Tuesday, October 14, 2008

Lehman Brothers approved $100 million executive payout days before declaring bankruptcy.

The Times of London reports that just three days before going bankrupt, the board of Wall Street financial giant Lehman Brothers “signed off on more than $100m (£59m) in payouts to five top executives.” In the two years prior to Lehman’s collapse, the same executives “were generously remunerated while overseeing forays into risky commercial real-estate investments that helped to bring the company down.”

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Quicken Online is finally free

Intuit has finally dropped the subscription fee on Quicken Online, its Web-based financial software that competes with Mint, Geezeo, Buxfer, and Wesabe. The company is still selling, as completely separate products, software versions of Quicken.

When I last covered Quicken Online in December 2007, my biggest complaint was its price. In a market with free (and very good) competitors, there was just no reason to pay for Quicken Online. This is a smart move on Intuit's part. But while Intuit Online is a solid service, the online competitors keep getting better, too. It's unclear to me that Intuit's history will translate into market share in this competitive market.

Intuit is also still preparing to release its iPhone app that accesses Quicken Online data, as I wrote in December. No word on when that ships.

High customer support costs and an angry customer base (check out the user review scores for Quicken and Money) make standalone financial apps like Quicken and Microsoft Money questionable product lines for their makers, and when the online services take hold I will expect their demise. Devoted Quicken users like me, though, will need more capabilities (like bill paying and support for complex investment transactions) before we can make the transition, and the public at large has yet to be convinced that these online financial data storehouses can be trusted.

A quick snapshot of your cashflow (2007 version of Quicken Online)

(Credit: Intuit)

See also: Quicken Beam: Your finances made cute.

There's more online financial news coming tomorrow morning from the Finovate conference. Check back here.

Rafe Needleman writes about start-ups, new technologies, and Web 2.0 products, as editor of CNET's Webware. E-mail Rafe.

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NWV Direct Caught Pulling Bait And Switch, Tries To Backpedal

Joshua caught New World Video Direct trying to pull a bait and switch on him with a recent order, so he canceled it and gave them a bad review on resellerratings.com. They contacted him to ask if he'd remove the rating. Joshua wrote back to decline, but he reminded them that it's actually pretty simple to develop a decent reputation as retailer: "If you want to have anyone trust you as a business you have to only list items you plan to sell for the price you plan to sell them at."

The problem started when he bought a $28 charger from New World Video's online store. They list the item as usually shipping in 1 to 2 days, but the next day they called him to tell him the charger was on back-order, and instead they could sell him a $99 off-brand charger. After he hesitated, they cut the price to $45 to sweeten the deal—but it was still $17 over what he originally intended to spend, and for a different product altogether.

Joshua set up a blog to publicize the subsequent email exchange he had with New World Video, and on it he clearly explains why the company is engaging in bait and switch tactics:

The website said (and STILL says) in stock at the low (lower than any other website) price of $28. The rep said it was on backorder and gave me NO option to wait. She immediately tried to sell me another product for $90 saying that I must really need the item fast since I had ordered with expedited shipping!

In his emails to Joshua, an NWV rep named Scott argues that the company never promised the item was in stock, only that it "usually ships in 1 to 2 days."

Curiously, neither item says "in stock" on the site, but both say they usually ship in 1 or 1-2 days. These are screen caps from 13 October 2008:

We think Scott's trying to hide behind a technicality, but okay, let's assume he and the company he represents are legit (despite the fact that Joshua's bait and switch accusation isn't the only one on resellerratings.com). Assuming you're honest, there's an easy solution to this problem with future customers, Scott. Simply keep your website updated so that the stock situation accurately reflects your store's true inventory as closely as possible. Oh, and if you do have inventory issues, don't call customers to try to upsell them a product that's three times more expensive.

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AT&T to sell U-verse at Wal-Mart, Circuit City

NEW YORK (Reuters) - AT&T Inc plans to sell its U-verse high-speed Internet and video service at Wal-Mart and Circuit City stores starting this month, stepping up competition against cable service providers.

AT&T said on Monday that it would sell U-verse at 600 Circuit City Stores Inc and Wal-Mart Stores Inc stores in parts of Arkansas, California, Connecticut, Texas and several other states where the service is available.

The company said the retail deals, the first for U-verse, would help create a powerful distribution channel and provide customers with a convenient way to order the service.

Both AT&T and No. 2 phone company Verizon Communications Inc have invested heavily in high-speed Internet and video services to stop a rapid decline in home phone lines.

Many of those consumers have canceled wired phone services in favor of Internet, video and phone services offered by cable service providers.

Consumers are currently able to sign up for cable service at major electronics stores.

AT&T aims to have more than 1 million U-verse television customers in service by the end of the year. It also plans to expand the network and have the service available to more than 30 million homes by the end of 2010.

(Reporting by Ritsuko Ando; Editing by Lisa Von Ahn)

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Carriers Say No to Airporn

By Dave Demerjian

People get bored on long flights, which is why we love in-flight Internet access. It lets people check email, read Wired.com, watch the stock market collapse and enjoy their favorite scenes from On Golden Blonde and Forest Hump.

Airlines, worried the wi-fi services they're rolling out will turn planes into flying porn theaters, are installing filters to prevent passengers from surfing smut. The decision is hailed by flight attendants -- who've so far been responsible for preventing porn peeping -- and by activists concerned that children and other passengers might be subjected to objectionable material. They also worry unfettered onboard Internet access poses a security and safety risk.

