Stillman News
Ethics
Professionals educate students at Executives in See p. 6 Leadership event.
Is the FBI’s proposal to extend the Patriot Act ethical? See p. 8
Sports Business The NHL secures its largest sponsorship deal in history. See p. 11
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TUESDAY, MARCH 1, 2011 - VOL. 7 NO. 10
Malls of America Revitalize Relationships with Consumers By Jennifer Crowe, Money & Investing Assistant Editor
made many changes going into its new fiscal year. The company plans to increase sales by planning the amount of merchandise to buy so that there is little to no excess inventories at the end of any given season. Furthermore, Macy’s intends to localize its merchandise; its inventory will vary depending on each store’s location. Doing so allows individual stores to cater to the needs of its surrounding community. The department store giant has created the “search and send” program, which is designed so that items can easily be shipped from one location to another to prevent inconvenience for customers. The retailer also created a system in which it will teach employees how to better interact with customers and be more engaging. Macy’s is just one example of many retailers on the rise this year. Neiman Marcus reported a 10 percent increase in sales relative to last year. Nordstrom reported a 4.8 percent increase, Saks Fifth Avenue reported a 4.4 percent increase, Khols increased 1.4 percent and TJMaxx increased 2 percent, to name a few. Economists have been keeping a careful eye on what consumers are spending their money on; clothing stores had the most sales this past year, with a 7.3 percent increase from the previous year.
Since the early 1900s, shopping malls have been a significant feature in American pop culture, and have even helped grow the U.S. economy until they hit rock bottom during the 2008 economic recession. In the last couple of years, shopping malls nationwide saw a significant decline in business. Recovering from this decline has been a slow process, but shopping malls across the country are slowly on the rebound. Macy’s Inc. (NYSE: M), a firm that operates department stores located in shopping malls, topped economists’ expectations in the fourth quarter of its fiscal year. For the quarter which ended on January 29, Macy’s reported a net profit of $667 million, or $1.55 per share. This quarter’s results completely outshine the same quarter a year ago; at the close of last year’s fiscal year, the company reported quarterly net profit of $445 million and earnings per share of $1.05. The department stores’ profits have increased by 50 percent in one year. In an interview with The Wall Street Journal, Macy’s CFO, Karen Hoguet, said that “We are entering the year with momentum which gives us confidence that we should have another strong year.” Making sure to start fresh, Macy’s has
Continued on page 5...
Chinese Social Network Looks to Libya’s Qaddafi Vows Resistance Add Friends on Public Market as Dissidents See Gains in East By Rebecca Townsend, International Business Writer The wait for social networks to go public is finally over as Renren.com, China’s version of Facebook, recently announced its plans for an initial public offering in the U.S .sometime this year. Not only will Renren be the first social networking site to go public, it will provide the first insight to the challenges that face web 2.0 startups in China. Renren.com, formerly Xiaonei, began in 2005 as a social networking website for Chinese college students in response to Facebook.com. In 2006, it was purchased by Oak Pacific Interactive, and re-named “Renren,” which translates to “everyone.” Today, the website has over 160 million active Chinese users. This already large number can be expected to grow, considering that the average person in China spends 2.7 hours per day online, compared to 0.4 hours for
INDEX Money & Investing.............. 2 Stillman News...................... 6 Ethics ................................... 8 Editorials ............................. 9 Sports................................... 10 Domestic News..................... 13 International News.............. 15 International Business........ 16 Image courtesy of Image Shack
Americans, according to the Financial Times. The IPO is being underwritten by Morgan Stanley, Deutsche Bank, and Credit Suisse Group, and is believed to be valued at $500 million. Ad revenue for Renren grew by more than 100 percent since 2009, and the Chinese ad market is expected to triple by 2014, according to The Economic Times. Renren’s aggressive advertising scheme, which has already raked in $60 million for the company in 2010, and its emphasis on online gaming, make its public emergence promising. Renren will be interesting to follow as a public company, because social networking culture in China is very different from that of the West. One key distinction is the governmental blocks that are placed on social networking websites in China. Continued on page 16...
By Douglas Tatz, International News Writer The road into the city of Tripoli has become a test. Those who can flag-wave and cheer loudly enough in support of Libyan leader Muammar al-Qaddafi are permitted to pass through the dozens of checkpoints comprised of soldiers and foreign mercenaries. Those who fail to display their support are not so fortunate. “You are trying to convince them you are a loyalist,” one resident told The New York Times, “and the second they realize that you are not, you are done for.” This tension between Qaddafi supporters and pro-democracy protestors has become characteristic of the current situation in Libya. Inspired by the revolts that have taken place in other neighboring countries, citizens in Libya have united in an attempt to overthrow the oppressive rule of Qaddafi, who has been in power for 41 years.
Like Egypt, social media has played an important role in raising awareness of the revolution. However, unlike other countries whose revolutions have been primarily peaceful, Libya has been rocked by violence and bloodshed. Qaddafi maintains power with his private militias and mercenaries, which are comprised of soldiers that are uniquely loyal to him and of brutal mercenaries hired from neighboring countries. Qaddafi has encouraged the tensions between tribes in Libya, resulting in a fragmented military while simultaneously building an extremely loyal army from his own clan. According to The New York Times, however, he distrusts even his own generals and has brought in large numbers of mercenaries from other countries who have no qualms firing on Libyan protestors. Continued on page 15...
Obama and Justice Department Will Not Support Defense of Marriage Act By Padmavathy Sonti, Domestic News Writer On Wednesday, February 25, the Justice Department announced that it would no longer defend the Defense of Marriage Act, calling it unconstitutional. The law defines marriage as a union between a man and a woman. “After careful consideration, including a review of my recommendation, the president has concluded that given a number of factors, including a documented history of
discrimination, classifications based on sexual orientation should be subject to a more heightened standard of scrutiny,” wrote U.S. Attorney General, Eric Holder, in a letter to Congress. For the past 15 years, the law has prevented the extension of social security, family and medical leave, and tax benefits to same-sex couples. The announcement is being celebrated as a victory by many gay rights groups, only two months after the repeal of “Don’t Ask, Don’t Tell.” “This is a great step by the Obama
administration and a tipping point for the gay rights movement that will have ripple effects in contexts beyond the Defense of Marriage Act,” said Anthony D. Romero, executive director at the American Civil Liberties Union said. “It will reach into issues of employment discrimination, family recognition and full equality rights for lesbian and gay people.” Continued on page 13...
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TUESDAY, MARCH 1, 2011
Money & Investing
Company Comparison
This Week’s Poll Question:
Graph courtesy of Google Finance
Do you think that revolutions around the world will continue to spread? A: Yes, peacefully B: Yes, but they will get violent C: No, governments will regain control D: No, it will begin to settle down
Last Weeks Poll Question: Graph courtesy of Google Finance
With President Obama’s recent call for one million electric cars on the road by 2015, would you consider buying an electric car? Yes, especially becauseof tax breaks (6%) Yes, I like the idea of going green (44%) If they make electric more efficient (13%) No, I like my gas guzzler (38%)
Sector Summary Courtesy of Google Finance
NEWS BRIEFS
Earnings Stock to Watch: Disney Inc. Graph courtesy of Yahoo! Finance
• Warren Buffett's Berkshire Hathaway reported a 43 percent jump in fourthquarter earnings Saturday largely because of a strong performance by its railroad business and a paper gain of $1.4 billion on the company's derivative contracts and investments. • The new chief executive of Sears Holdings Corp. was awarded $7.2 million in salary and other compensation. He is also eligible for a bonus of up to $2 million, the struggling retailer said in a regulatory filing Friday. • President Barack Obama says the economic recovery will stall if Congress cannot agree on spending cuts and avoid a government shutdown. • A federal judge on Friday approved a $624 million settlement in a lawsuit brought by several New York public pension funds against fallen mortgage giant Countrywide Financial Corp.
World Currencies Courtesy of Google Finance
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Money Funny Corner
With Excessive Gov’t Bailouts, Bill Gates Bails Out Gov’t By Danny Jones, Money & Investing Writer After a record-breaking 13 billion companies filed for bankruptcy, the government, for some reason, has decided to bail them all out. What they don’t know is that excessive bailouts accumulate and can create quite a dent in the country’s bank roll. Our government is broke. However, after giving our country an already brilliant contribution, Bill Gates has decided to help our country again by taking care of all of our debts. Gates has decided to bail out our government, making him Time Magazine’s Man of the Century. “It’s okay I guess,” Bill Gates commented after receiving this illustrious title. “I was just bored one day and, after buying Australia so my kids could have a secluded spot to raise a family, I decided to bail out our government. I mean, if I didn’t do it, then who would?” After such a generous, heaping donation to our country, Commander-in-Chief Barak Obama has decided to change our nation’s name, effective immediately, to the United Gates of America. In addition to the name change, Gates will be receiving one of America’s greatest honors next weekend. The world’s second richest man will be allowed to have lunch with any member of the Jersey Shore that he wants to meet. When asked, Gates immediately responded with “Snooki.” In addition, he commented, “I have a couple posters of her and I follow her on Twitter and Facebook. If I could meet her in person, my life would be complete.” Snooki agreed to have lunch with Gates, but had a few questions about him before meeting the savior of American debt. “Well, I’ve never heard of him. I just want to make like sure he’s not like, a pedophile or like something gross or anything. I just hope lunch doesn’t really like last long, I’m only doing this because someone told me he’s got a lot of money or whatever.” Inspiring words from Jersey Shore’s finest. Bill Gates was giddy with anticipation as he talked about meeting Snooki. “I’ve never been so excited about anything in my entire life. I’m so excited to tell her all about my business and how computers work. I know she’s going to be enticed by how the CPU Linxsis Chip splices with the manutilits malvirberator. Look at me going on and on. I just can’t wait to meet Snooki.” In a related story, CEO and Chairman of Apple Inc., Steve Jobs, will be following Bill Gates from a distance, “just to make sure he’s okay. I don’t know what I’d do without my Billy.” Contact Danny at daniel.jones@student.shu.edu
All information contained in this publication is not intended to substitute for the advice of a professional financial planner. It is meant only for informational purposes. The Stillman Exchange assumes no liability for any investment losses incurred as a result of information provided in this publication. Readers should consult a professional financial planner.
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Oil Prices Continue to Rise, Hits $100 per Barrel By Scott Watson, Money & Investing Writer The political conflict and unrest in the Middle East and Africa has been flooding the news for weeks; protests have threatened leaders to step down, elevating uncertainty in the marketplace. Last week, Libya has been all over headlines as protesters try to mimic the success of the Egyptians and overthrow their leader. It is interesting to see people standing up for their rights as citizens, but the overflow from these events and struggles has caused third parties to feel burdened, even halfway around the globe. Libya is a member of OPEC, the Organization of Petroleum Exporting Countries, and has the most oil reserves in Africa; this political instability creates pressures on the oil markets, increasing prices for those of us who drive cars and need heat during the winter. On Wednesday, the price per barrel of oil hit $100 as fighting between protestors and the government intensified. Oil has not been this high since October of 2008. All over Libya, oil operations have been shutting down or slowing; this includes plants such as Eni, Libya’s largest producer of oil which on average puts out 224,000 barrels per day. Other organizations, such as The International Energy Agency and the Saudi Arabian government, have pledged to provide for any shortages that result from Libya. Yet, there is still a problem: Libya is widely known for its high quality oil. Barrels produced from companies like Eni are refined to make gasoline and jet fuel. Oil from other places like Saudi Arabia do not produce these higher-quality products because of the low quality oil excavated. This concern has driven prices up sharply and is affecting gas prices all over the United States. The increase in prices is a result of uncertainty, despite the ample reserves in the U.S. and in other countries. The U.S. receives only one percent of its oil from Libya. Yet, the national average price per gallon for gasoline rose 2.3 cents to $3.194 according to AAA Wright Express and Oil Price Information Service. The effects of the Libyan conflict is more relevant in certain European countries. In Ireland, for example, the nation imports 23 percent of its oil from Libya alone. Another large nation dependent of Libyan oil is Italy, which receives 22 percent of its nation’s oil from Libya. In the next few months, Tom Kloza, Chief Oil Analyst at Oil Price Information Service, expects the price of oil to move between $3.25 and $3.75 per gallon in the U.S. There is doubt that the price will go above $4, but at this point, it depends on the state of the Middle East whether or not prices will fall back to last year’s lows. Contact Scott at scott.watson@student.shu.edu Photo courtesy of telegraph.co.uk
Money & Investing
TUESDAY, MARCH 1, 2011
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Ma d of f Tru s t ee S u es S EC Law yer Ov er I llegit im at e Prof it s By Amanda Bronson, Money & Investing Writer Baker and Hostetler partner and Madoff Trustee, Irving Picard, has issued a $1.5 million lawsuit against the Securities and Exchange Commission’s top lawyer, David Becker. Picard is suing in order to reclaim what was deemed to be more than $2 million in illegitimate profits from the infamous Madoff scheme. The trustee filed this “clawback” lawsuit against David, William and Daniel Becker, who are the heirs of a massive estate previously owned by their mother, Dorothy Becker. According to legal financial records produced by a bankruptcy court in Manhattan, during the time of Bernard Madoff’s fraudulent activity, the Beckers made $1.5 million more than what they invested. The Madoff account was liquidated in February 2005 after their mother’s death. Since February 2009, Becker has been employed as the general counsel and senior policy director at the SEC. According to an SEC spokesman, Jon Nester, Becker states that he “was not involved in his parents’ financial affairs and has no recollections of his parents' investment with Madoff prior to his mother's death and the subsequent liquidation of the account.” Picard never alleged that Becker was aware of the Ponzi scheme at the time. However, it does raise serious questions as to whether or not the SEC did a satisfactory job in investigating Madoff’s company. The SEC has already been scrutinized for not uncovering the scandal earlier when there had been accusations against the legitimacy of Bernard L. Madoff Investment Securities trade reports. Financial analyst, Harry Markopolos, had his doubts that Madoff could have such impressive gains. He found it both mathematically unfeasible and unrealistic that the firm’s reports
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Trustee Irving Picard is suing the SEC for $1.5 million in order to reclaim what was deemed more than $2 million in illegitimate profits.
were so impressive. Yet, when he questioned there accuracy, his attempts were ignored. Bernard Madoff was arrested on December 11, 2008 for securities fraud. He was later charged with money laundering, investment advisor fraud and other allegations. The scandal was believed to have commenced as early as the 1970s, making it the longest and most outrageous case of fraud in history. Madoff estimated that the losses from his fraud exceeded over $50 billion. By creating false trading reports, he used new clients’ investments to pay redemptions, adding up to over $7 billion in gains for his older clients. Madoff refused to comply with authorities as to naming any co-conspirators or associates involved in the scheme. After pleading guilty to 11 federal charges in March 2009, Madoff was sentenced to 150 years in prison, the maximum allowed, and forfeited over $17 billion. He currently resides at the Butner Federal Correctional Institution in North Carolina.
