Small Business Owner Optimism Lowest in Five Years but Most Say Credit Available

According to the recent Wells Fargo/Gallup Small Business Index surveyed in November, small business owners’ optimism fell to its lowest level since the survey’s inception in 2003. The score now stands at 10, a 35-point drop since last quarter. The Index has been declining since mid-2007.

“The Index hit a record low last month, which appears to be the result of a sharp decline in consumer and business spending,” said Dr. Scott Anderson, senior economist at Wells Fargo. “Despite the significant decrease in overall optimism, four of every five small business owners said they did not perceive credit as difficult to obtain. It appears that the Fed’s injections of capital and liquidity in the banking system may be having some effect on maintaining credit flow.”

The Index dropped a total of 104 points from its highest score of 114, recorded in December 2006, and 73 points since January of this year. The Index is the sum of “current situation” and “future expectations” of small business owners for six key measures, including financial situation, cash flow, revenues, capital allocation, job hiring, and credit availability. The “present situation” score fell to three this quarter — down 16 points from the last survey conducted in July — and “future expectations” dropped to seven, down 19 points from July. Five out of the six measures contributed to the Index’s overall drop, with “cash flow” showing little change (both for present situation and future expectations).

		Overall Index Small Business Owner Optimism		Present Situation		Future Expectations
Q1 2008 (January)		83		38		45
Q2 2008 (April)		48		18		30
Q3 2008 (July)		45		19		26
Q4 2008 (November)		10		3		7

About the Small Business Index

For the last 22 quarters, the Wells Fargo/Gallup Small Business Index has surveyed small business owners on current and future perceptions of their business financial situation. The Index consists of two dimensions: 1) Owners’ ratings of the current situation of their businesses and, 2) Owners’ ratings of how they expect their businesses to perform over the next 12 months. An Index score of zero reflects that an equal number of small business owners are optimistic and pessimistic about their companies’ situation. Results are based on telephone interviews with 605 small business owners nationwide conducted November 5- 17, 2008. The margin of sampling error is +/- 4 percentage points.

About the Gallup Organization

For more than 70 years, the Gallup Organization has been a recognized leader in the measurement and analysis of people’s attitudes, opinions and behavior. While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.

About Wells Fargo

Wells Fargo & Company is a diversified financial services company with $622 billion in assets, providing banking, insurance, investments, mortgage and consumer finance through almost 6,000 stores and the internet (wellsfargo.com) across North America and internationally. Wells Fargo Bank, N.A. is the only bank in the U.S., and one of only two banks worldwide, to have the highest possible credit rating from both Moody’s Investors Service, “Aaa,” and Standard & Poor’s Ratings Services, “AAA.”

Wells Fargo is America’s #1 small business lender in total dollar volume according to the most recent Community Reinvestment Act data (2007) and the #1 SBA 7a national bank lender in total dollar volume. Wells Fargo has loaned more than $37 billion to women, African American, Latino and Asian business owners since 1995.

First Data Announces Final Results of Tender Offers for $115.2 Million of Its Outstanding Debt Securities

First Data Corporation announced today the final results of its previously announced cash tender offers for any and all of the outstanding debt securities listed in the table below, which we refer to as the “Notes.” The tender offers expired at 5:00 p.m., New York City time, on December 29, 2008.

The following table identifies for each series of Notes the principal amount outstanding prior to the tender offers, the principal amount validly tendered and accepted for purchase by the Company under the terms set forth in the Offer to Purchase dated November 26, 2008 (the “Offer to Purchase”), and the principal amount outstanding after the tender offers. This information has been provided by Global Bondholder Services Corporation, the depositary and information agent.

Description of Security		CUSIP Number		ISIN Number		Principal Amount Outstanding Prior to Tender Offer		Principal Amount Tendered and Accepted		Principal Amount Outstanding Post Tender Offer
3.9% Notes due 2009		319963AJ3		US319963AJ32		$15,312,000		$4,567,000		$10,745,000
4.5% Notes due 2010		319963AL8		US319963AL87		$21,435,000		$8,307,000		$13,128,000
5.625% Senior Notes due 2011(A)		319963AF1		US319963AF10		$41,666,000		$9,106,000		$32,560,000
4.7% Notes due 2013		319963AH7		US319963AH75		$19,042,000		$3,902,000		$15,140,000
4.85% Notes due 2014		319963AK0		US319963AK05		$6,689,000		$2,875,000		$3,814,000
4.95% Notes due 2015		319963AM6		US319963AM60		$11,012,000		$1,202,000		$9,810,000
(A) Listed on the Luxembourg Stock Exchange

The tender offers were made upon the terms and conditions set forth in the Offer to Purchase and the related Letter of Transmittal, which were distributed to the holders of the Notes.

For additional information regarding the tender offers, please contact: Citi, the dealer manager, at (800) 558-3745 (toll-free) or (212) 723-6106 (collect). Questions may also be directed to Global Bondholder Services Corporation, the information agent, at (212) 430-3774 (for banks and brokers only) or (866) 807-2200 (for all others toll-free). Deutsche Bank Luxembourg SA was the Luxembourg tender agent for the tender offer for the 5.625% Senior Notes due 2011.

The offer to buy the Notes was made pursuant to the tender offer documents, including the Offer to Purchase that First Data distributed to holders of Notes. This press release is not an offer to purchase or a solicitation of acceptance of the tender offers.

About First Data

First Data is a global technology leader in information commerce. The company processes transaction data of all kinds, harnesses the power of that data and delivers innovations in secure infrastructure, intelligence and insight for its customers. With operations in 37 countries, First Data serves more than 5.4 million merchant locations and more than 2,000 card issuers and their customers. It powers the global economy by making it easy, fast and secure for people and businesses around the world to buy goods and services using virtually any form of payment. The company’s portfolio of services and solutions includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck; as well as Internet commerce and mobile payment solutions. The company’s STAR Network offers PIN-secured debit acceptance at 2.1 million ATM and retail locations. Through First Data’s centers of excellence, such as security, analytics, customer loyalty and mobile payments, it offers data-driven commerce solutions for customers around the globe.

