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April 18, 2014

Defend ‘Obamacare’ unabashedly, some Democrats say

Filed under: economics, management — Tags: , , , — Snowman @ 8:36 am

WASHINGTON • With enrollments higher than expected, and costs lower, some Democrats say it’s time to stop hiding from the president’s health care overhaul, even in this year’s toughest Senate elections.

Republicans practically dare Democrats to embrace “Obamacare,” the GOP’s favorite target in most congressional campaigns. Yet pro-Democratic activists in Alaska are doing just that, and a number of strategists elsewhere hope it will spread.

President Barack Obama recently announced that first-year sign-ups for subsidized private health insurance topped 7 million, exceeding expectations. And the Congressional Budget Office — the government’s fiscal scorekeeper — said it expects only a minimal increase in customers’ costs for 2015. Over the next decade, the CBO said the new law will cost taxpayers $100 billion less than previously estimated.

Republicans already were pushing their luck by vowing to “repeal and replace” the health care law without having a viable replacement in mind, said Thomas Mills, a Democratic consultant and blogger in North Carolina. Now, he said, Democrats have even more reasons to rise from their defensive crouch on this topic.

“Democrats need to start making the case for Obamacare,” Mills said. “They all voted for it, they all own it, so they can’t get away from it. So they’d better start defending it.”

Even some professionals who have criticized the health care law say the political climate has changed.

“I think Democrats have the ability to steal the health care issue back from Republicans,” health care industry consultant said Bob Laszewski said. “The Democratic Party can become the party of fixing Obamacare.”

In truth, some Democratic lawmakers often talk of “fixing” the 2010 health care law arrest records. But it’s usually in response to critics or in a manner meant to show their willingness to challenge Obama.

For instance, Sen. Mary Landrieu, D-La., who faces a tough re-election bid, used her first TV ad of the campaign to highlight her demand that Obama let people keep insurance policies they like.

But Landrieu and other hard-pressed Democrats have not gone as far as a pro-Democratic group in Alaska that is unabashedly highlighting the health law’s strongest points.

The independent group Put Alaska First is airing a TV ad that praises Democratic Sen. Mark Begich for helping people obtain insurance even if they have “pre-existing conditions,” such as cancer. The ad doesn’t mention Obama or his health care law by name, but it focuses on one of the law’s most popular features.

Other Democrats should consider such tactics, political consultant David DiMartino said.

“There is still time to tell the story of Obamacare to voters,” he said. Democratic candidates don’t want to be defined entirely by the health law, he said, “but now they can point to its successes to fend off the inevitable distortions.”

GOP strategists don’t agree. The recent upbeat reports might help Democrats temporarily, but “the negative opinion of Americans toward Obamacare is baked in,” Texas-based Republican consultant Matt Mackowiak said. “If Obamacare was truly trending positively,” he said, “Sebelius would have stayed, and Democrats in tough races would be picking a fight on Obamacare, instead of mostly hiding from it.”

Kathleen Sebelius, the health and human services secretary closely associated with the health care law, is stepping down. Democrats say it’s a sign that the biggest problems are past, but Senate Republicans vow to use her successor’s confirmation hearings as another forum for criticizing the law.

Democrats hardest hit by anti-Obamacare ads — including Sens. Kay Hagan of North Carolina and Mark Pryor of Arkansas — continue to defend the health law when asked, but they generally focus on other topics, campaign aides say.

Polls don’t suggest public sentiment is shifting toward Democrats, said Robert Blendon, a professor of health policy and political analysis at the Harvard School of Public Health. But with at least 7.5 million people enrolled despite last fall’s disastrous rollout of insurance markets, Blendon said, Democrats have some strong new material to use.

“Each of the Democratic candidates is going to have to make a calculation on whether or not they can motivate Democrats,” Blendon said. “For Democrats to get an advantage out of the law, they have to convince people they have something to lose if the Senate changes hands.”

Republicans need to gain six seats to control the 100-member Senate.

New political problems might arise for the health care law before the Nov. 4 election. For instance, the individual requirement to carry health insurance remains generally unpopular, and now penalties may apply to millions of people who remain uninsured.

So far, Republicans have had an edge in public opinion, particularly when those with strong sentiments about the law are considered. A recent AP-GfK poll found that strong opponents outnumber strong supporters, 31 percent to 13 percent. And motivated voters often make the difference in low-turnout nonpresidential elections criminal search. But the poll also found that most Americans expect the health law to be changed, not repealed.

