Use your web smarts to help others grow their online businesses.
Startup Costs 2000$-10 000$
Home based: Can be operated from home
Part time: Can be operated part time
Business Overview
Doing business online and achieving any kind of e-profitable success is probably more difficult than it is in the bricks-and-mortar world. For that reason many online entrepreneurs are turning to enlisting the services of an e-commerce specialist to help build, market, and maintain their e-commerce businesses. Right now, and for the foreseeable future, there is an incredible opportunity to build a super profitable e-commerce consulting business for entrepreneurs with web development, online marketing, e-commerce, and e-communications skills and experience. In short, if this describes you, the potential to earn $1,000 a day and more is presently available. E-commerce specialists do much more than just show businesspeople how to hawk their goods online. They also: • Help businesses build or improve their web sites • Develop productive database systems • Create efficient e-showrooms and checkouts • Create and manage electronic mailing lists • Design e-mail communication systems and plans • Increase search engine rankings • Create effective advertising and pay-per-click promotions • Develop and implement order processing and fulfillment systems • And much more Needless to say, the timing cannot get better than now for getting your piece of this very lucrative pie. The Institute of Certified E-Commerce Consultants provides training, and students graduate with the professional designation of Certified E-Commerce Consultant
joi, 20 mai 2010
Big Tax Breaks for Small Business
By Bonnie Lee Entrepreneur
The new health-care laws offer incentives for employers who provide benefits for employees
As an entrepreneur and small-business owner, didn't you get a little ticked off last year watching the big financial institutions get their bailouts? Didn't you want to say "Hey, what about me? What about small business?" I know I did.
Well, we finally get a hand. Congress recently passed two new tax laws that should provide an economic boon for small business. The first is a tax break included in the health-care reform legislation. The Patient Protection and Affordable Care Act is a health-care credit for small business. Yep, big business is excluded from this one, which represents a major score for entrepreneurs everywhere! It's about time we were afforded tax breaks to help us during these trying times.
And this one is an example of behavior modification at its best. The credit is designed to encourage smaller employers to provide health care for their employees. Here's how it works:
The maximum credit is 35 percent of premiums paid in 2010 by eligible small-business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit increases to 50 percent of premiums paid by eligible small-business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations.
It is generally available to employers that have fewer than 25 full-time equivalent (FTE) employees paying wages averaging less than $50,000 per employee per year. Because the eligibility formula is based in part on the number of FTEs, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers.
The second tax break signed into law will help employers and possibly scale back the unemployment rolls. Enacted into law on March 18, 2010, was the HIRE Act (Hiring Incentives to Restore Employment), which provides relief from the employer's share of matching Social Security tax (6.2 percent of wages) paid on behalf of new hires who have been out of work for at least 60 days before beginning work or worked fewer than a total of 40 hours for someone else during the 60-day period. In addition, for each worker retained for at least one year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file 2011 income tax returns.
The employee must sign an affidavit certifying that he or she was unemployed during the 60 days (or employed for less than a total of 40 hours during that same 60-day period). The IRS is currently developing a form that employees can use to make the required statement.
If you hired a qualified worker during the first quarter of 2010, you have likely already paid the matching Social Security tax. Do not amend your Q1 Form 941 payroll tax return. If you haven't filed the return yet, do not attempt to take the credit on the first-quarter 941 form. The IRS is developing a new Form 941 to provide for the credit. You will simply take the credit on the new form for second quarter 2010. Household employers cannot claim this new tax benefit.
A final note: Included in the HIRE Act was an extension of the expanded version of Section 179 through December 31, 2010, which allows for a deduction in the year of acquisition of up to $250,000 of the cost of capital assets--depreciable property. You probably didn't know this, but that provision actually expired on December 31, 2009, and the prior law limitation was $25,000.
The new health-care laws offer incentives for employers who provide benefits for employees
As an entrepreneur and small-business owner, didn't you get a little ticked off last year watching the big financial institutions get their bailouts? Didn't you want to say "Hey, what about me? What about small business?" I know I did.
Well, we finally get a hand. Congress recently passed two new tax laws that should provide an economic boon for small business. The first is a tax break included in the health-care reform legislation. The Patient Protection and Affordable Care Act is a health-care credit for small business. Yep, big business is excluded from this one, which represents a major score for entrepreneurs everywhere! It's about time we were afforded tax breaks to help us during these trying times.
And this one is an example of behavior modification at its best. The credit is designed to encourage smaller employers to provide health care for their employees. Here's how it works:
The maximum credit is 35 percent of premiums paid in 2010 by eligible small-business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit increases to 50 percent of premiums paid by eligible small-business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations.
It is generally available to employers that have fewer than 25 full-time equivalent (FTE) employees paying wages averaging less than $50,000 per employee per year. Because the eligibility formula is based in part on the number of FTEs, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers.
The second tax break signed into law will help employers and possibly scale back the unemployment rolls. Enacted into law on March 18, 2010, was the HIRE Act (Hiring Incentives to Restore Employment), which provides relief from the employer's share of matching Social Security tax (6.2 percent of wages) paid on behalf of new hires who have been out of work for at least 60 days before beginning work or worked fewer than a total of 40 hours for someone else during the 60-day period. In addition, for each worker retained for at least one year, businesses may claim an additional general business tax credit, up to $1,000 per worker, when they file 2011 income tax returns.
The employee must sign an affidavit certifying that he or she was unemployed during the 60 days (or employed for less than a total of 40 hours during that same 60-day period). The IRS is currently developing a form that employees can use to make the required statement.
If you hired a qualified worker during the first quarter of 2010, you have likely already paid the matching Social Security tax. Do not amend your Q1 Form 941 payroll tax return. If you haven't filed the return yet, do not attempt to take the credit on the first-quarter 941 form. The IRS is developing a new Form 941 to provide for the credit. You will simply take the credit on the new form for second quarter 2010. Household employers cannot claim this new tax benefit.
A final note: Included in the HIRE Act was an extension of the expanded version of Section 179 through December 31, 2010, which allows for a deduction in the year of acquisition of up to $250,000 of the cost of capital assets--depreciable property. You probably didn't know this, but that provision actually expired on December 31, 2009, and the prior law limitation was $25,000.
Netbook or Laptop?
From Business on Main By Dan Briody
The explosion of choices available today can turn the purchasing process into a torturous journey
Buying computers can be a trying experience for any small business. And it's not the prices that make it so difficult; those have come down considerably over the years. No, the problem is the explosion of choices that are available today, any one of which can turn the purchasing process into a torturous journey into techno-jargon and self-examination: Is our company mobile enough to buy laptops? Are we hip enough for Macs? What exactly is 2GB Shared Dual Channel DDR2 at 800MHz, and will it be enough?
Well, I'm sorry to say that these decisions won't be getting easier any time soon. The personal computer industry, once thought to be consolidating and commoditizing, is now splintering into countless different product directions. There are phones that act like PCs, PCs that act like phones, and everything in between. And the latest entrant to further muddy these waters is the netbook, a thinner, lighter and cheaper version of the widely adopted laptop computer.
Netbooks were originally supposed to be classic thin clients. That is to say they would feature a keyboard, screen and terrific connectivity. They would have limited storage and processing power, a stripped-down operating system, and would pretty much rely on the internet for everything. Think of them as simple windows to the internet. And the first netbooks were true to this vision.
But since then the price of PC components has plummeted. Storage is practically free. And memory is only slightly more expensive than storage. So today we have netbooks with 160 GB hard drives (that's big) running Windows XP, Vista and Windows 7. We also have the Apple iPad entering the market in April. These are essentially full-blown personal computers. You can run your office applications. You can download iTunes and other entertainment programs. And you can, of course, go online to do everything from checking your e-mail to sending instant messages.
So, here's the question for small businesses: Should we be buying netbooks? Two years ago I would have answered unequivocally "no." Because, in general, business PCs must be able to run the latest versions of various applications, and that requires maximum space on a hard drive and lightning-fast processor speeds. But lately, the answer I'm giving to some business owners is, "Why not?
Here are the two key questions you'll want to ask yourself when choosing between netbooks and traditional PCs for your business:
What is this computer going to be used for? Different types of businesses use computers differently. Some may need to run compute-intensive graphic design programs. Others may be accessing complex databases. But some may be simply running an office suite and accessing applications over the internet. This last category is where you can save some money by buying a netbook, which can run anywhere from $250 to $500. As more and more applications live on the internet, there is less need to have the computing power in your hands. So consider the computer's use before you overspend.
Who is going to be using this computer? You'll want to get netbooks only for employees who are fairly mobile (that can include those who work from home regularly), because netbooks are meant to be ultra-portable. If an employee is simply going to be using the system in the office, you can get more power and functionality at about the same price with a desktop computer. Also, the keyboards and screens of netbooks are typically smaller, so if the employee is likely to be doing a lot of typing, like a journalist might, a netbook is probably not a great solution.
Other than that, netbooks are a terrific, if not totally distinct, alternative to traditional PCs. They are inexpensive and very portable. And they are increasingly powerful. For executive types who travel a lot, I especially like them as a "companion PC," something you take on the road with you to catch up on e-mail and browse the Web. Bigger than a phone, but easier to type on.
miercuri, 19 mai 2010
Geothermal Energy: Intelligent Use Of The Earth’s Heat
Geothermal energy falls under the category of renewable energy source because the water is replenished by rainfall and the heat is continuously produced inside the earth. Geothermal energy is derived from heat within the earth. People can use the steam and hot water created inside the earth to heat buildings or produce electricity. Wondering what makes the water so hot? Geothermal energy is produced in the earth’s core.
People utilize geothermal energy to heat their homes and to produce electricity. This is achieved by digging deep wells and pumping the heated underground water or steam to the surface. But we can also use the stable temperatures near the surface of the earth to heat and cool buildings.
Dr. Ernst Huenges is the head of Geothermal Research at the institute GFZ – German Research Centre for Geosciences. He is of the opinion, “The new methods deliver important decision-support for the selection of sites for future geothermal projects. With this we can considerably reduce the risk of expensive misdrills,”
Geothermal energy is making its presence felt worldwide and Iceland is the best example of the utilization of geothermal power. In fact Iceland leads the world in the development of geothermal utilization. They have doubled their annual power supply capping it up around 500 MW as far as electricity supply is concerned. Germany is also emerging as a major user of geothermal energy. Germany is deriving its 100 MW of heat from geothermal energy. Italy is not far behind. A team of European scientists, in the region of Travale (Italy), is planning to tap the potential of localized geothermal reservoirs. If this project is completed it will produce energy akin to a potential of around 1,000 wind power plants. This is one of the projects discussed at the international final conference of “I-GET” (Integrated Geophysical Exploration Technologies for deep fractured geothermal systems) in Potsdam.
The European Union is also feeling the “heat” of geothermal energy. European nations are waking up to the potential of geothermal energy. This conference aimed at the development of state-of-the art technology with potential geothermal reservoirs. Seven European nations participated in this “I-GET” conference. They want to explore more and more geothermal reservoirs and utilize it for clean and green energy. The project “I-GET” could be a substantial step towards renewable energy source.
The newly developed techniques have been tried at four European geothermal locations. They are combining different geological and thermo¬dynamic conditions. High-temperature reservoirs have been examined in Travale/Italien having metamorphic rocks and in Hengill/Island (volcanic rocks). They are also examining two deposits with medium-temperature in deep sediment rocks in Groß-Schönebeck/Germany and Skierniewice/Poland.
The implications of the results of “I-GET” would be felt worldwide. Geothermal experts from Indonesia, New Zealand, Australia, Japan and the USA also participated in the “I-GET” project. There were 120 scientists and industry representatives from the 20 countries.
“Reliable geothermal technologies are in demand worldwide. Even countries with a long experience in geothermal energy such as Indonesia and New Zealand are interested in the results acquired in I-GET,” says Dr. Ernst Huenges. Therefore, we hope that this “I-GET” will give the necessary push to the geothermal research. GFZ is currently establishing an International Centre for Geothermal Research, which will, focus on carrying out application-oriented large-scale projects on a national and international level.
Fuel from Chicken Feathers?
If we go by the stats, every year 11 billion pounds of poultry industry waste accumulates annually, because we have gigantic appetite for poultry products. They can’t be stuffed into pillows. Mostly they are utilized as low-grade animal feed. Scientists in Nevada have created a new and environmentally friendly process for developing biodiesel fuel from ‘chicken feather meal’. Professor Manoranjan ‘Mano’ Misra and his team members at the University of Nevada discovered that chicken feather meal consists of processed chicken feathers, blood, and innards. Prof. Misra has been honored as the 2010 Regents’ Researcher by the Nevada System of Higher Education Board of Regents.
Chicken feather meal is processed at high temperatures with steam. This feather meal is used as animal feed and also as fertilizer. Chicken feather meal has high percentage of protein and nitrogen. The researchers have paid attention to the 12% fat content of the chicken feather meal. They have arrived at the conclusion that feather meal has potential as an alternative, non-food feedstock for the production of biofuel. They have extracted fat from chicken feather meal using boiling water and processing it into biodiesel. Another advantage of extracting fat from feather meal is it provides both a higher-grade animal feed and a better nitrogen source for fertilizer applications.
Stats tell us that if we take into account the amount of feather meal generated by the poultry industry each year, researchers could produce 153 million gallons of biodiesel annually in the U.S. and 593 million gallons worldwide.
