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February 2011

Dear Faculty and Staff, On behalf of VSB’s marketing & public relations team, I am pleased to share with you our 2010 media report. I'd like to take this opportunity to sincerely thank and congratulate those of you who continue to devote your time, effort, and energies to promote VSB in the media. In 2010, VSB achieved great success in generating increased brand awareness. The school reached millions through appearances in international, national, and local media. More than 30 faculty members appearing in over 120 publications and on news programs around the world offered reactions to the news of the day or authored articles based on their research. Equally exciting, 35 percent of our stories this year focused on VSB’s institutional priorities, including our students, alumni, leadership, and innovation in education. VSB was featured extensively on the national level last year, including placements in The New York Times, The Wall Street Journal, The Washington Post, and The Chronicle of Higher Education. Our faculty also made appearances on nationally-televised networks, including ABC and CNBC. Your participation in media opportunities plays an important role in enhancing VSB's reputation. This increased media attention coupled with our consistently strong rankings validate the outstanding work of our students, alumni, faculty, and staff, and increases the value of the degrees already earned by Villanova University alumni. The start of 2011 is proving to be just as successful for VSB. We hope this momentum will continue throughout the year to increase media coverage and build reputation. Thank you again for your support.

Liz H. Field Director of Communication Villanova School of Business

2010 By the Numbers •

The Villanova School of Business was included in 120 news stories.

More than 30 different faculty members were featured in news stories, many multiple times, as experts.

The Villanova School of Business was highlighted in 36 institutional stories, showcasing our students, alumni, leadership, and innovation in education.

VSB faculty were interviewed 9 times on broadcast radio and featured in 10 television broadcasts.

The Villanova School of Business was featured 11 times by the Philadelphia Inquirer and 6 times by the Philadelphia Business Journal.

VSB faculty made 6 appearances on local television stations, including Fox 29, NBC 10, and CBS 3, as well as 6 appearances on local news radio programs KYW and WHYY.

VSB was featured extensively on the national level last year, including 15 unique placements in The New York Times, The Wall Street Journal, The Washington Post, and The Chronicle of Higher Education. Our faculty also made appearances on nationallytelevised networks, including ABC and CNBC.

Television Broadcast Highlights On March 29, 2010, Professor Ronald Hill was featured on Fox 29 News discussing consumer psychology and buyer behavior in relation to Toyota recall crisis. On April 8, 2010, The Center for Marketing, Public Policy Research and NIAF were featured on CBS 3, highlighting a forum sponsored by the two organizations focused on success in the communications industry. In Early June, Dean Danko Was Featured in two 30 seconds clips on Fast Company Magazine’s website answering the questions “Is there a place for a person who is brilliant but not a team player?” and “What is too much information in an Information Age?” On Monday June 14, 2010, Professor Michael Pagano was featured on CNBC to discuss the Nasdaq and NYSE rolling out of new circuit breakers. On August 17, 2010, Professor of Economics Cheryl Carleton, was interviewed on Fox 29 News to discuss the recession. On August 30, 2010, Professor of Management Patrick Maggitti, was interviewed on Fox 29 News to discuss new research on “Shrinking the Wage Gap” On November 3, 2010, Victor Li, professor of economics and a former senior economist at the Federal Reserve Bank of Atlanta was featured on ABC National News to comment on the Federal Reserve’s plans to buy billions of dollars in government debt. On November 26, 2010, Eric Karson , professor of marketing was featured on NBC 10 News to discuss Online Retailers, Cyber Monday, and the holidayshopping season. On December 23, 2010, Eric Karson , professor of marketing was featured on the CNBC Squawk Box to discuss the holiday shopping season and the biggest Christmas items , and consumer buying habits. On December 29, 2010, David Fiorenza, professor of economics was interviewed on Fox 29 News to discuss the potential consolidation of Municipalities in Pennsylvania and New Jersey as well as complications and consequences involved with consolidation.

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Radio Broadcast Highlights

On January 29, 2010, Greg Bonner, chairman of marketing and business law at the Villanova School of Business commented on the Toyota recall. On April 20, 2010, David Fiorenza professor of Economics was featured on KYW New Radio to talk about how his class is studying the North Penn School District’s Teacher’s Strike. On August 29, 2010, Robert Nydick, professor of management and operations at Villanova’s business school was featured for taking his classes to New Orleans for nine consecutive semesters to build houses with habitat for humanity. On October 14, 2010, Dr. Kevin Clark, associate dean of the Villanova School of Business was featured on KYW News Radio to comment on the impact the recession has had on certain industries salaries as well as the most recent Bureau of Labor Statistics data.

James M. Danko, The Hellen and William O’toole Dean at the Villanova School of Business first appeared on Executive Leaders Radio on April 9, 2010. Executive Leaders Radio is dedicated to honoring individuals who have risen to leadership roles through hard work and dedication. This highly popular radio program shares the stories and wisdom of leaders like Jim Danko with a diverse listener audience.

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On January 8, 2010, WHYYRadio featured Ron Hill associate dean of the Villanova School of Business to discuss the impact of looming layoffs on employees’ mental health and productivity On February 25, 2010, WHYY Radio featured The Center for the Study of Church Management at the Villanova School of Business’ Parish Technology Summit.

On March 16, 2010 Victor Li, professor of economics at the Villanova School of Business and a former senior economist at the Federal Reserve Bank of Atlanta was featured on The Wall Street Journal This Morning Radio Show to comment on interest rates in the weak economy.

On November 3, 2010, Victor Li, professor of economics at the Villanova School of Business and a former senior economist at the Federal Reserve Bank of Atlanta was featured on wtop Radio to comment on the Federal Reserve’s plans to buy billions of dollars in government debt.

2010 Media Report Villanova School of Business

Print and Online Media

Villanova Grad Breaks Into Movie Industry Leo DiCaprio set to star as ex-con in movie scripted by undergrad business major By Sarah Halls, 4 January 2010

Business student-turned screenwriter Brad Ingelsby

When Brad Ingelsby finished his BSc in Marketing at Villanova University in Pennsylvania, he hardly expected that six years later Hollywood would be beating at his door offering him $150,000 for his script. Unlike his classmates who pursued careers in finance, Ingelsby moved to the West Coast to do a Masters in screenwriting at the American Film Institute in Los Angeles. “I grew up watching tons and tons of movies. Wanting to be part of that is where the drive came in,” explains Ingelsby. “I’ve always loved movies. I would write stories on the side as a hobby of mine... and download screenplays online to see the format and structure.”

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After stints in the financial sector, the Villanova graduate was given his big break when a friend passed a script Ingelsby had written to various agents. In 2008, Ingelsby’s script was snapped up for $150,000 by Relativity Media, the production company behind titles such as Frost/Nixon and 300. The script, originally Ingelsby’s thesis, is a “modern western” about a guy who is released from prison after serving eight years for a crime that is not revealed to the viewer. When the main character returns home to rebuild the family farm with his brother, he finds out his brother has fallen in with the wrong crowd. The plot takes a violent turn when the brother is murdered. Seeking revenge, the main character sets out to find his brother’s killers. As the story develops, the main character is haunted by ghosts of his past and the more he tries to outrun them, the more his past catches up with him. The movie, titled The Low Dweller, is currently in pre-production and will star Leonardo DiCaprio, according to the website Although now embarking on a career in films, the marketing graduate-turnedscreenwriter has found skills learned as an undergraduate have helped him to negotiate better deals. “Advertising, microeconomics and marketing: they made you be creative,” says Ingelsby. “It wasn’t just about numbers. You had to entice people to be interested in products they wouldn’t normally be interested in

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Five Lessons From Business Schools January 15, 2010 By Robert Maranto, Gary Ritter, & Arthur E. Levine U.S. Secretary of Education Arne Duncan recently urged the nation’s schools of education to pursue reforms, and particularly to strengthen their teacher-preparation programs. Could the recent history of business schools offer a future for schools of education? As the management scholar William G. Ouchi pointed out in his 1985 essay “Reflections on Management Education,” from 1961 to 1981 the percentage of undergraduate degrees awarded in business administration nearly doubled (from 13 percent to 22 percent). M.B.A.s more than tripled their market share, from 6 percent to 22 percent. By the 1980s, business schools had become “the largest single component of the modern academy.” Less noticed was a quantum leap in the quality of the degree, particularly remarkable since the easiest way to grow in quantity is to shrink in quality. In the 1950s, business schools were seen as places for marginal students to skate by, and for privileged students to network into future careers. Yet by the 1980s, business schools were training many of the best and the brightest, and became more prominent within universities. What changed? Ouchi makes a powerful case that a 1959 Ford Foundation report authored by economists Robert A. Gordon and James E. Howell led the way for reform. Like the Flexner report on medical schools a half-century before, Gordon and Howell’s report said that, in business schools, “the students were second-rate and the faculty third-rate and graduate education … was a fraud.” But that is only half the story. The report recommended that business schools reorganize their academic structures around three rigorous academic disciplines external to traditional business programs: applied mathematics, economics, and behavioral science. These assured intellectual rigor, and also offered a framework for the applied skills that modern corporations, the employers of M.B.A.s, needed. The Gordon-Howell approach had already been pioneered in the 1950s by G. Leland Bach and Herbert A. Simon at Carnegie Mellon University (then called the Carnegie Institute of Technology), and was

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soon adopted by the graduate school of business at the University of Chicago, with others to follow. "If schools of education are to be remade, it will be the ambitious near-great schools, rather than the field's leaders, that do the remaking." Business schools changed because their poor reputation made them open to change. In addition to this, the Ford Foundation sank substantial resources—some $30 million in 1958 dollars—into enticing prominent business programs to reform. Ford invested its resources in near-great schools anxious to compete with the likes of Harvard, the University of Pennsylvania’s Wharton School, and Columbia. Leaders at such schools realized that they could best overtake the giants by embracing a new approach. Of course, as recent corporate scandals remind us, all is not well with business schools today. Various commentators have continued to call for reforms. By 2005, prominent (but not quite leading) business schools at places like Villanova began to emphasize business ethics, for reasons that now seem all too obvious. But this is merely to say that reform is an ongoing journey, not that it is not worth the trip. In fact, this may well be a trip that leaders of schools of education should consider taking. Despite business schools’ imperfections, their experiences in successfully reinventing themselves hold five lessons for those who wish to improve public education by reforming schools of education. First, history matters. As David F. Labaree writes in The Trouble With Ed Schools, American schools of education were designed, in an era of rapid school expansion, to quickly increase the supply of teachers, no matter their quality. This was consistent with the notion that teaching was a craft rather than a science. As “women’s work” quite unlike law or medicine, teaching and teacher preparation were not deemed worthy of large investments. We are still paying for these long-ago policies. Second, as numerous reports have argued for years, American schools of education lack sufficient academic rigor and applied acuity. Consequently, those they train—teachers and administrators at traditional public schools—often do not have the knowledge and skill for their very difficult work. Yet, as was true for 1950s schools of business, today’s schools of education have significant assets. In particular, they train school teachers and administrators, include many faculty members with real-world experience in schooling, and offer considerable leadership within state education policy circles. Ed. school networks have significant influence over K-12 education in each of the 50 states, thus their effective reform could have enormous ripple effects. Accordingly, we, unlike some, think it worthwhile to reform schools of education, rather than discard them. Moreover, education schools have several advantages that their burgeoning numbers of competitors lack. They have capacity: While many of the competitors in the certification

business are small in size, education schools continue to prepare over 90 percent of teachers and school administrators. Change at education schools is also self-sustaining, as enrollees pay tuition after reforms are adopted, in contrast to many competitors that require continuing philanthropic support. They are unique in being located at universities, the homes of the disciplines, as noted in the Gordon-Howell report on business schools. And the research on the effectiveness of teacher education offered by most of the various providers shows little evidence that education school programs are less effective. So they seem an appealing target for investment. Third, like business schools of the 1950s, schools of education occupy relatively marginal places within the academy. This means they can be influenced by outsiders with big ideas and relatively smaller amounts of money, such as the Gates, Wallace, Broad, and Walton foundations, or the U.S. Department of Education. (Secretary Duncan seems to want to reorient schooling around measurement, and also seems interested in institution-building over the long term.) Any of these sources could well have the money, vision, and patience to dramatically reform schools of education. Fourth, if schools of education are to be remade, it will be the ambitious near-great schools, rather than the field’s leaders, that do the remaking. Unlike Harvard, Stanford, or Teachers College, institutions such as the University of Arkansas, the University of Rhode Island, and the California State University system have relatively little to lose and much to gain by reform. Finally, unlike those promoting inchoate “21st-century skills” and the like, we propose that contemporary schools of education, like the business schools of the 1950s, be reorganized around highly rigorous academic disciplines with well-established academic quality, and which seem likely to offer the skills and content teachers and administrators need. Psychology, biology, statistics, and content knowledge in the disciplines taught in K-12 schooling make the most likely candidates. With these five lessons in mind, we believe that a well-funded nonprofit or government agency could remake American schools of education, and ultimately American public education. Business schools have been there and done that. As learning organizations, schools of education should learn from their experience. At the very least, we are hopeful that some academic leaders will view this time as a golden opportunity to position their institutions as the ed. school versions of the University of Chicago or Carnegie Mellon. Any takers? Robert Maranto holds the 21st-century chair in leadership, and Gary Ritter holds the endowed chair in education policy, in the University of Arkansas at Fayetteville’s department of education reform. Arthur E. Levine is the president of the Woodrow Wilson National Fellowship Foundation, in Princeton, N.J., and a president emeritus of Teachers College, Columbia University.

Villanova Students Put People Before Profit A new crop of business students are shifting the focus away from the bottom line to social justice By Sarah Halls, 12 January 2010

Business Without Borders' Abigail Butkus with villagers in Kenya's Amboseli National Park

The searing Kenyan sun beats down on Abby Butkus as she teaches members of the Meshanani tribe practical business methods to assist them with their enterprises. Swapping the classrooms of Villanova School of Business in Pennsylvania for Amboseli National Park in Kenya, Butkus, two classmates and their professor traveled to Africa last summer as part of Business Without Borders. The non-profit student-led group was founded by four Villanova seniors in 2008, who wanted to create “an organization that put together values of service with concepts they were learning at b-school,� says Butkus, vice president of Business Without Borders and a senior studying

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Accountancy and International Business. While in Kenya, Butkus and her group looked for opportunities to use their business skills to enhance the economic development of the Meshanani people. “We did a couple workshops with the village helping their businesses grow,” she explains. “One [man] herded cattle…two women made beaded jewelry for tourists and their newest venture involved a cultural village, which tourists would pay to visit.” Overcoming cultural business problems and initial skepticism from the Meshanani people, the group persevered thanks to some of the elders who spoke English. Armed with translators, the group taught workshops on marketing and goal-setting and a seminar titled ‘What is Business?’ However, the most significant lesson the Meshanani people learnt inevitably happened outside the classroom. “They wanted to open their own store, so we took them to five-star lodges and went into the gift shop and let them ask questions to become aware of the atmosphere that we were in,” said the Villanova senior. “That was really an experience for everyone.” “Combining social justice with business” as Butkus puts it, came of age during the first decade of the millennium, but has its roots planted over half a century ago. In an interview with BusinessWeek, an online finance magazine, Edward Lawrence, a professor of finance at the University of Missouri-St. Louis said that Bluffton University in Ohio created the first socially responsible student–run investment fund in 1956. Fast forward to the 21st century and student-led socially-oriented initiatives are increasingly popping up. In 2007 and 2008, BusinessWeek reported that students at NYU’s Stern School of Business and Columbia Business School amongst other b-schools started investment funds with the aim of financing social and environmental projects.

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Similar issues are also impacting the curriculum as b- schools increasingly offer “specialized degrees and concentrations in sustainability due to student demand,” according to the Financial Times. Classes on these non-traditional themes are what encouraged Butkus to participate in Business without Borders, despite encountering obstacles like funding. Luckily, Villanova gave the group a grant, but Butkus intends to build bigger fundraising opportunities to further subsidize the trips. Business without Borders has also been to Nicaragua where students assisted a women’s cooperative with solar-powered ovens, discussed the possibility of an ecotourism project and helped subsistence farmers turn fruit into jams and spreads. “These improved products could be sold for more profit and to a larger consumer base, therefore advancing quality of life for the subsistence farmers,” says Lauren Zales a sophomore student from Villanova, who traveled to Nicaragua with the organization last October. To round off a busy year, engineering and business students visited the Philippines during the Christmas break, to assist in sanitation and economic development projects. The organization has also launched a project closer to home: the Volunteer Income Tax Assistants program. Run in partnership with the Inland Revenue Service, volunteers help low-income families prepare their income tax returns. “Overall I hope we can grow and sustain these projects and I hope our organization continues to grow, gain recognition and funding,” says Butkus

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Double acts By Rebecca Knight Published: January 25 2010 00:01 | Last updated: January 25 2010 00:01

Life was already busy for Sam and Felicia Brownell, but when the couple enrolled in the Flex Track MBA at Villanova School of Business, a three-year programme for working professionals, their schedule became jampacked. The Delaware pair both work full time – Sam is a pharmaceuticals executive and Felicia is director of financial reporting at an asset manager in Philadelphia – and they have five children ranging in age from three to 16. “We joke that neither one of us wanted to be home with the kids while the other was in school,” says Felicia. While the Brownells take every class together, carving out time with each other outside of school is hard. They also admit they are very competitive. “I always say that in class he’s not my husband,” Felicia says. “He has a very different perspective, and we don’t always agree.” But they both maintain that business school has been a good experience in their relationship. “I have learned more about her,” says Sam. “In class, I see different facets of her personality and I appreciate her in a different light.” Not every couple is as lucky. Indeed, business school is notoriously hard on partnerships. From adjusting to a new city, to meeting people, to getting used to a schedule where the student is stretched between home activities and coursework, MBA programmes often create romantic casualties. “There’s going to be a huge amount of time sucked away from the person who is doing the MBA programme, so the spouse has to set expectations accordingly,” says Michael Cohan, head of MBAPrepAdvantage, an admissions consulting company. Few business schools keep up-to-date records about how many MBAs are married. But according to the Graduate Management Admission Council’s 2001 survey of business school students, 48 per cent of MBA students are married or in a domestic partnership. That is why business schools all over the world are working increasingly hard to appeal to students’ companions. Most MBA programmes have a dedicated social and professional programme for married students. At the University of Notre Dame in Indiana, a student-run family life committee, for instance, aims to include spouses in campus activities as much as possible.

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The joint ventures group at the Kellogg School of Management, Northwestern University, runs the school’s programmes for spouses and significant others, and helps partners with employment assistance and opportunities for charity work. Some business schools also offer clubs for gay and bisexual students. Out for Business, at the Ross School of Business at the University of Michigan, aims to build up the community among the lesbian, gay, bisexual and transgender students, but also helps partners find a social outlet. Cohan, whose firm is based in Miami, says that both spouses ought to get involved with the school’s extra curricular activities if they want to make their relationship work. In addition, he says, the MBA student ought to try to include his or her spouse as much as possible in study groups or social events. Kyle and Mia Reini married two days before his student orientation at Mendoza College of Business at the University of Notre Dame. “I joke that we took our honeymoon in South Bend, Indiana,” he says. Mendoza’s programme, like other MBA programmes, is all-consuming. Students are in class from the early morning until dinner time, and in the evenings there are meetings, recruiting interviews, speaker events and study groups. Mia didn’t know what she was in for as the wife of an MBA student. “I went to law school, but I didn’t realise what business school was: a lot of group work, a lot of hours, and a lot of time away from home,” she says. She has, however, adjusted nicely. She has a full-time job as an attorney at the general counsel’s office at Notre Dame, does charity work regularly, and has made new friends, many of them partners of MBA students. “I’ve been pleasantly surprised by how much the school plans for spouses,” Mia says. “It’s a big adjustment, and it can be isolating if you don’t have a support system. You’re in a new place, with a new house and a new job. A lot of us had great lives and careers before this.” Perhaps the biggest challenge of business school for couples is finding time to spend together. Kyle says he has made it a priority to keep his weekends as school-free as possible. “It’s not just about you,” he says. “Some days you have to put in a 16- or 18-hour day so that you can have Saturdays and Sundays with your spouse.” Keya Gohil, who runs the joint ventures group at Kellogg, says the school allows spouses to participate in many clubs, attend school-sponsored conferences, and even sit in on classes. “It’s an inclusive environment,” says Keya, who is originally from India and moved to Evanston, Illinois, from Washington DC, when her husband, Pranav, started there. Keya attended a class in technology marketing, and joined a class trip to India as part of her husband’s global immersion in management course. “Professors are welcoming,” she says. “It’s almost as though [partners] can get an MBA free of charge. More than anything, they get to network with some really bright Kellogg students.” There are also dedicated support networks for partners of gay students. Dante Mastry, president of Out for Business at the Ross School of Business, University of Michigan, recommends that

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before selecting a school, prospective students research the school’s gay affinity groups to determine how active they are to get a sense of the gay community on campus. “They should try to find an environment that is supportive to them, and look for schools that show a visible community,” says Mastry, who is specialising in digital marketing. There are, of course, many couples who meet on an MBA programme. Business school is an intensely social environment, and romance often blooms during late-night cram sessions, group project preparation, or a student-organised happy hour. Nicole and Doug Massey, for instance, met at maths camp in the weeks before starting their MBA programme at the Haas School of Business at the University of California Berkeley. They began dating shortly afterwards. “The fact that we were in school meant that we spent a lot of time together, but our spheres on campus were pretty separate,” says Doug, who works in marketing. “We were in different groups, we only had a couple of classes together, and we participated in different clubs and activities.” Most couples who met at business school say that having a partner who is also an MBA student often reduces some of the pressures of adapting to a new school and a rigorous academic programme because they are experiencing the same things. Nicole, who works in brand management, says this was particularly true on the job front. “We were both career switchers, and it was helpful to have someone going through it with me – to bounce ideas off of, and to provide perspective,” she says.

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Are Concert-Goers the Losers in Ticketmaster-Live Nation Deal? By Erika Morphy E-Commerce Times 01/26/10 11:41 AM PT Reactions are divided over the prospect of a live-music industry behemoth with the merger of Ticketmaster and Live Nation. The DoJ, which has approved the deal, expects ticket prices to decline. However, the service fees that already have so many concertgoers bristling "will only go up," predicted N. Venkatraman, professor of management at Boston University. The Department of Justice has cleared the path for Live Nation and Ticketmaster to merge -- but with several conditions attached, including significant support to companies that will be formed to provide competition. The two firms, which announced the possibility of a merger a year ago, have agreed to the conditions, setting the stage for the creation of a large, multifaceted, multiservice live music company. Essentially, the combined company will manage artists, arrange for their bookings -- most likely at venues owned by the company -- and then sell tickets to their concerts. The prospect of end-to-end control prompted many in the industry -- from artists such as Bruce Springsteen to advocacy groups like the National Consumers League -- to protest the deal, with fears of higher ticket prices being the main complaint. The Obama administration promised to give the proposed deal a stringent review.

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New Competition The DoJ's proposed solution was the creation of two rival companies that would keep the ticket sales market competitive. The merged company, Live Nation Entertainment, will have to license its ticketing software to, AEG Live, a subsidiary of Anschutz Entertainment Group that owns some 100 venues. The point will be for AEG to create its own ticketing service. Ticketmaster will also sell a subsidiary, Paciolan, that provides industry-specific software for venue operators. Comcast (Nasdaq: CMCSK) Spectacor, the cable company's sporting events division, has signed a letter of intent to acquire the subsidiary. The Justice Department deal forbids Live Nation Entertainment from retaliating against venue owners that work with these competitors. Approval of the deal is also contingent upon acceptance of a 10-year period of government oversight. What the Justice Department is proposing are extraordinary conditions, according to Howard Morse, a former senior official with the Federal Trade Commission and currently a Washington, D.C.-based antitrust partner with Drinker Biddle & Reath. "The DoJ is requiring not only structural remedies -- licensing of ticketing software to AEG and divestiture of an established ticketing business to Comcast-Spectacor -- but is also imposing behavioral remedies, what DoJ officials are calling 'anti-retaliation' provisions, to keep the merged company in check," he told the E-Commerce Times. "They are imposing, among other things, prohibitions on bundling and use of consumer ticketing information." The Justice Department had been prepared to litigate the case if necessary, Christine Varney, head of the antitrust division, told reporters. Now that both firms have agreed to the terms, ticket prices are likely to decline, she said.

Still Many Skeptics Despite those assurances, there is still skepticism about the deal and its impact -- not only on consumers who buy tickets, but also on the venues that book shows. This merger makes sense for the two companies and their shareholders, said N. Venkatraman, a professor of management at Boston University.

However, "I cannot see how it helps the customers, who increasingly rely on the convenience provided by such ticketing agencies on the Web for obtaining their tickets," he told the E-Commerce Times. "There are so many different ways that these companies now charge for their services. I cannot but help think that the premium -- i.e., service -charges will only go up." That will depend on whether Ticketmaster's sale of Paciolan and its licensing of ticketing software to AEG succeeds in creating real competition for Ticketmaster, which has an extraordinarily strong hold on the entertainment ticketing business, said Richard J. Hoskins, an antitrust partner at Schiff Hardin and a senior lecturer at Northwestern University Law School. If healthy competition is created, the merger could well have precompetitive results, he told the E-Commerce Times. "I obviously have not examined the record the way the Justice Department has, but I am cautiously optimistic that the sale and licensing provisions, combined with the 10-year period of government oversight, will result in a plus for consumers."

New Competitors Don't Stand a Chance On the other end of the opinion spectrum is Eric Karson, associate professor of marketing at Villanova School of Business. "What were the regulators thinking? Sure, selling off the software side allows for the appearance/development of competitors, but at bottom, it is all about the brand," he told the E-Commerce Times. "Let's face it, an established behemoth with a huge war chest has an edge. In the ever-increasingly important pay-per-click world, how can you bid against a giant? I have to believe that this advantage will translate into the growing mobile market as well." As the new venture gets under way, it would do well to take into account some of these fears, said Sally A. Wright, president of the Alliance Consulting Group. "Ticketmaster already has a reputation for piling on 'convenience fees' that irritate customers," she noted. "Now, despite concessions, the merger has gotten some negative press," Wright told the E-Commerce Times. "Live Nation Entertainment needs to come out of the starting gate with a strong customer-centric message and really mean it."

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Why This $3 Million Baby Is Back on the Super Bowl Return Advertisers E-Trade, Careerbuilder, Audi Weigh ROI on the Big Game -- Each and Every Year By Brian Steinberg Published: January 25, 2010

NEW YORK ( -- E-Trade's snarky baby became a national phenomenon behind its high-profile Super Bowl buy, and last year 19 million people surged on its website to see outtakes. So it would seem a forgone conclusion that E-Trade Financial Corp. -- which has been in the past three Super Bowls -- would automatically sign on for next month's matchup. In reality, though, the marketer didn't commit to an ad in the Big Game until, well, pretty late in the game: October.

"This is a very serious business decision that we agonize over each year," said Nick Utton, the company's chief marketing officer. "The way we look at it, every year is a new year."

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Indeed, automatically placing ads in the Super Bowl year after year isn't the case, which may come as a surprise to anyone who has come to expect a game filled with commercial messages from Pepsi, FedEx and General Motors. FedEx had advertised in the Super Bowl 19 times since 1989, and General Motors in 11 of the 12 Super Bowls prior to 2009's, but both dropped out last year, citing the economy. This year, PepsiCo pulled a stunner, saying it would not advertise any of its beverages since its new campaign hinges less on in-your-face ad techniques. The public dithering suggests there is growing debate about the overall value of the game to advertisers. Sure, new entrants in recent Bowls have included blue-chip marketers such as Coca-Cola, Kraft and Unilever, but also a host of lesser-knowns: (2009), Diamond Foods' Pop Secret popcorn (2010) and Garmin (2008). The decision, like most things in advertising these days, comes down to return on investment for the outlay, which can run up to $3 million per 30-second spot. "What happened if we didn't make money on it?" asked CEO Bob Parsons at GoDaddy, a five-time Super Bowl advertiser. "We wouldn't do it again. But we're so far from that." 250 TV ads combined So what's the ROI on a Super Bowl ad? Everyone seems to have its own metric for the game, which reaches an average of 98.7 million people. But according to brand-strategy firm Millward Brown Optimor, investing in the game results in an immediate sales increase; consumer package goods brands can see an average sales lift of more than 11% in the month following the Super Bowl and one Super Bowl ad can be as effective as 250 more regular TV commercials. In E-Trade's case, in addition to the 19 million looking at outtakes from the ads, it saw a 19% increase in online applications in the week after last year's game aired compared with the average number of online

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applications in the first three weeks of the year. And the company saw an 86% increase in unique prospective visitors to its site in the week following the game. So-called soft metrics are also taken into consideration, he said: how the ads performed in various consumer ad polls and how many times they were viewed on YouTube. Even then, Mr. Utton said, the company wanted to see how its business proceeded after the first quarter, when the game was still fresh in consumers' minds. Careerbuilder is slated to make its sixth consecutive Super Bowl appearance this year, but it also makes its decision "year by year," said Cynthia McIntyre, senior directoradvertising. "What we've seen to date is pretty outstanding," she said. "There's a real list of reasons why we come back." One important factor: Over the past five years, Careerbuilder has seen its sales increase an average of 40% each year in the three months following the Super Bowl broadcast, she said. also doesn't seem to wring its hands over whether to return to the Super Bowl again and again. The web-domain registrar best known for its raunchy commercials, and the carefully planned resulting publicity, has seen its market share increase steadily since it began advertising in the Super Bowl in 2005 to over 48% worldwide from around 16%, Mr. Parsons said. Executives at Teleflora, entering its second year as a Super Bowl advertiser, and Audi, entering its third, both say the decision to advertise in the Super Bowl doesn't come without a serious assessment of performance of the commercials during and after the prior event. "It's not a foregone conclusion," said Scott Keough, chief marketing officer, Audi of America. Beyond sales Last year, Teleflora's Super Bowl ad aimed at getting consumers to buy

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flowers for Valentine's Day. Traffic to the company's website increased 100% during the Sunday night the game was aired and 75% the day after, said Lynda Resnick, co-chair of Roll International, parent of the flower-delivery service. The company also monitored chatter among florists to see if customer were talking about the Super Bowl ad when they made orders. In the end, February sales were up 5% in a tough market, while the average value of a Valentine's Day order was up 8%, she said. But executives wanted to know more than just February sales, she added. "You want to see if the brand awareness lasts beyond the holiday. This is a 12-month-a-year business and you want to be sure you're going to have some spillover." Audi tracks such measures as brand awareness, consideration and opinion; traffic to and Google searches for the product being advertised immediately following the game. Following the 2008 Super Bowl, for instance, brand awareness increased 11% between the fourth quarter of 2007 and the first quarter of 2008, and rose 3% after the 2009 contest between the fourth quarter of 2008 and the first quarter of 2009. "We generally run the analysis immediately to see immediate lift and then the related metrics come in after the first quarter," in mid-April, Mr. Keough said. Returning advertisers indicate the value is still there in a Super Bowl buy, even if some observers believe the novelty isn't. "Some of the excitement about Super Bowl ads has worn because it has been about 20 years since the Super Bowl ads became a significant event in and of themselves," said Raymond Taylor, professormarketing at Villanova School of Business.

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Is the Super Bowl losing its grip on the ad world? NEW YORK/CHICAGO (Reuters) – The Super Bowl is still the prize of the advertising world, with companies paying up to $3.2 million for 30 seconds of commercial time, but more and more critics are questioning whether the pro football championship game is worth it. “It’s so expensive to buy time and produce a Super Bowl ad, and you have so much competition and so many distractions, that you must hit an absolute home run to be able to get return on investment,” said Jim Cain, a senior vice president with brand communications firm Quell Group. Companies spend heavily for commercials that are often entertaining — but not always effective. “No one can convince me that flatulent horses help sell anything,” Cain said, referring to a spot once run by Budweiser. Last year, Fedex and General Motors found the costs too high and skipped the Super Bowl. This year, Pepsico has decided to forego any ads for its beverages in the February 7 broadcast, breaking a 23-year streak. “In an environment where people are on 24-7, it’s virtually impossible to actually build a relationship with them on the basis of one 30-second spot, whether it’s the Super Bowl or otherwise,” said Frank Cooper, who oversees brand marketing strategy for PepsiCo Americas Beverages. PepsiCo’s Frito-Lay snack division will air ads during the game. Still, CBS Corp is hardly struggling to sell commercial time for the contest between the New Orleans Saints and Indianapolis Colts. Ad executives said prices for 30-second spots are running between $2.5 million and $2.75 million, with at least one selling for $3.2 million. CBS declined to discuss specific prices but said nearly all of its commercial spots have been sold, and average rates have surpassed those of a year ago, when NBC broadcast the game. THE BIG SPLASH It is no secret why CMOs are willing to write big checks. The broadcast draws about 95 million viewers, a giant number given today’s media fragmentation. And most people watch the Super Bowl live, a rarity in the age of digital video recorders. What’s more, studies suggest many viewers pay attention to the commercials, not just the game. A recent Nielsen survey found more people enjoy the ads than the action on the field; a new study by ad agency Venables Bell & Partners showed 66 percent of viewers remember their favorite advertiser from the 2009 Super Bowl, while just 39 percent remember which team won. But not everyone is convinced.

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“You’re never going to see us on the Super Bowl,” Mazda North American chief Jim O’Sullivan said. “We’re not going to spend that kind of money on that kind of property.” The economy isn’t helping matters. Not only has it put enormous pressure on marketing budgets, it raises questions of whether audiences will take offense to over-the-top advertising when so many Americans are out of work or losing their homes. “Companies are cutting back on marketing and advertising budgets, so are they willing to go out and drop such a huge amount on one day?” said San Diego State University professor George Belch. “It’s more of an environment suitable for the bigger players with the larger budgets.” These days, every Super Bowl ad campaign seems to be complemented by some digital or social media element, the new darlings of advertising. Unilever, for instance, will augment its Super Bowl commercial for Dove Men+Care with blog posts. Others are using Twitter or Facebook. But does anybody want to read a blog post or text message touting a new commercial for body wash, razors or insurance? “There’s no doubt that social media is going to develop into a very good avenue for advertisers,” said Villanova School of Business professor Charles Taylor. “Marketers haven’t completely figured out how to use it yet.” Another issue is crafting the right ad for the Super Bowl. Most advertisers go for humor, which plays well for the many viewers who watch the game at parties. But with so many marketers banking on laughs, it’s tough for a brand to stand out. Plenty of companies are betting they do. The roster of those advertising this year is expected to include major marketers like Anheuser-Busch InBev, Viacom’s Paramount movie studio and Coca-Cola; newcomers such as Dr Pepper; and even the evangelical organization Focus on the Family. “I’m pretty confident, as is the sports world, that these big events will remain high-profile as far down the road as you want to project,” said Neal Pilson, former CBS Sports president and head of consulting firm Pilson Communications. (Reporting by Paul Thomasch and Ben Klayman; editing by John Wallace)

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Federal Reserve leaves key interest rate unchanged By Neil Irwin Washington Post Staff Writer Thursday, January 28, 2010

The Federal Reserve left its target interest rate near zero and will continue winding down its unconventional programs, the central bank said Wednesday -- though there were new signs of internal disagreement about how much longer to continue its extreme efforts to support the economy. Following a two-day policymaking meeting, the Fed said the weak economy and subdued inflation "are likely to warrant exceptionally low levels" for interest rates "for an extended period." It also said it will follow through with plans to end a $1.25 trillion program to support the mortgage market by the end of March, and taper off other special lending programs by Feb. 1. The Fed's comments helped turn around major stock indexes that were down earlier in the day. The Dow Jones industrial average finished the day up 0.4 percent after being down by about the same amount before the statement. The Standard & Poor's 500-stock index climbed 0.5 percent, and the Nasdaq composite index rose 0.8 percent. The year's first monetary policy meeting came at a sensitive time for the Fed, as Chairman Ben S. Bernanke awaits a Senate confirmation vote for a second term. Senate leaders intend to hold a procedural vote Thursday, in which Bernanke will need 60 ayes, followed by a confirmation vote as soon as Friday in which he will need 51 ayes to get four more years as Fed chairman when his term expires Sunday. At least one Fed official at Wednesday's meeting of the Federal Open Market Committee appears inclined to press even more aggressively to remove the central bank's policies that support economic growth. Thomas M. Hoenig, president of the Federal Reserve Bank of Kansas City, Mo., dissented from the decision, arguing that "conditions had changed sufficiently" -- meaning that the economy now appears sufficiently stable -- that the Fed should no longer promise to keep rates low for an extended period. The dissent represents yet another step toward stopping the extraordinary efforts it put in place amid the financial crisis and recession. While the Fed has moved steadily to end its unconventional programs, it has left its main policy tool -- its target for the federal funds rate, a bank lending interest rate -- at a range of zero to 0.25 percent since December

2008. After each policymaking meeting since then, the Fed has signaled that it probably would leave the rate there for "an extended period." Some Fed leaders, apparently including Hoenig, worry that this language is causing financial markets to anticipate a vast flood of money from the Fed for the indefinite future, and that this could risk causing inflation to take off and potentially fuel bubbles in the stock market and other assets. Hoenig, the longest serving of the 12 presidents of regional Fed banks, has argued that the Fed left interest rates too low during the 20032004 period, contributing to the housing bubble and inflation that followed. "The dissent doesn't mean they're going to raise rates soon, but it does continue to push them down the road in that direction a bit," said John Canally, an economist with LPL Financial in Boston. Hoenig's was the first dissent at a Fed policymaking meeting in a year, and reflects that he has now become a voting member of the Federal Open Market Committee. He and other regional Fed bank presidents rotate voting spots on the panel, starting with the January meeting. But the majority of the committee views the economy as too weak -- and the inflation threat too distant -- to even think about raising interest rates in the near future. "I doubt the Fed will raise rates as long as the unemployment rate is anywhere near 10 percent," said Victor Li, an economist at the Villanova School of Business. "This language about keeping rates low for an 'extended period' is not well defined, but if economic conditions change dramatically, in terms of growth, employment or inflation, they would move pretty quickly to reverse themselves." In its exit strategy, the Fed declined to take a more concrete step that analysts expect in the coming months: raising the amount that banks must pay to take out emergency loans at the Fed's "discount window." Before the financial crisis began in 2007, that rate was a full percentage point above the more widely followed federal funds rate, a gap that the Fed narrowed to help address the financial crisis. At some point the Fed probably will increase the discount rate, now at 0.5 percent, reflecting that the financial crisis is over, a step that would not flow through to borrowing costs across the economy and restrain growth.

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Friday, January 29, 2010, 11:34am EST

VILLANOVA BUSINESS SCHOOL HOSTS TEENS by Peter Key Staff Writer Forty eighth-graders from Radnor Middle School are visiting the Villanova University campus today as part of the Villanova School of Business’ Technology in Business day. The eighth-graders are meeting with business school administrators, professors and students and will spend time in the school’s Applied Finance Lab, which has a simulated trading floor with the actual equipment and resources available to Wall Street traders. The visit is sponsored by the business school’s Center for Innovation, Creativity and Entrepreneurship.

Categories: Education Companies: Radnor Middle School, Villanova University

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Slideshow: Radnor students get a taste for business at Villanova Published: Sunday, January 31, 2010

View and purchase photos By Pete Bannan The Villanova School of Business to hosted 40 Radnor Middle School eighth graders on Friday the “Technology in Business” event. Radnor students learned about Villanova’s Applied Finance Lab, a high tech simulated trading floor complete with the same equipment and real-time resources used by stock traders on Wall Street. Villanova's Dr. Patrick Maggitti, Director of the Center for Innovation, Creativity, and Entrepreneurship hosted the program while intrigued students received a real-life look at business.

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Another View: The Revenge of the Luddites? January 29, 2010, 10:00 am

Michael Pagano, a finance professor at Villanova, argues that the Volcker Rule resembles another attempt to turn back progress — namely, the Luddite movement of nearly 200 years ago. Like many of us, I have looked on in disbelief and dismay as the financial crisis and nascent recovery unfolded over the last two and a half years. Given the severity of this crisis and the excesses that caused it, I am open to hearing prudent ways we can do things differently that can help us avoid a repeat of the recent financial and economic turmoil. But I am concerned that the Volcker Rule, as President Obama’s financial regulatory plan is known, might be taking us down an alley to a dead end where we wind up boxed in a tight corner without much room to maneuver. The Volcker Rule and similar calls for re-regulation remind me of another political effort that began nearly 200 years ago when the Luddite movement rose up in 1811 to lash out at the technological and social changes brought on by the Industrial Revolution. Frustrated with this revolution’s effects, the Luddites attempted to tear down factories that automated many tasks once done by cottage workers. Several leaders in Washington appear to be lashing out in a similar way at the financial firms that have revolutionized virtually all facets of finance over the past 30 years. These leaders and administrators view the Volcker Rule as a way to turn back the clock and return to the days when there were no major financial crises in the United

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States. Actually, those days were not that long ago — the time from the 1940s through the early 1970s was a quiet period in terms of American financial crises. This period coincided with the heaviest degree of regulation ever imposed on American financial companies. Commercial banks, savings banks, investment banks, money management firms and insurance companies were all isolated within their own tightly bounded industries. The obvious benefit of such a heavy dose of regulation is that it can reduce the types of problems that occurred during the Great Depression. However, the costs of such an approach were ultimately deemed to be too much and thus deregulation of the financial services industry took root in the 1970s and has continued at varying degrees up until the current crisis. These costs included: 1) higher borrowing costs for consumers and businesses, 2) less access to credit for deserving borrowers, 3) a restricted set of financial products to choose from, 4) very limited ways to hedge risks commonly faced by businesses, 5) higher transaction costs, and 6) little incentive for financial firms to innovate. Similar to the Industrial Revolution, the financial services revolution of the last 30 years has not only brought great benefits to both consumers and nonfinancial businesses but it has also increased the chances of economic bubbles and financial panics. Compared to this trade-off, a Luddite-like return to the 1940s runs the greater risk that financial capital and jobs will move to parts of the world where “universal banks” are welcome. In the end, our financial markets and institutions could lose their status as world leaders and cede this control to growing financial powerhouses outside of the United States. Given the above discussion, I suggest below how we can make substantive changes to the current system without having to resuscitate 1930s-era regulations. First, rather than using strict prohibitions on such activities as proprietary trading or investing in private equity and hedge funds, the implementation of higher capital requirements for these activities (relative to traditional “bread and butter” commercial or consumer banking) would force financial firms to reassess their

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business models and reduce excessive risk-taking (because lower financial leverage reduces “moral hazard” problems and thus creates less incentive to take big risks). Second, in conjunction with higher capital requirements for riskier activities, I agree with some financial firms’ recent decisions to grant senior management bonuses in the form of long-term (five years-plus) restricted stock and greatly limit the amount of cash-based, short-term bonuses. By doing so, senior management will have a much greater incentive to focus on reducing risk and developing financial services that truly benefit their customers over the long run (as well as the firm itself). Third, another important lever to control risk is related to the financial regulators themselves. Rather than enact a large number of new regulations (other than some much-needed new rules to wind down all types of failed financial firms rather than just commercial banks), I think that regulators should reduce “regulatory forbearance” by being more proactive in monitoring firms and enforcing existing rules. These regulators should also have access to greater amounts of data on a financial firm’s operations. Greater transparency and the elimination (or at least sharp reduction) of regulatory forbearance can go a long way to catching problems before they become too great. Fourth, the idea of prohibiting proprietary trading for depository institutions is unfair, impractical and potentially destabilizing to the financial system. It is unfair because it singles out one type of institution, yet allows other types of financial firms to take as much risk as they want in this area. It is impractical because it can be hard to differentiate a firm’s proprietary trading from some forms of customer-motivated trading and thus, in practice, it seems likely that firms will be able to devise very creative ways to circumvent this type of rule. And last, the rule can actually be destabilizing because a bank’s proprietary trading profits can serve as a means of diversifying the firm’s cash flows and thus any restriction on this activity can cause the firm’s overall risk to actually go up. In sum, what the above points suggest is that our financial regulators should be like traffic cops for the financial services industry. These regulators should clearly lay out the existing rules of the road and strictly enforce them in an efficient manner.

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However, these financial traffic cops should not tell people (i.e., financial firms and consumers) where to drive. In this way, we can preserve the incentives for American financial firms to keep on innovating and to continue providing deep, liquid capital markets that are the most efficient in the world. Michael Pagano is a professor of finance at the Villanova School of Business. He previously worked in the financial services industry with Citibank as a financial analyst and at Reuters America. Mr. Pagano a member of Finra, the Financial Industry Regulatory Authority, the first finance professor ever appointed to the committee.

