Author: Serkadis

Jim Skinner, Chief Executive Officer of McDonald’s Corporation, today announced that Don Thompson, currently President of McDonald USA, has been elected to the role of President and Chief Operating Officer, with oversight responsibility for the company’s 32,000 restaurants worldwide.

At the same time, Skinner and Thompson jointly announced the promotions of Jan Fields, currently Executive Vice President and Chief Operations Officer for McDonald’s USA, to succeed Thompson as President of McDonald’s USA, and Jim Johannesen, currently U.S. Division President–Central Division, to succeed Fields as Executive Vice President and Chief Operations Officer for McDonald’s USA.

Thompson, Fields and Johannesen were elected by the McDonald’s Board of Directors today, and assume their new duties immediately.

In making the announcement, CEO Skinner said, “Don Thompson has done an outstanding job leading our U.S. business, and I am confident he will bring the same energy and innovative thinking to his new global role as President and Chief Operating Officer.

I also know he will hit the ground running, having worked collaboratively for many years with our Area of the World leadership teams to share strategic solutions and execute our successful Plan to Win.

Don’s U.S. leadership experience, combined with the great record he had as Executive Vice President of our global Restaurant Systems group, uniquely qualifies him for this next important responsibility at McDonald’s.”

Andy McKenna, Chairman of McDonald’s Board, said, “Don is a great example of McDonald’s remarkable ability to develop leaders who are immediately prepared to step up to the next level of executive responsibilities.

The Board is confident that Jim, Don and the entire senior management team will work together to continue McDonald’s worldwide business success.”

Skinner noted that the promotions of Thompson, Fields and Johannesen reflect the company’s deep bench of talented and experienced executives.

“Seamless management change is a by-product of McDonald’s commitment to leadership development and talent management,” Skinner said.

“Together with our Board of Directors, we have made succession planning a competitive advantage for our company worldwide.”

“I’m confident our positive momentum and business performance in the U.S. will continue under Jan Fields and Jim Johannesen,” Thompson said.

“Jan has been my trusted colleague in leading our U.S. system, and I know she has the complete respect and total support of our owner-operators, suppliers and staff. Jan epitomizes the very best values of our system–a commitment to franchising, continuous improvement, and putting our customers at the center of everything we do.

With the support of Jim Johannesen, she will continue to drive customer satisfaction and value.”

Thompson, 46, began his McDonald’s career in 1990 as an engineer in the Restaurant Systems Group. He moved into restaurant operations four years later, and rose quickly through the operations ranks.

He was named Regional Manager of the San Diego Region in 1998, and was promoted to Regional Vice President a year later.

In 2000 he was named President of the Midwest Division of McDonald’s USA, and in 2001 was appointed President of the company’s West Division.

In 2004, he returned to Oak Brook as Executive Vice President of McDonald’s Restaurant Systems Group. A year later he was promoted to Executive Vice President and Chief Operations Officer for McDonald’s USA, and in 2006 was named President of McDonald’s USA.

Fields, 54, began her McDonald’s career as a crew person for a McDonald’s owner-operator, and joined McDonald’s Corporation in 1978 as a Restaurant Manager Trainee.

She moved through McDonald’s operations career path as an Area Supervisor, Field Consultant, Operations Manager, and Director of Operations. In 1994, she was promoted to Regional Manager of the Pittsburgh Region.

In 2000, Fields was promoted to U.S. Senior Vice President and Central Division Support Officer.

Three years later, she was named U.S. Division President for the Central Division, and in 2006 she was named to her current role as Executive Vice President and Chief Operations Officer, McDonald’s USA.

Johannesen, 55, joined McDonald’s in 1979 as an attorney in the Corporate Legal Department. In 1986, he was named Director for McDonald’s Business Affairs group, and in 1992 he became an Assistant Vice President within the U.S. Restaurant Development Department.

In 1998, Johannesen moved into restaurant operations as Regional Vice President of the Phoenix Region. Three years later he was named Vice President and General Manager of the Chicago Region.

In 2002 he was promoted to U.S. Senior Vice President and Chief Support Officer for McDonald’s USA.

In 2006, he was promoted to his current role as President of the Central Division.

Complete biographical information for Thompson, Fields and Johannesen is available through McDonald’s Corporate Media Relations Department at aboutmcdonalds.com/mcd/our_company/bios.html.

McDonald’s is the leading global foodservice retailer with more than 32,000 local restaurants in more than 100 countries. About 80% of McDonald’s restaurants worldwide are owned and operated by franchisees.

Please visit our Web site at aboutmcdonalds.com to learn more about the Company.

Filed under: Detroit Auto Show, Coupe, Audi, Porsche, Volkswagen

If you’re wondering what the likelihood of Audi building a production version of its new e-tron Detroit Concept Car (yes, that’s really its official designation), our sources at Audi indicate that a version of the coupe is likely to go into serial production as the oft-rumored R4.