Prof. Misra is the director of the University of Nevada, Reno’s Renewable Energy Centre. He has published 183 technical papers in the areas of materials, nanotechnology and environmental and mineral process engineering until now. He also has 10 patents published and another 12 are pending. He has secured over $25 million dollars in grant funding.
Other research is going on regarding chicken feather meal. It contains stronger and more absorbent keratin fiber than wood. Professor Richard P. Wool of the chemical engineering department of the University of Delaware, is trying to carbonized chicken feathers. This type of chicken feather bears a resemblance to highly versatile (and tiny) carbon nanotubes. This chicken feather can be utilized to store hydrogen for fuel-cell vehicles. If we visualize carefully we can see that very tiny natural sponges of chicken feathers have a big weight advantage over metal hydride storage.
Wool’s graduate student Erman Senöz in the project explained that they applied the pyrolysis process. During this process a very high heat without combustion in the absence of oxygen is applied. This yields fibers “that are micro-porous, very thin and hollow inside like carbon nanotubes. They start forming at 350 degrees Centigrade, and above 500 C they collapse. We’re trying to find the perfect temperature.”
Another advantage of this process is there won’t be lack of chicken-feed, because the fiber is taken from the central quill part. It leaves the fluffy feathers available to force-feed livestock. Feather fiber is quite cheap, and the “gas tank” equivalent would cost around $200.
Chicken feather meal is processed at high temperatures with steam. This feather meal is used as animal feed and also as fertilizer. Chicken feather meal has high percentage of protein and nitrogen. The researchers have paid attention to the 12% fat content of the chicken feather meal. They have arrived at the conclusion that feather meal has potential as an alternative, non-food feedstock for the production of biofuel. They have extracted fat from chicken feather meal using boiling water and processing it into biodiesel. Another advantage of extracting fat from feather meal is it provides both a higher-grade animal feed and a better nitrogen source for fertilizer applications.
Stats tell us that if we take into account the amount of feather meal generated by the poultry industry each year, researchers could produce 153 million gallons of biodiesel annually in the U.S. and 593 million gallons worldwide.
Prof. Misra is the director of the University of Nevada, Reno’s Renewable Energy Centre. He has published 183 technical papers in the areas of materials, nanotechnology and environmental and mineral process engineering until now. He also has 10 patents published and another 12 are pending. He has secured over $25 million dollars in grant funding.
Other research is going on regarding chicken feather meal. It contains stronger and more absorbent keratin fiber than wood. Professor Richard P. Wool of the chemical engineering department of the University of Delaware, is trying to carbonized chicken feathers. This type of chicken feather bears a resemblance to highly versatile (and tiny) carbon nanotubes. This chicken feather can be utilized to store hydrogen for fuel-cell vehicles. If we visualize carefully we can see that very tiny natural sponges of chicken feathers have a big weight advantage over metal hydride storage.
Wool’s graduate student Erman Senöz in the project explained that they applied the pyrolysis process. During this process a very high heat without combustion in the absence of oxygen is applied. This yields fibers “that are micro-porous, very thin and hollow inside like carbon nanotubes. They start forming at 350 degrees Centigrade, and above 500 C they collapse. We’re trying to find the perfect temperature.”
Another advantage of this process is there won’t be lack of chicken-feed, because the fiber is taken from the central quill part. It leaves the fluffy feathers available to force-feed livestock. Feather fiber is quite cheap, and the “gas tank” equivalent would cost around $200.
Alubond Solar Panels Could Save $70 Million
People who want to use clean and green energy often complain about high costs of solar panels and even a longer breakeven period. So research teams and companies are constantly trying to improve upon the drawbacks of solar panels. Suntrof Systems LLC is bringing forth a new innovation in solar collector panels that could bring about savings of around $ 60-70 million and lessen the time for installation by around 5-7 months
Suntrof Systems LLC is a US-based company which has effectively introduced an innovative solar panel. This will cut the costs of photovoltaic solar power generation by more than 50 per cent. They can write a new chapter of improved efficiency and lower production costs of solar energy globally.
We are also familiar with another drawback of solar energy i.e. area. Ronald Whelan, representative Suntrof Systems LLC, said an “area of 3 to 3.5 acres was required to generate 1 MW of electricity, while the life span of a solar plant is roughly thirty years.” Ronald declared that they are entering into partnership with Mulk Holdings, which produces the Alubond Solar Collector Panels (SCP).
Advantages:
How is this solar generator different from existing products available in the market? What are the main differentiators?
* Alubond Solar Collector Panels don’t use heavy mirrors. These weighty mirrors are replaced with Alubond solar collector panels, which are 4 times lighter than heavy mirrors and reduced metal sub structure by 300 percent. They are also trying to reduce the fear factor of consumers by offering a 20-year exterior performance warranty. Traditional solar troughs are made up of glass mirror weighing around 12.5 kg per sq m or single-skin aluminium with a high-reflective laminated film. These solar troughs need heavy support arrangements and many bolts. These two facts lessen the efficiency of the conventional solar panels.
* We already know that Alubond Solar Collector Panels are less costly than available solar generator products in the market. The solar trough system is expected to lower current costs of solar generation by more than 50 per cent.
* ABTI managing partner Khurram Nawab has designed the panel. This panel is developed in the UAE R&D (research and development) facilities of Alubond.
The patented SCPs were tested and selected for a $200 million-plus solar energy generation plant project in New Mexico City, US.
Nawab comments: “This is a great achievement for both our Middle Eastern and American offices. Our solar collector panels were chosen on the basis of the highest solar-to-electricity conversion efficiency, their ability to retain the parabola shape without extensive support frame work (critical in reflecting solar light to the focal point besides reducing the cost of the trough system), the robust after-sales support mechanisms that we offer our clients and the most comprehensive warranty coverage for a solar panel.”
“We also hope that the success of this project will lead to an upsurge in the development of more solar energy plants, which will not only lessen the strain on existing energy resources, but also severely reduce the pollution levels that are currently witnessed in power generation.”
MIT Researchers Print a Solar Cell on Paper
We love the idea of clean and green fuel. But they come with certain disadvantages. First one is they are heavy on pocket of a commoner. Second disadvantage is their power conversion rate is quite low. Last one is you need storage space to save all the power converted by a clean and green technology. Now MIT researchers are coming out of solar cells printed on paper. Though the technology still has to wait for years before it can be converted into a commercially viable entity but it’s an interesting development.
Scientists at the Massachusetts Institute of Technology have effectively coated paper with a solar cell. It is a part of a suite of research projects aimed at energy breakthroughs.
Susan Hockfield, MIT’s president, and Paolo Scaroni, CEO of Italian oil company Eni, formally dedicated the Eni-MIT Solar Frontiers Research Center. Eni financed the research project by investing $5 million into the center. This project is also financed by National Science Foundation. They are granting a fund of $2 million.
The MIT people took inspiration from the inkjet printer. They molded the solar paper panels on the similar lines. They used organic semi conductor material. The technique will be quite helpful in lowering the weight of solar panels. “If you could use a staple gun to install a solar panel, there could be a lot of value,” Vladimir Bulovic, director of the National Science Foundation, said.
MIT researchers utilized carbon-based dyes. The efficiency of paper based solar cells is not great, at around 1.5% to 2%. But Vladimir Bulovic says that one can use any material if it can be deposited at room temperature. He further says, “Absolutely, the trick was coming up with ways to use paper,” he said.
Prof. Karen Gleason is the head of the MIT research team. She has submitted a paper for scientific review but it has yet to be published. MIT and Eni have confirmed that this is the first time a solar cell has been printed on paper.
During the press conference, Paolo Scaroni said that Eni is funding the center because the company understands that hydrocarbons will eventually run out and believes that solar can be a replacement, although the currently available technology isn’t sufficient enough.
Paolo Scaroni said, “We are not very active (in alternative energy) today because we don’t believe today’s technologies are the answer of our problems.”
Scientists at the Massachusetts Institute of Technology have effectively coated paper with a solar cell. It is a part of a suite of research projects aimed at energy breakthroughs.
Susan Hockfield, MIT’s president, and Paolo Scaroni, CEO of Italian oil company Eni, formally dedicated the Eni-MIT Solar Frontiers Research Center. Eni financed the research project by investing $5 million into the center. This project is also financed by National Science Foundation. They are granting a fund of $2 million.
The MIT people took inspiration from the inkjet printer. They molded the solar paper panels on the similar lines. They used organic semi conductor material. The technique will be quite helpful in lowering the weight of solar panels. “If you could use a staple gun to install a solar panel, there could be a lot of value,” Vladimir Bulovic, director of the National Science Foundation, said.
MIT researchers utilized carbon-based dyes. The efficiency of paper based solar cells is not great, at around 1.5% to 2%. But Vladimir Bulovic says that one can use any material if it can be deposited at room temperature. He further says, “Absolutely, the trick was coming up with ways to use paper,” he said.
Prof. Karen Gleason is the head of the MIT research team. She has submitted a paper for scientific review but it has yet to be published. MIT and Eni have confirmed that this is the first time a solar cell has been printed on paper.
During the press conference, Paolo Scaroni said that Eni is funding the center because the company understands that hydrocarbons will eventually run out and believes that solar can be a replacement, although the currently available technology isn’t sufficient enough.
Paolo Scaroni said, “We are not very active (in alternative energy) today because we don’t believe today’s technologies are the answer of our problems.”
Mortgage delinquencies hit 10%
By Les Christie CNNMoNEY
A dubious distinction was reached during the first three months of 2010: More than 10% of all mortgage borrowers are now behind on their payments.
The delinquency rate hit a record of 10.06% in the first quarter, according to the Mortgage Bankers Association. The seasonally adjusted rate accounts for all mortgages on properties that have up to four units and that are at least one payment late.
The rate has been inching steadily toward this record. In the previous quarter, 9.47% of borrowers were behind on payments; and one year ago, 9.12% were late.
The report contained a sliver of good news, however. The non-seasonally adjusted delinquency rate dropped to 9.38% from 10.44% in the fourth quarter. Rates usually peak in the fourth quarter, as holiday spending and heating bills kick in causing people to put off paying their loan. But then, when they get caught up in the first quarter, delinquencies fall again.
"The question is whether the drop represents anything more than a normal seasonal decline or a more fundamental improvement," said Jay Brinkmann, MBA's chief economist. "The normal seasonal drop is coming right at the point where we believe delinquencies could potentially be declining and the problem for the statistical models is determining which is which."
Housing market diagnosis: Bipolar
The foreclosure inventory rate, which represents the percentage of mortgaged homes repossessed by lenders, was fairly flat quarter-over-quarter, inching up to 4.63% from 4.58%. But it jumped a lot from 12 months earlier, when the rate stood at 3.85%.
Nearly all varieties of loans suffered increased delinquencies compared with 12 months earlier. Prime fixed-rate loans hit 6.17%; prime adjustable-rate mortgages (ARMs) tipped 13.52%. Subprime fixed-rates jumped to 25.69%; and subprime ARMs are a whopping 29.09%.
The one bright spot was that delinquencies for FHA loans, the mortgages guaranteed by the Federal Housing Authority, dropped slightly to 13.15%.
The improvement is likely due to tighter FHA underwriting standards, which it adjusted after loans issued in 2007 and 2008 started souring. That should be a relief for taxpayers, who will be on the hook for any losses the FHA suffers.
Most of the overall rate increases are attributable to the seriously delinquent loans, Brinkmann said. Those loans, which are 90 days or more late, are going all the way through to foreclosure, but are not being foreclosed, keeping people in the system longer.
In the pre-housing-bust world, many borrowers would have already lost their homes and their delinquencies would no longer be counted in the survey.
Shift in problem-loan types
Lenders have slowed repossessions for various reasons: They may not have enough staff yet to handle the volume; the foreclosure prevention initiatives, such as the Home Affordable Modification Program, is postponing many foreclosures; and the banks themselves are trying to prevent defaults by approving more short sales.
There has been a fundamental change in the nature of the loans causing the most default problems, according to Brinkmann. And, he added, unemployment is the culprit. "Delinquencies are much more driven by the recession than by any one loan type now," he said.
Subprime ARMs accounted for nearly 30% of all delinquencies a year ago, but just under 15% now. Meanwhile, prime fixed-rate loans delinquencies have grown so much that they represent the single biggest bucket of delinquent mortgages: 37% up from 29% a year ago.
Some of the prime loan defaults stem from an increase in people deliberately "walking away" from mortgages. These are homeowners who can pay their loans but choose not to because their homes have dropped so much in value.
According to a recent report, as much as 31% of all defaults in March were strategic.
Brinkmann opined that many of these "strategic defaulters" may be underestimating the impact of walking away. It may take them much longer to repair their credit histories than they realize as lenders assess more than their credit ratings to determine whether to finance future home purchases.
Underwriting involves more than just checking credit scores, and if a lender sees a strategic default on their records, homebuyers may not qualify for loans.
"They may be able to repair their credit scores," he said, "but their ability to buy a home in the future may be negatively impacted for years to come
A dubious distinction was reached during the first three months of 2010: More than 10% of all mortgage borrowers are now behind on their payments.
The delinquency rate hit a record of 10.06% in the first quarter, according to the Mortgage Bankers Association. The seasonally adjusted rate accounts for all mortgages on properties that have up to four units and that are at least one payment late.
The rate has been inching steadily toward this record. In the previous quarter, 9.47% of borrowers were behind on payments; and one year ago, 9.12% were late.
The report contained a sliver of good news, however. The non-seasonally adjusted delinquency rate dropped to 9.38% from 10.44% in the fourth quarter. Rates usually peak in the fourth quarter, as holiday spending and heating bills kick in causing people to put off paying their loan. But then, when they get caught up in the first quarter, delinquencies fall again.