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Posted on Sun, Jan. 31, 2010

This Economy: Advanta's investors dealing with losses By Harold Brubaker

Inquirer Staff Writer

Bankrupt Advanta Corp. is in liquidation mode, and thousands of mostly older investors are grappling with painful losses. The Montgomery County credit card company this month asked for court permission to abandon contracts for expensive suites at Citizens Bank Park and Lincoln Financial Field. The firm even asked if it could sell office equipment, cars - possibly including two limos, two early 1990s Mercedes-Benz sedans, and a 1997 Porsche 911 Carrera - and other items it no longer needs, now that chief executive officer Dennis Alter has given up hopes of finding a new business line for Advanta. Unfortunately, those moves will likely do little to help the 3,400 individual investors who were owed $138 million when the company filed for Chapter 11 bankruptcy protection in November after closing its card operations to new business in May. Last summer, Edward Lavage of Bethlehem invested $70,000 in Advanta investment notes with a 9 percent yield. "That was the best return out there, but there was no FDIC insurance on it. We knew that, but we didn't know that company was in such bad shape," said Lavage, 67. The company stopped selling the notes in July, not long after Lavage sent in his money. Advanta also owes $96 million to what are likely to be institutional investors. But that debt has a lower payment priority than the $138 million in investment notes, whose above-market-rate interest payments made them popular with older investors seeking income. The Spring House company's biggest asset was a Utah bank that issued Advanta credit cards. Slammed by huge losses on loans to small businesses and ordered by the Federal Deposit Insurance Corp. in July to unwind its operations, the bank hemorrhaged value last year and is likely to be taken over by regulators, leaving nothing for Advanta's creditors. "The bank was its main asset. With that going away, the outlook is bleak for full recovery," said Anthony H. Catanach Jr., an associate professor of accounting at Villanova University and the Maguire fellow at American College in Bryn Mawr.

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In a recent bankruptcy filing, Advanta said it had $98 million in cash. If all that money were applied to the $234 million owed to two classes of creditors, recovery would be 42 cents for every dollar of debt. But no bankruptcy is that straightforward. Asked by The Inquirer to examine Advanta's financial filings, Catanach said that there could be a little more money to distribute from the sale of a modern art collection with an estimated value of $4.3 million and other assets, such as receivables from subsidiaries, of uncertain value. Catanach, whose experience analyzing troubled financial institutions goes back to the 1980s savings-and-loan crisis, cautioned that an unknown amount of money will be eaten up getting the firm through bankruptcy. Two bankruptcy law firms asked for payments of nearly $180,000 in the last two weeks for work since the Nov. 8 filing. Lavage said he and his wife were not distraught at their loss, even though he is convinced that Alter, who built a 38,000-square-foot house in Whitemarsh Township and donated $15 million for a building at Temple University, "did things that are misleading." Citing a Psalm verse, Lavage said Thursday: "If someone steals your money, the Lord will restore it seven times. I'm standing on that." Meanwhile in Burlington, 90-year-old Irving Horwitz said he had gotten an offer for his $29,000 in Advanta notes that would pay him 10 to 15 cents on the dollar. Horwitz, who said he had been a satisfied Advanta investor for 40 years at least, back to the days of founder Jack Alter, had a different assessment of Dennis: "I know that Alters are very honest people. He'll do his best to pay everybody back."

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A Rough Road for Toyota The world's biggest automaker faces a huge recall over a safety issue that it says is rare and easily repaired. But after years of building loyalty, the company may have put its brand name at risk. Transcript of radio broadcast: 04 February 2010

This is the VOA Special English Economics Report. Toyota became the world's largest automaker in two thousand eight. But after years of building loyalty, the Japanese company may have put its quality brand name at risk, at least temporarily. Toyota is recalling millions of cars and trucks around the world because of cases where vehicles have sped up unexpectedly. Last August, a driver in California was unable to stop. The crash killed him and three of his family members. Toyota says the problem is rare and caused by accelerator pedals becoming stuck open. On January twenty-sixth, the company suspended sales of eight of its top-selling vehicles in the United States, its largest market. Toyota dealers have been receiving parts to make repairs. General Motors and Ford both reported increased sales in January. But Toyota sales in the United States have fallen, and so has its stock price. Toyota says it expects costs and lost sales from its recent safety recalls to total two billion dollars by the end of March.

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A technician repairs an accelerator pedal for a 2010 Corolla at McInerney Toyota in Clinton Township, Michigan

2010 Media Report Villanova School of Business

Louis Lataif spent twenty-seven years in the car industry at Ford. Now he is dean of the School of Management at Boston University. LOUIS LATAIF: "It's Toyota's biggest such recall. It's voluntary incidentally, it's not mandated. So, in that respect, they are doing something fairly bold, namely, taking the hit of shutting production and correcting the vehicles that are in inventory on which they have stopped sales." A recall late last year involved floor mats that Toyota said could cause the accelerator to get stuck. One of the vehicles in the floor mat recall was the Prius, the world's top selling hybrid. Now American officials are investigating the brake system on the twenty ten Prius. The Transportation Department says it has received more than one hundred twenty reports, including reports of four crashes. Toyota says it found a software problem that could briefly affect the "feel" of the anti-lock brakes on rough or slippery roads. It says it fixed the brake problem last month. But a growing number of legal cases claim Toyota knew for a long time about the sudden acceleration issue with other vehicles. The problem reportedly has led to more than eight hundred crashes and nineteen deaths in the past ten years. Congress is preparing for hearings. Greg Bonner is a marketing professor at Villanova University. He says to regain trust, Toyota will have to make public everything it knows about the problems and show it accepts responsibility. The recall has also intensified questions about all the computer control systems used in modern cars. And that's the VOA Special English Economics Report, written by Mario Ritter. I'm Steve Ember.

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Tebow ad airs on Super Bowl with soft-sell antiabortion message and light tone Sun Feb 7, 10:16 PM

By Emily Fredrix, The Associated Press NEW YORK - Even the long-awaited Super Bowl ad from conservative group Focus on the Family came with a punchline - a hard hit and a soft sell. The 30-second "Celebrate family, celebrate life" ad starring Heisman winner Tim Tebow ended with a surprise - Tebow tackling his mother after she says she nearly lost him during her pregnancy. The pair jokes that they have to be "tough" with all the family has been through. The commercial, which did not air in Canada on CTV's simulcast, sparked debate before it was even broadcast, and some groups called for CBS not to air it. Planned Parenthood made an online video response to the Tebow ad with former NFL player Sean James and Olympic Gold medal winner Al Joyner. The two discuss the importance of women being able to make their own health decisions. The ad is the first such advocacy ad to appear in television's most-watched broadcast, which draws about 100 million viewers. It aired early in the first quarter. The subtle and humorous ad made some wonder what all the fuss was about. The commercial, which shows just Tebow and his mother, Pam, against a white backdrop, does not contain an overt antiabortion message. Instead it sends people to Focus on the Family's Web site, which tells more of the Tebows' story and offers a more straightforward message. The devout quarterback's mother gave birth to him in the Philippines in 1987 after spurning a doctor's advice to have an abortion for medical reasons. "I can remember so many times when I almost lost him," Pam Tebow said in describing her pregnancy.

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The ad was "very gentle", which was surprising considering how much talk it generated before it even aired, said Tim Calkins, a marketing professor at Kellogg School of Management at Northwestern University. He said the use of humour helped make the ad more accessible - and not off-putting to most people - although the ad's message was hidden, which made it confusing to people who weren't familiar with it. "I think they took a very interesting strategy. It's clearly an effort to steer away from controversy," he said. "I suspect the people they were going after understood the message, but ... for most people, I don't think the ad really did a lot for them." Because the ad was so subtle and had so much mystery to it, it will get people whose minds are not made up about the abortion debate to evaluate the group's agenda, said Charles R. Taylor, professor of marketing at Villanova School of Business. "To the extent that there are people that they can influence, this probably does a good job of driving them to the Web site and getting them to check it out. I think it's much more effective than something more explicit would have been," he said. The Women's Media Center, which had objected to Focus on the Family advertising in the Super Bowl, said it was expecting a "benign" ad but not the humour. But the group's president, Jehmu Greene, said the tackle showed an undercurrent of violence against women. "I think they're attempting to use humour as another tactic of hiding their message and fooling the American people," she said. The ad didn't draw much attention at the Underground Lounge in New York, where the game was on. Sarah Cashin, 39, a business manager, said she didn't see why the ad was controversial. "I didn't find it offensive. I don't quite understand why everyone was so up in arms about it," she said.

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Alongside gags, Super Bowl ads plumb male psyche FEB 7, 2010 23:19 EST

NEW YORK, Feb 7 (Reuters) – Sidestepping the usual slapstick comedy and animal tricks, a number of advertisers tried to score during Sunday’s Super Bowl with commercials that tapped into men’s ambivalence with their everyday lives. In the battle among advertisers, Unilever’s <ULVR.L> Dove, Chrysler LLC’s <FIA.MI> Dodge and Flo TV created early buzz with spots that clearly targeted men feeling overwhelmed by responsibility and commitment. “All three spots delved into a similar theme — about how men are feeling and their relationship with their role in life,” said Professor Tim Calkins of the Kellogg School of Management, who oversees a Super Bowl advertising review. Another of the most buzzed about spots came from conservative Christian group called Focus on the Family, which created a stir even before the game when it announced plans to run an advertisement. Some U.S. women’s groups urged CBS not to air the ad, which starred college football star Tim Tebow, saying it has a strident anti-abortion rights message. [ID:nN26126352]. In the end, experts said, the spot itself was hardly controversial, using the sort of knock-down, physical comedy that is a staple of the Super Bowl. “The spot ended up being very gentle, subtle,” said Calkins.

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Charles Taylor, a marketing professor at Villanova School of Business, said the spot would be “the most talked about ad of many years.” That would be a major victory for any marketer. With a national audience that could reach an estimated one-third of 300 million Americans, the National Football League’s championship game is the biggest day of the year for advertisers. Sometimes known as the Ad Bowl or Buzz Bowl, prices for 30 seconds of commercial time during CBS’s <CBS.N> broadcast topped out at more than $3 million. Most deals were done in the $2.5 million to $2.75 million range, ad executives said. Those rates are far above what other TV events command, partly because the game draws around 95 million U.S. viewers, most of whom watch the game live, a rarity in the age of digital video recorders. In Sunday’s game, in which the New Orleans Saints beat the Indianapolis Colts, several newcomers made an appearance in advertisements. Dr Pepper Snapple Group Inc used its first ever Super Bowl commercial to trumpet Dr. Pepper Cherry in a spot featuring glam rock group Kiss; Sprint Nextel Corp’s Boost Mobile enlisted some of the players from the 1985 Chicago Bears Super Bowl team, including Jim McMahon and Mike Singletary. Catching many by surprise, Google Inc. ran a commercial during the game, an unusual marketing decision for a company that typically avoids mass market commercials. The spot, well-received by experts, told the story of a transAtlantic romance though search queries and results. After 12 years away from the game, another technology powerhouse, Intel, returned for Super Bowl XLIV with a 30-second spot it called “Lunchroom.” In the commercial, a robot’s feelings are shattered when an Intel engineer declares that a new microprocessor is the “most amazing” invention the company has ever come up with.

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Even without the presence of General Motors, which skipped the big game for the second year in a row, car-makers showed up frequently during commercial breaks, including a spot that declared that Dodge Charger as “man’s last stand” against a life that dictated he walk the dog, sit through dull meetings and watch the wimpy TV shows his girlfriend picks. Among foreign car-makers, Hyundai Motor Co, Honda Motor Co and Volkswagen all bought time. In a 60-second Audi spot, set to a tune by the 1970s pop band Cheap Trick, the “green police” come down hard on anyone using plastic bags, incandescent lightbulbs, batteries or Styrofoam cups — but let a man driving Audi’s A3 TDI clean diesel car breeze through a roadside “eco check.” “All of our research tells us this is an environment where people are looking for entertainment and they are looking for humor,” said Scott Keogh, Chief Marketing Officer for Audi of America, a unit of Volkswagen. “It was important not to come off too preachy.” Anheuser-Busch InBev NV <ABI.BR>, promoting Budweiser and Bud Light, once again purchased the most commercial time in the game, spending millions to buy 5 minutes. Experts gave its efforts mixed reviews. “The lighthearted approaches that resonate with their target audience that use a lowest common denominator are getting a little stale,” said Taylor. “I don’t think this was their best effort.” (Reporting by Paul Thomasch; Editing by Bill Tarrant)

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By EMILY FREDRIX AP Marketing Writer NEW YORK (AP) - February 7, 2010 -- Betty White plays football, babies talk about "milkaholics" and a house made of Bud Light cans falls slowly apart. It must be the Super Bowl - or at least the advertising showcase that entertains amid the gridiron action.

Not every commercial was strictly humorous. Automaker Toyota aired several ads before and after the game to reassure worried owners after its recalls connected with accelerator problems. A hotly anticipated commercial by conservative Christian group Focus on the Family hinted at a serious subject, although even it had a surprise punchline. Heisman Trophy winner Tim Tebow and his mother talk about her difficult pregnancy with him - implying an antiabortion message, because she had been advised to end the pregnancy for medical reasons. But the ad ended with Tebow tackling his mom and saying the family must be "tough." Amid the the laughs Sunday night on CBS, advertisers such as Anheuser-Busch and Coca-Cola also put the focus on their products, Villanova marketing Professor Charles R. Taylor said. That marks a turn from ads that were heavy on entertainment but light on salesmanship. Taylor said he had been disappointed for at least the past five Super Bowls in the effectiveness of ads in connecting with products. Advertisers pay dearly for the airtime - from $2.5 million to more than $3 million per 30 seconds - and marketers say ads work best when they sell the product, as well as entertain.

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He cited a commercial by tiremaker Bridgestone featuring men carrying a whale in the back of their truck, and another by Dove launching its new men's skin-care line. They were winners, he said, because they manage to entertain while telling people about the brands. The ad for Dove tells the story of boy growing into a man and the signal events in a man's life. "So far from what I've seen I'm quite positively impressed, more than I thought I would be," he said. A first Super Bowl ad by Google - which rarely advertises on television - told an affecting story of a budding relationship through a series of Google searches, beginning with "study abroad" and "how to impress a French woman" and ending with "churches in Paris" and "how to assemble a crib." That was one of the few strong ads this year, said Laura Ries, president of marketing consulting firm Ries & Ries outside Atlanta. She figured people would most likely talk more about the game between the New Orleans Saints and the Indianpolis Colts - which was close until the waning minutes - rather than ads. Often, it's the other way around. "It's very, very difficult to be entertaining in a place like the Super Bowl and have a connection to your brand," she said. "The home runs here are few and far between." Other highlights included a series of ads by restaurant chain Denny's that showed chickens nervous about all the eggs they'd have to lay when the company gives out free Grand Slam breakfasts again this year. A top topic on Twitter was "green police" - the name of an ad by carmaker Audi pushing its new diesel-fueled vehicle the TDI. Using word play on Cheap Trick's "Dream Police" - "Green" police officers deal with people making questionable environmental decisions. A man is arrested for choosing a plastic bag at the grocery store, for example. But not all ads were winners. Taylor said an ad by Boost Mobile, Sprint's prepaid cellular phone service, didn't work because it depended too heavily on the 1985 Chicago Bears' "Super Bowl Shuffle," a reference that could be too old for the brand's buyers. An ad by Kia for its Sorento SUV will be remembered for its story of a whimsical joyride taken by children's toys - but people won't likely remember the brand behind the ad, Ries said.

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Celebrities weren't as plentiful as in some years. Notable sightings include Charles Barkley rapping for Taco Bell, Betty White and Abe Vigoda playing football for Mars' Snickers brand and Beyonce for low-price television brand Vizio. A promotion for CBS' "Late Show with David Letterman" might be among the most talked about because its punchline was spoken by rival Jay Leno, whose show will again be squaring off with Letterman in March. Letterman, sitting on a couch with Oprah Winfrey, says, "This is the worst Super Bowl party ever." Leno replies that Letterman's "just saying that because I'm here."

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February 2010 VOLUME 4: ISSUE 1

Feature Interview: A Conversation with Associate Dean Robert Bonner


onnections interviewed Robert Bonner, Associate Dean, Graduate

and Executive Programs, at the Villanova School of Business, to provide readers with an inside perspective on how international students engage in studying business in the United States. Prior to his arrival at Villanova, Robert Bonner dramatically increased admissions standards at Temple University’s Fox School of Business and created the Career Trek program at the Wharton School of the University of Pennsylvania. With a strong track record of entrepreneurial leadership at top MBA programs and extensive experience in all facets of graduate business education, Associate Dean Bonner shares his more than 15 years of experience in MBA programs with EducationUSA. Connections: What aspects distinguish U.S. business education from business education in other parts of the world?

Associate Dean Bonner: Business education at both the undergraduate and graduate level in the U.S. has become more practical, applied and current, so that when students graduate they can immediately add value to the organizations they join and understand how to incorporate realtime economic changes into their business strategies. Many U.S. business schools now offer “action” or “applied” learning through consulting engagements that are part of the curriculum, simulations and other real-time application of business concepts, which makes students more marketable. At Villanova our MBA curriculum offers students the ability to apply what they are learning in the classroom through two consulting experiences–one with a not-for-profit and the second through a global consulting experience. One area that U.S. business education needs to improve is in recognizing that companies are organized differently today, are changing rapidly and are affected in a faster and more immediate way by the global nature of business and the interdependencies that exist in today’s companies. There is no such thing as a marketing problem that lives in a silo. Today’s business problems are cross-functional and interdependent. This is why at Villanova we have moved toward a more holistic approach to business education. Our undergraduate curriculum is among the few in the U.S. that have taken this holistic approach through team teaching courses that combine business disciplines like Finance & Accounting and Marketing & Strategy. At the graduate level our MBA

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programs take a systemic approach which emphasizes how a leader approaches problems in a unique and comprehensive way. Connections: How is business education adapting to the recent global financial crisis? Associate Dean Bonner: Many schools have added new courses on the financial crisis, risk management or the regulatory environment. At Villanova, we created a course titled “Managing in a Post-Bailout Economy.” This course is offered at both the undergraduate and graduate level and incorporates top faculty from across disciplines as well as practitioners. Through an interactive dialogue, students learn how they can adapt their learning and business strategies to be effective in this new economy. In our Executive MBA Program, we take a very different approach to business education through our Systems Thinking methodology. This approach recognizes that companies need to continually reinvent themselves, think differently and transform their strategies to be competitive. In our new MBA curriculum we introduced new crossfunctional electives and a required “Hot Topics” course for all students, and revamped our elective offerings – all with the goal of helping students be better informed and more responsive to this economic crisis, as well as be better prepared for future economic cycles. Robert Bonner, Associate Dean of Graduate and Executive Programs, Villanova School of Business

Villanova School of Business

Location: Villanova and Philadelphia, Pennsylvania Number of Students: 2,257 Website: CONTINUED ON PAGE 3


Connections: What factors should international students think about when considering attending business school in the United States? Associate Dean Bonner: International students should consider the quality and reputation of the school, the business school’s corporate and alumni network and the size of the program. The quality of the school is critical because international students often want international careers, and the ability of the school’s reputation to open doors is essential. The corporate and alumni networks are important because they provide internship and job opportunities. Many international students are attracted to large schools, yet the interaction among students and faculty is one of the most important factors in a student’s success. International students should also consider a school’s location or proximity to major urban centers for the experience it provides in immersing themselves in U.S. culture and the greater opportunities it provides for internships and postgraduation employment. It is important for international students to research all of these aspects to ensure the alignment of their personal and professional goals with what a business school offers. Connections: What is the value of an MBA for an international student? Associate Dean Bonner: For all students, an MBA provides not only a tool kit, but also a new way of thinking. MBA programs help students chart their future careers. For students coming from emerging markets or developed markets that are undergoing rapid change, an MBA provides the skills and management tools that organizations in those countries need as they grow at a fast pace or transform their businesses to compete in a changing economy. The MBA also helps international students be more competitive in the U.S. job market. Connections: What do admissions counselors look for when reviewing applications from international students who apply to an MBA program?

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Associate Dean Bonner: Admissions counselors review all applications holistically looking for the complete package that shows a track record of academic success as reflected in undergraduate grades, the GMAT and strong work experience. Admissions counselors use the same criteria for international students that they use for U.S. applicants, with an emphasis on strong communication skills. They also want to make sure that students’ future career plans are commensurate with the degree and their pre-MBA experience, and are aligned with the program’s strengths and goals. Connections: How would you address some of the reservations prospective international students may have about applying to an MBA program? Associate Dean Bonner: The issues of visa concerns, the financial commitment and the usefulness of the degree are important elements that international students should seriously consider. However, many schools like Villanova have graduate assistantships or tuition remission, strong career services and a strong alumni network, which help mitigate these concerns. Robert Bonner is Associate Dean of Graduate and Executive Programs at the School of Business, Villanova University.

Interview: A Conversation with Dean Robert Bonner CONTINUED FROM PAGE 2

VSB offers seven undergraduate degrees in the fields of accounting, economics, and business administration; seven graduate programs; executive education; and an executive MBA program. Over 90 percent of VSB’s faculty members hold the highest degree in their respective discipline and consistently contribute to leading journal and publications in every discipline of business.

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Posted on Fri, Feb. 26, 2010

An act of good reverberates My father turned 80 a few weeks ago. As I had lunch with him at the Lamb Tavern in Springfield, Delaware County, I listened to him retell memories of his youth. One story has always had an impact on me. My father was born at the very beginning of the Great Depression. His father died just 18 months after it began, when my grandmother was pregnant with her fourth child. Things were tough. When my dad was 11, he took his first job at the Bruder Farm in Springfield. He worked after school and weekends for this family, which also had a little paint business - MAB Paints. When Dad was in high school, he stopped working on the farm and started working in the paint factory. He attended West Catholic High School, where he was an athlete and an excellent student. He apparently was also an excellent worker at MAB. One day, "Old Man Bruder" (Thomas Bruder Sr., who had taken over the management of the business in 1932) called my father into his office and asked if he had ever thought about going to college. Dad said he had thought about it, but of course, couldn't afford to go. "If you could go, where would you go?" Mr. Bruder asked. "I'd go to Villanova," Dad answered. "Then go. Have them send the tuition bills and report cards to me," the man said. "And you work out a schedule to continue working at the paint factory while you are in college." So Dad went to Villanova and graduated in 1951. Four years later he was back teaching. And the rest, as they say, is history. He taught at Villanova for 40 years. In 1978, he became dean of the business school and held that position until his retirement in 1995. Along the way, he touched thousands of lives. It was readily acknowledged that he was a terrific teacher - but that's not the point I want to focus on here. I have heard more stories than I can count as to how Dad went out of his way to help a student in trouble. Maybe they got off on the wrong foot as freshmen and were going to flunk out, but Dad "saw something in them" and gave them a chance and a plan to succeed. Maybe they were trying to transfer from another school but didn't have quite the right courses that Villanova demanded. Maybe a student had trouble at home, a death in the family, or

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even an unplanned pregnancy. He made them understand that the world was not coming to an end, and that they would get through their difficulties. He cut them breaks, gave them chances, worked out plans, and the stories of success are countless and compelling. A few years ago, one of those students who had become very successful called the school and said he wanted to make a donation in my father's honor. When Dean Jim Danko made a few phone calls to see if anyone else was interested, he was flooded with responses - and the same stories I had been hearing for years. Before long, there was enough money to name what is now called the Clay Center at the Villanova School of Business. It is essentially dedicated to helping business students achieve academic, personal, and professional growth. It does what Dad did. Without Tom Bruder's act of kindness in 1947, my father probably never would have gone to college. Without the many acts of kindness that Dad performed over the years, there are hundreds of people who would not have had the personal and professional success they've had. I also know that many of those same people go out of their way to help employees and colleagues through difficult periods. The results of an act of kindness grow geometrically. It's not something we will find in our human resource manuals, but it is something we can all find an opportunity to do. Who knows how many lives we can change for the good?

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By Emily Stimpson March 6, 2010

How parish websites can better connect with Catholics Study finds majority are woefully inadequate. Experts suggest a way forward For Catholic parishes, simply being present on the Web can no longer be enough. That was the essence of Pope Benedict XVI’s 2010 World Communications Day Message, issued Jan. 25, 2010. In the message, the pope urged priests to embrace all that the Internet now has to offer and “proclaim the Gospel by employing the latest generation of audiovisual resources (images, videos, animated features, blogs, websites).” As it turns out, that message was more than necessary. Last month, the Center for the Study of Church Management at Villanova School of Business in Villanova, Pa., released the results of its nationwide study of parish websites. And they weren’t good. According to the study, the vast majority of parishes included in the study have woefully inadequate sites. Although most do pretty well at the basics — 96 percent list parish Mass times and 75 percent offer a link to the Sunday bulletin — few take advantage of the types of Web technology most Americans have come to expect. For example, only 12 percent post sacramental forms on their website, and only 2 percent provide interactive forms that can be submitted online. Similarly, only 14 percent allow parishioners to sign up for events via the

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Web, while just over a third allow people to register at the parish online. Barely half of the parishes even have a calendar of events online. Even fewer parishes have embraced what’s now commonly referred to as Web 2.0 — the types of interactive technology of which Pope Benedict spoke — with only 10 percent of the parishes featuring blogs and only 8 percent offering podcasts. Online Bible studies and links to good Catholic content on the Web are almost equally rare. Need to interact To Catholics of a certain age, those statistics might not seem all that troubling. But according to Eugene Gan, communications professor at Franciscan University of Steubenville, they spell big trouble for the Church when it comes to young people. “This generation expects a two-way street,” he said. “They expect interactivity. They’re not just looking for information, but also wanting to give feedback. They want to dialogue.” Charles Zech, who directs the Center for the Study of Church Management and headed up the study, agreed. “As a Church, we need to be concerned,” he said. “Things that most Catholics under age 40 take for granted can’t be found on parish websites. We’re not doing all we can to connect with them, and that’s a problem.” On one level, Zech said, that problem stems from the fact that as much as 80 percent of younger Catholics visit a church’s website before deciding whether or not to actually visit the Church. If the website is difficult to navigate or fails to communicate a sense of the parish, many of those Web visitors might very well never become real visitors.

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“You only get one chance to make a first impression, and for many younger Catholics the first impression they get of a parish comes from its website,” said Zech. Online evangelization On another level, outdated and inadequate websites are a problem because it means parishes aren’t doing all they can to spread the Gospel and form their parishioners. According to William Wagner, who worked alongside Zech on the parish study, when younger Americans have questions about the faith, the first place they usually head is to the Internet. “One study concluded that there are over 5 million Google searches for ‘God’ a day,” he said. Through blog posts, podcasts of homilies and links to good Catholic content, parishes can help those searchers find the answers for which they’re looking. And by creating conversations online, they can continue the formation that begins in the Mass throughout the week. Gan explained: “In his last World Communications Day Message, ‘The Rapid Development,’ [Pope] John Paul II outlined three tasks for social communications: formation, participation and dialogue. By creating dialogues online, we encourage participation, and that leads to formation. ” But again, as the Villanova study indicates, that’s not happening right now, at least not in the vast majority of parishes. The reason for that, Zech believes, is twofold. “First, parishes are strapped for money, and to do a really good website you need some funding. Second, most parish leaders don’t seem to understand the importance of a website in reaching parishioners.” Gan also sees some level of fear at work: “There’s a fear of online conversations getting out of hand, of people posting things that might

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be inappropriate or too negative. They don’t want to have to spend a lot of time policing forums or comment boxes.” But that fear, Gan said, is mostly misplaced. “The answer is simply to have more than one person moderating the forums and to encourage some self-policing,” he explained. Wagner also believes the cost concerns are inflated. “You can find some really good Web templates for under $50, and software features such as interactive calendars are available for as little as $10,” he pointed out. “Parishes can also look for volunteers from their members. One Web savvy parishioner can do a lot to improve a parish’s website.” For parishes to really step up their Web game, however, Zech believes it’s going to take some pushing (and funding) from the higher-ups in their diocese. “Dioceses need to take the lead and help parishes develop good websites,” he said. “Many dioceses currently host a very minimalist page for parishes, but its just not enough. We need a more concerted effort. Until dioceses provide more support, most parishes just aren’t going to get where they need to be.” And they do need to get there. “We can’t ignore Web 2.0,” said Wagner. “That’s where the people are.” Emily Stimpson is an OSV contributing editor. The Basics (sidebar) When it comes to parish websites, simply listing the Mass times and posting the Sunday bulletin is no longer enough. So what is enough? Our Sunday Visitor put that question to Eugene Gan, communications professor at Franciscan University of Steubenville, and William Wagner, who

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teaches courses on Web design for the Center for the Study of Church Management. Here’s what they recommend. When it comes to design, websites should: ƒ ƒ

Avoid flash animation whenever possible Be well-organized and easy to read with a top menu and a sidebar menu on the “Welcome” page

ƒ ƒ

Offer features that make it easier for people with disabilities to use Include pictures of people, not just buildings, to show a sense of community


Not include advertisements When it comes to content, in addition to Mass times and bulletins, the ideal parish websites would feature:

ƒ ƒ

A mission statement that describes parish worship, life and community Directions to the parish and contact information


An interactive parish calendar that can be updated by multiple members of the parish staff, as well as key volunteers


Interactive forms that allow people to register for the parish as well as parish events online


Sacramental forms that can be downloaded or e-mailed (such as forms for godparents)


A password-protected “Members Only” section for committee members to share information, post updates and obtain feedback from others

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Online giving tools


A page for visitors


A page for Catholics returning to the faith


Pages for the various age groups in a parish (children, teens, young adults, families, and the elderly) with age specific content (games, faith formation materials, resource links, and events)

ƒ ƒ

Podcasts or print versions of the Sunday homily A blog maintained by the priest, DRE, youth minister, catechists or all of the above


Forums for comments or discussions


The ability to submit prayer requests or purchase a Mass card


Bilingual content when appropriate Other Findings (sidebar) The Villanova School of Business’ Parish Technology Summit also found:




While there has been an increased emphasis on parish transparency and accountability within the Church, only about half of the parishes post their parish mission statement on their website and fewer than that (41 percent) post parish financial information. Parishioners typically have the opportunity to pay most or all of their bills electronically, but only one in six parishes provide the opportunity for online giving through their website. Only one-sixth of the parishes post their priests’ homilies on their websites, and only 8 percent provide webcasts/podcasts of Sunday Mass.

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In spite of the recent growth in the number of non-English speaking Catholics, especially Hispanics, only about 20 percent post multilingual content. Parishioners who are accustomed to communicating through social networks or who regularly blog find that only 10 percent of parish websites provide blogs or online forums for responses by parishioners, and only 14 percent provide the opportunity to submit prayer requests.

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Posted on Sat, Mar. 6, 2010

Manayunk church reaches out through Web By David O'Reilly

Inquirer Staff Writer

In the last few weeks, 30,000 big white postcards have landed in Center City mailboxes, inviting recipients to check out a start-up church that meets in a Manayunk multiplex. "We're pretty casual," the card reads. It gives the street address for Epic Church: United Artists Theater, 3720 Main. In lettering twice as large is its Web address: The hip interactive site was set up to lure young spiritual seekers, and it has done its job, said the Rev. Kent Jacobs, Epic's 30-year-old pastor. After just 16 months, the church typically draws more than 200 people to its 10 a.m. Sunday services. is "what has helped us grow," said Jacobs, who is assisted by a "media pastor." "If you've got a sorry Web site these days, nobody's going to go." Online technology is "by far the biggest change" that has occurred in religious congregations in the last decade, according to the latest National Congregations Survey by Duke University. Of the 1,506 churches and synagogues polled in 2007, nearly all of those with at least 500 "regular attenders" had Web sites. However, a new national survey by Villanova University of 250 Catholic parishes' sites and their use of social media, such as Twitter and Facebook, revealed an "alarming technology gap" between them and young members. Likewise, a survey last year of evangelical Protestant churches found many not making full use of technologies crucial to their futures.

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At a recent "Web site conference" at Villanova, economics professor Charles Zech told 200 leaders of mostly Catholic congregations that while most parishes post Mass schedules and weekly bulletins online, many lack interactivity. For instance: About one-third enable newcomers to register online. Only 14 percent allow parishioners to sign up for activities or view homilies. Eight percent provide Webcasts of Sunday Mass. Older adults might not notice the shortcomings, Zech said, but the young require razzle-dazzle sites. "If we lose them there, we've lost them," he warned. Apart from labor costs, a church can maintain a modest interactive site for under $4,000 a year, a "midsize" site for $10,000 to $15,000, and an elaborate one for $25,000 to $40,000, estimated Brad Abare, founder of the nonprofit Center for Church Communication in Los Angeles, which helps churches with marketing. The costs have fallen dramatically over the last decade, he said. Rather than having to handle design, video, and content management in-house, churches now can subscribe to services. File storage, hosting, and bandwidth costs also are down. If skilled volunteers manage the site, the expense drops even more. The investment can have a significant payoff. Catholics looking to join a parish usually turn to the one for where they live. For many Protestants, however, Web sites are the first place they go when "shopping" for a congregation. In the evangelical survey, 30 percent of people new to congregations (less than 90 days) said they had found out about their churches through the Web. The study was done by Monk Development, a San Diego firm that builds and manages Web sites and whose chief executive officer, Drew Goodmanson, is an evangelical pastor. He recommends that home pages include: A welcome video from the pastor.

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A "banner area" with the church's mission statement. A prominent "I'm New" area that includes the church's location, travel directions, and a short statement of its beliefs. When clicked, it should answer questions of interest to visitors. These features, and more, appear on Epic, which calls itself "a contemporary Christian church," is so new that Jacobs, the pastor, and his volunteer "media pastor," Matt Delvecchio, 25, don't have offices. So they recently showed off their site as they sat with laptops at the Manayunk Diner, a Frisbee throw from the movie theater next door. "We want it to be functional and up-to-date," said Delvecchio, a freelance video editor. With a few clicks he visited the podcasts of Jacobs' sermons and the registration page for the next baptism service. He pointed out a confidential page where new or prospective members can tell the pastor their stories. He found contact information for Epic's "life groups" that meet around the city, and linked to a video of members' makeover of a Manayunk woman's house last year. The site makes Epic look so established, the two said, that first-time visitors to Sunday services are often surprised to learn it's a start-up. "A century ago, when missionaries were going to places like Africa to win converts, they had to learn the local language," Jacobs said. "Digital media is the language of our generation." He'd get no argument from the Rev. James McGuinn. Since becoming pastor of St. Mary of the Assumption Catholic parish in Manayunk seven years ago, McGuinn has installed projectors and screens in the sanctuary. Last year, with the help of a tech-savvy parish staffer, he radically upgraded the Web site, "People need to know the parish is relevant," he said. The site includes the mission statement of the 525-household parish, directions, podcasts of McGuinn's homilies, the altar-server schedule, prayers for the sick, bingo times, last Sunday's collection, and 40 "good Catholic sites" that include the Vatican on YouTube, several Catholic colleges, and a Catholic dating service.

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"People are relying on the parish bulletins less and less," said McGuinn, who describes his technical know-how as "middle of the road." He does not tweet, he said, but the parish school does so extensively, sending out messages such as snow delays and early dismissals. St. Mary's also has a Facebook page, which it uses, among other things, to engage children and parents in its popular summer camp. "The children can share their stories," McGuinn said, "and parents can read about what the children are doing." But along with the benefits of being plugged-in, he sees potential pitfalls. One, he said, is the risk of becoming a "virtual priest." "You still have to bring people together in real community," the pastor said. "High tech is not high touch."

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Politics and Retail a No-Win Mix Retailers drawn into hot-button political fights have to tread lightly The Associated Press By EMILY FREDRIX and GREG BLUESTEIN Associated Press Writers NEW YORK March 9, 2010 (AP)

Guns. Religion. Abortion. These are the no-win arguments that spoil family gatherings â&#x20AC;&#x201D; and the stuff of retailers' nightmares.

Greg Dement, left, is handed a Starbucks coffee drink as he sits with a handgun strapped to his belt... (AP)

Starbucks has found itself in the middle of just such an argument as its stores became forums for demonstrations by both pro-gun and gun-control advocates. All for a firearm policy that hasn't changed and is the same as

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most retailers': follow the local law. If it's legal to carry a firearm in town, it's allowed in the stores. In recent months, the "open-carry" arm of the gun-rights movement, which advocates that gun owners carry visible weapons as they go about their daily business, have been exercising their rights. They've been proudly displaying their sidearms in public places, sometimes meeting up in groups. Starbucks' association with a politically liberal, "latte sipper" ethos, made it a tempting target for gun-control advocates. The Brady Campaign to Prevent Gun Violence attracted more than 26,000 signatures demanding that Starbucks "offer espresso shots, not gunshots." Starbucks' response? It reiterated its policy of following state and local laws and politely asked everyone to leave it out of the debate. It's frightful territory for a business, which risks alienating customers and losing sales by taking sides on such emotional debates. "They want you to like them. They don't want to be red brands or blue brands," said Allen Adamson, managing director of branding firm Landor Associates in New York. "Generally, Starbucks wants to be socially responsible and not take stands on divisive issues. Clearly they're being pulled in here because people want to use them to do that." Starbucks' situation is unusual in that it became a symbol of a debate not of its own making. But other companies have dealt with politically fraught situations where they risk alienating customers no matter what they do. This holiday season, the Christian group American Family Association urged a boycott of retailers, including The Gap and Old Navy, for not using the word "Christmas" in their holiday advertising. But other customers resent focusing on the Christian holiday. Marketing experts say standing firm was probably the best option Starbucks had.

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Charles R. Taylor, professor of marketing at Villanova School of Business, said changing its position would diminish the company's reputation and alienate people on the opposite side of the debate. Some businesses are taking a stand, even if it costs them customers. California Pizza Kitchen and Peet's Coffee & Tea banned customers with guns after open-carry advocates started showing up earlier this year. So has Great American Restaurants, a chain of 10 restaurants and a bakery in northern Virginia. The company's CEO, Randy Norton, said he decided to ban gun owners from carrying weapons when they planned large gatherings at his chain. "I'm just not interested in having large groups of gun owners coming in and making a point," he said. "The gun people got enraged and they have made a point of boycotting us, but we haven't felt any economic effect from this." Such a stance carries risks, though the effects on business are hard to pinpoint. Some who feel passionately about an issue might decide to take their business elsewhere, but those on the other side might give a company more business. "It's too early to see the real impact right now, but this will have an effect," said Fred Taub, an Ohio consumer advocate who is a consultant to companies on boycotts. "The Hollywood view is any PR is good. But from a business standpoint, this is a no-win," he said. Starbucks is hardly unique in following state and local laws that allow weapons to be carried openly, which is legal in 43 states. Most large retailers, among them Target Corp., Home Depot Inc. and Best Buy Inc., say they follow state and local laws. The world's largest retailer,

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Wal-Mart Stores Inc., didn't respond to queries, but open-carry advocates also count it among those that don't restrict patrons from openly carrying weapons. Such policies are "pretty much the majority rule" among large retailers, said John Pierce, the co-founder of, a gun rights advocacy group. Jim Snyder, a 59-year-old retired military member in northern Virginia now goes out of his way to visit Starbucks to show his support for its stance. He's not even a coffee drinker, but sips hot chocolate while wearing a 9 mm handgun strapped to his belt. "Quite frankly, if I saw a sign up there and it said no guns, I wouldn't go in there, even if I wasn't carrying," said Snyder, who has been carrying his weapon in stores and restaurants for about 15 years. "And there's a lot of gun owners who feel that way." Snyder's opposites in the gun control debate are using the situation as a rallying cry to garner more support. Abby Spangler, founder of, asked her supporters to urge Starbucks to declare its stores gun-free zones. "We just want to drink our coffee and have our children eat their scones in peace," she said. Matt Wood, 44, a Seattle resident taking a break at a Starbucks in San Francisco's Financial District, sees both sides of the argument but thinks the demonstrations are getting too much attention. "I mean, who carries a gun into a coffee shop?"

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Posted on Sun, Mar. 14, 2010

This Economy: Financial regulation a tricky process By Harold Brubaker

Inquirer Staff Writer

Before collapsing in bankruptcy in September 2008, the New York investment bank Lehman Bros. Holdings Inc. used off-balance-sheet trickery to make its financial condition appear better than it really was, according to a report released Thursday by a court-appointed examiner. Lehman's auditor, Ernst & Young L.L.P., knew about the use of the accounting gimmick but did not question it, the report alleged. Sound familiar? Maneuvers to conceal liabilities in legal entities that were required to be shown on audited financial statements were central to the Enron Corp. scandal in 2001. Plus, Enron had its own acquiescent auditing firm in the now defunct Arthur Andersen L.L.P. Enron, followed the next year by the blowup of WorldCom Inc., did not bring the global economy to its knees, as did the financial meltdown of 2008, which was symbolized by Lehman's bankruptcy as much as any other event. But those corporate scandals did prompt a major overhaul of rules on auditing, the treatment of off-balance-sheet entities, and the responsibilities of boards of directors and executives for the soundness of financial statements. As Congress wrangles over a much more ambitious fix to the nation's financial regulations, it is worth asking why that law, the Sarbanes-Oxley Act of 2002, did not do more to prevent the financial crisis that started in 2007 with the collapse of the subprime-mortgage market. Some argue that Sarbanes-Oxley was not designed to deal with the excesses that resulted in trillions of dollars in investor losses worldwide and unprecedented government action to keep credit markets in operation.

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Sarbanes-Oxley addressed "what was viewed as inadequate oversight of the audit practice," said Kenneth E. Bentsen Jr., executive vice president in the Washington office of the Securities Industry and Financial Markets Association, a trade group for securities firms, banks, and asset managers. The law was not designed to deal with the issue of excessive risk-taking and bad lending practices, Bentsen said while in Philadelphia last week. He worked on Sarbanes-Oxley when he was a member of the House of Representatives from Texas. Others think it is fair to wonder why Sarbanes-Oxley should not have been capable of doing more to prevent the most recent financial meltdown. Anthony H. Catanach Jr., an associate professor of accounting at Villanova University and the Maguire fellow at American College in Bryn Mawr, said the financial crisis showed that independent auditors were unable to "provide adequate oversight over management's valuations of financial instruments." "How could this happen in our post-Sarbanes-Oxley world?" Catanach asked rhetorically. Is there reason to believe that whatever comes out of Washington's legislative meat grinder is going to be any better? There are many skeptics convinced that, regardless of what Congress does, there will be a next time. A problem for would-be reformers is the constant evolution of businesses as they adapt to a changing economic landscape. It's Darwinian, said Ralph Walkling, executive director of the Center for Corporate Governance in Philadelphia. "Regulation doesn't follow a Darwinian process," Walkling said. It is more like a pendulum that gets stuck, either on the side of too much regulation or too little regulation, he said. Successful regulation would evolve with business, but that will not happen because the political process makes it impossible. Stephen Liedtka, a colleague of Catanach's in the accounting department at Villanova, said the financial world "might just be too complicated to be regulated properly." The best government can do is manage the system's tendency to melt down. "I think you're a fool if you think you can stop it," he said.

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Summit looks at how parishes can use technology to engage Catholics BY JIM GAUGER - CATHOLIC NEWS SERVICE TUESDAY, 16 MARCH 2010

Desktop and laptop computers will be artifacts in the Smithsonian in three years, replaced by mobile computing devices known as "smartphones," a keynote speaker predicted at a technology summit for parishes. Steve Hewitt, editor of Christian Computing Magazine and Christian Video Magazine, called it the "personal computing age" led by those under 40. "They don't care about network TV; they care about what other people have to say," he told the 200 people attending the summit on the campus of Villanova University. "They prefer text messaging to any other type of communication." To connect with this crowd, he suggested Catholic parishes use Webinars, social networking, blogging and texting. He also said "video testimonies" of people's stories of faith can become a powerful presence on YouTube, a video sharing site.

