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Bizness News 02-19-09

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  • Robert Sterling
    Please send as far and wide as possible. Thanks, Robert Sterling Editor, The Konformist http://www.konformist.com http://robalini.blogspot.com
    Message 1 of 1 , Feb 19, 2009
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      Please send as far and wide as possible.

      Robert Sterling
      Editor, The Konformist


      Senate passes $787 billion stimulus bill
      Senate votes to approve the historic legislation aimed at reviving
      the economy. Bill is now sent to President Obama for signing.
      By Jeanne Sahadi, CNNMoney.com senior writer
      February 13, 2009

      NEW YORK (CNNMoney.com) -- It's a done deal. Still controversial, but
      a done deal.

      The Senate on Friday evening passed the $787 billion American
      Recovery and Reinvestment Act of 2009, which was drawn up, amended
      and negotiated in record time.

      The bill got 60 votes -- the minimum it needed to pass. Three
      Republicans -- Sens. Susan Collins, R-Me., Arlen Specter, R-Pa., and
      Olympia Snowe, R-Me. -- voted for it. Earlier in the day, no
      Republicans in the House voted for the legislation, which
      nevertheless passed 246 to 183, with just 7 Democrats voting against

      President Obama is expected to sign the bill into law soon.

      "The goal at the heart of this plan is to create jobs. Not just any
      jobs, but jobs doing the work America needs done: repairing our
      infrastructure, modernizing our schools and hospitals, and promoting
      the clean, alternative energy sources that will help us finally
      declare independence from foreign oil," President Obama said Friday

      The Obama economic team estimates the stimulus plan will create or
      save between 3 million and 4 million jobs.

      "We've done something today that's transformational for the nation,"
      said House Speaker Nancy Pelosi, D-Calif., in a press conference
      after the House vote.

      During the House floor debate earlier on Friday, House Appropriations
      Committee Chairman David Obey, D-Wisc., characterized the bill
      as "the largest change in domestic policy since the 1930s."

      Republican discontent

      The bill's final passage would represent far less than the bipartisan
      victory Obama had hoped for weeks ago, a hope he tabled as it became
      clear that Republicans and some fiscally conservative Democrats were
      adamantly opposed to the size and contents of the bill.

      Republican critics believe there are more targeted and effective ways
      to create jobs than the measures in the bill, including more spending
      on infrastructure and more tax relief.

      They frequently cite the tag line to describe what Democrats have
      often said makes stimulus measures effective -- that they be timely,
      targeted and temporary. "This bill fails on all three points," Senate
      Minority Leader Mitch McConnell, R-Ky., said Friday.

      In the House, Rep. Mike Pence, R-Ind., blasted the bill as misguided.

      "Republicans are not about saying 'No' but about saying 'Yes' to
      solutions that put Americans back to work," Pence said. "[This
      legislation] will not grow our economy. It will grow our government."

      And they frequently cite the burden of such an expensive package on
      the country's record high deficit and the burden that will place on
      the next generation.

      In response to Republican critics, Sen. Dick Durbin, D-Ill., cited
      provisions in it that will help families facing job loss, education
      expenses and mortgage troubles.

      "Consider the impact on the next generation if their parents lose a
      job ... if their home is foreclosed upon ... if they're forced out of
      college because their parents can't pay the bills," Durbin said.

      Democrats have also countered the Republicans' debt argument by
      noting that record deficit levels were achieved as a result of
      borrowing to pay for the cost of the Iraq war and to finance a series
      of tax cuts -- both decisions made during a Republican administration.

      The compromise bill was crafted after intensive negotiations in
      recent days between the House, Senate and White House, although
      Republicans said repeatedly they felt excluded from the process. And
      on Friday, several said they did not think it was fair that they were
      being asked to vote on a 1,000-page-plus bill that was posted online
      only late Thursday night.

      How the bill breaks down
      The package devotes $308.3 billion -- or 39% -- to appropriations
      spending, according to the Congressional Budget Office. That includes
      $120 billion on infrastructure and science and more than $30 billion
      on energy-related infrastructure projects, according to key
      congressional committees.

