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Broadcast Media Highlights

On January 9, 2008, Professor Charles Zech was featured on WHYY Radio to speak about the new Master of Science in Church Management Program at VSB.

On January 23, Professor Charles Zech is a guest on the National Public Radio Program “Here and Now� to discuss the new Master of Science in Church Management Program at VSB.

On January 30, 2008, Professor Victor Li was featured on WHYY Radio to speak about predictions for the upcoming Federal Reserve meeting.

On February 12, 2008, Victor Li was a guest on Wall Street Journal Radio discussing the fiscal stimulus package.

Villanova School of Business 2008 Media Report


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On February 12, 2008, Professor Suzanne Clain was featured on WPHT as a guest of the Dom Giordano show to speak about the potential expense of public tax dollars on a new soccer stadium to be built in Chester, Pennsylvania.

On February 21, 2008, Professor John Pearce appeared on CN8’s “Your Morning” to discuss the elements of an economic recession.

On February 26, 2008, Professor Shawn Howton appeared on CN8’s “Your Morning” to discuss the housing market and the mortgage crisis.

On March 2, 2008, Professor Shawn Howton appeared on Fox 29 Evening News to discuss the housing market.

On March 25, 2008, Alan Donziger was a guest on AP Radio discussing the XM and Sirius Satellite merger.

Villanova School of Business 2008 Media Report


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On March 29, 2008, Victor Li was featured on WTOP-FM in Washington D.C. to discuss Federal Reserve policy.

On April 18, 2008, Cheryl Carleton appeared on CN8 to discuss recession-proof jobs.

On April 18, 2008, Cheryl Carleton appeared on Fox Business to discuss discrimination against women in the workplace.

On May 6, 2008, John Pearce appeared on CN8 to discuss “Recession: Where are we Now?�

On May, 7, 2008, Peter Zaleski appeared on Fox 29 to discuss rising gas prices.

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On May 23, 2008, Charles Zech was featured on Marketplace Radio to discuss the new Master of Science in Church Management Program.

On June 12, 2008, Cheryl Carleton appeared on CN8’s “Money Matters” to discuss economic news stories of the day.

On June 17, 2008, Dean James Danko appeared on BusinessWeek TV discussing VSB’s new undergraduate curriculum.

On July 1, John Kozup was featured on WHYY Radio to speak about.

On July 10, Charles Taylor was featured on Fox 29 discussing rise in text message advertising.

Villanova School of Business 2008 Media Report


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On July 14, William Madway was featured on Fox 29 discussing the rising trend of self customer service.

On September 17, 2008, Michael Pagano was a guest on National Public Radio discussing the crisis on Wall Street.

On September 17, 2008, Michael Pagano was on WHYY radio to discuss the Wall Street crisis.

On September 24, 2008, John Matthews appeared on “Your Morning” to discuss the government’s bailout of the financial crisis.

CNBC On August 4, Charles Zech was featured on CNBC’s “Mike on America with Mike Hegedus” to discuss the Summer Church Management Institute.

On October 7, Victor Li was featured on Marketplace Radio discussing the Federal Reserve.

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On October 13, 2008, John Matthews appeared on 6 ABC to discuss whether the government bailout plan was working.

On November 27, 2008, William Madway appeared on “Your Morning” to discuss holiday retail.

On December 7, 2008, William Madway was a guest on “All Things Considered” to discuss advertising firms retooling in economic crisis.

On December 16, 2008 Michael Pagano was featured on KYW News Radio discussing the econometrics of the recession

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Print and Online Media Highlights

January 3, 2008 By Alison Damast

Mastering the Business of Church Some universities now offer MBAs for church workers and officials who may struggle with management responsibilities they haven't been prepared for When he was in seminary school studying to be a priest, the Reverend John Burger never thought he'd have to deal with the day-to-day bookkeeping and budgeting for a church. But over the past few years, he has gradually taken on a greater leadership role in the Columban Fathers, a missionary society of Catholic priests. In his new role as general councillor at the society's headquarters in Dublin, he will assume more fiscal responsibility than ever before, reviewing the budgets of missionaries all over the world and tracking donated funds. It's a job he feels unprepared for, he admits: "I'm kind of nervous about it, to tell you the truth, because I don't have any training in this kind of stuff.‌ I studied philosophy, theology, pastoral counseling, and those kinds of things, rather than statistics or accounting." Professional Skills for Pastors Burger's insecurity about his business skills led him to apply to the Villanova School of Business, which will begin offering a master's of science degree in church management in June. The two-year program, which is offered online and requires a one-week campus residency, should help Burger master basic business and management skills. The program, which costs $23,460, is open to parish business managers, diocesan and religious-order managers, and managers of church-related social service ministries. Admission is based on a number of criteria, including experience, letters of recommendation, and a personal essay. Classes will cover topics normally taught in business school, such as accounting, development and planning, and human resources management. But unlike most MBA or master's programs in nonprofit management, all of the coursework will involve case studies that look at business exclusively through the lens of a religious organization, notes Charles Zech, director of Villanova's Center for the Study of Church Management. "Students in MBA classes sit there learning about finance on Wall Street, but that doesn't help church workers much," he says. "We've designed the program [such] that every course has to target folks in a faith-based context."

Villanova School of Business 2008 Media Report


8 Catholic Schools Lead the Charge A handful of colleges and universities—many with Catholic affiliations—are starting to offer master's degrees in church management or, in some instances, a dual MBA and master's in church management: Duquesne University in Pittsburgh began offering a master's degree in community leadership with a concentration in parish management this past fall, and St. Mary's University in Minnesota offers a similar program, with a two-week residency and mostly online classes. The University of Notre Dame offers a master's degree in nonprofit administration for church workers and employees of other faith-based organizations. A Boston College program offers a choice between an MBA in conjunction with a master's in pastoral ministry or a pastoral ministry degree with a concentration in church management. The new programs are a response to the religious community's realization that many of the volunteers who step up to assume management roles lack the skills required to run an organization, says Kerry Robinson, executive director of the National Leadership Roundtable on Church Management, a Catholic nonprofit in Washington, D.C. "It is a growing phenomenon across the country," she says. "Catholic colleges and universities, especially those with business schools, are taking very seriously this need facing Catholic churches in the U.S." Villanova's Zech points out that while large companies routinely recruit business-school graduates, many managers in religious organizations don't have backgrounds in business. Indeed, many parish business managers were church workers who rose through the ranks and haven't studied business. In other instances, retirees with business experience are brought in to administer church finances, but problems can arise if "they are accustomed to doing things the way they're done in the business world," Zech says. The worst-case scenario, he says, is when a pastor is forced to manage a church's financial operations because no one else is available to do it. As Zech puts it: "No one became a pastor because they wanted to run a small business, which is what a congregation or parish is." Clergy Scandals Unbalance Church Books While any religious group can benefit from better financial management, the issue is resonating strongly within the Catholic church as it faces the financial repercussions of recent sex abuse scandals involving clergy. Fraudulent financial reporting, such as the 2006 case in which a pastor in Darien, Conn., was sentenced to 37 months in prison for stealing $1.3 million from the church he led, is another reason for the recent urgency. According to a 2006 study by Villanova researchers, 85% of U.S. dioceses had detected embezzlement over the previous five years. As a result, parishioners are demanding more financial transparency and institutional financial controls, which can be challenging in organizations where the same person who tallies donations from the collection basket and deposits them in the bank, for example, may also be the person who balances the checkbook, Zech says. Duquesne's Administrative Focus Duquesne's online curriculum helps church workers balance the many daily demands they face, including budget management, human resources, parish marketing and fund-raising, school administration, construction project management, and social outreach projects, says Dorothy

Villanova School of Business 2008 Media Report


9 Bassett, dean of Duquesne's School of Leadership & Professional Advancement. It also emphasizes the difference between civil law and canon law, the internal ecclesiastical law that governs the Roman Catholic Church, and how that difference plays out in scenarios involving church assets. "One of the reasons we started the program…is the responsibility placed on these folks is just so incredible," says Bassett. "What you find now is more and more churches have laypeople handling everything but the actual church service. It is everything from soup to nuts and then some…." Bassett says the program, which signed up a handful of students when it began offering classes in the fall, is slowly attracting the interest of church workers. The cost is $23,544, and applicants should have a bachelor's degree and either currently hold an administrative position at a church or parish or plan to pursue such a position. Non-Catholics are eligible to apply, though none have so far, reports Bassett. "If I had someone come in…from a synagogue or mosque or Hindu temple, I'd probably sit down…and work with them [to select] courses appropriate for them in terms of their day-to-day administration." Fiscal Responsibility for a Higher Purpose Concern over the complexity of financial issues led Marcia Wilske, the parish social ministry coordinator for Catholic Charities of Idaho, to apply to Villanova's program. She first learned about it from an ad in Commonweal, a Catholic magazine. Her interest was piqued because, after she becomes chancellor for the diocese in July, she'll work closely with the director of human resources and chief financial officer, providing supervision and overseeing salaries and budgets. Wilske, who has previously worked as a director of religious education and a youth minister, has no formal business training and wants to feel comfortable in her new role. "There is that sense of responsibility that the money given goes to support the work of the church," she explains. "How do you maintain that responsibility and transparency so it's a fiscally sound operation?"

Directors of these programs hope the religious community's interest will spur more schools to offer such degrees and ultimately raise the standards of church management. Although only a few schools offer these programs now, Gregory Sobolweski, the director of Saint Mary's Institute in Pastoral Ministries, believes it's a step in the right direction: "The fact that the church [is asking] questions about how can we be good administrators [is] a fresh take on faith."

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January 8, 2008 By Ron Aslop

TALKING B-SCHOOL Teaching the Gospel of Management Program Aims to Bring Transparency To Church Business Practices The reputations of many Roman Catholic parishes have been tarnished in recent years, both by the priest sexabuse scandals and a growing number of embezzlement cases. That has prompted a burgeoning movement to improve the management and leadership skills of church officials through new programs being offered primarily at Catholic universities. M.B.A. Track columnist Ron Alsop talked recently with Charles Zech, director of the Center for the Study of Church Management and a professor of economics at Villanova University's School of Business in Villanova, Pa., about the launch of its master's degree in church management in May and the need for more sophisticated and more transparent business practices in parishes and religious organizations. WSJ: Why did Villanova decide to create a master's degree in church management? Dr. Zech: We find that business managers at both the parish and diocesan level often have social work, theology or education backgrounds and lack management skills. While pastors aren't expected to know all the nitty-gritty of running a small business, they at least need enough training in administration to supervise their business managers. Before starting the degree, we ran some seminars in 2006 and 2007 as a trial balloon to see if folks were interested enough to pay for management education. The seminars proved to be quite popular, drawing people from all over the country, including high-level officials from both Catholic dioceses and religious orders. How have the sexual-abuse scandals and embezzlement cases put a spotlight on poor management and governance practices? The Catholic Church has some real managerial problems that were brought to light by the clergy abuse scandals. It became quite obvious that the church isn't very transparent and accountable in its finances. Settlements had been made off the books with abuse victims and priests had been sent off quietly for counseling, to the surprise of many parishioners. Then came a string of embezzlement cases. Our center on church management surveyed chief financial officers of U.S. Catholic dioceses in 2005 and found that 85% had experienced embezzlements in the previous five years. One of our recommendations was that parishes be audited once a year by an independent auditor. There clearly are serious questions about internal financial controls at the

Villanova School of Business 2008 Media Report


11 parish level, and we are now doing research on parish advisory councils and asking questions about such things as who handles the Sunday collection and who has check-writing authority. Does the same person count the collection, deposit the money and then reconcile the checkbook? Obviously, you're just asking for problems if it's the same person; you can imagine the temptations. Beyond the need for better financial controls, what other management issues should get more attention from church leaders? Performance management is definitely an important but neglected area. That's partly because it's a very touchy issue. Who is going to appraise the performance of a priest or a church worker who is also a member of the parish? There's great reluctance on the part of the clergy to be appraiser or appraisee. You have to view the parish as a family business and understand that it's like evaluating members of your family. How will Villanova's church management degree be different from what other universities have started offering? Some schools combine standard business classes with courses from theology and other departments. But if you're taking a regular M.B.A. finance class, you're learning about Wall Street and other things that aren't really relevant. What we're doing is creating courses specifically for this degree program, so there are both business and faith-based elements in every class. For example, the law course will deal with civil law relative to church law so students understand the possible conflicts. The accounting course will cover internal financial-control issues for churches. And the human-resource management class will include discussion of volunteers, a big part of the labor force for parishes. Have you encountered any resistance from church officials? Yes, some people say a church is not a business. But I point out that we still have to be good stewards of our resources -- our financial and human capital -- to carry out God's work on Earth. When you use management terms with bishops, they often get turned off. But when you use the word stewardship, it has more impact because it's in the Bible. Jesus talked about the importance of our being good stewards who take care of our talents and other gifts. Is the degree restricted to Catholic clergy and lay managers? The courses will have a Catholic focus because as a Catholic university, our mission is to try to meet the needs of our community. But the degree is certainly not restricted to Catholics. Every church has similar managerial problems. In fact, we're eager for other Christian denominations to become part of the program and provide some valuable contributions to class discussions. A typical course, however, would not apply to other religions because of the different way Christian churches are organized compared with synagogues and other religious institutions. Why is the degree being offered primarily online, with only a one-week residency on campus? Since we view the market for church-management education as national and even global, a distance-learning degree will attract clergy and church workers from any part of the world who can't take off for two years to come to Villanova. In fact, we already have heard from a priest in Ireland and a Presbyterian minister in Cameroon interested in enrolling in the program.

Villanova School of Business 2008 Media Report


12 The church management degree costs $23,400. How can clergy and church workers afford it? We expect the vast majority of students to be supported by a diocese or other religious or social service organizations. We will chop 25% off the price for anyone who can get their organization to pay a third of the tuition. That cuts a student's out-of-pocket costs by about half. We're trying to send the message to religious leaders that this is important and that they should invest in management training.

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January 17, 2008 By Jane M. Von Bergen

Why the sad-sack attitude? Philadelphians fret and fret about the economy. Tim Bosse never did figure it out. In the five years he lived and worked in the Philadelphia area as an executive in a recruitment firm, he never understood why Philadelphians were always down in the dumps. Exhibit A: Twin findings from the Federal Reserve and a monthly survey by Bosse's firm, Hudson Highland Group Inc. Of the 12 metropolitan regions that Hudson surveys about worker confidence, Philadelphians have been among the most pessimistic in the nation, ranking only above San Francisco last month. They said their personal finances were getting worse. Fewer expected their companies to hire, and more foresaw layoffs. They fret and fret, even though yesterday's Beige Book report from the Federal Reserve paints a different picture. The Fed issues monthly reports (whose covers are beige) on the economies in various regions, including Philadelphia. The news? Not bad. The local economy grew, albeit slightly. There are definite hints of slowdowns, but most businesses are still forecasting modest, if somewhat constrained, growth for 2008. "Living there for five years, the attitude there seems to be more pessimism more than optimism," said Bosse, who, until June, was an executive vice president assigned to the Philadelphia market, working in the company's Lansdale office. Now he is in Chicago. "Chicago has experienced problems in the financial space," he said, "but . . . it's more optimistic in Chicago." To be sure, workers around the entire country have become more pessimistic. "Amid increasing talk of recession, workers' outlook can be significantly shaped by what they see and hear in the news," said another Hudson executive, Robert Morgan, co-president of Recruitment and Talent Management. "In actuality, the situation may not be as bad as some believe." So why the sad-sack attitude here?

Villanova School of Business 2008 Media Report


14 Gayle Porter, an associate professor of management at Rutgers University in Camden, studies attitudes about work, but her comments are strictly personal. She thinks that Philadelphians tend to stay in the region for a long time. They have long memories, and like many people, they tend to remember the bad. When there's a hint of problem, they immediately assume the worst, because they remember the last bad time. But, she said, they also adjust. "It's like family," she said. If the economy does something Philadelphians don't like, "they just accept it." Other places, she said, they'd be more inclined to pick up and leave. That adjustment may come easier because Philadelphia doesn't have as many extremes in its economy - bad or good. "Maybe there is something in those extreme fluctuations that energize people a bit," she said. "But I don't see it here." Or maybe, as Bosse's boss, Brown, said in his statement about Hudson's recent findings, it's the news media. Villanova University economics professor Kishor Thanawala says the media have been relentlessly beating the recession drum, and that can't help but depress people. But, he said, we won't know whether we're in a recession until we're actually in it, because of how recessions are officially defined - two consecutive quarters of falling GDP. "What we're talking about is perception, not reality," he said. Bosse, who left Los Angeles five years earlier to come to Philadelphia, has one theory. But in proffering it, he admits that he's skating on the thinnest of ice. "I think people in Philadelphia work harder than they do in Southern California. They take their work seriously," he said. So maybe, when the news hints of trouble, "they take it harder."

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January 18, 2007 By Bernie Monegain

International standards group accepts its first member organizations CHICAGO - The interim board of IHE International has accepted 93 members from the first group of applications submitted. The new member organizations include healthcare professional societies, healthcare IT vendors, provider organizations, universities, standards organizations, government agencies and other stakeholder groups interested in promoting the adoption of interoperable healthcare IT systems and electronic patient records. Integrating the Healthcare Enterprise (IHE), now in its ninth year, is dedicated to improving patient care by promoting the adoption of standards-based and interoperable solutions for healthcare information systems. To qualify for membership, organizations have to comply with IHE International's governance documents, which ensure transparency, equitable representation and the disclosure and fair use of intellectual property. Representatives of the member organizations will be eligible to participate in the first election of IHE International board members in March. The current interim board comprises representatives of IHE's sponsoring organizations and each of its clinical/operational domains. "The number of formal applications demonstrates that the IHE process continues to be very important to member organizations' corporate, institutional or national strategies," said board co-chairman Elliot Sloane, assistant professor of information systems at the Villanova School of Business at Villanova University. "It is evident that continued active international IHE participation, and adoption of IHE standards over the past decade, resulted in this large group of initial applicants. A significant number of additional applications continue to be received. We are very encouraged by this strong level of international support and participation as we move forward in bringing the newly formed IHE International to life." The IHE International board plans to incorporate as a nonprofit corporation in 2008. IHE International governs the development of IHE technical frameworks and related activities. Beginning March 1, IHE International will require that all IHE committee participants be designated representatives of IHE member organizations.

Organizations interested in applying to become IHE members should complete the application on the IHE governance Web page. New applications will be reviewed and considered for approval at the regular monthly meetings of the IHE international board. Villanova School of Business 2008 Media Report


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January 22, 2008 By Scott Jaschik

New Programs: Applied Engineering, Nursing, Church Management Bemidji State University, in Minnesota, is starting a new bachelor of applied science program in applied engineering. Georgia Southern University is starting a doctor of nursing practice degree program. Villanova University has started a master of science in church management.

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January 22, 2008 By Olesya Dmitracova and Laurence Fletcher

Market Gloom a Bright Spot for Risk Managers LONDON (Reuters) - Deal making has always been the glamour job in banking, but as markets turn down and bets on high-risk home loans go wrong, the more lowly "deal breakers", or risk managers, are due for their moment in the sun. Banks are looking for ways to guard against unexpected losses on the risk taking that is their bread and butter, and are boosting their control systems, procedures and risk staff. As banks cut jobs amid the market slowdown, risk managers are not only less vulnerable to the axe, they are gaining greater power and influence with top management. Last year was a hardlearned lesson for many a sector player. Financial risk professionals earn up to 150,000 pounds ($290,000) a year, modest compared with their deal-making colleagues who can earn several million. But the stock of these multi-skilled whizzes is rising. "If you don't do good risk management, the alternative is crisis management," said Michael Pagano, professor of finance at the U.S.-based Villanova School of Business, who specializes in risk among other topics. "That's exactly what happened in 2007." Global banks have written off billions of dollars after the plunge in value of mortgage-backed securities they held. Had the worst-hit ones factored in the possibility of such falling values and a drying up of liquidity, they could have softened the blow dealt them by mass defaults on subprime mortgages, risk experts say. Some put down the fortunes of Goldman Sachs, which managed a rise in fourth-quarter earnings against the sector trend, to its razor-sharp risk controls. REALITY CHECK The chief risk officer at badly-hit Citigroup, Dave Bushnell, followed CEO Charles Prince out the door in November in the aftermath of losses. Bushnell's replacement, Jorge Bermudez, now works with a new committee created to advise on ways of beefing up Citi's risk management.

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18 Morgan Stanley, meanwhile, has said it will reduce its risk taking for a short period until new risk management systems and leadership are established. One risk management expert in the hedge fund industry told Reuters he had had several calls from wealth managers and investors looking to recruit him as head of risk. He requested anonymity because he stayed with his existing employer. Banks have to manage different kinds of risk, including operational, market and credit risks. The crisis that took hold last August puts the focus on the latter. "There is no doubt that the credit side will be strengthened," said Laurent de Meeus, a consultant at global executive search firm Egon Zehnder. "Credit was the poor relation in the risk management family ... because credit has been so easy and lenient for so many years." A LIFE OF RISK At top-tier banks, credit risk specialists analyze economic indicators, news, asset prices and other data and feed them into complex computer models that work out the bank's probable gains and losses on its assets in a variety of scenarios. The models then interact with the computer systems that control trading decisions, stopping traders from executing deals that would lead to unacceptable losses in one or more scenarios. A risk specialist must also take account of any changes in regulation or in the bank's risk policy, which is regularly set out by the chief risk officer and the board. Supply is tight, since jobs in risk require high proficiency levels in finance, accounting, computing and mathematics. Some in the industry are educated to the PhD level. "It's a rare breed, so if you do have those skills it's a hot commodity," Pagano said. Nigel Hyde, a managing director at derivatives pricing firm Markit, agrees that risk specialists are hard to recruit. "There is a finite pool of people that understand financial instruments." Carolyn Williams, who looks after corporate partnerships and communication at the Londonbased Institute of Risk Management, says more and more financial firms are hiring risk managers. "Their stock is rising," agreed Pagano, adding that a job in risk "gives you a greater visibility with senior management -- gives you an opportunity to move ahead within the organization". Risk management may be the career of the moment, but deals and risk-taking will be back. "The essence of this industry is to take risk," said de Meeus of Egon Zehnder, "because if you tame a lion it's no longer a lion".

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January 22, 2008 By Jeannine Aversa

Analysis: Fighting Vicious Economy Cycle WASHINGTON (AP) — When people are panicking, it's hard to stop the stampede with talk about cutting a "federal funds rate." Economic fears on Wall Street and around the world are making people and businesses hunker down, and that could make all the recession worries come true — a vicious cycle the Federal Reserve, White House and Congress may be hard-pressed to break. Giving it a try, official Washington is in full crisis-management mode. Virtually everyone agrees more action will be needed. In his boldest action yet, Fed Chairman Ben Bernanke on Tuesday slashed the central bank's most important interest rate by three-quarters of a percentage point — the biggest cut in records going back to 1990 — and signaled he's ready to go lower. That should lower many other interest rates charged to millions of people and companies. At the same time, President Bush and top lawmakers in Congress were rushing to secure fast agreement on a rescue plan to inject about $150 billion into the troubled economy. Tax rebates for individuals and tax breaks for businesses are likely to be part of a package. Maybe more spending for food stamps and unemployment benefits, too. "The Fed's action gives some psychological breathing room, but it isn't enough in itself. There is a lot of fear out there," said Howard Chernick, economic professor at Hunter College. That was evident on Wall Street. The Dow Jones Industrials closed down nearly 130 points after tumbling more than 400 at the start of the day. Panic itself can make people and businesses change their behavior — clamp down on spending and or cut back on hiring and capital investment — and in turn make things worse for the economy. A gloomy mind-set can become a self-fulfilling prophecy. To break it, more rate cuts by the Fed are likely to be needed.

Villanova School of Business 2008 Media Report


20 "This is only the appetizer. The main course is going to be served up next week" when the Fed is likely to lower its key rate by one-half percentage point, said Ken Mayland, president of ClearView Economics. Many economists predict the rate, now at 3.5 percent, could fall to 2.5 percent, or possibly lower, by spring. For many people, that could mean lower interest rates on certain credit cards, home equity lines of credit and other loans. It also could provide some relief to some adjustable-rate mortgages. If people are paying less interest, they may be more inclined to shop, which would help energize the economy. For businesses, lower interest rates could spur capital investment and hiring. Most people think that won't be enough. The Bush administration and Congress promise to quickly approve an economic stimulus package to get cash into the hands of people, hoping they'll spend it just as quickly. Recognizing the urgency, both sides appear to be putting aside some political differences in championing tax rebates and other changes. There are some things, however, the administration has little or no control over — namely, higher oil prices that will sock people when they open their home heating bills and fill their cars with gas. And, there's the possibility that banks will continue to rack up multibillion dollar losses due to bad mortgage investments. Those losses have to run their course — and could fuel even greater panic. There was some thought that the Fed's dramatic move Tuesday may have added to the skittishness. "You have the Fed sending the message that something is seriously wrong," said Richard Yamarone, economist at Argus Research. "Most people do believe that we are in a recession." The Fed's rate cuts, which began in September, take months to work their way through the economy and show up in business activity. The same goes for a stimulus package. Senate Majority Leader Harry Reid of Nevada said the goal is to get a deal through Congress and on Bush's desk within roughly three weeks. Bush said he was confident that Congress and the administration will be able to approve a stimulus package. Will that avert a recession or at least cushion the blow? "The Fed and other policymakers in Washington are trying to avoid what people fear the most — an oncoming recession. If they can calm those fears, perhaps not today or tomorrow but down the road, that would go a long way in stabilizing the situation," said Victor Li, an economics professor at the Villanova School of Business. Lowering interest rates or passing a stimulus package may not be enough. People and investors may want to see something more concrete — lower unemployment or higher retail spending, for

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21 example. But the economy is dealing with a huge unknown: the ultimate magnitude of the housing crash and credit crunch. And with uncertainty comes more fear — a return to the vicious cycle.

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January 23, 2008 By Jon Hoeksma

Interoperability body announces 93 new members Integrating the Healthcare Enterprise (IHE), the international health interoperability body, has announced that it has been joined by 93 member organisations. IHE, is an initiative by healthcare professionals and industry to improve the way computer systems in healthcare share information. The international organisation, which first started nine years go, is dedicated to creating the framework for passing vital health information seamlessly between different settings, applications and healthcare enterprises. IHE is best known for running high profile ‘Connectathon’ events where suppliers’ technical experts come together to demonstrate they can connect their systems to those of competitors. The next European ’Connectathon’ is due to be held in Oxford in the week beginning 7 April. The next US event is being held in Chicago over three days beginning 28 January. The approval of its first wave of members marks a major step to IHE becoming an international organisation. Amongst the new member organisations approved in this first wave are healthcare professional societies, healthcare IT vendors, provider organisations, universities, standards organisations, government agencies and other groups interested in promoting the adoption of interoperable healthcare IT systems and electronic patient records. To qualify for membership, organisations first had to agree to compliance with the IHE International’s governance documents, which ensure transparency, equitable representation, and the disclosure and fair use of intellectual property. Representatives of the member organisations approved on January 10 will be eligible to participate in the first election of IHE international board members in March 2008. The current interim board of IHE comprises representatives of the sponsoring organisations of IHE and each of its clinical/operational domains. Interim IHE International Board co-chair, Eliot Sloane, PhD, Assistant Professor of Information Systems, Villanova School of Business, Villanova University, said: “The number of formal applications demonstrates that the IHE process continues to be very important to the member organisations’ corporate, institutional or national strategies.”

Villanova School of Business 2008 Media Report


23 Sloane said that further applications for membership continue to be made. “We are very encouraged by this strong level; of international support and participation as we move forward in brining the newly formed IHE international to life.�

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January 23, 2008

SAP Supports Business and IT Education at U.S. Universities Ten Undergraduate Students Awarded $10,000 Scholarships from SAP NEWTOWN SQUARE, Pa., Jan. 23 /PRNewswire-FirstCall/ -- SAP America Inc., a subsidiary of SAP AG , today announced the recipients of its second-annual scholarship program, which helps discover and empower talented undergraduates who exhibit the capabilities of future business leaders. In conjunction with the SAP(R) University Alliances program and SAP's corporate citizenship program, the highly competitive scholarship encourages students to think innovatively and apply business technology concepts to solve industry challenges through research. By partnering with member universities, the SAP University Alliances program exposes students to a variety of higher-learning opportunities and encourages them to apply their knowledge of business technology to real-life scenarios. Designed for undergraduate students studying business, computer science, mathematics or engineering, the scholarship program from SAP evaluates applicants based on their familiarity with and understanding of business technology. The application process is rigorous, with a personal research paper being the main component and highest weighted of the selection criteria. The paper must identify a current problem or issue relevant to enterprise resource planning (ERP) or other state-of-the-art business technology, and thoroughly examine both the issue and its consequences, as well as propose practical recommendations to solve it. Ten outstanding students were awarded scholarships valued at $10,000 each to help cover education costs. Their paper topics ranged from greenhouse emissions tracking, radio frequency identification (RFID), inventory management and Internet application security to privacy and workplace ethics. The following students received scholarships through the program: Nicole Smith, Ball State University; Greg Turcotte, California State University, Chico; Lora Atanasova, Drexel University; Matthews McGarity, Penn State University; Scott Pudlewski, Rochester Institute of Technology; Arthur Cardillo, Villanova University; Kyle Raschen, Villanova University; Marie Chapman, Western Michigan University; Richard Pode, Western Michigan University; and Noah Pascarell, Widener University. "The SAP University Alliances program has helped our students learn how information technology is used to manage business processes in real-life scenarios," said Dr. Bret Wagner, professor and Integrated Supply Management program director, Western Michigan University. "Their experience with SAP ERP software in the classroom has been valued by many of our corporate partners who use SAP solutions. Our students also value the strategic impact of the technology and the program on their future careers." Commitment to IT Innovation and Education

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25 As a global leader in business and IT innovation, SAP is already taking public leadership in numerous corporate social responsibility initiatives. With the SAP University Alliances program, SAP is demonstrating its commitment to higher education through investments in education that foster IT innovation and help equip tomorrow's entrepreneurs and managers with essential business know-how. For universities participating in the program, SAP provides free-of-charge licenses for current software releases and offers ongoing support and educational opportunities tailored to the specific needs of faculty members. User group meetings and curriculum congresses held in the EMEA, Americas and Asia-Pacific Japan regions share best practices and present new and innovative curricula. "Through this scholarship program, SAP is helping students synthesize their understanding of business and IT to make a social and economic impact in their career path of choice," said Richard Knowles, senior vice president, Operations and Communications, and executive lead for SAP's corporate citizenship program, SAP America Inc. "The scholarships provide practical incentives for students to obtain the skills and hands-on experience necessary to launch their careers and positively contribute to the 21st century, global workforce." The SAP University Alliances program was established in Germany in 1988. Today, the global program has nearly 800 universities participating worldwide. Annually, more than 150,000 students worldwide are enrolled in courses supported by SAP software. About SAP SAP is the world's leading provider of business software*. Today, more than 43,400 customers in more than 120 countries run SAP(R) applications-from distinct solutions addressing the needs of small businesses and midsize companies to suite offerings for global organizations. Powered by the SAP NetWeaver(R) technology platform to drive innovation and enable business change, SAP software helps enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP solution portfolios support the unique business processes of more than 25 industries, including high tech, retail, financial services, healthcare and the public sector. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol "SAP." (Additional information at http://www.sap.com)

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January 24, 2008 By Megan Woolhouse

Longtime usher charged with stealing from collection basket Newton church saw drop in cash When officials at Corpus Christi Church in Newton wondered why collections had dropped sharply, the Archdiocese of Boston launched an investigation, secretly installing surveillance cameras in a room where the money was taken after services. What they saw shocked them. Police said that a longtime usher, Richard D. Sonia of West Newton, was caught red-handed, lifting cash from the collection baskets. "They had him on film stuffing money in his pockets and in his socks," Newton police spokesman James O'Loughlin said. "It was kind of funny." Police have charged Sonia, 59, with larceny over $250. He pleaded not guilty at his Jan. 15 arraignment and was released on personal recognizance. He did not return phone calls yesterday. Church officials first suspected theft when, according to the police report, Sonia allegedly took the collections into the room and stayed in there longer than was necessary. His job was to put the money in a bag, which would later be placed in a safe. Church officials then asked a trusted parishioner to plant $10 and $20 bills in the collection basket to see what would happen, according to a police report. The bills never made it into the collection bag; it contained nothing larger than $1 bills, the report said. Church auditors have estimated that collections were down $17,000 in 2007, compared with 2006. According to a survey of 177 Catholic dioceses conducted by the Villanova School of Business in 2006, such thefts are not unusual. Eighty-five percent of the dioceses surveyed had experienced a theft in the previous five years. Corpus Christi's pastor, the Rev. Frank J. Silva, did not return phone calls yesterday. But in an open letter to the parish in last Sunday's church newsletter, Silva wrote that he would "continue to review the processes and procedures relating to parish collections" and work with the parish finance council to finalize any new procedures that may be necessary.

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27 Terrence Donilon, a spokesman for the Archdiocese of Boston, said church officials will not seek a harsh penalty in the case. "For us, full restitution would suffice," Donilon said. "We're not going to sit here in judgment of this person. We'll let the legal process play out."

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January 25, 2008 By Harold Brubaker

Spend or save rebates: Philadelphia-area residents divided Tax rebates are supposed to help the economy by spurring Americans to pry open their wallets and spend. But the rebates might not do the trick, based on an unscientific survey today of Philadelphia and South Jersey residents. Many of the people interviewed along Centre Street in Merchantville and at the Italian Market in South Philadelphia said they would either save the rebate or use it to pay bills. "I would probably put it in my savings account and hang onto it in case things got tight. I don't think I'd run out and spend it right away," said Don Feiler, a Pennsauken resident who has an ecommerce design and consulting business in Merchantville. In 2001, the last time Washington offered tax-rebate checks to boost the economy - with 92 million households getting checks for $300 or $600, at a total cost of $38 billion - the impact was muted. "The economy reacted very slowly to the stimulus package," said Victor Li, an associate professor of economics at Villanova University. "People did not spend. They saved." That is what Li said he did in 2001 and would do again, if he received a rebate. A 2002 University of Michigan survey found that nearly 75 percent of those who received rebates either increased savings or paid off debt. Jessica Weinstein, who was selling cosmetics in Merchantville, said at first that she would "go shopping. Who wouldn't?" On second thought, however, Weinstein, who lives in Cumberland County, said she would "probably just put it in the bank for now, until I need it." Her coworker, Ryan Melissa Landberg, has a practical use for the money. "I'd put gas in my car. . . . I'm in sales, so I drive a lot," she said. Pennsauken resident Gertrude Collins said she would send some of the money back to the federal government. "I would put it on my taxes that are due," she said. At the Darkroom Studios, which rents darkroom and studio space to photograhpers, Matthew Fegley said he would pay bills, including credit card bills for Christmas.

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29 If the rebate were $300 - one of the amounts under consideration - Fegley said it would not be enough to invest. Fegley, who handles outside sales for the photography business, said the economic downturn that had Washington officials scrambling to avert a recession did not surprise him, because of what he saw when he worked at a large South Jersey mortgage operation. "It was screaming for trouble," said Fegley, who lives in Maple Shade. "People rely on credit way too much these days." Brad Walker, owner of the Darkroom Studios, said the business component of the proposed economic-stimulus package - allowing businesses to immediately expense 50 percent of the cost of capital equipment - probably would do little good. "If you need equipment, you're going to buy it. A little tax break isn't going to make a difference," said Walker, who opened Darkroom Studios seven years ago. As for his personal rebate, Walker said he would save it. Li, the Villanova economist, said tax rebates were aimed at people who had cut back on spending because they feared losing their jobs or were simply worried about the economy. The idea is to make them feel comfortable enough to loosen their purse strings. The problem is that people are just as likely to save in case things get worse. Feiler, who has two boys and whose wife is studying full time at the Lutheran Theological Seminary in Philadelphia, said: "Whenever the economy turns down and money pops up, it usually goes into savings to build a cushion." In South Philadelphia, there were glimmers of hope that some of the rebate money would quickly find its way into the economy. Nicole Mercurio, a freshman at the University of the Arts, said she would either save the money for tuition or spend it on costly art supplies, such as paints, drawing pads and computer software. Mercurio, who worked for a medical publisher before starting school, was skeptical of the rebates. "The last time around it didn't make much of a difference," she said. Center City residents Tina and Douglas Pappajohn, alone among the 10 people interviewed today, said they would do something fun with their rebate. What's that? "Maybe go on a little unexpected holiday," Tina Pappajohn said while shopping at the Italian Market. It might not be enough to go someplace warm, but they could visit "New York for the day," she said.

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February 1, 2008 By Natalie Kostelini

Target: Distressed property Investors itching to gobble up locations when the prices bottom out Local real estate players are poised to deploy hundreds of millions of dollars this year to take advantage of the slumping real estate market by snapping up distressed properties nationwide. Lubert Adler Partners LP, Westrum Development Co. and Rubenstein Partners are among local investors who have raised massive funds to seize on what they expect to be one-of-a-kind deals at rock bottom prices. They aim to be among a group of risk-takers who seize upon downturns, seeking out opportunity and hoping to make astute real estate acquisitions that will eventually lead to handsome returns. The largest local player is Lubert Adler, whose private equity funds were, beginning in 1997, on the vanguard of investing in troubled properties. It has continued ever since, ramping up the size of its funds along the way. It's currently spending its fifth fund, which is $1.7 billion. It is also amassing its sixth, and largest, fund that will total roughly $2.5 billion, according to people familiar with it. As part of positioning itself for its buying spree of distressed assets, Lubert Adler in 2006 brought in Lenny Klehr, former head of the Philadelphia law firm Klehr Harrison Harvey Branzburg & Ellers, whose legal background includes real estate, private equity and debt restructuring. It also "significantly" beefed up its staff in its five offices across the country with former bank CEOs and individuals with backgrounds in distressed acquisitions, said Dean Adler, a founding partner. "We're looking at condominium developments that have the potential to fail, loans on land that may have issues, overly leveraged properties, and properties and mortgages that are in default," Adler said. The firm focused spending its fifth fund on two areas: value add and distressed. As for value add, Lubert Adler will buy properties in need of repairs or renovations as well as vacant office buildings. It also acquires companies for their valuable real estate holdings. For example, as a joint venture partner, the firm bought last year Central Parking and another parking operator, as well as Albertson's, its operating business and its 750 stores.

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31 The other part of its fifth fund is dedicated to buying distressed properties and debt originally funneled to residential real estate. It actively buys the real estate from companies going through bankruptcy. Adler declined comment on its sixth fund. However, three market sources familiar with it indicate the firm is expected to continue its focus on distressed properties but "in a much bigger way." John Westrum of Westrum Development is also set to seize on the troubled real estate market, and began planning for it in 2005. Westrum couldn't predict when it was going to happen but one thing was certain. "We knew this was coming," said Westrum, a residential developer active in Center City. With that in mind, Westrum set out three years ago to raise "tens of millions" of dollars for what he called a "distressed property opportunity fund." In 2006, he finished raising the money, the exact amount he won't reveal. He has sat on the sidelines ever since but is ready to spend this year. "We haven't been able to buy anything yet," he said. "Nothing has gotten too distressed." But it's getting close. Westrum now gets notified daily about 15 different properties up for sale for 50 to 75 cents on the dollar. Timing is an integral part of making such investments work, said Jack Pearce, a business professor at Villanova University's School of Business. Investors want to get in when prices are favorable and before prices begin to go back up, something that is difficult to predict. These types of investors are also betting the real estate they buy will retain value once a downturn or recession is over, Pearce said. Another risk is that others playing for the same end game could actually compete and bid up prices on properties, lowering potential future margins. Prospective rewards outweigh the risks for those vulture-like investors, who view this as a unique occasion. "The development community is looking for opportunities. There is no question that this is an opportunity," said Roger Friedman, a principal with ARC Wheeler, a Philadelphia-area developer. "It's quietly going on and I think anyone who is at a high level of real estate is looking to do this. We very rarely get this chance where extraordinary properties for one reason or another come up for sale and you're able to buy. Any cycle like this, there are winners and losers." Rubenstein Partners, which has a $475 million fund, is ready to pounce on troubled office properties. As with companies targeting residential properties, David Rubenstein, senior managing principal at the Philadelphia firm, believes there will also be distressed office players.

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32 "We have been very quiet during the last two years and we've probably been one of the least active buyers," Rubenstein said. "I don't at all expect that to continue in '08 and '09. We are now more actively looking than we have ever been and I expect that to just increase." Office submarkets with financial service companies, such as banks and mortgage firms, face increased exposure to going out of business or downsizing, he said. "Now the question is: Does that distress or trouble spread to other industries in the economy? If it does, a lot of tenants and other sectors will have trouble," he said. "I think it will spread to other areas. The question is to what extent." In the next two years, Rubenstein, whose funds buy along the East Coast, plans to pursue deals locally. Aside from offices, Rubenstein will also seek out buying debt, office related debt and notes backed by real estate.

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February 1, 2008

By David M. Katz

What's Wrong with the Kids? Coping with the newest generation in finance requires tact, patience — and restraint. WANTED: Candidate with undergraduate degree in finance/accounting. Long hours not required — come and go as you please. Spend as much time Web-surfing as you want. Work on the projects you like and refuse the rest. If you don't feel like finishing a project, your manager will gladly take it. Excellent salary and benefits; on-the-job napping encouraged. Far-fetched? While 30 years ago no one would have posted such a ludicrous help-wanted ad, these days finance managers say they have become all too familiar with exactly this kind of employee. Consultants have even coined a name for this new breed of entitled worker: they call them millennials. Many senior finance executives are complaining loudly about the new generation. They say they must now spend a good deal of time devising strategies to keep younger finance staffers happy and on the job. William Kurtz, CFO of San Jose, California-based semiconductor maker Novellus Systems, says he has had to focus much more attention on developing the careers of new recruits. Even then, the company has found it tough to ward off a wave of defections triggered by a resurgence of start-ups in Silicon Valley. Blame Fast Company, the business magazine that championed "The Brand Called You" and similar other anthems of the dot-com heyday. Although many younger workers revised their sense of entitlement when that boom went bust, the demand for accounting talent has enabled people with such skills to maintain an attitude normally associated with velvet-rope-jumping celebrities. Or so say their elders. Finance chiefs grumble that millennials (and their slightly older peers, the Gen Xers) are a mercurial, selfish bunch. Melissa Morales, CFO at real estate developer The MC Cos., has spent the better part of the last two years trying to staff the start-up's 15-person finance department. While granting that there are some gems in the bunch, she says few of the recent hires display the steady determination once associated with accountants. At the same time, she notes that many staff members require an excessive amount of praise. "You don't need to be recognized for everything you do," says Morales. Despite those deficiencies, Morales seems most annoyed by the lack of loyalty exhibited by the millennials. "There's no investment of time or commitment to the company," she says. The finance chief notes she was particularly irked by one recent hire who spent all of 60 days on the job — then bolted to a rival. "This is not the way I was brought up," laments Morales. If You Want Loyalty, Get a Dog Job-hopping goes against the grain of many old-school finance executives. Then again, it's hard to blame workers in the world's greatest free-market economy for attempting to benefit from that market.

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34 "We're such an affluent society that they just go where the money is because they want to be part of that affluence," says Michael Peters, an associate professor of accounting and information systems at Villanova University. "They chase after the buck." Defenders of the new order point out that loyalty is a two-way street. Years of corporate downsizing and finance department right-sizing have left accountants and finance professionals young and old with a firm belief that tenure doesn't matter anymore. In fact, long-serving finance staff employees — who generally make more money than junior colleagues — are often the first to be let go when belt-tightening commences. "I see firms quick to lay off highly qualified employees as soon as there is any sign of a downturn," says one self-described member of the millennium generation. "Yet they expect their employees to stick by them. You want loyalty, hire a cocker spaniel." Tailgating and Fantasy Drafts Ironically, the accounting shortage has been spawned by regulations targeting the corporate finance function. "[With Sarbanes-Oxley], we need a lot more accountants," says John Brausch, controller of Edens & Avant, an owner of retail shopping centers. "But more hiring shrinks the available pool." On campuses, top students can hardly mistake the strong message that their services are greatly in demand. Of the 140 or so accounting majors that graduate from Villanova each year, 95 to 100 percent are sure to find jobs immediately, notes Peters. In the current recruiting frenzy, students showing accounting aptitude are wined and dined by audit firms — sometimes as early as their sophomore year. At the University of Alabama, top accounting shops are prominent caterers of tailgate parties at Crimson Tide football games, hoping to lure possible hires. Richard Houston, a professor of accounting and director of the university's master of accountancy program, says audit firms take an intense interest in "who went where." He says the firms treat the competition for collegiate finance talent "almost like a fantasy baseball draft." The wooing continues once graduates enter the job market. Kurtz says Novellus saw a 20 percent turnover in its approximately 100-person finance department over the last several years. The exodus roughly tracks the resurgence of start-ups and initial public offerings in Silicon Valley after years of inactivity. With projected growth rates of 50 percent or more, these fast-rising companies have been snatching accountants and future controllers from Novellus. Says Kurtz: "These people were high-potential workers. We didn't expect them to leave." Proper Care and Handling For insight into why promising employees move on, finance chiefs might want to consult their own résumés. In several instances recently, high-profile CFOs left after extremely short stays in top finance positions: Alvaro de Molina, for example, lasted only 18 months as CFO of Bank of America; Craig Monaghan left Sears Holdings last January after only 4 months; and in August, Steve Sordello quit as CFO of Tivo Inc. after less than a year. A 2006 study by Crist Associates of 658 large companies put the average tenure of a Fortune 500 CFO at four-and-a-half years — not exactly a lifetime of service. What's more, who's to say that the old ways of running a finance department are necessarily the best? In truth, some finance chiefs may be holding on to idealized — and inaccurate — views of

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35 their early work experiences. Jay Jamrog, a senior vice president of research at the Institute for Corporate Productivity, says CFOs need "to challenge some of their assumptions about how work was done in the past." Such reflection can have unexpected benefits. Brausch of Edens & Avant recalls that rigid chainof-command structures were much more prevalent when he was starting his career. But the millennium group's preference for a more casual workplace has led, in some instances, to a more relaxed style of communications between employer and employee. "Twenty-five years ago, would I go talk to the CFO right out of college?" asks Brausch. "Probably not. But that happens every day today." Kurtz, too, says he now has one-on-one talks with new finance hires about their career objectives and educational needs. "By providing a clear path of development," he says, "we've seen we can have a better rate of retention." To mark that path, Novellus has installed a two-year training program for the eight or so new finance and accounting graduates it hires each year. Each participant is assigned a mentor for two years. In their second year, the employees spend two sixmonth periods working in different disciplines, such as financial-planning analysis or treasury.