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Hewitt and another keynote speaker, Sister Susan Wolf, a Sister of Notre Dame who is an Internet and social media strategist and consultant, addressed technology's effect on people's daily lives in separate sessions at an all-day summit sponsored by the Center for the Study of Church Management at Villanova's business school Feb. 25. "Parishes are having a hard time attracting and keeping young people," said Charles Zech, the center's director. "Young people communicate through social networks like Facebook. We need to meet people where they are." The center promoted the summit as a way for parishes to follow up on the theme of Pope Benedict XVI's message for World Communications Day 2010: "The priest and pastoral ministry in a digital world: New media at the service of the Word." Original plans called for having an audience of 100 at the summit, but an estimated 200 participated. That number included groups from the Archdiocese of Philadelphia, along with parish representatives from New Jersey, New York and Delaware. "I have a study that says that 40 percent of people who move to a new city check out the church's Web site before visiting the church," Zech explained. "That's the first impression -- the Web site. This study is for all religions, not just Catholic. You have to have an attractive Web site and communicate through technology." With many people now comfortable with using their computer for various daily

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activities -- from paying bills to shopping -- he suggested parish Web sites could provide a way for parishioners to make contributions electronically, establish prayer lists and give links to Web sites for their archdiocese or diocese and the Vatican. Zech said it is important to "keep folks attracted to the parishes between Sundays. It's important to put up attractive Web sites to keep in touch with the parishioners. Frankly, the biggest benefit is to the young members. Kids grow up with technology as part of their lives." In her presentation Sister Susan said she wants "to empower ministry leaders, Catholic organizations and religious communities to use the Internet and social media more effectively for the mission of making disciples of all nations." She cited statistics showing that "less than 30 percent of Catholics are in church on Sunday" and that many more Catholics are online on a daily basis. Using humor, Sister Susan took the audience through her own long, sometimes difficult path to learning about the digital world. She offered her ABCs of technology: access to information, building relationships and communication -- and spoke about how it all relates to Catholic ministry. "We need to provide access to our resources," Sister Susan said. "We need to build relationships so people can be with their faith peers and give support. And we need to be communicating the good news of Jesus Christ." She gave 10 tips for how parishes can proceed with technology:

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-- Be clear about your mission; be committed to delivering real content. -- Address specific audiences; know who you are relating to whether they are teenagers, new residents or the homebound. -- Fit technology to the audience; for example, making the Sunday homily available on the parish Web site. -- Do your homework, be thorough and compare Web sites. -- Offer people proper training. -- Learn from your mistakes. -- Think big, be inclusive. -- Start smart; think about where you can make inroads. -- Get feedback. -- Form your teams carefully; don't do it alone but bring in people who enjoy a challenge and want to be a part of the project. "Use your imagination," Sister Susan emphasized. "Repurpose content (for a Web site) that you already have. Ask yourself, 'How can we do this online?' You are empowering people to participate. Technology is all about people."

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Bridging the gap between the church and the digital world can be difficult, Sister Susan said. "Be innovative, but realistic." She also had this advice for developing Catholic ministry on the Internet: "Do it with joy and have fun with it."

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Leadership How Women Can Reduce Their Wage Gap Kevin Clark and Patrick Maggitti 03.19.10, 12:02 PM ET The wage gap between women and men has been a persistent fact of life in the U.S. Lawsuits brought by women against companies such as Boeing, Wal-Mart, Costco and Home Depot would seem to suggest that it is systemic and that there is little women can do individually to reduce it. However, we conducted a recent study that found some ways women might be able to increase their pay by better managing their relationships with their bosses, peers and subordinates. We surveyed 315 white-collar professionals recently enrolled in the M.B.A. program here at the Villanova School of Business and another school. We gathered information about their pay histories and job relationships and did a carefully tailored analysis to look for correlations between change in pay and types of network relationships. We considered three distinct kinds of corporate networks to see which was the most influential in increasing compensation, both for men and for women: subordinate networks (connections with people working below an employee), peer networks and networks with superiors. The students believed their relationships with their bosses were the most important factor in deciding their compensation. But our research surprisingly showed otherwise, that it actually was their subordinate network relationships that mattered the most for pay. This is critical information for anyone tempted to advance their career by kowtowing to the boss to the exclusion of their team. According to our study, treating your team better and giving it leadership is a surer path to a bigger paycheck. That is not to say that managers who continue to focus more on their supervisors and neglect relationships with subordinates won't move up the ladder. But such behavior can eventually backfire. Why? Because behaviors that are formed early in one's career become reinforced over time, and an upward-only focus leads managers to become insulated from important information about the overall needs of an organization's operations. The results of our study offer insight for both men and women, but we were especially struck by our finding that women's corporate networks were significantly less effective than men's, which suggests that women have a bigger opportunity to increase their pay and close the wage gap by taking specific actions to understand and cultivate their relationships with supervisors, peers and subordinates.

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We looked at superior, peer and subordinate networks from four different angles each, so we considered a total of 12 network characteristics: subordinate network size, closeness, information-gathering and influence; peer network size, closeness, information-gathering and influence; and supervisor closeness, contact initiation, information-gathering and influence. Women lagged behind men, we found, in seven of them: --Closeness with subordinates --Ability and willingness to gather information from subordinates --Ability and willingness to influence subordinates

--Ability and willingness to gather information from peers --Closeness to supervisor --Ability and willingness to initiate contact with supervisor --Ability and willingness to influence supervisor Of course, subordinates have a direct effect on anyone's job performance, through their execution of delegated tasks. The better your team performs, the better you look and the better your supervisor looks. Perhaps that should be self-evident, since a manager's performance is often judged by the work that is actually performed by those under her. Subordinates also are critical to a manager's performance because they can help garner information that can be used to advance the manager's career. We found that men tend to have closer and more influential relationships with their subordinates and are more likely to utilize those relationships for information, even though the size of subordinate networks didn't differ between men and women in our study. Peer network relationships, we found, aren't as important for pay as subordinate or superior networks, but they are helpful when used for information-gathering--and that was another area where the study found women at a disadvantage to men. They also fell behind men at initiating contact, and developing close and influential ties, with their bosses. Sizing up the results of the study, we make the following recommendations to women about how to draw on their networks to close their pay gap:

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Motivate and get to know your team: Research has shown again and again that women are better than men at establishing group consensus and managing teams for a common goal. Women should capitalize on these strengths with their subordinate networks.

Find out what your friends know: Although women are strongly aware of their work communities and groups, they often don't use their peers to their best advantage in obtaining information that can advance their careers. Influence your supervisor: Make chance run-ins with your boss meaningful by always having something useful ready to say. Instead of chatting about the weather, bring up a recent project or accomplishment. Suggest solutions to problems instead of seeking answers to questions. Over time, your boss will come to view you as a thoughtful and effective person who needs to be rewarded and retained. In summary, managers, both men and women, can increase their pay by having more effective corporate network relationships--but women have a particular opportunity. The wage gap is likely to persist, but there are things you may be able to do to improve your own situation. Kevin Clark is an associate professor of strategic management, and Patrick Maggitti is an assistant professor of management and entrepreneurship, at the Villanova School of Business.

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March 21, 2010 The Villanova School of Business has come up with a way of giving people a sample of what its MBA programs are like. It’s called the Mini-MBA and VSB will begin offering it next month at the Hub CityView in Center City. “We decided to do it downtown for the convenience of all the working professionals that are here in Center City,” said Robert Bonner, VSB’s associate dean for graduate and executive programs. The Mini-MBA course meets one night a week over an eight-week period starting April 27. Its overall theme will be managing in a post-bailout economy, but each week it will be taught by a different professor with a different specialty, giving students an overview of finance, marketing, international business, technology and strategy, among other things. Students will be required to do work for each class and an end-of-course paper. If they decide to enroll in one of VSB’s three MBA programs, they can count the course as a three-credit elective. All of VSB’s three MBA programs are for working professionals. In reaching out to potential students for them, the school found “a lot of people who are testing the water and aren’t sure whether they want to embark on afull MBA,” Bonner said. The Mini-MBA, he said, “is a way to test drive all the subjects.” VSB is trying to give them more than that. The course work for each class consists of a case study. The cases, Bonner said, are meant to allow students “to walk away from each session … with things they can bring back to their organization.” Ten people had signed up for the course, which costs $3,000, two weeks ago. VSB anticipates 15 to 25 will take it. The school plans to offer the course at least twice a year. VSB has more than 500 people in its three MBA programs — the fast-track program, which takes two years to complete; the flex program, which students can complete in three to five years; and the executive program. VSB began offering the fast-track program in Center City in addition to on its campus last fall. Although Villanova isn’t that far from Center City, VSB got the same number of applications for the Center City fast-track program as it did for the oncampus one. “It’s actually doubled the number of applications that we have for [the fast-track] program,” Bonner said. VSB is looking into offering its other MBA programs in Center City, too. Information about the course is available at

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March 21, 2010

Churches Slow to Embrace Technology Few Catholic churches currently offer their parishioners a way to give donations online. By Nicole Wallace Few Catholic churches are providing the online information and interactivity their parishioners want, says a new study. A team of researchers from the Center for the Study of Church Management -- part of the Villanova School of Business -- looked at 250 parish Web sites and found that most of them included basic information such as Mass times (96 percent) and weekly bulletins (75 percent). But relatively few sites provide more detailed information or offer interactive features. For example, only one in six church Web sites allows people to make online donations. "Younger people are accustomed to paying almost all of their bills electronically," says Charles Zech, the center's director. "If churches want folks to contribute at the level they would like them to maintain their stewardship, they're going to have to give them that option." Churches want to do better, says Mr. Zech. Last month, 200 people attended an allday seminar the center held on church technology use. It had only expected 100 participants.

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March 22, 2010 Villanova University center specializes in church management PHILADELPHIA -- One of the few places in the country where church administrators can get a graduate degree in church management is at the School of Business at Augustinian-run Villanova University in Philadelphia, the oldest Catholic university in Pennsylvania. “People say the church is not a business, and they’re absolutely right,” said Charles Zech, director of Villanova’s six-year-old Center for the Study of Church Management. But the church “has a responsibility to use its facilities and resources effectively,” he added, and that’s where the effective business management techniques come into play. “It’s really about responsible stewardship,” he said. NCR interviewed Zech after a daylong parish technology summit hosted by the center. The Feb. 25 summit drew about 200 diocesan and parish ministry leaders, mainly from the mid-Atlantic and Northeast regions. The center, established in 2004, now offers a Master of Science degree in church management, mainly through online courses. Zech said the chief goal is to help people who came up through the ranks of ministry in the church and now find themselves thrust into administrative positions with little or no background in how to manage personnel, handle institutional finances or deal with issues of civil and canon law that come with positions in church administration. He said the degree program takes a minimum of two years, and this May it will have its first 19 graduates. Funding from the Raskob Foundation and another foundation that prefers not to be named publicly allows the center to charge tuition that is less than half the actual cost of the program, he said. “About one-quarter of the students in our master’s program are Protestants,” he added. “Every church has the same problems, the same basic temporal issues” of finances, personnel and other management concerns. The center also runs a one-week intensive program on church management each summer and does extensive research in issues of church management and finance. Zech and the Washingtonbased Center for Applied Research in the Apostolate recently collaborated on a national study of parish councils and parish finance councils that is to be published this spring.

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Zech, a professor of economics at Villanovaâ&#x20AC;&#x2122;s School of Business, said he splits his time about 50-50 between teaching duties in the business school and directing the center. Other faculty fellows of the center are also professors in the business school, he said.

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Posted 3/23/2010 4:53 PM By The Associated Press While the Roman Catholic Church in Europe reels from a widening sex abuse crisis, the scandal that has plagued the U.S. church for nearly a decade is tapering off, a report released Tuesday says. The number of abuse victims, allegations and offending clergy in the U.S. dropped in 2009 to their lowest numbers since data started being collected in 2004, the report said. The price paid by the church has fallen, too. Dioceses and their insurers paid $104 million in settlements, attorneys' fees and other abuse-related costs in 2009, down from $376 million in 2008. All told, the scandal's price tag for settlements and other costs has risen to more than $2.7 billion, according to estimates. The numbers of cases were expected to decline, but the financial impact remains severe, said Charles Zech, a Villanova University economics professor. "The U.S. Catholic Church cannot afford that right now, not the way the economy has been going, the hit taken on diocesan investments, and to some extent parishioner contributions," Zech said. "The church ... can't afford to be going on like this very much longer." The latest annual report from the U.S. Conference of Catholic Bishops identifies 398 allegations of abuse involving clergy from Catholic dioceses in 2009 â&#x20AC;&#x201D; a 36% decline from 2008. Most cases involved preteen or teen males and incidents that were decades old, in keeping with past patterns. The number of offenders dropped 32%, to 286. Most are dead, no longer in the priesthood, removed from ministry or missing, the report said. Of the allegations reported in 2009, six involved children under the age of 18 in 2009. The report said that about one-eighth of the allegations made in 2009 were unsubstantiated or determined to be false by the end of the year.

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A companion survey that tracks how dioceses are complying with post-scandal reforms identified 21 cases of allegations against current minors in the year between July 2008 and June 2009. Nine allegations were against international priests visiting or serving in the United States. U.S.-born priests are scarce, and dioceses increasingly are looking overseas to staff their parishes. The report also showed a striking decline in the amount of money paid out to settlements, reflecting a quieter period after several years of huge payments to victims in states such as California. Settlements totaled $55 million in 2009, down from $324 million in 2008. Other 2009 abuse-related costs were attorney's fees (almost $29 million), support for clergy offenders including therapy, living and legal costs (almost $11 million), and therapy for victims not covered by settlements ($6.5 million). Insurance covered about a third of the costs to dioceses, which is consistent with previous years. Similar trends exist in religious orders, which account for a smaller proportion of priests in the U.S. The report identified 115 credible allegations against order priests and deacons in 2009, a 35% decrease. Again, most involve decades-old cases. Abuse-related settlements and costs totaled nearly $16 million for orders, down from almost $60 million in 2008. The picture of the scandal in religious orders, however, is incomplete because just 159 of 219 men's religious communities took part in the survey. David Clohessy, national director of SNAP, the Survivors Network of those Abused by Priests, reiterated victims' skepticism about self-reported abuse figures. He said it's naive to think an institution that has concealed abuse and protected its own for so long would suddenly be honest and forthcoming. Clohessy also predicted a ripple effect from the rash of new allegations of abuse and cover-up in Ireland, Austria, Switzerland, the Netherlands, Italy and Pope Benedict's native Germany. "Many victims, like Catholics, desperately want to believe the abuses and cover-ups are less pervasive and reform is actually happening," he said. "When confronted with evidence that's not so, I predict more victims will come forward next year." Dioceses in 2009 also invested more than $21 million for child protection efforts including training programs, background checks and training for staff, according to the

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report for the bishops prepared by Georgetown University's Center for Applied Research in the Apostolate. Almost 6 million children, or 96% of children in Catholic schools or religious education programs, received "safe environment" training. The training is required under the Charter for the Protection of Children and Young People, reforms adopted by bishops in 2002 at the height of the scandal. Two dioceses â&#x20AC;&#x201D; the dioceses of Baker, Ore., and Fresno, Calif. â&#x20AC;&#x201D; were not compliant by year's end with the provision requiring the training and documentation of it, the report said. "The number of children now equipped with the skills to protect themselves more effectively continues to grow," Chicago Cardinal Francis George, president of the bishops conference, wrote in a memo accompanying the report. "The Charter is causing a cultural change in the U.S. Catholic Church, one I hope will permeate all areas of society." George added that bishops need to continue to reach out to victims of child sexual abuse. Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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The Gender Pay Gap--New Opportunities for Women Posted Mar 25th 2010 10:57AM By Carol Berman Many discoveries are made by mistake. Penicillin. Rubber. Even Post-it Notes. Here's one more: unintended results from business school researchers have provided more insight into the decades-old discussion of why men earn more than women. Kevin Clark and Patrick Maggitti of Villanova University and Holly Slay of Seattle University looked to research relationships among business networks. They were not targeting gender or potential impacts gender might have. But gender did have an impact in workplace relationships--an impact they could not ignore. Especially when the impact was on pay. The State of Affairs

According to the Census Bureau, among full-time workers age 25 or older in 2007, women earned an average of $33,759 which was 24% less than the $46,788 average for men. Are Men Better Brown-Nosers?

The group looked at the influence of relationships that are 360 degrees around an employee--superiors, peers, and subordinates. It found that men build stronger relationships in all three situations which lead to an increased wage gap between men and women. Researchers controlled for starting salaries, job level, and industry. Relationships with subordinates had the greatest perceived impact on pay. In other words, if you connect with those below you, they will perform well, make you look good to your boss, and you get a raise. But this trail didn't exist for women.

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"We speculate that in some cases, men that are bosses make stronger attachments to the male employees," said Maggitti. "You get along better with people who are similar. That's one potential explanation." So it makes perfect sense when the men are talking about last night's game or the upcoming tee time at a fancy golf course, women don't necessarily fit in. And even if they can talk the talk, it's just not the same.

Good News for Women

The researchers did not want to cast more gloom and doom over the gender gap--an area that is squarely in public discourse at the moment. Instead, the researchers want their study to be used as a way to identify opportunities for women to rectify pay inequities. They suggest: â&#x20AC;˘



Motivate and get to know your team: Maggitti and Clark acknowledge that women are better than men at establishing group consensus and managing teams. But that's only in studies and on paper. When it comes to managing subordinate networks, women need to improve. Find out what your friends know: Maggitti and Clark say women are aware of their work communities and groups but don't use peers in obtaining information to advance their careers. Women need to start thinking of it as opportunity to share company information related to the work at hand, rather than gossip. Influence your supervisor: Researchers suggest taking advantage of chance runins with the boss by having something ready to say. Yes, when your boss is a man, and you're a woman, you won't have those bathroom run-ins. There's always the hallway.

Next Steps

Like many academic studies, results often spark ideas for future research. The folks behind the study hope to revisit the gender of all the people involved in all workplace relationships--the bosses, the peers, and the subordinates; not just the person at the center. They want to look at the perception of the "old boys club" network--does it still exist? But in the meantime, they hope that women will recognize and create opportunities that may exist right now in the workplace.

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Trading 'movie futures' like pork bellies? MPAA fights the idea. By Gloria Goodale, Staff writer, Daniel B. Wood, Staff writer posted March 29, 2010 at 8:26 pm EDT Los Angeles — Two firms want to turn America’s growing obsession with how much money movies make into a full-blown futures exchange through which investors can peculate on Hollywood profits and losses, much as traditional commodities markets offer wagers on the future prices of pork bellies and orange juice. The two exchanges – one from New York, another based in Chicago – hope to gain approval and open for investors in April. But they have run into a ferocious hailstorm of protest, some from the very folks the financial firms say they hope to benefit, first and foremost – the six major movie studios. “The reputation and integrity of our industry could be tarnished by allowing trading in the movie futures contracts in a manner which allows them to be viewed as the economic equivalent of legalized gambling on movie receipts,” says Greg Frazier, executive vice president of the Motion Picture Association of America (MPAA), in an e-mail. The trade group has requested a period of public discussion before any such exchanges gain final approval from the Commodity Futures Trading Commission (CFTC). Such an airing of industry concerns is a minimum provision in today’s troubled financial times, says Mr. Frazier, who adds, “Anyone who has followed the meltdown of the financial markets, and the pain this caused people throughout America, knows how important it is to ensure that the establishment of new financial marketplaces does not open the door to rampant speculation and financial irresponsibility.”

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Speculation isn't inherently bad While the industry registers its protests, media and financial observers suggest that the issue is more complicated. “The MPAA’s concerns are a bit overblown – these claims against ‘evil’ speculators [are] age-old and ring a bit hollow because [they] ignore potentially very useful price signals," says Michael S. Pagano, professor of finance at the Villanova University School of Business in Pennsylvania. "Speculators are not, by definition, bad for society," he says. "In fact, they can be quite good by providing liquidity and price signals that would not exist if these players were not present in the market.”

Will it be just another form of gambling? But box-office analyst Paul Dergarabedian, who aggregates the studio numbers for, says he is torn over the proposed exchanges. “The box-office chart is already a commoditization of movies,” he says, adding that the uproar is just one more chapter in the tension between art and commerce that has dogged Hollywood since its founding. However, one long-time observer minces no words in his condemnation of the proposals: “This is gambling pure and simple,” says Douglas Gomery, retired professor of the economics of cinema at the University of Maryland, in an e-mail. “Hollywood specialists have never figured out how to hedge these bets other than to know that 1 in 10 will make a great deal of profit. FYI, three-fourths of critics predicted "Avatar" would be a failure.” Even if the exchanges clear legal hurdles and concerns about insider trading after public hearings are held, their very existence could create a public relations nightmare for the movies. “[The exchanges] are the coming together of art and commerce in yet another extension of that age-old debate,” says Mr. Degarabedian. “It might give the movies a black eye if people have lost their shirt, because it might turn them off to movies.”

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Why MBA: Villanova School of Business 4/1/10 By Sunny Li Advanced qualifications aren’t de rigeur in the construction industry, which values experience above all else. However when project manager Jourdan Trice noticed how few construction professionals had earned MBA degrees, he decided it might give him an edge. “I realized doing a MBA would be a great opportunity to differentiate myself in the marketplace and add value to my firm,” the 31-year-old says. Phoenix, AZ native Trice is responsible for estimating and purchasing at L.F. Driscoll Co., the largest local construction firm in Philadelphia area. He earned his first degree in construction management at Northern Arizona University and has been in the business almost a decade. Trice, who holds a LEED certification provided by the U.S Green Building Council, is passionate about environmentally-friendly solutions in the construction world. The LEED qualification accredits construction professionals’ knowledge of energysaving, water efficiency, carbon emissions reduction and indoor environmental quality improvement. But in order to share his vision more effectively with fellow professionals, Trice felt he needed more leadership skills: “I want to embed these principles in construction when it comes to leadership,” he says. When his wife decided to pursue a PhD at the University of Pennsylvania last year, Trice thought the time was right to earn an MBA degree before starting a family. However he didn’t want to study full time: “I wanted to take the main principles learnt in classroom and apply them to work straightaway, and in a full-time MBA you can’t do it,” he explains.

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So Trice applied and was admitted to the part-time MBA program at the Villanova School of Business in Philadelphia. Classes are held on Tuesday and Thursday evenings. Personal attention to students is one of Villanova’s main strengths, according to Trice. Villanova part-time MBAs are allowed to fit classes around their own work and personal commitments by choosing either the Fast Track or the Flex Track, which take 24 months and 36 months to complete respectively. The average age in his class is 27, with seven years’ work experience, says Trice. Though it’s “not very usual” to meet international students at part-time MBA class, where everyone has a relatively established career already, Trice is glad to get an international perspective from his classmates. “I am pleased to have met several international students with interesting backgrounds and hope to connect with more international alums in the coming years,” he says. He is also impressed by the quality of teaching at Villanova School of Business. Instead of teaching “standard” business and financial models that will prove dated in the real world, the program content draws heavily on current business affairs. Financing his studies hasn’t been a major concern, as a scholarship from the school and corporate sponsorship have covered half of his US$44,000 tuition. However Trice admits that balancing school with his family life has been tough. “With us both putting in 14-plus hours [on] weekdays and [on] Saturdays, I suppose our biggest challenge is finding the time and energy to clean our house!” he says. After he graduates in summer 2011, Trice is looking forward to applying the business principles he’s learnt at Villanova to his daily work in construction. “Villanova has given me a broad business view… especially financial skills and innovative skills that I may not have developed. “I’ve never been so challenged as over the past ten months!” he says. Read more Why MBA stories

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U.S. NEWS APRIL 6, 2010, 10:05 P.M. ET

Gomez Named to Lead L.A. Archdiocese By LAUREN A.E. SCHUKER in Los Angeles and ANN ZIMMERMAN in Dallas

Pope Benedict XVI on Tuesday named Archbishop JosĂŠ Gomez of San Antonio to take over the archdiocese of Los Angeles, which is the nation's largest. He will succeed the retiring Cardinal Roger Mahony in February. The promotion of Archbishop Gomez, 58 years old, puts him in line to become the only Hispanic cardinal and the highest-ranking Latino official within the U.S. Catholic Church. More than two-thirds of the archdiocese's five million Catholics are Hispanic. Archbishop Gomez is considered more conservative than Cardinal Mahony, who is known as one of the more liberal Catholic leaders in the U.S.

During his six-year tenure in San Antonio, Archbishop Gomez locked horns with the more liberal branch of the 700,000-member diocese, disbanding the chancery's 17-year-old Justice and Peace Commission. The commission had opposed a state amendment that barred all forms of marriage except that between a man and a woman. In 2007, Archbishop Gomez denounced a decision by St. Mary's University in the city to allow pro-choice presidential hopeful Hillary Clinton to hold a rally on campus. He also voiced his concerns when another Catholic university in town allowed a high-profile nun who supports female ordination to be a keynote speaker at an event.

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Archbishop Gomez has also pressed on broader social issues, including a recent push to include immigrants in health-care legislation. Abuse advocacy groups including the national Survivors Network of those Abused by Priests said they were disappointed with the way Archbishop Gomez addressed abuse cases in San Antonio. They alleged that he didn't speak out about two clerics with a history of abusing children and teenagers. Pat Rogers, a deacon and spokesman for the Archdiocese of San Antonio, said the archbishop had no connection with the two clerics. One of the accused clerics is simply living and studying the San Antonio area. "He is not in any ministry under our auspices," Deacon Rogers said. The other was a priest teaching at a Catholic university who was fired when the allegation was confirmed. Born in Monterrey, Mexico, to a physician father, Archbishop Gomez studied at the Opus Dei order's University of Navarre in both Rome and Pamplona, Spain. In 1978, he was ordained a priest of the Opus Dei prelature. Before being named archbishop of San Antonio by Pope John Paul II he worked as an auxiliary bishop in Denver. The Los Angeles archdiocese has been hit with more sexual-abuse lawsuits than any other in the U.S. In 2007, Cardinal Mahony agreed to a $660 million settlement with more than 500 alleged victims of clergy abuse, the largest of its kind, according to Charles Zech, a Villanova economist who has written about financial issues in the Catholic Church. As a result, the archdiocese had to sell its 12-story chancery on Wilshire Boulevard in 2008 for $31 million. It now rents four floors. San Antonio's Deacon Rogers said of Archbishop Gomez: "He is a guy from a church point of view who believes convincingly the Catholic Church and the Bible have the answers to life's challenges. He saw his most important role as a teacher. He published three pastoral letters, two books and did two TV shows a month. That is his legacy."

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Friday, April 9, 2010, 4:17am EDT

Villanova U.’s real estate challenge set to start by Natalie Kostelni Staff Writer I will be out today sitting on a judging panel in what is Villanova University’s inaugural real estate challenge hosted by the Daniel M. DiLella Center for Real Estate at the Villanova School of Business. This national competition will have students from other colleges and universities compete on a case that entails the proposed construction of a major transit-oriented development in Tyson’s Corner, Va. I’ll let you know Monday how these future real estate entrepreneurs do and who wins.

Competition Overview Each participating team will be comprised of four students and be accompanied by a faculty adviser. Finalist teams will be selected from groups of first round presentations. Student presentations will be judged by senior executives representing top firms from all areas of the commercial real estate industry. Cash awards will be provided at the following levels: $5,000 first prize; $3,000 second prize, and $2,000 third prize.

Challenge Program Teams arrived at Villanova on Thursday and were to submit their presentation materials upon arrival (prior to the specified deadline). A networking reception was to be held on Thursday evening, and was to include all student participants, faculty advisers, industry judges, sponsors, and members of the DiLella Center for Real Estate advisory council. First-round case presentations will be held on Friday morning, and the finalist teams will be announced at lunch. The finalist teams will present to all of the judges and attendees in the afternoon, and then an awards ceremony and challenge reception will be held in the evening.

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Big screen battle: Hollywood vs. box office speculators By Daniel B. Wood, Staff writer April 10, 2010 Los Angeles — The eleventh-hour pushback by the movie industry and Congress appears to have worked. Two firms, one from New York and the other in Chicago, have been pushing in recent months for approval of a futures exchange that will allow investors to speculate on Hollywood box office profits and losses as they do about the future prices of orange juice and pork bellies. But the ruling – which was due Friday afternoon according to David Gary of the Commodities Futures Trading Commission (CFTC) – will be held another week. The request by Chicagobased Veriana Networks, deals with an exchange that would be open only to institutional investors. Another, by New York-based Cantor Fitzgerald, would be open to anyone.

Movie industry vigorously objects National debate has heated up in recent weeks because the Motion Picture Association of America (MPAA) objected vociferously to the idea and began to enlist others – including the Directors Guild of America, the Independent Film and Television Alliance and the National Association of Theater Owners – to urge the CFTC to deny requests for the exchanges. California’s US Senators, Barbara Boxer and Dianne Feinstein, also urged caution by the commission, as did US Representatives Lamar Smith of Texas, Robert Goodlatte of Virginia and Henry Waxman of California. The “contract market is not warranted where, as here, its sole purpose is to provide a trading platform for instruments that do not constitute legitimate futures or option contracts,” said the letter sent by the MPAA coalition. “But [they] are in essence wagers that are susceptible to manipulation. Rather than providing a real and useful means for hedging risk or price

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discovery, these instruments will be harmful and burdensome to the motion picture.” The letter charged that establishing online box office wagering marketplaces will be “detrimental to the industry they ostensibly are created to serve.”

Legalized gambling?

The Chicago-based firm, Veriana, carries on its website this rebuttal, written by the Futures Industry Association (FIA): “The MPAA has asserted that futures trading is a form of ‘legalized gambling’ that has no commercial interest or value to the public. Nothing could be further than the truth. Futures markets have proven to be vitally important mechanisms for risk management, as evidenced by the phenomenal growth in the use of futures contracts by a wide range of commercial and industrial enterprises, both here and abroad.” FIA also counters MPAA claims that these new contracts could lead to “rampant speculation and financial irresponsibility…. It is clear that the MPAA is not familiar with the futures markets or the regulatory framework within which they operate.” Industry observers similarly line up on both sides of the issue. “I agree wholeheartedly with the MPAA and the movie industry who hold that this is pretty much a thin veil for basic gambling,” says Chris Lanier, president of Motion Picture Intelligencer, a box office prediction firm. “If you want to lose all your money that badly, why not just go to Las Vegas?” And Douglas Gomery, a retired professor of the economics of cinema at Maryland University, has called the idea “gambling, pure and simple.” But Michael S. Pagano, professor of finance at the Villanova University School of Business, says there can be some legitimate reasons to have such an exchange.

New investors, more capital “In particular, the trading of these contracts gives useful information to all market participants about the demand, profitability, and growth potential of various types of movies, including the film studios,” Pagano says. “The exchanges can aid in the movie industry because film investors will now have a way to hedge their investments which, in the end, can attract new investors and generate more capital from existing investors.” He surmises other reasons for the vehement industry resistance.

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“It could be that the film studios are concerned that they will lose their monopoly position on information about various movies because the futures exchange will publish information which all market participants can then observe and analyze,” says Pagano. “This is the type of information that is currently held privately by the film studios and thus they could be fearful of losing their informational edge to non-Hollywood players.” As debate continues to heat up prior to the CFTC’s decision, Pagano says one concern of the film studios that is correct pertains to market manipulation. “It is crucial that the exchange operator … create a set of trading rules and monitoring systems to ensure the market is a level playing field for all participants,” he says. ”Because if it is perceived to be a rigged market, then retail investors and possibly other market participants can be taken advantage of and this could also be disruptive to the film studios’ operations.”

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On the Boards The Entrepreneurs Forum of Greater Philadelphia, an organization that helps entrepreneurs find the resources needed to get into business, has elected Richard Ott treasurer and David Neff board member. Ott is a chief financial officer of GFO CFO Group L.L.C. Neff is the owner of Philadelphia-based advertising and P.R. company Neff Associates. InfoLogix, Inc., a Hatboro provider of technology for business and clinical processes for health care and other sectors, has appointed Melvin L. Keating to its board. He will also serve as chairman of the audit committee. Keating was president and CEO of Alliance Semiconductor Corp. Robert Bonner was elected to the MBA Roundtable board, a graduate education think tank, dedicated to curricular innovation. He is associate dean for graduate and executive programs at the Villanova School of Business. PHH Corp., a Mount Laurel outsource provider of mortgage and vehicle fleet management services, has appointed Deborah M. Reif to its board. She most recently was CEO and president of the equipment services division of General Electric Co. The Wistar Institute, a Philadelphia independent nonprofit biomedical research institute founded in 1892, has named Gail Walker Hearn and Milton S. Schneider to its board of trustees. Walker Hearn is a biology professor at Drexel University in Philadelphia and founder and director of the Bioko Biodiversity Protection Program. Schneider, an investor and residential and commercial real estate developer, is the founder and principal of The Glenville Group, Lafayette Hill. World Class Greater Philadelphia, a program of the Economy League of Greater Philadelphia, has named Jane G. Pepper, Wendell E. Pritchett and Steven M. Altschuler cochairs. Pepper is retired president of the Pennsylvania Horticultural Society. Pritchett is chancellor of Rutgers University, Camden. Altschuler is president and CEO of Children's Hospital of Philadelphia.

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Monday, April 12, 2010

Villanova’s real estate competition inspires a judge On Friday I spent the day at Villanova University’s first real estate challenge and came away inspired and confident in the competence of the next generation of developers and brokers who will eventually shape the built environment. For those of you in commercial real estate, your mentoring of these young people will be invaluable to them and may leave you humbled. The competition was hosted by the Daniel M. DiLella Center for Real Estate that is in the university’s school of business, and organized by Shawn Howton, the center’s director, and Tim Hoffman, its associate director. Ten colleges — American University, Baruch College, Florida State University, Lehigh University, New York University, Penn State, the University of North Carolina at Chapel Hill, University of Pennsylvania, Virginia Commonwealth University and Villanova — competed. Each team was required to analyze a case in which a developer had an option to buy a 323,101-square-foot parcel in Tyson’s Corner for $116 million. One of the main issues was whether developers, given current market conditions, should exercise the option to buy the land. If they did decide to buy it, the developers would need to come up with a mixed-use transit-oriented development that would reinvigorate this part of suburban Washington, D.C., and create more of a community over multiple phases. The conclusions of each team varied. Some were very creative at times and some were lackluster. Some teams decided the option should not be exercised but renegotiated. Another threw in everything but the kitchen sink to justify buying the parcel. Most of the teams were committed to making the development meet LEED platinum designation and LEED gold at the minimum, which told me how important they see incorporating sustainable design into projects. The winning team decided to move forward with a mixed-use development that incorporated a 375,000-

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square-foot vertical expansion option on an office building to lessen its risk exposure to initially constructing too much space. While the judges generally scoffed at the idea of a vertical expansion, the team was convincing enough of its viability. We were told there was even a YouTube video of such an expansion project at the Blue Cross-Blue Shield Tower in Chicago! Here were the winners: 1. UNC-Chapel Hill; 2. VCU; 3. Villanova; and 4. Penn. The prizes were $5,000 for first place, $3,000 for second, and 2,000 for third and fourth place. The other judges were: Michael Brower, vice president and director of valuations at BPG Properties; John Derham, senior managing director at Cushman & Wakefield; Kim Diamond, managing director at Standard & Poorâ&#x20AC;&#x2122;s; Robert Fahey, executive vice president at CB Richard Ellis; Bill Glazer of Keystone Property Group; Chris Terlizzi, founding principal at PREIT Capital Advisors; and Simon Ziff, president of Ackman-Ziff Real Estate Group.

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Organizational Relationships, Pay, and the WageGap By Kevin Clark, PhD, Villanova School of Business, Patrick Maggitti, PhD, Villanova School of Business and Holly Slay, PhD, Seattle University

The wage gap between women and men remains a persistent fact of life in the U.S. According to the Census Bureau, full-time women over the age of 25 earn 24% less than men. The gap is particularly large for women with advanced degrees, at 31 percent. Numerous lawsuits brought by women against prominent companies such as WalMart, Boeing, and Costco and personal accounts of many women suggest that discrimination exists. While society may slowly be moving toward equal pay for women, researchers have begun to look for ways individual women can increase their pay in the near-term. For example, developing skills for negotiating assertively can pay dividends in performance and salary reviews. In a recent study of the link between work-place relationships and pay, we found another opportunity in which individual managers â&#x20AC;&#x201C; particularly women â&#x20AC;&#x201C; may have an opportunity to increase pay. In a survey of 315 white-collar professionals recently enrolled in an M.B.A. program here at the Villanova School of Business and another school, while controlling for years of work experience, position, industry and initial starting salary, we found that certain types of relationships managers had with their peers and bosses had an impact on pay. No surprise. Interestingly, however, relationships with subordinates had an even bigger impact. This finding runs counter to common wisdom in which those that are tight with the boss receive the highest rewards. Our findings apply to both men and women, however, further analysis of our data showed that the relationship of the women in our study were significantly less effective than the men. In other words, while benefits exists for both men and women, women appear have more opportunity to increase their pay by more effectively managing their relationships. In all, we found 7 types of relationship characteristics that can influence pay and in which women trail men: With respect to subordinates, it is important to be close with them, have the ability

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to gather information from them, and to develop the ability to influence them. With peers, it is important to be able to utilize them for information. Finally, with bosses, there is a benefit to being close, having an ability to influence them, and being willing to initiate contact with them. Overall, these results lead to the following advice: • • •

Get to know your team. Don't be afraid to develop close professional relationships with them and be sure to give heed to their thoughts and opinions Look to other managers at your same level for information about what is going on in your company. This increased awareness may prove valuable to your decision-making. Plan to have something of value to say should you have a chance encounter with the boss. Your ability to initiate meaningful conversations will help you enhance perceptions of your value. At some level, our findings are intuitive – managers are often evaluated on the performance of tasks, many of which are actually performed by subordinates. Still it is interesting to note the direct impact on pay. Indeed, in our research, managers underestimated the role subordinates play in career success and tended to over emphasize the relationship with the boss. This is not to say relationships with the boss aren't important, however. Developing the type of relationship in which you have an influence and where you are able to initiate contact matters greatly. To be clear, we are not advocating gratuitous and insincere behavior – we do find that managers who are able to wiled upward influence and who are more proactive with their boss achieve better career results. The danger we detected in the research was that an overemphasis on the boss tended to be coupled with less attention and regard for subordinates and this was clearly a mistake many managers were making. In summary, we again emphasize our belief that discrimination persists in our society. While we believe more effective relationship management provides an opportunity for women to lessen the gap, we do not believe it will erase it completely. Still, we are hopeful women managers can find our study helpful on an individual basis as they work to develop their networks for career success.

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Tue, Apr. 20, 2010

Bank purchases triple TD's presence in Florida By Harold Brubaker Inquirer Staff Writer TD Bank's purchase Friday of three failed Florida banks, with $3.8 billion in assets and 69 branches, from the Federal Deposit Insurance Corp. tripled the number of branches TD has in the Sunshine State. Stay tuned for more. "We will continue to look for opportunities," Bharat Masrani, president and chief executive of TD, which is based in Cherry Hill and Portland, Me., said Monday. Masrani said it would have taken TD five years to build its branch network in Florida as much as it has done through the acquisition of Riverside National Bank of Florida, First Federal Bank of North Florida, and AmericanFirst Bank. "We've been scouring the area for a while," he said. "These institutions fit exactly what we were looking for" because they give TD branches in places where it eventually would have built anyway, he said. Such deals happen because banks notify the FDIC that they are interested in buying institutions of a certain size or in a certain geographic area, said Tim McTaggart, a partner in the Washington office of Pepper Hamilton L.L.P. When a bank failure is imminent, he said, the FDIC solicits bids from potential buyers, who are put under strict confidentiality agreements. Before Friday, TD had 34 Florida branches, which are rooted in Commerce Bancorp Inc.'s 2005 purchase of Palm Beach County Bank. TD bought Commerce in 2008. No cash changed hands Friday. The actual cost to TD for the three Florida banks will not

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be known for some time. Friday's deal included an agreement under which the FDIC will reimburse TD for 50 percent of the losses on loans up to a certain amount, and for 80 percent of the losses beyond that. "The ultimate price will depend on the ultimate losses," Masrani said. If the 50 percent threshold is reached, TD's cost would be $259 million. The biggest of the three banks is Riverside National Bank, in Fort Pierce, which had 58 branches, $2.8 billion in deposits, and $1.7 billion in loans covered by the loss-sharing agreement. TD likely had competition in the bidding for Riverside, but Masrani declined to discuss the bidding in detail. "They may have been willing to assume more loans without assistance than the other bidder," said Anthony H. Catanach Jr., a banking expert at Villanova University and at American College in Bryn Mawr.

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New $100 bill: Why the high-tech redesign? By Daniel B. Wood, Staff writer posted April 21, 2010 at 4:24 pm EDT

A hundred dollar bill? "Dottie," a Starbucks cashier, says she almost never sees them. “Maybe, once in a month someone will pull one out,” she says, placing four tall lattes into a cardboard carrier. “Otherwise, no way Jose.” After a quick spot query of the café shows that not a single person has one in his or her wallet, the question arises: Why is the US's new $100 bill necessary? The quick answer, say banking experts, is that $100 bills are the most common use of American currency by foreigners. Two-thirds of all $100 bills are in foreign pockets. Therefore, international counterfeiters feel they can get away with bigger sums of fake cash in the far reaches of Europe, Africa, and Asia – not to mention being far from the spotlights of law enforcement. “The necessity of such a move can be easily debated. Counterfeiting of US currency is quite a big deal, especially in markets outside the US,”, says Scott J. Dressler. Assistant professor of economics at Villanova University’s School of Business. Among the many new high-tech security features, a blue ribbon will give a 3-D effect to micro-images on the bill. Tilt the note back and forth and you will see tiny bells on the ribbon change to 100s as they move. And that's one of the reasons for the new design. “You can check these features without holding the bills up to a special light,” says Edwin Donovan of the US Secret Service.

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While the added security features should thwart counterfeits of the new note for the time being, the old note will remain in circulation and can still be counterfeited, Mr. Dressler says. “While the old notes get retired, counterfeiting becomes more difficult. Therefore, you can think of this as the beginning of the end for counterfeiters - until they can successfully pass off a counterfeit of the new bill.” The perception that paper money is on the way out as consumers opt for debit and credit cards is incorrect, says Chad Wasilenkoff, CEO of Fortress Paper, which produces high quality security paper including bank notes and passports. "Contrary to popular opinion, banknotes, which are commonly known as 'paper money,' 'bills,' or 'notes,' are more in demand than ever across the globe," he says. The design of the new bill was unveiled Wednesday, but won’t appear in circulation until February, 2011. “As with previous U.S. currency redesigns, this note incorporates the best technology available to ensure we’re staying ahead of counterfeiters,” said Secretary of the Treasury Tim Geithner, at the unveiling. Those still in possession of the old-style bills needn't do anything, officials say. “When the new design $100 note is issued ... the approximately 6.5 billion old design $100s already in circulation will remain legal tender,” said Chairman of the Federal Reserve Board Ben S. Bernanke. “U.S. currency users should know they will not have to trade in their old design notes when the new notes begin circulating.”

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Nova offers â&#x20AC;&#x2DC;mini-MBAâ&#x20AC;&#x2122; for post-bailout economy The Villanova School of Business is offering a "mini-MBA" program in Center City on eight Tuesday nights from April 27 to June 15 for companies and professionals who want a broad overview of managing in a post-bailout economy. Topics will include principles of accounting, finance, international business, marketing, strategy, and business operations. The eight evening sessions, from 6 p.m. to 9:45 p.m., will be at Villanova business school's Center City location, the Hub City/View, at 30 S. 17th St. The tuition will be $3,000. For more information, visit

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Catholic Donors Keep Cash Flowing During Abuse Scandal By Flavia Krause-Jackson and Gadi Dechter - Apr 22, 2010

Margaret McSherry, a 79-year-old widow, keeps giving 7 pounds ($10.85) a week to Holy Family Church in Belfast as the investigation of pedophile priests spreads to three continents. “I am a practicing Catholic Christian and I always will be,” said the retired nurse in Northern Ireland. “The Church needs money to keep itself up.” Loyalty such as McSherry’s to the world’s oldest Christian denomination, with more than 1 billion followers, helps explain why anger at the Roman Catholic Church and Pope Benedict XVI for failing to prevent priests in five countries from abusing children won’t lead to a drop in Sunday collections and donations to local parishes, said Joseph Claude Harris, a Seattle-based expert on Catholic finance. After hundreds of incidents of priests sexually abusing their parishioners were disclosed in 2002 in the U.S., fundraising by bishops and parishes went up, said Harris, the author of “The Cost of Catholic Parishes and Schools,” published in 1996 by Sheed & Ward. He also has written 24 articles for national publications on financial and staffing issues in the American Catholic Church. “During a period when things were extremely negative, annual appeal and offertory collections increased,” Harris said in a telephone interview. Rising Gifts

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Pledged gifts to bishops’ appeals and offertory contributions from parishioners in the U.S., where churches are financed by voluntary donations more than anywhere else in the world, rose 18.8 percent to $7.7 billion in the four years after allegations of abuse in Boston emerged in 2002, according to the most recently available data from the International Catholic Stewardship Council in Washington. “People basically deal with the church on an extraordinarily limited, local level,” said David Clohessy, national director of the Chicago-based Survivors Network of Those Abused by Priests. “There is not a Catholic bishop on this planet who drives a smaller car or does his own laundry or takes fewer vacations or has suffered any tangible consequences.” Benedict, who turned 83 last week and celebrated the fifth anniversary of his papacy this week, is facing his worst crisis as Catholic Church victims in the U.S. and Germany proved that he was aware of child abuse during his previous roles as archbishop and cardinal from 1977 to 2005. While head of the Vatican’s priest-discipline office in 1985, he postponed the defrocking of a California priest convicted of child molestation while recommending “paternal care.” Good of the Church The delay was in part “to consider the good of the Universal Church,” the pope, then named Cardinal Joseph Ratzinger, wrote in a letter dated Nov. 6, 1985, to the Diocese of Oakland. The note was released April 9 by Jeff Anderson, an attorney in St. Paul, Minnesota, who has represented clergyabuse victims. “It was not expeditious perhaps by today’s standards but expeditious for the standards of the time,” said Jeffrey Lena, U.S. counsel to the Holy See

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since 2002, in a telephone interview. Defrocking “is a complex canonical process and the fact it took some time does not mean that this pope was not taking these cases extremely seriously.” There are two active lawsuits in the U.S., neither related to the current round of abuse disclosures, said Lena, who is based in Berkeley, California, at a location he declined to disclose. Not Employees “It is my firm conviction that United States courts do not have jurisdiction over these cases,” Lena said. “Such cases may be valid as against the dioceses and orders to which an offending priest appertains. But the priests of the world are not, as plaintiffs try to insist, ‘employees of the Holy See by virtue of their priesthood.’ Nor are the bishops of the world employees of the Pope.” Lena declined to comment on how much he charges clients. “I would only note that I am not part of a phalanx of corporate-type lawyers,” he said. “I try to style my practice on the traditional European model, rather than the American corporate model: a small firm providing discreet service and keeping a low profile.” Church donations in the U.S. are widely dispersed. On average, each of the 22 million registered Catholic households gave $317 in 2006, according to Harris’s analysis of survey data from the stewardship council. Same Pattern? “Parish giving wasn’t affected by the earlier scandal and I expect the same pattern to hold here,” said Charles Zech, director of

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the Center for the Study of Church Management at Villanova University in Pennsylvania. Exceptions to the U.S. trend abound. The Vatican’s handling of sex abuse has prompted Roberta Colucci, an Italian kindergarten teacher who has a 14-year-old daughter, to plan to stop checking the box on her annual income tax form that transfers 0.8 percent of her bill to the Catholic Church. “I have no words to describe how disgusted I am and I will do everything in my power to make sure they don’t get a cent from me,” said Colucci, 42. The cases of child abuse coincide with the global economy’s emergence from its worst recession since the Great Depression. The Holy See, the institutional framework through which the pope and his advisers govern the Catholic Church, has spent 254.9 million euros ($341 million) and took in 254 million euros in 2008, the most recent publicly disclosed figures. Peter’s Pence Gifts to Peter’s Pence, a fund of donations made directly to the pope, totaled $76 million in 2008, down from a high of $102 million in 2006 and up from $63 million at the start of the decade, according to the latest annual report released last July. Donations have held steady in one of the biggest archdioceses in Ireland, where child abuse charges will cost the Roman Catholic Church and the state at least 1 billion euros, according to the Residential Institutions Redress Board. The Dublin-based group was formed by the government in 2002 to make amends with people abused in schools and institutions.