"The question is whether the drop represents anything more than a normal seasonal decline or a more fundamental improvement," said Jay Brinkmann, MBA's chief economist. "The normal seasonal drop is coming right at the point where we believe delinquencies could potentially be declining and the problem for the statistical models is determining which is which."
Housing market diagnosis: Bipolar
The foreclosure inventory rate, which represents the percentage of mortgaged homes repossessed by lenders, was fairly flat quarter-over-quarter, inching up to 4.63% from 4.58%. But it jumped a lot from 12 months earlier, when the rate stood at 3.85%.
Nearly all varieties of loans suffered increased delinquencies compared with 12 months earlier. Prime fixed-rate loans hit 6.17%; prime adjustable-rate mortgages (ARMs) tipped 13.52%. Subprime fixed-rates jumped to 25.69%; and subprime ARMs are a whopping 29.09%.
The one bright spot was that delinquencies for FHA loans, the mortgages guaranteed by the Federal Housing Authority, dropped slightly to 13.15%.
The improvement is likely due to tighter FHA underwriting standards, which it adjusted after loans issued in 2007 and 2008 started souring. That should be a relief for taxpayers, who will be on the hook for any losses the FHA suffers.
Most of the overall rate increases are attributable to the seriously delinquent loans, Brinkmann said. Those loans, which are 90 days or more late, are going all the way through to foreclosure, but are not being foreclosed, keeping people in the system longer.
In the pre-housing-bust world, many borrowers would have already lost their homes and their delinquencies would no longer be counted in the survey.
Shift in problem-loan types
Lenders have slowed repossessions for various reasons: They may not have enough staff yet to handle the volume; the foreclosure prevention initiatives, such as the Home Affordable Modification Program, is postponing many foreclosures; and the banks themselves are trying to prevent defaults by approving more short sales.
There has been a fundamental change in the nature of the loans causing the most default problems, according to Brinkmann. And, he added, unemployment is the culprit. "Delinquencies are much more driven by the recession than by any one loan type now," he said.
Subprime ARMs accounted for nearly 30% of all delinquencies a year ago, but just under 15% now. Meanwhile, prime fixed-rate loans delinquencies have grown so much that they represent the single biggest bucket of delinquent mortgages: 37% up from 29% a year ago.
Some of the prime loan defaults stem from an increase in people deliberately "walking away" from mortgages. These are homeowners who can pay their loans but choose not to because their homes have dropped so much in value.
According to a recent report, as much as 31% of all defaults in March were strategic.
Brinkmann opined that many of these "strategic defaulters" may be underestimating the impact of walking away. It may take them much longer to repair their credit histories than they realize as lenders assess more than their credit ratings to determine whether to finance future home purchases.
Underwriting involves more than just checking credit scores, and if a lender sees a strategic default on their records, homebuyers may not qualify for loans.
"They may be able to repair their credit scores," he said, "but their ability to buy a home in the future may be negatively impacted for years to come
Carmakers agree to make electric cars noisier
by Peter Valdes-Dapena
Automakers and advocates for the blind have agreed on a plan to address an unintended problem caused by electric and hybrid cars: They endanger sight-impaired and distracted pedestrians because they make no noise when running on electric power.
The groups joined together to present Congress with a proposal for minimum noise levels that future electric cars would have to make.
Sometimes even sighted pedestrians can be unaware of the cars' approach.
"As a person who walks my dog in Virginia, where there are no sidewalks, I've been startled by hybrid cars, too," said Gloria Bergquist, vice president of the Alliance of Automobile Manufacturers.
A study done last year by the National Highway Traffic Safety Administration showed that hybrid cars tend to hit pedestrians more often than other cars in situations where the approaching car cannot be seen.
The AAM, along with the Association of International Automobile Manufacturers, the American Council for the Blind and the National Federation for the Blind, presented Congress with suggested language that could become part of the Motor Safety Act of 2010, a bill now moving through Congress that would create a host of new auto safety rules.
The proposed language would have NHTSA create a new safety standard for electrically powered cars involving some sort of minimum sound required when operating at low speeds. At higher speeds, wind and tire noise are typically enough to make the car detectable.
The sound couldn't be just anything. For instance, vehicle owners would not be able to "customize" the sound of their car the same way they can download ringtones for cell phones. That's specifically prohibited in the proposed rule.
Instead, car manufacturers would provide an approved sound or set of sounds for a given make and model of car.
It would be up to NHTSA to set the minimum noise level a vehicle would have to make at givens speeds and to determine what sort of sounds would be allowed. The sounds would need to communicate something about the car's speed and acceleration, just as the sound of a rumbling gasoline engine does.
Automakers and advocates for the blind have agreed on a plan to address an unintended problem caused by electric and hybrid cars: They endanger sight-impaired and distracted pedestrians because they make no noise when running on electric power.
The groups joined together to present Congress with a proposal for minimum noise levels that future electric cars would have to make.
Sometimes even sighted pedestrians can be unaware of the cars' approach.
"As a person who walks my dog in Virginia, where there are no sidewalks, I've been startled by hybrid cars, too," said Gloria Bergquist, vice president of the Alliance of Automobile Manufacturers.
A study done last year by the National Highway Traffic Safety Administration showed that hybrid cars tend to hit pedestrians more often than other cars in situations where the approaching car cannot be seen.
The AAM, along with the Association of International Automobile Manufacturers, the American Council for the Blind and the National Federation for the Blind, presented Congress with suggested language that could become part of the Motor Safety Act of 2010, a bill now moving through Congress that would create a host of new auto safety rules.
The proposed language would have NHTSA create a new safety standard for electrically powered cars involving some sort of minimum sound required when operating at low speeds. At higher speeds, wind and tire noise are typically enough to make the car detectable.
The sound couldn't be just anything. For instance, vehicle owners would not be able to "customize" the sound of their car the same way they can download ringtones for cell phones. That's specifically prohibited in the proposed rule.
Instead, car manufacturers would provide an approved sound or set of sounds for a given make and model of car.
It would be up to NHTSA to set the minimum noise level a vehicle would have to make at givens speeds and to determine what sort of sounds would be allowed. The sounds would need to communicate something about the car's speed and acceleration, just as the sound of a rumbling gasoline engine does.
How To Be a Better CEO
By Nilofer Merchant
On behalf of frustrated employees everywhere, Nilofer Merchant calls for corporate leaders to adopt a new way of thinking about growth and innovation
You say you want all of us within the company to innovate. But you haven't enabled us to do so. You need to work with us so we all get a shared understanding of what matters. This sets the stage for a meritocracy of ideas and also enables us to adapt quickly when our world changes, as it always does. Oh, and you need to stop sending every decision to the executive suite.
We need to understand company strategy. In most companies, only 5 percent of the workforce understands what that is. Think about the implications of this: Only one person in 20 is prepared to answer, clearly and realistically, what their company is doing and how their individual efforts can contribute. Can people really be effective without knowing the strategy? Likely not. And you've got to know that our company is no exception.
Our business needs all of us to work across our silos, champion new ideas, innovate faster, and generally get things done. We can no longer do our bit, toss it over a proverbial wall, and then have another function do their bit. The volume of strategies that need to be created, the rate of innovation that needs to increase, and the level of growth we need to hit cannot be done in this old way.
What's Wrong With "Accountability"
Too often, we've watched as you've assigned major initiatives to your executive team, carefully making sure that each one fits into each functional area and reassuring yourself that each one is sponsored by the right leader. You assume that this orderly allocation will guarantee success. But it won't. In fact, it simply guarantees failure. The company isn't falling behind because so-and-so isn't doing what you asked or because one particular functional area is failing. The organization is failing because you wanted to create "accountability," and this approach seemed like the best solution. It isn't.
You hired us. You did what Jim Collins described as "getting the right people on the bus." But then you asked us to sit down, shut up, and let you drive.
Take a look at what Google (GOOG) does right.
• Google reveals its direction to everyone who works there. No joking. Strategy and priorities are available online to everyone, regardless of level, and everyone is expected to know what matters to the company. Let's post our strategy for the larger business, publicly, in ordinary language, for all to see.
• Google treats talented, principled, creative people like talented, principled, creative people. That lets them keep recruiting exceptional technologists and business people. Visionary doers go where they will have an impact. If we change the burden from you telling us what to do to us knowing where we need to head, we too will recruit the best talent.
Right now, you tell us what to do, and we do our best. We want to have the power to create better outcomes with you. This is going to create real power. It might be unspectacular, but that's O.K. Set aside your desire to command and control and instead help us to know what matters and why. We can all take it from there. By being transparent, you will allow the free flow of ideas, creativity, innovation—and it will change everything.
All of us want to help you to innovate and grow. You might be surprised what we will give you, if you let us.
On behalf of frustrated employees everywhere, Nilofer Merchant calls for corporate leaders to adopt a new way of thinking about growth and innovation
You say you want all of us within the company to innovate. But you haven't enabled us to do so. You need to work with us so we all get a shared understanding of what matters. This sets the stage for a meritocracy of ideas and also enables us to adapt quickly when our world changes, as it always does. Oh, and you need to stop sending every decision to the executive suite.
We need to understand company strategy. In most companies, only 5 percent of the workforce understands what that is. Think about the implications of this: Only one person in 20 is prepared to answer, clearly and realistically, what their company is doing and how their individual efforts can contribute. Can people really be effective without knowing the strategy? Likely not. And you've got to know that our company is no exception.
Our business needs all of us to work across our silos, champion new ideas, innovate faster, and generally get things done. We can no longer do our bit, toss it over a proverbial wall, and then have another function do their bit. The volume of strategies that need to be created, the rate of innovation that needs to increase, and the level of growth we need to hit cannot be done in this old way.
What's Wrong With "Accountability"
Too often, we've watched as you've assigned major initiatives to your executive team, carefully making sure that each one fits into each functional area and reassuring yourself that each one is sponsored by the right leader. You assume that this orderly allocation will guarantee success. But it won't. In fact, it simply guarantees failure. The company isn't falling behind because so-and-so isn't doing what you asked or because one particular functional area is failing. The organization is failing because you wanted to create "accountability," and this approach seemed like the best solution. It isn't.
You hired us. You did what Jim Collins described as "getting the right people on the bus." But then you asked us to sit down, shut up, and let you drive.
Take a look at what Google (GOOG) does right.
• Google reveals its direction to everyone who works there. No joking. Strategy and priorities are available online to everyone, regardless of level, and everyone is expected to know what matters to the company. Let's post our strategy for the larger business, publicly, in ordinary language, for all to see.
• Google treats talented, principled, creative people like talented, principled, creative people. That lets them keep recruiting exceptional technologists and business people. Visionary doers go where they will have an impact. If we change the burden from you telling us what to do to us knowing where we need to head, we too will recruit the best talent.
Right now, you tell us what to do, and we do our best. We want to have the power to create better outcomes with you. This is going to create real power. It might be unspectacular, but that's O.K. Set aside your desire to command and control and instead help us to know what matters and why. We can all take it from there. By being transparent, you will allow the free flow of ideas, creativity, innovation—and it will change everything.
All of us want to help you to innovate and grow. You might be surprised what we will give you, if you let us.
UK inflation hits 17-month high
BBC News
UK inflation accelerated again in April to hit its highest rate in 17 months, official figures show.
On the Consumer Prices Index (CPI) measure, inflation hit 3.7% - well above the target of 2% and the highest rate since November 2008.
On the Retail Prices Index (RPI) measure, which includes housing costs, inflation was up to 5.3% - its highest rate in 19 years
The RPI measure is commonly used to decide pay rises or pension payments.
The Office for National Statistics (ONS) said food prices in particular had seen sharp rises.
The cost of food rose by 2.6%, the ONS said, thanks largely to rising transport costs over the last 12 months.
Fuel costs have increased by more than 25% in that time, the ONS said.
Last month's disruption caused by volcanic ash had little impact on prices, however.
Higher duty on alcohol and cigarettes introduced in April's Budget added to inflation in April, the ONS added, and clothes prices also rose.
'Downward pressure'
Bank of England governor Mervyn King has written a letter of explanation to the new Chancellor, George Osborne, as the official CPI measure remains more than one percentage point above the 2% target.
Earlier this month, Mr King said he expected inflation to be higher in the coming months than previously forecast, but insisted that it would slow to below the 2% target before the end of the year.
In his letter, the governor said inflation had accelerated significantly since September last year.
He blamed rising fuel prices, the rise in VAT and the fall in the value of the pound for the rising trend.
But he warned that these temporary factors were "masking the downward pressure on inflation from the substantial margin of spare capacity in the economy".
"If the recovery continues as expected, that will gradually erode the slack in the economy, bringing inflation back to target," Mr King added.
In his letter to Mr King, Mr Osborne said he noted that the Bank's view was that the "current elevated rate of inflation is expected to be temporary".
"I am sure that you will remain vigilant towards any upside risks to inflation," he added.
'Peak' inflation
Continue reading the main story If the recovery continues as expected, that will gradually erode the slack in the economy, bringing inflation back to target
Mervyn King
Governor of the Bank of England
Mervyn King's letter to Chancellor George Osborne
George Osborne's reply to Mervyn King
Send us your comments
The Bank of England's key interest rate remains at a record low of 0.5%, and this rate is unlikely to rise soon according to economists.