Picard is suing the Beckers as well as 400 other investors including executives and owners at JPMorgan Chase, UBS, and the New York Mets. His motive for the numerous allegations is strictly to recover the money lost and to return it to the Ponzi scheme’s victims. Becker was not an employee at the SEC when he was sorting his mother’s assets. He worked there from 1998 to 2002, and he did not rejoin the SEC until 2009, a year after the Madoff scheme was unveiled. Many of the investors that were allegedly benefiting from Madoff’s illegal activities claim they were unaware that they were even involved in the scandal. After completing his two-year commitment to the company, Becker plans to leave SEC at the end of this month and continue his own private practice. Contact Amanda at amanda.bronson@student.shu.edu
New Jersey Governor Pushes for State Workers to Pay More for Healthcare By Matthew Magi, Money & Investing Writer New Jersey Governor Chris Christie has proposed that public servants and educators should pay for a greater portion of their healthcare costs in order to decrease the state budget deficit. The state has approximately $33 billion in debt, and the Republican Governor believes that reforming the state’s benefits system is the only way to close the gap. Governor Christie explained that current healthcare benefits cost the state $4.3 billion per year and the costs are projected to rise in the coming years. His plan to combat the rising healthcare costs provide that workers pay for 30 percent of their health care premiums, as well as increasing their per-visit copay. Currently, state workers pay for an average of 8 percent of their health insurance premiums, so the plan would increase payments by nearly four times. Christie’s proposal also takes aim at the New Jersey pension system which currently has a deficit of $54 billion. Workers would be required to contribute more to their pension plans in order to raise sufficient funds to make
payments to current retirees. On top of increased contributions, the plan would raise the retirement age and abolish cost-of-living adjustments to pension payments. According to the state teacher’s union, these increased pension payments, in combination with the increased healthcare payments, would amount to a 15 percent pay cut for the state’s educators. The plan also partially reduces funding for environmental protection, health and senior services, city aid, and alters the treatment of Medicaid recipients in favor of lower costs. This is a large blow, not only to educators, but to the entire state. However, Governor Christie promises that the budget cuts and benefit slashing will finally spell the end of New Jersey’s financial woes. In return for support of this new plan, the Governor has promised that a portion of the money saved in next year’s budget will be used for extensive property tax rebates. New Jersey has one of the highest property taxes in the nation; the rebates are a large incentive for the public to support the proposed plan. The plan also outlines increased spending in other areas such as a $250
million increase in education aid and increased funding to hospitals and institutions which help the developmentally impaired. Funding would not be cut for higher education or municipalities in the state, and tax breaks are promised to businesses over the next five years. The plan is under heavy criticism from many different groups in the state who feel they are getting the short end of the stick. Unions have threatened to sue if the plan gets closer to passing through the legislature, and the leaders of several workers’ rights groups have made statements against the proposal. However, the leaders of the pension system are in favor of the plan because without the changes, the pension system will fall further into debt. The plan will be a controversial issue in coming weeks, and the outcome will have significant financial ramifications for the state of New Jersey. Contact Matthew at matthew.magi@student.shu.edu
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Money & Investing
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Kraft Promises to Keep Prices Reasonable as Food Costs Rise By Doug DeMarco, Money & Investing Writer, Food giant, Kraft Foods (NYSE: KFT), is facing increases in cost for ingredients it uses in its products, but is focused on keeping the prices of its goods at reasonable levels. The costs of ingredients, such as grain, wheat, and rice, have risen significantly, and are expected to cause financial strain on the food-producing giant. According to a report from Hormel Foods, grain and dairy prices alone have increased between 40 to 50 percent this year. In total, the prices of these core ingredients can cost the company an additional $700 to $800 million this year alone. In fact, this figure only pertains to the increase in costs in the North America region. According to Tony Vernon, president of Kraft Foods North America, “Half of our sales of meat and dairy products will be hit especially hard because of higher commodity prices”. There are very few options Kraft has to combat rising prices. Rather than transferring this increase to the consumer and potentially losing customers, Kraft has decided to cut business costs. This has included cutting 700 jobs, with more cuts on the way.
Photo courtesy of stockalerts.com
Kraft makes a variety of common household foods. Even with increasing costs, the firm is trying to keep prices low to retain customers.
However, the consumer will still feel some strain from the increase in commodity prices. Kraft will restructure its packaging, and will provide fewer products per package to consumers. For example, Kraft has already decreased the number of cheese slices in its popular Kraft Singles pack. This strategy has been the most effective and has allowed the company to remain
competitive without raising its prices. In effect, there is some impact on the consumers since they do not necessarily get what they paid for previously. The price charged may be the same, but the consumer does not get the same amount of “bang for their buck.” Kraft will also begin investing in marketing strategies, to try to entice more peo-
ple into becoming consumers of Kraft products. With increased publicity, Kraft hopes to drive up sales and remediate lost profits from rising food costs. In addition, Kraft is developing new products to bring more interest to the food giant. A greater diversity of products can help Kraft attract customers that it may not have attracted with its selection of traditional products. More sales means increased revenues as well as greater profits, which Kraft is continuously striving for. The consumer food industry is a volatile market, even though the world depends on food for survival. Additional costs for ingredients could have significant effects on Kraft’s profitability. Yet, it remains that food will always be bought. It is a necessity of life, and, no matter what the situation, it must be purchased for survival. Competition is very tough in the industry, and companies such as Kraft must find ways to entice consumers to buy their products. Kraft is working to keep its customers in a touch environment. Contact Doug at doug.demarco@student.shu.edu
Investors Disappointed, HP Shares Plunge 12 Percent By Dylan Mortensen, Money & Investing Writer Hewlett-Packard’s weak personal computer sales performance this past quarter resulted in a 12 percent decline in its share price. The firm fell short of analyst expectations of $33 billion in revenue. Hewlett-Packard (NYSE: HPQ) was
predicted to produce big results based off of earlier earnings reports. Many investors jumped on the HP bandwagon before Tuesday’s publication; its stock had climbed 14 percent this year and 32 percent since the beginning of 2010. According to CNN Money, HP’s first quarter net income rose 16 percent while revenue increased 4 percent relative to the
Photo courtesy of dailyspeculations.com
Hewlett-Packard is expecting total revenue between $31.4 and $31.6 billion. This falls short of Wall Street’s expectations that predicted earnings at $32.6 billion.
period last year. The world’s largest IT business storage and networking units climbed 22 percent while revenue from the company’s printer, software and networking group all grew as well. But it was computer sales to consumers that experienced a sharp decline in production. Earlier last week, HP announced projected numbers for the current quarter. Expected earnings will be around $1.20 per share and total revenue between $31.4 and $31.6 billion, an average that is below the expected $32.6 billion, according to CNN Money. Not all is raining down on HP though. A press event scheduled for March 14 is expected to reveal the company’s new strategic plan to upgrade its efforts on corporate and customer sales, according to HP chief executive Leo Apotheker. Apotheker took the reins as chief executive on November 1 of last year, replacing Mark Hurd. Hurd, who resigned from his duties amid a “sexual harassment charge” from a former HP consultant, is currently co-president at Oracle. Apotheker is optimistic about a recovery by its personal sales group; the firm nears essential PC operations in China, as well as the launch of a new tablet WebOS. The tablet comes off of the $1.2 billion buy-
out of Palm last spring. Other big acquisitions in outsourcing and “short-term service contracts” are expected to strengthen firm operations, according to Information Week. Leo Apotheker had this to say about HP’s road to recovery, “We are very confident in our ability to deliver the updated fiscal 2011 outlook… we have scrubbed these numbers really hard and we believe these are the right numbers.” In order to shake things up, HP announced the exit and entrance of multiple board members. Four members are to step down while five are to be brought in. Among the five new board members are former eBay CEO, Meg Whitman, and ex-leader of AlcatelLucent, Patricia Russo. “The management team is still there with the same operational excellence they had under Hurd… this story is not so much about the CEO as in the past,” said Kaushik Roy, an analyst with Wedbush Securities. On the flip side, HP’s rival, Dell Inc., showed significant signs of improvement, doubling its profit in the previous quarter.
Contact Dylan at dylan.mortensen@student.shu.edu
U.S. Charges Four Swiss Bankers with Helping Americans Evade Taxes By John Cenzia, Money & Investing Writer On February 23, 2011, four bankers from Credit Suisse, a bank headquartered in Zurich, Switzerland, were accused of helping Americans evade taxes. The charges are a sign that authorities are widening their investigation of offshore banks with services that allow for tax evasion. A grand jury in Alexandria, Virginia indicted the four bankers, Marco Parenti Adami, Emanuel Agustoni, Michele Bergantino and Roger Schaerer for “illegal cross-border banking that was designed to assist U.S. customers evade their income taxes by operating and maintaining secret bank accounts at the bank and other Swiss banks.” Although the bankers worked for Credit Suisse, the company itself is not the
target of investigation. David Walker, a spokesman for Credit Suisse, did say that they are “cooperating with the authorities in their investigation of these individuals.” The indictment states the Adami was a member of senior management who catered to the very rich, and Schaerer worked in New York City where he assisted taxpayers with their offshore accounts. According to the Department of Justice, Credit Suisse maintained “thousands of secret accounts” for U.S. customers with assets totaling upwards of $3 billion. The bankers worked with 17 clients, including two in California and several in New Jersey and New York. Essentially, they shifted the client’s money from Credit Suisse accounts to smaller private Swiss banks. Most of the illegal work occurred over
the course of the past decade, except for one account that was opened in 1953, according to The New York Times. Up until 2010, when the Swiss government started working with other countries on tax evasion investigations, Swiss banks were known for their subtle and safe system that rich individuals around the world preferred using. In addition to the United States, Credit Suisse has been scrutinized by Germany as well. On the same day as the indictment, German authorities raided four Credit Suisse employees’ homes and offices. Germany has been on this case since last summer. Ralf Möllmann, a German prosecutor said that this investigation is “very, very extensive,” but he did not comment on how much longer he thinks this investigation will last.
A spokesman for Credit Suisse said that the bank was aware of the German raids and that they were “fully cooperating” with the prosecutors. This investigation is reminiscent of the U.S. case where UBS, another big Swiss bank, avoided indictment by entering into a deferred-prosecution agreement and ultimately paid a $780 million fine. When things at UBS started heating up, many clients were concerned and put their money elsewhere; thus, hurting the firm’s profitability in addition to its reputation. If these four bankers are convicted, each of them could face up to five years in prison and a maximum fine of $250,000. Contact John at john.cenzia@student.shu.edu
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Money & Investing
TUESDAY, MARCH 1, 2011
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Oil Prices Pressure Airlines to Raise Airfares Photo courtesy of al-airliners.be
As the price of oil continues to rise, so does the price of airfare.
By Stephanie Gonzalez, Money & Investing Writer Although more airplanes are soaring this year, prices for air travel are soaring as well. Since the price of crude oil is increasing, jet fuel costs are placing a burden on airlines.
Oil prices are a significant factor in airline operations, and getting people into the skies. In order to compensate for increasing costs, a rise in airfares and fees is necessary for airlines to stay afloat. According to The New York Times, airlines have already increased airfare prices four times in the first three months of 2011,
which is a big shocker for passengers. In comparison, prices increased only three times in 2010. USA Today states that American Airlines raised fares last Monday from $20 to $60 on their round trip flights. Other airlines followed suit. The continuing problems in the Middle East are affecting the oil prices, according to The Wall Street Journal. Crude oil is refined into jet fuel that powers commercial airplane engines. “Refineries have increased heating oil output leaving less capacity to make the aviation fuel.” The proportion of crude oil that is being transformed into jet fuel is decreasing, reducing the supply available in the marketplace and increasing costs even more. Airlines are left with few options to reduce costs. This belief is reflected in the marketplace, where airline stocks have decreased by 11 percent in just one week, a recorded according to The New York Times. Airlines could either “look for more fuel-efficient planes,” or start, as most carriers have been doing, “hedging some of their fuel purchases to protect against sudden
price increases.” What does this mean for passengers? Since more fuel efficient planes would cost billions, and using hedging techniques to reduce volatility in costs does little to reduce significant increases in oil costs, it is likely that ticket prices will continue to increase for passengers. Yet, people still need to travel. Whether it is for business or for one’s vacation, airplanes are the fastest form of travel for long distance trips. The New York Times reported that airlines are reducing the number of “cheap seats” to further make up for increasing fuel cost, but “even those are not so cheap anymore.” For the time being, increasing airfares are the only option that airlines have to keep up with rising costs. Frequent fliers, vacationers and business professionals among others will need to keep up with the soaring prices. Contact Stephanie at stephanie.gonzalez@student.shu.edu
Malls of America Revitalize Relationships with Consumers ...continued from page 1 Department stores in shopping malls have a huge impact on the economy and make up a significant part of the marketplace. In 2009, the market share of department stores dropped immensely. Today, they are on the rise and things are looking up. Frank DeVito, a freshman business major, said, “In 2009 and 2010, it was common to walk around any given mall and notice a lot of vacancies. It was a bit
depressing and made consumers like myself feel like there was no hope for the suffering economy.” His observations changed in the spring of 2011. DeVito said, “It seems that with an up rise in the economy, businesses are starting to get back into the swing of drawing people into their stores and boosting people’s interest in making purchases. I am slowly noticing less and less vacant storefronts when I am in malls. It’s a reassuring feeling.” Many fresh changes have been made
within the past few months in New Jersey malls to attract consumers. In Bridgewater Commons mall, new stores have opened their doors and the mall has undergone an entire makeover. The Bridgewater mall recently welcomed new additions such as The Cheesecake Factory, California Pizza Kitchen, an AMC dine-in movie theatre, and various apparel stores. By renovating the mall, more people will be drawn to the location, resulting in increased consumer spending.
