retirement

Rabbi Shmuley Boteach: Will Banks and JP Morgan Chase Be More Ethical in the Coming Year?

December 24, 2010

Tis’ the season to be jolly. Er.. if you’re a Wall Street banker, that is, where billions in end-of-year bonuses are about to rain down like manna from heaven. Wall Street is the one place in America where the economic downturn has not reached. Over the holiday period flashy Ferraris will be fired up and driven off showroom floors. The Hamptons will emerge from a deep winter thaw, warmed by the fires of credit cards working at such a feverish pace that plastic will be hard-pressed not to melt. Oh yes, happy days are here again. If only the prophet Amos were alive to see it, he might have proclaimed, “Let champagne flow like a river; Don Perignon like a mighty spring.” King David would likewise have cheered, “Yay, though I walk through the valley of the shadow of unemployment, I shall fear no recession, for my government bailouts are with me… My cash runneth over.” OK, ok. So I sound a little bit envious. I confess. But only a little. I do not begrudge the success of my Wall Street brothers. Not because I have mastered jealousy but because I make a living counseling people whose lives are in crisis. And I’ve discovered that the only thing that buys happiness on this earth is a life lived as a blessing to others. Excessive consumption is naught by a manifestation of the black hole at our center and the human need to fill it with an endless supply of adult toys (OK, calm down. I mean, of course, the more respectable, if somewhat infantile, adult toys of the car, yacht, and plane variety). Not that there aren’t many Wall Street bankers who fill their lives with virtue rather than Hermes. Many of my former Oxford students run hedge funds and work on the street. The majority of them make money to give it away to the needy around the world and support their families in dignity. They reject conspicuous consumption, live faith-based lives, and are communally engaged. But they might just be the exception that proves the rule. There can be little doubt that the success of the banking industry is critical to the success of the overall American economy. But that success dare not be made off the backs of hard-working Americans. Let them Wall Street traders be paid a king’s ransom. Let them eat cake. But when government bailouts are chiefly responsible for their astronomical profits, then they better make darn sure that the spigot is not suddenly turned off for desperate homeowners who need modifications to stay in their homes. I used to have a much higher opinion of Wall Street and indeed, as I wrote above, many of my closest friends are bankers. But a series of unfortunate incidents soured me, nearly all of them with JP Morgan Chase and its subdivision Bear Stearns. I have earlier written of Bear Stearns’ losing about forty percent of my retirement savings and then trying to triple charge me with fees when another trader moved the money into mutual funds. Wow. You’d think that after everything my wife and I had been through they would at least not try and gouge me. I shared how an old and influential friend at the bank then told me that any attempt to recover the paltry $3900 I had requested, amid losses of tens of thousands, due to consequences of the triple-charging on the part of the young trader, would be labeled extortion. Bigger wow! If you complain they threaten you? Nobody likes to be threatened or bullied so I had no choice but to sue Bear Stearns. I have tried to settle the suit. Bear is offering a pittance. Still I indicated a willingness to accept the small sum to simply put the matter behind me. This was never about money but about a regular person showing Wall Street that they can’t simply push us around. But the draconian confidentiality terms Bear is demanding is making even a small settlement difficult. As a writer, broadcaster, and columnist, I talk about the state of the economy and the state of our banks as an important barometer of the overall health of our nation’s values. And it seems to me that rather than large institutions like Bear Stearns try to gag people from being critical, especially when it is the only remedy available to us given our weakness in taking on multi-billion dollar institutions, it is better to correct their inner culture to act fairly and ethically in the first place. The New York Times Magazine recently ran a cover story that seemed like a puff piece on JP Morgan CEO Jamie Dimon entitled, “America’s Least-Hated Banker.” (That’s what passes for a compliment for bankers today.) I would like to believe that he’s a good guy. Perhaps he is the genius they say he is (though I was startled to see writer Roger Lowenstein disclose halfway through the piece that “my mother is friendly with Dimon’s parents.” I kind of wondered why he was selected him to write the profile.) But to prove it, Dimon must demonstrate that he is changing the culture at Bear Stearns and JP Morgan Chase and that he gets that while it’s nice to make bucket loads of money and afford the luxuries of life, it’s even more important to uphold the highest ethical standards while doing so. Rabbi Shmuley Boteach is founder of This World: The Values Network, an organization dedicated to promoting universal Jewish values in the culture. The international best-selling author of 24 books, his most recent work is “Renewal: A Guide to the Values-Filled Life.” Follow him on Twitter @RabbiShmuley.

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END OF CHEAP CREDIT? Surge Of Money From Bonds Could Hurt Lending

