A Studio, a Star, a Fateful Bet

Abstract: SANTA MONICA, Calif. — If there was a nervous moment at Friday night’s showing here of Metro-Goldwyn-Mayer’s new James Bond movie, “Quantum of Solace,” it came with a trailer for the studio’s next big bet: “Valkyrie,” in which Tom Cruise plays a German officer who tried to kill Hitler. The audience watched. Mr. Cruise loomed in all his uniformed glory as Col. Claus Schenk von Stauffenberg. And the appearance passed without a single hoot or holler. It was not a bad start for a movie that has become unusually tangled in the fortunes of both its star and the company that made it. “Valkyrie,” directed by Bryan Singer, with an original script by Christopher McQuarrie, was conceived about 20 months ago as a dramatic showcase for Mr. Cruise. It was also a high-profile effort to kick-start United Artists, the MGM unit of which he and his producing partner, Paula Wagner, had become part owners. But Ms. Wagner has since resigned under pressure as United Artists’ chief executive, while Mr. Cruise has cut back his involvement in the studio, which was never as day-to-day as Ms. Wagner’s, and turned his attention to rebuilding his acting career. The movie, meanwhile, bounced from one intended release date to another, finally landing on Dec. 26, among a clutch of Oscar contenders and expensive Christmastime competitors, including “Yes Man,” with Jim Carrey, and “The Curious Case of Benjamin Button,” with Brad Pitt. Along the way, “Valkyrie” has turned into a test not only of Mr. Cruise’s career durability, but of MGM’s determination — with new ownership, and under the chairmanship of Harry E. Sloan since 2005 — to be taken seriously as a producer and distributor of the kind of risky event films that define a major studio. If “Valkyrie” succeeds, even moderately, MGM wins a modicum of credibility in image-is-everything Hollywood. A failure brings fresh sniping that the studio does not know what it is doing, making the job of attracting top-notch talent even harder. Financially speaking, the stakes are considerable. With a stated production budget of $75 million — competitors insist it is closer to $90 million — “Valkyrie” is the most expensive film made for distribution by MGM under Mr. Sloan’s watch. The studio will now spend about $60 million to market the movie — if nothing else, to make the point that it can play in the big leagues. (“Quantum of Solace” was much more costly. But it was co-financed and co-distributed by Sony Pictures Entertainment. The movie sold $70.4 million worth of tickets in North America in its first three days of release, the biggest opening ever for a James Bond film.) “Valkyrie” will also test the mettle of a 46-year-old Mr. Cruise: If it fails, his status as a superstar, damaged by a rough parting with Paramount Pictures in 2006, slips another notch. And this time United Artists — clipped by a Cruise flop last year in “Lions for Lambs” — slips with it. Mr. Cruise has become one of Hollywood’s more puzzling assets. He is still pursued for projects and has enormous cachet: Few stars have reliably drawn the kind of audience he attracted even to “Mission: Impossible III,” which took in nearly $400 million in theaters worldwide in 2006. Yet he has been a magnet for negativity, fed in part by hostility to his association with Scientology, and in Hollywood perhaps more by the delay in “Valkyrie’s” release and his two-year absence from the screen, other than relatively modest roles in “Lions for Lambs” and last summer’s “Tropic Thunder.” And just as Hollywood will scrutinize the outcome of “Valkyrie,” so will the potential investors MGM has been aggressively courting, to no avail. After Ms. Wagner’s ouster five months ago, Mr. Sloan stepped up his hunt for a new $650 million production fund to bankroll his new motion picture team’s ambitious slate of films, including two installments of “The Hobbit” and the next James Bond film, of which MGM has sole custody. “There’s no doubt that we’re going to get the money,” he said at the time. But that hunt is over, according to two bankers with knowledge of the matter, in part because of the global economic crisis, but also because of MGM’s already staggering $3.7 billion debt load. Options remain — taking out loans against expected revenue from “Quantum of Solace” and “Pink Panther 2,” due next year, or dipping into its own cash reserves — but those are unfavorable. Mr. Sloan and other MGM executives declined to be interviewed, as did Mr. Cruise. Jeff Pryor, the company’s chief spokesman, sent a 1,000-word e-mail message proclaiming the studio’s finances as robust. “MGM is not having financial problems,” Mr. Pryor wrote. Among his phrases: “MGM is not planning any large-scale financial cutbacks or employee layoffs”; “the studio has no short or midterm liquidity issues”; “MGM is not for sale”; “MGM has extremely solvent shareholders.” By various accounts, Mr. Cruise has scaled down his involvement with United Artists since Ms. Wagner resigned in August — perhaps signaling that stardom and studio management do not mix. Both continue to own a stake in the company, and Mr. Cruise maintains an office in MGM’s Century City high-rise. But Ms. Wagner now produces films on her own. Mr. Cruise meanwhile has focused on plans to star in a movie for another company. Mary Parent, chairwoman of MGM’s motion picture group, has largely taken charge of United Artists, although the unit continues to employ its own marketers and chief operating officer. A leading candidate for Mr. Cruise’s next film is “The Tourist,” an action-thriller financed by Spyglass Entertainment Holdings. Tentatively set for production in the spring, its script is being rewritten by Mr. McQuarrie — who originated the “Valkyrie” project — at the insistence of Mr. Cruise. If that points to Mr. Cruise’s continued faith in “Valkyrie,” he is not alone. Speaking on condition of anonymity to minimize conflict, more than a dozen people involved with “Valkyrie” and MGM described a campaign in which the studio and its allies for months have been quietly fighting to change the public perception of a film they believe was unfairly tainted by knee-jerk hostility toward the casting of Mr. Cruise as a German war hero. Insiders believe the company has corrected early blunders, successfully repositioning the film as a character-driven suspense thriller. The mood inside MGM is not exactly euphoric on the release, but is hardly foreboding. “Let’s face it, there was a time when the movie wasn’t on track; it is now,” said one person with knowledge of the situation, but who asked for anonymity for fear of angering Mr. Cruise. To some extent, saving the movie has meant soft-pedaling the star. Billboards that blossomed around Los Angeles last week flank a barely recognizable figure of Mr. Cruise with five fellow actors and three slogans. The last of them, notably group-oriented, reads: “The conspiracy begins this December.” Online promotions now feature Mr. Singer, who directed “The Usual Suspects” and “X-Men.” Images of Mr. Cruise with an eye patch — widely ridiculed when they surfaced as the movie was being shot — have yielded to battle scenes in new trailers. The shift, in fact, had long been planned, but was delayed until Mr. Singer, who filmed most of the movie in Germany, finished action sequences in the Southern California desert in June. This month, Mr. Cruise put in a surprise appearance at an Amazon.com employees’ town hall meeting in Seattle. After a 10-minute onstage interview, he announced a free screening of “Valkyrie” for employees: The star is clearly still using his muscle for United Artists, particularly where the film is involved. In an especially delicate maneuver, “Valkyrie” will open with no Oscar campaign, though it arrives at the height of Hollywood’s awards season, and is not without credentials: Mr. McQuarrie is a past winner (for writing “The Usual Suspects”), and Mr. Cruise has been nominated three times as an actor (for “Magnolia,” “Jerry Maguire” and “Born on the Fourth of July”). MGM instead is banking on audience appeal. Yet it will have to scrape for prime theaters in a holiday week in which Mr. Pitt, Mr. Carrey, Adam Sandler, Jennifer Aniston, Clint Eastwood and Will Smith will compete for attention among at least a dozen major films set for late December. MGM raised eyebrows in August when it plunked “Valkyrie” into such a competitive slot. Insiders say the decision was made mostly because of the large adult audience available to see films in the two-week holiday period. While Hollywood and the media obsess over “Valkyrie,” the studio’s production executives have shifted their focus to the pipeline. A remake of “Fame” is in preparation along with “Cabin in the Woods,” billed as a twist on the horror thriller. The studio is also keen on a talking animal picture titled “Zookeeper” and has remakes of “Robocop” and “Poltergeist” in the works.

Cruise Tom
United Artists
Wagner Paula
Finances
Motion Pictures
Valkyrie (Movie)


Economic Reports for the Week of March 11

Abstract: ECONOMIC REPORTS Information to be released includes retail sales for February, import prices for February and business inventories for January (Wednesday); weekly jobless claims, the Producer Price Index for February and the current account deficit for the fourth quarter (Thursday); and the Consumer Price Index for February, industrial production for February and the Thomson Reuters/University of Michigan consumer sentiment index for March (Friday). CORPORATE EARNINGS Companies scheduled to report quarterly results include Costco Wholesale (Tuesday). IN THE UNITED STATES On Tuesday, the Senate Banking Committee will conduct a hearing on the nominations of Mary Jo White to be chairwoman of the Securities and Exchange Commission and Richard Cordray to be director of the Consumer Financial Protection Bureau; and the Senate Commerce Committee will conduct a hearing on the oversight of the Federal Communications Commission. On Wednesday, a House Financial Services subcommittee will conduct a hearing on mortgage insurance; a House Energy and Commerce subcommittee will conduct a hearing on the effect of the Obama health care law on jobs; a House Judiciary subcommittee will conduct a hearing about investigating and prosecuting cyberthreats; and a judge in New York will oversee the auction of Hostess Brands’ snack cake business, including Twinkies. On Thursday, Samsung Electronics is expected to introduce the latest model of its Galaxy S smartphone in New York; the Federal Reserve is scheduled to announce which banks have the ability to pay dividends and buy back shares; the House Agriculture Committee will conduct a hearing on legislative improvements to the Dodd-Frank Act; and a House Judiciary subcommittee will conduct a hearing about abusive patent litigation. OVERSEAS On Wednesday and Thursday, global regulators will meet in Basel, Switzerland, to discuss revisions to capital and liquidity rules for banks. On Thursday and Friday, European Union leaders will meet in Brussels to discuss the debt crisis, bank regulation and other matters.