The German automaker is apparently looking to design a smaller modular platform leveraging the expertise it used to develop the front-engine sedan platform that underpins the new A8 and forthcoming A7, among others. The new mid-engine architecture will likely find homes in a number of Volkswagen Group properties, including a production version of the Concept BlueSport, and perhaps even the next-generation Porsche Boxster/Cayman.

While the e-tron show car is a battery-powered electric vehicle, the production model is likely to be available with either an electric motor or conventional internal-combustion four-cylinder variants.

Given the fact that VW intimated last year that a production BlueSport could be produced at around $25,000, we’re anticipating that the Audi R4 will slot in under the TT in the low-$30,000 range, as the 2010 TT presently starts at $37,800.

Detroit 2010: Audi e-tron Detroit Concept presages production R4 originally appeared on Autoblog on Tue, 12 Jan 2010 15:29:00 EST. Please see our terms for use of feeds.

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Individual biofuels — algae fuel, cellulosic ethanol, biodiesel, corn ethanol — have all had their day in the sun over the past few years. Is it time for everyone to cheer for the alternative version of butanol, biobutanol? This morning Mountain View, Calif.-based startup Cobalt Biofuels, which produces biobutanol, opened up its first pilot plant […]

Since the birth of SharePoint, Microsoft has marketed it as an internal collaboration platform, during a period when Intranet managers increasingly see collaboration as a high-priority service. Now, players such as Google and HyperOffice are trying to repeat SharePoint’s success, using an on-again, off-again "SharePoint Killer" marketing tactic combined with the idea of creating a kind of Intranet-in-a-box alternative. However, technology buyers inevitably discover with any technology — from Redmond or any competitor — there’s usually a wide gulf between the marketing hype and the implementation reality.

Google’s announcement today that it will allow Docs users to store other files inspired a fresh round of speculation in twittersphere about competition with SharePoint. File-sharing is essential to the modern enterprise, but storage alone doth not a collaboration application make.

Before that, Google made a big media push to promote their Sites application. The resulting coverage brought another round of "SharePoint Killer" claims. Most of these claims have been effectively critiqued. As my colleague Alan Pelz-Sharpe points out, Sites is hardly a SharePoint killer and Adriaan Bloem gets deeper in discussing the broader application of Sites.

But let’s back up for a moment. The real issue at hand is not whether Sites or Docs or Wave or HyperOffice can kill SharePoint, but rather can these tools (SharePoint included) stand up to the demands for which software makers market them?

If you ask any three consultants, you’ll get five answers regarding the definition of an intranet. Most average folks in medium and large organizations could probably give you a quick definition that goes something like this: "an intranet is a place where employees go to get information and resources necessary to do their jobs." While this broad definition could be applied to many applications, you’ll typically see the following in a basic Intranet: forms for various benefits, links to key services (and applications), and places to store simpler organizational content (e.g., holiday schedules, policies and procedures, and so on). For these basic services, SharePoint Services/Foundation, Google Sites, and HyperOffice can meet many needs, especially among smaller enterprises. However, if this is all organizations needed for intranets, Microsoft, IBM and OpenText would not have spent billions on developing more enterprise-centric products.

To better understand the very broad and deep needs organizations have for employee productivity, look at Jane McConnell’s Global Intranet Trends Report and Nielson/Norman’s Intranet Design Report. Through the lens of both reports (and others), we begin to see what organizations are not only doing today, but will do in the next couple of years — and the vastness of that marketing/reality gulf becomes very apparent.

Some of the functionality available within SharePoint Server (forthcoming successor to MOSS), IBM WebSphere, and other large-scale portal offerings are unavailable in more basic solutions like SharePoint Foundation (free successor to WSS) or Google Sites. For example:

• Personal Sites/Spaces
  Some enterprises want to provide each employee with an individual space in an intranet. These spaces are usually controlled exclusively or semi-exclusively by the employee and mimic the personalization features we might see on the internet (think iGoogle).
• Business/Social Networking
  One key aspect of many intranets today is the ability to connect employees from across the organization together. IBM, Microsoft and others have invested in developing solutions that connect one employee to another. In SharePoint, there’s a feature that helps you connect with people within your own team (common manager), within the same distribution list (through Exchange) and through other contacts (like LinkedIn).
• Enterprisewide Search
  No one is happy with their Intranet search engine, but Google’s hosted services are no closer to solving this problem than the on-premise search tools of its enterprisey competitors.
• Composite Application Frameworks
  Beyond the ability to create "simple" sites that collect content and allow employees to share data, many vendors are investing in the ability to create composite applications. Composite applications are a collection of features or functions for more than one application in the enterprise, brought together in a singular interface. In Web 2.0 speak, you’d call them a “mashup,” but composite applications are becoming increasing important in organizations that want to give portions of enterprise applications to a much broad audience. For example, combining a product lookup from SAP with sales lead data from SaleForce.com.

Subscribers to our SharePoint Research will know that it’s only at the fee-based level (MOSS and Server 2010) where SharePoint can begin to satisfy broader organization needs. And even then, the results can be uneven. At the same time, products like Sites and HyperOffice, as well as SharePoint Services/Foundation, only touch a small percentage of an organization’s needs, let alone address concepts like governance, security, and collaboration. Small businesses can cobble together lightweight hosted services effectively. Larger enterprises need to take a more holistic view. Do you need an apple or an orange?