"We do not expect the Bank of England to increase interest rates this year in response to what is a short-term pick up in inflation," said Hetal Mehta, senior economic adviser to the Ernst & Young Item Club.
Howard Archer, chief economist at IHS Global Insight, said he expected inflation to begin falling again immediately.
"April's consumer price inflation rate of 3.7% should mark the peak," he said.
"Inflation is expected to start heading down in the near term as temporary upward pressures start to unwind."
Low interest rates are likely to continue to frustrate savers.
"Savers have been having a rough ride thanks to a combination of ultra low rates and rising inflation," commented Andrew Hagger from Moneynet.co.uk.
But he added that a small number of savings accounts offering interest rates of up to 5% were still available
UK inflation accelerated again in April to hit its highest rate in 17 months, official figures show.
On the Consumer Prices Index (CPI) measure, inflation hit 3.7% - well above the target of 2% and the highest rate since November 2008.
On the Retail Prices Index (RPI) measure, which includes housing costs, inflation was up to 5.3% - its highest rate in 19 years
The RPI measure is commonly used to decide pay rises or pension payments.
The Office for National Statistics (ONS) said food prices in particular had seen sharp rises.
The cost of food rose by 2.6%, the ONS said, thanks largely to rising transport costs over the last 12 months.
Fuel costs have increased by more than 25% in that time, the ONS said.
Last month's disruption caused by volcanic ash had little impact on prices, however.
Higher duty on alcohol and cigarettes introduced in April's Budget added to inflation in April, the ONS added, and clothes prices also rose.
'Downward pressure'
Bank of England governor Mervyn King has written a letter of explanation to the new Chancellor, George Osborne, as the official CPI measure remains more than one percentage point above the 2% target.
Earlier this month, Mr King said he expected inflation to be higher in the coming months than previously forecast, but insisted that it would slow to below the 2% target before the end of the year.
In his letter, the governor said inflation had accelerated significantly since September last year.
He blamed rising fuel prices, the rise in VAT and the fall in the value of the pound for the rising trend.
But he warned that these temporary factors were "masking the downward pressure on inflation from the substantial margin of spare capacity in the economy".
"If the recovery continues as expected, that will gradually erode the slack in the economy, bringing inflation back to target," Mr King added.
In his letter to Mr King, Mr Osborne said he noted that the Bank's view was that the "current elevated rate of inflation is expected to be temporary".
"I am sure that you will remain vigilant towards any upside risks to inflation," he added.
'Peak' inflation
Continue reading the main story If the recovery continues as expected, that will gradually erode the slack in the economy, bringing inflation back to target
Mervyn King
Governor of the Bank of England
Mervyn King's letter to Chancellor George Osborne
George Osborne's reply to Mervyn King
Send us your comments
The Bank of England's key interest rate remains at a record low of 0.5%, and this rate is unlikely to rise soon according to economists.
"We do not expect the Bank of England to increase interest rates this year in response to what is a short-term pick up in inflation," said Hetal Mehta, senior economic adviser to the Ernst & Young Item Club.
Howard Archer, chief economist at IHS Global Insight, said he expected inflation to begin falling again immediately.
"April's consumer price inflation rate of 3.7% should mark the peak," he said.
"Inflation is expected to start heading down in the near term as temporary upward pressures start to unwind."
Low interest rates are likely to continue to frustrate savers.
"Savers have been having a rough ride thanks to a combination of ultra low rates and rising inflation," commented Andrew Hagger from Moneynet.co.uk.
But he added that a small number of savings accounts offering interest rates of up to 5% were still available
marți, 18 mai 2010
Euro drops to new four-year low against US dollar
The euro has plummeted against the US dollar, falling below $1.22 for the first time since April 2006.
The eurozone's single currency fell more than 1.7% in afternoon trading in New York, to $1.216, before rallying.
The decline came after Germany announced plans to ban naked short-selling of shares from midnight local time (2200 GMT).
The single currency dropped by more than 2% against the yen.
Traders fear that the austerity measures being put in place in many eurozone countries will hit growth.
Despite the huge sums of money pledged in support for eurozone countries, severe measures are needed to cut budget deficits and debt.
The German government's ban will apply to the country's 10 most important financial institutions, and aims to stop the short-selling of euro government bonds.
Short-sellers usually borrow shares, sell them, then buy them back when the stock falls and return them to the lender, keeping the difference in price.
"Naked" short selling is when sellers do not even borrow the shares
PC sales spike drives HP profit growth
By Chavon Sutton
Hewlett-Packard, the world's largest technology company, used its heft to push sales and income higher last quarter as both consumers and businesses upped their spending on HP's computers and printers.
HP (HPQ, Fortune 500)'s net income rose 28% in its second fiscal quarter, ended April 30, to $2.2 billion, or 91 cents per share. That's up from $1.7 billion a year ago.
The results excluded 18 cents per share for charges related to recent acquisitions. Without the charges, HP (HPQ, Fortune 500) said it earned $1.09 a share.
Analysts polled by Thomson Reuters, whose estimates typically exclude one-time charges, expected $1.05 per share.
Sales rose 13% to $30.8 billion, from $27.4 billion during the same period last year, beating analysts' forecast of $29.8 billion. The big growth came in HP's PC division, where sales rose 21% to nearly $10 billion.
"We've built the best portfolio in the industry, and our customers are responding," Mark Hurd, HP's chairman and chief executive officer, said in a prepared statement.
The company boosted its full-year outlook for the second straight quarter. HP expects earnings per share in the $4.45 to $4.50 range, up from its previous forecast of $4.37 to $4.44. It also lifted its sales forecast.
The raised outlook came as a surprise to analysts, who expected the company to temper its guidance based on pressures from currency fluctuations and economic weakness in Europe, where HP does around a third of its sales.
"Everyone expected them to guide down their revenue outlook, but you haven't seen that in these numbers," said Jane Snorek, a technology analyst at First American Fund Advisors.
In a conference call following the earnings release, HP chief financial officer Cathie Lesjak told analysts that the effects on HP of a weak euro would be "much more muted than you might believe," and have been accounted for in the company's forecast.
Broad-based growth
Consumer and commercial spending on computers and printers, which comprise about half of HP's sales, continues to climb. The company saw a 20% rise in year-over-year unit sales for its PCs and a 9% increase in printer shipments.
HP's sales rose in every unit except software, where revenue dipped slightly compared to last year. But analysts were generally pleased with the results, and HP's stock rose 2.5% in after-market trading.
"Strength was pretty broad-based. They're obviously landing big deals," Snorek said. "This tells me that business activity is picking up."
In recent months, HP has been on a buying spree. The company in November announced plans to buy 3Com (COMS), a networking gear manufacturer, for $2.7 billion. The deal closed April 12.
In April, HP announced that it would buy troubled smart phone maker Palm for $1.2 billion. But Mark Hurd was quick to cast the move as "not a smart phone play" -- what HP is really after is Palm's intellectual property, Hurd told analysts on Tuesday's call. Owning Palm will better position HP to take advantage of opportunities in the mobile technology market, he said.
The industry is waiting eagerly to see what HP will do with its new prize. With Apple's iPad blazing a trail through the tablet market, analysts expect a counter-move from HP. Will HP scrap its moribund current tablet, which uses the Microsoft Windows 7 operating system, for another that features Palm's technology?
Hurd offered few hints. HP will be a "participant" in the tablet market, but its "extremely important" relationship with Microsoft won't be threatened, he said.
HP's main rival in the personal computer market, Dell (DELL, Fortune 500), reports its quarterly earnings Thursday.
Buffett sells more Moody's
Berkshire Hathaway cut its stake in rating agency Moody's for the third straight quarter, according to a regulatory filing.
But other big investors have been buying the beleaguered rating agency, whose shares have fallen 19% this year.
Berkshire (BRKA), run by billionaire investor Warren Buffett, sold a million shares of the New York-based company in the first quarter ended March 31. Berkshire remains Moody's (MCO) biggest single investor with a 31 million-share stake worth $663 million at quarter-end.
Berkshire also sold some shares of Kraft (KFT), the food company with which Buffett, right, had a clash over how the firm sought to pay for its acquisition of the Cadbury candy giant. Berkshire cut its Kraft stake by almost a quarter, to 106 million shares.
With the latest round of sales, Berkshire has cut its Moody's holdings by a third since last summer. The move comes at a time when the rating agencies are under fire for their role in the housing bubble and facing regulatory curbs on what was their fastest-growing business.
The timing of some of Berkshire's sales has raised some eyebrows in some quarters. Berkshire sold shares the day Moody's received notice from the Securities and Exchange Commission that it could face an enforcement action over its failure to enforce its rating policies.
But Berkshire, which has held shares of Moody's and its predecessor company for more than a decade, has been paring back with some regularity for the past year (see chart below).
Despite the headaches, Buffett said at Berkshire's annual meeting this month that he believes Moody's and its rival Standard & Poor's have "incredibly wonderful businesses," thanks to the continuing lack of competition. Wall Street analysts estimate that Moody's and S&P, a unit of McGraw-Hill (MHP), control 95% of the business of rating securitized bonds, for instance.
It seems that many big holders of Moody's stock are following Buffett's words rather than his deeds. Three of the firm's top 10 shareholders added to their positions in the first quarter, according to data compiled by Lionshares.com.
Capital World Investors, the third-biggest Moody's holder with a 10% stake, bought 4.7 million shares in the latest quarter. No. 4 shareholder Fidelity, which holds 9% of Moody's, added a million shares. The biggest buyer, though, was No. 10 investor Invesco, which bought almost all its 6 million shares during the period.
Researcher Calls Interphone Study 'Biased'
Posted by: Olga Kharif
There’s no link between cell phone use and occurrence of some types of cancer, according to the world’s largest study examining the subject that came out on May 17. “An increased risk of brain cancer is not established from the data,” Christopher Wild, director of International Agency for Research on Cancer that coordinated the Interphone study, said in a statement.
That doesn’t mean that cell-phone use is safe, said Joel Moskowitz, director of Center for Family and Community Health at the University of California, Berkeley. In a May 16 paper, he argued the study and conclusions that have been drawn from it may be “biased.” “Based upon… analysis by the Interphone investigators, cell phone use may increase gliomas” — a type of a brain tumor — “by 12,000 to 21,000 cases per year in the U.S.,” he argues.
The Interphone study indicates that people who’ve used cell phones for at least 1,640 hours face a 40% higher risk of developing a glioma, which is a type of a brain tumor, he wrote. “… the average user in the U.S. today could fall into this high risk use category after about 13 years of use,” Moskowitz said.
The study followed cell-phone users from 13 countries, not including the U.S. It mostly collected data on cell phone usage between years 2000 and 2004, when people didn’t use their cell phones as much as they do today. An average study participant talked on the phone for two to 2-1/2 hours a month.
Today, though, the average U.S. cell phone user talks as much in a week, Moskowitz wrote. That said, more people nowadays use Bluetooth and wired headsets. And many users, particularly teens, often text instead of calling their friends.
Europe to Help Russia Modernize Economy
By Andrew Rettman
Brussels and Moscow are racing to devise a plan by the end of May for how the EU can help Russia develop its economy beyond energy and natural resources
The upcoming EU-Russia summit is to see the launch of a new initiative designed to help bring Russia's petro-dominated economy into the modern age.
The "Partnership for Modernisation" began as a conversation between European Commission chief Jose Manuel Barroso and Russian President Dmitry Medvedev at the last EU-Russia summit in November. The two sides are now racing against the clock to agree a joint communiqué for the top-level meeting in Rostov-on-Don on 31 May.
The EU commission in an informal paper last year put forward a 10-point agenda for the scheme. The main points include: ensuring the rule of law; increasing foreign investment; enhancing trade; integrating markets; creating a greener economy; boosting scientific research and support for NGOs.
The Commission wants to see "first concrete results" already in 2010 and is willing to put a modest sum of money into the pot. It aims to use existing EU-Russia diplomatic structures to implement the project, rather than creating new bodies.
The Kremlin in the run-up to Rostov-on-Don put some flesh on the commission's proposal in a three page "Memorandum on key areas of the Partnership for Modernisation" – a paper obtained by EUobserver.
The Russian memo underlines that the scheme should not be seen as a form of EU patronage, saying: "It is based on principles of equality and mutual benefit."
But it contains a wish-list of "flagship projects" which would lead to a transfer of high-end technology from EU companies to Russian firms, straying into areas with military applications.
The list includes: bio-technology; space technology; nano-technology; telecommunications; microelectronics; supercomputers and aircraft engineering. A large part is devoted to energy, covering: energy efficiency; nuclear technology; mineral resources extraction; alternative fuel research and oil and gas processing.
It envisages "a joint foundation for commercial introduction of research" and speaks of the "speedy conclusion of negotiations on Russia's WTO accession."
The memo proposes new legal instruments to tackle corruption and money laundering. And it calls for talks on how "to exclude possible damage to Russian investors on the EU energy market caused by the 'Third Energy Package'," a recent EU law which complicates attempts by Russian energy firm Gazprom (OGZPY) to buy up EU competitors.
An EU diplomat said the union is mainly interested in improving the rule of law in Russia, energy efficiency and the environment.
"Let's be frank. It's a bit of a one-way transfer in the end. Of course, it's they who will be the recipients. We're not naive. But it is in our interest that Russia modernises," the contact said. "We can't say all EU countries are fully modernised either. I don't know to what extent we can learn from Russia. But we don't have all the answers," the source added.
Confusion over WTO
Russia's leading EU trade partners – the UK, Germany and France – as well as former Communist EU countries all back the scheme. But there is worry it could push democracy and human rights down the agenda.