Earnings Reports
US Economy
Banking and Finance


Recession Tightens Grip on State Tax Revenues

Abstract: The recession can now claim another troublesome record: state tax collections shrank at the end of 2009 for a fifth consecutive quarter, the longest period of continuing state revenue declines since at least the Great Depression , according to a new report. Over all, state tax collections fell to $134.5 billion in the last quarter of 2009, a 4.1 percent drop from the $140.2 billion collected during the same period a year earlier, according to the report, which will be released Tuesday by the Nelson A. Rockefeller Institute of Government. While the drop in tax collections was less severe than earlier in the year — the record for the steepest drop was set last spring when tax collections fell by 16.6 percent compared with the same period in 2008 — the continuing declines are putting even more stress on states. The revenue decline comes despite the tax increases imposed by many states since the recession began. With less tax money coming into state treasuries and expenses for programs like Medicaid continuing to mount, many states will probably be forced to consider further tax increases, spending cuts and layoffs — actions that some economists warn could put a drag on the nation’s fragile economic recovery. The Rockefeller Institute report, which was written by Lucy Dadayan, a senior policy analyst, warns, “State tax revenue will continue to be insufficient to support current spending commitments, and more spending cuts and tax increases are most likely on the way for many states.” Oklahoma reported the largest revenue drop in the quarter, a 26.9 percent decline compared with the same period the previous year, followed by Arizona, which reported a 17.1 percent drop. Seven states reported growth in revenues, but the report notes that the gains “were often driven by legislated tax increases rather than growth in the economy and tax base.” The report predicts that more states will begin seeing revenue growth soon, particularly in sales tax collections as retail sales rebound, but warns that state tax revenue will likely remain below its pre-recession peak “for quite some time.” Many states are hoping that the federal government will provide them with more aid this year, now that much of the state aid included in the stimulus package has been spent. The National Governors Association, which continued its meeting in Washington on Monday, has warned that the fiscal year beginning in July will be “the most difficult to date.” Some states have already tapped so-called rainy day funds, and others have turned to a variety of one-time gimmicks to balance their budgets. Now, many states find themselves in the budgetary equivalent of looking for loose change under the sofa cushions. Some governors are even counting on more federal aid in their proposed budgets for next year, even though it is far from certain that the money will be approved. Others warn that doing so would be imprudent. “It would be irresponsible,” Gov. Haley Barbour of Mississippi, a Republican, said in a recent interview. “It’s irresponsible to count money that hasn’t even passed Congress.”

Rockefeller Nelson A Institute of Government


Dazzling Datsyuk Leads Red Wings Past Coyotes

Abstract: Pavel Datsyuk scored and had three assists and the Red Wings held on for a 4-3 win over the Phoenix Coyotes on Saturday in Detroit to take a 2-0 lead in their first-round series. Detroit led by 2-0 when Datsyuk poked the puck past a Phoenix player in the neutral zone and skated in on goaltender Ilya Bryzgalov. Datsyuk pulled the puck back between his legs, then flipped it at the goal — the type of move used during a shootout or maybe during practice. Bryzgalov made the save, but the rebound went to Darren Helm, who got an easy goal. “I am maybe trying to do too much,” Datsyuk said of his trick shot. He added, “Maybe next time, I try more easy way to score.” It was Datsyuk’s first 4-point playoff game. Brian Rafalski and Tomas Holmstrom also scored for Detroit, and Nicklas Lidstrom had two assists. Shane Doan scored twice for Phoenix, which nearly rallied from a four-goal deficit with a suddenly potent power play. The Red Wings were again without Henrik Zetterberg, who has been out with a left knee injury after leading the team in scoring during the regular season. Datsyuk filled the void and left his teammates and opponents impressed with his nifty stick-handling. “The fact he almost pulled it off,” Detroit goalie Jimmy Howard said. “It’s really remarkable.” Detroit scored two power-play goals in the first. Datsyuk contributed the first on a wrist shot through traffic with 9 minutes 18 seconds left. Then Rafalski made it 2-0 with a shot from just inside the blue line. The teams were at even strength in the first when Datsyuk broke in and set up Helm’s goal, and early in the second, Datsyuk stick-handled free in the slot and shot wide, but Holmstrom tipped in a shot by Valtteri Filppula seconds later. “It’s disgusting,” Phoenix defenseman Keith Yandle said, with admiration, of Datsyuk. “It’s fun to watch him but not fun to play against him. He makes the game look easy, he’s so good.” CANADIENS 3, BRUINS 1 Michael Cammalleri and Mathieu Darche each scored in the first 2:20, and Carey Price stopped 34 shots as visiting Montreal took a 2-0 lead in the first-round series. Boston, the No. 3 seed in the East, has never — in 26 tries — won a playoff series after losing the first two games. Game 3 is Monday in Montreal. The Bruins’ Patrice Bergeron scored in the second period to cut the deficit to 2-1 and end a postseason scoreless streak that dated to the team’s unprecedented collapse after taking a 3-0 series lead against the Philadelphia Flyers in last year’s conference semifinals. That is six postseason losses in a row for Boston. But after Yannick Weber made it 3-1 with 2:29 left in the second, the Bruins were booed off the ice by their home fans when the period ended. Boston played without its captain, Zdeno Chara, who was scratched minutes before the opening face-off because of dehydration. FLYERS 5, SABRES 4 Ville Leino and Danny Briere had clutch goals as host Philadelphia tied the first-round series. Game 3 is Monday in Buffalo. Goaltender Brian Boucher, one of many unlikely playoff stars when the Flyers orchestrated a surprising run to the finals last season, relieved the rookie Sergei Bobrovsky after Bobrovsky allowed three goals on seven shots. Introduced to the familiar cheers of “Booosh,” Boucher stopped 17 consecutive shots and steadied his teammates after a first period in which the clubs combined for 6 goals and almost 30 penalty minutes. KINGS 4, SHARKS 0 Drew Doughty had two goals and two assists, Jonathan Quick made 34 saves and Los Angeles beat San Jose to even the Western Conference series at one game apiece. Jack Johnson and Kyle Clifford also scored for Los Angeles. The King bounced back from an overtime loss in Game 1 to seize home-ice advantage heading back to Los Angeles for Game 3 on Tuesday night. The Sharks took too many undisciplined penalties and were unable to generate many good offensive chances against Quick, drawing the ire of their usually supportive fans, who booed the home team sporadically throughout the game. Antti Niemi allowed the four goals on 23 shots. DUCKS’ RYAN SUSPENDED Anaheim wing Bobby Ryan, a member of the Ducks’ top line, was suspended two games for stamping on the foot of Nashville defenseman Jonathon Blum.

Hockey Ice
Playoff Games
Detroit Red Wings
Phoenix Coyotes
Datsyuk Pavel
Bryzgalov Ilya


Three-Way Tie in Tournament of Champions

Abstract: The defending champion Dustin Johnson shot a four-under-par 69 to join Webb Simpson and Jordan Spieth in a tie for first after the third round of the Tournament of Champions in Kapalua, Hawaii. The second-round leader, Zach Johnson, shot a 74 to fall to fourth.

Golf
Dustin Johnson
Webb Simpson
Jordan Spieth


Snap Moving to I.P.O. Faster Than Its Peers

Abstract: Snap wants to be sure youth is not wasted on the young. The company, which offers an app with disappearing messages and pictures, is preparing an initial public offering at the tender age of five years. That is earlier than most of its technologically minded peers, which tend to mature a little more before going public. Snap’s value, however, may yet have some growing to do. The start-up, formerly known as Snapchat, is based in Los Angeles and led by the 26-year-old Evan Spiegel. It submitted confidential I.P.O. paperwork this month under a law intended for smaller firms. A market debut early next year could get Snap trading ahead of highly anticipated stock sales by older ventures including Airbnb, Palantir, Pinterest and Uber. Figures discussed only privately so far are impressive. Snap has approximately 150 million daily active users, should generate over $350 million in revenue this year and hit $1 billion in 2017. If that is accurate, it would mean growth of nearly 200 percent. The mooted top-end valuation of $25 billion would then peg it at an eye-popping 25 times the expected top line. Both Twitter and Facebook were expanding at about the same rate when they were the same age. Twitter would have had only about 50 million comparable users, an estimate calculated by using the proportion of monthly-to-daily users it reported at the time of its I.P.O. two years later. And yet it garnered a valuation, privately, of 25 times revenue. Growing pains have cut the microblogging site to less than five times next year’s revenue. Facebook’s backers in 2009 were valuing the social network and its 185 million daily users at 13 times forward revenue. With some $37 billion in sales expected next year, the social networking titan still trades at around nine times, a heady multiple considering growth may be slowing to around 30 percent. Snap should have ample room to expand, despite challenges ahead, like building its advertising model, an effort just underway. It is strong in video, where the action is, and teenagers stick around for long stretches. Facebook’s 430 million daily active users in the United States, Canada and Europe also suggest more growth opportunities for Snap in areas where ads are most lucrative. Twitter’s fate is a cautionary tale and financial details remain to be seen, but Snap’s I.P.O. is developing into an investor photo op.


