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Much of the reasoning behind Joe Biden’s recent summit with entertainment industry bosses and a variety of top administration officials — including the Attorney General and the head of the FBI — was to “coordinate” enforcement efforts. Efforts, one assumes, like the FBI’s hard work in tracking down and arresting the guy who put a pre-release version of the movie Wolverine online, even though it was lacking in special effects and final audio. As we noted at the time, there were many ways that the studio could have responded to the leak that made them look cool and would have encouraged more people to go see the real movie. Instead, 20th Century Fox went ballistic about how evil this was, and got the FBI to act as its private police force. Of course, despite how this leak “ruined” the movie, Wolverine (despite mostly dismal reviews) had a massive opening and went on to earn $180 million at the box office, significantly more than it’s $130 million budget. But, of course, the movie industry is dying, and our tax payer money should be used to track down the guy who did so much “damage.”

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Filed under: Etc., Safety, Technology

Traffic lights using state-of-the-art LED illumination use 90 percent less electricity, offer a much longer service life and are more durable than their incandescent counterparts. Taking advantage of the countless benefits, cities around the country have been replacing traditional filament-based traffic signal bulbs with LEDs for years. Unfortunately, the low-watt LED units burn much cooler than its white-hot counterpart making it unable to melt snow off weather exposed traffic fixtures.

“I’ve never had to put up with this in the past,” said Duane Kassens, a driver from Indiana who was involved in an accident attributed to a snow-clogged traffic light. “The police officer told me the new lights weren’t melting the snow. How is that safe?” It obviously isn’t.

Municipalities around the country are taking different steps to keep their signals shining brightly in the face of Mother Nature. Crews in St. Paul, Minnesota, use compressed air to keep their lights clean. In Green Bay, Wisconsin, city workers brush the snow off by hand in a labor-intensive process. Until a fix arrives, it is best to take the advice of Dave Hansen, a traffic engineer with the Green Bay Department of Public Works. Treat a blocked signal as if the power is out. “If there’s any question, you err on the side of caution,” says Hansen.

[Source: AOL Autos | Image: Oswego Police]

Unintended Consequence of Technology: New LED traffic lights can’t melt snow originally appeared on Autoblog on Wed, 16 Dec 2009 17:31:00 EST. Please see our terms for use of feeds.

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Nvidia has been talking about their Tegra roadmap since earlier this year, and now they have made things a bit more official.  According to Michael Hara, senior vice president of investor relations and communications at the company, a major announcement is coming in at CES.

“At CES we are going to make a major announcement about Tegra family. It is highly possible that we will see some very interesting form-factors coming out at the same time. [There will be products] shown by our partners using the next-generation Tegra device. You are going to see roll-outs and deployments of tablet PCs, smartbooks, netbooks, MIDs throughout the first half [of the year]; and then you will see major roll-outs of smartphones in the second half” Michael Hara, senior vice president of investor relations and communications, NVIDIA

The second generation of Tegra devices is expected to have double the power of today’s chipsets, and have a more modern ARM instruction set.

“You want to have fast response times and switching between your windows [on the desktop], you want to see high-definition videos, you want to see high-definition images, so, your experience is about HD Internet. Our objective with Tegra is to deliver the same experience to your handheld devices” Michael Hara

Devices featuring the chip are expected to arrive towards the end of 2010. One do however need to bear in mind however that Nvidia has been promising many more Tegra devices than they have actually delivered this year, and face formidable competition from Qualcomm and Texas Instruments, who appear to have better industry relations than the company.

Source: Slashgear via WMExperts.com

David Kent has been named the new director of the University of Tennessee Bookstore. He takes over for Mike Roos, who retires Dec. 31 after 27 years of service.

Kent is set to start his new position Jan. 1.

Kent has served as associate director of the bookstore for five years, and brings almost eighteen years of experience in retail management.

“We’re pleased to announce David’s selection,” said Jeff Maples, senior associate vice chancellor for finance and administration. “He has consistently demonstrated success in improving customer service, operational efficiency and increased sales at the bookstore, and we look for David to continue doing a great job as director.”

Kent is past president of the Tennessee Association of College Stores, which provides college and university stores a platform to communicate and collaborate to improve best practices among their members. Prior to coming to UT, Kent spent 12 years with the JCPenney Co. Currently a member of the National Association of College Stores’ retailing committee, Kent also serves on UT Knoxville’s retail, hospitality and tourism management board.

