidence fell, reports showed this week. To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net

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Texas Instruments Raises Forecast in Sign Semiconductor Demand Increasing

June 8, 2010

By Ian King June 8 (Bloomberg) — Texas Instruments Inc. , the second- biggest U.S. chipmaker, said sales and profit will be at the upper end of earlier targets, buoyed by demand for industrial machinery. Second-quarter profit will be 60 cents to 64 cents on sales of at least $3.45 billion, the Dallas-based company said today in a statement. That compares with April predictions of 56 cents to 64 cents a share on revenue of at least $3.31 billion. Texas Instruments is the biggest producer of analog chips, which go into everything from automobiles to digital cameras, making its earnings an indicator of demand for electronics. The company has struggled to keep up with orders, limiting its ability to increase earnings. It’s now better able to boost output, said Tristan Gerra , an analyst for Robert W. Baird & Co. “For the first time in several quarters, they’ve been able to address their supply issues,” said the Milwaukee-based analyst, who has an outperform rating on the stock and doesn’t own it. “There is a catch-up effect from the first quarter.” Analysts had estimated second-quarter profit of 61 cents a share and revenue of $3.47 billion on average, according to a Bloomberg survey. Texas Instruments rose 8 cents to $23.97 in extended trading after the report. The shares, down 8.3 percent this year, closed at $23.89 on the New York Stock Exchange. ‘Broad-Based Strength’ “We are seeing some pretty broad-based strength,” Vice President Ron Slaymaker said on a conference call. He downplayed concerns that European demand is slowing, saying that orders there are keeping pace with other regions. Sales from industrial companies grew faster than those from other sectors, he said. While lead times — the time between receiving orders and fulfilling them — are shortening, that’s due to an increase in output, not weakening demand, Slaymaker said. Under Chief Executive Officer Rich Templeton , the company is exiting the market for digital signal processors that manage the radio functions in mobile phones — an area it once dominated. Qualcomm Inc. now leads in that field. Sales in that market will be little changed from the first quarter, Slaymaker said. Total sales of wireless chips will rise, lifted by demand for applications processors — the chips that power operating systems in phones. Texas Instruments is focusing more on analog chips, where it expects to win more orders and grow faster. The company ranked second to Intel Corp. among U.S. chipmakers in total sales last year. To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

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BP Capturing Half of Leaking Oil as Spending Balloons to $27 Million a Day

June 7, 2010

By Brian Swint June 7 (Bloomberg) — BP Plc said that spending increased at a faster rate on the response to the Gulf of Mexico oil spill, the worst in U.S. history. BP has spent $1.25 billion so far, the company said in a statement in London today. That’s about $27 million a day, compared with $24 million a day in a June 1 estimate. BP said it captured 11,100 barrels on June 6 from the leaking well on the ocean floor, more than the previous day and about half of the top end of the estimated spill rate. A new cap over the well is capable of collecting the “vast majority” of the oil gushing out, Chief Executive Officer Tony Hayward said in an interview with the British Broadcasting Corp. yesterday. The U.S. Coast Guard said that the Gulf will be under “siege” from oil pollution until the fall. “It will be a few days before an assessment can be made as to the success of this containment effort,” BP said in today’s statement. A containment cap “never before has been deployed at these depths and conditions, and its efficiency and ability to contain the oil and gas cannot be assured.” The stock is down 34 percent since the April 20 explosion on the Deepwater Horizon rig that killed 11 workers and triggered the leak. BP fell 0.2 percent to 432.5 pence as of 3:12 p.m. in London today. Total Cost About 40 billion pounds ($58 billion) has been wiped off the value of BP since the accident. The spill may cost the company as much as $37 billion in cleanup and litigation costs, Credit Suisse estimated on June 2. BP is preparing a second system to capture even more oil that will be implemented within the week, Hayward said yesterday. BP plans to swap out those temporary systems with one that is more hurricane-proof by the end of the month. Hayward said he wouldn’t quit because of the oil spill and that BP has the financial strength to pay for the cleanup and to remain independent. The spill has soiled about 140 miles of shoreline in Louisiana, Alabama and Mississippi, along with some 80 miles in Florida, the Coast Guard said June 5. The well is estimated by U.S. government scientists to be gushing 12,000 to 19,000 barrels a day. BP said it will continue to try increasing the amount of oil it is capturing with its latest containment system. “I’d like to see us capture 90-plus percent of this flow,” Doug Suttles , BP’s chief operating officer for exploration and production, said June 4 on CBS’s “Early Show.” “That’s possible with this design.” President Barack Obama said communities along the Gulf Coast suffering because of the oil spill will be “made whole” with payments from BP and government aid. In his weekly address on the radio and Internet, which was taped June 4 in Grand Isle, Louisiana, Obama said livelihoods that have spanned generations are in danger of being lost. To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net .

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BP Capturing Half of Leaking Oil as Spending Ramps Up to $27 Million a Day

June 7, 2010

By Brian Swint June 7 (Bloomberg) — BP Plc said that spending increased at a faster rate on the response to the Gulf of Mexico oil spill, the worst in U.S. history. BP has spent $1.25 billion so far, the company said in a statement in London today. That’s about $27 million a day, compared with $24 million a day in a June 1 estimate. BP said yesterday it captured 10,500 barrels on June 5 from the leaking well on the ocean floor, about half of the top end of the estimated spill rate. A new cap over the well is capable of collecting the “vast majority” of the oil gushing out, Chief Executive Officer Tony Hayward said in an interview with the British Broadcasting Corp. yesterday. The U.S. Coast Guard said that the Gulf will be under “siege” from oil pollution until the fall. “It will be a few days before an assessment can be made as to the success of this containment effort,” BP said in today’s statement. A containment cap “never before has been deployed at these depths and conditions, and its efficiency and ability to contain the oil and gas cannot be assured.” The stock is down 33 percent since the April 20 explosion on the Deepwater Horizon rig that killed 11 workers and triggered the leak. BP rose 1.4 percent to 439.60 pence as of 8:10 a.m. in London today. BP is preparing a second system to capture even more oil that will be implemented within the week, Hayward said yesterday. BP plans to swap out those temporary systems with one that is more hurricane-proof by the end of the month. Financial Strength Hayward said he wouldn’t quit because of the oil spill and that BP has the financial strength to pay for the cleanup and to remain independent. The spill has soiled about 140 miles of shoreline in Louisiana, Alabama and Mississippi, along with some 80 miles in Florida, the Coast Guard said June 5. The well is estimated by U.S. government scientists to be gushing 12,000 to 19,000 barrels a day. BP said it will continue to try increasing the amount of oil it is capturing with its latest containment system. “I’d like to see us capture 90-plus percent of this flow,” Doug Suttles , BP’s chief operating officer for exploration and production, said June 4 on CBS’s “Early Show.” “That’s possible with this design.” President Barack Obama said communities along the Gulf Coast suffering because of the oil spill will be “made whole” with payments from BP and government aid. In his weekly address on the radio and Internet, which was taped June 4 in Grand Isle, Louisiana, Obama said livelihoods that have spanned generations are in danger of being lost. To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net .

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Richard Laermer: 10 Mistakes Businesses Make Daily…and 10 quick-fix solutions

June 6, 2010

During the last mercurial cycle, I asked several super-successful types what killed businesses. If we can somehow work on eradicating a few simple mistakes, the next few years will rock. 1. Stagnation. Evolve or die. Just sitting there will sure help your butt grow, but not much else. Change with the times only if you want to stay ahead of your competition. Imagine you’re okay, and you are surely asleep. 2. Lack of planning. Find your niche, craft a plan, and then stick with it each day. It’s easy for businesses to not stay focused on what they do best. If your plan isn’t working, tweak the mother quickly. 3. Turning off loyal customers. Too many businesses focus on bringing in new and ignore their old. Since 20 percent of customers are responsible for 80 percent of business, it’s a lot easier to keep loyal customers happy than to find new ones. I call that “horizontal growth.” If your clients think you treat them amazingly, they’ll sell you to others better than you ever can. For sure. 4. Thinking you know it all. If you’re not staying informed about the world, you’ll be left behind. That means forcing yourself to go out and find out about topics you “could care less about.” The stuff you love–don’t chase it, it’ll come in through your pores. 5. Not keeping up with your customers’ interests. Follow trends in the media, pay attention to what businesses down the street are doing, and be a spotter of trends so that you don’t become obsolete–or worse, stale. Ask customers what’s working, what’s not, and why. Do it without cynicism or thin-skinned defensiveness! 6. Staying quiet. Get the word out about who you are and what you offer–and don’t worry about giving away the “company secrets.” People should know what you’re doing. Don’t be self-important. I always hear “Someone will steal this.” So what? You were first. Also, leverage aggressive marketing techniques, our old pal the Internet, and even freaking 411.com. Do stunts–but only if they match the mission of what you are proffering. And yeah, PR. There are actual influential big mouths who can make your product or service a big deal. That isn’t a myth, Virginia. 7 . Having a tepid message. Think about how you want customers to feel and what you want them to do. Then craft memorable messages that are bent on surprising them and that make them go “woo, woo!” 8. Being inconsistent. If you act like an ass in public, it’s probably best to give the paying customers what they seem to want. If you’re a sweetheart, show that side of you all the time. Businesses are about people–but only the ones who pay to see the fake you. Don’t try to be someone new. It’s fake. 9. Neglecting the art of “What The Fuck!” Sometimes you have to throw away old wisdom. Go with your gut. My friend tells me The Dalai Lama said that at Radio City last month! 10. Worrying about what people think. That won’t get you anywhere. No one is paying attention to things like you are absolutely positive they are as you fall asleep at night. But if folks are mocking you–good. The biggest successes are those who enjoy being laughed at all the time. I know I do. Aristotle said “There is nothing common about common sense.” I leave you with that. I am the head-shaking author of 2011: Trendspotting and coauthor of P unk Marketing . My fabulous day job: CEO of RLMpr , all the while doodling on culture and media via Twitter — @laermer .

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BP Increases Gulf Oil-Capture Rate to 10,500 Barrels a Day, Hayward Says

June 6, 2010

By Edward Klump and Aaron Clark June 6 (Bloomberg) — BP Plc said it increased the amount of oil being captured from its leaking well in the Gulf of Mexico to 10,500 barrels yesterday and expects to increase that quantity in the next few days. The well is estimated by government scientists to be gushing 12,000 to 19,000 barrels a day into the Gulf. BP said yesterday it collected 6,077 barrels in the previous 24-hour period ending at midnight June 4. The spill is the worst oil spill in U.S. history. A “cap” over the well is capturing “probably the vast majority” of the leaking oil , Chief Executive Officer Tony Hayward told the Broadcasting Corp. today in an interview in London. BP has “a further containment system to implement this week,” he said, adding that a permanent and hurricane-proof mechanism will be in place by the end of the month. Oil from the gushing well will remain in the water into the fall, U.S. Coast Guard Admiral Thad Allen said today on CBS’s “Face the Nation” broadcast. “There will be oil out there for months to come,” Allen said. “This spill is holding everyone hostage. This is a siege. It’s going to go on for a long time.” Improvement Expected After the cap was put in place the night of June 3, gas reached a surface ship at about 11 p.m. local time, and oil was being piped to the ship about 10 minutes later, BP said yesterday on its website. “Improvement in oil collection is expected,” the London- based company said today on its website . “We’re hoping to improve it over the next few days,” BP spokesman Mark Salt said in a telephone interview today. Allen said yesterday in a news conference that four vents on the cap remained open, allowing oil to flow through the cap and into the ocean. BP will try to close the vents when pressure is stabilized, he said. The system can capture as much as 15,000 barrels a day, and BP will push toward that limit, according to Allen. “I’d like to see us capture 90-plus percent of this flow,” Doug Suttles , BP’s chief operating officer for exploration and production, said June 4 on CBS’s “Early Show.” “That’s possible with this design.” The shears used to prepare the well for the cap created a cut that was more jagged than had been hoped for, so there is isn’t a perfect seal between the cap and the well, Allen said. The company won’t know how bad the leakage is until it is capturing more oil, he said. History Lesson “History has taught us here to be cautiously optimistic, not overly optimistic,” Dan Pickering , an analyst at investment bank Tudor Pickering Holt & Co. in Houston, said yesterday. He said capturing 90 percent of the flow would be a “huge home run.” The spill, which has cost BP more than $1 billion, has soiled about 140 miles of shoreline in Louisiana, Alabama and Mississippi, along with some 80 miles in Florida, the Coast Guard said yesterday. Gulf winds are moving the oil now in the water closer to the coasts of Mississippi, Alabama and Florida, Allen said. He said oil in tar balls and patties is affecting areas from western Mississippi to Pensacola, Florida. The well began gushing oil after the Deepwater Horizon rig BP leased from Transocean Ltd. exploded on April 20 and sank two days later, resulting in the deaths of 11 workers. The leak is 40 miles (64 kilometers) off Louisiana’s coast under about 5,000 feet of water. Obama, Hayward President Barack Obama said communities along the Gulf Coast suffering because of the oil spill will be “made whole” with payments from BP and government aid. In his weekly address on the radio and Internet, which was taped June 4 in Grand Isle, Louisiana, Obama said livelihoods that have spanned generations are in danger of being lost. BP’s Hayward told the BBC he hadn’t spoken directly to Obama since the Deepwater Horizon rig exploded. “There is no need for that,” Hayward said. “I have spoken to his key lieutenants.” BP and the Obama administration are working “hand-in-hand” to resolve the spill, Hayward said. Hayward told the Sunday Telegraph newspaper in an interview published today that he doesn’t fear the threat of jail as a result of a criminal probe into the spill and that he expects to be in his job a year from now. Kuwait Investment Kuwait Investment Authority, the country’s sovereign wealth fund, isn’t considering selling its 1.75 percent stake in BP and believes there is no threat to the company’s future as a result of the spill, the Al-Rai newspaper reported today. Businesses and workers losing income from the Gulf of Mexico oil spill should be getting money more quickly from BP, the Coast Guard’s Allen said today. The company must “get better at claims processing and helping these people that need money,” Allen said on CBS today. “I know that’s not what they do as a corporation but they have got a responsibility,” Allen said. BP has paid about half of the 35,000 claims submitted by Gulf residents and companies for income lost because of the spill, Darryl Willis, vice president of resources at BP America, said yesterday on a conference call. BP is awaiting documentation for the other claims, he said. Willis said the company’s claims spending through June may top $84 million. ‘First Call’ Hayward told investors June 4 on a conference call the spill has the “first call” on the company’s funds and financial consequences of the spill will be “severe.” Allen said relief-well operations to stop the leak will involve pumping mud to reduce pressure and placing a cement plug. He said this effort will be the “bottom kill exercise.” Allen said the “worst case” he sees is that a discharge continues until relief wells are completed in August. “In the long term, the threat from this well will not go away until the relief well has been drilled, pressure has been taken off and the well has been plugged,” Allen said. “In the meantime, we need to optimize our containment efforts.” To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net .; Aaron Clark in New York at aclark27@bloomberg.net