      It devotes another $267 billion -- or 34% -- on direct spending,
      including increased unemployment benefits and food stamps, CBO said.

      And it provides $212 billion -- or 27% -- for tax breaks for
      individuals and businesses, although the biggest piece of that is for
      individuals. (Here's a quick breakdown of those breaks.)

      Depending on how tax measures are categorized, the percentage of the
      bill devoted to tax relief is 35%, according to the Joint Committee
      on Taxation.

      Unlike the CBO, the committee counts all portions of tax credits that
      are refundable. A refundable credit is one that may be paid to tax
      filers even if the credit exceeds a tax filer's liability. In other
      words, it is money the government needs to spend. The CBO, by
      contrast, treats that money as an outlay.

      Republicans have advocated for more tax relief in the bill -- they
      wanted at least 40% -- and they often oppose tax credits going to
      those who pay less in income tax than they receive in refunds.

      Democrats counter that the lowest-income families do pay money into
      the system by way of payroll tax for Social Security and through
      sales taxes. And they note that it is those low-income families most
      likely to quickly spend any tax relief they get, thereby making it
      more stimulative for the economy.

      What it can - and can't do
      For months, economists -- both liberal and conservative -- have urged
      lawmakers to act quickly to help stem the economic downturn. They
      argue that while tax cuts can be put out more quickly than
      infrastructure spending, they may not be as stimulative as spending
      because tax filers are likely to save at least a portion of what they

      There also has been debate over how large the total package should
      be. Many economists think it should be larger -- to help combat what
      is expected to be a $2 trillion shortfall in the country's output
      this year and next. But at this point, though they're not enamored
      with every provision in the bill -- they say it's necessary to do

      Proponents of the bill aren't promising the economic recovery package
      will be a panacea for the economy. "No one thinks this is the
      answer," said House Majority Whip Steny Hoyer, D-Md.

      But, they say, it's needed to stem the downturn and ease the
      financial strains hurting Americans. Indeed, Obama's economic team
      last month said they expect that the unemployment rate likely will go
      up in the near term but having a stimulus package could bring it down
      to around 7% by the end of 2010. That's slightly below the rate of
      7.6% today.

      - CNN's Ted Barrett and CNNMoney.com's David Goldman contributed to
      this report.



      Obama planning ambitious road ahead
      Story Highlights
      White House aides say they're planning an ambitious agenda for the
      rest of February
      Big messes to address are the crises in housing and banking
      Administration wants to lay groundwork for health care and
      entitlement reforms
      Nominations for either commerce and HHS secretary are unlikely next
      By Ed Henry
      CNN Senior White House Correspondent

      WASHINGTON (CNN) -- Fresh off victory on President Obama's signature
      $787 billion economic recovery plan, several top White House aides
      say they're planning an ambitious agenda for the rest of February.

      The Senate had waited for the return of Democrat Sherrod Brown, who
      was returning from his mother's wake in his home state of Ohio, to
      close the voting late Friday.

      For the rest of the month, the White House agenda will focus on
      addressing the housing crisis, cleaning up the banking mess and
      laying the groundwork for reform of the health care system and
      entitlement programs like Medicare.

      Obama's economic stimulus plan, which top aides say will be signed
      into law as early as Monday at the White House, received no
      Republican votes in the House and just three in the Senate despite
      his heavy emphasis on drawing bipartisan support. There have also
      been several Cabinet miscues in the early days, but top White House
      aides are confident the president has gotten off to a strong start.

      "Does the road to change have some bumps? Sure," said one senior
      White House aide. "But we're feeling good."

      Several White House aides noted that in addition to the stimulus win,
      the president has signed into law an equal pay act and legislation
      expanding a children's' health insurance program for an extra 4
      million kids.

      "There's an enormity to what's happened so far," said one of the
      White House aides. "It's hard work, but it's worth it. We're

      Aides say they plan to pick up the pace next week with a stimulus
      signing ceremony as early as Monday, though it could slide to Tuesday
      morning depending on how quickly Congressional leaders wrap up the
      legislative details.

