Shoppers will soon be able to stand outside the designer Norma Kamali’s boutique in Manhattan, point a phone at merchandise in the window and buy it — even late at night when the store is closed.
ScanLife technology allows customers to scan bar codes on merchandise.
Ms. Kamali is at the forefront of a technological transformation coming to many of the nation’s retailers. They are determined to strengthen the link between their physical stores and the Web, and to use technology to make shopping easier for consumers and more lucrative for themselves.
The main way they plan to do it is by turning people’s mobile phones into information displays and ordering devices. Can’t find the flour at the grocery store? Grocers will offer phone applications that tell shoppers exactly where to go. Is the department store out of size 8 jeans? Retailers want to make it simple to punch a couple of buttons and have the desired size shipped home.
Some supermarkets intend to offer real-time coupons while people shop. For example, a promotion for milk may be sent to a shopper’s mobile phone the moment her cart rolls into the dairy aisle. Drugstores will offer loyalty programs on cellphones, not on plastic cards. And specialty chains will allow shoppers to breeze through the aisles compiling a wedding registry, just by pointing at merchandise.
It remains to be seen how readily shoppers will embrace such aggressive merchandising, which will generally require them to download free applications onto their phones and consent to being tracked electronically while in a store. But many stores are betting they will go along. After all, people already wander city streets guided by maps on their mobile phones. Why shouldn’t the same technology lead them to the toilet paper in Aisle 3?
Hoping to use the technology as a competitive advantage, some big chains are reluctant to discuss their plans. The Sam’s Club division of Wal-Mart, Crate & Barrel, Kerr Drug of North Carolina and Disney stores are among the retailers that confirmed they were testing various mobile technology or planned to do so soon.
Technology companies behind the products say retailers are sniffing around, with some planning limited introductions this year and wider deployments in 2011 or 2012.
Appropriately enough for a revered designer, Ms. Kamali is in the vanguard. A technology called ScanLife was installed at her boutique in recent weeks, and it already allows people to scan bar codes on merchandise and obtain details about the clothes through videos. The part about buying items day or night will come in another week or two.
“To say that I’m excited is putting it mildly,” Ms. Kamali said. “I’ve been in this business since the ’60s and I have to just tell you, nothing — nothing at all — has been as powerful a change in the psyche of the way we do everything as this technology.”
Other retailers have begun testing a product from I.B.M. called Presence. Shoppers who sign up can be detected as soon as they set foot in a store. That enables Presence to offer real-time mobile coupons. And tracking shoppers’ spending habits and browsing time in various departments can help the system figure out who might be moved to suddenly buy a discounted item.
Presence can also make product recommendations. If a shopper was buying cake mix, Presence might suggest buying the store’s private-label frosting and sprinkles, too.
“We’re also able to do predictive analytics — predict what we think you might want based on what we already know about you,” said Craig W. Stevenson, an I.B.M. executive who oversees Presence.
Cisco Systems, the supplier of networking equipment and services for the Internet, is also a leader in the field. The company’s Mobile Concierge system is capable of connecting customers’ smartphones to retailers’ wireless networks — so a shopper could type “Cheez Whiz” into a cellphone, then pinpoint its location in the store.
“We see the smartphone being used more and more in the shopping experience,” said Dick Cantwell, Cisco’s vice president for retail at Cisco’s Internet business solutions group.
Beyond privacy worries, retailers recognize other potential pitfalls. If the phone applications freeze or give bad information, they will most likely frustrate consumers. So reliability will be a priority, a reason retailers are starting with limited tests. And as some executives said, many stores cannot yet afford such technology.
As the more daring retailers see it, the potential benefits outweigh the risks. More aggressive profiling of shoppers — along with a novel, entertaining shopping experience — could help increase sales. And the technology may help retailers save money by cutting workers, essentially substituting electronic guidance for store clerks. Motorola, for example, has stores testing kiosk systems that enable consumers to summon a clerk to a particular department or fitting room when needed.
A new Motorola product promises to eliminate loyalty cards, instead putting the program, as well as coupons, onto shoppers’ cellphones. “Probably by the end of 2010 we’ll have 10 to 20 retailers up and running,” said Frank Riso, a senior director at Motorola, adding that most of the activity will begin in 2011.
Many big retailers have already created cellphone applications that do more than just dole out coupons. Target, for one, has an application that can identify which store aisle sells nightgowns.
So far, many stores have focused on improving their mobile shopping sites, which some consumers use when browsing the aisles to see product reviews and specifications. Retailers like Sears and American Eagle Outfitters work with a company called Usablenet to optimize their mobile sites.
Jason Taylor, Usablenet’s vice president for mobile products, said retailers began clamoring for improvements around Thanksgiving. The company is also working with a retailer, which it said it could not name, to enable shoppers to use smartphones to scan items in its stores, then add them to gift registries.
“Extending the phone to use as a scanner in the retail world — especially gift registry, wish lists — you’re going to see a lot more of this year,” Mr. Taylor said.
In the end, though, stores may not have much control over the way consumers use mobile technology.
Some shoppers are already outwitting retailers, using mobile applications like RedLaser to compare prices in a physical store to those on the Web. (Such applications scan product bar codes through a cellphone’s camera.)
Ben Aldern, 20, of Berkeley, Calif., went to Target recently to shop for headphones. “I was ready to spend whatever I needed,” he said, but on a hunch, he fired up RedLaser — and found the same model for less at Amazon, the online merchant.
“Once I saw I could save 20 bucks,” he said, “Target lost me.”
Saturday, February 27, 2010
Here Come the Put-Backs !
Our comments this week (here and here), along with occasional TBP contributor Mark Hanson, were picked up in Barron’s this morning.
Note that Hanson observes that home-owers are seizing on “loan warranties” and putting their mortgages back to the lenders:
“Ugly weather probably was a drag in January, but even in the months when the sun was shining, home sales haven’t been setting the world on fire. And the dismal demand for both new and existing dwellings came in the face of hefty tax incentives for first-time buyers and other ameliorative efforts by Washington. The latest brilliant idea of Tim Geithner and his henchmen at the Treasury, of imposing a temporary freeze on foreclosures, seems ideally designed to wreak more havoc in housing.As Barry Ritholtz of Fusion IQ reminds us, the profound problems that beset the industry spring from the fact that over the past decade, something like five million to 10 million people bought dwellings they couldn’t afford and still can’t, and a heap of those homes today are worth less, often a whole lot less, than they paid for them.
The Treasury’s proposal, he scoffs, will achieve nothing more than keeping those unfortunate folks in homes they can’t afford, many underwater and burdened by payments they can’t make.
Such mortgages were riddled, not infrequently, with the connivance or encouragement of the lenders — says Mark Hanson, the insightful real-estate analyst who runs the eponymous Hanson Advisors — with fraud, white lies and like nasty stuff that violate the loan warranties. Investors, he relates, are only beginning to seize on such breaches to demand so-called put-backs — repurchases of principal, accrued interest and expenses for loans that have been compromised.
Mark warns that as more investors turn to put-backs to recoup losses, this process will begin to take a toll on financial institutions that were active in the mortgage and housing arena. He points out that because the put-back push is in its infancy, there is no way for financial institutions to estimate future losses or need to recognize the potential costs under current accounting requirements. All of which is apt to make losses that much more painful for those institutions.
Obviously, for investors, home builders and distressed homeowners, the pain inflicted by limp housing, to paraphrase that eminent philosopher, Yogi Berra, won’t be over until it’s over. And until it is, we have trouble envisioning anything resembling a robust rebound by the economy.
Good stuff !
>
Note that Hanson observes that home-owers are seizing on “loan warranties” and putting their mortgages back to the lenders:
“Ugly weather probably was a drag in January, but even in the months when the sun was shining, home sales haven’t been setting the world on fire. And the dismal demand for both new and existing dwellings came in the face of hefty tax incentives for first-time buyers and other ameliorative efforts by Washington. The latest brilliant idea of Tim Geithner and his henchmen at the Treasury, of imposing a temporary freeze on foreclosures, seems ideally designed to wreak more havoc in housing.As Barry Ritholtz of Fusion IQ reminds us, the profound problems that beset the industry spring from the fact that over the past decade, something like five million to 10 million people bought dwellings they couldn’t afford and still can’t, and a heap of those homes today are worth less, often a whole lot less, than they paid for them.
The Treasury’s proposal, he scoffs, will achieve nothing more than keeping those unfortunate folks in homes they can’t afford, many underwater and burdened by payments they can’t make.
Such mortgages were riddled, not infrequently, with the connivance or encouragement of the lenders — says Mark Hanson, the insightful real-estate analyst who runs the eponymous Hanson Advisors — with fraud, white lies and like nasty stuff that violate the loan warranties. Investors, he relates, are only beginning to seize on such breaches to demand so-called put-backs — repurchases of principal, accrued interest and expenses for loans that have been compromised.
Mark warns that as more investors turn to put-backs to recoup losses, this process will begin to take a toll on financial institutions that were active in the mortgage and housing arena. He points out that because the put-back push is in its infancy, there is no way for financial institutions to estimate future losses or need to recognize the potential costs under current accounting requirements. All of which is apt to make losses that much more painful for those institutions.
Obviously, for investors, home builders and distressed homeowners, the pain inflicted by limp housing, to paraphrase that eminent philosopher, Yogi Berra, won’t be over until it’s over. And until it is, we have trouble envisioning anything resembling a robust rebound by the economy.
Good stuff !
>
Friday, February 26, 2010
Israelis rush to join Mossad after Mahmoud al-Mabhouh killing
Would you be prepared to cross-dress? And kill a guest in an adjacent hotel room? If the answer to these questions is a resounding “yes”, and you can also act, enjoy luxury international travel with a twist and can carry off a convincing Irish or Australian accent, then the job could be yours.
The Israeli spy agency Mossad may be the target of international reproach since it allegedly killed the Hamas leader Mahmoud al-Mabhouh in a Dubai hotel this month, but at home emerging details of the operation have generated Mossad mania.
It has never been more popular in Israel, with stores selling out of Mossad memorabilia and its official website reporting a soaring number of visitors interested in applying to become agents. “Mossad has been restored to its glory days,” said Ilan Mizrahi, a former deputy director of the agency, which is located in the affluent beach town of Herzliya, north of Tel Aviv.
Israel has neither confirmed nor denied its involvement in Mr al-Mabhouh’s death — despite increasingly confident announcements by Dubai police that they have linked Mossad to the killing. Of the 28 suspects named, 11 share identities with Israelis who hold dual citizenship.
Governments across the world are lambasting Israel for what it considers a sloppy job done by agents who were caught on CCTV and may have left behind DNA. In Israel, the operation is being touted as a job well done. Israelis are discussing the killing with a wink, a nod, and pride in the agency, offically known as the Institute for Intelligence and Special Operations.
Opticians have reported a rise in sales of the horn-rimmed glasses in the style worn by 14 of the 26 suspects, T-shirts with Mossad logos are selling out at stores and the agency has experienced a flood of applicants.
Although no new jobs have been posted for half a year, a new statement on the Mossad website reads: “You have an opportunity to create a new reality where you can play the leading role. If you possess intelligence and sophistication, you can make a difference and fulfil a national mission. If you can engage, charm and influence people — you may have the qualities we are looking for.”
Elad, 21, had been dreaming of joining Mossad for years, but filed an application this week, the news site Ynet reported. “I ran to a computer and applied for a job,” Elad told Ynet. “I’ve always had a dream to work for the Mossad. It’s obvious why – it’s exciting, dangerous and special. Nobody really knows what people do there, and now I suddenly understand how it works. It’s cool. I hope they accept me. I think I have all the required skills.”
The Mossad website says that candidates must hold an academic degree and good command of at least two languages. Preference is given to people with experience abroad and an ability to begin work immediately.
If the reports by Dubai police are correct, the assassination and surveillance team of nearly 30 agents so far exposed would represent a sizeable number of Mossad agents who would no longer be able to engage in covert espionage.
Photographs of the alleged assassins have been published across the world and studied by a number of governments.
An inquiry by Haaretz newspaper announced this week that the photographs were doctored so that the agents could not be identified. Details such as eye colour or contours of the nose and lips were altered slightly to make it difficult for facial recognition software to identify the individuals, Haaretz said.
The Israeli spy agency Mossad may be the target of international reproach since it allegedly killed the Hamas leader Mahmoud al-Mabhouh in a Dubai hotel this month, but at home emerging details of the operation have generated Mossad mania.
It has never been more popular in Israel, with stores selling out of Mossad memorabilia and its official website reporting a soaring number of visitors interested in applying to become agents. “Mossad has been restored to its glory days,” said Ilan Mizrahi, a former deputy director of the agency, which is located in the affluent beach town of Herzliya, north of Tel Aviv.
Israel has neither confirmed nor denied its involvement in Mr al-Mabhouh’s death — despite increasingly confident announcements by Dubai police that they have linked Mossad to the killing. Of the 28 suspects named, 11 share identities with Israelis who hold dual citizenship.
Governments across the world are lambasting Israel for what it considers a sloppy job done by agents who were caught on CCTV and may have left behind DNA. In Israel, the operation is being touted as a job well done. Israelis are discussing the killing with a wink, a nod, and pride in the agency, offically known as the Institute for Intelligence and Special Operations.
Opticians have reported a rise in sales of the horn-rimmed glasses in the style worn by 14 of the 26 suspects, T-shirts with Mossad logos are selling out at stores and the agency has experienced a flood of applicants.
Although no new jobs have been posted for half a year, a new statement on the Mossad website reads: “You have an opportunity to create a new reality where you can play the leading role. If you possess intelligence and sophistication, you can make a difference and fulfil a national mission. If you can engage, charm and influence people — you may have the qualities we are looking for.”
Elad, 21, had been dreaming of joining Mossad for years, but filed an application this week, the news site Ynet reported. “I ran to a computer and applied for a job,” Elad told Ynet. “I’ve always had a dream to work for the Mossad. It’s obvious why – it’s exciting, dangerous and special. Nobody really knows what people do there, and now I suddenly understand how it works. It’s cool. I hope they accept me. I think I have all the required skills.”
The Mossad website says that candidates must hold an academic degree and good command of at least two languages. Preference is given to people with experience abroad and an ability to begin work immediately.
If the reports by Dubai police are correct, the assassination and surveillance team of nearly 30 agents so far exposed would represent a sizeable number of Mossad agents who would no longer be able to engage in covert espionage.
Photographs of the alleged assassins have been published across the world and studied by a number of governments.
An inquiry by Haaretz newspaper announced this week that the photographs were doctored so that the agents could not be identified. Details such as eye colour or contours of the nose and lips were altered slightly to make it difficult for facial recognition software to identify the individuals, Haaretz said.
The gun-toting boys from Brazil who rule Rio’s ‘Corner of Fear’
A boy steps boldly into the night traffic and waves a gun to bring the cars to a halt, clearing a path for a motorcycle which screeches into the intersection. Riding pillion is another boy, brandishing a machinegun.
Later two teenagers, also riding pillion on motorbikes, flash their guns at other motorists; nearby, a boy can be seen taking aim with a rifle equipped with a telescopic sight. Other youths wander the street smoking crack.
For residents, the junction between the busy Dom Helder Câmara and dos Democráticos, in North Rio de Janeiro, has become known as the Corner of Fear — and video footage of daily life there has shocked a nation already familiar with guns and violence.
The latest images, captured by undercover journalists from the Rio tabloid Extra, have exposed the city’s criminal youth culture in a manner that echoes the journalistic investigation featured in the film City of God.
The video footage has provided a glimpse into the city’s underworld that hardly touches Rio’s wealthier citizens.
Local newspapers rarely show at first hand the violence that permeates the city’s slums (favelas). Since the brutal torture and murder of the journalist Tim Lopes — who was caught filming secretly in the Vila Cruzeiro favela in 2002 — Brazilian reporters have been reluctant to take their cameras into slum areas. Any reports that are filed tend to come from correspondents talking from inside armoured cars, or are images showing the aftermath of a shooting.
“What is shocking is this parallel power, the fact that they are very young,” said André Cabral De Almeida Cardoso, 41, a teacher. “They are so brazen about it.”
Valera dos Santos, 34, a maid who lives in a favela in São Paulo, said: “My God, I’ve never seen pictures like this. It’s absurd, they’re just boys.”
The journalists who captured the images were also taken aback. “Even knowing the reality of what could happen, you are still shocked by the glamour that these weapons represent in the arms of minors,” said Fernando Torres, 27, one of a team of three who spent four nights undercover at the Corner of Fear.
“These images are desolate,” said Lucy Petroucic, 56, a translator. “These boys have become little Taleban who think they have nothing to lose.”
Within hours, police arrested one of a group of bandits shown in the video and promised that changes were on the way. Luiz Fernando Pezão, Rio’s Deputy Governor, told reporters that a new police base would open nearby in May.
Later two teenagers, also riding pillion on motorbikes, flash their guns at other motorists; nearby, a boy can be seen taking aim with a rifle equipped with a telescopic sight. Other youths wander the street smoking crack.
For residents, the junction between the busy Dom Helder Câmara and dos Democráticos, in North Rio de Janeiro, has become known as the Corner of Fear — and video footage of daily life there has shocked a nation already familiar with guns and violence.
The latest images, captured by undercover journalists from the Rio tabloid Extra, have exposed the city’s criminal youth culture in a manner that echoes the journalistic investigation featured in the film City of God.
The video footage has provided a glimpse into the city’s underworld that hardly touches Rio’s wealthier citizens.
Local newspapers rarely show at first hand the violence that permeates the city’s slums (favelas). Since the brutal torture and murder of the journalist Tim Lopes — who was caught filming secretly in the Vila Cruzeiro favela in 2002 — Brazilian reporters have been reluctant to take their cameras into slum areas. Any reports that are filed tend to come from correspondents talking from inside armoured cars, or are images showing the aftermath of a shooting.
“What is shocking is this parallel power, the fact that they are very young,” said André Cabral De Almeida Cardoso, 41, a teacher. “They are so brazen about it.”