Notice to Investors, Prospective Investors and the Investment Community; Cautionary Information Regarding Forward-Looking Statements

Statements in this press release regarding First Data Corporation’s business which are not historical facts are “forward-looking statements.” All forward-looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected. Important factors upon which First Data’s forward-looking statements are premised include: (a) no adverse impact on First Data’s business as a result of its high degree of leverage; (b) timely, successful and cost-effective consolidation of First Data’s processing platforms and data centers; (c) continued growth at rates approximating recent levels for card-based payment transactions and other product markets; (d) successful conversions under service contracts with major clients; (e) successful and timely integration of significant businesses and technologies acquired by First Data and realization of anticipated synergies; (f) timely, successful and cost-effective implementation of processing systems to provide new products, improved functionality and increased efficiencies; (g) continuing development and maintenance of appropriate business continuity plans for First Data’s processing systems based on the needs and risks relative to each such system; (h) absence of further consolidation among client financial institutions or other client groups which has a significant impact on First Data client relationships and no material loss of business from significant customers of First Data; (i) achieving planned revenue growth throughout First Data, including in the merchant alliance program which involves several joint ventures not under the sole control of First Data and each of which acts independently of the others, and successful management of pricing pressures through cost efficiencies and other cost-management initiatives; (j) successfully managing the credit and fraud risks in First Data’s business units and the merchant alliances, particularly in the context of the developing e-commerce markets; (k) anticipation of and response to technological changes, particularly with respect to e-commerce; (l) attracting and retaining qualified key employees; (m) no unanticipated changes in laws, regulations, credit card association rules or other industry standards affecting First Data’s businesses which require significant product redevelopment efforts, reduce the market for or value of its products or render products obsolete; (n) continuation of the existing interest rate environment so as to avoid unanticipated increases in interest on First Data’s borrowings; (o) no unanticipated developments relating to previously disclosed lawsuits, investigations or similar matters; (p) no catastrophic events that could impact First Data’s or its major customer’s operating facilities, communication systems and technology or that has a material negative impact on current economic conditions or levels of consumer spending; (q) no material breach of security of any of First Data’s systems; (r) successfully managing the potential both for patent protection and patent liability in the context of rapidly developing legal framework for expansive software patent protection and other risks that are set forth in the “Risk Factors” and “Management Discussion and Analysis of Results of Operations and Financial Condition” sections of the Annual Report on Form 10-K for the period ended December 31, 2007, and Quarterly Reports on Form 10-Q for the periods ended March 31, 2008, June 30, 2008 and September 30, 2008.

Getting Started in Government Contracting.

President-elect Barack Obama has his incoming team drawing up an economic stimulus plan that is, by all accounts, mammoth. With private work drying up, can small businesses get in on the government contracting bonanza? Mark Amtower, a partner in consultants Amtower & Co. in Highland, Md., says yes -- but they shouldn't expect quick results if they're just starting now. He recently spoke to Smart Answers columnist Karen E. Klein about how small companies can achieve long-term success through selling to the government. Edited excerpts of their conversation follow.

We keep hearing about how much money the government is going to spend on things like infrastructure projects to stimulate the economy next year. Will some portion of that work go to small businesses?

Definitely. These large infrastructure contracts will mostly be administered and bid out by the states, even for things like federal highway projects. So there's plenty of room for small businesses in government contracting, but only if they're selling something the government needs. The good news is that the government buys all kinds of stuff, even personal items for people who are traveling for the government, or moving their families. The bad news is that this is an incremental market. There are no quick hits, and learning the system is not easy or fast.

What advice do you give clients who are interested in getting into government work?

Identify no more than three federal agencies to target and home in on them first. And if you target federal contracts, you should also target state and local contracts in the jurisdictions where you pay taxes. It's a lot easier to raise a stink about the government buying from the big-box guys on the local level than it would be on the federal level.

For very small companies, I always tell them to start local. Putting a face to the company provides the same comfort factor for business-to-government as it does for business-to-business transactions. There are 37,000 government-occupied sites in the U.S. -- not including military installations or postal offices -- so the government is never far away from you. That includes things like the courts, VA hospitals, IRS tax offices, and even the animal and plant inspection guy who's attached to your local university. The blue pages of most phone books identify the government offices near you.

What kinds of companies get local -- or federal -- government contracts?

Name a business, and the government is buying from one like it. The federal government accounts for more than 15% of gross domestic spending. Throw in state and local governments and you get to over one-third of gross domestic spending. There are 20 million full-time government employees, and they are buying from independent office suppliers, companies that build or supply trucking equipment, companies that do grounds maintenance -- you name it. Think of all the post offices and military bases -- who's mowing the grass at those sites? There are a lot of ways that local businesses can play in this market.

Getting into the government contracting pipeline is complicated, as you mentioned. Where can small businesses get help with the process?

The Procurement Technical Assistance Program has 90-some offices around the country whose job is to help small businesses understand the mechanics of selling products or services to the government. They'll teach you the rules and regulations involved, which are substantial. The program is sponsored by the Defense Logistics Agency, and it provides low-cost or no-cost training that's held at universities or economic development agency offices. There's a list of the local centers available here.

COPYRIGHT 2008 The McGraw-Hill Companies, Inc.

Using old money on new ideas.