After completing the training program, employees are again promoted. Sporting three promotions in two years, employees can see a definite progression in their career. "It becomes clear to people that they'll be developed," says Kurtz. Other CFOs have gone so far as to restructure their departments to appeal to the new breed of employee. At The MC Cos., Morales has split her 15-person finance staff into two levels. At the entry level: accounting associates, who are responsible for basic tasks such as handling accounts payable and receivable and reconciling accounts. More-senior general accountants, who perform higher-level tasks, report to the controller and director of finance. The new structure, Morales says, "gives people the ability to work toward promotion." Morales has also made changes aimed at stressing a team approach. For instance, she has blurred the lines between the company's three activities — property development, construction, and management. Previously an employee was slotted into one of those areas. "Now," she says, "everyone does a little bit of everything." Finance executives say that kind of rotation appeals to millennials. "In the past, people were more content to dig deep and get those 10-plus years of experience and become an expert in a field," says Mary D. Hall, a divisional CFO for the chemicals and fibers group of Eastman Chemical. "But younger workers seem to really want variety. They want to be generalists." Apparently they want a lot of attention, too. "Younger employees want feedback at the touch of a button today," Jamrog says. "If you don't answer their E-mails and give them some positive reinforcement, you just dissed them." And if they feel dissed, they may walk. In fact, some observers say millennials are less willing than previous generations of workers to endure prickly situations. The University of Alabama's Houston says that he often hears from former students, toiling away during the first weeks of their first audit jobs in small hotels in remote outposts in the Southeast. Based on the experience of a single grim week, they might well decide to change jobs. "People nowadays are just more likely to focus on 'I hate this. If I go across the street, things will be better.'"

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36 Still, some CFOs have come to appreciate the talents that most millennials bring to their jobs. Many are more technologically adroit than their bosses. At Edens & Avant, for example, Brausch says he was looking for a way to shorten the budgeting process. One of the biggest challenges, however, was streamlining the company's budgeting for cost reimbursements for such things as snow removal and insurance costs. Those payments are set forth in the various leases of the company's 2,300 tenants, which range from Stop & Shop and Target outlets to smaller retail stores. Would the company have to create 2,300 different invoices to be loaded by a hired administrator? Brausch figured such an enormous job could take 10 weeks to complete. Then one of his finance managers, a millennial who is a whiz at Excel, created a macro in two hours that could handle the entire job. Says the veteran finance chief, "It was miraculous to watch."

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February 7, 2008 Irina Aleksander

What This Recession Nonsense Really Means for Us Recession, shmecession. Everyone keeps blathering on about the dwindling dollar, the deflating markets, and an economy that is sure to dissolve into something obscenely dire any day now. But what does that all really mean and what exactly are we supposed to be doing about it? For those of us who are too young—or let’s say financially challenged—to own a home or have loads of money in various investments, the recession is something that seems utterly dreadful. But, we’re not entirely sure why. The full explanation of what causes a recession is too intricate to explain here. And it would probably cure your insomnia quicker than an Ambien CR. All you really need to know is what to expect if a recession really comes to pass. So we phoned Villanova economics professor David Fiorenza to help us get a clue. And here are the wonderful things he said we have to look forward to: • •

• • •

You might have trouble getting a loan for big stuff like houses and cars. During a recession, banks get nervous that people will struggle to make their payments. So they make it more difficult—particularly for young people—to qualify for hefty loans. You might lose your job or, at the very least, you might miss out on that bonus or promotion you’ve been waiting for. A recession usually means that businesses lose money as people begin to consume less of their products. And if your boss ain’t getting paid, you won’t either. Your gas and utility bills may become more expensive. As your salary remains stagnant while oil and gas prices continue to rise, your utility bills will begin to sting even more. Your investments may take a dive. As people spend less and companies begin to lose dough, the market will contract. Those stocks you bet on may become less fruitful. You will not be taking that vacation. As all of the above begins to happen, you won’t have as much disposable income and you probably won’t be able to take that trip to St. Barths or wherever — especially if you don’t have a job to come back to.

So what should you do? Well, if you haven’t figured this out already, you should probably be careful with your spending because of the whole you-might-lose-your-job thing. Or, you can sell everything, buy nothing, put your cash under the mattress and rock back and forth in the corner like Demi Moore did in St. Elmo’s Fire.

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February 8, 2008

People on the Move MISCELLANEOUS Jim Krull has been named vice president of operations for the Trevose-based Bucks County Technology Park, a mixed-use business campus. Krull was formerly director of business development and planning for Reed Technology and Information Services, with offices in Fort Washington and Horsham. Lou Siegel has been appointed controller at Burlington County College in Pemberton, N.J. Siegel was formerly the associate vice president of internal audit and management consulting services at Philadelphia’s Drexel University. Mark Mandia has been promoted to president and chief operating officer of DMW Worldwide, a direct response advertising agency in Wayne. Prior, he was executive vice president and chief operating officer. ExecuTrain Northeast, a training company based in Georgia, has promoted Ron Kaufman to senior account manager for the Philadelphia and Wilmington, Del., markets. Formerly he was an account manager for a former franchise of the company. Lawrence F. Shay has been named president of the patent holding subsidiaries of InterDigital Inc., a mobile device company based in King of Prussia. Prior, Shay was the company’s chief legal officer. Villanova University School of Business in Villanova announced Madonna Marion-Landais has been named associate dean for external relations. Prior, Marion-Landais served as the vice president for institutional advancement at Rosemont College for six years. Bachmann Industries Inc., a model train distribution company in Philadelphia since 1833, has made three new promotions and one new hire. Philip Varughese, formerly accounting and office manager, was made vice president of finance and administration; Dongmei Liu was made accounting and office manager; Richard Janyszek, formerly national sales manager, was made vice president of sales; and Lloyd Kennie returned to the company as national sales manager after a four-year separation.

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February 12, 2008 By Jeff Gammage

Is it worth spending millions of public dollars? One reason people thrill to the prospect of pro soccer coming to Chester is the promise that a new stadium complex will generate a raft of jobs, spending and tax revenue - all told an astounding $1.7 billion in economic activity. Or not. "A fantasy figure," scoffed Rick Eckstein, a Villanova University professor and coauthor of Public Dollars, Private Stadiums: The Battle Over Building Sports Stadiums. "The numbers should be treated very, very skeptically." Despite the dozens of new stadiums built or rising in communities across the United States, and despite the huge public subsidies they command, there's nearly universal agreement among economists that arenas produce practically no benefits to taxpayers - a view hotly disputed by the businessmen who seek funds and the government leaders who back them. "The debate has intensified because the costs have escalated and these sports developments have become larger real-estate and entertainment plays," said David Carter, executive director of the University of Southern California Sports Business Institute. Now, that tension has come anew to the Philadelphia region, specifically to one of Pennsylvania's poorest cities, where Gov. Rendell has promised that a proposed $500 million stadium development will "change the face of Chester forever." He has pledged a pivotal $47 million in state funding that has supporters believing the city will land a Major League Soccer expansion team. A decision is expected soon. The team would play at a $115 million, 18,500-seat stadium set near the Commodore Barry Bridge and surrounded by what sounds like riverfront paradise - $385 million in restaurants, stores, offices and townhouses. The development would have boat slips and new streets, even a supermarket. Artists' renderings show people jogging on a waterside promenade and strolling with shopping bags. The prospective team owners, leading a St. Louis group in the contest to secure MLS's 16th team, predict a huge financial impact: More than 2,600 temporary construction jobs and 800 permanent full-time jobs. About $19 million in annual tax revenue. An estimated $670 million in personal earnings and $335 million in taxes over time. Those are giant numbers to a city where half the households get by on less than $25,000 a year. And they leave sports economists shaking their heads. Whether it's Kansas City or Charlotte, Chicago or Chester, they say, the argument is always the same, and so is the result. "Plopping down a stadium," said Temple University assistant dean Michael Leeds, coauthor of The Economics of Sports, "does nothing for a city." The team investors based their projections on a study by CSL International, a Minnesota consulting and analysis firm. The report itself has not been released, making it hard to judge the

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40 methodology. Economists tend to dismiss such studies as one-sided - composed solely of supporting data, presented in the most favorable light. The problem for taxpayers, they say, is the government subsidies are so big - estimated at $87 million in Chester - that they're difficult to recoup through small-percentage tax receipts at venues that are hardly ever open. Despite the large crowds they draw on game days, stadiums are rarely used. The Eagles host eight regular-season games, the Phillies 81. The Chester stadium would operate about 35 days a year for soccer games and other events. Perhaps most of all, economists say, stadiums are poor financial engines because of "the substitution effect." That is, spending by fans usually doesn't represent new dollars entering the economy, but a reallocation of dollars that would have gone to other entertainment - movies, dining, tickets to the symphony. In Chester that could be somewhat offset if the team draws paying fans from New Jersey and Delaware. Soccer executive Nick Sakiewicz, CEO of FC Pennsylvania Stadium, the group seeking a club, responds to economists' somber calculations with one word: hogwash. "These entertainment districts generate a boatload of jobs and real-estate taxes," said Sakiewicz, credited with securing the deal for Red Bull Park, a soccer stadium now being built in New Jersey near New York. He calls the argument for substitution spending "shallow." "You don't go to the symphony to get your soccer fix," he said. "The soccer team is new revenue." He offered details about how the tax and job figures were compiled - based upon wide financial universes and including both the spending and re-spending of dollars in Chester and other parts of Pennsylvania. Not all the predicted economic activity, jobs and taxes would accrue to the city. For instance, if achieved, the job creation would be impressive. The total number of people with jobs in Chester is 10,500. So 800 permanent jobs would represent a sizable increase of about 8 percent. But that includes the jobs of the players and coaches on the team, as well as jobs created outside of Chester as a result of the project. The team investors, including Jay Sugarman, CEO of iStar Financial, and James Nevels, chairman of the Swarthmore Group investment firm, insist the complex will be a magnet for growth. Building near the new Harrah's casino and the Wharf at Rivertown offices creates a solid base for future expansion. "The economists have defined a narrow issue: Is the public investment in sports facilities worth it to the public?" said John Lord, a marketing professor at St. Joseph's University. "Where government leaders, investors ask: Is the public investment in sports facilities worth it if it draws other development? Those could be very different answers." Supporters also argue that stadium projects bring benefits that don't show up on a balance sheet entertainment, of course, but also a sense of enhanced community pride and reputation. A city that has a sports team is presumed to have other positives, the argument goes, and that message is transmitted to the public every time a game appears in a box score. Fred Nance, an attorney who led the court fight to retain the NFL Browns in Cleveland, said it's wrong to view a stadium as a strict profit-or-loss venture. "The public subsidy doesn't have to work like a precise mathematical equation. There's all sorts of intangibles that come back," said Nance, who has followed the plans in Chester. "If you've got a credible developer, it could prove to be a very good development for the state." Nance, also chairman of the Greater Cleveland Partnership, the city's chamber of commerce, said it was worth every penny of about $1 billion spent on stadiums for the Browns, baseball's Indians

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41 and basketball's Cavaliers. He believes it's crucial to look beyond the initial investment to what a stadium complex can mean for a city's long-term ability to attract money, business and people. "If an area is perceived as hot and worth taking the risk, it can almost become a self-fulfilling prophecy." For the Chester project, the state has promised $47 million and Delaware County $30 million, while the Delaware River Port Authority is being asked for $10 million. Delaware County taxpayers would actually pay more, because the $30 million would be raised by selling bonds. The added cost of interest payments is not yet known, officials said. A 1997 study by the Brookings Institute, a Washington think tank, laid out the case against stadiums in explicit detail, concluding that the impact on local economies and employment was extremely small - and perhaps negative. That's because chain restaurants and stores that may settle near an arena don't recirculate much money - they ship it to headquarters. "It can actually create a 'dead zone' rather than an 'active-use zone,' " said Suzanne Clain, who teaches sports economics at Villanova. This is not a pro football operation moving to tiny Chester, bringing the colossal fan base and marketing power of the NFL, she noted. This would be a team in a league that last year drew 3 million fans - about as many as the Phillies. And anyone who thinks it's easy to thrive in the crowded Philadelphia market should consult the Soul, Kixx, Phantoms, Wings, Barrage, Rage and Charge. "What does it say," asked Leeds, the Temple dean, "that they're pinning much of their hopes for economic development on sports bars? Will parents taking their junior-high schoolers to a game stop-off for a cold one on the way home?"

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February 12, 2008 By Kathy Matheson

Colleges Seek to Protect Church Tills PHILADELPHIA -- The globe-trotting priest from Connecticut drove a Jaguar, shopped at Bergdorf Goodman and bought jewelry from Cartier, all of it with money stolen from his church's coffers. By the time the parish finance council caught on, he had embezzled $1.3 million. Many U.S. churches have been victims of embezzlement over the years, reflecting not just moral weakness on the part of the wrongdoers, but lax financial controls. Often, church budgets are overseen by volunteers or employees with little guidance or professional training. Now, some colleges are hoping to prevent such faith-shattering abuses by offering programs devoted specifically to managing church finances and personnel. Duquesne University in Pittsburgh and Boston College started programs in September, and Villanova University outside Philadelphia is offering an online master's degree in church management beginning this summer. The concept is becoming more popular despite some among the faithful who bristle at the notion of the church as a business, said Kerry Robinson, executive director of the National Leadership Roundtable on Church Management, a Roman Catholic group. "It is true that the church is not a company, and we respect and acknowledge that," Robinson said. "But it is comprised of people, finances and facilities. Catholic theology demands that those are managed well _ and not just well, but to the highest, exemplary degrees of stewardship." Better financial controls might have led to an earlier uncovering of the priest sexual-abuse scandal, said Charles Zech, director of Villanova's Center for the Study of Church Management. Numerous financial red flags were missed as dioceses and archdioceses quietly settled with victims and paid for treatment for priests.

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43 More than 60 Catholic dioceses responding to a survey by Zech and a colleague reported embezzlements within the past five years. The survey got responses from only about half of those contacted, but 60 amounts to around one-third of the nation's dioceses. About a halfdozen of the dioceses that responded reported thefts of more than $500,000. "If folks were better trained in management, a lot of problems that churches face today could have been avoided," Zech said. Just last year, the Associated Press found reports of more than 20 churches in 17 states dealing with embezzlement cases. The cases included clergy or church employees who were either charged with, sentenced for, convicted of or pleaded guilty to stealing religious funds. The frauds involved many denominations, and included a Roman Catholic priest in Virginia who admitted stealing at least $400,000 from his parishioners and a Lutheran youth minister in Pennsylvania charged with embezzling more than $68,000. Last fall, Boston College _ a Catholic school, like Duquesne and Villanova _ began offering a master's in pastoral ministry with a concentration in church management. It also offers dual master's degrees in ministry and business.

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February 15, 2008 By Nancy Frazier O'Brien

In U.S. pope will find multicultural church marked by stronger laity WASHINGTON (CNS) -- What kind of Catholic Church will Pope Benedict XVI find when he arrives in the United States in April? How similar or different will it be from the U.S. church community that greeted Pope John Paul II on his first papal visit in 1979 or his last trip to the U.S. in 1999? Scholars and experts contacted by Catholic News Service at Catholic universities around the country did not always agree on the answers to those questions, but several themes emerged. They saw a church dealing with parish consolidations or closings and a declining availability of priests, but also experiencing a new vibrancy in lay ecclesial ministry. They saw what one called "a chastened church" after the clergy sex abuse scandal but a church that has learned important lessons about accountability. And they saw a church already more than one-third Hispanic and still learning how to adapt to the realties of multiculturalism. There's no doubt that the United States Pope Benedict will visit has more Catholics than the country to which Pope John Paul came in 1979 or 1999. The Catholic population in the 50 states was less than 50 million in 1979 but grew to more than 59 million in 1999 and 64.4 million today, according to the Official Catholic Directory. That growth has roughly mirrored the rise in total U.S. population, from 218.6 million in 1979 to 232.4 million in 1999 and 300.7 million in 2007. The number of U.S. parishes has remained relatively steady over those years, with 18,695 parishes in 1979, a slight rise to 19,186 in 1999 and a drop back down to 18,642 last year. But the number of diocesan and religious-order priests serving U.S. Catholics has sharply declined, from 58,430 in 1979 to 46,355 in 1999 and 41,446 in 2007. Alan Schreck, chairman of the theology department at the Franciscan University of Steubenville in Ohio, said the alarming drop in the number of priests also has had a happy consequence in the rising number of Catholic laypeople involved in church ministries. At Franciscan University alone, there are more than 500 undergraduate theology students, "the vast majority of them laypeople," he said, and more than 100 graduate each year with the training once given only to clergy. Schreck believes Pope Benedict will find "a greater maturity, a greater sense of direction and

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45 mission" among American Catholics today than Pope John Paul did 28 years ago. "For me, the most positive thing in 2008 is that laypeople are immensely more aware of their responsibility for the church present and future," said Paul Lakeland, director of the Center for Catholic Studies at Fairfield University in Connecticut. Lakeland said the clergy sex abuse crisis had one positive result: It convinced Catholics that "we need to have more of a voice in our church." "It didn't matter if you were on the left or the right," he added. "You were equally scandalized." Michael O'Keeffe, a theology professor at St. Xavier University in Chicago, said he hopes Pope Benedict will acknowledge during his visit that the issues raised by the sex abuse scandal are not over. "I believe that the pope would be well served by speaking to people about this issue and becoming more engaged in helping the church to heal," O'Keeffe said. "I might also ask the pope to take the time to hear about the health of the American Catholic Church, not simply from the bishops, but from the people, especially those people that feel they have been pushed to the margins," he said. Charles Zech, professor of economics at the business school at Villanova University, near Philadelphia, and director of the school's Center for the Study of Church Management, said the sex abuse scandal brought "pressures at all levels to be more transparent." And the decline in the number of priests led more and more laypeople to take on "responsibility for the things priests and nuns used to do," he said. Together, those trends have left many laypeople in need of "the skills to run a faith-based nonprofit," Zech said, adding that the 2-year-old National Leadership Roundtable on Church Management is working to fill those gaps. Msgr. Kevin Irwin, dean of the school of theology and religious studies at The Catholic University of America in Washington, said Pope Benedict will find "a higher awareness of the multicultural reality of the church" than Pope John Paul might have seen on any of his U.S. visits. Hispanics now make up an estimated 35 percent of the U.S. Catholic population, and more than half of all U.S. Catholics under age 25 are Hispanic or Latino. With Mass celebrated in more than three dozen languages around the United States, "there's lots of work being done" to promote multiculturalism, "and more that needs to be done," Msgr. Irwin said. Eileen C. Burke-Sullivan, director of the master's program in ministry at Creighton University in Omaha, Neb., said she has heard little advance publicity about the upcoming papal trip, in sharp contrast to Pope John Paul's 1979 visit, "which stirred enthusiasm and excitement all over the country but especially here in the heartland." "It strikes me that the gap between the bishops and ordinary Catholics has so widened in this country that even if the bishops are excited about Benedict's coming they are not in a position to stir up the energy of lay Catholics to care a great deal," she said.

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46 Although there are some exceptions to "this enduring malaise," Burke-Sullivan said, most U.S. Catholics today are "willing to work on their own faith, be loyal to their own local clergy if they feel attended to by them," and are "somewhat uncaring about the universal expression of the church." Schreck hopes Pope Benedict will inspire "a revitalization" that will help American Catholics resist "the increasing pressure toward secularization, to be part of the mass culture." "Catholics in America do need to be reminded we are in a struggle" against the prevailing cultural norms, he said. "They have to understand this is really a battle."

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February 23, 2008 By Jeremy Pittari

Habitat gets help, donation, from a Pennsylvania university Item Staff Writer PICAYUNE — Students from Villanova University in Pennsylvania came to Picayune to help Pearl River County’s Habitat for Humanity build two houses currently under construction. During the visit, the group of 27 students and two professors brought with them a donation from the Karr Family Foundation, based in Pennsylvania. “We periodically make donations to charities. This was an easy one to make,” said Bob Nydick, a professor of management at Villanova. “It was really easy to see their good work going on down here.” Nydick said with larger organizations it is more difficult to see where their donations go, but with organizations such as Habitat for Humanity the work is clear. The donation totaled $75,000 and will help Pearl River County’s Habitat for Humanity finish the two houses under construction on South Haugh and will help fund ground breaking for two more houses next door. Work conducted Friday and Saturday on the two houses included insulation and dry wall installation. If the weather permitted, the group planned to do some siding work, said Villanova professor Daniel Wright. On a previous trip, the professor said he and another group of students from the university framed and put roof sheeting on the same homes they worked on Friday and Saturday. “It’s a lot of work for those two days,” Nydick said. While this is Nydick’s 14th Habitat for Humanity trip, this is his first time to work on the same house. The group from Villanova flew into New Orleans on Thursday and began work Friday morning. Thursday evening they had a chance to meet the families they were helping. Work will continue Saturday, but Sunday the group plans to attend church services in New Orleans before enjoying some free time touring the Big Easy in the afternoon. All of the students paid their own way to get to Picayune and even brought a donation of their

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48 own from last year’s class. Each year students at the university raise money to donate to various causes. This year the group brought $1,000 from the last year’s student efforts to add to the $75,000 donation from the Karr Family Foundation. Villanova Management and Business Law student John Ducci said he is enjoying his first time on a Habitat for Humanity trip. Ducci said previously he had worked with the Habitat for Humanity in Connecticut. “I wouldn’t be surprised to find myself on a another one of these,” Ducci said. That may be hard since the school fervently supports students taking trips like these, prompting a large amount of student response. “You honestly have to wait in line if you want to volunteer,” Ducci said. This week’s trip was the third a group has made to help Pearl River County’s Habitat for Humanity. Three other trips have been made to help other Gulf Coast region efforts recover from Hurricane Katrina. Gene Yeager with Habitat for Humanity said the organization will apply for a grant to match the donation provided by Villanova. While the local Habitat group has not yet submitted the application, members feel confident they will get the funds. Nydick said another trip is planned for October where Villanova students plan to help with the construction of at least one of the other two homes on Haugh Street. Several people have asked Nydick why he donates his time to bring students to Habitat for Humanity projects. “If I have to explain it, they won’t understand it,” Nydick said. He said while the experience will not change a student’s life, it is an experience they will not forget. Donna Fischer with Pearl River County Habitat for Humanity said she expects to be able to dedicate at least one of the homes being built to the eligible family by May 16. Fischer actually would like to be able to dedicate both of the homes by that date but cannot guarantee it. The time and work Villanova donated to Habitat for Humanity in Pearl River County is appreciated. “Villanova has been our guardian angel,” said Habitat representative Martha Sheppard. Additionally, Villanova recognized the efforts of Pearl River County’s Habitat for Humanity. “This is the most well run and organized Habitat organization,” Wright said. Local organizations also donated some assistance to the cause. Fischer said Joey Douglas of Douglas Drywall donated the Sheetrock that will be installed in the homes. Local builder Dennis Collier also is donating his time as construction supervisor, Fischer said.

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HABITAT FOR HUMANITY — A group of students from Villanova University in Pennsylvania donated their time and energy to help construct Pearl River County Habitat for Humanity homes. The group brought with them a donation of $75,000 to help fund the remainder of the homes’ construction. Students begin unloading Sheetrock to be used to sheath the inside walls. (Photo by Jeremy Pittari)

By Jeremy Pittari / By: Jeremy Pittari

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February 25, 2008 By Raj Dayal

A higher education on church management awaits Innovative degree addresses the managerial shortcomings of faith-based organizations. Universities and seminaries are recognizing the need for advanced business and leadership training regarding the management of churches. While most pastors and administrators have fulltime responsibilities, they can now enroll in several management and leadership programs throughout the country and online. Most of these programs offer a combination of theology and business degree or certificate of study. In May 2008, The Center for the Study of Church Management in the School of Business at Villanova University, Villanova, PA, will offer a Master of Science in Church Management (MSCM) almost entirely online. Church Executive spoke with the director of the center and economics professor Dr. Charles Zech about the new program and the necessity of management training for clergy and church staff. Why did the center decide to offer a program specifically on church management? The center conducted a survey in 2005 funded by a grant from The Louisville Institute, and we found that there was a real internal financial control problem in churches. It was sent to the CFOs of 174 Latin rite dioceses. We found that of the 78 total usable responses, 85 percent experienced some sort of embezzlement within the last few years. The purpose and reasoning behind the MSCM became obvious. Church management has become so complicated; leaders need professional help and training. It’s impossible to manage a church, especially a large one, with just the help a few well-meaning volunteers. In the summer of 2007 the center held a conference on church management. Were any significant findings revealed about the state of church operations? The main thing that jumped out to me at the conference was the need for performance evaluation of people in management and leadership roles at churches. The law is very clear that churches are granted no exception in regards to employee termination. There must be a paper trail. Also, many of the things such as financial controls and human resources that businesses understand routinely, are often absent from churches for one reason or another. How did the program develop in order to address these needs? What is covered in the curriculum besides an increased emphasis on financial management? The courses are holistic. The majority of the courses were developed in the business school with the specific focus on church management. We offer courses on the usual business topics but with focus on how these elements work for more effective church management.

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We offer courses on technology in business, human resources and accounting. There are also courses required on church law and civil law — which are often in conflict. The first course students take is on leadership and ethics. Specific for the church management program are courses on stewardship, planning and a unique course on what it means for an organization to be a church. Is the program solely offered to Catholic clergy and administrators? What are the admission requirements? This program is open to people of all denominations provided they meet the qualifications. The MSCM program requires students to have earned a BA from an accredited college and experience in church leadership and management. Experience is heavily weighted. We seek to foster an environment where students can learn from each other and have back and forth communication on message boards that they can relate to their specific churches. Why is the program being offered mostly online with only a brief requirement at the Villanova campus? We feel that by offering the program online, it offers more people the chance to enroll. This gives the MSCM program a national reach — even international. We have had people apply from all over the country and the world with various backgrounds; among them are a priest from Ireland and a Presbyterian minister in Cameroon, Africa. What is the expected cost to students completing the full MSCM degree requirements? Is tuition assistance available? We expect most students to be supported by their diocese, church or organization. We will also reduce the cost by 25 percent if a student’s church or organization pays for a third of their tuition. It’s important for us to emphasize to churches and religious organizations that church management training is essential. Are there other programs, degrees and certificates offered through the center that focuses on church management that doesn’t require the same amount of time to complete as MSCM? We offer the Summer Church Management Institute, which is an intensive executive education experience that will be held July 7 – 11 at the Villanova Conference Center, Radnor, PA. The institute is intended to offer leaders the latest expert information in sound managerial practices within a faith-based environment. What future programs or projects is the center currently working on? We are planning on introducing a series of nationwide conferences on best practices in congregational technology. That is, we hope to create an environment where church leaders are working together to learn from each other about how to best use technology to manage their churches and religious organizations. Master of Science in Church Management curriculum

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52 The 30-credit MSCM curriculum is designed to be completed in just 24 months, and includes the following: Introduction: Leadership in Religious Organizations/Organizational Ethics/Catholic Social Thought (6 credits)* Civil Law and Church Law for Church Administrators (3 credits) Stewardship and Development (3 credits) Financial Reporting and Controls (3 credits) Human Resource Management in a Ministry Setting (3 credits) Organizational Management (3 credits) Information Technology (3 credits) Church Teaching and Belief (3 credits) Pastoral Strategic Planning (3 credits) *Course commences with an introductory one-week residency on the Villanova University campus, May 2008. This course is a prerequisite for the rest of the curriculum. For more information visit www.villanova.edu/homepage/index.htm.

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February 26, 2008 MBA Roundtable Press Release

The MBA Roundtable Elects a New President The MBA Roundtable, a nonprofit international business school consortium, has elected Rodney Alsup as its new president. Alsup is the former senior associate dean for executive education programs at Kennesaw State University, and currently serves as director of international programs for ASEBUSS, the Romanian-American Postgraduate School of Business. A highly experienced and regarded leader in management education, Alsup has held multiple faculty and administrative leadership roles, published and taught in the field of accounting, and served on advisory boards for the Graduate Management Admissions Council(c), The Association to Advance Collegiate Schools of Business, and the Executive MBA Council throughout his career. "I am extremely pleased and honored to serve as the MBA Roundtable's president," says Alsup. "As business grows and changes, so must graduate management education. Through the collaborative efforts of our growing list of member schools, the MBA Roundtable is uniquely positioned to advance curricular innovation in MBA programs." Alsup succeeds James Danko, dean of the Villanova School of Business, who was elected president for three consecutive terms. Danko played an instrumental role in advancing the MBA Roundtable's mission and reach through membership growth, the launch of the symposium series, and introduction of the new member publication, MBA Innovation. Danko will continue to serve the MBA Roundtable as a member of its board of directors. Founded in 1995, the MBA Roundtable is a unique, collaborative organization that fosters open discussions around the design and delivery of graduate business programs as a way to advance the practice of management worldwide. Delivering information and resources relating to MBA curricular innovation to member schools is at the heart of this mission. More than 150 business schools are members of the MBA Roundtable. The MBA Roundtable

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JONATHAN WILSON / Inquirer Staff Photographer

Detective Sgt. Joseph A. Ryan (left) and Martin Morfin, a senior accounting major at Villanova, review embezzling case data.

February 27, 2008 By Mari A. Schaefer

Delco student interns help fight crime The Delaware County District Attorney's office figured the case against a Swarthmore investment adviser involved perhaps $50,000 in missing funds. But that was before a Villanova University student started going through bank records and discovered one discrepancy after another. They added up to $1.9 million of questionable transactions. Not only did the Delaware County District Attorney's office put the culprit away for five years, but it saved thousands in professional forensic accounting fees. In a program apparently duplicated in few other jurisdictions, undergraduate students from Villanova's business school work side-by-side with detectives from the county's economic crime unit investigating embezzlement, identity theft, forgery and fraud cases. The students have traced more than $5 million in stolen funds since 2004. "What we do in this unit is follow the money," said Sgt. Joseph A. Ryan. Previously, the county would hire professional firms at $150 to $300 per hour. Villanova students earn about $12 an hour. "It was fascinating," said Lauren Schulman, a 2006 Villanova grad. "I got to be part of the whole prosecution.

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55 With the number of white collar crimes increasing along with the cost of each investigation, District Attorney G. Michael Green and Ryan contacted their alma maters to gauge interest from the forensic accounting program. Villanova called back. The students, Ryan said, help with the "nuts and bolts" of combing through "boxes of records" looking for irregularities, allowing the detectives to focus on more typical detective work. The efforts of the program's first co-op student, Matthew Nobel, led to the arrest of Thomas J. Motley, the Swarthmore investor. In 2005, Motley pleaded guilty to 22 counts of fraudulent business practices and securities fraud in two investment schemes and received five years in prison. Nobel is now working at Goldman Sachs, an investment banking and securities firm, in New York. Goldman Sachs would not allow Nobel to comment for this story. "It's real life," said Martin Morfin, 22, a senior accounting major who began the six-month co-op in January. "Before I started I didn't think it would be hands on." Now, Morfin finds himself working side-by-side with the detectives, even going along on interviews as they build their case. He sifts through boxes of records looking for discrepancies in bank statements, charting financial deposits or withdrawals, combing through work schedules and other company or personal records, to spot inconsistencies. He then sets up spreadsheets tying the information together. "We get them involved in every aspect," said Ryan. "They are a member of the team, not an intern." So far, there have been nine undergraduates who have traded the student life for the working life. "This keeps our detectives doing what they do best," said Green. Green does not know of another district attorney's office using students to help with forensic accounting investigations. Neither does David Hoffman, general manager at the National Association of Forensic Accounting. Hoffman is unaware of any other university programs or postgraduate programs in forensic accounting where students get hands on experience. "It is a good way for them to do some investigation work with experienced professionals," said Hoffman. "They are the equivalent of a full-time employee in the D.A.'s office," said Brenda Stover, director of professional development and business institutes at Villanova University. She said the co-op program was far more intense than an internship.

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56 Participants in the program must have taken three required accounting classes, be a finance or economics major, hold at least a 3.0 GPA, and pass a background check and security clearance. They usually complete the co-op in their junior year. Schulman, 23, juggled a 40-plus hour work week, swim team practice and a night class as a co-op student. "After the program, I realized this is something I wanted to get involved in; this is my field," she said. Schulman spent much of her time cross-checking prison computer records with cash log books from defendant Sandra Belt, a prison official at Delaware County jail who was found guilty in 2005 of stealing money from inmate accounts. Schulman, who now works for AlixPartners, a financial consulting firm, said the co-op gave her an edge over other job applicants. "Alix is known to hire experienced professionals, and I got the job right out of undergraduate," said Schulman. Since starting work, Schulman has traveled to China, Japan, Israel, and California for her work. Morfin, of New Egypt, N.J., already has a job lined up with Ernst & Young after graduation. But, the work in this co-op has rekindled an interest in law enforcement and working for the FBI. Or, even law school. "It could be an option down the road," Morfin said.

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March 1, 2008 By Kate Plourd

CSI Pennsylvania A Pennsylvania district attorney uses Villanova accounting students to help root out financial crimes. Some Villanova University undergraduate students are learning first-hand how accounting skills can help take a bite out of crime. Every six months, Pennsylvania's Delaware County District Attorney's office accepts an accounting student from the university's business school into its cooperative work program. The student works in the economic-crime division, scouring the financial documents of people under investigation for everything from fraud to embezzlement. In the past four years, the program has not only saved Delaware County taxpayers an estimated $20,000 a year in forensic accounting and consulting fees, says District Attorney G. Michael Green, but has freed up detectives to conduct more interviews and take on larger caseloads. The program also gives students a unique accounting experience. The most recent student to complete the program, Michael Busby, a finance and accounting major, spent last fall combing through financial records for a fraud case in which the secretary of a sewage-treatment company had been arrested for embezzling almost $1 million over nine years. "It taught me a lot about how accounting is applied in law enforcement, as well as about how different organizations keep their books," says Busby. The program is a rĂŠsumĂŠ builder as well, says Green, who has seen former participants easily land forensic-accounting jobs. "They're investigating individuals who are extremely skilled at perpetrating economic fraud," he says. "Exposure to this field is an experience you can never get in a classroom or at an accounting firm."

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March 4, 2008 By Ian Mount

Slump-busting strategies These small businesses are prepared to thrive - even if recession strikes. As the CEO of Commonwealth Worldwide Chauffeured Transportation, Dawson Rutter painfully rode out the downturns of 1982, 1991, and 2001. Now the Boston-based entrepreneur is putting to work the lessons he learned. He has beefed up his sales staff from five to 14 in the past year because he remembers that competitors who slashed their marketing efforts got killed in 2001. He is concentrating on executive travel because he watched businesses with low-end customers get hit by price wars and defections. And he plans to invest in new cars - beyond the RR.L he just purchased - so he is poised to take advantage of the post-recession boom. "Even if we have to accept more debt to grow, we'll do it," says Rutter, 56, whose firm had $47 million in sales last year. "We don't worry about retrenching." With meager cash reserves and credit, little fat to cut, and a dearth of geographic and industry diversification, small businesses are typically hit harder by a slowing economy than are large corporations. During each of the past three recessions, about 500,000 small businesses closed or went bankrupt, says Villanova School of Business professor John Pearce II, who culled the figure from federal bankruptcy data. While the U.S. has not officially entered a recession (fourth-quarter GDP growth was still positive, albeit an anemic 0.6%), smart entrepreneurs are already planning on one - and the smartest have been doing so for years. In November and December, the National Federation of Independent Businesses optimism index, which has measured small-business attitudes since 1986, fell to lows previously seen only in 1991 and 1993. Each recession hits entrepreneurs differently. Seven years ago, companies in travel and technology got slammed hardest, while this time those involved in real estate are worst off. But today, as in past downturns, some small-business owners - even some in housing and construction - are nimble and savvy enough to thrive. Where others see only calamity, they see cheap credit, bargains on equipment and property, and new opportunities to hire topflight employees. There are a few common themes to their success: They didn't wait for Congress to decide on a stimulus package; they moved quickly to adjust their products and business plans to take advantage of more lucrative niches. Some diversified. Others identified new customers. Almost all cut behind-the-scenes costs.

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59 And the most aggressive, like Rutter, are investing in new technology, equipment, and personnel to seize market share from competitors large and small who entered the hard times poorly prepared. "Recessions are a period of opportunity," says Pearce. "During recessions, large companies abandon marginally profitable customers, and small businesses can get those customers. And recessions are healthy. They reward a history of fiscal responsibility. They discipline the economy for its excesses. And the great thing about recessions is, they end."

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March 10, 2008 By Kim Hart

Text-message spam on the rise The spam messages that have long plagued e-mail inboxes are now finding victims through a more personal route: the cellphone. Text messages are the latest tool for advertisers and scammers to target consumers. But unlike junk e-mail that can be deleted with the click of a button, text-message spam costs money for the person who receives it and chips away at the mobile phone's aura of privacy. "It's so annoying because I get charged every time I get one," said Ryan Williams, 27, of Falls Church, Va., who receives half a dozen spam messages on a daily basis. They ask him to download ring tones, visit questionable sites over his phone's Internet connection or urge him to subscribe to horoscopes or sports-score updates. Williams downloaded a program that was supposed to block texts from numbers not stored in his phone's contact list, but the junk messages still get through. More than 1 billion text messages are sent every day in the United States. U.S. consumers are expected to receive about 1.5 billion spam text messages this year, up from 1.1 billion last year and 800 million in 2006, according to Ferris Research, a San Francisco market-research firm. Those are conservative figures; some estimates are far higher. Verizon Wireless said it blocks more than 200 million spam text messages every month, and cellphone companies are ramping up efforts to shut them out by taking spammers to court and using more sophisticated filters. Spam is often a nuisance, but more malicious messages can lead to a new form of fraud called smishing, a variation of a spam e-mail attack known as phishing. Smishing attacks disguise themselves as legitimate messages from e-commerce or financial sites such as eBay, PayPal or banks, and seek to dupe consumers into giving up account numbers or passwords. Most text messages are sent without any form of encryption, allowing tech-savvy spammers to intercept the messages and get access to personal information, said Larry Ponemon, founder of the Ponemon Institute, a privacy and security research firm. As of 2005, federal agencies banned companies from sending unsolicited commercial e-mail and text messages to mobile phones. To receive promotional material or updates, consumers typically must text a message to a five-digit short code to opt in to the service.

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61 But Simeon Coney, marketing director at anti-spam software maker AdaptiveMobile, said spammers are breaking the law, bombarding cellphone users with unwanted mail that could infect phones and BlackBerrys with viruses. Consumer complaints about text-message spam have been sporadic, according to the Federal Trade Commission, the FBI and Consumers Union. But Coney said his firm is starting to see "overall increases in mobile-spam traffic." The rise of spam could spoil trust in text messaging as a mode of communication, according to Charles Taylor, a Villanova University professor who studies online and mobile ads. "Trust is crucial for an ad to be effective, and the minute you start clogging up cellphones and BlackBerrys, it's a real turnoff and an invasion of your personal space." The revenue generated by data services, such as text messages, has grown along with the consumer demand. About 20 percent of wireless carriers' total revenue now comes from the delivery of text messages, said Roger Entner, senior vice president for the communications sector for IAG Research. Each text message typically costs between 10 and 20 cents, although the four largest U.S. carriers — AT&T, Verizon Wireless, Sprint Nextel and T-Mobile — are rolling out flat-rate plans for text messaging. The carriers said they have rigorous filters to block spam, and they allow customers to block messages from certain numbers. They also try to remove charges for unsolicited spam. "We have every incentive to stop spam texts from getting through, since we end up footing the bill for a lot of it," said Verizon Wireless spokesman Jeffrey Nelson. "The longer a service like text is out there, the bigger the bull's-eye gets."

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March 18, 2008 By Jeannine Aversa

Analysis: Fed's Bold Moves Have Risks WASHINGTON (AP) — There's a risk in Federal Reserve Chairman Ben Bernanke's bold moves of late. If recent history is any guide, the euphoria that met the Fed's three-quarter-point reduction to a key interest rate Tuesday could be short-lived. With a string of urgent and aggressive actions, the Fed itself could end up feeding the panicky mind-set that it so desperately wants to calm. Even inside the Fed there was disagreement about just how much the key interest rate — its most potent tool in dealing with economic trouble — should be lowered. Two Fed members dissented, preferring a smaller cut, while Bernanke and seven others prevailed with a more powerful three-quarter-point one. Cuts of this size are pretty infrequent. Bernanke, in an emergency session in January, ordered one — making for the single-biggest reduction in more than two decades. Wall Street was ebullient Tuesday — soaring 420 points — even as it had hoped for greater relief — a rare reduction of one percentage point. Yet, one wonders just how long the good feeling will last. Wall Street has been largely engulfed in turmoil since last year — swinging wildly at times between relief and panic. In a bid to revive a sagging economy, the Fed dropped its key rate to 2.25 percent. In turn, the prime lendng rate for millions of consumers and businesses fell by a corresponding amount, to

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63 5.25 percent. Both are the lowest since late 2004. It held the door open to the possibility that rates would fall even lower in the months ahead. The Fed's action was the latest in a series of extraordinary moves — many in just the past few days and weeks — that the Fed has resorted to as it seeks to prevent a financial catastrophe that could plunge the country into a deep and painful recession. Yet, it raises the question: can the Fed in its very efforts to contain spreading credit and financial crises, end up also spreading fear? "I think it is true that Federal Reserve actions coming closely one after the other in the last few weeks — while no doubt are helpful for the economy — they carry with them a risk that people will perceive them as involving some slight desperation," said Marvin Goodfriend, economics professor at the Carnegie Mellon University. The Fed's words — not just its actions — matter a lot and can color how people view the economy and their own financial fortunes. On Tuesday, the Fed was blunt in its assessment that the country's economic health has worsened. "The outlook for economic activity has weakened further," the Fed said. "Financial markets remain under considerable stress and the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters." Such words can make people more nervous. The Fed walks a fine line between trying to give the public an accurate picture of what is going on and at the same time not spooking them — or investors. "Saying nothing could also trigger a panic as well" and undermine the Fed's credibility, said Victor Li, an economics professor at the Villanova School of Business. "People would be more nervous if the Fed sat back and did nothing." Still, the Fed's rate-cutting campaign, which started in September, and turned much more forceful in January, hasn't put people into a better frame of mind where they are more willing to spend. Instead, they have hunkered down, adding to the economy's problems. "Maybe the public is saying, the Fed can't really do much about the impending recession," Li said. The Fed's lifelines — through interest rate cuts and other moves — probably won't pull the country back from the brink of its first recession since 2001. Many believe the country has slipped into recession. With jobs harder to come by, most people probably will feel skittish for a while. Employers slashed 63,000 jobs in February, the most in five years. It was the second month in a row of nationwide job losses. The unemployment rate, now at 4.8 percent, is expected to rise to around 5.5 percent later this year. And, many believe the market's volatility will persist for some time, too.

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64 "Volatility is to be expected. You'll have good new one day, bad news another day. The market is trying to find a stable point in being buffeted by good and bad revelations of matters involving credit," Goodfriend said. Just a week ago, Wall Street soared by nearly 417 points — the biggest rally since 2002 — when the Fed unveiled a new and innovative way to deal with the worsening credit crunch, — letting big Wall Street firms borrow up to $200 billion in ultra-safe and much-in-demand Treasury securities and pledge harder-to-sell mortgage securities as collateral. The euphoria, however, was short-lived, and investors fell back into a nervous funk. A few days later, the Fed, in a rare use of authority dating back to the Depression-era days of the 1930s, backed a rescue package of venerable investment bank Bear Stearns, which teetered on the brink of collapse. Wall Street, however, tumbled by nearly 195 points as the Fed's action stoked concerns about the severity of credit troubles and whether other big financial firms might falter. Two days after that — on Sunday — the Fed took more bold actions — including backing JP Morgan's takeover of Bear Stearns and guaranteeing up to $30 billion in troubled mortgages and other assets that brought about Bear Stearns' downfall. Critics contend it's akin to a government bailout. The Fed also Sunday agreed to let big investment houses get emergency loans directly from the central bank for the first time. The new lending facility — similar to one that's been available to commercial banks for years — started Monday and will continue for at least six months. The following morning, stocks around the world fell sharply. Investors remained skittish in the United States, although the Dow Jones managed to finish the day up slightly. The panicky mind-set that has swept over investors since last summer has made credit become harder and harder to get. Financial institutions, which racked up huge losses due to soured investments in mortgage-linked securities, became increasingly wary of lending and hoarded cash. "The menacing beast is not a recession but the credit crisis," said Greg McBride, senior financial analyst at Bankrate.com. "Recessions happen and we'll get through them particularly with the Fed's rate cuts and the government's stimulus (of tax rebates and tax breaks). But without properly functioning credit markets, the economy can't grow. It is like starving a fire of oxygen."