This is a great leap forward for Bridgewater Commons, and other New Jersey malls are sure to follow. As shopping malls begin to see more consumers walk through their doors, sales are beginning to pick up, and malls nationwide are rebounding from the slump they were in. Contact Jennifer at jennifer.crowe@student.shu.edu
U.S. Court Overturns J&J Lawsuit Against Abbot Labs Photo courtesy of lacajadeluz.tv
The U.S. Court of Appeals overturned a patent infringement case against Abbott Laboratories.
By Vincent Lovasco, Money & Investing Writer Abbott Laboratories recently told reporters that the U.S. Court of Appeals for the Federal Circuit overturned their ruling that awarded their rival, Johnson & Johnson, for patent infringement. Johnson & Johnson had claimed that Abbott Laboratories’ drug Humira was infringing on its patent rights concerning an “antibody” clause. The Federal Court of Appeals’ decision disagreed with Johnson & Johnson. In the verdict, the Court claimed that Johnson & Johnson did not provide sufficient written evidence to support this claim. The issue of sufficient written evidence was crucial to the ruling. “The evidence clearly showed that Abbott was first to
invent a fully human anti-TNF antibody, Humira,” said Scott Stoffel, a spokesman for Abbott, as reported by Susan Becker of Bloomberg. In the end, the Court found that Johnson & Johnson’s patent application never described fully human antibodies and said the claims “constitute a wish list of properties” that such an antibody would have, reported Decker. The case was overturned ruling that the largest patent related damages award in United States history was invalid. The amount totaled $1.67 billion in damages. Decker reported that in June 2009, a federal jury in Texas said the company owed $504 million in patent royalties to Johnson & Johnson based on sales of Abbott’s Humira arthritis drug in addition to $1.17 billion to compensate Johnson & Johnson for decreased sales of its competing treatments. William Lee of WilmerHale represented Abbott Labs in the case and told reports, “The opinion confirms that you can’t claim what you didn’t invent.” A panel of three circuit judges came to this ruling. Yet, Johnson & Johnson’s biotech unit Centocor is unhappy with this outcome. The Associated Press reported that the company was “disappointed by the decision,” and is considering an appeal. Not surprisingly, North Chicago-based Abbott said in a statement, “We are very pleased with the appeals court’s decision.” President Rob Bazemore said, “We are considering whether to ask for reconsideration by the panel or by the court of appeals as a whole.” Johnson & Johnson has a medication called Remicade which treats arthritis symptoms similar to Abbott’s drug Humira. Decker also reported, “Humira is Abbott’s biggest drug with $6.55 billion in sales
worldwide last year, or about 18 percent of the company’s total revenue, according to data compiled by Bloomberg. Remicade is J&J’s largest drug product.” Both companies’ stock prices fell in the New York Stock Exchange following the Court’s ruling. Johnson & Johnson fell 26 cents to $60.39 and Abbott dropped 50 cents to $46.47. Although the Court made a
decision, it is likely that the case may be reopened with another appeal. Either way, the battle between these two pharmaceutical giants will continue to be fought in the marketplace. Contact Vincent at vincent.lovasco@student.shu.edu
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TUESDAY, MARCH 1, 2011
Stillman News
THE STILLMAN EXCHANGE
Professionals Educate on Standing Out in the Workplace By Andrew Weinstein, Stillman News Writer With the economy in the state that it is currently in, it may seem difficult to land the job that you are searching for. The number of jobs available are small, and those with a job are not guaranteed to keep it. In order to help students stand out in the workplace, Seton Hall hosted four executives in business to provide their insight to the working world. The event took place on Tuesday, February 22 and was hosted by the Stillman School’s Leadership Development Honors Program. It was also co-sponsored by a variety of Stillman clubs. The event featured panel members Christine Birnbaum, Patricia Haverland, Trina Mitsch, and Soeun Nam, all of whom provided fantastic advice. Some of the advice shared by the panelist are highlighted here. In order to excel in the workplace, you must be knowledgeable in the field that you are working in. Christine emphasized the need to commit to being a “lifelong learner” because times are constantly changing, and it is necessary to stay current on relevant topics in business. Being open minded about different perspectives and situations you may be presented with is crucial to your growth as an employee because it helps you to develop new ways of thinking. It also helps you learn about what it is you want to pursue in your career. Observing the habits of people who have proven to be successful, and emulating their good behavior helps individuals to stand out at their job. Trina suggests that students develop long term goals for themselves and ensure that your daily actions are in line with achieving that ultimate goal. Students will find success in the workplace if they project
Photo Courtesy of Carolyn Taggart
The panel of professionals at Executives in Leadership.
confidence in what they do and being able to explain yourself on a consistent basis. This assists people with understanding your position on a specific topic. It also helps to clarify that you are knowledgeable on the subject. Keeping track of what you do and how well you are doing it aids in building your supervisor’s confidence in your ability to complete your work. Establishing yourself as a leader amongst your peers helps shape your image on the job as well. Knowing what it is that you want to do and taking actions toward the goals you set is important in order to become a great leader. Managing your time effectively is a critical aspect of building this role because you do not want to be wasting not only your time, but the time of those around you. As a leader, do
not be afraid to ask for the help of your co-workers because they can be some of your best assets. It is important to know yourself and your limitations, and when it is better to get help from someone who may be more knowledgeable. This in turn, helps you to develop your understanding of the situation and build the skills that satisfy the needs of the group. Although it may not seem likely, it is also possible for you to utilize your manager or supervisor to help stand out. In most instances, the supervisor or manager is willing to give you feedback on your performance, which can then improve your production at work. When a person of higher authority knows that you are looking for help, more often than not they are willing to aid you by providing this feedback. They are also giving you opportunities to grow as an individual. Other important qualities that were described by the executives were to do honest work, act like a professional, and be willing to adapt. Cutting corners does not make you look good; instead, it is better to do work that you are confident in. Taking your work and yourself seriously keeps negative attention away from you that can harm your reputation. In addition, being willing to take on new challenges and learning new things helps open opportunities that may not have been present otherwise. By following the advice given by these four established executives, you can place yourself in a position above those around you and stand out in your workplace. Contact Andrew at andrew.weinstein@student.shu.edu
U p com in g S em in a r A im s t o C u lt iv a t e Lea d ers By Ryan Garrity, Stillman News Editor One of the most important aspects of life that faculty and staff at Seton Hall University try to emphasize is being a servant leader. It is being someone who will go out into the world after graduation and help shape what is around them for the better. This March, the John C. Whitehead School of Diplomacy and International Relations will be looking to do just that when they host a program entitled Leadership: A Dialogue. On Monday, March 21, the Whitehead School will be holding the aforementioned leadership conference from 3 to 4:30 p.m. Admission is free, but those wishing to attend will have to visit a website in order to register for the event. That day, the audience can expect to hear presentations from five panelists on the topic of leadership. The panelists will discuss leadership as they have lived it, or as they understand it. These five panelists are John C. Whitehead, founder of the John C. Whitehead School, Ambassador William Luers, former President of the UN Association of the USA, Florence Dennis, former intern with The Permanent Mission of the Republic of Liberia to the UN,
Jon Martin, United States Army Major, and Sunghyun Lee, graduate student and former intern with The Office of the Special Adviser on the Prevention of Genocide. According to Mie-Na Srein, a graduate student who is organizing the event, the staff will also be using a faculty member that is familiar to many of us. “We are thrilled that Professor Michael Reuter is moderating the event.” Srein said. “We will also be hearing from Ambassador Menzies, Dean of the John C. Whitehead School of Diplomacy and International Relations.” Srein also discussed the perks of attending this event. “Students will also receive free publications courtesy of the Dag Hammarskjold Foundation; these have been sent to us all the way from Sweden!” Srien and the Whitehead have very high expectations for this event. “My absolute hope for this event is primarily for students to take this as an opportunity to be inspired. For these students to become more reflective, more introspective, and aware of our world views and motivations.” He continued, “Each of us will someday, in some capacity, have a moment or position of leadership. Perhaps for some, a lifetime of leadership. The question is, how are we going to prepare ourselves for this?” Srien also looked back on her personal experience to
highlight why this workshop is important. “Leadership doesn’t happen overnight, and my experience in the private sector has illustrated that moving up a corporate ladder or organizational hierarchy does not equate to real, transformational leadership. We can prepare ourselves in part, by simply cultivating dialogue at an event like this; to allow our own thinking to become challenged, and to fill a room with people passionate about this subject.” The format of this event has been inspired by the aforementioned Dag Hammarskjold Foundation, based in Uppsala, Sweden. They are a unique, idea-based foundation, fitting in the space of civil society in Sweden. One of their central working methods are forums just like this one. It is a place where people can gather and respectfully exchange thoughts and ideas, and allow for discussion on important topics. Leadership is certainly one of those topics, and this forum should prevent an excellent opportunity to cultivate leadership in Seton Hall students To register for Leadership: A Dialogue, or for more information, students can visit http://setonhalluniversityautohome.eventbrite.com/ Contact Ryan at ryan.garrity@student.shu.edu
Supply Chain Management Students Get Hands-On Experience By Caitlin Schlack, Stillman News Guest Writer On Thursday, February 24, Stillman students attended a Supply Chain Management trip to Maher Terminal to experience how this vital part of business operates. “The trip was a real eye-opener to logistics problems faced on a practical level as well as the role of IT in a busy shipping port. It was a real tangible experience and an absolute must for a course in Logistics and Supply Chain Management, and something all business students should be exposed to,” commented Dr Penina Orenstein, Supply Chain Management professor who arranged the trip. The Maher Terminal is the largest marine container terminal in North America, reaching over 463 acres. It is also the largest multi-user container terminal in the world. Over a million containers a year pass through Maher by ship, train and truck; it is located in Elizabeth, NJ. Port Newark handles 13 percent of U.S. imports and exports. Without Maher, our economy could not thrive, due to many retailers, such as Wal-Mart, that rely on Maher to receive their products. Jim Mcgeehan, a Seton Hall Alum who has worked at Maher Terminals for over 29 years, gave the students in
attendance a very informative tour around the terminal. They were able to see the truck route where over 600 daily trucks would come drop off and pick up containers. The truck route is made to withstand 10,000 trucks. The truck “portal” or entrance is the only remote processing entrance in North America. Just beyond the truck route is the truck loading area where straddles, which look like moveable cranes on wheels, are used to move containers to and from trucks. There are over 184 straddles at Maher. Straddles are unique because the drivers drive sideways, two people are required to operate one straddle, it takes 6 months of training to be able to operate it, and each straddle costs $650,000. There are two different shifts for straddle drives, the first is from 6a.m. to 3 p.m. and the second is from 3 p.m. to 12 a.m. Mcgeehan told students that there is a total of 17 electric cranes in the terminal, each costing $8 million. Each crane has to have three workers on duty at all times. The cranes can make 30 moves per hour and each ship receives four cranes to load and unload containers. Students saw two ships being loaded, one from China and the other from Europe. The last stop on the tour was the reefers. Reefers are 80 feet high steel poles that carry 220 volts of energy that
are used to temporarily power refrigerated containers. Containers that are refrigerated carry products such as produce or frozen foods. There are three reefer areas on the terminal, each with 330 plugs per area. Before the tour, students met with another Maher employee, Kevin McAllister, who explained the behind the scene details. The Maher Terminal is not firm property; in fact, the firm has now rented the location for ten years. The rent is calculated by anchorage and volume. In addition, Maher has over 800 employees and only 200 employees are non union. Furthermore, Maher is considered unique for the firm’s relationship with its customers. Each customer has a one-of-a-kind contract. This means that if a customer brings in 150 containers, while another customer brings in 450 containers, the customer with more containers will make Maher more money. Each move or extra move Maher has to make with containers allows the terminal to charge customers an additional fee. This is just one way of the ways that Maher generates revenue. Contact Caitlin at caitlin.schlack@student.shu.edu
THE STILLMAN EXCHANGE
Stillman News
TUESDAY, MARCH 1, 2011
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Bright Future Ahead for Senior Finance Major Vijar Kohli By Beverly Makarios, Stillman News Assistant Editor The senior chosen for this edition of The Stillman Exchange's Interview is Finance Major Vijar Kohli. His accomplishments and opportunities as an undergraduate have proven to be exceptional. Vijar displays leadership in his academic life as Chair of the Investment Club and works within the Trading Room, teaching students and professors how to utilize the Bloomberg Terminal’s functionality. He recently had the opportunity to participate in the Capital Markets Colloquium student-faculty debate and was also the only undergraduate chosen to represent the NYSSA Investment Research Challenge. With four internships already under his belt, it’s clear that Vijar is heading towards a bright future. The following interview provides an insight into Vijar’s experiences and many accomplishments during his four years at Seton Hall. Beverly Makarios: What influenced you most in pursuing a degree in finance? What do you hope to do with this degree? Vijar Kohli: The faculty in the Stillman School has influenced me the most while pursuing my degree in finance over the last four years. I originally came to Seton Hall University with the mindset of becoming an accountant because of its accredited accounting program. That all changed after stepping into the Stillman School of Business. The school has so many opportunities to offer all of its students, and having faculty with Wall Street experience made it an easy transition to move completely into the finance world. I was able to attain an internship in investment banking before coming to Seton Hall, which definitely accelerated my track in finance and exposed me to all possible aspects of the financial markets. I enjoy learning about the derivatives market and have taught myself its fundamentals and analytics. Currently, I am writing my Senior Thesis on the liquidity of credit default swaps and plan to work in structured products for the rest of my career. BM: You recently took part in the Capital Markets Colloquium student-faculty debate. What was this experience like for you? VK: The Capital Markets Colloquium is an annual event that brings together students and professionals that are actively involved in finance. I have participated in the event for the last three years, and I have to say that it does a wonderful job of getting students involved with the school and other professionals. Wall Street professionals are always excited and look forward to the Colloquium because it provides them the opportunity to speak with students and talk about the industry they work in. This year was the first time we decided to add a student-faculty debate in which we would discuss current topics. I, along with Camela Cruz and Lee Duan, debated about whether the euro was at death’s door while the European crisis was peaking. We had a great turn out for the event, and it was very interesting to debate with the professors and hear their side of the story. The next day, I received a tremendous amount of positive feedback from my colleagues that the Colloquium was very enjoyable and that students were actually eager to take notes on all of the presentations. BM: As Chair of the Investment Club, how has this position enriched your academic life? What does your position entail?
