Local Heroes that Rock!

In these troubled economic times, as the Country struggles to stabilize and return a healthier financial future, families have had to reinvent ways to survive the higher cost of living with lower income. What, with news of global financial crisis, natural disasters, and local proliferation of human assaults; from abuses to homicide, it's only blind faith and inner strength that safeguards our sanity.

That said, there are indeed fewer and fewer reasons to smile, and increasingly difficult to keep a body’s self-esteem intact. But alas, there are needles in haystacks to be found if we look hard enough, and rays of sunshine that threaten to warm the hearts and souls of communities around the city. One such ray of sunshine comes to us in the form of Evan and Glen Turtel, who I’d like to call heroes.
The dynamic Duo saw the disparity in the math scores of students in the inner city public schools, and sought to answer the cry for help. The disparity in resources and education for inner city students is no less than a crime, so in the spirit of Batman, Spiderman, and Captain America, Glen and Evan Turtel, graduates of Wharton and Cornell, respectively, founded Top Honors. This organization is a non-profit math tutoring program that serves the New York community by shoring up the basic math skills and confidence of thousands of boys and girls. Their mission is simply this; "To provide all students with fundamental math and critical thinking abilities for success as students and productive members of society". Top Honors is a no frills, grassroots tutoring program that serves the underserved demographic of students throughout the city with impressive results. They’ve developed a unique curriculum, designed to pinpoint and strengthen each student’s problem areas. This remarkable organization is almost completely operated on volunteers.

For those of you with young children who needed tutoring from time-to-time, you already know the cost of tutoring can run from $40 -$75 per hour, and as much as $400 for Saturday programs working out of various University sites. The cost of tutoring is even more expensive at programs like Sylvan and Score. As a parent, and grad student who has watched my work hours dwindle down to a frightening level, I am eternally grateful for this program. Top Honor has provided over 3,100 hours of tutoring this year alone! So, for thousands of students who have already benefited from this awesome organization, and those yet to discover them, I emphatically elect Glen Turtel and Even Turtel NYC Local Heroes of the Year for their unyielding, uncompromising leadership and service to our community.

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Parents & Kids Check Out Another Great Math Site for Online Math Support! website; www.mathclub.info
K.J. Reilly

The Election are Over: What's Next?...continued

When the Fed buys long-term government debt from the private market, it shifts interest rate risk from bondholders to taxpayers," Minneapolis Fed President Narayana Kocherlakota warned last week. There are fears that rushing to buy additional assets will do little to spur hiring or spending in an economy already awash in excess cash, one in which nervous consumers are saving more and paying down debt. "Asset purchases in our current economic environment can do little if anything to speed up the return to full employment," Philadelphia Fed President Charles Plosser said in a recent speech. "Because I see little gain at this point, and some costs, I would prefer not to engage in further asset purchases at this time." Many economists echo Plosser's doubts about the Fed being able to jumpstart the economy with more money."I think the impact [of additional purchase] will be minimal," said Bernard Baumohl, executive director of the Economic Outlook Group.

Even if asset purchases lower interest rates, Baumhohl said, banks are still reluctant to lend and both businesses and consumers are still too nervous to take on more debt. So lowering rates feeds the risk of inflation down the road without solving the problem today. "We are following policies that unless changed will eventually lead to lots of inflation down the road," said Warren Buffettat Fortune's Most Powerful Women Summit. "We have started down a path you don't want to go down."

The government has two more years to show improvement to the economy or the House will not be the only thing that the Democrats will have to worry about in 2012.

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C. Cohn
The Cohn-Reilly Report

Hedge Funds Dodge Tax Increase

Hedge funds can breathe a sigh of relief as the expected State tax increase was voted down by State lawmakers.

The controversial tax increase was to target out-of-state fund managers, which could have lead to an exodus to nearby states, namely Connecticut.

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NY State lawmakers did manage to finalized the $136 billion budget, approving a final piece of legislation that will raise about $1 billion through a array of tax hikes and other measures. These measures are anticipated to cover the over $9 billion in deficits.