      Then Obama starts his first trip out West as president because White
      House aides say they believe Obama himself is their best salesman on
      the big agenda items coming. He will hold an economic event in
      Denver, Colorado, on Tuesday followed by the long-awaited unveiling,
      in Phoenix, Arizona, of his plan to deal with the foreclosure crisis
      on Wednesday.

      White House aides are holding back on details of the housing plan as
      top officials continue to weigh the best approach. Top Democrats like
      House Financial Services Chairman Barney Frank have been pressing the
      White House for details, but White House Press Secretary Robert Gibbs
      said Friday the goal is to get it right rather than rush it out.

      "It's not intended to be measured by one day's market scorekeeping,
      but instead to ensure that the 10,000 Americans each day that have
      their homes foreclosed on, and the millions more that are barely
      getting by, are protected," Gibbs said.

      Several White House aides say it is unlikely the president will
      reveal his choice for either commerce secretary or health and human
      services secretary next week. As for which pick will be unveiled
      first, one aide said it depends on "whenever the next cake is baked" -
      - meaning the White House is so eager to get both nominations behind
      them that they will move forward on either one when the president
      makes up his mind on the picks.

      The following week, the president will host what the White House is
      billing as a "fiscal responsibility" summit on February 23. The goal
      of the summit is to begin weighing the impact of massive federal
      programs like Social Security and Medicare just days before the
      president plans to unveil his first annual budget to Congressional

      Then on February 24, the president will deliver his first speech to a
      joint session of Congress. Top aides say that while other topics like
      foreign policy could be addressed briefly, the speech will be heavily
      focused on the economy and the domestic agenda.

      The president is expected to start taking on a role in selling the
      administration's plans for fixing the financial regulatory system
      during the speech and in his travels, according to top aides.
      Treasury Secretary Timothy Geithner began rolling out a plan to bail
      out more banks and bring more accountability to the existing
      government bailout program known as TARP, but that unveiling received
      harsh reviews on Capitol Hill and on Wall Street.

      Barack Obama • Medicare • Social Security Administration • Health
      Care Policy



      Banks Agree To Foreclosure Moratoriums
      February 13, 2009
      By Meena Thiruvengadam

      WASHINGTON -(Dow Jones)- JPMorgan Chase & Co. (JPM), Citigroup Inc.
      (C), Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) have
      committed to temporary moratoriums on foreclosures as the government
      works on a financial stability plan slated to include billions of
      dollars aimed at keeping people in their homes.

      "We will not add to the foreclosure process any new owner-occupied
      residential loans that are owned and serviced by JPMorgan Chase," the
      company's chief executive, Jamie Dimon, said in a letter Thursday to
      Rep. Barney Frank, D-Mass., chairman of the House Financial Services

      The moratorium on new foreclosure actions will remain in effect
      through March 6 and is similar to a 90-day foreclosure freeze
      JPMorgan announced Oct. 31.

      "We believe three weeks is adequate time for the Treasury to
      announce - and for us to implement - a new plan," Dimon said.

      Citigroup in a statement issued Friday said it will place a
      moratorium on foreclosures for all Citi-owned first mortgage loans
      that are on principal residences and on loans for which
      understandings with investors have been reached. The moratorium is
      scheduled to last until March 12 unless the government finalizes a
      loan-modification program before that date.

      Bank of America on Friday said it will delay foreclosure sales on
      owner- occupied properties whose mortgage loans are owned and
      serviced by it or Countrywide Financial Corp. through March 6. Bank
      of America acquired Countrywide in July.

      "If the program's development is not complete in three weeks, we will
      consider a possible extension," a Bank of America spokeswoman said.

      Wells Fargo, which recently acquired Wachovia Corp., has imposed a
      moratorium on foreclosures for loans it holds, company spokesman
      Kevin Waetke said Friday. That moratorium is expected to remain in
      place until the government's foreclosure prevention plan is announced.

      The majority of Wells Fargo's mortgage loans, however, are serviced
      by it and owned by other investors. The company is "working with
      these investors and related contractual commitments to determine how
      we will support the moratorium request," it said in a statement
      issued Friday.