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March 21, 2008 By Bill Frogameni

The pitfalls of shrouded finances Santiago “Charlie” Feliciano spent two decades working as an in-house lawyer for the Cleveland diocese. When he finally left in 2000, he had been the general counsel, Bishop Anthony Pilla’s main legal adviser, for 16 years. Feliciano held one of the top posts in the diocese’s Financial and Legal Office. Yet, talk to Feliciano and he’ll tell you how large swaths of diocesan finance remained a mystery to him. He paints a picture of himself as a man who was inside, but really on the outside. Someone who should have known the details of questionable schemes then being cultivated -- schemes that later mushroomed into the ugliest diocesan-level money scandal to hit American Catholicism in decades. But Feliciano says he didn’t know. “They never let me anywhere near a checkbook,” he said. The Cleveland case may present an extreme example of a lack of financial accountability, but it hardly stands alone. Cases of embezzlement and improper handling of parishioner and diocesan money are so widespread that the U.S. bishops were prompted recently to emphasize the need for controls. But there is little the bishops as a group can do to enforce their own recommendations, since each bishop is autonomous and without oversight when it comes to running his individual diocese. A number of lay groups have attempted to highlight the issue of financial accountability within the church. One group of professionals has put forward recommended standards for accountability. In Cleveland, Feliciano was cut out of policy meetings, where he might have expressed legal opinions about the imprudence of self-dealing or other questionable executive compensation practices. “They should have regularly run things by me, but they chose not to,” he said. The Cleveland scandal, now approaching its last act in federal court, involves Pilla and other top diocesan officials, one of whom, Anton Zgoznik, was convicted last year in federal court and another, former chief financial officer Joseph Smith, who faces his own trial later this year. It was only after Feliciano left the diocese that another insider mailed a stack of financial documents to Cleveland media -- the proverbial smoking gun. It was then, said Feliciano, that he started to get a clear picture of the embezzlement that had been happening more or less under his nose.

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66 If it seems a bit peculiar for a top church insider to be that out of the loop concerning church finances, what can the average parishioner expect to know about the finances of an institution where virtually all control is in the hands of local bishops and the diocese is largely exempt from publicly disclosing its financial operations to the Internal Revenue Service? Special protections In the United States, churches, church auxiliaries and many other religious-affiliated institutions enjoy special financial protections. As nonprofit establishments, they are exempt from paying taxes, although they are still obligated to abide by tax laws regarding accurate accounting, executive compensation, insider deals and so forth. Unlike most secular nonprofits, churches and many religious affiliates are not required to file IRS Form 990, a comparatively simple disclosure that gives a basic picture of an institution’s finances and, perhaps most important, is available for public scrutiny. Within the Catholic church, individual dioceses often have tens of millions of dollars in assets under management. Given the scope of church operations, mandatory public disclosure via IRS Form 990 could make the difference between good stewardship and the kind of fiasco that has rocked the Cleveland diocese. There is a growing awareness in clerical, lay and academic circles that church financial policies need to be improved, but no mechanism exists to force something to be done about it. In January 2007, an advisory committee to the U.S. Conference of Catholic Bishops called for greater internal financial controls at the parish level. The committee recommended the bishops implement several “best practices,” including greater documentation and “prosecution for all cases of fraud in the diocese.” For several years, the bishops’ conference has also had in place detailed recommendations for financial management at the diocesan level. The recommendations, however, remain only that: Canon law and civil law don’t obligate any bishop to answer to his brother bishops in other dioceses. Making the church publicly account for finances is a goal of numerous reform advocates, including Professor Charles Zech of Villanova University’s Center for the Study of Church Management. In 2006, Zech published a study that identified embezzlement in 85 percent of U.S. dioceses for the five years prior to the study. Zech’s study compiled data from the chief financial officers of 78 dioceses who responded to a survey that 174 diocesan CFOs were asked to complete. If the percentage of dioceses reporting embezzlement seems startling, “you can only wonder about those [96] dioceses that didn’t respond to our survey,” Zech told NCR in 2006. Zech thinks the church needs an overhaul to achieve reliable fiscal stewardship. He recommends better internal controls but barring that, he thinks a good start would be to make it mandatory for all incorporated Catholic entities to face the external scrutiny that comes from reporting to the IRS. “There’s no reason why we don’t [file 990 Forms]. ... These forms aren’t that onerous,” said Zech. The ease or difficulty of filing 990 Forms notwithstanding, most nonprofits are required to do so. The most notable exception is for standalone nonprofits (for example, those unaffiliated with other nonprofits) that have gross yearly receipts of $25,000 or less.

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67 Churches are universally exempt from filing. While the IRS is understandably at pains to offer a concise definition of “church,” everyone seems to agree on the generic “house of worship” model. In this sense, a church is a brick and mortar institution where people congregate to practice religion. Beyond that, things get tricky. ‘Loosey-goosey’ laws The IRS, in its literature, distinguishes between “churches” and other “religious organizations,” such as nondenominational ministries and interdenominational or ecumenical organizations. In general, the IRS is reluctant to talk in layman’s terms or even discuss hypothetical examples of religion in action. That may largely be because the IRS faces great political pressure when it comes to religion, says a U.S. Senate tax aide who asked to remain anonymous. The agency’s reluctance may be compounded because “the tax-exempt laws generally are very loosey-goosey,” according to the aide. So how is the government, or even a Catholic bishop, supposed to define reasonable compensation for key executives of a church? Difficult as that question is to answer, it’s even more difficult, given the lack of mandatory public oversight regarding religion, to identify financial wrongdoing in the first place. “It’s hard for the public to understand ministries’ expenses because they’re not required to file public disclosure of their activities, while other nonprofits have to file a Form 990 that offers some information about their activities,” said Iowa Republican Sen. Charles Grassley, the ranking member of the Senate Finance Committee, who is conducting an investigation of six (nonCatholic) televangelist ministries. Grassley isn’t yet making the leap to advocating mandatory 990 filing for all nonprofits. “But, in general, more transparency helps the public understand how tax exemption is used,” he said. Since the widespread exposure of the clerical sex abuse crisis in 2002, Catholic reform groups such as Voice of the Faithful have advocated sweeping changes in church governance and transparency. In response, some dioceses have begun to make financial statements publicly available. The reports are sometimes compiled by outside accounting firms hired by the dioceses, but the reports -- when dioceses provide them -- are under no obligation to reveal the diocese’s finances with the kind of detail required by IRS Form 990. Unlike the 990, the self-reports of dioceses are typically meaningless, said Tom Gallagher, a Catholic and former Wall Street securities lawyer. Gaping holes “Any seasoned pro can look at the audited financials most dioceses put out and find gaping holes,” said Gallagher, who favors mandatory 990 filing. To illustrate his point, Gallagher dissects the 2005 and 2006 financial statements of the Los Angeles archdiocese, which are available on the archdiocese’s Web site. Digging through the footnotes, Gallagher questions the consistency and transparency of the audit on several points. One notable omission is a breakdown of salary and benefits for key employees -- including Cardinal Roger Mahony. Were 990 filing mandatory, every American diocese would have to list its top employees and their compensation. Gallagher thinks that would constitute a positive step toward discouraging bishops and others who control the coffers from excessively compensating themselves. The same

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68 dynamic would work in parishes incorporated separately from their parent diocese or other Catholic entities, such as schools below the college level and religious orders, which are currently exempt from filing. In addition to providing a detailed image of a nonprofit organization’s financial status, the 990 requires disclosure of the compensation of each officer, director, trustee and key employee. Likewise, the 990 requires disclosure of the compensation of the top five highest paid contractors employed by the nonprofit. This requirement could be helpful in identifying artificially inflated contracts and scuttling kickback schemes, said Gallagher. One can only speculate what effect this latter provision might have had on the $17.5 million in contract work that Cleveland’s Joe Smith, the former diocesan financial officer, steered to his friend, the now-convicted Anton Zgoznik. The 990 is “the one document that gives you a snapshot of the health and wellness of an organization” said Gallagher. To Gallagher’s mind, there’s much to gain and little to lose if tax disclosure becomes mandatory for all nonprofits. But unless lawmakers muster the political will to make that happen, Cleveland Catholics are unlikely to get a complete picture of how their church fell into a financial quagmire. And Charlie Feliciano, the Cleveland diocese’s former top lawyer, will still be scratching his head, wondering exactly what happens after the basket goes around on Sunday.

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March 26, 2008

Radio merger waiting on FCC Now that the Justice Department has endorsed the $13 billion marriage of XM Satellite Radio and Sirius Satellite Radio, all eyes are on the Federal Communications Commission, which could hinge approval on one or more conditions. So far, District-based XM and Sirius of New York have introduced an "a la carte" programming scheme that includes packages priced at less than the companies' existing $12.95 monthly subscription fees. The companies also promised to introduce "interoperable" radios capable of receiving both signals. But a slew of proposed merger conditions from interested parties have cropped up in recent months. Private equity group Georgetown Partners wants the commission to require a combined XM and Sirius to lease one-fifth of their total channel capacity and infrastructure to a "totally independent and unaffiliated third party, such as Georgetown, to remedy the anti-competitive monopoly that would otherwise result," according to the company's FCC filing. HD Radio pioneer iBiquity Digital thinks any new satellite-radio receivers should be equipped to play both over-the-air broadcast radio and HD radio, a requirement it says should last for three years in cars and one year for stand-alone radios. The nonprofit Media Access Project urges any approval to be contingent on the company relinquishing half its spectrum, which would be used as either a set-aside for educational programing, leased to another commercial firm or returned to the FCC for a federal auction. D.C. public interest group Public Knowledge likewise calls for a set-aside (5 percent of channel capacity) for educational broadcasters, but also urges a three-year freeze on the new company's combined programming. Those groups and others endorse a proposal from U.S. Electronics, which makes car devices, that calls for an "open access" condition to force the companies to allow any hardware manufacturer to make a satellite-radio receiver. Of all the wish lists, Clear Channel Communications' appears to be the longest. The radio giant wants half of the satellite-radio spectrum to go to a competitor, as well as a 5 percent "public interest set-aside." Clear Channel also wants a prohibition on local programming and local advertising revenues. Like iBiquity, it wants HD radio receivers embedded in satellite-radio

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70 receivers. Clear Channel's most ambitious request is that satellite-radio content — which unlike broadcast is based on a pay-to-play model — be subject to broadcast indecency standards. The Justice Department on Monday approved the merger with no conditions, concluding it is not likely to harm consumers. The FCC proceeding is separate, but the agency typically is influenced by the department's assessment of market conditions. Alan Dozinger, a professor at Villanova School of Business, said the FCC likely will consider issues affecting satellite subscribers, such as pricing and equipment. The companies have said that no radios will be made obsolete by the merger, but Mr. Dozinger noted that XM uses geosynchronous technology and Sirius uses a low-orbit satellite. "It won't be so hard for [Sirius and XM] to satisfy future subscribers, but what are they going to do about the 17 million people who already have these systems? I suspect the FCC will put something down on that," he said.

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March 31, 2008 By Joseph Weber

Not So Fast, Mr. Paulson The Chicago Mercantile Exchange objects strenuously to the Treasury Secretary's regulatory reform plan—and it's not afraid of a fight As Treasury Secretary Henry Paulson labors to overhaul the U.S. financial regulatory system, he could run into a buzz saw in Chicago. The broad-shouldered folks who run the Chicago Mercantile Exchange (CME) have handily fought off would-be interlopers in the past, whenever their freedom to do business as they like has been threatened. They blew away critics who said their board was too heavily packed with exchange-industry insiders, for instance. For years, they've shoved aside competitive threats from rival exchanges that tried to make inroads into their business. And they beat back a competitor that tried to thwart their purchase last year of the Chicago Board of Trade. They may just do the same now with the latest threat to the status quo for the CME: Paulson's farreaching reform plan. Longtime observers argue that the parts of Paulson's Mar. 31 plan that could sharply rein in the free hand CME generally has are doomed. Most conspicuously, the idea of creating a new superagency that would put the CME's Washington overseer, the Commodity Futures Trading Commission (CFTC), under the same roof as the Securities & Exchange Commission (SEC), the stock-trading watchdog agency, is getting a chilly reception. Charges of Lack of Understanding The CME wasted no time in picking up the gauntlet Paulson threw down. A statement hurried out to respond to the former Goldman Sachs (GS) chief thundered against "an overly homogenized, less effective, and less competitive model" of regulation that it suggested could emerge from the Paulson plan. The outfit added pointedly that CME officials would work closely with all parties to make sure different regulatory approaches—one for its futures world and one for the stock world—are preserved. Exchange officials even got personal, saying Paulson's suggestion that certain rules governing stocks and futures ought to be "harmonized" reflects a lack of "sufficient understanding" of differences in the markets. Blending them, it warned "is certain to cause more harm than good." Indeed, the CME leaders hailed points Paulson made that seem likely to delay—or kill altogether—the idea of putting stock and futures exchanges under a single regulator. They welcomed the Treasury's suggestion that an SEC-CFTC merger required further study and isn't a short-term move, for example. And they agreed with Paulson's suggestion that the heavily rulesoriented SEC ought to shift to the lighter-touch governing philosophy, a so-called principlesbased approach espoused by the CFTC. "Principles-based regulation in U.S. futures markets has spurred unparalleled growth, innovation, and competition," the CME leaders said.

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An Alliance of the Regulator and the Regulated The CME's tack is being echoed by leaders of the CFTC, whose gentle regulatory touch certainly has helped the exchange become the world-beating bourse in futures. While the creation of a single regulator could bring efficiencies, CFTC Acting Chairman Walt Lukken said in a statement, he warned that any reform "must preserve the benefits of the CFTC's principles-based model and recognize the distinct functions of the futures markets and the mission of the CFTC." One particularly outspoken CFTC commissioner went even further in carrying the CME's message forward. "What I don't hear is a call from the countryside for moving boxes around in Washington, D.C., or the need for some omnipresent super-regulator," Commissioner Bart Chilton argued. "We shouldn't be about trying to cure what isn't sick." Lukken even took the chance to toot his horn for the CFTC, which some observers say has a potent instinct for self-preservation and wouldn't want to disappear into the SEC: "The CFTC is a world-class regulator because of its focused mission, market expertise, manageable size, problemsolving culture, and global outlook—all of which may be jeopardized with the creation of a larger regulatory bureaucracy." Industry observers say officials at the CFTC and the CME share a common interest in ensuring that little really changes. "There may be strong vested interests to stay with the status quo," says Michael Pagano, a professor of finance at Villanova University who follows the exchanges. "That is what has defeated things in the past." Worlds Blurring, Converging Still, the financial meltdown that has swept away Bear Stearns (BSC) and is now threatening much of Wall Street could reorder the alphabet soup of agencies in Washington—if Paulson can overcome the power of united bureaucratic and commercial interests. Pagano argues that distinctions between the stock and futures worlds are blurring, and he points to the CME's recent acquisition of Credit Market Analysis, a London outfit that will let the CME move into the over-the-counter world for credit derivatives. Such products, he says, are similar to the structured financial products involving mortgages that got Bear Stearns and other investment banks in big trouble. Moreover, some of the players in the battle over the regulatory overhaul are lining up on different sides. NYSE Euronext (NYX), for instance, supports Paulson's plan. The parent of the New York Stock Exchange argues that "greater regulatory convergence, in the U.S. and abroad," would better serve U.S. capital markets, a spokesman for the bourse says. It'll be tough to achieve in the short-term, the New York exchange argues, but would be worthwhile over time. NYSE Euronext has its own vested interest in such "convergence." While the CME has largely stayed out of the stock markets, NYSE Euronext is increasingly moving into futures and derivatives. It has a big futures operation in Europe, picked up a big options business—another form of derivative—by buying the American Stock Exchange, and is now buying the gold and silver futures business of the CME's Chicago Board of Trade unit. NYSE Euronext would prefer to deal with a single regulator, rather than answer to two separate masters. Commonly in Europe, it deals only with single regulators in both arenas. Change-Resistant Forces

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73 Even if a single superagency emerges in Washington, just how powerful it will be is hardly clear. Some analysts say the regulatory overhaul could wind up weakening the SEC, on whose watch Bear Stearns collapsed after all. Sandler O'Neill & Partners analyst Richard Repetto argues that the CFTC's "principles-based" tack is likely to prevail and that any combination of the CFTC and SEC wouldn't be an "automatic negative" for the exchanges. In the end, however, the lame-duck Bush Administration and its lame-duck Treasury Secretary almost certainly will wind up handing the idea of such reforms over to the next Administration. "Right now, we're just looking at something that is just a discussion piece," says Zacks Investment Research analyst Charles Rotblut, who is skeptical that any real change will take place. As the discussion proceeds, the powerful lobbying forces of the CME and other big players will surely press their cases against too much change.

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April 1, 2008 By Jack Pearce

Retaining Patent PROFITS; When patents expire, profits fall. But, there are some strategies to get more mileage out of branded pharmaceuticals. Dr. John A. Pearce II - VSB Endowed Chair in Strategic Management and Entrepreneurship, Villanova School of Business, Villanova University The principal consequences for an expired patent holder are that its product loses market share and considerable profitability in a very brief period. Fortunately, for the holders of expiring patents, innovative strategists can create options to forestall the company’s loss of profits— specifically the preemptive launch of a generic, layering innovations, and line extensions. Once a brand-name manufacturer loses patent protection for a profitable and popular product, generic substitutes capture the majority of the market because they are typically priced 25% to 70% lower than their brand-name equivalents. The experience of Bristol-Meyers Squibb (BMS) typifies the dramatic impact that generic products can have on competition after patent expiration. The patent on BMS’s Glucophage, which had sales over $2 billion in 2001, expired in January of 2002. One month later, more than 85% of that drug’s market share had been taken by generic alternatives. Strategy 1: Preemptive launch of a generic To combat loss of revenues to new competitors, a drug originator can introduce its own generic prior to its drug’s patent expiration. Using an “authorized generic,” the branded pharmaceutical company gives permission to a preferred generic firm, or its own generic subsidiary, to sell and possibly to manufacture an authorized version of the drug. This authorized generic is then launched on the same day as the first generic competitor, thereby effectively eliminating the 180 days of marketing exclusivity provided by the Waxman-Hatch Act of 1984. Brand-name pharmaceutical companies also have the unique ability to market a generic version of a patented drug before the expiration of the patent. They approach customers with a generic version of their own patented drug at a substantially reduced price for a contract period that extends beyond the patent expiration. Customers are attracted because such contracts make irrelevant any concerns that they have about the availability or quality of a future competitor’s generic substitute, and because such contracts cut their drug costs immediately. Despite its shortterm revenue forfeiture from the loss of monopolistic profits, the brand-name firm also benefits. It “locks-in” customers at a higher than generic price for a set period following patent expiration when the likely alternative is to lose those customer accounts altogether.

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75 For example, Upjohn succeeded in retaining control of 90% of the generic market for its patented drug Xanax by introducing its own generic over-the-counter version one month before the Xanax patent expired. Upjohn was aware that it is a common practice among pharmacies to stock the first generic substitute that becomes available and to stay with that generic even in the advent of a second generic. Effectively, Upjohn traded one month of sales at its high patent drug price for years of generic drug sales at 90% of its previous level, albeit at a substantially reduced price. An authorized generic also makes sense from the perspective of the theory of complementary assets. A patent-holder and an independent generic manufacturer can share benefits from an exchange of capabilities: the preservation of the pharmaceutical company’s market power and the avoidance of duplicative commercialization investments, specifically those associated with manufacturing, marketing, and distributing a generic. Branded firms generally regard their production facilities as far too valuable for the manufacturing of high-margin, patented drugs to commit them to generics. Symbiotically, generics manufacturers, which commonly have excess production capacity awaiting the release of drugs from patent protection, pin their survival on access to the markets that the branded firms have controlled. By partnering to produce an authorized generic, the complementary assets of branded and generics firms can be optimally deployed for mutual benefit. Strategy 2: Layering innovations The second pre-expiration strategy for pharmaceutical manufacturers involves layering patents one upon another by patenting innovations on a base drug to maintain an exclusive market position. The result is an enhanced product that enjoys a monopoly market guaranteed by additional periods of patent exclusivity. The FDA grants such periods in recognition of significant innovations, including alterations in active ingredients, strength, dosage form, route of administration, or conditions of use. Other forms of patentable innovation involve alternative delivery methods for a drug, such as offering a tablet, a time-release capsule, an injectable, or an ointment as a substitute for an original patented capsule. FDA exclusivity periods range from six months to seven years, but all have the same effect in that no generic drugs can be approved during the protected time span. In 1996, AstraZeneca obtained three years of exclusivity based on the patenting of a preservative added to the drug Diprivan. This exclusivity was granted as the patent protection on Diprivan expired and delayed the approval of a generic version submitted by Sicor, a subsidiary of Teva Pharmacueticals USA. Manufacturers of brand-name pharmaceuticals have one more special extension option available. Since 1998, the Department of Health and Human Services has given makers of more than two dozen brand-name drugs an extra six months of market exclusivity as an incentive for them to conduct clinical trials to determine how well their medicines work in children. Pediatric clinical trials typically cost the patent holder several million dollars, but can protect many millions of dollars in additional sales as was the case with the ulcer drug Prilosec that earned $11 million a day under extended patent protection for AstraZeneca, the patent-holder. Strategy 3: Line extensions Another strategy for pharmaceutical companies is to promote revised versions of the original drugs through line extensions. The goal is to switch current users to a new version of the drug before generic introductions of the old versions can appear on the market. Eli Lilly negated much

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76 of its lost revenues from the patent expiration on Prozac by getting FDA approval for Sarafem, which is a new name for fluoxetine, the active chemical in Prozac. The principal consequences for an expired patent holder are that its product loses market share and considerable profitability in a very brief period. — Dr. John A. Pearce II, Villanova University approved by the FDA to help hair loss in men, under the name Propecia. GlaxoSmithKline’s antidepressant Wellbutrin was given the additional name, Zyban, and marketed as a cigarette smoking-cessation medication. Forest Labs used a line extension when it abandoned its antidepressant drug Celexa, even though it had two years of patent protection remaining. Its 2,300 sales representatives were retrained to promote Lexapro, which is nearly identical in chemical composition to Celexa. In its first six months on the market, Lexapro grabbed 10% of the $8 billion antidepressant market. Lexapro is a “me-too” drug, i.e., a slight modification on an existing drug that allows its maker to seek a new commercial patent to replace sales lost when the initial patent expires. This highly successful strategy of Forest Labs was different from one that involves the layering of patents because the intent was not to extend the life cycle of the base product but rather to replace the original with a “new” drug that would begin a new lifecycle of its own. In an interesting twist on line extensions, holders of expiring patents can apply to the FDA for approval to make new claims that help reposition a familiar drug. This tactic worked for BMS when it repositioned Excedrin as Excedrin Migraine and for Johnson & Johnson’s McNeil Consumer Healthcare when Motrin was promoted as Motrin Migraine Pain, despite the fact that the active ingredients in both products remained the same. The potential of pre-expiration strategies The preemptive launch of a generic product by the patent holder is particularly promising when the firm can contractually commit major purchasers of the product for multi-year periods. Locking-in important purchasers helps to guarantee a sizable income stream for the patent holder, keeps its production costs low, and dissuades generic firms from entering the market because it makes economies of scale more difficult to achieve. Layering innovations usually forces a patent holder to face a scaled down version of its original R&D decision, namely, should the firm invest in a new undertaking given the market potential that a new or distinguishably improved product provides. The layering decision usually involves lower risks of product failure and market rejection. However, it also usually forecasts lower financial returns than the initial product investment because consumer and competitor options have likely changed in their favor during the interim time period. Creating a line extension is attractive when market niches have been identified that would welcome a tailored version of the product. Since such extension must usually be financially selfsufficient, a patent holder would want to attend to the needs of a market splinter only when the number of customers was sufficient in size or financial wherewithal to support the additional costs incurred by the firm in developing and marketing a specialized version of the product. Dr. John A. Pearce II is the VSB Endowed Chair in Strategic Management and Entrepreneurship at Villanova University. He is an active consultant to pharmaceutical firms and an experienced expert witness.

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April 1, 2008 By Lisa Sodolo

Not-for-Profits Reap Rewards From health to human rights and children’s welfare to wildlife, non-governmental or notfor-profit organizations play a vital role in promoting business and public interests in China. Early this year, the Hong Kong Red Cross provided emergency supplies to 200,000 people affected by the disastrous snowstorms that hit China. Non-governmental organizations (NGOs) such as these are key providers of our public services here and rank third after the government and businesses. The first NGOs entered China during the late-1970s and according to Xinhua, China’s state news agency, there were approximately 354,000 officially registered NGOs in China in 2006. As the number of NGOs in China has grown significantly over the last two decades (confirms the World Bank), so has their contribution to China’s socio-economic development. In China, the term ‘NGO’ extends to public schools and universities, scientific research institutes, private not-for-profit hospitals – all of which have links to the government – as well as fundraising charities and non-profit making support service/campaign groups. Strictly speaking, NGOs are not classed as businesses and they cannot make profits. “NGOs are private, not-for-profit organizations that aim to serve a particular public interest,” clarifies Jonathan Doh, a professor and expert in NGOs at Pennsylvania’s Villanova School of Business. “As opposed to growing and expanding a business, they are working to resolve a broader challenge in our society.” NGO Challenges But many challenges still face NGOs in China, particularly compared to the generally business-friendly climate. There are unclear regulations on how to register an NGO, and rigid operating rules for both domestic and international organizations. At the same time, the Chinese government has given the impression of welcoming NGO activities in the country. Although NGOs are not classed as businesses, they generally have business-like managerial practices. “Our managerial activities are very similar to a company,” says Duan Defeng, communications coordinator in Beijing for Oxfam Hong Kong, an NGO that has been in China since 1987 offering support with livelihood, disaster management, health issues, and basic education. Operating an NGO involves budgeting, human resource management, delivery and evaluation of services, and fundraising strategies – common requisites for businesses. Non-governmental organizations are diverse in the interests they serve. They often employ volunteers, but are typically staffed by paid employees with a wide range of skills, from

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79 accountants and scientists to doctors and fundraising managers. Recruitment for paid positions is a competitive process. “It rivals that of major corporations with candidates having to meet requirements based on qualifications and years of work experience,” according to Rhea Leung, corporate communications manager for the Hong Kong Red Cross, which has been providing services such as disaster relief and blood donation promotional projects in China since the 1990s. Getting Registered Despite the Chinese government’s somewhat cautious, regulatory controls, many NGOs still prefer to register officially. (The Regulations on the Registration and Administration of Social Organizations (RRASO), adopted by the Chinese government in 1998, is the main legal document, states a Reuters report.) NGO registrations are supervised by the Ministry of Civil Affairs, and the registration process requires a government sponsor. The capital required for Chinese national level NGOs is 14,000 USD and can be as high as 2 million USD for foreign organizations. Although registration is compulsory for both national and foreign organizations, the presence of non-registered NGOs seems to be tolerated. “We’re trying to register now,” explains Duan of Oxfam Hong Kong, an NGO active in China since 1987. Additionally, the government reserves the right to review the activities of any NGOs operating in China. However, there are signs that the government’s attitude is opening towards NGOs that provide practical services with real value to the local communities, according to Save the Children UK, an international NGO dedicated to children’s rights in China since 1920. Accountability and Funding – Major Issues In China, NGOs cover a diverse range of interests, services and issues. Health, labour, human rights, children, women, ethnic minority communities, wildlife, conservation and the environment are catered for in the NGO spectrum. It’s often difficult, yet important to judge successes. At World Wildlife Fund (WWF) China, a conservation NGO working in China since 1980 with over 40 projects from restoring the Yangtze River wetlands to environmental education and panda conservation, a board of directors and committees makes assessments. Other NGOs choose to collaborate with external auditors for accountability of many of their activities. “We work closely with government partners such as education authorities and civil affair departments to achieve long-term sustainability,” said a Save the Children UK spokesperson. Vital links have been forged between NGOs and international and local businesses to expand the NGOs reach and network. For example, “Carrefour has supported WWF by disseminating campaign messages throughout its store,” says Linnet Kwok, deputy head of marketing for WWF China. The French retailer is also an alliance member of WWF China where they provide funding to support conservation projects in China. Budgets for NGOs vary greatly. Oxfam China had an annual budget of 7 million USD from 2006 to 2007, but the Hong Kong Red Cross had 45 million USD for the same period. The source of funding also varies, and raises questions of independence. At the WWF, 70 per cent of their funding is contributed by individual donations, with the remainder provided by government aid agencies, private companies and foundations. Some NGOs, such as Greenpeace, refuse any governmental or corporate support in order to prevent any perception of outside influence. Funding is the major issue for NGOs, even if they only aim to stay at the grassroots level. Non-governmental organizations maintain tight budgets but profit is never a goal; their only mission is to continue to serve their key stakeholders, and to address a specific or environmental problem, according to Doh of Villanova School of Business. “For instance,

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80 WWF was founded to bring attention and respond to the global environmental threat,” says Doh. Since the 1970s, the wealth disparity between urban and rural dwellers has been growing. The United Nations Development Programme states that a Chinese citizen living in an urban area earns on average 1,000 USD annually, compared to 300 USD for their rural counterpart. In this context, NGOs are a welcome complement to government services and aid as well as a substitute for absent businesses. “International NGOs can bring knowledge, expertise and insight regarding various issues,” affirms Doh. Geographically, NGOs that deal with poverty have a strong presence in western China, which has yet to experience the phenomenal growth of the eastern coastal regions. “We chose western provinces like Guizhou, Yunnan, Guangxi, Gansu because they are the poorest areas in China,” explains Duan Defeng of Oxfam Hong Kong. In developed urban areas such as Beijing and Shanghai, NGOs provide services to migrant workers, orphans, and the elderly. NGO numbers have increased as these employees and devotees work to spread their message. From WWF China’s joint efforts with corporations in helping local communities build sustainable living conditions or Greenpeace China urging restaurants to stop using environmentally unfriendly disposable chopsticks, they’re here to stay and we need them more than ever.

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April 5, 2008 By Rachel Zoll

Pope Will Find Diverse Church in US In his visit this month to the United States, Pope Benedict XVI will find an American flock wrestling with what it means to be Roman Catholic. The younger generation considers religion important, but doesn't equate faith with going to church. Many lay people want a greater say in how their parishes operate, yet today's seminarians hope to restore the traditional role and authority of priests. Catholic colleges and universities are trying to balance their religious identity with free expression, catching grief from liberals and conservatives in the process. Immigrants are filling the pews, while whites are leaving them. Nearly one-third of U.S. adult Catholics are now Hispanic, and they worry about being considered a separate, ethnic church. Despite these divisions, Catholics across the spectrum of belief have been energized by the pope's trip. The man who was once responsible for enforcing adherence to Catholic doctrine isn't likely to do much scolding. Instead, he's expected to recognize the relative vibrance of the American church, while emphasizing core Catholic values: the reality of absolute truth, the relationship between faith and reason, love for the faith. "I think he's going to come in and try to inspire. As pope, he's really taken the positive track on a lot of issues. I don't think there's any reason he wouldn't continue to do so now," said Dennis Doyle, a theologian at the University of Dayton, a Marianist school in Ohio. Benedict has traveled to seven other countries since he was elected in 2005, but a papal journey to the U.S. is like no other because of the church's size and influence. In a nation founded by Protestants, Catholics comprise nearly one-quarter of the population. Catholic America is the biggest donor to the Vatican. The U.S. also is home to more than 250 Catholic colleges and universities. There's an added urgency to this visit. While it will be Benedict's first trip to the country as pope — he made five visits when he was Cardinal Joseph Ratzinger — it may also be his last. He turns 81 during his April 15-20 visit to Washington and New York, and he has less interest in travel than his globe-trotting predecessor, Pope John Paul II. Americans don't know much about Benedict. But surveys conducted ahead of his visit found three-quarters of U.S. Catholics view him favorably. They are clamoring to see him.

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82 "I get 30 to 40 requests a day to get into the speech he's going to give at Catholic University," said the Rev. David O'Connell, president of Catholic University of America, where Benedict will address leaders of the nation's Catholic colleges and universities. "There's a fascination with Pope Benedict, perhaps it is because there is more mystery about him." They have less enthusiasm for religious observance. About one-third of the more than 64 million U.S. Catholics never attend Mass, and about onequarter attend only a few times a year, according to a 2007 study by the Center for Research in the Apostolate at Georgetown University. A majority never go to confession or go less than once a year. The generational split is stark: About half of Catholics born before the 1960s say they attend Mass at least once a week, compared to only 10 percent of those born since the 1980s. One of Benedicts' core goals is strengthening Catholic culture to combat these trends, stressing the importance of religious life, and observing Holy Communion and other sacraments. Beyond religious practice, young and old American parishioners hold vastly different worldviews. Older Catholics who remember the Second Vatican Council of the 1960s are still debating its modernizing reforms. The council changed everything from the role of lay people to the direction priests face while celebrating Mass. Benedict has revived some traditions and prayers that had been largely abandoned since Vatican II, refueling the debate. But young adult Catholics are fed up with the fight, according to James Davidson, a Purdue University sociologist of religion who studies American Catholics. "They've become very impatient, and probably rightly so, with older generations, who see everything in terms of conservative-liberal, liberal-conservative, who they see as sometimes enjoying the ideological battle, even if it doesn't get them anywhere," Davidson said. "Problems aren't being solved, but people are yelling at one another." The next generation of priests generally hold that same outlook. Monsignor Thomas Nydegger, vice rector of the Immaculate Conception Seminary School of Theology at Seton Hall University, said seminarians today are reaching back in Catholic tradition — like Benedict does — for rituals and clerical garb they find inspiring. But they blend that interest with modern church goals: to serve parishioners and the larger community and to reach out to people of other faiths, he said. "There is a great sense of the pastoral needs of the people of our parishes — the sick, the dying, the people dealing with tragedies in their lives," Nydegger said. "They want to reach out and let them see that the church embraces them."

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83 Unfortunately, their numbers don't match their zeal. The priesthood has been shrinking for decades. More than 3,200 of the 18,600 U.S. parishes don't have resident priests. Some dioceses are now hiring recruiters to travel overseas to find clergy candidates. The number of priests from other countries is growing so steadily that Seton Hall and other seminaries have been adding English classes, hiring accent reduction tutors and developing courses explaining U.S. culture — inside and outside the church. After ordination, the men are finding fewer resources to support their work. While U.S. Catholics donate the most to the Vatican of any country, they donate to the local church at about half the rate of Protestants, according to Chuck Zech, a Villanova University professor who studies church finances. Church buildings are aging and are badly in need of maintenance. As the Catholic population grows in the South and West, new parishes are needed. Many dioceses still haven't adjusted to the loss of free labor from nuns and priests, and are paying such low wages that turnover in schools and for other church work is high, Zech said. The Lay Faculty Association, a teachers' union, recently authorized a strike at 10 New York-area Catholic schools during Benedict's visit. Beyond the daily expenses, dioceses have been paying out hundreds of millions of dollars in claims since the clerical sex abuse crisis erupted in 2002. Abuse-related costs for the church since 1950 have surpassed $2 billion. One visit from Benedict won't solve the problems of the American church. But by coming to the U.S., he can show Catholics — even briefly — what it might be like to be truly united by faith.

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April 27, 2008 By Henry J. Holcomb

Slight Correction in Career Plans A few months ago, Brad Kleinman, 22, was feeling good. He was about to graduate from Villanova University with a degree in finance, and he had a good job lined up at Bear Stearns. "Then Bear's stock tanked," he recalled the other day, sharing how he lived through the collapse of the iconic Wall Street firm. Classmate Kate Finley, 21, who gave up plans to become a doctor when an internship gave her a taste of Wall Street's competitive atmosphere, learned that Bear's stock was sinking while she was studying for a midterm exam. She spent the weekend with a computer in her lap, poring over news reports about her future employer. Their anxiety was short-lived. Within two days, Bear executives called with encouraging news: They'd probably have jobs at JPMorgan Chase & Co., the firm that is taking over Bear. They were hired within two weeks. They quickly regained confidence that Wall Street would remain the place to be for finance majors for years to come. If the credit crisis leads to more regulation, that will mean even more jobs. And rapid development overseas will mean even more money to manage, more opportunities to use skills that long have been a hallmark in the free-market United States. Still, the students, at the urging of their deans, professors and placement officers, are taking the economic uncertainty to heart. Finance and accounting majors once looked forward to picking from among several offers. Now, they are planning to network more and develop a broader range of skills and interests to reduce the risk of future unemployment. Recent college graduates fare better in a weak economy than those without degrees and laid-off older workers. "If you look at the March unemployment rate, it was 5.1 percent. But it was only 2 percent for those with a bachelor's degree," said Beth Paulin, associate professor of economics at LaSalle University. "Banks, large companies and consulting firms rely on the university talent pipeline," said Patricia Rose, director of career services at the University of Pennsylvania. "In the last recession - late 2000 through 2002 - some companies rescinded offers, and that hurt their reputation on campus." Joseph A. DiAngelo, business dean at St. Joseph's University, agreed. "It took a while to build back the bond they had with students and faculty," he said.

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85 Rescinding offers also causes a ripple of problems, Rose said. When people were ready for promotions, no one was ready to replace them. Finance and accounting graduates are among the first hired, usually in the fall before June graduation. Hires for marketing and other jobs come much later, placement officers said. Campus placement centers report that most finance majors are getting hired, though in some cases later than they would in good times. A spokeswoman for Goldman Sachs said they were honoring all job offers. They are hiring 1,700 interns and about 1,800 analysts this year, about the normal amount. Bank of America would not disclose how many new graduates and interns it has hired. But spokeswoman Kelly Sapp said the firm was honoring all offers and filling vacant positions. "We are active on campus," she said, "seeking to deepen relationships and be the employer of choice." JPMorgan said it was honoring job and internship offers Bear made before its collapse, except in investment-banking areas that were being eliminated because they would duplicate existing operations. Those whose full-time job offers JPMorgan won't honor are allowed to keep their signing bonuses and relocation allowances, and the company is helping them find jobs elsewhere. JPMorgan will pay the interns it cannot use, if they work for nonprofit organizations. Those who do that will be considered for employment after the internships. Even finance and accounting majors who haven't yet found jobs are optimistic. At Drexel University, Eric Meyer, 27, who grew up in Harrisburg, didn't get the Wall Street capital analyst position he wanted, and he has expanded his search to other finance-related jobs. He "has a good lead in Baltimore" and is working to develop others. "You live and learn, take what you can get, and get experience you can apply when the job you want opens up," Meyer said. Some who didn't get the Wall Street job they wanted were seeing advantages in the jobs they did get as places to learn while investment banking recovered. Drexel's Warren Bloom, 28, who grew up in Huntingdon Valley, took a leadership-development job with a corporation instead. He's excited about the overseas experience it will offer. Jason Weber landed a vice presidency at a smaller brokerage. He sees the problems at big firms as a grand opportunity to "create business and bring in revenue," using the entrepreneurial training he gained getting a master's of business administration at Drexel. The students say watching the credit crisis unfold has taught good lessons. "You've got to be more careful with the risk you take on," said Kleinman, "and you've got to be more careful about new products."

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86 In the future, said Alexander Zozos, 23, of Villanova, "the people who survive are the ones who can look past the current state, look at the long term and remain professional." Meanwhile, DiAngelo, the St. Joseph's dean, is giving faculty members summer fellowships to build ethics lessons into courses they teach. Villanova has revised its curriculum to better integrate finance, accounting and operations. Professors from different disciplines will team-teach courses that blend multiple disciplines. This is designed, said James M. Danko, dean of the business school, to give students a clearer picture of the relationship of these disciplines in the real world and to help them avoid becoming a part of something like the Bear Stearns collapse.

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April 28, 2008 By Brian Blackstone

Fed Looks Set to Enter New Cycle It’s time for Ben Bernanke, a noted basketball buff, to show Wall Street his pivot move. After an unprecedented three-month period of fastbreak policy easing and credit market intervention — when the Fed threw half-point and even three-quarter-percentage-point cuts in the fed funds rate at the economy and markets — the cycle appears to be reaching an end. In what must be a pleasant surprise to Bernanke and his FOMC colleagues, Wall Street seems OK with that. The Federal Open Market Committee is widely expected on Wednesday to reduce the target fed funds rate at which banks lend money to each other, but by only 0.25 percentage point to 2%. Officials have already lowered fed funds by three percentage points since September, including two percentage points over a two-month period between January and March alone. Many Wall Street firms expect the Fed to take an extended pause after this week and gauge how the mix of fiscal and monetary stimulus in the pipeline, as well as the Fed’s recently created credit mending facilities, affect the economy and markets. Brian Sack, a former Fed economist now with Macroeconomic Advisers, summed it up the change in strategy this way: Since January, the Fed’s task was to ease even more aggressively than markets expected “to convince markets that the Fed was on the job.” “Now you could be seeing the opposite,” he said, with the Fed offering fewer rate cuts than once hoped. Communicating such a shift is usually a tricky task, especially when markets are fragile. After all, it isn’t worth disappointing investors if it leads to the type of negative fallout that forces further easing. That seemed to be the case last year, when the Fed’s more modest pace of easing didn’t shore up the economy and led to this year’s much more assertive response. But Bernanke caught a big break in April, as Wall Street essentially did his work for him. After pricing in half-point rate cuts in the wake of the March meeting, market sentiment has done a remarkable turnaround in the weeks leading up to the Tuesday-Wednesday meeting. Futures markets now expect only a quarter-point reduction. The economy has more or less performed according to script. Though the first quarter may be a bit better than first feared, that appears to be coming at the expense of a slower recovery later in 2008. “This is a situation where we’re not out of the woods, [but] it’s not a situation that forces the Fed’s hand,” said Lyle Gramley, a former Fed governor now with The Stanford Group. Against that backdrop, “I’m leaning toward [a quarter-point reduction], but I wouldn’t be shocked if they did nothing,” Gramley said. So with the economy still growing and tax rebates arriving in the next few days, why not stop now? After all, in order to firm up his anti-inflation credentials, Bernanke will have to disappoint Wall Street at some point. And a pause wouldn’t completely blindside investors.

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88 Economists think the Fed still has little to lose by going an extra quarter-percentage point. While the Fed needs to shore up its inflation credentials at some point, “I don’t think [this week] is the time to do it,” said Victor Li, associate professor of economics at the Villanova School of Business. “The data clearly indicate that we are either in a recession or a recession is imminent.”

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April 30, 2008 By Henry J. Holcomb

Businesses angling to get piece of stimulus checks With federal economic-stimulus checks arriving in mailboxes soon, retailers are scrambling to lure customers, checks in hand, to their stores. Many offer 10 percent bonuses, for example, if you buy store gift cards with the government checks. That idea is spreading to local businesses. Restaurateur Derek Davis pondered the idea today and declared, "I can do that. Only I'll give a 15 percent bonus." The deal's good at Derek's, his restaurant on Main Street in Manayunk, but not at his upscale retail store, Mainline Prime in Ardmore. He is offering the deal even though business has been better than last year. He attributes that to neighborhood people coming in to avoid the high price of gasoline, choosing to stay local rather than venture farther away for entertainment. High gasoline prices may be helping Davis, but they hurt others. "Business has been tough," said Joe Magarity, who sells Chevrolets in Flourtown and Fords in Chestnut Hill. He said he would knock $500 of the price of a car, new or used, in addition to any other deals he may be offering, if the customer signs over their stimulus check as part of the payment. "We need to sell some cars," Magarity said. He and others hope the checks - $600 for individuals, $1,200 for married couples who filed joint tax returns - will help. Wal-Mart Stores Inc. and its Sam's Club stores, which typically charge up to $3 to cash government and payroll checks, say they will cash these federal checks free. Sears, Kmart, Lands' End, big grocery chains and others are among those offering a 10 percent bonus if customers buy gift cards with their federal checks. ShopRite grocery stores said today that, beginning Friday, it would add a 10 percent bonus to $300 gift cards that are purchased with either stimulus or tax-refund checks. For some businesses, such a discount would wipe out their profit and undercut the impact of the stimulus program. It is hard for a travel agent "to discount even 10 percent. We work on 10 percent margin," said Helene Singer, of Singer Travel, of Reading. The checks are part of a Bush administration proposal and have prompted broad skepticism about whether they will lift the economy or get eaten up by the debt crisis. William Madway, a marketing and market research professor at the Villanova University School of Business, said the stimulus checks were not how he would have tried to help the

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90 economy. But, he added, "pumping over $100 billion into the economy is going to have some impact. If I'm a retailer, I want to figure out how I can get my share . . . and how to get people into stores with their checks." Promotions that give "consumers more bang for the buck," Madway said, "will help the economy." If the checks just go to offset higher gasoline costs, he said, "that money is not going to stay in the country." Madway said he would urge businesses to resist the temptation to deeply cut prices. The idea behind the stimulus package "is to put money into a company's hands so it will hire more people. If they're not able to make money, that won't happen." Erica Hession, a Drexel University junior majoring in entrepreneurship, was asked what she would do if she was running her own business. "If I owned an auto dealership, I would offer incentives to promote hybrid cars that use less gasoline, which would get other rebates" and further stimulate the economy, Hession said. If she owned a grocery store, she would build promotions of locally grown products around the stimulus checks. In a home-improvement store, she would promote energy-saving products and workshops on how to make homes use less energy. These approaches, she said, would keep the stimulus money "cycling within the local community" and send less overseas to buy oil.

