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Damien Hoffman: Is Scandal the New Model for Marketing?

by on February 27, 2010

At the beginning of the week my wife likes to watch the anthropological study called The Bachelor . Inevitably, I get sucked in. This week the show did a Q&A with all the ladies who got dumped. However, the directors spent an incredible amount of time focusing on one topic: “the greatest scandal in Bachelor history.” (For those unaware, one of the female contestants hooked up with a show producer and was booted from the game show — yes , it’s a game show.) At first glance, this seems like a normal dramatic episode in the reality TV dimension of planet Earth. However, the intense focus on the scandal felt forced and strategic. It had the feel of a product placement or PR plug. It had the aroma of Madison Avenue. Another recent scandal was whether the Jersey Shore kids were degrading the image of all Italian-Americans. Really? That show is nothing more than an ethnic version of The Real World (which has been on for 18 years). However, Viacom brilliantly played the media for every last drop of scandal PR. The result: the most popular show for Viacom in years. Scandal is an awesome marketing tool. Rather than pay for ads in People, US Weekly, or on shows like E! or Headline News, with a little scandal you can get millions of dollars of press for free. Moreover, all that press becomes gossip (AKA “word-of-mouth” marketing). Now more than ever, scandal can go uber-viral on the backbone of social media. In a modern world where media companies are competing against new outlets such as Facebook, YouTube, and blogs, executives know it takes something shocking to gain a share of our finite attention spans. Therefore, marketing departments salivate to solve the Davinci Code of their careers by getting clients’ products tweeted, dugg, messaged, youtubed, or texted. If the past year has been any indicator, I anticipate scandal to play an increasingly important role in many media marketing budgets in the years to come. Luckily for marketing’s mad men and women, there is no shortage of egomaniacs-gone-wild to support the cause. What do you think about scandal’s role in marketing? Share your comments below.

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Damien Hoffman: Is Scandal the New Model for Marketing?

Steve Parker: Automotive/Auto racing shows this weekend

by Steve Parker on February 26, 2010

STEVE PARKER’S THE CAR NUT SHOW Saturday, 2/27, LIVE @ 11am Pacific/2pm Eastern on www.TalkRadioOne.com An amazing spectacle in congress this past week — Akio Toyoda, president and CEO of Toyota Motor Corp., was interrogated by a congressional committee about his company’s recalled cars, safety and quality problems and what did he know about it all and when did he know it. At the same time, the FBI raids three Toyota suppliers in the US. Outside of that, Hummer is officially dead and Saab is officially sold as GM continues as the Incredible Shrinking Corporation. Plus your calls — 213-291-9410. STEVE PARKER’S WORLD RACING ROUNDUP Sunday, 2/28, LIVE @ 5pm Pacific/8pm Eastern on www.TalkRadioOne.com NASCAR had its Disaster at Daytona followed by last week’s normally boring race at California Speedway, where Jimmy Johnson started what he hopes (and probably is) a massive streak of victories. This weekend: Las Vegas, home track of Kurt and Kyle Busch. IndyCar opens its season in two weeks on a new street course in Sao Paulo, Brazil and Formula 1 gears up the same weekend in Bahrain and there are plenty of changes in both series we’ll cover. Plus Danica Patrick gives up NASCAR. Join in at 213-291-9410.

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Steve Parker: Automotive/Auto racing shows this weekend

Sun Hung Kai Shares Advance After $540 Million of Hong Kong Property Sales

February 22, 2010

By John Duce Feb. 22 (Bloomberg) — Sun Hung Kai Properties Ltd. shares jumped after the developer sold 900 homes in Hong Kong for HK$4.2 billion ($540 million) over the weekend, fueling speculation the city’s housing market is overheating. Shares of the world’s biggest developer by market value added 1.7 percent to HK$101.80 at 10:41 a.m. Hong Kong time after gaining as much as 2.5 percent. The apartments at the Yoho Midtown apartment complex in Yuen Long sold for an average HK$5,400 per square foot, Amy Teo, Sun Hung Kai project director, said in an interview. That compares with an average HK$3,000 per square foot for new homes in the area a year ago, according to Wong Leung-sing, an associate director at Centaline Property Agency Ltd. Hong Kong’s home prices surged 29 percent in 2009 as low interest rates and an increase in buying by mainland Chinese stoked demand. Norman Chan, chief executive of the Hong Kong Monetary Authority, told lawmakers Feb. 1 that the city faces a “huge” potential risk of bubbles forming in its asset markets given high liquidity. “All the ingredients are in place for a property bubble in Hong Kong, including low interest rates and limited supply, but I don’t think we are in one yet,” said Buggle Lau, chief property analyst at Midland Holdings Ltd. “If more speculators enter the market then it could push prices up too high.” The city had the world’s fastest-growing major housing market last year, according to a survey compiled by real-estate agents Knight Frank LLP. Crowds Attracted Some 120,000 prospective buyers have flocked to the show homes since Feb. 19, Teo said, speaking at the display properties set up in a shopping center near the apartment complex in the city’s northern New Territories . Sun Hung Kai increased the number of apartments on sale to 900 from 700 because of demand, she said. The building complex has a total of 1,890 homes, according to Teo. “I’m excited to buy, but I think it’s a little overpriced,” said Nelson Ma, 36, a worker at an export company who had just put down a deposit on a HK$3.4 million, 650 square foot, two-bedroom apartment. “I think there is a bit of a bubble but I’m not too worried as I will be living in the apartment rather than buying it as an investment.” Sun Hung Kai estimates about 80 percent of the purchasers intend to live in the apartments, with the remainder acquiring the properties as an investment, company spokeswoman Vivian Kwok said. About 40 units were immediately advertised for resale at asking prices of as much as 20 percent more than the original costs of purchase, the South China Morning Post newspaper reported, citing property agents. “The property market in Hong Kong is still hot, especially for new properties,” said Ng Sinwa, an estate agent at Midland Realty, who joined the crowds queuing to view the show homes. “People are still keen to buy.” ‘Go Pop’ Not all prospective buyers were sold on the properties available. “It’s so expensive,” Ivy Sze said, looking at the show homes on display. “It’s a bubble. We just don’t know whether prices will go up more, or just go ‘pop.’ We want somewhere to live so we just have to keep looking.” The number of private homes completed in Hong Kong last year fell 18 percent to 7,200 units, the lowest since 1997, the government said in a report Jan. 22. The city’s government is holding its first land auction of the year today in the Tseung Kwan O area to try to ease the shortage of supply, with price estimates for the site ranging from HK$2.6 billion to HK$3.4 billion. The city’s home sales more than doubled in value in January from a year earlier to HK$36.2 billion, according to figures released by the government’s land registry. Sales gained 4.1 percent last month from December, the agency said. The authority, Hong Kong’s de facto central bank, raised deposit levels for luxury apartments in October to try to cool lending. The government also plans to raise stamp duty, or transaction tax, on homes selling for more than HK$20 million to 4.5 percent from 3.75 percent in a bid to rein in the property market, the Chinese-language Sing Tao Daily said Feb. 11. ‘Still Affordable’ “Government intervention could lead to higher interest rates, but I can’t see mortgages rates much above 2.5 percent this year, which is unlikely to deter some buyers,” said Midland Holdings’ Lau. Some buyers’ confidence that property values will rise is underpinned by the city’s economic recovery, Centaline’s Wong said. “There’s talk of maybe 2 percent growth in GDP this year and there’s a feeling that the economy is improving,” he said. “People seem able to spend more than ever before on property.” Prices may rise as much as 15 percent in the first quarter, Wong said. Hong Kong’s Chamber of Commerce forecasts the city’s economy may grow between 3 percent and 4 percent this year. Higher interest rates and more speculators moving into the market are among the risks that may lead to a decline in prices, or drive them to unrealistically high levels, according to Lau at Midland Holdings. “This could lead to a bubble in the property market,” he said. “But if a bubble means people are now paying prices for property they can’t afford, then we’re not in one,” he said. ‘Property is still affordable. People still seem confident in the market.” To contact the reporter on this story: John Duce in Hong Kong at jduce1@bloomberg.net

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Steve Parker: Automotive on-line radio shows this weekend

February 19, 2010

Saturday 2-20-10 Steve Parker’s The Car Nut Show on www.TalkRadioOne.com LIVE at 11am Pacific time. The convoluted Toyota story gets straightened out for you by Steve on the show. Find out how he predicted these kinds of electrical and other problems years ago. Tesla, the California electric car-maker, loses three executives in a plane crash. How will this affect the company? The Sixty Second Road Test covers the 2010 Cadillac CTS Sport Wagon…and YOUR phone calls at 213-241-4353. Sunday 2-21-10 Steve Parker’s World Racing Roundup on www.TalkRadioOne.com LIVE at 5pm Pacific time. Last week’s Disaster at Daytona will be talked about, while we’re expecting a rainout of today’s race at California Speedway. Rain’s scheduled in Southern California from Friday night through Monday at least. What is NASCAR thinking? The Danica Patrick phenomenon keeps rolling along while it appears her Nationwide team owner, Dale Earnhardt, Jr. might finally have the race car under him which he so sorely deserves. And the next-generation Indycar, getting rave reviews and severe complaints will be covered, too. Plus YOUR phone calls at 213-341-4353.

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Max Keiser: Is Soros a Progressive or Just Another Opportunistic Hedge Fund Manger?

February 17, 2010

While at Davos, George Soros claimed that gold was in the “ultimate bubble.” Davos 2010: George Soros warns gold is now the ‘ultimate bubble’ What we now learn is that he was simultaneously doubling his position in gold. Soros More Than Doubled Gold ETF Stake in 4th Quarter I have followed Soros’ career for 25 years. His hedge fund comes first, his causes second. Any progressives out there who think Soros is their friend are fooling themselves. Why do I say this? Because any hope progressives have in championing their cause on the basis of a more honest approach to politics and economics will always have a tall mountain to climb as long as Soros is around – with his duplicity and slippery hedge fund tactics – also claiming to be progressive. Here’s the latest edition of my show for Russia Today, “Keiser Report” My guest explains his new campaign in the UK, ‘Save Our Savers.’ This is the British equivalent to the US’s Move Your Money campaign. The movement to decapitalize the banksters has become global!

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Max Keiser: Is Soros a Progressive or Just Another Opportunistic Hedge Fund Manger?

February 17, 2010

While at Davos, George Soros claimed that gold was in the “ultimate bubble.” Davos 2010: George Soros warns gold is now the ‘ultimate bubble’ What we now learn is that he was simultaneously doubling his position in gold. Soros More Than Doubled Gold ETF Stake in 4th Quarter I have followed Soros’ career for 25 years. His hedge fund comes first, his causes second. Any progressives out there who think Soros is their friend are fooling themselves. Why do I say this? Because any hope progressives have in championing their cause on the basis of a more honest approach to politics and economics will always have a tall mountain to climb as long as Soros is around – with his duplicity and slippery hedge fund tactics – also claiming to be progressive. Here’s the latest edition of my show for Russia Today, “Keiser Report” My guest explains his new campaign in the UK, ‘Save Our Savers.’ This is the British equivalent to the US’s Move Your Money campaign. The movement to decapitalize the banksters has become global!

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Max Keiser: Is Soros a Progressive or Just Another Opportunistic Hedge Fund Manger?

February 17, 2010

While at Davos, George Soros claimed that gold was in the “ultimate bubble.” Davos 2010: George Soros warns gold is now the ‘ultimate bubble’ What we now learn is that he was simultaneously doubling his position in gold. Soros More Than Doubled Gold ETF Stake in 4th Quarter I have followed Soros’ career for 25 years. His hedge fund comes first, his causes second. Any progressives out there who think Soros is their friend are fooling themselves. Why do I say this? Because any hope progressives have in championing their cause on the basis of a more honest approach to politics and economics will always have a tall mountain to climb as long as Soros is around – with his duplicity and slippery hedge fund tactics – also claiming to be progressive. Here’s the latest edition of my show for Russia Today, “Keiser Report” My guest explains his new campaign in the UK, ‘Save Our Savers.’ This is the British equivalent to the US’s Move Your Money campaign. The movement to decapitalize the banksters has become global!

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Nokia Said to Unveil No New Phone at Mobile Event for First Time in Decade

February 11, 2010

By Diana ben-Aaron Feb. 11 (Bloomberg) — Nokia Oyj , the world’s largest mobile-phone maker, has ruled out showing new devices at the industry’s biggest annual gathering next week, the first time in at least a decade the company has done that, a person involved in the planning said. Nokia won’t have a stand at the Mobile World Congress in Barcelona. The Espoo, Finland-based company made a “strategic” decision not to unveil any new phones at the event, according to the person, who didn’t want to be identified because the plans are not public. The company’s low-key presence may disappoint those expecting to see Nokia’s newest devices to take on Samsung Electronics Co. and Apple Inc. It gives rivals the chance to dominate the show with touchscreen devices at lower prices. Technology blogs Fonehome.co.uk and Phonesreview have raised expectations by reporting that Nokia plans to show a new range of phones called the C Series at the event. “It would be a problem to have no introduction now because people want to see Nokia has something up its sleeve for summer,” said Tero Kuittinen , an analyst with MKM Partners in Greenwich, Connecticut, who has a “sell” rating on the stock. “Last year, they had a huge presence. The Nokia booth was like a spaceship.” Nokia will focus instead on announcements related to its services business, highlighting Chief Executive Officer Olli- Pekka Kallasvuo ’s effort to transition from a pure mobile phone maker to a company offering customers paid applications and media on its devices, the person said. Nokia spokesman Doug Dawson declined to comment. The company will hold offsite briefings during the event in Barcelona, Nokia says on its Web site. New Devices Nokia shares fell as much as 4 cents, or 0.4 percent, to 9.49 euros and were trading up 0.2 percent to 9.54 euros as of 2:17 p.m. in Helsinki. The company introduced six new devices at last year’s show including the E75 and E55 smartphones with push e-mail. It rolled out four devices at the Mobile World Congress in 2008 and four in 2007, including the E61i Qwerty smartphone and its first phone with navigation, the 6110 Navigator. The company “will undoubtedly unveil new devices” in Barcelona, Ben Wood , a London-based analyst with CCS Insight, wrote in a report on Feb. 5. In an interview yesterday, Wood said, “They need to get devices addressing the low-cost Qwerty and touch segment into the market as soon as possible. Samsung and LG in particular have stolen quite a march on Nokia in the $50-$150 bracket and if they leave gaps in the portfolio, their market share is vulnerable to a slow and steady decline. The longer they leave it, the more share they will cede.” Android Domination Products based on Android, the smartphone software from Google Inc., can be expected from Dell Inc., HTC Corp., Samsung Electronics Co. and Sony Ericsson Mobile Communications AB, he wrote in his report. “We expect Android to dominate this year’s events with a plethora of device announcements and more than 50 devices on the show floor,” Wood wrote. Nokia’s Symbian operating platform is losing ground to competitors, declining to 47.2 percent of smartphones last year from 52.4 percent in 2008, as Android, Research In Motion Ltd.’s BlackBerry, and Apple ’s iPhone gained, Reading, U.K.-based market researcher Canalys said. The company has said it plans major product announcements in the second half after completing a new version of Symbian. To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

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Nokia Said to Unveil No New Phone at Mobile Event for First Time in Decade