Valera dos Santos, 34, a maid who lives in a favela in São Paulo, said: “My God, I’ve never seen pictures like this. It’s absurd, they’re just boys.”
The journalists who captured the images were also taken aback. “Even knowing the reality of what could happen, you are still shocked by the glamour that these weapons represent in the arms of minors,” said Fernando Torres, 27, one of a team of three who spent four nights undercover at the Corner of Fear.
“These images are desolate,” said Lucy Petroucic, 56, a translator. “These boys have become little Taleban who think they have nothing to lose.”
Within hours, police arrested one of a group of bandits shown in the video and promised that changes were on the way. Luiz Fernando Pezão, Rio’s Deputy Governor, told reporters that a new police base would open nearby in May.
Monday, February 22, 2010
Nevada in Budget Squeeze
Nevada's $887 million deficit is puny compared with California's $20 billion hole.
But in a state that operates one of the leanest budgets in the nation, that amounts to a 22% shortfall, a gap that has some worried that the state might fall further behind in such areas as education and health care, where it already lags behind other states. Others sense an opening to chart a new course in small government.
"We are working on solutions to turn this recession into an opportunity to reinvent our state's government," Republican Gov. Jim Gibbons said in an emergency State of the State address this month. "We may never have an opportunity like this again," he said. Mr. Gibbons faces a tough primary battle this year and has had low approval ratings.
Workers in August dismantle cloud-seeding equipment after Nevada cut state funds for the program as it sought to curb government spending. Some local agencies have sought other funds to revive the practice.
.Limited government is as much part of the folklore of Nevada as cowboys and mobsters. Shortly before Nevada became a state, mining companies—then the dominant industry—ensured a tax cap for themselves in the constitution. The state has never had a personal income tax, and voters enshrined that ban in the constitution in the 1980s. The state legislature meets in regular session only for a few months every two years.
Nevada has been hit hard by both the foreclosure crisis and a sharp drop in gambling and tourism spending. The unemployment rate was nearly 13% in December, up from 8.4% a year earlier. Housing prices dropped 25% in the third quarter of 2009 from a year earlier, when they were already down 26%.
Mr. Gibbons, a conservative who faces a tough primary challenge, is among those who are trying to use the latest budget crisis as a way to ensure Nevada doesn't stray from its small-government roots.On Tuesday the legislature begins a special session to close the shortfall in the budget it approved a year ago, which includes this fiscal year and next.
However, that's a mighty task in a state as flinty as Nevada.
As Nevada's population grew by more than 30% in the past decade to 2.6 million in 2008, state government expanded even more rapidly as it hustled to build roads, increase university programs and develop cultural institutions. Still, in 2008, the state spent the least of any per capita, $3,563, according to data from the U.S. Census Bureau. California spent $5,707 per person, while New York spent $6,586 and Alaska, the leader, spent $13,294 per resident.
Counting local counties and cities, Nevada's spending ranked somewhat higher, though still below the national average. In 2006-2007, the last available U.S. Census comparisons, public welfare, education and health-services spending was among the lowest of all states. Medicaid spending ranked the lowest per person in the country—$472 compared with a national average of $1,015.
.In 2008, its spending on education per student was 48th among states, at $7,133, ahead of only Utah and Arizona. Nevada's student-teacher ratio was the fourth highest in the nation, at 19.3, according to the National Education Association, which represents teachers and other education professionals.
The governor's budget director, Andrew Clinger, said finding areas to cut has been a difficult process, especially since the state has been cutting budgets since 2008 as the economic picture worsened. "We're the leanest of the lean," Mr. Clinger said.
Mr. Clinger said the governor believed that there would now be opportunities to force cuts in areas that have protective constituencies. For example, Mr. Gibbons has long faced opposition to plans to close a state prison, which has been fought by prison employees, among others.
"It is so bad there are some things now that while they may not like it for political reasons, we're going to have to do it," Mr. Clinger said.
Other states are also taking drastic steps. Arizona this week is beginning to close state parks, and the governor there has proposed eliminating the health-insurance program for low-income children. Governors meeting over the weekend said they expected to face combined budget shortfalls of more than $134 billion over the next three years.
Some governors held out hope that economic conditions were starting to pick up. California Gov. Arnold Schwarzenegger said on ABC's "This Week" that "we see signs of a comeback, but it's very clear that the comeback is not going to be as quick as we've seen in the past." California is collecting revenue at a clip of $1 billion more a month than anticipated, he said.
But state revenue often trails an economic recovery because of the time it takes for collections to catch up with lower sales and incomes. In Nevada, many believe that because state revenue is so dependent on casinos, its recovery could lag. Already legislators are expected to confront an additional $3 billion budget deficit next year because funds from short-term tax increases and federal money won't be available.
The governor delivered a plan on Feb. 16 to the legislature that included raiding government accounts including the college scholarships reserve fund, cutting salaries for state workers and raising around $50 million from the mining industry by cutting out some tax deductions. He also proposed 10% across-the-board cuts that would reduce K-12 education by around $200 million and eliminate Medicaid benefits such as eyeglasses, hearing aids and dentures. and adult day care
Democrats, who control both houses of the legislature, have vowed to spare some of the cuts in funding to education and health services. They have discussed increasing some fees on businesses but have said tax increases are off the table this year, which means many programs they saved from the ax last year through a tax increase are on the chopping block this time around.
Some Democrats are hoping Nevadans will eventually loosen their anti-tax stance as they see key services like schools and hospitals erode. "Call me the eternal optimist, but I do think that there is a growing demand that we fix our tax structure," said Sheila Leslie, a Democratic Assemblywoman from Reno.
Democratic lawmakers often blame the low spending for the state's ranking on what they call the bottom of all the good lists and the top of all the bad lists. Nevada has among the highest number of uninsured children and suicide rates and among the lowest reading scores and college degrees per capita.
Conservative critics insist spending isn't the primary factor. "A lot of the spending programs have not been shown to significantly improve performance," said Geoffrey Lawrence, a fiscal policy analyst for the Nevada Policy Research Institute, a conservative group.
Employment was built on well-paying service-industry, mining and construction jobs. The state treated education as a low priority. Critics say that has made it hard to attract businesses that rely on a more educated work force, despite the low tax environment. University system Chancellor Dan Klaich said that under current proposals, the state would be forced to eliminate colleges, limit enrollment and raise student fees.
"We had started to make some headway," Mr. Klaich said. "We were recruiting some of the better students and building some research programs that had some national prominence. Some of that is going to be unwound, and the problem is that it could take us years and years to rebuild."
But in a state that operates one of the leanest budgets in the nation, that amounts to a 22% shortfall, a gap that has some worried that the state might fall further behind in such areas as education and health care, where it already lags behind other states. Others sense an opening to chart a new course in small government.
"We are working on solutions to turn this recession into an opportunity to reinvent our state's government," Republican Gov. Jim Gibbons said in an emergency State of the State address this month. "We may never have an opportunity like this again," he said. Mr. Gibbons faces a tough primary battle this year and has had low approval ratings.
Workers in August dismantle cloud-seeding equipment after Nevada cut state funds for the program as it sought to curb government spending. Some local agencies have sought other funds to revive the practice.
.Limited government is as much part of the folklore of Nevada as cowboys and mobsters. Shortly before Nevada became a state, mining companies—then the dominant industry—ensured a tax cap for themselves in the constitution. The state has never had a personal income tax, and voters enshrined that ban in the constitution in the 1980s. The state legislature meets in regular session only for a few months every two years.
Nevada has been hit hard by both the foreclosure crisis and a sharp drop in gambling and tourism spending. The unemployment rate was nearly 13% in December, up from 8.4% a year earlier. Housing prices dropped 25% in the third quarter of 2009 from a year earlier, when they were already down 26%.
Mr. Gibbons, a conservative who faces a tough primary challenge, is among those who are trying to use the latest budget crisis as a way to ensure Nevada doesn't stray from its small-government roots.On Tuesday the legislature begins a special session to close the shortfall in the budget it approved a year ago, which includes this fiscal year and next.
However, that's a mighty task in a state as flinty as Nevada.
As Nevada's population grew by more than 30% in the past decade to 2.6 million in 2008, state government expanded even more rapidly as it hustled to build roads, increase university programs and develop cultural institutions. Still, in 2008, the state spent the least of any per capita, $3,563, according to data from the U.S. Census Bureau. California spent $5,707 per person, while New York spent $6,586 and Alaska, the leader, spent $13,294 per resident.
Counting local counties and cities, Nevada's spending ranked somewhat higher, though still below the national average. In 2006-2007, the last available U.S. Census comparisons, public welfare, education and health-services spending was among the lowest of all states. Medicaid spending ranked the lowest per person in the country—$472 compared with a national average of $1,015.
.In 2008, its spending on education per student was 48th among states, at $7,133, ahead of only Utah and Arizona. Nevada's student-teacher ratio was the fourth highest in the nation, at 19.3, according to the National Education Association, which represents teachers and other education professionals.
The governor's budget director, Andrew Clinger, said finding areas to cut has been a difficult process, especially since the state has been cutting budgets since 2008 as the economic picture worsened. "We're the leanest of the lean," Mr. Clinger said.
Mr. Clinger said the governor believed that there would now be opportunities to force cuts in areas that have protective constituencies. For example, Mr. Gibbons has long faced opposition to plans to close a state prison, which has been fought by prison employees, among others.
"It is so bad there are some things now that while they may not like it for political reasons, we're going to have to do it," Mr. Clinger said.
Other states are also taking drastic steps. Arizona this week is beginning to close state parks, and the governor there has proposed eliminating the health-insurance program for low-income children. Governors meeting over the weekend said they expected to face combined budget shortfalls of more than $134 billion over the next three years.
Some governors held out hope that economic conditions were starting to pick up. California Gov. Arnold Schwarzenegger said on ABC's "This Week" that "we see signs of a comeback, but it's very clear that the comeback is not going to be as quick as we've seen in the past." California is collecting revenue at a clip of $1 billion more a month than anticipated, he said.
But state revenue often trails an economic recovery because of the time it takes for collections to catch up with lower sales and incomes. In Nevada, many believe that because state revenue is so dependent on casinos, its recovery could lag. Already legislators are expected to confront an additional $3 billion budget deficit next year because funds from short-term tax increases and federal money won't be available.
The governor delivered a plan on Feb. 16 to the legislature that included raiding government accounts including the college scholarships reserve fund, cutting salaries for state workers and raising around $50 million from the mining industry by cutting out some tax deductions. He also proposed 10% across-the-board cuts that would reduce K-12 education by around $200 million and eliminate Medicaid benefits such as eyeglasses, hearing aids and dentures. and adult day care
Democrats, who control both houses of the legislature, have vowed to spare some of the cuts in funding to education and health services. They have discussed increasing some fees on businesses but have said tax increases are off the table this year, which means many programs they saved from the ax last year through a tax increase are on the chopping block this time around.
Some Democrats are hoping Nevadans will eventually loosen their anti-tax stance as they see key services like schools and hospitals erode. "Call me the eternal optimist, but I do think that there is a growing demand that we fix our tax structure," said Sheila Leslie, a Democratic Assemblywoman from Reno.
Democratic lawmakers often blame the low spending for the state's ranking on what they call the bottom of all the good lists and the top of all the bad lists. Nevada has among the highest number of uninsured children and suicide rates and among the lowest reading scores and college degrees per capita.
Conservative critics insist spending isn't the primary factor. "A lot of the spending programs have not been shown to significantly improve performance," said Geoffrey Lawrence, a fiscal policy analyst for the Nevada Policy Research Institute, a conservative group.
Employment was built on well-paying service-industry, mining and construction jobs. The state treated education as a low priority. Critics say that has made it hard to attract businesses that rely on a more educated work force, despite the low tax environment. University system Chancellor Dan Klaich said that under current proposals, the state would be forced to eliminate colleges, limit enrollment and raise student fees.
"We had started to make some headway," Mr. Klaich said. "We were recruiting some of the better students and building some research programs that had some national prominence. Some of that is going to be unwound, and the problem is that it could take us years and years to rebuild."
Sunday, February 21, 2010
Israel unveils new drone fleet that can reach Iran
TEL NOF AIR FORCE BASE, Israel (AP) - Israel's air force on Sunday introduced a fleet of huge pilotless planes that can remain in the air for a full day and could fly as far as the Persian Gulf, putting rival Iran within its range.
The Heron TP drones have a wingspan of 86 feet (26 meters), making them the size of Boeing 737 passenger jets and the largest unmanned aircraft in Israel's military. The planes can fly at least 20 consecutive hours and are primarily used for surveillance and carrying diverse payloads.
At the fleet's inauguration ceremony at a sprawling air base in central Israel, the drone dwarfed an F-15 fighter jet parked beside it. The unmanned plane resembles its predecessor, the Heron, but can fly higher, reaching an altitude of more than 40,000 feet (12,000 meters), and remain in the air longer.
"With the inauguration of the Heron TP, we are realizing the air force's dream," said Brig. Gen. Amikam Norkin, commander of the base that will operate the drones. "The Heron TP is a technological and operational breakthrough."
The commander of Israel's air force, Maj. Gen. Ido Nehushtan, said the aircraft "has the potential to be able to conduct new missions down the line as they become relevant."
Israel's military refused to say how large the new fleet is or whether the planes were designed for use against Iran, but stressed it was versatile and could adapt to new missions. The plane's maker, state-owned Israel Aerospace Industries, has said it is capable of reaching the Persian Gulf, which would put Iran within its range.
Israeli defense officials said the Heron TP could be a useful tool against Iran. It could provide surveillance, jam enemy communications and connect ground control and manned air force planes.
The officials requested anonymity because they were discussing sensitive military technology.
Israel considers Iran a strategic threat because of its nuclear program, long-range missiles and repeated references by its leaders to the Jewish state's destruction.
Israel has hinted at the possibility of a military strike against Iran if world pressure does not halt Tehran's nuclear program. Israel and the U.S. believe Iran is trying to build nuclear weapons; Iran says its program is for peaceful purposes.
In past conflicts, various types and sizes of unmanned planes have been used in missions like long-range surveillance and attacking enemy targets with guided missiles in conflicts like Iraq and Afghanistan, where anti-aircraft systems are rudimentary.
They have proven much less successful in conflicts where the opponents possessed better anti-aircraft weapons.
During NATO's aerial onslaught against Serbia in 1999, for example, Serbian quickly forces shot down 42 U.S. drones, drastically reducing the effectiveness of the bombing campaign.
"We are aware of the dangers such an aircraft can meet in the battlefield, and we do whatever we can to protect it," said air force Lt. Col. Eyal.
Eyal, whose last name was not disclosed in line with military guidelines, would not comment on how the plane could protect itself from anti-aircraft systems.
Israeli defense analyst Shlomo Brom, a retired general and security expert at Tel Aviv University's Institute for National Security Studies, called the new drone a breakthrough.
"Its staying power and the height it can reach means it is able to cover ground continuously and it is able to cover large territory," he said.
Israel's military was the first to make widespread use of drones in its 1982 invasion of Lebanon, according to Mark Daly, an expert on unmanned aircraft at Jane's defense publications in London.
Israeli companies are considered world leaders in drone technology and now export unmanned aircraft to a number of armies, including U.S.-led forces that have used them in Iraq and Afghanistan.
The Heron TP has been in development for about a decade, but the aircraft first saw action during Israel's offensive against Hamas militants in the Gaza Strip just over a year ago.
Drones were seen as crucial to the Gaza onslaught by giving soldiers eyes in the air, keeping watch over rooftops and alleyways in congested urban areas - notifying troops of threats or obstacles in their path.
Palestinian witnesses have long claimed that Israeli drones fire missiles in Gaza, both before and during the Israeli offensive. Israel has never confirmed that its unmanned aircraft are capable of firing missiles.
The military says the huge new drone will give an added element to Israel's ability to control its borders.
The Heron TP drones have a wingspan of 86 feet (26 meters), making them the size of Boeing 737 passenger jets and the largest unmanned aircraft in Israel's military. The planes can fly at least 20 consecutive hours and are primarily used for surveillance and carrying diverse payloads.
At the fleet's inauguration ceremony at a sprawling air base in central Israel, the drone dwarfed an F-15 fighter jet parked beside it. The unmanned plane resembles its predecessor, the Heron, but can fly higher, reaching an altitude of more than 40,000 feet (12,000 meters), and remain in the air longer.
"With the inauguration of the Heron TP, we are realizing the air force's dream," said Brig. Gen. Amikam Norkin, commander of the base that will operate the drones. "The Heron TP is a technological and operational breakthrough."
The commander of Israel's air force, Maj. Gen. Ido Nehushtan, said the aircraft "has the potential to be able to conduct new missions down the line as they become relevant."
Israel's military refused to say how large the new fleet is or whether the planes were designed for use against Iran, but stressed it was versatile and could adapt to new missions. The plane's maker, state-owned Israel Aerospace Industries, has said it is capable of reaching the Persian Gulf, which would put Iran within its range.
Israeli defense officials said the Heron TP could be a useful tool against Iran. It could provide surveillance, jam enemy communications and connect ground control and manned air force planes.
The officials requested anonymity because they were discussing sensitive military technology.
Israel considers Iran a strategic threat because of its nuclear program, long-range missiles and repeated references by its leaders to the Jewish state's destruction.
Israel has hinted at the possibility of a military strike against Iran if world pressure does not halt Tehran's nuclear program. Israel and the U.S. believe Iran is trying to build nuclear weapons; Iran says its program is for peaceful purposes.
In past conflicts, various types and sizes of unmanned planes have been used in missions like long-range surveillance and attacking enemy targets with guided missiles in conflicts like Iraq and Afghanistan, where anti-aircraft systems are rudimentary.
They have proven much less successful in conflicts where the opponents possessed better anti-aircraft weapons.
During NATO's aerial onslaught against Serbia in 1999, for example, Serbian quickly forces shot down 42 U.S. drones, drastically reducing the effectiveness of the bombing campaign.
"We are aware of the dangers such an aircraft can meet in the battlefield, and we do whatever we can to protect it," said air force Lt. Col. Eyal.
Eyal, whose last name was not disclosed in line with military guidelines, would not comment on how the plane could protect itself from anti-aircraft systems.
