Monday, June 25, 2007

Missing Pants Not Worth $54 Million

Missing Pants Not Worth $54 Million
(AP Photo/The Post, Lois Raimondo)
Roy Pearson, an administrative law judge who has filed a multimillion dollar lawsuit against his dry cleaner, leaves the courthouse after attending, dry cleaning in hand, the trial at D.C. Superior Court in Washington June 12. Pearson, representing himself, alleges that Jin Chung, Soo Chung and Ki Chung, owners of the mom-and-pop business, committed fraud and misled consumers with signs, since removed, that claimed "Satisfaction Guaranteed" and "Same Day Service."
WASHINGTON (AP) -- A judge ruled Monday in favor of a dry cleaner that was sued for $54 million over a missing pair of pants.

The owners of Custom Cleaners did not violate the city's Consumer Protection Act by failing to live up to Roy L. Pearson's expectations of the "Satisfaction Guaranteed" sign that was once placed in the store window, District of Columbia Superior Court Judge Judith Bartnoff ruled.

Bartnoff ordered Pearson to pay the court costs of defendants Soo Chung, Jin Nam Chung and Ki Y. Chung.

WSJ: A Good Deal Can Matter a Good Deal

Greg Stanton of Wall street without walls; Elyse Cherry also quoted


A Good Deal Can Matter a Good Deal

June 15, 2007; Page W11

"You know something in your life has changed when you go from reading 'Liar's Poker' to 'Pathways Toward Heaven on Earth,'" Gregory Anderson joked last week to an audience at the Yale Club. Mr. Anderson, a managing partner at Alexandra & James Inc., was addressing the semi-annual advisory board meeting of Wall Street Without Walls. And judging by the raucous laughter that came from the investment bankers in the room (some of whom were actually mentioned in the first book, Michael Lewis's account of bond trading in the 1980s), others in attendance also were surprised to find themselves dipping into the latter book, a collection of the religious wit and wisdom of Sir John Templeton.

But as its members will tell you, Wall Street Without Walls has gotten some men and women to do some surprising things. People who may not have a reputation for community-mindedness have been engaging in great work for those less fortunate than themselves. And these bankers and brokers (both retired and active) didn't have to write any big checks or volunteer at a soup kitchen. Instead, they were asked to do what they do best -- make deals.

In 1997, Greg Stanton was 42 years old and working at Drexel Burnham when he had two heart attacks in quick succession. He thought he'd just give up and become a "gentleman farmer," until he got the idea for Wall Street Without Walls at a gathering of major foundations he attended. Originally set up to provide nonprofits with advice from financial experts, the group's focus has shifted. For the past few years, the 80 or so volunteers at WSWW have worked "to connect the traditional institutions and financial products of the capital markets with community-based development organizations engaged in the economic development in low- and moderate-wealth communities."

Today, as the organization's founder and co-chairman, Mr. Stanton is charged with explaining what that means in layman's terms. There are a significant number of community development groups and financial institutions that lend money in high-risk (read: poor) areas, either through business loans or mortgages. They lend money to assisted-living facilities, affordable-housing developments and charter schools, among other institutions. Some of the lenders get their money from private foundations, some from tax dollars and others from a combination of both. The loans often have a high default rate, which means that either the borrower must pay a high rate of interest or the foundations and the taxpayer must assume a lot of the risk.

But what if the high-risk loans could be bundled together? As Mr. Stanton explains, "If you have sufficient data on the loans, you can structure them so an investor will always receive principal and interest, and then they begin to seem like any other for-profit." And private investors will be interested in putting their money into them. Or, as Mr. Stanton is fond of telling people, "If it looks like a duck and walks like a duck, people will invest in it like a duck."

Holding the mortgage to one charter school can be risky. Who knows if the charter will be revoked, teachers will stick with it or students will enroll in sufficient numbers? But buying 30 such mortgages spreads the risk and is a much more sound investment. And now, Wall Street Without Walls is helping to sweeten the deals for potential investors. The group has just helped to launch a company called Community Development Assurance. Nonprofit lenders can pay a small premium so that if their borrowers default on the loans, investors will still be repaid principal and interest for the duration of the loan. In return, CDA will help the investments get a higher bond rating, thus making them more attractive.

So far, WSWW has helped to get about $1.1 billion in private capital to fund these sorts of loans. Their projects have included business loans in New Orleans and mortgages for teachers, police officers and firefighters in Washington, D.C. And what has been required of the volunteers? Typically about six conference calls per deal, and as little as one deal per year. After the deals are made, the bankers are released from service and may even choose to have their own firms (Chase, Deutsche Bank, Morgan Stanley, etc.) invest in some of the projects.

* * *

Elyse Cherry, a member of WSWW's advisory board, recalls the "early days" of the organization. "People were wandering around thinking about what this market needed, what loans could really be bundled." Ms. Cherry, who is the president of Boston Community Capital, a lender in low-income neighborhoods in Massachusetts, says she was initially skeptical that such deals would really work. "It was a long, hard slog, but if this stuff were easy to get to capital markets someone would have done it by now."

Which brings us back to Sir John Templeton, the mutual-fund mogul, whose foundation has just given a little under a million dollars to WSWW to help expand its programs to 500 volunteers and 150 projects annually. Part of the foundation's mission is to support research on the benefits of free enterprise, including how our economic system can provide solutions to poverty. By helping community groups to rely less on public funding and more on private capital, there is no doubt WSWW is fulfilling this idea.

But the foundation has another goal -- helping people find purpose in life, especially in retirement. According to Marta Oliver, one of the foundation's program analysts, Sir John, who is now 91, has told the foundation's employees that he wants "to find ways to encourage people to enjoy their retirement as much as he has, and to be as productive as he has been." Ms. Oliver adds, "There are lots of people looking forward to using their talents in retirement, but it's difficult sometimes to find opportunities."

WSWW could not have found a more enthusiastic leader than Greg Stanton, who seems the perfect embodiment of "purpose." He believes he got "a second chance on life" after his health scares, and he tells me, "My work is my gratitude."

Ms. Riley is the Journal's deputy Taste editor.