When Greenard Poles asked one of his clients at a free tax clinic why her address changed, her answer delighted him: She bought a house with some of the $7,500 tax refund he helped her get by filing two years worth of returns, including an extra $2,000 a paid preparer missed in one year. "Now she's a taxpayer. A property taxpayer," said Poles, director of a free tax preparation center. The tax office, where Poles works with volunteers who quietly fill out tax forms from a warren of cubicles, is inside the Tri-Main Building, the converted windshield wiper factory where John R. Oishei made some of the fortune that led to his namesake foundation. It was the Oishei Foundation that gave $450,000 to the United Way to revamp Erie County's collection of free tax centers -- set up new ones and publicize existing ones -- to help the working poor retrieve tax refunds the IRS said Buffalo residents weren't claiming. With the foundation's cash infusion, the tax centers helped clients retrieve almost $41 million in three years. This is part of the new style of philanthropy-fueled poverty assistance. A Buffalo News study of foundation giving in 2006 found that foundations gave more money to medical research, education and culture than to human services -- a category that represents some of the most direct giving to poverty- related programs. Yet as Buffalo becomes poorer -- its ranking as one of the nation's poorest for the last two years drew particular attention -- some foundations say they want to find ways to provoke lasting change in the midst the city's overwhelming poverty. That's the goal of the tax program, which now begins its fourth year, with the Tri-Main office expanded to include financial planning services. Perhaps, Poles said, more people could be encouraged to use tax refund money to buy houses. Turning rent checks into mortgage payments might lead to ambition: to strengthen communities and fix neglected neighborhoods. Maybe, he said, his client's drive will catch on. "Hopefully, the property next to her can either sell or be developed," he said. "And now we have a community. Now we have a street. Now we have a neighborhood that is benefiting from all of their efforts, but in one part benefiting from their tax return." The amount of money foundations pour into such individual programs is far less than the single-year totals that went to the arts: In 2006, $2.7 million went to the BPO for its endowment campaign, and that year $2.3 million funded the local collection of Frank Lloyd Wright building projects. Even so, some foundations want to encourage innovation, such as the "social" venture capital fund Oishei has been thinking of creating with others to loan money to for-profit operations that do social good, such as the Urban Roots garden center that opened in an ailing West Side neighborhood and the Lexington Co-op on Elmwood Avenue. Or programs such as the tax centers. Some foundations say the task involves sometimes abandoning passive check writing, overseeing donations like they are investments, encouraging collaborations and creating programs. Boards and trustees have even altered mission statements to better focus on poverty and economic development. "A foundation's power far exceeds anything they could do with their grants," said Clotilde Perez-Bode Dedecker, president and CEO of Community Foundation for Greater Buffalo. "Foundations have stuck to their knitting, so to speak, in giving grants. That's insufficient for the type of change our communities deserve. There's a lot of leadership in foundations that's not being realized." While foundations still give money in traditional ways -- funding scholarships, food pantries, after-school care and refugee outreach, for example -- they have also: --Responded to Buffalo's high illiteracy rate by sending reading coaches to day care centers throughout Buffalo, helping to prepare children for kindergarten. The Read to Succeed program also includes plans to tutor adults so they can win higher-paying in-demand jobs, such as health care work. Created by the Community Foundation, the program is funded with $500,000 from a trio of foundations. That money attracted another $5 million, including $4.1 million in federal dollars, Dedecker said. Another, the Josephine Goodyear Foundation, gave $150,000 to adopt East Delavan Library for three years. --Addressed the city's abandoned houses -- Buffalo has the third highest vacancy rate in the country -- by funding Buffalo ReUse. The two-year-old nonprofit helps restore neighborhoods by taking apart the old houses. It hires and trains young people from the neighborhoods to do the work. ReUse then recycles parts worth saving, selling doors, flooring and bathtubs at its store on Northampton Street. A collection of local foundations has given several hundred thousand dollars, including a $600,000 two-year grant from Oishei. --Provided additional training to Buffalo school administrators. The Tower Foundation, acting on research that says student performance is linked to the quality of school managers, spent $750,000 in the past five years to create a 10-month leadership training program with the University at Buffalo's Graduate School of Education. So far, about 150 Buffalo Public School staff members have gone through. --Launched a lead-abatement program, which includes a plan to remove lead paint from 100 homes in the year ahead, to improve the health of people living in low-income areas. Lead poisoning, a threat in any house built before 1978, harms brain development. And, in 2007, 737 children in Erie County had high levels of lead in their blood. Buffalo, said Dedecker, has the highest risk ZIP codes in the state. "We're robbing these children of their God-given potential," said Dedecker. The foundation won a $300,000 federal grant for the project and will contribute $134,000. --Established free tax clinics. After giving $450,000 for the first three years of an enlarged and better publicized program, Oishei staff urged better numbers, said Diane Bessel, a senior product manager for the United Way's Income program, which includes the free tax sites. Oishei wanted 10,000 returns filed, something Bessel wasn't sure could be done. "We did it and exceeded it because they challenged us to do it," she said. In 2008, the last of the three years of Oishei funding, 17,881 returns, worth almost $19 million, were filed from 48 sites -- 12 new and 36 newly publicized -- throughout Erie County. Before the grant, the county's previously smaller collection of free tax sites filed (about) 3,847 returns in 2002, Bessel said. The tally for all three Osheifunded years: 38,229 returns worth almost $41 million. The success led to more developments. Last year, an "income taxi" bus drove to rural areas to offer tax refund assistance. To help people make the most of their tax refund money, a free financial planning center will open in January. "We're hoping to expand the model . . . Just a friendly place where you can go and get some help," Bessel said. Peter Frumkin, at the University of Texas, says the foundation strategies to fund innovative programs, such as this, are more effective than what he calls a Victorian-style "spray and pray" model of giving many small grants without a plan for fundamental, lasting change. "We want philanthropy to play this role as change driver," said Frumkin, author of "Strategic Giving: The Art and Science of Philanthropy." Finding strategic ways to make the most of foundation money -- especially in these tough economic times -- seems particularly important in Buffalo and Western New York. On a list of 27 major metropolitan areas, even when Buffalo is expanded to include the region's eight counties-- an area with about a 1.5 million population in 2000 -- it hangs near the bottom: 419 registered foundations with $1.89 billion in assets gave away more than $90 million in 2006, according to foundation reports. That works out to be about $64 in foundation giving per capita. It is far less than Seattle, one of the richest foundation cities. The home to Microsoft computer company and Bill Gates has foundations giving away $610 a person. Findings similar It was, in part, the desire to find more willing collaborators to better leverage limited resources that led the Grantmakers Association of 40 foundations to study where Western New York's grant money is going. This year, six among them spent $18,000 to commission the University at Buffalo to find out how many other local foundations there are, their missions and their spending. The UB survey's initial findings, finished last month, were similar to The News.' Arts and culture spending ranked higher than the association's director Catherine Gura expected: It came in third place in the UB study, after education and health. Human services, the category most identified with serving the poor was fourth. In the News' survey, arts and culture was even higher: In second place, after education. The News also found human services was in fourth place, after health and medicine. With its new tally of all the foundations in the area, Grantmaker members hope to find peers interested in teaming up. "We would like to see more collaboration," said Ann Monroe, president of the Community Health Foundation. "Not lockstep funding so that everybody does the same thing. But so that we know better what each other are doing and where the gaps remain and how we can fill them. And we also then know where likely partners might be." While Grantmakers has no plans to suggest that foundations alter spending to direct more money to poverty-related programs, the group did organize a special workshop to help foundation people understand poverty better. At a half day session led by Bessel in October, some 22 foundation representatives came along with staff from the nonprofits. People broke up into small groups, got assigned a family persona and an objective of figuring out how to get by on a small budget. Gura was put in a family with a mother laid off, a father working a minimum wage job, a teenage daughter and an elderly mother in poor health. "I was one of the lucky families because one of us had jobs," said Gura who is executive director of Grantmakers and the Children's Guild Foundation, which gives to programs for children with handicaps. To make ends meet, her group negotiated with the bank to make partial mortgage payments and bought less food than they needed. She thinks the experience will make her more empathetic and effective when she helps choose what projects to fund. "You can have a lot of altruistic ideas," Gura said, "but unless you're living it, you really don't know."