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BP Increased Oil-Capture Rate to 10,500 Barrels a Day

June 6, 2010

By Edward Klump June 6 (Bloomberg) — BP Plc said it increased the amount of oil being captured from its leaking well in the Gulf of Mexico to 10,500 barrels a day from 6,077 barrels in the previous 24-hour period ending at midnight June 4. The well is estimated by government scientists to be gushing 12,000 to 19,000 barrels a day into the Gulf. The spill is the worst oil spill in U.S. history. A “cap” over the well is capturing “probably the vast majority” of the leaking oil , Chief Executive Officer Tony Hayward told the Broadcasting Corp. today in a live interview in London. BP has “a further containment system to implement this week,” he said, adding that a permanent and hurricane-proof mechanism will be in place by the end of the month. U.S. Coast Guard Admiral Thad Allen said yesterday in a news conference that four vents on the cap remained open, allowing oil to flow through the cap and into the ocean. BP will try to close the vents when pressure is stabilized, Allen said. On June 4, Allen said BP was recovering oil at the rate of about 1,000 barrels a day. BP said yesterday that it collected 6,077 barrels of crude in the 24-hour period of June 4. “They are making adjustments to the systems and making sure they don’t increase the production rate until it’s safe to do so,” Allen said. Improvement Expected After the cap was put in place the night of June 3, gas reached a surface ship at about 11 p.m. local time, and oil was being piped to the ship about 10 minutes later, BP said yesterday on its website. “Improvement in oil collection is expected over the next several days,” the London-based company said yesterday on its website . The system can capture as much as 15,000 barrels a day, and BP will push toward that limit, Allen said. “I’d like to see us capture 90-plus percent of this flow,” Doug Suttles , BP’s chief operating officer for exploration and production, said June 4 on CBS’s “Early Show.” “That’s possible with this design.” The shears used to prepare the well for the cap created a cut that was more jagged than had been hoped for, so there is isn’t a perfect seal between the cap and the well, Allen said. The company won’t know how bad the leakage is until it is capturing more oil, he said. History Lesson “History has taught us here to be cautiously optimistic, not overly optimistic,” Dan Pickering , an analyst at investment bank Tudor Pickering Holt & Co. in Houston, said yesterday. He said capturing 90 percent of the flow would be a “huge home run.” The spill, which has cost BP more than $1 billion, has soiled about 140 miles of shoreline in Louisiana, Alabama and Mississippi, along with some 80 miles in Florida, the Coast Guard said yesterday. Gulf winds are moving the oil now in the water closer to the coasts of Mississippi, Alabama and Florida, Allen said. He said oil in tar balls and patties is affecting areas from western Mississippi to Pensacola, Florida. The well began gushing oil after the Deepwater Horizon rig BP leased from Transocean Ltd. exploded on April 20 and sank two days later, resulting in the deaths of 11 workers. The leak is 40 miles (64 kilometers) off Louisiana’s coast under about 5,000 feet of water. Obama, Hayward President Barack Obama said communities along the Gulf Coast suffering because of the oil spill will be “made whole” with payments from BP and government aid. In his weekly address on the radio and Internet, which was taped June 4 in Grand Isle, Louisiana, Obama said livelihoods that have spanned generations are in danger of being lost. BP’s Hayward told the BBC he hadn’t spoken directly to Obama since the Deepwater Horizon rig exploded. “There is no need for that,” Hayward said. “I have spoken to his key lieutenants.” BP and the Obama administration are working “hand-in-hand” to resolve the spill, Hayward said. The company has paid about half of the 35,000 claims submitted by Gulf residents and companies for income lost because of the spill, Darryl Willis, vice president of resources at BP America, said yesterday on a conference call. BP is awaiting documentation for the other claims, he said. Willis said the company’s claims spending through June may top $84 million. ‘First Call’ Hayward told investors June 4 on a conference call the spill has the “first call” on the company’s funds and financial consequences of the spill will be “severe.” Allen said relief-well operations to stop the leak will involve pumping mud to reduce pressure and placing a cement plug. He said this effort will be the “bottom kill exercise.” Allen said the “worst case” he sees is that a discharge continues until relief wells are completed in August. “In the long term, the threat from this well will not go away until the relief well has been drilled, pressure has been taken off and the well has been plugged,” Allen said. “In the meantime, we need to optimize our containment efforts.” To contact the reporter on this story: Edward Klump in Houston at eklump@bloomberg.net .

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Israeli Ministers Oppose International Probe of Gaza Flotilla Raid Deaths

June 6, 2010

By Gwen Ackerman and Jonathan Ferziger June 6 (Bloomberg) — Two Israeli ministers said they opposed an international inquiry into the deadly naval raid on a Gaza Strip-bound aid flotilla as the United Nations discussed options for such a commission. “There shouldn’t be an international inquiry,” Finance Minister Yuval Steinitz said today. “If an inquiry is required it should be handled by parliament’s Foreign Affairs and Defense Committee.” Minister of Science and Technology Daniel Hershkowitz agreed and said he wouldn’t trust a probe that included Turkey. Calls for an international investigation began after nine Turkish citizens were killed when Israeli commandos raided their boat, one of six in a flotilla attempting to breach Israel’s three-year blockade on Hamas-controlled Gaza. The raid sparked calls for a lifting of the blockade, which Israel says is necessary to prevent weapons from reaching the area. UN Secretary General Ban Ki-Moon discussed yesterday with Turkish Prime Minister Recep Tayyip Erdogan and Israeli Prime Minister Benjamin Netanyahu “options for moving forward with the investigation,” a statement on the UN Web site said. The proposed commission would have members from Turkey and Israel as well as others appointed by the UN and would be headed by former New Zealand Prime Minister Geoffrey Palmer, an aide to Erdogan said in a telephone interview from the western city of Bursa, speaking on the usual condition of anonymity. Palmer didn’t reply to a voicemail message left on his cellphone in New Zealand today. Israeli State Comptroller Micha Lindenstrauss will participate tomorrow in a parliamentary committee discussion on the government’s performance. ‘Decision-making Process’ “There is a real need to examine ourselves and the quality of the decision-making process before and after the operation,” said Yoel Hasson, the head of the state comptroller committee in the Knesset. Criticism within Israel of the flotilla operation has focused largely on the execution of the raid and not the blockade. A survey of Israeli Jews published in the Maariv daily on June 2 showed 94.8 percent agreeing that it was necessary to stop the boats, with 62.7 percent saying it should have been handled in a different manner. Only 8.1 percent thought Netanyahu should resign. The newspaper didn’t say how many people were surveyed or give a margin of error. Israel’s benchmark stock index, the TA-25 Index, fell 1.8 percent at 3 p.m. in Tel Aviv. The U.S. has declined to specifically criticize Israeli actions. It backed a June 1 UN Security Council resolution that condemned the violence that led to the deaths of the aid activists, and called for an impartial inquiry. Turkey, which along with South Africa withdrew its ambassador from Israel over the incident, says an Israeli investigation wouldn’t meet that criterion. Numerous Warnings Israel has said it issued numerous warnings to the Gaza- bound flotilla asking it to change course for the port of Ashdod and unload there, before it seized the vessels. The other five vessels, as well as a separate boat that arrived yesterday, were commandeered peacefully. The raid on the flotilla, and the deaths of the activists, has focussed world attention on the blockade of Gaza. “The time has come to lift the closure and find an appropriate alternative,” Welfare and Social Services Minister Isaac Herzog , a member of the Labor Party, said on Army Radio. US Secretary of State Hillary Clinton has said the situation in Gaza is “unsustainable” and top Israeli ministers met June 3 to discuss ways to change how the blockade on Gaza is implemented, a senior Israeli official said, speaking on condition of anonymity. Blockade End The European Union, Russia and Turkey have called on Israel to end the blockade. Israel has been blockading Gaza since Hamas ousted forces loyal to President Mahmoud Abbas ’s Fatah group and seized full control in 2007 after winning Palestinian parliamentary elections the previous year. Hamas is considered a terrorist organization by the U.S., the European Union and Israel. Israel says its blockade is legal because it is in “a state of armed conflict” with Hamas. Some countries, such as Turkey, dispute the legality of the blockade. Some 330 rockets have been fired from Gaza into Israel since the end of a 2008 Israeli military operation in the area, killing one foreign worker last March, the Israeli army said. Israel says it launched the 2008 operation to stop the firing of rockets into its territory. More than 1,000 Palestinians and 13 Israelis were killed in the conflict. Activist Expulsions Israel will expel today all 19 passengers and crew from the aid ship intercepted this weekend. “They should all be gone by tonight,” said Sabine Haddad, an Interior Ministry spokeswoman. The Free Gaza movement, which organized the flotilla in the May 31 confrontation and yesterday’s attempt by the MV Rachel Corrie the breach the blockade said they are planning another flotilla in two months. The Rachel Corrie was named after an American activist killed by an Israeli bulldozer while protesting home demolitions in the Gaza Strip in 2003. “We are getting a huge amount of donations, about 2,000 euros a day,” said spokeswoman Audrey Bomse. “We will have no problem getting ships.” Israel says that on May 31 its soldiers were attacked with knives and clubs and seven were wounded, including by gunfire after volunteers aboard the ship managed to grab Israeli firearms. Activists have said they threw the firearms into the sea and that the Israelis instigated the violence. Multiple Times A Turkish autopsy found that several of those killed were shot multiple times and from the back at close range, the U.K.’s Guardian newspaper reported yesterday, citing Yalcin Buyuk, vice chairman of the council of forensic medicine. Turkey’s Hurriyet newspaper today published photos showing what it said were bloodied Israeli commandos, and activists standing at a door with what appeared to be iron bars. Palestinians say the restrictions on food imports and construction materials have created a humanitarian crisis. Israel says it restricts imports because building materials and even some foods can be used to build rockets, bunkers or bombs. Hamas’s charter calls for the destruction of the Jewish state. Hamas leaders say they will renounce violence when Israel withdraws from territory occupied in 1967 and allows Palestinians to return to areas in Israel from which they fled in 1948. To contact the reporters on this story: Calev Ben-David in Jerusalem at Cbendavid@bloomberg.net ; Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net ;

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U.S. Urges Gaza Aid Ship to Change Course, Avoid Confrontation With Israel

