Monday, July 21, 2008

US sets nuclear deadline for Iran

Javier Solana on his hopes for an answer from Iran

Iran must decide between confrontation and co-operation in the dispute over its nuclear plans, the US has warned.

At talks in Geneva, envoys from the US, EU and UN asked Iran to suspend its uranium enrichment in return for a pledge not to introduce new sanctions.

Iran gave no guarantees it would halt its activities, so the diplomats gave Tehran two weeks to provide an answer.

The meeting was the first time US and Iranian officials have held face-to-face talks on the nuclear issue.

Senior US official William Burns was present at the Geneva talks - although he made no public comment.

Instead, state department spokesman Sean McCormack issued a strongly-worded statement in Washington.

"We hope the Iranian people understand that their leaders need to make a choice between co-operation, which would bring benefits to all, and confrontation, which can only lead to further isolation," he said.

'New opportunity'

Mr McCormack added that Mr Burns had delivered a "clear simple message" that Washington was "serious" about the incentives package but that it would only negotiate with Iran if it upheld its side of the deal.

Diplomats had hoped that Iran would respond to a so-called "freeze-for-freeze" offer, under which a freeze of Iran's uranium enrichment programme at its current levels would be matched by a Western pledge not to strengthen sanctions on Tehran.

"It was a constructive meeting, but still we didn't get the answer to our questions," EU envoy Javier Solana told reporters.

"We hope very much we get the answer and we hope it will be done in a couple of weeks," he said.

Mr Solana said he had agreed with Iran's chief negotiator, Saeed Jalili, to speak again either by telephone or personally in two weeks.

The BBC's Jon Leyne in Tehran says Iran is interested in the offer but it is unclear whether there are divisions in the leadership or the Iranians are playing for time.

Mr Jalili said he had put forward many positive ideas and he urged Western powers not turn away from negotiations.

"This package we have proposed contains a number of possibilities. In a nutshell, it is a new opportunity which should not be lost."

But doubt was cast over the value of the talks, after a member of the Iranian delegation said there was "no chance" of a freeze on the uranium-enrichment programme.

Iran says its nuclear facilities are designed to meet its energy needs, denying that it has a weapons programme.

But Tehran's continued activity is defying UN Security Council demands to halt enrichment.

Rising tensions

In addition to the EU, Iranian and US envoys, the talks in Geneva's city hall were attended by representatives from Britain, China, France, Germany and Russia.

The US and Iran have had no diplomatic relations since the 1979 Iranian Revolution and the taking of hostages at the US embassy in Tehran.

Formal contact between the two countries has been extremely limited, though last year they met at ambassadorial level to discuss security in Iraq.

The meeting came after weeks of rising tensions in the Middle East.

The Iranians test-fired missiles last week, and a series of threats and counter-threats between Iran and Israel has been watched nervously in the West.

Original here

Gas prices pinch charities, volunteers

Patricia Gallagher keeps her spiritual motor running by volunteering weekly at an elementary school, her church, a hospital and by delivering meals in Rockland.

The cost of keeping her Toyota Camry going, however, has become far more expensive. She pays about $60 a week to fill up.


For now, Gallagher, 85, a New City resident, has no intention of scaling back. Her stop-and-start driving, and turning the car on and off repeatedly during her Meals on Wheels route through Nanuet's neighborhoods, uses more gas than the 11 miles she drives would suggest.

"I'm not going to let it stop me, I hope, unless things get that serious," Gallagher said of gas prices that have surpassed $4.25 a gallon in Rockland. "It's good to be busy. It feels nice to help other people."

Nonprofits in the Lower Hudson Valley are feeling the pinch of record fuel costs. More people who use their own cars to drive the elderly to medical appointments or bring food to their homes are asking for a few bucks to cover gas from the agencies, which themselves are struggling to deal with budget shortfalls due to rising transportation costs.

The good feelings people get from helping others may be reaching a tipping point, as the reality of higher food prices, job insecurity and a tight economy sink in.

A survey released last month by the National Association of Area Agencies on Aging found that rising fuel costs are having a direct effect on volunteers. Nearly three out of four (73 percent) agencies reported it was harder to retain volunteers, and 74 percent said it was more difficult to recruit them.