We’ve been highlighting how Nicolas Sarkozy — who was the original strong supporter of “three strikes” proposals to kick people off the internet based on accusations (not convictions) — and his political party have been caught time and time again infringing on the copyright of others. It looks like that’s happening again in an even more embarrassing fashion. The organization that’s been designated to deal with three strikes in France, Hadopi, unveiled a new logo… that used an unlicensed font, that had been created by France Telecom and had not been licensed for use by anyone else. Hadopi had to scramble and try to find a new font once called on this, and issued an “apology,” but will it allow those accused of infringement online the right to “apologize” as well?

These may seem like minor issues, but they’re actually quite instructive. The point is that due to the way copyright law is set up, people infringe unintentionally all the time. Even the biggest defenders of copyright do so. And that is the problem with any sort of system that punishes people for something as minor as three infringements — and it’s even worse when its three accusations of infringement, rather than actual convictions. It creates a massive liability for the way everyone — even copyright defenders — do things every day. But, of course, the big powerful folks — the ones who passed and support this law — can just apologize and ignore the consequences. Everyone else? Good luck.

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Dancing With the Stars will return for its tenth season this March, ABC confirmed on Tuesday.

A new edition of the hit reality dance competition will return to the small screen with a two-hour season premiere on Monday, March 22, ABC Entertainment Group President Stephen McPherson told reporters at the Television Critics Association Panel this morning.

Filed under: Bad Apple, Apple, App Store, SDK

Yo, Apple. February’s coming, and likely with it, the iPhone OS 4.0 SDK. And you know what? We’re totally over this infuriating ducking NDA thing when it comes to the iPhone software development kit.

NDAs refer to nondisclosure agreements. They are contracts — in this case, between Apple and would-be developers — that prevent those who have been granted beta access to early releases of Apple’s software development kits from discussing any aspect of the SDK in public forums.

Apple has pulled this NDA on us a few times before, for iPhone SDKs that anyone and their brother could download and look at freely. I’ll say it for the record: NDAs on new iPhone OS SDKs are a bad, bad thing.

These NDAs provide no protection against competitors discovering Apple’s proprietary secrets. Apple places no restrictions on who may sign up and access those materials. At the same time, they limit developer discourse outside of Apple’s rather minimal members-only developer forums.

Under past NDAs, TUAW could not publish how-to articles or code samples, which was frustrating. The fundamental problem is not limited to this site, though. Developers couldn’t tweet about their experiences, write about them on developer e-mail lists or otherwise engage in the kind of productive peer support that makes a development community thrive. Limiting discussion to a vendor-approved site where posts can be modded and/or deleted at the vendor’s whim does not exactly cultivate open discourse.

Of course, we’re talking about Apple. As avowed “Gearhead” Aleksandr Milewski puts it, “It’s Apple. They’d NDA their customers if they could.” So you can take it as likely that once again Apple is going to slam down an NDA on our collective selves. At least unless enough people proactively stand up and say: “We’re mad as hell about NDAs and we’re not going to take it any more.”

So what can you do? Add your voice to this post. Leave a comment and express exactly how you would feel about Apple NDA’ing the upcoming iPhone OS 4.0 SDK. Tweet it. Status wall it. E-mail it to your friends and to Apple. File a bug report at bugreport.apple.com. Give some unofficial feedback. Post about it on your own blog and leave a link in the comments.

It’s time to be heard. We’re tired of REDACTED and we want change.

TUAWEnough already with the draconian NDAs, Apple originally appeared on The Unofficial Apple Weblog (TUAW) on Tue, 12 Jan 2010 15:00:00 EST. Please see our terms for use of feeds.

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Filed under: iPhone, App Store, iPod touch

Gourmet food trucks are getting to be “all the rage,” particularly in Southern California. Based on the old construction site “roach coaches” that served stale doughnuts, ancient plastic-wrapped sandwiches, and hot, acidic coffee to hungry workers, the taco truck appeared as a way for food vendors to set up shop without the need for expensive real estate. In SoCal, taco trucks have gone mainstream and serve much more than just tacos. You can get not only excellent Mexican cuisine, but barbecue, Asian fusion, and a huge spectrum of other palatable yummies.

Since the taco trucks and trailers are truly mobile (although the vendors often find a location that becomes their “home territory”), it’s sometimes difficult to find a specific vendor. Fried Rice House has made the hunt a lot easier with their app Taco Loco [on sale for US$0.99, iTunes Link].

Taking advantage of the iPhone’s geolocation capabilities, Taco Loco displays a map of local taco trucks and other wheeled bistros, with a pin denoting the current location of each truck or trailer. A tap on a pin shows the name of the truck, a detailed map of the location, a phone number (if one has been entered), and a rating by other hungry folks who have used the app. If a truck moves its location, there’s a “move” button to note that and send the information to other people looking for a fish taco at 1:30 AM.