American Airlines says it will "implement technology to filter pornographic content over it's Gogo in-flight Internet service." It's an about-face for the airline, which had said it would leave the nannying to flight attendants. The course correction was prompted in part by the vocal concerns of flight attendants who didn't want to be morality cops after the airline started offering in-flight wi-fi last month.

"Flight attendants are on board to provide security and safety for passengers, not to monitor their Internet usage," Corey Caldwell of the Association of Flight Attendants told Wired.com. "We're glad the airlines have responded to our concerns and to those of passengers."

But at least one privacy rights advocate opposes the idea and says blocking porn is the first step down a slippery slope.

"I don't think it makes much sense," Marc Rotenberg, executive director of the Electronic Privacy Information Center, told ITWorld.com. Filters do nothing to keep people from viewing inappropriate material stored on their laptops and open the door to blocking other content airlines -- or others -- might deem inappropriate, he says. "It's so easy, once that precedent is set, to broaden ... the kind of information blocks that might be imposed."

Airline cabin crews aren't the only ones worried about airborne porn. Girls Against Porn lobbied American to install filters, urging the airline to consider the harm inappropriate content might have on passengers and citing a particularly disgusting incident that has resulted in a $200,000 lawsuit against American. "The airlines risk having this happen repeatedly if the Internet isn't filtered," Girls Against Porn said in a statement.

Delta Airlines, which rolls out in-flight wi-fi later this year, told the Atlanta Journal Constitution it will filter inappropriate content. "Blocking will be limited in scope and will be for sites that few, if any, would question are inappropriate to be viewed on an aircraft," spokesman Kent Landers said, addressing concerns about filters known to block non-erotic sites such as Vanity Fair.

The two airlines are working with Aircell, which provides the wi-fi technology, to find a filter, though the company has yet come up with a solution. "We want to be good partners to the customers coming to us with these types of concerns," a company source told Wired.com. "We're working with them to come up with an effective solution."

When they do, passengers will have to find another way to occupy themselves on those long-haul flights.

Photo by Flickr user Magitisa.

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Former Fed chief says U.S. now in recession

SINGAPORE (Reuters) - Former Federal Reserve Chairman Paul Volcker said on Tuesday the U.S. housing sector faced more losses and the economy was in recession even as authorities moved to stabilize the financial system.

Volcker said the priority for U.S. authorities in the credit crisis was to stabilize the financial system even though that meant heavy government intrusion.

"The first priority is to stabilize the financial system. It is necessary even though the cost involved is heavy government intrusion in markets that should be private," he said in a speech at a seminar in Singapore.

"House prices in the U.S. are still declining. There are still more losses to come there. The economy, I believe, is in recession."

Volcker is chairman of the board of trustees of the Group of 30, an international body composed of central bank governors, leading economists and private financial sector experts.

He is credited for battling double-digit inflation that flared in the 1970s.

He was chairman of the U.S. central bank between 1979 and 1987, before handing the reins over to Alan Greenspan, and oversaw a sharp increase in interest rates to quell the price pressures.

Volcker was asked by a member of the audience if the massive infusion of liquidity by the Federal Reserve could lead to inflation or stagflation.

"It's not going to be a problem in the short run. Inflation doesn't flourish in the face of recession," he said.

"It's something we have to worry about when we get out of this recession."

The United States has announced various measures to combat a credit crisis that emanated from the U.S. housing market and which has spread globally.

U.S. authorities are expected to announce plans later on Tuesday to pump $250 billion into the country's banks following similar concerted measures in Europe to revive money markets and stave off a global recession.

"I have been around for a while. I have seen a lot of crises but I have never seen anything quite like this one," Volcker said.

"This crisis is an exception. I don't think we can escape damage to the real economy."

(Reporting by Vidya Ranganathan and Koh Gui Qing; Editing by Neil Fullick)

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Canada Conservatives 'set to win'

Conservative supporters at election night rally
The Conservatives' victory looks unlikely to bring a majority

Voting has ended in Canada's third general election in four years, with early results showing victory for the ruling Conservatives.

Prime Minister Stephen Harper, who has headed a minority government since 2006, called the snap poll in a bid to secure a majority in parliament.

The main challenge has come from the Liberals led by Stephane Dion.

However, despite winning more seats, Mr Harper still looks likely to fall short of a parliamentary majority.

The first polls opened at 0830 local time (1100 GMT), with the last polling stations closing on the Pacific coast at 0200 GMT.

Early results indicate that the Conservatives can expect to win 144 seats in the 308- seat parliament, falling short of the 155 needed for a majority.

Before this election, the Conservatives held 127 seats.

Canada was the first big economic power to go to the polls to elect a new government since the financial crisis.

Conservative MP Jason Kenny hailed his party's result in the present circumstances.

"Every other incumbent government in the Western world is in serious political trouble with the economic situation," he said.

"Ours is probably the only one that could be re-elected - let alone with an increased mandate."

Stephen Harper campaigning in Toronto, Ontario
Stephen Harper called the snap poll last month

Mr Harper called the election last month amid hopes in his Conservative party that they could secure a majority.

But he was criticised during the campaign for not showing enough empathy with Canadians who have lost money during the upheaval on the stock markets.

Mr Harper's main rival, Liberal leader Stephane Dion, had been promoting an ambitious green carbon tax plan.

But Mr Dion, a French Canadian from Quebec, had difficulty connecting with English-speaking voters, the BBC's Lee Carter says.

The Bloc Quebecois was locked in a close battle to retain its dominance in French-speaking Quebec.

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