June 4, 2010

By Calev Ben-David and Gwen Ackerman June 5 (Bloomberg) — The U.S. urged an aid ship heading for Gaza to avoid confrontation with Israel by going to the port of Ashdod, hours after organizers of the effort said they will make another attempt to break a blockade on the territory. The Irish-owned MV Rachel Corrie and other vessels should sail to the southwest Israeli city to deliver goods to Gaza, “in the interest of the safety of all involved,” National Security Council spokesman Mike Hammer said in a statement released by the White House. Israel is weighing easing the restrictions on Gaza after nine activists died during a military raid on a similar vessel to the Rachel Corrie this week. Hammer said it is a “U.S. priority” to help the Gaza people. “The current arrangements are unsustainable and must be changed,” he said. “We are working urgently with Israel, the Palestinian Authority, and other international partners to develop new procedures for delivering more goods and assistance to Gaza.” The ship Rachel Corrie , named after an U.S. activist killed in Gaza in 2003, is expected to be 20 miles (32 kilometers) off the Palestinian enclave at about 10 a.m. local time today, Dennis Halliday , an Irish activist on the vessel who is a former United Nations humanitarian coordinator in Iraq, told Ireland’s RTE radio. The vessel’s voyage was organized by the Free Gaza Movement , which also arranged the flotilla halted by Israeli commandos in international waters on May 31. ‘Stop It’ “We’ll have to stop it,” said Michael Oren , the Israeli ambassador to the U.S., in an interview with Bloomberg Television’s “Political Capital with Al Hunt ,” airing this weekend. Prime Minister Benjamin Netanyahu will consider easing the blockade and changing methods of monitoring goods allowed in, including stationing United Nations inspectors at Israel’s Ashdod port to help with sorting, Israeli Army Radio reported, without saying where it got the information. The U.S., which has declined to join in the international condemnation of Israel over the raid, is seeking ways to widen the flow of aid to Gaza, Secretary of State Hillary Clinton said. “We’re open to any suggestions,” Oren said about easing the blockade. “We agree with Secretary Clinton that the status quo is not sustainable.” Top Israeli ministers have met to review the embargo on deliveries of goods to Hamas-controlled Gaza by sea, and explore ways of modifying it, an Israeli official said, speaking on condition of anonymity because he wasn’t authorized to speak to the press on the matter. He gave no other details of the meeting. ‘No Weapons’ Israel won’t board the ship provided it agrees to sail to the port of Ashdod instead of Gaza and unload the cargo there, Foreign Ministry Director General Yossi Gal said in a statement yesterday. The goods would then be taken to Gaza after checks to ensure “no weapons and war materials” are among them, and representatives of the aid groups are “welcome to accompany the goods to the crossings,” he said. Israel says it attempted to prevent clashes with the aid flotilla earlier this week by issuing numerous warnings beforehand to change course for Ashdod and unload there. Free Gaza said in an e-mail that the Rachel Corrie has no “intention of ever docking in Ashdod.” The ship will move toward the exclusion zone in daylight, Halliday told RTE. “At that point we may meet Israeli forces who will prevent us entering that zone,” he said. “It’s more likely, however, they will jump on us in the dark. “We are prepared for the worst but hopeful that maybe an exception will happen, that Israel will get some good sense and give us a chance to take this cargo and get into Gaza.” No Resistance Mairead Corrigan Maguire , an Irish Nobel Peace Prize laureate who is also on the ship, told the Associated Press that she and the other activists won’t offer any resistance if Israeli forces come aboard. Netanyahu met yesterday with U.S. Middle East envoy George Mitchell in Jerusalem, U.S. Embassy spokesman Kurt Hoyer said, without providing further details of their discussion. Mitchell, who is trying to keep alive U.S.-mediated indirect peace talks between Israel and the Palestinians, said this week during a visit to Bethlehem that the flotilla violence “underscores the need to make progress in the negotiations,” according to Arlissa Reynolds, a spokeswoman for the U.S. Consulate in Jerusalem. The U.S. confirmed this week that an American citizen, identified as 19-year-old Furkan Dogan, was killed by multiple gunshots during the Israeli raid. He was also a Turkish citizen, as were the other eight people killed. ‘Nothing to Fear’ Three Israeli Cabinet ministers have called for a probe into the raid. Foreign Minister Avigdor Lieberman said Israel should conduct its own investigation and allow limited outside participation. Finance Minister Yuval Steinitz called for a parliamentary investigation. “We have nothing to fear,” Industry and Trade Minister Binyamin Ben -Eliezer said in an e-mailed statement. “Everything is in the open, transparent. The video footage, the photographs can be shown to anyone who asks.” Israel has said its soldiers were attacked with knives and clubs after boarding the Mavi Marmara, one of the six vessels in the flotilla, and seven were wounded, including by gunfire after volunteers aboard the ship managed to grab Israeli firearms. Activists have said they threw the firearms into the sea. There was no violence on the other five ships. Criticism within Israel on the flotilla operation has focused largely on the execution of the raid and not the blockade. A survey of Israeli Jews published in the Maariv daily on June 2 showed 94.8 percent agreeing that it was necessary to stop the boats, with 62.7 percent saying it should have been handled in a different manner. Only 8.1 percent thought Netanyahu should resign. The newspaper didn’t say how many people were surveyed or give a margin of error. UN Condemnation The UN Security Council on June 1 condemned the violence that led to the deaths of the aid activists, and called for an impartial inquiry. Turkey, which along with South Africa withdrew its ambassador from Israel over the incident, says an Israeli investigation wouldn’t meet that criteria. Israel has been blockading Gaza since Hamas ousted forces loyal to Abbas’s Fatah group and seized control in 2007, after winning Palestinian parliamentary elections the previous year. Hamas is considered a terrorist organization by Israel, the U.S. and the European Union. Israel launched an operation in the Gaza Strip in December 2008 which it said was meant to stop the firing of rockets into its territory. More than 1,000 Palestinians and 13 Israelis were killed in the conflict. Since the end of the three-week operation, some 330 rockets have been fired from Gaza into Israel, killing one foreign worker last March, the Israeli army said. Palestinians, backed by the UN and human-rights groups, say the restrictions on food imports and construction materials have created a humanitarian crisis. Israel says it blocks building materials because they can be used by Hamas to build rockets and bunkers. To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net ; Calev Ben-David in Jerusalem at Cbendavid@bloomberg.net .

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Netanyahu Calls Flotilla Raid Criticism Hypocrisy Amid Probe Calls

June 3, 2010

By Gwen Ackerman and Jonathan Ferziger June 3 (Bloomberg) — Prime Minister Benjamin Netanyahu said criticism of Israel’s raid against a Gaza Strip aid shipment that left nine dead was “hypocrisy,” as international calls for a probe into the incident mounted. “Israel is told it has the right to defend itself, but when we do exercise that right we’re condemned for it,” Netanyahu said in a nationally televised address in Jerusalem. “Israel should not be held to a double standard.” Israel has faced international criticism over the May 31 raid by naval commandos on a flotilla of aid ships, as well as calls for it to lift restrictions on the flow of goods into Gaza. The incident has led to demands for Israel or others to investigate the raid on the ships that headed for Hamas- controlled Gaza in an effort to undermine Israel’s blockade. United Nations Secretary-General Ban Ki-moon told reporters in New York that the blockade was “counter-productive, unsustainable and wrong,” and that it should end “immediately.” Israel “must provide as soon as possible a full and detailed accounting of the events surrounding this incident,” he said. Vice-President Joe Biden said Israel has “an absolute right to deal with its security interest” and a “right to know” what is being transported to Gaza. Biden said he supports a “transparent and open” investigation that is led by the Israelis and has “international participation.” He spoke in an interview on PBS television’s “Charlie Rose Show. Israel isn’t likely to agree to an international probe, said Jonathan Spyer , a political scientist at the Interdisciplinary Center Herzliya. Faulty Intelligence “There is a very strong sense that it is not that something actually wrong took place,” Spyer said in a telephone interview. “Rather, there was a mishap and a strong sense that the army made a mistake based on faulty intelligence. There is not a sense that Israel feels answerable to the world community.” At the same time, Israel has acted to end the crisis. All detained members of the flotilla were expelled yesterday, with the exception of seven people still in the hospital, said Interior Ministry spokeswoman Sabine Haddad. Three aircraft landed in Istanbul carrying 466 passengers and the bodies of nine people killed in the raid, Foreign Minister Ahmet Davutoglu said in comments carried by state-owned news agency Anatolia. Four of the dead have been identified as Turks and the nationality of the others isn’t clear. Nineteen injured people were flown to Ankara and were being given treatment. Supporters Welcome The planes were welcomed by hundreds of supporters and family members at Istanbul’s main airport. Arab foreign ministers meeting in an emergency session in Cairo urged their governments to defy the blockade, Arab League Secretary-General Amre Moussa said. The ministers called on Arab states to “work to provide the people of Gaza with whatever they need regardless of the blockade and using all means,” he told a news conference after a three-hour meeting that ended early today. Netanyahu spoke after the United Nations Human Rights Council adopted a resolution to authorize an independent international investigation of the Israeli raid on the flotilla. The U.S., the Netherlands and Italy voted against the measure. “Every Ship’ “Our responsibility is to examine every ship going to Gaza, to stop the weapons and to let other cargo enter,” Netanyahu said yesterday. “If we don’t do that, the result is going to be an Iranian port in Gaza.” The UN Security Council has also called for an investigation. French Foreign Minister Bernard Kouchner said in an interview yesterday on RTL Radio that any investigation should be overseen by the UN. In the past, Israel refused to participate in a UN panel led by former UN prosecutor and South African judge Richard Goldstone that investigated the 2008 Gaza war. Goldstone’s panel accused Israel and Hamas of war crimes and called on them to investigate the charges. Ban said after meetings with envoys of Israel, Turkey, the U.S., China, Russia and Arab nations that he would take “some time” to decide how an investigation of the raid should be conducted. He said he would “make it as impartial, credible and transparent as possible.” Stop Hamas Israel’s benchmark TA-25 Index was up 0.02 percent at the close in Tel Aviv yesterday. Israel said the Gaza war was meant to stop Hamas and other militant groups from firing rockets into its territory. About 330 rockets have been fired from Gaza into Israel since the end of the operation, killing one foreign worker last March, the army said. Alon Liel , former director general of the Foreign Ministry, said that unlike the Gaza probe, where many facts were unknown, photos and video footage of the flotilla incident was readily available on the Internet. “I don’t think it is an inquiry that should bother Israel too much except one thing, the fact that they acted 80 or 90 miles from the beach in international water,” Liel said in a phone interview. “I don’t know if an international inquiry will say Israel did something illegal. This is the soft belly.” Some Israeli opposition lawmakers called on the government to set up an official inquiry into the raid, the daily Haaretz said. A survey of Israeli Jews in the daily Ma’ariv newspaper found that 46.7 percent of those questioned want the government to establish a probe into the incident, while 51.6 percent say there is no need. Israeli Blockade The pro-Palestinian activists were attempting to sail into Gaza, which has been under Israeli blockade since the Islamic Hamas movement took control of the territory in 2007. A seventh ship has sailed for Gaza to try and breach the Israeli blockade. Hamas is considered a terrorist organization by Israel, the U.S. and the European Union. Palestinians, backed by the United Nations and human-rights groups, say the restrictions on food imports and construction materials have created a humanitarian crisis. Israel says it needs to control Gaza’s borders or Hamas will smuggle in material to make rockets and attack its territory. Israel said its soldiers were attacked with knives and clubs after boarding a vessel and seven soldiers were wounded, including by gunfire after activists aboard the ship managed to grab Israeli firearms. Kuwait lawmaker Waleed al-Tabtabai, who was on one of the ships, told reporters on his return home that the “Israelis started firing even before they landed on the ship. They killed two Turks, one was killed by helicopter fire and the other by fire from a ship.” To contact the reporter on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net ; Jonathan Ferziger in Jerusalem at jferziger@bloomberg.net

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Netanyahu Calls Flotilla Raid Criticism Hypocrisy Amid Probe Calls

June 3, 2010

By Gwen Ackerman and Jonathan Ferziger June 3 (Bloomberg) — Prime Minister Benjamin Netanyahu said criticism of Israel’s raid against a Gaza Strip aid shipment that left nine dead was “hypocrisy,” as international calls for a probe into the incident mounted. “Israel is told it has the right to defend itself, but when we do exercise that right we’re condemned for it,” Netanyahu said in a nationally televised address in Jerusalem. “Israel should not be held to a double standard.” Israel has faced international criticism over the May 31 raid by naval commandos on a flotilla of aid ships, as well as calls for it to lift restrictions on the flow of goods into Gaza. The incident has led to demands for Israel or others to investigate the raid on the ships that headed for Hamas- controlled Gaza in an effort to undermine Israel’s blockade. United Nations Secretary-General Ban Ki-moon told reporters in New York that the blockade was “counter-productive, unsustainable and wrong,” and that it should end “immediately.” Israel “must provide as soon as possible a full and detailed accounting of the events surrounding this incident,” he said. Vice-President Joe Biden said Israel has “an absolute right to deal with its security interest” and a “right to know” what is being transported to Gaza. Biden said he supports a “transparent and open” investigation that is led by the Israelis and has “international participation.” He spoke in an interview on PBS television’s “Charlie Rose Show. Israel isn’t likely to agree to an international probe, said Jonathan Spyer , a political scientist at the Interdisciplinary Center Herzliya. Faulty Intelligence “There is a very strong sense that it is not that something actually wrong took place,” Spyer said in a telephone interview. “Rather, there was a mishap and a strong sense that the army made a mistake based on faulty intelligence. There is not a sense that Israel feels answerable to the world community.” At the same time, Israel has acted to end the crisis. All detained members of the flotilla were expelled yesterday, with the exception of seven people still in the hospital, said Interior Ministry spokeswoman Sabine Haddad. Three aircraft landed in Istanbul carrying 466 passengers and the bodies of nine people killed in the raid, Foreign Minister Ahmet Davutoglu said in comments carried by state-owned news agency Anatolia. Four of the dead have been identified as Turks and the nationality of the others isn’t clear. Nineteen injured people were flown to Ankara and were being given treatment. Supporters Welcome The planes were welcomed by hundreds of supporters and family members at Istanbul’s main airport. Arab foreign ministers meeting in an emergency session in Cairo urged their governments to defy the blockade, Arab League Secretary-General Amre Moussa said. The ministers called on Arab states to “work to provide the people of Gaza with whatever they need regardless of the blockade and using all means,” he told a news conference after a three-hour meeting that ended early today. Netanyahu spoke after the United Nations Human Rights Council adopted a resolution to authorize an independent international investigation of the Israeli raid on the flotilla. The U.S., the Netherlands and Italy voted against the measure. “Every Ship’ “Our responsibility is to examine every ship going to Gaza, to stop the weapons and to let other cargo enter,” Netanyahu said yesterday. “If we don’t do that, the result is going to be an Iranian port in Gaza.” The UN Security Council has also called for an investigation. French Foreign Minister Bernard Kouchner said in an interview yesterday on RTL Radio that any investigation should be overseen by the UN. In the past, Israel refused to participate in a UN panel led by former UN prosecutor and South African judge Richard Goldstone that investigated the 2008 Gaza war. Goldstone’s panel accused Israel and Hamas of war crimes and called on them to investigate the charges. Ban said after meetings with envoys of Israel, Turkey, the U.S., China, Russia and Arab nations that he would take “some time” to decide how an investigation of the raid should be conducted. He said he would “make it as impartial, credible and transparent as possible.” Stop Hamas Israel’s benchmark TA-25 Index was up 0.02 percent at the close in Tel Aviv yesterday. Israel said the Gaza war was meant to stop Hamas and other militant groups from firing rockets into its territory. About 330 rockets have been fired from Gaza into Israel since the end of the operation, killing one foreign worker last March, the army said. Alon Liel , former director general of the Foreign Ministry, said that unlike the Gaza probe, where many facts were unknown, photos and video footage of the flotilla incident was readily available on the Internet. “I don’t think it is an inquiry that should bother Israel too much except one thing, the fact that they acted 80 or 90 miles from the beach in international water,” Liel said in a phone interview. “I don’t know if an international inquiry will say Israel did something illegal. This is the soft belly.” Some Israeli opposition lawmakers called on the government to set up an official inquiry into the raid, the daily Haaretz said. A survey of Israeli Jews in the daily Ma’ariv newspaper found that 46.7 percent of those questioned want the government to establish a probe into the incident, while 51.6 percent say there is no need. Israeli Blockade The pro-Palestinian activists were attempting to sail into Gaza, which has been under Israeli blockade since the Islamic Hamas movement took control of the territory in 2007. A seventh ship has sailed for Gaza to try and breach the Israeli blockade. Hamas is considered a terrorist organization by Israel, the U.S. and the European Union. Palestinians, backed by the United Nations and human-rights groups, say the restrictions on food imports and construction materials have created a humanitarian crisis. Israel says it needs to control Gaza’s borders or Hamas will smuggle in material to make rockets and attack its territory. Israel said its soldiers were attacked with knives and clubs after boarding a vessel and seven soldiers were wounded, including by gunfire after activists aboard the ship managed to grab Israeli firearms. Kuwait lawmaker Waleed al-Tabtabai, who was on one of the ships, told reporters on his return home that the “Israelis started firing even before they landed on the ship. They killed two Turks, one was killed by helicopter fire and the other by fire from a ship.” To contact the reporter on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net ; Jonathan Ferziger in Jerusalem at jferziger@bloomberg.net