VK: I joined the Investments Club during my sophomore year and was elected to be the Co-President along with Thomas Klimek. Everyone in the Stillman School is required to take a business finance course in which they learn the concept of time value of money, and we apply that idea with thorough analysis and research of the markets in real time. As a club, we constantly analyze market movements and current events that occur only a weekly basis. Whenever large events such as a Federal Reserve Meeting or breaking news such as the Libyan crisis occur, we require members to go over the events and be prepared to discuss them at our meetings. The idea behind the club is to take what we learn in the classroom and apply it to the real world. We have members, from freshmen to seniors, who equally participate and bring what they have learned, either from the classroom or at an internship, to the club. The Investment Club allows students to further study and learn about the financial markets and how academic theories can be utilized in real portfolio management. Tom and I always start off the year by teaching new members fundamental and technical analysis techniques on how to interpret market news. We believe it is important to build a proper foundation of the basic rules of investing in order to become a better security analyst. Also, having Professor Scott Rothbort as our advisor has been great since his 20 years of portfolio management experience always adds insight to our meetings. Currently, we are writing a research report on Genco Shipping & Trading (Ticker: GNK). Half of the members are creating a growth strategy, while the other half values the financials. Together, we will determine a target price along with a buy, sell, or hold recommendation. Our goal will be to get this report published and recognized by investment firms. The Investment Club has also been in the process of raising capital so that we can one day have a student run portfolio with real money managed by its members. BM: You are the only undergraduate on the NYSSA Investment Research Challenge (IRC) representing Seton Hall University. Can you tell us about the experience and what you took from it? VK: The Investment Research Challenge has to be one of the most memorable learning experiences that I have had throughout my college career. I have participated in numerous case competitions during college, but this was the first time that I created a full equity research report and presented it to a panel of Wall Street experts. I was the only undergraduate on this team of five members, with Professor Tony Loviscek as our advisor, and together we spent over 200 hours on research to construct our report and presentation. We covered New Jersey Resources (Ticker: NJR) and used the free cash flow to equity and dividend discount models, along with a solid market strategy to come up with a target price. As you can see, we used the same material we learn from our classes in the Stillman School and were able to place Seton Hall in the final four for the first time in four years. Competitions such as the IRC offer a tremendous amount of experience for students and have always bridged the gap from the class room to the real world.
Terminal and the RiseTicker. The twelve computers placed on the “Trading Desks,” each with Telemet Orion which is a mobile financial software used to download financial data, is also required and is used by students taking Investment Analysis and Financial Strategy. Once you enter the room, you will notice the two Bloomberg Terminals, each with two 24-inch widescreens and direct access to the financial markets. Both Bloomberg and Telemet are financial platforms that provide real-time data and are used by finance professionals like hedge fund managers and traders on a daily basis. My job is to make sure these financial tools, along with the other hardware in the room, are constantly working. I am always talking to Bloomberg representatives that can help better the experience for students in the Stillman School. Last semester, I arranged a “Bloomberg Day” in which students and faculty could come to the Trading Room and learn about tools and features that Bloomberg has to offer. Through this job, I became Bloomberg Certified in equities, fixed income, foreign exchange currencies and commodities. Having the certification definitely shows initiative to any potential employer, and I always recommend other students to get certified as soon as possible. Also, after working my hours in the Trading Room, I stay in the room to tutor students, along with other volunteers, in finance to better understand theories taught in class. BM: You have had a number of internships with firms such as Merrill Lynch and Citigroup. Overall, what can you say about the experiences that you have gained from these internships? How did you go about receiving them? VK: In the last four years, I attempted to find out where my interests in finance would be best suited by attaining multiple internships at various bulge bracket firms. Before starting my first semester, I was able to attain an internship at an investment bank and learn the ropes of the industry within just seven months. I knew finance was my calling and that I needed to learn more about what other firms had to offer so I was constantly interviewed with firms such as Blackrock, JPMorgan, and Dow Jones every year to see what other firms had to offer. I have worked in front and back office positions just to experiment with these roles. Bulge bracket firms such as Citigroup and Merrill Lynch will always offer an employee the chance to easily move around and learn from executives and co-workers that have years of experience in the field. It is always exciting to work in a large firm because of the name and what the job may entail, but I believe that it is the experience that really makes the internship. Working for a small or private firm can be just as rewarding if one makes it noteworthy. I have always found my investment banking internship, which was at a private firm, to be the most memorable experience because of the amount of responsibility I was given as an intern. My recommendation to any underclassmen is networking, networking and more networking. It is important to build a strong network of mentors that can guide you while looking for internships or jobs. Everyone starts in the same position as a freshman, whether it is at Seton Hall or at another school, and the only thing that differentiates us is our experience and what we make of it.
BM: What does your position in the Trading Room entail? VK: Last year, I started working in the Trading Room with Nick Magone, who was the former President of the Investment Club. My job requires me to manage the 14 computers in the room, which includes the Bloomberg
Contact Beverly at beverly.makarios@student.shu.edu
Career Fair Helps Students Determine Path After College By Tara Stafford, Stillman News Writer On Thursday, February 10, students made their way to the Main Lounge in the University Center in preparation for their future career path. Several times throughout the year, Seton Hall students are given the opportunity to get a better understanding of their desired professional goals, as well as to explore the possibilities of internships and other experiences in their field of choice. Many students took advantage of this event and met with representatives from different companies such as Ernst & Young, KPMG, Prudential, Six Flags Great Adventure, Mars Incorporated, and Wachovia, along with 47 other establishments. From 4 to 6 p.m., the main lounge gave Seton Hall students from all majors an opportunity that should not have been passed up. This is one Career Center event that gives students a chance to network and find out more information
about specific companies they can work for without leaving the campus. Students were given a packet full of information regarding 53 companies that were placed at numbered tables all over the lounge. Several companies listed more information about the activities that they are involved in and positions being recruited. Many companies listed a wide range of majors being recruited for including Finance, Management, Marketing, Biology, Accounting, Graphic Design, Sports Management, Chemistry and many more. Representatives from each company freely answered student questions, and were open to discussing positions that were available. Attending a career fair is a huge step in the right direction for your future after Seton Hall. The more networking and overall interest in a company that you show, the more likely that you will receive a job offer upon graduation. There are upcoming career fairs available for those that
want to continue or start their next step towards achieving an internship or full-time position. This was the first career fair of 2011. If you missed it, there are still plenty more to attend. For more information regarding upcoming events, visit the Career Center online at www.shu.edu/go/careers or call (973) 761-9355 to start planning your future. The Career Center offers multiple career fairs and other events throughout the semester that allows the opportunity for you to become aware of internships or jobs that could interest you. They also provide resume and interview workshops that get you the internship or job of your choice. So next time you see a flyer on campus or hear about a career fair, dress to impress and bring plenty of resumes to start your search for your dream job. Contact Tara at tara.stafford@student.shu.edu
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TUESDAY, MARCH 1, 2011
THE STILLMAN EXCHANGE
Ethics Is the proposed extension of the Patriot Act going too far?
The FBI wants an extension of the Patriot Act to monitor not only phone conversations but also the internet and website communications such as Facebook, Twitter and Gmail.The FBI wants these services to go into their server to be ‘screened’. Christopher Lash, Senior Diplomacy Major
Honest Citizens Have No Worries The goal of the FBI is to attain more power in surveillance of the United States internet system to aid in the protection of our borders. By being able to track suspicious emails or exchanges on social networking sites such as Twitter or Facebook gives the FBI yet another crucial tool in the “War on Terror”. The purpose is not to intrude on the private life of citizens, but it is rather to create a barrier or protection around our citizens which will only aid us. Essentially we indirectly pay the FBI through our federal taxes and it is good to see that they are actively pursuing their goals of protection of its citizens. The FBI and its agents don’t care about the private lives of individuals. They probably won’t even have access to any sort of information that would link private individuals and their names to the correspondences that they would be reading and processing. It would most likely stay completely anonymous until such a time when they see that the correspondences are a potential threat to national security. Speculating on how this system would work, it would seem that the FBI would process all of these correspondences through a “super computer”, which would sift, at a rate of millions per second, through files and search for certain key terms of the
FBI’s choosing. Most likely, these words or would have to have some sort of link to national security such as making instructions” or other sorts
phrases directly “bombdanger-
“The honest and innocent citizen should have nothing to fear from this new FBI system.” ous correspondences. Only then would the FBI investigate and take further action. Therefore, the honest and innocent citizen should have nothing to fear from this new FBI system. Their honest correspondences would never be investigated so they have nothing to worry about. It is hard to tell if the FBI would use this system to prosecute crimes other than national security threats such as illegal drug related correspondences, arson or theft just to name a few. But, I don’t think it really matters. The honest citizen has nothing to fear. Most likely, they won’t even prosecute any smaller crime than a threat to national security because the FBI already has “a lot on their plate” in terms of protecting the nation. Contact Chris at christopher.lash@student.shu.edu
In a recent poll, 153 Seton Hall University Students were asked the question: “Do you support the new extension to the Patriot Act which would allow the FBI access to social networking sites such as Facebook and Twitter.”
William Stella, Junior Economics Major
A Necessary Invasion of Privacy The FBI for the past several years has been preparing for the imminent introduction of new legislation that will allow them to wiretap into internet communications. This would be passed in conjunction with the newly increased length of the Patriot Act and several of its provisions. It would essentially require internet communication companies to make a so called “back door” to allow the FBI to perform wiretaps on suspects, similar to how the Communications Assistance for Law Enforcement Act required phone companies to allow for the FBI to wiretap phones. The reason the FBI need this type of wiretapping is due to the fact that suspects use the internet more than phone calls and the FBI has no way to tap into conversations on the internet. If an act like this was passed it would bring up several questions regarding the safety of basic rights of Americans.
The largest of these concerns would be the privacy of Americans. Wiretapping as is clearly invades the privacy of Americans, but it is a necessary action to ensure safety. Many cases and terrorist plots have been solved and prevented by using wiretaps to get the upper hand. With this in mind it is clearly necessary to allow the FBI to perform these actions for our safety. The only issue in my opinion though comes with the nature of the internet. There are thousands of hackers and hacking attempts every day, and by companies opening a back door to their clients’ information, a hacker could potentially have an easy way to get sensitive information and spy on innocent people. The only way I could see this working is if the FBI provides a way to keep the back door sealed and only useable by them, while been sure that no hacker could easily intercept information. Contact William Stella at william.stella@student.shu.edu
Ashley Lorenzo, Sophomore Pyschology Major
Is Big Brother Watching Over Us? Last week, the FBI wanted to extend the USA PATRIOT Act (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act), tapping into e-mail accounts and communicating websites such as Facebook and Twitter. Many people are torn between if this act will either help us prevent terrorism or is being used as a means to further invade our privacy. Valerie Caproni, general counsel for the FBI, believes by passing this act it will prevent support networks that promotes terrorism, and by gaining personal information the FBI will be able to track down terrorists and criminals. Caproni assures the people that the FBI will not be trying to decrypt sensitive and private conversations; they are only focusing on intercepting criminals and terrorists. By gaining access to records, documents, and personal information, some people believe that USA PATRIOT Act is futile because the terrorists and criminals will find other venues to communicate and promote new members. With this in mind, many people become skeptical of passing this refurbished act. Several skeptics presume that the act is an invasion of privacy and if it is in the wrong hands, numerous personal information can either be stolen or exploited. One critic, Carmen DiRaposo, believes, “If the FBI can access all of this information, how about hackers who will probably be able steal this and use it for either identity theft or exploiting peoples’ personal information for money.” This unrestricted sharing leads some people to believe that this act could actually do more harm than good. Another concerned citizen, Nuria Garrido, says, “This is another form for the government to invade and control every aspect of our lives. The Internet is the last frontier of freedom, and as we have seen in Egypt, Bahrain, and Iran, governments tried to crack that down and the people
used other means by hacking into such as, the stock market and getting their message of freedom and abuses of the government across.” This leads others to suspect that the act is an invasion of privacy and personal freedom. Even though, there are many critics who are doubtful of the act succeeding, others believe that it is the best solution into capturing current and future criminals and terrorists.
“ But what is to say that this power of being privy to personal information will not be abused?” On the other end of the spectrum, others believe that the Act will protect American citizens from future attacks. One supporter suggests, “roving wiretaps are needed to deal with technology sophisticated terrorists” (NPR), meaning by having access to communicating websites, the FBI will find and stop numerous terrorist and criminal attacks. Another supporter says, “this provision has already allowed investigators to search the houses of drug dealers and other criminals without providing notice that might have jeopardize an investigation” (NPR). This act may cause good outcomes in the near future, with this information it makes prosecuting the criminals easier. But what is to say that this power of being privy to personal information will not be abused? Can we be sure that the FBI will protect and use this information wisely? Some believe that the FBI want more power and control over everyone, does this mean that they are power hungry? Many believe that the citizens should decide this act since it is their information that the FBI are accessing, and their safety is in question. Do the citizens want to trade in their freedom of privacy for a questionable security? Contact Ashley Lorenzo at ashley.lorenzo@student.shu.edu
The Stillman Exchange proudly offers students, faculty, and administration the opportunity to write about their views on controversial topics. These opinions are to be read as the opinions of individuals and not the views of the newspaper as a whole.