That puts Republicans in a tricky situation: GOP primary voters demand repeal, but general election voters in November are looking for fixes.

“It’s not a cheap and easy political target anymore,” Laszewski said. “Republicans are going to have to tell us what they would do different.”

Democrats deride GOP proposals to “replace” the 2010 health care law, saying they collapse under close scrutiny. Since they generally contemplate a smaller federal government role, many of the GOP ideas are likely to leave more people uninsured. Some approaches do not completely prohibit insurers from turning away people with pre-existing medical conditions.

Economist Douglas Holtz-Eakin, who advises many top Republicans, said the emerging GOP plans aren’t tied to the ups and downs of Obama’s law but look ahead to the 2016 presidential election, when the party will need alternatives.

Ultimately, he said, “there can’t be a Republican ‘replace.’ … There needs to be a bipartisan reform.” That doesn’t seem likely, but Holtz-Eakin said it was the only kind of change that will prove durable.

Democrats can cheer the latest statistics, “but they are not out of the woods yet,” he said. “They have waived and deferred a million things they knew were unpopular, and those are still out there.”

AP Director of Polling Jennifer Agiesta contributed to this report.

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April 17, 2014

BNSF outlines fertilizer shipment plan to feds

Filed under: economics, news — Tags: , , , — Snowman @ 6:40 pm

BISMARCK, N.D. (AP) — BNSF Railway Co. will add trains in the Dakotas, Minnesota and Montana solely for transporting fertilizer for spring crop planting, the railroad has told a federal oversight board.

“Simply put, we are working to deliver high volumes of fertilizer into the marketplace as quickly as we can,” the railroad said in a mandated response to the Surface Transportation Board that was released Thursday.

The federal board this week ordered BNSF and Canadian Pacific Railway to report their plans by Friday to ensure delivery of fertilizer shipments this spring.

BNSF beat the deadline. Calgary-based Canadian Pacific had not filed a response by midday Thursday.

The federal board ordered the railroads to submit the plans in response to a hearing it held last week on recent service problems in the nation’s rail network. Farmers and representatives of agriculture producers told the board that delays in fertilizer delivery could disrupt planting.

The board also ordered the railroads to provide weekly status reports on fertilizer delivery for the next six weeks, beginning April 25.

Increased crude oil and freight shipments have largely been blamed for causing the rail delays. BNSF, which is the biggest shipper in the Upper Midwest, has also said that rail service has been backlogged because of bad winter weather quick guaranteed personal loans.

BNSF is based in Fort Worth, Texas, but is part of Warren Buffett’s Berkshire Hathaway Inc., based in Omaha, Neb.

In its reply, BNSF said it expects to move 52 fertilizer-dedicated trainloads over the next six weeks. The railroad said each train would pull 65 to 85 cars.

“This trainload goal is built on our forecasting discussions with our trainload customers,” BNSF said in its response.

The railroad said 21 trainloads are destined for South Dakota, 10 for North Dakota, six for Minnesota and two for Montana.

Roger Johnson, president of the National Farmers Union in Washington, D.C., said rail service disruptions have hit those states hardest.

Johnson, a former North Dakota agriculture commissioner, said adequate fertilizer supplies are crucial for U.S. crop production.

“The demand for fertilizer is great, and it cannot be late by a week or two,” Johnson said. “There will be enormous logistical and economic impacts if fertilizer is not available.”

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April 16, 2014

The Syrian

Filed under: money, term — Tags: , , , — Snowman @ 7:32 am

ISTANBUL—They beg on the street corners with their Syrian passports open so passersby don’t confuse them with Roma.

Others crowd the congested, winding streets of Istanbul in their luxury cars with Syrian license plates.

Outside of the 220,000 refugees from Syria living in temporary camps lining the southern border, no one knows exactly how many displaced Syrians are living inside Turkey’s major cities, but estimates place the number at between 500,000 and 1 million people.

Syrian refugee family in Turkey ‘trying to leave this miserable life’

They can be found all over Istanbul, a sprawling metropolis of more than 14 million.

