Equity News

Shawn Amos: WATCH: 60 Seconds of Social Media

Companies that hope to remain competitive know they need to maintain a presence on social media sites. But how can they integrate customer service into the operation? We’ll take a look in this week’s “60 Seconds of Social Media.”

As companies created profiles on sites like Facebook and Twitter, customers found they could put their gripes on blast for the whole world to see, forcing an entirely new dynamic in business communication, one that many companies are still struggling to master.

In a recent study from American Express, 17% of respondents said they used social media for customer service in the last year, and 80% of them said they didn’t complete a purchase because the service was unsatisfactory. Another study from Conversocial showed some brands are taking as long as 50 hours to respond to questions asked online. That’s business they’re just giving away.

Finally, in our Social Media Shorthand segment, we’ll take a look at content curation.

Missed last week’s episode about online ads? Check it out here.

From:The Blog

Miles Mogulescu: Wall Street to Obama: Thanks for Saving Our Jobs and Bonuses, Now F*** Off

Now that President Obama’s views on gay marriage have “evolved,” it’s time for his views on Wall Street to likewise “evolve” and for Obama to forcefully campaign to break the stranglehold of Too Big To Fail banks on the economy.

For its part, Wall Street’s view of Obama has certainly “evolved” since 2008 when Wall Street bankers seemed to have fallen in love with Obama.

As New York Times reporter Nicholas Confessore recently wrote:

“By the beginning of the year, it had… become obvious to many on Wall Street that Obama’s campaign was going to take a populist turn. Some bankers believed that the administration’s strategy was to talk tough in public and play damage control in private, and they were sick of playing along… One former supporter, [hedge fund manager] Dan Loeb, compared Obama to Nero… Stephen A. Schwarzman, a founder of [private equity firm] Blackstone, said that an Obama proposal to raise taxes on “carried interest” [which taxes hedge fund and private equity managers like Schwarzman and Mitt Romney at 15% instead of 35%]… reminded him of ‘when Hitler invaded Poland in 1939.’

‘I think it’s an unfixable relationship,’ one Democrat involved in planning the March 1 [New York Obama] fundraisers told me this spring. ‘They hate him. They really, really do.’”

Having contributed more money to candidate Obama in 2008 than to John McCain or Hillary Clinton — and having been rewarded by a President Obama who largely protected their interests — Wall Street banks and hedge funds now seem determined to throw Obama under the bus and contribute the overwhelming majority of their massive campaign funds to one of their own, former Bain Capital Chairman Mitt Romney and Republican super PACS run by the likes of Karl Rove.

It’s not enough for Wall Street that President Obama appointed a pro-Wall Street economic team led by Tim Geithner and Larry Summers. It’s not enough that Geithner successfully lobbied Sen. Chris Dodd to remove a provision from the 2009 stimulus bill banning bonuses to bank executives whose financial institutions were bailed out by the Federal government. It’s not enough that the Obama administration insured that the Dodd Frank financial reform bill was relatively weak — the Obama administration lobbied Democrats in Congress to vote down amendments that would have limited the size of Too Big to Fail banks or that would have reinstituted the Glass-Steagall Act, which for half a century separated federally insured commercial banks from investment banks that could gamble trillions of dollars in the global financial casino. It’s not enough that in 2010 Obama allowed all of the Bush-era tax cuts — including those for the richest Americans — to be extended. It’s not enough that the Obama administration allowed bank lobbyist to delay the implementation, and water down the regulations, in the already weak Dodd Frank bill. It’s not enough that in the past 3 years under Obama’s presidency, the Dow is up over 60% and corporate profits have soared, increasing the wealth of the top 1% while the income of the rest of America stagnates.

No. Wall Street has already gotten what it wanted from Obama — a president who, in the wake of the financial meltdown of 2008, would deflect the pitchforks of angry Americans. Now Wall Street is treating Obama like a cheap hooker. They paid their money, got their services, and they’re ready to send him back out on the streets.

In its infinite greed, the moderate, centrist Barack Obama who saved their butts is no longer enough for most of Wall Street. It believes it can use its wealth — further unleashed by the Citizens United decision allowing unlimited contributions to super PACS — to install one of its own, private equity multi-millionaire Mitt Romney, in the White House, someone who promises to repeal even the modest regulations of Dodd Frank and to insure that millionaires and billionaires won’t pay a single dime more in taxes from their untold fortunes.

So Obama has a choice. He can continue to talk like a bit of a populist in public and send emissaries to Wall Street in private to assure the bankers and hedge fund managers that they have nothing to fear from him, in the hope that Wall Street will continue to send campaign cash his way as insurance in case he gets reelected.

Or Obama can take a cue from FDR’s landslide 1936 reelection campaign, in which FDR proclaimed,

“We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.”