      Lawmakers in a congressional hearing Wednesday asked the executives
      of several of the nation's largest banks to institute a moratorium on
      foreclosures until the details of a revamped government bailout
      effort are announced. The Office of Thrift Supervision, which
      regulates U.S. thrifts, on Wednesday also called for institutions it
      oversees to suspend foreclosures for the next few weeks.

      U.S. Treasury Secretary Timothy Geithner on Tuesday unveiled the
      outlines of the revamped government effort and said details will be
      released later. Geithner has been meeting with other members of
      President Barack Obama's economic team and the secretary of housing
      and urban development to discuss foreclosure prevention.

      Obama is scheduled to outline his plan to stem foreclosures next week.

      "I am asking you at this time to commit to this committee and to the
      people across America that you will do something here ... and that is
      to commit to having a moratorium on all foreclosures that each of
      your banks and affiliates deal with until the Treasury secretary can
      put together this package," Rep. David Scott, D-Ga., said at
      Wednesday's hearing.

      Citigroup Chief Executive Vikram Pandit in that hearing first told
      lawmakers of his company's intent to institute a foreclosure
      moratorium, saying Citigroup "would commit to making sure that people
      stay in their houses."

      Also in that hearing, Bank of America Chief Executive Ken Lewis
      indicated his firm would consider freezing its foreclosure
      activity. "If we could put a time frame on it, ... say it's two weeks
      or three weeks, we would do that," he told lawmakers.

      Some lawmakers have suggested Geithner "strongly encourage" banks
      receiving government capital through the controversial $700 billion
      Troubled Asset Relief Program, or TARP, to temporarily stop
      foreclosures. "TARP-assisted financial institutions should allow
      struggling homeowners more time to qualify for any systematic loan
      modification plan," Frank and Rep. Doris Matsui, D-Calif., wrote in a
      letter to Geithner on Wednesday.

      JPMorgan, Citigroup, Bank of America and Wells Fargo each have
      received billions of dollars in federal aid through TARP.

      -By Meena Thiruvengadam, Dow Jones Newswires; 202-862-6629;

      (Henry J. Pulizzi contributed to this article.)



      Microsoft to open stores
      By John Boudreau
      Mercury News

      If imitation is flattery, Microsoft once again will flatter Apple,
      this time by launching its own retail stores.

      The Redmond, Wash.-based software giant said it has hired 25-year Wal-
      Mart veteran David Porter as its new vice president of retail stores.
      Porter, who most recently headed up worldwide distribution for
      DreamWorks Animation, will oversee Microsoft's retail store strategy.
      The stores will be designed to help the company "create deeper
      engagement with consumers and continue to learn firsthand about what
      they want and how they buy," it said in a statement.

      Porter's first order of business will be to determine locations and
      opening dates, Microsoft said. A company spokeswoman said it had not
      been determined whether any stores will be opened in the Bay
      Area. "Our target is a small number of high-profile experience stores
      in a few major cities around the world," she said in an e-mail.

      Thursday's announcement triggered the usual round of verbal elbowing
      of Apple's erstwhile nemesis.

      "Microsoft has a history of copying Apple," said Shaw Wu, analyst
      with Kaufman Brothers. "They copied the whole idea of using icons and
      the mouse. Then they built the Zune to replicate the iPod. Maybe
      they'll change their logo. If Apple weren't around, I don't know what
      they would do."

      Cupertino-based Apple has deftly created a retail strategy like few
      others. Its modern, minimalist stores attract customers like a
      crowded cafe all day long.

      In January, Apple reported that its 251 stores in 10 countries drew
      nearly 47 million visitors during the quarter ended Dec. 27. Those
      stores sold 515,000 Macintosh computers — about 21 percent of the
      total 2.5 million sold during the period. Almost half of the store-
      purchased machines were bought by customers who had never owned a Mac
      before, the company said.

      Apple's retail stores accounted for about 17 percent of the company's
      $10.17 billion in sales for the quarter. It plans to open 25 new
      stores this year, about half overseas.

      As longtime tech outlets struggle and even shutter stores during this
      bleak recession, it makes sense for Microsoft to pursue its own
      retail store strategy, Silicon Valley tech analyst Rob Enderle said.