Israeli defense analyst Shlomo Brom, a retired general and security expert at Tel Aviv University's Institute for National Security Studies, called the new drone a breakthrough.
"Its staying power and the height it can reach means it is able to cover ground continuously and it is able to cover large territory," he said.
Israel's military was the first to make widespread use of drones in its 1982 invasion of Lebanon, according to Mark Daly, an expert on unmanned aircraft at Jane's defense publications in London.
Israeli companies are considered world leaders in drone technology and now export unmanned aircraft to a number of armies, including U.S.-led forces that have used them in Iraq and Afghanistan.
The Heron TP has been in development for about a decade, but the aircraft first saw action during Israel's offensive against Hamas militants in the Gaza Strip just over a year ago.
Drones were seen as crucial to the Gaza onslaught by giving soldiers eyes in the air, keeping watch over rooftops and alleyways in congested urban areas - notifying troops of threats or obstacles in their path.
Palestinian witnesses have long claimed that Israeli drones fire missiles in Gaza, both before and during the Israeli offensive. Israel has never confirmed that its unmanned aircraft are capable of firing missiles.
The military says the huge new drone will give an added element to Israel's ability to control its borders.
Saturday, February 20, 2010
Millions of Unemployed Face Years Without Jobs
BUENA PARK, Calif. — Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.
“There are no bad jobs now. Any job is a good job,” said Jean Eisen, who became unemployed more than two years ago.
Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.
Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.
Yet the social safety net is already showing severe strains. Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments, according to the Labor Department.
Here in Southern California, Jean Eisen has been without work since she lost her job selling beauty salon equipment more than two years ago. In the several months she has endured with neither a paycheck nor an unemployment check, she has relied on local food banks for her groceries.
She has learned to live without the prescription medications she is supposed to take for high blood pressure and cholesterol. She has become effusively religious — an unexpected turn for this onetime standup comic with X-rated material — finding in Christianity her only form of health insurance.
“I pray for healing,” says Ms. Eisen, 57. “When you’ve got nothing, you’ve got to go with what you know.”
Warm, outgoing and prone to the positive, Ms. Eisen has worked much of her life. Now, she is one of 6.3 million Americans who have been unemployed for six months or longer, the largest number since the government began keeping track in 1948. That is more than double the toll in the next-worst period, in the early 1980s.
Men have suffered the largest numbers of job losses in this recession. But Ms. Eisen has the unfortunate distinction of being among a group — women from 45 to 64 years of age — whose long-term unemployment rate has grown rapidly.
In 1983, after a deep recession, women in that range made up only 7 percent of those who had been out of work for six months or longer, according to the Labor Department. Last year, they made up 14 percent.
Twice, Ms. Eisen exhausted her unemployment benefits before her check was restored by a federal extension. Last week, her check ran out again. She and her husband now settle their bills with only his $1,595 monthly disability check. The rent on their apartment is $1,380.
“We’re looking at the very real possibility of being homeless,” she said.
Every downturn pushes some people out of the middle class before the economy resumes expanding. Most recover. Many prosper. But some economists worry that this time could be different. An unusual constellation of forces — some embedded in the modern-day economy, others unique to this wrenching recession — might make it especially difficult for those out of work to find their way back to their middle-class lives.
Labor experts say the economy needs 100,000 new jobs a month just to absorb entrants to the labor force. With more than 15 million people officially jobless, even a vigorous recovery is likely to leave an enormous number out of work for years.
Some labor experts note that severe economic downturns are generally followed by powerful expansions, suggesting that aggressive hiring will soon resume. But doubts remain about whether such hiring can last long enough to absorb anywhere close to the millions of unemployed.
A New Scarcity of Jobs
Some labor experts say the basic functioning of the American economy has changed in ways that make jobs scarce — particularly for older, less-educated people like Ms. Eisen, who has only a high school diploma.
Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.
“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”
During periods of American economic expansion in the 1950s, ’60s and ’70s, the number of private-sector jobs increased about 3.5 percent a year, according to an analysis of Labor Department data by Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a research firm. During expansions in the 1980s and ’90s, jobs grew just 2.4 percent annually. And during the last decade, job growth fell to 0.9 percent annually.
“The pace of job growth has been getting weaker in each expansion,” Mr. Achuthan said. “There is no indication that this pattern is about to change.”
Before 1990, it took an average of 21 months for the economy to regain the jobs shed during a recession, according to an analysis of Labor Department data by the National Employment Law Project and the Economic Policy Institute, a labor-oriented research group in Washington.
After the recessions in 1990 and in 2001, 31 and 46 months passed before employment returned to its previous peaks. The economy was growing, but companies remained conservative in their hiring.
Some 34 million people were hired into new and existing private-sector jobs in 2000, at the tail end of an expansion, according to Labor Department data. A year later, in the midst of recession, hiring had fallen off to 31.6 million. And as late as 2003, with the economy again growing, hiring in the private sector continued to slip, to 29.8 million.
It was a jobless recovery: Business was picking up, but it simply did not translate into more work. This time, hiring may be especially subdued, labor economists say.
Traditionally, three sectors have led the way out of recession: automobiles, home building and banking. But auto companies have been shrinking because strapped households have less buying power. Home building is limited by fears about a glut of foreclosed properties. Banking is expanding, but this seems largely a function of government support that is being withdrawn.
At the same time, the continued bite of the financial crisis has crimped the flow of money to small businesses and new ventures, which tend to be major sources of new jobs.
All of which helps explain why Ms. Eisen — who has never before struggled to find work — feels a familiar pain each time she scans job listings on her computer: There are positions in health care, most requiring experience she lacks. Office jobs demand familiarity with software she has never used. Jobs at fast food restaurants are mostly secured by young people and immigrants.
If, as Mr. Sinai expects, the economy again expands without adding many jobs, millions of people like Ms. Eisen will be dependent on an unemployment insurance already being severely tested.
“The system was ill prepared for the reality of long-term unemployment,” said Maurice Emsellem, a policy director for the National Employment Law Project. “Now, you add a severe recession, and you have created a crisis of historic proportions.”
Fewer Protections
Some poverty experts say the broader social safety net is not up to cushioning the impact of the worst downturn since the Great Depression. Social services are less extensive than during the last period of double-digit unemployment, in the early 1980s.
On average, only two-thirds of unemployed people received state-provided unemployment checks last year, according to the Labor Department. The rest either exhausted their benefits, fell short of requirements or did not apply.
“You have very large sets of people who have no social protections,” said Randy Albelda, an economist at the University of Massachusetts in Boston. “They are landing in this netherworld.”
When Ms. Eisen and her husband, Jeff, applied for food stamps, they were turned away for having too much monthly income. The cutoff was $1,570 a month — $25 less than her husband’s disability check.
Reforms in the mid-1990s imposed time limits on cash assistance for poor single mothers, a change predicated on the assumption that women would trade welfare checks for paychecks.
Yet as jobs have become harder to get, so has welfare: as of 2006, 44 states cut off anyone with a household income totaling 75 percent of the poverty level — then limited to $1,383 a month for a family of three — according to an analysis by Ms. Albelda.
“We have a work-based safety net without any work,” said Timothy M. Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin, Madison. “People with more education and skills will probably figure something out once the economy picks up. It’s the ones with less education and skills: that’s the new poor.”
Here in Orange County, the expanse of suburbia stretching south from Los Angeles, long-term unemployment reaches even those who once had six-figure salaries. A center of the national mortgage industry, the area prospered in the real estate boom and suffered with the bust.
Until she was laid off two years ago, Janine Booth, 41, brought home roughly $10,000 a month in commissions from her job selling electronics to retailers. A single mother of three, she has been living lately on $2,000 a month in child support and about $450 a week in unemployment insurance — a stream of checks that ran out last week.
For Ms. Booth, work has been a constant since her teenage years, when she cleaned houses under pressure from her mother to earn pocket money. Today, Ms. Booth pays her $1,500 monthly mortgage with help from her mother, who is herself living off savings after being laid off.
“I don’t want to take money from her,” Ms. Booth said. “I just want to find a job.”
Ms. Booth, with a résumé full of well-paid sales jobs, seems the sort of person who would have little difficulty getting work. Yet two years of looking have yielded little but anxiety.
She sends out dozens of résumés a week and rarely hears back. She responds to online ads, only to learn they are seeking operators for telephone sex lines or people willing to send mysterious packages from their homes.
She spends weekdays in a classroom in Anaheim, in a state-financed training program that is supposed to land her a job in medical administration. Even if she does find a job, she will be lucky if it pays $15 an hour.
“What is going to happen?” she asked plaintively. “I worry about my kids. I just don’t want them to think I’m a failure.”
On a recent weekend, she was running errands with her 18-year-old son when they stopped at an A.T.M. and he saw her checking account balance: $50.
“He says, ‘Is that all you have?’ ” she recalled. “ ‘Are we going to be O.K.?’ ”
Yes, she replied — and not only for his benefit.
“I have to keep telling myself it’s going to be O.K.,” she said. “Otherwise, I’d go into a deep depression.”
Last week, she made up fliers advertising her eagerness to clean houses — the same activity that provided her with spending money in high school, and now the only way she sees fit to provide for her kids. She plans to place the fliers on porches in some other neighborhood.
“I don’t want to clean my neighbors’ houses,” she said. “I know I’m going to come out of this. There’s no way I’m going to be homeless and poverty-stricken. But I am scared. I have a lot of sleepless nights.”
For the Eisens, poverty is already here. In the two years Ms. Eisen has been without work, they have exhausted their savings of about $24,000. Their credit card balances have grown to $15,000.
“I don’t know how we’re still indoors,” she said.
Her 1994 Dodge Caravan broke down in January, leaving her to ask for rides to an employment center.
She does not have the money to move to a cheaper apartment.
“You have to have money for first and last month’s rent, and to open utility accounts,” she said.
What she has is personality and presence — two traits that used to seem enough. She narrates her life in a stream of self-deprecating wisecracks, her punch lines tinged with desperation.
“See that,” she said, spotting a man dressed as the Statue of Liberty. Standing on a sidewalk, he waved at passing cars with a sign advertising a tax preparation business. “That will be me next week. Do you think this guy ever thought he’d be doing this?”
And yet, she would gladly do this. She would do nearly anything.
“There are no bad jobs now,” she says. “Any job is a good job.”
She has applied everywhere she can think of — at offices, at gas stations. Nothing.
“I’m being seen as a person who is no longer viable,” she said. “I’m chalking it up to my age and my weight. Blame it on your most prominent insecurity.”
Two Incomes, Then None
Ms. Eisen grew up poor, in Flatbush in Brooklyn. Her father was in maintenance. Her mother worked part time at a company that made window blinds.
She married Jeff when she was 19, and they soon moved to California, where he had grown up. He worked in sales for a chemical company. They rented an apartment in Buena Park, a growing spread of houses filling out former orange groves. She stayed home and took care of their daughter.
“I never asked him how much he earned,” Ms. Eisen said. “I was of the mentality that the husband took care of everything. But we never wanted.”
By the early 1980s, gas and rent strained their finances. So she took a job as a quality assurance clerk at a factory that made aircraft parts. It paid $13.50 an hour and had health insurance.
When the company moved to Mexico in the early 1990s, Ms. Eisen quickly found a job at a travel agency. When online booking killed that business, she got the job at the beauty salon equipment company. It paid $13.25 an hour, with an annual bonus — enough for presents under the Christmas tree.
But six years ago, her husband took a fall at work and then succumbed to various ailments — diabetes, liver disease, high blood pressure — leaving him confined to the couch. Not until 2008 did he secure his disability check.
And now they find themselves in this desert of joblessness, her paycheck replaced by a $702 unemployment check every other week. She received 14 weeks of benefits after she lost her job, and then a seven-week extension.
For most of October through December 2008, she received nothing, as she waited for another extension. The checks came again, then ran out in September 2009. They were restored by an extension right before Christmas.
Their daughter has back problems and is living on disability checks, making the church their ultimate safety net.
“I never thought I’d be in the position where I had to go to a food bank,” Ms. Eisen said. But there she is, standing in the parking lot of the Calvary Chapel church, chatting with a half-dozen women, all waiting to enter the Bread of Life Food Pantry.
When her name is called, she steps into a windowless alcove, where a smiling woman hands her three bags of groceries: carrots, potatoes, bread, cheese and a hunk of frozen meat.
“Haven’t we got a lot to be thankful for?” Ms. Eisen asks.
For one thing, no pinto beans.
“I’ve got 10 bags of pinto beans,” she says. “And I have no clue how to cook a pinto bean.”
Local job listings are just as mysterious. On a bulletin board at the county-financed ProPath Business and Career Services Center, many are written in jargon hinting of accounting or computers.
“Nothing I’m qualified for,” Ms. Eisen says. “When you can’t define what it is, that’s a pretty good indication.”
Her counselor has a couple of possibilities — a cashier at a supermarket and a night desk job at a motel.
“I’ll e-mail them,” Ms. Eisen promises. “I’ll tell them what a shining example of humanity I am.”
“There are no bad jobs now. Any job is a good job,” said Jean Eisen, who became unemployed more than two years ago.
Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.
Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.
Yet the social safety net is already showing severe strains. Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments, according to the Labor Department.
Here in Southern California, Jean Eisen has been without work since she lost her job selling beauty salon equipment more than two years ago. In the several months she has endured with neither a paycheck nor an unemployment check, she has relied on local food banks for her groceries.
She has learned to live without the prescription medications she is supposed to take for high blood pressure and cholesterol. She has become effusively religious — an unexpected turn for this onetime standup comic with X-rated material — finding in Christianity her only form of health insurance.
“I pray for healing,” says Ms. Eisen, 57. “When you’ve got nothing, you’ve got to go with what you know.”
Warm, outgoing and prone to the positive, Ms. Eisen has worked much of her life. Now, she is one of 6.3 million Americans who have been unemployed for six months or longer, the largest number since the government began keeping track in 1948. That is more than double the toll in the next-worst period, in the early 1980s.
Men have suffered the largest numbers of job losses in this recession. But Ms. Eisen has the unfortunate distinction of being among a group — women from 45 to 64 years of age — whose long-term unemployment rate has grown rapidly.
In 1983, after a deep recession, women in that range made up only 7 percent of those who had been out of work for six months or longer, according to the Labor Department. Last year, they made up 14 percent.
Twice, Ms. Eisen exhausted her unemployment benefits before her check was restored by a federal extension. Last week, her check ran out again. She and her husband now settle their bills with only his $1,595 monthly disability check. The rent on their apartment is $1,380.
“We’re looking at the very real possibility of being homeless,” she said.
Every downturn pushes some people out of the middle class before the economy resumes expanding. Most recover. Many prosper. But some economists worry that this time could be different. An unusual constellation of forces — some embedded in the modern-day economy, others unique to this wrenching recession — might make it especially difficult for those out of work to find their way back to their middle-class lives.
Labor experts say the economy needs 100,000 new jobs a month just to absorb entrants to the labor force. With more than 15 million people officially jobless, even a vigorous recovery is likely to leave an enormous number out of work for years.
Some labor experts note that severe economic downturns are generally followed by powerful expansions, suggesting that aggressive hiring will soon resume. But doubts remain about whether such hiring can last long enough to absorb anywhere close to the millions of unemployed.
A New Scarcity of Jobs
Some labor experts say the basic functioning of the American economy has changed in ways that make jobs scarce — particularly for older, less-educated people like Ms. Eisen, who has only a high school diploma.
Large companies are increasingly owned by institutional investors who crave swift profits, a feat often achieved by cutting payroll. The declining influence of unions has made it easier for employers to shift work to part-time and temporary employees. Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.
“American business is about maximizing shareholder value,” said Allen Sinai, chief global economist at the research firm Decision Economics. “You basically don’t want workers. You hire less, and you try to find capital equipment to replace them.”
During periods of American economic expansion in the 1950s, ’60s and ’70s, the number of private-sector jobs increased about 3.5 percent a year, according to an analysis of Labor Department data by Lakshman Achuthan, managing director of the Economic Cycle Research Institute, a research firm. During expansions in the 1980s and ’90s, jobs grew just 2.4 percent annually. And during the last decade, job growth fell to 0.9 percent annually.
“The pace of job growth has been getting weaker in each expansion,” Mr. Achuthan said. “There is no indication that this pattern is about to change.”
Before 1990, it took an average of 21 months for the economy to regain the jobs shed during a recession, according to an analysis of Labor Department data by the National Employment Law Project and the Economic Policy Institute, a labor-oriented research group in Washington.
After the recessions in 1990 and in 2001, 31 and 46 months passed before employment returned to its previous peaks. The economy was growing, but companies remained conservative in their hiring.
Some 34 million people were hired into new and existing private-sector jobs in 2000, at the tail end of an expansion, according to Labor Department data. A year later, in the midst of recession, hiring had fallen off to 31.6 million. And as late as 2003, with the economy again growing, hiring in the private sector continued to slip, to 29.8 million.
It was a jobless recovery: Business was picking up, but it simply did not translate into more work. This time, hiring may be especially subdued, labor economists say.
Traditionally, three sectors have led the way out of recession: automobiles, home building and banking. But auto companies have been shrinking because strapped households have less buying power. Home building is limited by fears about a glut of foreclosed properties. Banking is expanding, but this seems largely a function of government support that is being withdrawn.
At the same time, the continued bite of the financial crisis has crimped the flow of money to small businesses and new ventures, which tend to be major sources of new jobs.
All of which helps explain why Ms. Eisen — who has never before struggled to find work — feels a familiar pain each time she scans job listings on her computer: There are positions in health care, most requiring experience she lacks. Office jobs demand familiarity with software she has never used. Jobs at fast food restaurants are mostly secured by young people and immigrants.
If, as Mr. Sinai expects, the economy again expands without adding many jobs, millions of people like Ms. Eisen will be dependent on an unemployment insurance already being severely tested.
“The system was ill prepared for the reality of long-term unemployment,” said Maurice Emsellem, a policy director for the National Employment Law Project. “Now, you add a severe recession, and you have created a crisis of historic proportions.”
