Water/Blight Busters/Developer Incentives/Eminent Domain
March 26th, 2007

Utah Economic Snapshot

Looking for a new identity on the cheap? Just go online

Housing Grants

Economic Notes:

This Weeks Leads:




March 23rd 2007 Wasatch Front Water



Long-range weather forecasts predict warmer dryer weather through April, May and June.

Flaming Gorge is 84% full

Lake Powell is 47% full

Wasatch Front Water Withdrawls by Source and Use

Withdrawls by Source and Use1985 Withdrawls (acre-feet) 1985 Withdrawls (%)1995 Withdrawls (acre-feet)1995 Withdrawls (%) 2000 Withdrawls (acre-feet) 2000 Withdrawls (%)
Total Withdrawls1,219,264100% 1,227,767100% 1,372,264100%
Surface927,37876.1 %963,11178.4% 999,23672.8%
Ground291,88723.9 %264,11121.6% 373,44527.2%
Public Supply344,17528.2% 402,73732.8% 512,84737.4%
Domestic Self- Supply3,2820.3% 3,7970.3% nana
Industrial-Mining Self Supply22,0561.8% 42,1853.4% 57,6204.2%
Thermoelectric Power Self Supply4,6150.4% 1,4560.1% 3,1810.2%
Agricultural Self Supply844,72369.3% 775,22963.1% 799,03258.2%

Agriculture consumes 58.2% of the Wasatch Front water but only generates 0.1% of personal income and 0.9% of employment.

State-wide agriculture uses over 80% of the water in Utah of which 85% is surface water.

Source: US Geological Survey, U.S. Department of Interior, NWS, NOAA.


The halo effect, and other managerial delusions

Note: Mayors, City Managers, Public Officials - Everywhere it says “corporate” or “company” or “business” make your own appropriate substitutions.

Companies cannot achieve superior and lasting business performance simply by following a specific set of steps.

The quest of every high-quality corporate executive is to find the keys to superior performance. Achieving market leadership is hard enough, but staying at the top—given intense competition, rapidly changing technology, and shifting global forces—is even more difficult. At the same time, executives are under enormous pressure to deliver profitable growth and high returns for their shareholders. No wonder they constantly search for ways to achieve competitive advantage.

But many executives, despite their good intentions, look in the wrong places for the insights that will deliver an edge. Too often they reach for books and articles that promise a reliable path to high performance. Over the past decade, some of the most popular business books have claimed to reveal the blueprint for lasting success, the way to go from good to great, or how to craft a fail-safe strategy or to make the competition irrelevant.

At first glance, many of the pronouncements in such works look entirely credible. They are based on extensive data and appear to be the result of rigorous analysis. Millions of managers read them, eager to apply these keys to success to their own companies. Unfortunately, many of the studies are deeply flawed and based on questionable data that can lead to erroneous conclusions. Worse, they give rise to the especially grievous notion that business success follows predictably from implementing a few key steps. In promoting this idea, authors obscure a more basic truth—namely, that in the business world success is the result of decisions made under conditions of uncertainty and shaped in part by factors outside our control. In the real world, given the flux of competitive dynamics, even seemingly good choices do not always lead to favorable outcomes.

Rather than succumb to the hyperbole and false promises found in so much management writing, business strategists would do far better to improve their powers of critical thinking. Wise executives should be able to think clearly about the quality of research claims and to detect some of the egregious errors that pervade the business world. Indeed, the capacity for critical thinking is an important asset for any business strategist—one that allows the executive to cut through the clutter and to discard the delusions, embracing instead a more realistic understanding of business success and failure.

As a first step, it’s important to identify some of the misperceptions and delusions commonly found in the business world. Then, using these insights, we might replace flawed thinking with a more acute method of approaching strategic decisions.

Beware the halo effect

Many studies of company performance are undermined by a problem known as the halo effect. First identified by US psychologist Edward Thorndike in 1920, it describes the tendency to make specific inferences on the basis of a general impression.