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Two Irish reports, reports, one last May and the second in November, documented widespread child abuse by priests and members of religious orders, as well as efforts by church authorities to cover up the offenses. It wasn’t until March 19 that Benedict wrote a letter to Irish Catholics and apologized for the “grave errors” committed by his clergy. Bishop’s Resignation Benedict today accepted the resignation of James Moriarty, Bishop of Kildare and Leighlin in Ireland. Moriarty was auxiliary bishop in the diocese of Dublin 1991 to 2002, a period during which allegations of child abuse were improperly handled, the November report found. Donations for the year through June 30, 2009, to the Archdiocese of Dublin, which covers more than 200 parishes, were 61.4 million euros. That compares with 62.1 million in the year earlier and 47.6 million in the same period of 2003. “People are making a distinction between the national church, which is very weak, and the local church, which is relatively still strong,’ said David Quinn, director of the Dublin-based Iona Institute, which promotes marriage and religion in society. McSherry, who has worshipped at Holy Family in Belfast for more than 40 years, said she has limits on how her donations should be used. “I wouldn’t like to think I would be paying for sex abuse bills,” she said as she stood in front of her apartment building, which is less than a fiveminute walk from the church. “The Vatican should sell off some assets.” German Taxes

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German taxes from parishioners in the 10 years through 2008 increased 21.6 percent to 5.1 billion euros, according to government data. A church report released on March 12 said that when German-born Ratzinger was archbishop of Munich, he took part in the 1980 decision to move a priest accused of molestation to his diocese to undergo therapy. Vatican spokesman Father Federico Lombardi said in a March 12 interview that the pope was “extraneous” to allowing the priest to return to pastoral work, where he went on to commit further abuses. The pope said in an April 15 sermon in Rome that it was “necessary to do penance” for the sex-abuse crimes committed by Catholic clerics, and “to recognize the wrong in our lives” and “to prepare for pardon.” Benedict met with abuse victims during an official visit to Malta on April 18. The unscheduled meeting was “a beautiful experience,” said Lawrence Grech, 37, who leads a group of 10 Maltese abuse victims, in an interview. Praying Together The pope “prayed with them and assured them that the Church is doing, and will continue to do, all in its power to investigate allegations, to bring to justice those responsible for abuse and to implement effective measures designed to safeguard young people in the future,” the Vatican said in an emailed statement after the meeting. Yesterday, the pontiff told a general audience in Malta that he had “shared their suffering” and said the church would take “action.” He previously met in 2008 with victims in the U.S. and Australia. The Vatican said March 13 it would remove the 10-year statute of limitations for priests accused of child molestation.

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In Italy, where the church gets most of its funding from voluntary taxes, contributions climbed 32 percent to 1 billion euros in the 10 years through 2008, government reports show. The church risks losing parishioners like Colucci in Rome. “I can honestly say I have never been so disgusted,” she said. “When I think of such an abuse of trust, it really makes my skin crawl. That is why I am really questioning for the first time where my money goes. I don’t want them to have access to a cent that I earn.” To contact the reporters responsible for this story: Flavia Krause-Jackson at Gadi Dechter in Washington, D.C.

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10 College Courses That Will Pay Off at Work What courses should you take to get a jump on your professional life? Here are 10 examples. By Brian Burnsed Posted April 26, 2010 Nearly every college student sits through lengthy lectures and carts around mammoth textbooks. Unfortunately, these methods often do little to prepare students for their lives in the working world. Now, many graduate and undergraduate programs are supplementing their meat and potatoesâ&#x20AC;&#x201D;lecturedriven classesâ&#x20AC;&#x201D;with some dessert: career-oriented offerings. In these classes, students will shake hands and share ideas with real-world business leaders, find their own ways to isolate proteins in a lab setting, or make closing arguments in a simulated court case. In the increasingly competitive job market, students who take advantage of such offerings can stand apart from their peers. Here are 10 examples of these courses and their potential benefits: Research Methods in Cell Biologyâ&#x20AC;&#x201D;Eastern Connecticut State University This course, taught for more than 20 years by Eastern Connecticut Professor Mike Adams, is a six-hour-a-week investment for students, but an investment that Adams maintains yields a tremendous return. Though the initial portion of the class is driven mainly by traditional instruction, Adams eventually asks students to isolate and identify a protein with no help other than what they've assimilated in earlier lessons. "The overall effect is to simulate as closely as possible the feel of working in a research lab, rather than performing set piece exercises found in most lab courses," Adams says. "I know that employers and graduate schools both rank real hands-on experience at or near the top of their requirements. For employers, it can mean having a productive worker from day

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one, as opposed to tying up a second person who has to train the new employee for weeks or months." Education to Business Programâ&#x20AC;&#x201D;Pepperdine University's Graziadio School of Business and Management Companies facing real-world business problems come to Pepperdine for consulting assistance. In each of the consulting classes, students are split into groups that work to solve the various problems facing the company. The arrangement is mutually beneficial. Rather than invest in an expensive consulting firm, businesses save money while gaining access to a team of budding consultants. The students, in turn, are asked not to solve theoretical problems, but offer solutions in real time that a company may implement to help improve its bottom line. In the past, students have worked with companies large and small, ranging from corporate giants like Coca-Cola and Cisco to local auto collision shops and software companies. [See our complete coverage of America's Best Colleges.] HR on the Groundâ&#x20AC;&#x201D;Temple University's Fox School of Business While Temple, like Pepperdine, offers a consulting class to M.B.A. candidates that allows them to solve company's problems in real time, it offers a similar option for undergraduates in its business school. Temple formed a partnership with Target that allows undergrads to offer consulting advice to the retail giant after a thorough analysis of store performance. Their analysis is judged not only by their professor, but also by Target executives, who have a say in the students' grades. And the students' interaction with the firm often doesn't end with that final grade. Since the class's inception in 2005, Target has hired 56 former Temple students to work on the corporate level.

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Public Relations Writing—University of Houston Jack J. Valenti School of Communication Classes that offer tips on crafting a press release or media pitch are ubiquitous at communications schools across the country. What's often overlooked, however, are the nuances of being a professional—in any field—that can set a student apart from their competitors in the job market. While the University of Houston class does have PR-focused elements that are specifically useful to communications majors, many other aspects are universally helpful. The instructor, Mike Emery, teaches simple—yet important—nuances of the professional world like E-mail etiquette, letter writing, and the hazards and benefits of utilizing social media. Emery argues these skills are useful, no matter the profession. "While PR brings up images of flashy publicists or press conferences, it's also something that students in any discipline have to employ within the workplace as they represent themselves, their departments, their organizations, and their products," he says. "Likewise, clear writing is essential in managing relationships in and out of the office." [See how to launch your career in a lousy economy.] Legal Skills Program—William and Mary Law School Throughout the two-year program, students are not only taught law, but given the chance to practice it. Students take on simulated cases from genesis to conclusion. Along the way, they receive courtroom technology training and have access to an on-campus courtroom where they try their cases. Participation in the program is required of William and Mary law students. "The program provides students opportunities to learn the skills and professional responsibilities of attorneys," says Suzanne Seurattan, a William and Mary spokesperson. "The skills taught in the program provide our law students with training they would otherwise not receive until they were on the job."

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Entrepreneurship Minor— Villanova School of Business At Villanova University's Center for Innovation, Creativity, and Entrepreneurship, students take four courses over a year, helping them earn a minor in entrepreneurship. As the year progresses, students form their own ideas for business ventures and present them to peers. After presentations are made, the class selects the most viable ideas and forms groups that work together to analyze and develop the ideas. Each class has two instructors: a full-time faculty member and an entrepreneur who has found success outside of academia. Occasionally, students are given the option to continue their projects beyond the classes if the business plan is well received by investors during a year-end pitch. "More and more, companies are placing a value on these entrepreneurial talents and it is incumbent on us to help our students differentiate themselves in this regard," says Patrick Maggitti, director of the ICE Center. "[By year's end], all are better prepared to face tough questions and make presentations in a way that tells a compelling story with rock solid support." [See our complete coverage of Best Graduate Schools.] Speaking to Lead and Influence—St. Catherine University This course, offered at St. Catherine University in St. Paul. Minn., is designed to make students—whatever their career aspirations are—more comfortable with their office communication skills. While traditional speech classes tend to hone in on public speaking, this course attempts to instill confidence in students across an array of forums—interviews, in meetings, and group presentations, among others. "We're teaching students how to express what they think in a way that's more effective," says the instructor of the class, Elizabeth Otto. "I defy you to name a job where that's not an important part of the job function."

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Leadership, Ethics, Accountability and Professionalism (LEAP)— Arizona State University W. P. Carey School of Business Oftentimes seniors or graduate students are privy to interaction with corporate leaders, while freshmen toil away in classes more general in nature. At Arizona State University, however, it's the freshmen who get to work closely with seven of the nation's largest accounting firms. All accounting majors participate in the LEAP class, which Clinical Professor Phil Drake, who oversees the class, says has a two-pronged benefit. First, it allows students early in their college career to get a firm grasp on what accounting is and whether or not it's right for them. He claims the class confirms the choice of majors for some students, while others realize they should go in a different direction. Such a change is more easily accomplished as a freshman than later in college. Additionally, it allows students to establish and maintain relationships with employers that may hire them once their diploma is in hand. "It's a win-win for the students as well as the participating firms," he says. "They get a much deeper understanding of accounting early on." IT Project Management—Harrisburg University of Science and Technology Offered on both the graduate and undergraduate level, Harrisburg University's IT project management courses prepare students for the Project Management Professional (PMP) certification exam. It's a certification that many can't attain without years of IT experience. A decade ago, such classes didn't exist, but are now a near necessity for IT students looking to find meaningful employment immediately after graduation. Students leave school prepared to start their careers as IT management professionals and enjoy the six-figure salary that typically accompanies the title. Philanthropy and Social Change—Georgetown University

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This is an undergraduate class designed for students who may want to enter the nonprofit world after they graduate. Georgetown teams with nonprofits, for whom students write grant proposals and eventually dole out $15,000 in grants. Instructors say that students who have taken the class laud it for heightening their grant-writing skills, which employersâ&#x20AC;&#x201D;particularly in the Washington, D.C., areaâ&#x20AC;&#x201D;covet.

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Catholic Church responsible for 75,000 area jobs, study finds Published: 12:00 AM Apr 26,2010 BY KATIE DREWS

The Roman Catholic Church may be a spiritual force, but it's also a staggering economic force, directly responsible for at least 75,000 jobs in the Chicago region, a new analysis found. The Archdiocese of Chicago -- headed by Cardinal Francis George -- is perhaps the most visible Catholic institution around, overseeing hundreds of schools and parishes in Cook and Lake counties and employing more than 17,000 full- and part-time workers, according to the latest data available. But an assortment of hospitals, colleges and other charitable groups makes the total number of church-related jobs significantly higher, found in the analysis. Resurrection Health Care -- affiliated with two orders of nuns and including several hospitals, nursing homes and clinics -- has about 14,000 full- and part-time employees, an official said. Loyola University Chicago, which is run by Jesuit priests, reported about 9,000 employees at its academic and medical facilities. The Diocese of Gary, covering northwest Indiana, includes nearly 1,700 full- and parttime people, according to an aide to the local bishop. Through interviews, records and other sources, tallied employment levels at more than 20 church-related groups in the region, including the dioceses of Rockford and Joliet. ''Folks look at their parish sort of like a small business. But when you add up all the entities, people will be stunned. ... It's a huge economic entity," said Charles Zech, director of the Center for the Study of Church Management at Villanova University.

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Speaker offers tips for increasing stewardship By Jennifer Burke/Catholic Courier It isn't necessary to make major changes in order to implement effective parish-based stewardship programs. In fact, many parishes could increase parishioners' gifts of time, talent and treasure simply by incorporating stewardship principles into such current offerings as parish newsletters and adult-education opportunities, according to Charles Zech, director of the Center for the Study of Church Management at Villanova University. Zech was the keynote speaker for the Diocese of Rochester's sixth-annual Stewardship Day, which took place April 24 at Church of the Assumption in Fairport. Zech's keynote presentation on "Myths and Realities of Catholic Giving" was broadcast live via the Internet along with several other talks and presentations, including Zech's workshop on "Common Parish Activities to Enhance Stewardship." Video of the keynote and some of the workshops soon will be available on the diocesan Web site, During that workshop, Zech told participants that in a typical parish, the average annual household contribution is $517 and that approximately 27 percent of parishioners volunteer their efforts for the parish. The number of active volunteers and the contribution amounts both increase substantially in parishes that are viewed as welcoming communities, he said. Zech, who has studied stewardship at diocesan and parish levels for more than 18 years, said stewardship seems to increase at parishes that utilize such practices as having greeters at Mass and presenting welcoming receptions for new parishioners. "I can't over-emphasize the importance of your parish being viewed as a welcoming community. If your parish is not being viewed as a welcoming community, think about stewardship -- it's not going to work," Zech said.

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Building a strong sense of community within a parish is also key to building an effective stewardship program, he said. Events like parish picnics and pot-luck dinners are especially useful for this because they bring parishioners from all walks of life together for food, fun and conversation. "You get to meet other folks and develop that sense of community," Zech said. "You have to continually work at building community. If you don't have a sense of community in your parish, don't bother doing stewardship. It's not going to work." Communication is the third key to an effective stewardship program, he noted. Parishes regularly should share the stories of individuals and families who live out stewardship principles in their lives. Unfortunately a parish bulletin is not a very effective way to share these stories, Zech said. "Space is so limited, and folks just sort of skim through it. It only typically hits folks that are at Mass that Sunday," he said. Parish newsletters, however, typically are mailed to the homes of all registered parishioners and usually have fewer space limitations than bulletins. Parishioners also seem to peruse them at greater length, Zech said, so it's important for parishes to include stewardship stories and information in these publications. Parishes also should work stewardship into every aspect of their education and formation offerings. Stewardship concepts and stories can be incorporated into everything from the religious-education curriculum to youth-group activities, and from young-adult events to adult-education opportunities. "Permeate the parish. Make sure it's part of every element of parish education and formation," Zech said.

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RE Concern Over Derivatives Legislation WASHINGTON, DC-Emotions on Capitol Hill are running high over the issue of how to regulate the use of derivatives in financial transactions--emotions that were hardly blunted by the hours-long testimony by top executives at Goldman Sachs. To be sure, Congress, particularly the Democrats, had been seeking to establish some controls and transparency over these little-understood instruments before the US Securities and Exchange Commission charged Goldman with fraud in its structure of certain collateralized debt obligations. The suit, though--whatever’s one belief in its merits--has clearly heightened tensions and put a spotlight on the issue for the public. A public, it hardly needs to be said, that is feeling precious little sympathy for investment bankers these days. For all of these reasons, the real estate industry is becoming more nervous about what might be handed down in Washington--especially as the CMBS markets continue to show signs of revival. The most strict proposal--put forth by Sen. Blanche Lincoln--may not have the votes to pass. Essentially, Lincoln’s bill would have banks wall off their swapstrading desks completely. Nonetheless even less strict regulations could hamper the commercial real estate industry’s ability to manage risk--and possibly tamp down the emerging CMBS market, according to an informal survey of executives in this space by Real estate companies, along with other business end-users, employ over-the-counter derivatives products to help manage business risks such as interest rates and foreign currency exchange exposures, says Real Estate Roundtable senior vice president Chip Rodgers. “In our view, it is important for reforms to strike the right balance between bringing full transparency to the derivatives markets, reducing systemic risk and preserving the ability of real estate end-users to responsibly hedge their risk,” Rodgers tells A move too far in one direction could send businesses to offshore centers, says Walter J. Mix III, managing director of LECG Global Financial Services. Worse, from the perspective of the commercial real estate industry, it could also suffocate the nascent CMBS market. “To the extent that the derivatives in question impact the CMBS market, which is in its incipient stage of recovery, the rates to refinance

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commercial real estate will remain high and recovery in that area will be negatively impacted,” Mix tells Indeed, with Goldman Sachs under attack by the Senate and the SEC--rightly or wrongly-and with the likelihood that the ratings agencies will be the next to face scrutiny there will likely be a longer delay in getting conduit lending back to pre-meltdown levels or anything approaching it, says Carl Schwartz, chairman of the commercial real estate department at Herrick, Feinstein. "There are some lenders that have been warehousing debt in the hopes that the revitalization of the market would open up in the near future," he tells “But things will need to quiet down and confidence will need to be restored before that happens. This, too, shall pass, as all things do. But for now, the resurgence in the CMBS market we were hoping for might be delayed.” James Jablonski, instructor of finance at the Villanova School of Business, and an expert in derivatives and financial market regulation, offers a primer on the legislation under debate to get a better understanding of how a stopped-in-its-tracks CMBS market could be one end-result. There are two key issues under discussion, Jablonski tells There is the bill proposed by Lincoln in which banks would be forced to spin off their trading operations to keep the derivatives trading out of institutions deemed too big to fail to avoid systemic risk to the US economy. The other requires companies to put aside large sums of money to cover potential losses. A side issue, he says, is whether this legislation would apply to existing contracts--a move that is being vigorously lobbied against by Berkshire Hathaway because they have $63 billion in existing derivatives contracts on their books. Margining would grossly raise the cost of capital required to hedge their risks. “The legislation being proposed would likely have an impact on commercial real estate because of its impact on the cost and availability of financing,” Jablonski explains. “Banks and other direct financing firms often manage their commercial real estate loan business by packaging up loans and selling them to Wall Street financial firms so that they can free up more capital to make new loans," he adds. "If Wall Street firms are more restricted when it comes to hedging their exposure to these loans using derivatives then they will have to require higher interest rates from the lending banks to assume the risk of the loan packages they are trying to sell.“ Ultimately, Jablonski concluded, these higher rates will filter back down to the direct commercial loan market--causing existing variable rate mortgages to become more expensive--and raise the cost of borrowing for potential new customers.

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Fed remains cautious despite good economic news Keeps rates at historic lows; only minor changes to statement By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) -- Deciding once again that the economy remains too fragile for higher interest rates, a cautious Federal Reserve kept increases on hold Wednesday and repeated that conditions requiring low rates were likely to remain for an extended period. As expected, the Fed was more upbeat in its statement about the economic outlook, saying the economy was continuing to strengthen and that the labor market is beginning to improve. Hot Stocks: Financials Bounce Back Financials advance, led by asset manager Invesco after its earnings beat Wall Street estimates. AIG shares rally, recovering some of their losses from the previous session. MarketWatch's Greg Morcroft reports in New York.

But the good economic news was not enough to convince the Fed that higher rates are necessary. The Fed statement made no mention of the fiscal crisis in Greece, but developments in Europe may have played a part in the decision to issue a cautious statement, analysts said. With markets unsettled because of European sovereign debt worries, Fed policymakers don't want to add to market anxieties "by starting a countdown to monetary policy tightening," noted the economic team at RDQ Economics. "With Greece in trouble, Portugal downgraded, and Spain downgraded just today [Wednesday], it may have been an environment that just looked too risky" to make any major changes, agreed Robert Brusca, chief economist at FAO Economics. In its statement, the Fed said it "will maintain the target range for the federal funds rate at 0 to 0.25 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable

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inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period." The Fed has kept interest rates near zero at every meeting since December 2008. Stocks (DOW:DJIA) gathered momentum after the Fed's decision. The dollar (BOARD:DXY) pared gains. Treasury (U.S.:UST10Y) prices stayed down. Read MarketWatch comprehensive coverage of Wall Street. The Fed recently stressed that its pledge to keep rates low is conditioned on the forecast of high unemployment and subdued inflation and inflation expectations. Core consumer inflation has declined in recent months. Core consumer prices, excluding food and energy prices, fell to a 1.1% annual rate in March, the lowest level since January 2004. The rate was 2.5% in June 2008. With inflation declining, the Fed can afford to be patient, hoping that the better economic data translates into a falling unemployment rate in coming months. The unemployment rate has remained steady at 9.7% over the past three months. The rate peaked at 10.1% in October. The Fed's strategy is working and they want to stick with it, said Brian Bethune, chief U.S. financial economist at HIS Global Insight. The economy is in a "sweet spot" with solid growth and inflation is low, Bethune said. "The economy will still have to expand at a decent rate for several more quarters before we get decent job growth," Bethune said. The economy has shed 8.5 million jobs in the recession. And unemployed workers are finding it more difficult to find jobs. Low short-term rates also act as a tonic for the battered financial sector, allowing companies to borrow cheaply and lend or invest at higher rates. The Fed statement said that housing starts "have edged up but remain at a depressed level."

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Some analysts say there has to be a clear improvement in the housing sector and an end to the drop in home prices before the Fed would consider raising rates. There was one dissent to the policy stance. Thomas Hoenig, the president of the Kansas City Federal Reserve Bank, objected to the extended-period wording for the third straight meeting. Hoenig has argued that rates need to move higher to prevent a renewed bubble. He added a concern in this statement, saying the extended period language limited the Fed's flexibility. The Fed will not meet again until June 22-23. In between, there will be nine weeks worth of economic data -- including two reports on the health of labor markets. If the economy continues to improve, the June meeting could turn out to be pivotal. t that point, the Fed may want to say something more concrete. The Fed will release updated economic forecasts on May 19 along with a summary of the discussion at Wednesday's meeting. The Fed statement made no mention of the fiscal crisis in Greece but developments in Europe may have played a part in the decision to issue a cautious statement, analysts said. With markets unsettled because of European sovereign debt worries, Fed policymakers don't want to add to market anxieties "by starting a countdown to monetary policy tightening," noted the economic team at RDQ Economics. The Fed statement made no mention of asset sales. When the financial crisis hit, the Fed abandoned its Treasurys-only stance and bought all manner of securities from banks and financial institutions to push money into the financial system and keep credit channels open. It also commenced a plan to purchase $1.25 trillion of mortgage-backed securities. Those purchases have swelled the Fed's balance sheet above $2 trillion. Several Fed members are impatient about the size of the central bank's balance sheet and want to start a program of gradual sales in the near future,

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Fed Chairman Ben Bernanke has said the Fed would not sell any assets until after the first rate hike. Victor Li, a professor of economics at the Villanova University School of Business, said the Fed is unlikely to change the statement language until August. He said he doubted that the Fed would end up hiking short-term interest rates this year. The Fed will be watching closely to see if the housing market can stand on its own feet after the expiration at the end of the month of the special tax break for homebuyers, Li said in an interview. Julia Coronado, senior economist at BNP Paribas, doesn't think the Fed will raise rates until mid-2011. "I still think the Fed is a lot more patient than they are given credit for," Coronado said. In the short-term, the Fed is likely to start testing, as soon as next month, programs to drain excess reserves from the banking system. Those reserves are the flip-side of the Fed's large balance sheet. The Fed has said it plans to put in place a term-deposit facility, similar to a certificate of deposit, that would tie up reserves for six months or more. It also wants to conduct large volumes of reverse repo transactions. The programs remain in their "infancy" and the central bank will want to develop these tools without rocking markets too much, Coronado said.

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Rolls-Royce Sets Villanova Students Up For the Real World A recruiter at Villanova School of Business since 2004, Rolls-Royce, a world-leading engineering firm, is now sponsoring a live case study in which Villanova students interact with managers in different international locations to analyze issues facing the hi-tech manufacturing giant. This semester senior and junior students with an international business major or minor have enrolled in the course to work with Rolls-Royce managers in Reston, VA, and Derby, in the UK. Last semester the students analyzed foreign direct investment (FDI) to develop either wide-body or narrow-body jet engines. They shortlisted Dubai, South Korea, and Virginia as potential locations. This term their mission is to assess a proposed plant expansion to manufacture a jet engine for the "middle of the market" in Civil Aerospace. The three possible locations are Derby in the UK, Singapore, or Virginia. The teamâ&#x20AC;&#x2122;s tasks include researching the quality of the local labor force, the competitive environment, cost-benefit analysis over the long-term, supply chain management and government incentives. Rolls-Royce has sent leading managers to run guest lectures in the classroom and also via the web.

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Gabrielle Pettinelli, a senior year Marketing and International Business major, said: “It really gives us hands-on, real world experience in international comparative management. “Unlike some courses in which students analyze a five-year-old Starbucks or Wal-Mart case study, in this course we get the advantage of working on current and future data with Rolls-Royce.” On April 16, Boeing Philadelphia hosted business students from Villanova School of Business for an on-site visit. Students saw the production lines for the Osprey aircraft and the Chinook helicopter. Students also met engineers and technicians to discuss the design of several Boeing aircrafts during the four-hour trip. Industry experts also answered questions from the visitors. Rolls-Royce North America CFO Will Powers, who helped set up the visit through a retired senior Boeing Executive, hopes this initiative can “help Villanova students widen their perspective”. “Many undergraduate (and for that matter) graduate business students have never visited a factory or an assembly plant, let alone one that is involved with advanced manufacturing,” he says. “I believe that industries like aerospace, defense, pharmaceutical and others not only can and will be globally competitive, but more importantly are fascinating places to work. “And the future of advanced manufacturing is to attract a material share of the best and brightest.” According to Powers, who is a 1982 graduate of Villanova School of Business, Rolls-Royce feels it is “very important” to form long term relationships with prestigious undergraduate business schools – including Villanova – to build a “talent pipeline” that can feed the company’s internship and leadership programs.

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“We see it as a vehicle to drive interest in our company as well as advanced manufacturing,” he adds. In return, Powers says the students get the opportunity to work in multi-disciplinary teams to develop a proposal that would “theoretically” be delivered to a board of Rolls-Royce directors. Powers, according to Villanova senior Pettinelli, has been very “responsive” in email discussions with the students in the course. The Rolls-Royce North America CFO even took time to make suggestions for an end-of-the-year presentation that the class will present to him in two weeks. “I have never been a part of a course where the class is in constant contact with the CFO of such an influential international corporation,” says Pettinelli. Feedback from her peers has been “really positive”, says Pettinelli, though one change she’d like to see next year is a greater level of underclassman involvement. “It would be advantageous to have this course [available] for [more] underclassman as learning about international management issues and speaking directly with managers can help students in their career choices and networking,” says Pettinelli, who has received a job offer to work in New York in advertising upon graduation. With Powers confirming Rolls-R0yce’s long-term interest in his alma mater, more Villanova students look set to benefit: “Dean Danko and Dr Chaudhry and the other Villanova School of Business faculty have been terrific and open in their support for developing this case study,” he says. “I hope that this case study will continue for many years.”

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Traffic-light food signals advocated By John Gibb on Sat, 1 May 2010

Supermarket shoppers who are confused about the health status of food products would benefit from standard symbols, such as traffic-light colours, being displayed on packaging, US marketing researcher Jeremy Kees says. Assistant Prof Kees, of the Villanova University School of Business in Philadelphia, in the United States, is an Anzmac Visiting International Scholar at the University of Otago marketing department this week. Anzmac is the Australia and New Zealand Marketing Academy, a body which shares information and promotes research among marketing academics and practitioners. Nutritional panels on food packets contained valuable information, but busy shoppers also needed a simplified system of symbols, such as a red or green traffic light, on the front of packages to help them interpret complex nutritional data, he said in an interview. Many shoppers were confused by some of the current health-related messages on packaging. "It's confusing at best and deceptive at worst." One brand of US breakfast cereal was promoted on the front of the package as "high fibre", but also contained an unhealthy 40% sugar. Experimental research he had undertaken showed advantages in a system adopted in the United Kingdom, and backed by regulations, which provided traffic light-style information on each of four nutrients: fat, saturated fat, salt and sugar. Green indicates low levels, amber medium and red high levels of each nutrient.

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Prof Janet Hoek, of the Otago marketing department, said the issues raised by Prof Kees were timely because Food Standards Australia New Zealand was considering new food-product labelling requirements. Adopting a traffic-light system would be "extremely useful" for New Zealand consumers, and would also encourage the healthier reformulation of products, she said.

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Lettuce recall doesn't hide progress on food safety, experts say By Daniel B. Wood, Staff writer posted May 7, 2010 at 6:34 pm EDT The recall of romaine lettuce sold under the Freshway and Imperial Sysco names across the US points to the need for better food safety regulations and new legislation, but it is also focusing attention on America’s strong record. An E. coli outbreak possibly linked to tainted lettuce has reportedly sickened 19 in Ohio, New York, and Michigan, with cases reported on three college campuses. The Food and Drug Administration (FDA) is focusing investigation on lettuce grown in Arizona, according to the food safety advocacy group Safe Tables our Priority. The outbreak – and the resulting concern about what is and isn’t safe to eat – has some focusing on the progress made in food safety, rather than on fears. “When you consider the macro view – the amount of food we process from farms to stores to stomachs daily to over 300 million people – I am frankly amazed at the limited number of recalls and sickness,” says Greg Bonner, chair of the department of marketing and business law at the Villanova School of Business. “That is the reason why these outbreaks get so much attention when they do happen,” he says. A lot of progress has been achieved since the last reports of salmonella and E coli in 2007, say other experts. Farm groups, agricultural collectives, transportation firms, and processing plants have implemented voluntary regulations on cleanliness. More progress could be on the way. A House bill passed in July calls on food processors to register with the government periodically, implement food safety plans, meet FDA

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performance standards, and verify that the food they import complies with US law. Known as the FDA Food Safety Modernization Act, a Senate version sponsored by Senators Richard Durbin (D) of Illinois, and Tom Harkin (D) of Iowa, was passed unanimously by the Senate Health, Education, Labor, and Pensions (HELP) Committee in November. The bill was scheduled to head to the floor of the Senate this summer, but has been delayed by healthcare reform and now financial reform. The bill “is just the nudge that is needed,” says Caroline Smith DeWaal, Food and Safety Director for the Center For Science in the Public Interest. "It gives [the] FDA needed new authorities to manage food safety from farm to table, through improved standards and more frequent inspections,” she says. Under the current system, food manufacturing facilities might only receive visits from an FDA inspector once every five or 10 years. The House and Senate bills also give the FDA authority to issue mandatory recalls of contaminated foods. Another notch of progress came in 2007 when California farmers created the California Leafy Green Products Handler Marketing Agreement (LGMA). Over 100 produce handlers, representing approximately 99 percent of the volume of California leafy greens, are LGMA members. LGMA monitors compliance with accepted food safety practices through mandatory government audits. Because of the program, California leafy greens are now grown under a unique system that has become a model for growers in other states. “There is now a program underway based on the California model to create a national leafy green association,” says Dave Kranz, spokesman for the California Farm Bureau Federation. “As in California, this will help on two fronts. One is to insure that farmers and processors adhere to the standards for leafy green crops,” says Mr. Kranz. The other is focused on research and “gathering new information to hone the regulations and make them as effective as they can be.” This week’s recall also sends an important message that no matter how many new regulations mandating inspections come out, no system can achieve 100 percent perfection, food safety experts say. “No system can exhaustively inspect the food chain from farm to dinner table,” says Manual Cunha Jr., President of the Nisei Farmers League. “Everyone seems to think these contaminants occurred in the field because of animals or unclean farm workers,” he says.

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“No one seems to want to look at conveyor belts and check out counters in grocery stores, which handle meat and chicken as well as vegetables.” Mr. Cunha points out that farm fields can't be fenced in solidly enough to keep out mice or birds, and the alternative – using greenhouses for everything – would be prohibitively expensive. Some would tell consumers that simply switching to local foods is the solution to quality and safety concerns. But that isn’t enough, experts say. “Consumer confidence in food safety is falling, but consumer diligence with food safety practice is declining as well,” says Nancy Childs, a professor of food marketing at Saint Joseph's University in Philadelphia. “Turning to local food as a solution is to not understand the sources of contamination and the need to cleanse all food.”

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Friday, May 14, 2010

Villanova goes beyond borders Business students share know-how in capital-poor countries Philadelphia Business Journal - by Brian Loschiavo Special to the Business Journal

For two weeks last summer Abby Butkus, a double major in accounting and international business at Villanova University’s School of Business, woke each morning to the rising sun in Amboseli National Park in Kenya. Then she, along with fellow students Amber Brennan and Thomas Meehan and the associate dean of the business school, Debra Arvanites, set off on an hour trek through back roads in a vehicle fit for a safari, with African animals at an almost uncomfortable proximity. At their destination in a remote village of Meshanani tribespeople, they conducted workshops on goal setting, business planning and how to market the indigenous arts and crafts produced by the villagers. “We interviewed many people in the village to gather information on their businesses, how they see themselves and how they could benefit from economic growth,” Butkus said. “Almost all of them said they would send their child to school if they were able to earn more money.” The experience was one of several organized by a student-run nonprofit at Villanova called Business Without Borders. Modeled after Engineers Without Borders and inspired by Doctors Without Borders, the organization was conceived in 2008 by students interested in giving their business program a social justice component that

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would help to improve the lives of people who have limited access to capital. This academic year was the program’s first full year as a recognized campus organization. “The program is very consistent with the mission of the university,” said Jonathan Doh, director of the Center for Global Leadership at Villanova. “It gives students the opportunity to become business leaders while giving back to society.” Butkus, who was one of the organization’s first co-presidents, said that working with the people in Kenya helped her learn more than she was able to teach. “Standing in front of 70 Meshanani people and sharing my knowledge of business with them really showed me that I can lead a group of people and that I have very valuable knowledge that can be used for the betterment of society,” she said. Kenya was the group’s first international service mission. Working with a local nongovernmental organization called Water Is Life, the group selected the village because it was already involved with Engineers Without Borders, another student organization at Villanova. During the trip the students took 14 Meshanani leaders to a hotel to see how a gift shop used display cases to help the people understand how to sell their jewelry to tourists. “We showed them how to organize more effectively and we broke down the business piece by piece,” Butkus said. “We also showed them how to display their goods and how to approach their customers.” “There was a distinct mutual benefit and I saw firsthand how what I had learned for three years at Villanova School of

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Business could work to impact others positively,” Butkus reflected. Membership in Business Without Borders has grown to more than 100 students and the group has so far completed three international missions to Kenya, Nicaragua and the Philippines. During the fall break, students traveled to Nicaragua to explore potential partnerships with a local community, where the organization is interested in collaborating with the nongovernmental organization Water for Wasala and a women’s eco-friendly restaurant. In the Philippines, Villanova business students teamed up with engineering students to bring technical and business assistance to entrepreneurs in the Infugao province. They worked to identify projects for students to pursue on future trips, including small enterprise development and program assistance to local nongovernmental organizations. “I believe that developing, organizing and executing complex projects in challenging developing country environments and living for a period with the same hardships and difficulties faced by people in those communities provides students with one of the most powerful leadership experiences they will have in their lives,” Doh said. Back home, the organization runs a volunteer income tax assistance program and holds panels on topics such as sustainability and microfinance. It is also working on bringing professionals from socially responsible companies to campus to speak to students about potential career paths. A number of courses tie the initiatives of Business Without Borders into the curriculum. Competitive effectiveness is a core course offered which explores how management and marketing tools can be used to support

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nonprofit enterprise, and more specialized elective courses cover global corporate responsibility, global ethics and social entrepreneurship. Butkus had been on many service trips with Habitat for Humanity to various locations, but she said this trip made a deeper impact on her life. “The experience was more than I could have ever imagined,” Butkus said. “I saw how these people spoke, shared with each other, appreciated our presence, interacted and how they simply lived.” After graduation this spring, Butkus will go to work for GE Capital in its financial management program. She plans to stay connected with Business Without Borders and with her contacts in Kenya whether it is through simple updates or supporting future projects. “Business is for the betterment of the common good and this experience exemplified that,” Butkus said.

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Surviving your company’s mistakes Corporate crises such as at BP, Toyota and elsewhere impact employees

Company calamities like the ones playing out at firms such as BP, Goldman Sachs and Toyota do more than just impact a firm’s reputation and bottom line. They also do a number on employees. It’s been nearly a decade, but Shirley Green still remembers vividly the pain and anguish she felt when her former employer Qwest Communications faced disaster. The company announced sweeping layoffs in 2000, the stock plummeted in 2001, and CEO Joseph Nacchio soon resigned amid allegations of fraud. He was convicted of insider trading in 2007. “It was really upsetting,” said Green, who was a process analyst for the telecommunications company at the time. “At baby showers, networking groups, even when I went to the doctor’s office and filled out forms, I didn’t want to say where I worked.” Green, who lives in Denver and spent more than two decades with Qwest until she was laid off, describes herself as a “peon” who had no direct connection with the goings on at the top at the beleaguered company. “The people at the bottom of the food chain are the ones who get hit the worst.” Company crisis leaves many workers facing insecurity, a loss of control and disillusionment in a corporation that they were once proud of, management experts said. And that is a recipe for even more disaster because employee morale suffers.

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Unfortunately, many employers facing adversity forget about its impact on the rank-and-file. “In a crisis situation, many companies focus externally only” on things such as public relations and a firm’s stock price, said Christine Probett, a management and human resource professor at San Diego State University. “If there is no internal communication, employees expect the worst and productivity drops significantly while employees speculate on what might happen,” she said. Addressing employee concerns Toyota spokeswoman Celeste Migliore said that when the automaker began recalling vehicles late last year and earlier this year, there were a lot of questions from employees. “It was not so much a morale problem but concern for the company,” she said. As a result, the company held town hall meetings; allowed employees to ask questions of the executive staff through online forums; and instituted an internal website in February offering up-to-date information on what was happening to workers and dealers. Workers are “feeling much better” knowing what’s going on with the company, Migliore said. BP and Goldman Sachs did not respond to requests for comment on what they were doing to deal with employee morale. Boosting employee enthusiasm can be difficult after “hypercrises,” said Patrick Maggitti, an assistant professor of management at Villanova School of Business and director of the university’s Innovation, Creativity, and Entrepreneurship Center. A study co-authored by Maggitti called “Leadership in Hypercrisis: Leading in the Face of a Shaken Culture”offered examples of past hypercrises that severely impacted workers:

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In the wake of the 1989 Exxon Valdez oil spill, Exxon employees were stigmatized and experienced a degree of shame for working for a huge company that others saw as uncaring about the environment after 11 million gallons of oil spilled into Alaska's Prince William Sound. It was one of the largest environmental disasters U.S. history.

In the late 1970s, Ford Motor Company used a cost-benefit analysis to make decisions regarding safety designs on the Pinto model following reports that such vehicles were susceptible to fire in a collision. The company calculated that the cost of modifying Ford vehicles was $87.47 million dollars more than the estimated cost of the 180 deaths, 180 burn injuries, and 2,100 burned cars they estimated would result if the modifications were not made. “The shaken organizational culture and effects on organizational members require a masterful leader in order to effectively deliver the organization and its members from the depths of these types of crises,” Maggitti said. Need for strong leadership Employees are looking for signals from leaders that give them information about what has happened, what management is going to do, and where the company is headed, said Richard Coughlan, associate professor of management at the University of Richmond's Robins School of Business. Going on the defensive immediately following a crisis, as did leaders at Toyota and Massey Energy — the owner of the mine in West Virginia where 29 workers were killed — is exactly how not to handle the situation, Coughlan said. “Workers wonder what the company stands for” when leaders don’t take responsibility right away, he said. But it shouldn’t be just about assessing blame, said Ben Dattner, an adjunct professor at New York University where he teaches organizational development and co-author of forthcoming book “Credit and Blame at Work.”

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“Often when there’s a large-scale disaster, there’s been a cascade of errors. It’s better to avoid oversimplifying and having there be a villain,” Dattner said. Sometimes employees will rally around a company during upheaval because they feel they’ve made a commitment to an employer and are likely to defend it, added Dattner. In the case of Goldman Sachs, for example, partners at the firm reportedly gave CEO Lloyd Blankfein a standing ovation during an April earnings meeting, according to a Bloomberg article, despite the dark shadow of government civil charges. So what should workers do when a crisis hits their company? Jon Gordon, author of "Soup: A Recipe to Nourish Your Team and Culture," suggested asking yourself, “Did my company violate the principles that made me proud to work for this company and did they violate the standards that I believe in and live up to? If so, then identify what they are doing to address the crisis and ask yourself: Do I still want to work for this company?” “People have to be loyal to a company and skeptical at same time,” said Peter Firestein, a senior management consultant specializing in corporate reputation and author of “Crisis of Character: Building Corporate Reputation in the Age of Skepticism.” “As a productive employee, loyalty is important. How can you be creative and innovative without that?” he asked. “But you and you alone are responsible for your own destiny.” He said you have to figure out whether the leaders at your firm are seriously ready to emerge from the disaster as a team or are just looking out for No. 1. “Some of the most respected CEOs of our time have not only failed themselves and shareholders, but they’ve failed employees who are depending on them,” Firestein added. “You want to be able to assess the

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reality and be honest with yourself on what you think of your leaders. One sickness of this era is we seem to confer authority on other people.” A paycheck might be keeping many workers at a certain company because they can’t find other work, said Firestein, who doesn’t expect everyone to cut and run if they realize they’re working for unethical people. “But tell yourself the truth, and that truth will eventually lead to action,” he said. Truth and lies Alas, sometimes it’s hard to distinguish between truth and lies. In 2005, Ed Cohen left his job at Booz Allen Hamilton. His wife, Priscilla, left her consulting practice to take jobs in India with Satyam Computer Services, a top global IT outsourcing company. Satyam’s Chairman and founder, Ramalinga Raju, “was the most generous person we had ever encountered,” said Cohen. “He would speak of ethics and integrity at every leadership training meeting.” It turned out, Raju was actually cooking the company’s books. He was arrested in 2009. “At the time the allegations came up, I thought it was a joke,” Cohen said. Cohen, who was the chief learning officer responsible for talent management of Satyam’s 53,000 global workers at the time, said many of the employees, including himself, seemed to go through the stages of grief that people coping with death often face — betrayal, anger, depression, and eventually, acceptance. The experience prompted Cohen and his wife to write a book about their experience titled, “Riding the Tiger: Leading Through Learning in Turbulent Times.” “It was like we were in a war,” he said. “When you’re in war, your adrenaline is pumping, you’ve got to keep things going, but when it’s over the post-traumatic stress kicks in.”

