Saturday, December 31, 2011

New York Times sends email to millions by mistake (Reuters)

(Reuters) ? Some 8 million people received emails from the New York Times on Wednesday offering a special discount if they would reconsider their decision to cancel their subscriptions.

The trouble is, the offer was supposed to go to only about 300 people who had decided to stop taking home delivery of the newspaper -- it was erroneously sent by a New York Times employee to more than 8 million people on an email marketing list.

The debacle lit up social media sites such as Twitter and Facebook, sparking concerns that hackers might have broken into the newspaper's computer network to send out spam.

A spokeswoman for the newspaper blamed human error, saying hackers were not involved and security was not at fault.

"An email was sent earlier today from The New York Times in error. This email should have been sent to a very small number of subscribers, but instead was sent to a vast distribution list made up of people who had previously provided their email address to The New York Times," the paper said in a statement.

The email offered a 50 percent reduced rate for 16 weeks on home delivery.

The New York Times is owned by New York Times Co.

(Reporting By Paul Thomasch in New York and Jim Finkle in Boston; Editing by Steve Orlofsky, Phil Berlowitz)

Source: http://us.rd.yahoo.com/dailynews/rss/enindustry/*http%3A//news.yahoo.com/s/nm/20111229/media_nm/us_newyorktimes_subscribers

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Friday, December 30, 2011

Microsoft Excel specialist by bgrss

  • Project ID:

    1359064
  • Project Type:

    Fixed
  • Budget:

    $30-$40 USD

Project Description:

Easy task for a Microsoft Excel Specialist:

I need to export a 200 pages price list from PDF to Excel file keeping the exact same structure
( titles, products, prices, columns and rows...); then apply a formula or function to change prices in two ways:

1st : Change the %(percentage) number in one specific cell to change all prices on same time.
(example: if I change the price on this cell +20% or -20% all prices on list will change on same time)

2nd: Change the %(percentage) number in one specific cell by "category" to change all prices on same time on that specific category.
(example: if I change the category price on specific cell +20% or -20% all prices only on that specific category will change on same time)

*Important things to consider:
- The price list have 35 different categories (Posters, Flyers, Business cards, Hang tags etc...)
- after job done, please show-me the cells that I should change the percentages.

Thank You

Skills required:

Excel, PDF

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Source: http://www.freelancer.com/projects/Excel-PDF/Microsoft-Excel-specialist.html

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As the Iraq War Ends, No Parade for Troops

WASHINGTON (AP) - Americans probably won't be seeing a huge ticker-tape parade anytime soon for troops returning from Iraq, and it's not clear if veterans of the nine-year campaign will ever enjoy the grand, flag-waving, red-white-and-blue homecoming that the nation's fighting men and women received after World War II and the Gulf War.

Officials in New York and Washington say they would be happy to help stage a big celebration, but Pentagon officials say they haven't been asked to plan one.

Most welcome-homes have been smaller-scale: hugs from families at military posts across the country, a somber commemoration by President Barack Obama at Fort Bragg in North Carolina.

Article Photos

AP Photo
Army Sgt. Howard Acoff hugs his family as 1st Cavalry 3rd Brigade soldiers return home from deployment in Iraq at Fort Hood, Texas. These 3rd Brigade troops were in the last convoy to leave Iraq.

With tens of thousands of U.S. troops still fighting a bloody war in Afghanistan, anything that looks like a big victory celebration could be seen as unseemly and premature, some say.

"It's going to be a bit awkward to be celebrating too much, given how much there is going on and how much there will be going on in Afghanistan," said Don Mrozek, a military history professor at Kansas State University.

Two New York City councilmen, Republicans Vincent Ignizio and James Oddo, have called for a ticker-tape parade down the stretch of Broadway known as the Canyon of Heroes. A similar celebration after the Gulf War was paid for with more than $5.2 million in private donations, a model the councilmen would like to follow.

Mayor Michael Bloomberg said last week that he was open to the idea but added, "It's a federal thing that we really don't want to do without talking to Washington, and we'll be doing that."

A spokesman for the mayor declined to elaborate on the city's reasons for consulting with Washington. Ignizio said he had been told by the mayor's office that Pentagon officials were concerned that a celebration could spark violence overseas and were evaluating the risk.

Navy Capt. John Kirby, a Pentagon spokesman, said that he has not heard that issue raised and that New York has yet to make a formal proposal. He also said officials are grateful communities around the country are finding ways to recognize the sacrifices of troops and their families.

The last combat troops in Iraq pulled out more than a week ago. About 91,000 U.S. soldiers, sailors, airmen and Marines are in Afghanistan, battling a stubborn Taliban insurgency and struggling to train Afghan forces so that they eventually can take over security. Many U.S. troops who fought in the Iraq War could end up being sent to Afghanistan.

A parade might invite criticism from those who believe the U.S. left Iraq too soon, as well as from those who feel the war was unjustified. It could also trigger questions about assertions of victory.

Mrozek noted that President George W. Bush's administration referred to military action in the Middle East as part of a global war on terror, a conflict that's hard to define by conventional measures of success.

"This is not a war on a particular place or a particular force," he said.

The benchmarks were clearer in previous wars. After World War II, parades marked Japan's surrender. After the Gulf War, celebrations marked the troops' return after Iraqi forces were driven out of Kuwait.

The only mass celebrations of U.S. military activities since Sept. 11, 2001, were largely spontaneous: Large crowds gathered in Times Square in April after Osama bin Laden was killed.

At the same time, Iraq veterans aren't coming home to the hostility many Vietnam veterans encountered. The first large-scale event honoring Vietnam veterans was not held until 1982, when thousands marched in Washington for the dedication of the Vietnam Veterans Memorial. Parades were later held in New York in 1985 - 10 years after the war ended - and in Chicago the next year.

"I think we've seen recent history in Vietnam, where that wasn't done appropriately, and we want to make sure we do the appropriate thing by those that made the ultimate sacrifice and risked their lives for us to say thanks," Ignizio said.

At Fort Hood in Texas, troops have returned to welcome-home ceremonies at the post that were attended mostly by soldiers' families. Soldiers in uniform run to hug their loved ones after an announcer yells, "Charge!"

Col. Douglas Crissman, commander of the 3rd Brigade of the 1st Cavalry Division, said Saturday after one such ceremony that that is as large-scale a welcome as the troops need.

"This is just the right size because it's quick and meaningful and it gets them home to their families," he said.

In recent years, most of the ticker-tape parades in New York have been held for the city's championship sports teams.

"The sports celebrations that we've had in New York for the Yankees and the Mets were amazing," Oddo said. "But these are the real heroes."

Source: http://www.theintelligencer.net/page/content.detail/id/563566.html

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Thursday, December 29, 2011

Obama to Ask for $1.2 Trillion Increase in Debt Limit

Correction Appended

WASHINGTON -- President Obama will ask Congress this week for $1.2 trillion in additional borrowing authority, which would raise the federal debt limit to $16.4 trillion and avoid the need for further increases before the 2012 elections, administration officials said Tuesday.

This would be the final increase allowed under the budget agreement reached in August after the government came close to default. Since signing legislation to codify that agreement on Aug. 2, Mr. Obama has obtained two increases totaling $900 billion.