How does the halo effect manifest itself in the business world? Imagine a company that is doing well, with rising sales, high profits, and a sharply increasing stock price. The tendency is to infer that the company has a sound strategy, a visionary leader, motivated employees, an excellent customer orientation, a vibrant culture, and so on. But when that same company suffers a decline—if sales fall and profits shrink—many people are quick to conclude that the company’s strategy went wrong, its people became complacent, it neglected its customers, its culture became stodgy, and more. In fact, these things may not have changed much, if at all. Rather, company performance, good or bad, creates an overall impression—a halo—that shapes how we perceive its strategy, leaders, employees, culture, and other elements.

As an example, when Cisco Systems was growing rapidly, in the late 1990s, it was widely praised by journalists and researchers for its brilliant strategy, masterful management of acquisitions, and superb customer focus. When the tech bubble burst, many of the same observers were quick to make the opposite attributions: Cisco, the journalists and researchers claimed, now had a flawed strategy, haphazard acquisition management, and poor customer relations. On closer examination, Cisco really had not changed much—a decline in its performance led people to see the company differently. Indeed, Cisco staged a remarkable turnaround and today is still one of the leading tech companies. The same thing happened at ABB, the Swiss-Swedish engineering giant. In the 1990s, when its performance was strong, ABB was lauded for its elegant matrix design, risk-taking culture, and charismatic chief executive, Percy Barnevik. Later, when the company’s performance fell, ABB was roundly criticized for having a dysfunctional organization, a chaotic culture, and an arrogant CEO. But again, the company had not really changed much.

The fact is that many everyday concepts in business—including leadership, corporate culture, core competencies, and customer orientation—are ambiguous and difficult to define. We often infer perceptions of them from something else, which appears to be more concrete and tangible: namely, financial performance. As a result, many of the things that we commonly believe are contributions to company performance are in fact attributions. In other words, outcomes can be mistaken for inputs.

Wise managers know to be wary of the halo effect. They look for independent evidence rather than merely accepting the idea that a successful company has a visionary leader and a superb customer orientation or that a struggling company must have a poor strategy and weak execution. They ask themselves, “If I didn’t know how the company was performing, what would I think about its culture, execution, or customer orientation?” They know that as long as their judgments are merely attributions reflecting a company’s performance, their logic will be circular.

The halo effect is especially damaging because it often compromises the quality of data used in research. Indeed, many studies of business performance—as well as some articles that have appeared in journals such as Harvard Business Review and The McKinsey Quarterly and in academic business journals—rely on data contaminated by the halo effect. These studies praise themselves for the vast amount of data they have accrued but overlook the fact that if the data aren’t valid, it really doesn’t matter how much was gathered or how sophisticated the analysis appears to be.

This reliance on questionable data, in turn, gives rise to a number of further errors in logic. Two delusions—of absolute performance and of lasting success—have particularly serious repercussions for business strategists.

The delusion of absolute performance

One of the most seductive claims in business best sellers is that a company can achieve success if it follows a specific set of steps. Some recent books are explicit on this point, claiming that a company hewing to a certain formula is virtually sure to become a great performer. On closer inspection these studies rely on sources of data (including retrospective interviews, articles from the business press, and business school case studies) that are routinely undermined by the halo effect. Whereas a given set of factors may appear to have led predictably to success, the reverse is more likely—it would be more accurate to say that successful companies tended to be described in the same way. The direction of causality is wrong.

Following a given formula can’t ensure high performance, and for a simple reason: in a competitive market economy, performance is fundamentally relative, not absolute. Success and failure depend not only on a company’s actions but also on those of its rivals. A company can improve its operations in many ways—better quality, lower cost, faster throughput time, superior asset management, and more—but if rivals improve at a faster rate, its performance may suffer.

Consider General Motors. In 2005 GM’s debt was reduced to junk bond status—hardly a vote of confidence from financial markets. Yet compared with the automobiles GM produced in the 1980s, its cars today boast better quality, additional features, superior comfort, and improved safety. Owing to myriad factors, including the increased prominence of Japanese and South Korean automakers, GM’s share of the US market keeps slipping, from 35 percent in 1990 to 29 percent in 1999 and 25 percent in 2005. Its declining performance must be understood in relative terms. Paradoxi-cally, the rigors of competition from Asian automakers are precisely what have stimulated GM to improve. Is GM a better automaker than it was a generation ago? Yes, if we look at absolute measures. But that’s little comfort to its employees or shareholders.