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FW: Center of a Storm: How CDOs Work

Center of a Storm: How CDOs Work
June 23, 2007; Page B1

Mortgages are among the most widespread and simplest forms of financing.
So how is it that a bunch of home loans caused the crisis that has
gripped Wall Street for more than a week?

Because mortgages have morphed into something quite different on Wall
Street -- and some say more dangerous -- a trend that has accelerated
sharply in recent years. The two Bear Stearns Cos. hedge funds at the
heart of the crisis invested heavily in complex financial instruments
known as collateralized debt obligations, or CDOs, as a bet on the
mortgage market.
The Wall Street firm's wager under Bear executive Ralph Cioffi went
badly wrong after particularly risky home-loan borrowers defaulted in
record numbers as a result of lax lending standards and a slowing
housing market.
[R C]

But the funds' problems quickly became more than an issue for just
mortgage markets. Fears grew that other investors could suffer losses,
causing a ripple that would crimp lending and curtail the flow of
borrowed money that has fueled rallies in a variety of financial
markets. On Friday, Bear unveiled a $3.2 billion bailout of the funds
(see related article1.)

So what exactly are CDOs, the structures at the root of so much angst?
They are financial vehicles that bundle different kinds of debt --
ranging from corporate bonds, to securities underpinned by mortgages, to
debt backed by money owed on credit cards -- and cut it into slices.
These slices are sold to investors in the form of bonds. While the
slices contain the same debt, they differ in terms of which pay the most
interest and which are least at risk of losing money.

Slices that pay lesser amounts of interest are the last to get wiped out
by losses if there are defaults in the debt pooled in the CDO. Slices
that pay more feel pain more quickly. In other words, the CDO slice with
the lowest yield is at the front of the line on payday, but at the back
of the line when pink slips are handed out.

This is the way that some high-risk debts can be packaged to receive
investment-grade credit ratings.
That's a result of the CDO structure and the diversification gained by
bundling different debts. At the same time, CDOs use borrowed money to
amplify returns.

Although CDOs have been around for about 20 years, their use soared in
recent years. Investment banks in
2006 issued about $500 billion in CDOs, compared with about $84 billion
in 2002, according to research by Morgan Stanley. The popularity of CDOs
grew as low interest rates caused investors to embrace products that
offered the promise of higher yields.

Fans argue that CDOs allow investors to buy into higher-yielding
securities while taking on the same risk as they would with safe,
lower-yielding securities. They also say that CDOs are another tool that
allow financial markets to further spread risk so it isn't concentrated
in the hands of a few players.

But some investors think CDOs are an example of financial engineering
gone haywire. CDOs are "more sleight of hand" than a sound way to
generate diversified returns, said Brad Alford, founder of Alpha Capital
Management, an Atlanta-based investment advisory firm that caters to
wealthy families.
"They're a method for Wall Street to repackage securities as a way to
make more money."

Indeed, Wall Street has made millions of dollars in fees in recent years
by creating CDOs, selling them, servicing them and helping investors
trade them. The vehicles are generally used by institutional investors,
such as pension funds or hedge funds, not individual investors.

CDOs have generated debate because they are complex, and pose a risk
because they are several steps removed from the actual asset, or debt,
that is being packaged. Consider a mortgage. Jane Sixpack borrows
$100,000 from a bank to buy a house. The bank then pools Jane's loan
with thousands of other mortgages.
It then issues securities backed by this pool and sells those to
investors. Jane keeps making her payments to the bank, but her mortgage
is now owned by investors.

An investment bank creates a CDO, which is really just a company. The
CDO then buys some mortgage-backed securities, one of which holds Jane's
loan. The CDO then pools these with other mortgage-backed securities and
maybe some corporate bonds, slicing them up based on investor
preferences for yield versus risk.

The CDO manager sells portions of the package to other investors. In
some cases, other CDOs are the buyers.
There are even CDOs comprised of CDOs that have invested in CDOs.

The bundling of different debts, along with the fact that the CDOs are a
few steps removed from the debts they include, give rise to another
risk. It's tough to get an accurate price for CDOs, which don't trade in
active markets. When markets sour, the lack of available prices can make
it even more difficult to value a holding, or to get out of it without
taking a big haircut.

So investors often have to estimate the value of a CDO and have a lot of
leeway in how they do it. That's a worry for investors in hedge funds,
big buyers of CDOs. Hedge-fund managers make most of their money through
performance fees. This gives them added incentive to use price estimates
that work in their favor, even if they might not reflect the price at
which they could actually trade the CDO.

Or it could mean that the managers themselves don't know exactly what
their holdings are worth, because they are so far removed from the
underlying investment. In the case of Jane's loan, that means the CDO
buyer will have a tough time gauging whether she's a good risk or not.
And if she defaults, it may take a while before that affects the value
of the CDO, even though market conditions overall might have already

Write to David Reilly at david.reilly@wsj.com2
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Friday, June 22, 2007

NYT: Foundation With Real Money Ventures Into Virtual World

Foundation With Real Money Ventures Into Virtual World
  Jun 22, 2007 New York Times  

For the first time, one of the nation’s largest foundations is venturing into virtual worlds to play host to activities and discussions and explore the role that philanthropy might play there.

The foundation, the John D. and Catherine T. MacArthur Foundation, is sponsoring events in Second Life, the online world.

The goals are to gain insight into how virtual worlds are used by young people, to introduce the foundation to an audience that may have little exposure to institutional philanthropy and to take part in and stimulate discussions about the real-world issues that it seeks to address.

“This is not just some fad or something new and interesting that we’ve grabbed onto,” said Jonathan Fanton, MacArthur’s president. “Serious conversations take place there, people are deeply engaged, and that led us to think that maybe a major foundation ought to have a presence in the virtual world as well.”

Second Life says it has more than seven million members, about one-third of them Americans. Each member uses a virtual self, known as an avatar, to navigate the virtual world.

The MacArthur foundation, perhaps best known for the so-called genius grants it hands out each year, has given the Center on Public Diplomacy of the University of Southern California $550,000 to stage events in Second Life, including discussions of how foundations can address issues like migration and education.

In one such event today, Mr. Fanton, whose avatar in Second Life is known as Jonathan MacFound, is going to discuss the role of philanthropy in virtual worlds with Philip Rosedale, the founder and chief executive of Linden Labs, the company that produces Second Life.