Identifying pet food allergies can be challenging. Once those allergies are identified, some pet owners who can’t afford the prescription pet food have even given up their beloved pets to shelters. I met a sweet pet like that once that had been in the shelter for a year since his owner had given him up.

If you find it challenging to afford prescription dog food for allergies or make the trip to buy it, then you may have another solution in a food line from Wellness. It’s called Simple Food Solutions. However, if your pet suffers from food allergies, you shouldn’t change diets without first consulting with your vet.

To help us learn more about dog food allergies and Simple Food Solutions, I asked an expert, the consulting veterinary nutritionist to Wellness. Edward Moser, MS, VMD, DACVN holds the rare title of Board Certified Veterinary Nutritionist. He’s Adjunct Assistant Professor of Nutrition at the University of Pennsylvania School of Veterinary Medicine and sits on a federal panel working to establish guidelines for organic pet food.

If you decide to try Wellness, enter the Blisstree contest for a chance to win one of two $50 gift certificates for Wellness food, plus pet treats from Wellness. The deadline to enter is 11 pm CST on Thursday, December 17. Go to the Wellness contest post to enter.

What are the best indicators that your dog is suffering from a food allergy?

Dr. Moser: Just because your pets aren’t coughing and sneezing, as we do when confronted by some allergens, doesn’t mean they aren’t suffering all the same. Incessant scratching, licking a “hot spot,” recurrent ear infections and frequent messes on the living room floor are all signs that a dog has allergies. Allergic reactions can show up in puppies as young as five months old, or in seniors as old as 12 years of age, though the vast majority of cases occur between two and six years.

Pets with food allergies tend to experience skin irritation when exposed to known allergens, which in turn causes varied scratching behaviors. Dogs (and, to a lesser extent, cats) that scratch their ears, vigorously shake themselves, and lick or bite at their paws or coats may be suffering from an allergic reaction. They are experiencing a skin irritation that, if left untreated, may result in infection.

Many pets are also intolerant of certain food components, leaving them unable to fully metabolize the food and experiencing various GI problems. Unusual fecal color or consistency, excessive GI gurgling sounds and the passing of gas are typical.

There are many foods that can cause allergic or intolerance reactions in pets, and unfortunately, the list is growing every day. In addition to artificial chemical additives, preservatives and flavorings (that offer no nutritional value whatsoever), there are many otherwise healthy ingredients that can potentially pose a problem for sensitive pets. Meats of all kinds, including beef and poultry, are known allergens and/or GI irritants to some animals, as are wheat/wheat protein, eggs, dairy and soy-based products. The key is determining which one or more of these ingredients are responsible for your pet’s distress.

The best way to determine that is to conduct a food elimination trial. In the elimination trial, you should choose a wholesome, complete and balanced diet like Simple Food Solutions that avoids ingredients to which the pet has previously been exposed, then feed this recipe, and this recipe only, (no snacks or table food) for six to eight weeks

How is the Simple Food Solutions line different from most other Wellness dog foods?

Dr. Moser: A limited ingredient diet like Simple Food Solutions is designed to manage allergies naturally, by removing additional proteins, carbohydrates, fillers and additives. It combines one novel animal protein source, like duck, plus one easily digestible carbohydrate source, like ground rice, with a short, yet complete list of key ingredients. Nothing extra – and is a natural alternative to prescription diets. The limited ingredients in Simple Food Solutions are carefully chosen for their quality, nutritional value and their ability to nourish with simplicity:

• Ground Rice – With the bran layer removed, it is easy to digest. There are no additional carbohydrates.
• Duck, Lamb or Salmon – These are “novel,” high quality alternatives to common proteins due to their unique amino acid profiles.
• Canola Oil – High quality fat source is rich in Omega-3 fatty acids to help dogs maintain healthy skin and coat from the inside out.
• Tomato Pomace – Rich in the antioxidant lycopene; an excellent dietary fiber source.
• Vitamins & Minerals – A complete blend of everything a dog needs for daily wellbeing.

Do you have anything to add?

In addition to eliminating the dietary allergen or irritant and making the necessary switch to a quality natural pet food, you should visit your veterinarian. If your pet is prone to scratching, his skin should be examined for inflammation and infection that can lead to further medical complications and compromise overall health.