As New York Debates $15 Minimum Wage, a Bronx Company Makes It a Reality

Abstract: Whether or not New York State’s minimum wage is raised to $15, Steven Alvarado will still see that increase in his paycheck. His employer, Nebraskaland , a meat distribution company in the Bronx, has been voluntarily phasing in the higher wage floor. Mr. Alvarado, a shipping receiver, went from earning $12.50 to $14 an hour last summer. This July his salary will increase again, to $15. “It really makes a big difference,” said Mr. Alvarado, 29, who plans to use the money to buy clothes for his 11-year-old son. “I think everybody needs that extra money.” As Gov. Andrew M. Cuomo pushes for a $15 minimum wage in Albany budget negotiations, the experience of one business in the Bronx illustrates the impact that such an increase could have on many companies. When Nebraskaland decided last year to begin raising its minimum wage to $15 from $10 an hour, more than half of its 234 employees benefited (the rest were already making more). As a result, the company expects to spend an additional $350,000 annually on salaries. Image Richard Romanoff, the owner of Nebraskaland, hopes that increasing wages will lead to better morale and lower turnover. “How are you going to sugarcoat working in a freezer at night?” he said. Credit Ángel Franco/The New York Times Richard Romanoff, the owner of Nebraskaland, says he could afford the wage increases, and believes it is the right thing to do for his employees. He also hoped that it would increase employee morale and help tamp down the turnover among the company’s truck drivers and nighttime “selectors,” men who wear insulated suits to protect against the cold working conditions and spend hours on their feet lifting boxes to put together orders. “I’d like us to have an environment here where people like to come to work,” Mr. Romanoff said. “How are you going to sugarcoat working in a freezer at night?” If approved by state lawmakers, Mr. Cuomo’s proposal to increase the statewide minimum wage to $15, from $9, could benefit an estimated 2.3 million workers, according to state data. The figure is more than double the federal minimum wage of $7.25 an hour. Mr. Cuomo, a Democrat, has made it a centerpiece of his agenda and has been touring the state promoting the plan, which would make New York and California the only states in the country poised to make a $15-an-hour minimum wage mandatory. The proposal would extend to private sector workers the higher wage already given to government and State University of New York employees through executive actions by the governor in the past year. A state administrative board appointed by Mr. Cuomo also set a $15 hourly wage for fast-food workers last summer. “Raising the minimum wage empowers workers with a fair salary, helps them support their families with dignity, and grows the economy for all,” Mr. Cuomo said in a statement. “The staff at Nebraskaland joins fast-food workers as well as state and SUNY employees who experience the transformative impact of a living wage, and I commend the company for leading by example.” Image Nebraskaland, which decided last year to begin raising its minimum wage to $15 from $10 an hour, expects to spend an additional $350,000 annually on salaries. Credit Ángel Franco/The New York Times Supporters of the increase, including leaders in the Democratically controlled Assembly and labor unions, say that it would benefit workers and local economies. Opponents, including many in the Republican-controlled Senate, counter that it would harm many businesses, particularly in struggling communities in upstate New York, and could force them to lay off workers, reduce hours and benefits, raise the prices of their goods and services, and even relocate to another state, or close altogether. “There’s a big difference between being able to do it because the revenues are there and having it mandated by the state,” said Heather Briccetti, president and chief executive of the Business Council of New York State , a trade association that represents 2,600 employers, including many small businesses with fewer than 100 workers. She said many employers around the state already paid their employees significantly more than the minimum wage, because market forces dictated higher compensation. Ms. Briccetti, citing economic studies, said that raising the minimum wage could result in more than 200,000 lost jobs statewide. Instead of an across-the-board wage increase, her group has called on state leaders to focus their efforts on developing a trained work force for fields that involve science, technology, engineering and math, where the demand for better-paying jobs is strong. In response to such criticisms, the governor’s aides counter that almost every time the state has raised the minimum wage in recent years, there has been a net gain in jobs. For instance, they said, when the minimum wage was raised to $8.75 from $8 an hour in December 2014, there was an overall gain of 115,900 private sector jobs in the state from December 2014 to December 2015. Image When Nebraskaland announced the higher wage floor, many new employees were elated, but many veterans, like Luis Quiles, were not. “I opened the doors for them,” said Mr. Quiles, who has come to support the increase. Credit Ángel Franco/The New York Time The debate over a $15 minimum wage has reached Nebraskaland, where workers have argued for and against it on their lunch breaks. When the company announced that it was introducing the higher wage floor, many new employees were elated, but many veterans were not. “I was a little bit upset because I think they should have worked a little bit more time like I did,” said Luis Quiles, 40, who started at $10 an hour as a forklift driver in 2001. Today, he earns $19 an hour, as a shipping receiver. He added, “I opened the doors for them.” Still, Mr. Quiles, who has two teenage sons, said he had come to support the $15 minimum wage for both his company and the rest of the state because it would give his sons a better start than he had. “If it benefits them, it benefits me, because they’re going to be helping me with the bills,” he said. Mr. Romanoff said that because of resistance from some employees, the company had decided to phase in the wage increase. Workers who already earned $15 an hour or more received their regular annual raises, but did not receive any additional bonuses. Mr. Romanoff, who got his start dealing in oxtails, beef livers, cow’s feet and other cheap meat parts that no one else wanted, rings up more than $450 million a year, in sales to supermarkets, stores and wholesale companies in eight states. The company is based in a 100,000-square-foot warehouse in Hunts Point, where animal heads are mounted on the walls and nearly every aspect of the operation has been computerized to improve efficiency while moving an average of two million pounds of meat a day. Since new workers have to be trained to use the technology, retention of employees is important; the company loses time and money when they leave, Mr. Romanoff said. He has taken other steps to show his employees that they are appreciated, he said, including providing generous health and retirement benefits, annual raises, clean bathrooms, and free turkeys and pork shoulders at Christmas. The wage increase, at least so far, has not had a measurable impact on retention for the company’s hardest-to-fill jobs. In the first quarter of this year, 35 people, including 16 night selectors and 11 drivers, left the company, up from 27 during the same period last year. Alissa Marcus, Nebraskaland’s human resources manager, attributed the higher turnover, in part, to more people being fired for safety violations and other infractions. In addition, she said, the wage increase has helped attract more potential employees, some of whom earned $2 to $3 less per hour doing the same job elsewhere. Last year, she had so few applicants for night selectors that she had to recruit at job fairs and hand out fliers in the community. This year, she has 48 applicants for six open positions. Mr. Romanoff said he had no regrets about raising the minimum wage at his company, but stopped short of saying there should be an increase statewide. “For me it’s good, but I’m in no position to judge other companies,” he said. “I know people who are happy to have a job for $10 an hour.”

Minimum wage
New York
Nebraskaland
Hunts Point Bronx
Andrew Cuomo


China-Japan Island Dispute Escalates to Air

Abstract: BEIJING — The action in the skies over the East China Sea started simply enough. Last week, the Chinese government sent a civilian surveillance plane, a twin propeller aircraft, to fly near the uninhabited islands at the heart of a growing feud between China and Japan. Tokyo, in response, ordered F-15 fighter jets to take a look at what it considered Chinese meddling. The Chinese then sent their own fighters. It was the first time that supersonic Chinese and Japanese military fighters were in the air together since the dispute over the islands erupted last year, significantly increasing the risk of a mistake that could lead to armed conflict at a time when both countries, despite their mutual economic interests, are going through a period of heightened nationalism that recalls their longstanding regional rivalry. The escalation comes amid a blast of belligerent discourse in China and as the Obama administration has delayed a visit to Washington requested by Shinzo Abe, the new prime minister of Japan, the United States’ main ally in Asia. After the rebuff, Mr. Abe announced that he would embark on a tour of Southeast Asia intended to counter China’s influence in the region. On Friday, as Mr. Abe cut short his trip to return to Tokyo to deal with the hostage crisis in Algeria, Secretary of State Hillary Rodham Clinton said in Washington that Mr. Abe would meet with President Obama in the second half of February. For Japan and China, what began as a seemingly minor dispute is quickly turning into a gathering storm, military analysts and Western diplomatic officials warn, as each country appears determined to force the other to give ground. “What is really driving things is raw nationalism and fragmented political systems, both on the Japanese and even more so the Chinese sides, that is preventing smart people from making rational decisions,” said Thomas Berger, an associate professor of international relations at Boston University. “No Chinese or Japanese leader wants or can afford to be accused of selling out their country.” The backdrop for the dispute is the changing military and economic dynamic in the region. In Japan, which rose from utter defeat in World War II to become a prosperous global economic power, many experts talk of a nation preparing for an “elegant” decline. But Mr. Abe has made clear that he does not subscribe to that idea and hopes to stake out a tough posture on the islands as a way of engineering a Japanese comeback. In contrast, Beijing brims with confidence, reveling in the belief that the 21st century belongs to China — with the return of the islands the Chinese call the Diaoyu and the Japanese refer to as the Senkaku as a starting point. Though Japan is far richer than China on a per-person basis, its economy has been stagnant for years and contracted once again in the second half of 2012. It was hit hard by a slowdown in exports to China after the island dispute erupted in August; Chinese protesters disrupted Japanese plants in China and boycotted Japanese products during the autumn. The value of Japanese exports to China fell by 17 percent between June and November, the World Bank said this week. China’s fast-growing military still lags behind the Japanese Self-Defense Forces in sophistication of weaponry and training, but Japan’s edge is diminishing, according to Dr. Berger, an expert on the Japanese military, and other Western defense analysts. Image The Japanese defense minister, Itsunori Onodera, center, and other officials visited an air base on Okinawa on Friday. Credit Hitoshi Maeshiro/European Pressphoto Agency For now the Chinese military wants to avoid armed conflict over the islands, Dr. Berger said, but its longer-term goal is to pressure Japan to give up its administration of the islands. That would give China a break in what is known in China as the “first island chain,” a string including the Diaoyu, that prevents China’s growing ballistic submarine fleet from having unobserved access to the Pacific Ocean. Taiwan is part of the “first island chain,” as are smaller islands controlled by Vietnam and the Philippines. “The Chinese leadership seems to think that the cards are in their favor, and if they push long and hard enough, the Japanese have to cave,” Dr. Berger said. A senior American military official said that Washington considered China’s decision to send its fighter jets in response to Japan’s to be “imprudent” but not a violation of international law. The Chinese jets had entered what is known as Japan’s Air Defense Identity Zone, but had not infringed Japan’s airspace, the official said. The United States was watching closely and advising restraint on both sides, because there is no established method of communication — or hot line — between Japan and China that can be used in the event of a confrontation. With jet fighters from both countries aloft last week, “the potential for mistakes that could have broader consequences” was vastly increased, the official said. The Chinese state-run news media have stepped up their hawkish tone since the episode. On Mr. Abe’s trip to Southeast Asia, which the Chinese say is intended to create a pro-Japan alliance, the overseas edition of The People’s Daily newspaper said, “Even the United States, the world’s sole superpower, acknowledged that it cannot encircle and contain China, so why should Japan?” Chinese experts express similar views. In an interview, Hu Lingyuan, the deputy director of the Center for Japanese Studies at Fudan University in Shanghai, described Mr. Abe as a Japanese nationalist who was trying to overextend Japan’s reach. “The Diaoyu conflict keeps escalating,” he said. “A solution is not possible.” And as the commentary became harsher, the Chinese news media stressed reports of training by the military’s East China Sea units. Dozens of J-10 fighter jets participated in a live ammunition drill with the Navy’s East China Sea Fleet, the state run news agency, Xinhua, reported Thursday. Before returning to Japan, Mr. Abe spoke to reporters in Jakarta, Indonesia. He said he opposed “changing the status quo by force,” and called on China to behave in a responsible manner. “The seas is a public asset that should not be governed by force but by rule of law that keeps it freely open to all,” he said. “We will work with Asean nations to do our utmost to defend this.” Asean refers to the Association of Southeast Asian Nations. With a top United States diplomat, Kurt M. Campbell, in Tokyo this week, Washington is urging both sides to open a dialogue. But the initial signs are not particularly promising. On Thursday, a former Japanese prime minister, Yukio Hatoyama of the opposition Democratic Party, met in Beijing with Jia Qinglin, the chairman of the National Committee of the Chinese People’s Political Consultative Conference. The setting looked conciliatory. China, however, used the occasion to make a point that was immediately rejected in Tokyo. Mr. Jia called for talks with Japan over the disputed islands, an idea that Japan has always said was unacceptable. Japanese governments have consistently maintained that the islands rightfully belong to Japan and that there is nothing to discuss.