Fewer Protections
Some poverty experts say the broader social safety net is not up to cushioning the impact of the worst downturn since the Great Depression. Social services are less extensive than during the last period of double-digit unemployment, in the early 1980s.
On average, only two-thirds of unemployed people received state-provided unemployment checks last year, according to the Labor Department. The rest either exhausted their benefits, fell short of requirements or did not apply.
“You have very large sets of people who have no social protections,” said Randy Albelda, an economist at the University of Massachusetts in Boston. “They are landing in this netherworld.”
When Ms. Eisen and her husband, Jeff, applied for food stamps, they were turned away for having too much monthly income. The cutoff was $1,570 a month — $25 less than her husband’s disability check.
Reforms in the mid-1990s imposed time limits on cash assistance for poor single mothers, a change predicated on the assumption that women would trade welfare checks for paychecks.
Yet as jobs have become harder to get, so has welfare: as of 2006, 44 states cut off anyone with a household income totaling 75 percent of the poverty level — then limited to $1,383 a month for a family of three — according to an analysis by Ms. Albelda.
“We have a work-based safety net without any work,” said Timothy M. Smeeding, director of the Institute for Research on Poverty at the University of Wisconsin, Madison. “People with more education and skills will probably figure something out once the economy picks up. It’s the ones with less education and skills: that’s the new poor.”
Here in Orange County, the expanse of suburbia stretching south from Los Angeles, long-term unemployment reaches even those who once had six-figure salaries. A center of the national mortgage industry, the area prospered in the real estate boom and suffered with the bust.
Until she was laid off two years ago, Janine Booth, 41, brought home roughly $10,000 a month in commissions from her job selling electronics to retailers. A single mother of three, she has been living lately on $2,000 a month in child support and about $450 a week in unemployment insurance — a stream of checks that ran out last week.
For Ms. Booth, work has been a constant since her teenage years, when she cleaned houses under pressure from her mother to earn pocket money. Today, Ms. Booth pays her $1,500 monthly mortgage with help from her mother, who is herself living off savings after being laid off.
“I don’t want to take money from her,” Ms. Booth said. “I just want to find a job.”
Ms. Booth, with a résumé full of well-paid sales jobs, seems the sort of person who would have little difficulty getting work. Yet two years of looking have yielded little but anxiety.
She sends out dozens of résumés a week and rarely hears back. She responds to online ads, only to learn they are seeking operators for telephone sex lines or people willing to send mysterious packages from their homes.
She spends weekdays in a classroom in Anaheim, in a state-financed training program that is supposed to land her a job in medical administration. Even if she does find a job, she will be lucky if it pays $15 an hour.
“What is going to happen?” she asked plaintively. “I worry about my kids. I just don’t want them to think I’m a failure.”
On a recent weekend, she was running errands with her 18-year-old son when they stopped at an A.T.M. and he saw her checking account balance: $50.
“He says, ‘Is that all you have?’ ” she recalled. “ ‘Are we going to be O.K.?’ ”
Yes, she replied — and not only for his benefit.
“I have to keep telling myself it’s going to be O.K.,” she said. “Otherwise, I’d go into a deep depression.”
Last week, she made up fliers advertising her eagerness to clean houses — the same activity that provided her with spending money in high school, and now the only way she sees fit to provide for her kids. She plans to place the fliers on porches in some other neighborhood.
“I don’t want to clean my neighbors’ houses,” she said. “I know I’m going to come out of this. There’s no way I’m going to be homeless and poverty-stricken. But I am scared. I have a lot of sleepless nights.”
For the Eisens, poverty is already here. In the two years Ms. Eisen has been without work, they have exhausted their savings of about $24,000. Their credit card balances have grown to $15,000.
“I don’t know how we’re still indoors,” she said.
Her 1994 Dodge Caravan broke down in January, leaving her to ask for rides to an employment center.
She does not have the money to move to a cheaper apartment.
“You have to have money for first and last month’s rent, and to open utility accounts,” she said.
What she has is personality and presence — two traits that used to seem enough. She narrates her life in a stream of self-deprecating wisecracks, her punch lines tinged with desperation.
“See that,” she said, spotting a man dressed as the Statue of Liberty. Standing on a sidewalk, he waved at passing cars with a sign advertising a tax preparation business. “That will be me next week. Do you think this guy ever thought he’d be doing this?”
And yet, she would gladly do this. She would do nearly anything.
“There are no bad jobs now,” she says. “Any job is a good job.”
She has applied everywhere she can think of — at offices, at gas stations. Nothing.
“I’m being seen as a person who is no longer viable,” she said. “I’m chalking it up to my age and my weight. Blame it on your most prominent insecurity.”
Two Incomes, Then None
Ms. Eisen grew up poor, in Flatbush in Brooklyn. Her father was in maintenance. Her mother worked part time at a company that made window blinds.
She married Jeff when she was 19, and they soon moved to California, where he had grown up. He worked in sales for a chemical company. They rented an apartment in Buena Park, a growing spread of houses filling out former orange groves. She stayed home and took care of their daughter.
“I never asked him how much he earned,” Ms. Eisen said. “I was of the mentality that the husband took care of everything. But we never wanted.”
By the early 1980s, gas and rent strained their finances. So she took a job as a quality assurance clerk at a factory that made aircraft parts. It paid $13.50 an hour and had health insurance.
When the company moved to Mexico in the early 1990s, Ms. Eisen quickly found a job at a travel agency. When online booking killed that business, she got the job at the beauty salon equipment company. It paid $13.25 an hour, with an annual bonus — enough for presents under the Christmas tree.
But six years ago, her husband took a fall at work and then succumbed to various ailments — diabetes, liver disease, high blood pressure — leaving him confined to the couch. Not until 2008 did he secure his disability check.
And now they find themselves in this desert of joblessness, her paycheck replaced by a $702 unemployment check every other week. She received 14 weeks of benefits after she lost her job, and then a seven-week extension.
For most of October through December 2008, she received nothing, as she waited for another extension. The checks came again, then ran out in September 2009. They were restored by an extension right before Christmas.
Their daughter has back problems and is living on disability checks, making the church their ultimate safety net.
“I never thought I’d be in the position where I had to go to a food bank,” Ms. Eisen said. But there she is, standing in the parking lot of the Calvary Chapel church, chatting with a half-dozen women, all waiting to enter the Bread of Life Food Pantry.
When her name is called, she steps into a windowless alcove, where a smiling woman hands her three bags of groceries: carrots, potatoes, bread, cheese and a hunk of frozen meat.
“Haven’t we got a lot to be thankful for?” Ms. Eisen asks.
For one thing, no pinto beans.
“I’ve got 10 bags of pinto beans,” she says. “And I have no clue how to cook a pinto bean.”
Local job listings are just as mysterious. On a bulletin board at the county-financed ProPath Business and Career Services Center, many are written in jargon hinting of accounting or computers.
“Nothing I’m qualified for,” Ms. Eisen says. “When you can’t define what it is, that’s a pretty good indication.”
Her counselor has a couple of possibilities — a cashier at a supermarket and a night desk job at a motel.
“I’ll e-mail them,” Ms. Eisen promises. “I’ll tell them what a shining example of humanity I am.”
Thursday, February 18, 2010
Dubai Hamas assassination: how it was planned
Dressed in tennis gear and carrying racquets and balls, the guests who wandered through the lobby of Dubai’s al-Bustan Rotana hotel on Jan 19 couldn’t have looked less thrBut within hours they and nine accomplices had carried out the ruthlessly efficient assassination of the Hamas military Commander Mahmoud al-Mabhouh, who had just a few seconds’ warning of his fate as the killers overpowered him in his room.
The murder bears the hallmarks of a meticulously-planned operation by the Israeli intelligence service Mossad, though Israel has so far refused to say whether it was involved.
Israeli ambassador 'must answer' questions What is beyond doubt, however, is that the alleged hit team, travelling on forged British, Irish, German and French passports, spent no more than 19 hours in the Gulf state, killing Mr Mabhouh just five hours after he had flown in from Syria.
After trawling through dozens of hours of CCTV footage, investigators have been able to piece together a minute-by-minute reconstruction of how the hit unfolded.
The 11-strong team arrived in Dubai in the early hours of Jan 19 on flights from France, Germany, Italy and Switzerland, dressed as businessmen with trolley bags and laptops and blending in perfectly with other passengers.
As they checked into several different hotels, a young woman carrying a false Irish passport in the name of Gail Folliard, was filmed accepting the help of a porter to carry her bag.
A man using the name Kevin Daveron, and using another fake Irish passport checked into a different room in the same hotel ten minutes later, and at 2.29am a man using a French passport under the name Peter Elvinger arrived at the airport with a jumper slung casually over his shoulders.
“Elvinger”, who is now thought to be the leader of the squad, was met on his arrival by another member of the team, before the two left the airport in opposite directions.
After a few hours sleep the team began to assemble for instructions at a shopping centre, though at no point did any of them call each other – instead they used a series of telephone numbers in Austria, which was described by Dubai investigators as a “command centre” for the operation.
“Elvinger”, now dressed in a striped T-shirt, carrying a rucksack, and wearing a cap to disguise his features, arrived around 10.30am, followed by five other members of the team including the woman.
Two hours later the suspects left, one of them carrying shopping bags, and headed back to their hotels, where they began to check out at around 1.30pm.
“Daveron” went straight to another hotel, where he disappeared into the lavatories, emerging in a wig and glasses, and then on to a third hotel to meet up with the team again.
At 2pm, more than an hour before their target had even arrived in Dubai, the first of several surveillance teams arrived at the al-Bustan Rotana hotel dressed in their tennis gear.
Another team had been sent to an alternative hotel in case Mr Mabhouh checked in there but they left when they later received a call to say their intended victim had checked in at the al-Bustan.
Quite why Mr Mabhouh risked travelling to Dubai from Syria, his home of the past 20 years, remains a mystery, though there have been suggestions that he could have been lured there on the pretext of carrying out an arms deal for Hamas.
He arrived in Dubai using the name Mahmoud Abdul Ra’ouf Mohammed at 3.20pm and was immediately spotted at the airport by a member of another surveillance team who had been expectantly lying in wait.
As he arrived at the al-Bustan hotel, the “tennis players”, one of whom appeared to be wearing a false moustache and glasses, got into the lift with him and followed him to room 230.
They then passed on the details of the room number to “Elvinger”, possibly using a radio worn on the wrist, enabling “Elvinger” to check into room 237, across the corridor from Mr Mabhouh.
At 4pm a new surveillance team arrived at the hotel wearing track suits, T-shirts and caps and carrying shoulder bags, to help the tennis players keep an eye on their target.
Mr Mabhouh left the hotel at 4.23pm, followed closely by one of the surveillance team, just before “Elvinger” arrived to check into room 237 where he was joined by the woman and “Daveron”.
While the Hamas leader was out, the hit squad busily got to work trying to break into his room. Four burly men, with caps pulled down over their faces, arrived at 6.32pm, followed by another woman wearing a floppy hat, who has not been identified, and a man in a straw boater who took over surveillance from the tennis players.
The assassins tried to break into Mr Mabhouh’s room, and attempted to re-programme the door lock as the innocent-looking couple kept lookout in the hallway.
They were disturbed by a guest returning to her room and police believe they had to abandon their original plan – probably involving lying in wait for Mr Mabhouh inside his room – and decided instead to fool him into opening it when he returned.
When Mr Mabhouh arrived back at the hotel at 8.24pm, dressed in a checked shirt, jacket and jeans and carrying a white plastic bag, he had just minutes to live.
After he went back to his room, the female member of the hit team emerged from her room, grinning broadly, as the four burly members of the alleged assassination team went to work.
Footage of what happened next has not been released by police, but at some point during the 22 minutes which followed, Mr Mabhouh probably opened his door to his killers, who pinned him down and suffocated him.
They somehow managed to lock the door from the inside and put the latch and chain in place before they left.
Tellingly, when the four alleged assassins caught a lift back down to the lobby, one of them was wearing a bandage on his arm.
By 10.30pm the woman and “Daveron” were at Dubai airport to catch a flight to Paris, followed over the next 12 hours by the rest of the team, who flew to such scattered destinations as Frankfurt, Hong Kong and South Africa.
By the time Mr Mabhouh’s body was found at 1.30pm on Jan 20, when he failed to check out of his room, his killers were thousands of miles away.
The assassination was, as the Dubai authorities have been at pains to point out, “carried out by a professional team that is highly skilled in these kinds of operations
eatening.
The murder bears the hallmarks of a meticulously-planned operation by the Israeli intelligence service Mossad, though Israel has so far refused to say whether it was involved.
Israeli ambassador 'must answer' questions What is beyond doubt, however, is that the alleged hit team, travelling on forged British, Irish, German and French passports, spent no more than 19 hours in the Gulf state, killing Mr Mabhouh just five hours after he had flown in from Syria.
After trawling through dozens of hours of CCTV footage, investigators have been able to piece together a minute-by-minute reconstruction of how the hit unfolded.
The 11-strong team arrived in Dubai in the early hours of Jan 19 on flights from France, Germany, Italy and Switzerland, dressed as businessmen with trolley bags and laptops and blending in perfectly with other passengers.
As they checked into several different hotels, a young woman carrying a false Irish passport in the name of Gail Folliard, was filmed accepting the help of a porter to carry her bag.
A man using the name Kevin Daveron, and using another fake Irish passport checked into a different room in the same hotel ten minutes later, and at 2.29am a man using a French passport under the name Peter Elvinger arrived at the airport with a jumper slung casually over his shoulders.
“Elvinger”, who is now thought to be the leader of the squad, was met on his arrival by another member of the team, before the two left the airport in opposite directions.
After a few hours sleep the team began to assemble for instructions at a shopping centre, though at no point did any of them call each other – instead they used a series of telephone numbers in Austria, which was described by Dubai investigators as a “command centre” for the operation.
“Elvinger”, now dressed in a striped T-shirt, carrying a rucksack, and wearing a cap to disguise his features, arrived around 10.30am, followed by five other members of the team including the woman.
Two hours later the suspects left, one of them carrying shopping bags, and headed back to their hotels, where they began to check out at around 1.30pm.
“Daveron” went straight to another hotel, where he disappeared into the lavatories, emerging in a wig and glasses, and then on to a third hotel to meet up with the team again.
At 2pm, more than an hour before their target had even arrived in Dubai, the first of several surveillance teams arrived at the al-Bustan Rotana hotel dressed in their tennis gear.
Another team had been sent to an alternative hotel in case Mr Mabhouh checked in there but they left when they later received a call to say their intended victim had checked in at the al-Bustan.
Quite why Mr Mabhouh risked travelling to Dubai from Syria, his home of the past 20 years, remains a mystery, though there have been suggestions that he could have been lured there on the pretext of carrying out an arms deal for Hamas.
He arrived in Dubai using the name Mahmoud Abdul Ra’ouf Mohammed at 3.20pm and was immediately spotted at the airport by a member of another surveillance team who had been expectantly lying in wait.
As he arrived at the al-Bustan hotel, the “tennis players”, one of whom appeared to be wearing a false moustache and glasses, got into the lift with him and followed him to room 230.
They then passed on the details of the room number to “Elvinger”, possibly using a radio worn on the wrist, enabling “Elvinger” to check into room 237, across the corridor from Mr Mabhouh.
At 4pm a new surveillance team arrived at the hotel wearing track suits, T-shirts and caps and carrying shoulder bags, to help the tennis players keep an eye on their target.
Mr Mabhouh left the hotel at 4.23pm, followed closely by one of the surveillance team, just before “Elvinger” arrived to check into room 237 where he was joined by the woman and “Daveron”.
While the Hamas leader was out, the hit squad busily got to work trying to break into his room. Four burly men, with caps pulled down over their faces, arrived at 6.32pm, followed by another woman wearing a floppy hat, who has not been identified, and a man in a straw boater who took over surveillance from the tennis players.
The assassins tried to break into Mr Mabhouh’s room, and attempted to re-programme the door lock as the innocent-looking couple kept lookout in the hallway.
They were disturbed by a guest returning to her room and police believe they had to abandon their original plan – probably involving lying in wait for Mr Mabhouh inside his room – and decided instead to fool him into opening it when he returned.
When Mr Mabhouh arrived back at the hotel at 8.24pm, dressed in a checked shirt, jacket and jeans and carrying a white plastic bag, he had just minutes to live.
After he went back to his room, the female member of the hit team emerged from her room, grinning broadly, as the four burly members of the alleged assassination team went to work.
Footage of what happened next has not been released by police, but at some point during the 22 minutes which followed, Mr Mabhouh probably opened his door to his killers, who pinned him down and suffocated him.
They somehow managed to lock the door from the inside and put the latch and chain in place before they left.
Tellingly, when the four alleged assassins caught a lift back down to the lobby, one of them was wearing a bandage on his arm.
By 10.30pm the woman and “Daveron” were at Dubai airport to catch a flight to Paris, followed over the next 12 hours by the rest of the team, who flew to such scattered destinations as Frankfurt, Hong Kong and South Africa.
By the time Mr Mabhouh’s body was found at 1.30pm on Jan 20, when he failed to check out of his room, his killers were thousands of miles away.
The assassination was, as the Dubai authorities have been at pains to point out, “carried out by a professional team that is highly skilled in these kinds of operations
eatening.
States Sink in Benefits Hole
State governments face a trillion-dollar gap between the pension, health-care and other retirement benefits promised to public employees and the money set aside to pay for them, according to a new report from the Pew Center on the States.
States promised current and retired workers a total of $3.35 trillion in benefits through June 30, 2008, said the report from the nonprofit research group, a division of Pew Charitable Trusts. But state governments had contributed only $2.35 trillion to their benefit plans to pay current and future bills, the report said.
The Pew report said its estimate of the funding gap would likely prove conservative, because it didn't account for the massive investment losses pension funds suffered during the second half of 2008. Although there was a slight rebound last year, it wasn't nearly enough to cover the previous losses, Pew said.
Researchers compiled the data by reviewing each state's comprehensive annual financial report for fiscal year 2008, which for most states ended June 30, 2008. They also looked at pension-plan annual reports.