December 24, 2010

NEW YORK (AP, Matthew Craft) — Americans are leaving bond mutual funds at the fastest rate in more than two years. U.S. investors pulled $8.6 billion out of bond funds in the week ended Dec. 15, the largest withdrawal since October 2008 when financial markets were in free-fall. They pulled an average of almost $3 billion every week since Nov. 23, according to the Investment Company Institute. Prior to November, money had been flowing into bond funds every week for nearly two years. “This is the real deal,” says Marilyn Cohen, founder of Envision Capital Management, which oversees $300 million in mostly fixed-income investments. If she’s right, the end of cheap credit is near. Interest rates would rise, which would ripple through the economy. It would become more expensive for cities, states and companies to borrow money to build schools, roads and expand their businesses. It would also cause the value of bond funds to fall, blindsiding Americans who thought they’d stashed their retirement savings in an investment that wouldn’t sink. Bond funds are creditors. They take cash from savers and lend it to corporations and governments in exchange for interest payments and promises that the cash will be returned at a certain date. If there’s less money to lend, borrowers need to pay higher rates to coax funds to buy their bonds. It follows the law of supply and demand. If there’s less of something, it pushes the price up. In this case, if the stream of money running into bond funds dries up, the cities, states and corporations that rely on them for financing will wind up paying more to borrow. That would hurt cash-strapped states like California and Illinois which can’t afford higher debt payments. It also means that Wal-Mart Stores Inc., Johnson & Johnson and other corporations will no longer be able to borrow money at the cheapest rates on record. IBM Corp. sold $1.5 billion worth of bonds in August at a rate of just 1 percent. With few exceptions, Americans have favored U.S. stocks over bonds since the early 1990s. The housing bust broke that habit. U.S. stock funds began bleeding cash in 2007 and bond funds began piling it up. That shift intensified during the financial crisis as people sought safer investments and bond funds began posting stronger returns. Banks and foreign governments made U.S. bonds a favored hiding spot during the financial crisis, knocking the yield on the 10-year Treasury note down to nearly 2 percent. The yield had been above 5 percent in June and July of 2007, before the onset of the Great Recession in December of that year. The embrace of fixed-income funds throughout the recession had many benefits, says Hans Mikkelsen, credit strategist at Bank of America-Merrill Lynch. The record $376 billion that flowed into the bond market in 2009 allowed corporations to refinance their debt at cheaper rates. Without it, Mikkelsen says, many companies would have defaulted. “It should have been the worst run of defaults we’ve ever seen, but instead it ended up being the shortest,” Mikkelsen said. Just as their safe and steady performance drew investors to bond funds, the recent rout in debt markets is scaring them away. In four of the past five weeks, Americans have yanked more money from bond funds than they invested, the only weeks this year that has happened. Nicholas Colas, chief market strategist at BNY ConvergEx, regularly checks the data tracking investment flows for any surprises. Watching the slow, steady drip of cash into them became tedious after a while. “Now it’s like when you see a car crash,” he says. “First you look and think, ‘Did that really happen?’ And then you check to see if everything is OK.” Even the world’s largest mutual fund has lost some appeal. Pimco’s $256 billion Total Return Fund, run by bond market guru Bill Gross, returned just 1 percent a month on average until November, according to Morningstar data. That month the bond fund lost 1.4 percent, its worst performance since September 2008. Investors pulled $1.9 billion from the fund in November, the first net withdrawal in two years. What spurred the change? It started with a sharp drop in Treasury prices in mid-November, which drove long-term interest rates up from near-record lows. That sent borrowing costs higher across the board because all U.S. debt markets take their cue from the Treasury market. Treasury prices had been climbing since late August on hopes that a major bond-buying program by the Federal Reserve would prevent long-term interest rates from rising. But then a number of economic reports started to raise hopes that the economy was strengthening. That led investors to start pulling money out of Treasurys. The big blow came after President Barack Obama announced a compromise with Senate Republicans to extend tax cuts for two years and unemployment benefits for another year. Economists raised their forecasts for economic growth, and bond traders began bracing for even wider federal budget deficits. Both spell trouble for bonds. The tax package, signed into law last Friday, is expected to cost $858 billion. “All that talk from Washington about wanting to keep budgets tight just went out the window,” Colas said. The real danger, analysts say, is if the selling starts to feed on itself, creating a steep jump in long-term interest rates. Investors ditch bonds, pressing prices down and causing more investors to flee. “Selling begets more selling,” Cohen says. “The psychology of greed and fear never changes.” Under the worst-case scenario, long-term rates shoot higher and derail the recovery. If they rise gradually without choking off economic growth, some think the money flowing out of bond funds will find its way into stocks. That hasn’t happened yet. U.S. stock funds are still seeing an average $2.3 billion in net withdrawals a week. Stock funds have two important trends running in their favor. — Stocks became less volatile right after the bond market started to weaken in November, and major indexes have been on a steady climb. Analysts say investors may wind up returning to stocks for many of the same reasons they piled into bonds: a sense of security and greed. — Studies show people tend to follow winners. This “return chasing” benefited bond funds when they trounced stocks, and it may help lift stocks next year, Mikkelsen says. The Standard & Poor’s 500 index has returned 15 percent including dividends over the past year and has notched two-year highs day after day this month. On Tuesday, it hit the level it traded at just before Lehman Brothers filed for bankruptcy in September 2008.

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Bob Meighan: Year-End Tax Savings Tips

December 16, 2010

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

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Credit Rating Agencies’ Reports Ruled To Be Protected Speech

December 13, 2010

Ratings by Moody’s Investors Service Inc., Standard & Poor’s and Fitch Ratings Ltd. described as “wildly inaccurate” in a $1 billion lawsuit are protected speech, a California judge said in a tentative ruling. Judge Richard Kramer in San Francisco state court said yesterday that the companies’ ratings of three structured investment vehicles that the California Public Employees’ Retirement System lost money on are a form of speech about an issue of public interest that is protected under a state law designed to fend off cases meant to chill public debate.

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Terry Newell: "Good Enough for Government Work"