He can then propose a program to make the big banks Small Enough to Fail, without their failure so threatening the economy that the taxpayers will again have no choice but to bail them out when the next financial bubble bursts. This includes:

• Call all his top regulators — the Treasury Secretary, the Fed Chairman, the Comptroller of the Currency, the head of the SEC, the head of the Securities Futures Trading Commission, the head of the FDIC — into the Oval Office and make it clear that he expects regulators to promptly promulgate regulations that strongly enforce the letter and spirit of the Dodd-Frank act, including the strongest possible version of the Volker Rule closing loopholes that might allow federally insured banks to engage in anything that looks or smells like proprietary trading.

• Call for the passage of a new Glass-Steagall Act which will cleanly separate federally insured commercial banks from risky investment banks. As JPMorgan Chase’s massive trading losses on recent hedges (which may not have violated the Volker Rule) shows, Wall Street banks will inevitably find loopholes in something as complex as the Volker Rule, whose proposed regulations run thousands of pages. KISS = Keep It Simple Stupid. If you want to gamble in the global financial casino, you can’t take federally insured deposits, and vice versa.

• Break up Too Big To Fail banks. Call for the passage of the Brown-Kaufman Amendment (which the Obama administration previously opposed) that would limit the size of any single bank to 10% of the total insured deposits in the banking system.

• Call for real principal relief for underwater homeowners and use all of the tools already at the disposal of the executive branch to bring this about.

• Unleash the Justice Department and SEC to civilly and criminally prosecute bankers who gamed the system and caused the 2008 financial crash.

• Place a 0.1% tax on all financial transactions. This would, as former Clinton Labor Secretary Robert Reich points, out, bring in more than $ 250 billion over 10 years while slowing speculators and reducing the wild gyrations of financial markets.

There’s nothing really radical about this kind of program. It’s in the clear tradition of the New Deal which saved capitalism from its own worst excesses. The Dallas Fed, one of the most conservative branches of the Fed, recently called for breaking up the biggest banks in order to make capitalism safer, a call which was joined this week by the President of the St. Louis Fed.

Wall Street would of course freak out and pour even more millions into Romney’s campaign and super PACS. But with Wall Street already hating him, Obama can’t win the money war with Wall Street, anyway.

What he can win is the popular war for the hearts and minds of the American people. Americans hate Wall Street and they hate the bankers who were bailed out by taxpayers and put the money in their pockets in continue multi-million dollar bonuses. Obama can make clear in his campaign that he stands with the American people and not with Wall Street who is funding Mitt “Mr 1%” Romney’s campaign to put one of their own in the White House.

Either Obama can continue to privately suck up to Wall Street behind the scenes in the hope of competing for their campaign cash, acting like a battered housewife who keeps doing her husband’s bidding in the futile hope that he’ll stop beating her. Or he can become the actual populist reformer that Wall Street fears him secretly to be. He can channel his inner FDR and welcome the hatred of organized money in the name of standing up for the American people.

From:The Blog

Jim Thomas: Who Owns Your Business-Related Social Media?

There is a time bomb in your company that you had better defuse. This is true whether you are employee or employer, because when it blows, both sides will be out lots of time and money, including plenty in attorney’s fees. Not that we attorneys don’t want your money; it’s just that some of us would rather get a little to prevent a problem, instead of a lot to clean it up.

The bomb is your failure to be clear about, or even consider, ownership of the business connections represented by social media platforms such as Facebook, Twitter and LinkedIn. A couple of ongoing lawsuits, which I discuss in my presentations on the legal issues in social media, are examples of the trouble that you can avoid with a little attention.

In both cases, former employees (one was even the former owner) thought the social media networks (one on Twitter, the other on LinkedIn) built while at their old jobs belonged to them personally. The former employers thought differently. It wasn’t the tweets, posts, pictures, etc. that mattered; rather the issue was ownership of the network, the extensive base of active business connections — fans, followers, friends, whatever — represented by the accounts.

Since the employees had a hard time understanding how their “personal” accounts could be company property, litigation ensued. Now legal fees are piling up, and valuable time that could be spent on the real work of running a business is instead being spent applying old legal principles to the new and constantly evolving world of social media. Neither case has yet reached any definite conclusions, and even if they do, they will be limited by their facts and the laws in their states.

What is clear is that, under some circumstances, a Twitter or LinkedIn account that might appear to be personal may actually belong to the employer. That means a “personal” Facebook profile or Pinterest board, you name it, could likewise be company property. I’m not saying that result is right or wrong. I am saying that having the employee and employer agree upon ownership beforehand is infinitely better than going to court to determine it later.

Truly personal social media isn’t the concern, though companies should have policies on when such personal activities can take place while at work or using company property. Many business people (me included), however, promote their companies through their “personal” social media. Some companies, likewise, instruct their employees in coordinating “personal” social media for business purposes. In the same vein, subordinate employees often maintain the “personal” accounts of some high-profile employees.

If any of those situations sounds even vaguely familiar, or if you just want to be certain, it’s time to invest some thought and energy (and a little bit of legal fees) in the development of a policy that distinguishes the rights of the employee from those of the employer.