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May 16, 2010 5 Minutes With the Director of a Management Program for Church Leaders Chuck Zech, of Villanova University, discusses teaching the business of doing God's work. The Business of Doing God's Work By Beckie Supiano Few church leaders have a solid business background. Villanova University's new master-of-science program in church management was designed to offer them a strong grounding in business coupled with a faith-based approach. The two-year program is taught online, with a one-week residency on the campus of the Roman Catholic university outside Philadelphia. Chuck Zech, director of the Center for the Study of Church Management at the university's school of business, spoke with The Chronicle as the program's first class neared its graduation this past Sunday. Q. Why have a specific degree program in church management? A. Our mantra is that the church is not a business, but it does have a stewardship responsibility to use its resources effectively. Sometimes that stewardship responsibility requires them to use business-management techniques. That's what we're about. We're about helping churches use their resources more effectively, be better stewards of the resources they have, so they can better carry out God's work on earth. ... Frankly, most church workers don't have a background in business. They advance through the ranks, or they have a degree in theology or religious studies or social work or education, and at some point they find themselves in a managerial situation that they're not prepared for. Q. Your first class of students is graduating this spring. Tell us a little about these students. A. Well, we started with 28; we'll be graduating 19 this month. Of those who aren't graduating, some have just taken maybe one course at a time, so they'll be graduating later, others have personal situations that required them to leave the program, and others frankly found that distance education was not exactly what they thought it was. They come from a variety of positions. We have a couple guys that run retreat centers, we have a bunch of folks working in parishes and congregations, a bunch who work in diocesan or religious-order offices, and of course we have a bunch of clergy. A third of our students are Protestants. The Protestants are really important to us ... especially in a program like this, they are critical because, frankly, every church faces the same sort of problems. Every church struggles with internal financial controls, every church struggles with performance management of their volunteers and laity, every church struggles with what civil law and church law are saying. But every church has some good solutions. So by mingling Catholics and Protestants and a variety of faith traditions, we get to hear the good ideas that the other faith traditions have, and so the students can really learn a lot from

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one another. In adult education, so often students learn as much from the classmates as from their professor. That's real important here, that we have a nice, quality contingent of Protestants and Catholics so they can cross-fertilize their ideas. Q. The sexual-abuse scandal is back in the news lately, and the leadership of the Catholic Church has been getting negative attention. How do you handle that in class? A. The underlying problem of the sexual-abuse scandal, as well as the underlying problem of other recent scandals having to do with church embezzlement, has to do with the Catholic Church's culture of lacking transparency and accountability. ... Throughout the program we emphasize the importance of transparency and accountability in all decision making. And if the Catholic Church had done that from the beginning, they wouldn't be where they are right now with the sexual-abuse scandal.

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Villanova School of Business Q+A Where did you grow up? Plymouth Meeting, Pennsylvania (suburban Philadelphia). You are the Director of Nursing Operations at Thomas Jefferson University Hospital, Methodist Division, in Pennsylvania. Have you always had an interest in the healthcare industry? I have worked in diverse roles in the healthcare industry for over 20 years. I canâ&#x20AC;&#x2122;t say that I was always interested in healthcare; my exposure to healthcare as a teenager was limited and I was initially drawn to the arts. My desire to become a nurse was fostered during my senior year of high school. During my final year of nursing school, I was given the opportunity to scrub an OR (operating room) case. I immediately fell in love with the surgical setting and the rest is history. How much has the healthcare industry changed since you started your career? The healthcare industry has changed dramatically since I started my career. Healthcare outcomes have become transparent and many hospitals have either closed or merged as reimbursement for medical

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care has changed and there are much stricter regulations from governing bodies. What's your motivation behind going for an EMBA now, as you've already established a career? My motivation for going for an EMBA now is rooted in my awareness of the ongoing evolution of the healthcare industry. I am a nursing administrator who is responsible for many of the hospitalâ&#x20AC;&#x2122;s cost centers. As the healthcare environment has become highly competitive, it is becoming increasingly important for individuals in leadership positions to be highly competent in business performance. What classes from your EMBA program are you enjoying the most? I have actually enjoyed them all, as the faculty is highly engaging and makes the learning process interesting. One of the most unique benefits of the program is the opportunity to meet with an executive coach twice a month to develop my leadership skills. Why Villanova School of Business? When researching business schools in the area I was most impressed with the curriculum and structure of this program. I donâ&#x20AC;&#x2122;t have any previous business education and it was important to have classroom experience rather than online. I also like the fact that the classes were offered on the weekends, as my job does not always allow me to make class during the weekday evenings. You are currently on a "study trip" in Vietnam and Malaysia with your classmates. What is the purpose of this trip and what does the class want to achieve as a whole?

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The purpose of this trip was to become familiar with challenges of conducting business in emerging markets. As a whole, our class wanted to be able to apply our classroom studies of Global Management and Strategy in Emerging Markets into on-site, realworld applications. We were able to attend seven corporate site visits while in Vietnam and Malaysia. How is your MBA degree going to impact your career later? Having an MBA will allow me to expand my career beyond nursing administration. This degree will prepare me for any type of executive position, hence the name of the program, Executive MBA. What advice can you give for others who are considering doing an Executive MBA? An Executive MBA goes beyond earning a degree. You form close relationships and create a new network of highly trained professionals as you spend 21 months together. The program is a serious commitment of time but I am finding that it goes by very quickly.

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Another View: Market Makers Help Halt Crashes May 27, 2010, 9:33 AM

Michael S. Pagano, a finance professor at the Villanova School of Business, argues that the key to preventing another flash crash may lie in preserving a role for market makers at the largest exchanges. Given the recent attention from regulators, the business media, traders, investors and others to the “flash crash” of May 6, it is no small wonder that everyone is racing to “fix” the problem with American equity markets. On Jan. 13, even before the unnerving drop of nearly 1,000 points and swift rebound, the Securities and Exchange Commission called for a “concept release” to evaluate the structure, efficiency and integrity of the nation’s financial markets. Many investors, analysts, academics and others have already weighed in on the subject through comments to the S.E.C. via its Web site. In addition, the rapid response of market operators like NYSE Euronext, Nasdaq OMXand Direct Edge suggests a renewed sense of urgency in cooperating, rather than competing, with each other to regain the confidence of Main Street investors. The idea of introducing circuit breakers is a sound and sensible way to help curb, but not eliminate, the possibility of another flash crash – or a more severe one. One key aspect of the flash crash that has not received much media attention is how the NYSE’s attempt to slow down the market when

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prices went askew was met with a deluge of electronic traders who were legally allowed under the S.E.C.’s “Reg NMS” rules to bypass the floorbased market-maker system. Thus, the one part of the United States equity markets to elect using human beings to sort rationally through the chaos of the afternoon was essentially ignored. Meanwhile, swift-moving but somewhat misguided electronic sell orders bounced frantically from one market to another like ping-pong balls, in a vain search for liquidity at a time when calmness, liquidity and rational thinking were sorely in demand. The newly proposed marketwide, stock-specific circuit breakers will help avoid this problem to some extent by allowing the exchange listing the beleaguered company’s stock to halt trading across the entire market. The listing exchange can then reopen the market for the stock within, say, a 5-minute period at a hopefully more sensible price. Since the NYSE and Nasdaq both use a form of “designated market makers” that are expected to make a fair and orderly market in their listed stocks, this new rule change will help avoid some of the flash crash’s problems. Electronic orders will no longer be able to ignore the listing exchanges during severe market imbalances. This temporary reconcentration of liquidity at the NYSE and/or Nasdaq can benefit all investors because the market makers can inject human thought, skill and experience that cannot be programmed directly into a computer. Unfortunately, this rule change will probably not be enough to halt a decline in the trading volume directed to the two largest stock exchanges. This could be a problem in the long run for the competitiveness of American capital markets because the losses in market share may become so great that the NYSE and the Nasdaq can no longer afford to run systems based on market makers. In other words, traders and investors may not be willing to pay for market

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makers’ services because, under normal conditions, electronic buy and sell orders are sufficient. But when the markets are imbalanced, as they were during the flash crash, market makers’ stabilization efforts can prove very helpful. Moreover, numerous studies across various types of global financial markets show that the introduction of a market maker can improve a market’s functionality, while a departure can hinder the market’s efficiency. It is ironic that when we need market makers the most, they may no longer be around because not enough investors were willing to pay for their risk management services. In an academic paper I co-authored with Prof. Wen Mao, a colleague at the Villanova School of Business, we examine how a designated market maker can add value when competing against an electronic-only market. The key point of the paper is that market makers can add value by serving as risk managers who reduce intraday volatility and who lower the chances of an order going unfilled. However, how much investors will want to pay for these risk management services will depend on a particular market’s demographics. In particular, this depends on investors’ holding periods and their risk tolerance. If the market is dominated by short-term traders with high risk tolerances (at least during normal conditions), then not many people will be willing to pay up. That would be despite the market makers’ providing what economists call a “public good,” one that provides benefits to society as a whole but which few people are willing to pay for. In the end, the NYSE and the Nasdaq market makers may no longer remain viable businesses. To avoid this, regulators, traders and other interested parties must consider carefully whether market makers should still play an active,

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integral role in U.S. equity markets. Otherwise, all the efforts to overhaul the way markets work may be missing the key to preventing another flash crash. Michael Pagano is a professor of finance at the Villanova School of Business. He previously worked in the financial services industry with Citibank as a financial analyst and at Reuters America. Mr. Pagano is a member of Finra, the Financial Industry Regulatory Authority, the first finance professor ever appointed to the committee.

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Making the Most of an MBA Internship By Jane Porter

Making the most of your summer internship requires some strategizing. "Whether an undergrad or an MBA, you need to go in with focus and a clear understanding of what your goals are," says Mike Lowenthal, Interim Director of the MBA Career Management Center at the University of North Carolina's Kenan-Flagler Business School. Finance internships in particular offer a lot of opportunities to network and work on various projects. Taking the time to think through your approach before you get to your first day on the job will help you capitalize on the experience and stay away from avoidable missteps, says Lowenthal, who has managed recruiting efforts at Goldman Sachs, Bear Stearns, and PricewaterhouseCoopers. "You have to decide how much you are going to make of it," he says.

Come Prepared Be ready for the fast-paced atmosphere of a finance firm. You should be prepared to jump right in even before your first day at the office. "Interns are given the opportunity to get right into the thick of things," says Keisha Smith, global head of recruiting at Morgan Stanley. "We are looking for people who can take advantage of that offering." As the start of your internship approaches, email your manager to ask if you can do any prep-work before you arrive, suggests Julia Zupko, senior associate director of career services at the University of Chicago Booth School of Business. Are there white papers or industry reports you should review? "If you show that kind of initiative, you might get more insight into the types of projects available," she says. Because each finance team tends to have its own particular preferences and culture even within the organization, Zupko also suggests reaching out to intern alumni either through your business school network or those you met during recruiting to ask their advice on what to expect.

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Be on Your Game Once you're in the office, it's important to show that you're prepared and eager to work, says Lowenthal. Paying attention to details is particularly important when dealing with numbers and clients, so you should try to make an effort even in those areas that might seem secondary to the job, he advises. Pay attention to the details hiring managers might notice -- keep your desk organized, be prompt to meetings, and always carry a notebook in hand. Managers see a lot of interns come through their doors and they are watching for those tell-tale signs of work ethic, he says. While such details seem small, they can make or break your first impression to managers and colleagues. "It's a 10 to 12 week interview and they are watching you the entire time," he says. While confidence is critical in the finance world, so is a willingness to ask about things you don't know. "I've seen students assume that what's worked for them in the classroom will also work for them in the corporate world," says Smith. Recognize that each company and manager has a different work process in place that you need to take the time to learn.

Build Relationships In the whirlwind of introductions, pay attention to the people you'll be working with and make an effort to talk with them in the first week, says James Jablonski, instructor and director of the applied finance lab at the Villanova School of Business. Often interns in a financial firm will find themselves reporting to or taking on projects from multiple people. Try to map out these key people and establish a rapport with them early. "It's important to learn more about how to act and how to get things going in the very early stages so you can lay some ground work," he says. At firms big and small, interns should expect to interact with senior executives or be in close proximity to them often. Managers will be looking to see that you are handling such relationships with "maturity and poise," says Smith.

Make the Most of Mentorships Don't let the fast pace and stress of the job or those around you stop you from seeking guidance. While you may be reluctant to ask a busy coworker for help, at finance firms with formalized internships programs, you will likely be paired with a

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mentor who can answer many of your questions. Don't underestimate the importance of this relationship. Ask your mentor about the company culture, how to address work challenges you might encounter, or who you might benefit from networking with, says Lowenthal. Your mentor will be communicating with your manager, so make sure to be tactful about the relationship. But don't feel you can only turn to official mentors for help. Often, asking people who have recently been in the same position as you or administrative staff for guidance can be very valuable, he says. While a project or task you've been assigned may seem daunting, don't let yourself get intimidated. Remember that asking questions and seeking advice, is a part of the experience. "We want interns to ask questions early and often," says Smith.

Request Feedback You'll likely be working long hours and the weeks will go by quickly. But while it might not come up early on, don't wait until the end of the internship to find out how you're doing. While your manager will often offer a mid-summer performance review, the middle of the summer is too long to wait to learn what mistakes you've been making, says Zupko. "The key in the first six weeks is to check in with your manager and make sure you are meeting expectations," she says. While there is often a formal feedback process at larger banks, if the opportunity doesn't present itself, ask how you're doing, she advises. At Morgan Stanley, Smith encourages interns to check in with their manager after every completed project to find out how they did.

Socialize Strategically If you haven't picked up on it through the interview process, you'll soon learn that social functions play a big part in the finance internship experience. While it's important to get to know people and take the time to learn from those around you, Smith cautions interns against over-networking at the expense of your work. "Make sure you've mastered the work you've been given," Smith says. "The key mistake [interns make] would be pursuing networking as the ultimate goal of the summer." Keep in mind too that how you act off hours is just as important as how you act during office hours, says Lowenthal. He has seen too many finance interns lose out on a job offer at the end of their internship because of careless behavior at social events. "Just because you have a drink in your hand, doesn't always mean you should be drinking it," he says. "The social hours and the hours after work are an integral part of the internship experience."

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Have an Exit Strategy Your last week on the job will be here before you know it and it is no time to slack off after a summer of hard work. At a big finance firm, the end of the summer is often your last opportunity to prove yourself before hiring for full-time positions begins, so make sure to leave on a high note, says Zupko. At a finance firm you can expect to have worked on a number of projects over the summer for various people, but don't expect your manager to always be on top of what you've accomplished. As the end of the internship approaches. "Make sure the firm can see the work that you've done," says Zupko. Take the time to reach out to everyone you've met over the course of the summer in your last week. Tell them about the projects you worked on, what you learned, and thank them for their help, Zupko recommends. "The more people you can have to vouch for the excellent job you've done, the better your professional network," she says. --While there's no substitute for hard work, the success of your internships is often about fit. Forinvestment bankers that might mean your level of stamina; for sales interns it's your interpersonal skills and for private wealth management interns, that could mean your ability to work as part of a team, says Lowenthal. But while it's important to keep in mind that the internship is very much a trial period, don't forget it's a two-way street. "Remember that you are evaluating the firm as well," says Zupko. "At the end of the experience, ask yourself if it's the right fit for you."

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Villanova Alumna Eats (and Blogs) Her Way Through Magazine's Best-Dishes List June 6, 2010 By Andrea Fuller For someone who claims she's no writer, Lauren St. Clair Lynch has bitten off a big task. The May graduate of the Villanova School of Business is munching her way though Philadelphia magazine's "239 Dishes You Must Eat Now" and writing a blog about it. Ms. Lynch, who spent the second half of her senior year working on the project, plans to have tried each of the dishes listed in the January 2010 issue by December 31. So far she has eaten about 100 of them, and she keeps a schedule reminding her how many foods she needs to have tried by the end of each week. If her project sounds familiar, you've probably seen the movie Julie & Julia, in which the writer Julie Powell sets out to cook all the recipes in Julia Child's Mastering the Art of French Cooking. But Ms. Lynch's inspiration came not from the movie, but from coworkers who were flipping through the magazine one day. "Out of almost 250 dishes, I hadn't tried any of them," she says. "So I made it my mission to try all of them." The best dish she has tried isn't even on the list: key lime French toast at a restaurant called Supper, where the bibb salad was cited by the magazine. The worst? She's no fan of octopus, a key topping on a pizza at Osteria that she concedes was still fairly delicious. "If you're not into tentacles, it can be pretty hard to take," she says. Ms. Lynch's biggest obstacle is that she sticks to a mostly vegan diet when not eating items on the list. "Everything is fried or soaked in butter," she says. "There might only be two salads on the list. It's really appalling."

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Ms. Lynch, who draws the line at "anything that's made from a baby animal," has been joined in her quest by her friend Justin Jeffers, a fellow business-school graduate. He has guest-blogged about the lamb shoulder at Zahav. "I'll pretty much try anything once," he says. Ms. Lynch says blogging has helped her build friendships with her dining companions, like Mr. Jeffers, a Philadelphia native. It has also fed her. Ms. Lynch supplements her hobby with a PayPal account that allows fellow foodies to donate to her food budget and then savor her meals vicariously.

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States cap workers benefits to reduce shortfalls: Is your pension fund at risk? By Mark Guarino, Staff writer posted June 7, 2010 at 9:27 am EDT Chicago â&#x20AC;&#x201D; The funding crisis that will eventually hit Social Security is coming much sooner to a state near you. The ravages of the recession combined with chronic underfunding have created a $1 trillion shortfall, by one estimate, and threaten to undermine the pensions of state workers around the United States within the next 15 to 20 years. The probable results in many states: fewer guaranteed benefits for new state workers and either more taxes or fewer services. "These are not politically attractive options and not necessarily economically attractive options, but for the last 30 years state governments have been more than happy to pay money for stuff they don't have, and someone has to foot that bill," says Jeff Brown, a former economic adviser in the Bush administration and a finance professor at the University of Illinois at Urbana-Champaign. "There's no way to get around it." With the worst-funded pension system in the nation, according to the Pew Center on the States, Illinois is a now a testing ground for how to fix the problem. The challenge is large. In June 2009, accrued liabilities reached $126 billion, $62 billion of which was underfunded. In December, a state commission put the underfunded amount at $77.8 billion. In April, Illinois Gov. Pat Quinn signed a reform bill that he said would stabilize pensions and save taxpayers $200 billion over almost 35 years. The measure hikes the retirement age to

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67 and caps pension benefits. Anything state workers earn above $106,800 won't be included in pension calculations. But there's a catch: The reforms only apply to new hires starting January 2011. It's a dilemma for states around the country. How much will state governments really cut and how much of the problem will they merely push onto the shoulders of the next generation of workers?

Illinois reforms too tepid? In Illinois, critics say the reform doesn't go far enough. The bill offers steps in the right direction but does "nothing to address the immediate crisis for how the state is going to pay for the pension funds this year," says Laurence Msall, president of the Civic Federation, a nonpartisan tax policy think tank in Chicago. He says the state needs to increase the contribution requirements for existing employees to help steady a problem that, if not addressed seriously within the next decade, may lead the state into bankruptcy. "At the end of the day, the size of the liability is so large it is only going to be major structural changes in the existing funding structures that can help stabilize Illinois's finances," Mr. Msall says. Changing the pension rules on existing state employees is a political risk, which is why it is hardly broached by legislators who are also beneficiaries of the system. For some states, the solution is not tenable because the pensions are guaranteed by state law. Veteran employees have the most protections, either because they live in a state where their pensions have a constitutional guarantee or because state courts have established them as a right under common law. Either way, says Professor Brown of the University of Illinois, the courts have legally bound states to keep those pensions intact. So if state money dries up, lawmakers will be forced to make draconian cuts or order big tax hikes to make up the difference. Lawmakers would likely turn to retiree healthcare next, which is not constitutionally protected. "There are a lot of ways to do this without simply saying, 'Hey, your pension's gone.' Legally or politically, I can't see [a pension cut] happening," he says.

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One way around state constitutions State constitutions do provide one emergency option for governments to back out of their pension obligations, according to Amy Monahan, a professor at the University of Minnesota Law School who specializes in employee benefits. States have "police powers," she points out, which give them fundamental rights to protect the welfare of their citizens in a crisis, which in this case would allow a legal "out" in providing benefits. But when and how they could be applied is still in question because they have yet to be tested in court. "It's a big unknown," Ms. Monahan says. The public sector workers under the most threat are new hires at the lower end of the pay scale, such as road crews or janitors, who have less mobility than higher-paid professionals. "If you're a state worker, you don't have much recourse if your pension is reduced. They're in a worse situation," says J. Fred Giertz, an economics professor at the University of Illinois at Urbana-Champaign and an elected member of the State Universities Retirement System board of trustees. Past reform measures have not kept pension funds from losing value, especially when state lawmakers don't follow through on promises to make up for previous shortfalls. In 2000, over half of states fully funded their pension systems, according to a 2010 study by the Pew Center on the States. By 2008, only four states had: Florida, New York, Washington, and Wisconsin. That's why the pension shortfall now stands at an estimated $1 trillion nationwide and is growing, Pew says.

One answer: a 401(k) for state workers A possible solution may be to make the same change in public pensions that the private sector has largely already made. Instead of traditional pensions, which guarantee a fixed payment, states could fund 401(k) type retirement plans that only guarantee the level of pension contributions. In this scenario, the investment risk shifts to the employees. Despite resistance from public-sector unions, more states will be looking at this type of system as state economies worsen, says Peter Zaleski, a professor of economics and statistics at the Villanova School of Business, outside Philadelphia. "I'm all for [pensions] if states are responsible enough to fund them. But the problem is they haven't been."

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Newly Tenured ... at Beloit, Le Moyne, St. Catherine, Vanderbilt, Villanova June 10, 2010 The following individuals have recently been awarded tenure by their colleges and universities: Beloit College -- Kate Linnenberg, sociology -- Scott Lyngaas, modern languages and literature -- Matt Tedesco, philosophy Le Moyne College --Bruce Erickson, history --Jennifer Gurley, English --Lisa McCartan Kim, criminology --Farha Ternikar, sociology --Diane Zigo, education St. Catherine University, in Minnesota --Joann Bangs, international business and economics --Corjena Cheung, nursing --Megan Kalina, business administration --Sook Lim, library and information science --Hui Wilcox, sociology

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Vanderbilt University --Julie Adams, electrical engineering and computer science --Eric Barth, mechanical engineering --Franz Baudenbacher, biomedical engineering --Aniruddha Gokhale, electrical engineering and computer science --Deyu Li, mechanical engineering. --William Robinson, electrical engineering and computer science --Florence Sanchez, civil and environmental engineering Villanova University --Scott Dressler, economics --Stephen Liedtka, accounting --Scott Newbert, management --Narda Quigley, management --Daniel Wright, operations

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Hayward acts to stem BP identity crisis By Carola Hoyos in London Published: June 21 2010 19:18 | Last updated: June 21 2010 19:18 At BP’s sprawling campus in suburban Sunbury-on-Thames and in the elegant halls of its headquarters in St James’s Square, Mayfair, the realisation that the company was in deep trouble set in about a week ago, two months after the deadly explosion of the Deepwater Horizon rig in the Gulf of Mexico. In spite of a barrage of news stories and internal e-mails from Tony Hayward, chief executive, who had decamped to Houston almost immediately, and town hall meetings led by the long-time chief financial officer, Byron Grote, employees from information technology to mergers and acquisitions felt relatively unaffected, “like ostriches with their heads in the sand”, as one person who works at BP described it. “The general feeling was one of utter malignment, being accused of having caused the accident before the actual cause of it has been established.” But that sentiment has been replaced by fear and shock after BP’s recent announcement that it is cutting three-quarters of this year’s dividend payments and establishing a $20bn claims fund. That quantified for the first time the magnitude of the problems. Members of one BP team well versed in the challenges of raising finance wept when they heard the news. In the following days employees began cautiously voicing anxieties about possible redundancies. Decisions over discretionary spending, whether on laptops or hiring contractors, ground to a halt in many departments as anxious middle managers awaited direction from higher ranks. Mr Hayward acknowledged that concern in his most recent intranet message to employees last week. “I recognise that the decisions that we have announced on our dividend, the capital programme, and divestments will be painful to many people – including, of course, to many of you.”

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But keeping his staff updated remotely is no longer enough. It is one reason Mr Hayward is back in London. For the past two months Iain Conn, head of refining and marketing, and Mr Grote have been running day-to-day business while Mr Hayward has been in the US. So far that has raised little concern among analysts and investors. But some say it cannot go on much longer. It is only the chief executive who can decide on the future of billion-dollar projects such as drilling in the deep waters of Angola, expanding BP’s Tangguh natural gas project in Indonesia and the development of the Shah Deniz field, a giant oil and gas development in Azerbaijan. “There is some research that shows that geographic distance, in terms of the leader being away from employees during these kinds of events, is detrimental,” says Patrick Maggitti, professor at Villanova University and co-author of Leadership in Hypercrisis: Leading in the Face of a Shaken Culture. “In a hypercrisis, employees question their identity and it is important that the leader is seen as sharing the impact,” he said. He cited Rudy Giuliani, mayor of New York city during the terrorist attacks of September 11 2001, as a good example of a successful leader in a hypercrisis, because he helped people by sharing the experience. Mr Hayward’s task is made more difficult by the fact that, unlike the mayor, he has had to be in two places at once – London and the US. Even so, the chief executive’s record has been far less impressive. Mr Giuliani’s job was on shaky ground before September 11 and his reaction to the crisis made him indispensable, but with Mr Hayward the opposite has been the case. “Before the spill, Hayward was seen as turning around the company and making it safer,” said one person close to BP. Thanks to his warmth and ability to talk with employees one to one and in small groups, Mr Hayward was better liked than his predecessor Lord John Browne, the person said. But since the spill, employees had grown frustrated and annoyed with his gaffes, such as publicly wishing for his life back and spending last weekend sailing. “Sailing does not exactly send the message of shared impact,” Mr Maggitti said. This week, Mr Hayward will have a chance to soothe his employees’ fears and answer concerns that have grown after BP announced an asset disposal programme of at least $10bn.

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“The wind of austerity is already blowing,” notes Jon Rigby, an analyst at UBS. But he adds that Mr Hayward must make clear that he is pushing not for cost cutting, but for asset sales and reduced capital expenditure. “It has got to be top-down. The main decisions are: invest or don’t invest? Keep or sell? Not ‘can we do this cheaper’?” Mr Rigby said. Keeping BP from a demoralising identity crisis may be just as critical for the future of the company and of Mr Hayward, whose position as chief executive is seriously in doubt. Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.

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Startups replacing summer jobs for students Wed, Jun 23 2010

By Deborah L. Cohen CHICAGO (Reuters) - Eric Heinbockel recalls going on a Wall Street interview the day investment bank Bear Stearns collapsed. With his chances of landing a coveted finance job dwindling, the former Columbia University undergraduate began exploring more entrepreneurial options, eventually launching a business that lets customers build their own chocolate bars. "We had a difficult time finding jobs," said Heinbockel, 24, who founded in August 2009 with two buddies and nearly $100,000 in financial assistance from friends and family. "I was offered three jobs - all of them entirely commission based with no support." Nearly a year later, is on its way to becoming one of the first successful customized chocolate makers in the United States. The Cherry Hill, New Jersey venture hopes to reach $1 million in sales in its first full year and is gearing up to hire additional production workers. Across the country, similar stories of entrepreneurial pluck have been unfolding among the ranks of recent college graduates facing one of the most sustained job market declines in decades. In June, unemployment stood at 9.7 percent, hovering at levels it has maintained since the recession took hold in 2008. ENTREPRENEURIAL GENERATION While the dismal outlook for corporate jobs is certainly a strong catalyst, academic observers said there are other factors at play, noting that 20-somethings today tend to approach entrepreneurship as if it's their birthright. "This is the most entrepreneurial batch of students I've ever seen," said James Klingler, assistant professor of management and entrepreneurship at Villanova School of Business outside Philadelphia. "These young people have tools that are literally like breathing to them that previous generations didn't have," he said, referring to the globalization of information and the advent of social media. "The other factor is we have raised these kids so that, no matter if they couldn't hit the ball, they were heroes. They're very optimistic." Jay Rodrigues, creator and CEO of DormNoise, a company that develops interactive calendars for students on college campuses, epitomizes the current crop. Rodrigues, still a full-time student who enters his senior year at the University of Pennsylvania's Wharton School this fall, raised nearly $1 million in venture financing for his company and now supports three full-time employees working from their homes. "Adding those pressures on top of school was really challenging," said Rodrigues, 21, who has also maintained a high GPA and even found time to pledge a fraternity. "I just kind of put my head down and chug forward."

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Student entrepreneurs often have an underlying social mission. Consider Yeoman Organics, a t-shirt company run full-time since December by creator Joe Levy, a UC Davis graduate who majored in economics. Levy, who cultivated a taste for entrepreneurship after interning at beverage maker Hint Inc., raised less than $50,000 from family and has been operating the business from his parents' home, learning production and design along the way. "The economy made me want to do this even more," said Levy, 22, who makes his organic shirts in San Francisco using subcontractors and wants to bring more manufacturing back to the United States. "I wasn't and am not going to be deterred by naysayers." Neither was Blake Ferguson who co-founded Mangia Technologies three years ago, a business that allows sporting event patrons to text message food orders to concession providers from the comfort of their seats. The venture has raised roughly $2 million in seed capital to date and serves the likes of Salt Lake Stadium, Scottrade Center and Philips Arena. "Clearly we are no longer in a culture where somebody goes to work at a company and 30 years later they're still at the company," said the 27-year-old Salt Lake City-based entrepreneur. STARTUP SCHOOL The prolonged downturn is forcing people to rethink their plans for a career characterized by steady paychecks and progressive promotions. In addition to MBAs starting new ventures, is an array of graduates possessing practical skills ranging from information technology to graphic design. Many of them, too, are hanging out their own shingles. That's the case at Westwood College, a Denver-based career school with 17 locations. According to a poll, last year 10 percent of Westwood's graduates started their own businesses, up 2 percent from the prior year. "We really believe it's partly due to the economy," said spokeswoman Kristina Yarrington. Entrepreneurs like Danielle Baker are making a go of it with little more than an idea and some determination, bootstrapping along the way. Baker, a 24-year-old recent graduate of California State University Northridge with a degree in English, had planned on becoming a teacher. But the economy and the arrival of her second child led to a change in direction. She decided to take a stab at starting her own copywriting business, specializing in the needs of companies creating an online presence. "When we were starting this out, there was a period when my husband and I had it so rough," said Baker, who recalls her bank balance falling to just $400. Over the course of six months she has built a steady base of three to four active customers and a waiting list of projects in the wings. "Although you don't have the security of a 9-to-5 job, it's like you're creating more security," she said.

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MBA Students' View on the World Cup Villanova Students give us the real scoop on what they think about the World Cup!

I interviewed five Villanova business students to gather their perspective on the 2010 World Cup. Read on to learn their individual views about who can reap the benefits of this massive sporting event, exactly how hard soccer players work in relation to how much they get paid, and a couple other cool business viewpoints! Trevor Hayward Trevor is from Dublin in Ireland, 26 years old and worked in Operations before business school. Which country are you rooting for in the World Cup? I spent a lot of time in Amsterdam over the years, so at this point in the game, probably the Netherlands. I lived in Australia for 2 years so I would have supported Australia but they've since been knocked out. In your opinion, who works harder for their buck - American football players or soccer players? That's a tough call. I think they both work hard, and although each market is regulated to a certain degree, each player is valued by the market, therefore players are generally compensated for their worth, at least to the buyer. Does one work harder than the other I don't think is a fair comparison. An American football player is unlikely to be a good soccer player, and visa-versa, therefore I don't think they compare

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How big do you think soccer will get in the United States? How big is the potential market for this sport? It seems that soccer in recent years has certainly gotten bigger, with more people playing it, although that's only my own opinion from anecdotal evidence. I don't see it ever becoming a major sport compared with American Football, Baseball, Hockey etc, but I think it will be a small market that will grow, just not exponentially. Do you think the World Cup will bring lasting economic benefits to South Africa? I believe it will. Studies have shown that major sporting events like the world cup and the Olympics can increase exports by up to 30%, and this is a lasting effect, not just a once off event in the year in which the event is held. Mega events like this allow countries to showcase what their country has to offer, not just in terms of tourism, but also in products and materials. Obviously bars/pubs generate massive revenues from big sporting events, but are there any other businesses who could also benefit from the World Cup? Events such as these, especially when a country gets quite far in the event, increases consumer spending. From an economic perspective, spending begets spending, with bars/pubs then having additional money to spend on other things, so not only are the bars/pubs benefiting, but all of their suppliers, employees, and pretty much all of their stakeholders benefit. In a depressed economy where consumer spending is down, an event such as this can have a dramatic effect and really change the economic tide. *************** Leo Li Leo was born in China but grew up in Texas and NY. He's currently working as an investment analyst while going to school part-time. Which country are you rooting for in the World Cup? U.S.A (until last week was U.S. and France, let's just stop there)

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In your opinion, who works harder for their buck - American football players or soccer players? There's only one football, and endurance is the key to the game here, not stopping every 5 second for a play and restart. World class soccer players always start when they were a kid, but to be a pro American football player you could start at any age (under 25) How big do you think soccer will get in the United States? How big is the potential market for this sport? I think it's getting really big, I was shocked to see more than 34,000 people showed up for the Philadelphia Union's home game. There are a lot of fans here, it's just that the MLS skill level needs to improve before turning those fans back to domestic games vs. the EPL. Do you think the World Cup will bring lasting economic benefits to South Africa? Definitely in the short term, but the long term benefits are going to be hard to measure. For instance, if 4-5 years down the road South Africa improves their standard of living and business environment, would it be attributed to the world cup? Partially for sure, but to what extend? Obviously bars/pubs generate massive revenues from big sporting events, but are there any other businesses who could also benefit from the World Cup? Well, obviously FIFA is the big winner here, also there are beverage companies (coke, and Pepsi), Sporting good companies (Nike and Adidas). broadcasting companies (ESPN) could be benefiting greatly from the sport *************** Jennifer Cross Jennifer Cross is 30 years old and was a nationally ranked alpine ski racer before she became a finance consultant. Which country are you rooting for in the World Cup? I was rooting for the US, and given their ability to clinch incredible goals during the most crucial moments have given all US soccer fans a reason to cheer!

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In your opinion, who works harder for their buck - American football players or soccer players? In my opinion, US soccer athletes clearly work harder for their paychecks than American football players. Considering their average salaries alone, US soccer players take home, on average, $70,000 per year, while the average professional football player earns more than ten times that amount, at a staggering $770,000 per year. How big do you think soccer will get in the United States? How big is the potential market for this sport? The potential for growth of this sport in the US is huge. Already, the US has seen a significant increase in participation, from young children to adult leagues alike; much of this growth can be attributed to the 1994 World Cup, which was played the US for the first time. The market for US soccer will undoubtedly grow; its potential is unknown. Do you think the World Cup will bring lasting economic benefits to South Africa? Given precedence that the World Cup brings worldwide recognition, it can be assumed that South Africa will enjoy the same economic benefits that the US has, as all eyes are on this emerging nation. As it stands, the World Cup is expected to generate 21.3B Rand (equivalent to just over $2B), of which 12.7B Rand will be contributed to direct spending, and an estimated 159,000 new jobs will be created as a result. This contribution will impact South Africa incredibly, as unemployment has been extremely low for this emerging nation; adding jobs, and increasing tourism should enable significant growth for this South Africa. Obviously bars/pubs generate massive revenues from big sporting events, but are there any other businesses who could also benefit from the World Cup? With sponsorships for the 2010 World Cup, Wal-Mart expects its sales to increase 1%-2%, for each nation that reaches the quarter finals, in which they have a store present. Similarly, Adidas expects to see an increase of almost $2M in sales, directly related to World Cup advertising. Marketing is an enormous aspect of World Cup soccer. Other businesses that may indirectly benefit from the World Cup will include local soccer clubs, clothing stores and retail shops that sell World Cup paraphernalia.

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*************** Chris Mitrovich Chris Mitrovich is from Staten Island, NY. He is 28 years old and works as the Vice President at an asset management firm. Which country are you rooting for in the World Cup? USA (unfortunately we are out!) In your opinion, who works harder for their buck - American football players or soccer players? American football players. The physical toll on their bodies is incredible. They are at the most financial risk because their careers are short & contracts are not guaranteed. How big do you think soccer will get in the United States? How big is the potential market for this sport? I do not think soccer will get too big in the US. It does not have broad appeal to the American sports fan. For soccer to get big in the US they need to change the rules to increase scoring. Basketball, Football, Baseball, and Hockey have all adjusted the rules to promote more offense. Americans will be into the World Cup every 4 years but I do not think soccer will attract main stream appeal. Do you think the World Cup will bring lasting economic benefits to South Africa? If South Africa can leverage the infrastructure put in place for the World Cup it can attract new opportunities such as a summer Olympics and other International sporting events. Also, more people may be inclined to vacation to South Africa given the attention from the World Cup. Obviously bars/pubs generate massive revenues from big sporting events, but are there any other businesses who could also benefit from the World Cup? Apparel companies. I have noticed a lot more soccer jerseys and t-shirts around the streets of New York City. ***************

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Patrick Demchko Patrick Demchko grew up in Pearl River, NY but now lives in Philadelphia now. He was a technical marketing engineer before business school. Which country are you rooting for in the World Cup? Of course, I root for the USA primarily. Their play this year was full of grit and heart, which I think endeared this particular team to the US public more than in previous years. I secondarily root for Ireland and the Ukraine because of my heritage but unfortunately neither qualified the WC this year In your opinion, who works harder for their buck - American football players or soccer players? This is a tough one as American football players, on an average basis; earn significantly more than US soccer players which clearly favors the soccer players working harder. However, because of the elite level you need to play at to even make an NFL roster tips the scales back in favor of football players as the NFL version of soccer is really the European leagues. How big do you think soccer will get in the United States? How big is the potential market for this sport? The market is as large as it is for any other sport but, you need to find and market the mass appeal of your product. Frankly, to appeal to the American public, MLS would have to address the issue of talent first and formost. A less effective solution (but, much less costly) solution would be to exploit the exposure of the World Cup and create legitimate USA/MLS stars like Landon Donovan. Media exposure and promotion could help but, may not be long lasting. Lastly, MLS needs to identify more closely with the cities in which their teams are located. If you can watch a superior product elsewhere, playing to the local emotions of the sports viewing public could entice more people to take pride in their team, despite the conception they are inferior. Do you think the World Cup will bring lasting economic benefits to South Africa? Another tough call. To analyze this, I would have to understand the investment the country made into their stadiums and other needed infrastructure. This likely will be interesting for some tourists to visit for a few years but, for lasting impact, these stadiums would need to be put into

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continual use. If a city is not large enough, or significant infrastructure needs to be built specifically for the games, it can often be hard to sustain. Obviously bars/pubs generate massive revenues from big sporting events, but are there any other businesses who could also benefit from the World Cup? First and foremost are the hotels. Having high cost, sold out rooms for well over a month has to give a great boost to the yearly figures. There could be some lasting impact for 2-3 years of this type as well. Restaurants, local artists, sculptors, local shops and tourist hot spots will all fare well and benefit from the tourist population influx.

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Wednesday, July 7, 2010 4:34 PM Canada hurt by wealth fund injections in U.S., study finds Boyd Erman Sovereign wealth fund investments in U.S. financial institutions at the height of the financial crisis may have helped to calm American markets, but they sure didn't help Canada's. That's the conclusion of an academic study coauthored by a Villanova Business School professor and a Canadian businessman. Surprisingly, there wasn't much effect on equity prices from sovereign wealth funds in firms like Bear Stearns and Citigroup. Money markets were a different story. The study found that news of a sovereign wealth fund capital investment caused U.S. short-term interest rates to drop anywhere from 13 basis points to 61 basis points. North of the border, however, corporate rates would jump between 15 and 29 basis points. "I was surprised by the market implications of large capital injections into U.S. financial institutions," said co-author Vince Gasparro, because "you would think that would stabilize global markets." The study, officially titled "Sovereign Wealth Funds: An Early Look at their Impact on Debt and Equity Markets during the 2007-2009 Financial Crisis," was done by Michael S.

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Pagano, a professor at Villanova School of Business, and Mr. Gasparro, a Toronto private equity executive who is one of Prof. Pagano's former students. It was published in the May/June issue of the Financial Analysts Journal. "This is, as we argue in the paper, a kind of a crowding out effect," said Prof. Pagano. "Yes it was beneficial to the U.S. to have that money flow into the country, but....there was a pulling out of capital from other countries." What's more, the rate for overnight loans between Canadian banks also would jump in the wake of a sovereign wealth fund investment, which suggests the injections made banks more fearful of a failure in their midst, not less. "When they are scared to loan each other money overnight, it's pretty significant," Mr. Gasparro said. There are a few lessons in the findings, Mr. Gasparro said, and one is that Canada needs to do more to draw investment, if being on the outside in a situation like a sovereign fund injection is so hurtful. "Is Canada waving its flag enough to get the attention of people? Because there's a finite amount of capital, it's going to go to not only where the best investment is, but also where the best-known investment," he said. "We need to make ourselves more visible." Prof. Pagano said he wanted to know what the effect on markets really was when sovereign wealth funds showed up to put billions of dollars into sagging financial

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institutions in the U.S. Canada was a benchmark because its banking sector didn't need any injections. "It was a nice little laboratory," said Prof. Pagano. Mr. Gasparro had some patriotic reasons. As a Canadian, he wants to see more Canadian content in studies of capital markets. "There's a lack of Canadiana in a lot of these business journals; we just don't get the sort of attention we deserve," he said. The pair are considering a followup study in a couple of years to try to measure the long-term effects.

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Thursday, July 08, 2010 4:17:01 PM

Study Finds Canada the Innocent Bystander Amid Turbulent Markets A report analyzing the market's reactions to investments by sovereign wealth funds, with approximately $3 trillion in assets in 2008 and a projected $15 trillion by 2015, finds that wealth fund injections in the US have unintended consequences. (July 8, 2010) -- While sovereign wealth fund investments in US financial institutions during the economic crisis may have helped settle American markets, they hurt Canada's, a new study shows. "Canada was a good case study because it emerged from the financial crisis relatively unscathed," Michael S. Pagano, a Villanova Business School professor and co-author of the study, told ai5000. "We found it was beneficial to the US to have money flow into the country, but there was an extraction of capital from other countries." According to an academic study co-authored by Pagano and Vincent Gasparro, a Toronto private equity executive who is also one of Pagano's former students, news of a SWF capital investment resulted in US short-term interest rates dropping up to 61 basis points while corporate rates in Canada jumped between 15 and 29 basis points. Advertisement

The authors found that news related to the financial crisis and SWF investments in US and European firms not only affected returns on US money market instruments and firms’ common stock but also created negative “spillover” effects on Canadian money markets and Canadian firms’ equity returns, the report stated. Pagano told ai5000 that there are a handful of lessons to learn from this study. First, investors need to think about where SWFs are putting their money, because it could signal to the outside world where global capital is being reallocated. Gasparro told the Globe and Mailthat Canada needs to do more to lure investment. "Is Canada waving its flag enough to get the attention of people? Because there's a finite amount of capital, it's going to go to not only where the best investment is, but also where the best-known investment is," he said. "We need to make ourselves more visible." Pagano and Gasparro are considering a follow-up study to measure the long-term effects of SWF injections. The study, titled "Sovereign Wealth Funds: An Early Look at their Impact on Debt and Equity Markets during the 2007-2009 Financial Crisis," used data from 2006 and 2009 in its analysis and was published in the May/June issue of the Financial Analysts Journal.

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CAPITOL REPORT July 14, 2010, 12:39 p.m. EDT

New faces will strengthen Bernanke's grip at Fed No major policy shift seen By Greg Robb, MarketWatch

WASHINGTON (MarketWatch) -- President Barack Obama's three nominees to the Federal Reserve Board will strengthen Fed chief Ben Bernanke's control over the institution, but don't expect major policy shifts as he's already had his hand firmly on the monetary-policy tiller, Fed watchers said this week. Given current economic conditions, events -- and not personalities -- will dictate monetary policy moves over the next six months to a year, economists said. And Bernanke is feeling his way along, not ruling anything in or out. "We are in very unusual macroeconomic times. I think it is unlikely the Fed knows where they are going to be in six months or a year," said Irwin Morris, an expert on the Fed at the University of Maryland. Obama has nominated Susan Bloom Raskin, a former staffer at the Senate Banking Committee who worked her way up to be the commissioner of financial regulation for the state of Maryland, and Peter Diamond, an expert on employment issues and professor at MIT to the two vacancies on the central bank's seven-member board. In addition, Obama has picked Janet Yellen, the current president of the San Francisco district bank, to replace Fed vice chair Donald Kohn, who is retiring on Sept. 1. The three nominees are scheduled to answer questions in a public hearing of the Senate Banking Committee on Thursday. If confirmed by the Senate, as expected, the Fed board would be at full strength for the first time since April 2006 only two months after Bernanke became Fed chairman.