In an interview, Mr. Fanton said MacArthur planned to eventually open an office in a virtual world and make grants through it that will become actual grants in the real world. “We’re still figuring out how to do that,” he said. “All of this is a learning experience.”

Mr. Rosedale said making grants in the virtual world offered a way for foundations to explore concepts and develop programs before rolling them out. “You can start things very cheaply in Second Life, play with them and let them germinate, and then put more behind them if and when they take off,” he said.

Charities and other nonprofit groups are also beginning to migrate into the so-called metaverse, seeking ways of attracting new donors and hoping to educate a broader audience about the issues they address.

Adventure Ecology, a British group, staged a virtual flood in Second Life to show what global warming might bring, and a psychiatry professor at the University of California, Davis, created a way for his students to experience in Second Life what a person with schizophrenic hallucinations experiences.

“It’s a wonderful awareness-building tool,” said Beth Kanter, a nonprofit consultant. “You can walk someone through an experience there or sit down with them to discuss the work you’re doing in a way that you can’t in the real world or on the Web.”

The American Cancer Society has had success in raising real money with virtual walkathons in Second Life. Randal Moss, the society’s manager of innovation-based strategies and futurist, established an avatar in Second Life in 2004 — “It looks pretty much like me, maybe a little bit more muscular, with a little better haircut,” he said — and quickly noted that another avatar, named Jade Lily, was holding a silent auction to raise money for a charity.

His avatar, R. C. Mars, talked to Jade Lily and persuaded her to head a virtual Relay for Life, as the cancer society’s walkathons are known. A few hundred avatars did that walk in 2005, raising $5,000. This year’s walk has raised $82,000 at a cost of $4,200 — and it will not take place until the end of next month.

The benefits go beyond dollars. “We benefit by increasing brand awareness,” Mr. Moss said. “We’ve opened an office in Second Life, and through that, we will provide health information, link back to our Web site and provide space for community-based support groups to meet.”

More than 30 nonprofits have opened offices in a virtual business incubator in Second Life called the Nonprofit Commons that is operated by TechSoup, a group that helps other nonprofits with technology.


Monday, June 18, 2007

Debate Over Cause of Autism Strains a Family and Its Charity

Debate Over Cause of Autism Strains a Family and Its Charity
  Jun 18, 2007 New York Times, A1  

A year after their grandson Christian received a diagnosis of autism in 2004, Bob Wright, then chairman of NBC/Universal, and his wife, Suzanne, founded Autism Speaks, a mega-charity dedicated to curing the dreaded neurological disorder that affects one of every 150 children in America today.

The Wrights’ venture was also an effort to end the internecine warfare in the world of autism — where some are convinced that the disorder is genetic and best treated with intensive therapy, and others blame preservatives in vaccinations and swear by supplements and diet to cleanse the body of heavy metals.

With its high-powered board, world-class scientific advisers and celebrity fund-raisers like Jerry Seinfeld and Paul Simon, the charity was a powerful voice, especially in Washington. It also made strides toward its goal of unity by merging with three existing autism organizations and raising millions of dollars for research into all potential causes and treatments. The Wrights call it the “big tent” approach.

But now the fissures in the autism community have made their way into the Wright family, where father and daughter are not speaking after a public battle over themes familiar to thousands of families with autistic children.

The Wrights’ daughter, Katie, the mother of Christian, says her parents have not given enough support to the people who believe, as she does, that the environment — specifically a synthetic mercury preservative in vaccines — is to blame. No major scientific studies have linked pediatric vaccination and autism, but many parents and their advocates persist, and a federal “vaccine court” is now reviewing nearly 4,000 such claims.

The Wright feud has played out in cyberspace and spilled into Autism Speaks, where those who disagree with Katie Wright’s views worry that she is setting its agenda. And the family intent on healing a fractured community has instead opened its old wounds and is itself riven.

The rift began in April when Katie put herself squarely on the side of “The Mercurys,” as that faction is known, on Oprah Winfrey, where she described how her talkative toddler turned unresponsive and out-of-control after his vaccines and only improved with unconventional, and untested, remedies.

In a Web interview with David Kirby, author of the controversial book, “Evidence of Harm: Mercury in Vaccines and the Autism Epidemic,” Ms. Wright lashed out at the “old guard” scientists and pioneering autism families. If the old-timers are unable to let go of “failed strategies,” she said, they should “step aside” and let a new generation “have a chance to do something different with this money” that her parents’ charity was dispensing.

Complaints poured in from those who said Ms. Wright’s remarks were denigrating.

So, in early June, Bob and Suzanne Wright repudiated their daughter on the charity’s Web site. “Katie Wright is not a spokesperson” for the organization, the Wrights said in a brusque statement. Her “personal views differ from ours.” The Wrights also apologized to “valued volunteers” who had been disparaged. Told by friends how cold the rebuke sounded, Mrs. Wright belatedly added a line saying, “Katie is our daughter, and we love her very much.”

Ms. Wright called the statement a “character assassination.” She said she had not spoken to her father since. Ms. Wright continues to spend time with her mother, but said they had not discussed the situation.

“I totally respect if her feelings were hurt,” Mrs. Wright said. “But a lot of feelings were hurt. A lot.”

Now other autism families who hoped to put their differences aside are shouting at each other in cyberspace. “Our struggle is not and should not be against each other,” said Ilene Lainer, the mother of an autistic child and the executive director of the New York Center for Autism.

The big tent approach of Autism Speaks appealed to Mel Karmazin, chief executive of Sirius Radio and an early board member and contributor. “If you look at what projects Autism Speaks has funded, we are agnostic,” he said.

Mr. Karmazin, who also has an autistic grandson, added, “I never wanted to look my grandson in the eye and tell him I’m taking just one viewpoint or that I think it had to be genetic.”

Bob and Suzanne Wright are sympathetic to Katie’s plight, having witnessed Christian’s sudden regression and his many physical ailments, mostly gastrointestinal, which afflict many autistic children.

