Financial Mines

News and notes from the business reporters for the Connecticut Media Group.

Archive for June, 2012

Goodwill in Urgent Need of Donations of Small Appliances

Friday, June 29, 2012 by:Rob Varnon

Goodwill released the following plea today.

Goodwill stores are in urgent need of small appliances like blenders, toasters, mixers, coffee makers, food processors and hair dryers that are in working order. Currently the stores are seeing these items fly off the shelves, making it difficult to keep an adequate stock. Since Goodwill stores rely heavily on donated items, it is crucial to Goodwill’s mission of helping people train for and find jobs that a variety of donations keep coming in.

The sale of donations through Goodwill’s 15 retail stores translates into employment assistance, job training and other programs for the community that benefit thousands of people each year. Last year alone, Goodwill of Western & Northern Connecticut provided services to over 15,500 people.

Donors may drop off items at local Goodwill stores and attended donation centers located at many convenient locations throughout Connecticut. A Goodwill staff member will help the donor unload items and provide a donation receipt for tax purposes.

Goodwill is a non-profit organization that provides employment and support services to people with disabilities and other barriers to employment. Goodwill programs help people gain the skills they need to obtain and keep a job so that they may become self-sufficient.

Call 1-800-423-9787 or visit www.gwct.org for a list of retail stores and donation locations near you.

Mixed reaction from stocks and experts to SCOTUS Health Care decision

Thursday, June 28, 2012 by:Rob Varnon

The decision is in and fortunes are rising and falling following the Supreme Court decision on health care. If you missed it, SCOTUS basically upheld it as a power to tax. Remember folks, all things necessary and proper.

Here’s some early share numbers.

Cigna was down 4.69 percent but finished off just 2.69 percent

Aetna down 3.59 percent initially was able to claw back some of that loss but still finished 2.71 percent lower.

UnitedHealth down 3.19 was able to fight back to post a gain on the day of 0.52 percent.

Shares in many big name hospitals posted strong gains on the day ranging from 5 to 10 percent.

Reactions in Connecticut on the impact to the business climate was mixed with one economic guru admitting he was out clamming and had no clue how this would impact the economy going forward.

Paul Schatz, president and CIO of Woodbridge-based investment advisory Heritage Capital, sees it as almost all negative:

“SCOTUS ruling is negative for stocks, negative for the economy and negative for the political nonsense.

GDP will weaken and this adds more credence to my forecast for a recession in 2013 or 2014.

Wait until the criminals game the system now! Why can’t a company dump their health care plan, pay the fine and then send all employees to Medicaid? States will take it on the chin and that’s also a negative for muni bonds.

Also negative for jobs as it’s more counter productive to hire.

Probably a positive for hospital companies.”

Paul Timpanelli, president and CEO of the Bridgeport Regional Business Council, said he was glad the court ruled.

“I’m very pleased that this question is now behind us and we now have the opportunity to determine the real impact of this landmark law. Having all Americans now protected says a great deal about who we are as a country,” Timpanelli said.

Connecticut’s Congresswoman Rosa DeLauro sees it as a positive for families and their budgets:

This is her official press release, moved shortly after decision.

DeLauro Statement on Supreme Court Upholding Affordable Care Act

Calls for Renewed Focus on Job Creation, Building Strong Middle Class

Washington, DC – Congresswoman Rosa DeLauro (D-CT) released the following statement today on the Supreme Court’s decision upholding the Affordable Care Act. DeLauro, the senior Democrat on the Labor-HHS Appropriations Committee, fought for comprehensive health care reform for years and was a leading champion for health care reform.

“This is a victory for the American people. Families across the country will benefit from the Supreme Court’s decision to uphold the Affordable Care Act. Women will still have access to affordable preventative services, children with preexisting conditions will get the care they need and seniors will continue to save billions on their prescription drug costs. And so critical in this economic climate are the aspects of the Affordable Care Act that will help stem rising health care costs, such as ensuring at least 80 percent of premium dollars actually pay for health care, not corporate profits.

“The uncertainty created by the false questioning of the Act’s legality has been settled and states, insurance companies and businesses can move forward and keep carrying out the important health care and consumer protection provisions contained in the law. With this decision Congress can focus on what matters most to American families—strengthening our economy, creating jobs, generating economic growth and building a stronger middle class.”

The decision didn’t delight all in Connecticut.

Here’sthe National Federation of Independent Business’ take on it, out of Hartford:

Hartford (June 28, 2012) —The Supreme Court’s decision today upholding the controversial Affordable Care Act and its heavy-handed individual mandate is a deep disappointment to small businesses everywhere, said the National Federation of Independent Business (NFIB) today.

“While we are certainly disappointed, NFIB respects the decision to uphold the individual mandate by the Supreme Court. Clearly this mandate has now become a tax on all Americans and a broken campaign promise from President Obama not to raise taxes,” said Dan Danner, President and CEO of the National Federation of Independent Business. “We are concerned about the precedent that this will set in Congress’ ability to mandate other aspects of our lives, but we will move forward from today to continue to fight, harder than ever, for real health-care reform for our membership.