(Image via Wellness)

Post from: Blisstree

Interview on Dog Food Allergies

Recipes for cranberry breads and cakes often call for the use of fresh cranberries. Cookies and bar cookies, by contrast, usually call for dried cranberries instead. They’re easy to incorporate and have a nice sweet-tart taste. Dried cranberries mix into batters and doughs just as easily as nuts and chocolate chips do because they don’t add any additional moisture to a recipe. Fresh cranberries can have their advantages, however, and shouldn’t always be overlooked as cookie dough add-ins. They are more tart and have a clearer cranberry flavor than their dried counterparts.

This is precisely why I opted to use fresh cranberries in these Cranberry Almond Squares. The squares are moist and soft, with a base made with just enough ground almonds to give them a rich, nutty flavor. Without the berries, the bars would be very plain. With the berries, they are colorful and have a great balance of sweet and tart in every bite. I added some sliced almonds to the tops of the bars to give them a little contrasting crunch.

It’s great to have a sweet-tart dessert to serve alongside richer, sweeter desserts that tend to appear during the holidays. Cranberries are fresh and easily available during the late fall and early winter, as well. Although I’ve called for fresh cranberries in the recipe, you can substitute frozen berries easily to make this year-round. The recipe also doubles well and can be baked in a 9×13-inch pan. Or, you can simply do what I did, and bake three batches in a row to satisfy hungry taste-testers!

(more…)

Since getting the banhammer playing Resistance, Erik Estavillo’s name has been echoed in the gaming scene for his string of lawsuits and his notable subpoenas. Today isn’t another chapter on any of those he said it

The Office of Undergraduate Admission announced Monday that 753 restrictive early action applicants, or 13.5 percent of the 5,566 early applicants, were accepted to Stanford. Almost as many early applicants were deferred to the regular decision cycle as accepted via early action.

“We deferred just over 700 students to regular decision,” Director of Undergraduate Admission Shawn Abbott wrote in an e-mail to The Daily. “Approximately 87 percent of students who applied for admission, however, received a final (admit or deny) admission decision.”

The 13.5 percent admit rate for early action applications represents an increase from the early action cycle in 2008, when Stanford accepted 12.8 percent of early action applications, or 689 early applicants from a pool of 5,363 applications.

This year’s total of 5,566 early action applications is the highest in the University’s history and represents an increase of almost 3.8 percent from last year’s previous record of 5,363 early applications.

While the date for announcement of early action admission results is Dec. 15, the admission office this year notified applicants of their admission statuses at 3 p.m. on Dec. 11, four days ahead of schedule.

“The admission committee finalized its selection process earlier than anticipated, and in an effort to quell anxiety among applicants, parents, counselors and alumni, [Admission and Financial Aid] Dean [Richard] Shaw made the executive decision to release decisions today, December 11,” the office announced on its Web site.

“Well over 90 percent of students opened their e-mail decisions within 72 hours, even though they were not expecting to receive their decision e-mails until December 15,” Abbott said.

In November, The Daily reported that 5,583 students had applied early action to Stanford. The discrepancy in the final tally results from the fact that the admission office allowed some students to change their application statuses from restrictive early action to regular decision.

Because restrictive early action is a non-binding option, admitted students will have until May 1 to respond to the University’s offer of admission.

Filed under: Aftermarket, SEMA Show, Classics, Coupe, Performance, Videos

Legendary Motorcar Company built a Super ‘Cuda for SEMA – no, not with a modern Dodge Challenger, with an actual Barricuda – and then decided to find out what it could do. The car is stuffed with engine and rubber: A twin-turbo Viper V10 with at least 1,000 horsepower, along with 345-series, 19-inch tires in back. So about the only place they could test it properly was Chrysler’s Chelsea, Michigan proving grounds. For good measure, the folks at LMC brought a Ferrari Enzo along as well.

Needless to say, in a straight line drag, the Super ‘Cuda owns the Enzo. The green monster and its turbine howls raced through the air so quickly that the windshield molding came off and the hood lifted by three inches. When it came to top speed, however – and in all likelihood, real-life cornering- the Enzo took the round, going 218 mph to the ‘Cuda’s 208 mph. The ‘Cuda probably could have gone faster, but vintage aerodynamics and driver heebie-jeebies put paid to that. Get all the action in the video after the jump. Thanks for the tips, everyone!