Of course, no app is worth its seasoned salt if it doesn’t let you share the information with your friends. Taco Loco adds the familiar share button for sending tweets and emails to your cohorts who might be craving a movable feast. Although TUAW was unable to try out the app, it should work anywhere there are hungry iPhone owners who are willing to buy Taco Loco and let others know about the best little taco truck they’ve found.

[via New York Times Gadgetwise Blog]

TUAWTaco Loco app helps you chase down your favorite taco truck originally appeared on The Unofficial Apple Weblog (TUAW) on Tue, 12 Jan 2010 14:30:00 EST. Please see our terms for use of feeds.

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With tourists flocking to the Boston to walk the cobblestone streets of the Freedom Trail and visit various historical landmarks, Boston is often thought of for its ties to the American Revolution. But Boston is also the birthplace of a revolution of a different sort.

In 1946, Georges Doriot, a professor at the Harvard Business School, founded the American Research and Development Corporation (ARDC) in Boston – one of the very first venture capital firms. In 1957, the ARDC invested $70,000 in Digital Equipment Corporation, a company founded by two former Massachusetts Institute of Technology engineers working on transistor-based computing. The ARDC was later able to turn around and sell their investment for $450 million, quite possibly the best return on an investment ever at that point.

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Half a century later, Boston is a thriving and vibrant community not only for venture capital and startups, but also for large technology companies and research
corporations. With nearly a hundred regional colleges and universities – like MIT and Harvard – and over a quarter of a million students, Boston has quickly become a breeding ground for innovation in the tech sector.

“The thing that’s amazing is we don’t have to worry about attracting people into the Boston community,” said Jeffrey Bussgang of Flybridge Capital Partners in a speech at the Harvard Business School last October (see video embedded below). “The challenge is to retain people.”

And retain them they will, thanks to a plethora of resources available to young entrepreneurs and startups in Boston. Monthly meet-ups like Mobile Monday and Tech Tuesday as well as other events like the biannual Mass Tech Leadership Council Unconference are just a few of the great ways startups can get their feet off the ground.

Other organizations like TechStars and Stay in MA help Boston startups set up shop in Beantown with scholarships, funding, and mentorship. And why wouldn’t startups want to stay in Boston? Massachusetts boasts the highest per capita VC investment rate in the United States, eclipsing California and New York with $457 per person.

Data released today from information and data-services company ChubbyBrain shows that while other Northeaster states are suffering from floundering VC investment, Massachusetts is alive and expanding. While New York and Pennsylvania fell to just $513 million and $254 million respectively in the second half of 2009, Boston’s home state soared to $1.2 billion. Figures like these have vaulted Massachusetts past New York into the number two spot behind California for VC investments.

Bussgang says that reasons like these and the overall economic stability of the state have encouraged startups and entrepreneurs in Boston, despite being across the country from sunny Silicon Valley.

“Yeah the winter sucks, but Massachusetts has delivered a budget on time and balanced the last couple years… unlike what’s going on in California,” he says. Bussgang also points out that California continually ranks last on Chief Executive Magazine’s list of Best and Worst States for Business, though Massachusetts is usually not too far away.

The close-knit technology and innovation community of the greater Boston area has fostered spontaneous collaborations resulting in several successful companies across numerous industries. Cloud computing solutions like Carbonite and GlassHouse, robotics companies like Roomba-maker iRobot, online video providers like Brightcove, and e-commerce startups Vistaprint and Shoebuy are all examples of the firepower Boston’s potential can produce.

Boston has even seen recent expansion from larger corporations, such as Google, Microsoft and Cisco Systems. Having these larger companies in the Boston area provides excellent opportunities for startups, says Bussgang.

“Boston has become an outpost for a lot of these satellite R&D centers, and a place where the companies that we fund can find a home,” he says.

To learn more about the Boston startup scene, check out Don Dodge’s extensive list of events, resources and people, as well as Larry Cheng’s Massachusetts VC Blog Directory, which you can import right into your RSS reader to stay on top of what VCs in Boston are talking about.

Photo by Flickr user the-o.

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A distinguishing aspect to PBWorks is its industry-specific approach. The enterprise collaboration service has made a name for itself by focusing on the particular requirements of the education and legal markets.

Now PBWorks is taking a smart approach by extending its position in vertical markets and offering a template store that people may download and use in a variety of business- and industry-specific ways.

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The template store is opening with 25 applications, both officially approved and those developed by the community at large. PBWorks screens the templates that users provide.

The enterprise collaboration space is still in its early days. People understand the importance of collaboration but often they do not know where to start. The PBWorks templates provide some framework for how to start using wikis and other forms of collaboration. The templates can include embedded media, files and documents as well as folders.

PBWorks is making a smart move by offering templates. It follows a long standing tradition of providing a structure for people who are just starting to use new software or who want to improve what they are already offering. Microsoft has been doing this for years. The practice seems well suited to the increasing complex world of enterprise collaboration.