December 5, 2010

If you were seriously ill and could choose to go to a private hospital or a government-run veteran’s hospital, which would you pick? If you picked the former, you could have just bet your life on the wrong choice. The veteran’s health system outperformed all other sectors of the American health care system in 294 measures of quality in a 2004 RAND Corporation study. Last year, on the prestigious American Customer Satisfaction Index (ACSI), run by the University of Michigan, the Veterans Health Administration civilian health and medical program got a score of 88 (out of 100), compared to the non-government hospital average of 73. An anomaly? Not to be found in any other sector of the economy? Consider the following ACSI scores – and before you do, note that the ACSI model considers a wide range of service quality factors, from the courtesy and professionalism of customer service to the clarity and accessibility of information, the ease and timeliness of work processes, and the ease and usefulness of online assistance. Remember, all these data are obtained by an independent (i.e. non-government) source talking directly to customers about how they rate their customer experience: • Mercedes-Benz (86) receives a lower score than the Pension Benefit Guaranty Corporation (88) • Nordstrom (83) receives a lower score than the Railroad Retirement Board (88) • Nike (79) receives a lower score than the Federal Citizen Information Center (84) • GE (81) receives a lower score than the U.S. Citizenship and Immigration Services “Welcome to the United States” guide (86) OK, but in the new online economy, government is way behind, right? Wrong. Here are some ACSI score comparisons for Websites: • Google.com (80) vs. the Free Application for Federal Student Aid (www.fafsa.ed.gov) (88) • Wikipedia.org (77) vs. the National Library of Medicine (http://MedlinePlus.gov) (86) • Facebook.com (64) vs. IRS E-file (79) • USAToday.com (82) vs. the Social Security Retirement Estimator (90) Naturally, not every government organization performs better than every private sector organization. Government does have its duds, and the government-wide average ACSI score is seven points lower than the private sector average (though when government is compared to just the service sector of the private economy, this difference mostly evaporates). But government has its stars too, and they rarely get attention on the front pages of magazines, newspapers, or in the broadcast media. It’s not surprising then, that in a Washington Post poll conducted in late September 2010, 36 percent responded that “the quality of employees in the federal government is generally lower than the quality of employees who work in the private sector.” In the same poll, 49 percent said federal employees “work less hard than employees with similar jobs in private business”. What citizens say about government in the abstract is often totally different than what customers say about government when they actually use its services. This may be worth remembering as the nation mounts a new attack on government and government workers. The epithet we are used to hearing – “good enough for government work” – will be heard again, and worse. It may also be worth remembering, then, that in World War II, when that phrase was created, it meant that a product met the highest standards of quality and would not be accepted by Uncle Sam if it did not. Yes, many say, but government is so big, unruly, and thus inherently incompetent. Sure, there may be a few good government programs out there, but overall, why can’t it be as service-oriented and as customer-friendly as our local WalMart? WalMart gets an ACSI score of 71, exactly the same score as the U.S. Postal Service. Come to think of it, most of us really don’t want to lose our local post office as we cut back government. There may be a message there.

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

December 2, 2010

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

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Statement From the Blackfoot Telephone Board of Trustees on the Retirement Announcement of District 6 Trustee, Bill Teague

November 22, 2010

MISSOULA, MT–(Marketwire – November 22, 2010) – Blackfoot Telephone Cooperative (Blackfoot) Trustee Bill Teague announced his retirement effective November 1, 2010. The Board accepted the news with regret — and with gratitude for Bill’s 27 years of remarkable service to the company, their employees, and stakeholders.

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Douglas M. Branson: Women CEOs in the Fortune 500 — A Single Step Forward, Four Steps Back

November 18, 2010

My book, The Last Male Bastion – Gender and the CEO Suite at America’s Public Companies (Routledge 2010), appeared just last March. The book featured profiles of the 21 women who actually have reached the corner officer at large U.S. public companies, including references to the 22nd (Ursula Burns at Xerox). Ms. Burns took office after the manuscript had gone to print. There have been several twists and turns since that time, with the overall effect being a distinct setback. The total number of women CEOs has fallen, from 15, or 3% of the Fortune 500, which represented the high point, to 12, then in September back up to 13, then most recently back to 12, or 2.4%, where it now rests. When in 2009 Ursula Burns took office it was a historic moment, not because the number of women in office had reached a new high. It hadn’t: Burns replaced another woman, Anne Mulcahy, who had been Xerox’s CEO since 2002. The female CEO number stayed at 15. What was historic was that Ms. Burns became our first African American woman CEO. Very rapidly, though, three women CEOs resigned their positions. Mary Sammons, CEO of Rite Aid, Camp Hill, Pennsylvania, resigned, perhaps be she was tired. Once a high flier in the 1990s stock market, Rite Aid has fallen further and further behind the industry leaders, CVS and Walgreens. For a time the stock has flirted with a price under $1.00, which could mean delisting from the New York Stock Exchange. Sammons and her team seemed never able to pull the company out of its tail spin. Christina Gold, CEO of Western Union, re-located to outside Denver, stepped down later this spring. She simply retired. Then, in early summer came word that Brenda Barnes, CEO of Sara Lee, Downer’s Grove, Illinois, herself a widely publicized corporate CEO, had a severe stroke in her mid-50s. In June she took a leave of absence, followed in August by her resignation. Kohlberg Kravis & Roberts (KKR), the buyout firm has expressed interest in acquiring Sara Lee and taking the company private but, initially at least, Sara Lee’s management rejected the overtures. So, quite rapidly, the number of women CEOs had dropped from 15 to 12. The number rebounded slightly in late September when Campbell’s Soup, of Camden, New Jersey, announced the selection of Denise Morrison as CEO, succeeding Douglas R. Conant. Ms. Morrison is a food industry veteran, who rose through jobs at Proctor & Gamble, Pepsico, Nestle S.A., Nabisco, and Kraft Foods, before joining Campbell’s. She also evidences a common pattern of women who have made it to the top. They side stepped from one company to another, often several times in their careers, before they reached senior management. Only Anne Mulcahy at Xerox and Susan Ivey at Reynolds America are female CEOs who spent most all of their careers with a single company. The number of women on corporate boards of directors in the U.S. has been basically flat for 5 years now, according to Catalyst, the leading women’s advocacy organization. Catalyst, too, inflates the number, counting the number of directorships which are held by women as the number of female directors. The latter number is significantly less, as numbers of women, many of them prominent, allow themselves to be token, or corporate governance ornaments, serving on 4, 5, 6 or 7 corporate boards. The number of women trophy directors has rapidly increased as of late whereas the species has all but disappeared among men. Then, most recently, in late October, 2010, Susan Ivey at Reynolds America announced her retirement from the CEO position. Her stepping down is quite confounding, as she is only 51 and her leadership at RAI has been unparalleled. She led the company into smokeless tobacco, where future growth will be. She resurrected defunct premium brands, marketing them with premium panache but non-premium prices. The stock’s price hovers near an all-time high and the dividends are robust, to say the least. So, in the immediate year almost past, we have had one new appointment (Morrison) and four resignations (Sammons, Gold, Barnes and Ivey); one step forward, four steps back.