The EU is also sceptical about Russian talk on free trade. At the same time as calling for speedy WTO accession, Moscow is promoting a customs union with Belarus and Kazakhstan which would seriously delay WTO entry. It has not budged an inch on anti-EU tariffs on timber exports and fees for trans-Siberian overflights in the past three years of talks.
The Kremlin's break-up of the Yukos oil firm in 2003, involving an exotic mix of FSB agents, political clans and stolen billions, set the scene for doing business in Russia under Vladimir Putin. Mr Medvedev has made a number of pro-reform speeches. But during his presidency bankers and human rights campaigners have been shot dead in Moscow with apparent impunity.
It remains to be seen whether private-sector European firms will get behind the Partnership for Modernisation.
"The question is, will they try to pull in Western companies, take their technology and then kick them out, as is happening in China?" Keith Smith, a former US ambassador to Estonia turned analyst at the Centre for Strategic and International Studies in Washington, said.
Brussels and Moscow are racing to devise a plan by the end of May for how the EU can help Russia develop its economy beyond energy and natural resources
The upcoming EU-Russia summit is to see the launch of a new initiative designed to help bring Russia's petro-dominated economy into the modern age.
The "Partnership for Modernisation" began as a conversation between European Commission chief Jose Manuel Barroso and Russian President Dmitry Medvedev at the last EU-Russia summit in November. The two sides are now racing against the clock to agree a joint communiqué for the top-level meeting in Rostov-on-Don on 31 May.
The EU commission in an informal paper last year put forward a 10-point agenda for the scheme. The main points include: ensuring the rule of law; increasing foreign investment; enhancing trade; integrating markets; creating a greener economy; boosting scientific research and support for NGOs.
The Commission wants to see "first concrete results" already in 2010 and is willing to put a modest sum of money into the pot. It aims to use existing EU-Russia diplomatic structures to implement the project, rather than creating new bodies.
The Kremlin in the run-up to Rostov-on-Don put some flesh on the commission's proposal in a three page "Memorandum on key areas of the Partnership for Modernisation" – a paper obtained by EUobserver.
The Russian memo underlines that the scheme should not be seen as a form of EU patronage, saying: "It is based on principles of equality and mutual benefit."
But it contains a wish-list of "flagship projects" which would lead to a transfer of high-end technology from EU companies to Russian firms, straying into areas with military applications.
The list includes: bio-technology; space technology; nano-technology; telecommunications; microelectronics; supercomputers and aircraft engineering. A large part is devoted to energy, covering: energy efficiency; nuclear technology; mineral resources extraction; alternative fuel research and oil and gas processing.
It envisages "a joint foundation for commercial introduction of research" and speaks of the "speedy conclusion of negotiations on Russia's WTO accession."
The memo proposes new legal instruments to tackle corruption and money laundering. And it calls for talks on how "to exclude possible damage to Russian investors on the EU energy market caused by the 'Third Energy Package'," a recent EU law which complicates attempts by Russian energy firm Gazprom (OGZPY) to buy up EU competitors.
An EU diplomat said the union is mainly interested in improving the rule of law in Russia, energy efficiency and the environment.
"Let's be frank. It's a bit of a one-way transfer in the end. Of course, it's they who will be the recipients. We're not naive. But it is in our interest that Russia modernises," the contact said. "We can't say all EU countries are fully modernised either. I don't know to what extent we can learn from Russia. But we don't have all the answers," the source added.
Confusion over WTO
Russia's leading EU trade partners – the UK, Germany and France – as well as former Communist EU countries all back the scheme. But there is worry it could push democracy and human rights down the agenda.
The EU is also sceptical about Russian talk on free trade. At the same time as calling for speedy WTO accession, Moscow is promoting a customs union with Belarus and Kazakhstan which would seriously delay WTO entry. It has not budged an inch on anti-EU tariffs on timber exports and fees for trans-Siberian overflights in the past three years of talks.
The Kremlin's break-up of the Yukos oil firm in 2003, involving an exotic mix of FSB agents, political clans and stolen billions, set the scene for doing business in Russia under Vladimir Putin. Mr Medvedev has made a number of pro-reform speeches. But during his presidency bankers and human rights campaigners have been shot dead in Moscow with apparent impunity.
It remains to be seen whether private-sector European firms will get behind the Partnership for Modernisation.
"The question is, will they try to pull in Western companies, take their technology and then kick them out, as is happening in China?" Keith Smith, a former US ambassador to Estonia turned analyst at the Centre for Strategic and International Studies in Washington, said.
Apple, RIM Overtake Motorola in Phone Unit Sales
By Hugo Miller Bloomerg
Apple Inc.’s iPhone and Research In Motion Ltd.’s BlackBerry overtook Motorola Inc. handsets in global unit sales in the first quarter, helped by increasing demand for devices with video and Internet features.
RIM’s market share climbed to 3.6 percent and Apple’s rose to 3.04 percent, El Segundo, California-based research firm ISuppli said today. The two companies were the only ones to increase shipments from the fourth quarter. Motorola’s market share shrank to 3 percent from 3.6 percent.
Sales of smartphones like the iPhone and BlackBerry, which allow users to surf the Web, play video and send e-mail, are outpacing the market for more basic phones used mainly for calls and text messages. Apple and Waterloo, Ontario-based RIM are the only companies in the top 10 that exclusively make smartphones, according to ISuppli.
“The smartphone is reshaping the competitive landscape of the wireless business,” Tina Teng, an ISuppli analyst, said in the report.
Finland’s Nokia Oyj remains the world’s biggest mobile- phone maker, with a 37.4 percent share last quarter. South Korea’s Samsung Electronics Co. was No. 2 with 22.3 percent and LG Electronics Inc. No. 3 with 9.4 percent.
Sony Ericsson Mobile Communications Ltd. took the fourth spot, followed by RIM and Apple.
Motorola, North America’s largest handset maker by unit sales until last quarter, cut its range of basic models as demand slumped. The Schaumburg, Illinois-based company is rebuilding its handset business around smartphones based on Google Inc.’s Android platform.
RIM rose 9 cents to $66.25 at 4 p.m. New York time on the Nasdaq Stock Market. Apple, based in Cupertino, California, climbed 40 cents to $254.22. Motorola added 6 cents to $6.85 in New York Stock Exchange composite trading.
Apple Inc.’s iPhone and Research In Motion Ltd.’s BlackBerry overtook Motorola Inc. handsets in global unit sales in the first quarter, helped by increasing demand for devices with video and Internet features.
RIM’s market share climbed to 3.6 percent and Apple’s rose to 3.04 percent, El Segundo, California-based research firm ISuppli said today. The two companies were the only ones to increase shipments from the fourth quarter. Motorola’s market share shrank to 3 percent from 3.6 percent.
Sales of smartphones like the iPhone and BlackBerry, which allow users to surf the Web, play video and send e-mail, are outpacing the market for more basic phones used mainly for calls and text messages. Apple and Waterloo, Ontario-based RIM are the only companies in the top 10 that exclusively make smartphones, according to ISuppli.
“The smartphone is reshaping the competitive landscape of the wireless business,” Tina Teng, an ISuppli analyst, said in the report.
Finland’s Nokia Oyj remains the world’s biggest mobile- phone maker, with a 37.4 percent share last quarter. South Korea’s Samsung Electronics Co. was No. 2 with 22.3 percent and LG Electronics Inc. No. 3 with 9.4 percent.
Sony Ericsson Mobile Communications Ltd. took the fourth spot, followed by RIM and Apple.
Motorola, North America’s largest handset maker by unit sales until last quarter, cut its range of basic models as demand slumped. The Schaumburg, Illinois-based company is rebuilding its handset business around smartphones based on Google Inc.’s Android platform.
RIM rose 9 cents to $66.25 at 4 p.m. New York time on the Nasdaq Stock Market. Apple, based in Cupertino, California, climbed 40 cents to $254.22. Motorola added 6 cents to $6.85 in New York Stock Exchange composite trading.
luni, 17 mai 2010
Adidas' Big Money Defense Against Nike
By Matt Townsend and Holger Elfes Bloomberg
With Nike closing in, Adidas hopes sponsorships will preserve its lead
A few months after the 2006 World Cup finals in Germany, Adidas Chief Executive Officer Herbert Hainer was visiting the Kennedy Space Center in Florida when he received an urgent call on his cell phone. Horst Schmidt, then general secretary of Germany's national soccer federation, told Hainer that Nike (NKE) was trying to sign the German national team—an Adidas team since 1954—to an exclusive sponsorship.
Hainer, determined to retain Adidas' role as the world's largest soccer brand, thwarted Nike's angle of attack by doubling sponsorship of the team to 20 million euros ($25.7 million) per year. He didn't stop there. At the World Cup tournament that kicks off on June 11 in South Africa, Adidas will sponsor the entire event and a third of the teams. Explains Hainer: "We have protected our ground fairly well."
It's hallowed ground for global sporting goods makers like Adidas. Soccer, or football for purists outside North America, is the most popular sport on the planet. Sales of soccer products, which hit $10.8 billion in 2008, are expected to surpass that mark this year, notes Renaud Vaschalde, a Paris-based sport industry analyst at market researcher NPD Group.
Adidas spends $125 million a year on sponsorship deals with the FIFA global league and its six top teams, according to German sports marketing consultant SPORT+MARKT. Nike spends $75 million per year for the right to sell the game-related gear of five leading teams. The company, sponsor of 10 teams, hopes to expand the Nike brand's $1.7 billion soccer business. Adidas had soccer sales of about $1.8 billion in 2008 and has to spend big on the World Cup to counter its rival's lead in basketball and running gear, says Christopher Svezia, a sporting goods analyst at Susquehanna Financial Group. "They will fight tooth and nail" to stay tops in soccer, he says.
A run by Germany to the finals could double sales of Adidas match shirts (that go for $88) to 1 million. A strong showing by Nike-sponsored Portugal would help the other guys. "There's certainly a risk, that's the beauty of sport," says Nike brand President Charles D. Denson.
And that's why Adidas signed on as sponsor of the entire tournament—as a hedge. Hainer is defending a heritage that goes back to 1954 when company founder Adi Dassler supplied the first screw-in-stud soccer shoes to the German national team, which went on to win that year's World Cup. "Football is, of course, the heart and soul of our company," Hainer says.
The bottom line: The heated competition between Adidas and Nike in sales of soccer gear will be played out during the upcoming World Cup championship.
An Insurance Giant's Make-or-Break Deal
By Kevin Crowley
Investors resist a $35.5 billion bid by Britain's Prudential for a unit of AIG. A critic describes it as selling "billions of cheap stuff to buy billions of expensive stuff"
When Tidjane Thiam was strategy director at British insurer Aviva in 2006, he tried to buy Prudential, the U.K.'s biggest insurer. The bid failed. Thiam's career flourished and subsequently he moved to Prudential (which has no connection to the U.S. company of the same name) and became chief executive officer seven months ago. Now he's trying another ambitious acquisition—the purchase of American International Group's (AIG) AIA Group for $35.5 billion. If he fails this time, investors say, he may pay with his job, and the 162-year-old insurer itself could be broken up.
"Given that the CEO and the chairman [Harvey McGrath] attached their credibility and careers to this deal, it's going to be very difficult for them to survive if this fails," says Colin McLean, who helps manage $975 million at SVM Asset Management in Edinburgh. McLean sold his Prudential stock earlier this month because he doesn't support the bid.
AIA sells life, accident, and health insurance policies and private retirement planning and wealth management services in Asia, where it has more than $60 billion in assets. The purchase would make Prudential the biggest international insurer in Asia, Thiam, 47, told reporters in March. Prudential plans to fund the acquisition by raising $21 billion in a rights offering, in which existing shareholders get the chance to buy more stock. Earlier this month, the U.K.'s Financial Services Authority, the equivalent of the Securities & Exchange Commission, blocked the offering, which had been scheduled for May 28, over questions about Prudential's capital levels. Specifically, the FSA is concerned that in the event Prudential needed extra capital to deal with a financial crisis at home or in the U.S., regulators in Asia might prevent it from tapping capital reserves from its subsidiaries, according to two people with knowledge of the situation. The delay may be the "final straw" for the takeover, says Barrie Cornes, a London-based analyst at Panmure Gordon, who has a "buy" rating on the stock.
Prudential may seek to increase its capital reserve by $1.5 billion, says a person with knowledge of the matter. And it is in talks with AIG to change the terms of the deal to help win FSA approval. Yet even if Thiam gets a go-ahead from the FSA, he still needs 75 percent of investors to support the rights offering. That won't be easy. London-based Neptune Investment Management has started a Web site, www.prudentialactiongroup.com, to encourage fellow shareholders to oppose the bid.
Thiam has an unusual history for an insurance CEO. Born in the Ivory Coast, a former French colony, and schooled in Morocco, Thiam started his career working for McKinsey in France. He returned to the Ivory Coast, spending five years working for the nation's development department before the government was deposed in a military coup in December 1999. He escaped unhurt after being placed under house arrest. He returned to McKinsey before moving to Aviva, the U.K.'s second-biggest insurer, as head of group strategy and development in 2002. Six years later, Thiam joined Aviva competitor Prudential as chief financial officer.