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Brand advertising — the kind you’re used to seeing on TV and in print — isn’t nearly as big on the Internet as the search ads dominated by Google (GOOG). But that’s got to change, as marketers realize that traditional advertising works on the Web, too.

The above is an article of faith among a certain kind of Web publisher. And some of them are even paying for studies to prove that display ads — basically all the ads you see that aren’t part of search results — really do work on the Web.

Except when they don’t. That’s the unsettling conclusion that some research funded by Yahoo (YHOO) recently reached, the San Francisco Chronicle reports.

The study was produced by the Web giant’s Yahoo Labs group, which has been getting new attention in the Carol Bartz regime, and beefing up its staff of social scientists by “adding highly credentialed cognitive psychologists, economists and ethnographers from top universities around the world.”

One of the new hires, economics professor David Reiley, tried to track the benefits of a Yahoo ad campaign on behalf of a retail chain. He found that the ads did work — but only for people born before Woodstock:

The research, conducted in partnership with an undisclosed national retailer, sought to accurately measure the impact of Internet display advertising across online and offline sales, by tracking people who had registered with both Yahoo and the store. The research found an approximately 5 percent increase in spending among those who had seen the ads – with 93 percent of those sales occurring in stores.

The potentially worrisome thing, however, was that among those under 40, the percentage was nearly zero. That could reflect the unpopularity of the particular retailer among that demographic. Or it could underscore a growing immunity to display advertising among the Web-savvy younger generation.

Yikes. I asked Yahoo for their take on the study, and they sent me a (not surprisingly) sunnier summary of the research. Some of their highlights:

Major Findings:
By combining a controlled experiment with panel data on purchases, we find statistically and economically significant impacts of advertising on sales.
We estimate the total effect on revenues to be more than eleven times the retailer’s expenditure on advertising during the study.
93% of the effect was on offline (in store) sales.
Persistence: The effects of the campaigns were persistent over time, meaning that the sales impact could be tracked for a period of time after the campaign ended.
Demographics: there was no significant correlation or differences w/r/t location (by state) or gender.
But there was a significant difference w/r/t to age: customers over the age of 40 were significantly more responsive to the ads in terms of sales. The largest effect came from senior citizens (65+).
Clicks versus non-Clicks: Though clicks are a standard measure of performance in online-advertising , we find that online advertising has substantial effects on those who merely view but do not click the ads.
We find that 78% of the effect in sales comes from those who view ads but do not click them, while only 22% can be attributed to those who click.

Count me among the group predisposed to think that brand ads on the Web do work, by the way. But then again, I have a vested interest in that being true, since that’s what’s supposed to keep me clothed and fed. I’d hate to see scientific proof that it’s all a pipe dream.

For a contrary perspective, funded by people whose interests align with mine, check out this study funded by the Online Publishers Association.

[Image credit: pedrosimoes7]

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By Loretta Chao, Reporter, The Wall Street Journal

Google Inc. (GOOG) sought to calm anger in China over its book-scanning project, saying it aims to work out a new agreement with Chinese writers for the rights to publish their books in its digital library.

In a letter to the Chinese Writers Association, Erik Hartmann, head of Google Books in Asia, acknowledged that the company’s communication with Chinese writers was “not good enough” and said Google is negotiating with the China Written Works Copyright Society to create a new plan for authors and publishers to participate in Google Books.

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To Our Clients, Colleagues and Friends,

• You know how the Fed has been buying up so many Fannie, Freddie and Ginnie Mae MBS?  We read that last year the Fed made up something like 83% of all purchases of all such purchases. We can’t find the article, and it may have been 73%, but either way, it’s a big number. It will be interesting to see what happens as they stop buying.  The conventional wisdom is that it will cause rates to go up, but the conventional wisdom isn’t always right.
• And while we’re talking about mortgages, we all know what an MBS is, right?  It’s a mortgage backed security, singular.  So when you’re talking about a bunch of them, plural, do you call it “a bunch of MBS” or is it “a bunch of MBS’s” or, maybe MBSs without the apostrophe?  Do you pronounce the plural of MBS like Em-bee-ess-iz or is it more properly Em-bee-ess-uh-zuz?  Would someone please call Lew Ranieri and ask him?
• We mentioned Elvis Presley last week, and we came across something interesting. Below is the famous photograph of Nixon and Elvis shaking hands in the White House, this meeting taking place as a result of a letter Elvis wrote the President.  The National Archives kept a copy of the letter, which we’ve attached. It paints a picture of Elvis as being somewhat strange, but it’s also quite touching in a way.
  