One Rockland nonprofit agency that provides volunteers to other nonprofits offers generous mileage reimbursement to volunteers 55 and older. It expects to be flooded in the coming weeks, as the nonprofits encourage their volunteers to sign up through the agency.

"A lot of my volunteers are seniors themselves living on fixed incomes, and with the price of gas skyrocketing, they're getting second thoughts about volunteering," said Ann Menendez, executive director of the South Rockland Interfaith Volunteer Caregivers.

The Congers-based agency relies on 30 volunteers to drive 100 Clarkstown and Orangetown residents to grocery stores, doctor's appointments, even for haircuts.

The majority of the volunteers don't get reimbursed, and a few have recently asked Menendez to schedule them for shorter trips.

Harold Lindland estimated he and his wife, Betty, drove 500 to 700 miles for the agency last year.

A typical trip could see them drive from their New City home to a senior citizen center in Sparkill to pick up their client and then to a doctor's office in Pomona. Counting the return trip, the total distance easily exceeds 50 miles.

"I'm one of those people who don't pay too much attention to the mileage," said Lindland, 76.

Lindland, a retired McGraw-Hill marketing manager, counts himself among the fortunate. Like Gallagher, he is still married, has a generous pension and is able to absorb the extra costs in order to volunteer.

For years, Meals on Wheels Programs and Services of Rockland offered a $3 weekly gas allowance to its volunteer drivers, who typically spend an hour once a week delivering meals to senior citizens, the disabled or the needy.

Hardly anyone took it.

Now that's changing.

Three people recently have signed up for the gas allowance, which is paid by check every three months, and others are considering it, said Carissa Coslit, volunteer coordinator for Meals on Wheels. In total, 20 of 220 drivers receive it.

"I've had cases where people have called and said, 'We're so sorry. We don't want to do this to you, but we do need a little bit of help,'" Coslit said, noting many of the volunteers are retirees on fixed incomes or stay-at-home moms.

While the agency has lost one volunteer because of gas prices, others have stepped up and offered to take more routes, Coslit said.

Naomi Adler, president of United Way of Westchester and Putnam, said most of her 80 partner agencies plan their budgets nine months to a year ahead. Few expected gas prices to reach these dizzying heights, forcing them to raise mileage reimbursement for staff and cut back on travel, but fewer still expected they would have to offer incentives to hold on to volunteers.

"They have deficits in their budgets and they don't know what they're going to be doing to cover their deficits," Adler said recently.

The Cancer Support Team, which uses volunteer drivers to take cancer patients in southern Westchester to medical appointments and chemotherapy treatment, has plenty of people willing to help out. But sometimes the patients don't feel comfortable traveling with strangers, so the agency has started a new program that allows a neighbor or family member to drive the patients, knowing that they will be reimbursed for their gas and parking.

"There are people that maybe have the time, you know them and you like them, but you can't afford to reimburse them, so we've offered to do that," said Virginia Beirne, who is the Cancer Support Team's business administrator.

Only one person has used that program so far.

The nonprofit in Mamaroneck, which serves about 325 patients a year, recently raised its mileage reimbursement rate for its four nurses who visit patients in their home. The rate is now 47 cents per mile, up from 40 cents.

"It is a bind, but obviously our nurses are feeling the pinch of gas" prices, Beirne said.

Back in Rockland, nonprofits are encouraging their volunteers to sign up with the Retired and Senior Volunteer Program. The Spring Valley agency matches Rockland residents 55 and older - one doesn't need to be retired - with local nonprofit groups that could use their help.

It pays volunteers for the miles they drive to and from their job; and in cases where their volunteering duties call for them to drive, those miles are covered too.

Gerri Zabusky, RSVP's executive director, said more than 70 percent of its 600 volunteers drive to 100 agencies it serves. The others use two RSVP shuttle vans.

Since the start of the year, as gas prices have escalated, more volunteers are asking to be reimbursed for their mileage.

"More volunteers who already were driving but never asked for mileage reimbursement before, well, now they're asking for it for the first time," Zabusky said.

The agency is up to 208 volunteers who receive 48.5 cents per mile, with a cap of $40 a month.

A year ago, RSVP was paying 25 cents a mile, up to $25 a month, but Zabusky said she wanted to support her volunteers so she increased the rate. Because of the volume, she might have to lower it to 40 cents or lower the monthly cap.