The boy did not respond to behavioral therapies, the Wrights said, leading to their daughter’s desperate search for anything that might help. “When you have that sense of hopelessness, and don’t see results, you do things that other people think is too risky,” Mr. Wright said. “The doctors say, ‘Wait for the science.’ But you don’t have time to wait for the science.”

The Wrights agreed to disagree with most of Katie’s views. But her public attack on other parents crossed a line, Mr. and Mrs. Wright said in separate telephone interviews.

“I know my daughter feels deeply that not enough is being done,” Mr. Wright said. “The larger issue is we want to be helpful to everyone, and to do that we need information, data, facts.”

Some in the traditional scientific community worry that Autism Speaks has let Ms. Wright’s experience shape its agenda. She scoffs at the notion. Her parents, she said in a telephone interview, are “courageous” and “trying very hard,” but have been slow to explore alternative approaches.

“You can say it and say it and say it,” she said. “Show me evidence that they’re actively researching vaccines.”

The Wright family’s fight has captured the attention of the bloggers, who are now questioning everything from its office lease to how it makes grants. The charity rebutted the bloggers’ accusations of improprieties in interviews with The New York Times, which examined its IRS forms and read relevant sections to Gerald A. Rosenberg, former head of the New York State attorney general’s charities bureau. He said nothing he reviewed was untoward.

The most distinctive aspect of Autism Speaks is its alliance with Autism Coalition for Research and Education, an advocacy group; the National Alliance for Autism Research, devoted to scientific research into potential genetic causes, with high standards for peer review; and Cure Autism Now, which has championed unconventional theories and therapies.

Which wing of the merged charity is ascendant? Some establishment scientists and parents now fear it is The Mercurys. They point to Cure Autism Now’s having more seats than the National Alliance does on the board of directors and the growing number of research projects that focus on environmental causes.

At a recent benefit gala, featuring Bill Cosby and Toni Braxton, some in the audience were surprised when Mr. Wright announced that all proceeds would go toward environmental research, which generally includes vaccines.

But a list of current research grants on the Autism Speaks Web site suggests that the Wrights, while walking a fine line, are leaning toward genetic theories.

From 2005 to 2007, the charity sponsored $11.5 million in grants for genetic research (compared with $5.9 million by all its partners between 1997 and 2004). It sponsored $4.4 million in environmental research (down from $6 million granted by the partners in the previous seven years). And many of the environmental studies explore what is known as the double-hit hypothesis: That the genes for autism may be activated in some children by exposure to mercury or other neuro-toxins.

Bob and Suzanne Wright say their two-year immersion into the world of autism has been an eye-opener, especially the heated arguments worthy of the Hatfields and McCoys.

Mrs. Wright is aware that the marriage of the Alliance and Cure Autism Now, for instance, could fall apart over opposing ideologies. “I’m not going to let it,” she said. “The truth will rise to the top.”

She is also aware that the rift in her own family needs repair: On Friday, her daughter posted a message on an autism Web site questioning their “personal denouncement of me.”

Yet Mrs. Wright is confident that “we’ll work our way through this.” Autism, she said “has done enough damage to my family. I’m not letting it do any more.”

Fruchterman: Silicon Valley nonprofit uses technology for social causes

Silicon Valley nonprofit uses technology for social causes
  Jun 17, 2007 Sacramento Bee  

By Maria Henson

"Part of life's journey is figuring out what you're good at," Jim Fruchterman told our group of journalists last month at his Benetech office in Palo Alto. "I'm very good at getting things done."

The former rocket scientist developed and sold a nonprofit company that made reading machines for the blind in June 2000, then launched his next venture.

Service is "what motivates me," said the electrical engineer with degrees from the California Institute of Technology.

Benetech is a nonprofit whose mission is to use technology to serve social causes. It operates on a venture capital model that uses "high-tech discipline" while emphasizing social over financial returns, Fruchterman told Fast Company magazine.

One of its initiatives is, touted as the world's largest digital library for scanned material for people with reading and vision disabilities. Another provides technology to human rights groups to help them collect and analyze stories of individual and human suffering. The United Nations Commission for Historical Clarification relied on Benetech technology, for example, to help prove that genocide had been committed against the indigenous people of Guatemala.

The technologist's service didn't go unnoticed. Without his knowledge someone nominated him for one of the country's most prestigious honors. Last year, the MacArthur Foundation awarded Fruchterman one of its "genius grants" -- $500,000 over 5 years -- "to individuals who show exceptional creativity in their work and the prospect for still more in the future."

Fruchterman writes today for Bee readers with another leading light in the field of technology, Gregg Vanderheiden, director of the Trace Research and Development Center at the University of Wisconsin, Madison. He, too, is trying to make the Web more accessible to people with disabilities.

"There are some that say that accessibility and usability are two completely separate topics. They say that accessibility is for people with disabilities and usability has to do with everybody else," Vanderheiden told the Wisconsin State Journal in September. "The first problem with that is there is no difference between people with disabilities and everybody else. It's just a continuum."

One of the heralded inventions he and his team created are StickyKeys, which allow users to perform computer keyboard tasks with one hand that typically require two.

As the population ages, watch for the work of Fruchterman and Vanderheiden to gain more accolades. They will most certainly be in the news.

Thursday, June 14, 2007

Chinese Internet addict kills mother over money

Chinese Internet addict kills mother over money


A teenage boy in southern China, "heavily addicted" to the Internet, killed his mother and severely injured his father with a kitchen knife after he was refused money to go to a cybercafe, state media said on Thursday.

Wang, from Guangzhou, capital of Guangdong province, stabbed his mother to death at home during a heated argument, the Beijing Youth Daily said.

"After his father got home, Wang hacked at him causing serious injury. Seeing what he had done, Wang went to his room and sat on his bed," the paper said.

Wang's father ran bleeding to his brother's house, who then alerted the police, it said.

Wang had resolved to kill his parents a month earlier, and had once prepared to kill his father with an iron bar. He had also recently bought sleeping pills, the paper said.

Wang, who was "less than 16" but had left school a year before, would spend his spare time in Internet cafes when not working for his father who made a living selling barbecue food in their neighborhood.

He had dreamed of being an outstanding politician or economist and believed his parents were stifling his development, the paper said.