COPYRIGHT 2008 The Buffalo News

U.S. economic crisis threatens funds immigrants send home.

For almost two generations, residents of this rural community who immigrated to the United States have sent back tens of millions of dollars to support their families and bring prosperity to their once impoverished town.

Officials of Intipuca, 120 miles east of San Salvador, were so grateful for those remittances that they built a park to honor migrants, with a statue representing the first resident to leave for the United States back in 1967.

"Remittances have transformed Intipuca," said Omar Chavez, a town leader and himself the beneficiary of funds sent by his brother Pedro, who has lived in Maryland since 1979. Thanks to those remittances, the Chavez family was able to cover basic needs, like food and clothing, and educate its children.

Now, the slowdown in the growth of remittances caused by the U.S. economic crisis threatens the welfare of residents of this town of 10,000 and towns throughout Latin America and the Caribbean.

The 2008 Inter-American Development Bank survey of remittances from the United States to Latin America shows that remittances, flat for much of last year, might even begin to fall this year.

The survey added that while the total of remittances from the United States to Latin America will probably reach overall levels comparable to those of the past two years, the number of migrants sending remittances may fall by up to 25 percent during 2008, compared with 2006.

Such a slowdown "would negatively impact the standards of living of millions of families in the region who depend on the remittances migrants send home," according to IDB officials.

In a report on the outlook of remittance flows from 2008 to 2010, the World Bank said that remittances to Latin America will remain flat next year in the best-case scenario, but that in the worst-case scenario, they will decline to $58 billion from $61 billion.

"The crisis is now in the advanced markets, and it will have an impact in the emerging markets," said Massimo Cirasino, a World Bank economist.

Cirasino said that all Latin American governments should be worried about a decrease in the flow of remittances, but that countries with weak economies will be more negatively affected.

"Some countries have a certain leeway," he said. "In a country like Brazil, for example, there will be pressure on politicians to activate programs" to stimulate the economy. But, he added, "there are other countries that don't have the financial resources." Those countries, Cirasino said, will have to turn to the IDB or other international institutions for help.

In El Salvador, remittances account for 18 percent of the country's gross domestic product. They are the equivalent of 126 percent of El Salvador's total exports and of 242 percent of all direct foreign investment.

Last year, $70 of every $100 of El Salvador's income from abroad came from remittances, while only $5 of every $100 came from traditional agricultural exports, such as coffee and cotton. Back in 1978, $81 of every $100 of income from abroad came from agricultural exports.

Eighty percent of the remittance revenue comes from Salvadorans in the United States. The numerous roadside billboards advertising remittance-related businesses frequently feature stars and stripes or other red, white and blue themes.

Many worry that maybe the worst impact is yet to come. An actual decrease may occur early next year, said economist William Pleytez, with the United Nations Development Program.

The slowdown in remittances affects all social levels, but particularly the poor, Pleytez said.

The slowing growth of remittances should be a red flag for businesses and governments, said Katharine Andrade Eekhoff, a professor at Universidad Centroamericana Jose Simeon Canas and an expert on remittances and migration. "It could all fall like a house of cards if the recession deepens," she said.

Not everyone has such a grim view. Miguel Lacayo, a former minister of economy and a Harvard MBA graduate, sees hard times ahead but not catastrophe. Lacayo does not predict a reduction in remittances. At worst, he said, "perhaps they will continue to grow in the single digits for the next two years."

Three times more remittances go to the province of San Salvador than to any other part of the country, Andrade Eekhoff said.

(EDITORS: BEGIN OPTIONAL TRIM)

Maria Isabel Contreras, a 25-year-old law student in San Salvador, said the $600 she gets monthly from her mother pays for her education.

"This support is key to my future," said Contreras, whose mother has lived in Los Angeles for seven years. "I can't repay all the effort she puts in day after day to give me what she is giving me."

(END OPTIONAL TRIM)

But it is in the rural areas, where the proportion of households receiving remittances is higher than in urban areas, that the impact of remittances is most dramatic.

"It's changing the local economy," Andrade Eekhoff said.

In Intipuca, modest clapboard houses and food stalls with straw roofs coexist with two-story concrete homes featuring intricate wrought-iron fences, ornate moldings and other architectural details. Late-model pickup trucks, some sporting decals of the American flag or the bald eagle, are common.

In addition to providing for their families, former Intipuca residents abroad have helped underwrite community projects, such as water wells, cobblestones for the streets, and improvements to the municipal stadium, said Mayor Enrique Mendez.

About 50 percent of the population has moved to the United States and sends remittances.

Mendez is fiercely proud of the help his town has received from remittances, but he acknowledges evidence of trouble and is worried. "The crisis in the U.S. is affecting remittance," he said. "For some families, the frequency and quantity have diminished."

(EDITORS: STORY CAN END HERE)

According to Mendez, remittances have reached $2 million a month in the past, but "that has come down considerably in recent months."

Arnoldo Portillo, manager at the local Banco Agricola, where residents pick up their remittances, said he began to notice a change about six months ago.

"If before they sent $100, now they are sending $60," he said. "There is movement, but the proportion is smaller."

Portillo, who has relatives in Los Angeles and Dallas, said the bank serves about 80 customers on a heavy day and about 50 on light days, almost all picking up remittances.