That process should solve at least part of the issue. Even when ownership of the account is clear, the actual use of the account could still create problems. In a future post I will tackle another potentially explosive issue: non-compete and non-solicitation agreements in a highly connected digital world.

From:The Blog

Bruce Kushnick: The Great Verizon FiOS Ripoff

(Third in a series. See part one: “Please, Sir, May I Have Another?” and part two: “How Wireless Hype is Hurting America.”)

After decades of demanding and getting rate hikes and tax breaks in return for promising to deliver broadband internet access to schools, libraries, hospitals and every home and business in their territories, Verizon is now making it clear that it is no longer expanding FiOS, its fiber optic cable service.

So what did they accomplish? What did they build? And how much did it cost? Verizon claims that the company spent $ 23 billion dollars in rolling out FiOS since 2004. (See, for instance, this message from Tim McCallion, President of Verizon’s West Region.) That’s a lot of money.

But as I stare at a decade’s worth of Verizon annual reports, I notice something odd. Where, exactly, is that $ 23 billion? Specifically, where are the construction budgets to support this claim?

This chart shows Verizon’s construction budgets for 2000 through 2011, taken directly from the Verizon annual SEC-filed reports. It also shows an imaginary “FiOS Bump” — about $ 3.8 billion dollars per year in addition to the baseline that should have been spent annually over a six-year period if the company had really been paying out $ 23 billion dollars for the construction. But the numbers show no bump in construction for FiOS; no major increases in capital expenditures in general. In fact, Verizon, on average, spent more on construction from 2000 to 2004 than from 2005 to 2011.

Another way to look at it is this: Construction budgets for wireline services historically equal about 20 to 25 percent of revenues. One could reasonably expect that building out a $ 23 billion network over seven years would lift that percentage to well over 25 percent a year.

But it didn’t happen. From 2000 to 2004, construction amounted to 22.2 percent of wireline revenues. From 2005 to 2011, it was only 19.7 percent. That’s actually a $ 5.9 billion reduction in construction spending in those latter years, compared to what would have been spent had they just continued spending at the same ratio as during the earlier period.

This chart compares revenue and construction costs for wireline services from 2000 to 2011, in millions of dollars..

So How Did FiOS Get Built?

Whatever amount Verizon did spend on FiOS — and obviously it was a not insignificant amount — would therefore appear to have come out of the standard construction budgets that were supposed to be used to upgrade the lines that most Americans are still using for their phone service: the Public Switched Telephone Networks, or PSTN. It would seem that customers, including seniors, low income families, minorities and municipalities have been funding the construction of a cable service through the hefty monthly fees they pay for a dialtone and ancillary services. In some states this is actually illegal.

If Verizon did actually spend $ 23 billion, then it appears to have come at the expense of the traditional maintenance and upgrades of the utility plant — and the PSTN got totally hosed. At the very least, prices for basic phone service should have been in steep decline as one of the major costs, construction, was dramatically lowered.

Instead, Verizon was also getting rate increases specifically to pay for FiOS. For instance, Verizon persuaded New York officials to increase rates for “fiber optic investments,” where the only service that could use the fiber optic service was Verizon’s FiOS.

For instance, when New York State Department of Public Service Commission Chairman Garry Brown announced the approval of a $ 1.95 a month rate hike for residential phone lines in 2009, he said “there are certain increases in Verizon’s costs that have to be recognized.” He explained: “This is especially important given the magnitude of the company’s capital investment program, including its massive deployment of fiber optics in New York. We encourage Verizon to make appropriate investments in New York, and these minor rate increases will allow those investments to continue.”

Of course the states weren’t told that everyone would be charged extra for a service that only some people were going to get. In New Jersey, for instance, Verizon made a firm commitment to rewire the entire state with fiber optics — capable of 45 Mbps in both directions. It was supposed to be 100 percent completed by 2010. Instead, Verizon claims to have “passed” 1.9 million homes, representing 57 percent of the households in its territories — but “passed” may or may not mean that they can actually get service.

Insult to Injury: Verizon Abandons FiOS for Wireless

What has become clear is that Verizon is going to stop deploying/upgrading the wired networks and is instead going to put its money in wireless. As a result, places that don’t have FiOS now will never get higher speed services and cable competition from Verizon.

A N.J. state commission report from June 2010 saw this coming, and noted:

“While it is possible for Verizon to extend service throughout its authorized territory, to an additional 155 municipalities in the state that are not included in its current application of 369 towns, Verizon has indicated it will now concentrate its capital expenditures, expected to be between $ 16.8 billion and $ 17.2 billion in 2010 on its wireless telephone network. Further FiOS expansion will be limited to increasing penetration in those communities where FiOS is currently available, according to the company.”

(The $ 16.8 and $ 17.2 billion are the companies’ total annual construction budgets, not New Jersey only.)

