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  • The Other Health Bill: Medicare Pay Cuts for Docs, Cobra Extension

    DoctorPresident Obama signed a big defense spending bill into law yesterday. With all the hollering over the health-care overhaul, that didn’t get much attention. But, as we noted on Friday, the defense bill contains a few key health-care provisions.

    For one thing, it re-sets the shot clock on a 21% Medicare pay cut for doctors. The cut was supposed to take effect on Jan. 1; the bill pushes it back by two months. Blocking the cuts has bipartisan support, but Congress has to figure out how to come up with the extra money. They’ll try to do that early next year.

    The bill also extends government subsidies for Cobra insurance, a program that allows workers to keep their employer-sponsored health insurance after they lose their job. This WSJ story explains the extension in detail.

    Meanwhile, back in the Senate, the endless procedural stuff continues this morning. Barring some hugely surprising shift, the bill will pass this week. The real question now is what will happen in the new year, when negotiators from the House and Senate get together to try to merge the bills from the two houses. Lots of hot-button issues (abortion, the public option, new taxes) will be on the table.

    For more House-Senate conference pre-gaming, see stories the WSJ, New York Times and Politico. If you need to step back and clear your head, check out this side-by-side comparison of the House and Senate bills (note that it was updated late last week and doesn’t include a few last-minute changes to the Senate bill, such as the elimination of the cosmetic surgery tax).

    Image: iStockphoto


  • How to talk to kids about holiday gifts and lost loved ones

    Christmas Day DreamingThe holidays are supposed to be a time full of joy. Unfortunately, they can also bring with them stress, sadness and unrealistic expectations. Kids are affected by this just as much as adults. We talked to Children’s psychiatrist Stuart Goldman, MD, about how to help your kids cope with the holiday blues and make this a memorable holiday for the whole family.

    The holidays can be especially tough for children who have lost a family member. What are your suggestions for helping a child cope with the loss of a loved one during these times?

    The holidays bring back memories of things missed and that might have been. Parents need to give children permission to be sad and reminisce over the loss of a loved one. It’s okay to look through photo albums and have a remembrance at church or over dinner. It’s important for kids to remember the past and not have it shut off. Tell children that it’s okay to miss that loved one, but that you can still have a good holiday. Have them write a letter to Grandma who’s in heaven and start a new holiday tradition that will help make this year’s celebrations memorable.

    What are signs of sadness or depression that parents should be aware of?

    Sadness and anxiety are a part of life. It when they’re disproportional or extend too long and disrupt functioning that they become a problem. We should expect everybody to be a bit somber around the holidays or upset if they’ve lost a loved one. It’s when your child is irritable, won’t get out of bed and refuses to open presents that you should be more concerned. Episodic sadness is nothing to worry over. Only sustained sadness should be concerned about.

    A lot of families are experiencing a tough time economically. How can parents explain to their kids why they won’t be receiving as many gifts this year or going to The Nutcracker?

    Parents think kids don’t know about family problems, but they always do. Not talking to your children makes them feel excluded. Parents should be direct about their financial situation, but don’t need to share all of the details. You should shield them from things like being worried about making the mortgage payment, but should talk about why you can’t have the Christmas you’d like to have. Have this talk early on because kids always know.

    Parents have the idea that it’s all about gifts and it’s really shared memories that make the holidays, but it’s creative family time that makes a difference during the holidays. Rent The Nutcracker on DVD, make popcorn and buy candy for everyone to share.Gifts Boxes

    Children have come to have high expectations of the types and amount of gifts that they receive around the holidays. What has contributed to these expectations and what can parents do help their kids not get caught up in the commercial aspects of the holidays?

    Kids have learned to have high expectations for the holidays and very few things actually live up to one’s fantasies. Parents whose kids have unrealistic expectations have to examine whether they are contributing to that. They should begin to address the topic of gifts early on – not on Christmas morning. If parents are proactive, Christmas morning won’t be a disaster. Parents often feel guilty about not being able to get their kids everything they want, which can result in anger because their kids aren’t appreciative of the gifts.

    Break this larger conversation down to a few smaller serious conversations. Everybody has a wish and feels like the holidays are a time when they can be gratified. Parents have to set the line for realistic versus unrealistic gifts, wherever that may be in your family. There might be jealousy and sadness because your children didn’t get a certain gift that their friends did, but there are lessons to be learned. This is an opportunity to say we learned things and that it’s okay to be jealous. Maybe things will be different next year.

    What makes the holidays great is that it’s shared time with parents. Building new experiences doesn’t cost anything. One thing my family does is make “surprise balls.” It’s a paper mache ball or hollow Christmas ornament where you hide a note about where someone’s present is in house and what it might be. Do something that contributes to fun family memories.

    While you’re here, check out these other holiday-related blog posts:

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  • All Winter Olympic Games Venues Now Available in 3D in Google Earth

    The 2010 Winter Olympic Games are getting closer and the buzz is already starting to build up. Those who just can’t wait to see how it unfolds have a reason to be pleased, Google has introduced the 3D models for all the venues in Google Earth, enabling people to check out the locations well before the games begin, which should either make the wait easier or maybe harder to bare.

    “[W]e’ve introduced photorealistic 3D building models for all nine venues of the Winter Games. Producing these models is a multi-step process involving both aerial and ground-based imagery,” Bruce Polderman, product manager for Google Earth wrote.

    Google Earth has amassed quite a few 3D locations, so this by itself isn’t exactly that special or unexpected. But Google went the extra mile for these particular locations and has built all the models in-house. It also went to great lengths to ensure that it got its hands on the best imagery available to build the models themselves and also for the texturing.

    It managed to acquire some quality aerial photos of the region, not that it would have been much of a hassle for a company like Google, which has now made its way into Google Earth and Maps as well. It also acquired some ground images of the nine locations where the events will be held and used all th… (read more)

  • Welcome To The Most Depressing Commercial Real Estate Disaster In America

    voorhees300400

    Back in 1992, I remember going to the Echelon Mall in Voorhees, New Jersey.

    It was a five minute drive from my home in Cherry Hill and I always looked forward to it.

    The mall had every imaginable store you could think of, several fountains, rides and games for kids, a movie theater, and even a gigantic arena-sized arcade called Exhilarama.

    Check out the dead mall >

    Those were the 1990s. Those were the days.

    Today, the Echelon Mall is now called the Voorhees Town Center and even a name change can't aid a dying beast.

    Someone, somewhere thought it'd be a good idea to bulldoze half the mall, put up condos and housing, and give the mall a more "exclusive" feel. The problem is: who wants to live at a mall?

    Only two "anchor stores" remain at the mall, the food court is half vacant, and there are literally no stores of quality in the mall aside from a GameStop, Victoria's Secret, and Verizon Wireless.