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Many on Wall Street sees doves when looking at the new nominees, and for good reason, said Laurence Meyer, a former Fed governor and now top independent Fed watcher at Macroeconomic Advisers. "You can be sure that President Obama didn't nominate anyone whom he and his economics team deemed to be a hawk. You can take that to the bank," Meyer wrote recently in a note to clients. If confirmed, Obama will have nominated five out of the seven Fed governors. A "dove' in Fed-speak is a policy-maker who doesn't have such a quick trigger-finger when facing a perceived inflation threat and would be more likely to keep interest rates low, whereas a 'hawk' would tend to shoot first - lean towards higher rates -- and ask questions later. Bernanke in charge Fed watchers cautioned that the market should not worry that the three nominees would have the Fed keep rates at the current close-to zero level for too long, and widely expect that the three officials will vote with Bernanke on monetary policy matters. Bernanke will be able to walk into the Fed policy meeting with eight out of 12 votes in his pocket, Meyer said, meaning the seven Fed governors and the president of the New York Federal Reserve district bank. But this is not a shift. Bernanke is already "totally in charge," said David Jones, veteran Fed watcher and now chairman of DMJ Advisors. In addition, "there has always been an unwritten rule that rookie policymakers have very little influence," Jones said. Yellen, who is not a rookie, is expected to work quite closely with Bernanke as vicechair and be a "good soldier" for the chairman, Jones said. Bernanke's leadership style has undergone quite a transformation over the last four years, Jones said. Bernanke came into office promising not to be as authoritarian as former Fed chairman Alan Greenspan, who was known to ostracize other Fed governors at the

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merest whiff of policy disagreement. But during the financial crisis and the subsequent recession, Bernanke had to grab the helm tight and steer the Fed through uncharted waters with unprecedented policy responses. "Bernanke tried to stray away from policy dominance but in effect he has policy dominance," Jones concluded. "He picked a select group of policymakers to essentially weather the storm," Jones said. One of Yellen's first tasks may be to smooth any feathers among other Fed district bank presidents who felt left out of the policy-making process. Many of the Fed's innovative policy steps, including credit facilities and buying over a trillion dollars worth of housing related assets required only votes of the Fed board in Washington and not the district presidents. Victor Li, a professor of economics at Villanova University, said Bernanke did not have to resort to twisting arms to get other officials to follow him. Instead, Bernanke has operated in the broad middle of policy consensus. "It is not as if Bernanke is off to one side pulling people to that one side. He's relatively moderate in his orientation and is not far afield from the center of the group," said Morris of the University of Maryland. At the moment, this consensus, shared by hawks and doves alike at the central bank, is that "interest rates should be kept at extremely low levels until the unemployment rate shows significant improvement," Li said. But Bernanke does not attempt to choke off debate, analysts said. At the moment, there seems to be no agreement on how to tighten when the time comes, Jones said, and a debate has broken out over what to do if the economy weakens. Less confrontation on the Hill Analysts expect Congress to confirm the three nominees. The bitter atmosphere that surrounded Bernanke's quest for a second four-year term has evaporated, analysts said. Bernanke was confirmed by the narrowest margin in the history of the position after an often angry debate.

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"The nominations are going to fly through. Everyone wants to get it over after the agony of Bernanke's confirmation," Jones said. And in recent weeks, the Fed has emerged as one of the clear winners in the financial regulatory reform legislation that is close to final Senate passage. The Fed and other regulators have been given great latitude in the legislation to set out their new powers. Raskin, the former state regulator and banking expert, is expected to play an important role in this process.

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7/29/10 Parishioners at St. Stanislaus Kostka Church have voted before, most dramatically five years ago, in early January, when 98 percent of them rejected a measure ceding control of the church's property and finances to the Archdiocese of St. Louis. "It shows the people are together," parishioner Judy Jeglijewski said at the time. Another vote for the church, just north of downtown, is coming Aug. 8, and it's unlikely the people will be quite as together as they were in 2005. This vote â&#x20AC;&#x201D; termed a 'survey" by parish leaders â&#x20AC;&#x201D; will dictate to the St. Stanislaus board whether to settle a lawsuit with the archdiocese and accept Archbishop Robert Carlson's latest proposal to end a seven-year battle for control of the Polish church. The issue will generally be the same as it was in 2005: Is this group of Catholics ready to return authority over the parish to their archbishop? Since the 2005 vote, there have been multiple excommunications of lay board members, the parish itself has been banished from the Catholic Church and its renegade pastor was returned to the status of a layman by Pope Benedict XVI. All of which plays into the Aug. 8 vote. But below the fireworks of excommunications, supressions and laicizations, the heart of any deal offered by Carlson will be a change to the church's legal structure. In June 2003, Archbishop Justin Rigali, now a cardinal and the archbishop of Philadelphia, announced a massive legal restructuring of the archdiocese that would transform each parish from an unincorporated association to a nonprofit corporation. Chuck Zech, director of the Center for the Study of Church Management at Villanova University, said many dioceses around the country began changing their legal structures in the wake of the clergy sexual abuse scandal that erupted across the country in 2002. The traditional "corporation sole" legal structure put all diocesan and parish assets in the bishop's name, said Zech. That, according to civil courts, made all of a diocese's funds liable in legal settlements. In the corporation sole structure, parishes are considered unincorporated associations without identities separate from the diocese. But incorporating

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individual parishes protected their property and assets from lawsuits naming the bishop. Rigali hoped St. Stanislaus, like every other parish, would go along with the changes, but parishioners were unwilling to give up their unique place in St. Louis church history. In 1891, Archbishop Peter Kenrick agreed to allow the laity of the St. Louis Polish Catholic community to form a corporation that would govern the church's finances. Kenrick's move was not unusual in the 19th century, when immigrants often formed their own Catholic communities to buy land and build a church. By the 20th century, bishops had assumed control of most of those parishes around the country. St. Stanislaus was a holdout. In the archdiocesan-wide restructuring, Rigali saw a chance to rein in the Polish church, but he was transferred to Philadelphia soon after announcing the legal changes. It fell to his successor, Archbishop Raymond Burke, to complete the change. In the church's original bylaws, its lay board controlled the property and assets while the archbishop appointed its board members and a pastor. But in 2001, and again in 2004, the church's board rewrote its bylaws, eventually eliminating the archbishop's authority. The church set up the St. Stanislaus Corp. as its legal entity. In 2004, Burke â&#x20AC;&#x201D; a canon lawyer â&#x20AC;&#x201D; told the Post-Dispatch that the St. Stanislaus corporation was set up by Kenrick to operate "as a Roman Catholic parish within the disciplines of the church." In a declaration of excommunication of two board members, Burke wrote that since the church was suppressed in 2005, "the St. Stanislaus Kostka Corporation has never been and is not now a part of the Roman Catholic Church but instead is a sect ..." In 2008, the archdiocese and some former parishioners sued St. Stanislaus, asking a judge to restore the church to the structure that existed before the bylaw changes. Benedict transferred Burke to a position at the Vatican the same year, and a thid archbishop took up the St. Stanislaus battle. On Thursday, the archdiocese posted a letter from Carlson on its website explaining his proposal. "One of the concerns expressed again and again was that, even if an archbishop made a commitment to keep the parish operating so long as Roman Catholics of Polish heritage wanted to have a parish and were willing to support it, he could not bind his successors," Carlson wrote.

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That concern led to a proposed solution involving two cooperating corporations — one looking out for the interests of the parish, the other representing the archdiocese. Though, in reality, because of the way the parish board will be elected and approved, the archbishop would control both corporations. Parishioners discussed that offer in the church last Sunday with their attorneys, and will do so again on Sunday. The church's legal structure was key to those discussions. According to a summary of the proposal presented by Armstrong Teasdale attorney Richard Scherrer, and outlined in a document called "A Possible Resolution to the Litigation" handed out to parishioners, the two corporations would work like this: • The first would be a "St. Stanislaus Corporation," made up of a lay board elected by church members and approved by the archbishop. • The second would be a "Parish Corporation" run by a priest selected by the archbishop and who "would be in charge of day-to-day 'church-related' activities." The Parish Corp. would lease the church and rectory from the St. Stanislaus Corp. for 99 years; St. Stanislaus would adopt "new, up-to-date bylaws and articles of incorporation." Final sticking points, according to sources close to the negotiations, are the parish's legal fees and a severance agreement for the St. Stanislaus pastor, the Rev. Marek Bozek. The pope laicized Bozek in 2009, so he is no longer a Catholic priest. He has said in the past that he would someday like to be a bishop in an "underground Roman Catholic church." At their meeting this week, Scherrer told parishioners that both sides were still working on the details of Bozek's severance. "He would leave here with the gratitude and dignity he deserves," Scherrer said.

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August 1, 2010

Delaware crime: Pilferers prey on the faithful Too much trust makes church embezzlement common By GARY SOULSMAN and SEAN O'SULLIVAN The News Journal Delaware worshippers often speak of going to church to become better people, but this spring Christians got a wholly unexpected lesson in lying and theft. In May, at St. John's Methodist Church in Seaford, secretary Penny L. Kimbrough was arrested and charged with unlawfully writing checks to herself and getting a credit card by using the church's name. That same month at Christ Church Christiana Hundred, Shannon G. Tuso, an administrative assistant, was arrested for taking money from the Greenville Episcopal church, after being convicted of embezzling from a bank three years earlier. And at First Presbyterian Church of Newark, there is ongoing frustration over Carol H. Lind, a former administrator, treasurer and a respected choir member. She pleaded guilty to theft in a plea bargain in July 2009, but her restitution hearing has yet to be held in Superior Court. As a result, some members of the church have difficulties moving on, not knowing if the congregation will receive any of the missing $60,095 revealed in a forensic audit, said the Rev. Steve Brundage, the pastor. People have been hoping for "a public accounting of what, if anything, she will repay," he said. "My judgment is some people need that to get to forgiveness." The issue of church embezzlement extends beyond Delaware and is so pervasive that one management expert fears it could be the next big scandal in America's churches. "The issue needs the attention of churches," said Charles Zech, director of Villanova University's center for the study of church management. "They're so trusting, they fail to put in business protections that keep them from being taken advantage of." A Villanova survey of Catholic dioceses in 2006 found that financial officers were almost as worried about parish fraud as suits over sexual abuse.

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"We found an enormous amount of concern by those who watch over church funds," Zech said. On a question about embezzlement, 85 percent of responding churches said they had been victimized. But it's not just churches that need accounting protection. In Delaware, bonds of trust have been broken because of embezzlements across all strata of society -- banks, government, supermarkets, volunteer fire companies, law firms, beauty salons and churches. It's a crime of opportunity by people who present themselves as the best folks in the world, then take advantage of the trust they have earned, said U.S. Attorney David Weiss. With access to finances and little oversight, they begin to help themselves to money because of greed, addiction or financial pressures. Take Bernard Nowakowski. He slipped a check into his pocket as he left work one day at United Electric Supply near New Castle and was able to cash it. That led him to take more as he needed it to feed his gambling addiction. After nine years and 350 stolen checks, he'd taken $500,000. When he was caught, he said he was relieved and sobbed in court, apologizing "for all the hurt I've caused." FBI crime statistics show that Delaware has one of the highest per-capita rates of embezzlement. For instance, there were 291 reported embezzlements in Delaware in 2007 when the state had a population of 864,764, according to the FBI. In California, a state whose population is 42 times that of Delaware, there were 2,333 similar crimes that year. "I am unaware of anything unique to Delaware that makes us more susceptible to this type of crime," said Weiss. But without question, embezzlement is a "substantial problem" in Delaware, he said. In recent months, some high-profile embezzlements were resolved in Delaware: • William Hitch, head of finance, stealing $151,000 from the Laurel School District • Stephen Sassi, an accountant, stealing $1.5 million from two doctor clients • Wendy Davis, a bookkeeper, stealing $170,000 from a law firm where she had worked for 24 years • Cynthia Declet, a business manager, taking $287,744 from a small computer consulting business. Sentences in these cases ranged from probation for Hitch to three years in prison for Sassi. And while the courts do their best to see money is repaid, full restitution is rare, Weiss said. Usually, the money is spent on luxury items -- like trips, meals or hotel stays -- or addictions such as gambling and drugs, Weiss said.

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Nowakowski, who worked at United Electric Supply, plowed the $500,000 he stole into slot machines in Atlantic City, Dover Downs and Delaware Park, sometimes playing 24 hours a day. Now, four years after his conviction and two years after he left prison, Nowakowski sends the company a $100 check every month. "Frankly, it would take an eternity to pay off [what he owes] completely," said Gene Bruni, company president.

Few audits performed People attending the nation's 300,000 churches are among the most vulnerable. They come to meet good people, not to wonder who's going to rip them off after worship, said Chris Falkenberg, a former Secret Service agent who runs the private firm, Insite Security. In this setting, people let down their guard believing they are among holy and consecrated folks, said the Rev. Doug Gerdts, senior pastor of First & Central Presbyterian Church and treasurer of his denomination's regional governing body, New Castle Presbytery. "We also have some unbelievably pathetic accounting systems and nonexistent controls," Gerdts said. "It's not unusual to have one person in charge of everything and keeping records in their home and reporting to the congregation." "In the vast majority of churches, there is too much trust," said Villanova's Zech. "No one would think a minister or priest or selfless volunteer would embezzle and so they tend not to put in routine financial controls." He said he was surprised by the results of his survey sent to 174 Catholic dioceses that happened to include a question on embezzlement. Among those responding, 85 percent said that they'd had such a theft in the last five years. "The Conference of Bishops has provided good guidance on preventing the problem, but not enough dioceses are taking precautions," Zech said. Only three percent of dioceses were conducting an annual audit of parishes, while 21 percent said they never did the audits and 28 percent said they conduct an audit when a priest leaves a parish. If a discrepancy was found, would they prosecute? Zech said he doesn't know, given that one of the worst things a church can do is attract bad publicity. He said it's because of lax oversight that there are scandals like the one involving the Rev. Kevin Gray. He's the Waterbury, Conn., priest charged in July with stealing $1.3 million from Sacred Heart parish over seven years to pay for hotels, meals, clothing and male escorts. In January 2009, there was an arrest in the Diocese of Wilmington.

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Kenneth Hanbury, a 60-year-old deacon, was charged by Maryland State Police with embezzling more than $30,000 from Our Mother of Sorrows Parish in Centreville, Md., where he was the bookkeeper. "Any time you have money, there is going to be temptation, even though there are good people in our parishes," said Bob Krebs, a spokesman for the Diocese of Wilmington. In the diocese, each parish is required to have a financial council for oversight and to advise the pastor. And parish financial statements are reviewed each year at the diocesan level, said Krebs. A diocesan auditor visits a parish every two years to go over the books. That's also done when a pastor leaves a parish. The policy has been in place at least a decade, Krebs said. Still, Zech worries that embezzlements could be the next big crisis for the American Catholic Church. In his survey, almost 34 percent of financial officers said their biggest fear was the lack of financial controls at the parish level. Zech hates to say that churches are vulnerable because that "sounds like blaming the victim." Nevertheless, he said, embezzlement is a crime of opportunity and churches should make it harder for people to find that opportunity.

A congregation in shock No one has to convince the 220 worshippers at Newark's First Presbyterian Church of the need for oversight. The memory of the last three years is too fresh. A certified accounting firm, Wilmington's Jeter & Associates, showed that from January 2007 to December 2008, Carol Lind wrote at least 35 unauthorized checks that made their way to her bank. Lind, now in her 60s, was hired in the early 1990s as an office administrator and apparently did well under supervision, said Tom D. Runnels, a longtime member. "We're a loving congregation and that made us casual about our finances," Runnels said. The church had problems finding leadership and went through a period when pastors and interim pastors were there only a few years. During that period, financial oversight waned. The role of treasurer, which had been a volunteer role, was shifted to Lind. By 2000, she took care of vendor payments, processed payroll, monitored cash accounts, and prepared reports on the financial state of the church. She had control of the checkbook and wrote her own checks. "You could say it's a testament to faith that organizations run as badly as ours exist at all," Runnels said.

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If Lind needed extra money, it wasn't apparent. She drove a Mercedes, owned a home in Chester County, wore suits from Talbot's and the occasional mink. She began to funnel extra paychecks into her accounts as early as January 2007, said David Berkebile, president of the trustees. She covered the theft using a color copier that she'd contracted for at church. When statements from Bank of America and Wilmington Trust came in, she made her own versions using the copier and filled in new balances. (She also kept the original statements neatly stacked in a locked desk.) At first, church leaders did not know what was amiss -- only that it was impossible to get a detailed report for the annual budget meeting in the winter of 2007. Members of the finance committee say they went 14 months without proper accounting. "She always said she was working on getting people the records and our interim pastor would back her up, saying she had a lot to do," Runnels said. The theft fully came to light in the fall of 2008, when a church elder was visiting one of the banks and learned that an account, which should have had $60,000, was $10,000 in the red, Gerdts said. Gerdts got involved as treasurer of New Castle Presbytery, offering assistance in paying for a forensic audit. He also noted a reluctance to press charges. Gerdts said reporting the crime was a way to show the seriousness of the offense, a way to pursue repayment and a way for leaders to rebuild trust with the congregation, given that members felt let down by elders who had let this happen. So the church commissioned a full audit and used it to report her to the Newark police in early 2009. And the slow process of healing began with elders holding a series of meetings in which they admitted their failures. They also developed monetary reforms, Gerdts said. Now a team of three oversees the check writing, five teams of people take turns counting the Sunday collection and another team oversees accounting. There also is an annual report and review of finances for the whole congregation, Brundage said. It didn't hurt that when the embezzlement came to light, the congregation was interviewing a candidate to be pastor. It was Brundage, who had served 30 years in ministry. He said he wasn't scared by the controversy, and came in February 2009. "Theology is empty unless we trust that God is with us in the tough times," Brundage said. Initially, the crime's exposure led to a decline in membership and giving, Gerdts said. But the congregation bounced back. "They've worked hard to re-establish trust," he said.

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Today, positions that were previously vacant -- such as a part-time Christian educator and worship leader -- have been filled and the payroll is about where it was when Lind left, because much of the giving has been restored. "I think our church is as strong as ever," said Runnels, a member since 1977. But part of the Lind case is frustrating to members of the congregation because it's in legal limbo and because of the lack of media attention. In July 2009, Lind pleaded guilty to theft in Superior Court and was sentenced to two years in prison, though that was suspended for a year of probation, Runnels said. He said church members agreed to the sentencing because they were under the impression that Judge John A. Parkins ordered a plan for restitution to be completed within 90 days. A plan has yet to be presented in court. "I have people come into my office and say they're stuck wanting to know how come nothing is happening," Brundage said. "I understand why they feel let down." Frustrated, the church posted an open letter on its website in April asking that Deputy Attorney General Kevin Carroll give the case priority. Carroll wrote back to say the case "was overlooked as counsel caseload increased dramatically" but that he was seeking to have the Lind restitution hearing placed on the court calendar. "Is she able to pay?" said Bradley Manning, a public defender who represents Lind. "I can't answer that question. I know she and her husband are having financial difficulties. "All I know is that she admitted her guilt and there is an agreement she will pay." Lind declined to be interviewed for this story. Berkebile, a trustee, says church members would like the legal end to be settled because it feels unfinished. A lot of people don't expect to get much back but they'd be comforted if Lind apologized, he said. "I think even if she started paying 50 cents a month, some people could stop thinking about it," he said. "But some will never heal."

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August 1, 2010

How to spot and stop an embezzler By GARY SOULSMAN The News Journal As director of Villanova University's center for church management, Charles Zech is often asked for stewardship guidelines. Here are recommendations for preventing fraud: • Share duties among several people when money is involved. The collection is safer when counted with a group. And when large checks are written, it's good to require more than one signer. Control of checking and oversight of books should be in the hands of more than one person, too. • Make time and money for annual audits. People who think about engaging in fraud will think twice knowing they will be caught in an independent audit. • Insist that people handling money take a yearly vacation. If suddenly extra cash appears, there's a problem. That's how many thefts come to light. • Someone caught stealing should be reported to the police and prosecuted. This prevents future theft and shows a congregation that leaders value members' gifts. • Notice the lifestyle and behavior of volunteers and staff. Lavish and addictive habits are a motive for theft. • Zech stops short of suggesting background checks for staff and volunteers, though others disagree. They say such probing can be discreetly done and will bring to light people who may have embezzled in the past.

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Quest for enlightenment or self interest 9 August 2010 | By Vanessa Drucker The global crisis prompts business students to choose specialized, career-focused courses as the job market shrinks. Meanwhile, doctoral graduates seek answers to the “new normal”. In the 1970s - my generation - students embraced journalism, many inspired by Watergate (and some by Robert Redford’s cinematic portrayal thereof). A decade later, law schools saw an upsurge in enrolment; after that business schools attracted battalions of MBAs, while students also pursued economics and finance courses at universities. And how have American business students reacted to the global financial crisis? Are they disillusioned? Their theoretical framework, with its elegant models like capital asset pricing, diversification and efficiency, no longer seemed to work, as markets melted down in 2007. Why bother with carefully constructed portfolios, when all correlations merged to one? Bringing home the bacon The answer depends in part on students’ differing motivations. Most of those who choose economics-related disciplines are in it for credentials, jobs and earnings potential. “They come to us to land jobs in investment banks and consulting firms,” says Vikas Agarwal, a professor of finance at Georgia State University. “They want to learn just enough for interviews. They’re not looking for the holy grail.” He recalls how last September, at the start of his course on hedge funds, his students only wanted to know how to make money. Agarwal told them that if he knew that, he would not be standing there. He could however, teach them ways not to lose money, and help them understand fundamental strategies for trading. Of course every Wall Street aspirant recognizes that jobs have become more scarce. The highest ranking diplomas are still the most likely to open doors. Richard Herring, Jacob Safra professor of international banking at the Wharton School of the University of

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Pennsylvania, notes that “many of our students believe that they will get some of the few investment banking jobs that remain, although most are adjusting their expectations to the new normal.” Terry Connelly, the dean of the business school at Golden Gate University in San Francisco, reports that finance enrolment is up, although only thanks to interest from foreign students, mainly from China, South Korea and South-East Asia. His students prefer MBAs tied to specific career path “concentrations” like health services, human resources, project management or even sustainable management. “Employers like these too,” he adds. Old timers remind that they have seen business cycles come and go; yet less seasoned veterans exhibit stoicism too. Professor David Nawrocki reports that undergraduates at Villanova School of Business are “taking the longer view”. Many of them, who come from the New York area, grew up close to the financial industry. “They know investment banking is cyclical, and are confident that it will come back eventually.”

That Holy Grail One contingent, especially among doctoral graduates, is embracing the challenge of constructing fresh models. Unlike the more subdued job seekers, they are curious and enthusiastic. A similar phenomenon took place during the 1930s, when enrolments in economics rose significantly. “It’s as if a crisis convinces students that the subject is really important to understand,” Herring suggests. The market turmoil will doubtless set off a tsunami of doctoral theses, many intended to help prepare for the next Big One. (Ironically, like all black swans, it will almost certainly come from an unexpected direction.) “It’s as if a crisis convinces students that the subject is really important to understand” The financial upheavals have reinforced the limitations of yesterday’s textbook models, which may be too simplistic. We now need something to replace them, since “we are in the business of analyzing and understanding the realities of the marketplace,” as Agarwal says. Questioning those models may require more integrated disciplines and critical thinking, to replace a canon of assumptions. Finance has experienced an extraordinary evolution over just the past 50 years. From Harry Markowitz’s portfolio theory it has progressed through Eugene Fama’s efficiency hypothesis, (which he and colleagues later modified substantially) as well as asset pricing models. Lately, behavioral approaches have surfaced as alternatives to rational market theories.

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The process continues. The most intellectual students have not lost their passion to create new frameworks that will be one step closer to an elusive reality. They share some of the energy of medical researchers who are confronted with different strains of viruses every year, and continue to work on improving vaccines. For the next generation of financial theorists, perceived inadequacies of models offer an extraordinary opportunity to revise and rebuild.

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Questions surround St. Stanislaus vote Membership is central to how human beings organize themselves. They are members of groups they don't choose (gender, race) and groups they do (bowling leagues, Facebook). Not so long ago, membership of a particular faith group was something people were born into â&#x20AC;&#x201D; a group they didn't choose. But in the modern age of congregation shopping, more people of faith are choosing a house of worship that best fits their personalized concept of spirituality. A good example is St. Stanislaus Kostka, the church just north of downtown that has been locked in a property and authority battle with the Archdiocese of St. Louis for seven years. Since its foundation at the end of the 19th century, St. Stanislaus has had mostly Polish members who chose to worship there because the Mass was celebrated in their native language, and because the rest of the membership recognized a familiar Polish culture. Since 2005, when former St. Louis Archbishop Raymond Burke declared the church no longer Roman Catholic, it has attracted members from a pool of religious seekers who have become disillusioned with the Catholic hierarchy and church doctrine. Their Pied Piper is a former Catholic priest, the Rev. Marek Bozek, an activist fighting for Catholic approval of issues antithetical to church teaching â&#x20AC;&#x201D; female priests, homosexual behavior. On Sunday, 442 members of St. Stanislaus voted on how to proceed in their lay board's legal fight with the archdiocese. Just as it seemed the two sides were getting closer to a resolution to the 2-year-old lawsuit, Bozek and his board called for a vote, or a 'survey" as it was renamed by St. Stanislaus attorneys. Parishioners were asked if they agreed or disagreed "with the direction the Board is pursuing toward settling the lawsuit." In July, the board's chairman, Richard Lapinski, had sent out a postcard to parishioners telling them they should be prepared to vote on a "reconciliation offer on the table" from St. Louis Archbishop Robert Carlson. And, indeed, a couple of weeks later, Carlson made public a letter detailing his offer of a resolution with the church. St. Stanislaus attorneys met with parishioners in the weeks before the final vote to go over the proposal and update them on the status of the lawsuit.

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On Sunday, 58 percent of those voting rejected their board's direction toward settling the lawsuit, and Carlson publicly expressed his disappointment. Almost immediately, the vote was challenged by those unhappy with the results. Absentee ballots were lost in the mail, some parishioners said. Others claimed they were turned away on the day of the vote. Why? They weren't on the membership rolls. Churches, synagogues and mosques have a variety of systems for keeping track of members. Catholic parishes determine their membership rolls by registration â&#x20AC;&#x201D; typically a simple process of signing your name on the dotted line. Monsignor John Shamleffer, judicial vicar for the archdiocese, said 'someone stays a parishioner until they ask to be removed or die." Neither frequency of attendance, nor level of financial contribution is counted toward, or against, membership, said Chuck Zech, director of the Center for the Study of Church Management at Villanova University. Zech said Catholic parishes are "notoriously poor at cleaning their registration rolls" and that the majority have names on the rolls of members who have long since died or moved away. "I've never heard of a parish that deleted someone from their registration rolls merely because they haven't been attending Sunday Mass or financially supporting the parish," Zech said. Bozek said that's never happened at St. Stanislaus. And he said that "unless someone calls or e-mails and asks to be removed, no one is removed without a request." In order to become a St. Stanislaus member, a person fills in some basic information â&#x20AC;&#x201D; name, address, age, phone number â&#x20AC;&#x201D; on postcards available in the church. They then received a two-page application asking for information about religious information such as baptism, confirmation and marriage. After mailing in the application, they receive a stack of envelopes each month with a dedicated number. That number goes on the rolls, and determines membership, said Bozek. And voting privileges. Bozek said there were 508 households currently on the St. Stanislaus rolls. Some of those are single people, some entire families. Longtime parishioner Richard Bach, who heads a group called the Concerned Parishioners of St. Stanislaus, said that while he and his wife were able to vote Sunday, his six children were denied, despite their participation in previous votes. Several people told stories of jumping through hoops to obtain absentee ballots, and of absentee ballots arriving too late to return in time for the vote. Parishioner Gerry Koziatek, said it took three phone calls before she finally received her husband's absentee ballot in the mail.

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Greg Kultiniak, a longtime Bozek critic, said while he and his wife and two sons were eventually able to vote, the process involved making multiple copies of drivers licenses, trips to the church and ultimately no confirmation that their sons' absentee ballots were counted beyond vocal assurance from a board member. Bach said elderly people who'd been members of the church for decades were turned away from voting because they didn't have identification with them. Bozek said more than 100 absentee ballots were sent out, but he was unsure of the number that were returned in time for the vote. Burke moved the Polish apostolate, or official presence of Polish Catholics in the archdiocese, to St. Agatha in 2004. Many of those who followed the apostolate are native Poles who are now anxious to get back to St. Stanislaus after six years away from their church. St. Agatha has 123 names on its register, though the archdiocese says its more like 290. Because they left, they say, they were denied a voice in Sunday's vote. St. Agatha's pastor, Czeslaw Litak, wrote an open letter to St. Stanislaus parisioners who were allowed a vote, urging them to vote in favor of Carlson's proposal. It was signed by St. Agatha's parish and finance council members. Bozek said the vote was more than fair and that anyone who was legitimately due a vote was able to do so. He said "at least 50 percent" of the 185 who voted in favor of Carlson's proposal were St. Agatha members whose names remain on the St. Stanislaus rolls. "The people who voted against us," Bozek said, "were not our regular worshippers."

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Learning from Failures Tuesday, August 24th, 2010

Failure can be better than success â&#x20AC;&#x201C; at least as a teaching tool. New research from the University of Colorado examines how well companies deal with success and failure in the long run. The study found that when companies learn from a big mess and make smart changes, they often flourish in the long run. It also claims that knowledge gained from success is fleeting, while lessons from failures last much longer. Villanova University business professor Ron Hill says during this recession, many companies have shown a new interest in studying flops: Hill: Sometimes when things are going very well for a company, they tend to get lulled into a quiet and silence and do the same things over and over again and they are broken from that reverie when something bad happens. So this is an opportunity look at themselves and to see not only what went wrong, but to make that not happen again Hill says teaching future entrepreneurs how to learn from a flop is especially important today â&#x20AC;&#x201C; because many young people entering the work force have been shielded from ever experiencing failure: Hill: Every team they have gone out for, they have been allowed on that team, teachers go out of their way to benchmark against themselves, but not against the people around them, they haven't faced some of those early, inconsequential failures that allow them to grow up Hill says it's important for companies not to blame one individual in the aftermath of failure, but to look at the larger structures that lead to troubles.

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Foreign Schools Target U.S. Professors By DIANA MIDDLETON

Business schools in Asia are courting professors in the U.S. with the prospect of doing leading research work as the schools aim to strengthen the credibility of their graduate programs. As business schools in Asia work aggressively to become brand names in business education, their dominant strategy has been targeting and recruiting Western-trained professors. Deans at those schools say nabbing "star" professors is critical for building clout in the research world and subsequently attracting the brightest students to their graduate programs. When Xu Bin accepted a three-month teaching stint at China Europe International Business School, CEIBS, in 2003, he had no plans to abandon his tenured position at the University of Florida's Warrington School of Business. Instead, Prof. Xu saw the visiting professorship as a change of pace and a chance to spend time in Shanghai, where he grew up. Xu Bin, who left a tenured position at a U.S. university, is now a professor at the China Europe International Business School in Shanghai. But while there, the professor of economics and finance was struck by the quality of the students and the rhythm of the city life. At the same time, CEIBS's dean made an attractive full-time offerâ&#x20AC;&#x201D;a competitive pay package, three months rent-free in a twostory house close to the school and plenty of opportunities for research about emerging markets. Prof. Xu took the job. "The school really values high quality, bilingual faculty," says Prof. Xu, who left Florida to join CEIBS in the fall of 2004. "Our scarcity makes the university treat us well." Prof. Xu is part of a growing number of mostly foreign-born U.S. business school professors being lured overseas by more competitive salaries than schools abroad have ever been able to offer, lighter course loads, the promise of more time research and direct-access to emerging economies.

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The defections are adding to a problem American b-schools have faced for the better part of the past decade: a shortage of business Ph.D.s to teach the 100,000-plus students who enroll in graduate-level business programs each year. Over the past two decades, many U.S. schools trimmed down or shuttered business Ph.D. programs, resulting in fewer professors entering the market. Bernie Milano, president of the KPMG Foundation and the PhD projectâ&#x20AC;&#x201D;a program designed to bring more diversity to business school facultyâ&#x20AC;&#x201D;says international students are a major contingent in U.S. Ph.D. programs and in junior faculty slots. "As international schools offer more lucrative opportunities for students, U.S. schools are no longer training Ph.D. students to stay here," Mr. Milano says. "The top [U.S.] schools have the financial and reputation resources to never feel it. But it's the flagship state schools that will have to make difficult decisions." While most elite schools haven't had trouble retaining faculty, many local and regional players are more vulnerable. Alex Sevilla, assistant dean and director at University of Florida's M.B.A. program, says talent at many schools is being poached similarly to the way top managers at Fortune 500 companies are picked off. He says schools like his have the same caliber of faculty, but sometimes aren't as well-known globally, which makes them more vulnerable. The average base salary for business professors at 30 elite business schools is $153,000 for new doctorates in nine-month contracts, according to Dan LeClair, vice president and chief knowledge officer of the Association to Advance Collegiate Schools of Business. Across all schools, the average full-time business-school faculty salary in 2009 was about $111,000, according to AACSB. That figure makes it easier for Asian schools to compete, and international schools are also able to gain traction with summer research stipends and better or less expensive health-care options, he says. AACSB doesn't track compensation for business schools abroad. But Mr. LeClair said that based on his experience, a new doctorate going to a highly ranked private business school in Europe might earn the equivalent of $125,000 and receive public health care. A similarly ranked school in Asia might draw $90,000 salary and offer housing, he added. James Danko, the dean of Villanova School of Business and board member of the Graduate Management Admission Council, says schools have been caught by surprise by the groundswell of faculty interest in non-U.S. business schools. "Twelve years ago, we would have scoffed at international schools," competing for faculty, Mr. Danko says. "But as [they] have achieved greater credibility, talent is becoming a defining commodity."

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At Villanova, Mr. Danko has tried to head off the competition by increasing salaries and providing more high-profile or interesting assignments to retain star faculty. But many midtier schools will have a tough time justifying higher pay amid hiring freezes and staff cuts brought on by the recession, he says. While Asian schools are able to offer competitive pay packages for the living standard in the region, it's not just the pay package that makes it hard for faculty to resist the lure of a foreign post. At CEIBS, star professors are offered lighter teaching loads and extra Executive M.B.A. courses for more pay, says Lydia Price, dean of CEIBS. Ms. Price regularly scouts potential recruits, tracking target professors' research and momentum— sometimes for years, before making an offer. The Hong Kong University of Science and Technology, HKUST, is currently raising money to create 10 new chair positions, in fields like marketing and entrepreneurship, specifically to attract star faculty from the West, says Steve DeKrey, a former assistant dean at Northwestern University's Kellogg School of Management who was hired to help build the school's M.B.A. program. Mr. DeKrey, a senior associate dean at HKUST, says he was attracted to HKUST by its scholarly focus, collegial environment and lucrative vacation allowance of more than two months. Hiring someone like Mr. DeKrey from a brand-name U.S. or European business school is an asset in attracting faculty and students. Ms. Price of CEIBS says her background as an American and the fact that she was a marketing professor at INSEAD, an international business school with campuses in France and Singapore, has helped her tremendously when it comes to recruiting faculty. What's more, her own degree—a Ph.D. in marketing from Columbia University—has also been attractive in recruiting, as it adds to the image of prestige and credibility of the program, she says. Ajit Rangnekar, dean of Indian School of Business in Hyderabad, says he tries to attract star researchers by targeting professors with ties to India and giving them more support than Western competitors. Hiring research staff to assist professors in India is significantly less expensive than it is in the U.S. The extra help often means professors can churn out deeper research at a faster pace, he says. Gillian Yeo, dean of Nanyang Business School in Singapore, has built a faculty that is almost entirely U.S.-trained with promises of the opportunity to do cutting-edge research in a hot region for emerging trends and business. Such research is more accepted now that Asian companies and economies are becoming more transparent. The prospect of doing cutting-edge work has been appealing to prospective faculty, she says, and since research is one way to build institutional credibility what faculty produce also helps the school.

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Experts: Harrisburg's planned default will draw attention on bond market WRITTEN BY SCOTT GILBERT Friday, 03 September 2010 03:43 (Philadelphia) -- Some financial experts say Harrisburg's plan to default on a nearly $3.3 million bond payment coming due in a couple weeks will raise concerns on the municipal bond market. Assuming it happens, it will be the second-largest municipal bond default of its kind to occur in the U.S. this year. The largest, amounting to $227 million, happened in Jefferson County, Alabama. David Fiorenza, an economics professor at the Villanova School of Business in Philadelphia, sees a silver lining to Harrisburg's situation. He says the current low interest rates make it possible for cities like Harrisburg to refinance -or re-fund -- bonds they issued years ago. "I do see it as an opportunity for finance professionals in the marketplace as well as the ones who are hired by the municipalities to go in and look at their debt situations and hopefully come out of it with payments back to the insurers," he says. Fiorenza says it would be similar to a home mortgage. The bonds would be called back and reissued at much lower rates, saving the municipalities a lot of money. He concedes, though, it wonâ&#x20AC;&#x2122;t solve all the city's problems. An analyst from Janney Montgomery Scott in Philadelphia tells the Wall Street Journal the missed payment by Harrisburg could raise fears on the bond market that other distressed issuers might be likely to skip bond payments guaranteed by insurance companies.

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Schools, Businesses Focus on Critical Thinking -

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SEPTEMBER 12, 2010, 11:37 P.M. ET


While the ability to think critically is, well, critical in the workplace, employers have long complained that many of the young college graduates they hire seem to lack this skill. Now, universities are trying to fix the problem before their grads ever meet a recruiter. Paths to Professions Penn State Tops Recruiter Rankings See a slideshow of the Top 25 Schools Research Agreements Play Big Role in Jobs

When asked which skills new college graduates needed to improve most, more than half of the respondents to the question on The Wall Street Journal's survey of 479 college recruiters named some combination of critical thinking, problem solving skills and the ability to think independently.

These results echo what the Business Roundtable, a network of company chief executives, found in a 2009 Interns: Not Just for Summer survey of 600 employers. Despite the recession and high See the complete Paths to Professions report. jobless rate, 61% of respondents said it was difficult to find qualified employees. Susan Traiman, the Roundtable's director of public policy, says the skills companies felt were most lacking were work ethic, communication skills and analytic skills. "We heard this over and over again," she said. Some Chiefs Stay Close to Alma Maters

Sara Holoubek, chief executive of Luminary Labs, a boutique consulting firm in New York, says the recent graduate analysts she hires, though "extremely smart," can't seem to turn their isolated observations about a client's business into a strategyâ&#x20AC;&#x201D;despite the fact that they are often better observers than their superiors. This inability to assert an opinion holds young employees back in client presentations, she adds. George Washington University's Columbian College of Arts and Sciences is one of the schools addressing the problem. Its new core curriculum will focus on developing reasoning and critical thinking. Beginning in 2011, for example, freshmen will no longer simply complete a science class and get credit for a required course. They'll have to prove proficiency in scientific reasoning to pass. To measure that, 2010 Media Report professors are designing evaluation standards and assignments toVillanova test students onoftheir reasoning skills. Page 211 School Business Other schools are reformatting classes to shorten lectures and include peer teaching. Harvard University

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physics professor Eric Mazur first pushed the concept in the 1990s when he began using a short lecture that ends with a problem that students discuss with peers, instead of spending an hour lecturing. The student-to-student aspect helps cement understanding of the concepts, say experts. The model has been adopted in other science and math courses at Harvard, the Massachusetts Institute of Technology, and the University of California at San Francisco, among others. Similarly, in the last few years, the National Center for Academic Transformation has led the redesign of large lecture courses at dozens of colleges to ramp up the time students spend working on problems in small groups or in guided learning labs. Villanova University's School of Business is taking another approach, recently combining its introductory accounting and finance courses and its introductory management and marketing courses to form co-taught, cross-disciplinary classes more aligned with what students will encounter on the job. The idea, says marketing professor James Glasgow, who co-teaches the marketing and management course for sophomores, is to "take the concept… and then [show] the application of that knowledge so the student comes up with a better understanding." Meanwhile, many employers say they are trying to help new hires develop these skills. Ms. Holoubek, for example, recently signed up an employee for external training. Other companies make it a point for managers to spend extra time developing independent and critical thinking skills in their new hires. The Business Roundtable has launched the Springboard Project to find ways to bridge the gaps. Chaired by Accenture PLC Chairman and Chief Executive William D. Green, the group's latest effort is a free online video series called JobSTART101, which aims to teach what Mr. Green dubs the "dot-connecting skills." Subjects include how to articulate a point of view. "We need to raise the water table by improving the analytical skills, the critical thinking skills, the communication skills that are necessary for really almost every job in today's economy," said Mr. Green. The videos will be released in the fall to college career centers and social networking sites. Whether today's young graduates are less able to think critically than their forbears, or if it's that the current pace of the workplace requires more independent thinking than it did in the past, is up for debate. Some experts speculate that online search engines and peer-generated information from socialnetworking sites have dulled young people's research skills. Todd Davis, executive director of recruitment at Burbank, Calif.-based Warner Brothers Entertainment Inc. says he sees increasing numbers of his recent college graduate hires relying on such sources when creating strategies. That means many don't understand the reasons why a strategy might—or might not—work. Many take search engine results as fact, he says. "We have individuals who are making assumptions without doing any significant research," says Mr. Davis, who oversees hiring of more than a thousand employees a year. "They think they understand what they're saying…but they don't have an understanding of why." Write to Marisa Taylor at

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THE OFFICE ROMANCE September 16, 2010, 5:00PM EST

Why Office Romance Is on the Wane With legal threats on the rise, especially from "third parties," office affairs could be the latest recession casualty In 2002, Wal-Mart Stores (WMT) dispatched an investigator to Guatemala City on a top secret assignment: to spy on factory inspection manager James W. Lynn as he toured a facility with a female colleague. During four days of surveillance, the investigator eventually uncovered the evidence he was after in the form of "moans and sighs" emanating from their Holiday Inn bedroom. In accordance with Wal-Mart's rigid "no-fraternization" policy, Lynn was fired. The time-honored institution known as the office romance has survived threats like corporate no-fraternization policies, philandering chief executives, and David Letterman. (Or, in the recent case of former Hewlett-Packard (HPQ) CEO Mark Hurd, ambiguous contractors.) Now there's a new legal menace: scorned workers who claim that an office affair fostered an invidious work environment, even if they weren't actually involved in the romance themselves. So-called third party or hostile work environment sexual harassment claims are difficult to prove but easy to allege, particularly by employees fearing for their jobs in a sluggish economy. As job insecurity has mounted and third party claims have risen, the office fling may become the recession's latest victim. "It seems likely that there's a certain opportunistic element to what's happening out there," says Sondra Solovay, a director of Workplace Answers, a San Francisco-based compliance services company. "Employees who fear for their jobs are making sexual favoritism complaints as a means of ensuring their own job security."