[Source: Car Chat]

Continue reading VIDEO: Twin-turbo Viper-powered LMC Super Cuda shatters 200 mph against Ferrari Enzo

VIDEO: Twin-turbo Viper-powered LMC Super Cuda shatters 200 mph against Ferrari Enzo originally appeared on Autoblog on Wed, 16 Dec 2009 16:56:00 EST. Please see our terms for use of feeds.

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Lawyers at Kirkland & Ellis and Sidley Austin charge some of the highest rates in the city. But when it comes bankruptcy, their median billing rates still don’t come close to their peers at New York firms.

That’s one of the interesting facts that emerge from American Lawyer’s analysis of bankruptcy billing rates submitted by law firms in the nation’s two busiest courts, Delaware and the southern district of New York. Click here for the magazine’s online story that appeared Wednesday.

Some other interesting details:

* Kirkland’s Jamie Sprayregen billed $965 an hour for work on the bankruptcies of Lear Corp. and The Reader’s Digest Association.

* Sidley’s median rate of $700 an hour is hardly a bargain but it was nearly 30 percent less the $980 that Simpson Thacher & Bartlett charges.

* Several lawyers charge more than $1,000 an hour, but the article did not mention anyone from Chicago.

The article made me curious to see what lawyers in the the bankruptcies of two media companies that I’m familiar with, Tribune Co., which owns the Chicago Tribune, and Sun-Times Media Group, are charging. Both cases are in Delaware.

Kirkland represents the Sun-Times. In its most recent fee application, restructuring partner James Stempel topped the rate chart with an hourly fee of $860 an hour. Since March 31 when the company filed for bankruptcy, the law firm has requested fees totaling more than $2 million.

Sidley represents Tribune Co. In its most recent fee application, restructuring partner James Conlan topped the rate chart with an hourly fee of $925 an hour.

After the leak of Microsoft COFFEE into the ‘wild’ a tool emerges that will supposedly make life very difficult for a forensic investigator using COFFEE.

The tool is titled DECAF and is freely available, although not open source.

The tool does not to be installed, and when configured in ‘LockDown Mode’ offers a set of Counter-Forensics functions upon detecting a COFFEE process running on the computer. The following options Counter-Forensics functions are available:

• Contaminate MAC Addresses – Modify MAC addresses of network adapters to possibly throw investigators off course in the investigation
• Kill Processes – Eliminates
• Shutdown Computer – Self evident if possible evidence are in memory
• Disable network adapters – most forensic tools send their evidence onto a trusted network share – this will stop all external communication
• Disable USB ports – the basic blockade step to prevent COFFEE from working properly
• Disable Floppy drive – should you use floppy for evidence collection or COFFEE execution
• Disable CD-ROM – Same as USB and Floppy
• Disable Serial/Printer Ports – Got lost here, unless you have some specific tools or choose to print evidence this is not very useful
• Erase Data – Basic Windows delete of folders which you know may incriminate you. Won’t do much good though since it can be
• Clear Event Viewer – Remove logs from the Event Log
• Remove Torrent Clients – nobody wants these found, especially on their company computer
• Clear Cache – Remove cookies, cache, and history from everywhere

Since most user’s don’t have COFFEE copies to test DECAF, it includes a simulator that triggers the reaction as if COFFEE process is active.

According to information from the site, future versions will have text message and email triggers so in case the computer needs to enter into lock down mode the user can do it remotely. Also there is a suggested possibility to run as a windows service.

But DECAF is far from being a magic bullet: In it’s present form it has a lot of realistic issues that will prevent it from being successful. Here is my top list of issues

1. Related to one product and it’s current mechanism of operation – DECAF is designed to react to COFFEE, and is built to react to the leaked version of the COFFEE code. In the long run, Microsoft can modify the way COFFEE processes operate which may render DECAF useless. DECAF needs to expand into an automated ‘evidence eraser’ independent of COFFEE.
2. Needs to be run under administrator context to be most efficient – You can’t erase Event Log not change MAC address unless you are the local administrator. So usual corporate employees need to understand that their protection is limited to what their account is permitted to do.
3. It doesn’t ‘live’ as a service – you need to run the process for it to be active. And any forensic investigator can see the tray icon and the process in task manager. While DECAF developers announce that it will run as service, as it is now it is as visible as a zit in the middle of a teenagers nose.
4. Fails on certain platforms – running it on Windows XP (virtual environment test) produced an error and failed the application. While this may not be the case with all WinXP, there is a probability that DECAF will fail on some computers.