The pension problems started well before the recession. Even in good times, states were skipping pension payments, leaving larger holes to fill in future years. State legislatures also increased benefit levels without setting aside extra money to pay for them.
As a result, annual pension costs for states and participating local governments more than doubled, to more than $64 billion, from fiscal 2000 to fiscal 2008, said Susan Urahn, the research group's managing director.
"We have a significant problem now, but it's a problem that can be solved," Ms. Urahn said. "If states wait, eventually they will have an unmanageable crisis on their hands."
Investment returns won't be enough to make up the shortfall, she said.
Illinois has the largest pension-funding gap, with only 54% of the necessary contributions made to pay promised benefits to current and future retirees, the Pew report said. Kansas, Oklahoma, Rhode Island and Connecticut are close behind, with less than 65% of their pension benefits currently funded.
Experts recommend that states set aside each year at least 80% of what actuaries say will be necessary to cover benefit payments. In 2008, only four states—Florida, New York, Washington and Wisconsin—had fully funded pension systems, the Pew report said.
In addition, states generally have little set aside to cover retiree health-care and other nonpension benefits. The Pew report found states, on average, have funded only 7.1% of these expected costs, and 20 states have no money in reserve for the bills.
The report suggested that states consider lowering benefit levels and increasing the retirement age for new employees. In the past two years, 10 states increased required employee contributions to their benefit plans, the report said.
State budgets are so troubled that most don't have extra money to make up for missed pension contributions. With revenue consistently lagging behind forecasts, state governments are cutting spending, increasing taxes and imposing new fees to eliminate deficits.
The National Conference of State Legislatures says it doesn't expect state finances to improve for at least two years. Thirty-five states are projecting a combined budget gap of $55.5 billion for fiscal year 2011, which begins July 1, 2010 for most states, said Corina Eckl, the group's director of fiscal programs.
Raising taxes to fill pension coffers would be a difficult sell to taxpayers, Ms. Urahn said.
Public-sector employees in California and other states are facing a growing backlash from residents who are having their own benefits stripped by employers.
Write to Amy Merrick at amy.merrick@wsj.com
States promised current and retired workers a total of $3.35 trillion in benefits through June 30, 2008, said the report from the nonprofit research group, a division of Pew Charitable Trusts. But state governments had contributed only $2.35 trillion to their benefit plans to pay current and future bills, the report said.
The Pew report said its estimate of the funding gap would likely prove conservative, because it didn't account for the massive investment losses pension funds suffered during the second half of 2008. Although there was a slight rebound last year, it wasn't nearly enough to cover the previous losses, Pew said.
Researchers compiled the data by reviewing each state's comprehensive annual financial report for fiscal year 2008, which for most states ended June 30, 2008. They also looked at pension-plan annual reports.
The pension problems started well before the recession. Even in good times, states were skipping pension payments, leaving larger holes to fill in future years. State legislatures also increased benefit levels without setting aside extra money to pay for them.
As a result, annual pension costs for states and participating local governments more than doubled, to more than $64 billion, from fiscal 2000 to fiscal 2008, said Susan Urahn, the research group's managing director.
"We have a significant problem now, but it's a problem that can be solved," Ms. Urahn said. "If states wait, eventually they will have an unmanageable crisis on their hands."
Investment returns won't be enough to make up the shortfall, she said.
Illinois has the largest pension-funding gap, with only 54% of the necessary contributions made to pay promised benefits to current and future retirees, the Pew report said. Kansas, Oklahoma, Rhode Island and Connecticut are close behind, with less than 65% of their pension benefits currently funded.
Experts recommend that states set aside each year at least 80% of what actuaries say will be necessary to cover benefit payments. In 2008, only four states—Florida, New York, Washington and Wisconsin—had fully funded pension systems, the Pew report said.
In addition, states generally have little set aside to cover retiree health-care and other nonpension benefits. The Pew report found states, on average, have funded only 7.1% of these expected costs, and 20 states have no money in reserve for the bills.
The report suggested that states consider lowering benefit levels and increasing the retirement age for new employees. In the past two years, 10 states increased required employee contributions to their benefit plans, the report said.
State budgets are so troubled that most don't have extra money to make up for missed pension contributions. With revenue consistently lagging behind forecasts, state governments are cutting spending, increasing taxes and imposing new fees to eliminate deficits.
The National Conference of State Legislatures says it doesn't expect state finances to improve for at least two years. Thirty-five states are projecting a combined budget gap of $55.5 billion for fiscal year 2011, which begins July 1, 2010 for most states, said Corina Eckl, the group's director of fiscal programs.
Raising taxes to fill pension coffers would be a difficult sell to taxpayers, Ms. Urahn said.
Public-sector employees in California and other states are facing a growing backlash from residents who are having their own benefits stripped by employers.
Write to Amy Merrick at amy.merrick@wsj.com
Wednesday, February 17, 2010
Dumped! Brand names fight to stay in stores
NEW YORK (CNNMoney.com) -- Don't be shocked if you can't find your favorite salad dressing or mouthwash on your next trip to Wal-Mart.
Large retailers -- including Wal-Mart (WMT, Fortune 500), the world's biggest -- are wrestling with having too many types of brand-name products. At the same time, shoppers are buying less and looking for bargains.
So unless a particular brand is a top seller in its category, it's getting knocked off the shelf -- and sometimes getting replaced by a cheaper store brand.
For example, Wal-Mart recently removed Glad and Hefty-branded storage bags from shelves, replacing them with its own lower-priced Great Value brand, according to the parent companies of both products.
In the case of Hefty, parent Pactiv Corp. (PTV) told CNNMoney.com that Wal-Mart reversed its decision, and will return its products to shelves this spring -- after Pactiv agreed to make the Great Value bags that will sell alongside the competing Hefty product.
"Hefty was off Wal-Mart's shelves, but we are being brought back," said Matt Gonring, spokesman for Pactiv Corp.
Bill Pecoriello, CEO of market research firm ConsumerEdge Research, expects Wal-Mart and other sellers will trim several name-brands across categories in coming months, or negotiate deals to get better pricing.
According to Pecoriello, those categories at greatest risk of losing brands are everyday-type purchases such as household products, toiletries and food staples.
These are also categories in which retailers have aggressively pushed their own house brands.
"If you consider the economics of this, if Wal-Mart can build customer loyalty for its own brand, which is also cheaper-priced and cheaper to stock than name-brands, then it will," he said.
Heavyweight
Moves such as this are significant given Wal-Mart's heavyweight status in the retail industry.
"Any change that Wal-Mart makes with its product assortment has enormous implications for the entire industry," said Ali Dibadj, senior analyst with Sanford C. Bernstein & Co.
Wal-Mart declined comment for this story.
Wal-Mart is not the only one doing this, according to Dibadj. He says leading drug store chains, including CVS and Walgreens, grocers such as Kroger (KR, Fortune 500), and Wal-Mart's rival discounter, Target (TGT, Fortune 500), are also looking to simplify their store shelves.
In good economic times, product variety is a must for retailers. But in down times, when shoppers aren't buying much, variety can be a burden.
"Wal-Mart's a little fed up," said Lora Cecera, retail expert and partner at strategy consulting firm Altimeter Group. "I think the feeling is that as these companies keep extending their [product] lines, it's only causing confusion for shoppers and not really driving them to buy more products."
As a consumer, she asked, "Do I really need to decide between 15 different types of toothpaste when I go to a store?"
Dawn Willoughby, vice president-general manager of Glad brand for the Clorox Co. (CLX, Fortune 500), agreed.
"On an industry level, we've been talking about simplifying product assortment for a long time," said Willoughby. "If you walk into a Wal-Mart or another large retail chain, there are so many products on shelves that it does make it harder to shop."
Let's make a deal
Besides cutting clutter, industry experts say Wal-Mart and other retailers are looking for more lucrative deals from suppliers on both prices and advertising.
In one recent example, according to published reports, Wal-Mart removed Arm & Hammer liquid laundry detergent from most of its stores. But the discounter brought back the product after Arm & Hammer boosted its advertising for the product at Wal-Mart.
Arm & Hammer parent Church & Dwight (CHD) did not return calls for comment. Other consumer product makers -- including Colgate-Palmolive and Procter & Gamble -- either declined comment or did not return calls.
Said Dibadj, "Perhaps one consideration in which product to cut is based on which company gives [Wal-Mart] the best deal."
Citing the Hefty example, he said "these threats can become quite aggressive, such as delisting and subsequent relisting after a compromise.
Altimeter Group's Cecera believes consumers stand to win from the retailers' moves.
"In this recession, consumers have certainly become less discriminating with what they buy," said Cecera. "Consumers have rushed to value prices, and they are buying generic brands."
She said retailers' own brands have grown their market share by between 2% to 6%.
This newfound affection for store brands is "sticking," said Dibadj. He cites his firm's recent survey finding that 77% of consumers who traded down to less expensive private label products are happy with their decision.
Talkback: Are you about to become ineligible for federal unemployment benefits? What will you do if Congress doesn't extend the deadline to apply for additional benefits? E-mail realstories@cnnmoney.com and you could be part of an upcoming story.
Large retailers -- including Wal-Mart (WMT, Fortune 500), the world's biggest -- are wrestling with having too many types of brand-name products. At the same time, shoppers are buying less and looking for bargains.
So unless a particular brand is a top seller in its category, it's getting knocked off the shelf -- and sometimes getting replaced by a cheaper store brand.
For example, Wal-Mart recently removed Glad and Hefty-branded storage bags from shelves, replacing them with its own lower-priced Great Value brand, according to the parent companies of both products.
In the case of Hefty, parent Pactiv Corp. (PTV) told CNNMoney.com that Wal-Mart reversed its decision, and will return its products to shelves this spring -- after Pactiv agreed to make the Great Value bags that will sell alongside the competing Hefty product.
"Hefty was off Wal-Mart's shelves, but we are being brought back," said Matt Gonring, spokesman for Pactiv Corp.
Bill Pecoriello, CEO of market research firm ConsumerEdge Research, expects Wal-Mart and other sellers will trim several name-brands across categories in coming months, or negotiate deals to get better pricing.
According to Pecoriello, those categories at greatest risk of losing brands are everyday-type purchases such as household products, toiletries and food staples.
These are also categories in which retailers have aggressively pushed their own house brands.
"If you consider the economics of this, if Wal-Mart can build customer loyalty for its own brand, which is also cheaper-priced and cheaper to stock than name-brands, then it will," he said.
Heavyweight
Moves such as this are significant given Wal-Mart's heavyweight status in the retail industry.
"Any change that Wal-Mart makes with its product assortment has enormous implications for the entire industry," said Ali Dibadj, senior analyst with Sanford C. Bernstein & Co.
Wal-Mart declined comment for this story.
Wal-Mart is not the only one doing this, according to Dibadj. He says leading drug store chains, including CVS and Walgreens, grocers such as Kroger (KR, Fortune 500), and Wal-Mart's rival discounter, Target (TGT, Fortune 500), are also looking to simplify their store shelves.
In good economic times, product variety is a must for retailers. But in down times, when shoppers aren't buying much, variety can be a burden.
"Wal-Mart's a little fed up," said Lora Cecera, retail expert and partner at strategy consulting firm Altimeter Group. "I think the feeling is that as these companies keep extending their [product] lines, it's only causing confusion for shoppers and not really driving them to buy more products."
As a consumer, she asked, "Do I really need to decide between 15 different types of toothpaste when I go to a store?"
Dawn Willoughby, vice president-general manager of Glad brand for the Clorox Co. (CLX, Fortune 500), agreed.
"On an industry level, we've been talking about simplifying product assortment for a long time," said Willoughby. "If you walk into a Wal-Mart or another large retail chain, there are so many products on shelves that it does make it harder to shop."
Let's make a deal
Besides cutting clutter, industry experts say Wal-Mart and other retailers are looking for more lucrative deals from suppliers on both prices and advertising.
In one recent example, according to published reports, Wal-Mart removed Arm & Hammer liquid laundry detergent from most of its stores. But the discounter brought back the product after Arm & Hammer boosted its advertising for the product at Wal-Mart.
Arm & Hammer parent Church & Dwight (CHD) did not return calls for comment. Other consumer product makers -- including Colgate-Palmolive and Procter & Gamble -- either declined comment or did not return calls.
Said Dibadj, "Perhaps one consideration in which product to cut is based on which company gives [Wal-Mart] the best deal."
Citing the Hefty example, he said "these threats can become quite aggressive, such as delisting and subsequent relisting after a compromise.
Altimeter Group's Cecera believes consumers stand to win from the retailers' moves.
"In this recession, consumers have certainly become less discriminating with what they buy," said Cecera. "Consumers have rushed to value prices, and they are buying generic brands."
She said retailers' own brands have grown their market share by between 2% to 6%.
This newfound affection for store brands is "sticking," said Dibadj. He cites his firm's recent survey finding that 77% of consumers who traded down to less expensive private label products are happy with their decision.
Talkback: Are you about to become ineligible for federal unemployment benefits? What will you do if Congress doesn't extend the deadline to apply for additional benefits? E-mail realstories@cnnmoney.com and you could be part of an upcoming story.
Tuesday, February 16, 2010
Wisconsin Billboard Calls for Obama's Ouster
Somebody in Wisconsin doesn't like President Barack Obama all that much.
An unnamed company has paid for a billboard along Highway 41 in Oshkosh that reads, "Impeach Obama."
The tagline says: "America's small businesses are failing; help us spread the message."
It was paid for by an unnamed company represented by Tom Wroblewski who told the AP the sentiment is that Washington politics are bad for small businesses.
The billboard is scheduled to remain up for at least six months, at a cost of $1,000 per month.
Jef Hall is the chairman of the Winnebago County Democratic Party. He says having a bad opinion of the president doesn't mean there's been an impeachable offense.
Wroblewski says despite the billboard's language, he's not suggesting Obama committed an impeachable offense.
Huh?
An unnamed company has paid for a billboard along Highway 41 in Oshkosh that reads, "Impeach Obama."
The tagline says: "America's small businesses are failing; help us spread the message."
It was paid for by an unnamed company represented by Tom Wroblewski who told the AP the sentiment is that Washington politics are bad for small businesses.
The billboard is scheduled to remain up for at least six months, at a cost of $1,000 per month.
Jef Hall is the chairman of the Winnebago County Democratic Party. He says having a bad opinion of the president doesn't mean there's been an impeachable offense.
Wroblewski says despite the billboard's language, he's not suggesting Obama committed an impeachable offense.
Huh?
Monday, February 15, 2010
China's tropical getaway becomes latest property boom
does this sound familiar.been there,done that and it doesn't end well
HONG KONG (MarketWatch) -- It's home to a submarine base, a recent host for the Miss World beauty pageant, and it draws the likes of action hero Jackie Chan and legendary financier George Soros. And now China's southern island of Hainan can add another distinction -- the nation's newest hot property market.
Real-estate prices on the island, where white-sand beaches and jungle-covered mountains have earned it associations with Hawaii, have jumped by more than one-third in the last five weeks.
And in Sanya, one of the island's main resort cities, luxury condos have risen as much as 40% since the start of the year, bringing prices close to similar properties in Beijing and Shanghai.
A good part of the real-estate spike comes from Beijing's announcement in early January that the island would be developed into a major international tourism destination by 2020.
In addition to a slew of new golf courses and five-star hotels, the government may also loosen visa rules and could allow Hainan to become the first Chinese territory outside Macau to license casinos.
"A lot of developers are looking at Hainan very seriously because of the government's policy," said Margaret Ng, a senior China analyst with CB Richard Ellis in Hong Kong.
Local Communist Party head Wei Liucheng said he was taken off guard by the sudden rise, calling it an "unexpected response" to the tourism plan, according to Chinese news reports.
Provincial committee head of the Communist Party Wei Liucheng, who unveiled the new rules, said he was taken off guard by the sudden rise, calling it an "unexpected response" to the tourism plan, according to Chinese news reports.
In a bid to curb speculation, authorities suspended land sales and approvals of new building projects in January. But instead of cooling the market, many believe the suspensions incited a second wave of gains, as developers and land owners moved to hoard property in the expectation of higher prices.
"There is a bubble forming, and it is bound to burst if effective measures are not applied soon," the state-run China Daily quoted China Real Estate Association Vice Secretary He Qi as saying.
Among concerns is the number of vacant apartments -- estimated to be as high as 30% in Sanya -- raising the prospect that prices could tumble if confidence turns.
Off the charts
Ng said it was hard to get an accurate impression of the scale of the Hainan boom as there are few reliable data-tacking indexes.
Large property consulting companies tend to focus more on China's 70 largest cities, she said, but judging by anecdotal reports and her own visits to the island, the boom looks like the latest incredible chapter in China's ongoing love affair with real estate.
Research by Standard Chartered published earlier this week estimated nationwide land prices more than doubled in 2009, but that figure is likely well below the true rate of gains, the report's authors said.
For one thing, the report excluded some bizarrely inflated data. Standard Chartered's Shanghai-based head of research Steven Green said that figures showing an 880% rise in the eastern Chinese city of Wenzhou were axed from his analysis, as were "similarly crazy" data for Hainan's provincial capital Haikou.
"The level of appreciation was so high, we took them off the chart," Green said.
Even so, they found land prices in seven cities tripled -- based on their projected value when developed -- while those for a gauge of 10 cities, including Beijing and Shanghai, rose an average of 147%.
Market Edge: How Fast is China Likely to Cool?There's overheating in certain parts of the Chinese economy, such as the property sector, but that doesn't mean it can be called a bubble, according to Richard Gao, lead manager of the Matthews China Fund. Laura Mandaro reports.
China's official statistics are also indicating a heated market, though the gains look less spectacular. Property prices in 70 major cities were up 9.5% in January from a year earlier, accelerating from a 7.8% rise in December on year.
"We believe we now have a bubble in many cities, particularly the big ones," Green said.
Increasingly nervous at the scale of China's lending boom, some analysts have begun furiously filling in spread sheets to gauge the likely fallout from a property bust.