THE STILLMAN EXCHANGE
Editorials
TUESDAY, MARCH 1, 2011
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U.S. Congress Needs to Fix History of Unproductiveness By David Guzik, Ethics Editor Congress was formed by the Framers of the constitution as the first branch of government and given the special authority of policy making and as chief legislator in our separation of powers. It has been many times nick-named “the peoples’ branch” since it has a clear connection to the people via popular elections. It was endowed with a large amount of power in the necessary and proper clause which states, “Congress has the authority “to make all laws which shall be necessary and proper for carrying into execution the foregoing powers and all the other powers vested by this Constitution in the government of the United States”. It was also given power of the purse to control and appropriate funds for the country and also the supremacy over the other branches with actions such as overriding a president veto, changing the size or jurisdiction of the courts or impeaching and removing from office justices and presidents alike. With all this power and focus on Congress as the first branch it would seem standard that they would rise as Americas shining spotlight in the legislative process. Sadly this is not the case; there are many issues with the first branch of government which make it into being the broken branch of our government. The pieces of this broken puzzle begin with institutional decline with includes a broad range of issues such
Photo Courtesy of infiniteunknown.net
Congress uses different methods to force the opposite parties into an unconstructive atmostphere.
as the rise of earmarks or pork-barreling, the decline in deliberation, the unjust use of the filibuster in the Senate, the monarchy of power committees and committee chairs, the demise of regular order, the lack of debate on the House floor and most importantly the deficiency of congressional oversight over the other branches of government during which many times the executive branch gains power at Congress’s expense. This is only the beginning of the problem; extreme party polarization also has contributed to the busted branch as well as their lack effort in searching for a legitimate plan for continuity in the case of a tragic disaster. One aspect of institutional decline is
the fall in deliberation and debate which is exemplified in many different aspects of how Congress operates. How can Congress legitimately operate and make fair and sound public policy if they don’t take the time to deliberate and debate on issues? The answer is they can’t. The decline in deliberation begins with the amount of time Congress is in session. A majority of members are guilty of being part of the Tuesday to Thursday club. This is the tendency among members to come in late Tuesday afternoon and leave early on Thursday. This meant there was very little time for thoughtful deliberation since members were always on the go traveling back and forth from their districts. For example, the 109th Congress
was in session for the least amount of days in sixty years with only 97 days of recorded sessions. As an effect of this, major bills which would usually have required weeks of hearings and days of markups are only reviewed in days of hearings and little time spent on analysis by committee, this is all due to and Congress members rushed schedule with effectively only one full day of work, which is Wednesday. Not only does Congress not have enough time to get accomplish legislative goals but when they are in session, many times they are in a battle with themselves due to party polarization. In the late 1970s and 1980s Newt Gingrich used tactics via the fairly new technology of C-SPAN and color television. Afterhours when no one was in the chamber room Gingrich and his allies would talk on C-Span and charge democrats with all sorts of accusations. Since it was after hours and the hall was largely empty and the C-SPAN cameras were always fixed on the individual speaking so viewer couldn’t really see it was largely empty, when no Democrats stood up to rebuke the charges, it would seem to the viewers at home that the charges were mostly true! This is a prime example of the type of unconstructive atmosphere that was and is prevalent in the U.S. Congress today!. Contact David at david.guzik@student.shu.edu
Monetary System Calls for New Technology
The Stillman Exchange The Official Business Publication of Seton Hall University
Executive Board Managing Editors Lee Duan Margaret Reilly Assistant Managing Editor Rich Kimsey
Editorial Board Money and Investing Bryan Murawski Stillman News Ryan Garrity Ethics David Guzik Editorials Anthony Crisci Sports Business Travis Tosoni Domestic News Morgan Tornetta International News Kaitlin Tonti International Business Alex Cohen
Assistant Editors Money & Investing Jennifer Crowe Stillman News Beverly Makarios Sports Business Tony Bonkalski Domestic News Alina Fernandez International News Raphael Baseman International Business Alexandra Hauenstein
Faculty Advisers Michael Reuter, M.B.A. E-ma il stillmanexchange@shu.edu Website www.stillmanexchange.com Twitter stillmanXchange Fa cebook The Stillman Exchange
About The Stillman Exchange is the first undergraduate published business newspaper in the United States. The Stillman Exchange is published on a bi-weekly basis from the Center for Securities Trading and Analysis in the W. Paul Stillman School of Business at Seton Hall University.
By Bryan Murawski, Money and Investing Editor The monetary system in the U.S. was instated during a time period where horseback was the most common form of transportation, and the quickest way to send a letter from the east coast to west was a week long journey for the Pony Express. Now, nearly 250 years after the first official bank was founded our monetary system is showing signs of a major collapse. But how did it get to this point? What most don’t seem to realize is that the Federal Reserve creates money out of thin air, and without the gold standard which was abolished by Richard Nixon, inflation just continues to rise with each dollar printed. A dollar in 2010 had the buying power of 11.43 dollars in 1920. As more and more money is created by the government it is inevitable that the dollar will have less buying power as time goes on. The fact that monetary system exists allows for the possibility to fall into debt. Debt is economic slavery that requires people to feed and house themselves. It truly is a brilliant concept. The government and corporations use debt as a way to keep people working towards something. However, blind to the public, it enslaves them to the same routine of working day to day to just get by. People are so used to the system that they don’t even question it; it has turned into a social norm. The last time the U.S. had the national debt completely paid off was in 1835 after president Andrew Jackson shut down the central bank that preceded the Federal Reserve. He stated that “the bold efforts the present bank has made to control the government…are but premonitions of the fate that awaits the American people, should they be deluded into a perpetuation of this institution or the establishment of another like it.” Unfortunately his message failed to
hold as the international bankers succeeded to install another central bank shortly after in 1913. As long as this system exists perpetual debt is guaranteed. Since the monetary system was first instated, technology has advanced to the point where we could develop a different system that would benefit the majority rather than the minority. Technology would allow for people to work solely for personal gain instead of personal wealth. We have the ability to rebuild the grid system in a way that would make our cities and towns more efficient to power by using different forms of energy such as wind, tidal, solar, and geo-thermal energy. An example of how efficient some of these technologies are getting is that we can power the entire U.S. just by building wind farms in the Great Plains. These alternative energy sources are not being pushed as much as they could be because the oil giants are some of the most powerful corporations in the world. However, because of corporate greed and the want to keep the world Oil dependant, these technologies aren’t released to the mainstream public. Until the monetary system is abolished the majority of the world’s population will be slaves to the minority who controls the wealth. Only one percent of the world’s population owns 40 percent of the wealth. It is completely possible to develop a new system based on technology from this day and age. Our technology would allow for use to make meaningless jobs obsolete and for people to work for the sole purpose of personal achievements. It is time to move forward and free ourselves from this foolish system that works against the majority. The transition process is something that would take time, but if we as a society focused on it, it is completely do-able. Contact Bryan at bryan.murawski@student.shu.edu
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Non-Alcoholic Beer Targets Athletes and Fans Alike By Anna Negrón, Sports Business Writer The idea of a sports drink brings up the conscious thoughts of popular brands like Gatorade, PowerAde, and VitaminWater. However, a Bavarian brewmeister is changing this notion with its newest non-alcoholic beer, targeted towards athletes as a sports drink. Erdinger Alkoholfrei claims that its “sports drink” is full of vitamins and other components of a classic sports drink that help athletes recover after a game or event. “Beer contains sodium, potassium, carbohydrates, and B vitamins which are all good,” said Professor Mary Ellen Camire, a University of Maine nutritionist, to Fox Sports. “But they’re not found at the optimal levels for an athlete,” It will help with rehydration. Whether it’s the ideal drink to have, I’m not too sure.” She goes on to say that this non alcoholic beverage
Devils Launch First OnSite Social Media Hub
By Robert Szeluga, Sports Business Writer The New Jersey Devils, currently the hottest team in the NHL, has once again found another way to gain a leg up on its competition. The franchise recently introduced its Mission Control center on the third floor of the Prudential Center, an area designated for social media activity. The social media hub hopes to engage the Devils “army” during games, and is the first of its kind in team sports history. The Mission Control center is full of exciting new opportunities for fans to interact live during games. The third floor now features an array of technology that includes 10 iPads, nine computers, and two HD televisions. Participants will be able to voice their opinions and concerns to fellow fans through online channels such as Twitter and Facebook. The social hub will also give an opportunity for fans to communicate with the Prudential Center staff as well as the Devils management and marketing teams. Mission Control is not only a creative tool for the fans, it is by the fans as well. Before its construction, Devils management held a search through Facebook and Twitter for 25 devoted fans willing to run the hub. Eligible fans were then called in for interviews and selected based on their love for the team as well as social media knowledge. Fans chosen from the interview process were then selected to be generals or the Devils Army. Social media platforms are a great way for fans, players, and management to interact with one another. High profile athletes such as Tiger Woods and Lebron James have frequently updated their Twitter accounts to give fans up-to-the-minute accounts of their lives on and off the playing field. Similarly, Mission Control will give fans a designated area to speak their mind with fellow “army” members listening in. The Devils, once criticized for their lack of fan engagement, are now setting the standard for venues in the NY-Metropolitan area. If Mission Control is a success, it will not be surprising to see similar areas designated social media in venues such as the IZOD Center or even Madison Square Garden. Contact Robert at robert.szeluga@student.shu.edu
could be an alternative to a celebratory beer, because a regular beer would dehydrate the athlete, setting them back that much further from recovery after a game or workout. While Europe is experiencing exceptional success with this non-alcoholic beverage, the opposite effect is being seen here in the United States. Various beer companies, like Anheuser-Busch and Miller, have created a non-alcoholic beer to sell, but have seen declining sales from the time it was introduced into the market. Drinking beer has become a normal part of sporting events in the United States. A study by Scientific American, a science and technology magazine, found that as many as 5,000 people could be leaving NFL games over the legal limit to drive a vehicle. If the United States used Europe’s approach in making non-alcoholic beverages a popular trend, they could potentially be saving lives. A number of sports teams, including the New York Giants and Jets, New England Patriots, Philadelphia Phillies,
and Baltimore Ravens, have adapted the Hero Campaign at their venues. The Hero Campaign was launched in 2000 by the Elliot Family, after they lost their son John in a tragic drunk driving accident. This program encourages the use of designated drivers and the prevention of drunk driving. The venues agree to monitor their distribution of alcohol to individuals, and provide free non-alcoholic beverages to all designated drivers. Many colleges, restaurants, and bars have also adopted the program. A non-alcoholic sports drink may not be the best route for athletes, but this drink could quite possibly be targeted to the 154 million fans who attend sporting events each and every year. Contact Anna at anna.negron@student.shu.edu
Kin gs Look in g t o C h an ge C ou rt s ? By Matt Bartel, Sports Business Writer
Photo courtesy of Orange County Register
The buzzer sounded to conclude the 2002 Western Conference Finals, and after an epic seven game series the Sacramento Kings finally fell to the Los Angeles Lakers. The Lakers would go on to win the NBA Finals, and the Kings would fall into a cycle of turmoil and despair. Since that high-water mark nine years ago, the Kings have fallen into a downward spiral and now look to Anaheim, California as a possible site for relocation and rejuvenation. In an interview with ESPN.com, Kings Co-owner Joe Maloof was outright aloof about the possible relocation of his franchise. “We have to look at all of our options at this point,” Maloof said.. “But we also want to concentrate on our team right now. Any of the arena stuff, we’ll talk about that later.” Sacramento has already made one major alteration this season, changing the long-time name of its home arena from ARCO Arena to Power Balance Pavilion, ironically enough a company that is based out of Anaheim. The Kings have already moved twice in the franchise’s history and this fourth location is not only being sought by Sacramento’s front office. In an article for ESPN.com, Marc Stein reported that in January of this year the owner of the NHL’s Anaheim Ducks, Henry Samueli, extended the offer of a $100 million loan to the Maloofs in order to help encourage the Kings movement to his own Honda Center in Anaheim. Despite this, the Kings relocation is being met with some resistance. Stein also reported that although the Los Angeles based Lakers and Clippers franchises only have one vote each in the league’s relocation voting, they could in fact campaign to gain the majority vote required in order to stop the relocation to Anaheim, a mere thirty miles from Los Angeles. The Kings have failed to make the postseason each of the last four years and are on track for a fifth consecutive season of disappointment. The team has not won a playoff series since 2004, and relocation could spark new interest in the struggling franchise. A new home and different fan-base would possibly generate a new energy, like that received by the Seattle Super Sonics when they relocated to Oklahoma City and became the Thunder in 2008-2009.
Tyreke Evans and the Kings could be playing in Anaheim hext season.
Or will the Lakers stop the Kings from advancing again? This question will be answered on March 1st, the league’s deadline for relocation applications, and until then, the future of a once proud franchise hangs in the balance. Contact Matt at matthew.bartel@student.shu.edu
After Vote, French Open to Remain at Roland Garros By Brianna Young, Sports Business Writer The decision has been made to keep Roland Garros as the location for the prestigious French Open. The French Tennis Federation went through three rounds of voting to come to their decision. Paris’tennis
Photo courtesy of BBC The clay courts at Roland Garros in Paris.
federation had agreed to upgrade the venues at Roland Garros to ensure the site would gain the vote of the French Tennis Federation. Paris won the vote over three other French venues. These other three venues that were being considered to host the French Open in 2016 were Gonesse, Versailles, and Marne-la-Valle. The final round of voting came down to Roland Garros and Marne-la-Valle. The upgrade that Roland Garros agreed to will cost around $336 million. These proposed renovations will be an injection of life into the site, which has remained largely unchanged since the French Open was first held there in 1928. The city of Paris was not going to allow the tournament to be relocated outside of the city, so the face-lift for Roland Garros was necessary.
Since the opening of Roland Garros, it has expanded and renovated but is still a relatively small venue when compared to the venues that host the three other Grand Slam tournaments, Wimbledon, the Australian Open, and the U.S. Open. The new renovations are critical for the French Open. The new and improved grounds will cover almost 35 acres and contain 35 outside courts, 5,000 additional seats, and a new press center. In attrition, the main arena, Philippe Chatrier Court, will be redesigned with a retractable roof. These renovations are scheduled to be completed by 2016, and are expected to keep the French Open in Paris for years to come.
Contact Brianna at brianna.young@student.shu.edu
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Time Warner Cable Committed to Lakers for the Long-Haul By Roger Goldfond, Sports Business Writer After losing their top spot as the most valuable franchise in the NBA, to the New York Knicks, the Los Angeles Lakers have made a deal that could push them back to the top. The Lakers have signed a wide-ranging broadcast distribution deal with Time Warner Cable, which will see Lakers games and content feature on two speciallylaunched regional sports networks. It will begin with the launch of the new services at the start of the 2012-2013 NBA season. This 20-year agreement is unprecedented in both length and detail. Time Warner Cable will replace the current rights-holders, KCAL Channel 9 and Fox Sports Net, as the Lakers’ major broadcast
partner. “Suffice to say, any sports team in any league in any country if they’re going to be doing a broadcast agreement, there is a component that includes a discussion of economics and economics was something that needed to make sense for the Lakers and it does,” said Tim Harris, vice president of business operations. The new deal is rumored to be worth $3 billion over the two decades once all elements are taken into account. The Los Angeles Times reported that the Lakers’ previous deal with Fox Sports West was worth some $30 million per year in fees to the franchise. A source familiar with the structure of such deals suggested that, as well as a straightforward rights fee, there was likely to be some form of equity transfer element,
with suggestions that the Lakers could have secured as much as a 50 percent share in the new channels. Although lucrative, the deal means the end of “free-to-air” broadcasts of Lakers games in its local area. Included in the deal are plans for English and Spanish-language networks, which will utilize new facilities in Los Angeles and be made available to all cable distributors in an area that includes all of Southern California, Nevada and Hawaii. Broadcast rights to live games, including pre-season, regular season and post-season fixtures, are included where the NBA’s network broadcast contracts allow. Jerry Buss, majority owner of the Lakers, was unsurprisingly delighted at securing a deal that is likely to prove lucra-
tive for one of the most valuable franchises in the NBA. “Time Warner has been producing quality sports programming for over a decade and the Lakers have been producing championship seasons for even longer,” Buss said. “I am particularly proud of being part of the first ever Spanish-language RSN in the country. Together I’m confident we will delight our fans.” The Lakers, one of the most iconic franchises in the NBA, has yet again proved itself to be a very valuable brand through the signing of this deal.