Talkback and comments are most welcome

Related posts
New Helix3 Forensic CD – Welcome
Digital Forensics Framework – A Perspective Forensics Tool
Tutorial – Computer Forensics Process for Begginners
Tutorial – Computer Forensics Evidence Collection
Scalpel – File Carving from Partially Wiped Evidence Disk

This web seminar will discuss why it is useful to characterize the thermal properties of a component and what modeling methods are available.

We were just noting how the Computer Fraud and Abuse Act is regularly abused to bring “hacking” charges where none are really warranted. And here we have yet another example. Alex Howard points out that a Minnesota Public Radio reporter, Sasha Aslanian, is potentially facing “hacking” charges from a Texas company called Lookout Services. Lookout creates employment/compliance software for large organizations, and Aslanian was reporting on a supposed data vulnerability in the software used to verify employment eligibility that could potentially reveal private info. Aslanian’s report noted that she was able to see info from the state of Minnesota, and the state was now directing agencies to stop using Lookout. The details are not entirely clear, but from what’s written at the MinnPost link above, it sounds like there were some vulnerabilities, poor security, and a bungled demonstration which revealed a vulnerability — all of which Lookout admits — and from those vulnerabilities (which Lookout claims it closed), someone was able to adjust the URL to find private data.

So, basically, the company admits to a series of vulnerabilities, which exposed info that allowed the reporter to eventually see some private data… but still claims that the reporter was “hacking” and is now looking to sue under the same Computer Fraud and Abuse Act, which could lead to 5 years in prison. Because our federal government still hasn’t passed a journalism shield law, the reporter is potentially liable, though, as the MinnPost reporter notes, Lookout seems particularly shortsighted in bringing this lawsuit in the first place. All it does is call more attention to its own vulnerabilities and failings. And the CEO of Lookout basically responds that she doesn’t care:

While the legality and severity of Lookout’s security breach remains to be adjudicated, there’s no doubt Aslanian was trying to serve the public interest — something a prosecutor might consider. As Dalglish says, “The state of Minnesota should be grateful MPR exposed what’s going on. It seemed like a pretty good story.”

I asked Morley if she realized, by filing a high-profile suit, how hapless her timeline made Lookout look. After all, there’s the webinar screwup, letting clients pick lame IDs/passwords and caching security credentials in such a way that rendered them useless.

“Yup,” she admitted. “It was a perfect storm that came together. Our communication with the state really broke down — in our contract, we had 60 days to fix any problem. But there was still an unauthorized intrusion, and that was wrong.”

So, even though this will publicize not just Lookout’s failings, but also how it responds to people who notice and report on vulnerabilities, the company still thinks it needs to bring a lawsuit because exposing those vulnerabilities “was wrong”? I would argue that the company’s reaction to this gives many more reasons never to do business with Lookout — more than any discovered vulnerabilities. Vulnerabilities in software happen — and it’s more telling how a company reacts when they’re exposed. Suing those who expose them isn’t what you want to see. Update: Lots of good points in the comments, pointing out (of course) that Lookout cannot bring criminal charges against the woman, only prosecutors could do that, and it seems unlikely they would do so in this case.

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Square Enix has released a brand new trailer for Star Ocean: The Last Hope International. While this trailer does introduce the game’s cast of characters, there doesn’t seem to be any mention of the “additional characters” Square

Because no other explanation covers all the bases

Just when you thought every possible cause for the soaring number of overweight and obese citizens in the United States and worldwide had been identified and accused — from fast food lifestyles to computer games to kids’ TV commercials to neighborhoods designed for the automobile — up pops a new candidate for The Reason We’re All So Fat.

This one comes from Julie Guthman, a professor of community studies at the University of California, Santa Cruz, who noticed that none of the existing and widely cited causes really explain the empirical universality of the world’s weight gain. For example, obesity has increased by 73 percent since 1980 — in newborns!

It’s hard to pin that number on diet, physical activity, or other lifestyle elements at the age of a few months. Then there are those people who, even on healthy and disciplined diets and with physical activity, are and remain fat.

To quote The Graduate: “One word, Benjamin . . . plastics”

Given these gaps in the chain of causality, Guthman has come up with a fresh possibility, which she enunciated in a recent op-ed column in the San Francisco Chronicle: environmental toxins. Specifically, chemicals that can ramp up or inhibit certain hormones produced by the body. Even more specifically, chemicals that stimulate the body to create an overabundance of fat cells.