Syrian children dodge the hectic traffic, asking drivers stopped at lights for money. One afternoon, as we drove down Kennedy Ave., a main roadway that loops around southern Istanbul on the banks of the Sea of Marmara, a little girl ran through the stopped cars, tapping windows to get the passengers’ attention. When my Turkish translator stopped the car and rolled down the window, she spoke to us in quick Arabic, begging.

Fathers and sons approach diners at one of Istanbul’s many outdoor cafes, pleading for food. Some families spend their days at Taksim Square, the scene of deadly riots nearly a year ago that began over the attempted gentrification of nearby Gezi Park.

“In Istanbul, from my personal experience, this street, six months ago or so there were no Syrians begging,” says the International Crisis Group’s Didem Collinsworth as she points out the window down to Galata Towers. “Now there are so many Syrians sitting on the street . . . The situation is deteriorating.

“Turkey bankrolls this humanitarian effort. Yes, Turkey is building camps but that has kind of slowed down because they are expensive to build, they fill up quickly and they are expensive to maintain and run,” Collinsworth says from her office near the tower, constructed by the Genoese in the 14th century.

“In the meantime, the inflow has not stopped.”

In February, as the United Nations reported the crisis was escalating, at least 500 Syrians fled to Turkey every day; some days, between 1,000 and 2,000 moved through the crossing points at Turkey’s southern border. In a bleak milestone, the UN reported earlier this month that Lebanon has now taken in 1 million Syrians since the conflict began in 2011. The agency reports there are now 2.5 million Syrians registered as refugees in Turkey, Jordan, Egypt, Iraq and Lebanon.

By the end of this year, the Turkish government expects the number of Syrians within Turkey to balloon to 1.5 million.

The Republic of Turkey — the biggest, most stable state bordering Syria — has shouldered the burden of caring for the displaced mostly alone. It has spent close to $3 billion but has only received $183 million from the international community, says Collinsworth cash advance loan no fax.

Few countries grant Syrians asylum. In fact, 58,450 Syrian asylum applications were received by the EU by the end of August 2013, according to Eurostat and UN data. Of that number, Germany took in 19,360, followed by Sweden at 15,480. Canada has only accepted 512 from when the conflict began to 2012, the data shows.

There are no precise numbers on how many are in Istanbul because so many are illegal. They flee Syria so hurriedly that many leave without their passports. Yet, valid passports are needed to apply for work permits and to obtain other benefits.

Back home, they were engineers, tailors, teachers, doctors and farmers. In Istanbul, most live in crowded apartments and take jobs no one else would touch at low wages. Legal papers are needed to obtain a Turkish work permit.

Redwan Ahmd is one of the displaced. The 23-year-old university educated engineer left his world behind and fled Aleppo seven months ago. He works in a caf

April 13, 2014

Foster families have been

Filed under: economics, term — Tags: , , , — Snowman @ 1:48 am

MONTREAL—They speak Yiddish, follow the Jewish law to the letter and they’ve been on standby for months, waiting to welcome into their homes the children of Lev Tahor, the ultra-orthodox sect at the centre of a two-province child abuse probe.

Four months after child-welfare authorities in Quebec first went to court to have 14 children from two families taken into protective custody, the hassidic community of Montreal has been waiting to play its part.

Foster families able to meet some of the exacting needs of the children — namely, speaking Yiddish and keeping a high degree of religious observance — have been located. Now they are waiting for the ruling of an Ontario court judge Monday that could send the children along Highway 401 from Chatham-Kent to the hassidic enclave of Outremont in central Montreal.

“It was last week that they were expecting the children would be returned to Quebec, and so they have made contingency plans,” said David Ouellette, associate director of public affairs with Montreal’s Centre for Israel and Jewish Affairs. “As far as the foster families are concerned in Quebec, they’ve been ready for months.”

Four months, to be exact. It was last November that Quebec’s director of youth protection first went to court seeking an order that the 14 children be taken into temporary foster care for physical and psychological examinations. Social workers testified that the children were living in filth, lacked access to doctors and dentists, received a religious education that didn’t come close to meeting the provincial curriculum and were subject to a regime of psychological abuse and underage marriages.

A few days before that court order was granted, the entire Lev Tahor community fled to Ontario. They hoped to find escape from the snooping social workers and freedom to follow their strict interpretation of the Torah. Instead, they have been subject to the scrutiny of Ontario social workers, a police raid and an immigration probe that resulted in the detention and deportation of several adult members of the group.