Japan
China
East China Sea
Senkaku Islands Diaoyu Islands
Shinzo Abe


A Prime Time of Sitcoms and the Supernatural

Abstract: AS the television industry gears up for the 2012-13 prime-time season, executives are hoping that viewers will want to watch shows about the end of the world — and laugh, too. Those impulses seem contradictory, but they sum up a couple of the major trends that analysts and media agencies are noticing among the 21 new series for the fall, plus the many midseason replacements that so far have no firm places on the schedules. Those readings of the tea leaves come after the networks shared their plans for the coming season with advertisers in New York during what is known as upfront week. On one hand, shows with apocalyptic themes, among them “Last Resort” on ABC and “Revolution” on NBC, are joining returning series with supernatural and fantastical plot lines like “Fringe,” “Grimm,” “Once Upon a Time” and “The Vampire Diaries.” “I’m seeing a lot of dark,” said Shari Anne Brill, a longtime media industry analyst who is president and chief executive at Shari Anne Brill Media, a consulting company. The turn toward the dire, she said, may be inspired by the attention being paid to a prediction that the world would end on Dec. 21, which is now being attributed to a misinterpretation of the Maya Long Calendar. The “Mayan apocalypse” has already been a subject for commercials for Chevrolet trucks and TD Ameritrade. “If you put on a show with monsters and an apocalyptic feel,” said Ed Martin, television columnist at MediaPost, it may be easier to generate a following than for other kinds of series because of promotional platforms like Comic-Con International and the Internet. “Feed them and they’re yours,” he said of fans of such shows, “which is not necessarily the case with the monkey show on NBC.” (That was a reference to a coming sitcom, “ Animal Practice ,” which features a capuchin monkey as a co-star. The monkey, named Crystal, appears on the covers of this week’s issues of both leading ad trade publications, Advertising Age and Adweek.) Of course, Mr. Martin said, the show in question has to be deemed worth watching; just because “it is easy to build a following online for these shows,” he added, does not guarantee they will be hits. “But a well-done, serialized show with monsters and a sexy young cast can grab an audience,” Mr. Martin said, citing the success of “The Vampire Diaries,” which is the CW network’s most-watched series. Not only is it returning for 2012-13, it is the only returning CW series that will be back in the same time period it had this season. On the funny side of the coin, there will be nine new situation comedies come fall. They include, in addition to “Animal Practice,” “The New Normal” on NBC, “Partners” on CBS, “Ben and Kate” and “The Mindy Project” on Fox, and “The Neighbors” and “Malibu Country” on ABC. The new sitcoms will join 24 returning ones like “The Big Bang Theory” on CBS, “Modern Family” on ABC, “30 Rock” on NBC and the Fox Sunday block of animated shows. • A reason those two types of shows are predominant among the crop of new arrivals is that what few successful new series there were during the 2011-12 season emerged from those genres. They included, in the darker category, “Grimm” on NBC and “Once Upon a Time” on ABC and, on the lighter side, “Suburgatory” on ABC and “2 Broke Girls” on CBS. With situation comedies, “if a couple hit, you can make money forever,” Ms. Brill said, because “they repeat better” than do episodes of dramas and they can “live on in syndication,” rerunning on local stations and cable channels. “Plus, they’re timeless,” she added. “Look at ‘The Golden Girls,’ ‘Frasier,’ ‘Cheers.’ ” Not to mention “I Love Lucy,” which can still be watched , on outlets like Hallmark Channel. Mr. Martin said he wondered if the “tsunami of new sitcoms” would prove too many because “the audience seems to be able to process only so many at one time.” That is particularly true for NBC, he said, which is adding four comedies to six that are returning for another season. “If you are in the position NBC is in,” Mr. Martin said, referring to its lagging ratings, “I don’t know if you want to run the risk of a monkey being your high-profile star of the fall season.” • Adweek, in an article looking at the prime-time lineups for 2012-13, described NBC’s strategy this way: “The most beleaguered broadcast net hangs its hopes on Christina Aguilera” — a judge on the reality competition series “The Voice,” which is getting its first fall showing — “ and a monkey .” Advertising Age, in its prediction of the hits and misses for the coming season, was more charitable. It listed “Animal Practice” in the “honorable mention” category, citing “the lovable monkey”; other shows in the category included “Ben and Kate” and “Last Resort.” Advertising Age’s forecasts for hits are “Nashville” on ABC, a nighttime soap about country music; “Partners,” about two men, one straight and one gay, who are close friends; and “The Following,” a midseason series on Fox with a dark tone, about a search for a cult of serial killers. (Not to be confused, presumably, with “The Cult,” a dark midseason series on CW.) The new series that are likely to fail, according to Advertising Age, are two midseason shows on NBC — “Do No Harm,” a dark drama with Jekyll-and-Hyde overtones, and “Save Me,” a sitcom — along with “Mob Doctor,” a drama on Fox, and “The Family Tools,” a sitcom on Fox. Ms. Brill, asked which newcomer was mostly likely to fail, said: “A lot of people were making fun of ‘Animal Practice.’ But ‘Guys With Kids’ was looking pretty bad; it’s just not working for me.” Like “Animal Practice,” it is a sitcom on NBC.


U.S. Envoy Presses Iraq to Act Against Guerrillas

Abstract: BAGHDAD, Oct. 25 — Ambassador Ryan C. Crocker said Thursday that Iraq should disrupt supply lines and develop a “lookout list” of senior leaders for the Kurdish guerrillas who use the northern Iraqi mountains as a safe haven for attacks inside Turkey. But Mr. Crocker, the American ambassador here, stopped short of supporting Turkish demands that Iraq take military action against the guerrilla group, the Kurdistan Workers’ Party, known as the P.K.K., or extradite its leaders to Turkey. The Turkish government has repeatedly threatened to make incursions into Iraq to strike at the fighters. Any Iraqi military expedition, Mr. Crocker said, would run into the geographic fact that the northern mountains, called the Qandeel range, are remote and inaccessible. “I don’t think it’s realistic to expect that the Iraqis are going to march up that mountain and take on the P.K.K. and arrest their leaders,” Mr. Crocker said. “This is in the hard-to-do category.” It was unclear whether the new American demands would be enough to keep Turkey from crossing the border. The Iraqi government was also working furiously to avert an incursion, as a delegation of senior Iraqi officials traveled to Ankara for talks on Friday. Iraq’s foreign minister, Hoshyar Zebari , on Thursday urged Turkish authorities to accept steps that sounded similar to the ones being demanded by Mr. Crocker. Mr. Zebari said in a telephone interview that the delegation to Ankara would offer “practical steps and measures to be taken by the Iraqi government to pacify, isolate and disrupt P.K.K. activities.” The delegation would not be authorized to discuss approving any Turkish military actions inside Iraq, said Mr. Zebari, who is himself a powerful Iraqi Kurdish politician. The Iraqi officials, he said, would offer to stop arms supplies and logistical assistance to the rebels. Mr. Zebari conceded that the offer fell short of Turkish demands, but said that it represented the best possible proposal from the Iraqi side. Turkey’s prime minister, Recep Tayyip Erdogan, asked the United States on Thursday to take action along with Turkey in the struggle against the guerrillas, saying that the United States had taken action against Iraq with less immediate provocation. “One would question why America has come to Iraq from thousands of miles away,” he said at a news conference during an official visit to Romania. “We have a disturbance. What kind of disturbance did the United States have with Iraq? Right now, the United States, as our strategic ally, is in a position to act along with us. We acted along with them in Afghanistan.” With public anger rising after months of attacks in Turkey by the Kurdish rebels, the Turkish Parliament approved a measure earlier this month to allow troops to cross the border to fight them. But the United States has intensified diplomatic efforts to ward off an incursion that could destabilize one of the few relatively peaceful regions of Iraq. Mr. Erdogan insisted that the decision was up to Turkey, not the United States. “They can suggest that a military operation not be conducted,” he said, “but we make the decision whether we need to do it or not.” Mr. Crocker, meeting with Western reporters at the American Embassy in Baghdad, also made extensive remarks on Iran and, for the first time, on the Sept. 16 shooting on Nisour Square in Baghdad involving Blackwater USA, a private security firm that protects American diplomats. According to the Iraqi government, 17 Iraqis were killed in that incident and 24 were wounded. Just before the Nisour Square shooting, Mr. Crocker had strongly defended the use of security contractors like Blackwater in testimony to Congress. Asked Thursday if he now thought better of those comments, Mr. Crocker at first said: “These guys guard my back. I have to say they do it extremely well. “That said, the incident in September was a horrific one,” Mr. Crocker continued. He expressed serious concern over what happened but did not address whether the shooting was justified. As the chief official at the Embassy, Mr. Crocker said, “I’m responsible,” but he said that he would wait until an F.B.I. investigation is finished to draw conclusions. Mr. Crocker reiterated assertions by the United States that Iran was providing support to armed groups in Iraq, and raised a new concern that elements of the Mahdi Army, which is nominally under the control of the radical Shiite cleric Moktada al-Sadr, have moved from militant activities to financially profitable activities such as gas stations and basic services in neighborhoods. That shift suggests, Mr. Crocker said, a “Hezbollahzation” of parts of Iraq: an emphasis not just on military force but also on social networks, the hallmark of Iranian-supported Hezbollah in Lebanon. Finally, he made clear that that there was strong American support for at least some of the demands being made on the Iraqi government by Turkey. “We have been registering our support, our sympathy for their losses and their outrage, which we share,” he said. No Trial for U.S. Soldier ROME, Oct. 25 — An Italian court ruled Thursday that it did not have jurisdiction to continue a trial against an American soldier who killed a top Italian intelligence agent in Iraq in 2005. The trial, a continuing irritant in relations between Italy and the United States, had been held in absentia because American officials refused to hand over the soldier, Mario Lozano.