February 11, 2010

By Diana ben-Aaron Feb. 11 (Bloomberg) — Nokia Oyj , the world’s largest mobile-phone maker, has ruled out showing new devices at the industry’s biggest annual gathering next week, the first time in at least a decade the company has done that, a person involved in the planning said. Nokia won’t have a stand at the Mobile World Congress in Barcelona. The Espoo, Finland-based company made a “strategic” decision not to unveil any new phones at the event, according to the person, who didn’t want to be identified because the plans are not public. The company’s low-key presence may disappoint those expecting to see Nokia’s newest devices to take on Samsung Electronics Co. and Apple Inc. It gives rivals the chance to dominate the show with touchscreen devices at lower prices. Technology blogs Fonehome.co.uk and Phonesreview have raised expectations by reporting that Nokia plans to show a new range of phones called the C Series at the event. “It would be a problem to have no introduction now because people want to see Nokia has something up its sleeve for summer,” said Tero Kuittinen , an analyst with MKM Partners in Greenwich, Connecticut, who has a “sell” rating on the stock. “Last year, they had a huge presence. The Nokia booth was like a spaceship.” Nokia will focus instead on announcements related to its services business, highlighting Chief Executive Officer Olli- Pekka Kallasvuo ’s effort to transition from a pure mobile phone maker to a company offering customers paid applications and media on its devices, the person said. Nokia spokesman Doug Dawson declined to comment. The company will hold offsite briefings during the event in Barcelona, Nokia says on its Web site. New Devices Nokia shares fell as much as 4 cents, or 0.4 percent, to 9.49 euros and were trading up 0.2 percent to 9.54 euros as of 2:17 p.m. in Helsinki. The company introduced six new devices at last year’s show including the E75 and E55 smartphones with push e-mail. It rolled out four devices at the Mobile World Congress in 2008 and four in 2007, including the E61i Qwerty smartphone and its first phone with navigation, the 6110 Navigator. The company “will undoubtedly unveil new devices” in Barcelona, Ben Wood , a London-based analyst with CCS Insight, wrote in a report on Feb. 5. In an interview yesterday, Wood said, “They need to get devices addressing the low-cost Qwerty and touch segment into the market as soon as possible. Samsung and LG in particular have stolen quite a march on Nokia in the $50-$150 bracket and if they leave gaps in the portfolio, their market share is vulnerable to a slow and steady decline. The longer they leave it, the more share they will cede.” Android Domination Products based on Android, the smartphone software from Google Inc., can be expected from Dell Inc., HTC Corp., Samsung Electronics Co. and Sony Ericsson Mobile Communications AB, he wrote in his report. “We expect Android to dominate this year’s events with a plethora of device announcements and more than 50 devices on the show floor,” Wood wrote. Nokia’s Symbian operating platform is losing ground to competitors, declining to 47.2 percent of smartphones last year from 52.4 percent in 2008, as Android, Research In Motion Ltd.’s BlackBerry, and Apple ’s iPhone gained, Reading, U.K.-based market researcher Canalys said. The company has said it plans major product announcements in the second half after completing a new version of Symbian. To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

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`Tommy Supreme’ Is Real-Life Poker-Playing Lawyer in High Court TV Drama

January 21, 2010

By William McQuillen Jan. 21 (Bloomberg) — Tom Goldstein has argued before the U.S. Supreme Court on behalf of shoppers who overpaid for vitamins, fellow lawyers facing court sanctions and disabled passengers unhappy with their treatment on cruises. He had no idea such mundane legal issues might make for riveting television. “If you knew my life, you would not think it is the stuff of a television drama,” said the 39-year-old Goldstein, who has argued 21 cases before the Supreme Court since 1999. Hollywood thinks otherwise. Sony Corp. ’s Sony Pictures Television optioned the rights to Goldstein’s life story and General Electric Co. ’s NBC commissioned a pilot script for the tentatively titled “Tommy Supreme.” Past TV shows that centered on the high court met with swift and unpleasant verdicts. But then, they didn’t feature a poker-playing barrister with a social conscience to help enliven the court’s often fusty proceedings. The series would center on a younger version of Goldstein, a partner at Akin Gump Strauss Hauer & Feld LLC in Washington who also runs the Scotusblog.com Web site. It gets up to 300,000 hits daily for its reports on the inner workings of the high court. (Scotus is legal shorthand for the Supreme Court of the United States.) The hard-charging Goldstein argued his first Supreme Court case at 28 — for free. Script in Progress With Sony having let its option lapse, a script is being written. Actors haven’t been cast. Still, Goldstein said, if the show is fast-tracked, it could find a spot on NBC as early as next fall. The show’s protagonist, pitched as a likable version of actor Hugh Laurie’s irascible doctor character on Fox Television’s “House,” is an idealist fresh out of law school who argues Supreme Court cases. In true Hollywood fashion, he will butt heads with big companies and the government, said Goldstein, who declined to name an actor he’d like to portray him. The real-life Tommy Supreme co-chairs a litigation practice with 250 lawyers who bring in $200 million in revenue annually, Goldstein said. His clients have ranged from medical products maker Teleflex Inc. to the Los Angeles Police Department. And he’s one of GQ magazine’s 50 Most Powerful People in Washington. The show will dramatize cases that “can translate to the average worker, issues that are humanized,” said Barry Schindel , a former public defender who has produced episodes of “Law & Order” and is writing the pilot’s script. Reality-Based The pilot is based on an actual international child abduction case handled by Goldstein’s real-life wife, Amy Howe , who had been his law partner until he joined Akin Gump in 2006. The case, which the high court heard on Jan. 12, focuses on whether a mother who has taken a child out of Chile against the wishes of the father — Howe’s client — must return the child. Schindel said another possible show could dramatize the court’s June 2009 ruling in favor of white firefighters in New Haven, who claimed they suffered reverse discrimination. Goldstein wasn’t actually involved in that case, either. But this is Hollywood. As the show’s consultant, Goldstein meets with Schindel to answer questions on how the court works and other legal matters. He realizes some accuracy may get lost for the sake of entertainment. For example, his TV alter-ego will bankroll his law practice with his winnings at the poker table. Goldstein, who has played in the World Series of Poker tournament, never did. Law v. Drama “There is that gap between the lawyers’ world and dramas and entertainment,” Goldstein said. “You have to expect that there will be added elements.” A 1995 graduate of American University’s law school in Washington, Goldstein began his career as an intern for Nina Totenberg , the National Public Radio reporter who covers the high court. “He decided as a very young lawyer he wanted to be a Supreme Court advocate and concentrated on that when it was difficult,” said David Boies , whom Goldstein assisted in representing then-Vice President Al Gore before the court in the 2000 presidential election fight. Goldstein previously worked at Boies Schiller & Flexner LLP. When he started appearing before the court, “he talked a mile a minute and was cocky,” said Totenberg, who has covered the Supreme Court for more than 40 years. “They picked on him. I told him that, others did, and he got better. He is very good now. It’s really amazing; he never does anything without learning from it.” A Whim While Goldstein was running his own practice, he said he started his Scotus blog on a whim in 2002. “That day, we got 35 hits,” said Goldstein during an interview in his 12th floor office with a view of the Washington Monument. “I felt committed, people I knew had read the thing, and I would look kinda stupid giving up on it.” The Web site now employs 10 people who operate the site in different locations in Washington, from his DuPont Circle office to the Supreme Court press room, costing Goldstein about $150,000 a year out of his own pocket. He said he doesn’t accept advertising and has been looking for ways to make money from the site to reduce the financial burden. He declined to say how much he is being paid for his TV work. Goldstein, a trim man with a receding hairline, said he has no plans to leave his practice for a career in TV. “I have never angled to get it on TV,” Goldstein said of his Supreme Court work. Former colleague Boies said he thinks the show “has real potential” and that Goldstein’s character “could be quite entertaining.” With so many fictional legal characters, Boies said, “it’s nice to get a real life story, and I think Tommy’s story is at least as interesting as the fictional stories.” To contact the reporter on this story: William McQuillen in Washington at bmcquillen@bloomberg.net .

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Morgan Stanley-Handled IPOs Beating Competitors in Equity Capital Markets

January 15, 2010

By Michael Tsang Jan. 15 (Bloomberg) — Initial public offerings arranged by Morgan Stanley are performing better than any on Wall Street, helping the securities firm gain market share with IPOs poised to triple this year. The eight U.S. companies that listed New York-based Morgan Stanley first among underwriters for initial sales in the past year added 18 percent in their first month of trading, the most for investment banks credited with at least $1 billion of deals, data compiled by Bloomberg show. In contrast, the companies that hired JPMorgan Chase & Co. saw their market capitalization shrink by 0.9 percent, while those taken public by Credit Suisse Group AG posted the smallest advances even after the Zurich- based lender reduced the offering prices by the most on average. The sales helped Morgan Stanley boost its share of U.S. company IPOs, among the most lucrative generators of fees for banks, to 18 percent from 2.2 percent, Bloomberg data show. After equities rebounded from their swoon a year ago, IPOs are projected to increase to as much as $50 billion from about $16.5 billion in 2009, according to estimates from London-based Barclays Plc and Bloomberg. “Clearly, Morgan Stanley did a better job,” said Philip Orlando , the New York-based chief equity market strategist at Federated Investors Inc., which oversees $392.3 billion. “The lead underwriter has certainly got many masters. You want to see the pricing come at the high end of the range, yet there still be a full book and an appreciation of the share price once the stock trades publicly.” Highest Fees Banks earned fees of 5.6 percent from IPOs last year, more than 10 times higher than those from mergers and acquisitions or corporate bonds, data compiled by Bloomberg show. “IPOs represent one of the most important products at investment banks because they are profitable, establish meaningful relationships and lead often to future business,” said Alexander Gendzier , who advises bankers and companies on capital markets for Washington-based law firm Jones Day. Being the first bank listed on the prospectus , or the so- called lead left, typically means that firm is the underwriter that “runs the show,” according to Reena Aggarwal , a finance professor at Georgetown University in Washington. While most IPOs are arranged by two or more banks, the lead left underwriter often decides how many shares each bank in the selling syndicate receives and is usually responsible for supporting the IPO’s price after it starts trading, she said. A123, Fortinet Morgan Stanley helped companies from A123 Systems Inc. to Fortinet Inc. raise a total of $2.68 billion through initial offerings in the past year, 13 percent more than indicated by the midpoints of their original IPO price ranges, according to Bloomberg data that accounts for the size of each deal. A123 , a maker of lithium batteries for plug-in cars, filed with the U.S. Securities and Exchange Commission in September to sell shares at $8 to $9.50 each, and boosted the range to as high as $11.50 before offering the stock at $13.50. The Watertown, Massachusetts-based company’s IPO raised $428.3 million, 54 percent more than indicated by the original midpoint price, Bloomberg data show. The shares climbed 80 percent in the first month of trading on speculation A123 will benefit from the Obama administration’s efforts to cut gasoline and carbon exhaust. The surge was almost double the advance of any of the 47 U.S. IPOs last year, data compiled by Bloomberg show. ‘Best Barometer’ Morgan Stanley, the third-largest U.S. IPO underwriter by market share, also led the $179.7 million offering by Fortinet , the first Silicon Valley startup to go public in almost two years. The Sunnyvale, California-based maker of all-in-one network-security equipment said in October it would sell shares at $9 to $11 each, before pricing them at $12.50 on Nov. 17. The stock climbed 36 percent in the month after its IPO. “Regardless of market conditions, maximizing price for the issuer and having it trade well for the investor is the best barometer for success in the IPO business,” said Mohit Assomull , Morgan Stanley’s head of Americas equity syndicate in New York. An IPO that prices higher than its forecast range may spur underwriters to allot smaller stakes to buyers, which helps boost the stock as those investors purchase more once trading begins, according to Richard D. Truesdell Jr ., co-head of the capital markets group at Davis Polk & Wardwell LLP. His New York-based law firm was the top legal adviser for U.S. IPOs in 2009, according to data compiled by Bloomberg. ‘Hot IPO’ When banks are forced to reduce prices due to lack of demand, buyers get more shares in the IPO and push the stock lower once it starts trading, Truesdell said. “Pricing above the range tends to generate demand and help make it a hot IPO,” he said. “I’d be surprised if the underwriters that were getting the highest offer prices weren’t also generating the best performance.” The 11 companies that listed Charlotte, North Carolina- based Bank of America Corp. as the lead left underwriter rose 13 percent on average in the first month, making the largest U.S. bank the second-ranked arranger. Bank of America sold its IPOs at 5.3 percent above the midpoints indicated by their forecast ranges, also the second-highest. “We are intensely focused on the execution of our IPOs both for the issuer in achieving an appropriate IPO valuation and for investors who are looking for high-quality deals that will perform over the medium- and long-term,” said Lisa Carnoy , Bank of America’s New York-based global head of equity capital markets. Citigroup, Goldman Sachs Citigroup Inc. ranked third, with its two initial offers climbing an average of 12 percent. Goldman Sachs Group Inc. was fourth with a 10 percent gain for six IPOs. Both firms are based in New York. “The strong market reaction to these IPOs is a reflection of the issuers’ value proposition, as well as well-structured and distributed transactions,” said John Chirico , the co-head of capital markets origination for the Americas at Citigroup. Goldman Sachs received the biggest share of the $923 million in fees from U.S. IPOs last year, data compiled by Bloomberg show. The most profitable firm in the history of Wall Street made $191.6 million participating in 21.2 percent of offerings, while Morgan Stanley earned $156.1 million. Andrea Rachman , a spokeswoman at Goldman Sachs, declined to comment. The number of initial offerings has increased in the past four months from the slowest pace on record. Sales had evaporated in the fourth quarter of 2008 as the failure of New York-based Lehman Brothers Holdings Inc. froze credit markets. IPO Drought The drought extended into the first eight months of last year when an average of two U.S. companies went public a month, the lowest level since at least 1995, data compiled by Bloomberg show. The IPO market rebounded as the Standard & Poor’s 500 Index surged 70 percent from its 12-year low in March. The revival didn’t coincide with bigger returns for investors in new offerings. Almost 40 percent of U.S. IPOs in the second half of 2009 fell, data compiled by Bloomberg show. Three of the six IPOs by New York-based JPMorgan last year declined during the first month of trading. RailAmerica Inc., the railroad operator owned by New York-based Fortress Investment Group LLC , dropped the most, slumping 17 percent . The $15 IPO price for Jacksonville, Florida-based RailAmerica was below the range of $16 to $18 a share, Bloomberg data show. JPMorgan , the second-biggest U.S. bank, was also listed first among underwriters for three of the 11 IPOs that were postponed in the second half after pricing terms were set. Morgan Stanley was the lead left underwriter for Aviv REIT Inc. , the Chicago-based real-estate investment trust that pulled its offer in November. Credit Suisse The U.S. companies that listed Credit Suisse , Switzerland’s largest bank by market capitalization, as the first underwriter sold shares at an average discount of 19 percent, the most based on the original midpoint offer price, Bloomberg data show. The calculation excludes offerings, such as funds raising money to buy assets, that didn’t have price ranges. “You’re always trying to achieve pricing at the time of the IPO that works both for the issuer and the investors,” said Jeffrey Bunzel , the New York-based head of equity capital markets for the Americas at Credit Suisse. “Even though there was a pricing concession, at the end of the day, the transactions worked, and both the issuers and the investors walked away feeling that under the market circumstances they were successful.” Cloud Peak Cloud Peak Energy Inc. in Gillette, Wyoming, declined 8.3 percent in its first month of trading. Credit Suisse cut the price for the November IPO by as much as 17 percent. The U.S. coal unit of London-based Rio Tinto Group raised $459 million at $15 a share after seeking $16 to $18, Bloomberg data show. Credit Suisse’s Bunzel said that four-week returns don’t fully reflect the share-price gains for IPO investors. The firm’s six offerings, from San Diego-based Bridgepoint Education Inc. in April to Kraton Performance Polymers Inc. of Houston last month, climbed 27 percent from the time of their IPOs through yesterday, according to data compiled by Bloomberg. The average, which doesn’t account for the different periods that each company has been trading, is the second-highest for 2009. Citigroup’s two offers had an average rise of 54 percent. While the six IPOs that listed JPMorgan as the first underwriter produced losses on average in the first month, Brian Marchiony , a New York-based spokesman at JPMorgan, pointed to the performance of all 17 deals in which the firm was credited as an underwriter. Those IPOs have returned 31 percent on average since their offers, the biggest gain of any bank. ‘Point of View’ Taking an average from an underwriter’s offerings by their share-price performance since the IPOs without accounting for how long each company has been publicly traded may skew the results because it compares “apples and oranges,” according to Georgetown’s Aggarwal, who has studied IPOs for 20 years. “I can see from the underwriter’s point of view that they want to present the data that makes them look good,” she said. “From an academic point of view, you obviously can’t do that.” Aggarwal said an IPO’s first month of trading versus the broader market provides a gauge of each underwriter’s performance. By that measure, Credit Suisse’s deals gained an average of 2.4 percentage points more than the S&P 500, the smallest outperformance, while JPMorgan’s IPOs fell 3.4 percentage points versus the index. The IPOs handled by Morgan Stanley rose 15 percentage points more than the S&P 500 in the first four weeks of trading, while Citigroup’s IPOs beat the index by 17 points on average. The first U.S. IPOs of 2010 are scheduled for next week, with three sales set for Jan. 21, Bloomberg data show. Symetra Financial Corp., the Bellevue, Washington-based life and health insurer whose largest shareholders are Warren Buffett’s Berkshire Hathaway Inc. and White Mountains Insurance Group Ltd., plans to raise as much as $378 million. Omaha, Nebraska-based Berkshire and White Mountains of Hanover, New Hampshire, won’t cut their stakes, Symetra said last week. Bank of America is the lead left underwriter. To contact the reporter on this story: Michael Tsang in New York at mtsang1@bloomberg.net