Contact Roger at roger.goldfond@student.shu.edu
A City Wonders: “If You Build It, Will They Come?” Photo courtesy of Associated Press
Farmers Field in Los Angeles, CA is set to open in 2015, with or without an NFL franchise.
New NCAA Tournament Boasts New Television Contract By Tony Cramond, Sports Business Writer Everything is new this year for the NCAA Tournament: new format, new destinations, and a new contract for television rights. CBS and Turner Broadcasting System (TBS) have now teamed up to broadcast the games of the NCAA Tournament. The contract was agreed upon after the old six-year contract expired earlier this year. They have agreed to a new 14-year contract worth $10.8 billion. This contract with ensure that the NCAA Men’s Basketball Championship will be viewed on either CBS or TBS until 2024. CBS has had the exclusive rights to the NCAA Tournament, but because of the sizeable sum that was required to finally get the contract to be signed, CBS needed to take on a partner to retain the rights to the tournament. Beginning in March, all of the games will be broadcasted on CBS, TBS, TNT, and truTV. Since the tournament has expanded from 65 to 68 teams this year, the opening round will be two regular tournament games, instead of the play-in-game that was played in previous years. The opening round is now being called the “First Four” and is scheduled to be broadcast on truTV. Both
networks are hoping for that more people will watch these games as they now carry more importance. The two networks are also trying to start something new for the Monday following the selection of the teams on Sunday. They are calling it National Bracket Day, where CBS and TBS will run programs that are tailored to the games by providing in-depth analysis and looks into different matchups of the bracket. “This is a landmark deal for Turner Broadcasting and we’re extremely pleased to begin a long-term relationship with the NCAA and our partners at CBS and to have a commitment that extends well into the next decade,” said David Levy, president of sales distribution and sports for TBS to Media Post. “The NCAA Men’s Basketball Tournament has a rich tradition and is one of the most talked about sporting events every year highlighted by the Final Four and the National Championship Game.” With the improvements made to the NCAA Tournament, coupled with a new television deal, should make a great sporting event even better. Contact Tony at anthony.cramond@student.shu.edu
By Anthony Holesworth, Sports Business Writer Los Angeles, the second-largest city in the United States, has been home to multiple professional sports teams over the past several decades. Currently, the city is home to two MLB teams, two NBA teams, a WNBA team, an NHL team and an MLS team. The city is also home to two college sports powerhouses in UCLA and USC. The only thing the L.A. sports scene is missing is an NFL team. Insurance giant, Farmers Group, is teaming up with venue developer, AEG, to build an NFL-ready football stadium in L.A. in hopes to draw a football team to the city. Los Angeles has not always been without a football team. In 1946, the Cleveland Rams relocated to L.A. and became the Los Angeles Rams. The franchise stayed in the for 33 years, before moving to nearby Anaheim for the next 15 seasons. Eventually, in 1994, the team moved to St. Louis, leaving Southern California with no professional football team. Ever since the Rams left, Los Angeles has been trying to find a way to bring a professional football team back to the city. Finally, with an unprecedented stadium sponsorship deal, this goal is materializing
into a real possibility. Famers Group, a big-name insurance company, has made a deal with AEG, a venue developer to build a brand new NFL stadium in the city. This sponsorship deal is worth $600 million over a 30-year period. This naming rights deal is largest in history. However, what is most remarkable about this deal is not the amount of money involved, but rather the fact that there is no current NFL team planning to move to Los Angeles anytime soon. Furthermore, the NFL is not planning to create any new expansion team in L.A. either. Farmers and AEG are, in a sense, working backward, as they are trying to bring a team to the city by having a stadium already in place. Their plan is to have the stadium fully built with an NFL team ready to occupy it by the 2015 NFL season. This deal is a major step toward the city of Los Angeles’ vision of finally having an NFL team again. Although the bold plan’s success is still contingent upon many variables, this move may be just the ticket to further-expanding the powerhouse that is the Los Angeles sports scene. Contact Anthony at anthony.holesworth@student.shu.edu
MillerCoors, NHL Sign Sponsorship Mega-Deal By Anthony Crisci, Sports Business Writer The National Hockey League is considered one of the least marketed sports leagues in the nation, and popularity has recently followed suit. In order to boost these qualities the NHL has just settled on an agreement with Molson Coors brewing company. The deal was reached last week and contained aspects that make the Canadian beer company the official beer of the NHL. The agreement will begin in the 2011-2012 season and will last seven years. This is the main section where the league has bettered itself and helped its own cause in television ratings as well as overall popularity. The deal was set at $400 million and will give Miller Coors and Molson Coors in Canada exclusive advertising rights to the NHL. Not only is this the biggest sponsorship in NHL history but it also tops all other beer sponsorships in the NFL, doubling Anheuser-Busch’s pay day this season. “Hockey and beer go together,” said Andy England, the executive vice president and chief marketing officer of Miller Coors. “Hockey fans are big beer drinkers. In fact, we have data that shows hockey fans are the biggest beer drinkers of any major sports
league.” Molson Coors owns 42 percent of Miller Coors thus becoming the beer of the NHL in both the US and Canada, as Coors Light will have rights in Canada. The Made From Canada campaign introduced at last year’s Winter Olympics in Vancouver was the base of reasoning for the multi-million dollar deal. The campaign was set to glorify the best products that come out of the Canadian provinces. With Anheuser-Busch stealing a lot of the spotlight in the sports industry, Coors made a very important move in the right direction. Anheuser-Busch recently replaced Coors as the top beer of the National Football League as they also sued Major League Baseball for a contract dispute. The NHL has recently made moves to improve ratings and popularity, but none are as big as the new beer deal with the Molson Coors brewing company. With this beer sponsorship, the league is targeting a younger and important audience, to help promote that hockey as one of the top professional sports leagues in the country.
Contact Anthony at anthony.crisci@student.shu.edu
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With Lockout Looming, EA Sports and NFL Restructure Game Deal By Tony Bonkalski, Sports Business Assistant Editor With the looming fear of a lockout in the NFL, Electronic Arts (EA) and the NFL agreed to restructure their contract, mainly by extending their exclusivity to 2013 and relieving EA of many of their contractual obligations. This contract allows EA to continue its exclusive use of NFL team names, stadiums, colors, and logos. “For one of our core partners in a difficult environment, we say let’s look at this, and maybe it makes some sense to extend something out longer and give our partner some relief in the short term but gain something on the back end,” said Wayne Weaver, chairman of the NFL’s business ventures
committee and owner of the Jacksonville Jaguars. EA is certainly not the first licensee to have restructured their plan with the NFL. In fact, because of the fear of the upcoming season becoming a lockout, and with the collective bargaining agreement set to expire on March 4, the NFL has restructured other deals with various sponsors and licensees. Neither EA nor the NFL is releasing exactly how much EA is getting in relief, but in October, EA sports requested $30 million in reduction in its payments, according to the Wall Street Journal. EA was inclined to get the deal done, but it still may not settle the uneasiness that EA may feel toward releasing their new Madden title. “Why would EA do TV pre-buys [and]
Delta Airlines Lands Another Exclusive Sponsorship Deal By Brittany Hammer, Sports Business Writer With the 2011 MLB season just around the corner, the Atlanta Braves have just added another big name to their roster – Delta Airlines. The MLB franchise has announced that Delta Airlines, the second largest airline in the world, has agreed to a three-year partnership in which the airline receives naming rights and branding opportunities with the organization. Delta will have exclusive naming rights to the parking lot closest to Turner Field, the Braves’ home for almost 14 years. The sponsorship deal is meant to tie in with Delta’s recent promotion of its SkyMiles frequent flier program. The former “Green Lot,” located directly across from the stadium’s main entrance will be rebranded as the “Delta Medallion Lot,” meant specifically for Delta’s elite frequent fliers. The 600 parking spaces on the corner of Hank Aaron Drive and Ralph D. Abernathy Drive will be reserved for those fans that accrue more than 25,000 miles per year with the airline. Frequent fliers can gain access to the specialty lot by presenting their Medallion card. Several banners bearing the airline’s
logo, as well as a Delta marquee, will overlook the parking lot, distinguishing it from the other color-coded lots. Fans who meet the qualifications for the premier parking spaces are able to pay $830 for a season pass, coming down to about $10 per game. The airline, in addition to the exclusive parking lot, will receive other branding opportunities inside Turner Field. Final financial details have yet to be released, but it is estimated the sponsorship deal to be worth between $250,000 and $300,000. The Delta Medallion Lot will officially open for the Braves’ home exhibition games on March 29 and 30. The team’s home opener will be against a division-rival Philadelphia Phillies on Friday, April 8. The sponsorship deal marks a milestone, as it is the first time an airline has received exclusive naming rights to a parking lot. Delta’s partnership with the Atlanta Braves follows a string of sponsorship deals that the airline carrier has made on the west coast. Delta will be further represented by organizations such as the NBA’s Los Angeles Lakers and NHL’s Los Angeles Kings. Contact Brittany at brittany.hammer@student.shu.edu
advertise the ‘Madden’ game, which presumably they have to commit to before the launch of the game, which is around August 10?” said analyst Michael Pachter said. “They have to put the game out in the market and that is why they are getting relief.” Another problem that stems from this deal is that the NFL does not represent the players, so EA will have to restructure their deal with the NFLPA as well. They have not done so yet, but in order for that to happen, it is imperative that the CBA deal goes through. The NFLPA has been notifying league sponsors that if the CBA deal does not go through and after March 4 there is still unrest, then the rights to players through NFL deals will no longer exist, according to SportsBusiness Journal.
Even though EA is not technically in the same predicament as the rest of the sponsors, it will still have trouble finding a renewal in the contract with the NFLPA. A bright side to this situation is that the NFLPA makes $30 to $40 million annually, according to annual filings. EA is a main portion of their revenues. In renewing their deal, EA sports has solidified their position as being the only football videogame for the NFL, which ultimately eliminates any competition in the industry.
Contact Tony at antonio.bonkalski@student.shu.edu
TD Ameritrade On Board with USOC, NBC for Olympics By Travis Tosoni, Sports Business Editor TD Ameritrade has announced a new sponsorship deal with the United States Olympic Committee, making it the first online brokerage firm to strike an agreement with the USOC. The new deal also represents the first company to enter an agreement through the dual-effort sales pitch made by the USOC and NBC, the U.S. broadcaster of the Olympic Games. This joint sales effort made by the USOC and NBC indicates the two sides are now operating on better terms, after their relationship hit a rough spot back in 2009 when the USOC began plans to start its own Olympic television network. NBC is slated to broadcast the 2012 Summer Games in London, England. TD Ameritrade, through the deal, purchased a media and marketing sponsorship package for an estimated seven-figure monetary value. With the USOC and NBC working together on the deal, companies are no longer forced to negotiate for separate advertising rights with the USOC and NBC, an issue that had caused problems in the past.
“This streamlines the decision-making process and gives sponsors the assets the need to get the greatest utility out of the partnership,” said Lisa Baird, the USOC’s chief marketing officer With the deal, TD Ameritrade is hoping to assert itself as an international force in online brokering, as well as boost its current national television advertising campaign. For the USOC, adding TD Ameritrade to its list of sponsors for the 2012 Games serves as a step forward for its marketing department, which saw the loss of key sponsors after the 2008 Summer Games in Beijing. The agreement with the USOC by TD Ameritrade shows the company is continuing its recent trend of sponsorship deals. In 2009, it landed the naming rights to TD Ameritrade Park in Omaha, Nebraska, a minor-league baseball park that serves as the annual host of the NCAA Men’s College World Series baseball tournament. TD Ameritrade is a committed sponsor that is not only looking for its own gains through these deals; it is also focused on associating with events that are well-known supporters of unity and healthy competition. Contact Travis at travis.tosoni@student.shu.edu
KIA Scores a Slam-Dunk with New Griffin Commercial By Travis Tosoni, Sports Business Editor Every year, the NBA’s All-Star Weekend showcases the most talented players the league has to offer throughout the course three days. Celebrities, musicians, and other athletes flock to the event to see some of the high-flying, fast-paced action in both the All-Star Game, and the NBA All-Star Saturday Night presented by State Farm. The Staurday night event was comprised of four separate skills competitions, with the slam dunk contest serving as the finale for the night. Perhaps the most memorable moment of this year’s All Star spectacle in Los Angeles was rookie sensation Blake Griffin’s tremendous slam dunk over a KIA Optima, the official vehicle of the NBA, during the Sprite Slam Dunk Contest. In the final round of the competition, Griffin took an alley-oop pass from a wellplaced teammate sticking out of the car’s sunroof, and soared over top the car and slammed the ball into the basket while a gospel choir sang in the background. The crowd at Staples Center erupted, as a record-setting audience watched the dunk from home on TNT.
Photo courtesy of Associated Press
with the words: “Not your average dunk. Not your average mid-sized sedan.” Along with the commercial, KIA also plans to use the image in various print advertisements. “Kia Motors is the Official Automotive Partner of the NBA and we are tremendous fans of the game of basketball. This new spot underscores the fact that the Optima is not your average midsize sedan and allows us to share the excitement of Griffin's historic feat with our fellow fans,” said Michael Sprague, vice president of marketing and communications for Kia Motors. For now, the commercial is a one-time advertisement for Griffin, but his agency has had discussions with KIA regarding a possible extension of their sponsorship relationship. KIA’s current list of athlete endorsers is short, with only Michelle Wie of the LPGA as the sole sponsor. KIA Motors was quick to utilize the valuable product placement of their sedan during the All-Star Weekend, and did not hesitate to capitalize on the valuable exposure of its brand.
KIA saw a valuable opportunity to advertise with Griffin after his jaw-dropping dunk in Los Angeles.