Mixed in with those Ontario tribulations was the failed exodus of the children and their parents, who took a run for Guatemala last month. That incident resulted in six children being forcibly returned to Canada when they landed at the Trinidad airport; one infant child being apprehended with his 17-year-old mother at the Edmonton airport; and another six who made it to the Central American country and are currently fighting attempts to have them brought back.

The seven children who did not escape the long arm of Canadian law are currently with Ontario foster families fast payday loans.

Stephen Doig, executive director of Chatham-Kent Children’s Services said there are three possible outcomes of Monday’s court decision: the children could be returned to their families; the children could remain with foster families in Chatham-Kent; or the children could be returned to Quebec.

He said that the agency has been sensitive to religious considerations in their dealings with the children and has had help from nearby social service agencies that have Yiddish or Hebrew-speaking staff members that can act as translators.

“Some of the children and many of the adults in Lev Tahor speak or understand some English as well,” Doig said.

But adding to the difficulty of handling kids from a community like Lev Tahor — one that frowns on speaking any language but Yiddish, whose interpretation of kosher means extreme dietary restrictions and whose contact with the outside world is said to be next to nil — is what the children are said to have endured since last November. Put it all together and long-term care for the children may require a more intensive effort that only an ultra-orthodox Jewish clan can provide.

Eluzor Moscowicz, who has been caring for five Lev Tahor children for more than a year, said that when the children arrived in his home, they were unclean and wore too-small shoes that had left them with a stunted gait when they walked.

He told the Canadian Jewish News in February that they were suspicious and uncertain about such things as using scented soap or bathing. He said the children also had a habit of informing on one another, which coincides with testimony by a former Lev Tahor member that they were encouraged to report bad habits or breaches of the community’s strict rules to the group’s leadership.

The seven children affected by Monday’s court ruling may be in better physical shape, but the ordeal they have gone through since last November will have left psychological marks all the same, Ouellette suggested.

“The whole idea of having hassidic foster families is to ease the trauma that these kids are going to go through,” he said.

And even when the final decision is handed down, there could still be one additional snag that draws out the fate of the Lev Tahor children just a little bit longer. Monday will be marked by a flurry of preparation for the Jewish holiday of Passover, which would prevent observant Jews from travelling or working on Tuesday and Wednesday.

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December 4, 2012

Sanergy toilets turn poop into profit

Filed under: news, online — Tags: , , , — Snowman @ 10:36 am

In China’s Hunan Province, using the bathroom often means squatting over a dirty hole in the ground. An estimated 2.5 billion people around the world lack adequate sanitation — more than a third of the global population — and 2 million die each year of diarrheal disease.

To David Auerbach, that is both a human-rights crisis and an entrepreneurial gold mine. He and his business partners hatched a plan for profiting on both ends of a messy problem: Sell pay-per-use toilets to local entrepreneurs, then collect the waste and sell that too, after converting it into fertilizer.

Auerbach spent several years in China teaching English after college, then moved on to stints at the Clinton Foundation and Endeavor, a non-profit that supports entrepreneurs in emerging markets. At MIT’s Sloan School of Management, he teamed up with fellow grad students Ani Vallabhaneni and Lindsay Stradley. Vallabhaneni had worked with a chain of dialysis clinics for low-income patients in the Philippines, and Stradley was a veteran of Teach for America and Google.

On a trip to Kenya, the trio saw locals paying about 5 cents to use an unlined pit latrine. Even more common were “flying toilets” — plastic bags used as a toilet, tied off and then thrown outside. The ground is often covered in them.

When they returned, the three cofounders — all 31 now — wrote the business plan for Sanergy and its brand of Fresh Life toilets. Their vision won the 2011 MIT $100K Entrepreneurship Competition and landed the $100,000 Diamond Prize at the 2011 MassChallenge Startup Competition and Accelerator.

A Fresh Life toilet is 3′ x 5′ and made of prefabricated concrete. The floor has a squat plate and two holes, one for urine and one for solid waste, that lead down to removable waste cartridges. The toilets are sold at cost for $500, which includes installation, painting and daily waste collection. Owners are considered franchisees and have to supply toilet paper, soap and a hand-washing stand.

Right now, Stradley says, there are 150 toilets operating in Nairobi’s crammed Mukuru slum, and the company is selling another five to 10 toilets per week. About a third of Fresh Life operators have already purchased an additional unit.