The budget agreement largely pre-empts the partisan debate over federal deficits and debt that the request might otherwise have touched off in Congress.

While the House, controlled by Republicans, could try to block the proposed increase in the debt limit, the Senate, with a Democratic majority, is unlikely to go along. If both houses of Congress voted to block the increase, Mr. Obama could veto the legislation.

The government's need for more borrowing results from the fact that it spends far more than it raises in revenue; it makes up the difference by borrowing 36 cents of every dollar it spends. In the fiscal year that ended Sept. 30, the government spent $3.6 trillion and collected $2.3 trillion.

Despite record debt, the Treasury still finds that it can borrow at extraordinarily low interest rates, contrary to predictions by some Republican lawmakers, who had warned that soaring deficits would require the government to pay more to lenders and investors in Treasury debt.

In the last decade, the government has borrowed record sums to pay for the wars in Iraq and Afghanistan, tax cuts adopted under President George W. Bush and economic stimulus measures enacted in 2009 to address the worst economic slump since the 1930s.

Since President Obama took office, the debt has shot up 42 percent, to the current level of $15.1 trillion. Of that amount, $10.4 trillion is borrowed from the public, and $4.7 trillion consists of special-issue Treasury securities held by Social Security and other government trust funds. Debt held by the public, considered by many economists to be the more significant indicator, is 65 percent higher now than in January 2009.

Treasury officials said the debt often increased at the end of the year because of large interest payments that the government makes to Social Security and other trust funds. These payments will total $82 billion this month, the Treasury said. Money not immediately needed by the trust funds is invested in the special Treasury securities.

In September, the House voted to block Mr. Obama's request to raise the debt limit by $500 billion, the second increase. However, the Senate had already turned back a similar move.

Representative Tom Reed, a Republican from upstate New York, who led the House effort, said, "Dealing with this national debt is one of the primary reasons why I ran for Congress -- to stop the endless borrowing of Washington, D.C., on the backs of our children and our grandchildren." He said the debt was a "threat to national security."

Four House Democrats have introduced a bill to eliminate the statutory cap on the public debt. "There's no reason to have a debt ceiling at all," said one of the four, Representative Hank Johnson of Georgia. "It doesn't restrain spending, since the spending has already been committed. It just threatens our credit, and it weakens our country."

If the government got close to the debt limit again before the elections in November, a Treasury official said, "we would be able to invoke extraordinary measures to extend borrowing authority beyond the elections."

To avoid defaulting, the Treasury has sometimes delayed issuing certain types of debt held by federal trust funds and by state and local governments.

Under the new budget law, Mr. Obama could have requested a larger increase in the debt limit if Congress had agreed on a constitutional amendment to require balanced budgets or if deficit-reducing recommendations from a joint committee had become law. The amendment was not approved, and the committee could not agree on any proposals.

Correction: December 27, 2011, Tuesday

This article has been revised to reflect the following correction: A Web site summary with an earlier version of this article incorrectly listed the amount of the debt limit increase sought by President Obama. It is $1.2 trillion, not $1.2 million.

?

?

This article originally appeared in The New York Times.

First published on December 28, 2011 at 12:00 am

Source: http://www.post-gazette.com/pg/11362/1199700-84-0.stm?cmpid=nationworld.xml

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Wednesday, December 28, 2011

Did Nebraska Sen. Ben Nelson Just Play Scrooge to the Democrats' Christmas? (ContributorNetwork)

ANALYSIS | The word "Nebraska" loosely translates as "broad river" according to Netstate.com. And that's just what the Democrats are going to have to cross if they want to hold onto the Senate, now that Nebraska Senate Democrat Ben Nelson called it quits for after a career in statewide and national politics spanning more than two decades. Will such a retirement spell doom for Senate Democrats and their bid to hold onto the upper house of Congress?

Republicans probably perceived Nelson as "Dead Man Walking" after his health care vote, but Nelson made a career of defying expectations. He ousted a Republican Governor in a stand-pat election year in 1990. He was overwhelmingly reelected in a bad Democratic year (1994). He won an open seat in 2000, the same year Bush won and took Nebraska handily. And he coasted to a senatorial re-election in 2006. His only stumble came in 1996 when he lost an open seat Senate race (to independent-minded Republican Chuck Hagel), but only after breaking a campaign promise not to run for another office while governor, according to the Associated Press.

What's more is that this upsets Democratic Party plans. They had already purchased a number of ad buys, according to Schulte and Margasak. Nelson had a decent war chest, according to The Blaze. Plus, there was the prospect of a messy Republican primary between the state's Attorney General, State Treasurer, a legislator and business executive, which would have made things easier for Nelson.

There are no easy Democratic candidates to trot out as replacements. The entire congressional delegation is Republican, as are all statewide offices. Politics1.com lists Larry Marvin as a potential candidate (an Air Force veteran and prior candidate for office). There's also Scott Kleeb (former Congressional candidate) and Bill Hoppner (who ran twice for Governor, losing once to Nelson after a lengthy recount by 40 votes, and got 46 percent of the vote in a 1998 contest to succeed Nelson according to OurCampaigns.com), but only the younger Kleeb is likely to consider the election.

A more likely option could come from the state's second district, where Obama narrowly won in 2008. According to Politics1.com, three Democrats were attempting to unseat Republican Congressman Lee Terry: Douglas County Treasurer John Ewing, State Senator Gwen Howard, and Howard Buffett (listed as a former US Defense Dept. Official, Farmer, Philanthropist and Democratic Activist by Politics1.com). One of them could step out the race (where Terry faces his own primary) and switch to the Senate race.

Some on Yahoo Answers want Bob Kerrey to come back into politics. That may be wishful thinking on the respondents' part, but one cannot completely rule it out.

Whoever the Democrats run, it will be an uphill battle. For all their bad-mouthing of Ben Nelson, he was rated as a "toss-up" by the Charlie Cook Political Report, for race ratings in December 1 and 22 in the big red state of Nebraska. Already, there are 10 toss-up races; eight of them involved seats Democrats needed to defend. Only a Kerrey comeback might make this a toss-up.

Nelson's departure is likely to move the race into the Republican column, unless three things happen. First, the expected divisive GOP primary needs blood on the walls. Even this is not a guarantee, as Hagel was able to overcome a bitter intra-party feud against Don Stenberg (then-Attorney General, now State Treasurer, who wants Nelson's job). Second, Democrats need little or no in-fighting in their own primary. Third, Obama's fortunes need to rebound in a big way. He needs better economic numbers, or at least some sort of positive trend. And, as Cook wrote in the National Journal "If Republicans nominate someone whom swing voters find unpalatable, or if the GOP nominee self-destructs, Obama will benefit." And I have yet to meet a Republican in my conservative bastion of West Georgia (which resembles Nebraska for political ideology) who is enthusiastic about any of the choices, save Ron Paul supporters.

Democrats (and Democrat-leaning allies) must defend 23 of the 33 seats up for grabs in 2012, so the math was already against them. Without a big name entering the race, the Senate is even more likely to shift Republican next year.

Source: http://us.rd.yahoo.com/dailynews/rss/democrats/*http%3A//news.yahoo.com/s/ac/20111228/pl_ac/10756711_did_nebraska_sen_ben_nelson_just_play_scrooge_to_the_democrats_christmas

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Don't Worry About China: World Bank Chief Economist

Justin Yifu Lin, the World Bank's chief econom...