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Matt Spangler: Lessons From Late Night

January 13, 2010

I’v gotta admit its been fun to watch the huge cluster f&*k that is the new NBC “Late Night” wars. At the minimum its given some great fodder for each host to joke on each other. The video of Jimmy Kimmel doing Leno last night is an instant classic. I don’t know much about the situation beyond what I’ve read but I don’t think anyone would argue that its not exactly going how NBC hoped it would. It’s tough to make judgments without all the facts, but based on Conan’s statement and now Leno’s rumored response , at the end of the day, the “NBC Executives” making the decisions will bear most of the burden for the destruction of The Tonight Show brand and the costly repercussions. From a broader management perspective I think there are a few valuable lessons for employees and executives of any kind of organization … both what to do, and what not to do. 1. Trust in your hires and give them time to be successful. Creating a following and an incredible show takes time (certainly longer then the 8 months Conan and his team were given). It’s true for any position. In order for people to be effective in their jobs they need the time to learn about the new environment, new customers and the job itself. This often means time and the opportunity to grow and succeed. This sometimes means weathering some bad times before getting to the good. Sure, you mentor new hires, provide constructive feedback and help along the way, but if you are diligent in your process of finding the right people, they need to be given the time and space to do their job well before you pull the rug out from under them. 2. If you’re going to empower people, give them the tools to succeed. When Conan took over The Tonight Show, people who owned the affiliate networks and leadership on Conan’s team clamored that they needed a good lead into the local news that would then build a strong audience leading into their new Tonight Show. NBC didn’t listen and instead chose to put the former host on his own show before Conan as a 5-day a week low cost alternative. Leno’s last minute deal showed a lack of confidence in Conan carrying The Tonight Show, and did not provide a good lead in for the new host. If you are not really ready to make a move in your business, then go back to the table and make sure its the right decision. Give people that have committed to your company the respect they deserve by having open conversations about what it will take for them to be successful and then do your best to support those needs. 3. Don’t air your dirty laundry in public. When Jeff Gaspin went to the press and stated that the plan was to move the shows he acted as if this was gonna be no big deal while he made unfinished negotiations behind the scene public. He played his cards too soon in some sort of foolish attempt to force the hands of his employees. The plan for what was to be done should have never been aired to the public until they figured out the plan and got agreement from the various parties. Its tough to keep secrets these days, especially in television, and that’s why early, open and honest discussion with your people in private is always the best way to move forward. Once you’ve arrived at a joint decision you can announce what is happening to the world. By airing their disputes and concerns in the press, NBC gave their hosts no choice but to issue their own statements in opposition to this strategy that made the NBC executives look disconnected from two of their biggest talents and opened the door for public opinion to effect the negotiations. 4. Keep your head high, stay true to who you are and be humble under pressure. In his press statement Conan honored the legacy of the show and the hard work of his staff while taking into consideration the effect the move would have the on the shows around his time slot. He spoke honestly, passionately and plainly while keeping the door open for reconciliation and dialogue. His poise and class in this situation will be remembered by the public and in the end his reputation, audience and overall brand will continue to be strong no matter what his next steps may be.

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Intel Expecting to Get Boost as Web-Connected TVs `Take Off Like a Rocket’

January 9, 2010

By Ian King Jan. 9 (Bloomberg) — Intel Corp. will finally crack the home-electronics market in 2010 as the chipmaker’s products become central to bringing the Internet to television screens, said Senior Vice President Eric Kim . “It’s going to take off like a rocket,” Kim, who heads Intel ’s digital-home unit, said at the Consumer Electronics Show in Las Vegas. “We have a full solution now.” Under Chief Executive Officer Paul Otellini , Intel aims to get its chips into more home electronics — a bid to lessen the company’s dependence on personal computers, which provide about 90 percent of sales . Intel’s attempt to break into the market was slowed by having to coordinate all the software, chips and content needed to deliver Internet TV devices, Kim said. Kim declined to say who his TV-industry customers are, citing their desire to introduce their own products. “I know who, but I can’t tell you right now,” he said. Otellini demonstrated a new set-top box at the show yesterday that uses Intel chips to enhance TV viewing. Instead of the traditional text program guide, users see a display with multiple live programs showing at once. That product, which Orange SA is offering in France, is one example of how Intel hardware and software will change the way consumers use televisions and go online, Kim said. Intel , based in Santa Clara, California, rose 23 cents to $20.83 yesterday in Nasdaq Stock Market trading. The shares climbed 39 percent last year. To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

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Intel Vulnerable as Consumers Shift to Phones to Surf

January 6, 2010

By Ian King Jan. 6 (Bloomberg) — Intel Corp. ’s position as the gateway to the Internet will come under attack in 2010 as more consumers start going online via phones, tablets, e-readers and scaled- down laptops. Qualcomm Inc. , Marvell Technology Group Ltd. and Freescale Semiconductor Inc. are among the chipmakers demonstrating new kinds of Internet devices at this week’s Consumer Electronics Show in Las Vegas. Their goal: persuade consumers to ditch their Intel-powered personal computers as the primary way of going online. “The next billion users that are going to connect to the Web aren’t going to be connected by the PC,” said Henri Richard , head of sales at Austin, Texas-based Freescale. “It’s going to be a multitude of devices.” Intel , the world’s largest chipmaker, makes more than 80 percent of PC processors — the brains of computers. It aims to use its Atom product, which runs small laptops known as netbooks, to break into chips for wireless devices, a market IDC estimates will increase 14 percent to more than $46 billion in 2010. Its rivals are heading in the other direction: using phone chips to woo users of PCs and consumer electronics. While the PC will remain the main way for people to go online, portable devices are chipping away at that dominance — with mobile phones leading the charge. Qualcomm , Freescale, Marvell and Texas Instruments Inc. are using chip technology developed by ARM Holdings Plc . Reaching a Billion By 2013, the number of phones regularly being used to access the Web will exceed 1 billion for the first time, a fivefold increase from 2006, according to Framingham, Massachusetts-based IDC. Over the same time period, the number of Internet-connected PCs will rise to 1.6 billion from 754 million, according to IDC. “The push right now is to connect everyone and everything, and that’s why we’re seeing a plethora of devices,” said Jim McGregor , an analyst at Scottsdale, Arizona-based research firm In-Stat. “In terms of sheer numbers and usability, you can’t compete with a handheld. Everything migrates to a mobile.” The Consumer Electronics Show will reveal which phone-chip makers have made progress persuading computer and consumer- electronics companies to use their components. Qualcomm, the world’s largest maker of phone chips, will show off a so-called smartbook made by Lenovo Group Ltd., China’s biggest computer maker. That device will run on San Diego-based Qualcomm’s Snapdragon chip. Freescale will demonstrate similar small laptops based on its products, and Marvell will introduce products based on a new range of faster processors. Apple Tablet? Apple Inc. , maker of the iPhone, also is planning to unveil a tablet computer this month, a person familiar with the matter said this week. Yesterday, Google Inc. introduced a touch-screen phone called the Nexus One. It makes more sense to use smartphone technology to build tablets, e-readers and handheld computers, rather than relying on PC chips, said Sehat Sutardja , chief executive officer of Santa Clara, California-based Marvell. Smartphones offer the right mix of processing speed, low power consumption and touch screens, making them easy to convert into Internet devices, he said. “A touch-screen smartphone is actually a small tablet PC,” said Sutardja, whose company supplies the main chip for Research In Motion Ltd. ’s Blackberry. “The time for tablet devices is now.” Armada Chips In October, Marvell released a new line of chips called Armada. Those products can run fast enough to bring PC-level computing to e-readers and tablets, Sutardja said. Internet devices have previously failed to catch on with consumers because the chips that ran them were either too slow to make them useful or drew too much power, draining batteries, he said. At CES, Intel CEO Paul Otellini plans to demonstrate mobile devices based on its chips. “We remain committed to delivering the benefits of Intel architecture to handhelds and consumer electronics and believe that these devices will continue to become smarter with PC-like performance, computer and Internet capabilities,” said Claudine Mangano, a spokeswoman for the Santa Clara-based company. “This is Intel’s strength.” Intel lost 1 cent to $20.86 at 9:40 a.m. New York time in Nasdaq Stock Market trading. The shares added 39 percent in 2009. Qualcomm gained 15 cents to $48.22, and Marvell rose 19 cents to $21.62. Intel’s challenge in pushing into phones and mobile devices is creating less power-hungry chips with similar performance. The company’s rivals on the phone side are trying to gauge how quickly that will happen. Intel chips will continue to draw three to four times as much power as Marvell’s products, Sutardja said. ARM , though, doesn’t expect phone chips to have an edge for long. ‘Smart Company’ “Intel’s a smart company and in the next couple of years they’ll have the same type of power and performance,” said Bob Morris , director of mobile computing for Cambridge, England- based ARM. In the meantime, ARM chipmakers can gain an edge with electronics companies by selling chips that are cheaper than Intel’s, he said. They also can use Google’s free Android software, which works with ARM designs. Electronic-book readers, fueled by the success of Amazon.com Inc. ’s Kindle and Sony Corp. devices, are opening up another market for chips. For the first time, CES will have an area devoted to e-readers on the show floor. That market will double next year to about 11 million units and then double again by 2013, according to Vinita Jakhanwal , an analyst at El Segundo, California-based ISuppli Corp. As readers become more popular, they could become more general-purpose Internet devices, Freescale’s Richard said. His company makes the processors that power both the Kindle and Sony products, which account for about 75 percent of market sales. For now, the black-and-white screens of e-readers may make them unfit for broader applications, said ISuppli’s Jakhanwal. Until color displays are introduced, consumers won’t accept e- readers as Web browsers, she said. To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net .

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Intel Vulnerable as Consumers Shift to Phones From PCs to Browse the Web

January 6, 2010

By Ian King Jan. 6 (Bloomberg) — Intel Corp. ’s position as the gateway to the Internet will come under attack in 2010 as more consumers start going online via phones, tablets, e-readers and scaled- down laptops. Qualcomm Inc. , Marvell Technology Group Ltd. and Freescale Semiconductor Inc. are among the chipmakers demonstrating new kinds of Internet devices at this week’s Consumer Electronics Show in Las Vegas. Their goal: persuade consumers to ditch their Intel-powered personal computers as the primary way of going online. “The next billion users that are going to connect to the Web aren’t going to be connected by the PC,” said Henri Richard , head of sales at Austin, Texas-based Freescale. “It’s going to be a multitude of devices.” Intel , the world’s largest chipmaker, makes more than 80 percent of PC processors — the brains of computers. It aims to use its Atom product, which runs small laptops known as netbooks, to break into chips for wireless devices, a market IDC estimates will increase 14 percent to more than $46 billion in 2010. Its rivals are heading in the other direction: using phone chips to woo users of PCs and consumer electronics. While the PC will remain the main way for people to go online, portable devices are chipping away at that dominance — with mobile phones leading the charge. Qualcomm , Freescale, Marvell and Texas Instruments Inc. are using chip technology developed by ARM Holdings Plc . Reaching a Billion By 2013, the number of phones regularly being used to access the Web will exceed 1 billion for the first time, a fivefold increase from 2006, according to Framingham, Massachusetts-based IDC. Over the same time period, the number of Internet-connected PCs will rise to 1.6 billion from 754 million, according to IDC. “The push right now is to connect everyone and everything, and that’s why we’re seeing a plethora of devices,” said Jim McGregor , an analyst at Scottsdale, Arizona-based research firm In-Stat. “In terms of sheer numbers and usability, you can’t compete with a handheld. Everything migrates to a mobile.” The Consumer Electronics Show will reveal which phone-chip makers have made progress persuading computer and consumer- electronics companies to use their components. Qualcomm, the world’s largest maker of phone chips, will show off a so-called smartbook made by Lenovo Group Ltd., China’s biggest computer maker. That device will run on San Diego-based Qualcomm’s Snapdragon chip. Freescale will demonstrate similar small laptops based on its products, and Marvell will introduce products based on a new range of faster processors. Apple Tablet? Apple Inc. , maker of the iPhone, also is planning to unveil a tablet computer this month, a person familiar with the matter said this week. Yesterday, Google Inc. introduced a touch-screen phone called the Nexus One. It makes more sense to use smartphone technology to build tablets, e-readers and handheld computers, rather than relying on PC chips, said Sehat Sutardja , chief executive officer of Santa Clara, California-based Marvell. Smartphones offer the right mix of processing speed, low power consumption and touch screens, making them easy to convert into Internet devices, he said. “A touch-screen smartphone is actually a small tablet PC,” said Sutardja, whose company supplies the main chip for Research In Motion Ltd. ’s Blackberry. “The time for tablet devices is now.” Armada Chips In October, Marvell released a new line of chips called Armada. Those products can run fast enough to bring PC-level computing to e-readers and tablets, Sutardja said. Internet devices have previously failed to catch on with consumers because the chips that ran them were either too slow to make them useful or drew too much power, draining batteries, he said. At CES, Intel CEO Paul Otellini plans to demonstrate mobile devices based on its chips. “We remain committed to delivering the benefits of Intel architecture to handhelds and consumer electronics and believe that these devices will continue to become smarter with PC-like performance, computer and Internet capabilities,” said Claudine Mangano, a spokeswoman for the Santa Clara-based company. “This is Intel’s strength.” Intel lost 1 cent to $20.86 at 9:40 a.m. New York time in Nasdaq Stock Market trading. The shares added 39 percent in 2009. Qualcomm gained 15 cents to $48.22, and Marvell rose 19 cents to $21.62. Intel’s challenge in pushing into phones and mobile devices is creating less power-hungry chips with similar performance. The company’s rivals on the phone side are trying to gauge how quickly that will happen. Intel chips will continue to draw three to four times as much power as Marvell’s products, Sutardja said. ARM , though, doesn’t expect phone chips to have an edge for long. ‘Smart Company’ “Intel’s a smart company and in the next couple of years they’ll have the same type of power and performance,” said Bob Morris , director of mobile computing for Cambridge, England- based ARM. In the meantime, ARM chipmakers can gain an edge with electronics companies by selling chips that are cheaper than Intel’s, he said. They also can use Google’s free Android software, which works with ARM designs. Electronic-book readers, fueled by the success of Amazon.com Inc. ’s Kindle and Sony Corp. devices, are opening up another market for chips. For the first time, CES will have an area devoted to e-readers on the show floor. That market will double next year to about 11 million units and then double again by 2013, according to Vinita Jakhanwal , an analyst at El Segundo, California-based ISuppli Corp. As readers become more popular, they could become more general-purpose Internet devices, Freescale’s Richard said. His company makes the processors that power both the Kindle and Sony products, which account for about 75 percent of market sales. For now, the black-and-white screens of e-readers may make them unfit for broader applications, said ISuppli’s Jakhanwal. Until color displays are introduced, consumers won’t accept e- readers as Web browsers, she said. To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net .