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Israeli Commandos Intercept Gaza-Bound Aid Ships At Least 10 Die in Clash

May 31, 2010

By Jonathan Ferziger and Calev Ben-David May 31 (Bloomberg) — Israeli commandos killed more than 10 pro-Palestinian activists after encountering resistance while intercepting a flotilla of ships carrying humanitarian aid supplies to the Gaza Strip, the Israeli army said. Turkey’s Foreign Ministry said relations with Israel may suffer irreparable harm while German Foreign Minister Guido Westerwelle said his country was “deeply concerned” and France said it was “profoundly shocked.” Israel said its forces were attacked with knives, guns and clubs after boarding one of the vessels in the Mediterranean Sea and four soldiers were wounded. “What we have seen this morning is a war crime,” Saeb Erakat , the Palestinian Authority’s chief peace negotiator, said in an e-mailed statement. “The international community must take swift and appropriate action.” The six ships in the “Freedom Flotilla” came from countries including Sweden, Greece and Turkey on a mission aimed at breaking Israel’s blockade of Gaza that organizers pledged would be non-violent. Israel had warned it wouldn’t let the ships reach Gaza and called the mission a propaganda trick aimed at making it look bad. Israeli stocks fell the most in four days in the wake of the news. The benchmark TA-25 Index lost 1.5 percent, the biggest drop since May 25, to 1,083.83 at 13:21 a.m. in Tel Aviv. The shekel retreated as much as 1.3 percent and last traded 1 percent lower at 3.8559 to the dollar. U.S. Visit The botched commando operation came a day before Israeli Prime Minister Benjamin Netanyahu is scheduled to meet in Washington with President Barack Obama to discuss U.S.-backed indirect peace talks with the Palestinians. Aboard the ships were more than 500 people, including European members of parliament and Swedish author Henning Mankell, according to the Free Gaza Movement, which organized the trip. “Israel regrets the loss of life and did everything to avoid it,” Deputy Foreign Minister Daniel Ayalon said. He said the organizers had ties to terrorist organizations and called the ships an “armada” that made “a premeditated and outrageous provocation.” Turkey’s Foreign Ministry called the raid “inhuman” and said it “may cause damage to our relations that will be impossible to repair,” according to the statement e-mailed by the ministry in Ankara today. Hamas, the militant movement that controls Gaza, called on the Palestinian Authority to break off peace talks with Israel. Opened Fire The Israeli army said passengers opened fire on the commandos and also attacked them with knives and clubs, according to an e-mailed statement. The statement said two of the weapons used were grabbed from Israeli soldiers. Israel’s Channel 2 television said 16 passengers were killed. Turkey’s Anatolia news agency said at least 30 were wounded. Israel has restricted entry of people and goods into Gaza since the territory was taken over by Hamas in 2007, allowing in only a limited range of supplies including food, clothing and medicine. Israeli Navy ships have intercepted three previous efforts by the Free Gaza Movement, formed in 2008 to deliver aid, to reach the territory by sea. The army has said that Hamas has used materials such as cement and iron pipes to build bunkers and rockets. Bloodied Passengers Turkey’s NTV television showed footage of helicopters dropping armed soldiers onto a ship in the dark, and of bloodied passengers being treated on board. A passenger said the raid started around 4:30 a.m. and that the ships were attacked with live ammunition and tear gas. Binyamin Ben-Eliezer , Israel’s industry and trade minister expressed “sorrow” over the deaths, speaking to Army Radio from a conference he attended in Qatar. In Gaza, Hamas leader Ismail Haniyeh called for the suspension of peace talks. His speech was broadcast live on Al- Jazeera television today. Hamas is considered a terrorist organization by Israel, the U.S. and the European Union. Israel fought a three-week war in Gaza starting in December 2008 that it said was meant to stop Hamas and other militant groups from firing rockets into its territory. It has been negotiating a prisoner swap with Hamas to exchange a captive Israeli soldier, Gilad Shalit , for about 1,000 jailed Palestinians. Israeli bombing and ground operations during the war destroyed thousands of houses across Gaza and Israel’s restrictions on construction materials have prevented Palestinians from being able to rebuild. Turkey’s Foreign Ministry plans to summon the Israeli ambassador to explain the raid on one of the ships that carried many Turkish passengers, the state-run Anatolia news agency reported. A group of about 500 protesters gathered outside Ambassador Gaby Levi’s residence in Ankara, Turkish television reported. To contact the reporter on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net Calev Ben-David in Jerusalem at cbendavid@bloomberg.net

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Israeli Forces Clash With Gaza Aid Flotilla Army Radio Says 10 Killed

May 30, 2010

By Jonathan Ferziger and Calev Ben-David May 31 (Bloomberg) — At least 10 members of a flotilla of ships carrying hundreds of pro-Palestinian activists and humanitarian aid supplies to the Gaza Strip were killed in clashes with Israeli naval forces, Israel Army Radio reported. Turkey’s Foreign Ministry called the raid “inhuman” and said it “may cause damage to our relations that will be impossible to repair,” according to the statement e-mailed by the ministry in Ankara today. Several of the aid ships were from Turkey. Israeli forces met resistance early today when they boarded the ships to prevent them from reaching Gaza, Army Radio said. A spokesman for the Israel army denied initiating violence. “We did not attack any boats,” the spokesman said, speaking anonymously under military guidelines. “The IDF is fulfilling the directions of the Israeli government to prevent anyone from entering the Gaza Strip without proper coordination and authorization from Israel.” Israel has said it wouldn’t let the ships reach Gaza, calling the mission a propaganda trick aimed at making it look bad. The Israeli government had said it would assist in offloading the cargo and sending it by truck to Gaza after a security inspection. Hamas, the militant organization that rules Gaza, said the Israeli action was an “act of terror.” Taher Nunu, a Hamas spokesman, said in an interview with Al-Jazeera television that Israel should be tried for war crimes. Three Israeli navy missile boats left the Haifa naval base last night, planning to intercept the flotilla, according to reporters on board. To contact the reporter on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net Calev Ben-David in Jerusalem at cbendavid@bloomberg.net

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Israeli Forces Clash With Gaza Aid Flotilla Army Radio Says 10 Killed

May 30, 2010

By Jonathan Ferziger and Calev Ben-David May 31 (Bloomberg) — At least 10 members of a flotilla of ships carrying hundreds of pro-Palestinian activists and humanitarian aid supplies to the Gaza Strip were killed in clashes with Israeli naval forces, Israel Army Radio reported. Turkey’s Foreign Ministry called the raid “inhuman” and said it “may cause damage to our relations that will be impossible to repair,” according to the statement e-mailed by the ministry in Ankara today. Several of the aid ships were from Turkey. Israeli forces met resistance early today when they boarded the ships to prevent them from reaching Gaza, Army Radio said. A spokesman for the Israel army denied initiating violence. “We did not attack any boats,” the spokesman said, speaking anonymously under military guidelines. “The IDF is fulfilling the directions of the Israeli government to prevent anyone from entering the Gaza Strip without proper coordination and authorization from Israel.” Israel has said it wouldn’t let the ships reach Gaza, calling the mission a propaganda trick aimed at making it look bad. The Israeli government had said it would assist in offloading the cargo and sending it by truck to Gaza after a security inspection. Hamas, the militant organization that rules Gaza, said the Israeli action was an “act of terror.” Taher Nunu, a Hamas spokesman, said in an interview with Al-Jazeera television that Israel should be tried for war crimes. Three Israeli navy missile boats left the Haifa naval base last night, planning to intercept the flotilla, according to reporters on board. To contact the reporter on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net Calev Ben-David in Jerusalem at cbendavid@bloomberg.net

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China’s Wen Says Defusing Korea Tension `Urgent Task,’ Vows Cooperation

May 29, 2010

By Bomi Lim May 30 (Bloomberg) — Chinese Premier Wen Jiabao warned against letting the sinking of a South Korean warship lead to conflict in the region, giving no sign of joining other nations in blaming North Korea for the event in which 46 sailors died. “It is the most urgent task to gradually ease tensions following the incident, and especially to avoid conflict,” Wen said today on the South Korean resort island of Jeju after two days of talks with President Lee Myung Bak and Japanese Prime Minister Yukio Hatoyama . China will “help resolve the incident in a way that benefits peace and security.” Japan and South Korea have been pressing China to agree with the May 20 findings by a multinational team that North Korea torpedoed the 1,200-ton Cheonan. Lee said the three countries agreed to cooperate on the issue, remarks echoed by Hatoyama at a joint press briefing. “Wen Jiabao basically reaffirmed China’s stance of maintaining ambiguity, giving little indication of the possibility of taking South Korea’s side,” said Kim Yong Hyun, professor of North Korean studies at Seoul-based Dongguk University. The third three-way summit between the countries has been overshadowed by the accusations that North Korea sank the Cheonan. Wen on May 28 said that while China won’t protect anyone found guilty of causing the ship to sink, it is still assessing the evidence. China is North Korea’s largest trading partner and main political ally, having fought alongside the North and against the U.S. in the 1950-1953 Korean War. The sinking poses an “important global challenge,” which needs to be “properly dealt with,” Lee said. “I expect very wise cooperation in dealing with this incident from both China and Japan as responsible countries.” Wen stressed today that China was a responsible country and would take account of other nations’ responses to the investigation results, Lee’s spokesman Lee Dong Kwan told reporters. South Korea’s government hopes to write a letter to the chairman of the United Nations Security Council as soon as this week setting out its claims, Yonhap News reported, citing a government official it didn’t identify. The exact timing for taking the case to the UN hasn’t been set yet as there are still further discussions needed with related nations, Yonhap cited the official saying. Tensions have risen since President Lee said on May 25 South Korea will cut off most trade with North Korea as punishment for the attack. The communist country responded with an announcement that it will sever all ties with the southern neighbor and threatened “all-out war” against any punitive action. “While we are not afraid of war, we don’t want war either,” Lee told Wen and Hatoyama today, according to his spokesman. South and North Korea remain technically at war since their conflict ended in a cease-fire, which was never replaced by a peace treaty. The two countries had naval skirmishes in 1999, 2002 and November last year off their west coast near to the area where the Cheonan sank. South Korea’s military suspended the dropping of propaganda leaflets into North Korea, Yonhap News said today, citing an unidentified person at the Defense Ministry. The South last week broadcast a four-hour radio program across the border and has set up loudspeakers to blast propaganda across the demilitarized zone. So far, the government has refrained from using them. North Korea said it would shell any positions that used the speakers. To contact the reporter on this story: Bomi Lim in Seoul at blim30@bloomberg.net

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Jason Schmitt: Download Illegally, It’s the Right Thing to Do