  This photo is the property of the U.S. government, and it happens to be the one most requested item year after from the Archives. At the Richard Nixon Library and Museum, you can buy postcards with this photo. It’s their top seller.
• By the way, if you’re interested in U.S. history and politics, the Nixon Library is a great way to spend 3-4 hours.  They hide none of the embarrassing stuff and display Watergate quite prominently. You’ll learn that the EPA was Nixon’s idea, that he proposed a health plan similar to Obama’s, and when you listen to some of his secretly recorded office conversations,  you’ll hear him swear like a sailor.  We even heard him say “We need to stick the IRS on those Jew ___ suckers. “  A favorite is a small auditorium where a holograph of the former President is projected onto the stage.  You ask him certain pre-selected questions, and he answers them!  You get the eerie sense that he’s right there in the room with you, talking directly to you!
• How do you handle volatility?   From late 2007 to the 2009 lows, the Bank of America stock was down 94%.  By year-end 2009, it was up 380%.
• Thumbs down for Up in the Air. George Clooney’s character is empty, and while he has a certain charm, he has no friends, no family, no home, and no possessions.  His acting is what we’ve come to expect from him, and while there are a few light moments, the overall theme is depressing.
• We just read about call centers that pay their employees by the minute, but only for the time the person’s actually on the phone with customers. The one we read about pays $0.25 a minute, meaning that the most a person could make if they talked every second of every minute of every hour would be $15 an hour.  It’s like the old days of piece work. It seems weird at first, but it actually seems to make sense.  Sort of.
• Remember when Lomas & Nettleton was the nation’s biggest servicer with about $20 billion?  Here are the top servicers today.

Number 10 OneWest is the new name for what used to be Indy Mac Bank.  What kind of cash flow does $2 trillion throw off?  Let’s assume 35 bps of servicing income, and if our math is right, the servicing fee is about $7 billion a year or $580 million a month of gross revenue.

• Horizon Bank in Washington State with $1.3  billion of assets has failed, and the FDIC estimates that the cost will be approximately 41% of stated assets.  It seems like only yesterday when the Northwest banks were doing so well.  About 30% of Horizon’s portfolio was construction and land development, with another 34% in multi-family and commercial real estate.  That 41% loss still seems shocking.
• You always read about how the key to real estate investing is to use OPM, or Other People’s Money, and here’s an interesting example: Tishman Speyer paid $5.4 billion for a huge apartment complex in New York ( Peter Cooper Village ), and it’s now worth $1.8 billion.  How much of that $3.6 billion loss did the Speyer family lose?  They lost only $112 million, with the big losses being taken by their investors.  This will knock your socks off, but one of their biggest investors in the deal was the Church of England.
• The Dornbusch Law (named, imaginatively, after the late MIT professor of economics, Rudi Dornbusch) states that “In financial markets, things always take longer to happen than you expect – but once they happen, events unfold more quickly than you’d ever have imagined.”  Think back on the financial crisis of 2008-2009.  Isn’t this exactly how it unfolded?
• Heavyweight boxer Mike Tyson once said that “everybody has a plan until they’re hit.” An interesting statement and one worth thinking about when you’re updating your strategic plan.  The real message is to always have a Plan B.
• No one’s going to ring a bell announcing that the refinance boom is over, but we were puzzled by the MBA refinance Index.  It was 5,904 one year ago and this week it was 1,976.  That’s a 67% drop over the past twelve months. Should mortgage lenders be worried? We’re not on the front lines with loan officers, but it sure seems like things could be cooling down, now or in the near future.
• We mentioned last week that two banks raised their dividends twice last year, and some of you wanted to know which.  They were 1^st Source (SRCE) and Hudson City (HCBK).  Pretty amazing, to raise the dividend not once but twice in such a tough year.  Some more on 1^st Source:
• 1^st Source was founded in 1863 as First National Bank of South Bend ( Indiana ). It currently has 75 branches in Indiana and Michigan and $4.4 billion in assets.  A few of their metrics aren’t all that great: A 0.57% ROA, 4.1% ROE, 3.1% net interest margin, and an efficiency ratio of 68%.  What has really stood out for them, however, is that only 2.9% of their loans are non-performing.  Credit quality always pays off in the end. We like this bank.
• Okay, we’ll go along with the idea that keeping GMAC alive is somehow in our national interest and worthy of federal bailout money.  But when are they going to start getting things turned around there?  It’s hard to know how their auto-lending is doing, but Ally Bank will report a $1.3 billion loss and ResCap, not to be outdone, will report a $700 million loss.  And finally, their international lending group didn’t want to be left out, so it will report a loss of $1.3.  These are apparently due to re-classifying loans from held-for-investment to held-for-sale, but whatever.  GMAC and ResCap have brought in some great people like Steve Abreu, so maybe we’ll start seeing a turnaround soon.
• We get asked from time to time if we do recruiting. We’re not recruiters or head hunters, not by a long shot.  However, we have done a number of select searches for clients, mostly in the areas of Secondary Marketing, Heads of Operations, and Finance.   Our fee, by the way, is about a third of the typical recruitment firm.

• Ladies, do you have one of those lower back tattoos? A study showed that if an epidural is pushed through the tattoo during child birth, there could be severe problems if the ink enters the spine. There may, however, now be a way to remove that tattoo someday: (http://www.hulu.com/watch/61336/saturday-night-live-turlingtons-lower-back-tattoo-remover).    Well, that’s all for now.   See you next week sometime.

Garrett, Watts & Co.