The delusion of absolute performance is very important because it suggests that a company can achieve high performance by following a simple formula, regardless of the actions of competitors. If left unchecked, executives may avoid decisions that, although risky, could be essential for success. Once we see that performance is relative, however, it becomes obvious that a company can never achieve success simply by following certain steps, no matter how serious its intentions. High performance comes from doing things better than rivals can, which means that managers have to take risks. This uncomfortable truth recognizes that some elements of business performance are beyond our control, yet it is an essential concept that clear-thinking executives must grasp.

The delusion of lasting success

The halo effect leads to a second misconception about the performance of companies: that they can achieve enduring success in a predictable way. These studies typically begin by selecting a group of companies that have outperformed the market for many years and then gather data to try and distill what led to that high performance. Regrettably, however, much of the data come from sources that are commonly contaminated by the halo effect. What the authors claim to be the causes of long-term performance are more accurately understood as attributions made about companies that had been selected precisely for their long-term performance.

In fact, lasting success is largely a delusion, a statistical anomaly. As McKinsey’s Richard Foster and Sarah Kaplan showed,1 corporate longevity is neither very likely nor, when we find it, generally associated with high performance. On the whole, if we look at the full population of companies over time, there’s a strong tendency for extreme performance in one time period to be followed by less extreme performance in the next. Suggesting that companies can follow a blueprint to achieve lasting success may be appealing, but it’s not supported by the evidence.

High performance is difficult for companies to maintain, for an obvious reason: in a free-market economy, profits tend to decline as a result of imitation and competition. Rivals copy the leader’s winning ways, new companies enter the market, best practices are diffused, and employees move from one company to another. Of course, it is always possible to pick out a handful of enduring success stories after the fact. Then if we study those companies by relying on data that are suffused with the halo effect, we may think we have discovered the keys to success. In fact, we have only managed to show how successful companies were described—an entirely different matter.

The delusion of lasting success is a serious matter because it casts building an enduringly high- performing company as an achievable objective. Yet companies that outperform the market for long periods of time are not just rare but statistical anomalies whose apparent greatness is observable only in retrospect. More accurately, companies that enjoy long-term success have probably done so by stringing together many short-term successes, not because they somehow unlocked the secrets of sustained greatness. Unfortunately, pursuing a dream of enduring greatness may divert attention from the need to win more immediate battles.

Clear thinking for business strategists

These points, taken together, expose the principal fiction at the heart of so many popular business books and articles: that following a few key steps will inevitably lead to greatness and that a company’s success is of its own making and not often shaped by external factors.

The simple fact is that no formula can guarantee a company’s success, at least not in a competitive business environment. This truth may seem disappointing. Many managers would like to find a formula that can be easily applied—a tidy plug-and- play solution that ensures success. But on reflection, the absence of a simple success formula should not be disappointing at all. Indeed, it might even come as a relief. If success could be reduced to a formula, companies would not need strategic thinking but could rely on administrators to tick the right boxes and ensure that formulas were followed with precision. What makes strategic decision making so difficult, and therefore so valuable to companies, is precisely that there are no guaranteed keys to success. The ability to make the sorts of difficult, complex judgments that are pivotal for a company’s fortunes is, in the last analysis, a business executive’s most important contribution. Here are some approaches that may help.

Recognize the role of uncertainty

Rather than search in vain for success formulas, business executives would do better to adjust their thinking about the context of strategic decisions. As a first step, they should recognize the fundamental uncertainty of the business world. Doing so does not come naturally. People want the world to make sense, to be predictable, and to follow clear rules of cause and effect. Managers want to believe that their business world is similarly predictable, that specific actions will lead to certain outcomes. Yet strategic choice is inevitably an exercise in decision making under uncertainty. Another source of uncertainty involves customers: will they embrace or reject a new product or service? Even if a company accurately anticipates what customers will do, it has to contend with the unpredictable actions of new and old competitors.