Iraq
Turkey
Kurds
United States Armament and Defense
Civil War and Guerrilla Warfare
Armament Defense and Military Forces
Kurdistan Workers Party
Zebari Hoshyar


Central Bank’s Reserve Increase Won’t Rein In Lending

Abstract: A month before China ushers in the year of the tiger, its central bank has begun to address the effects of its roaring liquidity boom. It is encouraging that the authorities in Beijing are alert to the threat of an overheating financial system. But with so many countervailing forces, the liquidity tiger will not be tamed so easily. Markets yelped on Tuesday after the central bank raised the minimum ratio of capital to loans at banks by half a percentage point. But that amounts to little more than scooping water out of the sea. Some 1 trillion renminbi ($146 billion) of government bills mature in the next two weeks. If they are not rolled over, three times more money would flow into the system than the capital reserve increase would remove. Then there are foreign speculative flows — an estimated 378 billion renminbi in the fourth quarter of 2009. The reserve increase is not enough to calm the banks’ lending frenzy. They disbursed 600 billion renminbi of loans during the first week of 2010 alone, according to local media, more than in the whole of December. Furthermore, the capital ratio in the banking system in aggregate is already two percentage points above what is strictly required, so the new targets won’t necessarily have any effect on lending. Asset price inflation is already running wild in the real estate and stock markets, and another new government policy might make the problem worse. The State Council has approved the introduction of margin trading this year, so qualified investors will be able to use up to eight times leverage to buy stocks. The planned introduction of limited short-selling at the same time is unlikely to be enough to compensate. Even the central bank is not expecting much from the reserve increase. An official said the monetary policy stance is still reasonably accommodative and described the move as an attempt to fine-tune flexibly. Tinkering may be better than watching idly, but more substantial — and politically risky — moves will be required to get the financial beast under control. Holding Kraft ’s Line Kraft Foods should not budge — at least not much. Its reluctant British takeover target, Cadbury, has disclosed some impressive, if unsurprising, results and high expectations. But unless talk of interest from Hershey turns into a concrete counterbid, there’s little to persuade Kraft to pay more right now. Irene Rosenfeld, the chief executive of Kraft, has her reputation on the line. Cadbury’s chairman, Roger Carr, is not giving any signals about whether a raised bid — to Cadbury’s market price of 789.50 pence, or even to 800 pence — would bring Cadbury to the negotiating table. Indeed, Cadbury is still citing other industry acquisitions with valuations that imply Kraft needs to pay something closer to 900 pence. On top of that, the math for a Kraft sweetener does not add up. The current offer already surpasses the present value of the deal’s cost savings. Even if Kraft found a few more costs to cut, it still could not go more than a few pennies higher than its offer of 762 pence. Then there’s Warren E. Buffett. He owns 10 percent of Kraft and has made it clear that he does not want the company using too many shares to pay for Cadbury. His letter on the topic even appeared to suggest that he thought Kraft was already offering a full price. That restricts Ms. Rosenfeld’s options. Many Cadbury investors may be expecting a bit more, but they know that if Kraft backs off, Cadbury will get cheaper. Add 15 percent for market gains and performance to Cadbury’s share price before Ms. Rosenfeld showed up, and the stock would only be at around 650 pence, well below Kraft’s offer. There is still a good chance a majority of Cadbury investors will not tender their shares this time around. That would leave Ms. Rosenfeld fighting to save face. But like the Comcast boss, Brian L. Roberts, when he failed to acquire Disney with a hostile takeover, she would be able to say that she had exercised financial prudence. If that is the worst outcome for Ms. Rosenfeld, there is no reason to sweeten her offer now. Regardless of whether a Hershey bid surfaces, she will have another chance at Cadbury down the road if her current bid fails.


Fate of UBS Is in the Hands of Fickle Markets

Abstract: Investing in UBS is a bet on an uncertain world. The Swiss bank reckons resurgent investors may bolster its tepid 6.1 percent return on equity for 2016. But after a fourth quarter marked by net outflows of $5.4 billion and a further withering of wealth management margins, the hopes of the bank’s chief executive, Sergio Ermotti, for a pickup in activity need quick consummation. Investment banking and wealth management in the Americas were bright spots in the three months to December. UBS has less firepower in fixed-income trading, which has been booming. But revenue jumps in equities trading and in the origination and advisory business were bigger than at its rivals. Meanwhile, higher short-term interest rates and higher fees helped revenue at UBS Wealth Management Americas. The snag is that the outlook could disappoint even though client surveys point to rebounding confidence. In investment banking, UBS is less exposed to the United States than its rivals and more geared toward Asia, which is underperforming. Wealth management transaction fees could bring in more money in America if the recent rally in United States stocks spurs clients to rebalance their portfolios. But they may not rise much elsewhere. There are other risks. One is the potential for litigation as countries force UBS and other private banks to ditch investors’ assets that do not comply with tax rules. It bodes ill that the European Court of Human Rights this month rejected the Swiss bank’s appeal against aspects of a French government case. Another is the possibility of adverse currency swings. UBS estimates that a 10 percent drop in the dollar’s value against the Swiss franc would depress its pretax profit by 600 million Swiss francs relative to average forecasts. Any such move would offset the impact of Mr. Ermotti’s cost-cutting program, which is expected to deliver 500 million Swiss francs in savings this year. UBS looks doubly exposed to fickle markets, since President Trump’s policies will dictate whether American investors’ animal spirits persist. With UBS shares trading around a third above their estimated 2017 tangible book value — and in line with purer plays like Morgan Stanley and Goldman Sachs — the Swiss bank looks fully priced.

UBS
Banking and Finance
HNWI,Wealth,Billionaires,1 Percent
Sergio P Ermotti


New York Nears Deadline to Raise Day Care Pay or Lose Subsidy

Abstract: With a deadline looming for New York City to agree to increase the pay of in-home day care providers or face losing the state subsidy for the care of more than 100,000 poor children, city officials still had not agreed on Tuesday night to pay for the raises. Since October 2007, the city has refused a state order to give raises to these 28,000 providers, saying that the only way to pay for the increase — which it estimates would cost $53 million a year — would be to cut 6,300 day care slots to poor children. The state says the increase is mandated by federal law and sent the city an ultimatum this month to abide by it. City officials have continued to say publicly that some sort of resolution will be reached before the deadline, the close of business on Wednesday. Yet that has not stopped high-level city officials like Deputy Mayor Linda I. Gibbs and Deputy Mayor Kevin Sheekey from lobbying the governor’s office directly to win some concessions in how much the city will pay. The city has asked, for example, not to have to pay the day care providers retroactively, people familiar with the negotiations say. So far, however, the city has met stiff resistance from the powerful United Federation of Teachers , which has represented the day care providers for about a year. In addition, state officials say federal law does not allow them to compromise. They have reiterated their threat to stop federal and state reimbursement for subsidized day care — worth about $40 million a month — if the city does not produce a plan by end of the day. Of course, since the next state payment is not due until March, the threat would not have an immediate effect on day care in the city. Still, the last-minute wrangling had some lawmakers worried. “The city is playing with fire,” said Bill de Blasio, a city councilman from Brooklyn who is chairman of the Council’s Committee on General Welfare. “If the city gambles here and loses, we stand to forfeit $500 million in child care funding. Maybe the city thinks the state and federal government will back down, but there is no reason they would. The rules are crystal clear.” Ms. Gibbs and Mr. Sheekey said through their representatives that they could not comment because of continuing negotiations. But on Tuesday evening, John B. Mattingly, the commissioner of children’s services, which administers the day care programs for the city, issued the following statement: “The city is continuing discussions to find a satisfactory agreement without a cut in child care services to needy families in very difficult fiscal times." Edward Borges, a spokesman for the state Office of Children and Family Services, said, “Talks are continuing toward a resolution so that this will not adversely effect children or child care providers.” The city has been increasing the number of slots for subsidized day care since the late 1990s as part of its efforts to reform welfare. City officials say such work supports have played a pivotal role in the astonishing drop in the number of adults receiving cash assistance in the city in the past decade. There are about 104,000 slots for subsidized day care in New York, up by 15,000 since 1999, according to the Independent Budget Office. With the current fiscal crisis, the city says it cannot possibly pay for the increase for the in-home providers of day care. Instead, they say, they would have to cut day care openings to poor families. Those would probably be poor families with working parents, since poor families on welfare are entitled to day care. Those families who lose day care could be at risk for losing jobs and going on welfare, the city has said. But Randi Weingarten, president of the United Federation of Teachers, said that the city’s position that it would have to take day care away from poor families in order to pay day care providers, most of whom earn less than $20,000 a year, was dirty politics. “I am cautiously optimistic about the progress tonight,” said Ms. Weingarten on Tuesday, “but at the same time I remain very concerned that the city not try and pit one group of poor people against another.”