“Helping lenders increase revenues, control costs, and better manage risk.”

Joe Garrett   (510-469-8633)

Corky Watts   (408-395-5504)
Mike McAuley    (281-250-2536)

A Radio Shack employee was arrested after punching a customer who was trying to return an item. The employee was charged with assault, but since it is Radio Shack, battery was not included. (bah-da-bum)

Yesterday I mentioned Wisconsin’s SAFE Act. How about Oregon’s SAFE Act verbiage, which start at the end of July? “Financial Responsibility Criteria: For purposes of this rule, an applicant is not financial responsible if the applicant has shown a disregard of his or her own financial circumstances, taking into consideration the totality of the applicant’s financial circumstances. Factors that the director may consider in determining whether an applicant has not demonstrated financial responsibility include, but are not limited to, the following: (a) Current outstanding judgments or material litigation, excluding judgments solely as a result of medical expenses; (b) Current outstanding tax liens or other government liens and filings; (c) A foreclosure within the past three years and the type of property subject to foreclosure, whether residential or commercial; (d) Pending or completed bankruptcy proceedings, and the nature of the proceedings, occurring within the past five years; or (e) A pattern of seriously delinquent accounts within the past three years. In assessing the financial responsibility of the applicant, the director may consider extenuating or mitigating factors, including but not limited to the following: (a) Involuntary loss of job or income; (b) Involuntary medical expenses; (c) Divorce; (d) Attempting workout arrangements with creditors; or (e) Any other factor the director believes reflects circumstances beyond the control of the applicant.”

VA lenders may want to visit http://www.homeloans.va.gov/docs/2009_county_loan_limits.pdf That is the website that shows the VA county-specific loan limits. GMAC, for example, reminds their clients that any county that does not appear on this list is assumed to have a county limit of $417,000, and that the VA county limits are used to determine the calculation of the maximum amount of guaranty the VA will provide on a loan. It does not dictate the maximum amount of the VA loan. The new 2010 county limits must be used to determine the maximum VA guaranty/Veteran’s Available Entitlement for loans closed on or after January 1, 2010.

Sometimes a broker or agent will wonder what happened to investors paying 3-5 points for a loan. After all, older Treasury notes with higher coupons are trading at those levels, and more. But a mortgage investor is not going to pay much above par (100) if the loan is expected to pay off early, for whatever reason. Recently we learned that the “aggregate prepayment speed of the Fannie Mae hybrid ARM sector for December surged 32% from 20.3% CPR to 26.7% CPR.” Prepayments increased most dramatically for credit-impaired borrowers who had IO loans that funded in 2006-2007. The aggregate Freddie Mac hybrid ARM prepayments “increased 12% from 21.4% CPR to 23.8% CPR.” But some analysts believe that the aggregate Fannie Mae and Freddie Mac hybrid ARM prepayments to drop 15-20% this month due to the combined effects of a lower housing turnover in the middle of winter, along with three fewer business days. (Other analysts with attitudes say that anyone using the old “fewer business days” argument is misled.)

And just what is the current hybrid ARM issuance these days?

more news on USDA Rural Development Agency, housing prices, Fed MBS purchases, unemployment, the markets, and joke of the day … <<< CLICK HERE

-Everyone has an opinion on NBC’s late night debacle….

-Former Jets star Mark Gastineau fathered a son with Flavor Flav’s “FoFo,” Brigitte Nielsen…..

-The son of actress Cybill Shepherd was arrested Tuesday after he allegedly tried to rob passengers on a plane bound for Philadelphia International Airport……

-Tom Hanks has joined Twitter!

-Gisele Bundchen is the world’s highest-paid supermodel….

-Not only has Spider-Man 4 been scrapped, the franchise’s upcoming Broadway musical has also been delayed…..

-Usher’s been robbed!

–Happy Birthday, Kirstie Alley!

–Avatar’s Zoe Saldana is the new face of Avon…..

Mark Roth, 55, Indianapolis, was sentenced today to 43 months in federal prison by Circuit Judge David F. Hamilton following Roth’s guilty pleas to one count of wire fraud and one count of money laundering.

This sentencing concerned Roth’s role in a multi-million dollar mortgage fraud scheme operated by Robert Penn. Roth was found responsible for 25 fraudulent loans, including the first 11 Windsor Village loans, amounting to more than $5 million.

Today’s sentencing follows a lengthy investigation conducted by Special Agents of the Internal Revenue Service – Criminal Investigation Division, with the assistance of the Federal Bureau of Investigation.

Eight other individuals have been charged in the scheme. The remaining three cases are currently set for sentencing before Circuit Judge Hamilton on Feb. 2, 2010.

The investigation is continuing as to other individuals who were involved in the mortgage fraud schemes.

Previously sentenced in this investigation were:

• Robert Penn – 84 months’ imprisonment;
• Timothy Brown – 37 months’ imprisonment;
• Stephen Scott Brown – 37 months’ imprisonment;
• Jerry Jaquess – 30 months’ imprisonment;
• Tamara Scott – 24 months’ imprisonment.