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Dan Solin: WSJ Misses the Point on 401(k) Fees

November 17, 2010

In an informative article , Eleanor Laise at the Wall Street Journal laments the limited progress the U.S. Department of Labor has made with its new rules for 401(k) fee disclosure. Ms. Laise bemoaned the lack of transparency concerning 12b-1 fees, which she correctly described as “the murkiest of mutual-fund expenses.” Unfortunately, the thrust of her article misses the forest for the trees. Why focus on disclosing how bad the system is, rather than fixing it? Full disclosure of 401(k) fees, while a step in the right direction, will do little to remedy a system that practically insures most Americans will retire, if at all, with a sharply diminished quality of life. Here’s what real reform would entail: 1. Require all advisers to 401(k) plans to be “real” fiduciaries . Technically, this would mean their agreement to serve as as “ERISA 3(38) fiduciaries”. They could have no conflicts of interest and would be required to act in the best interest of the beneficiaries of the plan. The advisers would confirm their fiduciary status in a written agreement and would agree to accept 100% of the liability for the selection and monitoring of investment options in the plan. 2. Abolish revenue sharing : The practice of accepting kickbacks from fund families as the price of admission to a 401(k) plan’s investment options destroys both the appearance and the reality of objective investment advice. Plan advisers should be required to select funds based on merit alone, and not on the size of the kickback. 3. Require all plans to have at least five pre-allocated, globally diversified portfolios of low cost stock and bond index funds, passively managed funds or Exchange Traded Funds in the plan . The portfolios would be of varying risk levels, ranging from conservative to aggressive. What sense does it make to provide plan participants with a dizzying array of investment options? Most employees have no idea how to put together a risk adjusted portfolio suitable for them. The only reason most of the funds in a typical plan are high expense ratio, underperforming, actively managed funds is because those funds generate the maximum revenues for the fund families and the advisers. Returns of plan participants could be increased by as much as 200% if low cost, indexed based portfolios were substituted for these funds. That’s the way the massive $240 billion 401(k) plan for government employees is structured. It’s difficult for most Americans to understand why their congressional representative have a better plan than theirs. Those employees who persist in the discredited belief they can “beat the markets” could have the option of a directed brokerage account where they could freely gamble with their retirement funds. 4. Require advisers to plans to provide real investment advice to plan participants. Currently, most advisers “educate” but will not provide “investment advice” to plan participants. Why? Because they are concerned about liability — as they should be under the present system. An adviser who is providing the options I am recommending has nothing to fear. His advice is based on reams of academic data. Advisers collect a hefty fee for their services. If they won’t stand behind their advice, what value are they to the plan participants? Of course, fees should be transparent and unbundled. They should also be low. Low fees correlate directly with higher returns. But the fee tail should not wag the 401(k) dog. The entire system is broken and needs to be fixed. Taking baby steps is not the answer. The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog. Here is the trailer for my new book, Timeless Investment Advice .

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NYC Pension Funds Want Bank Foreclosure Audits

November 16, 2010

NEW YORK — The trustees of New York City’s government pension funds asked the directors of four major banks Tuesday to play a bigger role in policing company foreclosure practices. City Comptroller John Liu said the retirement system owns about $1.77 billion worth of stock in Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co. and Bank of America Corp. – an investment that could take a hit if the banks mishandle the mountains of bad home loans facing the industry. Liu said the trustees have become concerned in recent months about a variety of reported problems in the way banks are handling foreclosures. Saying the problems suggest “a larger systemic failure,” Liu said the trustees have filed a shareholder proposal calling for the banks’ directors to perform independent audits of internal controls over the foreclosure process and report back by Sept. 30. Among other things, the review calls for an examination of whether the banks have created “perverse” incentives that lead to houses being seized even when a loan modification might be better for everyone involved. “We raised concerns with the banks in July that misaligned incentives, inferior customer service and repeated requests for paperwork were undermining the loan modification process and leading to unnecessary foreclosures for homeowners,” Liu said in a statement. Bank of America said the resolution would be reviewed, along with other shareholder proposals, as part of the process leading up to the filing of the company’s proxy statement in advance of its annual meeting. Spokespeople for the other three banks declined to comment. Last month, several major banks temporarily halted most or all of their foreclosures nationwide after allegations that signatures were forged and documents weren’t checked properly in thousands of cases. Bank of America suspended foreclosures in all 50 states, while JP Morgan Chase halted them in 40 states. Lenders repossessed 909,000 homes through the first 10 months of the year and are on pace to take back more than 1 million homes this year.

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James Kwak: Dear Mr. President, Please Don’t Extend The Bush Tax Cuts