China has seen an alarming rise in the number of Internet addicts in recent years, who it says may be responsible for up to 80 percent of juvenile crime.

In recent months, China has banned the opening of new cybercafes in 2007 and issued orders limiting the time Internet users can spend playing online games.

Maryland governor announces public-private plan for refinancing mortgages

O'Malley announces public-private plan for refinancing, counseling

By Andrew A. Green Sun reporterJune 14, 2007


Gov. Martin O'Malley announced an initiative yesterday aimed at preventing home foreclosures through credit counseling, enforcement of lending practice standards and refinancing assistance to stop what he said is a rising threat to the state's middle class.

The state has received commitments for $100 million in private capital to allow about 500 households to refinance from adjustable rate loans into fixed mortgages. It will use $10 million in surplus funds from the state's mortgage insurance program to leverage another $200 million in private sector capital and will spend $1 million for foreclosure prevention activities, such as counseling for homebuyers.

"We're going to stand up for the working people of our state and to protect that building block of wealth for the middle class that is homeownership," O'Malley said.

Maryland has historically had a lower foreclosure rate than the national average, but state officials said they've seen worrisome signs, particularly in the past few months. The proliferation of adjustable rate mortgages - and unscrupulous practices by some lenders - have put an increasing number of the state's homeowners in financial peril, they said.

Labor, Licensing and Regulation Secretary Thomas E. Perez said Maryland ranked 40th last year among the states in its foreclosure rate, but last month, it jumped up to 22nd.

"This problem is all over the state," Perez said. "The trend lines are moving in the wrong direction."

Advocates and Maryland officials say state law allows one of the quickest foreclosure processes in the nation. A lender can seize a home and sell it 15 days after sending out a notice of foreclosure, and state law does not require proof that the homeowner received the notice.

O'Malley also announced the creation of a task force that will study the problem of foreclosures in the state and recommend legal reforms in time for next year's General Assembly session.

"A lot of times, people feel like they failed or some think they weren't worthy of homeownership because they didn't read the 42 pages of fine print" on their mortgage, O'Malley said. "They're not alone. There is help from the state. Whether it's investigating an unscrupulous loan or counseling or getting them into a loan they can afford, there are things we can do to help."

More information on the state's programs is available by calling

877-462-7555 or visiting Complaints about lending practices may be directed to the Department of Labor, Licensing and Regulation at 888-784-0136.

Monday, June 11, 2007

Apple extends Web browser to Windows

Apple extends Web browser to Windows

By MAY WONG, AP Technology Writer 17 minutes ago

Apple Inc. launched a version of its Safari Web browser for Windows-based PCs on Monday, pitting it against Microsoft Corp.'s Internet Explorer and Mozilla's Firefox.

The free program is the latest move by Apple to expand its reach beyond its Macintosh computer and, at the same time, attract converts to its products. It's previously made its iPod media player and iTunes Store compatible with Windows.

"What we've got here is the most innovative browser in the world and the most powerful browser in the world," Apple CEO Steve Jobs said during his keynote speech at the company's Worldwide Developers Conference.

Safari, which was released a few years ago for Apple's Macintosh computers, has captured about 5 percent of the world's browser market share with more than 18 million users, Jobs said.

Internet Explorer is the predominant browser with a 78 percent share, while Firefox has rapidly climbed to gain about 15 percent of the market, he said. Like the other Web browsers, Safari is available at no charge.

Jobs claimed Safari performs twice as fast as its competitors.

Never one to disappoint his audience, the iconic chief executive — in his final highlight of his 1 1/2 hour speech — also told the thousands of developers before him that the highly anticipated hybrid smart phone and iPod will run Safari.

That means, Jobs said, that any application meant to run on the Safari browser for Macs would also be fully accessible and compatible with the iPhone.

So far, Apple's strategy of offering software and products for computers other than Macs appears to be paying off.

Mac sales have grown significantly over the past two years, pushing its slice of the PC market in the United States from 3.5 percent in 2004 to 4.9 percent in 2006, according to IDC, a market research company.

"Safari is another Trojan horse that introduces an innovation of Apple to the Windows community and entices them to the Mac platform," said Tim Bajarin, an industry analyst at Creative Strategies, a technology consultancy.

Apple's iPhone is expected to further propel the iPod and Mac maker's fortunes. Anticipation for the mobile gadget, due to go on sale on June 29, has driven Apple's stock price to record highs in recent weeks. It soared to an all-time trading high of $127.61 last week after an analyst report predicted 45 million iPhones would be sold in 2009.

But investors seemed less than enthralled with Apple's announcements Monday, sending shares of Apple down by about 3.5 percent, or $4.30, to $120.19, in Monday trading.

Other than promoting how developers could introduce Web-based programs to the iPhone through Safari, Jobs gave little other new information about the iPhone's features.

Instead, Jobs used the event to focus mainly on the next upgrade to the Mac OS X operating system, dubbed Leopard. The product's release was pushed back from the spring to October after Apple said it needed to divert some resources to ready the iPhone instead.

Jobs presented many of the same features in Leopard that he had previewed at last year's Apple developers conference, but did reveal a few new ones.

Those included: a new desktop look — blades of green grass instead of a blue background; an advanced method of finding files on your computer or others machines on your computing network; "Stacks," a new way of organizing and managing the folders on your desktop; and the ability to share videos, photos or other documents in an Apple iChat video-conferencing session.

Friday, June 8, 2007

Obopay: Free $10 prepaid card


Based: Redwood City, CA
Founded: 2005

Why it’s Fierce: The mobile wallet concept the industry has been dreaming of is finally coming to fruition. The idea that consumers could use the mobile device at retailers or transfer funds was stymied in the past because of a combination of inadequate technology and questionable business models. But the market has seen a flurry of activity as startups, retailers and financial institutions rise up to help consumers spend with their mobile devices. One startup with momentum is Obopay. It inked deals with MVNOs Amp'd Mobile and Helio last year for a service that allows users to set up stand-alone accounts, Obopay Prepaid MasterCard cards, that can be used to send and receive money between users or make purchases. The company charges 10 cents per transfer of funds between users, paid by the sender. Retailers are charged based on the amount of each transaction. Obopay Prepaid MasterCard cards are accepted at 24 million merchant locations and over 1.1 million ATMs around the world. Obopay also inked an impressive deal for a pilot program to allow Citi customers to send and receive money from their phones. Peer-to-peer services like Obopay's may account for a tiny fraction of the overall mobile payment space today, but we believe they may offer a more viable long-term business model. Consumers might be willing to pay a few cents per transaction to transfer funds or send money to a friend, and financial institutions are scrambling to lure new customers with such services.