But as we discussed in our previous article, wireless is simply not a substitute for wireline services, especially broadband or cable service.

So, in New Jersey, one of the states I know best, here is the sequence of events: Verizon (in 1993) get changes in state law that allows them to collect billions of dollars in extra charges and tax perks in exchange for upgrading the utilities. Then, Verizon doesn’t roll out the fiber optic network until 2006 — which is a cable service, but which uses the same construction budgets that were allocated to do the utility upgrades. Then Verizon cancels FiOS, and does not upgrade the utility, leaving no upgrades of the current infrastructure in the state to compete with cable. Instead, Verizon now has its local-service customers paying for wireless upgrades, while more or less abandoning the wires and stranding millions of customers in New Jersey.

So what, at the end of the day, did all that ratepayer money actually pay for? Well, the massive excess profits were used to increase executive pay, pay for investments and losses overseas in hundreds of subsidiary companies, create massive foundations that try to buy off non-profits, and to fill war chests used for lobbying and campaign contribution. It’s clear the money didn’t go into upgrading the Public Switched Telephone Networks, where it was supposed to bring everyone a fiber optic future.

America is 15th or 33rd in the world in broadband, depending on which international or research group you believe. The failure to properly upgrade the PSTN, and the con of FiOS expenditures, has cost a large swath of America — from Massachusetts through Virginia and the old GTE territories, such as parts of California — a generation of technology, innovation and GDP growth.

From:The Blog

Taylor Lincoln: Don’t Get Fooled Again

Revisiting the lessons from deregulating derivatives is particularly important right now because Congress seems to have forgotten them. A report we just issued provides a road map of how derivatives wrecked the economy in 2008 and could do so again if Wall Street gets its way.

Nine bills that would roll back the derivatives reforms created in the wake of the financial crisis are moving in Congress. These proposals, most of which have already passed in committee, have been put forth in the name of furthering the competitiveness of U.S. companies and creating jobs for Main Street. These are quite brazen claims, since deregulating derivatives arguably did more to harm economic competitiveness and job creation than anything Congress has done for a very long time.

Here is the history, in brief: At the end of the Clinton administration, financial derivatives were relatively new and sat in a regulatory netherworld. In practice, they were not regulated. But they bore all the hallmarks of traditional futures, which by law must be traded on regulated exchanges.

Federal Reserve Chairman Alan Greenspan and successive Treasury Secretaries Robert Rubin and Lawrence Summers (a trio Time magazine dubbed The Committee to Save the World) argued that financial derivatives investors were too “sophisticated” to require oversight. Regulating derivatives would “cause the worst financial crisis since World War II,” Summers claimed.

In 2000, with the passage of the Commodity Futures Modernization Act, Congress established a regulation-free haven for financial derivatives. Derivatives soon became a petri dish for the growth of financial risk-taking, especially relating to the housing market.

In rough terms, derivatives dealers sold hundreds of billions of dollars worth of quasi-insurance policies (called credit default swaps) on mortgage-backed securities to holders of the securities. The illusion of protection provided by these insurance policies helped create a voracious appetite on Wall Street for mortgages to bundle into securities. This, in turn, led mortgage originators to adopt laughably low underwriting standards, causing housing prices to soar to unsustainable levels.

When reality intervened and mortgages defaults began occurring in droves, holders of defaulted mortgage-backed securities submitted claims to the providers of their credit default swap “insurance policies” (primarily American International Group, or AIG), only to learn that AIG could not make good on its promises. The absence of supervision of derivatives had permitted AIG to amass risks well in excess of its resources — and thereby put the entire economy in grave jeopardy.

AIG’s inability to pay its counterparties threatened to cause a ripple effect of institutional failures that could have thrown the economy back into the Stone Age. A $ 700 billion taxpayer-funded bailout was ordered up to prevent a total collapse of the financial system. Regular Americans were left to suffer through the deepest recession since the Great Depression.

Experts agree with the essence of the summary above. Each of the members of The Committee to Save the World, for instance, has recanted his advocacy for a laissez-faire approach to derivatives. Rubin now says he even favored regulation when critical decisions were being made in the late 1990s, but that “very strongly held views in the financial services industry in opposition to regulation were insurmountable.”

Which brings us to the present: The Dodd-Frank Wall Street Reform and Consumer Protection Act instituted a series of commonsense reforms, including requirements for derivatives trades to occur on designated exchanges. This key provision would ensure that prices are transparent and that a centralized clearing agency guarantees the credit worthiness of trading participants. This is how stocks and futures have been traded since the reforms of the 1930s. But because more money can be made trading on opaque, unsupervised markets, Wall Street objects to this reform. Once again, its leaders are attempting to subject Washington, and the country, to an insurmountable force.