November 15, 2010

There have been ( admittedly unclear ) indications from your administration that you may accede to the Republicans’ demand to extend the Bush tax cuts for everyone. I urge you not to do this. The question is: Is it better to extend the tax cuts for everyone or for no one? The answer is to extend them for no one. The Bush tax cuts have always overwhelmingly benefited the rich, not the middle class, and that is no less true today than when they were enacted. They were bad policy then and they are bad policy today. Extending the tax cuts would dramatically enrich the wealthy relative to everyone else. 65.5 percent of the total benefit would go to the top quintile by income, 26.8 percent to the top 1 percent, and 14.7 percent to the top 0.1 percent.* Leaving aside discredited, Reagan-era theories about trickle-down economics, there are two main arguments for extending the tax cuts: 1. You shouldn’t “increase”** taxes during in tough economic times. It is true that tax increases would have a modest first-order negative impact on economic growth. But that impact will be small (per dollar of net fiscal impact) for exactly the same reasons that tax cuts are a poor stimulus. The multiplier for tax cuts is far lower than the multipliers for virtually every other type of government spending, especially aid to state and local governments. In particular, the economic impact of tax increases is smaller when they go to the rich rather than the middle class, because the rich consume a smaller portion of their marginal income. In addition, letting the tax cuts expire would have positive second-order effects because it would improve the government’s fiscal balance, which is widely (though perhaps incorrectly) perceived as a source of risk to the economy. Now, it might be preferable to extend the tax cuts only until the economy recovers and then let them expire. But that is probably politically infeasible, and in any case creates the risk that, at that point, Congress would then make the tax cuts permanent. 2. The tax cuts will help the middle class. Yes, but they won’t help very much. If the tax cuts are extended, the average benefit for tax units (roughly speaking, households) in the middle income quintile will be $880 per year.*** By contrast, tax units from the 80th to 99.9th percentile will gain $6,094 each, and the top 0.1 percent–those with over $2 million in annual income–will gain $339,473 each. Now, $880 means a lot to a middle-class family, and I will no doubt be called heartless for saying we should extend the tax cuts for no one rather than everyone. But letting the tax cuts expire will be better for the middle class, for one big reason–actually, 3.7 trillion reasons. $3.7 trillion is the figure that is generally cited as the projected ten-year impact of the Bush tax cuts. Letting the tax cuts expire will eliminate $3.7 trillion from the projected national debt with one stroke. Why does this help the middle class? Because Social Security and Medicare are currently under assault. The national debt is being used as a bogeyman to frighten politicians (and the people who elect them) into agreeing to significant reductions to Social Security and Medicare. Yet middle-class households need Social Security and Medicare far more than they need $880 of current-year income. Our country faces the very real threat of a retirement security crisis, since saving via 401(k) plans is shockingly low; in 2007, the average retirement account balance for a household where the head of household was between ages 55 and 64 was only $63,000 ( Federal Reserve Survey of Consumer Finances , Table 6). That figure is surely lower today, after the financial crisis. And your administration knows very well the problem of health care cost inflation, having done more to attempt to solve this problem than any other administration, ever. The single most important thing you could do to protect the retirement and health care security of the vast majority of Americans would be to let the tax cuts expire. The CBO (full document, Table 1-7) projects the cost of those tax cuts in 2020 at $368 billion, or 1.6 percent of GDP. The tax cuts mean the difference between a federal deficit of 3.0 percent of GDP (probably sustainable) or 4.6 percent of GDP (probably unsustainable). Removing that enormous wedge from the structural deficit would reduce the current pressure for “entitlement reform” and give the cost-saving provisions in your health care reform bill time to work. In short, letting the tax cuts expire would be better for the middle class (and even more so for the poor–the lowest quintile would gain only $45 from extension), and for the country, than extending them for everyone. Since you have a reputation for putting the welfare of the country before your political fortunes and those of your party, I hope this should be enough to convince you. But I believe this would also benefit you politically. If the American people want to know why their taxes will be higher in 2011 than 2010, this is what you can say: “We face a grave threat to our nation’s future prosperity. That threat is a ticking time bomb set by my predecessor’s administration. In 2001 and 2003, my predecessor pushed through enormous tax cuts for the very wealthy, using small tax cuts for the middle class as a fig leaf. Instead of being honest about the impact this would have on our national finances, his administration timed the tax cuts to expire on December 31, so they could pretend they were smaller than they actually were. “The Republicans want to let this time bomb explode. They want to make these tax cuts for the wealthy permanent, meaning that families making more than $2 million would save $300,000 in taxes, while ordinary families would save less than $1,000. This is at a time when our governments–federal, state, and local–lack the resources necessary to provide basic services to our citizens, secure our borders, educate our children, provide health care to the elderly, and invest in our economy. “My proposal is to extend the tax cuts for the middle class, but not for the wealthy. The Republicans, who control the House of Representatives, insist on permanent tax cuts for the rich–tax cuts that load debt onto our children and grandchildren for decades to come. They are willing to sacrifice our future prosperity so that millionaires can save hundreds of thousands of dollars. “I refuse to force future generations to pay for our own failure to make hard choices. I refuse to allow an enormous hole in the national budget that will threaten the long-term health of Social Security and Medicare. Because this is the price that the Republicans are demanding that I pay in order to extend the middle class tax cuts, all of the tax cuts will expire on December 31–under the law passed by the Bush administration.” I’m sure your speechwriters, pollsters, and strategists can come up with something better (and didn’t you once say that you were a better speechwriter than your speechwriters?) than I came up with while lying in bed last night. But come up with something. * All figures, unless otherwise noted, are from the Tax Policy Center . These figures also assume extension of the AMT patch. Note that these figures exclude the impact of making permanent the repeal of the estate tax (a permanent repeal is assumed in both scenarios); including that impact would skew the benefits even more heavily toward the rich. ** Of course, it is President Bush and the 2001 and 2003 Congresses that are increasing taxes on January 1, 2011. *** The actual figure is probably slightly less than $880, since the Tax Policy Center’s analysis also includes extension of the AMT patch, so some of the $880 is due to the AMT patch, and some of it is due to extending the Bush tax cuts. Extending the AMT patch does not benefit the very rich (since they are above the AMT threshold in any case), so all of their benefits are due to extending the Bush tax cuts. Update: After The Huffington Post featured this post, I realized I made a mistake in the fictional speech. The Republicans don’t control the House yet, so theoretically the Democrats still have majorities in both chambers. But they still face the Party of No in the Senate, so practically speaking the Democrats cannot pass Obama’s plan on their own. I suppose it is possible they could use reconciliation to get past the filibuster, but having just suffered a crushing loss in the midterm elections, the democratic legitimacy for such a tactic would be questionable at best.