See News Flash Archive
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The Great Net Neutrality DebateContinuted......

of ISPs have often referred to firms like Google and Skype as ‘freeloaders’ for making money using networks that they have provided at a cost of billions. Secondly, many suggest what we have right now isn’t in fact net neutrality at all. The biggest firms can invest in higher bandwidth deals and server replication to provide faster access for its users in comparison to smaller sites that wouldn’t be able to afford such infrastructure, for net neutrality isn’t even something that exists to uphold. Thirdly, the increase in rich media means infrastructure providers have far more pressures on their resources than was once the case. Bret Swanson of the Wall Street Journal suggests Youtube streams as much data in three months as the world’s radio, cable and broadband television channels stream in one year, i.e. 75 petabytes. By
extension he believes telecommunications firms are simply not ready for the era of ‘exabyte’ delivery and something needs to give.

What’s next? In a recent bill introduced in Congress, U.S. House Democrats failed to win Republican support needed for legislation giving regulators temporary authority over how companies led by Comcast Corp. and AT&T Inc. provide Web service, Representative Henry Waxman said. A measure that would let the U.S. Federal Communications Commission enforce net-neutrality rules for two years won’t be introduced immediately, Waxman, a California Democrat and chairman of the House Energy and Commerce Committee, said on September 29, in an e-mailed statement. “This development is a loss for consumers and a gain only for the extremes,” Waxman said. “We need to break the deadlock on Net Neutrality.” The bill aimed to ensure the FCC has the power that was called into question when a U.S. court in April ruled it lacked authority over Internet-service providers. Republican leaders decided “there is not sufficient time to ensure that Chairman Waxman’s proposal will keep the Internet open without chilling innovation,” Representative Joe Barton of Texas, the top Republican on the committee, said in an e-mailed statement. Congress is to adjourn within days to campaign for the Nov. 2 elections. “It is not appropriate to give the FCC authority to regulate the Internet,” Barton said The bill may be introduced after the elections, Waxman said. The measure would restore the FCC’s authority to prevent the blocking of Internet content, bar phone and cable companies from unjustly or unreasonably discriminating against any lawful Internet traffic, and apply strictures to wireless providers, Waxman said.“Under our proposal, the FCC could begin enforcing these open Internet rules immediately, with maximum fines increased from $75,000 to $2,000,000 for violations,” Waxman said. FCC Chairman Julius Genachowski in September 2009 proposed rules aimed at ensuring net neutrality. He hasn’t sought a vote while the commission considers its reaction to the April court ruling.

Today’s development prompted renewed calls for Genachowski to proceed with his idea to claim power over Internet service using rules written for monopoly telephone service in the 20th century. AT&T and Verizon Communications Inc. oppose such action and say it may prompt more regulation, including price controls. Lawmakers and advocacy groups have urged Genachowski to proceed, saying customers need protection. Waxman’s bill would bar the FCC from using the phone rules during its two-year duration. “If our efforts to find bipartisan consensus fail, the FCC should move forward,” Waxman said.
Complete freedom of open access on the Internet or tiered payment approaches to stimulate corporate innovation.- you decide.

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C. Cohn
The Cohn-Reilly Report

Wall St.: Surviving the Plunge

Continued.....

The SEC summoned a meeting of the Exchange CEOs to Washington. According to Bloomberg News, the CEO of the Exchanges met with SEC chairmen, Mary Schapiro, yesterday concerning a proposal to implement a short-term circuit breaker system in an effort to mitigate vast losses during investor panic situations. We know too well that during a volatile trading day as panic spreads the sell-off accelerates and the cycle of irrational trading begins.