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China’s Property Bubble May Foreshadow a U.S.-Style Slump in Real Estate

December 30, 2009

By Dexter Roberts Dec. 31 (Bloomberg) — Li Nan has real estate fever. A 27- year-old steel trader at China Minmetals, a state-owned commodities company, Li lives with his parents in a cramped 700- square-foot apartment in west Beijing . Li originally planned to buy his own place when he got married, but after watching Beijing real estate prices soar , he has been spending all his free time searching for an apartment. If he finds the right place — preferably a two-bedroom in the historic Dongcheng quarter, near the city center — he hopes to buy immediately. Act now, he figures, or live with Mom and Dad forever. In the last 12 months such apartments have doubled or tripled in price, to about $400 per square foot. “This year they’ll be even higher,” says Li in the Jan. 11 issue of Bloomberg BusinessWeek . Millions of Chinese are pursuing property with a zeal once typical of house-happy Americans. Some Chinese are plunking down wads of cash for homes. Others are taking out mortgages at record levels. Developers are snapping up land for luxury high- rises and villas, and the banks are eagerly funding them. Some local officials are even building towns from scratch in the desert, certain that demand won’t flag. And if families can swing it, they buy two apartments: one to live in, one to flip when prices jump further. And jump they have. In Shanghai, prices for high-end real estate were up 54 percent through September, to $500 per square foot. In November alone, housing prices in 70 major cities rose 5.7 percent, while housing starts nationwide rose a staggering 194 percent. The real estate rush is fueling fears of a bubble that could burst later in 2010, devastating homeowners, banks, developers, stock markets , and local governments. High-End Bubble “Once the bubble pops, our economic growth will stop,” warns Yi Xianrong , a researcher at the Chinese Academy of Social Sciences’ Finance Research Center. On Dec. 27, China Premier Wen Jiabao told news agency Xinhua that “property prices have risen too quickly.” He pledged a crackdown on speculators. Although parallels with other bubble markets, the China bubble is not quite so easy to understand. In some places, demand for upper middle class housing is so hot it can’t be satisfied. In others, speculators keep driving up prices for land, luxury apartments, and villas even though local rents are actually dropping because tenants are scarce. What’s clear is that the bubble is inflating at the rich end, while little low- cost housing gets built for middle and low-income Chinese. In Beijing’s Chaoyang district, which represents a third of all residential property deals in the capital, homes now sell for an average of almost $300 per square foot. That means a typical 1,000-square-foot apartment costs about 80 times the average annual income of the city’s residents. Table Talk Koyo Ozeki , an analyst at U.S. investment manager Pimco, estimates that only 10 percent of residential sales in China are for the mass market. Developers find the margins in high-end housing much fatter than returns from building ordinary homes. How did this bubble get going? Low interest rates, official encouragement of bank lending, and then Beijing’s half-trillion- dollar stimulus plan all made funds readily available. City and provincial governments have been gladly cooperating with developers: Economists estimate that half of all local government revenue comes from selling state-owned land. Chinese consumers, fearing inflation will return and outstrip the tiny interest they earn on their savings, have pursued property ever more aggressively. Companies in the chemical, steel, textile, and shoe industries have started up property divisions too: The chance of a quick return is much higher than in their primary business. Built on Sand “When you sit down with a table of businessmen, the story is usually how they got lucky from a piece of land,” says Andy Xie , an independent economist who once worked in Hong Kong as Morgan Stanley’s top Asia analyst. “No one talks about their factories making money these days.” Newly wealthy towns are playing the game with a vengeance. Ordos is a city of 1.3 million in China’s Inner Mongolia region. It has gotten rich from the discovery of a big coal seam nearby. An emerging generation of tycoons, developers, and local officials will go to any length to invent a modern Ordos. So 16 miles from the old town, a new civic center is emerging from the desert that could easily pass for the capital of a midsize country. An enormous complex houses City Hall and the local Communist Party headquarters, each 11 stories tall with sweeping circular driveways. Nearby loom a fortress-like opera house and a slate-gray, modernist public library. Thousands of villas and apartment towers stretch into the distance, all built by local developers in the hope that Ordos’s recently prosperous will buy the places to be near the new center of power. Serial Drama Workers get bused daily to the new city hall, but the housing is still largely unoccupied. “Why would anyone go there,” asks Zhao Hailin, a street artist in the old town. “It’s a city of empty buildings.” Ordos officials declined to comment for this story. The central government now faces two dangers. One is the anger of ordinary Chinese. In a recent survey by the People’s Bank of China, two-thirds of respondents said real estate prices were too high. A serial drama with the ironic name The Romance of Housing, featuring the travails of families unable to afford apartments, was one of the most popular shows on Beijing Television until broadcasting authorities pulled it off the airwaves in November. The official reason was that the show was too racy — one woman got an apartment by becoming the mistress of a corrupt local official –, but online chat rooms speculated that the show was cut because it was upsetting to people unable to afford apartments. Injuries, Death The debate has become even more charged following injuries and deaths related to real estate. A woman from Chengdu committed suicide by torching herself when her former husband’s three-story factory and attached living space were demolished to make way for a new road. A man in Beijing suffered severe burns in a similar protest over his home. In early December five professors at Peking University wrote to the National People’s Congress calling for changes to a land seizure and demolition law and accusing developers of usurping the government’s role when taking land for construction. The law is leading to “mass incidents” and “extreme events,” the professors warned. The second danger is that Beijing will try, and fail, to let the air out of the bubble. Pulling off a soft landing means slowly calming the markets, stabilizing prices, and building more affordable housing. Key to Growth To discourage speculation, the State Council, China’s cabinet, is extending, from two years to five, the period during which a tax is levied on the resale of apartments. Tighter rules on mortgages may follow. Beijing also plans to build apartments for 15 million poor families. The government is reluctant to crack down too hard because construction, steel, cement, furniture, and other sectors are directly tied to growth in real estate. In November, for example, retail sales of furniture and construction materials jumped more than 40 percent. At the December Central Economic Work Conference, an annual policy-setting confab, officials said real estate would continue to be a key driver of growth. The worst scenario is that the central authorities let the party go on too long, then suddenly ramp up interest rates to stop the inflationary spiral. Without cheap credit, developers won’t be able to refinance their loans, consumers will no longer take out mortgages, local banks’ property portfolios will sour, and industrial companies that relied on real estate for a chunk of profits will suffer. Getting Nervous It’s not encouraging that the Chinese have been ham-handed about stopping previous real estate frenzies. In the 1990s the government brutally ended a bubble in Shanghai and Beijing by cutting off credit to developers and hiking rates sharply. The measures worked, but property prices plunged and economic growth slowed. Analysts are divided over the probabilities of such a crash, but even real estate executives are getting nervous. Wang Shi , chairman of top developer China Vanke Co. , has warned repeatedly in recent weeks about the risk of a bubble. In his most recent comments he expressed fear that the bubble might spread far beyond Beijing, Shanghai, and Shenzhen. One difficulty in handicapping the likelihood of a nasty pullback is the opacity of the data. As long as property prices stay high, the balance sheets of the developers look strong. And no one knows for sure how much of the more than $1.3 trillion in last year’s bank loans funded real estate ventures. Profit vs. Soul Analysts figure a substantial portion of that sum went into property, much of it indirectly. Banks often lend to state-owned companies for industrial purposes. But the state companies can then divert the funds to their own real estate businesses or relend the money to an outside developer. Meanwhile, the big banks may be cutting back on their real estate risk by selling loans to smaller local banks and credit co-ops. For now, the party continues. On Dec. 12, Beijing developer Soho China Ltd. celebrated a record-breaking year with a gala at the China Central Place JW Marriott. Guests dined on crab and avocado timbale, white bean soup, and beef tenderloin with wild mushrooms. Soho declined to comment for this story. After a dance performance, a panel debated “The Balance Between Profit and Soul.” When a writer joked he could not afford an apartment — and was still waiting for Soho Chairman Pan Shiyi to give him one — the crowd of 600 well-heeled developers, entrepreneurs, and consultants laughed appreciatively. If the bubble bursts, few will be laughing. To contact the reporter on this story: Dexter Roberts in Beijing at droberts34@bloomberg.net

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Restaurateurs Attack U.K. Banks for Tight Lending Even as Diners Return

December 27, 2009

By Richard Vines Dec. 25 (Bloomberg) — London restaurateurs are not optimistic they can get financing from banks for new eateries, even though they have fared better in the recession than they expected, said Richard Corrigan , owner of Corrigan’s Mayfair. “The banks are really negative toward our sector,” Corrigan said. “If you went in and asked them for 3 million pounds ($4.8 million) to open a restaurant, you might need a balaclava and gun to get it.” Corrigan, who also owns Bentley’s oyster bars in London and Dublin, said he started the year nervous because he opened in November 2008, just after the collapse of Lehman Brothers Holdings Inc. , which had been among the biggest customers at his London eateries. He was speaking on Bloomberg Television’s “Restaurant Review of the Year,” where the other guests at Corrigan’s Mayfair were David Moore, owner of Pied a Terre and L’Autre Pied; Russell Norman of Polpo; and Peter Prescott of Prescott & Conran Ltd., which opened Boundary and Lutyens in the past year. “It’s a strange approach from lenders at the moment,” Norman said. While the restaurateurs said business had picked up toward the end of the year after a slow start, spending on wine had generally not returned to that of the pre-recession days. “We found a turnaround in September, when all of a sudden we were getting more and more interest,” Moore said. “We’ve got the City types, bankers, not afraid to be seen spending money any more.” Lutyens, Boundary Prescott said Lutyens, his company’s new restaurant close to the financial district, still had some way to go but that spending was easier at Boundary, in Shoreditch, a fashionable part of East London that is known for its eateries and bars. At Lutyens, “We are still struggling a little bit because we are directly across the road from Goldman Sachs and there are lots of silly rumors like they can’t be seen anywhere near a glass of Champagne. We’ve seen some very good signs from October onwards. The wine spend in the City is still quite low, but fortunately it’s still reasonably good in Shoreditch.” Norman’s Polpo, which opened in Soho in September, has been a notable success with its informal ambience and inexpensive food and drinks. I’ve been a few times and seen the queues. Norman says recession may not be all bad for restaurateurs. “It’s one of the best things that we now have to work harder to keep our customers,” he said. Corrigan closed his restaurant in Soho, Lindsay House, after opening his new establishment in Mayfair. Did he have any regrets about leaving Soho, known for its night life? “Opening Corrigan’s was much better than I expected,” he said. “I took the punt and I’m very happy what it’s turned out to be. The horses have certainly come home for me on this site. But I miss all the crack dealers and the petty criminals.” The half-hour show starts on Bloomberg Television on Dec. 25 at 09:00 U.K. time and repeats through to Jan. 1, 2010. (Richard Vines is the chief food critic for Bloomberg News. Opinions expressed are his own.) To contact the writer on the story: Richard Vines in London at rvines@bloomberg.net .

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Sondheim Is Fan as Composers of `Dear Edwina’ Win $50,000 Fred Ebb Prize

December 21, 2009

By Philip Boroff Dec. 21 (Bloomberg) — Songwriters Marcy Heisler and Zina Goldrich, whose fans include composer-lyricists Stephen Sondheim and Maury Yeston (“Nine”), describe their road to Broadway from Paw Paw, Michigan, as blessed and bumpy. Their songs have been recorded by Kristin Chenoweth and others. A revival of their first collaboration, the kid-friendly “ Dear Edwina ” set in tiny Paw Paw, opened off-Broadway on Dec. 11 at New York’s DR2 Theatre. But what was to be their Broadway debut, an adaptation of the 1998 Drew Barrymore movie “Ever After,” was indefinitely postponed this year after the lead producer moved to Los Angeles. “Everyone who creates a show has to spray their body with Teflon,” said Freddie Gershon, who as head of Music Theatre International licensed “Dear Edwina.” “It’s a brutal business. You have to be tough as nails. They have it in spades.” Broadway, with costs spiraling, has produced just two new musicals so far this season: “ Memphis ,” with a score by Bon Jovi keyboardist David Bryan; and “ Fela! ” based on the life and music of Fela Anikulapo-Kuti, a Nigerian band leader and politician who died in 1997. As composer-lyricists with a point of view, Heisler and Goldrich “are like salmon swimming upstream,” Gershon said. They met in 1992 at New York’s BMI Lehman Engel Musical Theatre Workshop, a training ground that bred Broadway’s “Avenue Q” and “Next to Normal.” Goldrich, with a background in jazz, had been writing music and lyrics for Walt Disney Animation Studios. She found she preferred collaborating with Heisler, a poet since her childhood in Deerfield, Illinois. Songs About Etiquette They initially wrote songs about etiquette that became “Dear Edwina.” With music by Goldrich, book and lyrics by Heisler, it focuses on pint-sized “advice-giver extraordinaire” Edwina, who longs to perform in an “Advice-a- Palooza festival.” It’s been licensed for about 1,200 amateur, professional and school productions. “It’s goofy and whimsical and charming,” Gershon said. “And kids have no idea that they’re learning something, which is a good thing.” The pair’s adult songs are informed by what Heisler calls “the school of neurotic optimism.” Men who can’t commit or be left alone are an occasional target. Heisler, 42, said she’s been inspired by her romantic adventures. ‘Punch of a Lyric’ “I think the younger sister in me always appreciated the punch of a lyric,” Heisler said. “It made sure I got my point across when I couldn’t articulate something any other way.” (Heisler’s older sister, Eileen Heisler, co-created the television series “The Middle,” on ABC. Marcy Heisler regards Kevin McCollum , 47, a cousin and Broadway producer, as a brother.) Their best-known number is “Taylor, the Latte Boy,” an ode to a Starbucks staffer that Chenoweth recorded. The song is on a new CD , with performances by Heisler, Goldrich, Scott Coulter and Jill Abramovitz. “The spark of genius is the premise of the songs,” said Yeston, a member of the steering committee of the BMI Workshop. “It’s only a matter of time before they deliver a major award- winning, world-class show.” Sondheim says he doesn’t have a particular take on their work. “I just like it,” he said in an e-mail. ‘Adam Left Town’ Goldrich and Heisler were never fully briefed on why “Ever After” was tabled. The year before a scheduled tryout at San Francisco’s Curran Theatre, lead producer Adam Epstein “had a series of disappointments,” Goldrich said. A revival of Stephen Schwartz ’s “Godspell” was canceled after Epstein said an investor pulled out. “Cry-Baby,” based on the John Waters film, failed after two months on Broadway. “Adam left town, and we didn’t hear very much from him,” Goldrich said. “The way we knew the show was not going on was that Adam allowed the option on our score to lapse.” Epstein said “Ever After” was unrelated to “Godspell” and “Cry-Baby.” He said he couldn’t shepherd “Ever After” because he was working on movie musicals. On Nov. 30, Goldrich and Heisler received the $50,000 Fred Ebb Award, endowed by the late lyricist of “Chicago” and “Cabaret.” It recognizes excellence by a songwriter or team that hasn’t achieved significant commercial success. The money was well-timed, after they turned down lucrative concert dates conflicting with “Ever After” rehearsals. A few years ago, at Sondheim’s Manhattan townhouse, he advised them to “stick a Post-It on your head that says, ‘the writing is all.’” “He was right, and I plan to be writing up a storm next year,” Goldrich said. “‘Ever After’ or no ‘Ever After,’ you will hear from us.” “Dear Edwina” runs through Feb. 15 at DR2 Theatre, 103 E. 15th St. Information: +1-212-239-6200; http://www.dearedwina.com/schedule.html . To contact the writer on this story: Philip Boroff in New York at pboroff@bloomberg.net .