“Under PPACA, small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed businesses. We will continue to fight for the repeal of PPACA in the halls of Congress; only with PPACA’s full repeal will Congress have the ability to go back to the drawing board to craft real reform that makes reducing costs a number one priority. The power and control of health-care decisions should be in the hands of the consumer, not the government.”

“This day will go down in history as the day when Americans lost a part of their freedom – the freedom to choose what to buy with their own money.” said Karen Harned, Executive Director of NFIB’s Small Business Legal Center.

NFIB State Director Andrew Markowski said the ruling guarantees that Connecticut residents will have their most personal health care decisions made by politicians and bureaucrats in Washington and in other states whom they’ve never met and whom they’ll have a hard time influencing in the future.

“The tragedy in this ruling is that Connecticut residents are now at the mercy of politicians from other states and bureaucrats in Washington whose decisions won’t be based on what is best for Connecticut,” said Markowski. “Small businesses here will be overwhelmed by mandates, taxes and burdens imposed on them by people whom we cannot as easily hold accountable.”

NFIB Small Business Legal Director Karen Harned said the decision amounts to a loss of freedom for Americans.

“This day will go down in history as the day when Americans lost a part of their freedom – the freedom to choose what they want to buy with their own money when they want to buy it, apart from the government telling them they must purchase a product they may or may not want,” said Harned.

Fairfield-based Acme added to Russell Microcap Index

Wednesday, June 27, 2012 by:Rob Varnon

Acme United Corp., the maker of cutting implements, office and school supplies and first aid kits, was added to Russell’s Microcap Index this month.

Acme’s shares are traded on the NYSE’s Amex board and were priced at $10.09 Wednesday. Company has reported record profits in its most recent quarter and this month acquired the assets of the C-Thru ruler company. It manufactures Clauss cutting implements, Camillus knives, Westcott pencil sharpeners, scissors and slicers, Western brand pocket knives, Pac-Kit first aid and PhysiciansCare first aid products.

Besides the recent acquisition of C-Thru’s multiple line of measuring devices, the company signed an agreement in December with outdoor adventurer and survivalist Les Stroud, star of the six-time Gemini-nominated hit TV series Survivorman, to design knives for Camillus.

Acme was not the only Connecticut company added to the Microcap Index. Farmington-based aerospace, medical, industrial and commercial tool maker EDAC Technologies was also included.

The ugliness continues in the job market

Tuesday, June 26, 2012 by:Rob Varnon

Challenger, Gray and Christmas reports May layoffs jumped.

Here’s the placement firm’s brief synopsis:

Job cuts hit an eight-month high in May, as employers announced plans to shed 61,887 workers from their payrolls. The May total was 53 percent higher than the 40,559 job cuts announced in April and 67 percent higher than the same month a year ago. The report on June job cuts will be released by global outplacement consultancy Challenger, Gray & Christmas, Inc. on Thursday, July 5, at 7:30 a.m. EDT.

A possible down side to new technology

Monday, June 25, 2012 by:Michael C. Juliano

New technology is usually seen as a good thing, given it often makes tasks easier to perform as well as boosts efficiency for users as well as revenues for creators. A surefire win-win for all, right, or why else would the time and resources be invested in creating it? I am ever eager to applaud arrival of the newest gadget designed to make our lives easier — until I find myself reading and answering work-related emails from my iPhone after-hours and over the weekend from all sorts of places — the mall, the supermarket, my living room, the movie theater — you name it. I need to say that I do this out of choice as I am never required to do this, yet it is a choice I make nonetheless due to a new technology called the “smartphone.” Honestly, I have raved again and again about the smartphone as the penultimate “Swiss Army Knife” of all gadgets. Amazingly, it is a camera, a web browser, a recorder, an alarm clock, a gps device, a calorie counter, a flashlight, a notepad, a mirror, a police scanner and much, much more — that I can fit in my pocket. Oh, it’s also a phone, too. And I’m greatly appreciative of all of this usefulness in an object the size of a cassette tape — remember those? Yet after having acknowledged that my checking and responding to emails when I am not at work is of my own volition and having recognized a smartphone’s merits, I still find myself asking the question: Is a new technology that enables me to be connected to work all of the time such a good thing? I wonder this especially when I see those work-related emails coming in from other iPhones, so I can only assume these smartphones are having the same effect on others — and then I begin to wonder, have we become a society that has become “on-call” 24/7 as a result of new technology? And then I feel a sense of sadness. And then I feel a sense of fear. And then I look once again at my smartphone for the latest email.

Madoff feeder fund settles with NY AG for $410 million

Monday, June 25, 2012 by:Rob Varnon

New York Attorney General Eric T. Schneiderman announced this morning an agreement with J. Ezra Merkin, to make restitution to clients whose funds he handed over Bernard Madoff, who was running a Ponzi scheme.

The AG said Merkin controlled four funds- Ariel Fund Ltd., Gabriel Capital L.P., Ascot Fund Ltd. and Ascot Partners L.P. – that invested more than $2 billion with Madoff. The combined losses of the funds, according to the AG was $1.2 billion.