    What began as a revitalization project for a dying mall was cut short by a lack of credit and funding for constructing the project. Tons of big box stores and condos were supposed to go up around the newly re-designed mall but alas, nothing has come to fruition.

    Scanning the terrain, you'll quickly realize why commercial real estate is such an epic disaster.

    Click here to tour a dead mall ->

    Join the conversation about this story »

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  • Games on Demand: Lost Planet Colonies and Devil May Cry 4

     

    The following Xbox 360 games are now ready for direct download from the Xbox LIVE Marketplace:

     

    Lost Planet™ Extreme Condition Colonies Edition

    Content: LOST PLANET COLONIES
    Price: Check pricing for your region

    Availability: Not available in Japan
    Dash Text: (Online Interactions Not Rated by the ESRB) This game supports English, French, Italian, German, Spanish, and Korean. Download the manual for this game by locating the game on http://marketplace.xbox.com and selecting “See Game Manual". LOST PLANET has been enhanced with new maps and gameplay modes. Re-visit the great online action! There are no refunds for this item. For more information, see www.xbox.com/live/accounts.

     

    Add LOST PLANET COLONIES to your Xbox 360 download queue

     

     

     

    Devil May Cry® 4Content: Devil May Cry 4
    Price: Check pricing for your region
    Availability: Not available in Japan or Korea
    Dash Text: (Online Interactions Not Rated by the ESRB) This game supports English, French, Italian, German, and Spanish. Download the manual for this game by locating the game on http://marketplace.xbox.com and selecting “See Game Manual". A new Devil May Cry story starring an all new hero, Nero! What dark power resides in his right arm? There are no refunds for this item. For more information, see www.xbox.com/live/accounts.

     

    Add Devil May Cry 4 to your Xbox 360 download queue

     

     

    Also, Xbox LIVE members in Japan, can now purchase Absolute～Blazing infinity～

     

     

  • Tap Tap Revenge Developer Makes $1M Per Month

    Do you somehow still doubt that the App Store is a huge money-making enterprise, at least for a lucky few? Then consider the news that Tapulous, the development studio behind the wildly popular Tap Tap Revenge rhythm game franchise, rakes in a cool million every month. That’s not EA or Gameloft or someone similar that came in with a reputation. That’s an iPhone-specific development company.

    If you’re not familiar with Tap Tap Revenge (you must not own an iPhone, or read our site very carefully), then you probably don’t know that it’s essentially a clone of games like Dance Dance Revolution and Rock Band, redesigned specifically for the iPhone’s unique interface. It’s fun, and incredibly addictive, which probably has something to do with its impressive degree of success.

    Tap Tap Revenge has reportedly been installed more than 20 million times (although that isn’t necessarily unique installs) and people have played more than 600 million rounds. Rough estimates put the total install base of the game at one-third of all iPhones currently operating. Considering the iPhone’s success, that represents a hefty payday indeed.

    The source of revenue stemming from the Tap Tap Revenge series is varied. Most of the apps themselves cost at least 99 cents, though Tap Tap Revenge 2.6 is free, and artist-specific special editions cost more. But the real money is made from ads in the games, and from a cut of the in-app purchases available in the latest version, which allow iPhone users to buy and download playable, often themed tracks from their favorite artists.

    Obviously, Tapulous is the exception, not the rule. The vast majority of iPhone-only devs don’t make anywhere near that kind of scratch, but if nothing else, this simple rhythm game proves the money’s out there to be made.

  • Nook Firmware Update Speeds Page Turns, Adds In-Store Promos

    One of the first videos of the Barnes & Noble Nook was Matt Miller’s and I wondered how he could tolerate the slow page refresh. Others weren’t too happy with the relatively sluggish performance and unfinished feel, but a firmware update just hit for the Nook, so it’s too early to condemn it. Once upgraded, Matt’s Nook showed some improvement, but it’s still a bit laggy for my tastes. Above you can get a good idea of the page refresh speed because Matt compares it to his Sony Reader PRS-505, as he did on day one of Nook ownership. Instead of taking twice as long as the Sony, the Nook has caught up a little — it’s still not as fast as the Sony, but it’s a noticeable improvement, thanks to version 1.1 of the firmware.

    Matt also shares some details on the in-store experience and that’s where his Nook has a marked advantage over my Amazon Kindle. Aside from in-store content, Matt received a promo for a free cookie. The best I get with my Kindle in that case is five bars of EVDO — maybe Amazon will send me a cookie with the next Kindle firmware update?

  • The Future of Cognitive Health Tech – Intel’s Perspective

    We just announced a new session at upcoming SharpBrains Summit:

    Monday January 18th, 2010, 3.30-4pm: The Future of Cognitive Health Tech – Intel’s Perspective
    Two researchers at Intel Corporation and the Technology Research for Independent Living (TRIL) Centre will provide an overview of why and how Intel Corporation is supporting R&D initiatives to help develop home-based automated applications to assess, monitor and help maintain cognition among older adults. They will also share key lessons learned so far, and outline challenges and potential guidelines for the field at large based on ethnographic research and first-hand product development.

    * Margaret Morris, Senior Researcher, Intel’s Digital Health Group
    * Muki Hansteen-Izora, Product Research and Incubation Division Strategist, Intel’s Digital Health Group

    Muki Hansteen-IzoraMuki Hansteen-Izora, Senior Design Researcher and Strategist with the Product Research and Incubation division of Intel’s Digital Health Group. Muki is also the Intel lead and co-PI for the Technology Research for Independent Living (TRIL) Centre’s Cognitive Function research strand, which is investigating how interactive media and gaming technologies can support cognition in older populations. Prior to joining Intel, Muki served as a lead researcher at Philips Research Labs. He holds a degree in Cultural Anthropology from the University of California at Santa Cruz, and completed his graduate training in Learning, Design, and Technology at Stanford University.

    Margaret MorrisMargaret Morris, Senior Researcher in Intel’s Digital Health Group. Margaret studies the ways that emerging technologies can enhance mental and physical wellbeing. She conducts ethnographic research to identify needs and works with engineers to develop and evaluate exploratory prototypes. Prior to joining Intel in 2002, she studied technology adoption in Sapient’s Experience Modelling group. Margie completed her Ph.D. in Clinical Psychology with a minor in Behavioural Neuroscience at the University of New Mexico, her clinical internship at the San Francisco VA Medical Centre, and her postdoctoral fellowship at Stanford University. She has a B.A. in English from Haverford College.

    To learn more and register: click on SharpBrains Summit.