Investors fault Thiam for failing to make a strong case for the purchase. Thiam and Finance Director Nic Nicandrou held investor meetings in London, Hong Kong, and the U.S. after announcing the takeover on Mar. 1. Thiam was unable to provide any detail on AIA's investments, capital structure, or trading beyond the Mar. 1 statement, says one investor, who declined to be named because the meeting was private. "To support a rights offering of that size you need to be confident that the assets you're buying are being acquired at a very good price," says Ivor Pether, who helps oversee $9 billion at Royal London Asset Management. "That hasn't really been demonstrated yet."
"Our investors are waiting for the prospectus, and we will be publishing it as soon as we can," says Ed Brewster, a spokesman for Prudential. Thiam would not comment for this story. The prospectus is important because it contains critical information on AIA's assets and the final terms of the deal.
"From a strategic perspective this deal makes absolute sense," says James Laing, who helps manage $256 billion at Aberdeen Asset Management, a big Prudential shareholder. "We need to see the prospectus so that we can make a sensible judgment on the valuation."
The deal is not as critical for AIG as it is for Prudential. The bailed-out insurer has said it would use at least $25 billion from the AIA sale to pay down a Federal Reserve credit line that expires in 2013. AIG originally planned an initial public offering for AIA. If the Prudential deals falls apart, says Clark Troy, a senior analyst for research firm Aite Group, AIG will be able to sell the unit "either through an IPO or another buyer coming along."
Cavendish Asset Management is among the Prudential investors that have said breaking up the company would be a better move than a major acquisition. Shareholders would receive $36 billion, about 75 percent more than the company's present market value, if the U.K., U.S., and Asian divisions were sold off separately, according to Cornes at Panmure Gordon.
James Clunie, manager of the $2.3 billion U.K. Growth Fund at Scottish Widows Investment Partnership in Edinburgh, didn't wait to see how it all plays out. He sold his fund's Prudential stock after the deal was unveiled. (Other Scottish Widows funds still hold Prudential shares.) Prudential's raising money to fund the acquisition amounts to selling "billions of cheap stuff to buy billions of expensive stuff," Clunie says. "It's a bad deal. It doesn't look sensible
Man Group to buy GLG Partners for $1.6 billion
By The Associated Press The Associated Press
Man Group plc, the world's largest publicly traded hedge fund, said Monday it's acquiring GLG Partners for $1.6 billion in cash and stock. The combined company will manage $63 billion in assets worldwide.
Shares of GLG soared $1.40, or 48 percent, to $4.32 in morning trading. Man Group shares fell by 8.4 percent to 202.90 pence ($2.95) on the London Stock Exchange.
GLG brings to Man Group a portfolio of nearly $24 billion in assets. Man Group has faced declining assets under management — it had $39 billion on March 31, down from $46.8 billion a year ago. GLG also adds a discretionary style of investing to Man Group, which focuses on quantitative strategies.
Man Group said it will pay for the acquisition with internal funds. But the U.K. firm is lowering its dividend to at least 22 cents per share in 2011, down from 44 cents. Analysts have expected a dividend cut given the declining amount of funds under management, which in turn leads to lower annual management fees collected.
Under terms of the deal, Man Group will pay $4.50 per share for each GLG stock, a 55 percent premium to GLG's closing price on Friday.
The hedge fund firm will exchange 1.0856 of its shares for each share held by three GLG principals, a value of about $3.50 per share that will be capped at $4.25 per share. The three executives are Noam Gottesman, chairman and co-CEO, Pierre Lagrange, senior managing director, and Emmanuel Roman, co-CEO.
The GLG principals have a lock-up agreement in which they can't sell Man's shares for three years after the transaction's close, which is expected by the end of September.
Man Group said the acquisition should generate savings of $50 million a year, with a third realized in fiscal 2011 and the rest within the first six months of 2012.
The GLG deal is expected to add to earnings in fiscal 2012.
Treasury takes $1.6 billion loss on Chrysler loan
By MARTIN CRUTSINGER
The Treasury Department said Monday it will lose $1.6 billion on a loan made to Chrysler in early 2009. Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 billion, congressional auditors have said
Treasury said Monday that Chrysler repaid $1.9 billion of a $4 billion loan, which was extended before the company filed for Chapter 11. The government hopes to get another $500 million from the company that emerged from bankruptcy, Chrysler Group LLC.
Treasury officials said that the government had no plans to boost its stake in the new Chrysler to cover those losses. It also acknowledged another $1.9 billion in potential losses from a separate loan that had been made to the company that went through bankruptcy proceedings. It indicated slim hopes of recouping much if anything from that separate $1.9 billion loan.
The original $4 billion loan was made in January 2009, when the Bush administration was scrambling to rescue Chrysler, GM and their auto financing arms.
The Congressional Budget Office estimated in March that the government's $85 billion bailout of the automakers would cost taxpayers $34 billion.
Much of it will depend on how much the government recovers from its eventual sale of nearly 61 percent of GM and about 10 percent of Chrysler.
GM has said it could conduct a public stock offering later this year. Chrysler officials have said a public stock offering is not likely before 2011.
The Treasury Department made the announcement about the loss from Chrysler on a day when GM reported its first quarterly profit in nearly three years. That moved GM closer to a stock offering that would repay at least part of the $43 billion it owes the government.
Chrysler Holding is the parent company of the old Chrysler. It is owned by private equity firm Cerberus Capital Management. Cerberus bought Chrysler from Daimler AG in 2007.
Chrysler came close to running out of money at the end of 2008, so the U.S. government stepped in, authorizing $15.5 billion in aid and appointing Fiat SpA to run the new Chrysler after it emerged from bankruptcy protection. The old Chrysler's assets, along with its finance arm, became Chrysler Holding.
Treasury said it has received repayments of $3.9 billion to date, including the $1.9 billion repayment and a $1.5 billion loan paid off by Chrysler Financial. Chrysler also assumed $500 million of Old Chrysler's debt, reducing the debt to the government.
___
The Treasury Department said Monday it will lose $1.6 billion on a loan made to Chrysler in early 2009. Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 billion, congressional auditors have said
Treasury said Monday that Chrysler repaid $1.9 billion of a $4 billion loan, which was extended before the company filed for Chapter 11. The government hopes to get another $500 million from the company that emerged from bankruptcy, Chrysler Group LLC.
Treasury officials said that the government had no plans to boost its stake in the new Chrysler to cover those losses. It also acknowledged another $1.9 billion in potential losses from a separate loan that had been made to the company that went through bankruptcy proceedings. It indicated slim hopes of recouping much if anything from that separate $1.9 billion loan.
The original $4 billion loan was made in January 2009, when the Bush administration was scrambling to rescue Chrysler, GM and their auto financing arms.
The Congressional Budget Office estimated in March that the government's $85 billion bailout of the automakers would cost taxpayers $34 billion.
Much of it will depend on how much the government recovers from its eventual sale of nearly 61 percent of GM and about 10 percent of Chrysler.
GM has said it could conduct a public stock offering later this year. Chrysler officials have said a public stock offering is not likely before 2011.
The Treasury Department made the announcement about the loss from Chrysler on a day when GM reported its first quarterly profit in nearly three years. That moved GM closer to a stock offering that would repay at least part of the $43 billion it owes the government.
Chrysler Holding is the parent company of the old Chrysler. It is owned by private equity firm Cerberus Capital Management. Cerberus bought Chrysler from Daimler AG in 2007.
Chrysler came close to running out of money at the end of 2008, so the U.S. government stepped in, authorizing $15.5 billion in aid and appointing Fiat SpA to run the new Chrysler after it emerged from bankruptcy protection. The old Chrysler's assets, along with its finance arm, became Chrysler Holding.
Treasury said it has received repayments of $3.9 billion to date, including the $1.9 billion repayment and a $1.5 billion loan paid off by Chrysler Financial. Chrysler also assumed $500 million of Old Chrysler's debt, reducing the debt to the government.
___
What are business angels?
Business angels are wealthy individuals who invest in startup and growth companies in return for equity in the company. The investment can involve both time and money depending upon the investor.
Typically business angels have already made their fortune through other business ventures, possibly their own startup or a career in business. Most are men aged between 45 and 65. However, investors can be younger – particularly in the technology sector.
Business angels can operate independently, but many work as a syndicate. This is because 40% of all angel investments are lost. Only the top 20% achieve more than a 50% return. To avoid losing a lot of money on one big deal, an investor needs to make a number of investments and spread the risk.
The British Business Angels Association (BBAA) estimates that business angels invest roughly £300 million every year. BBAA research has indicated that business angels invest more in early stage businesses than formal Venture Capital Funds.
The term business angel covers a wide range of individuals investing varying amounts of money at different stages of business development. In general there are six different types of investor:
Virgin. Has not yet invested
Latent. Has not invested in the past three years
Wealth maximising. Experienced businessmen and women investing for financial gain
Entrepreneur. Backs businesses as an alternative to stock market investments
Income seeking. Invest for income or to gain a job
Corporate. Companies that make regular investments, often for majority stakes.
What can they offer?
Business angels are a vital tool used to fill the gap between venture capital and debt finance – particularly for startup and early stage companies.
They also provide a useful source of equity finance – where the investor takes a stake in the company in return for a cash injection – for relatively small amounts that would not otherwise be available through venture capital.
Investments can be anywhere between £10,000 and £250,000 although in practice most investments are in the region of £25,000. In addition to a first investment, business angels often follow up with later rounds of financing for the same company.
As well as cash, business angels can offer years of experience in the business world. Although some prefer to become a sleeping partner, others will get actively involved in your business from writing a marketing plan to taking the company through a flotation on the stock market.
Typically business angels have already made their fortune through other business ventures, possibly their own startup or a career in business. Most are men aged between 45 and 65. However, investors can be younger – particularly in the technology sector.
Business angels can operate independently, but many work as a syndicate. This is because 40% of all angel investments are lost. Only the top 20% achieve more than a 50% return. To avoid losing a lot of money on one big deal, an investor needs to make a number of investments and spread the risk.
The British Business Angels Association (BBAA) estimates that business angels invest roughly £300 million every year. BBAA research has indicated that business angels invest more in early stage businesses than formal Venture Capital Funds.
The term business angel covers a wide range of individuals investing varying amounts of money at different stages of business development. In general there are six different types of investor:
Virgin. Has not yet invested
Latent. Has not invested in the past three years
Wealth maximising. Experienced businessmen and women investing for financial gain
Entrepreneur. Backs businesses as an alternative to stock market investments
Income seeking. Invest for income or to gain a job
Corporate. Companies that make regular investments, often for majority stakes.
What can they offer?
Business angels are a vital tool used to fill the gap between venture capital and debt finance – particularly for startup and early stage companies.
They also provide a useful source of equity finance – where the investor takes a stake in the company in return for a cash injection – for relatively small amounts that would not otherwise be available through venture capital.
Investments can be anywhere between £10,000 and £250,000 although in practice most investments are in the region of £25,000. In addition to a first investment, business angels often follow up with later rounds of financing for the same company.
As well as cash, business angels can offer years of experience in the business world. Although some prefer to become a sleeping partner, others will get actively involved in your business from writing a marketing plan to taking the company through a flotation on the stock market.
Coal Emissions from U.S. Could Stop in 20 Years
Pushker Kharecha and his colleagues believe that we should follow some practical methods to do away with coal and conventional fossil fuel emissions. We all know that use of fossil fuels leads towards carbon emissions that cause immense damage to our environment. Pushker Kharecha and colleagues voiced similar sentiments in the American Chemical Society’s semi-monthly journal Environmental Science and Technology (ES and T).
They say, “The only practical way to preserve a planet resembling that of the Holocene (today’s world) with reasonably stable shorelines and preservation of species is to rapidly phase out coal emissions and prohibit emissions from unconventional fossil fuels such as oil shale and tar sands.” This group includes scientists, engineers, and architects. They are from NASA’s Goddard Institute for Space Studies, the Columbia University Earth Institute, the National Renewable Energy Laboratory, and 2030 Inc./Architecture 2030.
They believe that United States could totally stop emissions of carbon dioxide from coal-fired electric power plants. It is not a tall talk but can be achievable within 20 years. To achieve this target one doesn’t have to depend on some miracle or God send technology. This can be done by using technology that already exists or could be commercially viable within a decade.
The authors suggested some strategies to make that phase-out possible. They ask for elimination of subsidies for fossil fuels. They also suggest about putting rising prices on carbon emissions. They also want major improvements in electricity transmission. They want the utilization of power in the homes, commercial buildings, and appliances to be judicious and efficient. This team is also suggesting for the replacement of coal power with biomass, geothermal, wind, solar, and third-generation nuclear power. Pushker Kharecha and colleagues also want that if nuclear power plants are a success at commercial levels then we should opt for the deployment of advanced (fourth-generation) nuclear power plants. They also advocate of the methods of carbon capture and storage at remaining coal plants.
Aerobics Center today business startup project
Hi my name is Seit Eren and today I'll present you ''Aerobics Center" business startup project look what you need for start this project
Help others get in shape while working for yourself--a one-two punch.
Business startup costs
Aerobics Center
Startup costs 10 000 $-50 000$
Business Overview
Would you like to start an aerobics training business, but don't have the experience or qualifications required? Fear not, you still can--by starting an aerobics center. An aerobics center is simply a leased location that has been specifically set up to operate as an aerobics training center. The center can have multiple training rooms that are fully equipped and rented on a short- or long-term basis by qualified aerobics instructors to conduct their classes. Alternately, splitting the instruction course fees paid by students with the instructors can generate revenues. Additional income can be earned by locating a refreshment booth in the aerobics center, as well as selling related products such as sportswear, books and videos on aerobics training topics.