Jose Guevara, 22, worked in construction in Virginia and sent $250 a month to his mother, an insulin-dependent diabetic. But he was deported last November after immigration officials picked him up during a raid. He left behind his income and a 2-year-old son and has been unable to find work in El Salvador.

"We paid for the medicine and for the rent" with remittances, said his mother, Ada Isolina Sanchez, an agricultural laborer. She said she must now resort to credit to cover those expenses.

At the local travel agency, Yudith Escobar is selling far fewer plane tickets to the United States. They are typically paid for with remittance money or extra funds meant specifically for the fare.

"The change is dramatic," Escobar said. "I have seen a reduction of 30 to 40 percent in ticket sales."

"I have a friend who has completely stopped receiving remittances because of the economic situation that has deteriorated in the U.S. and the rising prices here. She had to give up her studies," said Contreras the law student.

She hopes for the best but is afraid. "I have a year to go at school. I am worried this could happen to me when I am about to finish. It's scary for young people."

COPYRIGHT 2008 The Miami Herald

UK To Launch Small Business Loan Guarantee Plan In Jan.

The U.K. government will launch a new small business loan guarantee scheme in January, Harriet Harman, the deputy leader of the governing Labour Party, told parliament Wednesday. Earlier this month, U.K. Prime Minister Gordon Brown hinted that the government could expand efforts to guarantee loans to businesses to ensure lending continues during the credit crunch and economic downturn. Nobody was immediately available at the Department for Business, Enterprise and Regulatory Reform to comment on the new scheme. In last month's pre-budget report the government expanded to GBP1 billion a preexisting loan guarantee scheme and provided a further GBPB1 billion for export credit guarantees. Last week the government also convened the first meeting of a new high-level panel to monitor lending which brought together senior officials, banks, and groups representing small business and consumers. "It is true to say that whilst lending figures are starting to show increasing lending to small businesses, there are still businesses having problems, that's why the national lending panel has been established," Harman said. She also told parliament that the government would change legislation if energy companies failed to pass on lower wholesale prices to customers, but didn't give any further details. "The energy companies must pass on the price cuts to consumers, both businesses and families, and they must also treat all consumers fairly and if they don't...we will change the law to force them to do it," she said. Pressure is mounting on the U.K.'s six biggest energy suppliers after the gas and electricity markets regulator Ofgem said Tuesday that it expected them to cut home energy bills for their customers in early 2009 after a big drop in wholesale prices. If they haven't complied by Ofgem's board meeting in February, they could face an inquiry by the Competition Commission, it said. The six big U.K. utilities are Centrica PLC (CNA.LN), Scottish and Southern Energy PLC (SSE.LN), Iberdrola SA (IBE.MC) subsidiary ScottishPower, and the U.K. arms of Electricite de France SA (1024251.FR), Germany's RWE AG (RWE.XE), and E.ON AG (EOAN.XE).

COPYRIGHT 2008 News provided by Comtex.

French Utility to Acquire Part of U.S. Nuclear Giant.

The French national utility will acquire a 49.9 percent stake in a major American nuclear operator, in a new push into the American power industry, which is the source of much of the French nuclear technology.

The EDF Group, which includes Electricite de France, will buy the stake in the nuclear operations of Constellation Energy, the parent company of Baltimore Gas and Electric, for $4.5 billion. For Constellation, the deal replaces a proposed merger with MidAmerican Energy Holdings, run by the investor Warren E. Buffett, which would have taken Constellation Energy private.

EDF's offer for half the nuclear assets is almost as much as Mr. Buffett had offered for the whole company.

Constellation is already in a joint venture with EDF to build several nuclear reactors in the United States. Michael J. Wallace, the chairman of the joint venture, which is called UniStar, said that Constellation saw advantages to remaining a publicly traded company. He added that Constellation was aligning itself with the largest nuclear operator in the world, which has 58 reactors, all based on American designs.

''They have a phenomenal proprietary database on performance of individual pieces of equipment: pumps, motors and valves,'' Mr. Wallace said. With that data, he said, French operators can schedule their maintenance on a predictive basis, something that Constellation, with five plants, cannot.

And, Mr. Wallace said, ''as the largest nuclear operator in the world, they have immediate and full access to the global supply chain. As a fleet operator of five units, we don't get the same access.'' Access to equipment will become more difficult as construction begins on new reactors, Mr. Wallace said.

Mr. Wallace said the oversight of the joint nuclear operations venture would be the same as in the construction venture, with five directors named by each side, in addition to Mr. Wallace, an American, as chairman. He said his tie-breaking vote satisfies American requirements for security and control.

EDF will make an immediate $1 billion cash investment in Constellation, by buying newly issued Constellation preferred stock, the companies said. Constellation can sell up to $2 billion in nonnuclear generating assets to EDF as well, they said. And EDF will provide Constellation with a $600 million ''interim backstop liquidity facility,'' they said.

Constellation owns Calvert Cliffs 1 and 2 in Maryland, south of Washington, and three plants in upstate New York: Nine Mile Point 1 and 2, in Scriba, north of Syracuse; and Robert E. Ginna, in Ontario, near Rochester. It is seeking to build reactors at the Calvert Cliffs site and in Missouri, New York, Pennsylvania and Texas.

Companies in those states would take ownership shares, but UniStar would build and operate the reactors. One such reactor is already under construction in Finland, and another in France.

COPYRIGHT 2008 The New York Times Company

RBI's measures can boost demand for property.

The slew of measures announced by the Reserve Bank of India (RBI) last week have brought some relief for the cash-strapped real estate sector. A cut of 100 basis points (bps) in both repo and reverse repo rates and restructuring of commercial loans have come as steps which can boost demand.

In fact, it is felt that government giving priority to housing loans up to Rs 20 lakh will bring affordable housing into focus once again. But in what way will these benefits be passed on to consumers? And how much will these measures help in reviving the realty growth?

Sachin Sandhir, MD & country head, Royal Institution of Chartered Surveyors (RICS) India, feels that the RBI's move will help reposition the sector as a priority one and bring it on par with other sectors.

"The across-the-board rate cuts by the RBI is expected to bring in more liquidity into the system by reducing the cost of borrowing for both corporates and retail consumers. Overall, this is a positive move as it signals the easing of interest rates, thereby increasing demand. This will infuse more liquidity into the system and lead to reduction in interest rates, eventually helping the market to expand and diversify."