Of the bills seeking to punch holes in Dodd-Frank, a few are comically ridiculous — and dangerous. One, H.R. 3283, cedes regulatory authority to foreign governments for the overseas activities of U.S. firms. Ask yourself, when was the last time Congress advocated submitting to foreign control of anything? Only Wall Street’s influence could convince lawmakers to favor such a thing.

Another bill is the cleverly titled Swaps Bailout Prevention Act. It does the opposite of what its title suggests. It would repeal Dodd-Frank’s prohibition against bailing out of major derivatives participants and, thus, allow federally insured banks to remain major derivatives players.

Last week brought news that JPMorganChase, the nation’s largest bank, suffered losses of at least $ 2 billion — which may climb above $ 4 billion — on bets on credit default swaps, the same scourge that led to the 2008 crisis. More alarming, the bank’s losses came on positions that may have been as high as$ 100 billion, meaning that a slight change in conditions had potentially enormous implications. This is exactly why derivatives, which financier Warren Buffett presciently labeled financial weapons of mass destruction in 2003, require vigilant public oversight.

The JPMorgan episode may be the warning that Congress needs to return to its role of protecting the public rather than coddling the banks. But it also raises a question: How many times does a lesson have to be taught before it is learned?

Taylor Lincoln is research director for Public Citizen’s Congress Watch division. @Public_Citizen.

From:The Blog

Robert Reich: The Commencement Address That Won’t Be Given

Members of the Class of 2012,

As a former secretary of labor and current professor, I feel I owe it to you to tell you the truth about the pieces of parchment you’re picking up today.

You’re f*cked.

Well, not exactly. But you won’t have it easy.

First, you’re going to have a hell of a hard time finding a job. The job market you’re heading into is still bad. Fewer than half of the graduates from last year’s class have as yet found full-time jobs. Most are still looking.

That’s been the pattern over the last three graduating classes: It’s been taking them more than a year to land the first job. And those who still haven’t found a job will be competing with you, making your job search even harder.

Contrast this with the class of 2008, whose members were lucky enough to get out of here and into the job market before the Great Recession really hit. Almost three-quarters of them found jobs within the year.

You’re still better off than your friends who didn’t graduate. Overall, the unemployment rate among young people (21 to 24 years old) with four-year college degrees is now 6.4 percent. With just a high school degree, the rate is double that.

But even when you get a job, it’s likely to pay peanuts.

Last year’s young college graduates lucky enough to land jobs had an average hourly wage of only $ 16.81, according to a new study by the Economic Policy Institute. That’s about $ 35,000 a year — lower than the yearly earnings of young college graduates in 2007, before the Great Recession. The typical wage of young college graduates dropped 4.6 percent between 2007 and 2011, adjusted for inflation.

Presumably this means that when we come out of the gravitational pull of the recession your wages will improve. But there’s a longer-term trend that should concern you.

The decline in the earnings of college grads really began more than a decade ago. Young college grads with jobs are earnings 5.4 percent less than they did in the year 2000, adjusted for inflation.

Don’t get me wrong. A four-year college degree is still valuable. Over your lifetimes, you’ll earn about 70 percent more than people who don’t have the pieces of parchment you’re picking up today.

But this parchment isn’t as valuable as it once was. So much of what was once considered “knowledge work” — the kind that college graduates specialize in — can now be done more cheaply by software. Or by workers with college degrees in India or East Asia, linked up by Internet.

For many of you, your immediate problem is that pile of debt on your shoulders. In a few moments, when you march out of here, those of you who have taken out college loans will owe more than $ 25,000 on average. Last year, ten percent of college grads with loans owed more than $ 54,000. Your parents have also taken out loans to help you. Loans to parents for the college educations of their children have soared 75 percent since the academic year 2005-2006.

Outstanding student debt now totals over $ 1 trillion. That’s more than the nation’s total credit-card debt.

The extraordinary rise in student debt is due to two related facts: the cost of a college education continues to increase faster than inflation, and state and local spending per college student continues to drop — this year reaching a 25-year low.

But this can’t go on. If unemployment stays high for many years, if the wages of young college grads continue to fall, if the costs of college continue to rise and state and local spending per college student continues to drop, and if the college debt burden therefore continues to explode — well, you do the math.

At some point in the not-too-distant future these lines cross. College is no longer a good investment.

That’s a problem for you and for those who will follow you into these hallowed halls, but it’s also a problem for America as a whole.

You see, a college education isn’t just a private investment. It’s also a public good. This nation can’t be competitive globally, nor can we have a vibrant and responsible democracy, without a large number of well-educated people.

So it’s not just you who are burdened by these trends. If they continue, we’re all f*cked.

Robert Reich is the author of Aftershock: The Next Economy and America’s Future, now in bookstores. This post originally appeared at RobertReich.org.

From:The Blog

Noah Kass: ‘That’s Not My Job’ Days Are Over: Ask Noah

Q: Very recently at work, I’ve noticed a tendency in my supervisor to unload some of the “busy work” he’s technically responsible for. I’d love to believe he’s testing me for a promotion by delegating new responsibilities my way. However, I can’t help but feel a little used. How should I handle this? Should I have a talk with him?