Mark Roth was involved in the mortgage brokerage business and assisted in brokering numerous loans through Argent Mortgage Company and The MoneyStation Inc.

Through his years of experience in the business, Roth had developed relationships with Argent Mortgage Company employees.

Roth prepared the Argent mortgage broker application packages for Web Mortgage Company LLC and American Funding Solutions Inc., to assist these companies in being able to broker loans through Argent. Roth also opened and ran the Indianapolis branch office of 1st Start Mortgage.

Roth, alone and with the assistance of others, prepared and submitted to the lenders false and fraudulent loan applications along with false supporting documentation for the loans, knowing that the documents were false when he submitted them.

On some occasions, Roth also requested other individuals to “front” down payment checks for the investors. Roth received money from the fraudulent loan proceeds. He opened an entity and bank account in the name WJP Roth Investments Inc., and used this bank account to deposit the fraudulent loan proceeds which he received.

Roth was also partners with Jaquess in Homevestors LLC, a company involved in the purchase of the first 11 Windsor Village properties, located near Arlington Avenue and 21st Street, on the east side of Indianapolis. These properties were purchased for $50,000.00 each, and then “sold” to straw purchasers for $120,000.00 each.

All of the loans involved in the schemes went into default, and the lenders either foreclosed on the homes or took other action, including granting deeds in lieu of foreclosure or allowing short sales of the properties.

Many of the duplexes in Windsor Village later re-sold in 2007 and 2008, generally for amounts between $3,500.00 and $15,000.00.

According to Assistant United States Attorney Susan Heckard Dowd, who prosecuted the case for the government, Circuit Judge Hamilton ordered Roth to serve three years on supervised release following his 43 months of incarceration and also ordered him to pay a total of $1,459,025.97 in restitution to Argent Mortgage Company and Homecomings Financial.

I once had to wait an extra four weeks for a couch. I was furious. All I can say is that I’m glad I’m not this dude on the Best Buy repair forums trying to get his TV fixed.

Just in case this post “mysteriously” disappears from the Best Buy site, here is the full story. We hope Best Buy can help get this guy taken care of:

It seems to take along time to get Best Buy to repair a tv!!!

I placed my first call back at the end of november. Complaint was green bloches and a green line in the middle of the screen. First date available is a week later. Before they get here the tv does snap crackle pop, smoke comes out the back and then no picture. Called BB and they say no problem, the tech has to see it anyway.

Tech looks at it and say he needs to order some parts. Writes down the serial number, model number and says will call after he knows parts have been delivered. One box with one part and second box will have three parts.

Week later a different tech calls to say he is coming and I tell him only one box is here. He says it shows both boxes have been delivered. Shows up and of course doesn’t have needed parts. Says he will reorder. Writes down serial number and model number again. Another week later the tech arrives and opens the boxes. Wrong parts!! Writes down the serial number and model number again to reorder parts.

Another week later…..again……arrives and opens the boxes. Surprise….wrong parts…..again. Tech tries to solder part onto old board to get tv working. After about 2 hours says he can’t fix the tv, will have to order parts. Writes down the serial number and model number….again. Say he will call me to confirm he ordered parts. Never received phone call.

I call the following week to check up on parts order only to find out no parts have been ordered. No reason why or when they will order parts. Geeks says they are having problem ordering parts. I ask how long they have had the problem. Two days he tells me. I tell him that parts were suppose to be ordered before then. He then tells me it has been longer than two days. I’m starting to get the feeling I’m running in circles.

Tech says he will order 6 parts and install them all in a effort to keep from coming back out again if there are still problems. They tell me they will contact and the tech and make sure someone calls me when the parts are ordered. No phone call…again.

Call back next week to find out when they are ordering parts. I was told they were ordered and delivered to my house already. Strange, I don’t have any parts here. Geek says maybe the tech has them. I ask if we could actually confirm that or if he was just guessing. He says to call back tomorrow. Parts show up a couple days later.

Tech comes out to install the parts. Install two out of six parts and tells me it’s fixed. Well……I can at least see the picture again. Remind tech that the original problem was never looked at because the tv blew before a tech arrived. He assures me this will fix that problem too. Told the tech it needs to run about a half hour before the green lines and blobs show up. I’m told to call back if there are any more problems.

I’m handed something like a ticket that says they have already spent over $1500.00 to try and fix this tv. It originally cost me $3000.00. What a surprise, half hour later the green blob is showing back up. I call BB and ask them to get the tech back. I am told he is now to far away. Have to schedule another day. I ask them to make sure the tech does not return the new parts he did not install. Was told they can always reorder them!!

So far it has been about six weeks of a dead tv. Then 30 mins of watching the tv to see the same problem I originally called about show up. Now I will sit home again and wait. Let them try and fix the problem. This is getting crazy!!!! How many times am I suppose to sit around and wait for people to come to try and fix this?? My time is actually worth something too. Even if no one else thinks so.

If the couch had me furious, this situation would have me on the verge of Geek Squad genocide. [Best Buy via Consumerist]