MIT heralds future of gadgets that can be recharged wirelessly

MIT heralds future of gadgets that can be recharged wirelessly
By Associated Press
Friday, June 8, 2007 - Updated: 12:40 PM EST

CAMBRIDGE, Mass. - In a perfect world, there’d be no wires. They clutter the view, get tangled behind desks and limit how far networks can reach. That’s why the telegraph gave way to the radio. Cell phones unstrung telecommunications. Wi-Fi liberated computer data.
    Now even the last knotty wire that seemed destined to remain - the power cord - could be on its way out.
    Massachusetts Institute of Technology researchers announced Thursday they had made a 60-watt light bulb glow by sending it energy wirelessly, potentially previewing a future in which cell phones and other gadgets get juice without having to be plugged in.
    The breakthrough, disclosed in Science Express, an online publication of the journal Science, is being called "WiTricity" by the scientists.
    The concept of sending power wirelessly isn’t new, but its wide-scale use has been dismissed as inefficient because electromagnetic energy generated by the charging device would radiate in all directions.
    Last fall, though, MIT physics professor Marin Soljacic (pronounced soul-ya-CHEECH) explained how to do the power transfer with specially tuned waves. The key is to get the charging device and a gadget to resonate at the same frequency _ allowing them to efficiently exchange energy.
    It’s similar to how an opera star can break a wine glass that happens to resonate at the same frequency as her voice. In fact, the concept is so basic in physics that inventor Nikola Tesla sought a century ago to build a huge tower on Long Island that would wirelessly beam power along with communications.
    The new step described in Science was that the MIT team put the concept into action. The scientists lit a 60-watt bulb that was 7 feet away from the power-generating appliance.
    "It was quite exciting," Soljacic said. The process is "very reproducible," he added. "We can just go to the lab and do it whenever we want."
    The development raises the prospect that we might eliminate some of the clutter of cables in our ever-more electronic world. Is that necessarily a good thing? Soljacic acknowledged "that it’s far from obvious how crucial people will find this."
    But at least one benefit could be that if devices can get their power through the air, they might not need batteries and their attendant toxic chemicals.
    Before that can happen, the technology has a ways to go.
    The MIT system is about 40 percent to 45 percent efficient _ meaning that most of the energy from the charging device doesn’t make it to the light bulb. Soljacic believes it needs to become twice as efficient to be on par with the old-fashioned way portable gadgets get their batteries charged.
    Also, the copper coils that relay the power are almost 2 feet wide for now _ too big to be feasible for, say, laptops. And the 7-foot range of this wireless handoff could be increased _ presumably so that one charging device could automatically power all the gadgets in a room.
    Soljacic believes all those improvements are within reach. The next step is to fire up more than just light bulbs, perhaps a Roomba robotic vacuum or a laptop.
    The MIT team stresses that the "magnetic coupling" process involved in WiTricity is safe on humans and other living things. And in the initial experiments on the light bulb, nothing bad happened to the cell phones, electronic equipment and credit cards in the room _ though more research on that is needed.
    The harmlessness apparently extends both ways: The researchers noted that putting people and other things between the coils _ even when they block the line of sight _ generally has no effect on the power transfer.
    On the Net:
    Soljacic’s Web page:

© Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Thursday, June 7, 2007

What Apple TV Costs to Make

What Apple TV Costs to Make

Analyzing and pricing out the components of Apple's new set-top video box reveal uncharacteristically slim profits

When Apple CEO Steve Jobs called Apple TV a "hobby," he wasn't kidding.

By typical Apple standards, the new set-top video box may as well be a hobby given how unprofitable it is in its current form. That's one conclusion you can draw from research firm iSuppli's analysis of the innards of the device, which connects a TV to videos stored on a Mac or Windows computer.

Having taken it apart, iSuppli estimates that the components and materials used to make Apple TV cost $237. Since Apple sells it for $299, that would leave a gross profit of $62, or about 20%, before marketing costs.

Big Departure

That would be a big change from Apple's penchant for gross margins in excess of 50% outside its computer lineup. That's been the usual case with the iPod music player family (see, 9/20/06, "The Skinny on Apple's New Nanos") and appears to be the case with the iPhone, the release of which is now less than four weeks away (see, 1/18/07, "What the iPhone Will Cost to Make").

Apple TV's slimmer-than-usual gross margin is also interesting when set against the fact that Apple plans to book the associated costs and revenue over a two-year period. So for every Apple TV sold, the company will split the revenue into chunks reported over eight quarters, at a rate of $37.375 for each period. Dividing iSuppli's cost calculation similarly, $7.75 of that total will be profit.

"This is certainly a departure for Apple, or at least it's approaching a departure," says Andrew Rassweiler, analyst with iSuppli. "We made some very aggressive assumptions with this device, and by that I mean we assumed low prices on the components." If the costs were much higher, "we'd be looking at a device that Apple was subsidizing," perhaps in hopes of making up the difference with video content deals, Rassweiler says.

Intel Inside

Such a business model would contrast sharply with that of the iPod, for which device sales generate far more profit for Apple than music sold on the iTunes online music service. Notably, last week's announcement by Jobs that Apple would offer videos from Google's (GOOG) YouTube suggests that third-party partnerships might be part of the long-term strategy to boost its profitability.

Analyst Wendy Abramowitz, who covers Apple for Argus Research, says that a lower gross margin on Apple TV probably won't have much effect on Apple's financial picture. "I wouldn't even look for this product to be a substantial part of the revenue base initially," she says. Yet Abramowitz also points out that Apple has warned analysts that overall gross margins will drop somewhat in coming quarters, in part because of new products.