Bob Orengo, a franchisee in Mukuru, sees about 47 customers a day. At five Kenyan shillings a pop, that’s about U.S. $19 a week.

“It’s a good way to start your own business and be self-employed,” he told CNNMoney through an interpreter.

Another Fresh Life operator in Mukuru, Esther Muniyiva, has about 96 customers a day and makes around $40 a week. The big benefit, she says, is that the area around the toilet is clean: “Some people think the toilet is so clean that they could eat in there too.”

Joshua Boger, the former CEO of Vertex Pharmaceuticals, was one of Sanergy’s judges in the MassChallenge competition. He says one of the company’s biggest challenges now is how fast to scale up.

“You don’t build a fertilizer plant for a million people if you only have 100 customers, so they have to go slow — but not too slow,” he says.

Sanergy collects about 1.5 tons of waste each day and sold its first batch of fertilizer in July — two tons at market price, which generally runs $300 to $600 a metric ton, Stradley says. That’s about twice the global price because, thanks to a local fertilizer shortage. It’s badly needed by Kenya’s huge horticulture industry, one of the largest flower exporters to Europe.

It takes Sanergy four to six months to change raw human waste into fertilizer. The process could be sped up with an investment in infrastructure, and Stradley says the company plans to build a high-tech waste management facility within the next year.

The same waste can be used for both fertilizer and biogas, but the company isn’t operating at a scale yet where it makes sense to generate electricity to sell back to the grid, Stradley says: “We need about a thousand toilets to have enough waste to do that.”

If Sanergy’s plans pan out, that won’t be a problem. Within five years, the company’s founders want to provide toilets to more than half a million Africans, generating 11,000 tons of fertilizer annually and 7.5 million kilowatt-hours of electricity.

Their aim is to be profitable within 18 months and to raise an equity investment round of $2 million in early 2013. But investors might question whether the model is sustainable, says Jenny Aker, an assistant professor of development economics at the Fletcher School at Tufts University whose research focuses on West Africa.

“If sanitation services aren’t commonly used or culturally appropriate, would the community be willing to pay for it?” she asks. If Sanergy expands into rural areas, the impact will probably be much lower than in urban zones , simply because there are fewer potential customers, says Aker.

And there’s the issue of using human waste as fertilizer. It’s fine if it’s just used in the flower industry. “What would people think about using human manure as part of growing their food?” Aker asks. “That’s something to consider long-term.”

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November 19, 2012

Greenspan: Recession ’small price to pay’ to fix debt

Filed under: news, term — Tags: , , , — Snowman @ 10:04 am

Former U.S. Federal Reserve chairman Alan Greenspan said Friday that a mild recession would be a “small price to pay” for getting the nation’s debt problems under control.

In an interview with CNN’s Ali Velshi, Greenspan said cutting spending on “so-called social benefits” would hurt the economy, but argued that it would cause less damage than raising taxes.

“I think if we have to have a moderate recession to solve this huge fiscal problem that’s in front of us — I think that’s a very small price to pay,” he said. “We’re not going to get out of this thing without pain.”

Greenspan said he was not referring specifically to the automatic spending cuts and tax increases that are set to go into effect January 1, known as the fiscal cliff, but to the “broad crisis with respect to our debt.”

The “inexorable rise” in government spending on social benefits, which occurred under both Democratic and Republican administrations, has corresponded with a decline in household savings, said Greenspan.

The decline in savings has undermined the economy by removing the “root source” of funding for capital expenditures and therefore productivity, he continued. As the economy has slowed, the government has been forced to borrow “foreign savings” to pay for social benefits at home.

“This is obviously an unsustainable situation that we have got to come to grips with sooner rather than later,” he said.

Greenspan acknowledged that cutting spending on benefits would be painful and damage the economy in the short run, but he said there is no other alternative and warned that investors are losing patience.

“I don’t see any way out of this without the brute changes that need to be made, and they are hurtful,” he said. “But if we don’t do it the market is going to do it for us.”

While Greenspan said he opposes increasing taxes, he does support allowing Bush-era tax breaks to expire in exchange for a reduction in government spending.

“If you have to allow a rise in taxes to cut a deal on a major benefit cut, that’s a good deal for me,” said Greenspan.