A: Let’s keep it real. The average employee is frequently asked to stretch his/her workload far beyond that of the original job description. This is a systemic function of our modern workplace. Companies want employees to work more, for less money. I don’t envision this changing anytime soon!

If there aren’t any union rules, which regulate a set-standard with which your supervisor needs to comply, there isn’t a ton you can do. I sense a pride in the work you turn in, so it doesn’t appear you want to be outwardly resistant either.

The truth is, a benefit of being a supervisor is getting to (unload) delegate one’s work onto others! In a perfect world, they do this to focus on macro issues. In a less than perfect world, they do this to focus on their golf game. Your supervisor’s motives are unknown. There is no point in pretending to be a mind-reader.

As far as having a conversation with him, I think we are too early in the game for that. Bringing complaints to your supervisor won’t make him or any other person in higher management see you as “future leader” material. Especially if he is indeed prepping you for a promotion.

My advice right now is to remain willing and flexible to complete these new responsibilities, staving off resentments that may be felt. Do not create a problem based on temporary discomfort. Concentrate on excelling first, and let’s see what comes of it.

Let logic be a guide and allow a little bit of time to pass before considering your next move.

Thanks for the question, and write me in a couple of months to update me on how the situation has evolved.

Have a profitable and peaceful week,

Noah

Please send all questions and comments to “Ask Noah” at nskass@gmail.com.

From:The Blog

Gino Vicci: Floor Traders Upset Over CME Group’s Changes

Amid pressure from the nation’s largest grain association and “significant feedback,” the CME Group Inc. backed off a proposed plan to extend trading hours in grain futures and options, but only by one hour. The amendment, which still has to be approved by the U.S. Commodities Futures Trading Commission before the Sunday start-up date, reduces the originally planned 22-hour electronic trading day to 21 hours.

CME Group’s expansion of electronic trading hours comes just weeks after its competitor, IntercontinentalExchange, began around-the-clock trading of grain products.

The National Grain and Feed Association has voiced concern over the extended hours, claiming there was insufficient time to close out and reconcile floor-trading activities and perform the required accounting and other back-office functions before electronic trading reopens.

In addition, the association and grain traders object to electronic trading at 7:30 a.m., when major U.S Department of Agriculture crop reports and other data are released. The group says the availability of electronic trading during the release of the reports could lead to “extreme volatility.”

“We look forward to continuing to discuss with the CME Group, other exchanges and other parties possible ways to address industry concerns about USDA reports being released during market hours,” said Randall C. Gordon, acting president of the National Grain and Feed Association.

Next month, CME Group plans to change the way grain futures contracts are settled by using prices from both the pit and from electronic trading.

With the news of extended trading hours in the grain and soybean complex and plans in June to incorporate both electronic trading and pit prices in daily price settlement procedures in, a growing number of traders on the floor are questioning the intent of the exchange.

“I would like to know if the exchanges are taking into consideration all the market participants,” said Greg O’Leary, owner of GX Trading.

Traders contend the exchange is concerned about retaining high-volume algorithmic traders in light of stepped-up competition from ICE.

“There is a feeling that the exchange [CME] has abandoned its original purpose… that they are driven solely by stock price and thus become beholden to the high-frequency traders, who provide “an enormously huge revenue stream,” argued Kelly King Taylor, who is an independent floor broker.

Two organizations have sprung up in protest of the CME’s proposals — protectagfutures.com and savethefloor.com.

The exchange initially planned a transition to the new settlement procedures for both grains and livestock futures in March and then in April but that plan was met with strong opposition from floor traders and the aforementioned groups.

“Initially when electronic trading started, it gave all players access to the marketplace with a computer, argued Heather Koch, director of protectagfutures.com. “It wasn’t supposed to be this mathematical model determining food prices.”

This article was first published at www.medillmoneymavens.com.

From:The Blog

John Friedman: A Lesson in Ethics From the Olympic Games

We each have our own favorite memories from the Olympic Games — whether it be Jessie Owens demonstrating the absurdity of Adolf Hitler’s racist notions, gymnast Nadia Comaneci’s perfect “10″s, Kerri Strugg’s valiant vault on a sprained ankle to win gold or Michael Phelps’ eight gold medals. This summer the world can once again look forward to breathtaking athleticism and triumphant and emotional moments that can only come from the collective shared global experience that are the Olympic Games.

More than an example of global cooperation, athletic excellence, courage and determination, the Olympic Games have brought us one of the greatest demonstration of ethics and integrity, when, in 1964, Italian bobsled driver Eugenio Monti was faced with the choice between doing what was expected or doing what he knew was right.