  • First Look: Dec. 22

    Research this week leans towards defying expectations. Common wisdom, for example, might suggest that a CEO who has risen through the ranks of her company would favor her former divisions in budget choices, as opposed to divisions in which she has little to no experience. Instead, “reverse-favoritism” seems the order of the day, according to HBS professor Yuhai Xuan. Writing in the December issue of the Review of Financial Studies, Xuan found that “after CEO turnover, divisions not previously affiliated with the new CEO receive significantly more capital expenditures than divisions through which the new CEO has advanced. […] The results suggest that new specialist CEOs use the capital budget as a bridge-building tool to elicit cooperation from powerful division managers in previously unaffiliated divisions.” Xuan’s article is titled “Empire-Building or Bridge-Building? Evidence from New CEOs’ Internal Capital Allocation Decisions.”

    This week also sees a comprehensive look at how and why multinationals vary in size from country to country. Contrary to popular expectations, “corporate headquarters in the U.S. are about twice the size of European counterparts,” HBS professor David Collis and coauthors write in the working paper “International Differences in the Size and Roles of Corporate Headquarters: An Empirical Examination” [PDF]. Whether your own HQ is bloated or lean ‘n’ mean, there is as yet no perfect model for headquarters size, the paper continues. “The size and role of corporate headquarters vary widely both between countries and within countries.[…] [T]here is more variation within each country than there is between countries,” the authors observe.

    — Martha Lagace

    Working Papers

    International Differences in the Size and Roles of Corporate Headquarters: An Empirical Examination

    Authors: David Collis, David Young, and Michael Goold
    Abstract

    This paper examines differences in the size and roles of corporate headquarters around the world. Based on a survey of over 600 multibusiness corporations in seven countries (France, Germany, Holland, U.K., Japan, U.S., and Chile), the paper describes the differences among countries and then applies a model of the factors determining the size of corporate headquarters (Young, Collis, and Goold, 2003) to systematically examine those differences. The data shows that there are significant differences among countries in the size and role of corporate headquarters and strongly suggests the existence of a developing country model, a European model, a U.S. model, and a Japanese model of corporate headquarters. Contrary to popular expectations, corporate headquarters in the U.S. are about twice the size of European counterparts. Headquarters there exert a higher level of functional influence and have larger staffs in certain key areas, such as IT and R&D. U.S. managers are generally more satisfied than their European counterparts with their larger more powerful headquarters, which suggests that, at least in the U.S. context, large corporate headquarters can create value.

    Download the paper: http://www.hbs.edu/research/pdf/10-044.pdf

    Publications

    Intra-Industry Foreign Direct Investment

    Authors: Laura Alfaro and Andrew Charlton
    Publication: American Economic Review 99, no. 5 (December 2009)
    Abstract

    We use a new firm-level dataset that establishes the location, ownership, and activity of 650,000 multinational subsidiaries. Using a combination of four-digit-level information and input-output tables, we find the share of vertical FDI (subsidiaries that provide inputs to their parent firms) to be larger than commonly thought, even within developed countries. Most subsidiaries are not readily explained by the comparative advantage considerations whereby multinationals locate activities abroad to take advantage of factor cost differences. Instead, multinationals tend to own the stages of production proximate to their final production, giving rise to a class of high-skill, intra-industry vertical FDI.

    Measuring and Managing Macrofinancial Risk and Financial Stability: A New Approach

    Authors: Dale F. Gray, Robert C. Merton, and Zvi Bodie
    Publication: In Central Banking, Analysis, and Economic Policies. Central Bank of Chile, forthcoming
    Abstract

    This paper proposes a new approach to improve the way central banks can analyze and manage the financial risks of a national economy. It is based on the modern theory and practice of contingent claims analysis (CCA), which is successfully used today at the level of individual banks by managers, investors, and regulators. The basic analytical tool is the risk-adjusted balance sheet, which shows the sensitivity of the enterprise’s assets and liabilities to external “shocks.” At the national level, the sectors of an economy are viewed as interconnected portfolios of assets, liabilities, and guarantees—some explicit and others implicit. Traditional approaches have difficulty analyzing how risks can accumulate gradually and then suddenly erupt in a full-blown crisis. The CCA approach is well-suited to capturing such “non-linearities” and to quantifying the effects of asset-liability mismatches within and across institutions. Risk adjusted CCA balance sheets facilitate simulations and stress testing to evaluate the potential impact of policies to manage systemic risk.

    Unravelling in Two-Sided Matching Markets and Similarity of Preferences

    Author: Hanna W. Halaburda
    Publication: Games and Economic Behavior (forthcoming)
    Abstract

    This paper investigates the causes and welfare consequences of unravelling in two-sided matching markets. It shows that similarity of preferences is an important factor driving unravelling. In particular, it shows that under the ex-post stable mechanism (the mechanism that the literature focuses on), unravelling is more likely to occur when participants have more similar preferences. It also shows that any Pareto-optimal mechanism must prevent unravelling, and that the ex-post stable mechanism is Pareto-optimal if and only if it prevents unravelling.

    Empire-Building or Bridge-Building? Evidence from New CEOs’ Internal Capital Allocation Decisions

    Author: Yuhai Xuan
    Publication: Review of Financial Studies 22, no. 12 (December 2009): 4919-
    Abstract

    This paper investigates how the job histories of CEOs influence their capital allocation decisions when they preside over multi-divisional firms. I find that after CEO turnover, divisions not previously affiliated with the new CEO receive significantly more capital expenditures than divisions through which the new CEO has advanced. The pattern of reverse-favoritism in capital allocation is more pronounced if the new CEO has less authority or if the unaffiliated divisions have more bargaining power. I find evidence that having a specialist CEO negatively affects segment investment efficiency. The results suggest that new specialist CEOs use the capital budget as a bridge-building tool to elicit cooperation from powerful divisional managers in previously unaffiliated divisions.

    Cases & Course Materials

    Finance Myopia in a Systems Business

    J. Bruce Harreld
    Harvard Business School Case 810-071

    This short case describes the tensions that often arise between finance executives attempting to curtail unproductive activities and strategy executives trying to optimize overall firm performance.

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/810071-PDF-ENG

    Memo from Counsel: Antitrust Law and Customer Allocation

    Lynn S. Paine and Lara Adamsons
    Harvard Business School Note 310-048

    When do antitrust laws come into play in a bidding situation? What should a company do if an antitrust violation is uncovered? This memo discusses “hard-core” antitrust violations, focusing on bid rigging and market allocation, under the laws of the U.S. and other leading antitrust regimes.

    Purchase this note:

    http://cb.hbsp.harvard.edu/cb/product/310048-PDF-ENG

    Nettwerk: Digital Marketing in the Music Industry

    John Deighton and Leora Kornfeld
    Harvard Business School Case 510-055

    How is music marketed in the digital era? Nettwerk Music Group built on its foundation as a social, grassroots marketer of music and artists and emerged as a leader in the Internet-enabled social media environment. For most of the past decade Nettwerk CEO Terry McBride let fans consume music on their own terms. He encouraged file-sharing, the remixing of his artists’ songs and videos, and an environment in which “the audience is the record company.” In the digital marketplace compact discs mattered much less, said McBride. “Digital assets” were the currency, in the form of ad, television, movie, and videogame song placement, ringtones, mixes, and community-created content. But new artist-label contracts were needed if digital assets were going to flow freely. Moving away from the infrastructure of the music business also meant having to do without the financial, logistical, and promotional power of the major labels. To provide an alternative to the muscle of the major labels, the company is launching a venture capital project called “Polyphonic.”