The Washington pow-wow resulted in an agreement to develope a framework for “strengthening circuit breakers" and the handling of erroneous trades. Accordingly, the Exchange CEOs are faced with determining the point when trading should be temporarily halted during periods of extreme swings in either direction; gains or declines. Additionally, the Exchange officers were asked to examine steps for aligning the various trading rules to prevent the conflicting systems from aggravating market plunges. It's unfortunate, but crisis management seems to be the rage around the world. Nevertheless, at least from our standpoint, solutions are on the table for the future mitigation of panic driven plunges in the financial markets.

It would appear that the SEC is on track for improving our system of trading. Who knows, if the law makers are serious about Wall Street reform and tightening regulations for Wall Street, we may actually enhance investor protections. This will ultimately impact us all.

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K. Reilly
Cohn-Reilly Report

Housing Market: Finding its Way Back (Part 1)

Much ink has been usurped on articles, reports and analysis about the housing market over the past 18 months. Like many other industry speculators, I’m inclined to believe the worst is behind us with respect to the economy. As far as the housing market is concerned, an industry come back is much more complex. Why….simply because we have to consider so many factors before we can to determine where the Industry is headed - for example: home values, the credit availability, interest rates, government programs,tax incentives, and unemployment. All of these elements impact the home owners ability to pay their mortgage, or the borrower’s access to credit, and their ability to purchase a home, or keep the one they’re in.

It has been reported that over two trillion dollars in bad mortgages will never be repaid. As housing prices continued to fall, analysts speculate that recovery in the housing market may be nearly five years away. Investors are not likely to want mortgage-backed securities from Fannie Mae - particularly if their loans are risky. Therefore, days where banks blindly loaned to home buyers with low credit criteria are long gone. This is not exclusive to subprime loans. All mortgages will be difficult obtain for while.

Much like the Cash for Clunkers program, the housing program offering an $8,000 tax credit to First-Time Home Buyers, was a great success. Increased housing sales in 2009, may have initially created false hope that the market was on the rise. As it turns out, 80% of FHA mortgages were First-Time Home Buyers taking advantage of the tax incentive. We can expect that once the First-Time Home Buyers program expires, home sales will fizzle. The Spring season normally renews hope in the housing market as sales and home values tend to increase during this time. Unfortunately, the market is not illustrating any signs that this trend will be realized this spring season.
Part 1-of-2

- K. Reilly
Cohn-Reilly Report

Bankruptcies Spike in 2009: Wall St. and Main St.

In an effort to deter consumers who abuse the system and recklessly run up debt and walk away without a scratch, the Prevention and Consumer Protection Act of 2005 was signed into law, comprised of higher bar for determining eligibility to file, and higher fees. The act also extended the 7-year abatement over before filing a second time to 8 years, as well as mandatory credit counseling and debt management workshops. On average, bankruptcy filing in the United Stated was as much as 1.1 million, but it was widely believed that tougher bankruptcy laws would bring that number down significantly. No surprise that there was a spike in consumer filings prior to the passing of the law in October of 2005 , which clearly indicated consumers were rushing to file to avoid having to deal with the tougher laws. Although stats showed a slight dip in filings, it was short lived. The recession, which we now know really started as far back as 2007, fueled a steady increase in bankruptcy filings. By the first quarter of 2009 consumer bankruptcies were up as much as 32 percent.

For corporations, the story isn’t much different. In 2008 corporations filing for bankruptcy increased 74% over the previous year. To make matters worse, 2009 was also a horrific display of corporate carnage with 249 public corporations filing some form of bankruptcy. Eighteen percent of those companies who filed for bankruptcy did so as a pre-structured package. It’s likely that pre-structured bankruptcies are viewed less pessimistically by shareholders and creditors. So it should be no surprise that industry analysts and rating firms such as Moody’s and Standard and Poors view structured bankruptcies more positively as well. Therefore, public corporations see this as a proactive step toward damage control. It’s the corporate strategy that neutralizes negative perceptions, while buying time for them to dig out of the financial ditch. This also explains why structured bankruptcies spiked up 300% on the past 24 months.

Part 1 of 2


- K. Reilly
Cohn-Reilly Report / Articles