When the Winter Olympic Games opened that year in Innsbruck, Austria, the favorites in the four-man bobsled were the Austrians and the Italians. But in the first heat, Canada broke the Olympic record and posted a substantial lead. During that record-breaking run, however, they damaged the axle on their sled. Facing disqualification, Team Canada reached the top of the track to find its sled upside down. Monti had instructed his mechanics to fix it. Canada went on to win the gold medal.

Later in the same games, Italy was again favored in the two-man bobsled event. Great Britain recorded the fastest time after their first run. However, similarly to the earlier incident, their sled was damaged — a bolt attaching the runners to the sled had sheared off. Monti completed his run and had the needed bolt removed from his own sled and attached to the British bob. Great Britain took home the gold.

Returning home, Monti was lauded by some and vilified by others. His response was simple: “Nash didn’t win because I gave him the bolt. He won because he had the fastest run.”

Four years later Monti brought home gold medals in both the two-man and four-man bobsled events, yet his place in Olympic history ought to be defined not by those wins — but by the way he played the game. Monti understood that doing well and doing right are intertwined, even when it is not required or expected (or even understood).

Every day organizations make decisions like the one Monti faced — do what is required by law (or convention) or dare to demonstrate the courage and true leadership by going above and beyond. It is a strategic decision because it defines who they are.

From a strategic perspective, businesses can forgo the “quick” or “easy” wins or they can rise to the level of true leadership recognizing that an organization’s reputation is derived from its behavior, not its words. And while cynics will say that public relations is nothing more than putting organizations in their best possible light, corporate leaders are realizing that in going the extra step, and engaging in transparency, openness and disclosure, they reveal the true character of their organization. Like Eugenio Monti, organizations that allow this model will find that they win not only on the playing field, but the hearts and minds of their customers and stakeholders as well.

After all, just ask yourself …

• For whom would you rather work or have your loved ones work?
• From whom would you rather purchase?
• Whom would you welcome into your town?

From:The Blog

Dave Johnson: Will Conservatives Support American Companies… Or Chinese Companies?

Which is better for an economy: millions of future jobs and trillions of future dollars, or a few people making a quick buck today by selling out their country? For decades America’s 1 percent-backed conservatives have chosen the latter course, and we can see the results all around us. Now the Obama administration has imposed stiff tariffs on Chinese solar panels because China was “dumping” — selling below cost — to drive American manufacturers out of business. Will conservatives support their country and our companies or will they continue to side with our country’s competitors?

U.S. Imposes Stiff Tariffs

The Commerce Department yesterday concluded that Chinese solar panel companies are “dumping” product — selling below the cost of production — into the U.S. market, and imposed stiff tariffs. According to the New York Times‘ “U.S. Slaps High Tariffs on Chinese Solar Panels”:

The United States on Thursday announced the imposition of antidumping tariffs of more than 31 percent on solar panels from China.

… The antidumping decision is among the biggest in American history, covering one of the largest and fastest-growing categories of imports from China, the world’s largest exporter.

Industry of the Future

Again and again technology revolutions come along and disrupt economies. Countries that jump on new technologies are the countries that win the industries and jobs and revenue. This is how the United States became the world power that it is was. Railroads, steel, automobiles, airplanes, electronics, semiconductors, computers, the Internet, pharmaceuticals, biotech and software are a few examples. And in every case our government helped these new industries get off the ground. When these industries took root the payoff was enormous.

Green energy is one such technology of the future. Producing solar panels, wind turbines, etc. will bring millions and millions of jobs and trillions of dollars, and several countries are competing to win a share of this new industry.

China is fighting hard for those jobs and dollars. They are being smart, and they are also pushing past the limits of the rules. From the New York Times story:

Alan Price, a partner who heads the international trade practice at Wiley Rein, the law firm representing the United States companies in both the solar and wind cases, said that China posed a particular threat to America’s developing green energy sector.

“China’s method is straightforward: it sets forth industry-specific Five-Year Plans and then uses all forms of national and local subsidies and other governmental support to quickly transfer jobs, supply chains, intellectual property and wealth, to the permanent detriment of U.S. and global manufacturers,” he said. “China’s ability to ramp up and overwhelm an industry is unique and particularly devastating with new and emerging technologies, where global competitors may be less established and can be knocked out more easily and quickly.”

To compete for a share of this new industry we need to be proactive. We need national efforts to develop the industrial commons, or ecosystem, that will foster green-tech industries. We also need government policies that promote a market for these products until they take hold, just as our defense industry did for aircraft and other new technologies. And we need to enforce the rules for international economic competition, which is what has happened with the tariff decision.

Decision Not Political

The New York Times story points out that this was not a political decision by the Obama administration,

The American decision was made by civil servants in a quasi-judicial process that is heavily insulated by law from political interference and does not represent a deliberate attempt by the Obama administration to confront China on trade policy. But that distinction has been largely lost in China, where the solar panel issue has been one of many causes embraced online by the country’s vociferous ultranationalists, who put heavy pressure on Chinese officials to respond forcefully to perceived snubs to China.