      "Why not start dropping stores where Circuit Cities have gone under?"
      he said. "They've lost a lot of shelf space due to the closing of
      these stores. They've got to bring them back."

      Unlike Apple, which moves to its own strategic beat, Microsoft is
      sure to avoid setting up outlets near important retail partners, such
      as Best Buy, Enderle said.

      "Apple puts stores in high-profile, high-traffic areas. It doesn't
      care about competition," even though retail giants like Best Buy and
      Wal-Mart now sell its products, he said. "Microsoft is not going to
      drop a store in an area where a Best Buy is very successful. The goal
      is to fix the problem, not create another one."

      By hiring an experienced retail hand like Porter, it's clear
      Microsoft understands the difficulties of creating successful store
      buzz, said Steven Addis, chief executive of Berkeley brand consultant
      Addis Creson.

      PC maker Gateway failed miserably in its foray into retail stores,
      closing all of its outlets in 2004.

      "NordicTrack was a successful mail-order brand and it opened up
      retail stores. Not only did that fail, but it took the whole brand
      down," Addis said. "There's been more disasters than successes.

      "Microsoft is going to be hard-pressed not to be compared to the
      Apple experience," he added. "If they try to create an Apple-like
      experience, they will fail. They need to create their own brand
      identity — be Microsoft."

      Contact John Boudreau at jboudreau@... or (408) 278-3496.



      Published on Friday, February 13, 2009 by The Associated Press
      US Security Firm Mired in Iraq Controversy Changes Its Name
      Blackwater Worldwide renamed Xe as company tries to salvage its
      tarnished brand

      Blackwater Worldwide is abandoning its tarnished brand name as it
      tries to shake a reputation battered by oft-criticised work in Iraq,
      renaming its family of two dozen businesses under the name Xe. The
      parent company's new name is pronounced like the letter z.

      Blackwater Lodge & Training Centre - the subsidiary that conducts
      much of the company's overseas operations and domestic training - has
      been renamed US Training Centre Inc., the company said today.

      The decision comes as part of an ongoing rebranding effort that grew
      more urgent following a September 2007 shooting in Iraq that left at
      least a dozen civilians dead. Blackwater president Gary Jackson said
      in a memo to employees the new name reflects the change in company
      focus away from the business of providing private security.

      "The volume of changes over the past half-year have taken the company
      to an exciting place and we are now ready for two of the final, and
      most obvious changes," Jackson said in the note.

      In his memo, Jackson indicated the company was not interested in
      actively pursuing new private security contracts. Jackson and other
      Blackwater executives said last year the company was shifting its
      focus away from such work to focus on training and providing

      "This company will continue to provide personnel protective services
      for high-threat environments when needed by the US government, but
      its primary mission will be operating our training facilities around
      the world, including the flagship campus in North Carolina," Jackson

      The company has operated under the Blackwater name since 1997, when
      chief executive Erik Prince and some of his former Navy Seal
      colleagues launched it in north-eastern North Carolina, naming their
      new endeavour for the area swamp streams that run black with murky
      water. But the name change underscores how badly the Moyock-based
      company's brand was damaged by its work in Iraq.

      In 2004, four of its contractors were killed in an insurgent ambush
      in Fallujuah, with their bodies burned, mutilated and strung from a
      bridge. The incident triggered a US siege of the restive city.

      The September 2007 shooting in Baghdad's Nisoor Square added to the
      damage. The incident infuriated politicians both in Baghdad in
      Washington, triggering congressional hearings and increasing calls
      that the company be banned from operating in Iraq.

      Last month, Iraqi leaders said they would not renew Blackwater's
      license to operate there, citing the lingering outrage over the
      shooting in Nisoor Square, and the US state department said later it
      will not renew Blackwater's contract to protect diplomats when it
      expires in May.

      Blackwater spokeswoman Anne Tyrrell said the company made the name
      change largely because of changes in its focus, but acknowledged the
      need for the company to shake its past in Iraq.

      "It's not a direct result of a loss of contract, but certainly that
      is an aspect of our work that we feel we were defined by," Tyrrell
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