Child Care
United Federation of Teachers
New York City
Finances
Children and Youth


Bulgaria Puts Up a New Wall, but This One Keeps People Out

Abstract: LESOVO, Bulgaria — Less than two decades after the painstaking removal of a massive border fence designed to keep people in, Bulgarian authorities are just as painstakingly building a new fence along the rugged Turkish border, this time to keep people out. Faced with a surge of refugees from the Middle East and North Africa — and the risk that they include jihadis intent on terrorist attacks — Europe is bolstering its defenses on many fronts, including this formerly Communist country, which little more than a quarter-century ago was more concerned with stanching the outbound flow of its own citizens to freedom. For the past 16 months, Bulgaria has been carrying out a plan that would sound familiar to anyone along the United States-Mexico frontier: more border officers, new surveillance equipment and the first 20-mile section of its border fence , which was finished in September. The hardening of the Bulgaria-Turkey border is one very visible manifestation of the agitation across the continent about the economic, social and political ramifications of the surge in immigration . With warmer weather fast approaching and more refugees likely to be on the move, nations along Europe’s southern tier are beefing up border staffing, adding sensors and other technical barriers, expanding refugee facilities, and building walls. More than 200,000 refugees are known to have penetrated Europe’s land and sea borders last year, not including those who were able to sneak through undetected. And the numbers for the first two months of this year, when Europe enjoyed its second mild winter in a row, were up sharply compared with the same period last year. Anti-immigrant sentiment is increasing in Britain, France, Hungary, the Czech Republic and elsewhere across the continent. Parties espousing ethnic nationalism are seeing their support rise, some to the point where they threaten the dominance of more traditional parties. “The rise of the right wing in Europe is a reaction to this refugee flow,” said Boris B. Cheshirkov, chief spokesman in Bulgaria for the United Nations High Commissioner for Refugees . And with much of Europe still struggling to recover from the 2008 financial crisis, the higher costs of caring for this flood of refugees — especially in countries like Bulgaria, the poorest member of the European Union — are straining national budgets. At the same time, episodes like the January attack on the Paris offices of the satirical newspaper Charlie Hebdo are raising worries that both homegrown jihadists and foreign fighters will cloak themselves in this refugee flood. “Right now, in the western part of Turkey, on the borders of Greece and Bulgaria, you probably have thousands of Syrian refugees waiting for an occasion to cross,” said Marc Pierini, an expert on Turkey and the Middle East at Carnegie Europe , a foreign policy analysis group. “If you talk about returning jihadists, you are talking about dozens.” Slavcho Velkov, a Bulgarian security expert and university lecturer, said he believed there was more jihadist movement through Bulgaria than the authorities acknowledged. “I have seen such fighters here with my own eyes,” he said. “I spotted some at the central bus station and struck up a conversation. When I asked them where they were going, they said, ‘We are going to heaven.’ ” To some degree, efforts like the new Bulgarian fence simply contribute to a game of Whac-a-Mole: When one route is cut off, smugglers shift to other paths into Europe. “In 2012, heightened security was implemented along the Greek border with Turkey, including the building of a fence,” said Gil Arias Fernández, deputy executive director of Frontex , the agency that coordinates border protection throughout the European Union. “The result was that flow changed towards the Bulgarian border.” It was this deluge that caused Bulgaria to institute its own “containment plan” in November 2013, including the continuing construction of the border fence, which will eventually stretch 100 miles. The impact was dramatic. The number of known illegal crossings fell to about 4,000 in 2014 from 11,000 the previous year. But that did not mean that refugees were not getting into Europe, Mr. Fernández said. Those thousands who failed to cross into Bulgaria were offset by larger numbers crossing from Turkey by sea to the nearby Greek islands. Smaller numbers tried making it to Bulgaria across the Black Sea. More than 170,000 refugees — most of them from the Middle East, Africa and Afghanistan — entered Europe on the sea route to southern Italy in 2014. In the first two months of this year, the number was up 42 percent over the same period last year. Here in the eastern Mediterranean, where Frontex measures land and sea crossings into Bulgaria and Greece, the number of those entering is up 107 percent over last year — with the raw number of those crossing, 5,275, approaching the 7,834 who used the Italian sea route. “We are expecting a surge of refugees in April and May for certain,” said Jordan Malidov, director of a Bulgarian refugee center in the town of Harmanli, 22 miles north of the Turkish border. Warmer weather emboldens those trying risky sea crossings or attempting to walk across remote, green borders. “And it is common when there is war for the numbers to increase,” he said. Back in the late 1990s, when Nikolay Radulov was a deputy minister of the interior, part of his job was overseeing the dismantling of the old wall, a Cold War relic that had been the southern edge of the Iron Curtain. It was actually two fences, stretching across the entire land border, with a 500-meter minefield between them, designed to prevent residents of Communist nations from sneaking into the West. The fence was dismantled piece by piece, he said, “and we very carefully removed each of the mines, one by one.” Now, as a professor of national and international security at New Bulgarian University , Mr. Radulov is watching with some disbelief as the new barrier rises to take its place. “The theory then was that it was antidemocratic to have these kind of devices along the border,” he said. “And of course, we were good democrats.” The new fence is rising on a rocky ridge, below which a pencil-thin minaret pokes through the rooftops of Hamzabeyli village in a gentle elbow of northern Turkey’s green hills. “We post the men 100 meters apart,” said Hristo Stefanov, the chief of the border patrol office responsible for this stretch of the frontier, pointing down a rutted road toward a distant man in black. “That way, you see, the officers are always in sight of one another.” Immediately behind him was the western end of the 12-foot-high metal fence that rolls along the stony hilltop until it disappears around a distant line of gnarled trees. The fence, on the Bulgarian side, consists of chicken wire in a steel frame, while a menacing cascade of razor wire climbs its Turkish face. Only this first section is in place, along the stretch where most refugees tried to avoid border checkpoints. But the Bulgarian government, drawing on money from the European Union and other sources, and eager to prove it can effectively control its southern flank, says it will begin later this month to extend the wall until it covers the entire 100-mile land border with Turkey not already blocked by the Rezovo River. One reason Bulgarian officials are keen to complete the wall is to demonstrate to European leaders that the country deserves to be admitted into the Schengen group of nations whose members do not require visas or passports to travel between them. Bulgaria was admitted to the European Union in 2007, but has been denied Schengen approval, partly because of border issues. Although the Bulgarian government contends that the wall will be finished this summer, few security experts believe this is possible. Construction has not begun, and roads must first be carved through the forbidding, often mountainous landscape. In the meantime, refugees will continue to find ways across the border at more remote and dangerous locations. About 4,000 refugees are living in centers like the one in Harmanli, which holds 1,600. Tahani Halad Hamza, 21, was studying biology in Mosul, Iraq, when the fighting erupted there . Her father was lost in the conflict, but she, her husband, her mother and two brothers managed to make it into Turkey and as far as the Bulgarian border, where they were taken into custody about six months ago. Now what is left of the family lives in a small, red-and-white trailer in the refugee center. Like others in the facility, they said they hoped to be granted official refugee status by the Bulgarian government, which would allow them to travel through Europe. Her family hopes to get to Germany, she said, or perhaps Britain. “The only difference between Bulgaria and Syria is the conflict,” she said. “There is no work in either place.” Her mother leaned forward with wide eyes, “Syria,” she said. “Boom, boom, boom!”

Bulgaria
Refugees,Internally Displaced People
Border Wall
Border Fence
Europe
Immigration
Turkey


Arizona: University Drops Fraternity After Complaints of Racism

Abstract: Arizona State University said Thursday that it is severing ties with a fraternity after the chapter hosted a distasteful party in commemoration of Martin Luther King’s Birthday, complete with racist stereotypes and offensive costumes. The college has notified Tau Kappa Epsilon its recognition as a chapter has been permanently revoked. The 65-year-old local chapter cannot recruit members or hold on-campus meetings. Alex Baker, a spokesman for the national fraternity, said Tau Kappa Epsilon had received the university’s findings and planned to release the results of its own investigation into the party shortly. Pictures from the party that made their way onto social media websites showed guests flashing gang signs and holding watermelon-shaped cups. Civil rights leaders had demanded that the university expel the fraternity.

Fraternities,Sororites
College
Discrimination
Party
Martin Luther King Jr
Arizona
Black People,African-Americans