Royal Bank of Scotland recently weighed up scenarios in which the property market crashes this year, and another where it continues to rise 15% before crashing in 2011, using the scenarios to asses the impact of 16 listed property developers.
If property prices crashed by an average 40%, for instance, Guangzhou R&F Properties Co.'s (SEHK:HK:2777) (OTHER:GZUHF) current share price would be 200% above its net asset value, while Agile Property Holdings Ltd (SEHK:HK:3383) (OTHER:AGPY.Y) - among those said to have projects in Hainan - would be 193% above NAV, according to the RBS projections.
Not the apocalypse
But despite the impossibly steep climb in real-estate values in Hanian and elsewhere across China, many analysts are surprisingly calm about the possibility of a catastrophic crash.
One mitigating factor involves a prime driver of the property-price gains: the rise in bank lending.
China's state-controlled banks opened the lending floodgates last year in response to the global financial crisis, but they are now tightening back up.
After data showed 1.1 trillion yuan ($161 billion) in new loans were issued during the first two weeks of January alone, regulators ordered banks to tighten their lending. They also raised the amount of funds that banks must set aside as deposits and even issued guidance on what sectors should receive credit -- a list which did not include real estate. See full story on China's December lending
Standard Chartered's Green said that land prices in many cities are currently near levels they reached at previous peaks, suggesting government's effort to cool the market could be successful, although some pain is likely during the next two years.
In fact, there's some evidence a cooling in China's property market is already underway -- outside Hainan at least.
Transactions in Beijing and Shanghai were down 41% and 29% respectively in January from December, according to figures compiled by Chinese real-estate tracking Web site Soufun. Part of the drop, however, may have to do with buyers seeking to avoid a levy that came into effect on Jan. 1.
And while such easing may going on in the big cities, interested money seems to now be bidding up prices in other markets, such as Hainan. About 80% of property transactions on the island are from outside the province, with a major of coming from the northern China, according to CB Richard Ellis estimates.
Hanqing Gao, a journalist who moved to Hainan in 2009, says matter weren't helped by one of the coldest winters in recent history in the country's north.
"A lot of people come from the north and they stay in town for the winter, and they need to rent or buy flats," Gao said, adding that the national tourism development plan further "drummed up the market."
She compared it to the fast-growing metropolis of Shenzhen, which sprouted after the central government decreed the city bordering Hong Kong as a special economic zone.
Even George Soros has gotten involved, apparently betting on the rise of China's leisure culture though his 18.6% stake in HNA Group, the parent of Hainan Airlines (SSE:CN:900945) , the largest privately owned airline in China.
But while such speculative frenzy could point to a devastating fall, some say the current levels have enough demand to support them.
Credit Suisse Chief Regional Economist Dong Tao said that while credit conditions in China are "getting shaky," there are few signs of a colossal bust any time soon.
"Chinese individuals are not short on money -- it's a massive excess liquidity situation," Tao said.
Standard Chartered said one possible outcome is that property prices hover around current levels, even as a wave of new supply is set to come onto the market around the middle of this year.
Prices in this scenario would draw support from strong demand from owner-occupiers -- estimated at 80% to 90% on a nationwide basis -- and from the fact that purchases, for the most part, are financed with low levels of debt.
Most at risk of a margin call are the luxury properties in Shanghai and other leading cities that were ground zero for speculation.
"Bubbly prices may deflate more [in Shanghai], but not enough to damage the broader economy," Green said.
HONG KONG (MarketWatch) -- It's home to a submarine base, a recent host for the Miss World beauty pageant, and it draws the likes of action hero Jackie Chan and legendary financier George Soros. And now China's southern island of Hainan can add another distinction -- the nation's newest hot property market.
Real-estate prices on the island, where white-sand beaches and jungle-covered mountains have earned it associations with Hawaii, have jumped by more than one-third in the last five weeks.
And in Sanya, one of the island's main resort cities, luxury condos have risen as much as 40% since the start of the year, bringing prices close to similar properties in Beijing and Shanghai.
A good part of the real-estate spike comes from Beijing's announcement in early January that the island would be developed into a major international tourism destination by 2020.
In addition to a slew of new golf courses and five-star hotels, the government may also loosen visa rules and could allow Hainan to become the first Chinese territory outside Macau to license casinos.
"A lot of developers are looking at Hainan very seriously because of the government's policy," said Margaret Ng, a senior China analyst with CB Richard Ellis in Hong Kong.
Local Communist Party head Wei Liucheng said he was taken off guard by the sudden rise, calling it an "unexpected response" to the tourism plan, according to Chinese news reports.
Provincial committee head of the Communist Party Wei Liucheng, who unveiled the new rules, said he was taken off guard by the sudden rise, calling it an "unexpected response" to the tourism plan, according to Chinese news reports.
In a bid to curb speculation, authorities suspended land sales and approvals of new building projects in January. But instead of cooling the market, many believe the suspensions incited a second wave of gains, as developers and land owners moved to hoard property in the expectation of higher prices.
"There is a bubble forming, and it is bound to burst if effective measures are not applied soon," the state-run China Daily quoted China Real Estate Association Vice Secretary He Qi as saying.
Among concerns is the number of vacant apartments -- estimated to be as high as 30% in Sanya -- raising the prospect that prices could tumble if confidence turns.
Off the charts
Ng said it was hard to get an accurate impression of the scale of the Hainan boom as there are few reliable data-tacking indexes.
Large property consulting companies tend to focus more on China's 70 largest cities, she said, but judging by anecdotal reports and her own visits to the island, the boom looks like the latest incredible chapter in China's ongoing love affair with real estate.
Research by Standard Chartered published earlier this week estimated nationwide land prices more than doubled in 2009, but that figure is likely well below the true rate of gains, the report's authors said.
For one thing, the report excluded some bizarrely inflated data. Standard Chartered's Shanghai-based head of research Steven Green said that figures showing an 880% rise in the eastern Chinese city of Wenzhou were axed from his analysis, as were "similarly crazy" data for Hainan's provincial capital Haikou.
"The level of appreciation was so high, we took them off the chart," Green said.
Even so, they found land prices in seven cities tripled -- based on their projected value when developed -- while those for a gauge of 10 cities, including Beijing and Shanghai, rose an average of 147%.
Market Edge: How Fast is China Likely to Cool?There's overheating in certain parts of the Chinese economy, such as the property sector, but that doesn't mean it can be called a bubble, according to Richard Gao, lead manager of the Matthews China Fund. Laura Mandaro reports.
China's official statistics are also indicating a heated market, though the gains look less spectacular. Property prices in 70 major cities were up 9.5% in January from a year earlier, accelerating from a 7.8% rise in December on year.
"We believe we now have a bubble in many cities, particularly the big ones," Green said.
Increasingly nervous at the scale of China's lending boom, some analysts have begun furiously filling in spread sheets to gauge the likely fallout from a property bust.
Royal Bank of Scotland recently weighed up scenarios in which the property market crashes this year, and another where it continues to rise 15% before crashing in 2011, using the scenarios to asses the impact of 16 listed property developers.
If property prices crashed by an average 40%, for instance, Guangzhou R&F Properties Co.'s (SEHK:HK:2777) (OTHER:GZUHF) current share price would be 200% above its net asset value, while Agile Property Holdings Ltd (SEHK:HK:3383) (OTHER:AGPY.Y) - among those said to have projects in Hainan - would be 193% above NAV, according to the RBS projections.
Not the apocalypse
But despite the impossibly steep climb in real-estate values in Hanian and elsewhere across China, many analysts are surprisingly calm about the possibility of a catastrophic crash.
One mitigating factor involves a prime driver of the property-price gains: the rise in bank lending.
China's state-controlled banks opened the lending floodgates last year in response to the global financial crisis, but they are now tightening back up.
After data showed 1.1 trillion yuan ($161 billion) in new loans were issued during the first two weeks of January alone, regulators ordered banks to tighten their lending. They also raised the amount of funds that banks must set aside as deposits and even issued guidance on what sectors should receive credit -- a list which did not include real estate. See full story on China's December lending
Standard Chartered's Green said that land prices in many cities are currently near levels they reached at previous peaks, suggesting government's effort to cool the market could be successful, although some pain is likely during the next two years.
In fact, there's some evidence a cooling in China's property market is already underway -- outside Hainan at least.
Transactions in Beijing and Shanghai were down 41% and 29% respectively in January from December, according to figures compiled by Chinese real-estate tracking Web site Soufun. Part of the drop, however, may have to do with buyers seeking to avoid a levy that came into effect on Jan. 1.
And while such easing may going on in the big cities, interested money seems to now be bidding up prices in other markets, such as Hainan. About 80% of property transactions on the island are from outside the province, with a major of coming from the northern China, according to CB Richard Ellis estimates.
Hanqing Gao, a journalist who moved to Hainan in 2009, says matter weren't helped by one of the coldest winters in recent history in the country's north.
"A lot of people come from the north and they stay in town for the winter, and they need to rent or buy flats," Gao said, adding that the national tourism development plan further "drummed up the market."
She compared it to the fast-growing metropolis of Shenzhen, which sprouted after the central government decreed the city bordering Hong Kong as a special economic zone.
Even George Soros has gotten involved, apparently betting on the rise of China's leisure culture though his 18.6% stake in HNA Group, the parent of Hainan Airlines (SSE:CN:900945) , the largest privately owned airline in China.
But while such speculative frenzy could point to a devastating fall, some say the current levels have enough demand to support them.
Credit Suisse Chief Regional Economist Dong Tao said that while credit conditions in China are "getting shaky," there are few signs of a colossal bust any time soon.
"Chinese individuals are not short on money -- it's a massive excess liquidity situation," Tao said.
Standard Chartered said one possible outcome is that property prices hover around current levels, even as a wave of new supply is set to come onto the market around the middle of this year.
Prices in this scenario would draw support from strong demand from owner-occupiers -- estimated at 80% to 90% on a nationwide basis -- and from the fact that purchases, for the most part, are financed with low levels of debt.
Most at risk of a margin call are the luxury properties in Shanghai and other leading cities that were ground zero for speculation.
"Bubbly prices may deflate more [in Shanghai], but not enough to damage the broader economy," Green said.
Sunday, February 14, 2010
Fire Your Relatives. Scare Your Employees. And Stop Whining.
IT’S not the economy, stupid, it’s you. So says George Cloutier, author of “Profits Aren’t Everything, They’re the Only Thing” (HarperBusiness, 2009). Mr. Cloutier, the 63-year-old founder and chief executive of American Management Services, specializes in advising small and midsize businesses and turning troubled companies around.
Skip to next paragraph
Share Your Thoughts
Is this what it takes to run a small business? To leave your own comments, please go to nytimes.com/boss.
Related
More Articles in This SeriesHis advice is to put profits above all. Always pay yourself first. Shock your laggard employees. Don’t accept excuses. His ax falls on trade shows (“they’re just a flimsy excuse for a paid vacation”), sweat equity (“I call it working for nothing and being a fool”) and teamwork (“vastly overrated”). And if you ever apply for a job at American Management Services, don’t mention that you like to play golf. A condensed version of a conversation with Mr. Cloutier follows.
Q. Lots of people blame the recession for putting them out of business. You don’t buy it?
A. I’m a little bit of a hawk on that one. The recession has been an excuse for poor performance. Why does your work dry up? Normally because you haven’t built a strong enough sales organization.
Q. What do most troubled companies have in common?
A. They have not implemented strong financial reporting. Small businesses fail to focus on the basics — doing your P.& L.’s [profit and loss statements] and paying attention to cash flow.
Q. What are you trying to drive into people’s heads when you say, “It’s not the economy, stupid, it’s you.”
A. Look, what happened yesterday is now done. Tomorrow is a new day. I have to cut my costs viciously. I have to spend a great deal more time on my sales and marketing, and I have to stop whining and get to work.
Q. You recommend that businesses never pay their vendors on time. What do your vendors say about that?
A. We tell our vendors, if you’re asking for 15 days, forget it. We’re going to pay you in 45 days. You don’t want the work? Tell me, and I’ll find somebody else. You have to work on stretching your payables because every dollar you get in extended payables is an interest-free loan. You have to spend time, go see them and negotiate. Honor your word. But don’t think 30 days is a good deal. It’s not.
Q. You’re a big advocate of micromanagement. What’s wrong with hiring people you trust and letting them do their jobs?
A. Getting good people is 100 times more difficult than conventional wisdom says. The fact is, you’re going to deal with a lot of mediocre people, no matter how hard you try. You have got to have a system in place to check on how they’re doing. If someone says, “I’m going to deliver $2 million in sales in the first six months,” you have to follow that every day. Like Ronald Reagan said, trust but verify. We actually have a button that’s says. “I’m a control freak and proud of it.”
Q. Tell me about being a control freak.
A. I have an extensive control system. I can tell you right now how many sales have been made today with new clients. I can tell you what our bank balances were this morning, how much line of credit I’ve used, how many people were in the recruiting class we’re having two weeks from now. I have a very strong view that you should be carefully monitoring — and intervene early rather than late when you see something going off track.
Q. You tell business owners to forget about being likable. Is there something wrong with employees liking you?
A. You have to treat your people with respect. If they have a personal problem, you have to help them through it. You have to follow the law. But we also need to get things done as asked. The abandonment of that principle is a large factor in the failure of small businesses to achieve real profitability.
Q. Do business owners coddle their people too much?
A. The concept that if you love your employees they’ll perform is on the edge of insanity. It’s not that you want to hurt your employees, but you have a mission. You’re paid to produce results.
Q. Can your employees talk back to you or say, “Sorry, boss, but that’s a stupid idea?”
A. We actually did a survey around Christmas of their attitudes toward the company. Two-thirds of them thought the company was changing for the better. We let them write any comments they had. One guy that worked for me for 10 years wrote, “If I fell dead at my desk, George wouldn’t notice for two days.” Sure, we let them talk back. We like to listen, but you can only listen so much and then you have to make a choice.
Q. What’s your view of fear as a management tool?
A. Fear is the best motivator.
Q. Are you a tyrant?
A. I’m sure many people would view me as difficult. If I ask you to do something and you say, “Geez, I don’t have enough time to do that.” Well, maybe I don’t have enough time to sign your check this week.
Q. You say, “Love your business more than your family.” What does your wife think of that?
A. Well, she loves me, but I’m not sure she would always agree with that. I’m not saying don’t love your family. But if you don’t love your business as much as your family, your probability of success is very much lower. Sometimes you just have to put the business ahead of family considerations.
Q. How many times have you been married?
A. This is my third marriage. But you have to look at it this way — it’s over 63 years. I’ve had a lot of spacing between them.
Q. Do you have kids?
A. I never had kids... But I would also say my current wife has not ruled that out.
Q. One might argue it’s easier for you to take these hard-line positions because you haven’t had to balance family considerations.
A. I would be the first one to say it probably is easier. But the reality is, if you’re not fully committed and prepared to sacrifice what many of us would view as the traditional family role, you have a much higher probability of failing in a small business.
Q. What do you think of “The 4-Hour Workweek” [a best-selling book by Timothy Ferriss]?
A. Oh, forget it. I haven’t even read it yet. I don’t want to die of laughter.
Q. You say the best family business has only one member — in other words, fire your relatives. What’s wrong with family businesses?
A. A member of the family, if they’re not carefully policed or indoctrinated by the principle of the business, tends to feel entitled. That entitlement is terrible for morale and is terrible for the business.
Q. What about a relative who’s highly competent and well respected?
A. They should work better than your conventional nonfamily members. If they don’t, parole them. Give them some money to go away.
Q. You say no owner should be satisfied with his business. What dissatisfies you about yours?
A. I feel that I should triple the size of the business over the next 10 years because I’m getting old. I’m a little dissatisfied we haven’t done that. I semi-retired for about five years and that was probably something I won’t do again. They’re going to carry me out of here in my shoes.
Skip to next paragraph
Share Your Thoughts
Is this what it takes to run a small business? To leave your own comments, please go to nytimes.com/boss.
Related
More Articles in This SeriesHis advice is to put profits above all. Always pay yourself first. Shock your laggard employees. Don’t accept excuses. His ax falls on trade shows (“they’re just a flimsy excuse for a paid vacation”), sweat equity (“I call it working for nothing and being a fool”) and teamwork (“vastly overrated”). And if you ever apply for a job at American Management Services, don’t mention that you like to play golf. A condensed version of a conversation with Mr. Cloutier follows.
Q. Lots of people blame the recession for putting them out of business. You don’t buy it?
A. I’m a little bit of a hawk on that one. The recession has been an excuse for poor performance. Why does your work dry up? Normally because you haven’t built a strong enough sales organization.
Q. What do most troubled companies have in common?
A. They have not implemented strong financial reporting. Small businesses fail to focus on the basics — doing your P.& L.’s [profit and loss statements] and paying attention to cash flow.
Q. What are you trying to drive into people’s heads when you say, “It’s not the economy, stupid, it’s you.”
A. Look, what happened yesterday is now done. Tomorrow is a new day. I have to cut my costs viciously. I have to spend a great deal more time on my sales and marketing, and I have to stop whining and get to work.
Q. You recommend that businesses never pay their vendors on time. What do your vendors say about that?
A. We tell our vendors, if you’re asking for 15 days, forget it. We’re going to pay you in 45 days. You don’t want the work? Tell me, and I’ll find somebody else. You have to work on stretching your payables because every dollar you get in extended payables is an interest-free loan. You have to spend time, go see them and negotiate. Honor your word. But don’t think 30 days is a good deal. It’s not.
Q. You’re a big advocate of micromanagement. What’s wrong with hiring people you trust and letting them do their jobs?
A. Getting good people is 100 times more difficult than conventional wisdom says. The fact is, you’re going to deal with a lot of mediocre people, no matter how hard you try. You have got to have a system in place to check on how they’re doing. If someone says, “I’m going to deliver $2 million in sales in the first six months,” you have to follow that every day. Like Ronald Reagan said, trust but verify. We actually have a button that’s says. “I’m a control freak and proud of it.”