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/510055-PDF-ENG

    Stolt-Nielsen Transportation Group

    Lynn S. Paine and Lara Adamsons
    Harvard Business School Case 310-043

    Richard Wingfield considers whether to continue a cooperative agreement with industry peers in the deep-sea parcel tanker shipping industry. What are the economic and strategic implications of ending the agreement? What are the legal implications of continuing? Where is the line between cooperation and conspiracy, and what should a company do if the legality of a long-standing business practice comes into question?

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/310043-PDF-ENG

    Purchase this supplement B:

    http://cb.hbsp.harvard.edu/cb/product/310044-PDF-ENG

    Purchase this supplement C:

    http://cb.hbsp.harvard.edu/cb/product/310045-PDF-ENG

    Purchase this supplement D:

    http://cb.hbsp.harvard.edu/cb/product/310046-PDF-ENG

    Purchase this additional supplement:

    http://cb.hbsp.harvard.edu/cb/product/310047-PDF-ENG

    VF Brands: Global Supply Chain Strategy

    Gary P. Pisano and Pamela Adams
    Harvard Business School Case 610-022

    This case examines VF Brands global supply chain strategy. Historically, VF has used a combination of in-house manufacturing and traditional arms-length sourcing arrangements. At the time of the case, the company is considering a third approach to supplier relations that involves much closer cooperation and partnerships. The goal of this “third way” approach is to create a sourcing relationship that combines some of the virtues of vertical integration with the flexibility of sourcing. Such arrangements are increasingly discussed in the operations literature and in practice. This case provides students an opportunity to do an in-depth analysis of such an arrangement and develop an understanding of the trade-offs involved.

    Purchase this case:

    http://cb.hbsp.harvard.edu/cb/product/610022-PDF-ENG

  • Stocks Still Set To Rise As Slow Growth Equals Cheap Money

    punch bowl fruitThe punchbowl stays!

    —-

    NEW YORK (AP) — Stock futures are retreating from their highs after a report showed economic growth in the third quarter was not as strong as previously forecast.

    Stocks are still set to rise for a second straight day Tuesday as investors remain confident a recovery is under way.

    The U.S. government said the nation’s economy grew at an annual rate of 2.2 percent, smaller than the previous estimate of 2.8 percent.

    Overseas markets climbed following a report Britain’s economy did not contract as much as previously thought.

    Dow Jones industrial average futures are up 30, or 0.2 percent, at 10,372. Standard & Poor’s 500 index futures are up 3.10, or 0.3 percent, at 1,111.30, while Nasdaq 100 index futures are up 7.25, or 0.4 percent, at 1,832.75.

    Join the conversation about this story »

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  • Ford brags about largest residual value increase in industry – $1,300+ year-over-year

    Filed under:

    2010 Ford Fusion Sport – Click above for high-res image gallery

    Residual values tell you a lot about a vehicle. If a car or truck has good quality and has plenty of customer demand it will have high residuals. If it’s a lemon on wheels, clogging the rental lots, it will carry poor residuals. Detroit automakers have fared poorly in residual values for quite a few years, but it appears Ford may have taken a big step towards correcting that problem.

    Ford is gleefully touting the results of the ALG January/February 2010 Residual Value Forecast for a good reason; the residuals of Ford, Lincoln and Mercury vehicles went up by $1,310 versus the January/February 2009 numbers. The residual values are based off of a formula that shows how much 2010 vehicles will be worth 36 months after purchase and Ford maintains the increase in residuals has a lot to do with the success of its latest redesigns and improved quality.

    Proof of Ford’s improved 36-month value scores comes in a comparison of the Fusion versus the Toyota Camry. The Fusion is now reportedly worth $687 more than the Camry after three years. The Ford Flex enjoys an even more decisive win versus the Toyota Highlander, as the boxy Blue Oval-branded wagon will reportedly be worth $1,800 more in three years. The 2010 Taurus scored the biggest increase, but not against the foreign competition. The smartly restyled sedan is worth $4,862 more after three years than the invisible 2009 Taurus. Both the Taurus and the Super Duty won the Kelly Blue Book Best Residual Value award in their respective segments.

    A big reason Ford’s residual values have skyrocketed in only one year is due to the automaker’s improved status amongst customers. Fresh data from research firm Compete, Inc reportedly shows that the Blue Oval has surpassed Toyota in overall customer consideration for the past three months. Ford hasn’t passed Toyota in Compete’s customer satisfaction index since the firm began collecting data in 2002. Hit the jump to read over the Ford press release.

    Gallery: 2010 Ford Fusion Sport

    [Source: Ford]

    Continue reading Ford brags about largest residual value increase in industry – $1,300+ year-over-year

    Ford brags about largest residual value increase in industry – $1,300+ year-over-year originally appeared on Autoblog on Tue, 22 Dec 2009 08:58:00 EST. Please see our terms for use of feeds.

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  • Prezi.com: Visualization and Storytelling without Slides.

    In my initial exploration, Prezi seems like a pretty interesting presentation tool.   The concept of creating a presentation from one large continuous “map” is very intriguing–but need to spend more time with it to see how effective it is.
    Prezi is zooming sketches on a digital napkin.
    It’s visualization and storytelling without slides. Your ideas live on stage and on the web.
    Have you ever wondered about presenting your thoughts as free as they come? Ever got tired of creating a slideshow? It’s been said, that the best innovations come from people who are unhappy with the tools they use. We realized that our ideas won’t fit into slides anymore. Putting together creative thinking and technology expertise, we have created Prezi, a living presentation tool.

    Prezi is zooming sketches on a digital napkin.
    It’s visualization and storytelling without slides. Your ideas live on stage and on the web.
    Have you ever wondered about presenting your thoughts as free as they come? Ever got tired of creating a slideshow? It’s been said, that the best innovations come from people who are unhappy with the tools they use. We realized that our ideas won’t fit into slides anymore. Putting together creative thinking and technology expertise, we have created Prezi, a living presentation tool.

    http://prezi.com/

  • How to Destress Yourself

    De-Stress Yourself With Meditation For The Beginner
    [Health-and-Fitness:Meditation] These are six suggestions for successful meditation practice for the beginner. Prepare yourself physically. Prepare yourself physically by doing Yoga or stretches before you begin Meditation.