RSVP has $12,000 in its mileage reimbursement fund, she said, and it is being depleted quickly.

"I'm going to run out this year. That ($12,000) isn't going to make it for me. Not this year. There's no way," Zabusky said.

With no new funding sources in sight, Zabusky said she'll save where she can, such as cutting down on office supplies. More volunteers signing up to claim mileage every week places a further strain on her budget, but she said RSVP will meet the challenge.

"If this is what's going to keep them volunteering, then I'm going to find a way to find other funding," she said. "But it's not so easy to do."

Original here

Why No Outrage?

Why No Outrage?

Through history, outrageous financial behavior has been met with outrage. But today Wall Street's damaging recklessness has been met with near-silence, from a too-tolerant populace, argues James Grant
July 19, 2008; Page W1


"Raise less corn and more hell," Mary Elizabeth Lease harangued Kansas farmers during America's Populist era, but no such voice cries out today. America's 21st-century financial victims make no protest against the Federal Reserve's policy of showering dollars on the people who would seem to need them least.

Long ago and far away, a brilliant man of letters floated an idea. To stop a financial panic cold, he proposed, a central bank should lend freely, though at a high rate of interest. Nonsense, countered a certain hard-headed commercial banker. Such a policy would only instigate more crises by egging on lenders and borrowers to take more risks. The commercial banker wrote clumsily, the man of letters fluently. It was no contest.

The doctrine of activist central banking owes much to its progenitor, the Victorian genius Walter Bagehot. But Bagehot might not recognize his own idea in practice today. Late in the spring of 2007, American banks paid an average of 4.35% on three-month certificates of deposit. Then came the mortgage mess, and the Fed's crash program of interest-rate therapy. Today, a three-month CD yields just 2.65%, or little more than half the measured rate of inflation. It wasn't the nation's small savers who brought down Bear Stearns, or tried to fob off subprime mortgages as "triple-A." Yet it's the savers who took a pay cut -- and the savers who, today, in the heat of a presidential election year, are holding their tongues.

Possibly, there aren't enough thrifty voters in the 50 states to constitute a respectable quorum. But what about the rest of us, the uncounted improvident? Have we, too, not suffered at the hands of what used to be called The Interests? Have the stewards of other people's money not made a hash of high finance? Did they not enrich themselves in boom times, only to pass the cup to us, the taxpayers, in the bust? Where is the people's wrath?

Getty Images
Crowds at the New York Stock Exchange in 1929.

The American people are famously slow to anger, but they are outdoing themselves in long suffering today. In the wake of the "greatest failure of ratings and risk management ever," to quote the considered judgment of the mortgage-research department of UBS, Wall Street wears a political bullseye. Yet the politicians take no pot shots.

Barack Obama, the silver-tongued herald of change, forgettably told a crowd in Madison, Wis., some months back, that he will "listen to Main Street, not just to Wall Street." John McCain, the angrier of the two presumptive presidential contenders, has staked out a principled position against greed and obscene profits but has gone no further to call the errant bankers and brokers to account.

The most blistering attack on the ancient target of American populism was served up last October by the then president of the Federal Reserve Bank of St. Louis, William Poole. "We are going to take it out of the hides of Wall Street," muttered Mr. Poole into an open microphone, apparently much to his own chagrin.

If by "we," Mr. Poole meant his employer, he was off the mark, for the Fed has burnished Wall Street's hide more than skinned it. The shareholders of Bear Stearns were ruined, it's true, but Wall Street called the loss a bargain in view of the risks that an insolvent Bear would have presented to the derivatives-laced financial system. To facilitate the rescue of that system, the Fed has sacrificed the quality of its own balance sheet. In June 2007, Treasury securities constituted 92% of the Fed's earning assets. Nowadays, they amount to just 54%. In their place are, among other things, loans to the nation's banks and brokerage firms, the very institutions whose share prices have been in a tailspin. Such lending has risen from no part of the Fed's assets on the eve of the crisis to 22% today. Once upon a time, economists taught that a currency draws its strength from the balance sheet of the central bank that issues it. I expect that this doctrine, which went out with the gold standard, will have its day again.