British Open — Woods in Hunt, but Missing Old Killer Instinct

Abstract: LYTHAM ST. ANNES, England Tiger Woods made a sterling save for par from behind the 12th hole to remain seven under par, and moments afterward, the manual scoreboard on the far side of the green pulled down Brandt Snedeker’s score from the previous hole. Snedeker had bogeyed the 11th, and the reserved English crowd responded with a knowing murmur. Woods was now alone in second place behind Adam Scott, who have been in or near the lead of the 141st British Open since Thursday. Woods gazed at the scoreboard and knew what it meant: keep that position, and he would be in the final pairing Sunday with Scott, a friend of his but still a friend whose trophy case contains 14 fewer major championships than the one in Woods’s home. That is a pivotal advantage. Woods, 36, has always been good at recognizing and exploiting momentum. In his prime, he breathed it into his lungs like the elixir that powers a superhero, and it made him almost unconquerable. Momentum was the force of his competitive instinct, the will behind his might. On Saturday, with momentum enveloping him, lifting him up the leader board and boosting him toward the final holes of the third round, he closed his day this way: At the 14th hole, Woods missed a level, straightaway, 12-foot birdie putt. On the 15th hole, he missed a 6-foot par putt that produced a bogey that dropped him into a tie for second place. By the time he got to the 16th hole, he was in third place and desperately needed a birdie to regain second. After standing in the middle of the 16th fairway with a wedge in his hand, he made par. Another makable birdie putt on the 18th slid past the hole. A few minutes later, Woods walked into the clubhouse in fourth place, already assigned to the penultimate pairing Sunday. The most asked question in golf — and even for those barely interested in golf but fascinated by Tiger Woods — has been the same since March: Is Tiger back? There are two answers, and the second matters far more than the first. If being back means hitting technically proficient shots with increasingly ordinary effort, if it means a relatively calm putting stroke, if it means sound course management and a placid existence because his marital and adultery scandal no longer comes up on or off the course, then Tiger is back. He has demonstrated that he is again performing at a level matched by few. With three PGA Tour victories this year, he would be player of the year if the vote were held today. Some would say that is the definition of being back on top. But if being back means seizing the major champion’s moment and facing the attendant pressure with so few hiccups it intimidates others into flinching, if it means making the stellar effort seem routine, if it means drawing the momentum to your side and letting it propel you where you need to go to win not just a PGA Tour event but a major championship, then Tiger is not back. He may yet win Sunday; he is only five strokes behind Scott. That woud be a definitive answer to most every question. But Saturday’s late-round stagger to the finish has become all too familiar for Woods in the last 15 months. For a while, it seemed the problem was the health of his legs. Then it looked as if it was his putting stroke that caused pivotal slip-ups. Then it was his driving. Then it was a lack of practice time. All those issues have largely gone away or been resolved (just don’t bring up his wedge play, but no one is perfect). The fact is Tiger Woods now regularly gets in position to do something majestic in the same ways he once habitually did superlative things in major championships. He is right there, the way he was always right there, and it seems inevitable that he will at least stay there and maybe stamp all over the competition during the final round. But these days, that has not happened. More commonly, Woods hits a shot, and as it tracks through the air, he gets a puzzled look on his face that we had almost never seen before 2010. The ball ends up in a bunker or, more commonly, over the green. He makes par instead of the birdie that would have shaken up the leader board. He tries to throw a haymaker at the field, but it misses. He is still standing, but so is everyone else. He still has a good chance, just as he does in Sunday’s final round at Royal Lytham & St. Annes. And so does everyone else. He marches on, the momentum of the moment leaking from his countenance with every step. He is clearly getting better, or maybe closer. At the United States Open last month, Woods fell apart Saturday . This time, he never fell apart; he just kicked away his best opportunity in the final 75 minutes. “I’m still in there,” he said late Saturday. “We’ll see what happens tomorrow.” He says that kind of thing all the time now. Over and over. Is Tiger back? Not yet. One more day to find out.

Golf
British Open (Golf)
Woods Tiger
Scott Adam


For Netanyahu in Israel, Being in Front Has Risks

Abstract: TEL AVIV — Can a candidate ever be too far in the lead for his own good? As Israel’s election campaign begins in earnest on Tuesday with a two-week blitz of television ads, Prime Minister Benjamin Netanyahu is battling a problem that, at first glance, may seem enviable: Everyone seems sure that he will win. In Israel’s multiparty, coalition system of government, that presumption has led many of Mr. Netanyahu’s traditional supporters to flirt with smaller parties that cater to special interests. A whopping 81 percent of survey respondents expect him to serve another term, according to a poll conducted by Dialog and published last month in the newspaper Haaretz. Yet surveys ever since have shown that support is slipping for the joint list of candidates Mr. Netanyahu heads, from its current 42 of Parliament’s 120 seats to as few as 32. “That’s the danger of being a front-runner: When everyone assumes he’s going to win, they feel like they have the luxury of voting their real ideology,” said Gadi Wolfsfeld, a professor of political communication at the Interdisciplinary Center in Herzliya. “Ironically, what he’s trying to do is prove that the left really could win. If he can somehow undermine that certainty that he’s going to win, then of course he has a realistic chance of bringing some votes back.” Political analysts and some people inside the campaign say that this challenge has been compounded by a lackluster campaign, infighting and a series of strategic errors that include criticizing other conservatives. Although Mr. Netanyahu is still the favorite to form the next government, experts predict he could end up with a relatively slim majority in Parliament rather than a broad unity coalition that would give him freer rein to set policy and define his legacy. “Somewhere between disastrous and catastrophic” is how Sam Lehman-Wilzig, deputy director of the school of communication at Bar-Ilan University, described the incumbent’s campaign so far. “There’s no ‘there’ there. It’s a pure emotional ‘we don’t want the left in power’ and ‘trust me’ and ‘I have experience and that’s why you should vote for me.’ I don’t think that’s going to enthuse a lot of people.” Mr. Netanyahu’s allies and campaign aides acknowledge that the last month has been rocky, but they said the next two weeks would be what matters. “The only poll that we are looking at is the election results on Jan. 22,” said one senior official, promising a “much more focused messages in the homestretch.” Critics say the first major mistake was the decision to merge Mr. Netanyahu’s Likud Party with the ultranationalist Yisrael Beiteinu . That, combined with a Likud primary that ousted several popular moderates, alienated some centrist voters, the analysts said. Then, as right-wingers flocked to Naftali Bennett, the charismatic young leader of the new Jewish Home party , Mr. Netanyahu attacked him as well as the ultra-Orthodox Shas Party, a longtime political partner. Both attacks seem to have backfired. Some analysts and people inside Likud-Beiteinu complain that the prime minister has been too quiet and reactive, and that his recent push on Jewish settlements in East Jerusalem and the West Bank put the Palestinian conflict at the center of the campaign, forcing the Iranian nuclear threat, on which he is stronger, into the background. Image Workers preparing ballot boxes for the Jan. 22 vote. Credit Baz Ratner/Reuters In most of these cases, “you can see the fingerprints of Finkelstein,” said Gabriel Weimann, a professor at the University of Haifa who specializes in political communication, referring to the American political consultant Arthur Finkelstein. “Finkelstein is running the campaign. People in his own party were criticizing Netanyahu for following Finkelstein when he is sitting in the States and doesn’t know what’s happening here.” Mr. Finkelstein, a Republican strategist from Westchester County, N.Y., who has run many hard-edged conservative campaigns in the United States and Israel, including Mr. Netanyahu’s for his first term as prime minister in 1996, declined through campaign aides to be interviewed. He was summoned to Jerusalem last week as the campaign was flailing, and several analysts and insiders say they can already see the beginning of a shift in strategy. For one, the attacks on Mr. Bennett have ceased. And the prime minister seems to be lightening up: he made a big show of wearing jeans to a young professionals’ campaign event here Sunday night, and he was warm and personable in an interview broadcast Monday night, sitting in his childhood home as he recalled playing ball and roasting potatoes with his brothers. Perhaps most important, the prime minister is newly focused on opponents to the left. Over the weekend, three leaders of center-left parties talked about joining together to create what they called a “blocking coalition” to prevent Mr. Netanyahu from forming the next government. If this effort by the three forms into a credible threat, it could scare back into the fold those conservative voters so confident in the prime minister’s re-election that they wanted to send a message by choosing a smaller party. “The main focus will be, of course, that we can face a coalition of those three parties the day after,” Silvan Shalom, a senior Likud minister, said Monday of the campaign’s new message. Acknowledging the stumbles so far, Mr. Shalom said, “We have to push harder; we have to work harder; we have to explain.” Israeli campaigns are a sprint, and analysts caution that there could be major movement before the Jan. 22 balloting, particularly once the television commercials are unveiled starting Tuesday. Already, Mr. Netanyahu’s face is ubiquitous on billboards and overpasses here in Tel Aviv, alongside the campaign’s slogan, “A strong prime minister, a strong Israel.” The prime minister, who has barely hit the campaign trail, made a brief appearance at a dance club Sunday night, spending several minutes reaching out from the stage to touch a few hands, with bodyguards close on three sides. He spoke for less time, asking where his young sons were in the crowd and then joking, “You are all my sons.” “Who wants to keep protecting Israel?” he asked. “There is only one choice.” Hundreds of people in their 20s and 30s, mostly men, filled the dance floor, though few danced despite the pulsing music, instead staring at smartphones or waving fluorescent light sticks. “A vote for a small party weakens Israel,” read the campaign fliers distributed at the party. “I will not waste my vote.” The front-runner’s problem was on clear display in several interviews at the rally. Richard Binstock, 33, an immigrant from London who works in the high-tech field, said of Mr. Netanyahu, “He stands for Israel and he defends Israel and I respect that.” Then he said he planned to vote for Mr. Bennett. Samuel Scott, 32, who works in marketing and voted for Mr. Netanyahu in 2009, expressed a similar attitude. “I do admire Bibi personally, and I am a member of the Likud,” Mr. Scott said, using the prime minister’s nickname. “They just may not get my vote in this election. I really despise their campaign tactics. I think it’s selfish to say a vote for any other party is a wasted vote.”

Election
Polls
Benjamin Netanyahu
Israel


Oregon Law Is Delayed

Abstract: PORTLAND, Ore. (AP) — A federal judge on Friday postponed a state domestic partnership law that was scheduled to take effect Jan. 1, pending a February hearing. The law would give some spousal rights to same-sex couples. Opponents asked Judge Michael W. Mosman of Federal District Court to intercede after the Oregon secretary of state’s office ruled in October that they had failed to collect enough valid signatures to force a referendum on the law.