While Merkin’s clients, which included nonprofits, were losing money, he was taking fees for his “management” of the money.

As with much of the Madoff case, this is another example of why investors need to do more than just trust a reputation, but must be sure they understand what their advisers and managers are doing to earn fees. Several feeder fund managers appear to have been not much more than great salesmen and women, telling investors of their prowess in the area of investment, when they were actually just handing the money over to Madoff and his magic show.

As for Merkin, he will pay $405 million to compensate investors over a three-year period, and $5 million to the State of New York to cover fees and costs. This is the first settlement resulting from a government action against Merkin.

David Pitofsky and Bart Schwartz, Court-appointed receivers overseeing the winding-up of the Merkin Funds, will oversee the return of the money to investors. Justice Richard B. Lowe III who has overseen the Attorney General’s case since its inception will have continued oversight of the receivers and the implementation of the settlement agreement.

Depending on the size of their losses, eligible investors will be entitled to receive over 40 percent of their cash losses. Pursuant to a claims process, investors who were not aware of Merkin’s delegation to Madoff will receive a defined percentage of their losses, while those who were aware of Madoff’s role will be eligible to receive a smaller recovery. In addition, all investors are likely to receive additional payments at a future date when the Madoff Estate is able to distribute moneys recovered by Irving Picard, the Securities Investor Protection Corporation Trustee for the liquidation of Madoff’s Estate, who is not involved in Attorney General Schneiderman’s settlement.

This is an abridged version of the AG press release from this morning, with some analysis by the Mines.

Shelton man sentenced to 3 years for $300k fraud

Friday, June 22, 2012 by:Rob Varnon

Shelton resident John H. Goldsmith was sentenced Friday in U.S. District Court in Bridgeport to 36 months in prison for securities fraud related to a multi-year scam that took more than $300,000 from family and friends.

U.S. District Judge Stefan R. Underhill increased the sentence beyond the guidelines, telling Goldsmith he made his decision based on the duration of the crime, the betrayal of trust and the impact on the victims.

Goldsmith pleaded guilty to the charge in February. The sentence guidelines called for 21 months of incarceration, based on the monetary amount stolen.

For a period of five to seven years, according to court records, Goldsmith, a web developer, took investments at first he said to create a magazine. He then came upon the idea of creating a video web site for teen athletes and attempted to build that. However, he was unable to get the video website off the ground and eventually told investors he was able to buy stock in Sallie Mae at a discount rate on their behalf.

One investor remorgaged their house and sold stocks in legitimate companies to make the investment.

The FBI said Sallie Mae confirmed it did not buy his business and that Goldsmith never had access to discounted stocks.

Goldsmith’s attorney objected to the sentence. She and Goldsmith declined comment after judgement.

Stratford biz owner at Opryland Hotel during explosion

Friday, June 22, 2012 by:Rob Varnon

Irony was in hyper drive at the Gaylord Opryland Resort and Convention Center this week when a boiler explosion disrupted conventions for sheriffs and disaster recovery construction firms.

No one is believed to have been hurt in the Tuesday nigh explosion, but Paul Plouffe, owner of Servicemaster of Greater Bridgeport, with his wife Mary Jane, were eyewitness to the aftermath. The couple, whose business is based in Stratford, were there to attend a convention of Contractor Connection, for disaster recovery firms like Plouffe’s and for builders who come in to rebuild after fires and other disasters strike.

“We were at the Grand Ole Opry next door,” Paul said via cell phone Friday. “One of the guys that was with me, we carry 24-hour pagers, said the hotel we’re staying at just had an explosion.”

Paul said he thought it was a bit of inappropriate humor, after all they’re all in disaster recover. But when the group got back to the hotel they were greeted by a scene right out of a movie, with everything cordoned off with police tape, emergency workers all over the place and helicopter flying overhead.

“There are 1,000 rooms there. Everyone was out on the lawn,” Plouffe said. “We were out and about until 3 a.m.”

The early morning hours were spent walking down streets and alleys, past dumpsters trying to find a room. He said they finally secured lodging at the Fiddler’s Inn.

People weren’t allowed back in that night until structural engineers checked the building for stability. The Opryland Hotel is under a dome, he said, and there was a worry glass would come down.

The event was a bit of a shock to the system, he said, as one moment you’re in this beautiful place with no worries and the next, you’re confronted by the scene of emergency responders and people milling about.

“What a marvelous place,” he said. “You had that feeling of bullet-proofness then,..”

They did get back into their hotel and the convention went on he said, with everyone getting free breakfast. There was a big hole in the middle of where the sheriffs convention was, he said.

You had about 4,000 contractors giving out their cards to the hotel manager,” he said, after the explosion.

Plouffe said the hotel did a good job overall.

His takeaway from the event is that it is important for people to be prepared for events like this. To have systems in place to deal with it before it happens.

“It was interesting to be at a disaster convention and having a disaster hit here,” he said. “I think, the corny phrase, and bad joke going around was, ‘How’d the convention go? We had a blast.”

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