A third source of uncertainty comes from technological change. Whereas some industries are relatively stable, with products that don’t change much and customer demand that remains fairly steady, others change rapidly and in unpredictable ways. A final source of uncertainty concerns internal capabilities. Managers can’t tell exactly how a company—with its particular people, skills, and experiences—will respond to a new course of action. Our best efforts to isolate and understand the inner workings of organizations will be moderately successful at best. Combine these factors and it becomes clear why strategy involves decisions made under uncertainty.

See the world through probabilities

Faced with this basic uncertainty, wise managers approach problems as interlocking probabilities. Their objective is not to find keys to guaranteed success but to improve the odds through a thoughtful consideration of factors. Some of these are outside the company—including industry forces, customer trends, and the intentions of competitors. Others are internal—capabilities, resources, and risk preferences. On the foundation of that analysis, the role of the business strategist is to make decisions that improve a company’s chances for success while never imagining that a company can simply will its success.

Rather, the goal should be gathering accurate information and subjecting it to careful scrutiny in order to improve the odds of success. As former US Treasury Secretary and Goldman Sachs executive Robert E. Rubin wrote in his memoirs,2 “Once you’ve internalized the concept that you can’t prove anything in absolute terms, life becomes all the more about odds, chances, and trade-offs. In a world without provable truths, the only way to refine the probabilities that remain is through greater knowledge and understanding.” Wise managers know that business is about finding ways to improve the odds of success—but never imagine that it is a certainty.

Separate inputs from outcomes

Finally, clear-thinking executives know that in an uncertain world, actions and outcomes are imperfectly linked. It’s easy to infer that good outcomes result from good decisions and that bad outcomes must mean someone blundered. Yet the fact that a given choice didn’t turn out well doesn’t always mean it was a mistake. Therefore it’s important to examine the decision process itself and not just the outcome. Had the right information been gathered or had some important data been overlooked? Were the assumptions reasonable or were they flawed? Were calculations accurate or had there been errors? Had the full set of eventualities been identified and their impact estimated? Had the company’s strategic position and risk preference been considered properly?

This sort of rigorous analysis, with outcomes separated from inputs, requires the extra mental step of judging actions on their merits rather than simply making after-the-fact attributions, favorable or unfavorable. Good decisions don’t always lead to favorable outcomes, and unfavorable outcomes are not always the result of mistakes. Wise managers resist the natural tendency to make attributions based solely on outcomes. They avoid the halo bestowed by performance and insist on independent evidence.

Our business world is full of research and analysis that are comforting to managers: that success can be yours by following a formula, that specific actions will lead to predictable outcomes, and that greatness can be achieved no matter what rivals do. The truth is very different: the business world is not a place of clear causal relationships, where a given set of actions leads to predictable results, but one that is more tenuous and uncertain.

The task of strategic leadership is therefore not to follow a given formula or set of steps. Instead it is to gather appropriate information, evaluate it thoughtfully, and make choices that provide the best chance for the company to succeed, all the while recognizing the fundamental nature of business uncertainty. Paradoxically, a sober understanding of this risk— along with an appreciation of the relative nature of performance and the general tendency for performance to regress—may offer the best basis for guiding effective decisions. These complex decisions, made without any guarantee of success, are ultimately the main contribution of business strategists. If a set of steps that could guarantee success did exist, and if greatness were indeed simply a matter of will, then the value of clear thinking in business would be lower, not greater.

Source: McKinsey & Company, 2007

Energy Costs Color Data Center Boom

Propelled by requirements of the Sarbanes-Oxley Act and the Health Insurance Portability and Accountability Act (HIPAA) as well as a surge in Internet traffic, data center development is enjoying a revival as companies scramble to find places to store sensitive data. Unlike the data centers built during the 1990s tech boom, companies this time around are paying closer attention to energy costs.

The data center market is “the fastest-growing sector of the site selection field right now,” says John Boyd, founder and president of Princeton, N.J.-based site selection consulting firm The Boyd Co. Inc. Because of the centers’ hefty contributions to local tax rolls and their addition of high-paying jobs, Boyd says, “this is the new coveted type of corporate facility that mayors and governors are trying to attract to their communities.”