Image by AFP/Getty Images via @daylife

As the Chinese economy tumbles into recession, the World Bank?s chief economist is embarking on a campaign to reverse negative perceptions about his home country?s prospects.? ?China has the potential to achieve another 20 years of 8% growth,? said Justin Yifu Lin in a speech sponsored by the Federal Reserve Bank of San Francisco late last month.? Moreover, he also has stated in various venues that in two decades the Chinese economy could, in purchasing power parity terms, end up twice the size of the American one.

And what is his principal argument?? Lin correctly notes that China is at the level of Japan in 1951, South Korea in 1977, and Taiwan in 1975, and for the two decades after each of those years those countries grew at annual rates of 9.2%, 7.6%, and 8.3%, respectively.? In short, he thinks the Chinese economy has lots of room to expand and merely needs to accomplish something that smaller countries have already managed.

Yet as the South China Morning Post?s Tom Holland noted on Thursday, ?You don?t need to be an eminent international economist to spot the holes in his argument.?? Japan, South Korea, and Taiwan all grew through exports.? As Holland tells us, China is far larger than those countries, and there are not enough consumers in the world to support Chinese growth at Lin?s predicted rate.

In any event, China?s export performance is already stumbling.? Its existing markets?the European Union and the United States together absorb about half of its exports?will not support continued Chinese expansion in this troubled period, and the country?s new markets are either not large enough to take up the slack or are not willing to do so, at least on a sustained basis.

In fact, Xia Bin, an advisor to the People?s Bank of China and a researcher at the State Council?s Development Research Center, says that next year trade may end up being a negative for GDP.? Moreover, both central government and outside economists believe that the country?s export-fueled current account surplus will continue to fall as a percentage of GDP.? It stood at 10.1% of GDP in 2007, and was 5.2% last year.? By next year, it could be half the 2010 figure.

In these circumstances, Justin Lin is right to say Beijing must unwind what he calls the ?triple imbalances? by boosting lagging domestic consumption, narrowing the widening income gap, and protecting the degraded environment.? Beijing?s leaders for years have acknowledged these problems but have deliberately pursued policies that have made them substantially worse.? In short, they did not attempt to alleviate the imbalances in the boom times in the middle of the last decade, so it is unlikely they will do so now as the economy falters and as the Communist Party and central government head into a multi-year political transition.

Justin Lin knows the difficulty of sponsoring change in today?s China.? Before he became the first Chinese citizen to follow in the footsteps of Larry Summers and Joseph Stiglitz to assume his current post at the World Bank, he was a staunch opponent of change, a champion of Beijing?s behemoth state enterprises. ?Those in control of the Chinese economy view the state sector as their primary source of power and patronage and perceive needed reforms as ?political suicide.?? After all, a literal translation of the name of the Communist Party is ?the Party of Public Assets,? so that organization must protect state enterprises?the country?s ?public assets??to maintain political legitimacy.

Because China will not be able to ramp up exports or eliminate the ?triple imbalances,? it is sure to be snared in what economists call ?the middle-income trap,? where growth stalls before a moderately well-off population becomes rich.? China has already reaped all the easy growth that comes with starting from a low base, and now it needs to, among other things, encourage consumption, allow the renminbi to float, flatten the social structure, promote democratization, remove restrictions on labor, adopt the rule of law, and strengthen the social safety net.? The Party will not make substantial progress toward any of these goals?with the possible exception of the last one?until it adopts fundamentally different political and economic models.

In the meantime, Justin Lin?s triple imbalances are getting larger because Party leaders have ruled out the structural changes necessary to lay the foundation for the next multi-decade round of growth.? So, despite what the World Bank economist hopes, China will not become the next Japan, South Korea, or Taiwan.? It?s much more likely to resemble the trapped Venezuela and Argentina?not to mention the former Soviet Union.

Lin, who terms his homeland ?a leading dragon? of the global economy, nonetheless remains confident.? ?I am hopeful that we can anticipate an Asian century where China will grow dynamically,? ?he wrote at the end of last month on the World Bank site.

Source: http://www.forbes.com/sites/gordonchang/2011/12/25/dont-worry-about-china-world-bank-chief-economist/?feed=rss_home

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Tuesday, December 27, 2011

Romney Maintains Lead in N.H. (ABC News)

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Rowan University students prepare to work as Engineers Without Borders

Ten Rowan University students will begin their new year by participating in Engineers Without Borders projects in El Salvador and The Gambia.

Two juniors ? Sarah Gettings of Runnemede and Gemma Peebles of East Windsor ? will play integral roles in these programs. Gettings is the project lead for El Salvador, and Peebles is the EWB?s web master and clinic team lead for The Gambia.

Gettings said the Rowan EWB chapter has been working with the community of La Ceiba, El Salvador since 2007.

?The river and wells in the community are all contaminated with unhealthy levels of coliform,? said Gettings. ?This contamination causes high incidence of diarrhea and parasites among community members, resulting in the death of many children. Three assessment trips were made by the chapter from 2007 to 2010, during which many different solutions were examined and talked about with the community. The final solution, which was affordable for both the chapter and the community, sustainable and practical overall, was to install biosand filters in each of the 150 homes of La Ceiba.?

Gettings said, since this decision was reached, the Rowan chapter of EWB has taken two trips to the area ? in January and June 2011. Ten biosand filters were constructed and installed on each trip and the filter recipients were taught how to use and maintain their filters and encouraged to participate in the construction process. On the June trip, monitoring activities like water quality testing and health and filter surveys of the filter recipients were also completed.

?So far, the filters have been successful in removing contamination from the water,? said Gettings. ?A team of Rowan students and a professional mentor will be traveling this January to install 15 more filters and continue to monitor filters that have already been installed.?

As the project lead, Gettings said a lot of her responsibilities were in preparing for the trip.

?I was making sure all of the reports required by EWB were completed, picking the travel team, getting everyone?s paperwork together, making sure the community knew we were coming, making sure supplies were ordered, getting plane tickets and travel insurance, packing our cases with water quality testing supplies and anything else we would need, making our schedule, assigning responsibilities to each team member and organizing and holding meetings with the travel team,? said Gettings. ?I had a lot of help from one of the travel team members, Kelly Barb, who is also on the clinic team with me.?

Gettings said while the team is in El Salvador, she will make sure they stay on schedule with the work that needs to be done each day and adjust the schedule when needed.

?I will hold meetings each night where the team will get together and discuss what was accomplished that day and goals for the next day, and I will help resolve any issues that arise,? she said. ?Along with that, I will be doing manual labor with the rest of my team and some community members, sieving and washing sand and gravel for the filters. I will lead a small group of three or four team members when we are ready to install the filters, and I will also be doing some water quality testing for monitoring.?

Peebles said the original reason the Rowan EWB team went to The Gambia was to repair a flooding road.

?Another organization actually completed that project, so we started looking at the pumps in the villages,? said Peebles. ?Our project at that point was to find sustainable ways to help the villagers access clean drinking water. Another project was added to that when the issue of deforestation came up ? peanut-shell briquettes which could be added to fires as a supplement for wood during cooking. We?ll be collecting data from the villages on our main project ? water pump repair and maintenance ? as well as monitoring our original project ? the Kudang-Kuntaur Road. We also hope to test our peanut shell briquettes.?