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Cannibal Witch, Fanfarlo, Samurai, Chocolate: Perfect Weekend in New York

December 16, 2009

Review by Manuela Hoelterhoff Dec. 16 (Bloomberg) — Family dynamics especially bad this time of year? Think of Elektra and cheer up. You’re probably not living in a drafty palace with your drug-addled mother who killed your beloved father with her effete boyfriend. Her brother has gone missing in the Trojan Wars; the family dog looks sad; the maids make fun of her. Richard Strauss got some good — and loud — tunes into this ode to family dysfunction. The production is big and old- fashioned — no sunglasses, no Nazis! At less than two hours, even a kid can sit through it. With Deborah Voigt , Susan Bullock and Felicity Palmer. At the Metropolitan Opera , Lincoln Center. Information: +1-212-799-3100; http://www.metopera.org. Hansel and Gretel The cannibal witch is worth another detour to the Met, especially in Richard Jones’s inventively creepy production featuring a big-bosomed tenor in a shirtwaist frock. Out-of- control holiday eaters will appreciate how the director dramatizes the hunger theme: instead of angels, Hansel and Gretel dream of chefs; at the end saved, starved kids eat the witch. In English; reduced-price tickets available. With Miah Persson, Angelika Kirchschlager and Philip Langridge as the witch. Go to Church Too unsociable for sing-along Messiahs? Go sit in the atmospheric dark of the Cathedral Church of St. John the Divine in Morningside Heights listening to the Early Music New York group. There’s nothing quite like hearing 15th- and 16th-century carols, noels and motets resounding through the nave of this great space. Remaining concerts are scheduled for Dec. 20, 25 and 27. Amsterdam Avenue at West 112th Street. Information: +1- 212-280-0330; http://www.stjohndivine.org . Fanfarlo The London-based indie folk band Fanfarlo plays Webster Hall on Dec. 18. Expect lashings of mandolin from its debut CD “Reservoir.” My local Bloomberg rock tutor, Jaime Widder , feels this was one of the best debut albums from 2009. At 125 E. 11th St. Information: +1-212-353-1600; http://www.websterhall.com . Samurai Cool head-toppers amaze and amuse in the engaging “Art of the Samurai: Japanese Arms and Armor 1156-1868” at the Metropolitan Museum of Art. The glittering array of swords, guns, archery equipment and banners reveals an elegant approach to butchery and death. But it’s the whimsical helmets you will remember, ornamented with tall rabbit ears and hollyhock leaves. Go on a Friday or Saturday night when a live chamber music group plays in the cafe-bar overlooking the Great Hall. Fifth Avenue at East 82nd Street. Information: +1-212-535-7710; http://www.metmuseum.org . Tim Burton In a dark corner, a toy-size carousel dangling a glimmering wee octopus slowly turns to melancholy whoo-whoo music by the appropriately named Danny Elfman . It’s the magical highlight of the Museum of Modern Art’s Tim Burton retrospective. The odd- ball filmmaker has drawn obsessively almost since birth and even if the show could have used more editing (Edward Scissorhands, where were you?), a lot of the stuff is wonderfully nuts. Who can resist the mind that brought us that penguin baby carriage? Timed entry on weekends. Go at off hours or on weekdays to avoid crowds. At 11 W. 53rd St. Information: +1-212-708-9400; http://www.moma.org . Broadway At the Eugene O’Neill, on West 49th Street, choreographer Bill T. Jones’s “Fela! The Musical” tells the fast-moving story of Afrobeat legend Fela Kuti. Meanwhile, nostalgia flows at the St. James on West 44th Street, where a revival of the 1947 “Finian’s Rainbow” brings back such classics as “How Are Things in Glocca Morra?” Information on both shows: +1-212-239- 6200; http://www.telecharge.com . Holiday Train There’s only one place you can see all of New York City up close in an hour or two without risking cardiac arrest: The annual Holiday Train Show at the New York Botanical Garden ’s Enid A. Haupt Conservatory. Scale model trains chug past the original Yankee Stadium, the Brooklyn Bridge and the Statue of Liberty — all created from natural materials (Lady Liberty’s torch is a pomegranate). Step off for hot chocolate. Bronx River Parkway at Fordham Road, in the Bronx. Information: +1-718-817- 8700; http://www.nybg.org. Hot Chocolate For the full chocolate experience, nothing compares with Jacques Torres’s SoHo outpost on Hudson Street. You can watch the process from bean to bar, in a gleaming, glass-enclosed shop run by the city’s most famous chocolatier. It looks like the set from the Met’s “Hansel and Gretel” without the lethal cook. At 350 Hudson St. by King Street. Information: +1-212-414-2462; http://www.mrchocolate.com . At Max Brenner, a chocolateria serving American fare as an excuse to get to the good stuff, try the $21.95 Chocolate Fondue, which comes with enough fruits, candies, macaroons and other dipping treats to satisfy the most gluttonous family. At 841 Broadway by 13th Street. Information, +1-212-388-0300; http://www.maxbrenner.com . Nutcracker And so, off we go to the land of sweets, as the fabled George Balanchine production of “The Nutcracker” twirls through the holidays. Last we checked, there were still a few seats left to the annual presentation at the New York City Ballet. At the David H. Koch Theater, Lincoln Center; http://www.nycballet.com . ( Manuela Hoelterhoff is executive editor of Muse, Bloomberg’s arts and culture section. Any opinions are her own.) To contact the writer on the story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net .

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Don McNay: Washington: Totally Disconnected From Main Street

November 23, 2009
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Belichick’s No-Punt Bet Gets Patriots Coach Into Freakonomics Hall of Fame

November 17, 2009

By Michael P. Regan and Eric Martin Nov. 17 (Bloomberg) — A decision by New England Patriots coach Bill Belichick that cost his team a win over undefeated Indianapolis earned him the praise of “Freakonomics” co-author Steven D. Levitt , who said the call probably was the right one. Belichick, who has led the Patriots to three Super Bowl championships, decided to go for first down on fourth-and-two from his own 28-yard line with 2:08 left and his team leading 34-28 in the National Football League game on Nov. 15. The Patriots failed to get the first down and turned the ball over to the Colts, who scored a touchdown to win 35-34 and trigger an outcry against Belichick among Patriots fans. Statistical analysis suggests that the 57-year-old Belichick made the right decision, according to Levitt, a University of Chicago economist whose 2005 book “Freakonomics: A Rogue Economist Explores the Hidden Side of Everything” applies economic theory to topics from drug dealing to cheating among sumo wrestlers. He wrote the book with journalist Stephen J. Dubner . “So hats off to Bill Belichick,” Levitt wrote on his New York Times blog . “This decision may have hurt his chances for the Football Hall of Fame, but it guarantees his induction into the Freakonomics Hall of Fame.” Levitt cited a study by David Romer , professor at the University of California-Berkeley, which said coaches often get too conservative on fourth downs. In an analysis of more than 700 regular-season NFL games from 1998 through 2000, teams had 1,068 fourth downs where averages suggest they would have been better off going for a first down. They kicked in 959 of those situations, according to Romer’s study. ‘Play With Numbers’ The Advanced NFL Stats blog agrees that Belichick’s decision was not as foolish as some Patriots fans claim, even when factoring in the exceptional play of quarterback Peyton Manning and his now 9-0 Colts. Fourth-and-two conversions are successful 60 percent of the time, according to the blog. A punt from the 28 typically nets 38 yards, which would have put the Colts at their own 34 with a 30 percent chance of scoring. “You can play with the numbers any way you like, but it’s pretty hard to come up with a realistic combination of numbers that make punting the better option,” a posting on the blog said. “You’d have to expect the Colts had a better than a 30 percent chance of scoring from their 34, and an accordingly higher chance to score from the Pats’ 28. But any adjustment in their likelihood of scoring from either field position increases the advantage of going for it.” The statistics are likely to do little to appease Patriots fans, as the arguments over Belichick’s decision rage from Boston to Wall Street. Art Hogan , the chief market analyst at New York-based Jefferies & Co., said he and fellow Patriots fan Craig Peckham , an equity trading strategist at the firm, continue to debate the call. “Belichick has three rings on his fingers and has been to the show however many number of times, so he kind of gets a pass for such a gutsy call,” said Hogan. “I think it was the right thing to do. But Craig disagrees with me, and that’s what makes markets. We sit together and root for the same team, and we can come up with completely divergent views.” To contact the reporters on this story: Michael P. Regan in New York at mregan12@bloomberg.net ; Eric Martin in New York at emartin21@bloomberg.net .

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Don McNay: Lottery Winners & Lottery Losers. Don McNay interview on CBC

November 13, 2009

This is a link to an interview I did with Mark Kelley on his prime time CBC show about the pitfalls that lottery winners and others who receive big money have to deal with.

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Don McNay: Lottery Winners & Lottery Losers. Don McNay interview on CBC

November 13, 2009

This is a link to an interview I did with Mark Kelley on his prime time CBC show about the pitfalls that lottery winners and others who receive big money have to deal with.

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Arianna Huffington: Why It’s Wrong When Wrongdoers Are Allowed to Admit No Wrongdoing

November 9, 2009

“The struggle of man against power is the struggle of memory against forgetting.” So wrote Milan Kundera in The Book of Laughter and Forgetting . It is one of my favorite quotes and it popped into my head as I was reading about last week’s settlement between JPMorgan and the SEC in which the banking giant agreed to pay a $25 million penalty and cancel $647 million in fees owed by Alabama’s Jefferson County as the result of a complicated derivatives deal that blew up in the county’s face. As part of the settlement, JPMorgan neither admitted nor denied wrongdoing — despite ample evidence that it had engaged in plenty of wrongdoing. Things like paying off local officials with millions to win no-bid contracts worth billions and convincing county officials to switch from fixed-rate bonds to bonds hedged with risky derivatives — a switch that has driven Jefferson County to the brink of bankruptcy . “We have been victimized by our creditors,” said a county official. JPMorgan released a statement that it was “pleased to have reached a settlement with the SEC,” and acted as if it was practically a disinterested party: “The charges relate principally to municipal transactions that occurred six and seven years ago. JPMorgan has since discontinued that business, and the employees in question are no longer employed by the firm.” So no wrongdoing admitted, and time to move on to the next lucrative money-printing scheme. How tidy. This is what passes for justice on Wall Street these days. If you commit a petty crime and hammer out a plea bargain, you’ll have to admit wrongdoing as part of the agreement. But put on a suit and commit a billion dollar crime and you won’t even have to admit you did anything wrong. It’ll be as if it never happened. Which, of course, makes it much more likely that it will happen again. We saw the same dynamic played out earlier this year in the legal saga surrounding the $3.6 billion in bonuses that was awarded to Merrill Lynch executives just before the failing firm was acquired by Bank of America (with a lot of help from American taxpayers, who bailed out BofA with $45 billion). It appears that Bank of America executives failed to inform their shareholders that, as part of the acquisition, they were going to give billions to the executives who had been at the helm while Merrill lost $27 billion in 2008. Had the shareholders been told, the news would more than likely have put a crimp in the hastily arranged deal. Many thought the matter was closed back in August when the SEC reached a settlement with Bank of America in which the banking giant would pay a $33 million fine but — you guessed it — admit no wrongdoing. Of course, lots of wrong was done in that case too — something that was implicit in the bank’s willingness to pay the multimillion-dollar fine. Specific people had made very specific decisions surrounding the Merrill Lynch bonuses — including not informing their shareholders. But, instead of going after them, regulators went after the company, gave it a minor ding to its bottom line, and were ready to forget the whole thing. Last year, the total of amount of fines levied by the SEC was the lowest since the corporate scandals of 2002 led to stricter enforcement regulations. So while the financial system was on a fast track to near-collapse, the SEC was taking its hand off the brake. And the perpetrators of that near-collapse are being allowed to avoid accountability. When crimes are uncovered then resolved with no acknowledgment that a crime was ever committed, that’s a recipe for anarchy — not for a healthy democracy. It’s really not that complicated: if you do the crime, you do the time. But the people who run the show like to make it seem like it is very complicated — all the better to obscure the simple moral principle of right and wrong. Why should it matter whether you commit your crimes in a fancy boardroom or on the street? If you were reaping the (often enormous) benefits of your crime, why don’t you have to admit wrongdoing when you’re caught, and pay a commensurate — not a token — penalty? As it happens, there are some heroes out there who have noticed that the ambiguous way our laws are being enforced has diverged from the unambiguous morality the laws are based on. In the Bank of America case, the hero is U.S. District Court Judge Jed Rakoff. Instead of rubber-stamping the BofA/SEC settlement as everybody expected, Judge Rakoff refused to sign off on the deal , which he called a breach of “justice and morality” that “suggests a rather cynical relationship between the parties.” And Judge Rakoff demanded to know who exactly were the executives who knew about the bonuses and decided not to disclose them. Instead of a faceless company, shouldn’t the culpability, Rakoff asked at a hearing , be on “the individuals who were responsible?” But rather than naming those responsible, Bank of America claimed it was all the fault of its lawyers — an excuse that, shockingly, the SEC bought, saying the fact that the bank’s executives had relied on legal advice would present “substantial obstacles” to prosecution. Judge Rakoff wasn’t buying it — he saw the slippery slope that thinking would lead to: “It would seem that all a corporate officer who has produced a false proxy statement need offer by way of defense is that he or she relied on counsel,” he said. Rakoff has a history of actually applying the law. Back in 2003, he rejected a settlement with WorldCom because the fine was too low. When he first became a judge, prosecution used to focus more on individuals instead of companies. “The feeling then,” he said , “was if a crime had been committed, it was important to discover who the persons were who made the wrongful decisions.” Judge Rakoff’s display of spine appears to have rubbed off on the SEC, which now says it will aggressively pursue its case, taking Bank of America to trial . And there have been other ripple effects: after initially stonewalling a congressional committee looking into the Merrill acquisition, the bank agreed in September to hand over some, but not all, of the documents the committee had requested. And in October, it agreed to turn over to the SEC and the New York Attorney General’s office documents revealing the legal advice it received regarding the Merrill deal — an unusual waiving of attorney-client privilege. What’s more, Brian Moynihan, the bank’s onetime general counsel and a contender to succeed departing CEO Ken Lewis, will testify before the House Oversight Committee next week about his role in the Merrill takeover. Of course, it’s not just our “too big to fail” banks that have been allowed to do wrong without having to admit to any wrongdoing. The pharmaceutical industry and health insurance companies have been doing the “pay the fine but admit nothing” dance for years — chalking up the millions (and sometimes billions) they have been fined as the cost of doing business. But with the banking, drug, and insurance industries all finding themselves at a crossroads, now is a very good time to revoke the Get Out of Jail Free card those at the helm of these companies have been given for far too long. We all know that there was a great deal of wrongdoing that led to the near-collapse of our financial system and to our badly broken health care system. The first step to reforming each of them is to acknowledge that wrongdoing — and to seek the real punishment of the wrongdoers.