What also comes as a positive measure is that housing loans below Rs 20 lakh will be categorised as a priority sector. This means that consumers can now get double benefit in terms of a reduced interest rate as well as more affordable pricing. Hence, properties in the range of Rs 25-30 lakh will become more accessible for the end-user.

"Buyers now have the advantage of getting better prices for their dream homes. Locations in Delhi NCR such as Ghaziabad, Faridabad, Manesar, Sonepat and others will be conducive. Also, developments surrounding tier II & III cities such as Mohali and Zirakpur and all outlying areas of Hyderabad, Bangalore, Kolkata and Pune will be viable locations," says Rohit Malhotra, CEO, Realtech Group.

Targeting tier II and III towns as well as NCR are locations where you could look to avail of the loan advantage, feels Vijay Jindal, CMD, SVP Builders India. "End users were waiting for a reprieve in home loan interest rates. The measures announced by the RBI will be a big help. The benefits will clearly be passed on to the consumer as developers have already started targeting the affordable bracket for the end-user and will further step up their efforts now," says Jindal.

Clearly, the consumer stands to gain in the wake of the recent RBI measures. So what should be the buyers' outlook now? Experts say the disadvantage of waiting too long is that one could lose out on best properties as well as on lower rates which will not hold once the market regains equilibrium.

"The reality is that a reduction in interest rates along with a 20-25% correction in property rates is an ideal situation and the prospective home buyer should take advantage of this situation as the resulting EMI will be a lot more affordable," adds Sandhir.

In fact, people familiar with the trends feel that the present situation is ideal for a buyer looking at a value buy. "The situation today is buyer-friendly, especially for the end-user group. Developers are keen to sell their projects and hence are offering the best value deals.

Banks are also supportive in lending and extending various long-term schemes. The market is good for projects which are ready-for-possession. One can get attractive deals at best locations as the developers want to sell their unsold stock," asserts Punit Beriwala, MD, Vipul.

However, even though end-users have incentives right now to buy, real estate players still have challenges to face. For most realty firms facing an acute credit crunch, the recent initiatives mean a limited impact. Rohtas Goel, CMD, Omaxe, feels that the current move will solve some of the current liquidity crisis for many real estate companies.

"Restructuring of loans will alleviate the liquidity problem for the moment. That I think is a positive development for many of the struggling real estate companies today. It is a small point but it is a significant point."

Beriwala, too, is cautious and feels the benefit to the real estate sector is yet to be seen. "Much depends on the banks to announce a policy change to ensure that this extra money is pumped into the realty sector by making funds easily available to developers. We also look forward to banks reducing the home loan rates which will bring the customers back to the market."

The housing sector is one of the most significant sectors in the economy. These steps, no doubt, will offer some relief to those looking at value-for-money buys. With the latest RBI initiatives, the market is in all likelihood expected to see a revival of demand in the near future.

COPYRIGHT 2008 Bennett, Coleman & Co. Ltd.

Web site can help small businesses learn their worth.

Long Island is the home of small business , which make up nearly 90 percent of the companies in Nassau and Suffolk counties. Yet, business experts say, small-business owners are unlikely to know the answer to one essential question: What is their business worth?

Help may be within a few clicks of the keyboard. A new free Web site, biz equity.com, is now available to provide small-business owners on the Island and elsewhere with some idea of what their store, Internet site or sales operation might be worth. The emphasis, business experts and even the founder of the site say, is on the word "might." A business owner still must talk to an accountant and do his or her own investigations. But bizequity.com is a start, Tom Taulli, founder of BizEquity Corp., which began and operates the site, said in an interview last week. Taulli once had an Internet business of his own and sold it. "I had to go through the process of evaluation," he said, recalling the experience as arduous. "I found valuation is a complicated thing, but an important thing." The Web site makes use of publicly available data to calculate a business' worth. There are other sites that have valuation calculators, but Taulli said the advantage of bizequity.com is that "we have it all in one place."

A total of 89.5 percent of the 96,199 businesses on Long Island are considered small by the Long Island Association, meaning they employ fewer than 20 people, said Pearl Kamer, an economist for the LIA, a business and civic organization. The value of many may be falling.

Bizequity.com, for example, located 411 apparel stores in Melville and some of the surrounding areas. The site said those stores' average current value is $102,252, a 17 percent decline from only six months ago. About 1,400 restaurants in the same general area were worth an average of $93,622, a 19 percent decline over the same time period, the site found. Worrisome? Yes, but essential to know, said Gloria Glowacki, assistant director and a small-business adviser at Stony Brook University's Small Business Development Center. Glowacki said she and her staff surveyed the site and liked what they saw, but "it should be used as part of a process, not the be all and end all."

Glowacki said she doubts many business owners would be able to state the value of their business: "They're just running their companies" and their value "just comes up when they need it." Taulli acknowledges figures from the site are "not something you can take to the bank." But he said, "It's a starting point."

Copyright (c) 2008, Newsday, Melville, N.Y.

Small Stores Find Ways To Drum Up Traffic.

The owner of a futon store outside San Francisco started running comedy shows. A comic book shop in Florida held art shows. And a lingerie shop in New Mexico is planning a men's night later this month.

Small businesses are always searching for ways to differentiate themselves. But with fewer people out buying, some of the businesses are doing whatever they think will draw in customers.

''This is a buyer's strike,'' said Eric G. Flamholtz, a professor emeritus of management at the Anderson School of Management at the University of California, Los Angeles. ''People are holding back and not spending any money. So you have to give them a reason to come.''

Holding special events also can be far less expensive than regular advertising. And in a slowing economy, advertising and marketing budgets typically get trimmed. A recent National Small Business Association survey of its members found that 49 percent planned to start new advertising or marketing this year, down from 54 percent in 2007.

''They're trying to market with little or no extra money,'' said Molly Brogan, the association's vice president of public affairs. ''People are doing more on the Internet, any free thing they can.''