Part of Peebles? leadership role was to get The Gambia trip approved, with which she had obvious success.

?From this point on, it will be to finalize trip details and make sure we get the proper data out of this trip,? said Peebles. ?When we?re actually in-country, I will be collecting data on our peanut shell project. As web master, I update the website and as clinic lead, I make sure all the paperwork gets done on time and handed in. Everyday duties include editing reports, reading sections from other team members for accuracy and pounding out trip details. I prepared by reading documents from the project leads in past years to find out exactly what had been tried already or what still needed to be done.?

Peebles, who will be in The Gambia with her team from Jan. 2 to 13, said she expects ?a thorough and complete end-product from all aspects of the projects.? Though she said the projects are very time-consuming and sometimes difficult as far as communication is concerned, she would like to continue to work on the project in years to come. Peebles? ultimate goal is to be a civil engineer in the United States Air Force.

?I?m in the ROTC program and will commission after my senior year,? said Peebles. ?The Air Force does many humanitarian missions around the world and, as a civil engineer, I could be a part of that. Through Engineers Without Borders, I can get some experience with travel and the cultures of other countries. I will also be more aware of the problems they have around the world and be better prepared to combat them.?

Peebles said she?s both nervous and excited about the project. She has never been out of the country before, let alone planned a trip to Africa. But she thinks it will be a great ?eye-opening experience.?

Gettings, who already traveled to El Salvador once last June, said she now knows what to expect on her trip, so she?s mostly excited.

?It is very different than America,? she said. ?Since it was my first time out of the country, I think the biggest shock to me was that I couldn?t understand anything. I knew no one would be speaking English, but I had never experienced anything like that before. It was weird to not be able to communicate at all with anyone except the small group of people that I went with. It was very obvious just from our three hour drive from the airport to La Ceiba that it was a poor area. It was even more obvious once we were in La Ceiba. And it made me realize, even more than I already knew, all of the things we take for granted.?

Gettings said she expects the project will continue its success and looks forward to seeing more and more community involvement so that, eventually, the people of La Ceiba will be able to make the biosand filters without the team?s help.

?These projects are important because they are changing people?s lives,? she said. ?It?s hard, probably impossible, to imagine what it?s like to live in a place where you know drinking the water will probably make you sick, probably make your children sick. They didn?t do anything to deserve that. If I have the ability to help, why would I not??

Though she?s not yet sure what her ultimate career goal would be, Gettings said she knows she wants to continue to work with EWB.

?You learn a lot when you work on these projects, not just about the methods of coming up with solutions and technical design, but about what to do when things don?t go as planned, about thinking and problem solving in the field, and about people, culture and cultural differences,? she said. ?These things all help make me a more well-rounded engineering student, which is helpful no matter what field I go into. And I would encourage others to get involved because it?s a good opportunity to help people and to learn a lot. The more people that are involved and helping, the more people we can help.?

Source: http://c.moreover.com/click/here.pl?r5663968636

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Monday, December 26, 2011

escravoroger_rf: Esqueci o iPad ma casa dos meus pais. u_u

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Funny Updates on Facebook, Twitter

NORAD Santa Tracker 2011: Funny Updates on Facebook, Twitter
Source: IBTimes
Sunday 25th December, 2011??

Santa continues his flight uninterrupted, busy visiting all the continents.

And people have been able to spot him at different points thanks to NORAD Santa Tracker 2011.

There are live pages running on social networking sites too, tracking every moment of Santa's fabulous flight.

And the pages dedicated to NORAD Santa Tracker 2011 are abuzz with f... ...

Read the full story at IBTimes

Source: http://c.moreover.com/click/here.pl?r5661973822&f=378

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Sunday, December 25, 2011

4 Great Deals For Investing In 2012 - Seeking Alpha

By Adam Fischbaum

What a year! If nothing major happens in the next week or so, it looks like the S&P 500 will finish the year down by about 3.6%. Try to be careful as you jump for joy.

It's hard to argue against the fact that there's a sideways bias to the market. So how do you make money? Savvy investors have embraced the beauty and power of dividends. And that's exactly where I plan to keep searching for investment ideas in 2012.

Next year, I'd stay away from utilities and integrated oil companies for the most part. Utilities look OK from an interest rate and regulatory standpoint, but many stocks such as Southern Company (SO) and Consolidated Edison (ED) look a little pricey from a valuation standpoint. As for integrated oil stocks, I think a strengthening dollar (thanks to the euro crisis) will continue to be a problem for oil prices (oil and other commodities are priced in dollars). Stick a fork in this trade. It's done for now...

Big, Big Pharma: In the past few years, smart investors who stayed defensive have been well compensated. That's still a good strategy. But it will also pay to play defense with an eye on growth. Large drug companies fit this sleeve. My favorite in this space is still Eli Lilly (LLY), which I wrote about earlier this year. Lilly shares have had a more than respectable year, with a total return of about 23%. The company is still sitting on mountains of cash and has a full pipeline of new drugs, half of which are in some sort of regulatory review. The stock still looks cheap with a forward price to earnings (P/E) ratio of less than 10 and a 4.8% dividend yield.

The Two "T's"--Technology and Telecom: The smartphone will continue to reign supreme as Google's (GOOG) Android platform and Apple's (AAPL) iOS continue to duke it out. The real beneficiaries, ironically, aren't these two stocks.

I'm not making any predictions of about either of these stocks one way or the other. Let others do that. The three names that stand to gain the most from the smartphone war are AT&T (T), Vodafone Group PLC (VOD) and Intel (INTC).

Look for AT&T to gain subscriber share thanks to Apple's sudden, post-Steve Jobs burst of democratization with free iPhone 3's for all. AT&T shares trade at a reasonable forward P/E ratio of less than 12 and carry a 6% dividend yield. For a global play, I like mobile giant Vodafone.

With a 45% ownership stake in U.S. wireless provider Verizon (VZ), Vodafone shares also offer exposure to growing frontier mobile phone markets in Africa and the Middle East as well as the more developed Asia-Pacific and Eastern European emerging markets. They are also a major presence in developed Europe, as well. The stock offers compelling value with a forward P/E ratio of 9.5 and a dividend yield of 5.4%.

Profiting from the rise of the smartphone will be the chip makers. Already the king of desktop and laptop semis, tech giant Intel is making a more than concerted push into not just the wireless device processor space but anything that requires a microprocessor: automobiles, appliances -- you name it.

Few companies are positioned to leverage their expertise as Intel. With a commitment to spend nearly $9 billion on capital investment in the next few years, expect good things to happen. Even though the stock has had a nice run this year, up 11% exclusive of dividends, Intel shares still look cheap with a forward P/E ratio of less than 10. The 3.6% dividend is a nice bonus, especially with the company developing a habit of raising the dividend -- they've bumped it an average of 16.5% annually in the past five years. [This is one of the primary reasons StreetAuthority co-Founder Paul Tracy calls Intel a "forever stock."]

And One of the Most Ridiculous Values Available: I'll go out on a limb on this one. Some of the more irrational investment bargains lying on the "Reduced for Quick Sale" table are Bank of America (BAC) bonds and preferred stocks.