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Michael Lynton And Amy Pascal: Sony’s Tracy-Hepburn Act

October 25, 2009

DAYS after Michael Jackson died last summer, an executive at Sony Music phoned Amy Pascal, the co-head of the company’s movie studio, to tell her that the pop singer had left hours upon hours of rehearsal tapes for his planned run of 50 concerts in London. The Jackson deal was just the latest coup from a pair who are putting on a leadership display that is rare in any industry, outside of family-run businesses: a man and woman, equal partners, at the helm, and operating in sync. It has worked at Sony Pictures, say executives who know both people, because Mr. Lynton checked his ego after first being offered the job alone, while Ms. Pascal has put aside her resentment at not getting the chance to run the show herself after a long run at the studio.

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Vivian Norris de Montaigu: Sexism and the Workplace: Have We Come a Long Way (Baby)?

October 24, 2009

We need to stop listening to our mothers who tell us that if we want something from a man we have to be subtle enough to make them think they actually came up with the idea in the first place! We should take Norway as an example to follow and make sure all corporate boards are made up of at least 50% women. Then we should do the same for foundation boards and political representation. Why? Because the reality is that, even if you are a female executive at Goldman Sachs, you will never be part of the “boys’ club” — and guess what, it’s still a boys’ club. Women are still discriminated against because of the fact that they are women. They are paid less than men, in many places there is still no maternal leave to protect us when we have children, in fact we can pretty much bet that our careers will be over if we leave to start a family. I think back to the late 1980s and a job I had when I was twenty-two, working for a Texan, who seemed shocked when I asked him to sign an employee contract. Lucky for me, he signed it. But he also did the following: invited me to lunch in a very dark restaurant where they knew him and showed us to the far back corner table, cornered me in a warehouse where I was cataloging items in his antiques collection, and came up behind me while I was in the home office looking in the file cabinet and basically made me feel very uncomfortable. I finally quit, and when I did (via a two page letter outlining why I was quitting) he told people he fired me! Then there was an Italian boss I had who was five months behind paying me for work on a festival. When I pushed him to pay me he finally asked, “What? Don’t you have a boyfriend?” I looked at him aghast. What does having or not having a boyfriend have to do with getting paid for a job well done? Women are also usually known for not negotiating for higher salaries; they don’t even realize that they can ask. In France, not so long ago, I read a poll in which women executive assistants were asked if they would go away with their married bosses for a weekend if it meant bettering their careers — something like 60% replied in the affirmative! In other words, if you help the male peacocks feel powerful and like they are in control, you can gain a bit of power. But the reality is not many women in France are running big banks, or industries or business schools. But neither are they in America. Now imagine if you are a woman working in a country where you cannot even legally drive. How in the heck are we supposed to become empowered when we are treated like children? The Mad Men series may be sexy, but what is the most wonderful thing about the show is that Don Draper keeps ending up in the arms of more liberated modern women: the beatnik girlfiend living downtown who is free enough to let him go, the woman who inherits her family’s business, and eventually turns him down, and the power broking woman his own age whose mind and business sense is as sharp as his own — and who ends up in a car wreck with him, while the wife (who is about to blow) is on the edge of heading towards some serious female liberation. You can almost hear the call of the mid-life return to a college psychology degree a few seasons in the future, because the only way to stay married to these sexist men is to become their full-time therapist! In other words, Don Draper is a man whose time has come, and is almost over. He is the post-WWII American male anti-hero who has no place in the modern world. Yet all these cigar smoking execs who have brought us to the financial crisis have not figured that out yet. A real man empowers women. Insecure men need to feel like “the boss.” Women need to run their own companies, have decision making powers and have the same access to financial services, especially credit, as men. The fastest way to end up in poverty is for a woman to get divorced and be a single mother. Yet we have better payback rates for loans than men (look at the microcredit scores of up to 99 around the world in programs which loan primarily to women). The Obama administration needs to take a look at putting more women in charge of the economy. They are slowly “getting it,” but taking advice from the friends of Goldman Sachs (all men), is doing more harm than good. Those who are making the most sense right now are women: Sheila Baer at the FDIC, Elizabeth Warren, the Harvard law professor who serves as the chair of the Congressional Oversight Panel for the TARP program, and the first female recipient for the Nobel Prize in Economics, Elinor Ostrom, whose work focuses not on theories but real world economics and helping poor countries. Obama’s mother, Ann Dunham Soetoro, was a visionary in seeing how women, when given access to credit, could bring themselves out of poverty. It is too bad that she is not here now, at the right hand of Obama, advising him. But surely he knows how important women are to the world, he should, they raised him!

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Porsche, Daimler Snub Tokyo’s Show as Carmakers Make Beeline for Shanghai

October 20, 2009

By Makiko Kitamura and Kiyori Ueno Oct. 20 (Bloomberg) — Porsche SE , Daimler AG and Volkswagen AG all sent top executives to April’s Shanghai Motor Show as China is set to become the world’s largest car market. All three are skipping this week’s Tokyo Motor Show. With the recession slashing global vehicle demand and Japan’s car sales headed for the lowest in three decades this year, no major foreign automakers will be represented for the first time in 45 years at the Tokyo event, formerly one of the world’s five biggest car shows. “The Tokyo Motor Show is being snubbed by companies who made a beeline for Shanghai,” said Yuuki Sakurai , chief executive officer of Fukoku Capital Management Inc., which manages about 800 billion yen ($8.8 billion). “It’s just like investors being more interested in emerging-market stocks than in Japanese shares.” The Tokyo show, open to the public from Oct. 23, will feature 108 automakers and suppliers. Compared with 26 foreign exhibiters at the last show in 2007, this year there will be only three; the U.K.’s Group Lotus PLC and Caterham Cars, and Germany’s Alpina Burkard Bovensiepen GmbH. In contrast with the Tokyo event, 1,500 exhibitors from 25 countries were present at the Shanghai show. Foreign automakers and suppliers are passing on Tokyo to cut costs as vehicle demand drops in the world’s most rapidly aging country, whose population began declining in 2005. Imports accounted for just 176,723 out of Japan’s 5.08 million vehicle sales in the fiscal year ended March 31, representing a market share of 3 percent. China Eclipses Japan China overtook Japan as the world’s second-largest car market in 2006 and is set to surpass the U.S. for the top spot this year. U.S. vehicle sales are expected to drop by 23.5 percent to 10.1 million this year, according to an estimate by CSM Worldwide, an auto consulting company. In China, full-year vehicle sales may rise 28 percent to 12 million, according to a government forecast. Japan’s market is expected to decline 8.5 percent to 4.3 million vehicles in the year ending in March. The show area in Tokyo has shrunk by about half to 21,000 square meters, or one- eighth of the 170,000 square meters allotted at Shanghai. Even domestic truckmakers Isuzu Motors Ltd. and Hino Motors Ltd. are sitting out the Tokyo show, for the first time. Hino, Japan’s largest maker of heavy trucks, withdrew “due to the difficult business environment,” spokesman Yoshihiro Udagawa said. Economic Contraction Economists expect Japan’s economy will contract a record 5.7 percent this year and the unemployment rate will reach an unprecedented 6 percent in 2010, undermining consumer spending, according to a survey by Bloomberg. In one parallel to Shanghai, the Tokyo Motor Show will feature electric cars alongside hybrid and gasoline-engine models. Toyota Motor Corp. , Honda Motor Co. and Nissan Motor Co. , Japan’s three largest carmakers, are all displaying models designed to cut carbon emissions. “In terms of scale and volume, China is the main attraction,” said Yasuaki Iwamoto , an auto analyst at Okasan Securities Co. in Tokyo. “But Japanese carmakers will remain the front-runner in environmental technologies. That won’t change.” Honda, Mazda Tokyo-based Honda will display a battery-powered concept car, the EV-N, and a concept electric motorcycle. Yokohama-based Nissan will show its Leaf electric car, to be sold starting next fiscal year. The carmaker’s shares have risen 46 percent this year. Mazda Motor Corp. , Japan’s second-largest car exporter, is developing a high-performance gasoline-engine car that achieves 32 kilometers (20 miles) per liter. The concept car, Kiyora, will be showcased at Tokyo Motor Show. Toyota will unveil the four-seat FT-EV II electric concept car, which can run more than 90 kilometers on a full charge and can hit a top speed of more than 100 kilometers. The company’s stock has gained 23 percent this year. The automaker will also show its FT-86 Concept sports car at the show. The model, which is set to be sold in 2011, is a compact rear-wheel drive sports car. Toyota will also display a plug-in version of its third-generation Prius gasoline-electric hybrid. The three foreign exhibitors are all niche brands. Alpina configures Bayerische Motoren Werke AG cars, producing less than 2000 vehicles a year. Lotus makes hand-built cars with an aluminum chassis and Caterham builds two-seat racing vehicles in the U.K. It forecasts sales of 70 cars in Japan next year, according to Andy Bothwell, a spokesman for the company. “There is great affection in Japan for anything quirky and British,” he said. To contact the reporter on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net

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Steve Parker: Hummer’s now history — Here’s how it started

October 10, 2009

Somewhere, California Governor Arnold Schwarzenegger has tears in his eyes. His favorite vehicle, Hummer, has left the building. Its sale was announced today. The Guvernator was in large part personally responsible for the military HumVee, built by AM General in Mishawaka, Indiana, being turned into a civilian vehicle and sold to the general public. More on that in a minute. The monster-sized truck company, whose products were sold through General Motors dealers starting in 1992, has been sold to China’s Sichuan Tengzhong Heavy Industrial Machinery Company. The sale will garner GM an estimated $150 million; military technology associated with Hummer will not be part of the sale. The classic, massive Hummer H1 was the civilian version of the military HumVee The first civilian Hummer, the H1, was based on the military HumVee, or High Mobility Multipurpose Wheeled Vehicle. AM general was a vestige of the old American Motors, which at one time owned Jeep, and AM General was Jeep’s “general products” division. In fact, the HumVee replaced the Jeep as the all-around general military vehicle. It was available to the military in scores of configurations, from rocket launchers to troop carriers to communications trucks to ambulances and everything in-between. The H2 and H3 Hummers were actually based on GM pickups, not the HumVee. The H1 was one of the few vehicles which, at over 6,000 pounds, entitled the owner to claim a farm equipment tax credit with the IRS. Hummer’s H3 was built on a GM truck platform, not a military HumVee’s. AM General had been exploring production of a civilian HumVee, entering the military truck in some rugged off-road races to build its reputation among hard-core off-roaders. Then came Arnold. This story was told to me at a dinner for journalists announcing the new Hummer. It was at the Saddle Peak Lodge outside Los Angeles. Jim Armour, then head of AM General (of course he’d be named ‘Armour’) was my neighbor at the table and we talked for hours. As best as I can remember, this is what he told me: In 1989, Arnold was making the film Kindergarten Cop in Oregon. One day, while driving on a freeway to the set, he saw a military convoy on the other side of the road, a convoy featuring several HumVees. Never having seen one before, Arnold went nuts. He crossed the median of the highway to chase down the convoy. When they made a rest stop, Arnold started checking-out the HumVees and talking with the military people driving them and traveling in them. Arnold Schwarzenegger’s determination to own a Hummer of his own resulted in AM General making a civilian version of its ubiquitous military truck “It has balls,” is what Arnold said about the truck. Of course, he wanted one. When they explained to him that he couldn’t have one, he became even more determined to find out everything he could about the truck and the company which made it. I once had the pleasure of giving Arnold an early-morning tour of the Los Angeles Auto Show (we had some friends in common) … just the two of us, cruising the show without the crowds. Three things I learned that day about our incumbent governor: He knows his cars. And, he’s very, very funny. And a lot shorter than you might think …and if he wanted AM General to build a civilian HumVee, there was no one better to make that case to the company. It wasn’t long until Arnold was (private) jetting his way to AM General’s plant in Mishawaka, meeting the line workers and executives, seeing how the HumVees were made. And his enthusiasm was contagious. AM General execs sped-up their plans for making a civilian version and put together a deal to supply these newly-named “Hummers” to General Motors. And the rest, as they say, is history. Robby Gordon pilots his race-prepped Hummer H1 in the Paris-Dakar event AM General and GM did some smart things as far as off-road racing with their Hummers. They hired Rod Hall, one of the best Baja racers, to be their lead driver, and also eventually hired another off-road great, Robby Gordon, now in NASCAR Sprint Cup. Gordon took his Hummer to race in the Paris-Dakar, one of the longest and toughest events in the world, and always acquitted himself well. His racing Hummer was estimated to be worth over $1 million, with its carbon fiber body panels and all the rest of its trick stuff. Actually, even a moderately skilled off-roader (like me) could do well in a Hummer. Those things would almost go straight up a wall … and the on-board air compressor which allowed the Hummer’s tires to drop pressure or add it at the flick of a switch made Hummer even more formidable off-road. One problem never solved was the H1′s lack of space for the driver and front passenger. The engine was located between and under them, and both front seats held its occupants like they were equipped with five-point racing harnesses. The marketing was impressive and straightforward. Being the ‘stars’ of the first Gulf War didn’t hurt Hummer’s image or its sales. The advertising told potential customers, in so many words, that it’s a tough world out there, getting uglier every day, and maybe an “urban assault vehicle” was just what a family needed to survive freeway shootings and car-jackings. Another message was that Hummer buyers are people who are used to the best in every product category; why would they settle for a mere 5,000 pound SUV when a 6,000 pound car-crushing Hummer was available? One team in the DARPA government challenge to individuals to create a vehicle which can, literally, drive itself under any conditions, used a Hummer. GM had their Hummer dealers sell the trucks out of their own dedicated buildings; often they looked like glorified Quonset huts and many dealers installed short off-roading tracks to show-off the vehicle to its advantage. Many police and fire departments around the country bought their own Hummers to use as emergency vehicles, especially for fire-fighting in the back country; these were probably the only sales which made sense. Hummer certainly had a place and time in American history; that Schwarzenegger had a hand in bringing them to civilian life just made the story more Hollywood, more perfect. Even in the GM truck-based H3, the largest thing in the interior still seemed to be the center console In fact, at car events in southern California in those days, there would be a lot of Hummers in the parking lots or even on display. And of course everyone wanted to see Arnold’s Hummer. There was an easy way to spot his vehicle. People in the know simply got down on their hands and knees and looked under all the Hummers. The one with a bull’s scrotum, testicles pronounced and included, attached to and hanging from the rear axle was Arnold’s truck … and I am not kidding. Balls, indeed.