Q. Tell me about being a control freak.
A. I have an extensive control system. I can tell you right now how many sales have been made today with new clients. I can tell you what our bank balances were this morning, how much line of credit I’ve used, how many people were in the recruiting class we’re having two weeks from now. I have a very strong view that you should be carefully monitoring — and intervene early rather than late when you see something going off track.
Q. You tell business owners to forget about being likable. Is there something wrong with employees liking you?
A. You have to treat your people with respect. If they have a personal problem, you have to help them through it. You have to follow the law. But we also need to get things done as asked. The abandonment of that principle is a large factor in the failure of small businesses to achieve real profitability.
Q. Do business owners coddle their people too much?
A. The concept that if you love your employees they’ll perform is on the edge of insanity. It’s not that you want to hurt your employees, but you have a mission. You’re paid to produce results.
Q. Can your employees talk back to you or say, “Sorry, boss, but that’s a stupid idea?”
A. We actually did a survey around Christmas of their attitudes toward the company. Two-thirds of them thought the company was changing for the better. We let them write any comments they had. One guy that worked for me for 10 years wrote, “If I fell dead at my desk, George wouldn’t notice for two days.” Sure, we let them talk back. We like to listen, but you can only listen so much and then you have to make a choice.
Q. What’s your view of fear as a management tool?
A. Fear is the best motivator.
Q. Are you a tyrant?
A. I’m sure many people would view me as difficult. If I ask you to do something and you say, “Geez, I don’t have enough time to do that.” Well, maybe I don’t have enough time to sign your check this week.
Q. You say, “Love your business more than your family.” What does your wife think of that?
A. Well, she loves me, but I’m not sure she would always agree with that. I’m not saying don’t love your family. But if you don’t love your business as much as your family, your probability of success is very much lower. Sometimes you just have to put the business ahead of family considerations.
Q. How many times have you been married?
A. This is my third marriage. But you have to look at it this way — it’s over 63 years. I’ve had a lot of spacing between them.
Q. Do you have kids?
A. I never had kids... But I would also say my current wife has not ruled that out.
Q. One might argue it’s easier for you to take these hard-line positions because you haven’t had to balance family considerations.
A. I would be the first one to say it probably is easier. But the reality is, if you’re not fully committed and prepared to sacrifice what many of us would view as the traditional family role, you have a much higher probability of failing in a small business.
Q. What do you think of “The 4-Hour Workweek” [a best-selling book by Timothy Ferriss]?
A. Oh, forget it. I haven’t even read it yet. I don’t want to die of laughter.
Q. You say the best family business has only one member — in other words, fire your relatives. What’s wrong with family businesses?
A. A member of the family, if they’re not carefully policed or indoctrinated by the principle of the business, tends to feel entitled. That entitlement is terrible for morale and is terrible for the business.
Q. What about a relative who’s highly competent and well respected?
A. They should work better than your conventional nonfamily members. If they don’t, parole them. Give them some money to go away.
Q. You say no owner should be satisfied with his business. What dissatisfies you about yours?
A. I feel that I should triple the size of the business over the next 10 years because I’m getting old. I’m a little dissatisfied we haven’t done that. I semi-retired for about five years and that was probably something I won’t do again. They’re going to carry me out of here in my shoes.
Thursday, February 11, 2010
What Google's High-Speed Broadband Plan Implies
Google (NSDQ:GOOG) plans to experiment with fiber-optic broadband it says will be able to supply 1-Gigabit-per-second Internet and outdo existing fiber networks in the U.S. Seeing as it's Google that's involved, the implications of Google's plan are at least as intriguing as the plan itself.
Does Google plan to compete with ISPs? Will Google become a 1-Gbps broadband carrier? Is what appears to be any effort for Google to advance the national broadband agenda actually the search giant's boldest, baddest business maneuver yet?
Google said Wednesday that it would run trials for high-speed, fiber-optic broadband in various locations around the country. The goal, stated Google product managers in a blog post explaining the plan, was to build better fiber networks that could not only offer 1-Gbps-speed Internet access but also enable app developers a platform for building top-of-the-line, bandwidth-intensive applications -- "killer apps," as Google's James Kelly and Minnie Ingersoll put it.
More specifically, Google said it plans to work with local and state governments to build the fiber networks, and that the networks will serve between 50,000 and 500,000 people. As Google pointed out, the project is not unlike Google's own Wi-Fi Network in Mountain View, Calif., which is open to the city's near-75,000 residents and provides 1-Gbps Internet access over Wi-Fi.
Google hasn't yet stated what it plans to spend on the new fiber-optic network and said it would announce potential test sites later in 2010.
Google skeptics would seem to have all the evidence they need to see Google's broadband plan as a bold business move, and that evidence is in various forms called Google search, Google Android, Google Voice, Google Chrome, the new Google Buzz, and the Google Nexus One smartphone. All of those products saw and are seeing Google attempt to upend various market segments as a disruptive vendor: choosing to market and sell its own mobile phone, for example, or challenging rival Internet browsers -- and soon, operating systems -- with Chrome.
Google wants Internet-driven products on its own terms, and it's willing to remake industry models that don't seem to suit its ambitions. How will the broadband plan be any different, observers wonder? Android and Nexus One were Google's bold challenge to the world of mobile. Is it not now issuing a similar challenge to the world of fiber and broadband?
Google has already gone on the defensive about perceptions that it will now attempt to compete with ISPs. Richard S. Whitt, Google's telecommuncations and media counsel, said in an interview with The New York Times Wednesday that the move should be viewed as a "business model nudge and an innovation nudge."
Federal Communications Commission Chairman Julius Genachowski, who will present the FCC's plan for national broadband to Congress in March, didn't seem too worried either. In a statement, Genachowski applauded Google's plan and said, "The FCC's National Broadband Plan will build upon such private-sector initiatives and will include recommendations for facilitating and accelerating greater investment in broadband, creative jobs and increasing America's global competitiveness."
Other industry observers had similar praise for Google, with some singling out Google's plan to keep the broadband pipe open -- one of Google's stated goals as outlined in its Wednesday blog post.
In a statement form the Open Internet Coalition, Executive Director Markham Erickson said, "We hope this will serve as an example to other network operators that the open model should not be feared, but should be emulated. Profit and openness are mistakenly seen to be in conflict; in fact we believe they are synergistic and amplifying."
As for the telecoms themselves, most executives are keeping mum, and no calls or e-mails were returned to ChannelWeb following several inquiries to various telecom companies on Wednesday.
The Wall Street Journal quoted one telecom executive anonymously, who said, "If this were easy, everybody would be doing it," and suggested Google doesn't have experience servicing broadband and maintenance needs for consumers.
That doesn't seem to scare Google in the mobile world, though, where despite ongoing customer service concerns, its Nexus One plans are full speed ahead.
Google's made its intentions to build a fiber network known. What'll be most interesting is what comes next.
Does Google plan to compete with ISPs? Will Google become a 1-Gbps broadband carrier? Is what appears to be any effort for Google to advance the national broadband agenda actually the search giant's boldest, baddest business maneuver yet?
Google said Wednesday that it would run trials for high-speed, fiber-optic broadband in various locations around the country. The goal, stated Google product managers in a blog post explaining the plan, was to build better fiber networks that could not only offer 1-Gbps-speed Internet access but also enable app developers a platform for building top-of-the-line, bandwidth-intensive applications -- "killer apps," as Google's James Kelly and Minnie Ingersoll put it.
More specifically, Google said it plans to work with local and state governments to build the fiber networks, and that the networks will serve between 50,000 and 500,000 people. As Google pointed out, the project is not unlike Google's own Wi-Fi Network in Mountain View, Calif., which is open to the city's near-75,000 residents and provides 1-Gbps Internet access over Wi-Fi.
Google hasn't yet stated what it plans to spend on the new fiber-optic network and said it would announce potential test sites later in 2010.
Google skeptics would seem to have all the evidence they need to see Google's broadband plan as a bold business move, and that evidence is in various forms called Google search, Google Android, Google Voice, Google Chrome, the new Google Buzz, and the Google Nexus One smartphone. All of those products saw and are seeing Google attempt to upend various market segments as a disruptive vendor: choosing to market and sell its own mobile phone, for example, or challenging rival Internet browsers -- and soon, operating systems -- with Chrome.
Google wants Internet-driven products on its own terms, and it's willing to remake industry models that don't seem to suit its ambitions. How will the broadband plan be any different, observers wonder? Android and Nexus One were Google's bold challenge to the world of mobile. Is it not now issuing a similar challenge to the world of fiber and broadband?
Google has already gone on the defensive about perceptions that it will now attempt to compete with ISPs. Richard S. Whitt, Google's telecommuncations and media counsel, said in an interview with The New York Times Wednesday that the move should be viewed as a "business model nudge and an innovation nudge."
Federal Communications Commission Chairman Julius Genachowski, who will present the FCC's plan for national broadband to Congress in March, didn't seem too worried either. In a statement, Genachowski applauded Google's plan and said, "The FCC's National Broadband Plan will build upon such private-sector initiatives and will include recommendations for facilitating and accelerating greater investment in broadband, creative jobs and increasing America's global competitiveness."
Other industry observers had similar praise for Google, with some singling out Google's plan to keep the broadband pipe open -- one of Google's stated goals as outlined in its Wednesday blog post.
In a statement form the Open Internet Coalition, Executive Director Markham Erickson said, "We hope this will serve as an example to other network operators that the open model should not be feared, but should be emulated. Profit and openness are mistakenly seen to be in conflict; in fact we believe they are synergistic and amplifying."
As for the telecoms themselves, most executives are keeping mum, and no calls or e-mails were returned to ChannelWeb following several inquiries to various telecom companies on Wednesday.
The Wall Street Journal quoted one telecom executive anonymously, who said, "If this were easy, everybody would be doing it," and suggested Google doesn't have experience servicing broadband and maintenance needs for consumers.
That doesn't seem to scare Google in the mobile world, though, where despite ongoing customer service concerns, its Nexus One plans are full speed ahead.
Google's made its intentions to build a fiber network known. What'll be most interesting is what comes next.
Tuesday, February 9, 2010
More merchants embrace mobile coupons
As cell phones become appendages that many people can't live without, businesses are increasingly eyeing them as prime real estate for their marketing and advertising messages.
Whether it's to build brand, boost business or reward loyalty, more merchants are adopting mobile marketing strategies to tap into the cell-phone's power of immediacy.
"It's cool," said Kristen Palestis of Plantation at a Jamba Juice in Fort Lauderdale recently after she opted in to receive a 20 percent coupon on her cell-phone.
"I'm spending less money and it was real easy," said Palestis, 25, who used the coupon to buy a smoothie.
Palestis received the coupon within seconds of texting a special five-digit code from her cell phone.
Retailers mobile marketing messages can include text-messages with numeric 'short codes' that customers dial to receive a promotion, bar-coded digital coupons, Web page or website links and display advertisements.
"We know the most effective way to reach the customer is to be where they are," Jamba Juice spokesman Damon Miller said. "For our customers this means both on the Internet and on their mobiles."
Since September, Jamba Juice's 20 South Florida locations – 22 statewide – have been testing a text-message campaign that invites customers to sign up for offers on their mobile phones.
Getting special offers quickly into the hands of the consumers who are most apt to use them is what Jamba Juice and others are striving for.
These mobile social users as they're called -- represent 11 percent of American online adults, but their ranks are growing, according to Forrester Research Inc. They're more likely to respond to ads on their cell phones, buy mobile content and services such as ring tones and access the mobile Web.
"We've seen fantastic results both in opt-ins and redemptions of follow-on offers," Miller said.
Jamba Juice, a national chain of more than 700 smoothie stores, plans to roll out the campaign to other markets early this year, he said.
Companies that embrace mobile marketing know they have to be careful not to abuse the access consumers have granted, so permission-based text-message offers are becoming the standard.
Trade groups like the Mobile Marketing Association in New York have set guidelines for marketers that are designed to protect the consumer, said Jeff Michaud of 3Cinteractive in Boca Raton, a mobile technology firm.
These include opt-in, opt-out and message delivery frequency standards , he said.
Worldwide the number of mobile coupon users is forecast to triple by 2014 to more than 300 million people, according to United Kingdom-based Juniper Research.
Although usage is still relatively nascent in the United States, the mobile applications revolution is fueling growth of coupon specific services.
During the recent holiday season, many tech-savvy consumers used mobile shopping apps to get coupons on their smart phones and comparison shop.
Still, mobile coupons aren't for everyone.
Based on user feedback, Hollywood-based Coupster LLC is revamping its opt-in mobile coupon service MyCoupster.com to include print and e-mail delivery options.
"Everyone loves the [mobile coupon] concept but people still want to print coupons and some don't want them on their phones," Chief Technology Officer Christopher Alfano said.
The upgrades and other features such as social networking links will debut in March, he said.
Challenges aside, merchants continue to test the water, many motivated by cost efficiencies. Experts say e-coupons have higher average redemption rates -- 5 percent to 15 percent, compared with 1 percent or less for print coupons.
This month JCPenney is rolling out a mobile coupon program nationwide after doing tests in 16 stores in Houston, spokeswoman Kate Coultas said.
In the Northeast, Wendy's International is also testing a mobile coupon program that is managed by Boca Raton's Options Media Group.
Chick-fil-A recently added a 'Text Insiders' program on its website for fans to sign up for offers on their cell phones.
Dunkin' Donuts could be next if it takes a cue from Fresco Development Group, a Coral Springs franchisee with seven Miami-Dade County locations.
Last year Fresco sent a free iced coffee coupon to consumers living near its stores who'd already opted-in for promotional text messages.
This was done to generate buzz and learn more about the consumers' demographics and shopping psyche, co-owner Scott Ball said. "We had very good success with it."
Ball, who sits on Dunkin' Donuts national marketing steering committee, said the chain is considering launching a program nationwide.
Arlene Satchell can be reached at asatchell@SunSentinel.com or 954-356-4209. Follow her on Twitter.com @TheSatchreport.
Whether it's to build brand, boost business or reward loyalty, more merchants are adopting mobile marketing strategies to tap into the cell-phone's power of immediacy.
"It's cool," said Kristen Palestis of Plantation at a Jamba Juice in Fort Lauderdale recently after she opted in to receive a 20 percent coupon on her cell-phone.
"I'm spending less money and it was real easy," said Palestis, 25, who used the coupon to buy a smoothie.
Palestis received the coupon within seconds of texting a special five-digit code from her cell phone.
Retailers mobile marketing messages can include text-messages with numeric 'short codes' that customers dial to receive a promotion, bar-coded digital coupons, Web page or website links and display advertisements.
"We know the most effective way to reach the customer is to be where they are," Jamba Juice spokesman Damon Miller said. "For our customers this means both on the Internet and on their mobiles."
Since September, Jamba Juice's 20 South Florida locations – 22 statewide – have been testing a text-message campaign that invites customers to sign up for offers on their mobile phones.
Getting special offers quickly into the hands of the consumers who are most apt to use them is what Jamba Juice and others are striving for.
These mobile social users as they're called -- represent 11 percent of American online adults, but their ranks are growing, according to Forrester Research Inc. They're more likely to respond to ads on their cell phones, buy mobile content and services such as ring tones and access the mobile Web.
"We've seen fantastic results both in opt-ins and redemptions of follow-on offers," Miller said.
Jamba Juice, a national chain of more than 700 smoothie stores, plans to roll out the campaign to other markets early this year, he said.
Companies that embrace mobile marketing know they have to be careful not to abuse the access consumers have granted, so permission-based text-message offers are becoming the standard.
Trade groups like the Mobile Marketing Association in New York have set guidelines for marketers that are designed to protect the consumer, said Jeff Michaud of 3Cinteractive in Boca Raton, a mobile technology firm.
These include opt-in, opt-out and message delivery frequency standards , he said.
Worldwide the number of mobile coupon users is forecast to triple by 2014 to more than 300 million people, according to United Kingdom-based Juniper Research.
Although usage is still relatively nascent in the United States, the mobile applications revolution is fueling growth of coupon specific services.
During the recent holiday season, many tech-savvy consumers used mobile shopping apps to get coupons on their smart phones and comparison shop.
Still, mobile coupons aren't for everyone.
Based on user feedback, Hollywood-based Coupster LLC is revamping its opt-in mobile coupon service MyCoupster.com to include print and e-mail delivery options.
"Everyone loves the [mobile coupon] concept but people still want to print coupons and some don't want them on their phones," Chief Technology Officer Christopher Alfano said.
The upgrades and other features such as social networking links will debut in March, he said.
Challenges aside, merchants continue to test the water, many motivated by cost efficiencies. Experts say e-coupons have higher average redemption rates -- 5 percent to 15 percent, compared with 1 percent or less for print coupons.
This month JCPenney is rolling out a mobile coupon program nationwide after doing tests in 16 stores in Houston, spokeswoman Kate Coultas said.
In the Northeast, Wendy's International is also testing a mobile coupon program that is managed by Boca Raton's Options Media Group.
Chick-fil-A recently added a 'Text Insiders' program on its website for fans to sign up for offers on their cell phones.
Dunkin' Donuts could be next if it takes a cue from Fresco Development Group, a Coral Springs franchisee with seven Miami-Dade County locations.
Last year Fresco sent a free iced coffee coupon to consumers living near its stores who'd already opted-in for promotional text messages.
This was done to generate buzz and learn more about the consumers' demographics and shopping psyche, co-owner Scott Ball said. "We had very good success with it."
Ball, who sits on Dunkin' Donuts national marketing steering committee, said the chain is considering launching a program nationwide.
Arlene Satchell can be reached at asatchell@SunSentinel.com or 954-356-4209. Follow her on Twitter.com @TheSatchreport.
Iranian militia attacks French, Italian, possibly Dutch embassies
In a well-coordinated offensive, pro-government Basijj militiamen in civilian dress hurled rocks and eggs at the Italian and French embassies in Tehran Tuesday, Feb. 9, shouting death to their respective leaders. Some reports say the Dutch embassy was also targeted. debkafile's Iranian sources report the attacks appear to have kicked off the campaign for "stunning" the West - as threatened by spiritual ruler Ayatollah Ali Khamenei, or "crushing" the West - in president Mahmoud Ahmadinejad's words this week.