As markets panicked back and forth this year, BofA common stock was beaten down to the $5 neighborhood. The debt and preferreds took a similar drubbing. The difference is the income. BAC shares don't even yield 1%. However, bonds such as the Bank of America 5.7% Internotes that mature on Feb. 15, 2028, currently trade for around 83 cents on the dollar ($830 for a $1,000 face value bond) and yield about 6.9%. They're rated "BBB+/BAA2," which is investment grade. Some preferred shares trade at a 25% discount to their par value of $25 and yield 7.8% and carry a "BB+/BAA3" rating. Half of that is investment grade.

There's a lot of fear out there concerning BofA, which is probably why Warren Buffett stepped up to invest in this particular name. It's cheap and a great franchise. There's probably a decent trade in the bonds and the preferreds. The attractive yields will also compensate the investor for their risk.

Risks to Consider: Annual predictions are always dependent on big "ifs." The biggest if out there is probably the European situation. Resolution to the crisis is touch-and-go at best on a daily basis. If the wheels come off, expect shockwaves on our shores. And with the U.S. gross domestic product expected to grow at maybe 2% in 2012, our economy is vulnerable to a recession. Even the best run companies are affected by downturns. Lower P/E, high quality, dividend-paying stocks can offer some protection.

Due to their volatile nature, the Bank of America bonds and preferreds are susceptible to credit-rating downgrades. Is a downgrade below investment grade a possibility? These days, very little is surprising. Like the Boy Scouts say... "Be prepared."

After an ambivalent 2011, many investors are either exhausted and ready to throw in the towel or others are still searching for the magic bullet. Don't do either. Focus on high quality, good yield and value. All of the names I've recommended trade at P/E ratios that are lower than the S&P 500 and have greater dividend yields than the index, too. This allows more room for P/E expansion (resulting in price appreciation), and enhanced yield will always add to total return. They're also quality, highly-liquid, name brand companies.

Source: http://seekingalpha.com/article/315590-4-great-deals-for-investing-in-2012

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Friday, December 23, 2011

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Chinese Hackers Hit U.S. Chamber

A group of hackers in China breached the computer defenses of America's top business-lobbying group and gained access to everything stored on its systems, including information about its three million members, according to several people familiar with the matter.

The WSJ's Jerry Seib details a cyber attack against the U.S. Chamber of Commerce in which emails were stolen. Correction: An earlier caption incorrectly said more than 300 Internet addresses were breached.

The break-in at the U.S. Chamber of Commerce is one of the boldest known infiltrations in what has become a regular confrontation between U.S. companies and Chinese hackers. The complex operation, which involved at least 300 Internet addresses, was discovered and quietly shut down in May 2010.

It isn't clear how much of the compromised data was viewed by the hackers. Chamber officials say internal investigators found evidence that hackers had focused on four Chamber employees who worked on Asia policy, and that six weeks of their email had been stolen.

It is possible the hackers had access to the network for more than a year before the breach was uncovered, according to two people familiar with the Chamber's internal investigation.

One of these people said the group behind the break-in is one that U.S. officials suspect of having ties to the Chinese government. The Chamber learned of the break-in when the Federal Bureau of Investigation told the group that servers in China were stealing its information, this person said. The FBI declined to comment on the matter.

A spokesman for the Chinese Embassy in Washington, Geng Shuang, said cyberattacks are prohibited by Chinese law and China itself is a victim of attacks. He said the allegation that the attack against the Chamber originated in China "lacks proof and evidence and is irresponsible," adding that the hacking issue shouldn't be "politicized."

In Beijing, Foreign Ministry spokesman Liu Weimin said at a daily briefing that he hadn't heard about the matter, though he repeated that Chinese law forbids hacker attacks. He added that China wants to cooperate more with the international community to prevent hacker attacks.

The Chamber moved to shut down the hacking operation by unplugging and destroying some computers and overhauling its security system. The security revamp was timed for a 36-hour period over one weekend when the hackers, who kept regular working hours, were expected to be off duty.

Damage from data theft is often difficult to assess.

People familiar with the Chamber investigation said it has been hard to determine what was taken before the incursion was discovered, or whether cyberspies used information gleaned from the Chamber to send booby-trapped emails to its members to gain a foothold in their computers, too.

Chamber officials said they scoured email known to be purloined and determined that communications with fewer than 50 of its members were compromised. They notified those members. People familiar with the investigation said the emails revealed the names of companies and key people in contact with the Chamber, as well as trade-policy documents, meeting notes, trip reports and schedules.

Andrew Harrer/Bloomberg

The Chamber of Commerce building in Washington, D.C.

"What was unusual about it was that this was clearly somebody very sophisticated, who knew exactly who we are and who targeted specific people and used sophisticated tools to try to gather intelligence," said the Chamber's Chief Operating Officer David Chavern.

Nevertheless, Chamber officials said they haven't seen evidence of harm to the organization or its members.

The Chamber, which has 450 employees and represents the interests of U.S. companies in Washington, might look like a juicy target to hackers. Its members include most of the nation's largest corporations, and the group has more than 100 affiliates around the globe.

While members are unlikely to share any intellectual property or trade secrets with the group, they sometimes communicate with it about trade and policy.

U.S. intelligence officials and lawmakers have become alarmed by the growing number of cyber break-ins with roots in China. Last month, the U.S. counterintelligence chief issued a blunt critique of China's theft of American corporate intellectual property and economic data, calling China "the world's most active and persistent perpetrators of economic espionage" and warning that large-scale industrial espionage threatens U.S. competitiveness and national security.

Two people familiar with the Chamber investigation said certain technical aspects of the attack suggested it was carried out by a known group operating out of China. It isn't clear exactly how the hackers broke in to the Chamber's systems. Evidence suggests they were in the network at least from November 2009 to May 2010.

Stan Harrell, chief information officer at the Chamber, said federal law enforcement told the group: "This is a different level of intrusion" than most hacking. "This is much more sophisticated."

Chamber President and Chief Executive Thomas J. Donahue first learned of the breach in May 2010 after he returned from a business trip to China. Chamber officials tapped their contacts in government for recommendations for private computer investigators, then hired a team to diagnose the breach and overhaul the Chamber's defenses.

They first watched the hackers in action to assess the operation. The intruders, in what appeared to be an effort to ensure continued access to the Chamber's systems, had built at least a half-dozen so-called back doors that allowed them to come and go as they pleased, one person familiar with the investigation said. They also built in mechanisms that would quietly communicate with computers in China every week or two, this person said.

The intruders used tools that allowed them to search for key words across a range of documents on the Chamber's network, including searches for financial and budget information, according to the person familiar with the investigation. The investigation didn't determine whether the hackers had taken the documents turned up in the searches.

When sophisticated cyberspies have access to a network for many months, they often take measures to cover their tracks and to conceal what they have stolen.

To beef up security, the Chamber installed more sophisticated detection equipment and barred employees from taking the portable devices they use every day to certain countries, including China, where the risk of infiltration is considered high. Instead, Chamber employees are issued different equipment before their trips?equipment that is checked thoroughly upon their return.

Chamber officials say they haven't been able to keep intruders completely out of their system, but now can detect and isolate attacks quickly.

The Chamber continues to see suspicious activity, they say. A thermostat at a town house the Chamber owns on Capitol Hill at one point was communicating with an Internet address in China, they say, and, in March, a printer used by Chamber executives spontaneously started printing pages with Chinese characters.