In With the Out(sourcing)
By Chris Pentilla
Small businesses are hiring more independent contractors, but be aware of the pros and cons.
Ron Vigdor is co-founder of BornFree, a 3-year-old company that makes BPA-free bottles, sippy cups and other baby products sold at retailers such as Whole Foods, Walgreen's and CVS.
Vigdor, however, isn't taking any baby steps when it comes to outsourcing. BornFree offloads its logistics, accounting, payroll, taxes, and public relations to third party outsource providers. Even the company's sales team is outsourced.
"It's cost effective," says Vigdor, 40. "Especially for small companies, I think that outsourcing is the way to go."
Chicago-based payroll company SurePayroll, which releases a monthly "scorecard" based on data from more than 25,000 U.S. small businesses, calculates small business contracting grew 19 percent last year while staff hiring grew only 3.4 percent. "There was a much greater percentage growth in contractors than there was in the overall small businesses," says SurePayroll President Michael Alter.
20 years ago, companies viewed contractors with derision and suspicion. But outsourcing is no longer a dirty word. Entrepreneurs in particular see definite benefits to outsourcing, such as lower production costs, being able to focus on core competencies, and eliminating fixed costs such as salaries and benefit packages. "There's a lot more efficiency in going to a specialist," Alter says.
Outsourcing to Drive New Revenue
Small companies are hiring outside expertise to drive revenue in a down market. Online marketing, lead generation, and brochure writing are hot services, but small companies are also handing off what Alter calls the "backend plumbing": The basic tasks like payroll and accounting that free up time to generate new revenue. Business plan writing, website design, search engine optimization and financial modeling are all up and coming outsourcing services as well, says Chaitanya Sagar, CEO of p2w2, a San Jose, California firm that matches contractors with companies and conducts 90 percent of its work internationally.
"Outsourcing" and "offshoring" tend be used interchangeably, but there's a difference. Outsourcing means contracting with a supplier to provide a service, while "offshoring" is a subset of outsourcing in which a company task or department is sent to another country. Sagar prefers the generic term "sourcing." "Buyers don't see it as outsourcing or offshoring. They see it as sourcing, which is ‘Hey, I want to get this stuff done and who's the best person to do it?'" he says. "It doesn't matter where the person is located."
The semantics are up to debate, but one thing is certain: Any small business owner who has outsourced has a horror story to tell. Maybe it's a project that arrived late, lackluster or riddled with errors. Maybe the independent contractor flaked out mid-project, leaving the company hanging. Many small business owners, meanwhile, have found it hard to manage and trust independent contractors, who by definition work remotely and only know enough about the company to complete the project.
BornFree, which employs 8 people full-time in Boca Raton, Florida and over 100 internationally, has its own horror stories, like the time it used FedEx to deliver a termination letter to an outsourcing firm only to learn weeks later that the fine print in the contract required termination letters to be mailed through the U.S. Postal Service. Vigdor says BornFree shelled out "thousands of dollars" before the contract was finally severed three months later. "Read the fine print," he warns. "I've been burned enough times to learn what I should and should not be signing."
In this economy you can hire a freelance contract attorney to read it for you, and at a cheaper rate. The Great Recession has pushed contractor rates down across the spectrum. Companies are able to outsource on the cheap, but the best contractors are avoiding projects that could make them lose money. They're running the numbers, too. "Contractors are entrepreneurs no different from somebody running a business with 40 employees," Alter says. "It's a question of how best to use their time."
BornFree has renegotiated contract terms to its advantage in this recession, but Vigdor sees risks in getting too lean and mean with contractors. "You get what you pay for," he says. "If people tell you they can do it for half the price, it's not necessarily true that you'll get the same quality of work." BornFree keeps customer service, receivables and some logistics work in house so it knows what's going with customers and cash flow. "We try to excel at customer service," Vigdor says. BornFree's sales exceed $10 million.
SurePayroll's data show small businesses hired more full time people than contractors between November and December, but it doesn't mean small businesses are turning their backs on contractors.
"I don't think you'll see a decline in the percentage of contractors," Alter says. "You've seen a shift in mindset of small business owners toward the idea of using contractors for particular projects, and I think that's here to stay."
Small businesses are hiring more independent contractors, but be aware of the pros and cons.
Ron Vigdor is co-founder of BornFree, a 3-year-old company that makes BPA-free bottles, sippy cups and other baby products sold at retailers such as Whole Foods, Walgreen's and CVS.
Vigdor, however, isn't taking any baby steps when it comes to outsourcing. BornFree offloads its logistics, accounting, payroll, taxes, and public relations to third party outsource providers. Even the company's sales team is outsourced.
"It's cost effective," says Vigdor, 40. "Especially for small companies, I think that outsourcing is the way to go."
Chicago-based payroll company SurePayroll, which releases a monthly "scorecard" based on data from more than 25,000 U.S. small businesses, calculates small business contracting grew 19 percent last year while staff hiring grew only 3.4 percent. "There was a much greater percentage growth in contractors than there was in the overall small businesses," says SurePayroll President Michael Alter.
20 years ago, companies viewed contractors with derision and suspicion. But outsourcing is no longer a dirty word. Entrepreneurs in particular see definite benefits to outsourcing, such as lower production costs, being able to focus on core competencies, and eliminating fixed costs such as salaries and benefit packages. "There's a lot more efficiency in going to a specialist," Alter says.
Outsourcing to Drive New Revenue
Small companies are hiring outside expertise to drive revenue in a down market. Online marketing, lead generation, and brochure writing are hot services, but small companies are also handing off what Alter calls the "backend plumbing": The basic tasks like payroll and accounting that free up time to generate new revenue. Business plan writing, website design, search engine optimization and financial modeling are all up and coming outsourcing services as well, says Chaitanya Sagar, CEO of p2w2, a San Jose, California firm that matches contractors with companies and conducts 90 percent of its work internationally.
"Outsourcing" and "offshoring" tend be used interchangeably, but there's a difference. Outsourcing means contracting with a supplier to provide a service, while "offshoring" is a subset of outsourcing in which a company task or department is sent to another country. Sagar prefers the generic term "sourcing." "Buyers don't see it as outsourcing or offshoring. They see it as sourcing, which is ‘Hey, I want to get this stuff done and who's the best person to do it?'" he says. "It doesn't matter where the person is located."
The semantics are up to debate, but one thing is certain: Any small business owner who has outsourced has a horror story to tell. Maybe it's a project that arrived late, lackluster or riddled with errors. Maybe the independent contractor flaked out mid-project, leaving the company hanging. Many small business owners, meanwhile, have found it hard to manage and trust independent contractors, who by definition work remotely and only know enough about the company to complete the project.
BornFree, which employs 8 people full-time in Boca Raton, Florida and over 100 internationally, has its own horror stories, like the time it used FedEx to deliver a termination letter to an outsourcing firm only to learn weeks later that the fine print in the contract required termination letters to be mailed through the U.S. Postal Service. Vigdor says BornFree shelled out "thousands of dollars" before the contract was finally severed three months later. "Read the fine print," he warns. "I've been burned enough times to learn what I should and should not be signing."
In this economy you can hire a freelance contract attorney to read it for you, and at a cheaper rate. The Great Recession has pushed contractor rates down across the spectrum. Companies are able to outsource on the cheap, but the best contractors are avoiding projects that could make them lose money. They're running the numbers, too. "Contractors are entrepreneurs no different from somebody running a business with 40 employees," Alter says. "It's a question of how best to use their time."
BornFree has renegotiated contract terms to its advantage in this recession, but Vigdor sees risks in getting too lean and mean with contractors. "You get what you pay for," he says. "If people tell you they can do it for half the price, it's not necessarily true that you'll get the same quality of work." BornFree keeps customer service, receivables and some logistics work in house so it knows what's going with customers and cash flow. "We try to excel at customer service," Vigdor says. BornFree's sales exceed $10 million.
SurePayroll's data show small businesses hired more full time people than contractors between November and December, but it doesn't mean small businesses are turning their backs on contractors.
"I don't think you'll see a decline in the percentage of contractors," Alter says. "You've seen a shift in mindset of small business owners toward the idea of using contractors for particular projects, and I think that's here to stay."
duminică, 16 mai 2010
7 Ways to Convert Online Contacts Into Sales
By Starr Hall Entrepreneur
Ditch the pitch and push internet conversations into profitable territory without alienating customers.
Misguided marketers are trying to use "old-school" marketing tactics in a new, consumer-driven business landscape. But being the best, the cheapest or the most convenient is no longer going to get you the results you're after; so don't promote these virtues on social networks.
We've all seen how kindness, honesty and generosity online are rewarded. And yet internet conversations are getting heavier with sales pitching and self promotion by the minute. This sales pitching is not only turning consumers off, it's giving internet marketing a bad rap and making it more challenging for business to convert contacts into sales.
There are a few marketing strategies you should add to your daily practice to set yourself apart and turn your online communities into profitable business transactions. What's more, these activities will increase the ROI for your online efforts without looking or sounding sales pitchy (or what I like to call sales bitchy).
Here are seven secrets for successfully converting online contacts into sales.
Focus on generosity: Share your knowledge and expertise willingly online. Avoid the attitude that people are out to get you, instead think of it as people are out to do business with you. The more you are generous with your expertise and resources, the faster people will connect with you online and want to do business with you (because they've already had a sneak peek at what you offer).
Use the 3/3 Rule: The opposite side of the generosity coin is this; you have to set some boundaries online so as not to give too much away. When you are directly e-mailed or approached for advice, offer your services no more and no less than three times to that contact before you ask for the business. Don't spend more than three minutes responding or chatting per person or group. After the third such activity (on the same network, of course), just ask. This is the one thing that separates the broke from the prosperous--asking.
Don't act desperate: There is a big difference between desperate and sincere. Make sure that you really want the relationship and their business specifically and that you're not just asking for the sake of getting another deal (or because it's the third action and you're "supposed" to). Consumers are smart, they can tell the difference between the two.
Do a SPAM check: Before you even ask for the business when you're beginning to build a relationship you need to do a SPAM check. Whether it be online or off, make sure that your conversation does not involve constant:
Sales
Pitching
After
Meeting.
If you start a sales pitch before you've even established a rapport then you are spamming, something that consumers do not tolerate very well. This can instantly shut down a relationship. Make the conversation about the consumer, not you. [link to Green]. Start by listening and end conversations by asking what you can do to help them with a goal or problem. By doing this, your services and offerings will become a natural part of the conversation, rather than a forced sales pitch.
Have a communication plan in place: Once you start to engage with people make sure that you have an ongoing plan to stay in touch. A great way to do that is to get their e-mail address and send them periodic updates, resources and tips.
Build your social proof: Do you have testimonials or recommendations on your social sites and your main website or blog? Social proof is basically proving to your target market and community that you are worth doing business with. Testimonials show potentials how great you are, you don't have to say a thing. LinkedIn is a great place to house some of those testimonials.
Just be yourself: Do not try to be someone that you are not because you think that you will get more contacts, leads and business. Consumers want to feel like they are doing business with someone real, not someone that's insincere.
Above all, don't hold yourself back from reaching out to new people, groups or industries. The internet is full of millions of new contacts for you, just engage with them sincerely and leave out the sales pitching. You never know if that invite or accepted request will be your next big customer.
Ditch the pitch and push internet conversations into profitable territory without alienating customers.
Misguided marketers are trying to use "old-school" marketing tactics in a new, consumer-driven business landscape. But being the best, the cheapest or the most convenient is no longer going to get you the results you're after; so don't promote these virtues on social networks.
We've all seen how kindness, honesty and generosity online are rewarded. And yet internet conversations are getting heavier with sales pitching and self promotion by the minute. This sales pitching is not only turning consumers off, it's giving internet marketing a bad rap and making it more challenging for business to convert contacts into sales.
There are a few marketing strategies you should add to your daily practice to set yourself apart and turn your online communities into profitable business transactions. What's more, these activities will increase the ROI for your online efforts without looking or sounding sales pitchy (or what I like to call sales bitchy).
Here are seven secrets for successfully converting online contacts into sales.
Focus on generosity: Share your knowledge and expertise willingly online. Avoid the attitude that people are out to get you, instead think of it as people are out to do business with you. The more you are generous with your expertise and resources, the faster people will connect with you online and want to do business with you (because they've already had a sneak peek at what you offer).
Use the 3/3 Rule: The opposite side of the generosity coin is this; you have to set some boundaries online so as not to give too much away. When you are directly e-mailed or approached for advice, offer your services no more and no less than three times to that contact before you ask for the business. Don't spend more than three minutes responding or chatting per person or group. After the third such activity (on the same network, of course), just ask. This is the one thing that separates the broke from the prosperous--asking.
Don't act desperate: There is a big difference between desperate and sincere. Make sure that you really want the relationship and their business specifically and that you're not just asking for the sake of getting another deal (or because it's the third action and you're "supposed" to). Consumers are smart, they can tell the difference between the two.
Do a SPAM check: Before you even ask for the business when you're beginning to build a relationship you need to do a SPAM check. Whether it be online or off, make sure that your conversation does not involve constant:
Sales
Pitching
After
Meeting.
If you start a sales pitch before you've even established a rapport then you are spamming, something that consumers do not tolerate very well. This can instantly shut down a relationship. Make the conversation about the consumer, not you. [link to Green]. Start by listening and end conversations by asking what you can do to help them with a goal or problem. By doing this, your services and offerings will become a natural part of the conversation, rather than a forced sales pitch.