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Richard (RJ) Eskow: Simpson/Bowles: A Predawn Raid on the Middle Class

November 11, 2010

Today the Presidential Deficit Commission’s co-chairs released a radically right-wing budget proposal. They acted without any prior announcement, just three weeks before the entire Commission was scheduled to deliver its collective report. Consider it as a sneak attack on the middle class, a pre-dawn raid on the American dream. Many things can and will be said about this draft proposal, but first and foremost it must be considered an admission of failure. Erskine Bowles and Alan Simpson were asked by the President to lead a commission that was to agree on a set of proposals most of its members could endorse. This proposal is their admission that they’ve failed, and it should be read with that failure of leadership in mind. It’s also important to remember that this is not an isolated act. The release of their proposal today was the culmination of a highly coordinated and extremely well-funded assault led by deficit hawks willing to harm our already-weak economy in order to cut government, and who would slash important programs like Social Security and Medicare to advance their agenda. And the timing of this proposal was no accident. Simpson and Bowles know they don’t have the 14 votes they need to issue a report. Releasing this proposal may be a desperate attempt to pressure some of their Commission own members. Or they may be trying to deliver some “shock and awe” by issuing a proposal so extreme that any subsequent package of cuts, no matter how unfair, will seem reasonable by comparison. Whatever their motives, the President who appointed this Commission is now in an ideal position to reject their conclusions. For one thing, endorsing them would violate his campaign promise not raise the retirement age or to cut Social Security benefits. (Check it our here .) Instead he should reiterate his argument that we need to reduce runaway health care costs, not cut or cap Medicare benefits, if we want to fix the deficit. As for Simpson and Bowles, this attempted end run around their own Commission shows they’ve failed to carry out the mission he gave them. It would have been more honorable if they had simply resigned. Since they haven’t, the President should look elsewhere for good ideas. Because of the covert way this was done, only their ideological allies were given a preview of the proposal. But an initial reading makes it clear that their agenda is a radical upward redistribution of national wealth and resources, with budget policy as the vehicle and “deficit reduction” as the rhetorical smokescreen. The bald guy says everybody should get a haircut It’s the perfect metaphor for this proposal: The cue-ball-headed Mr. Simpson is proposing an “across-the-board ‘haircut’” for public programs while saying absolutely nothing about Bush’s tax cuts, a budget-busting bonanza for the ultra wealthy that Republicans are pledging to defend at all costs. Their proposal calls for great sacrifices from the elderly, college students, and veterans. Surely, people will say, a plan that asks so much of those in need must also call for increased taxes on the wealthiest Americans. After all, their tax burden will be lower than it was for most of the 20th Century, even if the Bush cuts are allowed to expire. So they’ll share in the sacrifice too, right? Nope. When it comes to asking the super rich to pay their fair share, these deficit hawks suddenly go silent. If these Commissioners lack the political will to call for rolling back the Bush tax cuts, they should go back to Wyoming and North Carolina. The US economy and the global economic system are still struggling to recover from the worst recession since the 1930s. The nation urgently needs more jobs and increased economic growth. Instead the co-chairs have laid out a reckless set of proposals that would impose crippling austerity on the US government precisely when we need a strong increase in public investment. This plan is a recipe for pushing the economy into another recession. In the past, Bowles and Simpson have given lip service to the reality that any spending cuts must wait until we’ve achieved a strong economic recovery and sustained growth. But the document they released today would send the economy right off a cliff. They’re proposing major cuts to public spending that start in 2012, when most economists expect the economy will still be weak and fragile. Even if your only goal is a balanced budget, that’s a bad idea. A smart deficit hawk would first work to create jobs, increase income, and expand business activity, all of which reduce deficits in the long run. These are not smart deficit hawks. Co-Chairs Simpson and Bowles acknowledge that Social Security contributes nothing to the Federal deficit. That doesn’t prevent them from pushing cost-of-living changes that would harm current retirees, along with future increases in the retirement age that would reduce benefits even more for those who retire in the years to come. The Campaign for America’s Future just conducted election day polling which found that strong majorities of Americans – including Tea Party supporters – strongly oppose the cuts they’re proposing . Most voters of all political persuasions prefer eliminating the cap that limits the taxes wealthy individuals now pay for Social Security. The truly ‘bipartisan’ solution, embraced by Democrats and Republicans alike, is to lift the tax cap while protecting benefits. That’s the exact opposite of what Simpson and Bowles have proposed. At a time when most Americans are worried about their jobs and everyone has just taken a huge hit to their retirement savings, any politician who embraces these proposals is committing political suicide. And any leader who has the public’s best interests at heart will understand that these ideas must be rejected. Roger Hickey is Co-Director of the Campaign for America’s Future. He was a leader of the campaign to stop the privatization of Social Security, and he is a founder and member of the steering committee of Health Care for America Now. In the late 1980s he and Jeff Faux created the Economic Policy Institute. Richard (RJ) Eskow is a Senior Fellow with the Campaign For America’s Future. He is also a former executive with experience in health care, benefits, and risk management, and a policy consultant who has worked in the United States and in over 20 countries.

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Jerry Chautin: Starting a Business Begins With Exit Planning and a Buy-Sell Agreement