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Soros, Davies Expound on Economic Crisis in David Hare Play: London Stage

October 9, 2009

Review by Warwick Thompson Oct. 9 (Bloomberg) — A character called The Author, dressed in a battered leather jacket and red tie, steps onto an empty stage. “This isn’t a play,” he says. “It’s a story.” Right. Wrong. David Hare’s “The Power of Yes” at the National Theatre is really a form of low-power documentary. Subtitled “A dramatist seeks to understand the financial crisis,” it explores the causes of the debacle started on Sept. 15, 2008. One by one, 20 or so participants are prompted by The Author to offer their thoughts. We meet the multibillionaire hedge-fund manager George Soros (played by Bruce Myers). Then comes the first chairman of the U.K. Financial Services Authority , Howard Davies (Jonathan Coy), and a brilliant young financial journalist called Masa Serdarevic (Jemima Rooper). Their speeches are edited from interviews conducted by Hare. The talking-heads technique is a method the writer has used before in “The Permanent Way” (2003), about the privatization of the British rail network, and “Stuff Happens” (2004), about the build-up to the war in Iraq. In the former work, the testimony of rail bosses and bankers was movingly contrasted with survivors’ accounts of train crashes. Here, the tone is grayer and varies little: Hindsight’s a grand thing. Everyone admits things went wrong, everyone gives an opinion. Sometimes those opinions morph wearyingly into lectures. Several of the speakers attack Gordon Brown at one point, which feels a little like kicking a punctured football. Somber Suits It doesn’t help for the bare visual look of the piece that the majority of interviewees are middle-aged men in dark suits. Though the acting is fine, few of them leap into three- dimensional theatrical life, and there’s not much conflict to keep the tension levels up. The Author prompts and cajoles his interviewees, rarely challenging them. They don’t challenge each other either. It’s a series of consecutive justifications and hypotheses. The words of two vital players — former chairman of the U.S. Federal Reserve Alan Greenspan and ex-chief executive officer of Royal Bank of Scotland Group Plc Fred Goodwin — are only given in hearsay, relayed by others. For all that, some facts startle. The Black-Scholes equation, a mathematical formula for predicting market trading, caused the hedge fund Long-Term Capital Management to lose $4.6 billion and fail in 1998: It’s still the standard equation used in the industry. And the accounts of Barclays Plc one year included the bewildering term “non observable inputs” in its headings. “Non observable input” is how I feel about Hare’s work on this show. Overall, it’s a dutiful plod, more like research for a play rather than the play itself. Rating: **. For a vibrant theatrical response to the crisis, see Lucy Prebble’s razor-sharp, carnivalesque piece “Enron,” now at the Royal Court Theatre and transferring in January to the Noel Coward Theatre . Nothing could be further from a plod. “The Power of Yes” is in repertory at the National Theatre. Information: http://www.nationaltheatre.org.uk or +44- 20-7452-3000. ( Warwick Thompson is a critic for Bloomberg News. The opinions expressed are his own.) To contact the writer on the story: Warwick Thompson , in London, at warwicktho@aol.com .

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Albright Deployed Snake, Zebra, Tiny Missile Pins Against Putin, Hussein

October 5, 2009

By Katya Kazakina Oct. 5 (Bloomberg) — After being called an “unparalleled serpent” by the Iraqi press in 1994, Madeleine Albright met the country’s officials wearing a snake brooch. Albright, then the U.S. ambassador to the United Nations, used the pin to send a message to Saddam Hussein’s government. The incident marked the beginning of an original approach to diplomacy. “Before long, and without intending it, I found that jewelry had become part of my personal diplomatic arsenal,” Albright writes in her book , “Read My Pins: Stories From a Diplomatic Jewel Box” (HarperCollins). Used at the right time, the symbol “can add warmth or needed edge to a relationship.” Now more than 200 bugs, reptiles, crustaceans and other jeweled accessories from Albright’s collection make up a new exhibition at New York’s Museum of Arts and Design. Albright continued using jewelry to send messages to world leaders, foreign governments and the press when she became the first female U.S. secretary of state in 1997. “A foreign dignitary standing alongside me at a press conference would be happier to see a bright, shining sun attached to my jacket than a menacing wasp,” she wrote. Russia’s Vladimir Putin told then-President Bill Clinton that he routinely tried deciphering the meaning of Albright’s brooches, Albright writes in the book. Sometimes, she offered the interpretation. She wore an arrow-like pin during talks with Russian Foreign Minister Igor Ivanov. “Is that one of your interceptor missiles?” he asked. “Yes, and as you can see, we know how to make them very small. So you’d better be ready to negotiate,” Albright replied. Mood Signals As the pins became part of her public persona, the collection grew. There were numerous ladybugs, butterflies and hot-air balloons to express her good mood. Spiders, snakes and flies came in handy for more combative occasions. Turtles marked slow negotiations and owls sought wisdom. She wore a very large American flag brooch when meeting North Korea’s Kim Jong-Il and stuck on her favorite zebra pins for a get-together with Nelson Mandela at his estate in South Africa. Some accessories in the show have a more personal meaning for the former head of the State Department. One looks like interconnected shards of broken glass. A symbol of Albright’s professional accomplishment, it represents the shattered glass ceiling. “Read My Pins: The Madeleine Albright Collection” runs through Jan. 31, 2010, at the Museum of Arts and Design; 2 Columbus Circle. Information: +1-212-299-7777; http://www.madmuseum.org ( Katya Kazakina writes for Bloomberg News. The opinions expressed are her own.) To contact the reporter of this story: Katya Kazakina in New York at kkazakina@bloomberg.net .

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Stephen Viscusi: Should Disney/ABC Change the Name of "Good Morning America" to ABC’s "Good Morning Gay America"? Viscusi’s TOP…

September 25, 2009

I was recently reading on my friend Tory Johnson’s blog (www.womanforhire.com). Tory’s blog mentioned how she had met Suzie Orman and her “life partner,” Kathy Travis (“KT”), at a speaking engagement called the Pennsylvania Governor’s Conference for Women. Orman is a lesbian TV personality who talks and writes about money related issues. She is a class act to whom I look up to. According to the “Woman for Hire” blog, Suze and KT were both excited about Suzie’s high ranks in the TVNewser poll, which, to that date placed Orman as the highest contender to replace Diane Sawyer in January on ABC’s “Good Morning America.” Here is a little back-story about Tory Johnson. Tory founded a woman’s job fair company called, “Woman for Hire,” after losing her job at NBC, where she had previously worked as a publicist. Tory is also a paid workplace expert on ABC’s “Good Morning America,” and the author of the new book “Fired to Hired,” which I highly recommend. If Tory can go from a public relations person at NBC, lose that job and somehow convince a producer from Good Morning America to hire her as “on-air” talent–not to report on “public relations” but to give career advice, without her even needing to go back to school, you want to know her secret. I say, good for Tory. It’s sweet revenge for her with NBC. After all, these are the same producers that hired all these childless “on-air” talents to lure parents to the show. Welcome to the world of television! Or, as I call GMA, “smoke-and-mirrors in Jimmy Chu shoes!” However, I had to chuckle at the Suze Orman story Tory wrote. There is the sense of clear irony in what Tory wrote about regarding “Good Morning America” and the woman Tory said is now feels like her “BFF”-Suze Orman. It was my impression that Disney/ABC had decided to focus on attracting moms (women), to score the all-time highest ratings war for television’s morning shows. “Moms” are apparently the strongest demographic for morning television. However, here is the thing. Disney/ABC’s “Good Morning America” is the only morning show on network broadcast that does not have a parent at the helm. Diane Sawyer is not a mom. Robin Roberts is a single woman in her mid-to-late forties who never married, and never talks about having a boyfriend or even dating men, like Hode Kobe does on NBC’s “Today Show.” I was on a Ferry from the Fire Island Pines, a predominately lesbian and gay community near Long Island NY, about two years ago. Robin Roberts had spent the weekend there and was on her way back with her doggy. She may have been visiting Sam Champion, who has also been out there. All of the morning show’s programming strategy seemed to be to attract women, mostly moms who would be home in the morning or at least part of it, before getting the kids off to school and then heading off to work…and well, I found the whole story amusing. Tory would be an ideal host. As a working mom, she even looks like a Sawyer, that is, if Sawyer had had children. I love to put on my headhunter hat with these TV “on -air” scenarios and add my two cents, even when not asked. I have no gripe with the lesbians, even single straight women, and non-moms ruling the morning talk-show world. After all, Oprah and Tyra are not married, and are not mothers either- -at least that we have heard of. First, picture this in your head. “Good Morning America” with your hosts, Robyn Roberts and Suze Orman, Sam Champion with the weather and our news reader Chris Cuomo (who has kids). If ABC does not give the job to Cuomo, (and if not, I would walk if I were Chris Cuomo), then give his job to Anderson Cooper! Better yet, here is an idea: ABC can hire MSNBC’s, talk show host, Rachel Maddow. Then, ABC may be able to cross-sell their morning franchise to Viacom’s LOGO network. (Just tongue-and-cheek here, before you wrote, and no pun intended!) My last advice to ABC is that Barbara Walters should bring in Sarah Palin as a replacement for Elizabeth Hasselbeck! Boy did I hear from thousands of my readers about that. Wow! Therefore, I hope you will let me know what you think of this list of TOP TEN. OK-here are my top ten more realistic picks (men and woman) to replace Diane Sawyer on “Good Morning America. I write them as a recruiter, author of the HarperCollins book “Bulletproof Your Job,” and as a TV-journalist and writer myself: 1. Ann Curry (ABC should be trying to steal her away). 2. Kathy Lee Gifford (Meredith Viera and her are roughly the same age), she is a mom and cannot stop talking about her kids. 3. Rosie O’Donnell (at least she has kids) 4. Campbell Brown (Former NBC Weekend anchor of the “TODAY” show, and now has her own gig on CNN. Moreover, she cannot seem not stop having kids) 5. Dr. Phil -Come on, you know he would be great to wake up too. 6. Heidi Klum-Perfect complement to Robin and another one who can’t stop having children! 7. MSNBC’s “Morning Joe” contributor Willie Geist 8. ABC/Disney can go out on a limb and consider “How You Do-In’” gal, and my friend, Wendy Williams. 9. CBS Weekend Morning Show Host Chris Wragge – A HUNK that everyone seems to love. 10. And —for my Number TEN choice—well of course… Paula Abdu l…who I hear… is still looking for work! Tell me what you think! ——————————————————————— You’re always welcome to write me with your career dilemmas, and I’ll answer you on this column. Follow me on Twitter (@WorkplaceGuru) and add me on Facebook or email me at: stephen@viscusi.com. Disclaimer: The scenarios and events portrayed in this article are products of the author’s imagination. (c) Stephen Viscusi. All rights reserved. Article can be duplicated in part of full without author’s permission. Stephen Viscusi is the author of two books about jobs and the workplace. Charles Gibson from ABC’s World News calls Viscusi, “America’s Workplace Guru”. Viscusi is a TV broadcast journalist on jobs, a headhunter and resume spin doctor. His latest book, Bulletproof Your Job: 4 Simple Strategies to Ride Out the Rough Times and Come Out On Top at Work (HarperCollins) has been published around the globe in at least 9 languages including Chinese, Korean, Spanish and Portuguese. Viscusi is also the founder of www.BulletproofYourResume.com. Viscusi’s headhunting and workplace advice is usually considered counter-intuitive to the conventional wisdom. Viscusi is not a career or life coach. To the contrary, his current book, Bulletproof Your Job has been described as the New Millennium’s The Art of War, by Sun Tzu, and that’s how Viscusi sees the workplace. He’s your workplace General. Each week, Stephen Viscusi volunteers his headhunting career advice to the world. His disciples can be celebrities, politico, world leaders, heads of industry, and some are just ordinary people who write him for advice. It’s like Tony Robbins advising Al Gore or Deepak Chopra advising Michael Jackson (wait, scratch that one). Even you can get your own advice by writing to Stephen at stephen@viscusi.com, Facebook him or Twitter him at WorkplaceGuru.

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Giants Victory Over Cowboys Beats Emmy Awards in TV Ratings by 8 Percent

September 21, 2009

By Rob Golum Sept. 21 (Bloomberg) — The 61st Primetime Emmy Awards on CBS attracted 13.3 million viewers last night, an 8 percent increase over last year’s telecast as the show came in second place to NBC’s Sunday Night Football. The annual awards program had a preliminary rating of 8.7, indicating it was seen in almost 10 million TV households, according to Nielsen Co. data supplied by New York-based CBS Corp. The Emmy show also boosted its audience by 11 percent in the 18-49 age group advertisers target. The gain marked a turnaround for the Emmy broadcast, which registered the smallest audience since 1990 last year on ABC, according to Nielsen data. Broadcast networks took six of the seven comedy awards presented on the show, including best series for NBC’s “30 Rock.” AMC’s “Mad Men” won best dramatic series for the second straight year. The most-watched program last night was NBC’s broadcast of the National Football League contest between the New York Giants and Dallas Cowboys, according to preliminary Nielsen data supplied by the networks. The Giants won 33-31 against the home- team Cowboys with a field goal as time expired. Total viewer data for the matchup likely won’t be available until tomorrow because the game aired in prime time on the East Coast, and earlier in other time zones, NBC said. Based on initial ratings, NBC’s telecast was seen in almost 19 million homes and was also the most-watched show in 18-49, the network said. The game was the highest-rated Sunday Night Football telecast for the network and had the largest prime-time audience for any NFL game since December 1998, the network said. Each rating point equals 1 percent of the 114.9 million U.S. television households. NBC is owned by General Electric Co. AMC is part of Bethpage, New York-based Cablevision Systems Corp. CBS Corp. fell 22 cents to $12.38 at 3:27 p.m. in New York Stock Exchange composite trading. The stock had gained 54 percent this year before today. Fairfield, Connecticut-based General Electric gained 21 cents to $16.71 and ABC parent Walt Disney Co., run from Burbank, California, fell 42 cents to $28.02. To contact the reporter on this story: Rob Golum in Los Angeles at rgolum@bloomberg.net

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NBC’s `30 Rock’ Wins Third Best-Comedy Emmy; `Mad Men’ Takes Drama Award

September 21, 2009

By Andy Fixmer Sept. 21 (Bloomberg) — NBC’s “30 Rock” won the Emmy for best comedy series for a third straight year as broadcast television extended its dominance over cable in the genre. “30 Rock” star Alec Baldwin received a second win for his portrayal of a slick and unscrupulous network executive. AMC’s “Mad Men” won best dramatic series for the second consecutive year yesterday at the 61st Primetime Emmy Awards, hosted by actor Neil Patrick Harris on CBS Corp.’s television network. Broadcasters took six of the seven comedy awards presented on the show. The networks are adding humor to their lineups in the TV season that begins today to attract advertisers, John Rash , director of media analysis at Campbell Mithun in Minneapolis, said in an interview. NBC gave comedian Jay Leno a 10 p.m. weeknight talk show, while ABC is airing two hours of comedy on Wednesdays. “Comedy can generally make people feel better, and that is needed everywhere right now, especially for many advertisers,” Rash said. “That focus leads to the best comedy writers and directors finding more opportunities on the networks.” General Electric Co.’s NBC won a total of 11 awards, the second most, with five for “30 Rock,” a satire set behind the scenes of a network variety show. “30 Rock” co-creator Tina Fey took a jab at NBC for replacing scripted programs with Leno’s talk show to reduce costs. “We want to thank our friends at NBC for keeping us on the air,” Fey, also one of the show’s star’s, said after accepting the award, “even though we are so much more expensive than a talk show.” ‘Lower Ratings’ While broadcast networks ruled comedy, cable networks including Bethpage, New York-based Cablevision Systems Corp. ’s AMC and Time Warner Inc.’s HBO dominated drama. HBO garnered 16 Emmys, the most overall, with six stemming from the television movie “Grey Gardens.” Dramas on cable networks don’t face the same level of regulation as broadcast shows and the programs can survive on cable while drawing a smaller audience, Rash said. “The lower ratings expectations mean the shows don’t have to play as broad, allowing for a ‘Breaking Bad’ and other intense dramas to be nominated,” Rash said. There were multiple repeat winners. Glenn Close and Bryan Cranston both won for the second year in a row for their leading dramatic roles in FX Network’s “Damages” and AMC’s “Breaking Bad.” FX is owned by New York-based News Corp . Toni Collette received the award for best lead actress in a comedy for her role as a mother with an identity disorder in Showtime’s “United States of Tara.” ‘The Daily Show’ “The Amazing Race,” on CBS, won the award for best competition reality show, and “Grey Gardens” won best made- for-television movie. “The Daily Show with Jon Stewart” from Viacom Inc.’s Comedy Central received awards for best program and best writing in variety-comedy-musical categories. Host Neil Patrick Harris, who was nominated for supporting actor in a comedy for “How I Met Your Mother,” also presented the Tony Awards for theater earlier this year. The 36-year-old Harris, who became famous playing a teenage doctor in television’s “Doogie Howser M.D.,” will appear as a guest judge on Fox’s “American Idol” this season. Cherry Jones , who plays U.S. President Allison Taylor in Fox’s action thriller “24,” won best supporting actress in a drama. It was Jones’s first Emmy nomination. Jon Cryer won best supporting actor in a comedy series for his role as a hapless father in CBS Corp.’s “Two and a Half Men,” and Kristin Chenoweth also won for supporting actress in a comedy for her role in ABC’s “Pushing Daisies.” Prime-time audiences fell at three of the four biggest U.S. TV networks last season, with only CBS gaining both total viewers and the 18-to-49-year-olds that advertisers target most, according to Nielsen Co. CBS ended the season as the most- watched network and Fox finished with the most viewers 18 to 49. To contact the reporter on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net

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David Sassoon: Can Murdoch Flirt with Racism on Fox News and Not Pay a Price?