Our sources expect the government-instigated violence to escalate up to and including Thursday, Feb. 1, the start of anniversary events marking Iran's 1979 Islamic revolution. They are designed to raise international tensions around Iran to fever pitch to deter opposition leaders from staging their planned mass protest demonstrations lest they be accused of treason and collaborating with the Islamic republic's foreign foes.
The Iranian regime has a long score to settle with French president Nicolas Sarkozy and his ministers. They are the most outspoken of any Western critics of Iran, often citing intelligence input to prove Iran is running a military nuclear program and building a nuclear bomb.
Sarkozy also warns that Israel will not stand by and let this happen without resorting to a military offensive that will generate a major war drawing Middle Eastern and other nations into the conflict
Tehran's grievance against The Hague stems from the suspicion that the Dutch BVD national security service maintains the farthest-flung network of agents inside Iran of any other agency and the high quality of its intelligence on happenings inside the Islamic republic:
Our sources expect the government-instigated violence to escalate up to and including Thursday, Feb. 1, the start of anniversary events marking Iran's 1979 Islamic revolution. They are designed to raise international tensions around Iran to fever pitch to deter opposition leaders from staging their planned mass protest demonstrations lest they be accused of treason and collaborating with the Islamic republic's foreign foes.
The Iranian regime has a long score to settle with French president Nicolas Sarkozy and his ministers. They are the most outspoken of any Western critics of Iran, often citing intelligence input to prove Iran is running a military nuclear program and building a nuclear bomb.
Sarkozy also warns that Israel will not stand by and let this happen without resorting to a military offensive that will generate a major war drawing Middle Eastern and other nations into the conflict
Tehran's grievance against The Hague stems from the suspicion that the Dutch BVD national security service maintains the farthest-flung network of agents inside Iran of any other agency and the high quality of its intelligence on happenings inside the Islamic republic:
Spray-on liquid glass is about to revolutionize almost everything
The fissure was induced in order present an image which shows the characteristics of the coating. The image shows the SiO2 coating on a filament of a microfibre.
(PhysOrg.com) -- Spray-on liquid glass is transparent, non-toxic, and can protect virtually any surface against almost any damage from hazards such as water, UV radiation, dirt, heat, and bacterial infections. The coating is also flexible and breathable, which makes it suitable for use on an enormous array of products.
Ads by Google
Plasma Technology - Cleaning Coating Activation Etching Modify every surface with plasma - www.plasma-us.com
The liquid glass spray (technically termed “SiO2 ultra-thin layering”) consists of almost pure silicon dioxide (silica, the normal compound in glass) extracted from quartz sand. Water or ethanol is added, depending on the type of surface to be coated. There are no additives, and the nano-scale glass coating bonds to the surface because of the quantum forces involved. According to the manufacturers, liquid glass has a long-lasting antibacterial effect because microbes landing on the surface cannot divide or replicate easily.
Liquid glass was invented in Turkey and the patent is held by Nanopool, a family-owned German company. Research on the product was carried out at the Saarbrücken Institute for New Materials. Nanopool is already in negotiations in the UK with a number of companies and with the National Health Service, with a view to its widespread adoption.
The liquid glass spray produces a water-resistant coating only around 100 nanometers (15-30 molecules) thick. On this nanoscale the glass is highly flexible and breathable. The coating is environmentally harmless and non-toxic, and easy to clean using only water or a simple wipe with a damp cloth. It repels bacteria, water and dirt, and resists heat, UV light and even acids. UK project manager with Nanopool, Neil McClelland, said soon almost every product you purchase will be coated with liquid glass.
Food processing companies in Germany have already carried out trials of the spray, and found sterile surfaces that usually needed to be cleaned with strong bleach to keep them sterile needed only a hot water rinse if they were coated with liquid glass. The levels of sterility were higher for the glass-coated surfaces, and the surfaces remained sterile for months.
Other organizations, such as a train company and a hotel chain in the UK, and a hamburger chain in Germany, are also testing liquid glass for a wide range of uses. A year-long trial of the spray in a Lancashire hospital also produced “very promising” results for a range of applications including coatings for equipment, medical implants, catheters, sutures and bandages. The war graves association in the UK is investigating using the spray to treat stone monuments and grave stones, since trials have shown the coating protects against weathering and graffiti. Trials in Turkey are testing the product on monuments such as the Ataturk Mausoleum in Ankara.
Ads by Google
Thin Film Processing - Ion Beam Processing Equipment Thin Film Coating Services - www.4waveinc.com
The liquid glass coating is breathable, which means it can be used on plants and seeds. Trials in vineyards have found spraying vines increases their resistance to fungal diseases, while other tests have shown sprayed seeds germinate and grow faster than untreated seeds, and coated wood is not attacked by termites. Other vineyard applications include coating corks with liquid glass to prevent “corking” and contamination of wine. The spray cannot be seen by the naked eye, which means it could also be used to treat clothing and other materials to make them stain-resistant. McClelland said you can “pour a bottle of wine over an expensive silk shirt and it will come right off”.
In the home, spray-on glass would eliminate the need for scrubbing and make most cleaning products obsolete. Since it is available in both water-based and alcohol-based solutions, it can be used in the oven, in bathrooms, tiles, sinks, and almost every other surface in the home, and one spray is said to last a year.
Liquid glass spray is perhaps the most important nanotechnology product to emerge to date. It will be available in DIY stores in Britain soon, with prices starting at around £5 ($8 US). Other outlets, such as many supermarkets, may be unwilling to stock the products because they make enormous profits from cleaning products that need to be replaced regularly, and liquid glass would make virtually all of them obsolete.
More information: Nanopool: http://www.nanopool.eu/couk/index.htm
--------------------------------------------------------------------------------
• Join PhysOrg.com on Facebook!
• Follow PhysOrg.com on Twitter!
(PhysOrg.com) -- Spray-on liquid glass is transparent, non-toxic, and can protect virtually any surface against almost any damage from hazards such as water, UV radiation, dirt, heat, and bacterial infections. The coating is also flexible and breathable, which makes it suitable for use on an enormous array of products.
Ads by Google
Plasma Technology - Cleaning Coating Activation Etching Modify every surface with plasma - www.plasma-us.com
The liquid glass spray (technically termed “SiO2 ultra-thin layering”) consists of almost pure silicon dioxide (silica, the normal compound in glass) extracted from quartz sand. Water or ethanol is added, depending on the type of surface to be coated. There are no additives, and the nano-scale glass coating bonds to the surface because of the quantum forces involved. According to the manufacturers, liquid glass has a long-lasting antibacterial effect because microbes landing on the surface cannot divide or replicate easily.
Liquid glass was invented in Turkey and the patent is held by Nanopool, a family-owned German company. Research on the product was carried out at the Saarbrücken Institute for New Materials. Nanopool is already in negotiations in the UK with a number of companies and with the National Health Service, with a view to its widespread adoption.
The liquid glass spray produces a water-resistant coating only around 100 nanometers (15-30 molecules) thick. On this nanoscale the glass is highly flexible and breathable. The coating is environmentally harmless and non-toxic, and easy to clean using only water or a simple wipe with a damp cloth. It repels bacteria, water and dirt, and resists heat, UV light and even acids. UK project manager with Nanopool, Neil McClelland, said soon almost every product you purchase will be coated with liquid glass.
Food processing companies in Germany have already carried out trials of the spray, and found sterile surfaces that usually needed to be cleaned with strong bleach to keep them sterile needed only a hot water rinse if they were coated with liquid glass. The levels of sterility were higher for the glass-coated surfaces, and the surfaces remained sterile for months.
Other organizations, such as a train company and a hotel chain in the UK, and a hamburger chain in Germany, are also testing liquid glass for a wide range of uses. A year-long trial of the spray in a Lancashire hospital also produced “very promising” results for a range of applications including coatings for equipment, medical implants, catheters, sutures and bandages. The war graves association in the UK is investigating using the spray to treat stone monuments and grave stones, since trials have shown the coating protects against weathering and graffiti. Trials in Turkey are testing the product on monuments such as the Ataturk Mausoleum in Ankara.
Ads by Google
Thin Film Processing - Ion Beam Processing Equipment Thin Film Coating Services - www.4waveinc.com
The liquid glass coating is breathable, which means it can be used on plants and seeds. Trials in vineyards have found spraying vines increases their resistance to fungal diseases, while other tests have shown sprayed seeds germinate and grow faster than untreated seeds, and coated wood is not attacked by termites. Other vineyard applications include coating corks with liquid glass to prevent “corking” and contamination of wine. The spray cannot be seen by the naked eye, which means it could also be used to treat clothing and other materials to make them stain-resistant. McClelland said you can “pour a bottle of wine over an expensive silk shirt and it will come right off”.
In the home, spray-on glass would eliminate the need for scrubbing and make most cleaning products obsolete. Since it is available in both water-based and alcohol-based solutions, it can be used in the oven, in bathrooms, tiles, sinks, and almost every other surface in the home, and one spray is said to last a year.
Liquid glass spray is perhaps the most important nanotechnology product to emerge to date. It will be available in DIY stores in Britain soon, with prices starting at around £5 ($8 US). Other outlets, such as many supermarkets, may be unwilling to stock the products because they make enormous profits from cleaning products that need to be replaced regularly, and liquid glass would make virtually all of them obsolete.
More information: Nanopool: http://www.nanopool.eu/couk/index.htm
--------------------------------------------------------------------------------
• Join PhysOrg.com on Facebook!
• Follow PhysOrg.com on Twitter!
Sunday, February 7, 2010
Can Greece Avoid the Lion?
ATHENS ― Even as the European Union and the International Monetary Fund (IMF) lay the groundwork for a giant first-round bailout, debate is swirling about whether Greece can avoid sovereign default.
Some view Greece as Argentina revisited, noting the stunning parallels with the country that in 2001 set the record for the world's largest default (in dollar terms).
Others, such as Greek Prime Minister George Papandreou, see the country's problems as difficult but manageable, and complain of interference from ill-intentioned foreign speculators.
Avoiding default may be possible, but it will not be easy. One has only to look at official data, including Greece's external debt, which amounts to 170 percent of national income, or its gaping government budget deficit (almost 13 percent of GDP).
But the problem is not only the numbers; it is one of credibility. Thanks to decades of low investment in statistical capacity, no one trusts the Greek government's figures. Nor does Greece's default history inspire confidence.
As demonstrated in my recent book with Carmen Reinhart ``This Time is Different: Eight Centuries of Financial Folly," Greece has been in default roughly one out of every two years since it first gained independence in the 19th century.
Loss of credibility, if it comes, can bite hard and fast. Indeed, the historical evidence slams you over the head with the fact that, whereas government debt can drift upward inexorably for years, the end usually comes quite suddenly.
And it can happen to any country, although advanced countries can usually tighten fiscal policy with sufficient speed and credibility that the pain comes mainly in slower growth.
Unfortunately, for emerging markets, adjustment is often impossible without help from the outside. That is the precipice on which Greece stands today.
A debt crisis is not inevitable. But the government urgently needs to implement credible fiscal adjustment, concentrating not only higher taxation, but also on rolling back some of the incredible growth in government spending ― from 45 percent of GDP to 52 percent of GDP ― that occurred between 2007 and 2009.
The government must avoid relying too much on proposals for tax increases, which ultimately feed back on growth and sustainability. It would be far preferable to balance tax increases with some reversal of runaway government spending.
I have Greek friends who say that Greece is not alone. And they are right. Some countries are almost inevitably going to experience bailouts and defaults.
One of the more striking regularities that Reinhart and I found is that after a wave of international banking crises, a wave of sovereign defaults and restructurings often follows within a few years.
This correlation is hardly surprising, given the massive build-up in public debts that countries typically experience after a banking crisis.
We have certainly seen that this time, with crisis countries' debt already having risen by more than 75 percent since 2007.
But, whereas we are likely to see a wave of defaults and IMF programs this time, too, fiscal meltdown does not have to hit every highly indebted country.
Indeed, what a country like Greece should be doing is pulling out all the stops to stay clear of the first and second wave of restructurings and IMF programs.
If it can, then perhaps watching other countries suffer will help convince the local political elite to consent to adjustment. If not, Greece will have less control over its adjustment and potentially experience far greater trauma, perhaps eventually outright default.
There is an old joke about two men who are trapped by a lion in the jungle after a plane crash. When the first of them starts putting on his sneakers, the other asks why.
The first answers: ``I am getting ready to make a run for it." But you cannot outrun a lion, says the other man, to which the first replies: ``I don't have to outrun the lion. I just have to outrun you."
Greece has yet to put on its sneakers, while other troubled countries, such as Ireland, race ahead with massive fiscal adjustments.
Greece's new Socialist government is hampered by campaign promises that suggested the money was there to solve the problems, when in fact things turned out to be far worse than anyone imagined.
Unions and agricultural groups tie up traffic with protests every other day, hinting at possible escalation.
Most Greeks are taking whatever action they can to avoid the government's likely insatiable thirst for higher tax revenues, with wealthy individuals shifting money abroad and ordinary people migrating to the underground economy.
Greece's underground economy, estimated to be as large as 30 percent of GDP, is already one of Europe's biggest, and it is growing by the day.
In the case of Argentina, a pair of massive IMF loans in 2000 and 2001 ultimately only delayed the inevitable harsh adjustment, and made the country's ultimate default even more traumatic.
Like Argentina, Greece has a fixed exchange rate, a long history of fiscal deficits, and an even longer history of sovereign defaults.
Nevertheless, Greece can avoid an Argentine-style meltdown, but it needs to engage in far more determined adjustment. It is time to put on the running shoes.
Kenneth Rogoff is professor of economics and public policy at Harvard University, and was formerly chief economist at the IMF. For more stories, visit Project Syndicate (www.project-syndicate.org) For a podcast of this commentary in English, please use this link: http://media.blubrry.com/ps/media.libsyn.com/media/ps/rogoff65.mp3.
Some view Greece as Argentina revisited, noting the stunning parallels with the country that in 2001 set the record for the world's largest default (in dollar terms).
Others, such as Greek Prime Minister George Papandreou, see the country's problems as difficult but manageable, and complain of interference from ill-intentioned foreign speculators.
Avoiding default may be possible, but it will not be easy. One has only to look at official data, including Greece's external debt, which amounts to 170 percent of national income, or its gaping government budget deficit (almost 13 percent of GDP).
But the problem is not only the numbers; it is one of credibility. Thanks to decades of low investment in statistical capacity, no one trusts the Greek government's figures. Nor does Greece's default history inspire confidence.
As demonstrated in my recent book with Carmen Reinhart ``This Time is Different: Eight Centuries of Financial Folly," Greece has been in default roughly one out of every two years since it first gained independence in the 19th century.
Loss of credibility, if it comes, can bite hard and fast. Indeed, the historical evidence slams you over the head with the fact that, whereas government debt can drift upward inexorably for years, the end usually comes quite suddenly.
And it can happen to any country, although advanced countries can usually tighten fiscal policy with sufficient speed and credibility that the pain comes mainly in slower growth.
Unfortunately, for emerging markets, adjustment is often impossible without help from the outside. That is the precipice on which Greece stands today.
A debt crisis is not inevitable. But the government urgently needs to implement credible fiscal adjustment, concentrating not only higher taxation, but also on rolling back some of the incredible growth in government spending ― from 45 percent of GDP to 52 percent of GDP ― that occurred between 2007 and 2009.
The government must avoid relying too much on proposals for tax increases, which ultimately feed back on growth and sustainability. It would be far preferable to balance tax increases with some reversal of runaway government spending.
I have Greek friends who say that Greece is not alone. And they are right. Some countries are almost inevitably going to experience bailouts and defaults.
One of the more striking regularities that Reinhart and I found is that after a wave of international banking crises, a wave of sovereign defaults and restructurings often follows within a few years.
This correlation is hardly surprising, given the massive build-up in public debts that countries typically experience after a banking crisis.
We have certainly seen that this time, with crisis countries' debt already having risen by more than 75 percent since 2007.
But, whereas we are likely to see a wave of defaults and IMF programs this time, too, fiscal meltdown does not have to hit every highly indebted country.
Indeed, what a country like Greece should be doing is pulling out all the stops to stay clear of the first and second wave of restructurings and IMF programs.
If it can, then perhaps watching other countries suffer will help convince the local political elite to consent to adjustment. If not, Greece will have less control over its adjustment and potentially experience far greater trauma, perhaps eventually outright default.
There is an old joke about two men who are trapped by a lion in the jungle after a plane crash. When the first of them starts putting on his sneakers, the other asks why.
The first answers: ``I am getting ready to make a run for it." But you cannot outrun a lion, says the other man, to which the first replies: ``I don't have to outrun the lion. I just have to outrun you."
Greece has yet to put on its sneakers, while other troubled countries, such as Ireland, race ahead with massive fiscal adjustments.
Greece's new Socialist government is hampered by campaign promises that suggested the money was there to solve the problems, when in fact things turned out to be far worse than anyone imagined.
Unions and agricultural groups tie up traffic with protests every other day, hinting at possible escalation.
Most Greeks are taking whatever action they can to avoid the government's likely insatiable thirst for higher tax revenues, with wealthy individuals shifting money abroad and ordinary people migrating to the underground economy.
Greece's underground economy, estimated to be as large as 30 percent of GDP, is already one of Europe's biggest, and it is growing by the day.
In the case of Argentina, a pair of massive IMF loans in 2000 and 2001 ultimately only delayed the inevitable harsh adjustment, and made the country's ultimate default even more traumatic.
Like Argentina, Greece has a fixed exchange rate, a long history of fiscal deficits, and an even longer history of sovereign defaults.
Nevertheless, Greece can avoid an Argentine-style meltdown, but it needs to engage in far more determined adjustment. It is time to put on the running shoes.
Kenneth Rogoff is professor of economics and public policy at Harvard University, and was formerly chief economist at the IMF. For more stories, visit Project Syndicate (www.project-syndicate.org) For a podcast of this commentary in English, please use this link: http://media.blubrry.com/ps/media.libsyn.com/media/ps/rogoff65.mp3.
Subscribe to:
Posts (Atom)