The evidence for this is wispy at best, mainly because no one has adequately researched a possible connection, but related studies have found that certain chemicals in commercial plastics are distinctly linked to obesity because of their estrogen-like effects, and that other hormone-disrupting drugs given to pregnant women had “time bomb” side-effects that manifested in their offspring years later.

Guthman may be onto something, but her cause is not helped by a tone of environmental self-righteousness that she brings to it, arguing that our attention should shift from such irrelevancies as diet and exercise behavior patterns and focus on “lax regulation of the chemical industry.” Especially irksome is her conclusion that “getting fresh food into the schools doesn’t take the place of sound environmental regulation and enforcement.”

Perhaps research will prove you right, Professor, but until we know what to regulate and are able to enforce it, education and social pressure to promote healthy lifestyles and childhood nutrition are the best tools we have in the Weight War. Derogating them before your theories have become facts is not helping.

(By Robert S. Wieder for CalorieLab Calorie Counter News)

From the RSS feed of CalorieLab News (REF3076322B7)

What’s to blame for our obesity epidemic, version 286: Environmental toxins

Being the mom in a large family is always a unique balancing act. You don’t have the option of taking a nap when the baby does because you have several other kids that need your attention. In fact nap times becomes the moment when you hurriedly try to get in quality time with the older kids, and if you homeschool nap time is the time you cram all of the academics into the busy day.  Generally you find your peace and quiet moments when you are driving the car, taking a shower, or some other almost impossible to share moment.

In fact, for the longest time I kept my devotional book and my Bible on the back of the toilet. This is the life of a mom of many.

I don’t think any of the women I know with large families would complain. Most of us do the same things, cope in the same sort of ways. You find that when everyone is gone…one of those rare moments…you can’t concentrate on anything and end up wasting your precious free time because  without the group there is no focus.

At the end of October I become a single mom. With six kids still at home there was even less time for me.  Still homeschooling, adding extra writing assignments to make up the difference financially, trying to keep everyone on track….not the easiest thing ever and I found that I had let somethings go with one hand and find alternative methods for relieving stress on the other.

For me baths with a tub full of LUSH bath stuff is a bit extravagant but provides the much needed break and moment of me time I need. I can soak in  the fragrant water, feel a little guilty for the expense, and recharge. It is quality time for me.  My kids get quality time with me…because I am a quality mom. I only get quality time with me if I actually make time for it.

Too many of us stretch ourselves too thin. We become bitter and angry with our children because they keep us form doing what we want… and yet it isn’t them. It is us. There is always enough time to do the things you really want to. Add yourself to the list. You are worth it, mom.

For me recharging with some quiet time with the Lord,  a scented bath, and the occasional  coffee at a coffee shop allows me to maintain my individuality and my sense of self. What is it for you?

image: marye audet via picnik.com

Post from: Blisstree

Finding the Eye of the Hurricane

Filed under: Aftermarket, Coupe, Sedan, Europe, Volkswagen, Design/Style

Volkswagen just opened the order book on the Passat CC with the R-Line package in Europe. We saw this car at the Frankfurt Motor Show and were completely smitten with it. Taking the regular CC’s swoopy coupedan shape and adding the R-Line package makes it just about perfect. What stops it from being perfect is the fact that the R-Line package doesn’t add any oomph. Just like Audi’s S-Line, its alterations are mainly cosmetic.

The R-Line package adds an aero kit, surprisingly modest “Mallory” pattern 17-inch wheels, R-Line emblems, smoked taillights, R-Line aluminum sill plates, a unique three-spoke multifunction leather-wrapped steering wheel, front foglamps, and the Park Pilot system.

It becomes the eighth R-Line model in Volkswagen’s lineup and will add 2,200 euro to the price of your CC – about $3,200 in Yankee bucks. Full press release after the jump and plenty of live and press pics below.

Photos by Jonny Lieberman / Copyright (C)2009 Weblogs, Inc.

[Source: Volkswagen]

Continue reading Volkswagen Passat CC R-Line now on sale – in Europe

Volkswagen Passat CC R-Line now on sale – in Europe originally appeared on Autoblog on Wed, 16 Dec 2009 16:28:00 EST. Please see our terms for use of feeds.

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Ed note: Last week we published Bill Ackman’s bull case for the mall REIT General Growth Properties. This morning we posted a rebuttal by Hovde Capital. Below is Whitney Tilson’s rebuttal to the rebuttal.