Wall Street is off the political agenda in 2008 for reasons we may only guess about. Possibly, in this time of widespread public participation in the stock market, "Wall Street" is really "Main Street." Or maybe Wall Street, its old self, owns both major political parties and their candidates. Or, possibly, the $4.50 gasoline price has absorbed every available erg of populist anger, or -- yet another possibility -- today's financial failures are too complex to stick in everyman's craw.

I have another theory, and that is that the old populists actually won. This is their financial system. They had demanded paper money, federally insured bank deposits and a heavy governmental hand in the distribution of credit, and now they have them. The Populist Party might have lost the elections in the hard times of the 1890s. But it won the future.

Before the Great Depression of the 1930s, there was the Great Depression of the 1880s and 1890s. Then the price level sagged and the value of the gold-backed dollar increased. Debts denominated in dollars likewise appreciated. Historians still debate the source of deflation of that era, but human progress seems the likeliest culprit. Advances in communication, transportation and productive technology had made the world a cornucopia. Abundance drove down prices, hurting some but helping many others.

The winners and losers conducted a spirited debate about the character of the dollar and the nature of the monetary system. "We want the abolition of the national banks, and we want the power to make loans direct from the government," Mary Lease -- "Mary Yellin" to her fans -- said. "We want the accursed foreclosure system wiped out.... We will stand by our homes and stay by our firesides by force if necessary, and we will not pay our debts to the loan-shark companies until the government pays its debts to us."

By and by, the lefties carried the day. They got their government-controlled money (the Federal Reserve opened for business in 1914), and their government-directed credit (Fannie Mae and the Federal Home Loan Banks were creatures of Great Depression No. 2; Freddie Mac came along in 1970). In 1971, they got their pure paper dollar. So today, the Fed can print all the dollars it deems expedient and the unwell federal mortgage giants, Fannie Mae and Freddie Mac, combine for $1.5 trillion in on-balance sheet mortgage assets and dominate the business of mortgage origination (in the fourth quarter of last year, private lenders garnered all of a 19% market share).

Thus, the Wall Street of the Morgans and the Astors and the bloated bondholders is today an institution of the mixed economy. It is hand-in-glove with the government, while the government is, of course -- in theory -- by and for the people. But that does not quite explain the lack of popular anger at the well-paid people who seem not to be very good at their jobs.

Since the credit crisis burst out into the open in June 2007, inflation has risen and economic growth has faltered. The dollar exchange rate has weakened, the unemployment rate has increased and commodity prices have soared. The gold price, that running straw poll of the world's confidence in paper money, has jumped. House prices have dropped, mortgage foreclosures spiked and share prices of America's biggest financial institutions tumbled.

One might infer from the lack of popular anger that the credit crisis was God's fault rather than the doing of the bankers and the rating agencies and the government's snoozing watchdogs. And though greed and error bear much of the blame, so, once more, does human progress. At the turn of the 21st century, just as at the close of the 19th, the global supply curve prosperously shifted. Hundreds of millions of new hands and minds made the world a cornucopia again. And, once again, prices tended to weaken. This time around, however, the Fed intervened to prop them up. In 2002 and 2003, Ben S. Bernanke, then a Fed governor under Chairman Alan Greenspan, led a campaign to make dollars more plentiful. The object, he said, was to forestall any tendency toward what Wal-Mart shoppers call everyday low prices. Rather, the Fed would engineer a decent minimum of inflation.

In that vein, the central bank pushed the interest rate it controls, the so-called federal funds rate, all the way down to 1% and held it there for the 12 months ended June 2004. House prices levitated as mortgage underwriting standards collapsed. The credit markets went into speculative orbit, and an idea took hold. Risk, the bankers and brokers and professional investors decided, was yesteryear's problem.

Now began one of the wildest chapters in the history of lending and borrowing. In flush times, our financiers seemingly compete to do the craziest deal. They borrow to the eyes and pay themselves lordly bonuses. Naturally -- eventually -- they drive themselves, and the economy, into a crisis. And to the scene of this inevitable accident rush the government's first responders -- the Fed, the Treasury or the government-sponsored enterprises -- bearing the people's money. One might suppose that such a recurrent chain of blunders would gall a politically potent segment of the population. That it has evidently failed to do so in 2008 may be the only important unreported fact of this otherwise compulsively documented election season.