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May 16, 2008

Financial review for Milwaukee Archdiocese parishes planned More than 200 parishes in the Archdiocese of Milwaukee will undergo financial reviews by outside professionals, a Catholic official said. Milwaukee Archbishop Timothy Dolan decided to require the reviews after consulting with advisers, but is awaiting recommendations from a special committee on how extensive and how frequent the reviews should be, said Katie Hoeller, director of the Parish and School Financial Services Office. Dolan discussed the matter in his Thursday column in the archdiocesan newspaper, saying the church "must be scrupulous in sound stewardship of the money entrusted to us by God's people." He also noted the archdiocese itself has had an annual audit for decades. The reviews of parish finances would cover more than $198 million in unrestricted donations and fees that parishes and their schools collect each year. The move comes amid a larger effort by U.S. Catholic bishops to improve church stewardship and tighten financial accountability in the aftermath of the priest sexual abuse scandals. The U.S. bishops conference strongly encouraged dioceses last November to routinely audit parishes. "Every church has the same problem of being too trusting of their priests and ministers and church workers," said Chuck Zech, director of the Center for the Study of Church Management at Villanova University. "It's not unique to the Catholic Church," he said. "... No one would think that a priest would embezzle, and no one would think that a church worker would, so they don't put in the kinds of internal controls common in the business world." The Milwaukee archdiocese's financial guidelines call for an internal financial review of each parish every four years to make sure it is following the required accounting procedures. But Hoeller said that has not been done since 2000 because of additional duties given to the archdiocese's Financial Services Office. About 25 parishes have had annual reviews, either because they requested them or because of irregularities in the parish's financial reports, the turnover of key parish staff members, the posting of deficit budgets or other factors, she said.

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MSNBC.com May 21, 2008 By Eve Tahmincioglu

How to make your job layoff-resistant Human-resource managers offer tips to make a pink slip less likely Thomas, a 60-year old project manager for a construction company, knows there’s a possibility for layoffs at his firm because of the sagging housing market. And Brandon, a customer service representative for a phone company in Oregon that’s about to be bought out by a telecommunication’s giant, fears his days may be numbered. It’s impossible to know for sure if either man will be fired until they actually get that tap on the shoulder by their manager asking them to come to their office for a chat. During tough economic times almost everyone wonders if they’ll end up on the chopping block, and we hope the companies we work for make sensible choices when choosing who will stay and who will go. But alas, sense doesn’t always prevail. “Employees think bosses fire on a last-in, first-out basis, [and] that firing is somehow based just on performance,” says Stephen Viscusi, author of the forthcoming book, "Bulletproof Your Job: How to Ride Out the Rough Times and Come Out on Top at Work." “It’s not. It is not objective. It is subjective. Bosses keep the people they like regardless of experience or performance and fire people they don’t like — plain and simple.” Viscusi says managers disguise their decisions as a business decision when it’s actually “a human and often personal decision. That’s why bosses' and HR’s favorite line is “don’t take it personally.” So, is there a type of employee that is more likely to get axed than their co-workers? Is there a personality trait or job history that pegs a certain worker as dispensable? Is there an anatomy of a person most likely to get canned? I decided to ask some of the human resource managers I know at companies around the country if they could pinpoint the employee that’s most likely to get laid off, and I got a range of responses. One thing I can tell you, based on their feedback: If you’re a loner with no friends at work; make lots of money; and don’t think twice about coming late to the office, you may want to start sprucing up your resume. "I have worked with some managers whose first words out of their mouths are 'let's get rid of X because we're paying too much for the return we're getting,’" says a human resources manager for a major publishing company.

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93 But, she stresses, HR managers like herself try to coach bosses not to do that and often try to encourage them to base decisions on seniority because it’s easier to defend if a worker comes back with a lawsuit. When it comes to personality types, says another HR executive who works for a top insurance company, the area where that’s most critical is “for leadership positions where someone has not built relationships or credibility with a broader array of colleagues. This can make them an easier target.” But, he adds, “performance and contribution tends to trump all in my view. Relationships and alliances are important in these kind of situations, however, once again the performance has to be there as well.” This particular HR veteran warned against putting too much emphasis on whether someone gets along with others or not. “I would not consider the layoff process to be like a "Survivor" episode where people are voted off the island based on popularity and alliances. It's different in that these decisions tend not to be a vote or consensus and a track record of performance is a critical factor.” As for slackers, there seems to be a consensus. “If you can't make it to work on time,” he says, “then certainly all bets are off. This would translate to lower performance.” Another thing to keep in mind is whether or not you toot your own horn, says Cheryl Asher, Assistant Professor of Economics and Statistics at the Villanova School of Business. If you’re kicking butt but no one knows about it you may end up on the layoff list; and this is particularly a problem for women, who aren’t great on singing their praises at work, Asher notes. (See a past column I wrote on the topic.) Working in a particular division, or segment, of a company can also make your position more precarious in a down-turning economy. Jim Lanzalotto, vice president of staffing company Yoh, says workers more likely to get fired are those who “aren’t close to the customer. If you’re working on non-core, or infrastructure projects, or 'nice to have' kind of projects, it’s a tough environment to stay successful now.” If you’re on the team that’s working on a major company product or service, he says, then you probably have job security, as opposed to support or back office staff. But, he admits, “A lot of times it comes down to the relationships you have in an organization and the perceived value you bring to the table. It’s not always people who are suck ups, but people who’ve built relationships.” Their perceived value may be greater than actual value is, he adds but enough people like them and decide they can stay. So, is it time to take your colleagues out for drinks after work or start learning jokes so you become the worker everyone loves? Not a bad idea. No one’s going to paint a layoff-target on a worker who everyone loves.

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94 Rich Gee, a career coach, suggests you “stop having lunch by yourself, at your desk.” “Have strategic lunches once a week — get out of the building, meet a colleague, a friend, or a new acquaintance — get the skinny on what is happening outside of your circle,” he says. “Talk to everyone you meet. Not just exchange pleasantries. Ask them questions, look interested and then ask more questions.” Here are some more tips from Viscusi’s upcoming book on how to keep your gig: Perfect the art of looking busy — being active makes a great impression. The boss should never wonder whether you have enough to do… because you should always have things to do. Come in early, stay late. (Even when there is nothing to do.) This aggressive stance as a hardworking employee is always remembered when it comes time to decide who will be on the chopping block. Look good — dress for success. Look the part — neat hair, clothes, and invest in whitening strips for your teeth. (Yes, whitening strips.) Be sure to dress appropriately for your work environment. Be sure to look professional and not stick out. Stay away from exaggerated colors and styles. Take initiative — volunteer for the hard assignments that no one else wants. (As long as you are sure that you can accomplish these tasks well.) Taking on a project that you have no chance of completing successfully can be as damaging as not taking initiative at all. Share credit — this shows a lot about what kind of person you are, and in difficult times, a positive personal trait like that may help you keep your job. But if you do get that pink slip, remember, don’t take it personally and move on!

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May 19, 2008 By Charles R. Taylor

Lifestyle Matters Everywhere Marketers Need to Stop Targeting Consumers by Country and Instead Target Based on Habits, Likes, Dislikes

Charles R. Taylor

Over the past several decades, it has become clear that around the world, consumers' habits, likes and dislikes are becoming much more similar. Sushi is becoming a common dinner option for many in Middle America, for example, and one can easily find Chinese and European students wearing Major League Baseball caps on their college campuses. But despite the trend toward a more global consumer, there has been little effective implementation of cross-market segmentation. Instead, marketers continue to demographically segment markets largely on a country-by-country basis, with very little focus on cross-market segmentation. While there has been periodic talk of a few marketers targeting the "global teen" or "global elite" segments, very little has been discussed on how to identify and target cross-national market segments. The time is now for grouping consumers together -- independently of their home country. Cross-market segmentation refers to grouping consumers across all markets in which a product is offered, independent of nationality. The growth of the global economy has initiated a market experiencing significant convergence in consumer tastes and preferences in several product categories. Marketers have been aware of this for some time now with respect to luxury goods. As observed by Radha Chadha and Paul Husband in their book, "The Cult of the Luxury Brand," more than half of the world's $80 billion (annual) market comes from Asian consumers. Consumers around the world seek out brands such as Gucci, Ferragamo, Coach, Chanel, Armani, Burberry and Ralph Lauren. Remarkably, more than 90% of women in their 20s in Tokyo own a Louis Vuitton. Given the striking evidence of a global market particularly in the luxury industry, what do marketers and advertisers selling these types of goods need to do to be competitive? Transnational preferences The results of recent studies I have conducted -- in conjunction with Dr. Eunju Ko of Yonsei University in Seoul, among others -- indicate that targeting consumers by lifestyle will provide better results than targeting by country of origin. In our recently published article in International Marketing Review, U.S., Korean and European female consumers' reactions to advertising campaigns run by Chanel in the Asian, European and American editions of Vogue magazine were analyzed. In assessing reactions to the ad campaign, findings proved lifestyle to be a more important segmentation criterion than the consumers' country of origin. In addition to eliciting consumer reactions to the advertisements, the study asked consumers questions about their

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96 attitudes, values, buyer behavior and demographics. The study was able to identify four distinct fashion-lifestyle segments of female fashion consumers which cut across cultures: conspicuous consumers, information seekers, sensation seekers and utilitarian consumers. 1. The conspicuous fashion consumer (19% of the consumers in the study) holds a strong belief in the value of prestige brands with an upscale image. These women are concerned about social status and value the attention and prestige that associated brands bring. Others' opinions matter considerably to this group. They are clearly less price sensitive, and in many cases, are willing to make sacrifices to own elite brands. For this reason, this group cuts further across income segments than one might expect. An important feature of the conspicuous fashion consumer is the belief that well-known, prestigious global brands are of the highest quality. Moreover, members are largely unwilling to consider investing time in information searches for products they are not familiar with, even if these alternatives might actually be of high quality. How should marketers target this segment? By emphasizing prestige, elegance and status. 2. Information seekers (27%) are women who are willing to put considerable effort into researching fashions by consulting books and magazines. Information seekers are very information-oriented and more open to considering new brands, or brands with which they do not have prior experience, than the conspicuous consumer. Consumers within this segment are very fashion conscious and seek information to keep up with fashion trends. As a result, they show a high level of interest in advertising for fashion products. To reach this segment, marketers should leverage advertising that emphasizes quality and trendiness. 3. Sensation seekers, which accounted for 30% of the sample, clearly value aesthetic elements in clothing. Sensation seekers are especially interested in color coordination and believe they have good taste in choosing clothing products. They place high priority on aesthetic aspects of clothing -- tastefulness, color, design, coordination -- and weigh this heavily in making purchase decisions. Likewise, they tend to respond to fashions that are eye-catching and think about fashion in a holistic sense. Sensation seekers believe they have an "eye for fashion" and are less influenced by information on trends than the information seekers. Target this segment with ads highlighting coordination. 4. The final segment is utilitarian consumers, which accounted for 25% of consumers in the sample. Women in this segment are primarily concerned with the comfort and functionality of the clothing. Purchasing clothing is viewed as a necessity or chore as opposed to a fun use of leisure time. Utilitarian consumers are very value-oriented and are not prone to making purchases on a whim. Instead, purchases are made based on rational calculations that weigh quality, comfort, functionality and price. Utilitarian consumers are price-conscious, though quality is often important as well. To target, emphasize both the functional aspects of clothing as well as value. Today and in the future -- in industries where consumer needs are similar, such as women's fashion -- the global consumer should be targeted by considering lifestyle and consumption patterns. While savvy fashion advertisers already are incorporating a significant degree of standardization into their advertising programs to establish brand image, the firms that successfully target the appropriate cross-national segments to whom their brands appeal will develop a sustainable competitive advantage.

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May 21, 2008 By Dan Gross

Dan Gross: Flyers mark the end at Borgata AFTER HAVING their behinds handed to them by the Penguins in five games, most of the Flyers drowned their season's-over sorrows with steaks and drinks in Atlantic City at the Borgata's Old Homestead restaurant. Executive chef Romeo DiBona is a huge Flyers' fan and took good care of the party of 40. Some of the players also partied at the hotel's mur.mur nightclub, where they took over the VIP area with friends and fans Monday until almost dawn. Owen Wilson hangs at Rick's Owen Wilson spent several hours and hundreds of dollars at Rick's Cabaret (2908 S. Columbus) late Thursday night, according to the New York Post's Page Six, which reports he got private dances from some busty blondes, while sucking down a few brews. One dancer reportedly told the paper that Wilson, here shooting "Marley & Me," had his mind elsewhere despite the fact that her "36D boobs can hypnotize anyone." Movie mentions Brad Ingelsby is about to move to Los Angeles to write screenplays full time. He's off to a great start, having sold his first film, "The Low Dweller," last month to Relativity Media for $650,000. So far. He could collect $1.1 million if the film gets made and he's the only writer credited. The thriller, set in small-town Indiana in the 1980s, has Ridley Scott attached to direct and Leonardo DiCaprio slated to star. Inglesby, 28, wrote most of the screenplay while a student at the American Film Institute, which he attended after graduating from Villanova's School of Business. The Archbishop Carroll grad is working for his father, Villanova basketball legend Tom Ingelsby, at Berwyn-based insurance company Kistler Tiffany Benefits. The 6-foot-3 Ingelsby played ball at Carroll, but wasn't as good as his dad or brother Marty, a star at Carroll and Notre Dame, where he's still a coach. Inglesby has a few screenplay ideas kicking around but is keeping them close to the vest.

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May 25, 2008 By Rebecca Trounson

L.A. parishes help pay archdiocese's $720 million in abuse settlements With gifts large and small, they're heeding Mahony's appeal for help in paying victims. Blessed with a nest egg of nearly $1.5 million, a Woodland Hills parish donated almost all of it, leaving just $1,000 in its savings account. An Encino church offered a $100,000 interest-free loan. And a Boyle Heights parish decided it could spare $500 after ruling out the idea of raising money with tamale sales. With gifts large and small, parishes across the sprawling Roman Catholic Archdiocese of Los Angeles are answering an appeal from Cardinal Roger M. Mahony to help the archdiocese dig out of the financial hole resulting from its multimillion-dollar legal settlements with victims of clergy sexual abuse. "It's important that we the church take care of this," said Father Scott Santarosa of Dolores Mission Catholic Church in Boyle Heights, which gave the $500 from its limited unrestricted funds. "It's like a family trying to take care of itself. Every family has parts that break down or need help. That's part of the church too, and we can't turn our backs." Some parishes have told the archdiocese they cannot contribute because they are too poor or in debt from construction projects or real estate purchases. Others have yet to decide, their pastors said in interviews. But whatever the circumstance, the choice is not easy, several said. "Either way, it's controversial," said Msgr. David A. Sork, pastor of St. John Fisher Church in Rancho Palos Verdes, who said he is praying about the issue and consulting parish leaders but has not yet decided. "It's a tough one." On the one hand, Sork said, his congregants are asking why they should pay for mistakes that occurred in other parishes, not theirs. "Or they say, 'Why do we have to pay for something that happened 30 years ago?' That's hard for many to understand," he said. "But not helping means the archdiocese's services to all parishes, including this one, will be hampered." Mahony made his request in a series of meetings around the archdiocese between January and March. Speaking to clergy and lay leaders, Mahony offered details of his financial recovery plan for the archdiocese, which has been staggered by abuse settlements totaling $720 million, including last summer's record $660-million agreement, in hundreds of civil cases. Mahony, 72, whose remarks at one session were recorded for distribution to the parishes, apologized for "mistakes and miscalculations" he said he had made in handling the abuse crisis. He asked for help, saying the settlement costs were more than expected. To pay its $292-million share of the bill, he said, the archdiocese had cut administrative staff, liquidated investments and begun to sell off about 50 properties, including its headquarters on Wilshire Boulevard. The archdiocese's central office is also trying to trim its budget an additional 10% and has asked parishes to increase their annual assessments to the office by 2% for five years beginning July 1.

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99 Mahony said he had decided against trying to raise funds directly from the L.A. area's estimated 5 million Roman Catholics, saying he feared such a move might create ill will among parishioners and lead to resentment of the abuse victims. But he asked any parish that could afford it to assist with gifts or loans, mostly to pay down $175 million borrowed from an Irish bank to cover part of the settlements. "I need to say to you very openly: I need your help," Mahony said, his face and voice somber. Without such assistance, he said, retiring the debt could take up to 15 years and force even deeper cuts in administrative and support services the central office provides the archdiocese's 288 parishes. The cardinal also wrote letters seeking help from about 100 parishes that had undesignated funds of $100,000 to $1 million in the archdiocese's centrally managed investment pool, spokesman Tod Tamberg said. One such parish was St. Bernardine of Siena Church in Woodland Hills, which had significant savings, much of it from a $1-million bequest from a parishioner who died several years ago. After Mahony's appeal, the church's pastor, Father Robert McNamara, held two long meetings with his finance council, staff and lay leaders. In the end, McNamara decided to give nearly all of his parish's savings, almost $1.5 million. He declined recent requests for comment but explained the decision in several letters to parishioners. "I prayed a lot, had some sleepless nights too . . ," McNamara wrote April 27. "I kept asking what kind of parish is St. Bernardine's." McNamara reminded parishioners that both the church and its school still had substantial endowments and that the parish also had an emergency maintenance fund of about $540,000. And he said he had been inspired by his parishioners' generosity in raising nearly $170,000 in recent years for the victims of Hurricane Katrina, the Southeast Asian tsunami and famine in Africa. "You have given like a people who wanted to make a difference, and a difference you did make," he wrote. "That continued generosity inspired my decision then to help by giving all our savings minus $1,000." That amount was held back to keep the savings account open. McNamara acknowledged that the decision had come after meetings that included "some heated exchanges. There was some venting -- anger, disappointment, frustration, concern for victims, etc., all coming from the shame we felt as Catholics and our empathy for the victims," he wrote. But he said most of the responses since then had been supportive. At least one longtime member of St. Bernardine said she remains upset about the priest's decision, saying all parishioners should have been consulted. The woman spoke on condition of anonymity, saying she feared she would be criticized for speaking out against the gift. "When the basket came around, we were told that if we kept giving to the church, the money would not go to pay for anything related to the abuse," she said. "Now all that money is gone, and it's gone exactly where it wasn't supposed to go." But Eileen Fewless, the church's director of religious education who attended one of the discussions, strongly supported the gift. "Everyone in that meeting had a thoughtful, prayerful attitude, and I think most were really in favor of giving," she said. "That's the kind of parish we

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100 are." Charles Zech, director of the Center for the Study of Church Management at Villanova University in Pennsylvania, said Mahony's request to parishes was unusual but not unprecedented, with dioceses in San Diego and Tucson among those that also have asked parishes to help pay abuse settlements. "The ultimate source of money for any archdiocese or diocese is the parishioners," he said. "They're going to pay for this one way or the other." But Zech also said he considered such appeals to parishes to be fair, as long as any contributions were voluntary. Some parishes, even in relatively wealthy areas, said they could not afford to contribute because they are paying off loans for building projects. And others, including Resurrection Church in Boyle Heights, simply cannot. "We have no discretionary funds," said Msgr. John Moretta. "We are in a parish that is in a survival mode itself, but others are very graciously stepping up to the plate." At St. Anne Church in Santa Monica, Father Michael D. Gutierrez said the meeting in his Westside deanery with Mahony, priests and lay leaders was tense at times. "There were some really hard questions, but I thought the cardinal did a good job explaining why he needed this," he said. The priest said his own parish, a relatively poor congregation that has struggled in recent years to keep its small school open, nonetheless wanted to contribute. He said it will give $25,000 -$5,000 a year for each of the next five years. Gutierrez also is among local priests who have donated a month's salary to help pay down the debt. "I think we've all learned from these mistakes and we've moved forward," he said. "We do good work now and we need to help the church move on." At St. Cyril of Jerusalem, a congregation of about 1,400 families in Encino, Msgr. Carl Bell said he and his finance council had decided to lend the archdiocese $100,000 interest-free and would be paid back over the next decade. And at St. Denis Church in Diamond Bar, Msgr. James Loughnane said he had consulted parish leaders. Although no decision had been made, he expected they would contribute. "They understand that at this point, blaming anyone isn't the answer," Loughnane said. "We need to rally around the situation and take care of it."

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June 2, 2008 De-Departmentalizing the B-School Today, you need to know a little bit of everything, But Villanova University’s undergraduate business school curriculum, starting this fall, is designed on the theory that you don’t need an individual course in everything. James Danko, Villanova’s business dean, said the “fundamental root” of the new curriculum is to have a multidisciplinary perspective. Several courses that used to be taught stand alone will be integrated into one course. For example, the introductory courses in finance and in accounting, which used to be two separate courses, will become one. The new course, financial management and reporting, will be six credits and taught by two instructors. Walter Tymon, associate professor of management, explained another new course, in business dynamics, will also be taught over two semesters. It was created by a team of professors from accounting, business law, finance, information systems, management and marketing. Faculty members from these areas will each teach a section. The first semester will focus on giving students a “context for studying business.” Questions the course will cover include: “What is business and how does a business create value? Who are the various stakeholders in a business and how do they, and should they, influence decision-making? How has business evolved, and what are the important issues associated with the global business environment, ethics, leadership, teams, communication, motivation, and the structure and culture of companies.” The second semester will focus on concepts from “each functional area of business with an emphasis on integration and how each discipline is part of a total system to achieve a business mission.” Building on the growing trend of colleges requiring new students to read a common book before they enroll, Villanova is having its new business majors read Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time, over the summer prior to beginning the course. Students will discuss the book in the business dynamics course, and in small groups led by business executives who graduated from Villanova’s Executive M.B.A. program. “That’s going to be taught from a broader perspective,” Danko said. Also, instead of having separate courses about skills such as communication or technology, Danko said there will be an emphasis in these skills being taught throughout the curriculum. The changes came about in attempt to respond to the current business world, Danko said. The current curriculum has not had a significant overhaul since the 1950s and is based on an economic model that is no longer applicable into today’s world, he said. Tymon, who was on the faculty committee that looked at curriculum revision, said that one of the factors that led to the change was “the fact that we do have a global economy.” He also mentioned students need to be able to see the “big picture” and the intent behind it, which means they need to have knowledge across the disciplines of business. “Students really need to be able to integrate across functions,” he said.

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102 Danko said 85 percent of the faculty voted in favor of the proposed changes. John J. Fernandes, president and chief executive officer of AACSB International: The Association to Advance Collegiate Schools of Business, said an integrative curriculum like the one Villanova will be using is increasingly common. “It’s definitely the wave of the future to build an integrated curriculum,” he said. In addition to the new curriculum, there have also been changes in how the faculty and departments have been structured. When Danko became dean three years ago, he proposed a new organization, which included compressing some departments and opening new ones. Operations management was merged with management and strategy. The economics department became economics and statistics. Accounting and management information merged to make accounting and information systems. In addition, Danko said he made “trial departments” called strategic initiative groups. Professors were offered the chance to take a “leave of absence” from their own department to join these groups. Some of these groups have focused on course development while others have focused on research. He said he encouraged the faculty to work in a “multidisciplinary way.” This faculty reorganization became a precursor to the change in curriculum. Although most business schools don’t follow this model, Fernandes said he thinks that will change in the future because the traditional model is not sustainable, and more business schools will rethink structures. “They’re going to have to, personally I think they should, but they’re going to have to,” he said. Johns Hopkins School of Business is going even further than Villanova in its approach to faculty organization. The school, which only opened in 2007, will have no departments, beginning July of this year, said Yash Gupta, the dean. All professors will be encouraged to be part of multidisciplinary centers for research. But Gupta said that departments aren’t needed. “Business decisions are integrative,” he said.

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June 6, 2008

PEOPLE ON THE MOVE The Villanova School of Business has announced that Robert F. Bonner was named associate dean of graduate and executive programs. Previously, Bonner led the graduate programs at Temple University’s Fox School of Business as assistant dean of MBA and MS programs.

Bonner

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June 16, 2008 By Andrew R. McIlvaine

Creating Dress Codes Workplace-appearance standards are based on community standards and are not gender neutral, experts say. While employers have a lot of leeway in requiring appropriate dress codes, they need to ensure that policies do not place an undue burden on one sex over the other. Religious considerations also play a part. A woman who worked as a waitress at Nathaniel's Restaurant in Owen Sound, Ontario, was told by the owner to take the summer off without pay after she shaved her head to raise money for a local charity benefiting cancer research. The waitress, Stacey Fearnall, told a local newspaper that her bosses at the restaurant asked her to wear a wig after she shaved her head and, when she refused, told her to leave until her hair grew back in. "Our staff is expected to come dressed appropriately and we did not feel that this was appropriate," the restaurant's co-owner, Jeff Ferris, told the Owen Sound Sun Times, adding that he and the restaurant's other owner had expressed discomfort with the idea to Fearnall prior to when she shaved her head and asked her to find other ways of supporting the charity. Meanwhile, a group of female employees at the Mid American Credit Union in Wichita, Kan., protested the company owner's policy of requiring female employees to wear pantyhose at work. "My own professional view is, I grew up with women wearing pantyhose, and I just think they look great in them," Jim Holt, the company's 58-year old president, told ABC News. Several female employees said the policy was unfair, noting that the firm did not require male employees to wear ties, for example. Are there different rules in effect for men and women when it comes to workplace appearances? Most assuredly there are, according to several employment experts questioned for this story -and what's more, in most cases it's perfectly legal, at least in the United States. However, employers do risk crossing the line when their workplace-appearance policies place a greater burden on one gender than another or when they conflict with religious beliefs. If Fearnall worked as a waitress at an American restaurant, she probably would have had little success had she chosen to pursue the matter in a U.S. court, says John A. Pearce, a professor of strategic management and entrepreneurship at Villanova University in Villanova, Pa.

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105 "The overriding principle is whether Fearnall's behavior or appearance matches community standards," he says. "An employer can argue that if an employee's appearance goes against the norm, then their business could suffer." Community standards in most regions of the country mean that a female waitress with a shaved head certainly stands out -- and not in a positive way, says Andria Ryan, a partner at Fisher & Phillips in Atlanta. "A man with a shaved head is not an oddity, but a purposely bald woman is," she says, adding that -- particularly in the restaurant, retail and hospitality industries -- an employer can argue that workers who choose to sport a certain look that deviates from "community standards" can potentially harm the business by alienating some customers. Where employers potentially get into legal trouble is when their appearance policies end up placing a bigger burden on female employees instead of men, or vice versa, say Susan K. Lessack, a partner in the labor and employment practice at Pepper Hamilton in Berwyn, Pa. "Requiring women to wear dresses but not requiring men to wear suits may impose an undue burden," she says. That may have played into the conversations at Mid American Credit Union, where Holt agreed to rescind the company's pantyhose policy after conferring with his HR director and outside sources, according to ABC News. Had Mid American's female employees chosen to pursue a legal remedy, they might have been successful, says Ryan. Such was not the case for Darlene Jesperson, a former bartender at Harrah's Casino in Reno, Nev., who sued the company in 2000 after she was fired for refusing to comply with a company requirement that female bartenders wear makeup while on the job. The U.S. 9th Circuit Court of Appeals held, in a 2-1 decision issued in 2003, that there was no evidence that Harrah's requirement imposed an unequal burden on male and female employees. "The court said the Harrah's policy was appropriate and reasonable, that it was part of the community standard," says Pearce. "In the United States, case law has supported the differences between genders." On the whole, however, most appearance policies tend to be more restrictive of men than women -- such as those barring men from wearing earrings at work or from wearing their hair below a certain length, says Lessack. Employees have been far more successful in challenging appearance policies that conflict with their religious beliefs. In recent years, for example, many female Muslim employees have won the right to wear hijabs, a headscarf that covers the head, or burkas, which are coverings that conceal the entire body, over employer objections, says Ryan.

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106 In most cases, courts will side with employees on religious matters unless the employer can demonstrate an undue business burden or safety hazard would be created by accommodating such a request, she says, adding that these protections extend to practitioners of non-mainstream religions as well. "The threshold for proving you have a sincerely held religious belief is pretty low, so it's likely the courts will uphold these requests," says Lessack. When all is said and done, employers must also consider the impact of their policies on the morale of other employees -- and on a potential backlash from the public, she says. In Owen Bay, the owners of Nathaniel's restaurant have since issued an apology to Fearnall and the charity she represented. The apology came in the wake of a rash of angry editorials, protests and coverage of the issue throughout Canada and the world -- a reaction that has apparently taken a toll on the restaurant's owners. "I am upset for [the owners]. They are a physical wreck today," kitchen employee Cathy Cruickshank told the Toronto Sun. "It just breaks my heart."

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June 20, 2008 By John Curran

Catholic sex abuse crisis far from over in Vermont diocese BURLINGTON, Vt. (AP) - Many Roman Catholics believe that the worst of the clergy sex abuse scandal is over. But in the Diocese of Burlington, it's deepening. The case of one cleric, assigned to Vermont parishes in the 1970s despite warnings from an Indiana bishop that the priest was suspected of molesting boys, is battering the local church. Last month, a former altar boy who said the Rev. Edward Paquette molested him repeatedly three decades ago won an $8.7 million jury verdict in a negligence lawsuit against the diocese. Attorneys for the diocese say they have insurance that could cover part of the $8.7 million payout, but they can't find their copy of the policy and have sued the insurer to get it. To make certain that the settlement is paid, a judge put a $10.2 million lien on the diocese's central offices. An appeal is pending. But even if the verdict is overturned, 16 more people who said Paquette molested them in Vermont have filed their own claims. "Clearly, the diocese can't afford 18 more of these $8.7 million awards," said Chuck Zech, a Villanova University economist who researches church finances. It's an expense the Vermont church will have to scramble to avoid. Paquette is not known to have faced criminal charges, but he acknowledged in a 2006 deposition that he was "sexually involved" with boys while in parishes in Massachusetts, Indiana and Vermont. That deposition was for a negligence claim brought by a former Vermont altar boy who reached a nearly $1 million settlement with the Burlington Diocese. The diocese, which serves all the state's 148,000 Catholics, put its individual parishes under charitable trusts two years ago to shield them from what Burlington Bishop Salvatore Matano called "unbridled, unjust and terribly unreasonable assault." The diocese also faces at least six additional negligence cases involving other Vermont clergy. Matano is considering selling property -- including a Lake Champlain site that has been used for more than 20 years as a summer camp for children with cancer. The accuser's attorney in the recent jury trial, Jerome F. O'Neill, called it a publicity stunt to generate sympathy for the diocese. He contends that the church was considering selling Camp Holy Cross before the recent verdict.

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108 Zech said that the diocese should have sought bankruptcy protection, as six other American dioceses did in response to multimillion-dollar abuse claims. But Tom McCormick, a lawyer who represents the diocese, said church officials would only file for Chapter 11 as a last resort. Beyond money, parishioners' trust in the diocese is at stake. Three of the pending Paquette lawsuits are headed to trial beginning in August, with juries likely to see documents and hear testimony about how church officials knew of Paquette's past, yet allowed him to work in Vermont. Paquette, 79, who is still a priest but has been barred from any church work, could not be reached for comment on this story. He has no listed telephone number for his Westfield, Mass., home, and could not be reached through his former Vermont attorney or through the Diocese of Springfield, Mass. He had served as a pastor in Fall River, Mass., and Fort Wayne, Ind., before applying to the Burlington Diocese in 1972. He said he wanted to be near his parents in Westfield. At the time, Bishop Leo Pursley of the Diocese of Fort Wayne-South Bend told Vermont Bishop John Marshall that Paquette had been accused of molesting boys. If the Burlington Diocese decided to take the priest, he should be assigned to an institutional chaplaincy -- a hospital or senior center away from children, Pursley said, according to church documents entered as evidence in the recent jury trial. But Vermont church officials ignored the advice, assigning Paquette to a parish in Rutland, then transferring him twice over six years -- to Montpelier, then Burlington -- after he was accused of abuse in each church. He sometimes groped altar boys while giving "pony rides" after Mass in which he sat them on his knee and groped them, according to the altar boy who won the $8.7 million judgment. The man, who does not want his name published, testified last month that he and other altar boys nicknamed Paquette "Father Pockets," joking that he always had something in his pocket for them. The 40-year-old Lakewood, Colo., man served Mass with the priest as an 8-year-old and said he was molested by Paquette 40 to 100 times over two years. He said he never reported the abuse because Paquette was "the next closest thing to God," but years later went "ballistic" after learning about Paquette's history and the warnings to church officials about the priest. The Associated Press does not publish the names of sexual assault victims without their consent. Church officials have defended their handling of abuse claims in the 1970s, saying that at the time, it was believed prayer and counseling could cure sexual attraction to children. Matano declined to be interviewed. He told Vermont Catholics in a letter read at Mass on May 18 that he hopes that the "needed ministries will continue uninterrupted and parishes remain unaffected by a burden that does not belong to them." O'Neill argued that the diocese has more than enough resources to fund the settlements, including $42 million worth of property in Burlington alone.

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109 "It's payment of a past-due debt, ever since Bishop Marshall and other parts of this diocese permitted those priests to abuse boys," O'Neill said. But Zech said that if the diocese sells its real estate to fund the settlements "they might as well cease to exist."

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June 27, 2008 Reid Kanaley

How Dow Now? After yesterday’s 358-point haircut on the Dow, how low can the stock market go? Economists answer as follows: Much lower. No lower. Impossible to tell. Take your pick. It all depends on who’s talking. The Dow Jones industrial average, Nasdaq composite index, and Standard & Poor‘s 500 index each fell about 3 percent yesterday. For the year, the Dow is off 13.7 percent, the Nasdaq is down 12.4 percent, and the S&P has fallen 12.6 percent. William Dunkelberg, economics professor at Temple University’s Fox School of Business, said the Dow has about a 25 percent chance of falling another 500 points before a turnaround. Or maybe it’ll be a 1,000-point slump. Hard to tell, he said. But, Mark Zandi, chief economist at Moody’s Economy.com in West Chester, said he feels that the brakes already are on. “I think we’re there. This is the bottom, roughly speaking,” Zandi said. The bad news, from Zandi’s view, is that it’ll be another six to nine months before a recovery kicks in. Until then, the market will have “good days and bad days, good weeks and bad weeks, good months and bad months.” David Shaffer, finance department chairman at the Villanova University School of Business, said he doesn’t know how low to go. The credit crisis, continuing uncertainty over how the Federal Reserve is going to react, and the volatile energy markets are fueling relentless market turmoil, he said. “I don’t know what the bottom is. I’m stunned, day after day.” “What we’re facing is just an enormous amount of uncertainty. … Every day we think we’ve cleared another hurdle, some more bad news comes,” Shaffer said. Meanwhile, Dunkelberg — of the possible 500-to-1,000 point decline — has some advice for investors: Buy stock. According to him, no matter how insane the economy looks, the old rules still apply. What goes down will come back up.

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111 “Profits are the fundamental driver of share prices in the long run,” he said. “There’s tons of money sitting on the sidelines, and this is about psychology.”

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112

July 1, 2008 By Erika Morphy

Google Media Server: A Giant Toe in the Door? Google is entering the scramble for pieces of the media convergence pie with a new software application that lets users view content from a computer on a television. Is this one small step on a trajectory leading to TV domination? Rackspace now offers green hosting solutions at the same cost without sacrificing performance. We make it easy for our customers to choose a green configuration or customize one that works for your business needs. Make the eco-friendly choice. It already dominates the Internet -- why not the TV? Probably Google (Nasdaq: GOOG) wasn't thinking exactly in those terms when it conceived the idea for Google Media Server, its latest addition to a ballooning product line. But planting a foothold in a medium in which it so far only dabbles is clearly the driver behind this release. Google Media Server is the company's latest enhancement to its Google Desktop suite. Basically, it is software that allows users to view content from the Internet on a television. Unlike many other media server software applications, it can support videos from YouTube and photos from Picasa Web Albums -- both Google properties. It runs using Google Desktop technology -- e.g., Desktop gadgets for the administration tool and Google Desktop Search to locate media files. "All you need is a PC running Google Desktop and a UPnP-enabled device such as a PlayStation 3, wrote Software Engineer David Garcia.

True Convergence If nothing else, anytime Google makes a new announcement or acquisition, it is difficult to resist reading into what that one-off development really means for the big picture. The Google Media Server is no exception. Media Server illustrates the vanishing distinctions between the Internet, mobile phones and more traditional communication channels such as television -- a blurring of the lines that Google is leveraging very well, William Madway, a marketing professor at the Villanova School of Business, told TechNewsWorld. "So media content has to be able to migrate to any platform," he said. "What's interesting about this is that the content is migrating from PCs to a stationary device; that's in contrast to most of the migration occurring today, but nonetheless, a very wise move. It also is very

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113 open in its architecture, working with the video leader, YouTube, intstead of a proprietary software." Others take a more parochial view. Google Media Server "is a bit -- but an important bit -- player in its long-term strategy of creating true convergence," Jordan Hudgens, CEO of Vidshadow, an online video network, told TechNewsWorld. Google has become the largest distributor of online media on the Web, he continued -- and now it is exploring the potential of cross-platform distribution. The point, of course, is the continued monetization of its content. With the TV in is grasp, Hudgens said, Google has another channel for placing targeted ads. "These ads will get different rates and have different targeting and relevance for advertisers," he predicted.

Reinventing the Wheel? Google is not the first Internet player to try to make the leap to the living room TV screen, notes Sterling Market Intelligence Principal Analyst Greg Sterling. Other market entrants include SlingMedia, TiVo, Apple TV and Hulu. One way or another, he said, "the two "platforms" are quickly becoming interoperable, and the screen in the living room will eventually just be a big PC in addition to an on-demand premium content distribution channel." More provocative, though, is Google's move into original content distribution online through an initial deal with Seth MacFarlane, creator of TV's "Family Guy" cartoon, says Sterling. There are two ways to view that move, he wrote: "It is either a creative extension of Video for AdSense and related experiments, or it's Google moving into original content creation and distribution." Google as a TV network? Who knows? Maybe Google really was thinking about TV domination when it conceived of Media Server.

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July 6, 2008 By Henry J. Holcomb

Ethics 101 College business schools are taking a hard look at how they teach ethics, looking for ways to help graduates think and prevent future scandals and half-baked business experiments that backfire. "Too many times the focus of ethics courses has been on not stealing pencils," said Joseph A. DiAngelo, dean of the Haub School of Business at St. Joseph's University. The need for change is more complex than that. "There are overarching business issues that business schools cannot ignore," said James M. Danko, dean of the Villanova School of Business. Schools of all sizes are developing fresh ways to teach how to assess the impact of decisions on others and how to search for better alternatives. St. Joseph's is weaving ethics into every business course and giving professors time and assistance to figure out how to do that effectively. Villanova University's business school is merging some courses and having professors from two disciplines team-teach them. This, officials say they believe, will give students a more realistic view of how decisions get made and help them think more about consequences, near- and long-term. "For ethics to be effective, you've got to understand how it applies in real situations, how it permeates everything," Danko said. Gettysburg College, a small liberal-arts school, takes management students to the sewer-treatment plant. "I want students to see how even routine decisions have an impact on other people's interests. . . . Their jaws drop when they realize that our treated sewer water goes into the Potomac River and Washington's drinking water," said Daniel R. Gilbert Jr., a Gettysburg professor. There is a sense of urgency as the nation reels from the hubris of banks collecting fees for bundling bad loans with good. Last month, federal authorities arrested 406 people on mortgagerelated charges and accused two former Bear Stearns Cos. Inc. hedge fund managers of fraud. "We're seeing a pervasive pattern of good people going bad. We want to put students in situations where they have to make decisions under pressure to succumb. We want them to experience how once you're on the slippery slope, it is hard to come back," said Jonathan P. Doh, director of the Center for Global Leadership at the Villanova School of Business.

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115 New, more dynamic exercises are being developed to simulate - rather than just look at and discuss - decision-making. Rather than follow a script, students act out roles, responding in real time to what happens as the scenario plays out. "We want students to experience what it will feel like when they are caught between a client and a partner who wants to keep the client happy. We want," Doh added, "to build the strength and competence of character to stand up to the client or executive. We need to teach them how to do it. . . . The only way is to make them feel the sweat and pressure." There is a new emphasis on role-playing exercises and observations that simulate the reality of decision-making. This is in contrast to the ethical case studies that have been around for years - on the Internet and in textbooks. Some traditional case studies are based on situations in which people such as Enron Corp.'s Ken Lay went wrong at the expense of many. Others describe thorny situations involving sales, advertising, accounting, purchasing, what people are required to wear to work, getting friends to leak information, and ignoring safety warnings. Many have a script with lines for people to spark discussion. This traditional approach often leads to "a vigorous discussion, with opinions bouncing around the room. But often no one walks out with a way to come to a conclusion," said Stephen J. Porth, associate business dean at St. Joseph's. "Too many are focused on legal, not moral, answers," DiAngelo said. Scandals spawn laws and rules, but there has been too little focus, professors say, on what led people onto the slippery slope. Examinations of ethical failures often find "that the people involved didn't see the whole picture" so they could think about consequences, Danko said. Professors say teaching must go beyond knowing right from wrong. Students must develop the skills to participate in processes - involving many cultures and disciplines - that produce ethical behavior. New initiatives seek to promote a more critical view of business. "Maximizing shareholder value is a legitimate objective, but it has to be pursued within a moral context. . . . The singular pursuit of any objective can produce perverse results," said John J. McCall, professor of management and philosophy and director of St. Joseph's Pedro Arrupe Center for Business Ethics. "We must teach that business is not primarily about making money. It is about providing goods and services that other people need. Businesses that are the most successful are the ones that pay attention to what they're doing and how they're doing it," McCall said. These companies develop a corporate credo, and "they don't just hang it on the wall, they live it," McCall said.

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116 Such businesses, he and others said, take a hard look at the sustainability of new ventures and avoid doing things that lead to laying off workers and leaving communities with debt from utilities and schools built to support plants that failed early. The pressures for profit on corporations can crowd out critical thinking and block important information, said David M. LeVan, former chairman and chief executive officer of Conrail Inc., the Fortune 500 railroad. His concerns about ethics led to a $1.25 million gift to Gettysburg College to fund an ethics professorship - his first contribution after Conrail was taken over by rivals and broken up in 1999. "I decided to do this based on observations, particularly after I became CEO," he said in his office of the Gettysburg Harley-Davidson dealership he and his wife, Jennifer, own. Students must learn to overcome "the natural tendency to protect the boss from bad things." If they become CEO, he said, they will have to "bypass normal channels and tap into key places to find out what's going on." And, he added, they will have "to create an environment where people are confident enough to tell the truth." Crafting fresh approaches to teaching ethics is just beginning. Deans and faculty are meeting with companies that recruit their students, graduates, current students and others. The new emphasis is on principles, not rules. "Ethics is a tradition of disciplined thinking. I teach 21-year-olds to think in disciplined ways they haven't thought before," said Gilbert, who holds the professorship LeVan endowed. "Enrons come and go," Gilbert added. "I don't think a scandals-based approach to teaching works. I want to connect ethics with everyday lives, teach that organizations couldn't operate if people didn't tell the truth and come to the aid of each other."

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July 9, 2008 By Michelle Williams

Real Deal: Block Text Message Spam! It's annoying and it can cost you - spam that comes across your phone in the form of a text message! But there is a way to stop it. "It seems like the spammers come up with more and more creative ways to get through," says Professor Charles Taylor of Villanova University. Advertisers are now using text messages to target consumers. If you haven't gotten one yet, you will. "It's projected that it's going to go way up over the next 10 years, getting into the billions of dollars," says Professor Taylor. We've gotten used to junk-email but that doesn't cost us anything, except the time it takes to delete it. When we get spam on our cell phone is different. "Consumers really view it as an invasion of their personal space," says Professor Taylor. Villanova Marketing Professor Charles Taylor says trust is crucial for an ad to be effective. An unwanted SMS text breaks that trust. "Boy, an SMS comes in and it might cost you more minutes or more money. Really annoying in terms of being irrelevant to you and in terms of about paying for it as well," said Professor Taylor. Unless you have an unlimited text plan, each annoying ad could actually be costing you money. Federal law bans companies from sending unsolicited commercial e-mail or texts to your cell, but that doesn't stop it. "We've probably had more complaints in last several months than we've had in last several years," says Sheldon Jones of Verizon Wireless. Verizon Wireless tells us they use filters to block up to 200 million spam messages every month. "It's a cat and mouse game," says Jones. The company also set up a website, www.vtext.com ,so you can block spam from getting through to your phone. Other cell carriers have similar programs. For step-by-step directions for each one, click here for my blog.

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"These messages that come across our network are pollutants. So we don't want that on our network and we certainly don't want it invading the privacy of our customers," says Jones. Most of the time these spammers are phishing and they're looking to find numbers that are active. If you respond to the text, they know they've got you - so never respond!