President Obama is meeting with top congressional leaders Friday to begin the process of negotiating a solution to the fiscal cliff.

The Wall Street Journal said the Obama administration is considering a plan to replace massive spending cuts with a combination of smaller, targeted cuts and tax increases. By postponing the so-called sequester, lawmakers could put off a number of large deficit-reduction decisions until mid-2013.

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October 18, 2012

Bank of America tops forecasts, driven by mortgages, trading and investment banking

Filed under: money, term — Tags: , , , — Snowman @ 5:28 am

Mortgages both helped and hurt Bank of America’s third-quarter results. While the bank cashed in consumer demand for new mortgages and refinancing old ones, its tarnished portfolio of pre-financial crisis mortgage loans continued to cut into profits.

Revenue from the refinancing and origination of home mortgages increased 12% from the second quarter and 18% from a year earlier. Amid a broader plan to cut 30,000 employees over the next several years, Bank of America actually added 3,000 to 4,000 new workers to handle the rising mortgage volume.

On the flip side, Bank of America is still dogged by its Countrywide baggage and other pre-financial crisis loans. The mortgage lending unit failed to turn a profit during the quarter, as the cost of managing the bank’s delinquent and defaulted loans dragged down the unit’s earnings.

But Bank of America still managed to report earnings that topped expectations. The bank earned $340 million, which translated to $0.00 per share, on revenue of $22.5 billion. Analysts expected the bank to generate a net loss of 7 cents per share, on $21.9 billion of revenue.

“Our strategy is taking hold even as we work through a challenging economy and continue to clean up legacy issues,” CEO Brian Moynihan said in a statement.

Moynihan and CFO Bruce Thompson said on an analyst call that as those so-called legacy costs continue to shrink, the bank will move some of its staffers who service delinquent mortgages into divisions that work on new mortgages or refinancing no teletrack payday loans.

Related: Big bank lending remains weak

Bank of America also cashed in on the global corporate refinancing boom. Fees in the investment banking division jumped 17% from the second quarter and 44% from the third quarter of 2011.

Overall, the bank increased both its deposits and its lending from the prior quarter. Deposits grew 2.7%, and lending increased 8%.

Still, the bank remains mired in litigation from the financial crisis. A$1.6 billion litigation expense dragged down profits this quarter. Part of that stemmed from the bank’s recent $2.53 billion settlement of a class action shareholder lawsuit related to Bank of America’s acquisition of Merrill Lynch.

That settlement will help the bank put the bulk of its litigation expenses behind it, executives said on the conference call.

Shares of , Fortune 500) are up 70% this year, after dropping precipitously in 2011. The bank’s stock edged up about 0.6% early Wednesday.

Bank of America is the fifth major bank to report earnings, following , Fortune 500), , Fortune 500), , Fortune 500), and , Fortune 500). All four banks also beat expectations. , Fortune 500) reports Thursday.

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October 15, 2012

Softbank could play Sprint’s savior

Filed under: legal, management — Tags: , , , — Snowman @ 7:56 am

Sprint Nextel’s seven-year nightmare may soon be over. The nation’s third-largest wireless carrier confirmed Thursday that it is in talks with Japanese technology giant Softbank to sell at least part of the company.

, Fortune 500) has struggled to keep up with stronger competitors , Fortune 500) and , Fortune 500) ever since its disastrous 2005 merger with Nextel. The company is up to its eyeballs in debt, undergoing an expensive — and late — transition to 4G-LTE, and losing contracted customers in the wake of its decision to ditch the Nextel brand. With smaller rival T-Mobile entering into an agreement to buy , Fortune 500) earlier this month, Sprint is feeling the heat of stronger competition from all sides.

Forced to go it alone, the company has been working on a major upgrade intended to modernize its network. It’s also toying with backup plans: Sprint’s shares rose last week on a Bloomberg report that said the company was considering making a counter-offer to MetroPCS.

But then, seemingly out of the blue, Softbank arrived dangling a new rescue plan. It’s the kind of white knight with deep pockets that Sprint desperately needs. Softbank had roughly $13 billion in cash at the end of last year. Sprint, by comparison, has $21 billion in debt and just $7 billion in cash and short-term investments.

Shares of Sprint jumped by as much as 19% Thursday on the news.