A prime example: Microsoft Corp. announced in January that it will build a $550 million, 400,000 sq. ft. data center on 44 acres in San Antonio. The center will employ about 75 full-time workers who will earn up to $70,000 a year. Government officials, who are granting tax breaks for the center, expect the project to reap more than $20 million in economic benefits over 20 years.

Experts say that nearly all of the data-center remnants of the tech wreck now are occupied and that the number of new data centers being developed is on the rise. In the first half of 2006, for example, demand for U.S. data centers climbed nearly 13% compared with the same period in 2005, according to Tier1 Research, an information technology and telecommunications analysis firm in Minneapolis. Meanwhile, new supply inched up by 3.7% during that period.

The power of power

Communities best suited to lure data centers have readily available low-cost power, experts say. As computer servers stored inside data centers devour an increasing amount of energy, the need to tap a cheaper source of power is critical. Microsoft picked San Antonio over neighboring Austin because electricity is 2 cents per kilowatt-hour more expensive in Austin, according to Tom Freeman, senior vice president in the global data center practice at Chicago- based real estate services company Jones Lang LaSalle Inc. Freeman worked on the Microsoft deal.

A kilowatt-hour is a unit of energy equaling 1 kilowatt of power used for one hour. Consumption of power by homes and small businesses typically is measured in kilowatt-hours. Larger businesses and other big users of power often apply the megawatt- hour measurement. One megawatt-hour equals 1,000 kilowatt hours.

Bill Kosik, managing principal in the Chicago office of information technology consulting firm EYP Mission Critical Facilities Inc., says that five to seven years ago, a server cabinet — a refrigerator-sized metal box that houses the computer equipment — typically contained about 40 servers with a total capacity of 5 to 6 megawatts. With the advent of slimmer, higher-density blade servers, however, 60 to 80 servers gobbling up to four times as much energy can fit into the same data-center cabinet, Kosik says.

Given the energy considerations, location can make or break a data center. Experts say it costs roughly $1,000 to $2,000 per sq. ft. to build a fully equipped data center in the United States. The price rises exponentially for each penny added to the cost of power per kilowatt-hour. For instance, a data center that can accommodate 40 megawatts of electricity would pay an extra $2 million in annual operating costs, Freeman says. A new study commissioned by chip maker Advanced Micro Devices Inc. found that in 2005, power consumption by U.S. data centers — including servers, cooling systems and auxiliary equipment — amounted to about 45 billion kilowatt- hours. The total utility bill: $2.7 billion.

An abundance of cheap electricity is why central Washington has become a hotbed for data centers, with Microsoft, Google Inc. and Yahoo Inc. scooping up sites in the region. Electricity in that area, where hydropower is king, costs about 3 cents per kilowatt- hour, Freeman says, compared with about 14 cents per kilowatt-hour in Los Angeles.

A 50-city study recently released by The Boyd Co. Inc. found Sioux Falls, S.D., to be the least expensive U.S. location to operate a hypothetical, newly constructed 150,000 sq. ft. health care data center with a workforce of 150. Annual operating tab: $16.1 million. The most expensive place was New York City, where yearly operating expenses reached $22.5 million.

Aside from central Washington, U.S. hot spots for data centers include Northern Virginia, Atlanta, San Antonio, Austin, Dallas and Chicago, according to Freeman. In addition to power costs, considerations in choosing a site include access to fiber-optic networks and IT talent, experts say.

Data-center upswing

Buyer demand also has made the data-center market increasingly liquid. Last year, San Francisco- based Digital Realty Trust Inc. spent $552.5 million to buy 17 data-center properties in the United States and Europe. In 2006, the REIT leased about 300,000 sq. ft. of data-center space to single and multitenant users.

Unlike the last go-round, this growth spurt appears to have legs, as 77% of respondents in a 2006 AFCOM survey indicated that they planned to relocate or make major improvements to their data centers by 2016. AFCOM, based in Orange, Calif., is a trade association for data-center professionals.

Rob Kennedy, managing director at Dallas-based Stream Realty Partners LP, is marketing for sale a 150,000 sq. ft. speculative shell in the Dallas suburb of Plano that it built to house a data center. The firm is considering development of at least three or four more data-center shells, with Atlanta, Dallas, Denver and Phoenix among the prospective markets.