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July 15, 2008 By Kelli B. Grant

5 Ways to Save on Online Shipping Fees WITH GAS PRICES blowing past $4 a gallon, fewer shoppers are heeding the call of a trip to the mall. In order to save some cash, they're turning to the Internet to get their shopping fix instead. The problem is that many of those budget-conscious consumers aren't always saving that much money. Thanks to sluggish sales and higher fuel prices, many online retailers have been forced to boost shipping fees, a move that can significantly add to an order's final tally. Old Navy's "famous $5 shipping," for example, quietly rose to $7 in May when the retailer's web site merged with those of sister brands Banana Republic, Gap (GPS1) and Piperlime. This month, Staples (SPLS2) increased its charge for orders under $50 from $7.95 to $9.95. Afraid of alienating fickle shoppers, many web retailers, however, still aggressively market free shipping offers with the hope of recouping the cost in other ways (say, fewer coupons). "History has shown that online shoppers will go to great lengths to avoid shipping charges," says Eric Karson, associate professor of marketing and business law at Philadelphia's Villanova University. According to a study conducted by technology market research firm, Forrester Research, 61% of online shoppers say a free-shipping offer would sway them to pick one retailer over another. Encountering unexpectedly exorbitant shipping at checkout, on the other hand, is enough to make 43% of shoppers abandon their virtual carts entirely, reports PayPal and comScore. "There's a huge psychological impact from free shipping," agrees Dan de Grandpre, CEO of bargain-hunting site Dealnews.com3. "It's magic. It takes away, for most people, the biggest barrier to shopping online." That's why, despite the added expense for web retailers, free shipping remains the most popular online promotion. These days, however, shoppers should expect such promotions to come with a few added strings attached, such as higher order minimums or a requirement to pay with a store credit card. Here are some of the best ways to avoid getting dinged by shipping fees while shopping online: Crunch the numbers To continue offering free shipping, some smaller retailers may pad item prices, warns Karson. Before you jump on a free shipping offer, use a price-hunting search engine like PriceGrabber.com4 or NexTag.com5 to find the cheapest total price from a reputable store, including taxes and shipping fees. Hunt down free-shipping codes Stores are increasingly forgoing standard free-shipping policies in favor of regular promotions. To get the best deal, in many cases, requires a promotion code. Two new web sites, FreeShipping.org6 and FreeShippingOn.com7, offer exclusive free shipping promotions and codes from more than 700 retailers each. Users can search by retailer name or by product category.

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120 One thing to keep in mind is that major retailers often run more than a dozen promotions at one time, with different minimums and restrictions, so be sure to compare all of their current offers. J.C. Penney (JCP8), for example, currently offers one code (JCPCHOT) for free shipping on orders of $99 or more, and another (BBFAM8E) for free shipping on orders of $75 or more. Both expire July 31. Check for minimum-order requirements "Retailers still want to offer free shipping, but now they're requiring more," says Luke Knowles, founder of FreeShipping.org. Accessory retailer Fossil (FOSL9), he says, raised its minimum spending requirement for free shipping from $40 to $75. If your order balance is close to the limit (say, its $70 in the case of Fossil) then you may want to consider buying a cheap filler item to snag the free shipping. Amazon.com's (AMZN10) Super Saver Shipping, which offers free ground shipping for orders of at least $25 in qualifying items, is such a popular promotion that sites like Amazon Filler Item Finder11 now exist to help people meet the minimum and save. Use your store credit card It's often the key to low, or even no minimum order requirements. Gap, for example, offers its silver-level cardholders free shipping on any order. Meanwhile, Kohl's (KSS12) also offers codes for free shipping, with no minimums to its cardholders. Become a member Both Amazon and Sears (SHLD13) offer annual subscription memberships that come with free shipping — a cost that you can easily recoup if you order frequently enough or buy heavy items, says de Grandpre. Sears ShipVantage: For a $79 annual fee, you get free ground shipping at Sears.com and Kmart.com, as well as upgrades to two-day and overnight shipping for $0.99 and $3.99, respectively. (In comparison, someone ordering a single large bookcase14 would pay $90 in shipping costs.) Amazon Prime: For $79 a year, you get free two-day shipping on every order, as well as upgrades to one-day shipping for $3.99. The service is particularly useful if you use Amazon as your online grocer, de Grandpre says. (The megastore is routinely 20% cheaper than grocery stores15 on bulk packs of items like cereal and snacks.)

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Jul. 20, 2008 By Bob Fernandez

Lesser Giant General Motors' stock market value is now below that of several Philadelphia-area companies. Poor, shrunken General Motors. The American auto icon has fallen so far on Wall Street that several Philadelphia-area companies, in comparison, are looking like world-class corporate titans. One is hip Philadelphia retailer Urban Outfitters Inc., whose recent value on the stock market over $5 billion - nearly matched that of GM in recent weeks. GM gained significant ground last week after announcing a restructuring, but the company's total stock value, $7.5 billion, remains half of what it was in late 2007. Urban Outfitters markets products with whimsical brands like "Fairytales are True" and "Sparkle and Fade." Sales to mostly younger women are growing 29 percent a year. Half of its 10,000 employees work as part-timers. Its revenue last year was $1.5 billion. The South Philly company wouldn't seem to be in the same business league as General Motors, a company with 13 percent of the global auto market and $181 billion in 2007 revenue. But indeed, according to investors, it is. The Pennsylvania chocolatier Hershey Co., which has annual revenue of about $5 billion, and whose chocolate bar with almonds is celebrating its 100th birthday this year, has a stock-market value of $8 billion - bigger than GM. Other Philadelphia-area companies - Campbell Soup Co., Rohm & Haas Co., Tyco Electronics and Comcast Corp. - are significantly more valuable than GM as soaring oil prices and a recessionary economy have beaten down shares in the nation's largest domestic automaker. On Tuesday, seeking to calm speculation that the company might be forced to eventually seek bankruptcy protection, the automaker's top executive announced several steps to slow its cash burn: eliminate the cash dividend, cancel retiree health benefits, and eliminate thousands more jobs. "As I've said from the start, our goal is not just to change GM's bottom line from red to black, our goal is to change GM for the long haul," said chief executive officer Rick Wagoner. The immediate goal, analysts said, was to stay solvent beyond 2009.

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122 GM shares revved through the week. Before Tuesday, the difference in stock-market value between GM and Urban Outfitters was hovering between $300 million and $500 million. But by Friday, GM had closed with a stock-market value, or market capitalization, of $7.5 billion, compared with Urban Outfitters' market cap of $5.4 billion. This is what it would take for a corporate raider or private-equity investor to buy all the stock in the companies. Still, these are deflated times for GM, which peaked in market cap at about $47 billion in 1998, according to Bloomberg. To put its recent decline in context, let's wander Pennsylvania, South Jersey and Delaware - a land of towering giants when compared to the ailing automaker. Dow Chemical this month agreed to purchase Rohm & Haas Co., the specialty chemical maker located on Independence Mall, for about $15 billion in cash - about twice the value of General Motors. In Camden there's Campbell Soup Co., whose $13.1 billion in market cap is 77 percent higher than GM's. Tyco Electronics, in the western suburbs, weighs in at $17.4 billion in stock-market value. In Wilmington, Dupont Co.'s $39.8 billion is over five times GM's stock-market value. And then there's the gorilla in our midst: Center City's Comcast Corp. At $59.9 billion in stockmarket value, the pay-TV and Internet company is roughly eight times more valuable than General Motors. For Philadelphia boosters these market caps don't signify a muscling-up of the region's companies, but an enfeebling of a Rust Belt icon. A book, The End of Detroit, published in 2003, explored problems at GM, Chrysler and Ford. Author Micheline Maynard discussed the U.S. carmakers' inability to focus on quality and failure to consistently deliver sedans that excited American consumers, such as Honda's Accord or Toyota's Camry. Chrysler is privately owned, and Ford has suffered, similar to GM, from high oil prices and the waning popularity of big vehicles. Ford's market cap on Friday was $12.2 billion. U.S. auto executives failed to lead their companies out of danger, said V.K. Narayanan, a Drexel University business professor for strategy and entrepreneurship. "I will not condone the lack of cars. It's not like we don't have the know-how. We have the know-how. What we have not seen is reasonable leadership coming from the domestic auto industry," he said. It would be a mistake, he said, if the U.S. lost its domestic auto industry, which supports hundreds of thousands of jobs and engineering innovation. "GM should transform itself," Narayanan said. "I'm hoping it will happen. It's not a strategy. It's a hope." Last year, General Motors lost $39 billion on its $181 billion in sales. The losses were largely attributed to deferred taxes. The company sold 9.4 million vehicles around the world. Its share of the U.S vehicle market fell to 19.4 percent in 2007 from 20.7 percent in 2006 and 22.6 percent in 2005, according to its regulatory filings.

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123 William Madway, visiting instructor in marketing and business law at Villanova School of Business, said a big problem is GM's many brands - Chevy, Cadillac, Pontiac, Buick, GMC, Saturn, Hummer and Saab. GM has said it could dispose of the gas-gulping Hummer. Madway said he recently gave a Toyota dealership a $1,000 deposit to get on a list to purchase a gas-sipping Prius hybrid. "The biggest issue now is that no one wants their vehicles," Madway said of GM. "It doesn't feel like they have been a pioneer in any way." Peter McCausland, the chairman and chief executive officer of Airgas Inc. in Wayne ($4.9 billion market cap), sympathizes with GM's management, which had to negotiate labor contracts with the United Auto Workers. He enumerated other challenges the domestic auto industry has faced: Japanese automakers were game-changers. The cost of health care battered companies, most painfully those with large numbers of retirees. GM operated older factories that had to be modernized. The company does business in a nation that lacks a coherent energy policy. "We got sucked into cheap oil," McCausland said. But no one said business was easy. "We've faced our difficulties and addressed those core difficulties and learned from our mistakes," McCausland said of Airgas.

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124 MSNBC.com July 21, 2008 By Eve Tahmincioglu

Beware of social networking overload As Web sites proliferate, focus on one or two; don't be like Marcia There’s a great scene from "The Brady Bunch" when Marcia — just turned high school freshman — is nervous about fitting in and making friends so she signs up for every club listed on the school bulletin board. This is sort of what I see happening with many of you and all the social networking sites out there. I’ve been getting questions from readers, colleagues and friends about the social networking explosion in cyberspace. It seems like there’s a new site popping up every day, and no one wants to be left out of the latest and greatest group. The choices are endless, everything from Black Planet, a site for African Americans, to Xing.com, a site for professionals with an international flair. But with all the choices comes a digital daze. Here’s what people have been asking me lately: “Is it enough just to be on LinkedIn and Facebook?” “I just got an invite from a friend who’s on Plaxo. What is it and should I join?” “Will I dilute my networking effectiveness if I’m on MySpace, LinkedIn, Facebook and Twitter?” Marcia! Marcia! Marcia! You can’t be in every club. It’s just not humanly possible. I know, there’s a hint of desperation in the air because of the tough economy, and everyone wants to have lots of connections just in case layoffs are looming. But beware. You might end up with social networking overload. Enhancing your brand Trust me. In researching this column, I signed up for as many of the networks out there as I could and what did I get? A headache. Suddenly my e-mail inbox was flooded with friends accepting my invites for Plaxo, Twitter, etc., and I realized there was no way I was going to have time to do any of these sites justice. Especially since I’m already a member of LinkedIn and Facebook, and I barely have time to keep those up-to-date. So what’s the best strategy?

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125 “There are two purposes to social networks,” says Jason Alba, author of “I'm On Facebook, Now What?” and “I'm on LinkedIn, Now What?” “One is for networking, and the other is to enhance your brand.” Neither will happen overnight, he says, so you should take time to figure out your best networking options. First, you need to be part of at least one of these networks. Let’s face it, these sites have helped many workers with their careers. I hear great stories all the time about people being recommended by their connections and ending up with dream jobs. Greg Moore was a victim of the mortgage mess and ended up out of a job when the San Diego bank he worked for shuttered. But LinkedIn led him to new employment. “I had heard about LinkedIn through a guy I met at a golf tournament,” he explains, He signed up ASAP, created a profile and started making connections. Next thing he knew, he got an invitation to link up from someone who worked at I Love Rewards, a Toronto-based employee incentive company, who saw his profile and knew the golf buddy. “Now I’m business development manager for the company,” he says. LinkedIn and Facebook When it comes to professional networking, most experts say, LinkedIn is probably one site you want on your list. “LinkedIn has carved out a strong identification within the professional, job-seeking world,” says William Madway, professor of marketing at the Villanova School of Business. “It can offer more contacts and a professional, trustworthy environment for career-related networking. So, if I were attempting to advance myself professionally or career-wise, I’d be very inclined to turn first and foremost to LinkedIn.” Dan Abelon, the founder of SpeedDate.com, says he uses LinkedIn heavily for hiring. “It is extremely useful for finding appropriate candidates based on skills and work history,” he explains. If LinkedIn just seems too suit-and-tie for you, Facebook is a good alternative and also on the list for many networking gurus. I find you can get a good feel for what certain companies are like on this site because managers and employees seem to let their hair down a bit more, offering a glimpse of what the corporate culture may be really like. Where else can you get a cyber feng shui invitation? Be sure to use Facebook’s privacy settings. This allows users to separate their party photos from the weekend from the professional information they want prospective employers to see, says Adam Ostrow, editor of the social networking news Web site Mashable.com.

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126 The best of the rest Another site getting a lot of attention these days is Squidoo, a favorite for marketing expert Penny Sansevieri. She says it’s the best site for career enhancing because “you can upload a video of you, the page is very interactive, you can add widgets, a blog, just about anything.” It’s a useful way to “showcase your knowledge,” adds Mashable’s Ostrow, because you set up something called a lens on any topic you’re interested in, and then create a section that’s almost like a personal Web page that includes links and news on the subject. When a hiring manager Googles your name, your Squidoo page can be a great selling point if your lens includes expertise a company is looking for. Pulse, a service launched last year by online address book company Plaxo, is another great way to get into the social networking space. It works as an aggregator, with a space on the site where you can see updates on activity on many of your other social networks, Ostrow explains. It’s a good idea to check out all these sites to see what they have to offer, and then it’s up to you to choose one or two. You can add more than that if you have time to keep your friends and your profiles up to date, but don’t dilute your social networking juice. It’s not going to help your career if you have a bunch of profiles, or pages on a bunch of sites, and no time to check all the connections and news happening everyday. It’s better to focus your efforts and building a solid network on one site. Once you pick one main, general networking site, you might also consider finding a network that targets your profession or industry. Jon Ruiz, career services advisor at The Art Institute of California in San Francisco, recommends mainstream sites such as LinkedIn and MySpace to design students, but he also points them towards industry sites like Real TV and Coroflot. There’s also some value in joining online networking groups that are focused on a particular geographic area, adds Mashable’s Ostrow. He recommends using Meetup.com to find out about groups in your area. Just put in your topic of interest and zip code, and you can find out about networking opportunities in your town. That way you can put away your mouse, bypass the tweets and try your hand at the most effective career networking strategy: face to face. And I’m not talking avatars, folks!

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July 25, 2008 By Kathleen Ryan O’Connor

When bloggers attack Online criticism can be hard to take. Lashing back isn’t the answer - but a diplomatic response can turn the situation around.

Reese Adams, Lewis Advertising, Rocky Mount, N.C. What is the current opinion on how to handle negative blog posts about your company or brand? Respond or don’t respond?

By Kathleen Ryan O’Connor, Fortune Small Business contributor Dear Reese: Many businesses, both large and small, are still grappling with Web 2.0 - so it’s not surprising that your question drew a spirited response from bloggers, experts, and academics. But before we relate their opinions, was there an easy consensus? Yes. Respond. Honestly, quickly and transparently. In nearly every circumstance, our experts thought it was best to engage with bloggers and try to find common ground. First, read the post carefully. Did the writer have a bad experience with your product or service? Don’t try to sweep that under the rug - ask if you can fix it. Treat bloggers like valued customers. But if you believe they have a negative agenda or that they’re armed with bad information, stand up for your business and set the record straight. Investigate how the blog has handled such responses in the past - do they post corrections? Make sure you’re prepared to back your claims. Consider setting up a link to a page where readers can access more information, and find advocates for your position, such as valued customers. Before you hit “send,” carefully reread your e-mail. While a traditional journalist rarely has the space to reprint a message in its entirety, a blogger can - and often will - do so, especially if it comes across as snide, exasperated, or unintentionally funny. Assume that everything you write could be reprinted in full, and proceed with caution. Will Chen, editor of the personal finance blog Wise Bread: Living Large on a Small Budget, says he once wrote a “pretty critical post” about the privacy policy of Google (GOOG) Reader, which was later changed. According to Chen, many companies become emotional, or even hostile, when they come across unfavorable blog write-ups - a big mistake. “When you encounter negative posts, see it as an opportunity,” Chen says. Blogs, whether positive or critical, give companies access to a new audience. He says most bloggers want to be fair, but laughingly admits that “we have a certain egocentrism.”

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128 It’s helpful to consider how a professional blogger operates. While a traditional news reporter might bang out one or two stories a day, a blogger could be under the gun for five to ten posts in as little time. Bloggers are out to get eyeballs: trackbacks, unique visitors, and repeat visitors are their badges of honor. So use that to your advantage. Send bloggers information about your company, or offer to contribute your perspective on a subject that’s relevant to your expertise. You could be providing them with the post they’ve been sweating over all morning. But while it’s often smart to engage with bloggers, there are some situations where silence is the best policy. Aaron Schoenherr, Chicago-based executive vice president of Greentarget, a PR firm, advises you to look at the blog itself. If it’s an industry-specific outlet that critiques your work, you probably don’t want to respond unless the writer is making a false accusation. Ask yourself if the blogger is getting enough traffic to make it worth your time to respond. “Is the blog slick and professional, or was it made with a free template?,” Schoenherr asks. John Pearce, professor of strategic management and entrepreneurship at the Villanova School of Business, says: “If the attacker is mainly a nuisance with transparent motivations, whose wild claims appear on page three or later in your search engine listings, you can ignore him, as most other prospective customers will do.” But there are some sites that can’t be ignored. For example, Yelp, a popular venue where customers post reviews of businesses, draws 10 million monthly unique visitors. Matt Dornic, president of 3 Dog Agency, a Washington-based PR agency that specializes in online reputation management, says you should bow to the power of Yelp’s search placement. “They’re going to kick your butt no matter how great your search-engine optimization is,” he says. Since you can’t beat them, says Dornic, you should join them. “Sign up for the community, and be a true user: understand how it works, have a planned response to criticism, and review other people’s businesses. I’m brutally honest on Yelp.” According to Dornic, bloggers can rarely ding a business with a transparent, expansive Web presence. It’s easier to produce positive Internet hits than fix negative ones. To control your own search results - and crowd out unwanted hits - Dornic suggests creating avatars on different social networks, posting how-to videos, and even uploading Yahoo’s (YHOO) Flickr pictures from the company’s holiday party. You can also piggyback on others’ traffic by commenting on popular blogs. Be sure to provide your name and URL, but don’t publish overly self-promotional or superfluous comments. For an owner who doesn’t have time to update a slew of sites, Dornic recommends channelme.tv, a service that enables you to upload videos and content to your own page. Dornic himself uses the site and says it’s garnered him more hits than his professional home page. If you feel that blog attacks are seriously damaging your business, consider calling in reinforcements. Pearce says it can be useful to engage the services of a professional onlineidentity management firm, but advises you to check whether it’s worth your money. Some of these firms charge thousands, he says, to do what you can do on your own - create profiles on Facebook and Linkedin that will push back negative mentions in search engine results.

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129 Businesses facing an abundance of posts can also hire companies to track their Internet appearances. “The blogosphere is a fluid thing,” says Jeff Catlin, CEO of Lexalytics, an Amherst, Mass. firm that helps businesses manage information online. “You might not know about another post until it’s too late.” The average small-business owner, however, can catch references with Google alerts and determined surfing. You should also pay attention to whether there are bloggers within your own ranks. Zach Hummel, an expert in labor and employment law and a partner in the New York office of Bryan Cave, handles cases involving negative blogs created by current and former employees. Hummel encourages small companies to develop a blogging policy to preclude such issues. “It’s a protective measure that may be important in the long-term,” he says. Hummel adds that it’s much more difficult to take non-employees to court for online slander. “The growth of blogging has been huge,” he says, “and the legal system is still coming to grips with these things.” For now, you’ll have to rely on your own policing - but keep in mind that it’s generally wiser to be politely corrective than to act the part of vigilante.

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July 27, 2008 By Tom Taulli

Entrepreneur's Journal: Five key steps when starting a business Over the years, I've started several businesses. All in all, the process has been exciting. But, at the same time, there were lots of risks and frustrations. So, if you're thinking about making the leap, what are some things to consider? Let's take a look: 1. Know your industry: I read lots of business plans. And, one common theme is: the entrepreneur has only a sketchy understanding of the industry and competition. And, I think this can be a dangerous sign. However, with the internet, you can get a great understanding of an industry. For example, you can look at trade association websites, industry publications and even government sources. Finally, there's a good book on the subject: Successful Business Research: Straight to the Numbers You Need--Fast!. 2. Write an executive summary: With your industry research, this should be easier to do. Also, specify the business model (how do you make money?); the competition; a forecast and key milestones; and marketing strategies. Make this simple and concise (hopefully the summary is only one page). 3. Where's the money? That is, how will you get customers to pay you? For example, according to James Klingler, who is the Assistant Professor of Management and Operations at the Villanova School of Business: "Too many businesses are started without a clear path to money. Often this stems from not really understanding who the customer is and how the business will reach that customer. Self delusion can often be found in the assumptions made about getting to the customer." So, it's a good idea to talk to potential customers. And talk to many of them. 4. Leverage: Don't do everything yourself. In fact, with virtual assistants, on-demand applications and outsourcing, there are cost-effective ways to deal with many business functions (such as payroll, customer management systems and so on). So, I had a chance to interview Tim Berry, who is the founder of Palo Alto Software (which develops business plans and marketing software) and the author of a new book, The Plan-as-YouGo Business Plan. He says: "One of the mistakes I made along the way was trying to do too much alone. Even if you're the lone ranger, don't try to do all the legal and all the bookkeeping and all the administration and all the selling and all the marketing and ... whew, I need to take a breath. Way too many people fail because they don't recognize that nobody's really good at everything.

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131 They play too close and too tight. Get help. Make sure you have an attorney you trust and an accountant you trust, at the very least. This is the real world; it takes a village to build a business." 5. Reality check: Take a realistic assessment of yourself. Can you deal with lots of stress? Are you OK with working long hours? Can you sell your products and services? Yes, it's tough stuff. But, if done right, starting a business can be a tremendous experience.

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July 28, 2008 By Tom Avril

New trans fats warning labels may not be effective A requirement that package labels show the amount of harmful trans fats in foods may not be effective, says a new study from Villanova University and the University of Arkansas. When shown a simulated label describing a serving of crackers with 4 grams of trans fats, diabetic and coronary heart-disease patients were unlikely to view this as a large amount unless they were given additional health information, the study found. In fact, this amount represents about 70 percent of the average U.S. daily intake of these fats, which are blamed for raising "bad" cholesterol. Patients who were given extra information in advance - on the cardiovascular health risks and average consumption of trans fats - were far more likely to recognize that 4 grams was a lot, said John Kozup, director of the Villanova Center for Marketing and Public Policy Research.

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July 28, 2008 By Brian Steinberg

Pay-for-Play Wends Its Way Into TV News McD's, Others Get Exposure on Morning Shows as PR Yields to Paid Placements NEW YORK (AdAge.com) -- The revelation last week that McDonald's paid to have iced-coffee drinks set in front of the news anchors on Las Vegas' KVVU created a stir, even though the news personnel went about their business, didn't sip them and didn't give their inanimate co-stars even the slightest mention. Those outraged will be sad to learn that paid appearances for cold java are no longer that unusual.

Sit there and look cool: Iced joe on KVVU was untouched. Meredith has allowed similar placements at a CBS affiliate it owns in Atlanta, said Paul Karpowicz, president of the Broadcast Group at Meredith Corp., which owns the station. Other stations hold the line against such stuff, but have found other ways to weave marketers into select broadcasts. KCPQ, a Seattle Fox affiliate owned by Tribune Co., has in the past let McDonald's place logos against certain onscreen elements. Fox's WFLD in Chicago has a man-on-the-street segment in its "Good Day Chicago" program called "Breakfast Buzz," which is sponsored by McDonald's and shot in front of one of the chain's outlets, said Judson Beck, VP-general sales manager, Fox Chicago. The chain's logo is on screen during the segment and viewers are told afterwards that McDonald's was the sponsor, he said. "Advertisers look at it as an opportunity to have some visibility on their product and not get caught up in a traditional commercial break," said Mr. Karpowicz. Will marketers -- or more important, viewers -- look at the technique as crossing a line? It's one thing for Ford Motor Co. to pay for prominent appearances in programs such as "24" or "Knight Rider," where the stories are fictional and journalism is the furthest thing from any viewer's mind. But it's quite another to insert advertisers' wares into programs where serious, unbiased coverage of any number of topics is supposedly the hook that gets people to watch. The coffee cups in Las

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134 Vegas, first reported by The Las Vegas Sun, are also a signal that marketers are moving from overt promotions to more subtle ones that usually involve public relations and guerrilla marketing, and are willing to live with the risk that viewers might find the practices duplicitous or offensive. Potential disaster? "Despite station managers' promises that accepting paid product placements won't affect their station's news coverage, I think it most likely will, in time," said William Madaway, professor of marketing at the Villanova University School of Business in Philadelphia. "And even if they do hold the line, it will undoubtedly affect the public's perception of the independence and integrity of TV and radio newscasts, and that would be a disaster for viewership or listenership." Indeed, news programming can be a veritable minefield. "As you enter the news-program world, the line between what is news and what is promotion has always been a little more clear. And as we see more and more of these things it's going to be important that producers of these shows are transparent about what is an endorsement and what's actually news," said Fred Cook, CEO of Interpublic Group's GolinHarris, which works for McDonald's but had no role in the coffee placement. Nonetheless, he says paid placement outside of entertainment shows is a growing trend. "It's not uncommon these days to be asked to pay for a placement on a talk show. Those used to be done in exchange for the product, but now there are often fees associated with it because the programs are trying to create new revenue streams." Then there's the question of how effective such below-the-radar placement can be. "I guess if you have a cup of McDonald's sitting in front of you it's a subtle endorsement. It's like a billboard but I'm not so sure what the ROI is given the expense," said Margi Booth, president, M Booth & Associates. "If I had my druthers I'd much rather go with: spend the money to get a spokesperson or product on when there's something to say about it. That's much more valuable." Both business and news executives see where product placement in news programs could go too far. Steve Kraycik bristles at the idea of letting a potential subject of coverage entrench itself too deeply into a news broadcast. "You want to maintain a separation between paid advertising and news product as much as possible to retain your credibility," said Mr. Kraycik, KCPQ's news director. "That newscast needs to remain pure," agreed Chicago's Mr. Beck. Acceptance Whether consumers care enough about intrusions into space usually considered sacrosanct is a matter for debate. In a survey of about 800 respondents conducted by two Iowa State University professors, traditional product placement was generally considered acceptable, with people saying they knew it when they saw it. Negative reaction rose 30%, however, when viewers perceived products onscreen were designed to sell something, said Jay Newell, a professor of advertising at the university. The separation of news and ads is an idea that TV executives arrived at over time, and the line has been crossed depending on the type of newscast being broadcast. In the early days of TV, when entire programs were often owned or sponsored by a single marketing entity, NBC's nightly news program was known as the Camel News Caravan and backed by the cigarette maker. More recently, advertisers have paid to have radio hosts talk about products on air in the belief that it sounds more enticing and relevant than a stock 30-second commercial. "There are tasteful ways

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135 to do it," said MJ Keehn, partner-media director at WPP Group's Cole & Weber/United. "We're not talking about turning Tom Brokaw or Katie Couric into Billy Mays selling OxiClean." Much of this new push is driven by economics. Network newscasts have steadily lost viewers for years, and morning-news shows have become more focused on lifestyle and celebrity than on the serious news of the day. In a sign of the pressure on the formats, CBS's "60 Minutes," NBC's "NBC Nightly News" and ABC's "ABC World News" have all in the last few years let advertisers such as Philips Electronics and Pfizer sponsor entire broadcasts in exchange for running fewer ads, with more time for news segments. Marketers, too, have their reasons: Broadcast TV is snaring fewer viewers, who have more power than ever to skip past a 30-second ad. It's no surprise that some rules have begun to form. At KVVU, the McDonald's placement is disclosed by an on-air announcement as well as on-screen graphics, Mr. Karpowicz said. And the company wouldn't allow such stuff on more serious newscasts, including its evening and late news shows. Should a story about McDonald's or the fast-food industry come up when the chain's coffee is on screen, he said, the station would cover it "vigorously and aggressively." What about the coffee? It'd be taken "off the set, just as we remove the commercials for airlines" when an air disaster strikes.

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July 30, 2008 By Jack Neff

Study: Skinny Women Better for Bottom Line Researchers Find Thin Models Make Viewers Like Brands More, but Themselves Less BATAVIA, Ohio (AdAge.com) -- Thin is still in for advertising, new research suggests, unless you're trying to sell cookies or self-esteem. Women who had just seen thin models were nearly four times more likely to turn down a snack pack of Oreo cookies offered as thanks for their participation in the study than women who hadn't. A study by business professors at Villanova University and the College of New Jersey, inspired by Dove's "Campaign for Real Beauty," shows that ads featuring thin models made women feel worse about themselves but better about the brands featured. Seeing thin models also made college-age women far more likely to turn down a snack pack of Oreo cookies offered as thanks for their participation in the study, or to opt for a reduced-fat version. Women who had just seen thin models were nearly four times more likely to say no to Oreos than women who hadn't, and 42% more likely to opt for reduced-fat cookies if they did indulge. Women in a sample of 194 college students aged 18-24 expressed more negative feelings about their sexual attractiveness, weight and physical condition after seeing thin models than before. So-called high self-monitoring women, or those more concerned about what others think of their appearance, were the most negatively affected by seeing the thin models in the study. More likely to buy The professors are still preparing a written report on results from a second phase of the research, which found that despite the negative effect on their body image, women preferred ads showing thin models and said they were more likely to buy products featured in those ads than in ones showing "regular-size models," said Jeremy Kees, a business professor at Villanova. Karen Becker-Olsen, a business professor at the College of New Jersey, also has been conducting the research. She couldn't be reached for comment by deadline. "The really interesting result we're seeing across multiple studies is that these thin models make women feel bad, but they like it," Mr. Kees said. "They have higher evaluation of the brands. With the more regular-size models, they don't feel bad. Their body image doesn't change. But in terms of evaluations of the brands, those are actually lower."

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Mr. Kees acknowledged the findings create something of a quandary for marketers, who might have a positive effect on young women's self-esteem by showing more typical women in ads, but suffer in the marketplace as a result. "I'd tend to be cautious about using models in advertising that wouldn't maximize the attitudes and evaluations of the advertising and the brands," he said. "Certainly [Dove is] getting a lot of publicity, and it's a great, innovative campaign. But in terms of the bottom line of how that might be impacting ... purchase behavior, I'm not sure." Appetite suppressant Mr. Kees said the professors landed on the Oreo tactic, in which study participants didn't know their post-ad-exposure cookie-eating would be monitored, as a way of studying real behavioral impact in addition to the usual survey responses regarding ads. The Dove Self-Esteem Fund, backed by its Campaign for Real Beauty, has exceeded its original goal of reaching 1 million young girls by this year and expanded its target to 5 million by 2010. The data shows a definite, if short-term, link between thin models in ads and eating behavior, but Mr. Kees said he wasn't comfortable making the leap that seeing thin models could cause eating disorders. Dove and its agency, Ogilvy & Mather, Toronto, weren't reluctant to connect those dots in their "Onslaught" viral video released last year, splicing scenes of yo-yo dieting and bulimia into a montage of beauty advertising. "That's a far stretch to infer an eating disorder from a one-time choice," Mr. Kees said, but added, "That's certainly a scenario that would be rich for future research." The new study in part concurs with and in part diverges from some prior research on the impact of thin models. Research reported in 2005 and 2006 from psychology professors at University of Sussex and University of West England in the U.K. concluded that ads featuring ultra-thin models do make women feel worse about their looks, but aren't any better at selling products than ads featuring more typically proportioned women. The Lower Chamber of France's Parliament earlier this year passed a law that would ban the use of ultra-thin models in ads, and authorities in Spain last year banned ultra-thin models from runways. Unilever also vowed to not use size-zero models in any of its advertising. Unilever stays the course In a statement, a spokesman for Unilever said the company believes its approach works. "Unilever is confident in the effectiveness of its advertising," he said. "We believe women have the right to feel comfortable with their bodies and not suffer from lack of self-esteem brought on by images of excessive slimness." Dove's campaign, he said, has "penetrated society and started a dialog about real beauty," adding that "we are thrilled by the overwhelming positive responses we have received from women (and men) as a result of the campaign."

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138 The Dove Self-Esteem Fund, backed by the campaign, has exceeded its original goal of reaching 1 million young girls by this year and expanded its target to 5 million by 2010. Campaignforrealbeauty.com, he said, already has reached 4.5 million people. Despite those efforts, he said, "There is no question that women and young girls are being bombarded with unrealistic messages and images of beauty that impact their self-esteem." But, he said, "We are excited to see now (and have seen in the past couple of years) a growing trend towards more realistic and healthy looking women in advertising and in the media."

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July 30, 2008

Skinny Models Turn Women To Masochists

Ladies, have a look at this ad featuring skinny supermodel Kate Moss. How does it make you feel? Wait, let me tell you how it makes you feel: it makes you hate your own body, but really want to purchase that handbag Kate Moss is advertising! What am I, psychic? No, I'm just telling you what the advertising industry has discovered in a breakthrough new study about skinny models. Women love to hate themselves and keep coming back for more, apparently! The actual, scientific study found that "ads featuring thin models made women feel worse about themselves but better about the brands featured." They make you despise your own "normal" body, and subconsciously try to correct the situation with therapy consisting of shopping. Oh, the pretty girls have all the pretty brands! A Villanova professor who ran the study ferreted out just what advertisers bank on: masochism. ""The really interesting result we're seeing across multiple studies is that these thin models make women feel bad, but they like it," he said. The advertising industry always knew you were a bad, bad girl. And in the most entertaining twist to this whole thing, the study also found that images of skinny models make women stop eating. Surprise!: Seeing thin models also made college-age women far more likely to turn down a snack pack of Oreo cookies offered as thanks for their participation in the study, or to opt for a reduced-fat version. Women who had just seen thin models were nearly four times more likely to say no to Oreos than women who hadn't, and 42% more likely to opt for reduced-fat cookies if they did indulge. No telling what this means for Spanx.

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July 31, 2008 By Kai Ryssdal

Kai Ryssdal's Final Note ... This final note today: It's about fear and self-loathing in the marketing business. Professors at Villanova University gathered a group of college-aged women together and showed them ads featuring thin models. Then, as thanks for participating, the women were offered a pack of Oreo cookies. The overwhelming majority said no to the cookies, but they did say they would buy the brands and products that the ads featured. One researcher said the analysis went something like this: That thin models make women feel bad about themselves, but they like it, and that ads using normal-sized models didn't affect womens' body image, but they didn't like the brands and products that those ads featured either.

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THURSDAY, JUL 31

Shockingly Plus Sized Models Don't Make Women Want to Buy Stuff

Adage wrote a story about new research that states the obvious- Advertisers prefer thin models because it makes consumers like the brand more, but no so much themselves. According to the article, the study was done by business professors at Villanova University and the College of New Jersey and was inspired by Dove's "Campaign for Real Beauty". It concluded that "ads featuring thin models made women feel worse about themselves but better about the brands featured". Since when is this news to anyone? That's been the deal all along. Sure we had a few months of "conscious" fashion designers that weighed their models and put full figured models on the runway. But we all know that was just to try make women feel better about themselves long enough to get them shopping again. They mentioned that women that had just seen a thin model were less likely to opt for cookies like Oreos out of negative feelings about their own body, but still preferred brands that used ads with thin models. What a self loathing society. Giving more validity to spokemodels that look "better", but aren't a real representation of society. But it appears that Dove will continue with its effort to promote real women and real lifestyles. The article noted that a spokesman for Unilever said the company believes its approach works. He says that "Unilever is confident in the effectiveness of its advertising. We believe women have the right to feel comfortable with their bodies and not suffer from lack of self-esteem brought on by images of excessive slimness." I think that's a noble thought, but probably one that's wasted.

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The "All Black" Issue Of Italian Vogue: Both A Success And A Failure It's official: The "all black" issue of Italian Vogue is a hit. According to Time magazine's Jeff Israely, "After the original run of the July issue sold out in the U.S. and U.K. in 72 hours, Vogue Italia has just rushed to reprint 30,000 extra copies for American newsstands, another 10,000 for Britain and 20,000 more in Italy. The only complaints about the reprints might come from those currently trying to sell copies on eBay for $45 apiece." But not everyone thinks the issue is ground-breaking enough. Writer Priyamvada Gopal has a column in today's Guardian in which she claims black women actually have "little to gain" from the issue. So for whom should we chalk one up? Gopal writes: Well, it certainly is one for the inalienable right to be tall, thin, and airbrushed‌ Black models? Sure. But there's not a "natural" or "kinky" in sight, indeed, barely even a mop of curly hair. This is black girls-as-white girls: all aquiline noses, large eyes, oval faces (bar the standard exception of "unusual" Alek Wek), hair coaxed into silky straightness or carefully turbaned away in shot after shot. As for "black", it's more latte than americano. By simultaneously marking blackness as "special" and yet ensuring conformity to dominant (white and European) ideas of sophistication and beauty, the "black issue" tells us a great deal about race and ethnicity in the media today. To be non-white is to be constantly relegated to a "special issue", while the regular edition remains determinedly white. She has a point. Magazines are not inclusive. There's absolutely a euro-centric point of view; a Westernized, Caucasian standard of beauty. But I'll argue that without the "special" issue, some people would not be talking about the race problems in the fashion industry at all. Model mogul Bethann Hardison spearheaded conversations about the lack of black models last fall; I attended

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her "Out Of Fashion" discussion in October. Then another one in January. The number of people at the events grew; the number of news outlets discussing the issue grew. By June, Vogue had acknowledged the problem. Italian Vogue may be but a hammer blow to the wall put up around a billion dollar industry; a fortress to which, for years, only willowy Eastern European 16 year-olds had access. It wasn't always so; black models worked in the '70s and '80s more than they do now. Does Italian Vogue solve the problem? No. But every little bit helps. A dialogue helps.

And the next wall to break through just might be weight: With the exception of Toccara, all of the models in the "all-black" issue held to the slim standard. Unfortunately, according to a study by business professors at Villanova University and the College of New Jersey, ads featuring thin models made women feel worse about themselves but better about the brands featured. Writes Jack Neff for AdAge, "Despite the negative effect on their body image, women preferred ads showing thin models and said they were more likely to buy products featured in those ads than in ones showing 'regular-size models,' said Jeremy Kees, a business professor at Villanova." Why do we expect magazines to embrace women of all colors, shapes and sizes, when we, the women reading them, fail to do so?

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8/1/08

Real Women Not as Good as Skinny Women in Ads By George Anderson

The move by marketers to use "real" looking women has brought them positive publicity and, along with it, sales. A new study by professors at the College of New Jersey and Villanova University, however, suggests that these very same companies might have actually done better if they did away with using everyday women as models and just stuck with, well, real models. Jeremy Kees, a business professor at Villanova, told AdAge.com, "The really interesting result we're seeing across multiple studies is that these thin models make women feel bad, but they like it. They have higher evaluation of the brands. With the more regular-size models, they don't feel bad. Their body image doesn't change. But in terms of evaluations of the brands, those are actually lower." The exception to the above rule is in snack advertising (women prefer to see real women eating cookies than waiflike creatures) where women were four-times more likely to turn down an Oreo after seeing an ad with a thin model than one who was normal size. While the research made a case for skinny models, it did not involve assessing ads in the marketplace that feature regular-sized women. Unilever's Dove brand, with its "Real Beauty" campaign, has no reservations about the effectiveness of its advertising. A company spokesperson said in a statement, "We believe women have the right to feel comfortable with their bodies and not suffer from lack of self-esteem brought on by images of excessive slimness... We are thrilled by the overwhelming positive responses we have received from women (and men) as a result of the campaign." The spokesperson added, "There is no question that women and young girls are being bombarded with unrealistic messages and images of beauty that impact their self-esteem. We are excited to

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145 see now (and have seen in the past couple of years) a growing trend towards more realistic and healthy looking women in advertising and in the media." Discussion Questions: Does the research from professors at the College of New Jersey and Villanova University make a stronger case for using thin models in ads or presenting images that bolster women's self-esteem? Should brands be pushing buttons that may, in some way, be harmful/hurtful to consumers while generating sales or should they find a way to drive sales without making people feel bad about themselves?

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August 1, 2008 By Sean Scully

Business management by the Bible The Villanova University School of Business can teach you many interesting things — how to run a Fortune 500 company, how to finance a multibillion-dollar acquisition, how to audit complex balance sheets. Add to that now how to run your own Roman Catholic parish. Starting this summer, the school will offer a master’s degree in something called “Church Management.” Villanova says it is the first graduate-level business school program in the nation tailored exclusively to the needs of the lay staff who run churches and the pastors who supervise them. “Things have gotten such that in most churches, the pastors have gotten so overwhelmed with their spiritual duties that really it’s unfair to ask them to also take over temporal duties,” said Economics Professor Chuck Zech, head of the school’s Center for the Study of Church Management. “So more and more, these are being assigned to laypeople who sometimes lack the training in what it’s like to be a manager in faith-based organizations.” Dwindling numbers of priests, widespread cases of embezzlement, and growing demands for transparency from parishioners are prompting a greater emphasis on practical business training for church managers. The courses will examine regular business concepts but with a focus on ethics, theology and church law and practice. Barbara Purnell-Small, one of the 28 members of the inaugural church management class, is the sort of person the program was designed to help, Zech said. Purnell-Small serves as director of religious education at St. Francis of Assisi, a small parish in the Germantown section of Philadelphia. Although she has some religious training, she has no experience running a business. Yet the parish is so small, she said, that she is in effect assistant to the pastor. The two struggle constantly to manage the books and maintain the parish. “We have extremely large church buildings,” Small said. “Now, I’m not going to get a plumbing degree or learn how to do the heating, but there are a lot of issues … that come up through the course of the day, and you need a good, solid foundation — beyond theology — to be able to answer ‘how do you do this?’ Or ‘what do we do next for the church?’”

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147 Although the classes are targeted largely at Catholic churches, seven of the 28 students are Protestant, as is at least one instructor, Zech said, and the Lutheran Theological Seminary of Philadelphia plans to send over some graduate students in the fall. “All churches have the same problems, but every church has different solutions,” Zech said. Students spend a week on campus at the start of the program and complete the rest online. The initial class has American students from as far away as California and Idaho and even a priest from Hong Kong. A number of trends are putting a spotlight on the need to educate church managers. First, lay staff is becoming increasingly important as the number of priests and nuns dwindle. “For years, you could have had people who had no skills, no training, running $2, $3 million operations,” said Monsignor Louis Marucci, the pastor of the Church of St. Vincent Pallotti in Haddon Township, N.J., and one of the inaugural students. “You’d never see that in the corporate sector, but it’s been allowed to develop in the church because … the tradition was that the Father did it all. We’re moving into a whole different type of management model in the church.” Priest sex abuse scandals have also led to greater demands for transparency by parishioners, particularly on financial matters, Marucci said. The Archdiocese of Philadelphia has not yet sent any priests to the Villanova program, but it has used other nonbusiness school programs, such as classes by the Philadelphia-based Catholic Leadership Institute. Monsignor Timothy Senior, the archdiocese’s Vicar of Clergy, said the archdiocese is interested in “strengthening the secular skills” of its priests as they find themselves in charge of an everlarger collection of professional and volunteer lay employees. “A priest is more frequently alone or the only priest where there is a large lay staff,” Senior said. “So he has to be a leader among all the other leaders within the group. And that is a unique skill set.” Meanwhile, Zech said, awareness is growing that churches are as vulnerable to theft and mismanagement as any secular business. A survey last year by Zech’s center found that 85 percent of all U.S. dioceses had experienced embezzlement sometimes running into the multimillions of dollars. “It’s not enough to run this as a mom-and-pop shop any more,” Zech said. “We need some people with a professional background.” The two-year program costs $23,400 per student, with a substantial discount for anyone whose church steps up to pay at least a quarter of the cost. Half of the first class received the 33 percent discount. “We want to encourage churches to realize that this is an important ministry,” he said. “If you’re to survive, you have to start supporting finance like you support the other ministries you have.”

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August 10, 2008 By Brad Forsythe

Villanova University Professor of Marketing, and Marketing Business Law, Discusses The Olympics, International Branding, And Why More Advertisers Should Pursue A Cross-Cultural Segmentation Strategy This week Co-Host Brad Forsythe interviews C. Raymond Taylor, John A. Murphy Professor of Marketing, Marketing & Business Law, Villanova University. Charles R. “Ray” Taylor is the John A. Murphy Professor of Marketing at Villanova University. He received his Ph.D. from Michigan State University. Taylor served as President of the American Academy of Advertising in 2005, having previously served as Vice President and Treasurer. Dr. Taylor also serves on the Advisory Board of the Center for Responsible Leadership and Governance at Villanova and on the Board of Directors for the Marketing and Society special interest group of the American Marketing Association. Dr. Taylor’s primary research interests are in the areas of international advertising and advertising regulation. Dr. Taylor has provided consulting services to numerous businesses and organizations and has served as an expert witness in several court cases. Clients have included Viacom, General Motors, Philip Morris, U.S.A., McCann Erickson, Clear Channel Communications, Magic Media, Inc., Eller Media, Star Storage, Lamar Outdoor, Magic Media, Inc., Craig Realty, the Outdoor Advertising Association of America, the International Sign Association, Dechert LLP, Rossbacher and Associates, Mattioni and Associates, and the Center for Information on Beverage Alcohol (United Kingdom) as well as other companies. Professor Taylor has been named a Fulbright Senior Specialist by the Council of International Exchange of Scholars. Taylor has taught courses in Korea, China, Germany and the Czech Republic and has given lectures at many locations throughout the world. Taylor has also given speeches at the meetings of several major organizations, including ICORIA (European Advertising Association), the Academy of Marketing Science, the Korea Advertising Society, the International Sign Association, and the Transportation Research Board. He has provided testimony to the U.S. House of Representatives as well as state legislatures and has served as an expert witness in litigation involving marketing and advertising issues. He has also given speeches or lectures at prestigious Universities, including Harvard, Columbia, Ludwig Maximillians University, University of Amsterdam, Autonomous University of Madrid, Korea University, Harbin Institute of Technology, University of Texas at Austin, and Rutgers, and others. Professor Taylor has published numerous books, journals, and conference papers. He has published academic articles and book reviews in outlets that include: Journal of Advertising, Journal of Advertising Research, Journal of Marketing, Journal of International Marketing, Journalism and Mass Communication Quarterly, Journal of Public Policy and Marketing, Thunderbird International Business Review, Journal of Marketing Research, and Journal of Current Research and Issues in Advertising. He serves as Associated Editor of Journal of Public

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149 Policy and Marketing and on the Editorial Review Boards of Journal of Advertising, International Journal of Advertising, Journal of Business Research, Journal of Current Issues and Research in Advertising, Journal of Marketing Communications, Advances in International Marketing, Psychology and Marketing, and Journal of Consumer Affairs. He also serves as an ad hoc reviewer for Journal of Marketing and other journals in the marketing field.