—–

General Growth Properties (GGP) is one of our biggest winners in 2009, having risen from $1.29 on January 1 to a high of $12 a few days ago. It has sold off over the last two days to a low of $7.00 earlier today, most likely due to a widely circulated bearish presentation by Hovde Capital Advisors (posted here), which is short the stock. Hovde directly challenges Pershing Square’s analysis, which Bill Ackman presented at the Ira Sohn conference on May 27 (posted here; Pershing Square also discusses GGP in its Q3 investor letter and shares its bullish views of malls and retailers in this Dec. 7 presentation to the ICSC).

We don’t normally let the stock of a company in bankruptcy grow to be one of our largest positions, but have done so with GGP based on our belief that the company is very likely in the near future to either exit bankruptcy or be acquired – in either case, the stock should be north of $20. That said, GGP is no fortress like Berkshire Hathaway (also one of our largest positions), so such a large position makes us nervous and we’d welcome a rationale to trim it. We also always look for disconfirming evidence in all our investments, so we reviewed Hovde’s presentation with great interest. Alas, we found it unconvincing and full of valuation inconsistencies – but are grateful for the drop in the stock, which we’ve been using to aggressively add to our position this morning.

Valuing REITs is not that hard. The most widely used measure of financial performance is Net Operating Income (“NOI”), which is simply the income generated by the underlying properties. Enterprise value is computed by dividing NOI by the appropriate capitalization rate (think of this as an annual hurdle rate; the lower the cap rate, the higher the resulting enterprise value).

Hovde’s bearish case paints an inaccurate picture of rapidly declining financial performance, then misstates NOI, and then applies an inappropriate capitalization rate – a rare trifecta of poor analysis. Here’s a summary of the most important mistakes Hovde makes:

1) Hovde arrives at its NOI estimate for GGP by annualizing Q3’s NOI, which is invalid because of seasonality. Here’s an excerpt on this in GGP’s filings:

Seasonality

Although we have a year-long temporary leasing program, occupancies for short-term tenants and, therefore, rental income recognized, are higher during the second half of the year. In addition, the majority of our tenants have December or January lease years for purposes of calculating annual overage rent amounts. Accordingly, overage rent thresholds are most commonly achieved in the fourth quarter. As a result, revenue production is generally highest in the fourth quarter of each year.

2) Hovde compares GGP’s valuation to other REITs, but isn’t consistent in how it does so. Hovde takes GGP’s future NOI (which it projects will decline, as does Pershing Square, incidentally – see page 36 of its May presentation) and compares it to peer companies’ trailing NOI.

3) Hovde is also inconsistent in how it calculates NOIs – it haircuts GGP’s NOI with certain “unusual items” but fails to do so for peer companies’ NOIs.

4) Hovde only analyzes GGP’s core REIT business, ignoring GGP’s valuable management and Master Planned Communities businesses, which are worth at least $1 per share (and could be worth as much as $8/share; see pages 5 and 59-66 of Pershing Square’s May presentation).

5) Hovde uses high cap rates that are outdated and based on invalid comps. With the market moving so rapidly, even transactions from a few months ago are of questionable value. This slide from Pershing’s ICSC presentation (page 19) shows how quickly mall REIT cap rates have fallen in recent months (and how they are likely to fall further):

In addition, take a look at the stock charts of Macerich (MAC), Simon Properties (SPG) and Boston Properties (BXP) since the Pershing Square presentation on May 27. In light of how much the market has moved, Hovde’s belief that the cap rates Pershing Square used in May are too aggressive in today’s market is absurd:

6) Hovde completely ignores GGP’s value as a strategic asset to an acquirer, which is not a theoretical idea but a concrete reality as both Simon and Brookfield are circling right now. For Simon, there would be big cost savings and, more importantly, revenue benefits: according to the WSJ article below, “Buying General Growth would make it by far the dominant player in the U.S. mall industry with more than 500 properties, giving it enormous clout over retailers in lease negotiations.” As for Brookfield, it raised a $5 billion fund in the past year to make acquisitions and GGP represents its last opportunity to break into the U.S. market in a big way. These are two very motivated potential acquirers.

Here’s an excerpt from an 11/18 WSJ article:

Mall giant Simon Property Group Inc. has hired investment adviser Lazard Ltd. and law firm Wachtell, Lipton, Rosen & Katz to help it formulate a strategy for possibly bidding for all or part of rival General Growth Properties Inc., which is operating under Chapter 11 protection.