Japan’s third-largest carrier, led by colorful and outspoken CEO Masayoshi Son (he devised a 300-year plan in 2010, which involved brain-computer symbiosis and machines that know how to love), isn’t shy about dealmaking. It owns a stake in ), had a chunk of ) until last year, and orchestrated a blockbuster deal to buy Vodafone’s Japan unit that gave the company a huge presence in the burgeoning wireless space no fax payday loan. Softbank was the first Japanese wireless company to carry the , Fortune 500) iPhone.

Softbank’s flair and assertiveness could give Sprint a needed jolt. The company lost its brief marketing edge — billing itself as the only nationwide network with unlimited data — when T-Mobile recently reverted to its unlimited data plans as well. Despite a network technology transition that appears to be on schedule and promises cost savings and improved coverage, Sprint’s management has been criticized for lacking the chutzpah to do something bolder. The company seems locked in a losing battle with its two much-larger competitors.

“If Softbank does acquire Sprint Nextel, it is not a forgone conclusion that the company will do well,” said Jeff Kagan, an independent telecommunications analyst. “However, the chances it can do well are there if the company can understand the U.S. marketplace.”

Terms of the deal that is being negotiated were not disclosed, and Softbank declined to comment. A Wall Street Journal report said the deal, worth roughly $13 billion, would give Softbank a controling stake in Sprint.

Regulators would likely cheer the deal, which would ensure that four strong, nationwide wireless competitors remain in the U.S. market. In AT&T’s scuttled $36 billion buyout offer for T-Mobile last year, regulators said they opposed the deal because it would bring the number of national wireless choices down from four to three.

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October 9, 2012

California gas prices hit record

Filed under: Uncategorized, canada — Tags: , , , — Snowman @ 5:56 pm

Gas prices across California have soared to record highs, shooting up 50 cents a gallon in just the last week.

But even as prices are expected to rise slightly before falling, the spike is not likely to spread to other parts of the United States, experts say.

The average price of a gallon of regular gas in California edged up another 0.3 cent Tuesday, according to AAA’s latest reading, setting a record at $4.671.

It stood at around $4.17 on Oct. 1 but has risen every day since then. The biggest increase was a 17-cent spike Friday, followed Saturday by a 13-cent increase.

On Sunday, California environmental regulators, acting on a request from Gov. Jerry Brown, agreed to allow refineries to start making a cheaper, winter blend of gasoline as soon as possible — a move that could solve shortages of the more expensive summer blend that sparked the price spike.

Normally, refineries wouldn’t start making the winter blend until the end of October.

Most of the country makes the transition from the cleaner summer blends of gasoline to the cheaper winter blends on Sept. 15. California, with warmer average temperatures and the nation’s strictest air pollution rules, makes the transition six weeks later.

The cleaner gasoline is used in the summer to mitigate against the smog that accompanies warmer temperatures.

The switchover can often cause shortages of the summer blend and a temporary rise in prices. Refineries and stations don’t want to have an inventory of the more expensive gas when it is time to start selling the cheaper gas.

Refining capacity is also an issue. Tom Kloza, chief analyst at the Oil Price Information Service, which compiles prices for AAA, said a major refinery in Richmond, Calif., owned by , Fortune 500), still hasn’t returned to operation since an August fire.

More recently, California refineries owned by , Fortune 500) and , Fortune 500) were also off line for maintenance, although the Exxon refinery came back Friday, while Gov. Brown said the Tesoro refinery is due back in operation this week.

But Kloza said supplies are so tight that those latest disruptions caused wholesale gas prices to spike by $1.12 a gallon to $4.15 a gallon between Sept. 25 and Oct. 4.

He said the wholesale prices have already started to fall, dropping 47 cents on Friday and 10 cents Monday.

“I don’t want to say the coast is clear but there is a light at the end of the tunnel,” Kloza said. California retail prices are likely to top out at about $4.75 a gallon and then start to decline, he said.

The spike in California comes while gas and oil prices have remained relatively stable in the rest of the country. The national average for a gallon of regular gas has kept to a narrow range of between $3.78 and $3.82 during the last week. It edged 0.3 cent lower Tuesday, remaining around $3.82 a gallon.

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September 19, 2012

The case for investing in bonds, too

Filed under: economics, marketing — Tags: , , , — Snowman @ 5:28 pm

I’m 52 and have had 100% of my savings in stocks since I began investing at age 25. Given my high risk tolerance and the fact that I expect that my pension and Social Security to cover a substantial portion of my expenses in retirement, why should I reduce my investment returns by investing in bonds? — Eric C.