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The most pressing threat to the office romance, Solovay says, is the rise of the retaliation lawsuit. Such suits are waged by workers who claim they were fired to prevent them from filing a discrimination claim against their employer. Currently, retaliation suits are contributing to a wave of litigation that has employers in a panic. The Equal Employment Opportunity Commission's records show claims involving retaliation grew by 23 percent in 2008—roughly twice the rate of all other claims. They totaled 32,690 and accounted for approximately one-third of claims filed with the agency. Retaliation claims rose again last year, accounting for 36 percent of the total. The EEOC, whose mandate is to enforce federal antidiscrimination laws, has added 170 investigators across the country, in part to address the issue. A once-amorous workforce already seems to be feeling the effects. This February, 75 percent of U.S. workers surveyed by job search website (MWW) believed a workplace relationship could bring a conflict. Sixty-two percent said they felt office romances were a distraction from job performance.'s annual Valentine's Day romance poll has shown an alarming decline in reported office trysts. In 2006, 50 percent of respondents claimed to have partaken in a workplace relationship during their career. Earlier this year, the number dropped to 37 percent. This is disturbing news not only for employees but also for their bosses. Some management experts believe that a workplace fling can "greatly increase something called 'engagement,' " says Stephanie Losee, co-author ofOffice Mate, a guide to finding love in the workplace. "That's when you're excited to come in and work and you care about your company." For these reasons, National Public Radio, Princeton Review (REVU), Pixar (DIS), and Southwest Airlines (LUV) encourage in-house matchmaking. Frederick S. Lane III, author of The Naked Employee, argues that co-worker couples spend more time at work, take fewer sick days, and are less likely to quit. More than ever, all it takes is one overly amorous apple to ruin the fun for everyone. Claims of such behavior led to the landmark office romance legal ruling—Miller vs. Dept. of Corrections, in 2005—involving a story of a classic prison love triangle. Plaintiffs Edna Miller and Frances Mackey, both

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corrections officers, claimed they were discrimination victims of Chief Deputy Warden Lewis Kuykendall, who allegedly was sleeping with three of their colleagues. Miller and Mackey alleged that Kuykendall habitually rewarded the three women with promotions, bonuses, and other special treatment. On one occasion, they said, a paramour announced that if she didn't get promoted, she would take the warden down with her knowledge of "every scar on his body." Worse, Miller and Mackey described a prison rife with awkward tension, lovers' quarrels, and public displays of affection. When Miller told Kuykendall about an additional affair one of his girlfriends was having with another female employee, she said, the message was passed on to the paramour, who summarily beat Miller into submission and locked her in a closet. In its ruling, the California Supreme Court declared that neither Miller nor Mackey were victims of traditional sexual harassment. However, it concluded, their claims implied they suffered the collateral damage of an office romance, even though they weren't intimately involved. The case subsequently redefined sexual discrimination liabilityâ&#x20AC;&#x201D;and the intervening years have only seen the law evolve more. Third party discrimination claims have helped further the rise in retaliation and develop the legal theory of "Sex Plus." Regarding the latter, courts have ruled that when a romance enters the office, an employee can prove discrimination based on gender "plus" another particular characteristic. If a manager's failed office romance forces him or her to focus more heavily on the work, his increasing demands on, for example, a pregnant underling could give her the grounds for a lawsuit. Under Sex Plus, the pregnant woman could allege that the office romance had provided an underlying basis for a separate act of discrimination. "When the courts find in favor of the client, then interpretation of the law gets expanded," says Dr. John A. Pearce II, an endowed chairman at Villanova School of Business. "We're seeing the emergence of more and more third party cases. Attorneys go to court and say, 'Following the logic of these laws, we think that you ought to

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find in favor of our client in this particular new twist.' And that's exactly what's happened." According to the EEOC, money paid out by companies in sexual harassment lawsuits has averaged only $47.8 million over the last 12 years. That low figure, many believe, is indicative of employers' preference to settle out of court rather than face an ugly lawsuit. However, thanks to the rise of third party discrimination claims, the EEOC recovered $376 million on behalf of discrimination victims in 2009. Fearing such settlements amid a recession, a growing number of companies are fighting back. One popular method is forcing employees to sit through Web-based compliance training sessions that underscore the perils of a little affection in the copy room. By consolidating sensitivity seminars and policy education into a mandatory online tutorial, companies can put the onus of awareness on the employee. "The dollar amounts that companies are spending on training in general are significantly down from the 2007 and 2008 period," says Gary Fusco, a senior director at Workplace Answers. "But [one of] the two areas where companies actually grew in terms of real dollars targeted was compliance." Another strategy is forcing employees to sign "love contracts," the office version of a prenup, stating their mutual affection will not interfere with the workplace. If such documentation effectively takes the fun out of an office romance, well, that's the point. Most companies, however, haven't yet decided what to do. According to a survey of more than 600 companies by the Society for Human Resource Management, 13 percent reported having a written policy addressing intraoffice affairs; 14 percent claimed they had an unwritten one. "Companies are still on the fence," says Fusco. "They want to see what happens next before making their move." One such company is discount retailer Costco (COST). A recent issue of its monthly magazine, The Costco Connection, featured a photo of two co-

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workers locking lips over a queue divider under the banner headline, "Should dating co-workers sign a 'love contract'?" The Connection offered a panel of experts to inform the debate. "At issue here is whether an organization should invite a host of organizational vulnerabilities so as not to impede an office romance," noted Francie Dalton, one of the featured "experts from the field" and founder of Maryland-based management consultancy Dalton Alliances. "That it may happen anyway is not sufficient to negate the need for clear policy....This isn't being hard-heartedâ&#x20AC;&#x201D;it's acting to avoid ill-advised risk."

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Broaddus, Croushore Say Inflation Language Suggests Fed May Act By Vivien Lou Chen - Sep 21, 2010

Former Richmond Fed President J. Alfred Broaddus and former Fed economist Dean Croushore said the Fed’s statement today saying inflation remains below levels consist with price stability suggests the central bank will act to keep prices from falling. They spoke after the Fed said today that it is willing to ease monetary policy further to boost the economy and support prices. Villanova University professor Victor Li, OppenheimerFunds Inc. economist Brian Levitt, former Fed economist Paul Ballew and Wells Fargo Securities LLC Chief Economist John Silvia also spoke today. Broaddus: “If there are clear signs, perhaps in inflation expectations, that the deflation risk is rising, then at that point the Fed will need to act decisively.” “This is a recognition by the committee that the inflation rate is now well below its desired level.” “There may be some internal politics or dynamics going on.” Even so, “this seems to signal that the Fed is more concerned about the risk of moving toward deflation.” “The economy is healing. It has taken a big hit and it has taken some time to get things moving, but I do think it is healing.”

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“I do not think you can ignore the short run in the sense that if deflation were to get under way, I am not expecting that, but if something like that were to become apparent, the Fed needs to act to preempt that. Because if we go back into the economic hole, the costs are tremendous and it will make it all the more difficult to do the kinds of things we need to do with economic policy over the longer term.” Croushore: “Policy makers are so far apart on where they think inflation is heading and at such polar extremes that there’s probably a lot of healthy debate inside the Fed. But to the outside world it sends mixed signals about what they’re willing to do and how effective those steps might be.” “The language in the second paragraph on inflation has changed significantly so that it makes it sound like the Fed is closer to additional quantitative easing than I thought they would be. What worries me is that they did mean to send that signal.” “Going into the meeting, I thought their message would be that they stand ready to do more if conditions deteriorate further. This suggests they aren’t willing to wait and the odds that they might do more have gone up after reading the statement.” Li: “The Fed still has tools and it sounds like they’re willing to use them.” “The statement is an attempt to instill confidence among consumers and financial markets, and those expectations can go a long way toward helping sustain an economic recovery.”

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“The economy is on its way to recovery. Unemployment will come down. It’s going to take some time. Meanwhile, people are still suffering. The economic outlook for many people is still not great, but we’ve certainly turned a corner.” Levitt: “The Federal Reserve is clearly going to wait to see a deterioration in economic activity or a decline in inflation expectations before it embarks on an asset-purchase program or further expansion of its balance sheet.” “Bernanke will want more of a full consensus on the committee before embarking on further quantitative easing. The question now is, even if the Fed were to aggressively expand its balance sheet, what impact would that have on the market? The biggest challenge facing the Fed is that interest rates are already very low and expanding the money in banks’ reserves doesn’t necessarily mean that money is going to circulate through the economy.” Ballew: “There’s a two-part communications strategy: One, that they’re on top of situation as far as how the economy is playing out, and two, that they stand at the ready to intervene with any other additional actions.” “The Fed has done a good job of comforting markets. The message has been very consistent once again, which is soothing to the markets.” “The Fed’s biggest problem is it’s got a recovery with lot of weight on its back and a lot of uncertainty about fiscal policy.”

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“It’s interesting that the opening paragraph is such a rambling paragraph. It’s almost a laundry list of all the challenges that the economy is experiencing.” Silvia: “They are basically saying the risk is on the downside for deflation and they don’t want to deal with that. They will be biased toward another round of quantitative easing, probably in the fourth quarter.” Another round of quantitative easing might start at “$250 billion to $300 billion,” and its size could then be adjusted based on incoming data, he said.

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Parish Day for Pastoral Priorities Implementation THURSDAY, 23 SEPTEMBER 2010 15:19 WRITTEN BY PETER G. SÅNCHEZ

Harvesting Gifts for the Church of Camden WILLIAMSTOWN — “This is a graced moment to set course for the future of our diocese.” These were the words spoken by Bishop Joseph A. Galante, in describing the importance of last Saturday’s event at Our Lady of Peace Parish here, kicking off a new initiative that will help parishes throughout the Diocese of Camden address the six Pastoral Priorities identified by them in 2005 and 2006. Called “Harvesting Gifts for the Church of Camden,” the pastoral plan is the culmination of an effort under Bishop Galante’s leadership, in collaboration with clergy, religious, and laity, to strengthen parishes and renew parish life in every area of the diocese. At more than 140 Speak Up sessions held with Bishop Galante in 2005 and 2006, parishioners in the Diocese of Camden identified six pastoral priorities: Lifelong Faith Formation, Youth and Young Adults, Liturgy, Lay Ministry, Vocations, and Compassionate Outreach. In front of more than 400 clergy and parish leaders on Saturday, Sept. 18, Bishop Galante and members of the Pastoral Planning team presented a planned process, as well as newly-developed resources, to help all parishes carry out these critical ministries. “What we do in these next months and years, will shape our church for generations,” Bishop Galante said. “We need to take up the torch, to renew this church that we love.” Sister Antoine T. Lawlor, IHM, has been named by Bishop Galante as the director of Pastoral Priorities. She is working together with the staff of the Pastoral Planning Office and the Diocesan Pastoral Priority Task Force to coordinate these efforts.

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Larry Farmer, of the Pastoral Planning Office for the diocese, also spoke to those gathered, introducing a “collaborative and cyclical process (that has) greater potential to help us in ministry.” Called “Plan-Do-Check,” the process will effectively implement the pastoral priorities, where parishes first “Plan,” using the diocesan Vision, the parish mission, and Pastoral Priorities for guidance, set objectives, create a timeline, determine personal responsibilities, and resource requirements; then “Do,” where members of the various diocesan offices and the parish team work together to carry out parish ministry objectives. Diocesan offices provide parishes a “toolkit” to help with on-site training, start-up, and, finally, “Check,” where parishes act to adjust, find solutions for their plan, and participate in a periodic review of their pastoral plans. Members in this process, Farmer said, should be the pastor, parish staff members, the Pastoral Council, Finance Council, and other members of parish ministries. He added that parishioners with a specific expertise, for example, in communications, planning, customer service, education, or fundraising, should be asked to assist. Parish toolkits, Farmer mentioned, are on a new website: These toolkits will be regularly updated, and new ones provided as parish needs are identified. Farmer said there are four key factors that are designed to bring about success in this implementation process: “It is crucial to have a fuller understanding of who we are as the Church of South Jersey; to share resources and best practices; to engage in current and new ministry practices, and then to respond to the call of Servant Leadership modeled by Jesus Christ himself.” The keynote speaker was Dr. Charles Zech, director of the Center for the Study of Church Management and professor of economics at Villanova School of Business, and co-author of the 2008 book, “Listening to the People of God: Closing, Rebuilding and Revitalizing Parishes.” “We’re looking at the face of the future church,” Dr. Zech said. “The entire country’s watching this diocese, to see if doing things the right way really works.” Dr. Zech outlined the most important activities of implementation: well-informed parishioners; prayer; recognizing the needs of the common good of the Church of South Jersey, that all parishes benefit as a result of reconfiguration; and clear expectations and roles of each parish in the reconfiguration. “This (process) is about building up and not tearing down,” he said.

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Other presenters on stage included 10 individuals who represented effective examples of each pastoral ministry at their respective parishes: Mary Ann Exler, Parish Cathechetical Leader, St. Charles Borromeo, Sicklerville; Kalyn Parker, Youth Ministry, St. Josephine Bakhita, Camden; Joyce MassotBurnett, Finance Council, St. Michael the Archangel, Clayton; Ben McCauslin, Liturgy of the Word for Children, Our Lady of Peace, Williamstown; Sonia Morales, Lay Ministry Formation Program, St. Bridget’s University Parish, Glassboro, Jane and Pete Cote, Compassionate Outreach Ministry, from Christ Our Light, Cherry Hill; seminarian Kevin Mohan; and Brian Leydon, Young Adult Ministry, St. Simon Stock, Berlin. “The merger was just the beginning,” remarked Father Cadmus Mazzarella, pastor of Our Lady of Peace. Last year, St. Mary’s Church in Williamstown and St. John Neumann, Sicklerville merged, creating Our Lady of Peace. “It’s good to get people excited, motivated, and get everyone focused on the task of strengthening parishes,” he said.

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September 24, 2010

Congregations Reeling From Decline in Donations By SAMUEL G. FREEDMAN

Late this summer, as the country’s economic slump entered its third year, Bishop Robert E. Girtman met with the board of his church to discuss finances. The weekly collection of tithes and offerings, routinely $4,000 before the recession, had sunk to barely $3,000. Some members, newly jobless and ashamed, turned in tithing envelopes that were empty. Others skipped church a few Sundays a month to avoid the awkwardness of having nothing to give. So the question for Bishop Girtman and his board at the Church of the Living God in Port Chester, N.Y., a suburb of New York City, was how to respond. They could run fund-raising events. They could hire fewer gospel musicians. Or, as one board member told the pastor, they could just face facts and stop asking for donations for a year, praying that by then the economy might be healthy. “I was shocked off my chair,” Bishop Girtman, 67, recalled in a phone interview this week. “Because how, then, would the church live? You have the lights and the heat and all the other bills that go on.” Beyond the momentary jolt lay a broader realization, no less distressing. “I’ve seen recessions in the past when people didn’t give

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as much,” said Bishop Girtman, who has pastored the Pentecostal church for 30 years. “But I have not seen one like this before. People are cutting the church out, trying to make ends meet at home to pay their rent, their bills. People are just in financial straits.” The experience at Bishop Girtman’s church echoes across the congregational landscape of America. From storefront chapels to Sun Belt megachurches to suburban synagogues, across denominational lines, religious institutions are reeling from a decline in donations. The National Cathedral in Washington, the most prominent Episcopal church in the United States, has made four rounds of staff layoffs since 2008. The Crystal Cathedral in Garden Grove, Calif., an archetypal evangelical megachurch, has laid off staff members, sold property, and been sued by creditors. In the Williamsburg section of Brooklyn, the 55-member Primera Iglesia Getsemani, its monthly intake falling to $400 from $900, is surviving by running a weekly flea market on its sidewalk. While the recession has sharpened the drop in giving, it is not entirely responsible for it. Rather, it has accentuated and accelerated a trend away from giving to religious organizations that scholars have been tracking for the past decade. The impending wave of retirements by baby boomers, who start hitting age 65 next year, threatens another blow to congregational income. “When the foundation falls, when the base isn’t there, then you have problems,” said Elbert T. Chester, an accountant in Queens who has more than 60 churches along the Eastern Seaboard as clients. “And we haven’t even seen the worst of it.”

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Well before the subprime mortgage crisis threw the economy into a tailspin, warning signs for religious giving were present. A 2007 study by three professors at Indiana University-Purdue Universityin Indianapolis found that baby boomers in 2000 were donating about 10 percent less to religious bodies than their parents’ generation did at a comparable age in 1973 — and almost 25 percent less than those parents, by then ages 62 to 76, were donating in 2000. As for what explains the generational divide, scholars of philanthropy offer several explanations. Charles E. Zech, a professor of economics at Villanova University outside Philadelphia, cites “cohort theory.” The so-called Greatest Generation came of age during the New Deal and World War II, developing trust in institutions, he said. The baby boomers, in contrast, learned skepticism as products of the Vietnam and Watergate years. In religious terms, that wariness of institutions has meant that boomers are more likely to construct a personal sense of spirituality than to subscribe to a denominational or even congregational one. Arnold M. Eisen and Stephen M. Cohen persuasively showed the trend among American Jews in their 2000 book, “The Jew Within.” “It’s wrong to look at this as a money problem,” said Mark OttoniWilhelm, a professor of economics at Indiana-Purdue who was a coauthor of its study. “The drop in giving follows the involvement pattern. Because people aren’t as involved, the giving pattern traces it.”

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Unquestionably, though, the recession worsened the trend. Before the economic crisis hit, according to a study of 1,500 congregations by the Lake Institute on Faith and Giving, half saw an increase in annual donations and about 20 percent registered a decline. In 2009, the first full year of recession, the percentage with smaller donations almost doubled, and only one-third of congregations reported higher giving. Mr. Chester, the accountant, said that donations had fallen at twothirds of his client churches, anywhere from 25 to 50 percent from the pre-recession levels. “They’ll reduce missions, cut salaries, make layoffs just to pay the mortgage,” he said. “Even our fees are slow in coming in. Before, it was one, two, three. Now it’s like pulling teeth.” Rabbi Gerald L. Zelizer, who has led Congregation Neve Shalom in Metuchen, N.J., since 1970, described a phenomenon of financial extremes. On one hand, more than 50 families out of a total of 580 in his congregation this year asked for their annual dues to be reduced. On the other hand, several large donors in the congregation, knowing of its budgetary struggle, increased their contributions to the annual fund, which rose to $67,000 from $53,000 over the past year. Still, with what Rabbi Zelizer calls the “graying” of Conservative Jewish congregations, and a “growing disinterest in organized religion,” a few philanthropic angels cannot provide a long-term solution. “This is a different dip than we’ve ever had before,” he said. “You have to work harder to overcome this. The mountain is steeper.”

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Conference explores Catholic leadership By Lou Baldwin Special to The CS&T UPPER GWYNEDD — The question was interesting if hypothetical. If our first parents and humankind in general had not succumbed to sin through disobedience to God, would Christ our Lord and Savior still have come into the world?

Presenters include, from left, Msgr. Michael Magee, Kathleen McCarthy, Father Bernard O’Connor, O.S.F.S., Anne Ayella, Msgr. Thomas Flanigan, Jim Glasgow and Mary Halinski.

Father Bernard O’Connor, president of DeSales University in Allentown, believes, as did St. Francis de Sales for whom his congregation the Oblates of St. Francis de Sales is named, Christ still would have come to the world.

“Salvation is often linked exclusively with getting rid of sin,” he said. “A lot of the world’s theologians said it doesn’t mean that Jesus doesn’t have a job if people hadn’t sinned.” Jesus, he suggested, would have come into the world even if it was sinless to invite the people into the fullness of heaven. As an example, the Virgin Mary, who was born without sin, had no need of redemption. The question to Father O’Connor came at the end of his keynote address at a Sept. 11 conference at Corpus Christi Parish, Upper Gwynedd, “The Body of Christ; Catholic Leadership in the Modern World.” The thrust of his lecture was that those who wish for a post-Christian society while retaining Christian values have an impossible task because these values cannot exist without Christianity. The conference, the third since its inception, attracted about 160 participants with perhaps 60 percent of them from the parish itself and the rest mostly from other Montgomery County parishes, according to Msgr. Thomas Flanigan, pastor of the 4,000-family Corpus Christi. In addition to Father O’Connor’s keynote there were four workshops. Msgr. Michael Magee, chair of the Department of Systematic Theology at St. Charles Borromeo Seminary, spoke on “How to Lead Like Christ.” “If He is in fact as we believe, as we know Him to be — the perfect union of the Divine and the human, we have in Him the perfect model of leadership, that perfect model of unity with God,” Msgr. Magee said. Page 229

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Kathleen McCarthy, a mother of 12 whose inspirational radio program is broadcast on WTMR800 AM, spoke on “Allowing the Holy Spirit to Move in Your Life.” She retold the Gospel account of the woman at the well meeting Christ. “She was empowered by the living water and had no more doubts,” she said. “He gave her the gift of hope and she went out and told everybody that she met.” Jim Glasgow of Villanova University’s School of Business spoke on “Building Community Two at a Time.” His thrust was if you are to get your message across, you must first understand your audience. “Pay attention to what they want and why,” he said, suggesting through this you will be able to present your message most effectively. Anne Ayella of archdiocesan Nutritional Development Services and diocesan director for Catholic Relief Services spoke on “Service: A Life Changing Experience.” She told of those experiences in her own life beginning as a very small child living near the Overbrook School for the Blind when she and her friends would go there on Sunday to walk the blind children to church. In addition to the speakers, a mini parish fair was set up to explain some of the varied ministries offered by Corpus Christi. Addressing those people who came from other parishes for the conference, Msgr. Flanigan said, “We don’t purport to be par excellence in this, we are just trying to share with you what we have and hopefully learn from you who are not part of our community. What do you do, how do you bring the Word to the people? Every parish has wonderful ideas and it is important that people become active in the parish community.” Lou Baldwin is a member of St. Leo Parish and a freelance writer.

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Sept. 29, 2010, 12:01 a.m. EDT

SEC may set limits with final flash-crash report Agency seeks to help restore investor confidence in wake of plunge By Ronald D. Orol, MarketWatch

WASHINGTON (MarketWatch) — The Securities and Exchange Commission may impose new high-frequency trading regulations and eliminate placeholder quotes when the agency publishes its long-awaited final report on the “flash crash” stock market plunge on May 6, investors and attorneys say. The report that is to be jointly written by the SEC and the Commodity Futures Trading Commission comes in the wake of the Dow Jones Industrial Average’s (DOW:DJIA) sudden drop of nearly 1,000 points on May 6 before swiftly recovering to end at a 348-point loss, rattling U.S. investor confidence in the stock market. At one point that afternoon, the Dow dropped 481 points in six minutes and then had recovered 502 points just 10 minutes later. The SEC on May 18 released a 151-page preliminary report arguing that the plunge could be due, in part, to the combination of a major drop in the prices of stock index products such as index exchange traded funds, the decline of E-Mini S&P 500 futures and “simultaneous and subsequent” waves of selling of stocks. Regulatory observers are skeptical about whether the SEC will be able to respond to the flash crash in an effective manner even if the agency has a deep understanding of what happened. Read about SEC's preliminary findings “Just because you’ve figured out the confluence of events that caused the crash, can you stop another constellation of events that will cause another market movement like that again?” asked Michael Pagano, a finance professor at Villanova University's school of business. Yet even with that uncertainty, the SEC is expected to take steps to solve the issues raised by the market plunge.

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Susan Grafton, an attorney at Gibson Dunn & Crutcher in Washington and a former staffer at the SEC’s division of trading and markets, said she believes agency officials may want to either prohibit stop-loss market orders, which are orders to sell a stock when it reaches a certain price, or limit when these orders can be used. Many retail investors that lost significant sums of money on May 6 did so because these orders were activated but could not be fulfilled until the stock plummeted to severe depths, resulting in major losses. Some of those were later cancelled, but a significant number of retail losses were retained. Joe Saluzzi, co-head of equity trading for Themis Trading in New Jersey, agreed that the agency could abolish or make adjustments to these types of orders, as a means of protecting retail investors. He said that instead of prohibiting stop-loss market orders, the agency may decide to require that investors setting up these provisions also signify what is the lowest price limit at which they would like to see the trade executed. “As the market melted down, these orders were activated and chased prices down a vicious spiral,” Saluzzi said. “These orders were not the cause of the flash crash per se, but they resulted in enormous damage to many unsuspecting traditional investors.” The end of the placeholder stub quote Gibson Dunn’s Grafton noted that the agency may force proprietary trading firms that act as market makers to make both buy and sell quotes, and that the exchanges and the SEC are moving to prohibit market makers from entering so-called “stub quotes.” “The exchanges are already moving to require market makers to display two-sided that have some reasonable basis to the market for the relevant security,” she said. Currently, the SEC requires market makers -- typically specialists at the New York Stock Exchange or Nasdaq -- to have both a bid and an offer when they want to publish a quote. To deal with this, market makers typically post placeholder stub quotes, which are orders placed that are considerably different than the market price for a particular security. Market makers will often post a stub quote bid for a penny not anticipating that anybody would actually ever trade against it. However, during the ‘flash crash’ these orders became the only liquidity in the market for many securities. The Nasdaq has already proposed eliminating the stub quote.

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Saluzzi said the SEC will point to stub quotes as one contributor to the plunge and he expects the agency to propose banning them. “Now the SEC will act to eliminate them,” he said. New regime for high-frequency traders The SEC’s Schapiro also said recently that the agency is considering whether highfrequency trading systems, which represent 70% of trading volume daily, should be subject to a new regulatory regime. See earlier story about Schapiro's comments on high-frequency trading. It is unclear what specifics Schapiro has in mind, but Villinova’s Pagano argues that many high-frequency traders are acting like market makers in good times but disappear from the markets during bad times, like during the flash crash. He contends that the SEC could put some requirements on high frequency traders. One approach, he said, would be to have them be regulated like traditional market makers and make active bids -- for larger bundles of securities -- when the markets are falling or are in stress. Alternatively, they can stop conducting their market maker-like investments. Pagano worries that without such a requirement on high-frequency traders, traditional market makers at NYSE and Nasdaq that have an obligation to make a fair and orderly markets will disappear. “If the Nasdaq and NYSE market makers go out of business, who’s going to be responsible for making a fair market?” asked Pagano. “Get prepared for a lot more flash crashes. That’s unnerving for retail investors.” If it is imposed, he said, the traditional market makers would become more relevant and orders would be directed back to the people who have responsibility for making sure the markets don’t go into free fall. “Trades could slow, but it would make for a sounder financial system,” Pagano said. The agency could also increase the amount of disclosure and capital traders employing high-frequency trading systems must hold, a prospect supported by larger high-frequency traders and opposed by smaller market makers, Saluzzi said.

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“We believe the SEC will side with the larger HFTs and impose their requested obligations,” Saluzzi said. Limiting circuit breakers Regulatory observers believes the SEC will make adjustments to a circuit-breaker program the agency adopted in May and expanded in September to halt or slow down trades of a particular stock if the price moves 10% or more in a five-minute period. The SEC’s Schapiro said at a Sept. 22 Securities Traders Association meeting the agency needs to examine whether there are ways to adjust circuit breakers so they aren’t employed whenever there’s an erroneous trade in a stock. However, Saluzzi complains that these fixes, while useful, are just band aids and don’t ensure that another ‘flash crash’ could be avoided in the future. He argued that the SEC should seek to consolidate the ‘fragmented’ exchange system and also impose a fee on orders that are cancelled. “More than 90% of orders are cancelled,” Saluzzi said. “This potential overload of data to market centers is a clear systemic risk. Orders entered into the marketplace without the intention to trade threaten an orderly market.”

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Auditors Need to Work on Interpersonal Skills VILLANOVA, PA. (OCTOBER 1, 2010) BY WEBCPA STAFF

Internal auditors who combine likable personality traits with well-presented arguments do better at influencing managers’ accounting judgments and financial reporting estimates than auditors who are rude and provide information in a jumbled way, according to a new study. The study, by Professors Kirsten Fanning of the Villanova School of Business and David Piercey of the University of Massachusetts, recently won the Outstanding Emerging Scholars Award at the American Accounting Association’s Accounting Behavior & Organizations Research Conference. Contrary to the assumption that internal auditors only need to use numbers and relevant accounting information to support their position, the study shows that how they present themselves and their accounting information is just as important. Fanning and Piercey recruited 133 managers and other business professionals who were enrolled in a professional executive training program at the University of Massachusetts as participants in the study and had them all read case information as managers of a hypothetical firm trying to make a determination about inventory obsolescence. The experiment divided participants into groups that read different versions of the case. In one group, the internal auditor was portrayed as “likable” (easy to be around, down to earth, nice, and understanding), and in another, the internal auditor was “dislikable” (hard to be around, arrogant, a jerk, and condescending). “They read about an interaction that they had with a particular auditor,” said Fanning. “They were given a narrative of words that the auditor was saying to them in the meeting so they could infer whether that auditor was likable or dislikable based on the conversation that they had in the case. The controller also mentioned whether the auditor was meant to be likable and easy to get along with and that you should have

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no problem dealing with him. If the auditor was meant to be dislikable, it would say just the opposite, that sometimes he can be tough to deal with, but basically I just need you to get in touch with him to get some more information.” Different versions of the case also varied whether the available information was more or less supportive of the internal auditor's preferred position, and whether that information appeared in an “argument format” or a “list format.” The “argument format” information was arranged into logically organized paragraphs that could help recipients better understand and process the implications of that information. The “list format” placed exactly the same sentences of information into a randomized bullet point list to remove the argument’s thematic flow. “All of the information was the same, but in the argument format, the auditor presented the information in paragraph form with items of information that were related to each other and organized by paragraph based on whether those pieces of information fit together,” said Fanning. “In the list condition, I randomized the sentences of information, so instead of grouping them together based on the theme or the topic they were covering, it was just the exact same sentences but in a random order to disrupt the thematic flow of that information or the cohesive argument of the information about why he believed the inventory was obsolete.” Fanning and Piercey found that managers were more persuaded by the internal auditor when the auditor used an argument format and good interpersonal skills. Neither argument format nor good interpersonal skills alone had any effect. Both had to be present to further persuade managers over and above the implications of the accounting information alone. The joint effect of interpersonal skills and information format persuasion occurred regardless of whether the underlying accounting information was more supportive or less supportive of the internal auditor's position. Essentially, the findings suggest that an internal auditor with even relatively less supportive accounting information could still persuade managers further by joint use of an argument format and good interpersonal skills. For example, when internal auditors had less supportive information to make their case, managers generally disagreed with internal auditors who

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used only argument format or good interpersonal skills. But managers agreed with internal auditors when they used both, despite the relatively unsupportive information. “Right now probably most people would believe that an internal auditor presenting good accounting information would be equally persuasive independent of his presentation, independent of whether he is likable or dislikable, or whether the format of the information is presented in a structure like an argument format or presented raw like a list format,” said Fanning. “I think the study shows that how internal auditors present themselves and their accounting information is an important consideration for how well they can influence managers.”

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The Christian Science Monitor -

California state budget deal has holes, analysts say By Daniel B. Wood, Staff writer posted October 4, 2010 at 6:57 pm EDT Los Angeles — The California state budget accord to be voted on Friday relies on $5 billion in federal money, $10 billion in Wall Street loans, and some pretty big assumptions, say some political observers.

Gov. Arnold Schwarzenegger is shown at a ceremonial bill signing in Los Angeles on Oct. 1. Signaling an end to California's record-long budget stalemate, Gov. Arnold Schwarzenegger and legislative leaders say they've struck a comprehensive agreement after an intensive five-hour meeting. California officials are high-fiving themselves over the announcement that they have reached a compromise to close the state’s $19.1 billion budget deficit, ending a record-breaking impasse. The new “accord,” reached three months after the start of the fiscal year, doesn’t raise taxes as Democrats wished, but also doesn’t dismantle the state’s welfare system, as Republicans had proposed. After a five-hour meeting Saturday between Gov. Arnold Schwarzenegger and Democratic and Republican heads of the state Senate and Assembly, Senate president pro tem Darrell Steinberg told the press, “We have a comprehensive agreement.” More details, he said, would be released Thursday at a hearing and a vote could come as early as Friday. There is only one problem, say several analysts: nothing is signed yet. “Don’t count your chickens, yet,” says Robert Stern, president of the Center for Governmental Studies. “The budget still has a long way to go before it is finally enacted.”

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"A lot can still happen to derail this,” adds Sherry Jeffe, a political scientist at The University of Southern California. Details which have trickled into various press accounts include $7.5 billion in spending cuts and the suspension of a corporate tax break valued about $1.4 billion. Alicia Trost, a spokesperson for Mr. Steinberg, says that the so-called “gang of five” also agreed to erase another $1.4 billion by accepting an independent legislative analyst's estimate of incoming revenue, which was that much higher than Governor Schwarzenegger’s. There is also the assumption of $5 billion in federal funds, and $10 billion in loans from Wall Street. But one unknown is how legislators will respond to the sale of 11 state office buildings, which the state would rent for the long term. Two of the buildings are at San Francisco’s Civic Center, which would bring in over $1 billion immediately, but would cost $30 million annually to rent. More questions surround what kind of long-term credit the state can arrange, given its falling bond ratings. The budget plan reportedly relies on bogus economic assumptions and unrealistic expectations about federal aid, says Jack Pitney, a political scientist at Claremont McKenna College in Claremont, Calif. “They debated, deliberated, and delayed – and then ended up faking it anyway," he says. "Never have so many Californians waited for so long for so little.” One of the biggest reasons why California set an all-time record for budget lateness this year, says Ms. Trost, was that for each of the two previous years, the state has had to close the largest state deficits in American history. “Both sides have already compromised and cut to deep bone,” says Trost, “which made getting this far harder than ever.” Schwarzenegger has come under criticism for his decision to furlough state workers three days a month, essentially cutting their pay 14 percent. The California Supreme Court on Monday upheld Schwarzenegger's order to furlough state workers, handing him a victory for his current budget plans. State employee unions have been challenging Schwarzenegger's order since he implemented the furloughs for more than 200,000 state workers in February of 2009. He later expanded it to three days a month, which has translated to a pay cut of roughly 14 percent for government employees.

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Furloughs saved the state's general fund $1.5 billion during the previous two fiscal years and an additional $80 million a month in the fiscal year that began July 1, said H.D. Palmer, spokesman for the governor's Department of Finance. The record budget impasse should create new impetus for the passage of Prop. 25, experts say. The ballot initiative would change the legislative vote requirement necessary to pass the state budget and spending bills related to the budget from two-thirds to a simple majority. It also would provide that if the Legislature fails to pass a budget bill by June 15, all members of the Legislature will permanently forfeit any reimbursement for salary and expenses for every day until the day it passes one. California is one of three states to require two-thirds of legislators to agree before a budget can be passed. Many analysts have said that is one of the keys to why the state seems so dysfunctional and ungovernable. “A two-thirds requirement enables a smaller group to hold the larger one hostage and demand concessions,” says David Fiorenza, a professor of public sector economics at the Villanova School of Business in Villanova, Pa. “It becomes more of a political science question than a budget issue. If California voters don’t see now how this measure could help its budget impasses, it would baffle me.” At the moment Prop. 25 has less than 50 percent voter approval, according to the latest Field Poll of California voters. “The conventional wisdom is that budget stalemate strengthens the argument for the proposition, but just the opposite could be true,” argues Claremont McKenna's Mr. Pitney. “Voters may think, ‘it’s already too easy for those guys to play games.' This measure would make it even easier.”

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October 24, 2010

A Black-Belt Dean Gets a Kick Out of Karate

Courtesy of Ronald Hill Ronald Hill says a sparring match can be much like dealing with some faculty and administrators.

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By Eric Kelderman Ronald P. Hill holds an endowed chair at the Villanova School of Business, where he is senior associate dean of intellectual strategy. He can probably also kick your butt. Mr. Hill earned a black belt in karate in 1972, then opened his own studio, Hill's Hitters, which is now run by his brother, Phillip. (Full disclosure: This reporter is a Hill's Hitter student and has a brown belt, with stripe.) Associate Dean Hill still trains as a martial artist and says he rides his bicycle about 150 miles a week. He is working on a book about incorporating a martial-arts mind-set into every aspect of a practitioner's personal and professional life. Q. Are there similarities in the approach to a sparring match and some of the confrontations you find in academe? A. You get hit much harder in academe! Seriously, the give and take, yin and yang, of a sparring match in karate is much like dealing with some faculty and administrators. First, you are often on an equal footing with tenured faculty,

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so the idea of an inherent advantage to your position does not exist. Also, many faculty believe that there should be some tension between faculty and department chairs/deans, and, having served in both roles, you must be watchful when and how you proceed. Finally, you learn to use just enough power/force to move the situation in a positive direction but without sapping all of your energies. In the end, a mutual respect must persist or the match is lost in the long run. Q. What things did you learn teaching martial arts that you carry into the business-school classroom? A. I remember quite well my first class as an instructor at the University of Maryland at College Park, during the fall semester of 1976. An important distinction was that I no longer was able to demonstrate with my body what I just said to the class. Yet several things held true in both environments. For example, you need to be in command of both the material and the classroom. I learned early on that part of the job is seeming like an expert in your demeanor as well as the tone of your voice. Also, students need to do more than listen; they need to be engaged, challenged, delighted, and respected. This makes the job more demanding but also more rewarding. Finally, martial arts is about flow, and the classroom, or even executive education, must have a certain pattern of interaction for the entire experience to be worthwhile. Q. What will your book be about? A. How karate is representative of every aspect of our professional and personal lives, and it has something to offer to improve our living. For instance, take [any] single technique in karate. We often practice it over and over again, to the tune of hundreds of thousands over a lifetime. Why? Did we not get it right after the first 10,000? In truth, we do so because it changes with each execution as we advance in skill, age, environment, intent, etc. Thus, even the single front kick can be a metaphor for the constantly changing nature of the self and its always-evolving interactions with the world. Just think what advice the infinite number of combinations will yield.

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Q. A lot of business books reference The Art of War. Is that really a helpful approach to doing business? A. All such books have their wisdom, and they may ring true for some. Instead, go back to the single technique. Do you do it the same way as your instructor? Your best martial-arts friend? No, you do it as only you can, and even that nature changes over time. Read often, listen carefully, integrate what is useful into your defenses, and allow your inner self to reveal the combination of traits that is you. This is the way of the warrior.

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Fed at precipice as it moves to boost economy By Neil Irwin Washington Post Staff Writer Monday, November 1, 2010; A01,A18

The Federal Reserve is preparing to put its credibility on the line as it rarely has before by taking dramatic new action this week to try jolting the economy out of its slumber. If the efforts succeed, they could finally help bring down the stubbornly high jobless rate. But should the Fed overshoot in its plan to pump hundreds of billions of dollars into the economy, it could produce the same kind of bubbles in the housing and stock markets that caused the slowdown. Or the efforts could fall short and fail to energize the economy, leaving a clear impression that the mighty Fed is out of bullets - thus adding even more anxiety to an already dire situation. The meeting of Fed policymakers Tuesday and Wednesday is set to be a defining moment of Ben S. Bernanke's second term as chairman of the central bank. Although he helped win the war against the great financial panic of 2008 and 2009, he now risks losing the peace if he fails to end the protracted economic downturn that followed. Just two years after the world financial system nearly collapsed, it is again gutcheck time for Bernanke. "The greatest risk for the Fed in taking this action is that it could extend the economy's funk by giving a sense that either no one is in charge or that the people who are in charge can't get it right," said David Shulman, senior economist at the UCLA Anderson Forecast. "The whole psychology of that could leak back into the economy." Jobs and prices

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The Fed is charged by Congress with a twin mandate of maintaining maximum employment and stable prices, and it is failing on both counts. The economy isn't in free fall. But as new data on gross domestic product affirmed Friday, the economy is mired in mediocre growth, too slow to bring down the unemployment rate. Inflation, meanwhile, is running about 1 percent, below the rate Fed officials view as optimal. When inflation is a little higher, it encourages consumers and businesses to spend money before it loses value. "Viewed through the lens of the Federal Reserve's dual mandate . . . the current situation is wholly unsatisfactory," William C. Dudley, the New York Fed president, said in a speech early last month. When Bernanke was confirmed this year for a second four-year term, the widespread assumption was that his major task would be to decide when and how to move away from the unconventional measures taken during the crisis to boost growth. In reducing its target for short-term interest rates to zero, the Fed had exhausted its normal tool for managing the economy. So the central bank pumped money into the economy by buying vast quantities of bonds - more than $1.7 trillion worth. Now the Bernanke Fed is poised, if not to double down on that earlier bet, at least to up its wager. "Phase one was to avoid a complete market meltdown and something akin to the Great Depression," said Mark Gertler, a New York University economist who has collaborated with Bernanke on academic research. "Phase two begins now and is in some ways trickier. . . . Once again we're in a situation where we have to use policies we haven't really experimented with." The Fed is seeking to avoid the fate of Japan, where falling prices and weak economic growth over the past two decades have created a self-reinforcing economic stagnation. The hope is that by moving aggressively, such a cycle can be averted. Fed watchers expect that the two days of meetings around a giant mahogany table will culminate this week in the announcement of around $500 billion in

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Treasury bond purchases and perhaps a statement indicating a willingness to make even more. The intended benefits are already being felt. In anticipation of the Fed's action, investors have driven down mortgage rates, creating an extra incentive for people to buy a home. Expectations have also driven the stock market up, making Americans feel wealthier. And the dollar has fallen in value, making U.S. exporters more competitive, as currency investors reacted to an expected decline in U.S. interest rates. But there's a danger that the bond purchases could work too well. For example, while a modest decline in the dollar could be good for the economy, a steep and disorderly drop could be disastrous. And while Fed leaders want the inflation rate to be higher than it is now, if prices were to accelerate rapidly, that would be unwelcome. There's also a risk that investors could view the Fed's program of buying Treasury bonds as a signal that the central bank essentially plans to fund U.S. budget deficits indefinitely by printing money. That could prompt interest rates to rise, stymieing the economic recovery. Thomas M. Hoenig, president of the Kansas City Fed, appears likely to dissent from the Fed's decision this week. He said in October that such measures "could be a very dangerous gamble," given the risk of stoking asset bubbles, for instance in the stock market. If, on the other hand, the efforts to jump-start growth fall flat, the Fed would be confronted with an even knottier quandary: take even bolder steps, such as a trillion-dollar round of bond purchases, or admit that these kinds of measures won't work and stand pat. Encouraging spending Ultimately, the question of whether the Fed can invigorate the economy depends on whether companies, individuals and even the government respond to lower interest rates by spending and investing.

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Rates have been at exceptionally low levels for more than a year and corporate America is in sound shape financially, yet companies are holding back on hiring more employees and making new investments. Executives say they lack confidence that consumers will boost demand for products, because Americans are busy paying down debts. Some economists argue that the volume of bond purchases needed to jar the economy into motion again is vastly larger than what the Fed has seriously considered. Larry Meyer, a former Fed governor now with Macroeconomic Advisers, estimated last week that it would take more than $5 trillion worth, 10 times what analysts are expecting. Fed leaders deem such gargantuan numbers too risky. Either way, if the Fed overshoots or falls short, it could undermine the faith of the public and the financial markets in the ability of the government to address prolonged high unemployment and the risk of falling prices. At a time when investors are already skittish about gridlock in Washington, such doubts could spook financial markets, creating a self-reinforcing downward cycle in the economy. (By contrast, the U.S. economy flourished from the mid-1980s until 2008 in part because investors and businesses were confident that the Fed would keep the nation on a steady growth path.) A failed effort by the Fed could also prompt renewed calls to limit its authority and independence at a moment when popular discontent over its role in bailing out the financial system has already made the central bank a target for many in Congress. But some partisans of the Fed are urging it take dramatic new steps even if there's a chance they don't work. "I think the public understands that if unemployment remains high, monetary policy isn't going to be the reason," said Victor Li, a Villanova professor and former Fed economist. "No one is going to say the Fed isn't doing everything it can.

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Morris County pastor admits tax evasion, diverting $63K from parish funds Published: Wednesday, November 03, 2010, 5:51 PM

Updated: Wednesday, November

03, 2010, 8:36 PM

By Joe Ryan/The Star-Ledger MORRIS COUNTY — With his penchant for travel and gift giving, Monsignor Patrick Brown drew attention for a lifestyle that, to some, seemed larger than the modest stipend he earned from St. Vincent de Paul Catholic Church in Morris County. The 59-year-old pastor vacationed in Vail, Colo., Hawaii and Ireland. And he shopped frequently enough at a jewelry store in Morristown that when authorities began investigating the priest’s finances last year, FBI agents subpoenaed the shop’s sales records. More than 17 months after that probe began, Brown pleaded guilty to tax evasion today before a federal judge in Newark. He said that between 2004 and 2009 he augmented his roughly $30,000-a-year stipend by secretly diverting more than $63,000 from the funds of the parish in Long Hill. He said he never paid taxes on the money, which he acknowledged spending on gifts, vacations and repairs to his lake house. "Was your 2005 federal income tax true?" U.S. District Judge Susan D. Wigenton asked. "No, your honor," Brown said, standing before the judge wearing a black jacket and Roman collar. Under his deal with federal prosecutors, Brown faces between 10 and 16 months in prison, said Lee Vartan, an assistant U.S. attorney. Judges, however, are not bound by such terms, and the Brown’s agreement allows him to argue for less time.

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"No matter what your station, it is unacceptable to help yourself to other people’s money and violate their trust. If you commit a crime, status as a religious leader will not protect you from federal prosecution," said U.S. Attorney Paul J. Fishman. The admission marked a sharp fall for Brown, a prodigious fundraiser who has sat on at least 11 charitable boards and helped raise untold sums for inner-city Catholic schools in Passaic and Paterson. He resigned today as pastor of St. Vincent de Paul, which he led 18 years. At his request, Brown will be reassigned to a parish in a poor section of Paterson to work until his sentencing, scheduled for Feb. 9. "To the great number of people who respect Monsignor Brown and hold him in high esteem for his many good works, this admission brings sorrow and pain," said Richard Sokerka, a spokesman for the Diocese of Paterson. Brown’s guilty plea comes roughly four-and-a-half years after Rev. Joseph W. Hughes admitted stealing $2 million from Holy Cross Roman Catholic Church in Rumson. Charles Zech, a Villanova University economics professor who specializes in church finance, said it is a common problem for religious institutions of all faiths. Too often, he said, congregations put sole financial discretion into the hands of spiritual leaders without proper safeguards. “No would think that a pastor would embezzle, so we don’t have controls in place like they do in the business world,” Zech said. With his ebullient charm, Brown has long been popular among parishioners at St. Vincent, a bustling church with a prosperous congregation. A large stone sits at the doorstep of the rectory, engraved with the words: "Monsignor Brown is rock solid." The priest has also long been a fixture in the halls of Morris County government. He spent 25 years as chaplain of the Morris County jail. He delivered the invocation at virtually every county government reorganization meeting for a decade. Even after news of the FBI probe became public last year, Brown was

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honored as a "hero" for his work on affordable housing by a subsidiary of the United Way. As he pleaded guilty today, Brown was accompanied not by one, but three lawyers: including Michael Critchley, who is among New Jersey’s most prominent criminal defense attorneys. Afterward, they issued a brief statement, saying that aside from personal expenses, Brown used the money he took to help poor families and pay for gifts for parish employees. Standing before the judge, Brown acknowledged diverting the money into two bank accounts he kept hidden from parish and church auditors. In some cases, he spent money from those accounts on legitimate parish expenses. But Brown also said he used it to buy Christmas and birthday gifts for his mother, his siblings and himself. And Brown admitted spending "several thousand" dollars on repairs to his home on Budd Lake in Morris County. Brown’s guilty plea also requires him to pay $12,400 to the IRS. He has already repaid the $63,000 to the parish, said another of his lawyers, John P. Lacey. "Those Americans who file accurate, honest and timely returns need to be reassured that everyone is paying their fair share and the government will hold accountable those who don’t," said Victor W. Lessoff, head of the IRS’s criminal investigation office in Newark. Editor's Note: Monsignor Patrick Brown admitted failing to pay taxes on money he took from St. Vincent de Paul Church between 2004 and 2009. An earlier version of this story had reported the wrong time span.