    Destress Yourself With Meditation
    [Self-Improvement:Stress-Management] Meditation is one of the greatest exercises we can do for our mind. Many people do not participate in this practice because they view meditation as a religious tradition or they are unaware of the benefits of meditation. In order to convince the individuals that are opposed to meditation we must look at the benefits. Before we discuss the benefits let us keep an open mind to possibilities in our own life that we may learn and improve our current circumstances.

    Seven Keys To Destress Yourself With Basic Stress Management
    [Self-Improvement:Stress-Management] After studying years of stress management and developing my program destress yourself I have come to the conclusion that there are seven keys to destress yourself with basic stress management. What is basic stress management? Well, it consists of the basic actions we can do to enhance our ability to manage our stress.

  • Sponsor Post: MyDomain Shows How to Take Your Business Online in 2010

    Editor’s note: we offer our long-term sponsors the opportunity to write ‘Sponsor Posts’ and tell their story. These posts are clearly marked as written by sponsors, but we also want them to be useful and interesting to our readers. We hope you like the posts and we encourage you to support our sponsors by trying out their products.

    Over the past decade, the Internet has evolved at a rapid pace, and if you didn’t jump on the bandwagon in years past you may be feeling like it’s a bit too late to establish an online business. That’s not the case, however, and 2010 is the perfect time to start doing business online. The underlying technologies of Internet architecture are well-established and are more affordable now than ever to end-users.

    Sponsor

    The last several years have also seen a huge increase in the number of available social tools, web utilities and online services that make promoting your business and being visible online easier and more affordable. The number of Internet users continues to grow substantially across the globe, and there are an expansive number of channels you can use to reach potential customers online.

    From an economic perspective, now is also a good time to consider starting or growing your business. The global economy is showing signs of recovery from recession, and catching an economic upswing when growing a small business is always a good thing. Small business loans from banks and other creditors may still be difficult to come by, however, which makes an online business an even better choice due to low start-up costs. In recent history, a great deal of attention has been paid to the massive growth in large social networks, but now the Internet appears to be shifting towards a more local or hyperlocal focus with smaller communities inside bigger networks becoming more common. As a result, small businesses offering local products or services can find a targeted audience of potential customers to engage with.

    All these factors make now a great time to start your business online. Follow through on a 2010 resolution to make money from what you enjoy doing by starting a complete business from the ground up, adding an online component to your existing physical business, or just using a website to supplement other income and test the water for your idea. Below are a few steps you can take to get started.

    9 Steps to Getting Your Business Online

    Find a little cash: It’s probably going to cost a lot to get started with a business website, right? Not so much. Don’t fool yourself into thinking that you can’t afford to start a business online just because you see startups with millions of dollars in venture capital funding featured on ReadWriteWeb or other tech blogs. A huge number of successful online small businesses were started out of a home office or garage workspace. The Internet is massive, and if you can find a good niche, you don’t have to be everywhere at once to be successful. Costs for getting started with a domain name, hosting, basic website creation and online marketing can easily be kept under $1,000 in your first year of business if you plan well.

    Get a strong domain name: If you’re in the early planning stages of your business, always keep potential domain names in mind when choosing a business name. If you move forward with a great business name only to find the domain name is taken, it could mean back to square one on name planning. Instead, keep a domain search handy as you brainstorm and get creative with names to find a great fit. Your domain name will be your website’s permanent address on the web, so it’s important to get it right the first time.

    Get Web hosting: You’d be surprised how many people think the domain name is all they need to build a website. What you need next is a place to store website files online. That could be something as simple as basic web hosting or a more powerful solution such as a virtual private server – both of which we offer at MyDomain. There are many other options as well, including self-hosting on your own server. There’s a decent chance you know these basics already, so if that’s the case, make sure to share your knowledge with others who are looking to get started online.

    Build a website: There are a huge number of options when it comes to creating a website in 2010. Most hosting packages come with some a website builder that will create a decent, if not slightly dated looking website from a template. If you’re not experienced in web design but want to create a good-looking site yourself, look into content management systems such as Drupal, Joomla, or even WordPress as viable options that are easy to keep updated. The best – and not-surprisingly most costly option – still remains to hire a Web design company or freelancer. But if you’re serious about your online business, your website design and usability should be a top priority.

    Create an e-commerce strategy: Now comes the fun part: figuring out how to let other people pay you. If you want to have an integrated shopping cart solution, you’ll be able to sell directly through your site and manage complete product listings. However, this type of solution is the most expensive and complex way to sell online, and a simpler solution may be a better fit for a small business just getting started. A great place to start is simply integrating services such as Paypal or Google Checkout into your website to accept payments. Another viable alternative is to use a website as an informational source for your business, but sell through another online vendor like Amazon, eBay, or Etsy. A final option is to choose to not sell online, but instead establish a website to promote and market your physical business.

    Secure your site: If you’re planning to sell through your website or will even be collecting sensitive information from visitors, you’ll want to look into getting an SSL certificate for your website. SSL encrypts data transmissions to and from your website and is most commonly used to protect credit card and financial data. Varying levels of encryption and visible security indicators for your website are available.

    Network like crazy: Traditional networking can be crucial to the early success of a business, and social media can enable you to network effectively online. Talk about social media for business use is everywhere, and there are a huge number of resources and articles available to help you get started. Make sure that above all else, you go where your customers are. Utilize the tools that will allow you to most effectively communicate with those customers.

    Track like crazy, too: Make sure you’re using website analytics to track your website visitors and sales. Part of the beauty of the web versus a traditional storefront is the ability to easily track, sort and analyze all of the data collected from visitors to your website. Analytics can help you improve your website design, track your sales conversion, see where you’re ranking in search engines and much more. Google provides some of the best options available with Analytics, Webmaster Tools and Website Optimizer that all provide invaluable data for any online business.

    Grow and organize for the future: If you’ve made it to the point where you have a website set up, sales are coming in and your business is growing, it’s the perfect time to make sure you’re fully organized online. Use custom email addresses for your business, and make use of powerful collaboration, calendar and task management tools such as Open Xchange, Microsoft Exchange or Google Apps. Stay on top of the latest Internet trends and changes as things will continue to change rapidly for the foreseeable future. From there, carry your 2010 success long into the future as the Web continues to expand as a great place to do business.

    Discuss


  • Seesmic Updates Android Twitter Client

    Everyone has their own favorite twitter clients for Android.  Whereas most people gravitate to Twidroid, other apps like Seesmic have started out slowly but are building a following.  After a few months in release, Seesmic has announced an update for their Android client that adds some new features.  The latest version of their popular twitter client includes searches, twitter lists, share with Seesmic, and font size settings.