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Aug. 11, 2008 By Stacey Burling

Too many firms use jargon to convey ideas So you're at a party getting to know a couple of attractive strangers. "What do you do?" you ask one of them innocently. "I'm a market-leading provider of technology-enabled process-optimization tools to reduce and right-size inventory, improve forecast accuracy and service, optimize production resources, and reduce cycle time across the supply chain," your new acquaintance intones. Whoa, time to get out of here, you think. But you recover your social graces enough to look hopefully at his friend. "Well," the friend says, "I develop small-molecule, orally administered pharmacological chaperones for the treatment of human genetic diseases." "How interesting," you lie, edging toward the door. "I'm sorry to run, but I just remembered I have to clean the cat boxes. Nice meeting you." Obvious as it may be that such heinous assaults on the English language would send people at a party running, this is how real businesses introduce themselves to reporters - and anyone else who reads their news releases on their Web sites - every day. After enduring this literary torture nearly to the breaking point, we thought it might help to share our pain, plus some thoughts from business experts - dare we say "thought leaders" - about the virtues of clear communication. After all, if potential customers cannot figure out what your company does, that might be a problem. "Maybe it's technology. Maybe it's poor schooling, but I think we're becoming a nation of weaker, more jargonistic communicators," said Kelly O'Keefe, who is director of executive education at Virginia Commonwealth University's Brandcenter. "It's certainly not good for brands." Maybe the people who write these descriptions are so steeped in jargon that they think we all know what managed telephony, online motion content, powerful enterprise server technology, mission-critical strategies, operational outsourcing solutions and "under-banked" consumers are. One company "helps pharmaceutical companies create competitive advantage and shareholder value through unparalleled insights into the drivers of physician prescribing behavior." Another English abuser describes itself as "the global leader in applying Advanced Enterprise Management Systems™ to help public- and private-sector clients transform into resilient organizations that proactively mitigate strategic risk, further competitive advantage, and optimize enterprise performance."

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151 Rich Sherman, an Austin, Texas, marketing consultant, who wrote the description for our first partygoer - Lead Time Technology of Wilmington, Del. - put a lot of thought into his wording, and was happy to defend it. Sherman, who is on Lead Time's board, said his target readers were supply-chain managers and trade-press writers, not reporters for daily newspapers. "It is not our strategic intent for you to understand," he told an Inquirer reporter. The description was purposely wordy, he said, to use as many key Internet search words as possible. He is phasing in some simpler language, but would never just say Lead Time is going to improve your company's efficiency. "So what? Who isn't?" he said. "The simpler you get, the less effective you get." Alan Siegel, who runs a branding company whose slogan is "simple is smart," thinks most Dilbert-worthy writing stems from naive attempts to impress. People, he said, "are using overblown, imprecise, confusing gobbledygook to try to sound big and important." The problem is "worse now than it's ever been," he said. He concedes that some tech companies are complicated, but thinks there's no excuse for using "nonsense language." Not surprising, given his company's approach, he thinks customers prefer plain English. "It's a definite business advantage and strategic advantage to communicate with clarity and coherence . . .," he said. "All the audiences of these big companies are crying for clarity." The Brandcenter's O'Keefe says the most successful brands are built on simple messages. Think Target and democratized style. "Most consumers crave simplicity," he said. (While Target's ads are masterly, its news-release description of itself refers to customers as guests, not the sort of simplicity we crave.) Some of the problem may stem from confusion within companies. "A lot of corporations really don't know who they are," O'Keefe said. Leaders of three local business schools say they're trying to create better communicators. James M. Danko, dean of the Villanova School of Business, said his school had revamped its curriculum to include more writing and oral presentations. Temple University's Fox School of Business is adding a business communications class this fall that will focus on clear, concise business writing and speaking. Drexel University's LeBow College of Business worked with its English department to bring more writing instruction into the business school and has started sending out examples of student work to alums in the working world for critique. While there is a sense in the business world that obtuse language impresses people (yes, we know this is true in other fields, too), students should know that clear writing is a sign of good thinking, said Frank Linnehan, LeBow's associate dean of undergraduate and graduate studies.

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152 "Being able to describe a complex concept clearly and succinctly is really an indication of how well you know that subject," he said. Some of the most puffed up, buzzword-laden writing is, of course, meant to dress up unremarkable ideas. It survives because of what Linnehan calls "emperor's-new-clothes syndrome." Davia Temin, who owns a marketing, reputation- and crisis-management firm, says turgid writing may start at the top, not with the lowly writer of a news release. Many business leaders, she said, want to include "every one of their marketing messages" in company boilerplate. "A lot of these guys, they want to throw in the kitchen sink, obfuscate with jargon," she said. "To get them off of that, it takes a major war."

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August 11, 2008 By Rebecca Cullers

Thinness still has upper hand in advertising Following up on the Looking Glass Foundation ads from Canada, Jeremy Kees of Villanova University has published a study that suggests that seeing skinny women in ads makes women feel worse about their personal body image but better about the brands advertised. When "regular-sized" models were used, the participants didn't feel any differently about their personal body image, but they gave those brands lower marks. Seeing the skinny models also resulted in at least short-term behavioral alteration, making the women 42 percent more likely to opt out of the "thank you" Oreos given away at the end of the study. The study, conducted jointly by Villanova and the College of New Jersey, stops short of making the link between a one-time cookie opt-out and advertising's role in fullblown eating disorders. Still, it poses excellent ethical questions for us in the biz. Although it would clearly not be a good idea if you're selling Oreos, assuming you think the study's findings are correct, would you use anorexics in your ads if testing showed it sold the product better?

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Aug. 14, 2008 By Linda Loyd Oil pumps inflation up in July, but just wait The higher-than-expected jump in U.S. consumer prices in July can be summed up in a word: oil. Inflation in July rose 5.6 percent over the last 12 months, the largest annual gain since 1991. From June to July, the rate rose 0.8 percent, twice as fast as economists were expecting. But with energy prices now retreating, July's increase in the Consumer Price Index is history, a one-month snapshot and not necessarily a trend. With oil prices heading down in the last few weeks, experts say the next monthly CPI report, for August, will be interesting. In other words, prices may ease up this month for the same reason they rose last month: oil. Here's how a few economists addressed the key points about prices: What drove the higher-than-expected July CPI number? Gasoline, food, clothing and communications - your telephone and cable bills. Tobacco prices have been soaring. Transportation costs - public transit, trains and airplane tickets - mostly because of energy. - Joel Naroff, Commerce Bank and Naroff Economic Advisors This one-month number is largely driven by energy, by oil. We already know that energy prices have receded. This number is not all that worrisome to me. CPI is released monthly; energy prices are every day. - David Shaffer, finance department chairman, Villanova School of Business What is the Fed and Chairman Ben S. Bernanke likely to do? I think they will do nothing based on this number. This is a July number. The Fed does not make policy by looking through the rearview mirror. Analysts are already looking at August and beyond. We all know that oil peaked in July. But oil has been dropping since. The August number is going to be interesting, not so much the July number. - David Shaffer While these inflationary pressures are broad-based and of concern, the economy is even softer. Right now, the Fed is likely to continue to focus on the weak economy by keeping rates stable, not lowering rates but not raising them either, possibly all through this year. - Joel Naroff How will the stock market react? The market is likely to discount the CPI report with hopes that future reports will be better because of the declines in energy. The market is focusing on oil and is therefore able to discount the CPI. - Joel Naroff

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155 The market already saw oil peak in mid-July, and the market also knows that oil has dropped fairly substantially. The market is factoring in that information more than this CPI number. In fact, the market is up almost 200 points today. [It eventually closed up 82 points.] This CPI number reflects history, and since the third week in July oil has been dropping. That is far more relevant to the market than this July number. - David Shaffer Is there a worst-case scenario from these CPI numbers? The inflation picture really teeters on what oil does. If oil goes back up substantially, I think that would be an inflation risk to the economy. If we see another spike in oil that has some permanence. The major fear would be that higher oil prices would seep into all areas of the economy. - David Shaffer Consumer prices by themselves are not going to create a recession. If we had consistently high numbers like this, the Fed could be forced to raise rates, and that would hurt the economy, possibly forcing it into a recession. - Joel Naroff Much of the increase in food was due to a strong reading for "food away from home" - meals at restaurants, vending machines, etc. - which respond to changes in food-commodity prices only with a long lag. This could imply that food inflation will remain elevated longer than we previously expected . . .." - Zach Pandl, Lehman Bros. Holdings Inc., quoted in the Wall Street Journal Any reason for optimism? The recent decline in oil prices. If oil does not return to $140 a barrel, I don't think this CPI number is too much of a worry going forward. - David Shaffer When we get the August Consumer Price Index report, it's going to look an awful lot better. It could be flat or even down. We are seeing a rollback in energy costs as well as some other commodity costs. It's likely that we may have seen some of the worst of the inflation numbers. Joel Naroff

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September 9, 2008 By Raj Daval

An advanced business education will create better stewards Leaders share insight about obtaining management education while serving at their churches. It’s important for today’s church leaders and administrators to have and develop strong business management acumen in addition to a solid theological foundation in order to manage more effectively. In recent years this necessity has become increasingly evident in light of sexual abuse scandals and countless financial misappropriations. To meet this need for additional training, several universities began offering continuing education programs, including the Master of Science in Church Management (MSCM) program at Villanova University, Villanova, PA and Biola University’s Master of Arts in Organizational Leadership (MOL) in La Mirada, CA. (See Church Executive, March 2008.) With an initial class of 27 students that began this May, Villanova’s MSCM program — which is almost completely online — developed by the Center for the Study of Church Management is a pioneering program in the field. Victoria Bailey, who does strategic planning for churches, including her own, First Baptist Church of Vienna, VA, is among the inaugural class. “I am currently facilitating a seven-year strategic planning project. It did not take me long to realize that church management is a lot different from managing a business for profit,” Bailey says. Bailey searched for educational programs that would help her meet her objectives but only found one or two day seminar options, and she felt that her MBA would not be enough. “After searching for church management courses that would provide me with a broad scope of topics, I selected Villanova’s program because there curriculum was in line with my needs,” Bailey says. Equipped to lead The MOL program at Biola has been offering classes since 1988, in several modular options. Nicole Maiocco, director of local outreach, Mariners Church, Irvine, CA, enrolled in the MOL program because she felt it would equip her to be a better leader. Maiocco graduated in 2006. “I learned so much from the program; I learned so much about myself as a leader,” Maiocco says. The MOL includes a Leadership Challenge as part of the program which is an intensive teamwork exercise. “The Leadership Challenge was eye-opening. It put me in a situation that I was uncomfortable with and made me push myself to get through it,” Maiocco says. “It reconfirmed the value and importance of teamwork. Throughout the program, I was forced to deal with my strengths and weaknesses and to come to terms with how they affect my role as a leader.” Sheila Anderson, chief business officer for Reid Temple African Methodist Episcopal Church in Glenn Dale, MD, found out about the MSCM program after the application deadline had passed. However, she persisted to the director, Charles Zech, that the curriculum was exactly what she was looking for. Anderson is also currently enrolled in a graduate certificate

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157 program in management at The Carey School of Business at Johns Hopkins University. Before the MSCM she was constantly trying to tailor the program to fit what she does for her calling in church business administration. “As a former civil litigator, I have a particular interest in risk management strategies for the church,” Anderson says. “I’m presently laying the foundation for future implementation of innovative strategies/alternative approaches to church business operations.” Many backgrounds are represented The aspect of the program that has been the most energizing for Anderson has to do with the people who are enrolled. “Currently, we represent several denominations, with diverse backgrounds and ethnic groups. I would never have imagined that 27 adult students could meet via distance learning and immediately become such a loving family,” Anderson says. Jen Hurst, coordinator of small groups, Bel Air Presbyterian Church, Los Angeles, CA, graduated from the MOL program in 2005. “Understanding different styles of leadership has been immensely helpful to me as I oversee small group leaders, coaches and project-based teams which have planned and executed large-scale events,” says Hurst. Bel Air organized the 34 Degrees Small Group Conference in partnership with Mosaic Church in November 2007. “I have also found that my understanding of organizational development has been key in the continuing effort to change the culture of BAPC from being a church with small groups, to being a church of small groups,” Hurst says. While continuing education for church leaders is a valuable tool for leaders and administrators, this type of intensive training requires students to take time away from their families and the responsibilities they have at their respective churches. When Bailey began the program at Villanova, there was an adjustment period. “At first it was difficult because it has been awhile since I was in school. But when I reorganized my time and recognized the value of what I am learning for the things I am currently involved in, this became an extension of my duties,” Bailey says. She suggests that if people commit to a program of continuing education as an extension of their work, it becomes easier to manage responsibilities over time. Maiocco’s experience in the MOL program also proved demanding, but ultimately beneficial. “It was challenging at times, but having class one night a week didn’t feel overwhelming,” Maiocco says. She was able to take a few classes on Saturday, which provided added flexibility. “I feel very fortunate that Mariner’s Church was very supportive of my attendance in the program,” Maiocco says. “Because the material we were studying was so relevant to and even entwined with my job, I was able to complete some of my coursework while at work.” For those seeking to further their management skills, there are now programs that include focused curriculums. Because of the often overwhelming responsibilities required of church lead ers the new church management programs offer a variety of options. The potential impact on local churches and communities by leaders that receive intentional church business management training is immeasurable.

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158 “At a minimum, the contribution to your local church will be immediately meaningful; at best, the reward of making lasting contributions to the business operations of your church is invaluable,” Anderson says. “Being equipped with the resources and networking strength of those with similar vocations and areas of expertise will enable us to keep the focus on ministry, outreach and leading souls to Christ.”

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August 29, 2008 By Miriam Hill

GlaxoSmithKline drug ad sparks a debate Advertisements appearing this week that attack GlaxoSmithKline P.L.C. don't beat around the bush: "DON'T BE FOOLED: GlaxoSmithKline's scare tactics are only concerned with protecting its profit, not the health of people with HIV/AIDS," the ads read. The AIDS Healthcare Foundation (AHF) is running the spots in the Washington Blade, the Village Voice, and Frontier Magazine to counter GlaxoSmithKline ads that the group fears will scare patients away from new treatments. In those ads, sharks circle and lions stalk alongside the tag line "avoid hidden dangers from changing your HIV medicine." GlaxoSmithKline, one of the largest providers of HIV drugs, has defended its ads as educational. And AHF itself has come under fire from other HIV advocates who say its tactics are questionable. Consumer drug ads are often such a touchy subject that controversy is their most common side effect. This year alone: Pfizer Inc. pulled Lipitor ads featuring artificial-heart pioneer Robert Jarvik after it emerged he was not a practicing doctor. Merck & Co. Inc. and Schering-Plough Corp. stopped advertising their cholesterol pill Vytorin amid questions about why the companies had delayed reporting disapppointing results from a trial of the drug. Ads for Lipitor, Vytorin and other drugs came under attack during a May congressional hearing titled Direct-to-Consumer Advertising: Marketing, Education or Deception? That question sums up the disparate views of what is often called "D To C," or "DTC" for short. Drug companies must submit ads to the U.S. Food and Drug Administration before they appear, but the agency does not preapprove them. The FDA may issue a warning letter after an ad appears, but the agency considers only whether the promotions make accurate claims and disclose side effects. "Basically, in very short and lay terms, an ad cannot be false, cannot be misleading, and must have what is called fair balance," said Thomas W. Abrams, director of the FDA's division of Drug Marketing, Advertising and Communications. The pharmaceutical industry is facing several years of soft sales as patents for blockbuster drugs, such as Lipitor, expire. It is countering that slide with an onslaught of ads. The number of ads

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160 submitted to the FDA has more than doubled - from 31,000 in 2001 to 68,000 last year, Abrams said. He would not comment on the GlaxoSmithKline HIV ads. HIV activists also have criticized a Bristol-Myers Squibb Co. ad featuring an image of a toilet bowl that reads, "Ask your doctor if there are HIV medications with a low risk of diarrhea." Bristol-Myers' antiviral drug Reyataz is believed to be less likely than other drugs to cause that side effect. GlaxoSmithKline, an early leader in HIV treatment, has been losing sales. Since 2003, the company's share of U.S. sales of HIV antiviral drugs has shrunk from 15 percent to 6 percent, according to IMS Health Inc. Ads undercutting competitors are common when products have been on the market for a while, pharmaceutical-marketing experts said. "They're more or less fighting for market share at this point," said Michael Capella, an assistant professor of marketing at Villanova University. "One of the classic examples of that would be the Pepsi challenge." Bob Huff, antiretroviral project director at Treatment Action Group, a New York advocacy group, said images of sharks and lions only made patients fearful. "From my perspective, this is the way that GSK has always kind of handled things in the past," Huff said. "Their modus operandi is always kind of to bash the competition, and they do that in a number of ways." AHF President Michael Weinstein said, "Running Jaws ads is just going to raise the anxiety level very high. For people nervous about getting treatment, this could put them over the edge." But Debra Parmer, who works to educate people about AIDS in northeast Ohio, said she thought the GlaxoSmithKline ads were effective. They reminded her of a group that promotes condom use by filling a casket with condoms and using the slogan, "A tisket, a tasket, a condom or a casket." That image is negative, too, but she said it had encouraged people to use condoms and seek treatment. Representatives from both Bristol-Myers and GlaxoSmithKline, which has extensive operations in Philadelphia, said they had vetted their ads with people who have HIV before running them. AHF often mounts public attacks such as this one, which calls the GlaxoSmithKline ads the "Worst Drugs Ever." It has criticized many companies in ways that at times have aggravated other HIV/AIDS activists. Paul Dalton, director of treatment information and advocacy for Project Inform, an advocacy group for people with HIV and AIDS, said he respected AHF for the treatment it provided to people with HIV and AIDS.

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161 But he said the group's campaigns "are always self-serving." In 2004, for example, AIDS activists criticized AHF for settling a lawsuit it had filed against Abbott Laboratories over the price of its AIDS drug by accepting funding for AHF treatment programs even though Abbott did not lower the price of the drug. In 2003, GlaxoSmithKline's then-chief executive officer, Jean-Pierre Garnier, accused AHF of blackmail after it had sued the company over its drug prices. AHF spokesman Ged Kenslea said the group's sole goal was providing good treatment for patients. He said AHF had gone after many companies, including Gilead Sciences Inc. Gilead's general counsel, Gregg Altman, is on AHF's board. The company competes with GlaxoSmithKline, but in an e-mail, Altman said he was not involved in the decision to run ads criticizing Glaxo.

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September 9, 2008

Ron Cruse publishes ‘Lies, Bribes and Peril’ International business authority Ron Cruse has published Lies, Bribes and Peril: Lessons for the Real Challenges of International Business, the quintessential guide to success in the global marketplace. Cruse has built three multi-million dollar companies over a career spanning three decades in virtually every headline grabbing hot spot in the world. Kirkus Discoveries called the book "engaging," "informative," and "intriguing." Kirkus confirmed the book's broad appeal by also stating that Cruse's experiences, "will especially interest those involved in politics, business or international relations." The review continued to say, "the author's instructions will aid anyone attempting to interact with other cultures." From Russia to Zimbabwe, from Pakistan to Nigeria, and from Germany to Afghanistan, Cruse relates stories of his dealings with an unusual cast of characters -- a gentle Sudanese, a Harvardeducated Saudi, a Masai guide, an Indonesian shopkeeper, a Kazak official, an Iraqi driver, and many more -- in a way that entertains as well as informs. His fast-paced, enthusiastic style colorfully illustrates how culture affects perceptions, actions, thinking, communication, legal frameworks, and even personal security when doing business globally. In addition, the book demonstrates how doing business across political borders and cultural divides can transform even ordinary events into bizarre challenges that must be carefully navigated to ensure success. "This book is a must-read for anyone looking to succeed in business outside the United States," says James Danko, the Helen and William O'Toole Dean at the Villanova School of Business. "Ron Cruse offers critical insights into the fact that there's more to succeeding in global business than just numbers."

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September 8, 2008 By Erika Morphy

Multifamily Mull Implications of GSE Takeover WASHINGTON, DC-The commercial real estate industry has had 48 hours to absorb the news of the GSEs’ conservatorship. The initial assessment--both by the larger global financial community and the commercial real estate industry specifically--is one of cautious approval. Global stock markets have soared as a result of the weekend’s news that the Federal Housing Finance Agency is assuming the power of the Board and management of Fannie Mae and Freddie Mac, with rises ranging from 2% in the US indexes, by mid morning, to as much as 4.5% in Europe and Asia. The Treasury action is also a positive for the US housing market, Mark Zandi, chief economist and co-founder of Moody's Economy.com, told listeners in a conference call this morning. While the measures by themselves "are no silver bullet" for the greater problems troubling the housing and capital market, the Treasury takeover will likely result in lower mortgage rates and increased availability of mortgage credit. "A better capitalized Fannie and Freddie will be empowered to step up their provision of credit," he said. The multifamily sector, for its part, is busily trying to determine whether these same benefits will filter into their niche of the commercial real estate market. For many that question is still unclear, with several financiers declining to comment for this article for that reason. Fannie Mae and Freddie Mac did not return a call in time for deadline. "I think it is too early to tell how capital allocation will be effected by the takeover.," Professor Shawn Howton, associate professor of Finance and director of the Villanova School of Business Center for Real Estate, tells GlobeSt.com. "It might stabilize these giants and allow them to better serve their markets. Since the government is providing an infusion of capital to the firms lending through them might not be impacted and price and volume of multifamily deals might improve. It is very hard to tell but the markets seem to be responding very favorably to the news." There is also a growing body of opinion that, yes, the GSEs’ multifamily lending operations will also receive a boost from the conservatorship. "I don’t see why multifamily will be different than any other facet of the industry," Matthew Krauser, director of Integra Realty Resources in New York City, tells GlobeSt.com. He predicts that the government action will provide a significant boost with multifamily lending. "We should see more competitive rates in multifamily as a result," Allan Domb, principal of Philadelphia’s Allan Domb Real Estate, tells GlobeSt.com. Spreads in the multifamily sector have widened significantly over the past year, he continues. "Spreads for conduit loans have gone as high as the mid 6% to 7% range. Now, I think they will start to compress."

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164 Much of these benefits will not be realized immediately, Dave Baird, national director for multifamily for Sperry Van Ness, tells GlobeSt.com. "Overall the ability [to finance multifamily] will still be there. The two GSEs have funded huge amounts this year. In the short run, though, I think there will be some confusion and delays." That all said, the multifamily community is understandable nervous about this sea change in government support given the importance the GSEs have to the sector. When asked whether the government actions will be beneficial to multifamily finance, Doug Bibby, president of the National Multi Housing Council, responded with "we hope so." Probably it will provide a boost in the short run, he tells GlobeSt.com. "However I am most concerned about the effective and efficient functioning of the multifamily market in the long run. Our business is heavily dependent on [the GSEs’] portfolio execution. We hope the government doesn't de-emphasize portfolio execution to the point that it winds up hurting multifamily business."

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By Vigyan Arya on Tuesday, September 09, 2008 Thin is still in for the advertising world, despite majority of female consumers showing resentment. New research on the subject shows that many women may personally resent thin or super-thin volunteers approaching them for promoting various products, but they do take the message seriously. "It's a case of conveying an aspiration message," says Matina Covello, a strategy executive with a marketing communication company based in Dubai Media City. The conclusive message is derived out of two such research conducted by Oreo cookies and Dove, in their recent "Campaign for Real Beauty". On the face of it, the survey conducted by cookie makers Oreo revealed that women who had just seen thin models were nearly four times more likely to turn down a snack pack of cookies offered as thanks for their participation than women who hadn't. On similar grounds, college-going girls that participated in a research to study the impact of Dove's "Campaign for Real Beauty," shows that ads featuring thin models made women feel worse about themselves but better about the brands featured. The study was conducted at Villanova University and the College of New Jersey, in the US. Seeing thin models also made college-age women turn down a snack pack of Oreo cookies offered as thanks for their participation in the study, or to opt for a reduced-fat version. Women in a sample of 194 college students aged 18-24 expressed more negative feelings about their attractiveness, weight and physical condition after seeing thin models than before. So-called high self-monitoring women, or those more concerned about what others think of their appearance, were the most negatively affected by seeing the thin models in the study. "At a personal level, all the participants, or for that matter women in general," explains Martina "may not be appreciative of the slim figure of promotional girls, but they clearly understand the message and it's in fact absorbed for long-term retention." Communication experts are still collecting data and are in the process of collating a detailed research report, but initial indications in survey found that despite the negative effect on their body image, women preferred ads showing thin models and said they were more likely to buy products featured in those ads than in ones showing "regular-size models". "The really interesting result we're seeing across multiple studies is that these thin models make women feel bad, but they like it," said Jeremy Kees, a business professor at Villanova about the study in a special paper on the subject. "They have higher evaluation of the brands. With the more regular-size models, they don't feel bad. Their body image doesn't change. But in terms of evaluations of the brands, those are actually lower." Martina believes that this is a sensitive areas where advertisers cannot impose a thin image in the minds of consumers beyond a point, as "that may backfire in reality".

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166 The findings create something of a quandary for marketers, who might have a positive effect on young women's self-esteem by showing more typical women in ads, but suffer in the marketplace as a result. "I'd tend to be cautious about using models in advertising that wouldn't maximise the attitudes and evaluations of the advertising and the brands," said Kees in support of the rational. "Certainly [Dove] got a lot of publicity, and it's a great, innovative campaign. But in terms of the bottom line of how that might be impacting ... purchase behaviour, I'm not sure." Kees said the professors landed on the Oreo tactic, in which study participants didn't know their post-ad-exposure cookie-eating would be monitored, as a way of studying real behavioural impact in addition to the usual survey responses regarding ads. The Dove Self-Esteem Fund, backed by its Campaign for Real Beauty, has exceeded its original goal of reaching one million young girls by this year and expanded its target to five million by 2010 in the US. The data shows a definite, if short-term, link between thin models in ads and eating behaviour, but Kees said he wasn't comfortable making the leap that seeing thin models could cause eating disorders. "That's a far stretch to infer an eating disorder from a one-time choice," Kees said in response to a query fromAdAge, but added, "that's certainly a scenario that would be rich for future research." The new study in part concurs with and in part diverges from some prior research on the impact of thin models. Research reported in 2005 and 2006 from psychology professors at University of Sussex and University of West England in the UK concluded that ads featuring ultra-thin models do make women feel worse about their looks, but aren't any better at selling products than ads featuring more typically proportioned women. There has been an onslaught at government level against the phenomenon of using thin models with authorities and brands vowing to discourage being thin to the extent of being unhealthy. France had earlier this year passed a law that would ban the use of ultra-thin models in ads, and authorities in Spain last year banned ultra-thin models from runways. Unilever also vowed to not use size-zero models in any of its advertising. In a statement, a spokesman for Unilever said the company believes its approach works. "Unilever is confident in the effectiveness of its advertising," he said. "We believe women have the right to feel comfortable with their bodies and not suffer from lack of self-esteem brought on by images of excessive slimness." Dove's campaign, he said, has "penetrated society and started a dialog about real beauty," adding "we are thrilled by the overwhelming positive responses we have received from women (and men) as a result of the campaign." Despite those efforts, he said: "There is no question that women and young girls are being bombarded with unrealistic messages and images of beauty that impact their self-esteem." But, he

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167 said: "We are excited to see now (and have seen in the past couple of years) a growing trend towards more realistic and healthy looking women in advertising and in the media."

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THE FED

Rate cut could happen as soon as Tuesday Move, once thought extremely unlikely, now in play By Greg Robb, MarketWatch Last update: 12:50 p.m. EDT Sept. 15, 2008

WASHINGTON (MarketWatch) - Only 48 hours ago, a Federal Reserve rate cut was considered off-the-table, but in the wake of the Wall Street turmoil and shake up at two of the nation's largest investment banking firms, the central bank may well decide to cut interest rates, economists said. Diane Swonk, chief economist at Mesirow Financial in Chicago, saw a 75% chance that the Fed would cut rates by a quarter-percentage point to 1.75% and a smaller chance of a half-point move. The move would be designed to bolster investor confidence and to try, once again, to get markets functioning, Swonk said. "It is an attempt to shore up confidence, but also an attempt to deal with the reality that market mechanisms are not working and the economy is weakening," Swonk said. The backdrop of rising unemployment and a moderation in inflation may help the Fed decided to move, analysts said. Most economists were not as sure as Swonk that the Fed would move. They said the situation was very fluid and stock market trading leading up to the meeting would play an important role in the final decision. But Swonk said the market was relatively calm because of expectations of a rate cut. But they agreed that a rate hike was now a definite possibility, but may not be the most-likely scenario. "It wouldn't hurt," said one economist who couldn't comment on the record because there was a disagreement at his firm about what the Fed would do. Other Wall Street economists said they had been told not to comment to reporters on such a volatile day.

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169 The fact that the Fed may cut represents a lightening-fast change in the outlook for interest rates. Only last Friday, almost all economists saw the Fed remaining on hold at 2% with the next move being a rate hike. But the stress in financial markets has changed all of that. Late on Sunday night, Lehman Brothers announced that efforts to find a partner failed and the company would file for bankruptcy. In addition, Bank of America announced that it would acquire Merrill Lynch. The events raised the possibility of concerted rate cuts from the Fed, the European Central Bank and the Bank of Japan, economists at Morgan Stanley told clients. "A precondition for such action would be disorderly markets," the Morgan Stanley economists wrote in a note to clients. Fears that the collapse of Lehman Brothers could cause worried banks to freeze lending to each other and customers prompted the Fed, the ECB and the Bank of England to aggressively add liquidity to money markets Monday. Maury Harris, chief economist at UBS, was one of the few economists expecting a rate cut by the Fed before the end of the year. But Harris was skeptical that the Fed would cut at its meeting on Tuesday. Rather, he said, the Fed would issue a statement leaning in the direction of lower rates. "There likely will be reluctance at this point for Fed officials to quickly cut the funds rate in response to the market turmoil," Harris said. Many Fed policy makers have been anxious for the Fed to tighten monetary policy, believing that low 2% rate was fueling the public's expectations of higher inflation. But the majority of Fed members have been reluctant to move rates higher. Victor Li, associate professor of economics at the Villanova School of Business, said that a rate cut might be counterproductive.

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170 "I see very little gain of lower rates at this time and some may argue that extremely low rates may encourage the type of risky behavior on the part of investors which is exactly what the Fed wants to avoid," Li said.

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September 15, 2008

By Jeannine Aversa

Wall Street crisis could put Fed rate cut in play WASHINGTON (AP) — Wreckage from a massive crisis on Wall Street could prompt the Federal Reserve to do an about face and once again cut a key interest rate this week or possibly later this year, economists said Monday. Just a few days ago, a rate cut appeared largely off the table. Now it has emerged as a possibility as the Fed prepares to meet Tuesday against a backdrop of historic upheaval in the U.S. financial system. Lehman Brothers Holdings Inc., the country's fourth-largest investment firm, filed for bankruptcy protection on Monday. And, Bank of America is buying Merrill Lynch in a $50 billion deal. "It puts a Fed rate cut back on the table," said Stuart Hoffman, chief economist at PNC Financial Services Group. Seeking to calm frazzled markets, President Bush assured the country his administration is "working to reduce disruptions and minimize the impact of these developments on the broader economy." The Dow Jones industrial average plunged more than 300 points in afternoon trading. On the other side of the Atlantic, major European central banks plowed billions into markets Monday with the hope of averting a lending freeze-up in the wake of Lehman's failure. "It is an ongoing process and we have to remain extraordinarily alert," said European Central Bank President Jean-Claude Trichet. In Asia, China's central bank cut a key interest rate to stimulate growth as inflation has eased. It was the first rate cut there in almost six years. Chinese regulators have steadily raised interest rates over the past three years to contain inflation pressure. During emergency sessions over the weekend, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson made clear there would be no government bailout of Lehman. The Fed took steps Sunday night to keep cash flowing to major Wall Street players by expanding its loan programs, however. Before the extraordinary events over the weekend, the prevailing wisdom was that the Fed would hold its key interest rate steady at 2 percent at its next meeting on Tuesday. Although that still could happen, a growing number of economists and investors now believes there is a chance the Fed could reduce its rate by one-quarter or even a bolder one-half percentage

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172 point on Tuesday. Much hinges on the information the Fed gets about how the inner workings of the U.S. financial system are functioning and how Wall Street investors react to the crisis. "It is a different ballgame. Anything can be expected and a rate cut is possible," said economist Richard Yamarone, economist at Argus Research. Yamarone thinks the Fed on Tuesday will decide to stay the course and leave rates alone, fearing another cut would hurt the value of the U.S. dollar more. Hoffman, too, isn't convinced a rate cut will happen. Were the Fed to slice its key rate, the prime lending rate for millions of consumers and businesses — now at 5 percent — would drop by a corresponding amount. The prime rate applies to certain credit cards, home equity lines of credit and other loans. The Fed's key rate and the prime rate are at four-year lows. Even if the Fed doesn't lower rates on Tuesday, analysts believe the central bank could switch signals and suggest it could cut rates sooner down the road. Over the last few months, Bernanke and his Fed colleagues have signaled that the central bank's next move on interest rates would probably be an increase to fend off inflation. Given all the economic and financial stresses, though, economists are now saying the likelihood of a rate increase over the next six to nine months is virtually nil. A recent retreat in record-high oil prices and improved readings on wholesale prices, however, gives the Fed more leeway to lower rates if needed or at least hold them steady. The Fed in June halted its most aggressive rate-cutting campaign to shore up the economy out of fears that those low rates were aggravating inflation. It didn't budge the rate at the last meeting in August for the same reason. Fed officials have suggested that harder-to-get credit and financial troubles have blunted the energizing impact of the central bank's already-ordered rate cuts on consumers and businesses. Economic growth is slowing and the unemployment rate is at a five-year high of 6.1 percent. Some argued that an additional rate cut might offer a psychological boost to shaken Wall Street investors, but probably wouldn't do much to turn around worried consumers and bolster the economy. Others feared another rate cut could send a wrong message to financial companies that made bad bets. "I see very little gain of lower rates at this time and some may argue that extremely low rates may encourage the type of risky behavior on the part of investors which is exactly what the Fed wants to avoid," said Victor Li, an economics professor at the Villanova School of Business.

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By Erika Morphy

Lehman, Merrill Distress Could Bring Buying Frenzy NEW YORK CITY- By now the shock and dismay stemming from the events of the last fortyeight hours is wearing off, replaced--at least in some quarters-–by calculated opportunism. These events, of course, are Lehman Bros.’ Chapter 11 bankruptcy filing and Bank of America’s sudden acquisition of Merrill Lynch for $50 billion. To be sure, the impact will be a severe one by many measures: there will be a significant toll on employees of these firms, as well as the local economies in many financial-center cities besides New York. The national economy is also certain to suffer as banks continue to scale back lending in all sectors, from credit cards, to business loans to auto loans. That said, for some well-positioned firms, the implosion of these investment banks represents new buying opportunities. Indeed, if the discounted assets and securities are priced appropriately, their influx onto the market could finally launch that much-awaited buying spree by the equity that has been sitting on the sidelines for the last 18 months. “If these loans are priced to market and there is a cram down, that could help precipitate a quicker movement through this downturn,” Steve Pumper, executive managing director in Transwestern’s Investment Services Group, tells GlobeSt.com. And if that happens, speculates Anthony LaMalfa, a senior manager at the real estate practice at BDO Seidman, the securitization market is bound to follow. “There is a lot of cash out there, and sooner or later it will have to be deployed,” he tells GlobeSt.com. For people that have capital, this will provide an excellent opportunity over the next 12 to 24 months for them to make investments and earn above-market returns, Pumper says. But there are a number of moving parts to this theory that could go wrong, the Transwestern executive readily admits. First, investors are not at all convinced that we've hit bottom, which means they will hold off on acquisitions and purchases of distressed debt. Also, he says, many investors are likely to wait for loans that are coming due in 2009 and 2010--assets that will sustain a double hit with a drop in value plus a much lower LTV available from banks. Making market-wide prognostications is also difficult because investors are still trying to assess the quality and quantity of these assets. “One number we have been able to verify today [Monday] is that Bank of America has been involved in an estimated $28 billion of commercial real estate transactions since 2001,” Hessam Nadji, managing director of research services with

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174 Marcus & Millichap Real Estate Investment Services, tells GlobeSt.com. “Each of these entities has exposure to both properties and mortgages that were issued or acquired after 2005. The most vulnerable part of the market is late vintage paper or properties that transacted at the height of the market in 2006 or 2007.” Those are the assets most vulnerable to price pressure, he says. Mortgages and properties issued or transacted before 2005 most likely have few performance issues and should have value built up despite the correction that has occurred in the market over the last year. The key question is how disposition of these assets will be handled--a subject of intense debate and speculation over the past several days. “I assume that all assets are fair game," says Professor Shawn Howton, an associate professor of finance at the Villanova School of Business and director of the Daniel M. DiLella Center for Real Estate. "This includes real estate. There is a fire sale going on of any assets backed by either commercial or residential property.” “I assume the bankruptcy reorganization will involve selling as many good assets as possible to make creditors whole or happy,” he tells GlobeSt.com. “Equity holders are in for a very long ride with Lehman.” Unfortunately, he adds, “we need a firm bottom in the housing market before all of these positions can be unwound and some of the uncertainty resolved. “Without that bottom, the increase in foreclosures and housing supply will continue to reverberate in the rest of the economy, and these real estate assets will continue to lose value, hurting the credit quality of institutions across the board. At the end of the day, there are assets at the bottom of many of these contracts, they are just assets that are declining quickly in value in very levered firms.”

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Sep 16, 2008 By Ben Simmoneau

Wall Street Woes Hitting Home PHILADELPHIA (CBS 3) ― Monday's freefall may have happened on Wall Street, but it is hitting home in communities across the Delaware Valley. At the Maris Grove Retirement Community in Concordville, retirees are watching their nest eggs closely. "You're inclined to want to panic," says Dick Smyth, a long time Verizon employee. "Your senses tell you don't panic, because that's what the problem is right now." And despite losing $10,000 in Lehman Brothers bonds, fellow retiree Ike Walton is taking the losses in stride – even laughing it off. "If things go bad with us, they go bad with everybody," he says. Still, both Walton and Smyth have spoken with their financial advisors over the past few days, seeking advice about the best course of action. "She said to me, 'we've got to hang in there – you're used to this, we've got to hang in there,' and I agree with her," says Smyth. That is exactly what most financial experts will tell you to do in most cases – even if it is tempting to stop making those 401(k) payments. "That's not a very good idea," says Dr. Mike Pagano, a former financial accountant and professor at Villanova University. "I think if you look historically over the last 75 years, the markets have gone up." If you drop your stocks too quickly, you could end up losing more than if you just stay put. "There are studies that show if you miss out on the 12 months, it [the market] moved the most, you've missed out on about 50 percent of the upside of the marketplace," says Pagano. "So, there's a lot of danger to just stepping out of the market." But that is difficult to do when, like the Smyth's, you're looking at a loss in the 6-figure range just over the past year. "I grew up in South Philadelphia," Smyth says. "That's a lot of money!"

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September 17, 2008 By Jessica Borg

How to deal with the banking crisis PHILADELPHIA - September 16, 2008 - (WPVI) -- With the ongoing crisis in the financial sector, what should you do with your money? The experts say, ignore the impulse to move your cash around. "It's better to stay calm and relaxed and think about what's happening at the stock market over the last 20 years. It's gone up and down and eventually in the long run, it gets back to normal," said John Matthews of Villanova University. "I'm a big believer in not doing anything panic-oriented," said Ken Podell of First Financial Group. "The market is so down right now that if people move all of their assets out of stocks, they're just compounding their misery that the market is already giving them and locking in their losses." If you're a customer of AIG, and you're concerned about the government's $85 billion loan to keep the company afloat, be patient. Experts who spoke with Action News Tuesday say it's still a developing situation, and you should wait until the dust settles before making a move. When it comes to retirement, remember: this could be an unbeatable opportunity. "People are terrified about the state of their 401K's. They are and one thing they need to know is that if they're more than 10 years away from their retirement, this is a fabulous buying opportunity. You don't need to want to be buying high, that's not the way to make money in this market, it's to be buying low," said Podell.

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Is there security in troubled securities? By Lou Baldwin Special to The CS&T

How

serious

is

the

current

financial

crisis

gripping

America?

First of all, in terms of “corrections,” as Wall Street euphemistically calls its periodic meltdowns, so far this one is in no way the biggest — at least in terms of the bellwether Dow Jones Industrial Average. In the two days of Oct. 28-29, 1929, the Dow lost 24.5 percent of its value. Although there was a temporary rebound, by July 1932, the index had plummeted a whopping 89 percent. In a more recent “correction” between 1972 and 1974, the Dow lost 42 percent of its value. Contrast these to the latest crisis. From the all-time high closing of 14,164 on Oct. 9, 2007 until the Sept. 18, 2008 close at 11,019, there was an approximate 22 percent drop. While this was certainly serious (and it could go lower) it was not epic compared to past downturns. What makes the 2008 crisis unique is the heavy concentration of very serious losses in a single sector of the economy — the financial industry; the banks, insurance companies, brokerage houses and mortgage lenders, triggered by a high rate of mortgage defaults. This caused the financial sector virtually to collapse with resulting bankruptcies, mergers at fire-sale prices and government takeovers and bailouts. Some local Catholic professionals shared their insights into what ordinary people can or should do, under the circumstances. “We’re getting a lot of people panicking right now and rightfully so,” observed Brian Allen, a financial consultant and first Vice President at RBC Wealth Management in Conshohocken. “Early in 2003 the market tanked but people saw their investments come back in the last year or so. This is a different animal; it’s more financial and technical. Fixed income securities are being beaten to death.” Everybody

is

taking

a

beating,

Allen

said,

but

“we’ll

get

through

it.”

People with stocks, he believes, should look at their portfolio and make sure they are diversified. Core industries that might be the safest would include energy and agriculture, he suggests. Shawn Howton, an associate professor of finance and director of the Daniel M. DiLella Center for Real Estate at Villanova University, said the housing market is at the cause of the crisis and those companies in trouble “made bad business choices.” The situation won’t ease, he believes, “until we find the bottom of the housing market.”

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If you need your funds in the short term, you should be in equities (bonds), not stock, he advises. But if you know you won’t need the money for five or 10 years, “you shouldn’t pay attention to this. The best thing to do is nothing.” Also, Howton noted, bank deposits under $100,000 are insured and safe. The whole housing crisis began, Howton said, because of bad loans. “People forgot about risks,” and after this crisis, “some sanity will come back into the lending market,” he said. The sad part of the situation now is that small businesses and people who have relatively good credit can’t get loans, he said. Robert Sims, chairman of Sims Financial Services in Wayne, believes the crisis is “mainly a mental crisis.” But he added, “we built too many houses and we built too many cars.” Mortgages were granted with no documentation when in the past “you brought your tax return with you to prove you could afford the house,” he said. Another

villain,

he

believes,

is

the

over-aggressive

marketing

of

credit.

“It’s too easy to borrow money,” Sims said. “Review your spending habits. Give your charge cards a break for a month. If you go out to dinner have the drinks at home, the restaurant bill will be half. If your job may be in jeopardy because of the crisis, prepare for it. Open your mind for another way to make a living.” Also, as people grow older, they often find themselves with more house than they need. “Examine your housing options,” Sims said. Matthew McCloskey IV, the president of McCloskey Financial Group, said, “Greed got in the way,” and the companies in trouble “are paying for past sins. They were playing with people’s lives.” He describes himself as “extremely cautious” and thinks the financial problems are deeper than most people realize. “The fact that the government has taken such extreme steps to correct it tells you something,” he said. People with investments should seek the advice of their financial advisors, he suggests. “Are they adequately protected? What is their risk tolerance? Some people have more risk tolerance than others.” If they can’t afford risk, “they should take the opportunity to get rid of weak stocks, but keep the strong ones.”