September 5, 2009

How much more rope can Rupert Murdoch afford to give Glenn Beck and his brand of race-baiting demagoguery? Back in February, when his New York Post published a cartoon widely perceived to be a racist slur on the new president, the media grandmaster himself issued a statement of apology : As the Chairman of the New York Post , I am ultimately responsible for what is printed in its pages. The buck stops with me. Last week, we made a mistake. We ran a cartoon that offended many people. Today I want to personally apologize to any reader who felt offended, and even insulted. Over the past couple of days, I have spoken to a number of people and I now better understand the hurt this cartoon has caused. At the same time, I have had conversations with Post editors about the situation and I can assure you – without a doubt – that the only intent of that cartoon was to mock a badly written piece of legislation. It was not meant to be racist, but unfortunately, it was interpreted by many as such. We all hold the readers of the New York Post in high regard and I promise you that we will seek to be more attuned to the sensitivities of our community. So where is Rupert Murdoch now that Glenn Beck has brought the issue of racism to the company’s doorstep again with his attacks on President Obama and his green jobs adviser Van Jones? Observers believe Murdoch will be guided by financial calculation more than political correctness. Beck is among the Fox Network’s biggest draws, and his viewership has increased by almost 30% since he said President Obama has “a deep-seated hatred for white people” before going on to say that “this guy is, I believe, a racist.” But the comment also has prompted a backlash from advertisers who have pulled their spots from the show in response to a campaign launched by Color of Change , a grass roots organization co-founded by Jones that is dedicated to strengthening Black America’s political voice. More than 145,000 people have signed on to the Color of Change ad boycott campaign, and 57 advertisers — including HSBC, WalMart, CVS, Geico and Proctor and Gamble. In retaliation, Beck launched a campaign against Jones, now in its second month, highlighting evidence of a radical past, connection to 9/11 truthers, and releasing a video in which Jones calls Republicans “assholes.” Jones has already issued two statements, apologizing for his comments about Republicans in one and disavowing his belief in the truther point of view that “high-level government officials may have deliberately allowed the September 11th attacks to occur.” The White House is now on the defensive, protecting Jones and his effective work promoting green jobs, but no matter the outcome, Murdoch and his News Corp. brand are in a vulnerable position. When the dust settles on Pennsylvania Avenue, Murdoch will still have to contend with the Color of Change campaign. The group has yet to call on its members to boycott products of companies that advertise on Beck’s show or to bombard them with phone calls. James Rucker said his organization is first giving companies the opportunity “to be responsible corporate citizens.” In New York, where over 50% of the population is now comprised of people of color, Murdoch was quick to issue an apology over publication of a cartoon widely perceived to be racist in The NY Post . He acted quickly lest the taint of racism erode the profitability of a key property in the nation’s media capital and its ability to compete with arch rival Daily News . Earlier this year, his New York Post reported a 20% decline in circulation. For now, Fox has claimed that the ad boycott has not harmed overall revenues, with advertisers merely shifting their ad buys away from Beck’s show but not cutting spending. If the Color of Change campaign continues to grow and intensify, however, Murdoch will have to assess if Beck is worth the viewers he draws. Beck could do permanent damage to both Fox News and the News Corp. brand by associating both with unapologetic racism. For now, Murdoch is making a short-term buck on Beck’s race-baiting. Longer-term, it’s a losing corporate strategy. The color of demographic change is trending darker, and companies will be forced to be sensitive not to offend their own workforce or their customers by supporting race-baiting speech with advertising dollars. That’s Murdoch’s bread and butter, and Beck’s attack on Jones to protect his own revenue stream has only amplified the success of the ad boycott and has really let the genie out of the bottle. Color of Change couldn’t have asked for a better endorsement than Beck’s attack on Jones, and a belated apology from Murdoch similar to the one he issued in February, if it even comes, may be too late.

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Video: Robert Novak’s Life And Legacy

August 21, 2009

He was a regular on the show until a year ago when he began his courageous battle against brain cancer. (Political Capital)

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Mike Simonsen of AltosReaserch Featured On Tomato Radio – Aug 21st, 3pm PST

August 20, 2009

(We know we missed our last 2 episode dates 1st and 15th of Aug – Our successful trip to Inman SF made it impossible to produce the show – But we’re happy to be back!) Altos Research is the leader in providing consumer friendly market statistics for your website or blog. We are fortunate to get Mike’s perspective on how to use this data to attract, engage and convert visitors to your site. Together, we will be discussing Mike Simonsen’s 3 Question Philiosphy The consumer shows up on your site and they only have 3 questions: What’s for sale? How much is the house worth? How’s the market? …and therefore your site needs to answer those three questions immediately. How does clear market data help accomplish this? We will also be getting Mike’s take on:   What makes a good blog post? What do real estate consumers need to know? How do people respond to and understand data? How do you use data for lead conversion? How effective are the PDF data reports?  I know it all sounds a bit boring (now that I type it out) but trust me, we’ll make market statistics and data seem sexy by the time we’re done! Starting in the second half of the show will be Mike answering your questions!  Click here to Listen Live at 3pm PST on August 21st. Call in to listen away from your computer, and Ask Questions: (347) 884-9764 (Hit the #1 on the keypad to get our attn, and we’ll bring you on live!)  There’s a Chat Room too! Yes, there will be a podcast in case you missed the live show… but being there is where it’s at!

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Natalie Holder-Winfield: When Comedy Meets Workplace Diversity

August 18, 2009

Last week, as I was piecing together a diversity training presentation, I came across my “Two Wongs Don’t Make a White” slide. This corny play on words was used as a t-shirt graphic by the clothing company Abercrombie & Fitch in the earlier part of this decade. Thank goodness those t-shirts didn’t get much play and were dragged off of the market, along with Abercrombie’s image as an equal opportunity employer. (The retailer has also faced failure to hire and promote discrimination lawsuits.) Although the retailer, today, is making an effort to redeem itself, I couldn’t help but wonder what they were thinking when they exposed the market to those t-shirts. Have the lines of culturally insensitive jokes been so drastically moved that even a large retailer doesn’t know the difference between wrong and right? With the advent of diversity and multi-culturalism, many of the invisible racial barriers in society are slowly fading away thanks, in part, to entertainment. With Justin Timberlake and Amy Winehouse producing some of the best R&B music, it’s hard to have white radio stations and black radio stations. Reality television shows openly parade mixed race-couples, making them less of a taboo or head turner. Comedians, especially, have been the greatest catalysts for making other cultures less mysterious by lifting the lid off of what were once private inside jokes. You have Rex Navarrette openly joking about Filipino time (that is, being 20 minutes late to everything). George Lopez pokes fun at his Latino brothers and sisters on HBO specials and his network television show. Larry the Cable Guy gives Northern urbanites comedic insight to redneck life. What happens when people at work decide to re-tell a joke they heard from Navarrette, Lopez, or Larry? Is it ok to laugh at or make a joke about another race, culture, or religion? These were the questions underlying my reasons for not watching the Dave Chappelle show. Now, I never started a mass boycott against the show, but I was vocal about why I didn’t tune in. While I never judged anyone for watching the show, I just couldn’t support a show that profusely overuses the “N” word on national television. I felt that his show, which was written by a multi-racial staff, could be used to defend the use of the “N” word. I knew that some would argue that the word had evolved to the point where it was no longer an offensive racial epithet to denigrate black people and could be used by any and everyone. I was not ready for that level of evolution. Comedy is tricky. The same slurs, epithets, and offensive language that comics use to get laughs, can create disrespect in the workplace, school and in other social settings. I’m sure that some snarky designer at Abercrombie & Fitch probably thought he or she was appealing to the public’s sense of humor about Asians with the hideous “Wong” t-shirts. As Abercrombie reminds us, context matters. Material that works in a nightclub often falls flat in the office.

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Dana Thomas: The Party’s Over

August 7, 2009

Fashion, it seems, has gone out of fashion. Companies are reporting record losses for the first half of 2009, several are filing bankruptcy — the most high profile being the French couture house of Christian Lacroix, and fashion magazines are in a panic over the drop in ad page sales. So Diane von Furstenberg, the president of the Council of Fashion Designers of America, held a summit of sorts in New York last week with leaders of the industry, including Vogue editor Anna Wintour, to rethink Fashion Week, the semi-annual trade-show-like event to present new offerings and drum up hype. Instead, the meeting turned into a strategy session to figure out how to stop plummeting sales and profits during the current economic recession. There were several conclusions. Von Furstenberg argued that the period between the fashion shows and when the clothes reach the stores was too long and wants to reform the show system. Fashion designer Donna Karan declared that the practice of early delivery to retailers was the problem. Who wants to by a bikini in March or a mink in July? As a result, Karan said, consumers wait until sales to shop, and companies and retailers lose the huge mark-up that equals bigger profits. Wintour suggested following the French model of having a government-fixed day when retailers can start price reductions, but this was quickly shot down as price-fixing and illegal in the United States. “Is that something we can change?” asked Wintour. “We have friends in the White House now!” Finally, von Furstenberg addressed the elephant in the room: “Everyone had been too greedy,” she said, “and everyone thought the party was forever.” Indeed, they were, and they did. During the 1990s, business executives, most with no previous experience in fashion, began to buy up small family businesses and turn them into corporate conglomerates. The executives saw the growth potential in the brands by targeting a new audience: the increasingly wealthy middle market consumer. The executives “renovated” the houses by hiring media-hyped young designers, spent billions of dollars on deliberately shocking advertising campaigns, dressed celebrities — some paying six-figure sums to the celebrities to wear the items, introduced fashionable lower-priced logo-covered accessories, rolled out thousands of stores that are as ubiquitous and approachable as Benetton or Gap, opened outlets to sell leftovers at bargain prices, launched e-commerce sites, and ramped up their share of duty-free retailing. To raise the profit margins that much more, many of the companies quietly began to use lower quality and less costly materials and move their manufacturing to developing nations, where labor is vastly cheaper, and they switched from individual handcraftsmanship to more cost-effective assembly-line production. Most of those brands hid the fact that their products were no longer produced in Italy, France or Britain — the only countries, executives insisted publicly, that has the “culture” to produce luxury handcraftsmanship. Simultaneously, the companies raised their prices exponentially: the average luxury brand handbag is marked up 10 to 12 times its production cost; clothing as much as 20 times, sometimes more. Most importantly, they shifted the focus of the advertising from the product itself to the logo stamped on it, thus changing the reason consumers buy fashion, from what it is to what it represents. As a result, the luxury industry exploded — it grew to a staggering $200 billion a year in sales — and luxury fashion brand owners and shareholders have gotten staggeringly rich. In 2007, Bernard Arnault, head of Moët Hennessy Louis Vuitton-LVMH, a publicly traded group of more than 50 luxury brands, was named by Forbes to be the seventh richest man in the world. That’s all changed in the last six months. After nearly two decades of getting fleeced, the middle market consumer has wised up and stopped buying. In part, because the recession has curbed unnecessary spending, and consumers rightly see fashion — particularly luxury fashion — as ephemeral and unnecessary. But also, consumers have taken a good look at what they are getting — massed produced clothes and accessories, often shoddily made, for thousands of dollars — and realized that as the prices have increased, the quality has decreased. “It’s junk,” Tom Ford told me. “And it’s getting junkier all the time.” Greed has killed the fashion industry, just like it killed the automobile industry, the banking industry, the music industry and all the others who are in a panic now and holding summits and asking their “friends in the White House” to fix their problems. When integrity becomes the leading principle in business again, only then will we be able to right our economy, and our lives. Dana Thomas is the author of Deluxe: How Luxury Lost Its Luster, published by The Penguin Press.

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Jonathan Tisch: Beyond the Boardroom: Four Lessons for Season Four

August 3, 2009

As a hotelier, I know a thing or two about having guests and one thing is generally true — they stay for a limited time. Well, there was one occasion in my life when I was an invited guest… and I never left. In 2005, as I was finishing my first book tour for The Power of We , I got a phone call from the Plum TV network asking if I would be the guest on a pilot show they were developing where CEOs would be interviewed in a relaxed setting.

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Liza Weisberg: The Yes Men Fix The World One Prank at a Time

July 27, 2009

In their new HBO documentary The Yes Men Fix the World , the eponymous pranksters take aim at unapologetic free market profiteers. Yes Men Mike Bonanno and Andy Bichlbaum articulate their agenda concisely: “What we do is pass ourselves off as representatives of big corporations we don’t like.” It doesn’t take the full measure of the duo’s abundant wit to expose the unfettered greed of the corporate executives. At a conference on international finance, Bonanno poses as a spokesman for DOW Chemical (the company responsible for the largest industrial disaster in history, which left 5,000 dead and 100,000 sick in Bhopal, India following a pesticide plant explosion).

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Dylan Ratigan, Eliot Spitzer Take On The Fed In Skit (VIDEO)

July 24, 2009

The future of our country is contained in a garbage bag. Or, rather, that’s the metaphor chosen by MSNBC’s Dylan Ratigan, who hosted former New York State Governor Eliot Spitzer and Toure on his show earlier today. If it sounds a bit oblique, well, it’s actually a pretty good description of the bank bailout and the Federal Reserve’s much-maligned secrecy

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Julie Menin: Jack Welch Sounds False Note on Women in Corporate America

July 21, 2009

Women across the country should sound a collective sigh of dismay at the antiquated and frankly harmful comments [Hyperlink: http://online.wsj.com/article/SB124726415198325373.html] recently made by former GE CEO Jack Welch. Speaking at a human resources conference, of all places, where one expects to hear more gender friendly rubric, Welch proclaimed: “There’s no such thing as a work-life balance,” going on to explain that a woman’s choice to have a family makes career advancement all but impossible

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With Warhol Martini, $350,000 Murakami, Young Gallery Says `Don’t Panic!’

July 20, 2009

Review by Katya Kazakina July 20 (Bloomberg) — Two square canvases by Japanese artist Takashi Murakami flash Louis Vuitton logos, cutesy pink and yellow graphics and the price of $350,000.

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