    From the Seesmic blog:

    • View your saved searches, search on Twitter for Tweets, search for users, see current Trending Topics, create and save new searches, delete existing saved searches.
    • Be able to view and manage your Twitter Lists in Seesmic for Android. View your Twitter lists as well as lists for all the users from their profile. You can also follow and unfollow a list right from the app.
    • Easily share links, photos or videos using Seesmic. Simply share your item via “Seesmic” and a new message will be created with the content you’re sharing.
    • You can now change the font size of the timelines text from the settings and choose the size that is the most convenient to you.

    Popular Posts That You Might Enjoy!


  • Q3 GDP Revised All The Way Down To 2.2%, Much Lower Than Expectations

    Revised Q3 GDP came in a 2.2%, which was below the 2.8% analysts had been expecting. It’s also well lower than the 3.5% that was initially reported.

    Here’s the full announcement from the Commerce Department

    ——

    Real gross domestic product — the output of goods and services produced by labor and property
    located in the United States — increased at an annual rate of 2.2 percent in the third quarter of
    2009, (that is, from the second quarter to the third quarter), according to the “third” estimate
    released by the Bureau of Economic Analysis.  In the second quarter, real GDP decreased 0.7 percent.

          The GDP estimate released today is based on more complete source data than were available for
    the “second” estimate issued last month.  In the second estimate, the increase in real GDP was 2.8
    percent (see “Revisions” on page 3).

          The increase in real GDP in the third quarter primarily reflected positive contributions from
    personal consumption expenditures (PCE), exports, private inventory investment, federal government
    spending, and residential fixed investment that were partly offset by a negative contribution from
    nonresidential fixed investment.  Imports, which are a subtraction in the calculation of GDP, increased.

          The upturn in real GDP in the third quarter primarily reflected upturns in PCE, in exports, in
    private inventory investment, and in residential fixed investment and a smaller decrease in
    nonresidential fixed investment that were partly offset by an upturn in imports, a downturn in state and
    local government spending, and a deceleration in federal government spending.

    _______________
    FOOTNOTE.–Quarterly estimates are expressed at seasonally adjusted annual rates, unless otherwise
    specified.  Quarter-to-quarter dollar changes are differences between these published estimates.  Percent
    changes are calculated from unrounded data and are annualized.  “Real” estimates are in chained (2005)
    dollars.  Price indexes are chain-type measures.

        This news release is available on BEA’s Web site along with the Technical Note and Highlights
    related to this release.
    _______________

          Motor vehicle output added 1.45 percentage points to the third-quarter change in real GDP after
    adding 0.19 percentage point to the second-quarter change.  Final sales of computers subtracted 0.08
    percentage point from the third-quarter change in real GDP after subtracting 0.04 percentage point from
    the second-quarter change.

          The price index for gross domestic purchases, which measures prices paid by U.S. residents,
    increased 1.3 percent in the third quarter, 0.1 percentage point less than the second estimate; this index
    increased 0.5 percent in the second quarter.  Excluding food and energy prices, the price index for gross
    domestic purchases increased 0.3 percent in the third quarter, compared with an increase of 0.8 percent
    in the second.

          Real personal consumption expenditures increased 2.8 percent in the third quarter, in contrast to
    a decrease of 0.9 percent in the second.  Real nonresidential fixed investment decreased 5.9 percent,
    compared with a decrease of 9.6 percent.  Nonresidential structures decreased 18.4 percent, compared
    with a decrease of 17.3 percent.  Equipment and software increased 1.5 percent, in contrast to a decrease
    of 4.9 percent.  Real residential fixed investment increased 18.9 percent, in contrast to a decrease of
    23.3 percent.

          Real exports of goods and services increased 17.8 percent in the third quarter, in contrast to a
    decrease of 4.1 percent in the second.  Real imports of goods and services increased 21.3 percent, in
    contrast to a decrease of 14.7 percent.

          Real federal government consumption expenditures and gross investment increased 8.0 percent
    in the third quarter, compared with an increase of 11.4 percent in the second.  National defense increased
    8.4 percent, compared with an increase of 14.0 percent.  Nondefense increased 7.0 percent, compared
    with an increase of 6.1 percent.  Real state and local government consumption expenditures and gross
    investment decreased 0.6 percent, in contrast to an increase of 3.9 percent.

          The change in real private inventories added 0.69 percentage point to the third-quarter change in
    real GDP, after subtracting 1.42 percentage points from the second-quarter change.  Private businesses
    decreased inventories $139.2 billion in the third quarter, following decreases of $160.2 billion in the
    second quarter and $113.9 billion in the first.

          Real final sales of domestic product — GDP less change in private inventories — increased 1.5
    percent in the third quarter, compared with an increase of 0.7 percent in the second.

    Gross domestic purchases

          Real gross domestic purchases — purchases by U.S. residents of goods and services wherever
    produced — increased 3.0 percent in the third quarter, in contrast to a decrease of 2.3 percent in the
    second.

    Gross national product

          Real gross national product — the goods and services produced by the labor and property
    supplied by U.S. residents — increased 3.0 percent in the third quarter, in contrast to a decrease of 1.0
    percent in the second.  GNP includes, and GDP excludes, net receipts of income from the rest of the
    world, which increased $25.7 billion in the third quarter after decreasing $7.4 billion in the second; in
    the third quarter, receipts increased $15.7 billion, and payments decreased $10.0 billion.

    Current-dollar GDP

          Current-dollar GDP — the market value of the nation’s output of goods and services — increased
    2.6 percent, or $90.9 billion, in the third quarter to a level of $14,242.1 billion.  In the second quarter,
    current-dollar GDP decreased 0.8 percent, or $26.8 billion.

    Revisions

          The “third” estimate of the third-quarter increase in real GDP is 0.6 percentage point, or $17.3
    billion, lower than the second estimate issued last month, primarily reflecting downward revisions to
    nonresidential fixed investment, to private inventory investment, and to personal consumption
    expenditures.

                                             Advance Estimate     Second Estimate      Third Estimate
                                                     (Percent change from preceding quarter)

    Real GDP…………………………….      3.5                 2.8                 2.2
    Current-dollar GDP……………………      4.3                 3.3                 2.6
    Gross domestic purchases price index……      1.6                 1.4                 1.3

                                            Corporate Profits

        Profits from current production (corporate profits with inventory valuation and capital
    consumption adjustments) increased $132.4 billion in the third quarter, compared with an increase of
    $43.8 billion in the second quarter.  Current-production cash flow (net cash flow with inventory
    valuation adjustment) — the internal funds available to corporations for investment — increased $28.4
    billion in the third quarter, in contrast to a decrease of $30.5 billion in the second.

         Taxes on corporate income increased $15.1 billion in the third quarter, compared with an increase
    of $35.6 billion in the second.  Profits after tax with inventory valuation and capital consumption
    adjustments increased $117.3 billion in the third quarter, compared with an increase of $8.2 billion in
    the second.  Dividends decreased $6.1 billion, compared with a decrease of $62.1 billion; current-
    production undistributed profits increased $123.5 billion, compared with an increase of $70.3 billion.