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Friday, September 26, 2008

Student P.O.V. Carla Bobka Philadelphia Business Journal

Carla Bobka View Larger

Age: 43. School: Villanova University, executive MBA student. Current job: Senior account manager, Archway Marketing in Aberdeen, Md. Why did you choose this program?: Villanova’s approach to its curriculum is “systems thinking methodology.” Systems thinking is the antithesis of analysis. It looks at the big picture and how organization silos are interconnected. What makes this program different?: The professors have experience and passion. Many sit on boards of directors. They use current material (we study Bear Stearns and Countrywide, not Enron and Andersen). Describe a typical student: Classmates are experienced contributors in the classroom with diverse experiences and deep domain expertise in almost every vertical. They are geographically diverse from locals to transcontinental commuters. What does having an MBA mean to you?: I have built muscle. I have the ability to lead in any role I take on, not just those where I have experience. The results are paying off everyday and increasing with every session attended.

Villanova School of Business 2008 Media Report


180 MONDAY, SEPTEMBER 29, 2008

Academia debates whether Paulson bailout is the right course of action More than 160 economists last week signed an open letter to the leaders of the U.S. House of Representatives and Senate expressing concern over the $700 billion financial-sector bailout plan. Emanating from the lauded University of Chicago economics department, the letter criticizes the plan’s fairness, ambiguity and long-term effects. (Besides 44 Chicago school signatories, there were 14 from the University of Pennsylvania.) The Chicago school pans Treasury Secretary Henry Paulson’s initiative as a “subsidy to investors at taxpayers’ expense.” The economists agree that “bold action” is needed to keep the financial system functioning, but this bailout isn’t it. “We ask Congress not to rush,” it states. I expressed some of the same worries last week about the pell-mell push this massive, ill-defined effort was getting. And in response to my column, Villanova School of Business finance professor David Nawrocki told me that I and 166 economists are wrong. “We need this rescue plan,” Nawrocki wrote me in an e-mail. “It is a bigger-scale problem than Resolution Trust … but it is basically the same issue.” Nawrocki, like others, points to the success of the $125 billion Resolution Trust Corp. that cleaned up the mess left by the failure of dozens of savings and loans in the late ’80s and early ’90s. The federal entity took on the assets of those institutions, sold them off in a 48month period, and disappeared. To me, the big difference is that the Paulson plan would have the federal government buying bad assets from financial institutions that still have a pulse - good or bad - and sitting on them until it can auction them off. While we don’t have details of how the mechanism would work, it stands to reason that some “bad” banks would be able to whistle past the graveyard after littering it with their junk. Is that a good idea? Shorn of the liabilities of their bad decisions, will those bankers suddenly make ethical and sound lending choices, once again lubricating the gears of the American economy? Wouldn’t it be better to let the Washington Mutuals of the world fail? Not to Nawrocki. He doesn’t see why any banks need to collapse. “I understand the natural evolution of value creation and value destruction, but I like the idea that a lot of people at the lower levels of these institutions still have a job at the end of the day,” he said.

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181 Counter to the free market/no regulation crowd, Nawrocki said governmental intervention is needed to jump-start a market for assets that no one wants to touch right now. Only some federal entity willing to step up and buy mortgage-backed securities and other derivatives can begin to restore confidence, he said. “Markets are powerful when they can do price discovery,” Nawrocki said. The trouble with a lot of the derivatives dreamed up on Wall Street is that they lack transparent secondary markets and that’s why no one knows what these “toxic” assets are worth. He’s been telling his students since January that Congress was going to have to pass some kind of rescue plan. His estimate then was $400 million to $500 million. Despite the poor sales job by Paulson and others on this rescue plan, the country can’t afford to wait, according to Nawrocki. “We need the Paulson plan to start us out of this mess and then Congress has to revamp the whole market regulation process,” he said. “We are not bailing anyone out. We are fighting for the survival of our credit market system,” he said. “Credit is needed in order to maintain a level of GDP - if the credit goes, the GDP goes. Very simple.”

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182 September 30, 2008 By Miriam Hill

Citigroup buys Wachovia for $2.16 billion The historic sale of Wachovia Corp. to Citigroup Inc. for a bargain price of $2.16 billion will create one of the country's largest banks, with 4,300 U.S. branches and $600 billion in deposits. Both companies had fallen prey to the nation's home-loan crisis. Even so, the deal was greeted with a sigh of relief because federal regulators were so worried about Wachovia's financial health that they had urged the bank to find a stronger partner. "This morning's decision was made under extraordinary circumstances with significant consultation among the regulators and Treasury," Federal Deposit Insurance Corp. Chairwoman Sheila C. Bair said in a statement. "This action was necessary to maintain confidence in the banking industry, given current financial-market conditions." She urged Wachovia customers not to worry. "For Wachovia customers," Bair said, "today's action will ensure seamless continuity of service from their bank and full protection for all of their deposits. There will be no interruption in services, and bank customers should expect business as usual." The sale announcement arrived on a day of intense market turmoil. The Dow Jones industrial average lost more than 777 points after the U.S. House voted down the proposed $700 billion bailout of the country's financial system.Rumors of a sale had swirled around Wachovia for weeks as losses on subprime mortgages mounted. "The thesis, at least as far as the market is concerned, is that the combined institution will be better off than the two apart," said Michael Greenberger, a former regulator and now a law professor at the University of Maryland. Less than a year ago, Citigroup's portfolio of securities tied to home loans was in such bad shape that it sought and got $7.5 billion in fresh capital from the Abu Dhabi Investment Authority. Citigroup also replaced its chief executive officer, Charles Prince, in December with Vikram Pandit. Since then, the bank seems to have rebounded, and market watchers say they believe regulators would not have allowed the Wachovia sale if they did not see Citigroup as financially strong. Wachovia stumbled badly after it acquired Golden West Financial Corp. in 2006 and its portfolio of "pick-a-pay" loans, which allowed home borrowers to choose a payment so low that the balance grew. Citigroup said in a statement: "FDIC has agreed to provide loss protection in connection with approximately $312 billion of mortgage-related and other Wachovia assets."

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183 Citigroup has agreed to assume the first $42 billion of any losses connected to distressed assets and $53 billion of Wachovia debt. The New York banking company also will pay the FDIC $12 billion in preferred stock and warrants. Citigroup shares closed down 11.91 percent, or $2.40, to $17.75. It is paying about $1 per Wachovia share. Wachovia shares plunged 81.60 percent to close at $1.84. News reports also identified Wells Fargo & Co. and Spain's Banco Santander Central Hispano S.A. as potential bidders. New York's Citigroup has about 22 branches in the Philadelphia area. Wachovia, based in Charlotte, N.C., has about 200 and is the largest bank in this region, as measured by deposits. The combined institution will have almost 10 percent of the U.S. deposit market. The companies would not comment on whether the deal would mean a new name for Philadelphia's Wachovia Center, home to the Sixers and Flyers. Wachovia is not selling its A.G. Edwards brokerage division or Evergreen Investments operations. Michael Pagano, a business professor at Villanova University, said the Citigroup-Wachovia deal made sense because the two companies had large operations on the East Coast and should be able to cut costs. Citigroup predicted yesterday that the combined company would save about $3 billion yearly. Wachovia's vast deposit base gives Citigroup, the company that pioneered the credit card, a large group of customers to sell its loan products. "Citigroup has a very strong banking operation," Pagano said. Several of the company's units reported record profit this year, partly because of success overseas. But University of Michigan finance professor Sreedhar Bharath remained skeptical. "It's not by any means all an advantage for Citigroup," he said. "There are downsides," including risk in both companies' loan portfolios and the possibility that the merger will not achieve expected savings or growth targets. At Wachovia's administrative offices on South Broad Street in Center City yesterday, there was anxiety among employees. Two women taking a sidewalk smoking break, who declined to give their names because of the turmoil surrounding the bank, said the merger with Citigroup had so battered the company's stock price that employee 401(k) accounts had taken severe beatings. They said many employees – particularly those not working face-to-face with depositors – spent much of the day on and off Web sites for news about the merger and the government bailout. "Washington should pass that bill," said one woman. "The market is down as much as 700 points today." The turbulence of the stock market had finally been felt on a personal level, said the other woman. "You really feel the impact now," she said, "because somebody came and bought us out."

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Three will wield tremendous power By Dave Carpenter The Associated Press last updated: September 30, 2008 0:38:10 AM

NEW YORK -- The sale of Wachovia's deposits and other assets to Citigroup on Monday leaves the nation with three superbanks, reshaping the U.S. banking landscape in the midst of unprecedented financial upheaval. For customers of those institutions -- Bank of America, Citigroup and JPMorgan Chase -the consolidation may result in higher fees on everything from checking accounts to bounced checks and overdrafts, and lower interest rate yields on deposit accounts, banking experts said. Loan availability remains in question in the near term, particularly after congressional defeat of the government's proposed financial bailout plan. "The larger the bank is, theoretically the more power they have to set pricing and other policies," said Nancy Atkinson, senior analyst at Aite Group, a financial services research firm. "I expect we'll start to see free checking accounts start to disappear and rates on overdrafts could go up. Savings rates could drop." But the news isn't all bad. Atkinson and others are convinced that the approximately 8,500 remaining regional and community banks nationwide will continue to play a role, providing consumers with more options. "If you are a customer of the Big Three, you're probably going to see some increased fees because these banks have increased their market shares -- dramatically in some instances," said Tim Yeager, associate professor of finance at the University of Arkansas and a former economist at the Federal Reserve Bank of St. Louis. "From the community bank point of view, I don't think you're going to see much change." More customer service glitches can be expected as Citigroup Inc. absorbs most of Wachovia Corp. and JPMorgan Chase & Co. consolidates the branch network of the nation's largest savings and loan, Washington Mutual Inc., according to Michael Pagano, finance professor at the Villanova University School of Business. That could range from delays or inattentiveness to confusion over fees as two systems are integrated. However, Pagano was not overly concerned about the risk of much higher costs from a quasi-monopoly created by the recent bank purchases.

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185 "If we had five banks in the whole country, I'd be worried about market power," Pagano said. "But there are more than 8,000 banks. And even credit unions are a viable alternative, from large ones to small mom-and-pops with $10 million in assets." Wachovia, headquartered in Charlotte, N.C., on Monday became the latest casualty of the widening global financial crisis after Citigroup agreed to buy its banking operations for about $2.16 billion in a deal brokered by federal regulators. The deal greatly expands New York-based Citigroup's retail franchise, with more than 4,300 U.S. branches and $600 billion in deposits. But it comes at a cost: Citigroup Inc. said it will slash its quarterly dividend in half to 16 cents. It also will dilute the value of existing shares by selling $10 billion in common stock to shore up its capital position. Citigroup shares closed down $2.40, or 11.9 percent, to $17.75 on Monday. In addition to assuming $53 billion worth of debt, Citigroup will absorb up to $42 billion of losses from Wachovia's $312 billion loan portfolio, with the Federal Deposit Insurance Corp.agreeing to cover any remaining losses. An estimate for that figure was not available. Citigroup will issue $12 billion in preferred stock and warrants to the FDIC.

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CNBC.COM Business Schools Prepare For A New Wall Street

WALL ST. IN CRISIS, CREDIT CRUNCH, ECONOMY, INVESTMENT BANKS, BUSINESS SCHOOLS, EDUCATION, LEHMMAN BROTHERS By Joseph Pisani News Associate

CNBC.com | 30 Sep 2008 | 12:04 PM ET

As Wall Street tries to survive the credit crunch, business schools are planning their own rescue plans: tinkering with their curricula and preparing students for a different job landscape. “Our advice to them is that this will pass,” says Joseph Baczko, dean at Pace University's Lubin School of Business in New York City. “We’ve gone through this before,” he says, referring to other crises like the 1987 stock market crash. If tumultuous market swings weren't enough in recent weeks, Wall Street has undergone structural changes that are likely to shrink the number of jobs available to future business school graduates. Investment banks Goldman Sachs and Morgan Stanley have opted to become bank-holding companies, while others—Merrill Lynch, Lehman Brothers and Bear Stearns—have either been bought up or filed for bankruptcy protection. As a result, many schools are working to reduce the anxiety their student's are feeling by reevaluating the curriculum and helping students navigate the gloomy job market. At the Villanova School of Business, in Villanova, Pa., Dean James Danko sent a letter to all business school students on Friday Sept. 19, 2008; the end of a week that saw Lehman Brothers file for chapter 11 bankruptcy protection, Merrill Lynch agreed to a takeover by Bank of America and AIG receive an $80-billion federal rescue package. The letter encouraged students to meet with career services and to investigate “different career paths, industries and companies.” That thinking was evident at other schools as well. Take Dean Van Tassell, 27, a senior in the MBA program at Pace.

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187 “I’m starting to develop a contingency plan,” he says acknowledging that his dream job on a trading desk may be even harder to attain in this market. He's now also seeking opportunities in other areas like corporate finance and portfolio management. Villanova dean Danko said the school is working with a more diverse group of companies looking to recruit business students including teen clothing retailer American Eagle Outfitters , conglomerate General Electric (the parent company of CNBC and CNBC.com) and British engine maker Rolls-Royce. Ed Fredericks, a professor at Pepperdine University’s Graziadio School of Business and Management in Malibu, Calif. says that areas of growth for newer grads will be in smaller “boutique firms.” He recommends students intern over the summer to improve their chances of landing a job upon graduation. That was the case for Andrew DeVries, 29, a senior in the MBA program at Emory University's Goizueta Business School in Atlanta, Ga., who was recently offered a job at a Wall Street firm he interned at over the summer. "Most of the banks seemed to strictly [hire] out of their summer classes," says DeVries. Graduates may have another reason for optimism. “They’re cheaper than the older talent,” says Baczko. Cheaper indeed. The credit crunch has hurt entry level pay and starting bonuses more than during other downturns. Sign-up bonuses are lower because there’s more people in the job pool, says Van Tassell, who’s now actively job hunting. “They aren’t competing for labor right now.” Curriculum Changes In addition to helping students navigate the new job market, many schools say they are shifting the curriculum so that students graduate with a broader business background. Emory's business school has done that and more, while Villanova now offers a combined finance and accounting course that exposes students to both fields.

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188 Change and challenges aside, schools say they are not expecting a drop in applications. “The classic situation is that when certain sectors go down people look to sharpen their skills,” says Baczko. In fact, many have seen an increase this year as the economy stumbled. A survey conducted by the Graduate Management Admission Council, an association of graduate business schools around the world, shows that 77 percent of full-time MBA programs reported an increase in applications in 2008, the highest in five years. In the testing year ending June 30, 2008, the GMAT, the standardized test used to get into MBA programs, was administered 246,957 times, the highest ever, according to GMAC. The second highest year the test was administered was in 2002, the time of the last downturn. Some, however, are seeing signs of a shift away from business schools. Lisa Jacobson, CEO of Inspirica, a high-end, one-on-one test preparation firm says many of her students are changing plans and opting for law school, which happened during other slumps. The joke is they’ll be busy doing bankruptcy work, she says. “This younger generation has never really seen a bad economy," says Jacobson, "To them it’s really scary.”

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Posted on Sat, Oct. 4, 2008

The Bank Merger: In a surprise move, Wells Fargo heads off Citigroup at the pass to rescue Wachovia. By Diane Mastrull Inquirer Staff Writer Taking on the look of a classic Wild West shoot-out, Wells Fargo & Co. has outbid Citigroup Inc. for Wachovia Corp. in another stunning turn of events on the banking prairie. News just four days earlier that Citigroup had acquired Wachovia still was being digested when word came early yesterday morning that Wachovia had decided to run off with another suitor. And just like that, the Philadelphia region found itself in the middle of an OK Corral of sorts, its 200 Wachovia bank branches an attractive expansion lure to both San Francisco-based Wells Fargo and New York's Citigroup, neither of which have a significant presence in the region. Unlike the $2.16 billion Citigroup deal - considered a steal for Wachovia, based in Charlotte, N.C. and one of the country's largest banks - the $15.1 billion acquisition by Wells Fargo would require no financial help from the Federal Deposit Insurance Corp. or any government agency. In the stock-for-stock transaction, Wells Fargo would acquire all outstanding shares of Wachovia common stock and all of Wachovia Corp., its businesses, obligations and banking deposits, according to a joint statement by the companies. "This deal enables us to keep Wachovia intact and preserve the value of an integrated company without government support," Robert K. Steel, Wachovia's president and chief executive, said in the statement. The agreement, approved by the banks' boards late Thursday night, requires the approval of Wachovia shareholders. By noon yesterday, trouble was on the horizon. Citigroup had issued a statement calling Wachovia's agreement with Wells Fargo "in clear breach of an exclusivity agreement between Citi and Wachovia." "Citi was negotiating in good faith and [had] nearly completed the definitive agreements required to consummate the Citi/Wachovia transaction," the bank said. Sheila Bair, head of the FDIC, issued a statement saying the agency, which insures deposits at the nation's 8,451 banks and savings associations, "stands behind its previously announced agreement with Citigroup." It went on to say that the FDIC "will be reviewing all proposals and working with the primary regulators of all three institutions to pursue a resolution that serves the public interest."

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190 Representatives for Wachovia and Wells Fargo declined to comment. Locally, the Wells Fargo deal was getting thumbs-up from business and financial experts who found no downside to a West Coast banking company with $609 billion in assets, a strong balance sheet, and a highly regarded reputation for customer service rolling into town. "It may well be a remarkably positive outcome in remarkably negative times," said Mark Schweiker, president of the Greater Philadelphia Chamber of Commerce. Against a national backdrop of the $700 billion federal bailout package, "the fact that taxpayers in no way have to step into a potential bailout here . . . lightens the load by a couple of bricks," said Ed Nelling, associate professor of finance at Drexel University. Nick Schorsch has built a thriving business out of buying banking offices that banks no longer need. Over the last six years, his American Realty Capital, based in Jenkintown, has bought more than 2,000 buildings in 39 states and 370 markets, mostly to reposition them for future use as a bank branch. He has a contract with Wachovia. Whether Wachovia is acquired by Wells Fargo or Citigroup, he said, the result will be good for the Philadelphia market because of both banks' virtual absence from the scene. That means that massive branch closings and layoffs of branch employees would not be likely, Schorsch said. It was the idea of Wells Fargo - its logo a stagecoach - emerging as the victor in this banking showdown that had marketing experts here chortling yesterday but predicting no major culture clashes. "Stagecoach equals rescuing," said Bill Madway, a marketing professor at Villanova University. "It could have positive connotations - riding into the rescue." At AgileCat, a branding, advertising and public relations agency in Center City, president Peter Madden's thoughts drifted to an entertainment venue in South Philly that currently bears the Wachovia name. "Is the Wachovia Center now going to have a giant cowboy hat on top of it?" he asked. By pure coincidence, the home to the Sixers and Flyers owned by Comcast-Spectacor broke with tradition yesterday and allowed its employees to wear jeans to work. It was to raise money for charity, not to get into the Western groove, spokesman Ike Richman said. He declined to discuss whether the arena's name would change should Wells Fargo become the owner of Wachovia's banking operations. Should the deal be finalized, Wells Fargo would own the naming rights to the center, he said. In Narberth, headquarters of Royal Bancshares of Pennsylvania, Marc Sanders, director of marketing, was unrattled by the prospect of Wells Fargo galloping into the market. Why would he be?

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191 Officials of the company's Royal Bank America have been sporting cowboy hats on billboards looming over the region's highways for 25 years. The late founder, Dan Tabas, was big on image and he believed the hats conveyed confidence - as in Texas oil tycoons, Sanders said. "We're not worried about stagecoaches," he said.

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Fed becomes 'lender of last resort' Credit is so tight the Fed is now loaning money to businesses in need of short-term cash. Should we be worrying about the Fed's new role as America's ATM? Washington Bureau Chief John Dimsdale reports. TEXT OF STORY Kai Ryssdal: The Federal Reserve reached into it financial toolbox yet again, this time to shore up the $1.6 trillion commercial paper market. Those are short term loans that companies take out to cover their immediate need for cash, to pay workers or buy supplies, for example. To make these loans to businesses, the Fed is dipping into rare emergency powers that haven't been used since the 1930s. John Dimsdale reports. John Dimsdale: Over 1,700 businesses use commercial paper loans. But the market has shrunk by about $150 billion in the last few weeks as lenders worry that credit-squeezed companies won't pay them back. So the Fed announced it will make loans for three months to eligible companies. During a speech to economists in Washington today, Fed chairman Ben Bernanke said the move is designed to unfreeze credit markets. Ben Bernanke: The expansion of federal reserve lending is helping financial firms cope with reduced access to their usual sources of funding. In some cases, the Fed will not require collateral, although borrowers will pay up-front fees. Bob Reed, an analyst with the B-net business Web site, says the Fed is betting that money will begin to flow again. Bob Reed: Bernanke is taking a gamble here that says, look, I need to restore confidence not only to the economy as a whole, but specifically to the credit market which has been tightening so dramatically over the last couple of weeks. So, he's trying to send a signal to lenders and borrowers that the government will back up their play. The Fed essentially has unlimited resources to make commercial paper loans. But if companies don't pay back, the federal deficit swells and interest rates rise. Villanova University Professor Victor Li says the Fed finds itself in an uncomfortable position. Victor Li: This is really something that the Fed doesn't typically do. They can intervene in this way, but typically they would rather have financial markets work themselves out in terms of the commercial paper aspect of the market. Credit markets eased a bit after the Fed's move on hopes the government loans will relieve a cash shortage for many companies. In Washington, I'm John Dimsdale for Marketplace

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Business experts see some edge for regional banks By LISA CORNWELL Associated Press Writer Published on Tuesday Oct 07, 2008 Some of Ohio's regional and community banks may have an edge over industry giants as the banking sector struggles to cope with the financial meltdown that resulted in the federal government's $700 billion rescue plan, some experts say. Those advantages may lead consumers to turn to from bigger to smaller banks, according to business analysts. Even though the stock of Ohio banks such as National City Corp. and Fifth Third Bankcorp has been pounded by the financial crisis, analysts say some regional banks already are seeing increasing deposits from customers pulling money out of the skidding stock market or worried about larger banks like Wachovia being bought. In better times, depositors might be drawn to larger, well-known banks like Wells Fargo or Citigroup, but that reputation factor has reversed some, said Michael Pagano, a finance professor at Villanova University School of Business. "If I'm in Columbus, Ohio, and I see a bank that has been there for decades, maybe it's time to trust that bank more than the big guys," he said. Ohio regional banks are important to the state's economy _ providing capital for small- and medium-sized businesses to operate and loans for farmers and homeowners. Shares in Ohio's Columbus-based Huntington Bancshares Inc., Cincinnati-based Fifth Third and Cleveland-based National City _ rose after Congress approved the rescue plan, but they haven't escaped concerns over the financial fallout. National City shares plummeted Monday as the market tumbled and after its ratings were cut by Fitch Ratings. Fitch said National City could face more losses on mortgage and home equity portfolios in the weakening economy. Some analysts have been concerned by Huntington's exposure to Franklin Credit Management Corp. _ a mortgage servicer tied to Sky Financial Group, which Huntington acquired last year. Robert W. Baird & Co. last month downgraded shares of Fifth Third to "neutral" amid concern that the weak economic environment may make it difficult to sell off assets as planned. One plus for regional banks is that they rely primarily on stable deposits for funding, said Scott Valentin, an analyst with FBR Capital Markets Corp. He said big banks like Citigroup depend more on capital market-based funding that is either very expensive or not available now.

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194 "Most regional banks tend to have pretty straightforward balance sheets," said Valentin. "They make loans and take deposits." The big banks are more complex, involved in capital-market activities, acting as broker-dealers and having more international exposure. "Right now, in a market where everyone's nervous and there's no risk appetite, many want to avoid complex business models," Valentin said. Many regionals also weren't as involved in the ill-fated acquisitions during the 2002-2006 heyday of real estate growth and the corresponding increase in subprime lending that left larger banks in trouble, according to Pagano. One of the biggest problems for Wachovia _ one of the nation's largest banks _ was its 2006 acquisition of California-based Golden West Financial Corp., Pagano said. He said Wachovia ended up with option ARM mortgages, shaky loans and bad credit when everything came crashing down. An option ARM is an adjustable-rate mortgage allowing borrowers to choose among several payment options. Some borrowers chose low payments that didn't cover the interest, which was then added to the principal, Pagano said. "With real estate values sliding and their debt going up, there is very little financial incentive for those borrowers to continue making payments, so they decide it's better to go into default," he said. One disadvantage for some regionals is that they are less geographically diversified than big banks. Regionals operating in areas where the real estate market went boom and then bust are hurting more than some large banks and other regionals, Pagano said. "I think one reason regional banks in the Philly area kind of survived unscathed is because we didn't have that kind of real estate boom and bust that affected other banks," he said. "If you are a regional bank in California, Nevada or Florida where you had more of that, you are going to have more real estate-related problems." Kevin Kabat, Fifth Third's chief executive, said last month at a conference held by the nowbankrupt investment bank Lehman Brothers, that Fifth Third's mortgage losses were concentrated primarily in Florida and Michigan, where home value deterioration has been the most severe. "While certain pockets of the Midwest exhibited softness or a couple of lumpy credits, we've not seen anything similar to the magnitude of the issues in Michigan and Florida," said Kabat, also Fifth Third president and chairman. Analysts say banks should expect weakening credit to put more pressure on small businesses and commercial real estate.

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195 "The issue with housing is still going on, but at least people are able to estimate the problem," said Valentin. "We haven't seen the other shoe drop yet in commercial real estate." While Ohio wasn't as exposed as other states to extreme real estate fluctuations and related mortgage troubles, all banks will be impacted from "guilt by association," said Xavier University finance professor Phil Glasgo. "Rightly or wrongly, banks that didn't do stupid things are going to be lumped in with those that did. They just need to be a little more conservative and ride out the storm."

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Posted on Sun, Oct. 12, 2008

How electronic trading has added to market's volatility By Chris Mondics Inquirer Staff Writer More than anything else, raw fear has been driving the huge declines in stock prices over the last seven trading days. But also adding fuel to the Wall Street bonfire has been the proliferation of online trading and electronic trading, which have accentuated the hair-trigger reactivity in the markets, according to market experts. "Before, you had to call a broker; now, you can see the pain" on laptops or television screens, said Bruce Rader, assistant professor of finance at Temple University's Fox School of Business. "So you are sitting here and you are down and you see that immediately. So I tend to think it makes people more reactive." Said James Jablonski, professor of finance at Villanova University: "It is easier for the individual investor to see the news and react to that immediately." Rader said signs of growth in online and electronic trading were widespread. On commodity exchanges alone, electronic trading has grown from near single digits in the mid-to-late 1990s to 90 percent today, he said. The actual number of traders on the floor of the New York Stock Exchange also appears to have declined as traders instead do their work on personal computers. When markets turn sour, the impulse to check on account values is all the more powerful. Patrick Lane, president of Wachovia Securities Direct, said that his company had noticed in recent months that there had been an increase in the number of clients logging in to check on accounts and to trade stocks. However, he said it was unclear whether that activity had added to market volatility. One great advantage to online trading is that it costs less, and that too may have added to the volatility, said Itay Goldstein, associate professor of finance at the University of Pennsylvania's Wharton School and an expert on financial crises. Goldstein said that one barrier to selling stocks during tumultuous market events of the past was the cost of executing a trade. But since online trading costs are substantially below those of going through a broker, that disincentive likely has become less powerful.

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197 "Before, you had to pick up the telephone, but now you can do it in one minute and be done with it," Goldstein said. Goldstein emphasized that the larger forces driving the current downturn were emotional, but he said that online trading could affect that trend on the margins. "I don't think the underlying economics justified what we are seeing here," Goldstein said. "There was a bubble in the housing market and the bubble crashed and it had some spillover effect." Yet people are emotional when it comes to money. "We now have a society where people take courses in trading; it is so easy to open a trading account. It doesn't take a lot of expertise," said Rader of Temple. "It doesn't take a lot of expertise if you have the money." And inexperienced traders tend to react emotionally, he said.

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Why Some Brands Cheer a Sour Economy Oct 12, 2008 -By Kenneth Hein and Steve Miller <http://www.brandweek.com/bw/content_display/news-andfeatures/retail-restaurants/mailto:feedback@brandweek.com> It is a good time to be McCormick spices. While not the sexiest of brands, "The taste you trust" is positioned extremely well for an economy that looks to be in a recession. While many companies are suffering at the hands of one of the worst economic downfalls in the history of the country, others are quietly prospering. "If you're a brand you eat, drink, smoke or wash yourself with, you're going to be OK," said Marc Babej, partner at the strategy firm Reason, New York. "McCormick spices, think about it, you will always need that. No matter how bad things get, you will still cook at home." McCormick's net sales for the brand rose 9% to $782 million for its third quarter. Similarly, production of snack foods, tortillas and confectionary products are expected to grow next year, per industry research firm IBISWorld, Los Angeles. Snack foods industry constant dollar revenue will grow 5.3%, tortillas (3.1%) and confectionary products (2.7%). Another likely beneficiary of the down economy: Private label. Some retailers are already seeing the bump. Walgreens, for example, announced its private label sales were up 15%. Private label is "positioned to move and grow," said Gary Stibel, CEO of New England Consulting Group, Westport, Conn. "Kroger and CVS are two examples of brands that are doing a great job of promoting their own labels." Likewise, Wal-Mart, which seemed to be losing brand power only a year ago, today is poised to reap the rewards of consumers who are looking to save some cash. In September, as same-store sales for Kohl's and Nordstrom fell 5.5% and 9.6%, respectively, Wal-Mart's rose 2.4%. Author and branding expert Rob Frankel thinks the retailer's gains will closely mirror the economy: "Wal-Mart is the brand that reminds people they are poor. Nobody shops at Wal-Mart because they want to; they shop there because they have to. The minute the economy recovers, Wal-Mart's sales will drop like a brick." Wal-Mart's not the only discounter to see business improve. Wholesale clubs same-store sales grew 7.4% last month compared to the same period last year, per the International Council of Shopping Centers, New York. Meanwhile, discount retailers, thrift shops, consignment stores and goodwill stores saw an 85.5% increase in customers (January-August 2008), per the National Assn. of Resale & Thrift Shops. About 63% also saw an increase in sales.

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While they may be looking for inexpensive groceries and second-hand items, consumers are willing to spend on some forms of escapism. Entertainment can expect to fare well during a downturn, experts say. The weekend after a $700 billion bailout was passed by Congress, theatergoers flocked to the malls, sending the weekend gross for the top dozen flicks to $95.4 million, up 41.5% from the same period a year ago, per Media by Numbers, Encino, Calif. "The conventional wisdom is that an economic downturn helps the movie business," said Paul Dergarabedian, president of Media By Numbers, Los Angeles. "They find escapism for a relatively small amount of money." Then there's beer. It seems only logical that watching the Dow plummet into the abyss would drive some to drink. The U.S. beer industry is expected to post its second consecutive year of case sales gains, per the Beverage Information Group's 2008 Beer Handbook. Wine and spirits are also expected to continue to grow though consumers may be less likely to trade up as had been the trend. Another category that's already enjoying a boom in this economy: vocational and two-year colleges, which were seeing a migration of students who are priced out of four-year colleges, noted Robert Coen, svp and director of forecasting at Universal McCann, New York. "It doesn't add up to a whole lot for the industry in terms of ads. But they can kick up enrollment at a pretty good clip right now." And finally, for those looking to avoid school in the immediate future, a sector that looks particularly strong is repair services. "During tough times we typically point to certain categories/sectors," said William Madway, marketing professor at the Villanova School of Business. "Repair services, remodeling services, do-it-yourself products, services and retailers . . . [Still], every brand has the potential to be successful if they adapt to the economic realities."

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MSNBC.com Investing October 24, 2008, 12:01AM EST text size: TT

Five Myths About the Election and the Stock Market With the Obama-McCain contest nearing the finish line, BusinessWeek debunks some Wall Street notions about bulls, bears, elephants, and donkeys By Ben Steverman For the first time in 76 years, a financial crisis is occurring at the same time as a Presidential election. Based on recent polls, the coincidence seems to have boosted the chances that Illinois Senator Barack Obama, the Democratic nominee, will defeat Republican Arizona Senator John McCain on Nov. 4. The financial crisis has affected the Presidential race, but how is the election affecting the financial markets? Pundits offer endless theories on that question, and their answers are often suspiciously similar to their political views. Thus, right-leaning market experts insist Obama's tax proposals would be disastrous for investors. More liberal Obama supporters insist the market will celebrate if he is given the job of leading the world out of the financial crisis. Some of these claims are impossible to prove or disprove. But there are some myths about the election and the stock market that need clearing up. Myth No. 1: The stock market is waiting to see who wins. Stock traders are used to looking at the data, weighing probabilities and making investing bets based on them. Among fund managers, analysts, and other market professionals interviewed in the past week, there is little doubt which is the more likely outcome of the 2008 Presidential election. Consider two pieces of evidence the "smart money" on Wall Street would be likely to take seriously: On the Iowa Electronics Market, traders can put up money to make bets on the outcome of the Presidential race. On Oct. 3, Obama was given a 70% chance of winning. On Oct. 23, it was 87%. Then there are the polls. Nate Silver, who first achieved renown in the area of baseball statistics, runs a sophisticated daily analysis of all polling data that incorporates state-by-state demographic

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201 factors, historical data and polling firms' past track records. On Oct. 23, Silver's site, www.fivethirtyeight.com, rated Obama's victory a 93.5% likelihood. That's not to say that McCain can't win the election. (Google the name "Thomas E. Dewey" when you have a spare moment.) He still has a chance, but based on the forecasts the Street is watching, the probability of a win is so small that very few investors are going to bet money on a McCain victory. Myth No. 2: Wall Street is disappointed at Obama's lead in the polls, because it always wants the Republican to win. There is anecdotal evidence that investors in some sectors are worried about an Obama victory. With Democrats in control, Washington could squeeze profits for health-care firms or energy companies, for example. And it's true that it's not hard to find a Republican on Wall Street: Wealthy investors and financial professionals tend to favor low taxes and deregulation, planks of the Republican party platform. However, Obama has plenty of supporters among investors, too. Berkshire Hathaway (BRKA) Chief Executive Warren Buffett is an Obama supporter, and many hedge fund managers and others have contributed to his campaign. In fact, according to the Center for Responsive Politics, donors in the securities and investment industry have given $11.1 million to Obama's campaign, and only $7.7 million so far to McCain. A 2004 academic study (by Scott Beyer, Gerald Jensen, and Robert Johnson) found that, from 1926 to 2000, the broad Standard & Poor's 500-stock index actually performed better under Democrats than Republicans, 15.24% vs. 10.78%. However, that Democratic advantage evaporated when the impact of the Federal Reserve—which sets interest rates—was taken into account. Myth No. 3: Investors and traders are watching the election closely, following the candidates' proposals and rhetoric. "Truly I don't think the market is paying much attention," says John Merrill, chief investment officer of Tanglewood Wealth Management, when asked about the election. "Today the market and the economy are shaping events much more than the Presidential election." It's not that the Presidential election doesn't matter to investors. It's just that other events— particularly the financial crisis and the economic slowdown—have taken center stage. "We have so many other things on the table right now that we haven't even thought about the election," says Greg Church, president of Church Capital Management. Wall Street often shows a healthy skepticism to candidates' rhetoric and party platforms. American history is full of examples of politicians who abandon campaign promises once in office. McCain, if victorious, would have trouble getting his proposals through a Democratic Congress, observers say. And both candidates would need to adjust their policies to the realities of the financial crisis and recession. What matters is "less who is elected than what policies they pursue," says Andy Bischel, president of SKBA Capital Management and co-manager of the AHA Socially Responsible Equity Fund (AHSRX).

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202 Myth No. 4: The market is alarmed by prospects the capital-gains tax rate could be raised. Earlier this year, some were worried about a stock market sell-off if Obama was elected, due to his proposal to raise taxes on capital gains for wealthy investors. The theory was that investors would rush to sell stocks before the higher tax rate took effect. Though higher taxes can be a burden on the economy, this theory of a short-term impact from Obama's tax plans was always open to question. "You try not to let tax implications dictate [investment] decisions," says financial planner Micah Porter of Minerva Planning in Atlanta. As stock prices plunged the last two months, those worries have mostly evaporated. The S&P 500 closed at 908.11 on Oct. 23. In the last 10 years, the market has traded above this mark for all but a brief period, from July 2002 to April 2003. If you bought stocks at any other time, there's a good chance you have no capital gains to be taxed. Myth No. 5: Wealthy investors can breathe easier because the next President wouldn't dare raise income taxes in a recession. Investors don't like paying taxes, so Obama's proposals to raise taxes on the wealthy are a frequent subject of conversation among market professionals. Economists and Washington observers, however, see few prospects to avoid higher taxes—even if McCain is elected. One reason is the federal government's bailout plan, which adds $700 billion or so to an already bloated federal budget deficit. Even before the crisis hit, President George W. Bush and a Republican Congress had been unable to extend Bush's tax cuts beyond their scheduled expiration in 2010. While higher taxes can hurt, a huge budget deficit is "really a problem in the long run," says Victor Li, an economics professor at the Villanova School of Business. "Whoever wins, the revenues have to be raised somewhere. Taxes have to be raised." Many hope that Obama—or McCain, cutting a deal with a Democratic Congress—can delay this tax-raising until the economy revives. Obama "needs to be really realistic about raising taxes in an economic environment that could be really nasty," Church says. "Right now, the focus of the Democrats is on stimulating the economy," says Daniel Clifton of Strategas Research Partners. However, a tax increase during a recession wouldn't be unusual, he adds. "Generally the government has to raise taxes in a recession because the federal deficit gets so big." Join a debate about whether Election Day should be a paid holiday.

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October 30, 2008 By Darren Dahl

Trust Me: You're Gonna Love This Getting employees to embrace new technology. Although the promise of the paperless office has long eluded businesses, David Zugheri, cofounder of First Houston Mortgage, a mortgage bank based in Texas, really wanted to take a stab at it. Three years ago, his 125 employees were using about a million sheets of paper a year. The files for each of First Houston's 1,500 customers usually contained up to 250 pages, including applications, credit reports, tax returns, pay stubs, and other documents. And employees would often make two or three hard copies of each file to send to underwriters, title companies, and other parties involved in the mortgage approval process. Plus, because most of the documents contained sensitive customer information, First Houston was shelling out $550 a month to a shredding service. Zugheri decided to buy a few multipage scanners, and one night, after all his workers had gone, he went around the office and unplugged every printer. The next morning, at 8 a.m., he announced a new rule: no paper. All documents would be scanned and stored digitally. An uproar ensued. Two employees threatened to quit. By noon, Zugheri had plugged the printers back in. "After playing a human punching bag for four hours, I realized that we couldn't just change our technology overnight," he says. When it comes to instituting new technical systems, snafus like Zugheri's are common. Up to 70 percent of IT projects wind up as flops, according to Forrester Research (NASDAQ:FORR). In many cases, the new systems -- whether hardware, software, or Web-based applications -- sit idle because employees either find them too difficult to use or simply refuse to try. "IT projects fail not because of the technology but because human beings resist change and uncertainty," says Moez Limayem, who chairs the information systems department at the Sam M. Walton College of Business at the University of Arkansas. Here are a few ways to get your employees on board with your next upgrade: Work From the Bottom Up The most common mistake in implementing new technology occurs when the selection comes solely from the top, says Stephen Andriole, a former chief technical officer who teaches business technology management and corporate strategy at Villanova University's business school. Employees bristle at being force-fed new ways to do their jobs, especially if the technology is difficult to use and actually makes those jobs harder in the short term. "Many users will happily nod their head as the technology gets deployed," Andriole says. "But within days, they have figured out ways around it so they can do their job the way they always did, which results in a big waste of time and money all around." Ben Swartz, co-founder and president of Marcel Media, an interactive marketing firm in Chicago, learned that the hard way about five years ago. He spent several hundred dollars on software that

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204 was supposed to help employees find the best search-engine keywords for clients. Months later, he discovered that employees had stopped using it. They told him they got better results using their own methods and the free tools offered by the search engines. Today, Swartz goes about things differently. He holds weekly meetings at which his 14 employees are encouraged to discuss ideas about new software. "By getting employees involved from the beginning, we no longer run into issues of buy-in," he says. For example, when the company recently began shopping for new project management software, a group of employees researched programs and tried several demos. When it came time for a decision, Swartz allowed employees to make the call. "We operated like a jury room," he says. "We didn't move forward until we had a consensus from our employees." Invest in Training Another mistake companies make is skimping on training, says Patrick Gray, president of Prevoyance Group, a Fort Hill, South Carolina, consulting firm that specializes in IT strategy. "The more training employees receive," he says, "the greater the chances that the project will be a success." Gray says rolling out new technology over a period of months, while employees continue to use existing systems, helps iron out unforeseen problems. Because employees don't all learn the same way -- some may prefer more formal sit-down sessions, while others would rather just learn on the fly -- organizations benefit when they take a multipronged approach. He recommends giving extra training to "power users," select employees who will be able to guide their peers and help reduce the number of calls to the IT help desk. Barkley, an independent advertising agency in Kansas City, Missouri, has taken this concept to another level by creating an internal training program it calls Digital Ninja. Every month, employees meet to learn about the latest technology in advertising -- topics such as blogging, podcasting, and virtual reality. Employees who have earned the distinction of "subject matter experts" teach the lessons, says Mark Logan, who heads the program. "This helps us get everyone in the company fired up about the latest tech trends," Logan says. Create Incentives Often, business owners don't give employees enough motivation to use the new systems. "Simply saying, 'The company will be better off if we do this' just doesn't cut it," says Limayem. He suggests stronger incentives: making a salesperson's commission tied to his or her use of the new CRM system or giving bonuses for completing training programs. After his first attempt at creating a paperless office tanked, Zugheri at First Houston Mortgage decided he needed to create an incentive: a more flexible work schedule. He paid a programmer about $30,000 to devise an electronic mortgage application, a tool for accepting electronic signatures, and a program to organize the company's electronic documents on its servers. Zugheri spent about three months designing a formal process for the saving, naming, and virtual handling of the files. When he finally gathered his employees to demonstrate the new system, Zugheri emphasized the benefits for his workers, many of whom commuted an hour or more each day. Because the customer files would now be stored on an Internet-accessible server, employees would be able to work from home on Fridays, stay home with a sick child, or take a weeklong vacation without worrying about losing track of their accounts. "I could literally see their attitudes change through

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205 their body language," Zugheri says. "And I felt confident that when we left that room, we were all moving in the same direction." Zugheri's company, which is in the process of changing its name to Envoy Mortgage after recent acquisitions, now employs about 475 people and has been praised by mortgage industry publications for its use of technology and for cutting back on paper waste. Though Zugheri concedes that his firm will never be completely free of paper, he is excited about the progress his employees have made -- and that he is saving about $150,000 a year on paper and toner. But perhaps the greatest benefit of Zugheri's new system came in September, when Hurricane Ike devastated the Houston area. Even when 80 percent of his employees were unable to make it to the office because of flooded roads and debris, business continued to hum, as many of them were still able to log in via the Internet and do their work. For more on educating and motivating employees -- including advice on developing lesson plans, structuring employee rewards, and calculating training costs -- read Inc.'s how-to guide on employee training at www.inc.com/guides/hr/training.html.

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November 1, 2008 By Jane M. Von Bergen

Volatility: Measure could signal a bottom. Halloween this year came with an added scare: the VIX index. Wall Streeters like to call it the barometer of investor fear. This measure of wild and wacky swings on the stock market hit an all-time high in October. "Now we're in uncharted territory," Bruce Rader, an assistant finance professor at Temple University, said yesterday. The volatility index, or VIX, is a measure of predictions of future volatility in the market remember those days last month when the Dow Jones average rose and fell by huge amounts down 733 points one day, up 401 points the next? All through the year, the VIX hovered in the 20 percent to 30 percent range, but then in September, it rose to a whopping 40 percent of what might be considered normal. "That was considered outrageous," Rader said. Then, on Oct. 24 - a day that world markets took what seemed like a coordinated nose-dive, and the 79th anniversary of the 1929 stock market crash - the VIX reached an all-time high of 89.53 percent. Yesterday it closed at 59.89 percent. "Going up to the 80s and 90s is unheard of," Rader said. "It is a measure of how much people have panicked." So what is the VIX? It's complicated, says James Jablonski, a finance professor at Villanova University and former professional trader. The VIX is a formula created by some mathematical jiggering based on all the prices of all the options of all the stocks on the Standard and Poor's 500 index, he said. It factors in various timing scenarios, or what its creators on the Chicago Board Options Exchange like to call "the whole volatility skew." Most of us buy and sell shares of stocks. Some people also trade in options - the right to buy or sell shares at some future price. Options can be an investment, but many people think of them as a way to hedge their losses.

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207 If you are worried about the price of your shares going down, you can buy the right to sell them at a higher price, even if the shares fall. That protects your investment. It's like buying insurance on your $20,000 car - you pay a premium in case you get into a wreck. As long as you survive, all you've lost is the premium and deductible. The more likely you are to crash your car - or the more likely it appears that share prices will fall - the more you'll pay for your car insurance premium, or your "put" stock option. But the VIX takes a wider view of the market, based on the S&P 500. The more crazy up-anddown swings there are, the more people hedge their bets out of legitimate fear and the more they are willing to spend for these options. As the market careened in October, there was a lot of option buying going on, with an average of 16.6 million contracts traded per day. By contrast, five years ago, the October average was 4.2 million. This year, for the first time, three billion contracts were sold in a single year. That happened Oct. 20. "People are a lot more willing to pay for insurance in the marketplace with the underlying asset moving abruptly," Jablonski said. Traders, who will bet on anything, actually make trades on the VIX itself. Rader says the VIX acts as another forecasting tool. To him, the high VIX, now mitigating, signals a bottom. "When there is blood on the streets, it's time to buy," he said. "So now we're up to our throats in blood."