Deborah Reese, who owns a lingerie shop in Albuquerque, said she opted not to increase her advertising budget this year for the first time since she opened the shop, Seventh Goddess, four years ago. Instead, she said, she developed a new Facebook page and is encouraging employee blogs. She is also planning an array of events, like a recent ''Sex and the City'' pajama party in which customers sat on pillows for manicures and facials. Men's night is coming up later this month, where employees model the store's offerings and offer ''man food.'' And there will be an erotic poetry reading on Valentine's Day.

''Events are cheap publicity,'' Ms. Reese said. ''People who ordinarily wouldn't come, come. You just have to spring for the munchies and drinks.''

The parties are also good for sales. Ms. Reese sold dozens of pajamas at her ''Sex and the City'' event and hundreds of pairs of underwear and bras at a men's night last December. She said she always offered discounts at the special events and a portion of her sales went to local charities.

Nor are the special events just for young businesses. Even well-established businesses, like Mary's Futons in San Rafael, Calif., have been feeling the pinch. Fewer people are buying new futons, and more futons are being brought in for repairs. Mary Hughes, the owner, said she thought a comedy show would be the perfect thing to do because ''everyone loves comedy and I wanted to meet women.'' A theatrical producer was less than convinced.

'' 'Lady, are you crazy?' '' Lisa Geduldig, the producer of Kung Pao Kosher Comedy in San Francisco remembers telling Ms. Hughes. '' 'I don't do little futon stores; I do professional venues.' ''

But after Ms. Hughes cornered her and begged her to do one show, she finally agreed. The first, ''An Evening of Lie-Down Comedy,'' was held in March and did so well, they added a second. When that one sold out, they added another. That, too, sold out. Proceeds from the tickets go back to the comedians and Ms. Geduldig. If more than 100 people attend, Ms. Hughes gets a small percentage of the ticket sales.

''I get the publicity and that's worth more than the money,'' Ms. Hughes said, though in a later interview she said she was taking over management of the shows.

One recent Sunday night, a hundred people milled around the futon store, nibbling on cake and catching up on gossip. A window display had been turned into a stage, 30 futons were turned to face it and salespeople were doing sound checks. Raffle tickets for a water fountain and beanbag chair were being sold at the door and a line of people snaked away from a sales counter doing service as a concession stand.

Ms. Geduldig threaded through the crowd to the stage, clambered on top and welcomed everyone to the show. ''This is a futon shop,'' she said. ''Feel free to fall asleep.''

Everyone laughed. The show had begun.

But for every successful event, there are others that do not work out. Ms. Hughes thought she could draw 100 people to her store for a holiday sing-a-long last December. Only a few people came. At Seventh Goddess, Ms. Reese assumed a poetry writing workshop on Valentine's Day would fill her store. Two people showed up.

Mr. Flamholtz, who is also a business consultant, said store owners should be cautious about getting into the events business. ''The problem is that business owners want to diversify, but they'll diversify into something they don't know anything about,'' he said. ''They have to add products and services that make sense around their core.''

Outside events can quickly become a second business, and are rarely as simple as they appear, said Martin Lehman, a counselor and marketing director for Counselors to America's Small Business, or Score, in New York. If a business owner wants artists to perform or exhibit their work, the business has to provide an incentive and make sure the event does not erode its brand, Mr. Lehman said. Ms. Reese noted that there were snacks to buy, bloggers to contact, community calendars to update and fliers to hand out.

Kimberly Smith-Johnson, who owned a comic book store, turned to her customers and local artists for help in putting on monthly art shows. As a former drama teacher, she turned them into her stagehands. They handed out fliers and blogged about her store.

''Events have been the best marketing tool, but they have to be genuine,'' said Ms. Smith-Johnson, whose business was Comics & Classics in Jacksonville Beach, Fla. ''It has to be about the artist and the event, not about bottom-line sales. People will pick up on the tone if it's not.''

The events could not save her business, and Ms. Smith-Johnson and her husband, Percy, closed the store a few weeks ago. Even though many of their comic books were inexpensive, the Johnsons could not overcome one basic problem: they opened a new store right before the economic downturn.

''We got loved to death, but people just weren't purchasing enough to keep us going,'' said Ms. Smith-Johnson, who starts a new job as an eighth-grade teacher on Monday. ''We ran out of capital. Between the banks, credit cards and people not spending, we got squeezed in the middle.''

Ms. Hughes, on the other hand, seems to have hit the right note with the comedy shows. At the September show, futons were crammed with four people each, many of them laughing. One woman yelled out, ''This is the hardest I've laughed in a long time.''

Some said they could not believe where they were. ''This is a store I'd never come into and here I am,'' said Grace Flannery, from Novato, Calif. ''I'm looking around at these futons and they're a lot nicer than I thought.''

Other customers seemed to agree. After some of the shows, audience members have returned to buy the exact futon they sat on.

COPYRIGHT 2008 The New York Times Company

Accountant: $85,000 wasn't for well-being: Pottsville couple on trial for theft from man they cared for.

A forensic accountant told a jury Tuesday he "followed the money" taken from bank accounts of a Schuylkill County man with Alzheimer's as a Pottsville couple cared for him, and found nearly $85,000 of it had nothing to do with his well-being.

Instead, Catherine Whitney, 58, and her husband, Robert, 57, used money from the estate of Louis V. Long of Mahanoy City to pay their credit cards, loans, insurance, car payments and even college tuition for one of their children, Dennis Houser testified in county court.

Long, 77, died March 24, 2006, a month after Schuylkill Senior Services removed him from the Whitneys' home and started an investigation.

"Was Mr. Long in school or owner of a Volkswagen?" Senior Deputy Attorney General Anthony W. Forray, who is prosecuting the case, asked Houser.

"No, sir," he replied.

Houser's testimony took up much of the second day of the Whitneys' trial. Each is charged with seven counts of theft and one count of conspiracy.

The defense is expected to present testimony today.

The Whitneys' attorney, Frederick Fanelli, said the couple doesn't dispute spending money from Long. Fanelli said they had a decade-long friendship with Long and took him into their home in 2004.

Instead, Fanelli has said the childless widower gave the Whitneys power of attorney and made them promise he would not go to a nursing home.

Fanelli challenged Houser's repeated testimony about $5,700 withdrawals the Whitneys made by saying they equal the amount Medicare requires recipients to "pay down" their estate to show they're using it for care and to qualify for government aid.