May 24, 2010

The music business is a touchy subject hinged between the pay for your consumption model and the instant gratification/I want it all for free mentality. The problem with the two downloading camps is the fact that they divide us into two distinct societal groups: One with penalty; one with privilege. And more unfortunate than the act of illegally downloading, is this behavior generating more power for those engaged in the practice. Illegal downloading, and the technological knowledge to conduct it effectively is continuing to increase the massive separation between the “haves” and the “have-nots.” Huge mult-inational, multi-billion dollar enterprises come into this equation as helpless pawns under the ultimate discretion and control of the end computer user. A 15-year-old boy sitting in his living room eating Fritos is in control as he goes online. The zillions of dollars that have been spent to both stigmatize downloading as “illegal” and occasionally persecute perpetrators comes to fruition as a barely audible whisper as he sees the file dangling in the digital divide waiting to be picked from the tree. I know this is unstable ground to tread, and this conversation runs deep with people. Warner/Elektra/Atlantic used to have me on the roster as an employee, but due to shifting of assets (read: illegal downloads taking the cash), my regional office in Novi, Michigan was disbanded quickly. I was annoyed after the news and angry at the shape that the music business was transforming into. I’ve lived with the resentment and, perhaps, had an epiphany. From my 2010 vantage point, after watching the war between the Recording Industry Association of America (RIAA) and illegal downloading for quite some time, I have no option but to say: go illegally download everything you want. My reasoning for such a bold statement isn’t for my own greed, frugality, or to stick it to the man. Instead, my thought process exists to protect the under privileged. We live in an economic period which is widening the class gap between rich and poor, and cutting out the middle. From this reasoning, if a kid in Silicon Valley with a $3,000 silver laptop has the privilege from his Palo Alto technical education allowing him to figure out how to go on ZTorrent (a file exchange program), and download away to his hearts content — without paying Owl City for Fireflies, or a Mad Men episode, or for the $1,000 Final Cut Pro Suite — the act of the file showing up on his hard drive speaks more of his societal privilege than of his moral ethics. In contrast, a large portion of my student body at Wayne State University graduated from Detroit Public Schools and have no concept of how to go about downloading files illegally. Why should an underprivileged student in one of my Detroit classes say she is going to spend $4.50 to go rent a video for my course? She is being blatantly penalized for her lack of a technical education provided by her schools, peer group, and larger community. Her life does not need another penalty. There are ramifications for my willy nilly sentiments, and I understand them. It is estimated in a March 2010 International Federation of the Phonographic Industry (IFPI) study that two million people are employed in the broader music economy. Roughly 4,000 artists are signed to major record company rosters. The Institute of Policy Innovation commissioned a 2005 study covering sound recording, motion pictures, business software and video games. The study found that the losses due to piracy in the 2005 U.S. economy accounted for $58 billion in output, over 370,000 jobs, and $2.6 billion in tax revenue. We can expect the ramifications to have increased significantly in a current view. I also understand there is some serious financial outlay given to signed artists by the record labels, and they deserve compensation for the risks they engage in. The majority of artists signed to record labels will lose money. The current costs associated with breaking a successful pop act in major markets, according to a March 9, 2010 IFPI study, is typically hovering around the million dollar mark per act. That is a big coin to lose if it doesn’t work out. It rarely does. Currently, the labels are still huge corporations operating adequately in conjunction with illegal downloading. Maybe it is just my Detroit genetics, which is quite used to seeing massive companies (a.k.a. the Big 3) scaling back across the board. The industries becoming more lean doesn’t mean that they are gone, or even that they are not profitable — just that they are different entities now than they were before all the globalized hoopla began. Perhaps it is a good idea to have the music industry give some power back to the people. I think the working class, not the most privileged, need a vitamin B12 shot of support. As of the January 2010 U.S. Supreme Court ruling, corporations can now provide endless funding to political candidates and now more significantly than ever alter the influence of the individual citizen in the democracy. If that’s the case, I am going to make the assumption that corporations have more than enough clout in my society. Author and media critic Douglas Rushkoff argues in his book, Life, Inc. , that, in fact, corporations trump humans in all kinds of ways. They don’t die. They don’t get sick. They can wait out a new political election to get officials (who they can legally buy off now) into office to amend legislation to fit their needs and bottom lines. Nearly always the changes corporations make to society take power and control away from average citizens for the end goal of providing a higher rate of return for the company shareholders. Case and point: the RIAA in 2008 convinced Tennessee Governor Phil Bredesen to sign a bill (SB 3794) into law which requires colleges in his state to exercise appropriate means to ensure that computers on campuses are not being abused for distributing copyrighted material. Although the 2008 legislation looked to be the start of something big, IFPI released its report on digital music as of 2009. The report says that despite initiatives by the music industry, 95% of music downloads continue to be illegal. This is one of the rare cases in society where the masses are winning against the corporate elite. Not for long. The RIAA and associates recently trotted to the courts for some more help to quell this nuisance to their gross sales. This time it looks to stick a little more firmly. A May 12, 2010 federal court ruled that P2P service provided by LimeWire and its operators are liable for inducing widespread theft (or information delivery). It didn’t take all that long to get the big courts on the side of the company. The RIAA states, “The court decision is an important milestone in the creative community’s fight to reclaim the Internet as a platform for legitimate commerce.” Let’s look at the act of downloading and the concept of “legitimate commerce.” The April 2010 Report to Congressional Committees on Intellectual Property pays respect to the fact that if a consumer “illegally” downloads media, the copyright infringer will have extra disposable income (due to significant consumer savings) and the money can be found to reappear in the U.S. economy as the consumer spends the funds on other goods and services. Although the act of “illegally” downloading a file is taking away the profit margin from the copyright holder, we see the quest to maintain copyright exclusiveness in nearly all manufacturing/technology industries. Ford Motor Company always loses engineering ideas to India. The iPods and iPads of the world have been reverse-engineered by hundreds of global firms trying to improve their products. It is well known that companies in the global economy need to adopt the leakages into their business models. At least the power as it relates to illegal music downloading in the U.S. keeps the economic funds hanging around our own back door. The divide of illegal music downloading doesn’t exist exclusively from pedagogical differences of communities such as Detroit and Palo Alto. It also rears its head socioeconomically and relates to age. Does the average Wal-Mart shopper, who stereotypically isn’t the highest on the socioeconomic totem pole, really need to send $13.50 toward the Britney Spears’ camp due to their lack of education, older age, or lack of “know how” in a digital society? The problem here is, due to the restructuring of the industry, most artists do not see much of the $13.50. The money that is being paid by the less advantaged is paying a dying infrastructure that has huge interest bearing loans that are given by some of the top banks who borrow their money primarily from the Chinese. The plea from the music industry, which seems to have only gross sales in mind, is that if you illegally download you are hurting the artists themselves. This logic is far from true. The Internet sensation Fireflies by Owl City would not have broke without the web. The song now is the most downloaded song on the web and the creator Adam Young has mounted a very profit heavy world tour in its shadow. Countless other artists have recently gotten success holistically from their own talent. Not just from media campaigns orchestrated by huge multi-national labels, but from homegrown abilities. That seems liberating, fair, and exciting for my future on the planet. Perhaps digital files traded freely due to their usefulness, intrigue, or artistic merit (and not due to affiliation with multi-national companies) is one of the last true democracies left in our country. If you think I am off track, there are swarms of people who will agree. Ted Nugent stated during an interview with me in 2008 that, “Technology has fucked the music thing. People think they can get bread for free because they have a direct pipeline to the bakery.” Someone with the musical tenure of Nugent has seen his fair share of change in musical consumer evolution: from vinyl records to eight tracks to analog tapes to CD to the current end all, be all — digital mp3s. I wish I wrote “Cat Scratch Fever” when society decided eight tracks were passé and millions had to go out and buy the same song on an analog tape and again on CD. Talk about profit for no extra work. The thoughts of the day would undoubtedly be hinged on what color do I want my new yacht to be. For more recent artists, the made in the shade profits from album sales is a vernacular never learned fluently. Their lack of submersion in the artist royalty stream never occurred, which made these artists more willing to concede their album sales. Kid Rock is one such artist. Rock is in direct opposition to Nugent’s view and he stated in an interview with me in 2008 that, “I would give my records away for free if I could.” His view has made his business relations more than a little shaky at times with Atlantic Records. The record label told Rock he should stand out against illegal downloading. Rock was far from agreement with their plea. Instead, Rock said, “the labels have been ripping off artists for years, now that somebody found a way to rip them off, they want me to speak up for them, fuck all those motherfuckers. I want to go play live, make my money there.” David Grohl of The Foo Fighters is in a similar vein as Kid Rock. Grohl says in a December 2009 Time interview that, “I don’t have a problem with people downloading music. To me the important thing is that people come to the shows and see the music live and have that personal experience with the band. I’ve made a decent living making music. I’d feel greed if I asked for more.” This counterculture voice ringing the tone of “it is ok to download illegally” does not often carry far. Even if you are wielding some serious musical success like Kid Rock or David Grohl, few media channels will promote their stance, and they end up muting the counter arguments. So, when all is left to settle, we end up hearing the voices which promote “fair use” and “legitimate commerce.” The voice which promotes illegal downloading is sanitized — the same company that owns Kid Rock’s label owns many of the radio stations that plays his songs and many of the magazines that report on his music. You can best bet a voice against the corporate mission doesn’t have a chance. I believe that if “wrong” is right for some kid in a Silicon Valley coffee shop then “wrong” must be right for all of society, including the less technologically savvy. If we continue to head down this downloading double standard path, we are continuing to hurt communities that have already seen their fair share of hardships and privilege those who are already privileged. From my view, most of the regional communities in the U.S. are in worse shape than the billion dollar record labels.

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Obama Appoints Democrat Graham, Republican Reilly to Investigate BP Spill

May 22, 2010

By Nicholas Johnston May 22 (Bloomberg) — President Barack Obama named Democrat Bob Graham , a former U.S. senator and Florida governor, and Republican William Reilly , a former Environmental Protection Agency administrator, to lead a presidential commission to investigate the BP Plc oil spill in the Gulf of Mexico. In his weekly address on the radio and Internet, Obama said the commission, which he established by executive order, will consider the “root causes” of the accident and find ways to “prevent a similar disaster from ever happening again.” To work with Graham and Reilly, Obama said he will name five other commission members, directing them to report in six months with recommendations “on how we can prevent, and mitigate the impact of, any future spills” at offshore wells. “We can only pursue offshore oil drilling if we have assurances that a disaster like the BP oil spill will not happen again,” Obama said. “This commission will, I hope, help provide those assurances so we can continue to seek a secure energy future.” After the Deepwater Horizon rig exploded and sank last month, BP estimates that 5,000 barrels of oil per day has been leaking into the Gulf of Mexico. BP has succeeded in siphoning some oil from the leak, 5,000 feet (1,524 meters) below the surface, and pumping it to ships. In today’s address, Obama called the oil spill an “environmental disaster” and said the nation’s “best minds are using the world’s best technology” to try to stop the leak. Obama said the accident was caused by a breakdown in responsibility on the part of London-based BP, Geneva-based Transocean Ltd. , the company from which BP leased the rig, and Houston-based Halliburton Co. Held Accountable “We will continue to hold the relevant companies accountable” for stopping the leak, repairing the damage, and repaying financial losses, he said. Obama also said the federal government should be held accountable. “If the laws on our books are inadequate to prevent such an oil spill, or if we didn’t enforce those laws, I want to know it,” he said. “I want to know what worked and what didn’t work in our response to the disaster, and where oversight of the oil and gas industry broke down.” Obama has already announced plans to split the revenue and regulatory functions of the Minerals Management Service to prevent conflicts of interest, ordered inspections of all deepwater drilling operations in the gulf and issued a moratorium on new drilling. “But we need to do a lot more to protect the health and safety of our people, to safeguard the quality of our air and water, and to preserve the natural beauty and bounty of America,” Obama said. Republican Address In the Republican address, Louisiana Senator David Vitter called on the U.S. Army Corps of Engineers to immediately start work — “with BP, by the way, appropriately footing the bill” — dredging material from rivers and deltas to build up barrier islands to help protect the coast from oil. Vitter also said he is working with other Gulf Coast legislators to back legislation that raises the liability cap for companies responsible for spills to the greater of “the last four quarters of the responsible party’s profits” or double the current $75 million limit. The measure would also encourage research on ways to cap wells and develop booms to prevent the spread of oil in rough seas. “That would make offshore drilling safer, smarter and more reliable,” Vitter said. To contact the reporter on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net .

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Brett King: Digital versus Traditional Advertising? Wrong Question – BANK 2.0

May 4, 2010

There is a debate that has been raging in Advertising quarters for almost a decade now – which is better Digital Media or Traditional Advertising. The fact that this question is being asked at all shows that most advertisers and institutions don’t get consumer behavior in the interconnected world. Considering that agencies are in advertising, you’d think they would get it right? Considering the declining ROI in traditional marketing approaches, you’d think marketing staffers would get it too right? Over the last couple of years the debate on Advertising spend has centered on where the money is going. In March 2008 General Motors shocked the traditional advertising world when they announced they were shifting US$1.5Bn of ad spend to the digital space and while some shift towards digital has been hailed as ‘game changing’ most advertising spend is still heavily biased towards traditional media . Susan Wojcicki, Google’s vice president of public policy and communications, was quoted in Digital Media Buzz as arguing that Ad spending has not caught up with consumer behavior. “U.S. users spend 12 hours per week online, which represents about 32 percent of their media time. However, online advertising makes up only 13.6 percent of advertising spend in the U.S.” Susan Wojcicki, VP – Public Policy and Communications, Google This is accurate, but what is holding back the shift? Long entrenched marketing behaviors, lack of digital skills in-house, lack of agency drive away from traditional media buy, or lack of understanding of changing consumer behavior… It’s probably a combination of all of these. The fact that most financial institutions, for example, have minimal social media or mobile advertising spend today shows either a complete lack of understanding of consumer behavior, a lag in internal adaptation of ‘digital’ or organizational inertia that is just too hard to shift? I think all of the above contribute, but the real problem lies in the ‘campaign’ mentality. Brand marketing is very well suited to traditional media, because it is about creating a ubiquitous recognition of your brand, logo, image or message. To fit broadcast mediums for product ROI advertisers created the campaign – really mini product or service branding initiatives designed to create recall at a time when customers are compiling their ‘evoked’ set of purchase alternatives. But while the campaign worked in the 70-90s utilizing broadcast, this is no longer the case in the digital world. The question over Digital or Traditional is the wrong question. The question should be, how do we better engage customers today so that they are compelled to buy? Campaigns on traditional media are struggling in the one area that digital is increasingly effective – measuring ROI. Measurability is a strong advantage in the new world because the ability to understand why, when and where customers need a product or service should be considered the Holy Grail. But traditional broadcast methods such as TVC, Radio, Newspaper, Direct Mail, and static outdoor, only work efficiently when it is a static message directed at a wide audience that doesn’t need to change. It was for this reason that Pepsi started its shift to Direct Response Marketing this year as they moved their entire SuperBowl TVC budget to online and social media . At the Sears Annual General Meeting on Tuesday, Edward Lampert explained that even a major retailer is having to conceptualize a shift away from broadcast methods to much more targeted conversations with customers, something that static media can’t deliver. “It’s not just us broadcasting to customers any more, he said. “It has to be interactive, and it has to be relevant.” Edward Lampert, Chairman of Sears Retail organizations, whether banks, financial institutions, or retailers like Sears need to understand that Brand advertising can survive and thrive with traditional media, but campaigns are effectively dead in the IP-conversation space. Companies need to re-gear their marketing teams toward conversations, not just telling their customers a message and hoping for brand recall at purchase time. In the next 5-7 years TVCs will largely disappear because consumers aren’t watching them, why? Because we’ll either be downloading or TiVo’ing and Ads won’t be a part of the experience. Newspaper will shift to digital format so that ads in that space will go from static to just like web banner Ads. Radio will survive, but perhaps be delivered differently based on subscription feed models. Billboards just like Newspaper will move to digital format also. The question over Digital versus Traditional is kind of redundant. The way media is morphing everything is going digital, even traditional. What marketers and advertisers need to work on is the conversation, not broadcast. It takes a lot more competency internally, and initially the cost of delivering conversation marketing is alot more expensive than traditional broadcast production. However, the ROI in direct response, permission or conversation marketing blows anything in the traditional media measurability space away. We have the technology now to target messages at customers at the right time, across the right channel, but we’re not using it because we can’t fit campaigns into this model. It’s tough – but reengineering our approach to customer engagement is the only way through this discussion. Marketing staffers better go back to school, and fast…