"It's nearly impossible to keep people out. The best thing you can do is have something that tells you when they get in," said Mr. Chavern, the chief operating officer. "It's the new normal. I expect this to continue for the foreseeable future. I expect to be surprised again."

--Owen Fletcher in Beijing contributed to this article.

Write to Siobhan Gorman at siobhan.gorman@wsj.com

Source: http://online.wsj.com/article/SB10001424052970204058404577110541568535300.html?mod=fox_australian

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Thursday, December 22, 2011

Revenues up for state, local governments (Reuters)

WASHINGTON (Reuters) ? Tax revenues of U.S. state and local governments rose in the third quarter, the U.S. Census said on Tuesday, marking the eighth straight quarter of growth and heralding the promise of continued economic recovery in areas where revenues collapsed during the recent recession.

Revenues totaled $292 billion, rising 4.1 percent over the third quarter of 2010 to their highest third quarter level on record.

They were primarily bolstered by a 10.9 percent surge in individual income taxes, which reached $66.7 billion in the third quarter.

"State and local finances are gradually improving, but neither states nor localities are out of the woods yet," said Gregory Daco, principal U.S. Economist at IHS Global Insight, in a note on the data.

"The current fiscal year will be one of many challenges. State and local governments will have to manage still-high demand for public services while relying less on federal assistance, and without the boost to revenues from temporary tax increases and fees," he added.

Most states begin their fiscal year in July.

State tax revenues alone rose 5.6 percent, to $178.2 billion, from the third quarter of 2010.

States had experienced a slight time lag between the recession's beginning in 2007 when the fall in employment, housing prices and consumption hit the wider economy and state revenue collection.

Despite the onset of the recession, their revenues reached a record high in 2008 before the recession's impact was felt and revenues plummeted.

I n much the same way, states are only now beginning to register the recession's end, officially in June 2009, and are eager for revenues to return to the 2008 peaks.

And while revenues have been improving steadily, the European debt crisis, stock market declines, and other economic troubles on the national level have states worried revenue growth will not last.

In Tennessee, individual income tax receipts plummeted 42.2 percent in the third quarter from the same period in 2010, the only state where those tax revenues dropped, Census data showed. On the other hand, they rose 139.6 percent in Hawaii and 81.8 percent in Illinois.

All property taxes increased a much smaller 1 percent to $87.4 billion in the quarter. Those collected by local governments, $84.4 billion, were up 1.5 percent from the same quarter a year before.

Sales tax revenues made much heartier gains, rising 3.3 percent to $73.3 billion, but corporate income taxes dropped for the first time in a year, by 2.9 percent to $9.1 billion.

Sales tax collections dropped in six states and the District of Columbia. They rose the most, 40.8 percent, in North Dakota, and were up 25.1 percent in Nevada. Five states do not collect sales taxes.

The Census data showed that other taxes, primarily those charged on oil and mineral extractions, surged 75.5 percent to $3.7 billion. Only a handful of states levy severance taxes, such as oil-rich Alaska, where they leapt more than 200 percent.

At the start of the recession, state and local governments temporarily increased taxes and fees to tide them over. Those measures are ending now, just as the extraordinary assistance from the 2009 federal economic stimulus plan draws to a close.

That has left fewer places to tap revenues, especially as states' voters and leaders such as Virginia Governor Bob McDonnell slam the door on the possibility of future tax increases. The only tax increase on a state ballot in November, in Colorado, failed.

Meanwhile, the U.S. Congress is fighting over any spending increases, which means that the federal government will likely send fewer dollars to the states, which are likewise cutting local aid.

(Reporting By Lisa Lambert; Additional reporting by Lucia Mutikani; Editing by Theodore d'Afflisio)

Source: http://us.rd.yahoo.com/dailynews/rss/economy/*http%3A//news.yahoo.com/s/nm/20111220/us_nm/us_revenues_governments

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Saturday, December 17, 2011

Gingrich defends government-sponsored enterprises

(AP) ? Former House Speaker Newt Gingrich describes some government-sponsored enterprises as valuable entities that can help people.

Gingrich on Thursday night defended his time working with Freddie Mac, the quasi-government home mortgage agency. Gingrich made more than $1.6 million working with it.

Gingrich says at the latest GOP debate that some public-private partnerships ? institutions like credit unions and electricity cooperatives ? are important and do a good job.

His Republican rivals criticized him. Texas Rep. Ron Paul says those are the "worst kind" of economic entity because they mix free enterprise with the government.

Minnesota Rep. Michele Bachmann says Freddie Mac and a similar entity, Fannie Mae, "need to go away."

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/89ae8247abe8493fae24405546e9a1aa/Article_2011-12-15-GOP%20Debate-Gingrich-Freddie%20Mac/id-fe04be70e54147cda96f03c305d85752

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UN makes $7.7 billion aid appeal for 2012 (AP)

GENEVA ? The United Nations is asking donor nations to give $7.7 billion to pay for humanitarian emergencies in 2012.

The initial request for next year is significantly lower than the $8.9 billion that the global body asked for in 2011.

The U.N.'s humanitarian appeals are revised throughout the year to respond to unforeseen disasters.

U.N. aid chief Valerie Amos told reporters in Geneva on Wednesday that the appeal would cover the needs of 51 million people from Afghanistan to Zimbabwe.

The biggest amount, $1.5 billion, will be devoted to Somalia.

This is followed by $1.1 billion for Sudan and $764 million for Kenya where tens of thousands of Somalis have sought shelter from war and famine.

Source: http://us.rd.yahoo.com/dailynews/rss/world/*http%3A//news.yahoo.com/s/ap/20111214/ap_on_re_eu/eu_un_aid_appeal

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Friday, December 16, 2011

Sharpening the lines: Advance could lead to smaller features in the quest for more compact, faster microchips

ScienceDaily (Dec. 14, 2011) ? The microchip revolution has seen a steady shrinking of features on silicon chips, packing in more transistors and wires to boost chips' speed and data capacity. But in recent years, the technologies behind these chips have begun to bump up against fundamental limits, such as the wavelengths of light used for critical steps in chip manufacturing.

Now, a new technique developed by researchers at MIT and the University of Utah offers a way to break through one of these limits, possibly enabling further leaps in the computational power packed into a tiny sliver of silicon. A paper describing the process was published in the journal Physical Review Letters in November.

Postdoc Trisha Andrew PhD '10 of MIT's Research Laboratory of Electronics, a co-author of this paper as well as a 2009 paper that described a way of creating finer lines on chips, says this work builds on that earlier method. But unlike the earlier technique, called absorbance modulation, this one allows the production of complex shapes rather than just lines, and can be carried out using less expensive light sources and conventional chip-manufacturing equipment. "The whole optical setup is on a par with what's out there" in chip-making plants, she says. "We've demonstrated a way to make everything cheaper."

As in the earlier work, this new system relies on a combination of approaches: namely, interference patterns between two light sources and a photochromic material that changes color when illuminated by a beam of light. But, Andrew says, a new step is the addition of a material called a photoresist, used to produce a pattern on a chip via a chemical change following exposure to light. The pattern transferred to the chip can then be etched away with a chemical called a developer, leaving a mask that can in turn control where light passes through that layer.