If you’ve been putting your dough exclusively in stocks for the past 27 years, then you know firsthand how lucrative they can be over the long term. Since 1985, the year you began investing, stocks have gained an annualized 11%.

Ultimate Guide to Retirement

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You no doubt also know how risky stocks can be over shorter periods. You’ve lived through the Crash of 1987 when the Dow Jones Industrial Average plummeted 508 points — nearly 23% — in a single day. And you’ve survived both the bear market of 2000-2002, which saw stock prices fall 49%, and the meltdown of 2007-2009, when stock values dropped almost 57% (a setback from which they still haven’t fully recovered).

I’m sure I also don’t have to tell you that bonds returned far less than stocks over the past 27 years and that their yields are especially low right now, with 10-year Treasury bonds yielding less than 2% and investment grade corporates paying only a half percentage point or so more.

Given your experience with stocks and the state of the bond market these days, I can understand why you equate keeping any of your savings in bonds as nothing more than an invitation to subpar returns.

But I think you need to revise your thinking. Here’s why:

You became an investor near the beginning of one of the greatest bull markets in history. The surge in stock prices that began in 1982 and with few interruptions continued through the end of 1999, showered investors with almost unprecedented rewards. It also included some truly phenomenal stretches, like the 10-year span from 1989 through 1998 when stocks gained a compounded 19% a year, almost double equities’ long-term annualized return since 1926. So I think it’s fair to say that this outsize performance has a lot to do with the way you feel about stocks.

Related: Investing: When to ‘take money off the table’

What’s more, up to now you’ve viewed the risks and rewards of stock investing primarily through the lens of a relatively young person. Which means you’ve been much more likely to shrug off stocks’ periodic setbacks. They’re not as scary when you have decades to rebound from them.

But looking ahead, conditions may be quite different. While stocks are still likely to beat bonds over very long stretches, many analysts believe stocks won’t deliver anywhere near the same size gains they did in the go-go ’80s and ’90s, nor will they outperform bonds by as large a margin instant credit report.

That’s certainly been true for the past 10 years with stocks gaining 7.3% vs. 6.3% for bonds. Some investment advisers, like PIMCO’s William Gross, are even forecasting extremely meager stock returns for the years ahead.

And while you may still think of yourself as quite the risk taker, I think you should allow for at least the possibility that a 50% decline in the value of your savings — and the retirement income it might produce — may be much more upsetting as you get closer to the end of your career than it was when you were starting out. I’m a bit older than you, but I’ve found I’m much more sensitive to stocks’ volatility myself.

As you weigh the issue of risk, you may also want to factor into your thinking recent research that suggests that the severity of downdrafts we’ve seen in stocks in the past may occur more frequently than we previously believed.

At any rate, I recommend that you at least consider scaling back your equity exposure. I’m not talking about a total retreat. Rather, I’m suggesting a stocks-bonds mix that allows for long-term growth, but won’t get hammered as much should the market tank during your home stretch to retirement — say, 70% stocks and 30% bonds. As you age, you would then gradually reduce your stock stake, dialing it back to 50% or so of your holdings by the time you retire and then eventually paring it down to between 20% and 30%.

If you expect that your pension and Social Security will cover most of your basic retirement living expenses, you’ll have more leeway in how much you’ll have to draw from your stock portfolio. That flexibility could allow you to be more aggressive and increase your stock percentage a bit. But I’d be wary of going higher than, say, 75% to 80% stocks today and 55% to 60% at retirement.

Related: Am I on track to retire at 67?

Many investors are particularly wary of making bonds part of their portfolio these days for fear they could suffer losses if interest rates rise. But the potential setbacks in bonds — especially those with short- to intermediate-term maturities — pale in comparison to the hits stocks have taken in the past and could take in the future. So despite any anxiety about interest rates rising, bonds are still a worthwhile way to reduce the overall risk level of a portfolio.

Bottom line: I’m all for maintaining reasonable exposure to stocks in the years leading up to and following retirement. But the key word is reasonable. Obviously, you have to decide what’s appropriate for you. But you’ll be a lot better off if your decision includes a realistic reassessment of your risk tolerance rather than simply going with what worked over the past 27 years.

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