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Brett King: Digital versus Traditional Advertising? Wrong Question – BANK 2.0

May 4, 2010

There is a debate that has been raging in Advertising quarters for almost a decade now – which is better Digital Media or Traditional Advertising. The fact that this question is being asked at all shows that most advertisers and institutions don’t get consumer behavior in the interconnected world. Considering that agencies are in advertising, you’d think they would get it right? Considering the declining ROI in traditional marketing approaches, you’d think marketing staffers would get it too right? Over the last couple of years the debate on Advertising spend has centered on where the money is going. In March 2008 General Motors shocked the traditional advertising world when they announced they were shifting US$1.5Bn of ad spend to the digital space and while some shift towards digital has been hailed as ‘game changing’ most advertising spend is still heavily biased towards traditional media . Susan Wojcicki, Google’s vice president of public policy and communications, was quoted in Digital Media Buzz as arguing that Ad spending has not caught up with consumer behavior. “U.S. users spend 12 hours per week online, which represents about 32 percent of their media time. However, online advertising makes up only 13.6 percent of advertising spend in the U.S.” Susan Wojcicki, VP – Public Policy and Communications, Google This is accurate, but what is holding back the shift? Long entrenched marketing behaviors, lack of digital skills in-house, lack of agency drive away from traditional media buy, or lack of understanding of changing consumer behavior… It’s probably a combination of all of these. The fact that most financial institutions, for example, have minimal social media or mobile advertising spend today shows either a complete lack of understanding of consumer behavior, a lag in internal adaptation of ‘digital’ or organizational inertia that is just too hard to shift? I think all of the above contribute, but the real problem lies in the ‘campaign’ mentality. Brand marketing is very well suited to traditional media, because it is about creating a ubiquitous recognition of your brand, logo, image or message. To fit broadcast mediums for product ROI advertisers created the campaign – really mini product or service branding initiatives designed to create recall at a time when customers are compiling their ‘evoked’ set of purchase alternatives. But while the campaign worked in the 70-90s utilizing broadcast, this is no longer the case in the digital world. The question over Digital or Traditional is the wrong question. The question should be, how do we better engage customers today so that they are compelled to buy? Campaigns on traditional media are struggling in the one area that digital is increasingly effective – measuring ROI. Measurability is a strong advantage in the new world because the ability to understand why, when and where customers need a product or service should be considered the Holy Grail. But traditional broadcast methods such as TVC, Radio, Newspaper, Direct Mail, and static outdoor, only work efficiently when it is a static message directed at a wide audience that doesn’t need to change. It was for this reason that Pepsi started its shift to Direct Response Marketing this year as they moved their entire SuperBowl TVC budget to online and social media . At the Sears Annual General Meeting on Tuesday, Edward Lampert explained that even a major retailer is having to conceptualize a shift away from broadcast methods to much more targeted conversations with customers, something that static media can’t deliver. “It’s not just us broadcasting to customers any more, he said. “It has to be interactive, and it has to be relevant.” Edward Lampert, Chairman of Sears Retail organizations, whether banks, financial institutions, or retailers like Sears need to understand that Brand advertising can survive and thrive with traditional media, but campaigns are effectively dead in the IP-conversation space. Companies need to re-gear their marketing teams toward conversations, not just telling their customers a message and hoping for brand recall at purchase time. In the next 5-7 years TVCs will largely disappear because consumers aren’t watching them, why? Because we’ll either be downloading or TiVo’ing and Ads won’t be a part of the experience. Newspaper will shift to digital format so that ads in that space will go from static to just like web banner Ads. Radio will survive, but perhaps be delivered differently based on subscription feed models. Billboards just like Newspaper will move to digital format also. The question over Digital versus Traditional is kind of redundant. The way media is morphing everything is going digital, even traditional. What marketers and advertisers need to work on is the conversation, not broadcast. It takes a lot more competency internally, and initially the cost of delivering conversation marketing is alot more expensive than traditional broadcast production. However, the ROI in direct response, permission or conversation marketing blows anything in the traditional media measurability space away. We have the technology now to target messages at customers at the right time, across the right channel, but we’re not using it because we can’t fit campaigns into this model. It’s tough – but reengineering our approach to customer engagement is the only way through this discussion. Marketing staffers better go back to school, and fast…

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Greece, EU, IMF Poised to Sign Rescue Package as Protests Mount in Athens

May 1, 2010

By Jonathan Stearns and Natalie Weeks May 2 (Bloomberg) — Greece is poised to announce an agreement with euro-region allies and the International Monetary Fund on a 120 billion-euro ($159 billion) bailout as protests mount against budget cuts that are a condition for the rescue of the debt-stricken nation. Prime Minister George Papandreou called a special Cabinet meeting at 9:30 a.m. Athens time today. Euro-area finance ministers will meet in Brussels at 4 p.m. to approve their part of the three-year lifeline to be financed with the IMF. With national debt of almost 300 billion euros and its credit rating cut to junk status, Greece faces a fiscal mess that has begun to spread to Spain and Portugal, forcing the European Union to orchestrate the rescue. At stake is the future of the euro 11 years after its creators gave the European Central Bank responsibility for interest rates while leaving fiscal policy in national capitals. “I hope the aid package is enough,” Finnish Economy Minister Mauri Pekkarinen said yesterday on the opening day of the World Expo in Shanghai. “It’s very important for our common currency that they manage their problems.” As talks with the EU and IMF on the terms of the loans wound down in Athens, more than 15,000 demonstrators took to the streets of the capital yesterday, turning traditional May Day celebrations into protests against austerity measures that will accompany the aid. Papandreou, who needs the funds to avoid default, said April 29 Greece’s very survival was at stake. Wage Cuts Papandreou has already raised taxes, cut wages and reduced government spending in a bid to tame a deficit that reached 13.6 percent of gross domestic product last year, more than four times the EU limit. Those measures prompted the euro region to commit to making 30 billion euros available to Greece in the first year of the package, with the IMF due to provide another 15 billion euros initially. That austerity plan also triggered a wave of strikes and protests across Greece. Unions plan another general strike for May 5. Papandreou’s government may have agreed to additional budget cuts worth 24 billion euros, or around 10 percent of GDP, to secure the second and third year of the aid, Greece’s NET Radio said. Measures may include a three-year wage freeze for public workers and the elimination of two of their 14 annual salary payments, the ADEDY union said after a briefing with Papandreou on the talks. ‘Unprecedented’ Measures Finance Minister George Papaconstantinou said in an April 30 speech that Greeks must brace themselves for “unprecedented” austerity and that they face “a critical point in the history of our country.” Most Greeks feel anger and fear rather than relief over the bailout, an opinion poll showed. Just 14.8 percent of the 1,256 people surveyed by Kappa Research for the poll published yesterday in To Vima newspaper felt relief or hope after Papandreou’s April 23 decision to request aid, compared with 31 percent who answered “anger,” 30.6 percent who said “disappointment or fear” and 22.8 percent who responded “shame.” As the talks with the EU and IMF dragged on, Greece’s fiscal crisis rippled through Europe, sending the euro to its lowest in a year on April 28 and leading to a surge in the borrowing costs of other high-deficit countries. On April 27, the same day Standard & Poor’s cut Greece’s credit rating to below investment grade, the company also downgraded Portugal and followed the next day by cutting Spain. Maturities Looming Disbursing the funds quickly is critical as the government faces 8.5 billion euros in maturing bonds this month. The surge in Greek yields — its two-year note yielded more than 20 percent last week — has made tapping financial markets unsustainable. Markets rebounded late in the week on signs an agreement to disburse the aid was near. Greece’s ASE benchmark general index rose 2.2 percent on April 30, extending a 7 percent gain the previous day. The yield on Greek 10-year government bonds, which jumped to 11.406 percent on April 28, slipped to 9.45 percent. The euro, which has lost more than 7 percent this year as the Greek crisis tested the single currency’s credibility, also gained 0.5 percent to $1.3294. French Finance Minister Christine Lagarde said in Paris yesterday she was confident there would be a final agreement today on a three-year aid package worth 100 billion euros to 120 billion euros. The euro area has said it would fund two-thirds of the total. National Approval Once the Greek government and euro-region finance ministers sign off, a further test will come when some euro-area countries push for domestic approval of the loans. Public opposition to the Greek bailout is running high in Germany, which will have to put up 8.4 billion euros in the first year, almost 30 percent of the euro-region total for 2010. Even if the package does spare Greece having to tap the markets for funds, the austerity measures will deepen a recession, complicating efforts to trim the deficit by more than 10 percentage points of GDP and reduce debt. Greece’s debt was 115 percent of GDP last year, second highest in the EU after Italy. “There is a very real possibility that at the end of two or three years, Greece will still have an unsustainable debt and will have to restructure because it will have a deep, deep recession in the meantime,” said Barry Eichengreen , economics professor at the University of California, Berkeley. To contact the reporters on this story: Jonathan Stearns in Athens at jstearns2@bloomberg.net ; Natalie Weeks in Athens nweeks2@bloomberg.net

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Blankfein Says `Callousness’ Shown in E-Mails Doesn’t Represent Goldman

May 1, 2010

By Christine Harper May 1 (Bloomberg) — Lloyd Blankfein , chief executive officer of Goldman Sachs Group Inc. , said a “callousness” toward clients demonstrated in some e-mails released to the public this week is unacceptable and doesn’t represent the firm. “There were some e-mails where some people were projecting I would say, at best indifference, and at worst a callousness,” Blankfein, 55, said in an interview on the “ Charlie Rose ” television show last night, according to a transcript. While he said those e-mails aren’t representative of the firm, “it’s inexcusable if 10 people think that way or thought that way.” Goldman Sachs, the Wall Street firm that generates more trading revenue than any other, has lost 21 percent of its market value since it was sued on April 16 by the U.S. Securities and Exchange Commission over its sale of a mortgage- linked security. It is also under criminal investigation by federal prosecutors, said two people familiar with the matter. “The firm is guiltless and this is a big preoccupation for me and a big preoccupation for our management group,” Blankfein said, according to the transcript. Blankfein, who has run the company since June 2006, defended the firm’s actions this week under interrogation from a U.S. Senate subcommittee, which released 901 pages of documents including e-mail that showed employees disparaging securities they were offering to clients. Most of the complex derivatives the firm developed and traded had a “social utility,” he said, while others may have gone too far. ‘Hindsight’ Regrets “If the issuants themselves are too complicated, become too illiquid as it turns out that they were, notwithstanding the purpose you may say, ‘Let’s not do those things,’” Blankfein said, according to the transcript. “So in hindsight I wish we had not done some of those things.” The stock fell 9.4 percent yesterday to $145.20, in New York trading, its biggest drop since the SEC brought the suit on April 16. The company has lost $21 billion in market value since the case was filed. Blankfein said Goldman Sachs will survive and “thrive” in the future. He said he would step down if his leadership damaged the firm, calling that scenario unlikely. “I’ll be here,” he said, according to the transcript. “That’s my expectation and that’s my duty.” Goldman Sachs must improve communication with the public, Blankfein said. “That’s a huge challenge, I would just say it’s my deficiency,” he said. “We can’t exist in the current state that we’re in and we understand that. So we have a lot of work to do.” Stunning News News of the SEC suit came as a shock, Blankfein said. “It was in the middle of the morning, it was stunning,” he said. “I saw it over the screen. I read it, and my — it just — my stomach turned over. I couldn’t — I was stunned.” Blankfein defended the role that Goldman Sachs , and Wall Street as a whole, plays in making markets. “You could call it a casino, but if it is, it’s a very socially important casino,” he said. On congressional efforts to strengthen financial regulation, Blankfein said he supports many aspects of the bill proposed by Senator Christopher Dodd , a Connecticut Democrat. The so-called Volcker Rule, which would require banks to exit the business of trading for their own account, or proprietary trading, would eliminate about 10 percent of Goldman Sachs’s revenue, Blankfein said. “There are aspects of the Volcker rule that go too far,” he said. “I work very hard for the 10 percent of our revenue.” In an interview to be aired tomorrow on CNN’s “Fareed Zakaria GPS,” Blankfein said parts of the Volcker rule “are warranted” and he ”could” support them. “If it makes institutions safer, that’s good,” he said. “But if it makes institutions forgo revenue opportunities, that fact by itself is bad.” Contributing to Crisis Goldman Sachs, which reported record earnings last year even as it repaid $10 billion of taxpayer bailout funds, inadvertently helped cause the worst financial crisis since the Great Depression, Blankfein said in an interview with National Public Radio on April 29. “Some of the things that Goldman Sachs did contributed to the crisis,” Blankfein told NPR, according to a transcript of that interview. “So, for example, Goldman Sachs did transactions for companies that involved lending them a lot of money, maybe too much money. We financed real estate that was probably overleveraged.” Blankfein told CNN the firm must “regain the trust of the public” to survive. “We have no choice,” Blankfein said, according to a transcript of the interview. “We can’t survive without people thinking well of us.” In the CNN interview, Blankfein also said former Treasury Secretary Henry Paulson called him “maybe twice as often as he called any other bank CEO” during the financial crisis and that Paulson was being “very, very careful to be appropriate.” Paulson had been head of Goldman Sachs before going to the Treasury Department. Paulson isn’t connected to the hedge fund by the same name. To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net