The most expensive component inside the Apple TV, Rassweiler says, is an Intel (INTC) microprocessor iSuppli valued at $40. The chip, he says, is a variant of Intel's mainstream Pentium M for personal computers, but runs at a slower clock speed than the regular M processor, thereby lowering the cost. "If it were one of the mainstream chips Intel is selling Apple now for the Mac, there would be no room left for a profit margin at the $299 retail price," Rassweiler says.

Accompanying that Pentium is a $28 Intel chipset, which connects the main processor to memory and other parts of the device. That brings Intel's material share of Apple TV's cost to $68, or 28% of the total, the biggest of any supplier.

Cheap Chips

The graphics chip is an Nvidia (NVDA) GeForce Go 7300 costing $15. This card gives Apple TV the ability to deliver true high-definition video, suggesting that Apple may offer HD television shows or movies for download in the near future. At present, the video content for Apple TV that's available through iTunes plays at a lower-end flavor of HDTV.

Apple TV's 40-gigabyte hard drive from Fujitsu, Rassweiler says, costs $37. But once Apple starts offering HD content, 40GB of storage capacity will quickly prove insufficient. Intriguingly, Apple appears to be seizing on this reality as an opportunity to boost its profit margin. Last week, the company unveiled a build-to-order option for Apple TV that includes a 160GB hard drive for $399, or $100 more than the basic model (see, 5/31/07, "Higher Hopes for Apple TV"). The 160GB hard drive costs $73, according to iSuppli. The relatively modest price difference between the two drives boosts Apple's profit margin on the higher-capacity model to more than 30%, Rassweiler says.

Other Apple TV suppliers include Broadcom (BRCM), which supplies 802.11n Wi-Fi components costing $19 per unit. Cypress Semiconductor (CY) supplies two chips worth a combined $1.65, and Silicon Storage Technology (SSTI) supplies a $1 microcontroller. The cheapest part? A 75¢ audio chip from Taiwan's RealTek Semiconductor.

Hesseldahl is a reporter for


Tuesday, June 5, 2007

Edwards, Clinton and Obama Describe Journeys of Faith

Edwards, Clinton and Obama Describe Journeys of Faith
  Jun 5, 2007 New York Times  

By Patrick Healy and Michael Luo

WASHINGTON -- One presidential hopeful described how prayer helped him survive his son’s death and his wife’s cancer diagnosis. Another spoke about the Israeli-Palestinian conflict and the role of faith in forgiving those who treat others unjustly. A third said of her husband’s infidelity, “I’m not sure I would have gotten through it without my faith.”

Intimate discussions of politics and religion have long been the province of Republican candidates for public office. But on Monday night, the three leading Democratic presidential hopefuls — former Senator John Edwards and Senators Barack Obama and Hillary Rodham Clinton — opened up at an unusual televised forum about their faiths, the role of prayer in their public and private lives and the ways that religion informs their views on policy and government.

Each is aiming to make historic inroads among evangelical Christians and other committed churchgoers who have up to now been most linked with the Republican base. The candidates appeared eager not just to discuss their policies but also to discuss their personal faith journeys as they spoke, one after another, at George Washington University.

The event was organized by a liberal evangelical group, Sojourners, and televised by CNN.

The participants sought to walk a fine line between appealing to religious voters, while not turning off secular voters, who represent a crucial constituency for them.

Mr. Edwards, who has spoken extensively about poverty in moral terms but has shared little about his faith, demonstrated dexterity with speaking the language of Christian belief.

When asked whether he would be willing to discuss the “biggest sin you’ve ever committed,” Mr. Edwards laughed, paused for a moment and said that the “list is too long.”

“I’d have a very hard time telling you one thing, one specific sin,” he said, drawing applause. “If I’ve had a day in my 54 years that I haven’t sinned multiple times I’d be amazed. We all fall short, which is why we have to ask for forgiveness from the Lord.”

Mr. Edwards recalled growing up in the Southern Baptist Church but admitted that he had strayed as an adult. His faith, however, came “roaring back” in the midst of family crises. First was his son Wade’s death in a car accident, and then came the diagnosis for his wife, Elizabeth, and the recent recurrence of cancer.

“I’ve been through a faith journey in my life,” he said, adding that prayer “played a huge role in my survival” in those difficult moments.

“It’s the Lord who got me through,” he said.

Mrs. Clinton, who appeared comfortable chatting on stage with the CNN interviewer, Soledad O’Brien, and later roaming the stage while addressing the audience, drew the most rounds of applause. There were moments on stage that had an almost confessional quality for her.

Ms. O’Brien noted that Mrs. Clinton had shared relatively little about her faith in public but then carefully broached what has largely been the one issue that has been largely off limits in Mrs. Clinton’s campaign, her husband’s infidelity, asking whether her faith helped her deal with it.

“I’m not sure I would have gotten through it without my faith,” Mrs. Clinton said.

Mrs. Clinton said she took her faith “very seriously and very personally” but went on to say she came from a faith tradition, Methodism, that is “perhaps a little too suspicious of people who wear their faiths on their sleeves.”

She admitted that talking about her faith in public “doesn’t come naturally to me,” saying she often flashed back to “the Pharisees and all of the Sunday school lessons and readings I had as a child.”

She expressed gratitude for close friends and others who she said were praying for her, describing them as “prayer warriors” who “sustained me through a very difficult time.”

“I am very grateful I had a grounding in faith that gave me the courage and the strength to do what I thought was right, regardless of what the world thought,” she said, drawing a rousing round of appreciative applause.

When Ms. O’Brien asked what she asked God for in her prayers, Mrs. Clinton drew laughter from the audience when she said, “Sometimes, I say, ‘Oh Lord, why can’t you help me lose weight.’ ”

Mr. Obama dwelled somewhat more on policy and global concerns than on his personal faith or Scripture, in large part because of the nature of the questions that he faced. But he also found ways to interlace religion and policy.

Asked whether he believed that God took sides in a war, Mr. Obama reached for a famous quotation of Lincoln, about asking whether the nation is on God’s side.

At the same time, he said, it was important to remain “our brother’s keeper, our sister’s keeper” to advance the causes of justice and freedom.

Mr. Obama said he believed that evil existed in the world, noting, ‘I do think when planes crash into building and kill innocents, there’s evil there.” In other times of violence and war, however, he saw just causes like the Civil War and the defeat of fascism and the liberation of Europe.