Mary Yellin would spit blood at the catalogue of the misdeeds of 21st-century Wall Street: the willful pretended ignorance over the triple-A ratings lavished on the flimsy contraptions of structured mortgage finance; the subsequent foreclosure blight; the refusal of Wall Street to honor its implied obligations to the holders of hundreds of billions of dollars worth of auction-rate securities, the auctions of which have stopped in their tracks; the government's attempt to prohibit short sales of the guilty institutions; and -- not least -- Wall Street's reckless love affair with heavy borrowing.

For every dollar of equity capital, a well-financed regional bank holds perhaps $10 in loans or securities. Wall Street's biggest broker-dealers could hardly bear to look themselves in the mirror if they didn't extend themselves three times further. At the end of 2007, Goldman Sachs had $26 of assets for every dollar of equity. Merrill Lynch had $32, Bear Stearns $34, Morgan Stanley $33 and Lehman Brothers $31. On average, then, about $3 in equity capital per $100 of assets. "Leverage," as the laying-on of debt is known in the trade, is the Hamburger Helper of finance. It makes a little capital go a long way, often much farther than it safely should. Managing balance sheets as highly leveraged as Wall Street's requires a keen eye and superb judgment. The rub is that human beings err.

Wall Street is usually described as an industry, but it shares precious few characteristics with the metal-fasteners business or the auto-parts trade. The big brokerage firms are not in business so much to make a product or even to earn a competitive return for their stockholders. Rather, they open their doors to pay their employees -- specifically, to maximize employee compensation in the short run. How best to do that? Why, to bear more risk by taking on more leverage.

"Wall Street is our bad example because it is so successful," charged the president of Notre Dame University, the Rev. John Cavanaugh, in the time of Mary Lease. He meant that young people, emulating J.P. Morgan or E.H. Harriman, would worship the wrong god. The more immediate risk today is that Wall Street, sweating to fill out this year's bonus pool, runs itself and the rest of the American financial system right over a cliff.

It's just happened, in fact, under the studiously averted gaze of the Street's risk managers. Today's bear market in financial assets is as nothing compared to the preceding crash in human judgment. Never was a disaster better advertised than the one now washing over us. House prices stopped going up in 2005, and cracks in mortgage credit started appearing in 2006. Yet the big, ostensibly sophisticated banks only pushed harder.

Bear Stearns is kaput and Lehman Brothers is reeling, but Morgan Stanley perhaps best illustrates the gluttonous ways of Wall Street. Having lost its competitive edge on account of an intramural political struggle, the firm, under Chief Executive John Mack, set out to catch up to the rest of the pack. In the spring of 2006, it unveiled a trillion-dollar balance sheet, Wall Street's first. It expanded in every faddish business line, not excluding, in August 2006, subprime-mortgage origination (the transaction, intoned a Morgan Stanley press release, "provides us with new origination capabilities in the non-prime market, which we can build upon to provide access to high-quality product flows across all market cycles"). Nor did it pull in its horns as the boom wore on but rather protruded them all the more, raising its ratio of assets to equity to the aforementioned 33 times at year-end 2007 from 26.5 times at the close of 2004. Naturally, it did not forget the help. Last year, Morgan Stanley paid out 59% of its revenues in employee compensation, up from 46% in 2004.

Huey Long, who rhetorically picked up where Lease left off, once compared John D. Rockefeller to the fat guy who ruins a good barbecue by taking too much. Wall Street habitually takes too much. It would not be so bad if the inevitable bout of indigestion were its alone to bear. The trouble is that, in a world so heavily leveraged as this one, we all get a stomach ache. Not that anyone seems to be complaining this election season.

Original here

Flaming cheek! £1m-a-year gas chief tells families: 'Just wear two jumpers'

A gas firm boss faced a heated backlash yesterday after telling families struggling with soaring fuel bills to 'wear two jumpers'.

Jake Ulrich of Centrica - the parent company of British Gas - was attacked for his 'flippant' and 'out of touch' remarks.

The 55-year-old, who earns more than £1million a year, was accused of having no sympathy with his cash-strapped customers. His firm warned yesterday that gas bills could rise to more than £1,000 a year by 2010.