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Buffett Says He Supports Goldman Sachs Chief Executive Blankfein `100%’

May 1, 2010

By Betty Liu and Andrew Frye May 1 (Bloomberg) — Warren Buffett , the Wall Street critic who invested $5 billion in Goldman Sachs Group Inc. , said he supports the bank’s Chief Executive Officer Lloyd Blankfein “100 percent” after the firm was sued by regulators for fraud. “He’s done a great job running that firm,” Buffett said today in Omaha, Nebraska in a Bloomberg Television interview before the shareholders meeting for his Berkshire Hathaway Inc. “He’s smart. He’s high grade.” Buffett became one of Goldman Sachs’s most visible advocates amid public outrage over the bank’s pay practices and conduct with customers. He backed Blankfein in January, saying the bank’s leader since 2006 “has been the right man” for the job. Last month, Goldman Sachs was sued by the U.S. Securities and Exchange Commission, and Blankfein, 55, was pilloried in Congress on April 27. The SEC said Goldman Sachs misled clients on the sale of assets tied to home loans as the housing market started to falter. The bank, which said the suit is unfounded, must weigh the risks of a legal battle against the benefits of a more immediate resolution as politicians vilify the firm as a symbol of the Wall Street excess that led to the collapse of the residential real estate market. Buffett said he will discuss the trade at the center of the regulator’s suit later today at the meeting and “I will bet that of the 40,000 people in there, 39,900 of them have a misconception.” AIG, Bear Stearns Bailed-out insurer American International Group Inc. and failed securities firm Bear Stearns Cos. are among companies hobbled by losses on investments from Goldman Sachs, the most profitable firm in Wall Street history. The European Union is probing Goldman Sachs’s role in arranging swaps for Greece that may have masked the country’s budget deficit. Goldman Sachs fell 9.4 percent yesterday in New York trading after reports that federal prosecutors are weighing criminal fraud charges and the stock was downgraded to “neutral” from “buy” at Bank of America Corp. Blankfein, who also serves as chairman, said he would step down if his leadership damaged the firm, calling that scenario unlikely, according to the transcript of an interview from the “Charlie Rose” television show. “I’ll be here,” Blankfein said, “That’s my expectation and that’s my duty.” Buffett said he hasn’t been approached about an executive role at Goldman Sachs since the suit and has “no interest whatsoever” in a position. He had served as an interim chairman and CEO of Salomon Inc. in 1991 and 1992 as the company sought to recover from involvement in a Treasury debt auction scandal. ‘This Year, Next Year’ “My choice would be to have Lloyd running it this year, next year and 10 years from now,” Buffett said. ”Running Goldman is a big job, and there’s nothing I could improve on.” Blankfein has apologized for Goldman Sachs’s role in some of the activities leading to the financial crisis and said the firm needs to be more transparent to stave off criticism. “Some of the things that Goldman Sachs did contributed to the crisis,” Blankfein told National Public Radio, according to a transcript on NPR’s Web site this week. “Goldman Sachs did transactions for companies that involved lending them a lot of money, maybe too much money. We financed real estate that was probably overleveraged.” Senator Carl Levin , who led a subcommittee that questioned Blankfein on April 27, accused the bank of conflicts of interest for selling mortgage bets to clients as it cut its own housing exposure. ‘The Risk They Want’ Clients who make trades with Goldman Sachs don’t rely on the bank for its opinions, Blankfein told Levin. “The thing we are selling to them is supposed to give them the risk they want,” Blankfein said. Goldman Sachs, which has paid back $10 billion in U.S. bailout funds with interest, has touted Buffett’s investment as a vote of confidence. The bank named the billionaire last year as co-chairman of a $500 million charitable effort, funded by Goldman Sachs, to assist small businesses. Buffett, the world’s third-richest man, has committed most of his fortune to charity. Berkshire’s investment in the New York-based firm, arranged by Buffett, 79, at the depths of the financial crisis, was a bet on “not just the strength of Goldman but its integrity,” Berkshire Director Ronald Olson said in a Bloomberg Television interview last month before the suit. The bank reported 2009 net income of $13.4 billion , the biggest annual profit in Wall Street history. Buffett has said that the securities industry is essential to economic growth. ‘Given to Huge Excess’ “I don’t look at Wall Street as ‘evil,’” Buffett said in an interview last year conducted by the CEO of Business Wire, the Berkshire subsidiary that posts corporate press releases. “I look at Wall Street as given to huge excess sometimes. I don’t want to get rid of it. We need something to allocate capital and distribute securities and all of that throughout the system. We have got a big capitalist system and we have to have a big capital market — but there is plenty of room for improvement.” Berkshire makes $500 million a year in interest on the Goldman Sachs preferred stock, which the bank may call at any time by paying a 10 percent premium. The warrants Buffett negotiated as part of the deal give Berkshire the option to buy $5 billion of common stock for $115 a share. The shares closed at $145.20 yesterday. ‘A Preferred Deal’ “In Buffett’s defense, he doesn’t own Goldman,” said Robert Miles, a Berkshire investor and author of “The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers.” “He gave them a loan. It’s a preferred deal, and as a shareholder, I kind of like the terms.” Berkshire’s paper profit on the warrants was about $1.3 billion as of yesterday, down from about $3 billion before the SEC lawsuit was announced. “The most important thing to understand is he’s stuck with it,” Alice Schroeder , author of “The Snowball: Warren Buffett and the Business of Life,” an authorized biography of Buffett, said in a Bloomberg Television interview. “As long as he has an investment he’s got to defend them,” said Schroeder, who is a columnist for Bloomberg News. Buffett, who has ridiculed investment bankers for the size of their fees, relied on Goldman Sachs for some of his biggest deals , including the $4.5 billion acquisition of Marmon Holdings Inc. in 2008 and the $1.45 billion takeover of McLane Co. Those deals were facilitated by Byron Trott , the former Goldman Sachs managing director of whom Buffett said “I trust him completely.” Berkshire rose to first place last month in Harris Interactive’s annual survey of corporate reputations. Goldman Sachs came in 56th out of 60. “He’s an important client as well as an investor,” Blankfein said of Buffett in an April 27 Bloomberg Television interview. “I can’t speak for Warren.” To contact the reporters on this story: Betty Liu in Omaha at bliu17@bloomberg.net ; Andrew Frye in Omaha at afrye@bloomberg.net .

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Goldman’s Blankfein Says E-Mail `Callousness’ Doesn’t Represent the Firm

April 30, 2010

By Christine Harper April 30 (Bloomberg) — Lloyd Blankfein , chief executive officer of Goldman Sachs Group Inc. , said that a “callousness” toward clients demonstrated in some e-mails released to the public this week is unacceptable and doesn’t represent the firm. “There were some e-mails where some people were projecting I would say, at best indifference, and at worst a callousness,” Blankfein, 55, said in an interview on the “ Charlie Rose ” television show airing tonight, according to a transcript. While he said those e-mails aren’t representative of the firm as a whole “it’s inexcusable if 10 people think that way or thought that way.” Goldman Sachs, the Wall Street firm that generates more trading revenue than any other, faces a U.S. Securities and Exchange Commission civil-fraud lawsuit over its sale of a mortgage-linked security. It is under criminal investigation by federal prosecutors, said two people familiar with the matter. Blankfein, who has run the company since June 2006, defended the firm’s actions this week under interrogation from a U.S. Senate subcommittee, which released 901 pages of documents including e-mail that showed employees disparaging securities they were offering to clients. Most of the complex derivatives the firm concocted and traded had a social utility, he said, while others may have gone too far. “If the issuants themselves are too complicated, become too illiquid as it turns out that they were, notwithstanding the purpose you may say, ‘Let’s not do those things,’” he said, according to the transcript. “So in hindsight I wish we had not done some of those things.” Stock Decline The stock fell 9.4 percent today to $145.20, in New York trading, its biggest drop since the SEC brought the suit on April 16. The company has slid 21 percent since the case was filed, losing $21 billion in market value. Goldman Sachs must improve communication with the public, Blankfein said, a role he said he finds especially difficult. “That’s a huge challenge, I would just say it’s my deficiency,” he said. “We can’t exist in the current state that we’re in and we understand that,” he said. “So we have a lot of work to do.” Blankfein defended the role that Goldman Sachs , and Wall Street as a whole, plays in making markets. “You could call it a casino, but if it is, it’s a very socially important casino,” he said. Goldman Sachs, which reported record earnings last year even as it repaid $10 billion of taxpayer bailout funds, inadvertently helped cause the worst financial crisis since the Great Depression, Blankfein said in an interview with National Public Radio yesterday. “Some of the things that Goldman Sachs did contributed to the crisis,” Blankfein told NPR, according to a transcript of that interview. “So, for example, Goldman Sachs did transactions for companies that involved lending them a lot of money, maybe too much money. We financed real estate that was probably overleveraged.” To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net

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Papandreou Says Greece’s Survival at Stake in Talks on $159 Billion of Aid

April 30, 2010

By Maria Petrakis and Natalie Weeks April 30 (Bloomberg) — Greek Prime Minister George Papandreou said the nation’s survival was at stake in talks to win a potential $159 billion European Union-led bailout that included budget cuts denounced by unions as “savage.” “Now, today, immediately, what is at stake is the survival of the nation,” Papandreou said in parliament in Athens today. “This is the ‘red line.’” He said talks with the EU and International Monetary Fund were “tough,” with his government resisting “not in the street with rocks, but in negotiations.” Greek stocks rose and the euro strengthened as an EU spokesman said an agreement on the rescue package could come as soon as tomorrow. Signs of the accord that may require 24 billion euros ($32 billion) in austerity measures ended a bond market selloff across Europe this week. Moody’s Investors Service said yesterday Greece was vulnerable to a “multi- notch” downgrade if measures don’t go far enough. Greece’s fiscal crisis rippled through Europe this week, sending the euro to its lowest in a year after Germany’s reluctance to approve emergency funds sparked a drop in Greek bonds and Standard & Poor’s cut the country’s credit rating to below investment grade. S&P followed its Greek downgrade with cuts for Portugal and Spain. Papandreou’s budget cuts may include a three-year wage freeze for public workers and eliminating two of their 14 annual salary payments, the ADEDY union said. Greece’s NET Radio reported that cuts could amount to 10 percentage points of gross domestic product. The deficit was 13.6 percent of GDP in 2009. ‘Unprovoked Attack’ “We find ourselves before the most savage, unprovoked and unjust attack,” Spyros Papaspyros , head of the ADEDY civil servants union, said in Athens late yesterday after meeting Papandreou. “The answer will be given in the street.” The pending wage cuts will overshadow tomorrow’s annual Labor Day celebrations, usually marked by rallies and picnics, which unions called on Greeks to join before the “coming storm.” The slogan is: “The Croesus-es should pay for the crisis,” a reference to the ancient king renowned for his wealth. Public transport will be halted between 5 a.m. and 7 a.m. “It’s a tall order to assume that Greeks will be convinced because for years they have been used to getting a different type of treatment from their governments,” said Michael Massourakis , chief economist at Alpha Bank, the country’s third largest, in a telephone interview. “Papandreou doesn’t have the luxury of choosing the context or pace of the adjustment.” Weekend Meeting Shopkeepers plan to shut their stores on May 5, joining a strike organized by the GSEE union, the nation’s biggest. European governments are speeding up efforts to finalize a rescue package after the Greek crisis threatened to spread through the rest of Europe this week. French Finance Minister Christine Lagarde said euro-region officials will probably hold talks this weekend after European Central Bank President Jean- Claude Trichet yesterday said policy makers must create a “sense of direction” to help overcome the fiscal crisis. Signs of a renewed drive to tackle the crisis sparked a 7 percent rally in Greece’s ASE benchmark general index yesterday, with National Bank of Greece jumping 30 percent in the past three days. It was up 0.7 percent at 2 p.m. in Athens. The yield on Greek 10-year government bonds, which surged to 11.406 percent on April 28, was at 9.07 percent. The euro gained 0.6 percent against the dollar to $1.3315. Stuck Papandreou is stuck between investors, who want faster deficit cuts, and voters and unions, who are already chafing from existing austerity measures. Elected in October on pledges to raise wages for public workers, Papandreou has been forced to cut salaries, curb spending and raise taxes to reduce a deficit that was more than four times the EU’s limit last year. Other deficit-cutting steps include increasing sales tax and raising the cap on the number of workers who can be fired to 4 percent from 2 percent, Kathimerini newspaper said, without saying where it got the information. Greeks may also be shifting money out of the country in the face of higher taxes and more austerity measures. Deposits in Greek banks fell for a third month in March, leading to a 4.5 percent drop in the first quarter. That coincided with a fourth monthly increase in deposits held in Cyprus by local branches of Greek banks on the island. Political Risks Voters’ anger about further cuts has been partly focused on the IMF and the political risks facing Papandreou are highlighted by the lender’s most recent involvement in Europe. In Hungary, the first EU member to turn to the Washington- based lender, voters this month ousted the ruling Socialist party two years after it accepted a bailout. Fiscal conditions attached to the $27 billion loan exacerbated the country’s recession as unemployment soared to a record, souring support for the government. Sixty-five percent of Greek voters polled by researcher Alco for the Proto Thema newspaper last week said Papandreou must reject any measures that lead to more wage and pension cuts. Papandreou, who said last week that his country faces a “new Odyssey,” will now have to convince voters that they don’t have a choice, said Alpha Bank’s Massourakis. Even after a bond-market rally, Greece must pay 11.741 percent to borrow for two years. Germany pays 0.79 percent. “It’ll be difficult, but at end of the day people will realize that these are necessary because the country doesn’t have access to borrowing anymore,” he said. To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net Natalie Weeks in Athens at nweeks2@bloomberg.net