The moves set the stage for what could be a takeover struggle as General Growth readies a plan to reorganize and exit from bankruptcy…

…Another big rival, Australian mall owner Westfield Group (WEFIF.PK), has $6.8 billion of cash and equivalents, much of it raised in the past year…

…The maneuvering comes as mall owners are getting pummeled by the weak economy, which has hammered rents and occupancy as consumers have reined in spending. Nevertheless, a prize like General Growth, which owns 200 malls, may be too juicy for others to resist. The opportunity “is a potentially transformational event that doesn’t come along very often,” says Steve Sakwa, an analyst with International Strategy and Investment Group Inc.

And here’s an excerpt from a 12/4 WSJ article:

One of Canada’s largest property owners may be about to face off against the largest mall owner in the U.S. over General Growth Properties Inc., according to people familiar with the matter.

Brookfield Asset Management Inc. (BAM, of Toronto, which manages some $40 billion of commercial property world-wide, has purchased close to $1 billion of General Growth’s unsecured debt to position itself to make a bid on the company or some of its malls, people said. General Growth, known as GGP, is the country’s second-largest mall owner with 200 properties. It collapsed under billions of dollars in debt at the height of the credit crisis and has been operating under bankruptcy protection since April.

Brookfield faces competition, though, from Indianapolis-based Simon Property Group Inc., which owns 323 U.S. malls and has been hiring advisers and buying General Growth unsecured debt in preparation for making a bid, people said. Simon wants to acquire all of General Growth not individual assets, a separate person familiar with the matter said.

“This is a once-in-a-generation opportunity to buy a large, high-quality mall portfolio in the U.S.,” said Jim Sullivan, an analyst with Green Street Advisors Inc…

…Both Brookfield and Simon have strong balance sheets and are highly motivated. Simon has raised $4 billion this year by selling stock and bonds and has more than $3 billion in undrawn money in its credit lines. Buying General Growth would make it by far the dominant player in the U.S. mall industry with more than 500 properties, giving it enormous clout over retailers in lease negotiations.

Brookfield, whose most prominent properties include World Financial Center in downtown Manhattan and Brookfield Place office complex in Toronto, has been trying to break into U.S. retail for years. It attempted in 2007 to buy Mills Corp. and its 37 discount malls, but Mills ultimately was bought by Simon and Farallon Capital Management LLC.

More recently, Brookfield was part of a bid led by Goldman Sachs Group Inc. to provide debtor-in-possession financing for General Growth in bankruptcy, but a rival bid led by Farallon ultimately prevailed. Brookfield in the past year has raised $5 billion, mostly from institutional real-estate investors contributing to its newly created fund for making acquisitions.

Our Valuation Methodology

Reasonable people could argue endlessly about what the appropriate cap rate is, so we believe it is useful to value GGP another way: based on cash flows. Our simple (and we believe conservative) valuation of GGP’s REIT business is:

NOI $2.4 billion

Minus senior debt service* $1.1 billion

Minus cap ex $0.3 billion

Equals cash flow of $1.0 billion

Simon Properties trades at 14x this number. If we apply this multiple to GGP, the unsecured debt plus the equity is worth roughly $14 billion. Netting out the unsecured debt leaves approximately $7 billion for the equity, equal to more than $22 per share.

* Assumes the remaining senior debt gets renegotiated on similar terms; see this morning’s press release here.

Conclusion

We’ll let Todd Sullivan, who raises some additional questions about Hovde’s analysis here, have the last word:

I will not make any accusations. BUT, whenever I see anything that uses changing metrics (sales per sq. ft. to NOI margin), data a year old in a rapidly changing industry, omitting some data and comps that are questionable at best due to the deal structure, in virtually every instance it is done so to make the data fit the preconceived outcome, not deriving an outcome based on the data…

The true irony of this short thesis is that they accuse current GGP investors of using the Pershing presentation from May of this year claiming its data is “outdated”. They say that, and then go on the use even older sales per sq. ft. data from December 2008 for their comps.

What did the pot say to the kettle?

Disclosure: Author’s fund is long GGP.

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See Also:

• Bill Ackman Is Wrong On General Growth — Malls And The US Consumer Are So Screwed
• Bill Ackman: Here’s Why I’m Super-Bullish On Shopping Malls And The US Consumer
• Whitney Tilson’s T2 Partners: Down 1.2% In November, But Up Huge For The Year