October 27, 2010

Charlie Spence’s advice to prospective small-business owners is to visualize your exit before you start. But even if you are already in business, it is not too late plan your exit. Spence is a financial adviser with Edward Jones Investments in Murphy, N. C. and I caught up with him at a workshop in this small, Western, North Carolina, Appalachian Mountain town. “At some point, undoubtedly you will exit (your business),” he says. “And that time could be rather soon for unexpected reasons, in the distant future, or sometime in between.” But unexpected occurrences can also happen to your business partner and you need to be prepared. “Two ways business plans for joint owners can become derailed is by either the death or disability of a partner,” Spence says. “The transition after a death can be made much easier with a buy-sell agreement .” My brother-in-law had a buy-sell agreement when he unexpectedly died leaving behind a wife and five children. His business partner was also left behind to fend for himself. A buy-sell agreement is a critical first step in exit planning. It should be one of the first requirements when starting a small business with multiple owners. Without one, my brother-in-law’s wife would have inherited his half of the business. In that instance, she could have taken his place in the company, whether or not his partner was pleased with that arrangement. Alternatively, she could have sold her inherited portion to an unqualified stranger with the chance of destabilizing the company. Instead, the buy-sell agreement mandated the purchase of life insurance to cover both partners. Their spouses were the beneficiaries and the tax-deductible premiums were paid by the business. So when my brother-in-law passed away, his wife got the insurance benefit. It turn, she was required to sell her inherited interest in the company to the surviving business partner for the amount of the insurance proceeds. Disability insurance works in a similar fashion if a business partner becomes disabled. In that event, the insurance pays off so that the disabled partner continues to have income. It protects his or her family from experiencing financial hardship during that time. “In the case of a partner’s disability, disability insurance would help replace income and protect the family of the disabled from experiencing financial hardship during that time,” Spence says. Additionally, disability of a partner or key salesperson can adversely affect the revenues of a small business. To protect the company’s cash flow, insurance policies can name the business as the beneficiary so that the income stream continues. But exit planning is also for business owners who are in good health and envision a comfortable life in retirement. More specifically, it is designed to help business owners save and invest their earnings while deferring income tax payments until they retire. “One day we all hope to retire and the earlier we plan for that day the more likely it will take shape as we hope,” Spence says. Exit planning is “to protect themselves, as much as possible, from taxes and inflation, and to build a retirement nest egg.” Retirement plans also offer benefits to the employees. It helps companies attract and retain them. Yet, “workers in small firms with fewer than 100 employees are much less likely than larger businesses to have a retirement plan available to them,” according to a study by the U.S. Small Business Administration’s Office of Advocacy . “Nearly 72 percent of workers in small companies have no retirement plan available.” The study says that about 58 million workers do not have access to any type of retirement plan through their place of work. But even when a company-sponsored retirement plan is offered, “20 million workers do not participate.” According to SBA’s Susan Walthall, the study is to ensure business owners and their employees “plan and save adequately for their retirement.” The study blames the cost of setting up and running a retirement plan as reason that many small businesses do not offer them. Importantly, however, the cost varies with the complexity of the plan that you choose. And some simple plans are cost effective. To help you structure the best retirement plan for your circumstances, a financial adviser or your accountant can help. Additionally, an attorney who specializes in pension plans may be required to set it up and keep it current. For more complicated plans, an actuary will be needed. To estimate how much you need to save for a comfortable retirement, check out MSN’s retirement calculator online. Jerry Chautin is a volunteer SCORE business counselor, business columnist and SBA’s 2006 national ” Journalist of the Year ” award winner. He is a former entrepreneur, commercial mortgage banker, commercial real estate dealmaker and business lender. You can follow him at www.Twitter.com/JerryChautin

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Stephen M. Wing: Workplace Flexibility: Ensuring Success for the 21st Century

October 27, 2010

Corporate Voices was pleased to participate in the Women’s Bureau’s National Dialogue on Workplace Flexibility in Dallas on October 20. The Dialogue marked the first in a series that the Women’s Bureau will organize around the country to discuss how employers can use flexibility to empower their employees and their families, and to become more competitive in the global economy. The Dialogue on Wednesday was held in the Dallas Fort Worth area-an area with the highest growth rate of small businesses in America. There, small and medium sized businesses, advocates, researchers, business associations, union leaders, government agencies, and employees gathered to discuss the challenges and successes of making flexibility work for small businesses. This was an especially timely Dialogue, occurring during National Work and Family Month, when we are shining the spotlight on what role corporate and federal policy can play in helping the millions of Americans that continue to struggle to manage the dual demands of work and family. Sara Manzano-Diaz, director of the Women’s Bureau, Tina Tchen, director of the White House Council on Women and Girls, and Secretary of Labor Hilda Solis gave opening remarks. They highlighted flexibility as a critical recruitment, retention, and talent development tool that businesses can use to support workers throughout all phases of their lives. Corporate Voices approaches flexibility in much the same way- we take a life-cycle approach to flexibility, recognizing that it enables new mothers to continue nursing , working mothers and fathers to take care of their families, students to work while continuing their education, and the elderly to continue working while enjoying their retirement. We also recognize that flexibility can support diversity in the workplace by empowering women, minorities, working learners, and the elderly. Speakers noted that small businesses are in a unique position to offer a culture of flexibility to support these groups, especially small businesses owned and operated by women. They also noted that often times when flexibility is available, it is modestly used, however still yields a positive impact. Another main theme discussed during the breakout sessions was the business imperative for flexibility , and the value of measuring flexibility’s impact on the business bottom line. Kathleen Wu, partner at Andrews Kurth LLP and one of the main speakers during the plenary session, said, “You measure what you value, and you value what you measure.” This sentiment was echoed by Ted Childs, Jr., principal of Ted Childs, LLC, during his closing remarks when he recounted the value of quantifying the positive business benefits that flexibility offers by helping to retain and motivate top talent. Corporate Voices, in conjunction with its partner companies, has published business research documenting the quantifiable business impacts of flexibility, as well as research showing that it works well with an hourly workforce . Especially for small businesses with limited capital, flexible work arrangements offer a cost-effective way to engage workers and enable them to balance the dual demands of work and life. Yet another main theme was the complexity of workplace flexibility, what it means to different employers and workers, how it should be implemented across different industries, how it can be implemented while still ensuring a small business’ compliance with the Fair Labor Standards Act, and what public policies can support flexible work arrangements . The Dialogue in Dallas created the opportunity for many stakeholders to exchange valuable viewpoints and experiences, yet much is left to be done in terms of expanding the knowledge and awareness of the positive business and employee benefits of flexibility. Corporate Voices looks forward to helping expand this awareness through its national workplace flexibility campaign , in conjunction with the Women’s Bureau’s Dialogues, now being planned through June 2011. Corporate Voices’ national workplace flexibility campaign seeks to create a broader awareness of the positive impact workplace flexibility can offer to workers and to the business bottom-line. It will create the forward momentum critically needed to expand workplace flexibility within the private sector. For more information on how to get involved in this campaign, please visit: CorporateVoices.org/our-work/flexcampaign .