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Papandreou Makes Austerity Pitch as Unions Slam Cuts Tied to Bailout Plan

April 29, 2010

By Maria Petrakis and Natalie Weeks April 29 (Bloomberg) — Prime Minister George Papandreou is starting his sales pitch to the Greek people as unions denounce as “unjust” budget cuts linked to a potential $159 billion European Union bailout. “We find ourselves before the most savage, unprovoked and unjust attack,” said Spyros Papaspyros , head of the ADEDY civil servants union, after meeting Papandreou in Athens today. “The answer will be given in the street.” Greek officials will conclude talks with the EU and the International Monetary Fund in the next days as signs of agreement ended a bond market selloff that cascaded through the euro region this week. Measures may include a three-year wage freeze for public workers and cutting two of the 14 salary payments that they receive annually, the ADEDY union said. Greece’s NET Radio said cuts may amount to 10 percentage points of gross domestic product, equivalent to around 24 billion euros ($32 billion). The deficit was 13.6 percent of GDP in 2009. Retailers said today they’ll shut their stores on May 5, joining a strike organized by the GSEE union, the country’s largest. “It’s a tall order to assume that Greeks will be convinced because for years they have been used to getting a different type of treatment from their governments,” said Michael Massourakis , chief economist at Alpha Bank, the country’s third largest, in a telephone interview. “Papandreou doesn’t have the luxury of choosing the context or pace of the adjustment.” Breathing Space Other proposals include increasing sales tax and raising the cap on the number of workers who can be fired to 4 percent from 2 percent, Kathimerini newspaper said today, without citing anyone. “We will do what is needed for the salvation of the country,” Papandreou said, according to the e-mailed transcript of his comments to union and business representatives today. It didn’t give details of the austeriry measures. The yield on the Greek 10-year government bond, which surged to 11.406 percent yesterday after Standard & Poor’s cut its credit rating to junk, fell 91 basis points to 9.04 percent today as officials speed up efforts to finalize a rescue package. The ASE benchmark general index , which has lost nearly a fifth of its value this year, jumped 7 percent today, the most since December. National Bank of Greece SA soared 18 percent. “The financial support will give Greece sufficient breathing space from pressures of financial markets,” EU Monetary Affairs Commissioner Olli Rehn told reporters in Brussels today. ‘Tough Package’ Papandreou is stuck between investors, who want faster deficit cuts, and voters and unions, who are already chafing from existing austerity measures. Elected in October on pledges to raise wages for public workers, Papandreou has been forced to cut salaries, curb spending and raise taxes to reduce a deficit that was more than four times the EU’s limit last year. “We were and are the champions of change,” Papandreou said yesterday. “We know we must put our economy in order if we are to survive.” The time has come to move on from “watching the spreads go up and down, usually more up than down.” “I got a taste of a very tough package,’’ Yannis Panagopoulos, head of the GSEE union, said after meeting Papandreou. He described it as “arbitrary and unjust.” Voters’ anger has been partly focused on the IMF and the political risks facing Papandreou are highlighted by the IMF’s most recent involvement in Europe. Pension Cuts In Hungary, the first EU member to turn to the Washington- based lender, voters this month ousted the ruling Socialist party two years after they accepted a bailout. Fiscal conditions attached to the $27 billion loan exacerbated the country’s recession as unemployment soared to a record, souring support for the government. Sixty-five percent of Greek voters polled by researcher Alco for the Proto Thema newspaper last week said Papandreou must reject any measures that lead to more wage and pension cuts. Europe’s fiscal crisis worsened this week after Germany’s reluctance to approve emergency funds sparked a drop in Greek bonds and S&P followed its Greek downgrade with cuts of Portugal and Spain. Papandreou, who said last week that his country faces a “new Odyssey,” will now have to convince to voters that they don’t have a choice, said Alpha Bank’s Massourakis. Even after today’s bond market rally, Greece must pay 12.57 percent to borrow for two years. Germany pays 0.79 percent. “It’ll be difficult, but at end of the day people will realize that these are necessary because the country doesn’t have access to borrowing any more,” he said. To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net Natalie Weeks in Athens at nweeks2@bloomberg.net .

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Papandreou Starts Austerity Pitch to Greeks as EU Says Bailout Almost Done

April 29, 2010

By Maria Petrakis and Paul Tugwell April 29 (Bloomberg) — Greek Prime Minister George Papandreou began trying to persuade labor unions to accept further austerity measures as the European Union said it’s close to agreeing on a bailout that will stave off a default. As Papandreou started his pitch, Greek bonds jumped on optimism a package amounting to 120 billion euros ($159 billion) will help the government meet debt obligations over the next three years. “I got a taste of a very tough package,’’ Yannis Panagopoulos, head of Greece’s biggest union, said in comments broadcast on state-run NET Radio after meeting Papandreou. Panagopoulos, whose union will hold a general strike on May 5, described the measures as “arbitrary and unjust.” He didn’t give details on what they entail. Greek officials will conclude talks with the EU and International Monetary Fund in the next few days after a bond market rout pushed the country’s two-year borrowing costs to 24 percent. The crisis worsened this week after Standard & Poor’s cut Greece’s rating to junk and investors started to shun the bonds of other countries struggling to cut their deficits. As part of the agreement hammered out with the EU and the IMF, the government may cut two of the 14 monthly salaries paid to civil servants and increase value-added tax rates, Kathimerini newspaper reported, without citing anyone. Other plans include raising the cap on the number of workers who can be fired to 4 percent from 2 percent. Stock Rally Papandreou’s government was told to cut the budget deficit, which may have topped 14 percent last year, by 10 percentage points in 2010 and 2011, NET Radio said. The station didn’t say how it got the information. Bonds and stocks rallied after EU Economic and Monetary Affairs Commissioner Olli Rehn said he is confident aid discussions will conclude in a few days. Greek 10-year bond yields fell to as low as 8.9 percent from 9.8 percent. The ASE benchmark general index jumped 7 percent, the most since December. National Bank of Greece SA soared 16 percent. “The financial support will give Greece sufficient breathing space from pressures of financial markets,” Rehn told reporters in Brussels today. “This is done not only because of Greece but for every euro member state and its citizens to safeguard financial stability in Europe and globally.” Merkel Pledge German Chancellor Angela Merkel yesterday pledged to step up efforts to overcome the crisis after the euro fell to the lowest in a year and S&P followed its Greek cut with downgrades of Spain and Portugal. Officials from the EU, the European Central Bank and the IMF, dubbed the “troika” by the Greek press, are in Athens working out details of the loan package that would provide about 45 billion euros this year. IMF Managing Director Dominique Strauss-Kahn told German parliamentary leaders yesterday that Greece may need as much as 120 billion euros over the three-year horizon of the deficit plan, German Green Party lawmaker Juergen Trittin said yesterday. Dimitris Daskalopoulos , the head of the Federation of Greek Industries, said the biggest employer group is prepared to support the government’s plans. “Our will is a given,” he said today after meeting with Papandreou. “Businesses can and will contribute. We can see better days.” Platform Papandreou is stuck between investors who want faster deficit cuts and voters and unions who are uncomfortable with further austerity measures. Elected in October on pledges to raise wages for public workers, Papandreou has been forced to cut salaries, curb spending and raise taxes to reduce a deficit that was more than four times the EU’s limit last year. That’s not enough for some investors. Borrowing costs for Greece, which has the second-highest debt ratio in the EU, have soared amid market concern that the country may default on its debt. The extra yield that investors demand to hold Greek 10- year bonds over German bunds exceeded 800 basis points this week. To contact the reporter on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net .

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Texas Instruments Forecasts Exceed Estimates on Demand for Semiconductors

April 26, 2010

By Ian King April 26 (Bloomberg) — Texas Instruments Inc. , the second- largest U.S. chipmaker, predicted sales and profit that topped analysts’ estimates, helped by demand for semiconductors used in industrial machinery, phone networks and cars. Second-quarter profit will be 56 cents to 64 cents a share on sales of at least $3.31 billion, the Dallas-based company said today in a statement . Analysts had predicted a profit of 53 cents a share and revenue of $3.23 billion on average, according to a Bloomberg survey. Texas Instruments is the biggest producer of analog chips, which go into everything from washing machines to supercomputers, making its earnings a broad indicator of demand for electronics. Last month, the company raised its first- quarter projections, citing a recovery in demand from customers that make industrial machinery. “The numbers we’re going to see out of them for the rest of the year are probably going to be pretty good,” said Doug Freedman , an analyst at Broadpoint AmTech Inc. in San Francisco. He has a buy rating on the shares, which he doesn’t own. After depleting stockpiles of parts last year, electronics makers are still struggling to get hold of enough inventory, Freedman said. Texas Instruments rose 19 cents to $27.35 in late trading. The shares , up 52 percent over the past year, advanced 49 cents to $27.16 at 4 p.m. on the New York Stock Exchange. ‘Very Strong Demand’ First-quarter profit rose to $658 million, or 52 cents a share, from $17 million, or 1 cent, a year earlier, the company said in the statement. Sales climbed 54 percent to $3.21 billion. Analysts had estimated profit of 51 cents a share and sales of $3.14 billion. The company had forecast profit of 48 cents to 52 cents a share on sales of $3.07 billion to $3.19 billion. The company got “very strong demand” in all of its end markets and regions, Chief Financial Officer Kevin March said in a telephone interview. Texas Instruments has improved its lead times — the gap between receiving an order and filling it — without an increase in cancellations, he said. Orders continue to exceed shipments, he said. “Cancellations remain unchanged and orders picked up even more,” March said. JPMorgan Chase & Co.’s Chris Danely and other analysts had expressed concern that electronics makers were stockpiling supplies, inflating chip companies’ earnings. Inventory levels for Texas Instruments and its distributors are “very lean,” March said today. Under Chief Executive Officer Rich Templeton , the company is leaving the market for digital signal processors that manage the radio functions in mobile phones — an area it once dominated. Qualcomm Inc. now leads in that field. Texas Instruments is focusing instead on analog chips, where it expects to win more orders and grow faster. The company ranked second to Intel Corp. among U.S. chipmakers in sales last year. To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

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Argentine Bonds Gain for Third Straight Day Before $20 Billion Debt Swap

April 13, 2010

By Gabrielle Coppola April 13 (Bloomberg) — Argentine bonds rose for a third day on speculation the country will restructure $20 billion of defaulted debt, paving the way for a return to global credit markets. The yield on Argentina’s 7 percent bonds due in 2015 fell 40 basis points, or 0.40 percentage point, to 11.12 percent at 3:24 p.m. New York time, according to JPMorgan Chase & Co. The bond’s price rose 1.45 cents to 83.70 cents on the dollar. President Cristina Fernandez de Kirchner is seeking to win bondholder approval of a restructuring offer for $20 billion of debt held out of a 2005 settlement. A successful debt exchange would allow the country to return to international debt markets and tap into growing demand for emerging-market bonds. The government will unveil terms of its exchange offer April 14 or 15, President Fernandez said last week. “There’s a lot of optimism that Argentina is finally looking to put this issue to bed, with the hopes that they are once again able to tap the debt market,” said Aryam Vazquez , an emerging-markets economist at Wells Fargo & Co. in New York. “It’s a very flush and happy-go-lucky climate for emerging- market activity. This is all part of that lower risk aversion trend, and Argentina certainly plays into that.” The proposed restructuring will include a payment with seven-year bonds of past-due interest, Economy Minister Amado Boudou said today. “The payment of past-due interest, unlike the cash payment made in 2005, will be with a 7-year bond,” Boudou said. “We are working so that the swap has the maximum level of acceptance and we are seeing a very good reaction.” ‘Substantial Participation’ Asked in an interview with Buenos Aires radio station Radio Mitre whether the country would recognize all past-due interest, Boudou said he was still working on the final details of the offer. “One of the questions early on was whether they were going to recognize the past-due interest,” said Jaime Valdivia , who manages $1 billion in assets for Emerging Sovereign Group in New York. “It’s an offer good enough for substantial participation in the deal.” Argentina’s peso rose 0.1 percent to 3.8769 per dollar, from 3.8787 yesterday. To contact the reporter on this story: Gabrielle Coppola in New York at gcoppola@bloomberg.net

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