Have a communication plan in place: Once you start to engage with people make sure that you have an ongoing plan to stay in touch. A great way to do that is to get their e-mail address and send them periodic updates, resources and tips.
Build your social proof: Do you have testimonials or recommendations on your social sites and your main website or blog? Social proof is basically proving to your target market and community that you are worth doing business with. Testimonials show potentials how great you are, you don't have to say a thing. LinkedIn is a great place to house some of those testimonials.
Just be yourself: Do not try to be someone that you are not because you think that you will get more contacts, leads and business. Consumers want to feel like they are doing business with someone real, not someone that's insincere.
Above all, don't hold yourself back from reaching out to new people, groups or industries. The internet is full of millions of new contacts for you, just engage with them sincerely and leave out the sales pitching. You never know if that invite or accepted request will be your next big customer.
Steve Jobs: "Freedom from porn
Posted by Philip Elmer-DeWitt Bloomberg
"Traditional PC folks feel their world is slipping away," says Apple's CEO. "It is."
Kudos to Valleywag's Ryan Tate for posting in full his bizarre late-night alcohol-induced e-mail debate with Steve Jobs, given -- as he is the first to admit -- how bad some of the things he wrote make him look. (He drops names he shouldn't, he can't seem to spell Cocoa correctly, and he'll have hell to pay when his wife gets home.)
The 10-message exchange -- six from Tate, four from Jobs -- touches on a wide range of hot-button issues: the Adobe (ADBE) Flash controversy, the lost iPhone debacle, Apple's (AAPL) hard line on non-native applications and Jobs' personal views on freedom, pornography and a life worth living.
"Gosh, why are you so bitter over a technical issue such as this?" Jobs asks Tate at one point. And he ends with a zinger that says volumes about his attitude toward people who write -- rather than build computers -- for a living:
"By the way, what have you done that's so great? Do you create anything or just criticize others work and belittle their motivations?"
As MTLB's Bill Green's wrote, you will either hate or respect Steve Jobs a little more after this exchange. Read it in full here.
Does Amazon want to buy Netflix?
By Paul R. La Monica CNN Money
It would be a marriage made in e-commerce heaven: Amazon.com and Netflix. Too bad it probably will never happen.
Shares of Netflix (NFLX), the wildly popular online DVD rental and streaming video service, surged Thursday, hitting a new all-time high. The company clearly is gaining momentum, largely at the expense of the apparent demise of Blockbuster (BBI, Fortune 500).
But the main reason cited for Thursday's pop was the revival of chatter about Amazon.com (AMZN, Fortune 500) being interested in buying Netflix. Trust me, it's probably not going to happen.
Representatives from Netflix and Amazon both declined to comment on the merger speculation. But the Amazon-for-Netflix story is getting a little long in the tooth. I first wrote about it back in February -- of 2005.
Analysts who cover Netflix are dubious as well. Three analysts cut their ratings on the stock in the past two days, including a downgrade by UBS to a "sell" on Thursday.
The downgrades were mainly based on concerns that the stock has run up too far and too fast lately. Netflix dropped more than 8% Friday as a result.
Still, there must be some reason why this rumor just won't die, right? And stranger things have happened in the world of tech.
After all, scuttlebutt about HP (HPQ, Fortune 500) wanting to buy Palm (PALM) surfaced every now and then for years, only to be shot down every time as mere rumor. But, lo and behold, HP finally pulled the trigger and agreed to buy Palm last month. So the rumors were clearly more than just idle, unsubstantiated chit-chat.
Of course, there's a big difference between Palm and Netflix. Palm is falling woefully behind in the smartphone race and there were fears it would eventually run out of cash.
Netflix is in a position of strength as it capitalizes on the shift to digital video that's dooming the likes of Blockbuster and Movie Gallery, which announced earlier this week that it is shutting down its chain of Hollywood Video stores.
As such, Netflix has no compelling reason to sell out. It's not in a distressed situation. And for that reason, Amazon would risk overpaying for Netflix if it seriously wanted to buy it now.
Netflix now has a market value of nearly $5.5 billion, and one would have to think that if takeover talks were for real, Netflix would command a premium to its current price.
Besides the issue of how much it would cost to buy Netflix, it's also debatable why Amazon would want or need Netflix in the first place.
Keep track of Netflix's stock
Eric Wold, an analyst with Merriman Curhan Ford who was one of the three to recently downgrade Netflix, said the biggest reason Amazon would probably be wary of buying Netflix is because an acquisition would boost Amazon's number of distribution centers.
Wold noted that Amazon has made an effort to pare back the number of distribution centers in recent years in order to be more efficient and cut costs. It also is trying to avoid having to charge as many customers taxes in states where online purchases are subject to a sales tax.
"This rumor has been around for years and comes up every couple of months, " Wold said. "But there are always more valid reasons why it shouldn't happen as opposed to why it will happen."
Sure, Netflix has grown phenomenally over the past few years. It has done a fantastic job of striking favorable deals with the Hollywood studios so it can offer subscribers new releases in a timely fashion and expand its library of DVDs beyond current hits.
But Amazon already offers movie downloads for rent on its own site and has a fairly wide selection of its own. It's also less clear if Netflix really will remain the winner in the video market over the long haul given that Apple (AAPL, Fortune 500) is making waves with the iPad.
There's also increased competition from the likes of Wal-Mart (WMT, Fortune 500) via its recent acquisition of Vudu. Finally, Redbox, the $1 DVD kiosk service owned by Coinstar (CSTR), is growing like a weed - and proving in the process that there's still a market for physical DVDs.
It may be a digital world but people are still apparently willing to get their butts off the couch and drive to a store to pick up a movie if the price is right.
In fact, Wold argued that Coinstar's stock is now a better bargain than Netflix.
None of this is to suggest that Netflix is in trouble. The company is likely to keep adding subscribers at a rapid clip and that should lead to significant increases in sales and profits. But investors know that, and the stock is now simply too pricey.
Investors are either ignoring the growing competitive risks or naively believing that Amazon is really going to add Netflix to its queue at long last.
Reader comment of the week: Some interesting feedback on Thursday's piece about why the comeback in luxury goods may not be the worst thing in the world. Unsurprisingly, there was the typical doom and gloom about the U.S. economy.
But Jason Marks points out that too much negativity can just make things worse. "Sure, some consumers might be getting a little over-optimistic about the economy, but the optimism will help the recovery. It's the same way that pessimistic consumers fueled the downturn by cutting spending, which resulted in layoffs. Both optimism and pessimism fuel themselves."
An Internet Struggle with Bandwidth Aplenty
By Paul M. Barrett, Todd Shields and Jonathan D. Salant Bloomberg
The fight over regulating the Internet has become the engine for a perpetual Washington fund-raising machine. By definition, this means the battle won't end anytime soon.
On May 6, Julius Genachowski, chairman of the Federal Communications Commission, announced that his agency would move toward crafting new restrictions on high-speed service providers such as Comcast (CMCSA), AT&T (T), and Verizon (VZ). As he sees it, the FCC is defending the status quo of a free and open Net. Preserving what fans call "net neutrality" would mean barring service providers from favoring their own online offerings and those of business partners. It would also mean stopping the providers from slowing or blocking content from rivals like Google's (GOOG) YouTube video empire.
Rather than settling the issue, though, Genachowski's move may guarantee years of jockeying in all three branches of government. Among the K Street law and lobbying firms, it means plenty of lucrative paydays ahead.
Victor E. Schwartz, who chairs the Washington policy group at Shook, Hardy & Bacon, has seen this drill before. "You have a Washington game with certain perennial issues important to business," he says. "They come back again and again. Why? They're fund-raising gushers." Members of Congress see little reason to resolve the clash quickly, so long as conflicting interests fill their campaign coffers.
Schwartz served as an industry field general in a 20-year war against the plaintiffs' bar over product liability restrictions. That scorched-earth exercise in the courts and Congress finally burned out in 2005. Business interests won selected litigation curbs, including limits on state court class actions and securities suits. Total victory—broad federal "tort reform"—eluded Schwartz and his allies.
Net regulation could be the new product liability. The FCC announcement "is likely to set off a politically charged conflagration and deep-pocketed lobbying war," pitting the digital service providers against Google, Amazon (AMZN), and others that want their content disseminated free of special charges or limitations, says Jeffrey Silva, a Washington-based analyst with Medley Global Advisors.
Genachowski, 47, a Harvard Law School classmate of President Barack Obama, began fleshing out his vision for the broadband future by claiming authority to regulate the Net under statutory provisions long applied to phone companies. His May 6 declaration was an attempt to salvage an ambitious agenda from a potentially crippling ruling in April by a federal appeals court in Washington. The court had said the FCC lacks authority under a different set of provisions governing "information services." The high-speed providers that favored the court decision will almost certainly steer the dispute back to the judicial branch while simultaneously seeking aid in Congress.
As occurred in the product liability hostilities, the Internet struggle is breaking down along partisan lines. Republicans sided with business on litigation curbs; Democrats linked arms with plaintiffs' lawyers and consumer groups. Today, the GOP has signaled its eagerness to back the service providers. Representative John Boehner (R-Ohio), the House Republican leader, calls the FCC net neutrality plan "a government takeover of the Internet," words echoed by conservative groups led by Americans for Tax Reform. Consumer advocates and Democrats such as Representative Edward J. Markey (D-Mass.) back the FCC.
Among major companies favoring the FCC's net neutrality initiative, Google boosted spending on lobbying in the first three months of 2010 by 59 percent, to $1.4 million, compared with the same period a year earlier. Amazon's lobbying expenditures rose 46 percent, to $540,000. AT&T, which has told the FCC that net neutrality rules could discourage important investment in digital infrastructure, has also increased lobbying. It spent $5.9 million through Mar. 31, up 16 percent. Comcast boosted its spending 11 percent, to $3.1 million.
All that money points to a protracted slog with an uncertain ending. One thing is for sure: Prospects are brightening for the capital's influence-peddling elite.
The bottom line: A quick fix in the net neutrality debate looks unlikely if the issue becomes a proxy battle for larger Democratic and GOP agendas
The fight over regulating the Internet has become the engine for a perpetual Washington fund-raising machine. By definition, this means the battle won't end anytime soon.
On May 6, Julius Genachowski, chairman of the Federal Communications Commission, announced that his agency would move toward crafting new restrictions on high-speed service providers such as Comcast (CMCSA), AT&T (T), and Verizon (VZ). As he sees it, the FCC is defending the status quo of a free and open Net. Preserving what fans call "net neutrality" would mean barring service providers from favoring their own online offerings and those of business partners. It would also mean stopping the providers from slowing or blocking content from rivals like Google's (GOOG) YouTube video empire.
Rather than settling the issue, though, Genachowski's move may guarantee years of jockeying in all three branches of government. Among the K Street law and lobbying firms, it means plenty of lucrative paydays ahead.
Victor E. Schwartz, who chairs the Washington policy group at Shook, Hardy & Bacon, has seen this drill before. "You have a Washington game with certain perennial issues important to business," he says. "They come back again and again. Why? They're fund-raising gushers." Members of Congress see little reason to resolve the clash quickly, so long as conflicting interests fill their campaign coffers.
Schwartz served as an industry field general in a 20-year war against the plaintiffs' bar over product liability restrictions. That scorched-earth exercise in the courts and Congress finally burned out in 2005. Business interests won selected litigation curbs, including limits on state court class actions and securities suits. Total victory—broad federal "tort reform"—eluded Schwartz and his allies.
Net regulation could be the new product liability. The FCC announcement "is likely to set off a politically charged conflagration and deep-pocketed lobbying war," pitting the digital service providers against Google, Amazon (AMZN), and others that want their content disseminated free of special charges or limitations, says Jeffrey Silva, a Washington-based analyst with Medley Global Advisors.
Genachowski, 47, a Harvard Law School classmate of President Barack Obama, began fleshing out his vision for the broadband future by claiming authority to regulate the Net under statutory provisions long applied to phone companies. His May 6 declaration was an attempt to salvage an ambitious agenda from a potentially crippling ruling in April by a federal appeals court in Washington. The court had said the FCC lacks authority under a different set of provisions governing "information services." The high-speed providers that favored the court decision will almost certainly steer the dispute back to the judicial branch while simultaneously seeking aid in Congress.
As occurred in the product liability hostilities, the Internet struggle is breaking down along partisan lines. Republicans sided with business on litigation curbs; Democrats linked arms with plaintiffs' lawyers and consumer groups. Today, the GOP has signaled its eagerness to back the service providers. Representative John Boehner (R-Ohio), the House Republican leader, calls the FCC net neutrality plan "a government takeover of the Internet," words echoed by conservative groups led by Americans for Tax Reform. Consumer advocates and Democrats such as Representative Edward J. Markey (D-Mass.) back the FCC.
Among major companies favoring the FCC's net neutrality initiative, Google boosted spending on lobbying in the first three months of 2010 by 59 percent, to $1.4 million, compared with the same period a year earlier. Amazon's lobbying expenditures rose 46 percent, to $540,000. AT&T, which has told the FCC that net neutrality rules could discourage important investment in digital infrastructure, has also increased lobbying. It spent $5.9 million through Mar. 31, up 16 percent. Comcast boosted its spending 11 percent, to $3.1 million.
All that money points to a protracted slog with an uncertain ending. One thing is for sure: Prospects are brightening for the capital's influence-peddling elite.
The bottom line: A quick fix in the net neutrality debate looks unlikely if the issue becomes a proxy battle for larger Democratic and GOP agendas
Abonați-vă la:
Postări (Atom)