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November 10, 2008 By Anthony H. Catanach Jr. and Paul L. Walker Professors at the Villanova and University of Virginia business schools

Sounding the Financial Alarm The Sarbanes-Oxley Act of 2002 requires annual reviews of public companies' financial reporting controls by their independent auditors. But as far as we know, only one of the big auditing firms actually sounded an alarm before a series of financial-services companies collapsed or required bailing out in recent months. (The lone firm was PricewaterhouseCoopers, in the case of AIG.) In fact, just weeks before the credit-market collapse, management of several of the largest companies involved (including Bear Stearns, Fannie Mae, Lehman Brothers, Wachovia and Washington Mutual) reported that their operating policies and procedures were good enough to reliably prepare financial statements - findings supported by each of their external auditors. How is this possible? As bankers, investors and regulators continue to struggle with valuing billions in subprime loans and exotic financial instruments, we wonder how these executives and their independent accountants missed what appear to be glaring deficiencies in these companies' financial reporting. We acknowledge that predicting a global financial meltdown may be impossible, and these large auditing firms may have prevented some reporting failures. But we remain puzzled as to how they could have missed the dangers of increasing leverage, declining asset quality, complex derivative valuation, and the liquidity risks that ultimately plagued these firms. Complicating matters, many of the Big Four auditing firms are still facing numerous lawsuits related to recent audits. These legal pressures create huge incentives for them to focus on shortterm survival strategies, rather than long-term solutions to provide the market with the highquality auditing it desperately craves. In fact, the Big Four continue to aggressively lobby legislators and regulators for liability caps. It's particularly troubling that many regulators now view these large auditing firms as "too big to fail" because there is no auditing alternative. Clearly, the status quo is not acceptable. The magnitude of the recent global market meltdown and government bailouts requires a serious rethinking of auditing's role and standards. The Public Company Accounting Oversight Board also needs to seriously reevaluate its role in monitoring auditing quality and setting standards. In addition to reviewing the work of the Big Four firms, perhaps the board could emulate the National Transportation Safety Board: When a financial-reporting disaster or audit failure occurs, it could send in a team of governmental experts to investigate how it happened and what could prevent a recurrence.

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209 A fresh look is needed. Legislators and regulators should answer a few questions: How can we get a "real" audit for a publicly traded company? How can we encourage accountants, auditors and executives to look for financial-reporting fraud? Can we design a compensation scheme that rewards these firms for detecting weaknesses and deficiencies?

We simply cannot accept another "too big to fail" argument to justify support of a profession that promises oversight but delivers much less.

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November 14, 2008 By Sean Scully

Business schools scramble to adjust curricula after the Wall Street collapse Lessons of the fall As Wall Street began to collapse in September, so too did Professor Jonathan Scott’s syllabus for his “Introduction to Financial Markets” class for business students at Temple University. “I pretty much threw the plan out the window from the last two weeks of September and first week of October,” Scott said. “And still as things transpire, I try to get them to think about what’s going on in the markets.” Faced with what may be the worst meltdown in U.S. financial markets ever, Scott turned his advanced undergraduate seminar class into a real-time laboratory for his students. At every session, they discuss the latest twists and turns in the markets, look at the underlying financial processes, and try to reason out why it happened and where it may be going. “I have tried to emphasize to them that this is historic,” he said with a laugh. “Just this morning, I said to them ‘this is as historic as the Phillies winning the World Series.’” The fantastic events of the past two months have left students and faculty of Philadelphia’s business schools reeling, with students reconsidering how to find a job in a devastated business sector and instructors trying to explain what is happening. “As a student it’s pretty terrifying looking out at that,” said Joseph Negri, 21, a senior in Villanova University’s business school. “But there are a couple of things you have to remember — first, the economy is cyclical; two, you did go to school with a general finance degree, a general accounting degree,” so there are plenty of places to find jobs off Wall Street. Maryellen Reilly Lamb, senior associate director of Wharton’s MBA Career Management program at the University of Pennsylvania, senses a real nervousness among her students. “For many of our students, it’s been a big adjusting of expectations of the summer and for graduation as well as coming up with Plan B that’s going to keep their dream alive … what can you do for the next 18 to 24 months to 36 months that will allow you to get the same sorts of rewards as the other career” they might have hoped for, she asked.

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211 Fortunately, Lamb said, it doesn’t look like banks and other stricken firms will eliminate recruiting completely, as many did during the recession of 2001 and 2002. Instead, they will continue to recruit as a way to keep talent in the pipeline, but they will cut the number of positions that are available. “For our students, that just means they have to be above and beyond ‘prepared,’” she said. “If they are going to get into one of those opportunities, they have to make sure they are superprepared.” Frank Linnehan, associate dean for graduate and undergraduate programs at Drexel University’s LeBow College of Business, said he expects to see a shift away from finance-related majors, with more students focusing on the accounting skills that will be required to clean up the vast mess. “There are definitely options” for students, he said. “The accounting people are going to be in demand. It’s now about how to evaluate value [of assets]. In the short term, there is going to be tremendous demand for people who can do that.” Drexel student Brennan O’Brien said he and his colleagues in the one-year MBA program remain committed to careers in business, but even those who weren’t considering Wall Street careers are having to rethink their job search strategies. “I’m looking at my job prospects being a lot dimmer than what I thought they’d be. … I think everybody is trying to make sure they have two or three options, just knowing that everybody is tightening up because of the economy,” he said. Instructors, meanwhile, find themselves struggling to make sense of economic events and turn them into a useful lesson. “Even the professionals are trying to figure out how this happened so quickly,” said Rakesh Sambharya, professor of management and international business and director of the MBA program at Rutgers University-Camden. “As far as the business schools, we’re just trying to figure out what’s going on.” Although it will take years for academics to understand and teach the lessons of the latest crash, he said, some obvious topics are entering business classrooms. “There will be more regulation,” he predicted. He said that professors are explaining “that we need not just more regulation for the sake of regulation, but more sensible regulation, so that things don’t get out of hand and everyone gets affected and we don’t have $700 billion bailouts.” While the economic crisis may have shaken up students and confounded the faculty’s class plans, Sambharya said, it may in the long run be a good thing for business schools. “You’ll be surprised: When the economy goes down, our applications go up. You get laid off, you want to retool, go back to school. It’s good for us, perversely,” he said. “When it’s boom

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212 time, they keep postponing school … and we’re getting a lot of applications to teach people who’ve been in the industry, maybe at Merrill Lynch, all of a sudden you’re laid off.”

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November 17, 2008 By Carol Zimmermann

"Economic Downturn Brings Call for Extension of Unemployment Benefits" WASHINGTON (CNS) -- Behind the grim statistics about the nation's rising jobless rate are men and women who need help, according to Catholic Church officials and economists at Catholic universities. One immediate response to the nation's high unemployment rate should be an extension of unemployment benefits, said Tom Shellabarger, domestic policy adviser for the U.S. bishops' Department of Justice, Peace and Human Development. He called it "unconscionable" that by the end of the year the unemployment benefits will run out for close to 2 million workers. According to the U.S. Labor Department statistics released Nov. 7, the jobless rate rose to 6.5 percent in October when employers fired 240,000 workers. That figure put the total number of unemployed Americans past 10.08 million, the highest level in 25 years. More than 22 percent of the nation's unemployed have been out of work for six months or longer -- something which also has not happened in 25 years. One year ago, the jobless rate was 4.8 percent. Many economists are saying the rate could climb to 8 percent or 8.5 percent by the end of 2009. Job losses nationwide have occurred in nearly every occupation. Construction companies, retailers, mortgage bankers, securities firms, the motel industry, appliance factories, shipping companies and steel plants have all cut positions this year. The staggering economy has delivered a strong blow to the country's poor faced with rising utility, energy, food and housing costs, said Father Larry Snyder, president of Catholic Charities USA. In a letter this fall to House and Senate leaders, he asked members of Congress to "remember the low- and middle-income Americans whose lives and economic security are being shattered by the current economic crisis." He specifically called on them to extend unemployment benefits and to increase food stamp benefits and social service assistance. Unemployment benefits were created in 1935 in response to the Great Depression as a means to provide partial wage replacement to unemployed workers while they looked for a job. Unemployed workers can get these benefits -- administered by the states -- for up to 26 weeks.

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214 On occasion, the federal government has extended the number of weeks these benefits are available. This June, Congress extended the program by 13 weeks. Congressional Democrats are currently pushing for a further extension of unemployment benefits in a new stimulus package. Shellabarger said he was looking forward to working with Congress on legislation to help the unemployed even if a larger stimulus package does not get passed. But he also sees problems with the way unemployment figures are measured and said the system "needs an overhaul," especially since it was designed when people primarily worked 40-hour weeks. Now, some people work less but want to work more or work on a contractual basis and therefore do not qualify for unemployment benefits. "How do we make sure people that are part of the workforce yet can't find work get the money they need to feed themselves and maintain shelter?" asked Shellabarger in a Nov. 13 interview with Catholic News Service. Economists have likewise stressed the need to help low-income families in the complexities of this economic crisis. Steve Conroy, an associate professor of economics at the University of San Diego, said, "As Catholics, we must consider the human side of this economic crisis, particularly the impact of economic policies on workers and their families." Tax cuts alone cannot help the country get back on track, said Conroy in an e-mail response to a query from CNS. Instead, he recommended the government focus on infrastructure development projects, taking a page from President Franklin Roosevelt's New Deal, which was a series of programs that had as a goal the creation of jobs for the unemployed in the 1930s. Conroy said focusing on public investment projects would reduce unemployment levels and help to jump-start the economy. Suzanne Clain, associate professor of economics and statistics at the Villanova School of Business at Villanova University in Pennsylvania, similarly recommended job-creation programs that would grant public service jobs to displaced workers. She said in an e-mail to CNS that these jobs were preferable to simply extending unemployment benefits. Clain also emphasized that from the perspective of Catholic social thought the government should be "especially conscious of the economic impact of the crisis on the poor and vulnerable, and should take action -- or see that action is taken by others -- to cushion the blow."

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November 21, 2008 By DeNeen L. Brown and Richard Leiby

The Very Image of Affirmation In Michelle Obama, Black Women See A Familiar Grace & Strength Writ Large Michelle Obama emerged, long and lean, from a black limousine that pulled up at the White House the other day. She stood in a bold red dress that followed her lines. She smoothed her hair and moved between her man -- the president-elect -- and the first lady. Tall in shiny red pumps, Michelle seemed to tower over them all. As she stood there, many black women on this side of the White House gate saw something else in Michelle Obama that sunny afternoon: bits and pieces of themselves. They saw their family in hers, or the family they dreamed of having. Saw a woman whose husband seemed to adore her, giving her hugs and pecks on the lips as if the whole world were not watching. Women watched Michelle Obama until she disappeared into the White House. Then they began talking. "I like the way she carries herself," says Liz Nolan, 65. "I like the fact that she walks with him," says Shenee McRae, 31, "not behind him or in front of him." "For black women, she is visible proof that you can be anything you want to be," says Greer Jones, 37. These particular women were at A Natural Motion, Nolan's beauty salon on Georgia Avenue NW. Elsewhere, in offices, in kitchens, on the radio, over the telephone, in churches, on blogs, women are talking and whispering a chorus of amens. Not just black women -- all women. They comment on what they see, or don't see. They opine about Michelle Obama's intellect, her style. Fascinated by Michelle. That's what they call her, Michelle -- first-name basis already. They noticed the way Michelle, 44, wore her hair pulled back in a ponytail to vote, as normal black women would on the way to the hairdresser the morning before a big event. Two daughters in tow in plaits. They liked the way she wore J.Crew on Jay Leno. And noticed that she told her husband he needed to be home for Valentine's Day. It would be too trivial to say that she is smashing stereotypes of black women, because the stereotypes are so flat, so one-sided, so unreal, that smashing them would be like punching a cloud.

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216 "There's the stereotype of the powerful black woman, the aggressive black woman; there is the stereotype of the over-sexualized, overly sexed black woman; there is the stereotype of the mammy," says Aziza Gibson-Hunter, 54, a conceptual artist and mother of four who lives in Northwest Washington. What she sees in Michelle Obama is strength: "I saw it in my mother. When I was a kid, I saw it in the women in the church, this dignified strength. I think that is real. "I think Michelle Obama is her own woman. I think people with the stereotype thing need to get over it. She is forcing people who have never taken the time to know who we are as black women to take a second look. To actually see, for once in their life, that there are black women that are brilliant and graceful, intelligent, well spoken and have their own sense of themselves. And it doesn't have to be measured up to anyone else." Gibson-Hunter is sitting on the black leather sofa in her home with her husband, Jawara, an anesthesiologist. Their brown dachshund just jumped in her lap. Her 16-year-old son is on the computer in the other room "supposedly doing homework." They have just finished a dinner of tofu, salad and naan flat bread. "I think for nonblack people, they are going to have to maybe deal with the stereotypes in their heads," Gibson-Hunter said. ". . . What this whole situation is doing is inviting people to look behind the projections in their own minds and maybe begin to do some work to deconstruct some of that and find the truth." "She is educated. She is not like 'Michelle the housewife.' It's 'Michelle the attorney,' " says McRae. "She is smart. She is not an airhead. She's not the pretty girl. She's not the ugly girl. She's not the trophy wife." "Nobody wants to see anybody in a Chanel suit," says Diavian Jeffreys, 24. "I look at her head to toe, and I can't find one fault," says Nolan. The stage is set for soul-searching. "Michelle Obama will be under the microscope in a way no other woman of color has been," said Donna Brazile, a Democratic commentator and strategist who offered advice to the Obama campaign. "There's no question that Michelle Obama will alter the playbook for black women for years to come. . . . We're long overdue for this." During the presidential campaign, Michelle Obama found herself branded "Obama's baby mama" in a Fox News graphic. Some conservative pundits labeled her an "angry," unpatriotic black woman after she remarked in February, "For the first time in my adult life, I am proud of my country, because it feels like hope is finally making a comeback. And I have been desperate to see our country moving in that direction." By July came a depiction of Michelle Obama as an Angela Davis type, fist-bumping her husband on a satiric New Yorker cover that famously backfired. She says she ignores labels, telling NPR: "I have not paid much attention about what people say about me who don't know me." She said she was saying one thing -- how proud she was that more Americans were participating in the electoral politics -- and the way people interpreted it was another thing. African Americans say they knew exactly what she was talking about: For too long, they felt excluded from the political process. The Obamas changed that.

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217 But the controversy highlights how the first lady will need to practice "impression management," said Quinetta Roberson, a Villanova University business school professor who co-authored a law journal article analyzing public perceptions of the future first lady. "One of the other perceptions around her is that she is a very strong woman, and her influence on her husband and family is very clear," Roberson said. "In his acceptance speech, Barack Obama said she is 'the rock of our family.' Other politicians may say my spouse is my ally or inspiration, but it doesn't necessarily suggest an equal role. 'Rock of our family' means she is right next to him and a critical part of his foundation." Yet the positive can easily be spun as a negative, into a stereotype of an "aggressive, somewhat overbearing woman," Roberson says. "She can help girls with the decision that when they grow up, what kind of man you should want by your side," Greer Jones says. "Do you want a man to stand on the corner or do you want a man who has potential to become president?" "In Chicago, she stood right there till her man finished his last word," says Patricia Johnson, 34. People have been drawing conclusions about Michelle Obama by refracting her words through their own experiences and biases. There are blogs following her every move: the school-selection process for her daughter, her performance on "60 Minutes," her figure. Essayist Erin Aubry Kaplan posted this on Salon.com: "Barack's better half not only has stature but is statuesque. She has coruscating intelligence, beauty, style and -- drumroll, please -- a butt." Still to come will be more serious assessments based on the causes she promotes, her first official journey outside the country, her first state dinner. "I have no doubt that she is prepared for the challenge," said Lani Guinier, a Harvard Law School professor and onetime Clinton nominee for a top Justice Department post. "She and her husband embody a very healthy relationship. That in itself is quite a public and political statement." Guinier added: "I toast to the time when this is all normal -- or otherwise unremarkable." Portia Pedro, 29, a third-year student of Guinier's, is pursuing the same degree held by the incoming president and first lady. "The hope for young black professional women that's embodied in Michelle Obama is a bit different from the hope invested in Barack Obama," she said. "As we go higher and higher into education, we outnumber black men, and there is a not-sosilent concern that you are less likely to get married and less likely to have children. The career part is not in question, but can you do that and be married and have a family? "If she can do that, then it opens possibilities for other black women." Alice M. Thomas, a 45-year-old professor at Howard University School of Law, said the Obama marriage should help redefine the image of black relationships. With his election night tribute to Michelle as "the love of my life, your next first lady," Thomas said, the president-elect crowned all black women: "He had a humble enough spirit to concede the stage to her. . . . It elevated black women in a way we haven't been elevated since antiquity:

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218 Queen Hatshepsut, Queen Nzinga, Cleopatra, Nefertiti. World leaders came seeking them, admiring their beauty. They were not just beautiful, they were intelligent. "For him to regard her and treat her and show and express unabashedly, unashamedly, his love for her, his love for her intelligence, respecting her, romancing her, smiling at her -- for the world to see that exchange between a powerful black man and a powerful black woman, I think it's what is everlasting about this," Thomas said. "I don't think we can point to another power black couple like that. Oprah and Stedman aren't married. And Stedman doesn't seem to have power. Nelson and Winnie broke up." Some women say Michelle Obama and her family represent nothing really new -- that there have always been stable, married, beautiful black families living in beautiful houses and sending their children to private schools. Mother in pearls. Dad in sharp suits. So often, black families are depicted as statistics. But look behind the curtained windows and you'll see "normal" American behavior: working parents, live-in grandmothers. Michelle Obama told the Cleveland Plain Dealer during the Democratic convention: "When I was growing up in the '80s, 'The Cosby Show' meant so much to African American families. A lot of people looked at the Huxtables and thought, 'There's no way that family exists.' But African Americans knew differently. If we don't see those images, then the people don't believe they exist."

If you peeked you would see yourself, too -- a family, just a regular family. All these years they were there, living in cities and suburbs, down the street from you. Soon, they'll be living in the White House -- with Michelle Obama as self-described mom-in-chief, standing in for so many women on this side of the gate.

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November 26, 2008 By Jenice Armstrong

Jenice Armstrong: A working first lady? THE MOMMY WARS is shorthand for the on-again, off-again debate about moms who stay home vs. those who have full-time careers. They've spilled over onto the incoming first lady, who has been the subject of much handwringing over whether the Harvard-trained attorney will pursue her own interests or be forced to take a traditional role. Will she return to her community and professional pursuits? Or will she instead concentrate mostly on more traditional first-lady duties? "Michelle Obama opens up the possibilities for so many new things," said Quinetta Roberson, a Villanova professor who recently completed a study about challenges Obama will face as first lady. "Up until Eleanor Roosevelt, the first lady was a hostess, someone who could host great parties and be a support to the president. "When Hillary Clinton became first lady, we saw the model really move," added Roberson, whose findings will appear in the Hasting Women's Law Journal. "I think with Michelle Obama, that model can move even more." Granted, the speculation is somewhat justified considering that Obama, 44, is only the third first lady to have a graduate degree. She's also one of the few first ladies to have had a professional career. With the inauguration still weeks away, Obama still is feeling her way through her new role. Meanwhile, everybody has an opinion as to what she needs to do. Recently, she was subjected to some unsolicited advice from the wife of former British Prime Minister Tony Blair. In a piece published in the Times of London, Cherie Blair warns Obama that "you have to learn to take the backseat, not just in public, but in private." "When your spouse is late to put the kids to bed, or for dinner, or your plans for the weekend are turned upside down again, you simply have to accept that he had something more important to do." Blair continues: "You can't confuse being a sounding board with having influence over decisions. You always have to remember it's not you who was elected."

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220 Given the rigors of the campaign trail and what Obama already has been through, I hardly expect that's going to be a problem. For starters, Obama is a quick study. Besides, Obama apparently doesn't have a problem with her "momification" as a recent piece on Salon called it. She, herself, uses the nickname "mom in chief." During a recent interview on "60 Minutes," Obama talked openly about how she plans to focus on helping her daughters, Malia and Sasha, transition to a new home and school. She doesn't appear the least bit worried about disappointing those who wish she'd return to her $300,000-a-year job as an executive at the University of Chicago Hospitals. As first lady, Obama has said she wants to focus on issues she has identified as important to her such as military families and work-life balance. Meanwhile, Blair, who says she used to give interviews about recipes to please her husband's critics, also points out in her Times article, "It is something of an irony that in these days of pushing for equality those of us married to our political leaders have to put their own ambitions on hold while their spouses are in office and keep their views to themselves. "I, at least, had my career. That's not an option for Michelle Obama. Now they are moving to Washington, any return to her high-flying job in Chicago would be impossible. But as Hillary once explained to me, it would be difficult for any spouse of a president to continue working." What an odd statement, especially considering that being first lady can be a job in and of itself.

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Posted on Fri, Nov. 28, 2008

For retail, it's likely 'Blech! Friday' Most forecasts call for one of the bleakest holiday shopping seasons in recent memory. Stores are scrambling to lure any cash out there. By Maria Panaritis Inquirer Staff Writer Welcome to Black Friday. The day consumers wipe away tryptophan hangovers with bargainhunting binges on the way to holiday cheer. Except this year, things are a bit different, in case you've been hiding under a rock. Consumers are on a spending diet. And shop-till-you-drop seems so very, very 1999. The way the economy has been banged and bruised over the last 12 months, this carefree kickoff to the lucrative holiday shopping season could be more appropriately dubbed "Black and Blue Friday." And it could dump already-struggling retailers into a deeper sea of red if consumers don't emerge from their fear-induced stupors and get into fighting, shopping shape. Sure, there'll be bargains, perhaps more than usual, given how desperate department stores and other retailers are to make money after consumers slammed the brakes on spending, analysts say. But most forecasts call for one of the most somber spending seasons in recent memory as shoppers test a new ethos: parsimony. "We're in for a period of time where consumers will think about how they spend and what they spend their available cash on very differently," said Tara Weiner, managing partner of Deloitte & Touche L.L.P.'s Greater Philadelphia office, in Center City. "There's evidence that suggests they're going to put off buying something for themselves to make a nice holiday for their kids," said William M. Madway, marketing instructor at the Villanova School of Business. "But they're going to get less for their kids, and they're going to lower the expectations for their children." A survey released this week by the National Retail Federation forecast that up to 128 million people would shop today, tomorrow and Sunday. That is down 5 percent from last year, when 135 million people said they would.

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222 In one of the more optimistic forecasts of how consumers would behave over the next month, the federation also projected a 2.2 percent increase in sales this holiday season. While still in positive territory, that increase is small compared with the fact that holiday sales increased 4.4 percent yearly, on average, over a 10-year period, the trade group said. Even if consumers spend the $470.4 billion that the group predicts this holiday season, it would be the smallest sales increase since the recessionary holidays of 2002. So electronics stores, apparel retailers, big-box stores, all are hustling to grab whatever cash is out there. "You've got to get your piece of the pie," Madway said. Retailers will have to lure buyers with attractive sales or by convincing shoppers that what they sell is a real value, Madway said. Retail stock prices have suffered sharp declines, and companies are desperate to rake in sales to quell fears among investors, he said. "They've got to create demand," Madway said. "They're desperate to meet their sales quotas." Despite the trade group's optimism, there is overwhelming agreement that shoppers will spend less than last year. And last year was already a tough one for retailers, who were caught by surprise when soaring gasoline prices curbed holiday spending. Per-household spending on holiday gifts this year will average $418, compared with $471 last year, according to data released last week by the Conference Board. Shopper pessimism has been building as the global economic crisis has led to rising unemployment and economic insecurity. Deloitte's annual holiday survey, conducted on the Internet between Sept. 26 and Oct. 7, found that 68 percent of consumers planned to change their shopping habits because of economic concerns. Many said they would seek sale items and use coupons, Weiner said. The findings reflected the early anxiety of the stock market turmoil that broke out in midSeptember. Among Greater Philadelphia consumers surveyed by Deloitte, 55 percent expected the economy to worsen next year, compared with 41 percent a year ago. Philadelphia retail expert Brian Ford said companies had been aggressive this year with early advertising and offers for Black Friday. "My advice is watch the sales, watch the coupons, watch the mailers," Ford said.

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223 "If Macy's sends you a coupon that says you get 20 percent in these departments, stay in that department," Ford said. "If somebody says to you that tomorrow morning for three hours we're going to do the following, get there during the three hours. Because those are truly bargains." Weiner suggested that consumers buy holiday gifts with their unredeemed gift cards. Deloitte found that about 47 percent of consumers have at least one unused gift card - 5.9 gift cards per person, compared with 3.7 last year. "It really is time," Weiner said, "to look in our wallets and say, OK, it's time to redeem these gift cards."

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Defining the job has challenged first ladies By DARLENE SUPERVILLE WASHINGTON (AP) â&#x20AC;&#x201D; Among the many challenges Michelle Obama will face as first lady, the biggest may be defining the job. And therein lies the problem: Her newest high-profile job isn't a job, per se. The Founding Fathers made no provision for the first lady in the Constitution, and no formal or official description exists. The first lady is neither elected nor appointed, but comes along with the president, for better or worse. Nor is she paid for all that's required of her. Many a first lady has said, in retrospect, that she had no idea how hard being first lady would be. Even the current one, Laura Bush, according to author and first lady historian Betty Caroli. Of all the first ladies, she should have known what was in store: Her mother-in-law, Barbara, was first lady from 1989-1993. "So no matter I suppose how well prepared ... she's probably going to be surprised by the enormity of the publicity, the focus, the demands and so forth," Caroli said of Michelle Obama. The first lady gets an office in the White House, typically the East Wing â&#x20AC;&#x201D; though Hillary Rodham Clinton caused a stir when she famously planted herself in the West Wing among the heavy-hitting honchos of her husband's administration. There's also a staff to help plan and execute the many social functions held every year at the country's most famous residence, and to help her promote her chosen causes. Still, the job description is ill-defined, said Robert P. Watson, who has written two books about first ladies and directs the American studies program at Lynn University in Boca Raton, Fla. "The first lady has to find her own way and match that with her husband's interests," Watson said. So like most people in a loosely defined job, first ladies have made of it what they've made of it, from the traditionalists like Mamie Eisenhower and Bess Truman, to the politically active like Eleanor Roosevelt and Hillary Clinton. First ladies have a certain freedom, then, but only to a point: For all the talk of the Obamas changing Washington, Michelle Obama, cannot, for instance, say "no" to presiding over the annual Easter Egg Roll, which dates to 1878.

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225 Laura Bush once said she didn't see herself as a certain type of first lady. "I view my role as first lady as Laura Bush," she told the Dallas Morning News in November 2001, near the end of her husband's first year in office. "I really do think that Americans want the first lady to do whatever it is she wants to do." And Laura Bush did. She started slow, with a traditional focus on reading and education, befitting a former teacher and school librarian. But she broadened her interests and became more politically active as the years passed. She has traveled alone through the Middle East, Europe and Africa, has championed the rights of Afghan women and has been a frequent, public critic of Myanmar's military government. Michelle Obama has said her first priority is to help her two young daughters make the adjustment to a new way of life. But many suspect a high-achiever like Michelle Obama won't sit idle for long. "The primary focus for the first year will be making sure that the kids make it through the transition. But there are many issues that I care deeply about," she told "60 Minutes," singling out military families, work-family balance, education and the Washington community. "So there's plenty to do." And to be criticized for. There's the other rub for first ladies: All have met with criticism at one point or another, usually for something they did, said or wore. Michelle Obama has endured her share already. She still hasn't lived down the moment when she seemed to suggest that she had not as an adult been proud of her country until she saw the public's reaction to her husband's candidacy, said Quinetta Roberson, a Villanova University business professor. "People will be watching to see that patriotism," said Roberson, who co-wrote a law journal article on the challenges awaiting Michelle Obama. She'll be under the microscope for other things, too, with everyone watching, for example, her clothes, how she styles her hair, how she decorates the White House for Christmas and how much money she spends on this or that. It's all part of the delicate balancing act for first ladies, who must tiptoe between being traditional and activist at the same time. Said Watson: "You can't go out too far one way or the other."

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Clergy brace for downturn in giving By Michael Paulson, Globe Staff | November 30, 2008 NORTH ANDOVER - The crumpling economy and plunging financial markets have demolished trillions of dollars in stock value, and now they've taken a toll on the pink stucco church on Main Street. A decision by the three priests of St. Michael's Church - the largest parish in the Archdiocese of Boston - to halt construction of a long-planned $5.2 million pastoral center is one small indicator of the enormous challenges now being faced by religious denominations and congregations throughout the region as their endowments fall, their donors' stock portfolios evaporate, and requests for help grow. The next few weeks, between Thanksgiving and New Year's, will be a key indicator of how dramatically the nation's financial crisis will affect religious organizations. Contributions to date have been stable or up for many denominations and congregations, but this period is the high season for American philanthropy, in part because people are motivated by the spirit of Christmas to be charitable, and in part because people are try ing to amass tax deductions as the year closes. "Seventy percent of our budget comes in December, so we live by faith, or by hope," said the Rev. Jim Antal, president of the Massachusetts conference of the United Church of Christ, which is the state's largest Protestant denomination. Antal has summoned all clergy to a January gathering for a brainstorming session about pastoring congregations during a downturn. "I can't tell you what's going to happen," he said. But even before the baskets are passed and the pledge envelopes opened, many religious leaders are bracing for a difficult next year, when, they believe, unemployment is sure to rise. "A lot is going to depend on December, because a lot of our pledges typically get paid by the end of December because of the tax impact," said Barry Shrage, the president of Combined Jewish Philanthropies. "And we're expecting a very difficult campaign [next year]. We know people are losing jobs, and it's not necessarily people at the bottom end - it's people who are [major] contributors." Here in North Andover, the clergy decided not to wait to find out. St. Michael's is one of the biggest success stories in the archdiocese - the fast-growing parish has 5,200 registered families, average weekend attendance of 3,000, 2,000 children in religious education and another 520 at the parochial school. Just a decade ago, the parish raised $10 million to build a new church with stadium seating, and for the last 18 months parishioners have been laying the groundwork for the project to demolish their old convent and replace it with a three-story pastoral center that would provide space for 60 parish programs.

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227 But a few weeks ago the clergy here decided the economy has gotten so bad that they didn't feel right asking their parishioners to pony up the multimillion-dollar tab. So they have shelved the project, indefinitely. "How can we ask them to pledge for three years, when they're losing their jobs and their stock portfolios are poor?" said the Rev. John Delaney, one of the parish's priests. "Now is not the right time to proceed." For religious organizations, the nation's economic woes hit twice. The faith groups rely for income on sources vulnerable to a downturn - contributions from individuals, income from investments, and, in the case of faith-based social service organizations, funding from government. But the faith groups also aspire to assist the hungry and homeless and unemployed, meaning that during a recession their expenses go up even as their revenue may go down. Multiple congregations and denominations are planning for things to get worse. Jewish synagogues are reviving congregation-based job networks that were last used during the real estate recession of the early 1990s, and the Episcopal Church is setting aside money to help congregations that get into trouble. Many organizations are also already cutting. The Catholic Diocese of Worcester has imposed new restrictions on building projects. The Unitarian Universalist Association has put off planned maintenance work on its Beacon Hill headquarters. The Archdiocese of Boston has been steadily cutting staff. The Episcopal Diocese of Massachusetts has cut staff and spending. And religious colleges are cutting too, including, most recently, Gordon-Conwell Theological Seminary, an evangelical institution on the North Shore that announced Monday it was laying off employees and reducing spending. Many clergy believe that religious philanthropy, especially at the local level, tends to be more resilient than other forms of charitable giving during a recession. But they note there is no exact precedent for the current economic crisis, making forecasting the impact this time speculative. "Perception and fear are a greater concern now than the real economic problem, and the fear of things getting worse will probably dominate people's reaction," said Chuck Zech, a professor of economics who studies church finances at the Villanova School of Business. Zech said that denominations are being hit harder than congregations, because denominations rely more on investment income, whereas congregations are mostly funded by direct contributions. And he said that Catholic parishes are likely to suffer more than Protestant congregations, because Catholic parishes tend to depend on weekly collections that are affected by ups and downs in the economy, whereas Protestant churches tend to rely on either pledges or tithing, which are often viewed as more of a commitment by donors. At the denominational level, everyone says they are taking a hit because of the impact of the market on their endowments. "We are exposed to the markets just like any other investor, so our endowment is down, our retirement fund is down significantly, and we're the beneficiary of several outside trusts that are down as well," said Tim Brennan, the treasurer of the Unitarian Universalist Association, which

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228 is based in Boston. "Everything is down these days, and that will affect future years - we will have less resources to draw upon." The revenue picture seems mixed. At the New England conference of the United Methodist Church, revenues are down 8 percent from last year, said conference spokeswoman Alexx Wood. Wood said some congregations are reporting increased giving, and says, "it's counterintuitive, but history has shown that when times are tough, people respond with generosity." The Roman Catholic Archdiocese of Boston expects giving to be "off a bit this year," but "we're more concerned about next year than this," said archdiocesan Chancellor James P. McDonough. Giving to parishes, he said, appears steady. McDonough said Catholic organizations in Massachusetts, most of which invest their money together, had some good fortune - because of a decision to replace some of the Catholic investment pool's managers, an unusual amount of the holdings had been converted to cash just before the market tanked. But the archdiocese has had several real estate deals fall through because buyers couldn't get financing, McDonough said. "Like everyone else, we've taken our lumps," he said. "But we're taking a very long-term view the church has been around for 2,000 years." In the Jewish community, synagogue administrators are worried. "I'm hearing tremendous concern," said Alan Teperow, executive director of the Synagogue Council of Massachusetts. "People in congregational leadership are concerned about the livelihoods of their members, the emotional well-being of their members and how that's going to affect them and their families, and ultimately whether that might affect the synagogue itself if people are unable to pay their dues." Multiple religious organizations say they are seeing significant increases in requests for assistance at food pantries, soup kitchens, and social service organizations that provide employment, food, or housing aid. "Requests for help are up, no question," said Tiziana Dearing, the president of Catholic Charities for the Archdiocese of Boston. Dearing said her organization is facing increased requests for assistance; among its responses has been to add extra hours for its food pantry at its Yawkey Center in Dorchester. Dearing said direct-mail fundraising is running higher than last year, and that attendance and fund-raising events has held steady, but that state funding, which makes up just over half of the organization's budget, is being cut. "At the big giver level, it's a little early to tell, and our concern is corporate giving, because we have huge donors who have lost 30 to 40 percent of their portfolios this year." Lutheran Social Services reports a significant increase in waiting lists for affordable housing that the organization manages, and is also facing program cuts as a result of state budget problems, according to Heather Feltman, the organization's chief executive. Feltman said her organization's fund-raising is up this year, but, she adds cautiously, "so far." The Church of Jesus Christ of Latter-day Saints provides a particularly direct barometer of economic woes, because Mormons place a strong value on avoiding government assistance, and try to help their own unemployed members rather than rely on welfare. Clayton Christensen, a top Mormon official locally, said the church's funds for helping its own members "are already getting taxed to the limit."

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229 "Unemployment is rising, and my personal bet is that we're going to see 15 percent unemployment within a year," said Christensen, who in addition to his volunteer role with his church is also a professor at Harvard Business School.

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DEC. 2

Newly Tenured ... at Emerson, UNLV, Villanova The following individuals have recently been awarded tenure by their colleges: Villanova University Vijay Gehlot, computing sciences Keith Henderston, geography and the environment John Kozup, marketing Sarvesh Kulkarni, electrical and computer engineering Jean Lutes, English Brian Ohta, chemistry Paul Rosier, history Deborah Schussler, education and human services Thomas Way, computing sciences Seth Whidden, modern languages and literature

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Tuesday, December 02. 2008

More Recruiting Woes Thanks to the Uniform Accountancy Act, beginning in 2010 in New York and 2012 in Pennsylvania, undergraduate accounting students will be required to complete 150 hours of related course work before sitting for the CPA exam. In fact, legislation has made this effective in most states. So what, right? Well, in New York, where the Big Four firms have their headquarters, this will dramatically change the way recruiting and hiring is done. The Big Four firms had hired students out of college before they passed the CPA exams with the understanding that they would pass it the summer after graduation. Now most accounting students will have to complete a fifth year as an undergraduate or go to graduate school to meet the 150-hour requirement., according to Bob Bonner, dean of graduate programs at the Villanova School of Business in Pennsylvania. Since many undergraduate degrees do not typically include 150 hours of accepted coursework, college students, according to Bonner, have two choices: 1) cram extra accounting courses into their schedules on top of what is already required for their major or 2) apply for a graduate accounting program that will help them fulfill the requirement. There might be some good with the annoying, though – many recruiters at accounting firms say that they prefer students to take the grad school route, a choice that may bring in better bucks in the long run. According to the National Association of State Boards of Accountancy, master’s degree holders receive starting salaries that are approximately 10 to 20 percent higher than the starting salaries of those with only bachelor’s degrees. What do you think? Good idea or just plain annoying?

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By Anne Rosivach New York and Pennsylvania have joined the 47 states and territories that already require 150 credit hours for CPA licensing. The latest state to mandate the change is Pennsylvania, where on July 10 Governor Edward Rendell signed a bill amending the state's CPA law to require 150 credit hours and one year experience in public accounting for licensure. The education and experience changes will go into effect as January 1, 2012. In New York, where students will have to meet the 150 hour education requirement to sit for the CPA exam as of August 1, 2009, students are deciding whether to take the exam before the end of the Spring semester. Universities in both states are expanding existing graduate programs or designing new pathways to a master's degree to prepare for an expected increase in enrollment, and accounting firms are adjusting their recruiting programs to help new hires meet the requirements. Tim Boyle, Partner in Charge of Recruiting at KPMG in Philadelphia said that that the new law creates the need to "think about how we can help." In a conversation with AccountingWEB, Boyle emphasized the need to communicate about the firms' needs with both students and the schools. At the same time, he says for the interim period, "It has forced us to be creative and work with the students." He finds that regardless of the requirements, more students want a graduate degree and are looking for a longer term experience in public accounting. The additional education requirement is not going to change the plans of many accounting students, Brian Campo, a candidate for the Masters in Accounting (MAC) at Villanova University in Philadelphia told AccountingWEB. "Accounting students today expect to go on for a graduate degree. The degree sets you apart and shows a dedication to the field." Villanova offers four programs that students can choose from to earn the 150 credits, including a popular 4-1, 1-4 program where candidates for the MAC take four courses during the summer after graduation, one distance learning course during both the fall and spring semesters and then return for four courses the following summer. "Since most accounting grads will not go to work until the September following graduation," Campo said, "this program gives them the opportunity to get into the work force and begin earning a salary with only one summer's interruption." Some senior accounting majors at Canisius College in Rochester, New York will sit for the CPA exam in the summer of 2009 rather than take another year of study, said Joe O'Donnell, chair of the college's accounting department, according to the Rochester Business Journal. "They've taken the approach, 'I want to beat the deadline'." One New Yorker who plans to stay in school is Peter Loney, a forward on the men's basketball team at Damaen College in Amherst, NY. "I planned to get a master's degree anyway," Loney

Villanova School of Business 2008 Media Report


233 says. "I think I'll definitely be more prepared with the 150-hour degree as opposed to the 120hour degree." At Villanova, faculty and administrators are working hard to ease the transition for students. "We are going into undergraduate courses, and the faculty are talking about it," Villanova's associate dean Bob Bonner told AccountingWEB. "Villanova has had graduate accounting programs in place since 2000, but at the School of Business, we are continuing to look at enhancements." Bonner plans to meet with the larger firms in the Philadelphia area "who also have a vested interest in making this transition," he says, to come up with solutions and ideas "so that the students don't have to have the conversation." Villanova, which has a large number of students entering as freshmen with advanced placement credits, is considering a range of additional avenues to the 150 credits that could include a nine-month compressed program for students who can begin their program in their senior year. As coordinator of the advanced accounting courses at the Zicklin School of Business at Baruch College of the City of New York, Associate Professor Donal Byard says he, "tried to make sure that all instructors in these courses informed students early about the impending changes in the requirements to sit for the CPA exam in New York," according to the school's news site, The Ticker.com. About 450 accounting majors graduate from Baruch each year preparing for the CPA exam. According to the chair of the department, Professor Masako Darrough, the department is proposing a revised program, that would allow for more flexibility for students pursuing the major. The program that used to require 33 undergraduate credits to meet New York's current 124 hour requirement might require fewer credits if the proposal is put into action, allowing for extra master's level classes. A hallmark of Pennsylvania's new law, according to Governor Rendell, is that it permits "increased CPA mobility to practice across state lines." Accounting graduates from Villanova practice in New York and New Jersey, Bonner says, and the requirement is becoming standard. Currently, only six jurisdictions do not have the 150 hour requirement in place: California, Colorado, Delaware, New Hampshire, Vermont and the Virgin Islands. Twenty-two states allow candidates to sit at 120 hrs, but require 150 for certification. They are: AK, AZ, CT, FL, GA, HI, ID, IA, KY, MA, ME, MI, MN, MO, NC, ND, NJ, RI, SC, VA, and WA. Pennsylvania can be added to this list, but the 150-hour is still optional until 2012.

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Last updated: December 17, 2008 09:57am Fed Trims Key Rate to Zero By Erika Morphy

WASHINGTON, DC-These are trying economic times in a modern economic environment, so it is little surprise that the Federal Reserve Bank has taken unprecedented steps in trying to curb calamity. The Fed decided to down-size the Federal Funds Rate from an already low 1% to between 0.25% to zero. The industry had been expecting a modest 25 or even 50 basis points trimmed away from this key rate. Fed officials, including Fed chairman Ben Bernanke had been sending out mixed signals of late over their intentions--promising on one hand to use all tools available, and then noting on the other that the Federal Funds interest rate was dropping too low to be an effective recessionaryfighting instrument. Clearly, though, the “use all tools” school-of-thought won out with Tuesday’s decision by the Federal Open Market Committee. Not only was the decision to cut the rate to this level unanimous but FOMC all but said it would keep rates at this level for as long as necessary. We anticipate “that weak economic conditions are likely to warrant [an] exceptionally low level of the federal funds rate for some time,” it said in a prepared statement. Furthermore, it added, the Federal Reserve will continue to consider ways of using its balance sheet to support credit markets and economic activity. Given that the Fed has already been fighting this recession very aggressively, it is difficult to imagine what else it could do. It could focus more on quantitative easing, Peter Cohan, principal with Peter Cohan & Assoc., tells GlobeSt.com. “Basically that means, [the Fed] next try to set longer term interest rates-- the federal funds rate is short term. To do this they would essentially flood the markets with longer term money.” Like the cuts to the Federal Funds rate, though, Cohan says this would be pointless. “The Federal Funds rate, after all, was hovering around 5% some 18 months ago. It has been steadily dropping to zero, to little effect in the economy.” Indeed, the commercial real estate industry has met each interest rate cut with a collective shrug. The cuts have done little to affect and industry which has been grappling with a credit crunch for the last 18 months. This time, though, might be different. Zero percent is essentially free money, and that is bound to have an impact in the lending market. It may well be that with money this cheap lenders will finally be inspired to begin lending again. “A downward movement in the Fed Funds rate is meant to induce more 'risk-taking' on the part of the lenders, because the returns on other assets become more attractive relative to a risk-free return,” Villanova School of Business professor Scott Dressler, tells GlobeSt.com.

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235 With “the Fed funds rate rendered impotent--near zero--look for the Fed to attempt to induce more 'risk-taking' on the part of the lenders using less traditional means.” An example of this would be to pursue 'open-market operations' in more long-term Treasury bill markets, he adds. One tweak the Fed may try, advises James Clark, managing principal of EnTrust Realty Advisors, of the Alter Group: Broadening the scope of businesses that may borrow from the Fed may have the most significant impact. “Perhaps a little competition will encourage banks to start lending again,” he tells GlobeSt.com. Clearly something must happen for lending to jumpstart. The $250-billion infusion of capital into the banking system earlier this year did not inspire banks to spread the wealth. “We have one client right now with good credit," David Weisman, a commercial Real Estate attorney at Greenspoon Marder, tells GlobeSt.com. "and the best he can find is from a smaller, 'maverick' lender who will give him 7.5% to 8%, regardless of how low prime is."

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Who Is Michelle Obama: Angry Black Woman or Supportive Spouse? December 22, 2008 By Zayda Rivera "The angry Black woman is a traditional stereotype of Black women in general," says Quinetta Roberson, professor at the Villanova School of Business and co-author of Michelle Obama: A Contemporary Analysis of Race and Gender Discrimination Through the Lens of Title VII. "With Michelle Obama, that was the natural kind of default mechanism or the go-to stereotype for a lot of people." A seasoned lawyer and mother of two girls, Michelle Obama left a high-paying salary job as vice president of University of Chicago Hospitals to support her husband on the campaign trail. Her natural instinct was to support her husband at all costs. Whether it was her bold statement about being proud of her country for the first time in her adult life or her candidness when talking about her husband's shortcomings, the country was enamored with Michelle. "I received a five-page e-mail talking about what she might wear to the inauguration," Roberson says. "During interviews, Michelle Obama was kidding her husband about habits he has or things around the house and some people thought, 'How is she going to say that about him on national TV?' But if you think about [Barack] saying '[Michelle is] my partner, my best friend,' that's the way partners and best friends act. They will call you on your stuff when you may not be doing the right thing and pat you on the back when you do." Make the judgment for yourself, but keep in mind that Michelle Obama's acceptance stems from the most important judge of all--her husband, President-elect Barack Obama. In a recent interview, he said: "She makes me laugh. When I told her I was nervous before a speech, she looked at me and said, 'Well, listen: Don't screw it up!'"

Villanova School of Business 2008 Media Report


2008 VSB Media Report