While traditional photolithography is limited to producing chip features larger than the wavelength of the light used, the method devised by Andrew and her colleagues has now been shown to produce features one-eighth that size. Others have achieved similar sizes before, Andrew says, but only with equipment whose complexity is incompatible with quick, inexpensive manufacturing processes.

The new system uses "a materials approach, combined with sophisticated optics, to get large-scale patterning," she says. And the technique should make it possible to reduce the size of the lines even further, she says.

The key to beating the limits usually imposed by the wavelength of light and the size of the optical system is an effect called stimulated emission depletion imaging, or STED, which uses fluorescent materials that emit light when illuminated by a laser beam. If the power of the laser falls below a certain level, the fluorescence stops, leaving a dark patch. It turns out that by carefully controlling the laser's power, it's possible to leave a dark patch much smaller than the wavelength of the laser light itself. By using the dark areas as a mask, and sweeping the beam across the chip surface to create a pattern, these smaller sizes can be "locked in" to the surface.

That process has previously been used to improve the resolution of optical microscopes, but researchers had thought it inapplicable to photolithographic chip making. The innovation by this MIT and Utah team was to combine STED with the earlier absorbance-modulation technique, replacing the fluorescent materials with a special polymer whose molecules change shape in response to specific wavelengths of light.

In addition to enabling the manufacture of chips with finer features, the technique could also be used in other advanced technologies, such as the production of photonic devices, which use patterns to control the flow of light rather than the flow of electricity. "It can be used for any process that uses optical lithography," Andrew says.

Professor Stefan Hell, head of the Department of NanoBiophotonics at the Max Planck Institute for Biophysical Chemistry in G?ttingen, Germany, calls this work "strikingly simple and elegant" and "a most impressive demonstration of the idea of using photochromic molecules to create features that are both finer and closer together than half the wavelength of the light."

"The work shows a concrete pathway to creating tiny and dense features at the nanoscale." he adds. "Because of its future potential it needs to be actively pursued. ... These methods have the potential of shifting the paradigm of what we think that focused light can do for making nanosized features and hence mastering the nanoworld."

In addition to Andrew, the paper's authors include Rajesh Menon, formerly a research engineer at MIT and now an assistant professor of electrical engineering and computer science at Utah, and Utah postdoc Nicole Brimhall and graduate student Rajakumar Varma Manthena. The work was supported in part by grants from the U.S. Defense Advanced Research Projects Agency and the National Science Foundation.

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Story Source:

The above story is reprinted from materials provided by Massachusetts Institute of Technology. The original article was written by David L. Chandler, MIT News Office.

Note: Materials may be edited for content and length. For further information, please contact the source cited above.


Journal Reference:

  1. Nicole Brimhall, Trisha Andrew, Rajakumar Manthena, Rajesh Menon. Breaking the Far-Field Diffraction Limit in Optical Nanopatterning via Repeated Photochemical and Electrochemical Transitions in Photochromic Molecules. Physical Review Letters, 2011; 107 (20) DOI: 10.1103/PhysRevLett.107.205501

Note: If no author is given, the source is cited instead.

Disclaimer: Views expressed in this article do not necessarily reflect those of ScienceDaily or its staff.

Source: http://feeds.sciencedaily.com/~r/sciencedaily/~3/kDlC3ObR-Us/111214105613.htm

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Wednesday, December 7, 2011

Balboa Island trying to outsmart a rising sea

As people stroll Balboa Island's picturesque waterfront, some wonder how much one of those cozy cottages costs.

City officials think about another price tag: how much it will take to defend those homes against rising sea levels.

City engineers revealed last month that it could cost about $60 million to replace Balboa Island's aging seawalls; otherwise, residents could risk more high tides washing into their streets and homes.

The island, 4 to 8 feet above sea level, represents only a small portion of coastal communities' looming problems from climate change. Replacing all of Newport Beach's seawalls could require nearly $500 million, engineers say, although some structures could be retrofitted, so the actual price would be less.

"The costs are a worst-case situation," said City Councilman Ed Selich, who represents Balboa Island, where a projected 4-foot rise in sea level by 2100 would inundate homes. "We don't know whether those projections are going to hold over the long haul, so we have to come up with a phased approach."

Already, the city's islands flood during extreme high tides. Crews pumped water from streets last winter after an 8-foot tide, coupled with storm surges, breached the seawalls.

Officials want to extend the walls, to 10 feet from 9 feet above the average sea level, to brace for an expected 1-foot water-level rise by 2050. On Balboa Island, that could mean replacing the 1930s-era concrete barriers with steel ones or extending the current structures.

Most of the city's seawalls have begun to show "widespread cracking," a public works report says.

Replacing aging infrastructure is reason enough to act now, officials say.

Newport Beach has 17 to 18 miles of seawalls, about 4.5 miles of which are in public control and 13 miles of which are privately owned.

In the conservative city, politicians often avoid talk of climate change ? especially its causes ? and instead point to a demonstrated sea-level rise and its threat to real estate.

Selich said he doesn't know if climate change is "man-made or simply a long-term cycle."

"I just know that the evidence is there that [the sea] is rising," he said, "and we have the responsibility to deal with it."

Selich hopes that over the next five years the city can build up the walls on Balboa Island that are already prone to flooding.

Each new seawall would be engineered to accept a 4-foot extension, in anticipation of the 2100 scenario. City officials are relying on mid-range estimates derived from projections by the Army Corps of Engineers and other tidal studies.

"We don't want to overbuild now," said City Engineer Dave Webb, who recommends reassessing around 2050.

Officials are focusing now on Balboa Island because its walls are the oldest and publicly owned. A citywide project could require property owners to replace private seawalls ? a daunting proposal that hasn't been vetted for funding or feasibility. Another idea is to require ground floors to be built at the 10-foot tide level.

"Right now we're just looking at Balboa Island," Webb said. "The money is huge."

The Balboa Island Ferry, which takes riders from the Balboa Peninsula to the island, alone could require $3.5 million to $5 million to retrofit its landings and adjacent fuel dock.

But the consequences of inaction could also be huge. Though Newport Beach hasn't projected property loss from extreme floods, a study commissioned by the California Department of Boating and Waterways found that rising sea levels could cost beach cities hundreds of millions of dollars in lost tourism and tax revenue.

To fund the fortifications, officials have identified a few federal and state grants. But they say money also would have to come from other sources, such as city funds and homeowner assessments.

"At some point, the property owners are going to have to kick in," Selich said.

That might be a challenge, especially for homeowners like Donna DiBari, whose home hasn't flooded recently. In 1985, her first year on Balboa Island, DiBari saw extensive flooding, but her seawall hasn't been breached much since then.

"If we felt it ? if the water kept going into my garage ? then I'd be afraid," she said.

Fear isn't motivating Webb. He says the seawalls have to be replaced anyway, so the city is using the latest science to choose a height.

"We're trying to do some advance work here," Webb said. "We don't want to wait until we have a problem."

mike.reicher@latimes.com

Source: http://feeds.latimes.com/~r/latimes/news/science/~3/sLNF8U0OaS0/la-me-seawalls-20111205,0,4059709.story

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Monday, December 5, 2011

Distressed Debt Investing: Distressed Investing Conference Notes ...