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Richard Barrington: The 10 Best States for Retirement (PHOTOS)

October 26, 2010

“Best of” lists are usually based on subjective points. When choosing our 10 best and worst states to retire, we went with the objective. Earlier this week, MoneyRates.com published a list of the 10 worst states for retirement . This list was based on a combination of quantifiable factors including: Economics (factoring in cost of living, unemployment, and average state and local tax burden) Climate Crime rate Life expectancy Now, the good news. MoneyRates.com has compiled a list of the 10 best states for retirement. You’ll find the MoneyRates.com list is not all geared to one set of priorities — it isn’t, for example, a list of 10 warm-weather states — but instead should have something for everybody. Some of the choices might surprise you, but when you look over the criteria, you can decide which states have the most appealing characteristics for your tastes. Then join the discussion on the best and worst states for retirement on the MoneyRates.com blog. The original article can be found at MoneyRates.com: 10 Best States for Retirement PHOTOS: Data sources: ACCRA Cost of Living Index, the Bureau of Labor Statistics, the Tax Foundation, the National Oceanic and Atmospheric Administration, MSNBC, the U.S. Census Bureau, Bloomberg Businessweek

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French Senate Passes Pension Cuts To Raise Retirement Age

October 23, 2010

PARIS — Under pressure from the government, the French Senate voted Friday to raise the retirement age from 60 to 62, a victory for President Nicolas Sarkozy after days of street rage, acrimonious debate and strikes that dried up the supply of gasoline across the country. The vote all but sealed passage of the highly unpopular measure, but it was unlikely to end the increasingly radicalized protests. The coming days promised more work stoppages and demonstrations by those who feel changing the retirement age threatens a French birthright. Sarkozy made overhauling the money-losing pension system a centerpiece of his project to modernize France. Undaunted by weeks of strikes, he ordered measures to unblock fuel depots and refineries to get gas flowing again to desperate motorists. “History (will remember) who spoke the truth,” Sarkozy declared during a visit Friday to a factory in central France. “What do you expect of a president? That he tells the truth and does what must be done.” With about a quarter of gas stations on empty – down from a third earlier in the week – motorists have been forced to reinvent their lives, particularly at the start of a school vacation period Saturday. Hours before Friday’s vote, riot police forced the reopening of a strategic refinery to help halt crippling fuel shortages. The impact on the crucial energy sector was an ominous specter for whole sectors of the economy. Employment Minister Laurent Wauquiez said this week that 1,500 jobs have been lost daily since the strikes began in earnest on Oct. 12. Friday’s vote came after some 140 hours of debate, with senators casting ballots by hand into a large green urn, approving the bill 177-153. The measure is expected to win final approval by both houses of parliament next week. Sarkozy’s conservative government cut short the debate via a constitutional article that accelerates the process – and gives the government final word on which of more than 1,000 amendments will get into the bill. He accused strikers of holding the French and their economy “hostage.” Speaking before the Senate vote, Labor Minister Eric Woerth said the day will come when opponents of the change “will be grateful to the president, to the government and the parliamentary majority for having had the courage to fully assume their responsibilities.” Leftist critics called the move a denial of democracy by an increasingly confrontational president. “No, you haven’t finished with retirement. You haven’t finished with the French,” said Socialist Sen. Jean-Pierre Bel, alluding to an apparently unflagging determination by unions, now joined by students, to keep protests alive – even through the upcoming week of school holidays. Students planned to block schools Tuesday, and unions scheduled strikes and protests for Thursday and again Nov. 6. Sarkozy says overhauling the pension system is vital to ensuring benefits for future generations. Many European governments are making similar choices as populations live longer and government debts soar. But French unions say the minimum retirement age of 60, in place since 1982, is a hard-earned right and maintain the working class will be unfairly punished. Many fear it is also a first step to dismantling an entire network of benefits, including long vacations and state-subsidized health care, that make France an enviable place to work and live. Guy Fischer, a Communist senator, denounced the pension overhaul as “brutal, unjust and inefficient.” Like other critics, he said that under the proposal, 85 percent of costs are paid by workers, leaving companies off the hook. The legislation phases in the new system, with retirement at 62 in force in 2018. It also raises the age for retirement with full benefits from 65 to 67. Hours before the Senate vote, helmeted riot police in body armor shoved striking workers aside to force open the gates of the Total SA refinery at Grandpuits, east of Paris, one of four refineries in the Paris region. A bastion of resistance, Grandpuits had been shut down for nine days – one of the nations’ 12 refineries on strike. “The strikers have opened the valves,” said Franck Monchon, a delegate of the hard-line CGT union. Protesters symbolically burned a coffin after the police intervention. Despite the government’s efforts to conquer union resistance, Prime Minister Francois Fillon said it would take several days to end gasoline shortages. The government began unblocking fuel depots days ago and is allowing tanker trucks on the road on Sunday, when they are normally forbidden. It has ordered oil companies to pool fuel to ensure gas stations are stocked. The prime minister convened oil industry executives Friday to review the country’s lagging fuel supplies. The head of the national petroleum industry body, Jean-Louis Schilansky, says it is struggling to import fuel to make up for the shortfall, because strikers are also blockading two key oil terminals, in Le Havre and Marseille. Dozens of tankers remained anchored in the waters off Marseille, unable to unload. “The problem isn’t so much finding the oil; it is getting it in to the country,” he said. “If the depots and refineries remain blocked, we will not make it.” Nevertheless, Schilansky insisted that France has weeks or months of fuel reserves. Marc Touati, head economist for Global Equities, was somber about the consequences of prolonged protests by the fuel sector, saying such a scenario could wipe out between 0.1 and 0.2 percentage points of economic growth. The government predicts economic growth of 2 percent next year, after 1.5 percent in 2010. Violence around student protests have added a new dimension to the volatile mix. “It is not troublemakers who will have the last word in a democracy,” Sarkozy told workers at a factory in the Eure-et-Loir region, promising to find and punish rioters. “If we stop companies like you from working, who will pay?” ___ Duclos reported from Grandpuits. Associated Press writers Angela Charlton and Greg Keller and AP Television News reporters Jonathan Shenfield in Lyon and Oleg Cetinic in Paris contributed to this report.

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