Foster City, Calif.-based Equinix Inc. also is riding the new data-center wave. Howard Horowitz, vice president of real estate at the data-center services provider, says Equinix operates 16 domestic data centers and four in Asia, with three more in the U.S. pipeline and a fifth on the way in Asia.

Horowitz says he thinks the current demand for data centers is sustainable. That stands in sharp contrast to the tech frenzy of a few years ago, when artificial demand hinged on “pie-in-the-sky projections,” Horowitz says. “Then, there was a mad rush to market.”

Source: NREI, 2007


Blight Busters/Developer Incentives/Eminent Domain

  • Wasatch Front Water
  • Interested in what the Utah Legislature did to Redevelopment?
  • Interested in what the Utah Legislature did to Economic Development?
  • Interested in what the Utah Legislature did to Eminent Domain?

Bonneville Research has prepared a short and understandable presentation that can answer these questions!

  • If you are a city wondering how to “turn a problem area around” – give us a call!
  • If you are wondering how to create an effective “a public/private partnership” – give us a call!
  • If you are a city worried that you're “getting gouged” by a developer asking for incentives – give us a call!
  • If you are a developer wondering how to make a marginal project work – give us a call!
  • If you are a city wondering how much TIF and sales tax revenues might be available – give us a call!
  • If you are a city worried that the newly proposed "big box" is going to force your local business to close – give us a call!

Bonneville Research would like to help you with these challenges!

    Bonneville Research


  • Utah Economic Snapshot
  • Utah Labor Market Indicators – February 2007 (Jan 07)


    • Employment Growth: 4.4% (4.5%)
    • Employment Increase: 52,000 (52,400)
    • Unemployment Rate: 2.3% (2.7%)

    United States

    • Employment Growth: 1.5% (1.6%)
    • Unemployment Rate: 4.5% (4.6%)

    Source: Utah Dept of Workforce Services

    Where the Jobs Are – February 2007 (Jan 07) – Change over Feb 06 (Jan 06)

    1. Salt Lake County + 26,010 +4.5% (25,076 +4.5%)
    2. Utah County + 8,753 +5.1% (8,768 +5.1%)
    3. Washington County + 3,668 +7.4% (3,738 +7.6%)
    4. Davis County + 3,196 +3.3% (3,921 +4.1%)
    5. Weber County + 2,289 +2.5% (2,270 +2.5%)
    6. Uintah County + 1,469 +11.6%
    7. Cache County + 1,460 +3.1%
    8. Iron County + 1,090 +6.6%
    9. Wasatch County + 914 +15.2%

    Note: Salt Lake County represents 49% of all new job growth in the State.

    What kinds of Jobs – February 2007 (Jan 07) – Change over Feb 06 (Jan 06)

    • Specialty Trade Contractors +9,700 +16.8% (9,800 +17.4%)
    • Professional, Scientific, and Technical Services +5,700 +9.7% (5,800 +10.1%)
    • Health Services and Social Assistance +3,800 +3.8% (3,800 +3.1%)
    • Accommodation and Food Services +2,800 +3.1 % (2,700 +7.6%)
    • Construction of Buildings +2,800 +14.3% (2,700 +14.0%)

    Note: Service jobs represent 63% of all new job growth in the State.

    Source: Utah Dept of Workforce Services, 3.20.07

    Tax Snapshot – Eight Months FY2007 (Seven Mo #’s)

    • Sales and Use Taxes (Gen Gov’t) (+1.8%) (+3.1%)
    • Individual Income Taxes (Education) (+7.9%) (+5.7%)
    • Corporate Franchise Taxes (Gen Gov’t) (+23.6%) (+25.4%)
    • Motor Fuel Taxes (Transportation) (-4.1%) (-2.2%)
    • Severance Taxes (Gen Gov’t) (-22.5%) (+11.2%)

    Source: Utah State Tax Commission, 3/15/07

  • Looking for a new identity on the cheap? Just go online
  • Anyone looking for a new identity - a bank account, credit card, government identification number and date of birth - need look no further than the internet, where one can be bought for as little as $14 (7).