KIA Motors jumped at the chance to use this spectacular moment in a new commercial and advertising campaign, featuring its own Optima and the gravity-defying Blake
Griffin. The 30-second television spot first aired on February 25, and featured the footage of Griffin’s dunk from the competition along
Contact Travis at travis.tosoni@student.shu.edu
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Ob am a an d Ju s t ice D ep a rt m en t Will N o t S u p p ort D ef en s e of Ma rriag e A ct
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While the announcement represents a shift in the Obama administration’s position, Attorney General Holder insists that the Justice Department will implement the law until Congress or the Supreme Court make the final decision. Meanwhile, Congress is entitled to appoint its own attorneys to defend the law. “This decision by President Obama and the Department of Justice is appalling,” responded the Family Research Council, a socially conservative non-profit organization, in a statement. “The President’s failure to defend DOMA is also a failure to fulfill his oath to ‘faithfully execute the office of President of the United States.’” For the past two years, the Justice Department has defended the law by citing legal precedents. In a statement the Justice Department explained that “laws singling out people based on sexual orientation…are constitutional if there is a rational basis for their enactment.” Last year, two cases were appealed to the Second Circuit, where there is no existing “binding standard” for how the discrimination of gays and lesbians is addressed. One of the lawsuits involves 81-yearold Edith Windsor, who married her partner in Canada in 2007. After the death of her partner, Windsor has been disputing the payment of $350,000 in estate taxes because her same-sex marriage was unrecognized by the U.S. federal government. “It’s almost overwhelming,” Windsor said in response to the announcement. “I
Photo courtesy of Getty Images The Obama administration’s decision to consider the Defense of Marriage Act unconstitutional was considered a huge victory for the LGBTQ community and its supporters.
don’t know what it means in terms of what follows. But the very fact that the president and the Department of Justice are making such a statement is mind-blowing to anybody gay or anybody who is related to anybody gay. I think it removes a great deal of the stigma.” Although same-sex marriage is banned in 30 states, it is legal in Connecticut, Iowa, Massachusetts, New Hampshire, Vermont, and the District of Columbia. Currently, Maryland is considering a same-sex marriage bill.
News Briefs Rahm Emanuel Wins Election in Chicago After 41 percent of the city of Chicago voted, Rahm Emanuel, Obama’s former chief of staff, was elected mayor by a strong majority. Accumulating 55.2 percent of the vote, Emanuel has been elected directly into the mayor’s office, making an April run-off, unnecessary. Emanuel won 40 of the city’s 50 wards, and received 70 percent of the vote from the city’s most populous districts. Emanuel attracted votes from several racial groups in Chicago, winning predominately white wards, and the votes of wards predominately consisting of minorities. The Chicago Tribune reported that Rahm , after the election, said, “Because of the people of Chicago, this is the warmest place in America.” Councilman Wants to Rename Pennsylvania Ave. Soon the Obamas may reside at 400 51st State Way. In an effort to recognize D.C.’s lack of statehood, Council member Michael Brown has asked residents to rename Pennsylvania Avenue via online survey . The options the residents can choose from are “Let D.C. Vote way,” “ Free D.C. Avenue” and “51 State Way.” Brown is currently considering the placement of an additional sign reflecting the new name would be placed under the current Pennsylvania Ave marker during a ceremonial renaming. The survey also asks the 600,000 Washington residents whether or not they believe the names of other streets in D.C. should be changed. Back Off My Thin Mints! An argument between roommates turned violent when Hersha Howard, 31, woke her roommate up and accused her of eating her Thin Mint Girl Scout Cookies. The Collier County Sheriff’s Office reported that things took a turn for the worse when Howard began chasing her roommate with scissors and spiraled out of control when Howard repeatedly hit her roommate with a board and then a sign. The roommate said she had not eaten the cookies, but had given them to Howard’s children. Howard has been charged with aggravated battery and assault, both with a deadly weapon.
In an Associated Press-National Constitution Center poll, approximately 52 percent of the participants believed that same-sex marriage should be federally and legally recognized. The issue of gay marriage divides the country not only on a politically, but generationally as well. “Anybody under the age of 40 doesn’t care or actively supports it,” Democratic staffer and lobbyist Steve Elmendorf told the Associated Press. The Obama administration’s decision has been criticized by some Republican
leaders. “While Americans want Washington to focus on creating jobs and cutting spending, the president will have to explain why he thinks now is the appropriate time to stir up a controversial issue that sharply divides the nation,” Michael Steel, the spokesman for Speaker of the House Rep. John Boehner (R-OH), said. “It’s only in the run-up to re-election that he’s suddenly changed his mind” Senator Jim DeMint (R-SC) said. Arkansas Gov. Mike Huckabee called Obama’s choice not to back DOMA “an absolutely boneheaded political move.” On a personal level, although President Obama does not support same-sex marriage, he believes that same-sex couples should be entitled to civil unions. “This is something that we’re going to continue to debate, and I personally am going to continue to wrestle with going forward,” he said at a conference in December 2010. Meanwhile, Senator Diane Feinstein (D-CA) has announced that she will initiate legislation to repeal the law. “My own belief is that when two people love each other and enter the contract of marriage, the federal government should honor that,” she commented. The Defense of Marriage Act was signed into law by President Clinton in 1996. Contact Padma at padmavathy.sonti@student.shu.edu
Wis con s in Work ers Prot es t C h a n ges t o U n ion R ig h t s By Connor Carragher, Domestic News Writer An orange-clad contingent of union supporters in the rotunda of the Wisconsin state capitol building lamented the State Assembly’s passage of a bill which would deny public workers the right to collective bargaining. The protestors have occupied the capitol for well over a week, and the passage of the bill does not bode well for their interests. The bill is part of a larger plan by Wisconsin Gov. Scott Walker to slash the state’s projected deficit of over $3.5 billion. The bill will now move to the Wisconsin Senate. However, all fourteen of the Senate Democrats have fled the state to prevent a vote on the bill. The stage was set for a showdown in Wisconsin when voters elected Scott Walker as the new governor in November of last year. He ran on a platform of fiscal responsibility and promised voters that he would put an end to the runaway state deficit. He won the election and took office with many new conservatives in January. With the newly elected legislature, Walker proposed new plans to help curb deficit issues. One of his signature approaches was to pick apart union practices which allow collective bargaining. According to Walker’s plan, public
workers would be responsible for more of their own pensions and health care costs, and they would also lose the right to bargain collectively. The bill garnered much support from the conservative sector of the legislature. State Assembly speaker Jeff Fitzgerald said, “In the end, we’re going to head the state in the right direction.” Liberal lawmakers sharply disagreed. They recognized the need for a solution to the deficit, but they do not think that such drastic measures should be taken to fix the problem. The unions offered Gov. Walker a compromise: they would accept changes to health care and pension plans if the legislature did not take away collective bargaining. When the governor refused to accept that proposal, Assembly Minority Leader Peter Barca said, “I have this to say to Gov. Walker: ‘Yesterday your employees gave a major concession on all the fiscal issues in a bill that is supposed to be repairing the current budget. They asked only that you leave them with their rights intact.’” Barca continued, “‘This entire conflict began because you would not sit down and look your employees in the eye and talk to them. You found it easier to dictate from behind a closed door with talk of the National Guard being on alert.”
With membership majorities in both branches of the Wisconsin legislature, the Republicans hope to push the bill through the Senate so that Gov.Walker may sign it into law. The Assembly passed its version of the bill, but now the Senate has to deal with issues of its own. All 14 Democratic senators have left the state and are in hiding in Illinois. Senator Fred Risser from Madison thought people in Wisconsin simply need more time to think over the consequences of the legislature passing the bill. “One of the reasons we're slowing this process up is to let the public realize what the governor slipped into this bill,” Risser said. Until one of the 14 Wisconsin senators returns, the Senate will not be able to take a vote on the bill. One more senator would provide a quorum, but until then, no action will be taken. If the bill is not passed by its March 4 deadline, Walker has said he will lay of 1,500 public workers. No one is budging, and Wisconsin seems to be deadlocked between efforts to cut the deficit or the push to save workers rights. Contact Connor at connor.carragher@student.shu.edu
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TUESDAY, MARCH 1, 2011
Domestic News
Study: Cell Phones Activate Certain Parts of the Brain By Fred DeRitis, Domestic News Writer Imagine a cell phone being able to affect your very body. On Tuesday, February 22, the National Institute of Health released a report stating that fifty minutes of cell phone exposure has the ability to change activity in the section of the brain closest to the cell phone’s antenna. In a day and age that, as CBS News reports, 71 percent, or about 217 million citizens, of the American population has a cell phone, the concern that this type of study causes is not only widespread but one to pay very close attention to. The study itself had participants exposed to a cell phone on the right and left sides of their brain for 50 minutes on two different days. On the first day, the cell phone was not on. On the second day of the study, the phone was on, but muted. After exposure to the cell phone, participants were scanned. Those who were exposed to an active cell phone saw an increase of glucose consumption, the amount of glucose, or sugar, used by a human cell, in the areas closest to the phone. The Wall Street Journal reports that the Photo courtesy of Science Daily
A new study suggests extensive phone use activates parts of the brain.
amount of increase in glucose consumption was about eight to ten percent, the same amount of increase found in the visual cortex when a person speaks. The findings have certainly brought up the question of what adverse effects can this have on the human brain. Recommendations from the NIH aim to gain more information about this phenomenon, before drawing any conclusions. The lead scientist of the study, Nora D. Volkow, said in an interview with the Washington Post, “The brain is very important and if you ask what my recommendation is from this study, I’d say I can’t overall say this is harmful but we have to study more for long-term effects.” Volkow also suggests that if this radiation does not have any negative effects, it could be use to stimulate the brain for treatment of depression. Many studies have been done on the subject, without conclusive results. Further study will be needed in order to draw conclusions from this study, but many are pointing to the findings as evidence that cell phones are harmful to human beings. These findings come during the time of an important cell phone debate in the U.S. The city of San Francisco has already passed measures requiring labeling on cell phones to warn about the radiation emissions from the devices. In fact, this debate of cell phones and their downsides has traveled from San Francisco to other counties in California and even to the state of Oregon. Trade associations are already suing cities and sending representatives to areas ready to debate measures against mobile devices. Ultimately, the NIH has deferred to the Federal Communications Commission and the Food and Drug Administration to supervise policies concerning cell phones and their effects on health. Contact Fred at fred.deritis@student.shu.edu
THE STILLMAN EXCHANGE
Christie and Education Ministers Push for Tenure Reform By Charlotte Lewis, Domestic News Writer Last week, Governor Chris Christie and his education commissioner announced controversial plan to completely reform the tenure system for public school teachers in New Jersey. The plan Christie’s education commissioner, Christopher D. Cerf, revealed proposes that tenure will still be held by teachers who are performing in a “highly effective” manner, and to those who continue to receive this rating for three years. The current tenure system prevents teachers from being fired after holding their positions for a set number of years, regardless of their professional performance. State legislature must also agree with the plan before it can move on. Christie continues to speak out against the tenure system, arguing that it gives an unfair protection to teachers who underperform in the classroom. He gave a speech at the American Enterprise Institute, saying that the current evaluation system for teachers gives “no reward for excellence and no consequences for failure.” Cerf also gave a speech at Princeton University, where he used statistics to fight against the tenure system. According to Cerf, only 17 tenured teachers out of more than 100,000 were fired over 10 years. However, the use of statistics to fight the current battle against the New Jersey Education Association is causing a great deal of controversy. State lawyers for Christie used statistics in their argument to prove that money is not related to performance in schools, in order to further the argument that qualified teachers should be tenured to find the best solution for schools. Judge Peter Doyne spoke on this use of statistics, saying that the state needs to make a set plan on how to proceed, and to make a solid decision soon. Cerf is not winning every battle of statistics, for he reportedly rejected a request through the Open Public Records Act that would force him to
compare student performance to financial income, and continues to deny commenting, saying that money is not a key factor in overall instruction quality. New York City Mayor Michael Bloomberg and New York Gov. Andrew Cuomo continue to support Christie’s claim that teachers should be rewarded for skill above seniority, and are pushing for the same plans to happen in NY. Photo courtesy of World Report
Christie and other Governors want to change the way teacher’s tenure works
As this war over the school system continues, the president of the NJEA has completely denounced Christie’s understanding of the teaching system and what being a teacher really requires. Contact Charlotte at charlotte.lewis@student.shu.edu
C o l l e g e B o a r d : M o r e St u d e n t s Ta k i n g and Failing Advanced Placement Exams By Alina Ivette Fernandez, Domestic News Assistant Editor More U.S. students than ever before are taking Advanced Placement, or AP, courses, but the increase in enrollment does not necessarily equate to a rise in test scores. The most recent information published by College Board, the company that administers the exams, said that 23 percent of students earned the lowest possible score, which is a substantial increase from a decade ago when only fourteen percent of students who took the exam earned the lowest score possible. On the whole, students failed 44 percent of the exams. This annual workup complete by College Board also showed that about one third of students who took the exams in the sciences, particularly biology, chemistry and environmental science, earned the lowest possible score. These and other STEM (Science, Technology, Engineering and Mathematics) subjects accounted for approximately one third of AP exams taken. Exam score averages vary from state to state, with New York and Maryland leading the nation. Trevor Packer, vice-president of the AP program, offers a possible explanation for the relatively low performance of students in STEM areas by highlighting the correla-
According to CollegeBoard, the total number of students taking AP exams has jumped, as has the number of students failing AP exams.
tion between lower scores and schools who led students to take AP courses before taking the fundamental sciences courses needed to prepare them for the class. He said, “It [rushing students into courses before they are ready] could have to do with the desire on the part of the school to stand out in the rankings and to help more students out in college admissions.” Packer also said that “a focus on access
and equity is resulting in greater percentages of students going into college with AP scores that qualify.” Additionally, the number of minority students passing the exams has more than doubled in the last ten years. Despite the increased minority enrollment rates, the study showed that the gap between minority performance and nonminority performance is still sizeable in most states.