        Domestic profits of financial corporations increased $82.8 billion in the third quarter, compared
    with an increase of $28.5 billion in the second.  Domestic profits of nonfinancial corporations increased
    $27.6 billion in the third quarter, compared with an increase of $29.8 billion in the second.  In the third
    quarter, real gross value added of nonfinancial corporations increased, and profits per unit of real value
    added increased.  The increase in unit profits reflected decreases in both unit nonlabor and labor costs
    that more than offset a decrease in unit prices.

        The rest-of-the-world component of profits increased $22.0 billion in the third quarter, in contrast
    to a decrease of $14.6 billion in the second.  This measure is calculated as (1) receipts by U.S. residents
    of earnings from their foreign affiliates plus dividends received by U.S. residents from unaffiliated
    foreign corporations minus (2) payments by U.S. affiliates of earnings to their foreign parents plus
    dividends paid by U.S. corporations to unaffiliated foreign residents.  The third-quarter increase was
    accounted for by a larger increase in receipts than in payments.

        Profits before tax with inventory valuation adjustment is the best available measure of industry
    profits because estimates of the capital consumption adjustment by industry do not exist.  This measure
    reflects depreciation-accounting practices used for federal income tax returns.  According to this
    measure, domestic profits of both financial and nonfinancial corporations increased in the third quarter.
    The increase in nonfinancial corporations reflected increases in utilities, information, “other”
    nonfinancial, retail trade, and transportation and warehousing that were partly offset by decreases in
    wholesale trade and manufacturing.  Within manufacturing, the largest decrease was in “other” durable
    goods, and the largest increase was in motor vehicles.

        Profits before tax increased $157.9 billion in the third quarter, compared with an increase of $90.6
    billion in the second.  The before-tax measure of profits does not reflect, as does profits from current
    production, the capital consumption and inventory valuation adjustments.  These adjustments convert
    depreciation of fixed assets and inventory withdrawals reported on a tax-return, historical-cost basis to
    the current-cost measures used in the national income and product accounts.  The capital consumption
    adjustment increased $9.7 billion in the third quarter (from -$128.6 billion to -$118.9 billion), compared
    with an increase of $16.3 billion in the second.  The inventory valuation adjustment decreased $35.2
    billion (from $18.1 billion to -$17.1 billion), compared with a decrease of $63.0 billion.

    Join the conversation about this story »

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  • REPORT: Visteon seeking to end pensions of 21,000 workers, retirees

    Filed under: ,

    Visteon, the automotive supplier currently going through bankruptcy proceedings, is seeking to rid itself of pension obligations for 21,000 current workers and retirees. It wouldn’t mean the end of pensions for the workers, but the payments would be taken over by the Pension Benefit Guaranty Corporation (PBGC), and that would mean diminished benefits.

    Visteon contributes to four pension plans, three of which is it attempting to drop. The company owes $544 million to those three plans, and although it will make $260 million in payments over the next five years its obligations will grow if it cannot free itself. If it does get clear, pensioners will collectively lose $100 million in benefits because of caps on what the federal body can guarantee.

    The PBGC wants Visteon to keep making pension payments, but its now in the hands of the Delaware judge handling the bankruptcy. Visteon has presented a few different options for reorganization, but each has met with resistance from one or more involved parties, including the plan to pay $8.1 million in bonuses to executives and the structure of it’s post-bankruptcy stock allocation. The company hopes to emerge from Chapter 11 by the middle of next year. Pension recipients will hope they do it with their funds intact, but that isn’t looking likely.

    [Source: Detroit News | Image: Bill Pugliano/Getty]

    REPORT: Visteon seeking to end pensions of 21,000 workers, retirees originally appeared on Autoblog on Tue, 22 Dec 2009 08:34:00 EST. Please see our terms for use of feeds.

    Read | Permalink | Email this | Comments

  • Sky High Profit Margin Expectations Baked Into Stocks For 2010

     

    Disturbingly, analysts now expect record profit margins for U.S. companies by the end of 2010. It's one thing to expect a recovery, but forecasts may have gotten out of hand.

     

    As Morgan Stanley highlights in their 2010 Global Outlook, given the sky-high margin forecasts, there isn't much room for positive earnings surprises in 2010 due to higher than expected profitability. If there will be any upside surprises, it will more likely have to come from better than expected sales.

    Morgan Stanley: 2010 margins are not likely to beat bottom-up expectations. Our economists are forecasting nominal GDP to exceed its 2007 peak by year- end 2010. This would be consistent with ex financials margins reaching their prior peak level, particularly given the unprecedented cost control through the current cycle. But corporates have been quick to cut costs, and we think at least 80% of the cost out story is done. The surprise on margins is that current expectations are achieved (rather than significant upside relative to expectations). 2010 will be about top line surprise, if any.

    ms

    Yet in terms of revenue forecasts, analysts might actually be a bit too conservative, as shown below. Thus profit forecasts might not necessarily end up incorrect. It might just be that margins come in lower than expected, but sales a bit higher.

    ms

    (Via Morgan Stanley, 2010 Global Outlook, Jason E. Todd, CFA)

    Join the conversation about this story »

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  • Pick up movie tickets in a flash with Fandango for BlackBerry

    Remember when movie tickets used to be $5? Maybe I’m dating myself here, but I remember paying that much for a prime-time movie with my friends on any random Friday night in middle school. Now, though, movies cost north of $10 per ticket, and that’s if you buy them at the theater. If you use an online service to get your tickets in advance, you have to pay a service charge on top of that, moving tickets into a once unfathomable price range. Sometimes, however, the extra price is worth the convenience. I can absolutely see the value in a Fandango application for BlackBerry. It’s out now, so you can get tickets to a movie no matter where you are.

    (more…)

  • The Garrett, Watts Report (Dec. 22, 2009)

     

    garrett-watts1

     