Last week, we reported notes from the Beard Group's 18th annual Distressed Investing Conference. Distressed Debt Investing contributor Josh Nahas, Principal of Wolf Capital Advisors, a Philadelphia based investment advisory firm focused on distressed debt and corporate restructuring, was in attendance. Here is more notes from the conference:

Baggage & Benefits: Current Issues in the Ownership of Distressed Debt and Bankruptcy Claims

Panelist:

  • Paul N. Silverstein, Panel Moderator, Partner/Co-Chair Bankruptcy & Restructuring Practice, ANDREWS KURTH LLP
  • Geoffrey A. Richards, Group Head, Special Situations and Restructuring, WILLIAM BLAIR & COMPANY L.L.C.
  • Jane Sullivan, Executive Vice President, EPIQ BANKRUPTCY SOLUTIONS

The first topic discussed was credit bidding and the Philly News and Palco decisions and how those decisions were unfavorable to secured creditors who, prior to those rulings, had always assumed to have an absolute right to credit bid except in the case of malfeasance. Section 363(k)of the bankruptcy code allows for credit bidding except for ?cause? which the 3rd circuit in Philly News went to define broadly, not just a bad act.

However, in In re River Road Hotel Partners LLC the 7th Circuit affirmed the bankruptcy court?s ruling, rejecting the debtor?s bid procedures motion on the grounds that it precluded credit bidding. In that case, the court took the same approach as the dissenting opinion of Judge Ambro in Philly News which was based on the principles of statutory construction. There is now a split between the 7th Circuit and the 3rd and 5th Circuits and the appellate circuits as to the interpretation of Section 1129(b)(2)(A)?s ?fair and equitable? standard. River Road along with another debtor in a similar case RadLax have appealed the decision to the Supreme Court.

Issues relating to the risks of trading with Plan Support Agreements ("PSA") were discussed. One result is that creditor will be required to disclose exact amount of holdings. Counter parties need to know whether they actually hold title to instruments (assignment vs participation) and whether the securities are held currently or out on loan. It was recommended that if you sign a PSA it is best not to sit on the UCC because of potential conflicts in your fiduciary duties.

Next, the panel tacked the issue related to WAMU and post-petition interest. The panel viewed as a troubling and unsound decision where a ruling by Jude Walrath of the US Bankruptcy Court in Delaware held that creditors with a contract rate of interest (bondholders) of a solvent debtor were only entitled to Federal Judgment Rate on post-petition interest. In the opinion, she admittedly disavowed her previous statements in In re Quorum Healthcare Corp where she had upheld post-petition interest at the contract rate. She did uphold a contractual subordination clause between the Sr and Junior lenders that will require the junior lender to turn over their recovery to the senior lenders until the senior lenders have recovered their post-petition interest.

The panel all agreed that as a result, investors should be modeling base case recovery waterfalls in solvent debtor case assuming judgment rate not contract rate, at least for cases in Delaware until there is more clarity on the issue.

Perhaps the most disturbing and far reaching decision for distressed investors is Judge Walrath?s findings with regards to potential insider trading claims. In her ruling, Judge Walrath found in favor of the equity committee having a ?colorable? claim of insider trading against members of a steering committee which had formed to negotiate a settlement with the debtor. The 4 fund group had established provisions for cleansing of inside information, and lifting of trading restrictions when negotiations had closed. The panel believed that this decision may significantly impact the ability and willingness of creditors to actively participate in negotiations with debtors. This could increase the time it takes to get a deal done in bankruptcy, as well increase the amount of money spent litigating, rather than negotiating.

The last issue the panel briefly touched on was Judge Kevin J. Carey?s decision to reject both plans in the Tribune bankruptcy. Carey said neither plan was confirmable but appeared to favor Tribune?s plan, labeling the competing plan as ?speculative.? The issue surrounds Fraudulent Conveyance claims against those who financed the 2007 LBO of the company. There are questions surrounding the ability of the creditors to step into the debtor?s shoes and pursue the claims, since fraudulent conveyance actions are prosecuted by the debtor on behalf of the estate.

Transportation & Shipping: Investment Tips & Traps

Panelists

  • Wilbur L. Ross, Chairman and Chief Executive Officer, WL ROSS AND CO. LLC (Pre-Recorded Statement)
  • Edward O. Sassower, Panel Moderator, Partner, KIRKLAND & ELLIS LLP
  • John P. Brincko, President, SITRICK BRINCKO GROUP, LLC
  • Mark Friedman, Senior Managing Director, EVERCORE
  • Daniel G. Montgomery, Managing Director, MESIROW FINANCIAL CONSULTING, LLC
  • Steven Strom, Managing Director and Global Head of Restructuring, JEFFERIES & CO.

Wilbur Ross opened with a 20 minute overview of distressed shipping sector. He spoke via a pre-recorded video as he was in Ireland meeting with regulators about his investment in Bank of Ireland. Mr. Ross spoke briefly about his investment in Navigator Holdings and Airlease, however he spend most of his time providing an astute overview of distressed shippers.

In the distressed shipping sector, he first noted that the majority of ships are financed by European banks which are under increasing strain and have dramatically curtailed lending. Shipping is already struggling due to the glut of ships that have come on the market from the mid 2000s boom as well as from declining economic activity. Moreover, shipping is still a highly fragmented industry with few barriers to entry. There are a large number of charter operations with 1 or 2 vessels who compete aggressively on price. He noted that currently shippers require $4 of assets to generate $1 of revenue, not a recipe for good returns on capital. With charter rates down over 45% from their 2007 peak, Mr. Ross predicted that the market would not reach equilibrium for at least another year if not more.

As a result of these factors Mr. Ross predicted that the next couple years would be difficult for shippers and that the way the industry finances itself would be fundamentally transformed and that private equity and alternative investors would play a significant role. He believed that banks were going lower the LTVs that they lend against to the 50% range while they previously had been closer to 80%. He noted that a great deal of ship financing over the last several years came from German KG tax shelters, but indicated that this source of funding was not likely plays as big a role going forward.

In addition, he felt that the current opaque corporate structures where operators are competing against their public company owners would need to change and that the business would need to become more transparent. Mr. Ross predicted there would be opportunities for those who funds willing to take a long view and capable of dealing with the multi-jurisdictional issues and untangling the complex corporate structure.

Moving to the panelists in attendance, John P. Brincko, President of Sitrick Brinkcko who specializes in the trucking space spoke on the current problems facing the sector. He pointed out that the business has become heavily commoditized, is highly fragmented with many independent owner/operators and has little pricing power. To make matters worse many of the truckers, including YRC which went through a restructuring are saddled with expensive union contracts. He felt the companies with expensive labor contracts, and particularly YRC, would likely need to file for bankruptcy to reduce operating costs and remain competitive.

Other panelists noted the free fall bankruptcies of Omega Navigation and Marco Polo and said those cases could influence future restructurings in the shipping space. Steve Strom of Jefferies cited Omega as an example of a foreign shipper filing in the US as a good test case. (Jefferies is advising the debtor). Mark Friedman of Evercore noted that there are a large number of publicly traded shippers priced under $10 per share with 12-15 shipping companies trading at $2. He thought many of these names could be good short candidates.

Source: http://www.distressed-debt-investing.com/2011/12/distressed-investing-conference-notes.html

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