The rules say that if a country is dumping, then we must impost tariffs. The Commerce Department investigated and concluded that China has been dumping so they had no choice. If we do not enforce trade rules, they are meaningless and countries that cheat gain an advantage, driving out the honest players. That is how cheating, accountability and enforcement work. (Hint: this also applies to banking fraud laws.)

In the case of solar-panel tariffs, we were losing companies and jobs and facing losing the possibility of losing the entire industry to China. From “Tariffs On Chinese Solar Might Help Prevent The Next Solyndra“:

You have probably heard about a solar-energy company named Solyndra, but probably what you have heard is a bunch of negative, conspiratorial, anti-alternative-energy, anti-Obama stuff from the corporate/conservative spin machine. The real story is that our government is trying to help us capture some of the new green energy industry that will create the jobs of the future. But China is, too. And China doubled down, and then quadrupled down on government support. They even directly subsidize their companies so their products cost less. This helped put Solyndra out of business. But the Obama administration is doing something about it.

China cheats, and we don’t usually do anything about it. They let companies pollute, don’t do much about worker safety, pay low wages, and make people work long hours. So-called “free trade” lets companies cost us more than 50,000 factories in the Bush years, and millions of jobs. And it empowers companies here to tell their workers to shut up and behave and accept wage and benefit cuts, or they’ll send their jobs to China, too. We continue to just let China take jobs, factories and industries because powerful interests, like Wall Street, make tons of money off of it.

So the decision is made, our country is engaging in the economic war that has been underway against us. Will our country’s conservatives take our country’s side?

Solyndra, Chevy Volt And The Anti-Green Propaganda Campaign

Oil-backed conservatives have been waging a campaign to discredit green energy, trying to stop government efforts to move us away from dependence on oil and coal. (Please click the links.)

They have used the failure of solar-panel manufacturer Solyndra — partly due to Chinese dumping — to paint green tech in general as a bad investment. They have even tried to turn the public against the Chevy Volt, claiming that it “ran out of juice in the Lincoln Tunnel” when it actually just kicked over to the gas-engine charger, and that the car is “flammable” because on test battery got too hot — as compared to cars that run on gasoline! (Gasoline car-fire data at the link.)

These anti-dumping tariffs change the dynamics of this oil-backed anti-green campaign. Now when conservatives slam Solyndra or the Chevy Volt and otherwise join in this anti-green-energy campaign they are taking China’s side against American companies at a time when the country is engaged in economic conflict. This presents a tough choice to the conservative movement: Do they continue to accept oil and coal company funding and side against their country and support China, or will they return to their pro-American roots and side with their country in a time of conflict?

Installers Hit Hard?

Low prices from trade-cheaters are always attractive. But if we want a slice of the jobs, factories, industries and economy of the future we have to fight back when our competitors cheat.

The solar-installer industry is worried they will be hit hard by this because prices for solar panels could increase sharply. According to BusinessWeek‘s “U.S. Solar Tariffs on Chinese Cells May Boost Prices“:

The tariffs “will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity,” Shah said in a statement. “This new artificial tax will undermine the success of the U.S. solar industry.”

[...] The U.S. decision to impose import duties on Chinese solar panels will raise their price to $ 1.11 per watt, according to calculations by Bloomberg New Energy Finance, a London-based researcher owned by Bloomberg LP. That price is 17 percent higher than the current spot price of non-Chinese panels.

Forbes‘s article “Solar Installers Caught In Cross Fire Of Escalating China Trade War” states:

On Thursday, the U.S. Commerce Department issued a preliminary decision levying steep tariffs against Chinese solar manufacturers, finding they illegally dumped cheap photovoltaic cells on the American market. But the companies that install those solar panels on residential and commercial rooftops — and which have benefited from a 75 percent plunge in photovoltaic prices in recent years — are split over the impact of the tariffs on their burgeoning business.

The government could remedy the impact on domestic customers and installers several ways, including:

• by using the new tariffs to fund tax credits and other incentives that help homeowners and businesses make the move to solar power,
• by imposing a large “carbon tax” that is refunded on a per-capita basis. This would mean high users of carbon-based fuels would pay in, the revenue is divided up evenly to everyone over 21 and paid out with a monthly check, and people could use this money to both cover their own added energy expenses and to purchase solar and other alternative energy products to lower their carbon-energy footprint,
• and by setting a national renewable energy standard, requiring power producers to use a certain percentage of solar, wind and other alternatives, creating more of a market for green tech.

Oil And Coal And “Buggy-Whip” Technologies

Of course the oil and coal companies will continue to fight this shift from their “buggy-whip” technology, and will use their tremendous influence over our government to try to hold off the inevitable. But the tide is shifting. The fact that China is fighting so hard and putting so much investment into this sector shows its value to the world economy in the future. The fact that our government is responding shows that we have a chance to win a share of the jobs and revenue that green tech promises to bring.

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Sign up here for the CAF daily summary

From:The Blog