    To Our Clients, Colleagues and Friends,  

    • A client wrote that she appreciated our wishing everyone a Merry Christmas and not the generic Happy Holidays.   I’m Jewish and believe me, I’m not offended when people wish me a Merry Christmas.  Really.  If you want to be politically correct and wish me Happy Holidays, go ahead, but please don’t do it on my behalf. I like the Christmas spirit!  I like Salvation Army people dressed as Santas, I like Christmas parties, I like the lights on people’s houses, and I like Christmas trees.  Even if you don’t celebrate Christmas, you can still like everything about it.  
    • We recently read that the FDIC’s 2010 operating budget will increase 55% from 2009, mostly due to bank failures. The receivership funding component of the 2010 budget will be $2.5 billion, up from $1.3 billion in 2009.  And all you people looking for jobs, we can’t think of a better place to look!
    • We tell people that we’re not forensic accountants, but we can smell a rat when we see one.  We once were reviewing some audited financials, and, hey, it sure looks like the font on the Audit Opinion is different than the font on the balance sheet and income statement!  These creeps also had the exact same number, down to the dollar, for loans held for sale in 2007 and in 2008.  A coincidence?  We don’t think so! A quick call to the audit firm confirmed our suspicions, and for all the magic possible through Adobe and scanning and all that stuff, we were still able to spot the fraud pretty easily.
    • If you’re a person “of a certain age”, next Sunday  is a very important date.  It’s the 62nd anniversary of Howdy Doody’s first appearance on television!  Assuming Howdy was, say, 6 years old then, that would make him 68 today.  Weird to think of him collecting Social Security and maybe taking medicine for his cholesterol.
    • We love movies, and there’s nothing quite like a great movie. But we finally came face-to-face with the reality of why books will never be replaced by movies. We’ve read The Great Gatsby 3-4 times over the years, and we consider it one of the two great American novels.  Maybe the single great American novel.  Anyway, since reading it last, we rented the movie version starring Robert Redford as Jay Gatsby.  We liked the movie, but it kind of ruined the book when we re-read it recently.
      If you remember the scene where Nick Caraway first meets Gatsby, you remember conjuring up your own image of the man.  The image in your mind would have been different than anyone else’s, as we each had our own picture of what he looked like and how he came across.   Each reader lets his own mind give him a mental picture of the way he stood, his clothes, his smile, his sense of detachment, the longing for Daisy in his voice.  Reading allows you to weave your own  imagination into the scenes and characters of a book, but if you see the movie, Gatsby will always be Robert Redford for you.   Redford was actually perfect in the role, but isn’t something lost when you can no longer bring your own imagination to bear when reading a book? Movies, sadly, eliminate your ability to use your own imagination and weave your own magic.
    • The Drug Wars in Mexico are devastating that country, and apparently, marijuana is a major part of the cartel’s business.  So here’s an obvious idea: Instead of spending billions fighting drug lords, instead of the drug lord’s corrupting politicians everywhere, and instead of 5,000 people being killed every year in this war, why not legalize marijuana in Mexico ?  Wouldn’t that be a huge blow to the illegal drug business there?
    • When F. Scott Fitzgerald mailed in the manuscript for The Great Gatsby, he wrote his publisher, Max Perkins, “I think my novel is about the best American novel ever written.” Isn’t that a wonderful thought? Can you imagine doing something so exquisitely perfect that you could say something like that?
    • We just received the Wells Fargo 2010 calendar, but, um, like, the stagecoach driver for April is African-American, and one of the stagecoach drivers for October sure looks like a woman.  We appreciate that Wells is politically hip, but please, did Wells really have African-American and female stagecoach drivers in the 1800’s?
    • Here’s a wonderful video that anyone Jewish will love and that everyone can laugh at and enjoy:   http://www.youtube.com/watch?v=w1uZ_W7atDE
    • A number of you wanted to know how to contact DataQuick to learn more about their Collateral Valuation product.  They’re at DataQuick.com (that’s a hard one) and the person to contact is Heidi Russell ([email protected]).  Valuations are still an issue, and we like their product.
    • You know how all stocks trade above, below, or right at their tangible book value?  Citigroup trades at about 80% of tangible book value, Bank of America trades at 130% of book.
    • We were doing a FOCIS-plus in Southern California the other day, and we were at a restaurant that had a Christmas-y fake snow scene.  And it was 80 degrees out!  Everyone here in Northern California loves to make fun of Southern California ,  but we love it down there. How can you not love a place where it’s 80 degrees in late December?
    • In 2003 we did tons of Broker-to-Banker conversions, and then it died around 2005 or so.  Interestingly, we’re back doing it again.  Probably because of all the new compliance issues that will be affecting brokers soon.
    • There are lots of good metrics to help you measure your performance, but if you want to do a real quick check on your productivity, take the number of units you close each month and divide it by the number of salaried employees.  Well run companies close at least eight units per employee, and the top performers are at 12 or better. 
    • Paul Tuttle, the intellectual founder of Modern Hedging Theory, has a very interesting blog at http://unfundedliabilitiesandclasswar.blogspot.com/. It’s always compelling reading. In his recent posting, he points out that Vallejo , California spends 74% of its budget on public safety, the City Manager of this fairly small city earns more than $400,000 a year, and the average firemen is paid $170,000.  Proving that there are no free lunches, the City had to file for bankruptcy earlier this year. And Paul also points that the City Council dealt with their fiscal crisis by cutting services rather than cutting salaries.  How do idiots like this manage to get elected???
    • Detroit is the poster child for troubled cities, and along with the demise of the auto industry, some blame has to be aimed at the City Council for agreeing to onerous pay packages for city employees.  A general rule-of-thumb is that with benefits, an employee costs you 30-35% above his base salary.  But in Detroit , union employee benefits cost 68% of their base wage! Please note that we don’t blame the unions.  Their job is to get the best possible deal for their people.  We blame the City Council for not standing up to these unions!  By the way, they have a great new Mayor in Dave Bing who totally gets what needs to be done there.  Perhaps there’s hope for Detroit after all.
    • You all know what benchmarking is, right?  It’s taking really successful companies and trying to mimic their performance numbers.  It used to be easy for mortgage bankers when you could look up the metrics for North American Mortgage, Countrywide, American Residential, Arbor Mortgage and maybe a 5-6 other public entities which did SEC filings you could access.  Now, it’s hard to think of a single mortgage banking company (we don’t count mortgage REITs) to benchmark to.
      This is why a big part of our FOCIS-plus Reviews is showing clients what their peers are doing, and making it possible to see how they’re doing compared to more successful companies.   In our reviews around the country, we see certain consistent metrics among the most profitable companies, and, sadly, we see consistent patterns among the struggling ones. Our clients seem to find it pretty useful to find out what they’re doing differently, what they’re doing wrong, and what highly successful companies are doing that they’re not.
    • You know the Franklin family of mutual funds? Their parent company (with the too-clever symbol BEN) just raised their dividend by 5% and agreed to pay a one time $3 a share dividend. Rising dividends are, of course, a vote of confidence by the Board that earnings, capital and liquidity are strong. We’re not recommending stocks here, but Franklin has raised its regular dividend every year since 1981.  With that record, their own stock has probably outperformed lots of their mutual funds.
    • If you haven’t prepared your budget for 2010, you still have a week or so!  And not having one till mid-January is better than not having one at all.  Some of you won’t believe this, but something like 9 out of 10 of the highly profitable companies we see have a budget that they monitor performance against.  Show us a company struggling, and we guaranty you that 9 out of 10 of them don’t have a budget.   This isn’t exactly benchmarking, but there is definitely a correlation there.

    Merry Christmas and Happy Hanukkah.

    Garrett, Watts & Co.  

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