Airline Apologizes After Pulling Muslims Off a Flight

Abstract: AirTran Airways apologized Friday for an incident on New Year’s Day in which airline officials pulled nine Muslim passengers off a domestic flight and refused to rebook them, even though F.B.I. agents said they had done nothing wrong. The incident occurred Thursday at Ronald Reagan Washington National Airport after members of a Muslim family boarding a flight to Orlando, Fla., had a conversation about the safest place to sit in the event of an accident. Other passengers reported the remarks as suspicious to a flight attendant. The passengers, all American-born United States citizens except for one, expressed frustration Friday in not being allowed back on the plane once the F.B.I. had cleared them. They had to buy tickets on US Airways. Initially, AirTran said it was not at fault. Later on Friday, it called the incident a “misunderstanding” and apologized to all 104 passengers, including the nine detained. “We regret that the issue escalated to the heightened security level it did,” the airline said, “but we trust everyone understands that the security and the safety of our passengers is paramount and cannot be compromised.” Kashif Irfan, 34, one of the detained passengers, a doctor residing in Alexandria, Va., said by phone: “We are very grateful for the apology, and we’re impressed by the outpouring of respect that AirTran has demonstrated after the fact. We have not ruled out the possibility of legal action.” The incident, first reported by CNN and The Washington Post, was a reminder for Atif Irfan, the younger brother of Kashif Irfan, of the challenges facing Muslims in the United States. “To be honest, as a Muslim, we do understand how to deal with this; we realize this is an unfortunate aspect in our lives,” Atif Irfan, 29, said by telephone from Orlando. Mr. Irfan, a lawyer from Alexandria, said, “Whenever we get on a plane, because of the color of our skin, people tend to look at us with a wary eye anyway.” Upon boarding the plane, Flight 175, Atif Irfan and his wife and sister-in-law (the women were wearing traditional head scarves) were talking about which section of the plane would be safer. Mr. Irfan said he and his wife saw that two passengers behind them had seemed to take note of their conversation. According to AirTran, those passengers alerted the flight attendant, who notified the pilot, who notified the Transportation Security Administration, and ultimately decided that the entire plane be emptied of its passengers, swept and the luggage examined. Two air marshals on the plane escorted the nine Muslim passengers, eight from one family, and a friend, into the terminal for questioning by the F.B.I. On behalf of the Muslim passengers, the Council on American-Islamic Relations, an advocacy group, filed a complaint Friday with the aviation consumer protection division of the Transportation Department requesting an investigation.

Airlines and Airplanes
Muslim-Americans
AirTran Holdings
Security and Warning Systems


2 Kidnapped U.S. Tourists Released in Yemen

Abstract: SANA, Yemen — Two American tourists taken hostage early this week were released by tribal kidnappers on Tuesday after Yemen ’s president agreed to free a prisoner held by the state, security and tribal officials said. The release came as a bit of welcome news for the Yemeni authorities on a day when the government had to apologize for a botched airstrike that killed a prominent local official who had been trying to persuade a local leader of Al Qaeda to surrender. The target of the attack, Mohammed Saeed Jardan, was apparently uninjured, officials said. The release of the two Americans, their driver and a interpreter, and the backlash against the government for the errant airstrike, underscored the central government’s ongoing problems in dealing with an entrenched tribal structure that challenges the authority of the state. The botched airstrike that killed Sheik Jabir al-Shabwani, deputy governor of Marib Province, seemed to incite even more violence as a group of armed tribesmen bombed an oil pipeline and attacked the government offices and Republican Palace. Reports said that several people were killed in shooting between the villagers and the police, and witnesses said that 20 tanks and armored vehicles surrounded the government offices to ward off the attackers. Angry tribesmen continued late Tuesday to block the highway between Marib and the capital, Sana. They fired at the power station, which led to a blackout in some areas of the country, including the capital. Sheik Abdullah Ahmed al-Sharif said that tribal leaders had offered the government a three-day truce and decided to form a committee to follow an official investigation into the airstrike. Sheik Abdullah said that the tribe would insist on holding talks with high-level security officials if Yemen was found responsible for the attack. But, he warned, if the United States was involved, he said the government would have to take action. Working with the United States, officials in Yemen have stepped up efforts to break terrorist networks, which have long found safety in the isolated rock and desert corners of Yemen. As the government was trying to calm the violence in the restive Marib Province, news came that the two hostages had been released and that they were already on their way back to Sana. Their release came as President Ali Abdullah Saleh agreed to release a prisoner, Hameed Shardah, said Said Naser Sabir, a local leader of the Haima tribe, in an interview. The BBC reported that Mr. Shardah had been arrested in a land dispute.


Delaware: Former School Headmaster Is Convicted in Child Pornography Trial

Abstract: A former headmaster of a prep school in Wilmington faces at least 50 years in prison after being convicted Monday of dealing in child pornography. The defendant, Christopher Wheeler, 54, was found guilty on all 25 counts. He was headmaster from 2004 to 2013 at Tower Hill School. Judge Eric Davis of Superior Court said the evidence showed that Mr. Wheeler had sought out and downloaded images of child pornography. “Mr. Wheeler developed a pattern of Internet browsing for child pornography,” Judge Davis said. Mr. Wheeler waived his right to a jury trial after the judge denied a defense motion to suppress evidence seized by the police. The judge tentatively set Mr. Wheeler’s sentencing for March; each count carries a minimum two-year prison term. A defense attorney said he planned to appeal.

Child pornography
Christopher Wheeler
Wilmington Delaware
K-12 Education


Making Hard Times Work for Your Business

Abstract: Times are tough, and now, especially, every small business is looking for ways to increase efficiency and cut costs. These ideas could help. LEMONS INTO LEMONADE? The current challenging environment is actually an opportunity, Michael Kanazawa argues on Slackermanager.com , but only if entrepreneurs look at these hard times in the right way. The obvious reaction to an economic slowdown is to tell the staff to do more with less. But that strategy, Mr. Kanazawa says, is rarely effective because when resources are substantially cut, “people are spread too thin and can’t finish any single project or task with quality and diligence.” That, he says, “is a root cause of poor execution.” Mr. Kanazawa’s recommendation is to tell employees “we need to do more on less, meaning more resources, more staffingand more focus on fewer initiatives.” The result of this approach, he says, “is a prioritization of the most important and high-impact initiatives and getting the new levels of resources focused for delivering results on those top priorities.” CHEAP BENEFITS Overtime, the office holiday party and the company’s off-site gatherings at the wonderful resort on the water may be off the table for the immediate future. But there still are some inexpensive benefits you can offer you employees, writes Entrepreneur magazine. Here are three ideas the magazine suggests: ¶ “Negotiate discounts with local merchants for your employees. Hotels, restaurants and amusement parks may offer discounts on their various attractions, including lodging and food through corporate customer programs.” ¶ Sign up with a credit union. This is “one of the most appreciated, but most overlooked,” benefits. Employees will probably “increase their savings rates especially if you offer automatic payroll deduction, have access to lower loan rates and pay lower fees — if any — for services.” ¶ Provide free, in-house, lunchtime seminars. Financial planners, lawyers and “other professionals will often offer their speaking services at no charge.” ANOTHER FREEBIE Here is a list of the five employee benefits most popular with workers: medical plans, paid vacations, defined benefit plans, defined contribution plans and flex time, ITBusinessEdge reports . While the first four can be expensive, the odds are that offering flex-time will cost you little (if anything). TALK IS CHEAP Communicating with employees usually does not cost a small business much. So make sure you continue to do it, especially now, as Diane Domeyer writes on Allbusiness.com . “A common response to changing times is to limit communication, usually by cutting back on internal newsletters, canceling staff meetings and conducting closed-door strategy sessions,” she says. “Employees want to know where the company stands — where they stand — and they want to hear this from you, not the rumor mill.” FREE IS GOOD Before you sign up (and pay) for a basic marketing seminar — something like How to Win New Customers — or a book on the best way to prepare a business plan, visit the online courses offered by the Small Business Administration. The link is: http://www.sba.gov/services/training/onlinecourses/index.html . The courses are free. LAST CALL One way to do more with less is to have your customers do the work for you. It sounds ridiculous on its face, but as HR.com points out it isn’t. “When was the last time you walked inside your bank to do a transaction? If you can’t recall, you are in good company. We use ATMs. We book travel arrangements online. We even fill our own drink cups at our favorite hamburger stop.” . To which we would add: Most of us pump our own gas, check ourselves in at the airport and sometimes even pay for and bag our own groceries. The message is clear: Look for places where you can “outsource” to your customers the work your employees used to do.

Entrepreneurship
Small Business
Layoffs and Job Reductions


Full Text of the Statement From the Federal Reserve

Abstract: The following is the full text of the statement released Wednesday by the Federal Reserve : Information received since the Federal Open Market Committee met in December suggests that economic activity has continued to strengthen and that the deterioration in the labor market is abating. Household spending is expanding at a moderate rate but remains constrained by a weak labor market, modest income growth, lower housing wealth and tight credit. Business spending on equipment and software appears to be picking up, but investment in structures is still contracting and employers remain reluctant to add to payrolls. Firms have brought inventory stocks into better alignment with sales. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the committee anticipates a gradual return to higher levels of resource utilization in a context of price stability. With substantial resource slack continuing to restrain cost pressures and with longer-term inflation expectations stable, inflation is likely to be subdued for some time. The committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter. The committee will continue to evaluate its purchases of securities in light of the evolving economic outlook and conditions in financial markets. In light of improved functioning of financial markets, the Federal Reserve will be closing the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility on Feb. 1, as previously announced. In addition, the temporary liquidity swap arrangements between the Federal Reserve and other central banks will expire on Feb. 1. The Federal Reserve is in the process of winding down its Term Auction Facility: $50 billion in 28-day credit will be offered on Feb. 8 and $25 billion in 28-day credit will be offered at the final auction on March 8. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remains set at June 30 for loans backed by new-issue commercial mortgage-backed securities and March 31 for loans backed by all other types of collateral. The Federal Reserve is prepared to modify these plans if necessary to support financial stability and economic growth. Voting for the Federal Open Market Committee monetary policy action were: Ben S. Bernanke, chairman; William C. Dudley, vice chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that economic and financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted.

Federal Reserve System
United States Economy
Interest Rates


Michigan: Record Fine Sought for Spill

Abstract: The federal Pipeline and Hazardous Materials Safety Administration said Monday that it would seek a $3.7 million fine, a record civil penalty, from the pipeline operator Enbridge over a 2010 oil spill in the Kalamazoo River. The spill, which involved at least 800,000 gallons of a form of crude called diluted bitumen, has been difficult to clean up, and parts of the river remain closed. The agency found that the company had violated many federal regulations, including failing to follow proper management procedures and using operators without the proper qualifications. Enbridge has 30 days to indicate whether it will accept the fine.