Consumer group Energywatch called Mr Ulrich's comments 'a slap in the face' for British Gas customers.

A spokesman said: ' The remarks demonstrate how out of touch they are with the daily struggle for their vulnerable customers to keep warm. British Gas and Centrica claim to take fuel poverty seriously. Comments like this don't help anyone.'

Mr Ulrich provoked the storm by referring to U.S. President Jimmy Carter's advice during the 1977 oil crisis - when he told Americans to put on a jumper and turn down their thermostats to save energy.

The Centrica boss said: 'I hate to go back to the Jimmy Carter days in the U.S., but maybe it's "two jumpers instead of one".

'I think that people will change the temperature at which they keep their homes, they will be more cognisant of energy waste and will buy better appliances.'

Commentators noted that what seemed like friendly advice from a national leader had a somewhat different tone coming from a man whose company is profiting handsomely from the fuel price rises.

Over the last five years, British Gas has increased its prices seven times, including inflation-busting rises of up to 19 per cent in the depths of winter.

Mr Ulrich's remarks have also been compared with the comments often attributed to French Queen Marie Antoinette.

She is said to have responded to complaints that the ordinary people were too poor to buy bread by saying loftily: 'Let them eat cake'.

In addition to a £1million salary as managing director of Centrica Energy, Mr Ulrich has a pension pot worth £3.2million.

He earns £20,000 a week - in stark contrast to two-thirds of single pensioners in this country, who according to the Office for National Statistics have just £200 to cover the same period.

Gordon Lishman of the charity Age Concern said: 'An extra jumper is not the solution to pensioner fuel poverty.

'We estimate more than one in three pensioner households could be in fuel poverty by the end of the year, which is a national disgrace.'

Gas prices are likely to soar, possibly rising to more than £1,000 by 2010

Gas prices are likely to soar, possibly rising to more than £1,000 by 2010

Households are classed as being in fuel poverty if they must spend more than ten per cent of their disposable income on fuel bills.

Around 2.25million pensioner households are in this state - and this number will soar if gas giants press ahead with rumoured price hikes.

Many older people are already dreading the winter months, knowing they will not be able to afford to keep warm.

Fears of another huge price rise were raised by a report commissioned by Centrica from the analysts Eclipse Energy.

It said that as North Sea oil runs down, the UK will become increasingly reliant on imports.

British energy firms will therefore have to pay top prices to secure the limited resources.

It blames bill increases on the fact that the price of gas is tied to oil, which has spiralled to more than $140 a barrel.

There were suggestions that the report, which was extensively publicised yesterday, was being used to justify big price hikes.

By publicising rises of nearly 70 per cent, suppliers could be hoping that customers will view smaller - but still double-digit - rises as a lucky escape. However, any increase in fuel prices would devastate millions who are already struggling with underwhelming pay rises and rising bills.

Household bills from food to fuel - and particularly mortgages - have rocketed this year, putting families under huge financial pressure.

Steve Bloomfield, national officer from the Unison union, said: 'British Gas and the other energy companies, who are trying to soften people up for another round of price hikes, ought to be ashamed of themselves.'

Liberal Democrat leader Nick Clegg said the solution was not to tell the public to put on a second jumper, but to make sure everybody was on the cheapest possible energy supply deal.

Many customers are struggling to pay bills which could easily be cut if they switched to internet-only accounts, he said.

'Rather than making flippant remarks about jumpers, energy bosses should be offering real help to families trying to pay rising fuel bills,' Mr Clegg added.

'A good start would be making sure that the poorest and most vulnerable people are being offered the best deals before winter arrives.'

Mr Ulrich last night apologised for the comments, which were made to Channel 4 News on Thursday - and insisted that he had not meant to cause any offence.

He added: 'My comments were intended to reflect that people are already thinking about energy efficiency as a way of offsetting increasing energy prices.

'Upon reflection, I appreciate how they might have been misconstrued and regret any offence caused.'

Just wrap up warm!

Jake Ulrich's hard-pressed customers might think his remarks are a little bit rich... particularly coming from him.

The wealthy energy boss - whose Centrica firm owns British Gas - has a seven-figure salary to protect him from the financial worries caused by the credit crunch.

