Archive for April, 2010

Allegations Everywhere

Monday, April 26th, 2010

Last Wednesday, Russian officials raided Hewlett-Packard’s (HP) Moscow office, as part of charges that HP paid a bribe of about $10.9 million to the Russian office of the prosecutor general to ensure a $47.8 million contract. Last Friday, U.S. Federal prosecutors indicted the former president of U.S. private security firm Blackwater (now called Xe) and four other employees, charging them with bribing Jordanian officials to win a lucrative contract there. Also on Friday, the SEC presented civil fraud charges against U.S. bank Goldman Sachs, accusing the firm of defrauding investors. (Fast Company, 4/15/10; BBC, 4/16/10)

The instances are unrelated, but three allegations in one week suggest that both national and international authorities are cracking down on what they believe to be illegal corporate activity and fraud. Why now, and who’s next?

Eric Zavolinsky

Tags: , ,
Posted in Finance, Gaming | No Comments »

Micro-lending in the USA

Thursday, April 22nd, 2010

Since 1976 Grameen Bank has provided micro-loans to low-income individuals – mostly women – in its home country of Bangladesh, and the repayment rate for those loans has been substantially higher than traditional loans in that country. Grameen Bank and its founder, Muhammad Yunus, split the 2006 Nobel Peace Prize. Now the institution is offering such loans in the United States, with two branches in New York, one in Omaha and others planned for Washington, D.C. and San Francisco. (US Banker, 4/10)

Grameen America focuses only on borrowers who are below the poverty line, and commercial banks that provide funds to the microlender are granted credits under the Community Reinvestment Act. How curious that a Third World financial institution is finding an attractive market in the U.S.

Ken Hey

Tags:
Posted in Finance, Global Economy | No Comments »

A Bumpy Road for State and Local Governments

Wednesday, April 7th, 2010

McGraw-Hill Construction data showed that U.S. non-residential building in January 2010 was 21 percent below January 2009. Non-structure construction started this January was another 8 percent behind January 2009. Despite that overall decline, highway construction in 2009 increased 5 percent, supported by stimulus spending. Without the stimulus funds, highway construction spending would have been down 15 percent in 2009. (Engineering News-Record, 3/22/10)

Because of budget constraints, state and local governments are cutting back on road construction. As an example, Colorado Springs, the second-largest city in Colorado, has announced that it will not pay for any street paving, relying instead on a regional authority, which has said it can meet only about 10 percent of the need. In a similar vein, communities in various states (e.g., Maine, Michigan, Indiana, Pennsylvania, Vermont, etc.) have announced plans to convert paved roads back to gravel in order to save on maintenance costs. In hard hit Michigan, 38 counties converted 100 miles of roads since last year because of insufficient funds. If there is not another federal stimulus bill that contributes to state and local highway funds, tire, shock and suspension companies should do quite well, as potholes ravage cars.

Charles Hess

Posted in Infrastructure, State and Local Governments | No Comments »

Diabetes Goes Global

Tuesday, April 6th, 2010

On March 24, the New England Journal of Medicine revealed that Type-2 diabetes afflicts 92.4 million Chinese adults. More than half of Chinese diabetics have not been formally diagnosed. This total is more than double earlier studies’ calculations, which put the figure closer to 43.2 million Chinese sufferers. India is estimated to have 50.8 million diabetics, according to the International Diabetes Federation. (Boston Globe, 3/26/10)

While Indians are known to have a genetic proclivity for diabetes, the incidence of diabetes in China is a wake-up call. If Type 2 is attributed to a high caloric diet and sedentary lifestyle, one has to question the ultimate extent of diabetes in the world. It could be a lot higher than assumed, and with expectations of healthcare coverage rising in emerging economies, the cost of diabetes treatment could skyrocket.

Charles Hess

Tags: ,
Posted in China, Healthcare | 1 Comment »