He also said that his “starting point as president is to restore that sense that we are in this together” and that this commitment rose out of his faith. He promised to build alliances across partisan lines to improve early childhood education, children’s nutrition, workers’ pay and efforts to put criminal offenders on a better path.

“The notion that we take away education programs in prisons, to be tough on crime, makes absolutely no sense,” Mr. Obama said.

The event was the first in recent memory by Democrats that focused explicitly on faith and its values. It highlights how far the party has come since the 2004 presidential election in its efforts to appeal to religious voters and the openings Democrats see if the Republicans nominate a candidate who supports abortion rights and gay rights like Rudolph W. Giuliani or one who would be the first Mormon president, Mitt Romney.

Mara Vanderslice, director of religious outreach for the Kerry-Edwards campaign in 2004, said it would have been almost unimaginable for Democratic candidates to have participated in such an event in 2004.

Ms. Vanderslice recalled how difficult it was to nudge Mr. Kerry to talk about his Roman Catholic faith in a substantive way during the campaign.

“We would never have seen something like this last cycle,” she said.

Friday, June 1, 2007

37signals: Small Is Essential

Thursday, May. 17, 2007

Small Is Essential

At 37signals, a company with just eight employees whose Web-based collaboration software is used by thousands of small businesses, there isn't time to sit around a conference room sipping latte and deconstructing memos. Come to think of it, there isn't even a company conference room. There are just a couple of cubicles, loads of brainpower and three simple goals: make useful business software, make it easy to run, make money selling it. Repeat.

Founder and president Jason Fried, 33, decided early on that he didn't need to be in the shiny valley of Silicon to make cool software. Half his team works out of a plain-vanilla Chicago office that 37signals shares with a design studio. The other four are scattered: Portland, Ore.; Chesapeake, Va.; Caldwell, Idaho; and New York City. This tiny crew, only three of whom graduated from college, has built software that many in the world of Web 2.0 consider the best for small-business collaboration. One of its development tools, Ruby on Rails, is the backbone for dozens of popular websites, such as Shopify, Twitter, 43 Things and Jobster.

Unconventional organization is proving to be one of 37signals' biggest assets. The company creates programs that facilitate teamwork, and it ends up relying on the very same tools it builds. "We are growing in the same way a lot of our customers are, so we build products that we need to run our own business," Fried says. "We just build stuff we want to use. If we need it, they need it."

At the heart of 37signals, named for an attempt to find signs of intelligent life in space, are four pieces of software that help business teams manage projects (see below). Subscribing to the Web-based software costs $12 to $149 a month, depending on the amount of disk space and the number of features you use. The thousands of paying users--Fried won't say exactly how many--provide 37signals with a steady revenue stream. The subscription model minimizes the up-front cost for small businesses and makes software spending more predictable for firms worried about cash flow. The monthly fees include ongoing service and updates.

The 37signals team manages its products remotely, so when a problem pops up, it can be fixed without having to recall software or ask customers to install a patch. And if a new product isn't quite what customers wanted, 37signals can respond immediately. When the company launched Highrise, a contact-management tool, in March, customers pleaded for a specific format for freelancers. Within 36 hours, 37signals expanded its offering. "They implement a mix of what's on their own road map and what people suggest," says subscriber Chris Busse, a Web developer.

Fried admits the 37signals team is stretched thin handling its users' demands. He insists that the bigger a staff gets, the slower it moves. "A lot of teams have problems with overcollaboration," he says. "Too much teamwork, too many cooks in the kitchen, too many people making decisions."

Simplicity is one of 37signals' guiding principles, in programming as well as management. For most technical issues that arise, simple work-arounds will address 95% of the need with 10% of the effort that would be required to cover everything. For example, when designing Writeboard, for collaborative writing, the team wanted to let people track how much a document had changed over time. They pored over Ph.D. theses and complex algorithms. Instead, ace programmer David Hansson worked out a "cheat": software to track the number of characters in each document. The evolving total could be conveyed visually using dots of different sizes. With that clever solution, 37signals reduced what could have been a months-long programming project to a day's work.

To help build Basecamp, Campfire and the company's other core applications, Hansson developed Ruby on Rails. It gives 37signals' software a consistent look: sleek, friendly and without the extraneous bells and whistles that plague much of the bloated software sold by larger companies.

Of course, there is another, somewhat larger company with a pretty good reputation for producing easy-to-use software. Google and its 9,000-plus employees have a growing suite of Web-based software tools called Google Apps that is attracting interest from companies of all sizes. And so far, all of it is free. But Fried is convinced that there is plenty of room in the market for smaller players like 37signals and that people should--and will--pay for tools that benefit their business. "Some people would rather pay $50 for something that works than get something for free that doesn't," says Fried. Critics, though, complain that the monthly costs quickly mount for tools available in more primitive form for free.

37signals isn't shy about dispensing one thing without charge: advice to small-business owners. On the company blog, Signal vs. Noise, Fried shares what he's learned about the art of streamlined teamwork with more than 65,000 readers. First, kill all your meetings; they waste employees' time. "Interruption is the biggest enemy of productivity," he says. "We stay away from each other as much as we can to get more stuff done." Use asynchronous communication and software instead to exchange information, ideas and solutions. Next, dump half your projects to focus on the core of your business. Too much time and effort are wasted on second-tier objectives. Third, let your employees decide when and where to work so they can be both efficient and happy. As long as their fingers are near a keyboard, they could as easily be in Caldwell, Idaho, as in Chicago.

In the eight years since 37signals launched, Fried says he has fended off more than 30 venture capitalists offering to fund his company. He turned them down, Fried says, because he wants to keep control instead of selling out to a larger player, as VC-funded start-ups often do. Last July, though, Jeff Bezos, founder of Amazon, bought a minority share of 37signals with his own money, setting 37signals alongside space travel in the Bezos portfolio. Fried says he was impressed with the Amazon chief's appreciation of 37signals' ethos and felt having Bezos on his team would be helpful if he ever faced obstacles running the company.

Next up for 37signals? Possibly financial software, Fried says. Like other small businesses, his firm now needs tools to manage its own financial success.