The heating bills for his palatial £5million three-storey mansion, for instance, must hardly make a dent in his bank balance.

It's also fair to say that buying an extra jumper will not be a problem for the greyhaired millionaire, who is well-rewarded for his work by Centrica.

Mr Ulrich, 55, and his wife Martha have lived in their West London home since

The couple jealously guard their privacy. Their house - with its Downing Street-style shiny black door - has pretty window boxes and is situated in one of the most soughtafter areas of the capital.

The property is worth at least £5million and is opposite the home of Kylie Minogue.

Jake Urlich's £5m, three-storey house in London

Jake Urlich's £5m, three-storey house in London

However, Mr Ulrich clearly believes you can never be too careful with your money.
He has placed the mortgage for the property offshore in the Isle of Man.

The reason for having such an arrangement, according to one financial expert, is to save on tax for the American-born businessman, who is still thought to own property back in the U.S.

'Banks such as these can offer not only cheaper repayments in dollars, but a tax-efficient way of buying a house for a non domicile,' he added.

As for his own salary, Mr Ulrich last year earned a total of £1,033,000 after becoming managing director of Centrica PLC in 1997.

He is due to retire at the end of the month and is listed as having more than £3million in share options linked to the firm.

He also has a pension pot that stands at £3.2million. It rose by £900,000 in value last year alone.

But when he gives up work at the end of the month, Mr Ulrich will sadly lose the use of his personal chauffeur.

The driver regularly takes him from his home to Centrica's Berkshire headquarters in Windsor.

This means Mr Ulrich will also lose the certain number of chauffeured trips he is allowed to take outside of work hours, under 'limited personal mileage'.

But he would undoubtedly get little sympathy from the shivering ranks of his customers.
Original here

A Couple of My Rules for Startups

My buddy Jason had a GREAT post about rules for startups. Read it, love it learn it.

Of course, anyone who has started a company has their own rules and guidelines, so I thought i would add to the meme with my own. My "rules" below aren't just for those founding the companies, but for those who are considering going to work for them as well.

1. Don't start a company unless its an obsession and something you love.

2. If you have an exit strategy, its not an obsession.

3. Hire people who you think will love working there.

4. Sales Cures All. Know how your company will make money and how you will actually make sales.

5. Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but are cheap

6. An expresso machine ? Are you kidding me ? Shoot yourself before you spend money on an expresso machine. Coffee is for closers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.

7. No offices. Open offices keeps everyone in tune with what is going on and keeps the energy up. If an employee is about privacy, show them how to use the lock on the john. There is nothing private in a start up. This is also a good way to keep from hiring execs who can not operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over their secretary, run away. If an exec wont go on salescalls, run away. They are empire builders and will pollute your company.

8. As far as technology, go with what you know. That is always the cheapest way. If you know Apple, use it. If you know Vista... ask yourself why, then use it. Its a startup, there are just a few employees. Let people use what they know.

9. Keep the organization flat. If you have managers reporting to managers in a startup, you will fail. Once you get beyond startup, if you have managers reporting to managers, you will create politics.

10. NEVER EVER EVER buy swag. A sure sign of failure for a startup is when someone sends me logo polo shirts. If your people are at shows and in public, its ok to buy for your own folks, but if you really think someone is going to wear your polo you sent them in public, you are mistaken and have no idea how to spend your money

11. NEVER EVER EVER hire a PR firm. A PR firm will call or email people in the publications, shows and websites you already watch, listen to and read. Those people publish their emails. Whenever you consume any information related to your field, get the email of the person publishing it and send them an email introducing yourself and the company. Their job is to find new stuff. They will welcome hearing from the founder instead of some PR flack. Once you establish communications with that person, make yourself available to answer their questions about the industry and be a source for them. If you are smart, they will use you.

12. Make the job fun for employees. Keep a pulse on the stress levels and accomplishments of your people and reward them. My first company, MicroSolutions, when we had a record sales month, or someone did something special, I would walk around handing out 100 dollar bills to salespeople. At and MicroSolutions, we had a company shot. Kamikaze. We would take people to a bar every now and then and buy one or 10 for everyone. At MicroSolutions, more often than not we had vendors cover the tab. Vendors always love a good party :0

These are all off the top of my head. But they have worked for me so far.
Original here