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Posted on Fri, Nov. 5, 2010

Spending cuts should top Houseâ&#x20AC;&#x2122;s agenda â&#x20AC;&#x201D; as will the debt ceiling By Harold Brubaker Sparks will fly as the Republicans take control of the U.S. House and start to put their brand on some of the really big economic issues: jobs, the deficit, and taxes. One early fight between the newly empowered House Republicans and the Democrats, who will still control the Senate and the White House, will be over the federal debt ceiling - it's now $14.3 trillion and must be raised. That will give GOP leaders such as Speaker-in-waiting John Boehner of Ohio and Rep. Paul Ryan of Wisconsin the chance to set a budget-cutting tone by demanding concessions in return for allowing the country to go even deeper into debt. Spending cuts must be a top priority for House Republicans, said Peter Zaleski, a professor of economics and statistics at Villanova University. If they do not act early on spending, he said, "they are going to lose credibility very quickly." Ryan, who is expected to become chairman of the House Budget Committee, admonished his party along those lines in an Op-Ed piece in Thursday's Financial Times: "Our passionate opposition to higher taxes must now be matched with an equal commitment to cutting spending." Unemployment is the nation's biggest economic problem, but it is not clear that the federal government, even if it were not gridlocked, could do much in the short term. That is especially true if those economists are right who say that high unemployment has been so persistent because too many job seekers lack the skills for today's jobs. One thing the GOP could do to boost the job market, Zaleski said, is "bring some sort of confidence or predictability to the business community," which has resented the uncertainty around taxes and regulation in the last two years.

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But do not expect a repeal of the massive Dodd-Frank Act, a top priority of the Obama administration, said Thomas P. Vartanian, a partner in the Washington office of Dechert L.L.P. and a former bank regulator. The GOP will have the power to call regulators to congressional hearings, where they can attempt to browbeat them into writing rules one way or another. But, Vartanian predicted, regulators will not be swayed in a big way. "They know what the law says," he said. "I think who's in power at a particular moment has only marginal impact."

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Posted on Fri, Nov. 5, 2010

Big and small businesses may give up reluctance to start hiring. By Diane Mastrull In the aftermath of Tuesday's Republican trouncefest, a rare Democratic victor stepped forward to voice support for manufacturing, a oncemighty American business sector reduced to a shell of itself because of policies that have made it more attractive for companies to take their work abroad. Delaware U.S. Sen.-elect Chris Coons pledged to "help make these . . . words real again . . . Made in America." Ironically, it might be the Republican platform that helps that cause. In a national survey of 99 manufacturing executives conducted last month by Grant Thornton L.L.P., 40 percent said the best way to create jobs was to reduce the corporate tax rate; 27 percent said to cut the personal income tax. In light of the GOP's gains, said Villanova University economics professor Peter Zaleski, manufacturing should continue what has been 15 straight months of expansion, largely because "what I would expect to see out of Washington would be a more businessfriendly climate." Although inventories dropped the last couple of years, manufacturers were reluctant to hire and ramp up production, "mainly because they weren't sure whether there was going to be an uptick in demand," Zaleski said.

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They also were unclear whether legislation was on the horizon that would restrict their flexibility when it came to hiring and firing and providing employee benefits, he said. "What you'll see now is maybe a little less reluctance to start taking up production again, which would then lead to some hiring eventually," Zaleski said. That goes for the broader world of small businesses, too, said Philadelphia entrepreneur and economic-development consultant Jamila Payne. It is a group that has been hit particularly hard by the liquidity crisis resulting from the evaporation of credit. "Getting the banks to open up their pocketbooks again is [a] really important factor," Payne said. Yet she is not sure whether to count on any help from the new Congress: "I'm hearing a lot of concern across party lines among small-business owners, because they feel that people who are representing the Republican Party have largely been for big business rather than small business."

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Cigarette warnings get more graphic November 15, 2010 By Meggan Kole Graphic visuals of rotting teeth or a body in a coffin will be on every pack of cigarettes sold in the United States by October 2012 The US Department of Health and Human Services hopes this aggressive campaign will illustrate health issues related to smoking cigarettes and encourage the 20 percent of adults who continue to smoke to stop. Most smokers spending the day in Center City Philadelphia had the same initial reaction when they looked at the proposed images. The graphic close-up of a person's yellow and decaying teeth incited the biggest reaction. Jeremy Kees is Professor of Marketing at the Villanova School of Business. He's not surprised the more realistic images cause the greatest reaction. He has tested the effects of graphic visuals on cigarette packaging and consumer behavior. He found that "cartoon-ish" images are easily discounted. The more shocking and realistic the visuals are, the more likely a consumer is to quit. He hopes the FDA moves away from the less jarring images "It would be a huge mistake to consider any warning that might be perceived as not believable," Kees said. "That just gives smokers a very easy excuse to think that all government warnings are a joke, not real, and thus not important to pay attention to." Kees says one reason the FDA may be hesitant to use potentially offensives images is because studies show these highly graphic images often cause intense anger among smokers. "Despite the strong negative reactions, these highly graphic warnings performed best on quit intention measures," Kees said. According to the Food and Drug Administration, smoking is the leading cause of preventable and premature death each year. Over 440,000 people die in the United States because of smoking related illnesses. Smokers also account for 90 percent of

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lung cancer deaths each year. Amy Pierce from North Philadelphia has been smoking for ten years. She says the pictures are disturbing but still won't be enough for nicotine addicts. "Basically unless it comes from within and I have a deep desire to want or need to quit, I'll look at the information, I'll hear it, but it's really not going to affect my decision either way," Pierce said. Studies suggest graphic images have a larger impact on the public than the current Surgeon General's warnings. The FDA is asking for the public's opinion on the 36 proposed images through January 9th. The FDA will then select the final nine images and text warnings that will appear on cigarette packages.

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Matching jobs with jobless Posted on Fri, Nov. 19, 2010

Policies that help businesses recruit and workers retrain will be most likely to ease high and persistent unemployment. By Victor Li The Great Recession, as some have called it, officially ended in June 2009, and gross domestic product is growing again. Yet the pace of the recovery has been frustratingly slow, unemployment remains close to 10 percent, and for many Americans - especially those still out of work the economic situation has not improved. While most economists believe a so-called double-dip recession is unlikely, there is concern that the long-term unemployment rate has risen permanently and may not return to the prerecession range of 4 to 5 percent. Unemployment is among the key factors hampering economic growth. So will "jobless recoveries" become the norm? And how can policymakers reverse this disturbing trend? Some of the answers may be found in the research of Northwestern University professor Dale T. Mortensen, who was awarded the Nobel Prize in economics this month. (Mortensen was my adviser at Northwestern, and I worked for him as a research assistant.) With his fellow Nobel laureates, Peter Diamond of the Massachusetts Institute of Technology and Christopher Pissarides of the London School of Economics, Mortensen revolutionized economics by moving market analysis beyond the basic concepts of supply and demand. In many markets, they emphasized, the matching of buyers and sellers takes

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time because the two groups have incomplete information about each other. Prior to this pathbreaking work, economists explained the idea of unemployment in one of two ways. Classical economists viewed labor markets as efficient, and unemployment as a choice - a product of workers' unwillingness to supply labor at the market wage rate. Keynesian economists, meanwhile, influenced by the Great Depression, believed involuntary unemployment resulted from a surplus of labor, a shortage of available jobs, and a failure of the free market to balance supply and demand. Both of these explanations were incomplete and unsatisfactory. Mortensen's contribution is based on a simple but important idea: Not all workers and jobs are created equal, and finding the right job or the right worker is a costly, time-consuming process. For example, someone with a high school education may have difficulty finding employment when most available jobs require a college degree. On the other hand, a college graduate may decline his first offer in hopes of finding a job that pays a higher wage or better suits his career goals. At the same time, businesses must invest resources to screen out unsuitable applicants and recruit the most qualified ones. Modeling the process by which unemployed workers and hiring employers are brought together to bargain over wages, Mortensen concluded that high unemployment and a large number of job openings can occur at the same time. That has important implications for today's unemployment problem. A recovering economy can experience high unemployment if there aren't enough workers qualified to fill new openings. This is particularly true in times of rapid technological change, when workers who lost their jobs at the beginning of a long recession find they are not qualified to fill new openings. It was recently reported, for example, that an unemployed autoworker applied for his old job but didn't have the skills to operate the new machinery involved.

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The erosion of usable skills during prolonged recessions increases longterm unemployment. This structural unemployment was estimated at 5 percent before the recession, and it's likely much higher today. So what can policymakers do to reverse rising structural unemployment? While tax cuts may increase consumer spending, a $250 rebate check does little to help workers attain the skills they need to fill available jobs. The focus should be on policies that improve the matching of unemployed workers with job openings. On the business side, the government could offer incentives for hiring through tax cuts that subsidize recruiting efforts. On the labor side, extending eligibility for unemployment benefits may also help. While some argue that such benefits diminish a worker's incentive to search for a job, many workers will likely take the opportunity to go back to school and retrain for job openings in expanding markets. Similarly, stimulus policies should focus on financial assistance for students and retraining and vocational programs for workers, which will equip the workforce with the skills to compete in a changing labor market. These and other policies that help hiring efforts and enhance labor skills will boost job creation, lower unemployment, and sustain the economic recovery. Victor Li is a professor of economics at the Villanova School of Business and a former senior economist at the Federal Reserve Bank of Atlanta. He can be reached at

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Gruesome Cigarette Pack Images Make Smokers Want to Quit, Study Finds But some experts say FDA's proposals may still be too mild to work Posted: November 22, 2010

By Jenifer Goodwin HealthDay Reporter MONDAY, Nov. 22 (HealthDay News) -- Earlier this month, the U.S. Food and Drug Administration proposed graphic new warning labels on cigarette packaging, to help curb smoking. But do these often gruesome images work to help smokers quit? A new study suggests they do. Smokers shown grim images of a mouth with a swollen, blackened and generally horrifying cancerous growth covering much of the lip were more likely to say they wanted to quit than smokers shown less disturbing images. Researchers had 500 smokers from the United States and Canada view a cigarette package with no image; a package with an image of a mouth with white, straight teeth; one with an image of a moderately damaged smoker's mouth; and a disfigured mouth with the stomachturning mouth cancer. Though researchers did not measure who actually quit, "intention to quit" is an important step in the process -- and the more gruesome the image, the more smokers said they wanted to finally kick the habit, according to the study. "The more graphic, the more gruesome the image, the more fearevoking those pictures were," said Jeremy Kees, an assistant professor of marketing at Villanova University. "As you increase the level of fear, intentions to quit for smokers increase."

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The study is published in the fall issue of the Journal of Public Policy &amp; Marketing. The findings come at a time when the FDA is grappling with what sorts of images tobacco companies should be required to put on cigarette packaging, beginning in 2012. As part of the Family Smoking Prevention and Tobacco Control Act, passed in 2009, the FDA was granted broad new powers to regulate the manufacturing, advertising and promotion of tobacco products to protect public health. On Nov. 10, the FDA released a series of images and text that are being considered. The images included a portrait of an emaciated lung cancer patient, cartoon drawings of a mother blowing smoke in an infant's face and a picture of a woman blowing a bubble, perhaps the implication being she couldn't blow a bubble with emphysema. The FDA will chose the images by July 2011. The images will have to cover 50 percent of the front and rear of cigarette packs, and tobacco companies will have until Oct. 22, 2012 to put the images on packaging. Although a step in the right direction, Kees said the proposed images may not be frightening enough to have much of an impact. None of the proposed images offered up by the FDA are as gruesome as those commonly used in other nations. "Other countries have had success in using graphic visual warnings on cigarette packages," Kees said. "It's important that we don't get it wrong. If we have even one warning that is cartoonish, that leaves the door open to smokers discounting all warnings as not realistic." Evoking fear via images is a tried-and-true method used by public health officials to frighten people into not doing some behavior, whether it's drugs or unprotected sex, said Michael Mackert, an assistant professor of advertising at University of Texas at Austin. When he showed the FDA images to his college students, a few, including a picture of an old man grimacing because of a heart attack or stroke, evoked chuckles. Even much harsher images may not have much of an impact among certain groups, particularly young people, he said.

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"Teens and younger people, if they have this air of invincibility, are they going to react to the fear appeal?" Mackert said. "A 15-year-old might think, 'Oh, that's so far away.' A lot of college students consider themselves social smokers, who smoke a few cigarettes when they're at a bar. They think, 'I don't smoke enough for that to happen to me,' or 'I'll quit before that happens to me.'" About 21 percent of the U.S. population smokes daily, according to the U.S. Centers for Disease Control and Prevention.

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Prof: Black Friday Shoppers 'Loosened Their Wallets' Local marketing professor said that shoppers spent their money more freely this year By Anthony Leone | Email the author | November 29, 2010

A Villanova University marketing professor said that Black Friday weekend saw many shoppers opening their wallets, but warned that local small businesses did not do well compared to large retail stores. "So far, everything looks good. Consumers this season have loosened their wallets," wrote Eric J. Karson, Ph.D., in an e-mail. The big retail stores were able to offer discounts and lower costs that made it especially tough for smaller stores to compete, stated Karson, an associate professor of marketing at the Villanova School of Business. "On top of that, add in the huge growth in online, and the large retailers' stronger presence there, again, I can't think the smaller retailers did that well," Karson wrote. And online shopping was popular for some holiday consumers. While waiting for the GameStop to open at midnight on Black Friday, Havertown resident Jason Leech told Haverford-Havertown Patchin a separate interview that he was going to Best Buy's website at 5 a.m. to do some online shopping. But economic predictions are not all in the red for small businesses, Karson wrote. Once the "frenzy for deals" settle down, small stores may benefit from local customers. "They (small business owners) have always competed on service and convenience, so I think they have to stick with that," advised Karson late Monday afternoon. And that was the case for a few local stores.

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"Black Friday was not too busy, but people planning to go away came in Saturday and Sunday," said Jan Wolkov, the co-owner of the Haverford store Cameo Water Wear. She explained that her swimwear store caters to some customers who go on cruises and tropical vacation spots during the winter months. While she did not want to reveal her Black Friday weekend revenue, Wolkov did admit Monday that Cameo Water Wear did make its quota. Hannah Schwartz, owner of the Children's Book World in Haverford, said many customers did go to the larger malls on Friday rather than her store, but she said that Saturday and Monday she was busy. "You know what, we have a dedicated group of customers who support us year round," she said. Her store is closed on Sundays. Schwartz only said that her store sold the same number of books this past Black Friday weekend compared to last year's, leaving her optimistic about this year's holiday shopping season. "I think this will be a better season," she said.

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Experts predicting big boost from Black Friday Friday, November 26, 2010 By DANIELLE LYNCH Experts are predicting today’s Black Friday crowds will be larger than last year and that the overall holiday shopping season will be one of the best in recent years. “This will be the strongest holiday season since 2007,” said Gus Faucher, director at Moody’s Analytics, an economic, financial, and industry research firm in West Chester. Nationwide, people can expect to see growth in retail sales — excluding auto — of a 3.5 percent increase from the fourth quarter of 2009 to the fourth quarter of 2010, according to Faucher. “The economy is slowly getting better,” Faucher said. “The number of jobs is growing but at a slow pace. And consumers are slightly anxious about what is going on in the broader economy.” Diane Phillips, an associate professor of marketing at Saint Joseph’s University, said consumers have a cautious, optimistic outlook on shopping this year. “I think that’s partly due to people feeling more confident about the security of their jobs,” she said. “I think the entire holiday shopping season is going to be a little better.” Phillips also said shoppers are getting smarter. “I think Americans do lead crazy, busy lives these days … and they are not going to fall for gimmicks. They are being very smart and very strategic.” Phillips said that in the past, many consumers fell for the “loss leader” model. With this

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method, retailers would reduce the price of an item, knowing that customers would flock to the store for it, and then fill their shopping carts up with other items. Now, consumers are purchasing one or two products at a store and then moving on, according to Phillips. “It’s called ‘surgical shopping,’” she said. Phillips and another local professor, Eric Karson, said they’ve heard sales will increase by at least 2 percent this season. “I think it will be a good Black Friday,” said Karson, an associate professor of marketing at Villanova University. “I think people have been really tight for a long time. I think (retailers) got the right amount of inventory. I think it will be what people expect.” € New applications on cell phones are also changing the way people are shopping this year. For example, Karson said, shoppers can now scan barcodes and take photos of products with their phones and then some applications will find out how much those items cost at other stores. The new applications are making people even more “price conscious,” he said. Joseph Fuhr, a professor of economics at Widener University, said he believes there will be an upward trend in shopping but customers won’t go overboard. He said there are a lot of people shopping for the lowest prices and looking for “things they actually need” and not luxurious items. As people become more comfortable with Internet shopping, Fuhr said more people will be shopping that way instead of “fighting through mobs” at the stores. As for Black Friday, Fuhr said there will be a significant amount of shoppers at stores. “There will be a lot of bargain hunters out there,” he said. Up to 138 million people plan to shop this weekend, according to a preliminary Black Friday survey conducted for the National Retail Federation by BIGresearch. This prediction is higher than the 134 million people who planned to shop last year, according to a release.

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Citi Regains Some Stock-Market Mojo -

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DECEMBER 8, 2010

Shares Rise 3.8% as Investor Interest Picks Up; U.S. Profitsâ&#x20AC;&#x201D;on This Bailout By RANDALL SMIT H and AARON LUCCHET T I

Citigroup Inc. shares gained 3.8% after the U.S. sold the last of its stake in the bank, lifting the cloud of government ownership that had been hanging over the company and its stock price. In an internal memo, Citigroup Chief Executive Vikram Pandit, who has returned the bank to profitability this year after heavy losses brought the bank to the brink of collapse in 2009, expressed thanks to taxpayers and employees from Citi's offices at Johannesburg, South Africa.

View Full Image Darren Hayward/The Wall Street Journal

Citi's Vikram Pandit, in Hong Kong last month, thanked taxpayers.

"We remain deeply grateful to the American people for the assistance we received and are very pleased that we have provided a substantial return on their investment," Mr. Pandit said in an email. The Treasury's claimed profits of $12 billion on its $45 billion Citi investment mark the largest return from infusions into a series of financial and industrial giants that were threatened by

the market meltdown. The government is still in the red on other bailouts. It recouped $13.6 billion on a stock sale in the initial public offering of General Motors Co. last month, boosting its returns to $23.6 billion on a $50 billion investment in 2009. But at current market values, that leaves the U.S. with a paper loss on GM of roughly $9 billion. The prospects are even more iffy at other big holdings such as mortgage-finance firms Freddie Mac and Fannie Mae, which still have $134 billion from the U.S. even after paying the government preferred dividends. 2010 Media Report Investment bank Morgan Stanley managed the Citigroup and GM stock sales, and earlier advised the government Page 267 Villanova School of Business on Fannie and Freddie.

12/8/2010 3:16 PM

Citi Regains Some Stock-Market Mojo -

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American International Group Inc., which received the largest bailout among financial institutions, still owes the government more than $90 billion. It recently completed two large overseas asset sales, and has earmarked more than $40 billion of asset-sale proceeds to repay the U.S. The rest of AIG's IOU is to be recouped through stock sales starting next year. At AIG's current price, the U.S. stake could fetch about $64 billion, which translates to a profit of roughly $15 billion. The government is also up $3.6 billion on its $17.2 billion investment in GM's former financing unit now owned by Ally Financial, according to Linus Wilson, professor of finance at the University of Louisiana at Lafayette. David Miller, chief investment officer of the Treasury's Troubled Asset Relief Program who managed the Citi stock sales, said in an interview that when all TARP returns are counted, the program's costs "will essentially be zero, while helping to accomplish the goal of stabilizing the financial system" and boosting economic growth. Meanwhile, the Treasury's exit from its Citi stake brings the bank several rewards. Big investors are more interested in owning the shares because the government no longer will be a constant seller, which has been holding down the stock. Customers may also feel more confident doing business with a bank that can stand on its own. Still, experts point out that Citigroup will still be under close government watch. "Just because the government is no longer an owner doesn't mean that Citigroup can thumb its nose at the government," says Michael Pagano, a Villanova University finance professor. He predicts that the Federal Reserve and other agencies will monitor Citigroup's capital closely enough that the bank won't make big strategic changes soon. Whether Citigroup gets back into risky businesses "is a question for a couple of years from now," Prof. Pagano adds. â&#x20AC;&#x201D;Serena Ng contributed to this article.

Write to Randall Smith at and Aaron Lucchetti at

Copyright 2010 Dow Jones & Company, Inc. All Rights Reserved 2010 Media Report This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by Page 268 Villanova School of Business copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit

12/8/2010 3:16 PM

Cigarette pack warnings scarier in other countries Dec 9, 2010 By Rita Rubin, USA TODAY

If Americans think the proposed graphic warnings for cigarette packs are frightening, they should see what's on packages in other countries. The U.S. Food and Drug Administration (FDA) last month proposed 36 possible illustrations and will pick one to run with each of nine new health warning statements it is to require on packaging and ads as of October 2012. Up until now, U.S. cigarette packs have carried only text warnings, and those haven't changed since 1985. SURGEON GENERAL: Just one cigarette can harm DNA The USA is playing catch-up with countries on every continent, and some researchers say a number of its proposed images aren't scary enough. At least 39 countries or jurisdictions have picture warning requirements, and many more are in the process of implementing them, according to a new report by the Canadian Cancer Society. While Canada in 2001 was the first to add picture warnings, many other countries have surpassed it, the cancer society says. One problem, critics say, is that after spending much time and money developing new ones, the Canadian government has never changed them. As a result, the warnings' effectiveness has waned. Uruguay, on the other hand, is battling tobacco giant Philip Morris International over its warnings, which cover 80% of the package, the largest in the world. The company has filed an arbitration claim with the World Bank alleging that Uruguay's warnings violate its trade agreement with Switzerland, where Philip Morris is based. The warnings leave little space "for display of legally protected trademarks," the company said Oct. 5. In addition, Philip Morris alleges, "repulsive and shocking pictures, such as a grotesquely disfigured baby," don't accurately depict health effects.

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Many countries besides Uruguay require images that are bigger and harsher than those proposed by the FDA, which include women blowing smoke in children's faces and diseased lungs. Some of the proposed pictures are cartoons, not photographs, and using them would be "really risky," because smokers might not take them seriously, says Jeremy Kees, an assistant professor of marketing at Pennsylvania's Villanova University. "Believability is one of the key issues for warnings," Kees says. The FDA might have been concerned that "gross-type" visuals would offend smokers, evoking anger instead of a desire to quit, he says. But his research has found that the scarier the images, the more likely smokers were to say they felt inspired to quit. "It doesn't matter what the theme is," he says. "The more fear-evoking, the more graphic, the more positive the response by smokers." Brazil's anti-smoking images, introduced in 2002, have been called the scariest in the world. The third set, added last year, include a gangrenous foot and what appears to be a fetus in an ashtray. They must cover the entire front or back of a pack. (In the USA, the proposed images are supposed to cover at least the top half of the front and the back.) And Brazil's warnings are working, says Eliane Volchan, an associate professor of neurobiology at the Federal University of Rio de Janeiro. Smoking rates in Brazil fell by more than half from 1989 to 2006, Volchan says, from 34.8% to 16%. The U.S. rate has been stuck at around 20% for the past five years. Volchan's views on the FDA's images are mixed. Some should be effective in scaring smokers smokeless, but others might not. "Highly aversive warning images should be selected," she says. "Those portraying harms of smoking ... are better." Her research has found that pictures of people smoking on cigarette packs might have opposite the desired effect. "Smoking-related images and words are craving triggers for smokers and should be avoided," Volchan says. Several images proposed by the FDA fall into that category. One simply shows a woman smoking in the rain. One photo and one cartoon show women blowing smoke in their children's faces. A couple of images show smokers annoying nonsmokers, while one image is simply a lighted cigarette.

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Tobacco companies have filed a lawsuit challenging the legality of requiring larger and more graphic warnings on U.S. cigarette packs. They say such a move would end up burying their logos at the bottom of the packages. Australia is planning to go a step further. As of July 2012, there won't be any logos on cigarette packs sold in the country, says Mike Daube. Manufacturers won't even be allowed to use colors or fancy type fonts to distinguish their packages. Daube, a health policy professor at Curtin University in Perth, was deputy chairman of the task force that recommended plain packs in Australia. Their only adornment will be text and pictures depicting smoking health risks. "It essentially means that the government takes over the full design of the pack," he says. "The industry has no say whatever." Brazil has also discussed plain wrappers, Volchan says. Andrew Lansley, the secretary of state for health in Great Britain, which introduced graphic images in 2008, issued a statement last month saying his government is considering such a move. "The evidence is clear that packaging helps to recruit smokers," so it makes sense to make it less attractive, he says. The 2009 Tobacco Control Act doesn't give the FDA authority to go that far. Still, Daube says, it is of "special importance" that the U.S. is finally adding pictures, because many countries, especially in the developing world where smoking continues to increase, look to it as an example. Says Daube: "If warnings like these are implemented in the U.S., where much of the tobacco industry is at home, and where it is at its most powerful, this will send out a striking signal that Big Tobacco is losing its influence."

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Sestak, Meehan: Keep Bush tax cuts Saturday, December 11, 2010 By DANIELLE LYNCH Both the congressman-elect and the outgoing congressman for the 7th Congressional District said they disagreed with House Democratic Party leaders’ recent decision to block a compromise deal on the so-called Bush-era tax cuts. The House Democratic Caucus on Thursday voted against a deal that would have extended the tax cuts for the wealthiest Americans. By voice vote, the Democrats passed a resolution that said the tax package should not come to the House floor for consideration. “We have a chance to create much-needed certainty for small businesses and families and also curb a potential recession, yet House Democrats are choosing to turn their backs on this opportunity,” said Pat Meehan, the Republican congressman-elect for the 7th district. U.S. Rep. Joe Sestak, D-7, of Edgmont, also disagreed with the Democratic Party leaders’ decision Thursday. “The Democratic Caucus doesn’t speak for me or for the people who I serve,” said Sestak, who was recently defeated in his Senate bid. “Instead of having my Democratic Party leadership worry about self-preservation (before the election), we should have had the courage of our convictions and separated the deficit hawks from the chicken hawks,” said Sestak. Nonetheless, Sestak said he’d reluctantly lean toward supporting the deal. He said he viewed it as a necessary repair for the fragile economy and pointed to problems faced by district residents. “If we don’t help them, (we) permit the other side to hold a gun to the working families’ head,” Sestak said. “We can’t pull that trigger.” Earlier this week, Obama announced that he reached a compromise with Republicans. Obama urged resistant Democrats to support the tax deal that would extend the cuts to citizens of all income levels for two more years, extend jobless benefits for the long-term unemployed and cut the Social Security payroll tax for a year.

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Local economic experts weighed in on the deal. If approved, the compromise would prevent the scheduled Dec. 31 expiration of all the Bush administration’s tax cuts enacted in 2001 and 2003, even though Obama had often promised to end the cuts for the highest earners. “We think the deal they worked on is a good one,” said Gus Faucher, director at Moody’s Analytics, an economic, financial, and industry research firm in West Chester. Faucher said the economy will “probably be OK if the tax cuts expire.” But he said expiration of tax cuts will definitely slow growth and “leave the economy more vulnerable if there is a shock.” “In an economy when things are not going well, you don’t want to increase taxes,” said Joseph Fuhr, professor of economics at Widener University. Fuhr said that if that tax cuts expire, local constituents’ disposable income will decrease, causing them to spend less money. David Fiorenza, economics professor at Villanova University, said that if tax cuts expire, “it will hit the working class, more so now than a few months ago because energy prices are on the rise.” Fiorenza said the tax cuts should continue for all citizens because it will spur economic growth. “Even people who make a quarter of a million dollars or more are more apt to hire or spend money on machinery and equipment if they have more money in their pockets, which will have a multiplier effect,” Fiorenza said. Fiorenza said the extension of tax cuts would provide some balance to the increase in food and gasoline prices. He said it would be best for the tax cuts to remain across the board and then be revisited a year from now. Local residents’ views on the compromise deal varied. Outside Genuardi’s in Springfield, Betty Leefson and Larry Rosenblum said they believed wealthy citizens need to pay more in taxes. “I think (Obama) shouldn’t compromise,” said Leefson, a resident of the Drexel Hill section of Upper Darby. Tammy Hudson, a resident of the Essington section of Tinicum, said tax cuts should be equitable for all citizens.

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“I think if it’s good for one group, it should be good for all,” she said, while standing outside Target in Springfield. Dave Scheidly, a Brookhaven resident, said the tax cuts should continue for all citizens. “The wealthy create jobs,” he said. “They are the engines for the economy. They are the ones who will spend money.” The Associated Press contributed to this report.

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PhillyDeals: Kill off the Fed? History provides lessons Posted on Fri, Dec. 12, 2010 By Joseph N. DiStefano 'End the Fed" is a book by U.S. Rep. Ron Paul (R., Texas). Last year, Paul introduced the Federal Reserve Board Abolition Act in Congress. Last week, Republicans named him head of the House committee that monitors the Fed. Is Paul, a free-market, hard-money advocate, really going to kill the central bank? He backpedaled a bit, telling Bloomberg TV he would "not really, not right up front" kill the central bank. "But obviously that's the implication," he concluded. Last time the United States ended its central bank, Andrew Jackson was president, and the central bank was in Philadelphia, which fell right into a long financial depression, along with the rest of the country. For the next 70 years, the United States rode a boom-and-bust cycle that lured many of our ancestors here to opportunities in factories, mines, and trade - then kicked them into the streets in the howling depressions that froze business in the 1850s, 1870s, and 1890s. Finally Congress set up the Federal Reserve in 1913. Our elected representatives ordered the Fed, not just, as I wrote last month, to fight inflation and boost employment, but also to act as "lender of last resort" in a crisis, as Villanova University economics professor David Nawrocki reminds me. How's the Fed doing? "The Fed's job is to stop the run, and it didn't do it" in the 2008 financial crisis, Nawrocki told me. "Letting Lehman Bros. fail froze the credit markets, and let the run spread to AIG, the money market funds, and the list goes on." President George W. Bush's forceful Treasury secretary, Henry Paulson, finally stepped in with massive financial support. Didn't that work OK? Last week, AIG said it's going to pay back the government at a profit, like the big banks already have. Maybe - but the rescuers waited too long, magnifying the damage, says Nawrocki. Nearly 10 percent of Americans are still out of work, tens of millions underemployed. Privatesector banks and investors are still deleveraging, writing down their losses. A big divide among economists is between conservatives who say that markets are natural and efficient and that government should get out of their way, and liberals who say that markets are inherently unstable and, as Nawrocki says, "have to be tended like a garden" by vigilant regulators. Markets match buyers and sellers at efficient prices, but only when people believe in them. When buyers and sellers panic, markets fail.

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That's where the Fed is supposed to step in - and has: After Philadelphia's giant Penn Central railroad failed in 1970, the Fed pumped billions into banks that financed other suddenly shaky corporations such as Lockheed and Chrysler. When the stock market fell in 1987 on Ronald Reagan's watch, the Fed backed bank loans to traders, allowing the markets to recover before business panicked. Nawrocki attributes the Fed's 2008 stumble to "a conservative ideology" that feared to seize or save key institutions until it was too late. If we kill the Fed, what happens in the next panic? Last time we had a central bank, its advocates were conservative, hard-money businessmen, and its opponents were subprime borrowers and lenders who convinced President Jackson the bank was holding back the nation. Now it's the reverse. To critics like Ron Paul, the Fed is an inflationary money-printing machine hijacked by free-spending, debt-addicted bureaucrats; only free money markets using a tangible currency (like gold) brings sustainable growth and prosperity. But power abhors a vacuum. Kill the Fed, and behind it stands the Treasury, beholden to the president; and Congress, scared of voter retaliation if it attempts something painful, like balancing the budget. The Fed is subject to public pressure - the president appoints its chairman, local business owners and bankers and nonprofit bosses man the boards that appoint many of its members - but it is insulated from direct political dictates. By ending the Fed, Paul and other Fed-killers, instead of strengthening free markets, would put more financial power right in the hands of our politicians. Do we trust them?

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Archdiocese to end lay pension plan Cites economy in move to 401(k)-style option By Lisa Wangsness Globe Staff / December 12, 2010

The Roman Catholic Archdiocese of Boston plans to freeze the pension plan for about 10,000 church secretaries, parochial school teachers, and other lay employees as the church joins a raft of nonprofit organizations and private corporations that have limited or modified retirement benefits in a down economy. Church officials say the move will stabilize the lay pension fund, which was 78.4 percent funded as of last June, and ensure that employees donâ&#x20AC;&#x2122;t lose benefits they have already earned. Though it was fully funded as recently as 2007, the fund was badly damaged in the financial meltdown of 2008, the archdiocese said. The church plans to continue contributing to the fund until it is fully solvent. The benefits of employees who are already retired will not be affected, church officials said. Lay employees who are already vested, or become vested, in the plan will receive all the money that have earned when they retire. But they will not accrue additional benefits after Dec. 31, 2011. At that point, the archdiocese will offer the retirees, as an alternative, a 401(k)-style plan. But some employees are unhappy because the church is replacing a guaranteed benefit with one that requires workers to assume more risk. About 40 percent of the lay pension fundâ&#x20AC;&#x2122;s beneficiaries are current employees.

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Archdiocesan officials say they are making the move for the same reasons that many corporations have replaced traditional pensions with “defined contribution’’ plans, such as 401(k)s, in which employees set aside part of their salary, often with an employer match, and control their own investments. People are living longer and drawing more benefits over time, ratcheting up the cost of pension plans to employers. The volatility of the financial markets in recent years has also made employers wary of taking on too much risk. “This is not a situation that is unique to us — there are very few defined pension plans that aren’t stressed today, and I think in many corporate settings and in many not-for-profit settings the same discussion is taking place,’’ said James P. McDonough, chancellor of the archdiocese. “We are just trying to tackle this head-on.’’ Charles Zech, an economics professor and director of the Center for the Study of Church Management at Villanova University, called the 401(k)-style plan “the wave of the future’’ for US dioceses. Many dioceses have already begun the transition, he said, including Brooklyn, N.Y., Detroit, Dallas, and Phoenix. “Every diocese in the country is suffering financially right now,’’ Zech said. “If they want to keep up their ministries, where are the cuts going to come? This is not necessarily a cut, but here is one way to . . . make sure they are not bearing all the risk themselves.’’ But some beneficiaries of the pension plan are unhappy with the change. Cathy Minkiewicz, the former director of adult faith formation and lay ministry formation for the archdiocese, was laid off in 2005; at 65, she is already receiving her pension and probably will not be affected by the change. But she is concerned for others.

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“Working for the diocese, you made certain sacrifices as to how much you were earning,’’ she said. “You expected to at least be taken care of in your old age.’’ The church and its employers contribute the equivalent of 7 percent of employees’ salaries toward the lay pension fund. The church plans to end that practice, and instead to devote the equivalent of 2 percent of salaries toward the new 401(k)-style plan and 5 percent toward closing the gap in the lay pension fund. McDonough said it could take many years for the pension fund to become fully funded again, but when it is, the church hopes to redirect the money it had been paying toward stabilizing the fund toward other employee benefits. He said employees have not had a raise in four years. “I don’t think we are looking to reduce our total compensation dollars at all through this,’’ he said. The church is offering employees who are 55 and older as of the end of next year two options for cashing out of the lay pension fund early — albeit at a financial loss. Those workers can choose to receive their benefits in a single lump sum, or to begin receiving annuities while they continue to work. But the early payments would be reduced to reflect the plan’s unfunded liability and, in the case of the annuities, to reflect the younger age at which the employee receives payments. If, for example, an employee who has earned $30,000 in benefits chooses the lump-sum option and cashes out and the plan has been 80 percent funded, on average, during the previous year, she would receive $24,000. The more employees take advantage of these opportunities, the faster and cheaper it will be for the church to reduce its risk and eventually end its

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obligations under the plan. But pension experts say both deals are poor ones for employees, unless they have a terminal illness, because it guarantees that they will receive a smaller amount of money than they have earned. “It’s really ugly, trying to get people to make bad financial decisions to save the Catholic Church some funding,’’ said Norman P. Stein, an authority on pension law and a professor at the Earle Mack School of Law at Drexel University. He said corporations, unlike religious organizations, are prevented by law from discounting lump-sum payments to reflect a pension fund’s underfunded status. He said the payouts can be tempting, particularly for the unemployed, but financially unwise. “People sometimes have a hard time looking very far into the future.’’ Carol Gustavson, executive director of human resources, benefits, and administration for the archdiocese, said the archdiocese has had many meetings with employees to explain the changes, and workers have been repeatedly told that the lump sum and annuity options are voluntary. In addition, she added, the archdiocese is offering free financial counseling to employees. “We are being very candid with people about what this is, and what it’s not,’’ she said. “It’s a voluntary choice.’’

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FOMC Meeting

Bernanke Keeps QE2 Steady As Bond Yields Rise Agustino Fontevecchia, 12.14.10, 4:10 PM ET

No new surprises came out of the final Federal Open Market Committee meeting of 2010, as the Federal Reserve's policy-setting arm kept its target rate for federal funds at between zero and a quarter point and pledged to continue its policy of quantitative easing through mid-2011. Keeping its language identical to its previous statement Nov. 3, the Fed pledged to continue its purchases of long-term Treasuries, as the "economic recovery is continuing, though at a rate that is insufficient to bring down unemployment." The second leg of the Fed's dual mandate, price stability, as measured through inflation, "continued to trend downward" and stood below central bank's target level of around 2%. To Doug Roberts of Channel Capital Research, Tuesday's announcement was more of the same. "[Fed Chairman] Bernanke maintains his usual pattern of disclosing any new or potentially controversial moves in speeches," says Roberts. The central bank's chief "wants FOMC statements to be confirmations of the Fed's existing positions," so as to not disrupt financial markets. Interest rates were kept in the band spanning from 0 to 25 basis points for an "extended period", while the pace of asset purchases, or QE2, will remain at $75 billion per month along with reinvestments of payments from maturing securities on the Fed's balance sheet, subject to regular review by the FOMC. As usual, the only member of the FOMC who dissented was Kansas City Fed President, Thomas Hoenig, who continues to be "concerned that the high level of monetary accommodation would increase the risks of future economic and financial imbalances," leading to unsustainable inflation in the medium to long term. (See "Bernanke Has FOMC Dissent, But Still Runs The Show.") But the Fed's policies seem to be having unintended consequences, as longer term Treasury yields have risen sharply since Bernanke signaled QE2 was likely in an August speech. Professor Victor Li, who worked with Bernanke at Princeton University from 1998 to 2000, suggested that it could be related to expectations of higher growth in the future. "QE2 is designed to lower 10 to 30 year [Treasuries], but if people are expecting the economy to do well in the next 5 to 10 years, then rates are going to come up" as the Fed is forced to

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tighten its policy, explained Li, professor of economics at the Villanova School of Business. Another possible explanation for the upward movement of bond yields is "fear that the U.S. will be like Japan during its 'lost decade'," when the central bank tried quantitative easing, but did not manage to spur economic growth. This, Li said, would lead to an erosion of the Fed's credibility and, in a worst-case scenario, stagflation, which is inflation accompanied by stagnant real wages. (See "Why Ben Is Addicted To Failure.") Li, who noted that economic growth above 3% is necessary to "make a dent in the unemployment rate," said he believed QE2 to be working, with unemployment falling under 9% by the end of next year. "The Fed is striking the right balance" between the risks and possible rewards of its policy, according to Li. The extension of the Bush tax cuts, which passed its first legislative hurdle Monday, should be complimentary to QE2. Both attempt to encourage spending, but as Li warns "large budget deficits and expansionary fiscal policies tend to raise long-term interest rates," which could undermine the Fed's efforts to shore up housing and lower unemployment without sparking rampant inflation. Asked about whether the Fed's policies were proving ineffective, as Wall Street and major corporations were sitting on vast piles of cash and record corporate profits while the unemployment rate continues to grow, Li explained it was a misconception. Noting that QE2 doesn't directly impact the distribution of wealth, Li said that "to get credit going and job growth, we need corporations" to start spending. "The Fed is trying to reestablish confidence in the markets, maybe it's all they can do," he said, but ultimately it's about "lowering the perception of risk" at a time when companies and investors are still clinging to safety.

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Knights of Columbus Suit Claims Sex Abuse Cover-Up Tuesday, December 14, 2010

New Haven, Conn. - Two men sued the Knights of Columbus on Tuesday alleging a youth leader sexually abused them decades ago and the world's largest Catholic lay organization covered up one of the men's earlier allegations of abuse. The lawsuits claim that Juan "Julian" Rivera, a former leader of the Columbian Squires in Brownsville, Texas, abused the men in the 1970s and '80s when they were boys. One of the victims told Knights of Columbus officials in 1986 that he had been sexually abused by Rivera, but the Knights concealed the report of abuse and intimidated the victim into not making the abuse public, one lawsuit alleges. "His allegations and his coming forward was basically shut down," Jeffrey Herman, attorney for the men, said outside the Knights' headquarters in New Haven as he announced the two lawsuits. "We believe that the Knights of Columbus organization was aware of what was taking place." Patrick Korten, senior vice president for the Knights, said there was no indication in the records at headquarters of such a complaint, but he said he doesn't know about records in Texas. He said the organization acted quickly to remove Rivera and refer the matter to police in Texas when officials first learned of the allegations last year. "There is nothing more important to us than to ensure the safety of the children in that program," Korten said. Korten said the Knights established a youth protection program in 2003 that includes background checks on all applicants to be youth leaders. There was no answer at a phone listed in Rivera's name. Larry Prather, chairman of the Texas Squires state council, said a phone number he believed was Rivera's was dead and his e-mail account was deleted.

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Herman said he believes the lawsuits are the first against the Knights of Columbus to allege sexual abuse of children. Each lawsuit seeks more than $5 million in damages. "It broadens the whole issue of the sexual abuse crisis and frankly further damages the Catholic Church's reputation," said Chuck Zech, director of the Center for the Study of Church Management at Villanova University. The Knights of Columbus is a well-regarded, generous organization which runs a large insurance program, Zech said. "They have deep pockets," he said. One of the victims, 49-year-old Jim Dennany of Texas, identified himself in the lawsuit, while the other was filed as a John Doe. The Associated Press generally does not identify victims of sexual abuse, but Herman said Dennany believes using his name will help protect other children from abuse. "I brought this lawsuit today because I do not ever want another child to be hurt the way that I was hurt," Dennany said in a statement to the AP. "I do not want anyone else who is suffering and blaming themselves to hurt anymore. I feel that it is time for the Knights of Columbus to be held accountable for what happened to me." Dennehy said the abuse affected every aspect of his life. "I do not trust anyone, especially with my family members," he said. "I have lived most of my life feeling ashamed and dirty for what Julian Rivera did to me. My abuse has affected everyone around me. I am hopeful that today is my first step toward healing myself and those that I love." Dennany's lawsuit alleges Rivera sexually abused him at various locations throughout Texas and Mexico between 1973 and 1977. Dennany, who said Rivera plied him with alcohol and pornography, said the abuse led to guilt, shame, self-blame, depression and chemical dependency. John Doe, who lives in Kansas, said Rivera plied him with whisky, marijuana, pornography and a white pill that he said would help him relax. He said when

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he hesitated to give Rivera a massage, Rivera pulled out a small handgun and placed it on the ground. Rivera sexually abused John Doe for six years on overnight trips for local and national events of the Squires, his lawsuit alleges. The man said if he told anyone, Rivera said he would kill his family or cut off a body part and send it to his mother, according to the lawsuit. Rivera also "shared" the boy with another adult leader of the Squires in another city who sexually abused him, the lawsuit alleges. The man said he suffered chemical addictions, nightmares, depression and suicidal tendencies.

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2010 VSB Media Report