Although there are some troubling statistics, the fact still remains that last year nearly 28 percent of U.S seniors took at least one AP test. Mr. Chris Mazzino, the 2003 Milken National Educator Award recipient, said “I believe that AP courses provide students of all backgrounds with a rigorous and challenging experience, especially if they plan to go to college.” He continued, “If you asked me if I believe if all students should be in AP courses, (something The College Board endorses), I would have to say no. However, if you asked me if I believe if all students should have AP quality instruction, no matter what the course or student level, I would say yes.” Mazzino also added that scores on these exams should not be used to define as student’s academic performance: “Honestly, how can the exam--a one-day, one-test experience--compare to what the student has been exposed to throughout the year, especially if the AP course and instructor are of high quality?” Contact Alina at alina.fernandez@student.shu.edu
THE STILLMAN EXCHANGE
TUESDAY, MARCH 1, 2011
International News
Natural Disaster Hits New Zealand Again By Angela Kelly, International News Writer In the aftermath of a 6.3 magnitude earthquake that hit the New Zealand city of Christchurch on Tuesday, February 22, hundreds of people are still missing. Prime Minister John Key has since declared a national state of emergency, also calling last Tuesday “the darkest day” in New Zealand history. State officials fear the worst, as a majority of the suspected 300 missing persons may have perished in the rubble. A previous earthquake which occurred in September of this past year cannot compare in terms of tragedy to the natural disaster that has affected this portion of the country this past week. Annually, New Zealand experiences an alarming 14,000 earthquakes per year, but very few pass a 5.0 on the Richter scale. Tuesdays quake was the worst since 1931’s North Island disaster that ended with nearly 300 casualties. Civil Defense is working rapidly to establish more welfare centers for those affected. According to the New Zealand Herald, nearly 80 percent of the residents in Christchurch are without running water and about 40 percent are still without electricity. The government is calling for cooperation to conserve water and even collect rainwater in buckets. There is no concrete answer as to when all operations will be fully restored, as the priority of most rescue workers and volunteers is to clear the rubble and continue the search for survivors. UN secretary-general, Ban Ki-moon has also
Photo courtesy of news.com.au Devastation in Christ Church.
expressed his sentiments towards this event, stating he is “deeply saddened by the loss of life and destruction” and also calls for the “readiness of the United Nations to contribute to its efforts in any way needed”. The loss of life and property are not the only troubles looming for New Zealand. As the days go on and the rubble is cleared, major economic loss is expected. Massive effects on roads and other forms of infrastructure may result in the loss of billions. As a result, transportation costs will undoubtedly be raised, particular for those in the manufacturing business, causing more stress and expenses for New Zealand business owners. Commercial interests are not the only ones devastated, as private residents are expected to pay over a billion U.S. dollars for their residential losses. Over one hundred successful rescues have been made since early Tuesday morning; however, most of those missing are believed located within the rubble of the city’s largest and most significant structures, including the Christchurch Cathedral and Canterbury Television, where students and teachers were in class. Anglican Bishop of Christchurch Victoria Matthews said of the church: “The big problem for this city is not the cathedral, it’s the loss of so many lives.” Contact Angela at angela.kelly@student.shu.edu
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Lib y a’s Qa d d a f i Vo w s R es is t an ce A s D is s id en t s S ee Gain s in Ea s t ...continued from page 1 Still, Qaddafi’s control over the country is by no means whole as protestors control much of the east coast. In several cities, such as the nation’s second largest, Benghazi, protestors have established committees to temporarily manage affairs. According to al Jazeera, in many areas under the control of protestors, Libyan armed forces have joined in the revolt. Qaddafi refuses to make any concessions to protestors, who strengthen in numbers and conviction daily. In a speech on Friday, Qaddafi warned any dissenters, “We can defeat any aggression if necessary and arm the people…I am in the middle of the people… we will fight… we will defeat them if they want… we will defeat any foreign aggression.” His bold statements did nothing to intimidate the protestors. Angry citizens poured out of mosques to display their resentment and desire for change. In response, Qaddafi’s forces opened fire upon the protestors, killing hundreds and wounding more. Though the total death toll remains unclear, Francois Zimeray, France's top human rights official, said it could be as high as 2,000 people killed. Because of these acts of violence, Qaddafi is rapidly losing support. Several influential Libyan officials have resigned from their posts. Two pilots defected after refusing to fire upon Libyan citizens. Protestors and other air-force personnel captured a base and disarmed the jets so they are not used against the protestors. Reuters reports that anti-Gaddafi Libyans have taken control over several key oil terminals and refineries. The violence in Libya has not gone unnoticed by the international community. The African Union has publicly denounced Qaddafi’s crackdown of pro-democracy protestors. The Arab League suspended Libya as a member. Switzerland suspended all of the assets of Qaddafi and his supporters. After Libya won its independence from Italy, the two countries maintained strong trade relations with each other. However, Italy cut some of its trade with Libya, significantly reducing Libya’s revenue from oil and natural gas sales. Even leaders of Al Qaeda condemned the massacres and clearly indicated their support of the protestors. The U.S. government also condemned the massacres in Libya. In an attempt to weaken Qaddafi’s power, sanctions will be imposed, and embassy operations have been put on hold. Furthermore, all military cooperation with Libya has been stopped, a change in policy, since the U.S. has aided Libya since the end of its nuclear program in 2003. However, diplomatic channels remain open in the hopes that progress towards ending the oppression can be achieved.
Perhaps the most powerful reaction to the massacres in Libya has come from the United Nations Security Council. A report by the Security Council represents a strong consensus among many member states that action needs to be taken against the horrors occurring in Libya. The report discusses several deterrence options to the Libyan regime, such as a ban on oil exports and the imposition of a no-fly zone to protect Libyan citizens from air-attacks. Though it is unclear whether such options will put a definite end to Qaddafi’s oppression, the actions taken by so many countries is promising. Hopefully with enough foreign assistance, Muammar al-Qaddafi’s oppressive regime can be toppled. Contact Doug at douglas.tatz@student.shu.edu Photo courtesy of johncoxart.com
Qaddafi has ruled Libya for over 40 years, despite holding no official position.
Fo rm er S erb ian Police C h ief S en t en ced f o r Wa r C rim es By Stephanie Dunham, International News Writer The UN International Criminal Tribunal for the former Yugoslavia (ICTY) found Vlastimir Ðordevic guilty of terror against ethnic Albanians on February 23. Ðordevic was found guilty of war crimes in Kosovo during the 1990’s that resulted in over seven hundred Albanian deaths. Ðordevic had been missing since 1999, and was first indicted by ICTY in 2003. Ðordevic is accused of covering up war and committing war crimes in Kosovo. He was the assistant minister of the Serbian Ministry of Internal Affairs along with serving as the chief of the Public Security Department from 1997 until 2001. Not only is he charged with over seven hundred deaths, but also for the deportation of eight hundred and fifty thousand more Albanians. The prosecution was completed in 2007, but Ðordevic is now being sentenced to twenty seven years in jail. Ðordevic had been indicted previously in 2003 with numerous Yugoslav army generals and Serbian police but their case was joined with others in 2006. He is the second Serbian arrested in the last three weeks for war crimes. Over 160 Serbs have been indicted for these crimes leaving only four to be found. During Ðordevic’s tenure many Kosovo Albanians were murdered, deported, or sexually assaulted, while civilian property was looted and destroyed. He commanded the police forces that operated in Kosovo during his time in power. One of the forty specific incidences of war crimes is covered in heart breaking detail in The Hague’s press release from June 17, 2007. Armed Serbian forces that were under the command of Ðordevic forced around fifty members of the Berisha family into
Photo courtesy of Vijesti
Vlastimir Ðordevic is the latest former Yugoslavian official to be indicted by the ICTY.
a coffee shop. After leading them into the shop, the forces commenced open fire on the people and afterwards threw in explosives. Forty four were killed and the rest were severely wounded. The forty four members of the family killed were found about three hundred and fifty kilometers away from the crime scene, close to Belgrade, in a mass grave. Contact Stephanie at stephanie.dunham@student.shu.edu
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TUESDAY, MARCH 1, 2011
THE STILLMAN EXCHANGE
International Business
Danish Shipping Firm Unveils World’s Largest Container Vessels By William Suggs, International Business Writer On Monday, Maersk Line officially announced an order for the construction of 10 ships that will be the largest container ships to sail the sea. The Danish shipping line awarded the $5.7 billion contract to Daewoo Shipbuilding of South Korea with an option for construction of 20 more ships. In a press release, Maersk outlined the details of the contract including the benefits of creating the largest container ship in operation. The new vessel will be known as Triple-E after its purposes of economy of scale, energy efficiency, and environmental improvement. Regarding the focus on environmental impact, Maersk Line CEO Eivind Kolding explains, “It is not only a top priority for us, but also for our customers, who depend on us in their supply chain, and also for a growing number of customers who base their purchasing decisions on this type of information.”
Chinese Social Network Looks to Add Friends on Public Market Photo courtesy of memeburn.com
...continued from page 1 However, this government censorship is not as large an obstacle to Renren as it may instinctually seem. Working around government censorship is a mere cost of business for all Chinese web startups, and all of Renren’s Chinese competitors are on a level playing ground in this sense. Additionally, websites like Facebook and Twitter are banned in China, which eliminates what would otherwise be Renren’s biggest competitors. The major obstacles that Renren has to face are much different from those of Western social networking startups. Whereas Western social networking is typically dominated by one or two websites, Chinese social networking is more diversified. “People often think of China’s Internet culture as a collection of warring states,” Guobin Yang said in an interview with the Huffington Post. Renren constantly has to contest with a slew of social networking sites that may be offering the same exact service. As Renren prepares to release its IPO, it is a prime example of China’s rise to prominence in the homegrown technology sector, and is a unique example of how social networking fares in governmentcentric states. Contact Rebecca at rebecca.townsend@student.shu.edu
Photo courtesy of Maersk
The vessel will be 400 meters long and 59 meters wide and will produce 20 percent less CO2 per container than the most efficient container vessel in operation today. It will also be equipped with a “waste heat recovery system” which harnesses excess energy from the engine to be reused. TripleE will operate slower than most container vessels at a top speed of 23 knots to meet efficiency standards. In a final gesture of
environmental responsibility, Maersk announced all of the materials of the ship will be logged so they can be recycled in the future. Since the onset of the global economic downturn, the shipping industry experienced significant losses with Maersk alone posting losses of $1.31 billion in 2009. A move by Maersk to make a massive investment in larger vessels holds vital implica-
tions for international trade on its route between Europe and East Asia. Although international shipping experienced a strong recovery in 2010, motivation for this deal may lie elsewhere. Maersk hopes to remain the global leader in international shipping at a time when its competition is unable to obtain funding for new investments. Shipbuilding orders take about three to four years to complete, which puts Maersk in an advantageous position. This is the first major contract issued since major losses in 2009, and the Danish shipping line will find itself with ample capacity should expectations for growing demand be realized. In its press release, Maersk announced intention to “position itself to profit from the 5-8 percent growth in trade the company expects, and to maintain its leading market share in trade.” Contact William at william.suggs@student.shu.edu
Siemens Signs Deal to Build Saudi Power Plant By Tristan Hugo-Webb, International Business Writer German energy giant Siemens announced that it has reached an agreement with Saudi Arabia’s Al-Arrab Contracting Company and China’s Sepco III Electric Power Construction Corporation to supply over $1 billion worth of power plant components for a combined power plant and seawater desalination treatment facility. The proposed Ras Al-Zour plant would be located on the outskirts of the western city of Jubail and just a few hundred miles south of Kuwait on the Persian Gulf. When built, the new power plant would be the fifth largest capacity power and desalination plant built by Siemens in the Saudi Arabian peninsula, following the Shuaibah IWPP, Jeddah III, Ghazlan and Alkhobar power and desalination plants respectively. While construction is not expected to begin until early 2014 on the plant, Siemens has agreed to supply in the near future 12 gas turbines, 10 heat-recovery steam generators, five steam turbines and any associated components required to keeping the plant running at 100 percent. When the Ras Al-Zour plant is finished, the power plant component will produce nearly 2500 megawatts (MW) to a local aluminum
smelting plant. The desalination plant, which takes sea water and turns it into potable water, will turn out around 225 MiGD (million imperial gallons per day) to the Saudi capital city, Riyadh. In addition to providing the necesPhoto courtsey of Utilities Middle East
A rendering of the Ras Al-Zour plant. sary components to the Ras Al-Zour plant, the newly agreed upon contract calls for Siemens to provide four additional gas turbines to the Hali and Al Qurayat power plants for new expansions in the coming years. Michael Suess, CEO of the fossil power generation division of Siemens
Energy, believes that the Ras Al-Zour plant represents an important building block of the company’s policy to build more highefficient and environmentally friendly power and desalination plants. “Ras AlZour is one of the most important mega projects in Saudi Arabia; it is another great example of the outstanding strength in the partnership between Siemens, ACC and Sepco.” He added that “With this step, Siemens establishes its dominant role for advanced gas turbines worldwide as well as in Saudi Arabia.” To many in the energy industry, Saudi Arabia has a bright future as the local population is expected to grow from 28 million to 40 million inhabitants in the next 10 years alone. If the Saudi Government is to meet the growing demand for electricity, the existing Saudi electricity capacity must be doubled. In a country where unemployment is above 10 percent, the plant offers a new source of jobs and, according to both Siemens and the Saudi authorities, around 1000 direct new jobs and up to 3000 indirect positions will be created by the new plant. Contact Tristan at tristan.hugowebb@student.shu.edu
France Struggles with Large Debt at Local Levels By Nicole Blackford, International Business Writer France is still struggling to manage its budget while smaller departments of the nation are dealing with enormous debt burdens. Last year’s national budget deficit totaled over $200 billion, and although it is expected to decrease this year to approximately $120 billion, this deficit is far from gone. The national government has been decentralizing debts onto the local departments which cannot afford to take on the burden. Local governments cannot issue bonds or borrow in order to pay these debts, and the national government does not compensate smaller governments for the charges placed on them.
The department of Corrèze in southcentral France is currently holding the largest per capita debt of any department. According to an article published by The New York Times, the average debt per person is about $1,600 which is triple the national average. Much of the debt incurred in Corrèze is from the period of Former President Jacques Chirac. The department will be putting out more than 10 percent of its annual budget just to pay down these debts in the coming years. Part of the debt that contributed to the increase is the result of a museum constructed under Chirac. This museum itself cost over $20 million to construct. There have been suggestions in the past to close the museum because of its high expenses but it is highly regarded as a display of
recent international relations and it is expected to attract more public attention in the future. The President of the General Counsel, François Hollande, has been trying to cut expenses for the French in hopes of promoting more socially responsible programs. He has already cut the national investment budget and plans to help cut the costs of running the museum in Corrèze. Mr. Hollande plans to run in the 2012 elections after a former partner of his lost the presidential election to Mr. Sarkozy in 2007. His display of financial responsibility will be an advantage throughout his campaign for next year’s election. Contact Nicole at nicole.blackford@student.shu.edu