He also asked Houser if he knew whether Long approved of the Whitneys' use of the money. "I have no idea," Houser responded, saying he simply looked at how the money was used.

"Were you ever asked to determine the cost of being in a home?" Fanelli asked. "Is there any way to put a value on living with friends?"

Fanelli countered Monday testimony that Catherine Whitney paid herself $72,000 in a year, partially for realty business she lost while caring for Long, but had not made more than $18,000 a year before that. Fanelli introduced tax records showing her business made $79,469 in 2002 and was growing.

COPYRIGHT 2008 The Morning Call

Some thinking outside the iBoxx.

Bond pricing policy is not subject to regulation, so each fund house handles the problem in a different way

The hedge fund sector often seems like the theatre of fund management, distilling the wider industry's ups and downs into a more concentrated, dramatic form. Simon Treacher's resignation from BlueBay Asset Management last week and the simultaneous closure of his emerging market debt hedge fund, which accounted for 6 per cent of the firm's assets under management, is a case in point.

The company insisted the two events were unrelated, attributing the former to a "breach of internal valuation policy" and the latter to deteriorating "financing and liquidity conditions". Yet, as trading activity in bond markets has dried up over the past three months, how to value credit holdings has become a worry for even the most conservative of retail fund managers.

Because bonds are traded over the counter rather than at a central exchange, they have no official price. Most managers therefore rely on iBoxx, an index run by the data provider Markit, to value their holdings.

iBoxx collects trading data from the market-making investment banks, runs a series of algorithms to eliminate any anomalous values, and averages the rest. This proved reliable in the credit boom, when the market was awash with liquidity. But since the Lehmans default in September, when the great sell-off began, the information chain has come under strain.

"In markets like these, traders have better things to do all day than update their electronic price feeds. Several of the banks that contribute prices no longer make markets any more because they've boiled down the number of staff," says Stephen Snowden, manager of the GBP828m Old Mutual Corporate Bond fund.

A second problem is the radically reduced number of trades, which means that any updates the banks do supply can differ significantly, while bid/offer spreads are highly stretched. Faced with an inconsistent set of inputs for a given instrument, iBoxx defaults back to the previous period's value - which in today's sharply falling markets is invariably higher.

"The process does not have the flexibility to adjust to the stressed market conditions quickly enough at the moment," admits Stephan Flagel, head of indices at Markit.

He says the company is working with the investment banks, regulators and investors to develop an alternative set of rules that will allow iBoxx to discard anomalous price feeds without compromising the objectivity and transparency of the programme. The new regime should be implemented by the end of the month.

Meanwhile, some bond managers are turning to alternative sources to value their holdings. Philip Milburn, co-manager of the GBP355m Aegon Sterling Corporate Bond fund, reports that 20 per cent of the fund house's bond portfolios are manually priced.

"If we think a price is wrong, we'll chase it up with the brokers. But we can't be there to police and price the whole market," he says, describing the middle-office process as "arduous".

But the blockages in iBoxx do not just make extra work for fund managers. Crucially, they call into question the performance statistics that are the backbone of the entire industry. If a bond is overvalued, so too is any fund that holds it.

Mr Snowden, who uses alternative sources to price 50 per cent of his portfolio, says turning iBoxx back on would add around 4 per cent to his returns year-to-date. "If everyone used the same pricing methodology, we might see a very different leader table than we do," he adds, albeit with the caveat that his one year track record would still be fourth quartile.

But even managers further up the current league tables complain the statistics misrepresent their work. Stephen Thariyan, head of credit at Henderson Global Investors, for example, claims the numbers do not do full justice to his strategy of underweighting certain crucial sectors that have been particularly hit in the sell-off.

"The inability of iBoxx to accurately reflect market levels is irksome since we do not see the benefit of our sector and security selection until the index catches up. We email them regularly to suggest they should re-examine a price," he says.

Bond pricing policy is not subject to regulation, so every fund house handles the problem in a different way. Needless to say, this only adds to the confusion. But most are reportedly still using the iBoxx index to value the vast majority of their holdings, suggesting there may be a considerable shake-up in the rankings when Markit reconfigures its algorithms in the New Year.

COPYRIGHT 2008 FT Business

It takes years to become an overnight success.

We're all familiar with Maxwell's equations, those four short and crisp formulas that define our electromagnetic world. Perhaps you've even seen the T-shirts with the equations, and at the bottom it reads: "and there was light."

There's only one problem with the equations. Yes, Maxwell did develop the essential electromagnetic theory, no question of that. But a fascinating article in Microwave Journal, "Twenty Three Years: The Acceptance of Maxwell's Theory" (July 2008), explains that his original equations were not the four we know today, but 20 simultaneous differential equations. Not only were they not accepted initially, they were incomprehensible to even the leading researchers and scientists of the day, such as Michael Faraday. Maxwell's equations only gained acceptance and actually became useful when the reclusive mathematical genius Oliver Heaviside reduced them to what we now call by that name.

The path to success in our industry is similarly convoluted, with lots of local swirls and eddies. Certainly, some products and standards become winners quicker than others, but we tend to forget how long it takes for even the faster ones to succeed. This forgetfulness makes both companies and their investors a pretty impatient bunch.

That is not good for the realities of complicated technical progress and accomplishments. Too many players want that quick ROI, despite all the evidence against it happening.

But we tend to gloss over the reality. For example, people use the term "Rosetta stone" as a shorthand phrase for a magic key that instantly unlocks a mystery, as if the engraved stone unearthed by Napoleon's troops in Egypt in 1799 was a ready-to-use translation guide between classical Greek, hieroglyphic, and Demotic symbols and words. The reality is that it took the scholars about 30 years to translate and correlate the texts and symbols, aided by many other sources as well as some luck.

Engineering success builds on the efforts of others, and even those celebrated "and-then-the-light-came-on" moments usually require follow-through, persistence, planning, execution and even luck to really make it, since so much can go wrong, whether due to internal issues and external events.

Dutch Kindelberger, chief engineer of Douglas Aviation and a leading aircraft designer, said in his autobiography, "No one ever pulled a rabbit out of a hat that somebody didn't put in there first." There's a lot of truth in that to keep in mind.

Copyright [c] 2008 United Business Media LLC.