    A US credit card costs just $1, a UK credit card about $2, and access to someone else's online bank account can be had for $300, according to the latest security report from Symantec, the US internet security company.

    The report sheds light on the thriving underground economy where stolen bank account and identity details are traded in internet chat rooms. A Symantec team monitored internet chats over the past six months to compile a rough price list. Dean Turner, senior researcher on the project, said there were "hundreds if not thousands" of internet chat sites where trades could be made. "We were looking at the tip of the iceberg. The problem is likely to be much worse than we can portray."

    Various hacking tools are bought and sold on the chat sites. Spammers can pick up a list of 29,000 e- mail addresses for $5. Details of a computer that has been hacked into and can be controlled externally by a hacker can be bought for between $6 and $20.

    Some of the pricing uncovered by Symantec was surprising. Credit card details sold for just a few dollars while a PayPal account could cost up to $500. A Skype account cost $12 and even an account for the World of Warcraft online role-playing game could be sold for $10.

    Mr Turner said the prices reflected how much use criminals were likely to get away with: financial institutions policed credit cards so tightly that a stolen card number was usable for only a few days or even hours.

    An online game would not be subject to the same scrutiny. Role-playing games had a thriving economy of their own, where characters and their equipment were traded for real money. Hackers had started to target the sites, stealing passwords and selling virtual assets.

    Theft of game passwords was rife in Asia, where online games were popular, he said. The report, published today, shows another rise in the stealing of confidential information. Attempts at information theft account for 45 per cent of the most serious internet attacks examined by Symantec, up from 23 per cent six months ago.

    Source: The Financial Times, 2007

  • Housing Grants
  • Provide Assisted Living Facilities!

    • Assisted Living Conversion Program for Eligible Multifamily Housing Projects
    • POSTED: 3/14/2007
    • ELIGIBILITY: Private nonprofit owners of multifamily assisted living housing developments
    • $ AVAILABLE: $30,000,000 GRANTS AVAILABLE: N.A.
    • DEADLINE: 6/7/07
    • CONTACT INFORMATION: Faye Norman, 202-708- 3000 x 2480
    • DESCRIPTION: Grants to convert some or all of the dwelling units in an eligible project into assisted living facilities (ALFs) for frail elderly persons.

    Increase Homeownership!

    • Self-Help Homeownership Opportunity Program (SHOP)
    • POSTED: 3/14/2007
    • ELIGIBILITY: Nonprofit consortiums
    • $ AVAILABLE: $19,800,000
    • DEADLINE: 6/13/07
    • CONTACT INFORMATION: Lou Thompson, 202- 708-2684
    • DESCRIPTION: Grants for a variety of approaches that encourage homeownership through self-help programs.

    Build New Affordable Housing for the Elderly!

    • Section 202 Supportive Housing for the Elderly Program
    • POSTED: 3/14/2007
    • ELIGIBILITY: Nonprofits
    • $ AVAILABLE: $431,500,000
    • DEADLINE: 5/25/07
    • CONTACT INFORMATION: Alicia Anderson, 202- 708-3000
    • DESCRIPTION: Funds for the development and operation of supportive housing for very
    • low- income persons 62 years of age or older.

    Build New Housing for Persons With Disabilities!

    • Section 811 Program of Supportive Housing for Persons With Disabilities
    • POSTED: 3/14/2007
    • ELIGIBILITY: Nonprofits
    • $ AVAILABLE: $88,300,000
    • DEADLINE: 5/24/07
    • CONTACT INFORMATION: Frank Tolliver, 202-708- 3000
    • DESCRIPTION: Funds to develop and operate supportive housing for very low-income persons with disabilities who are at least 18 years old.

  • Economic Notes:
    • Global Business Confidence
    • Global business sentiment remains steadfast in the range that has prevailed since last summer, consistent with global growth that is just below its potential. Businesses have become a bit more upbeat since the end of last year, led by firmer confidence among high-tech firms and the end of the downdraft in confidence among real estate and transportation companies evident throughout most of last year. Sentiment is stronger in South America and Asia, where it is consistent with just above trend growth, and softer in North America and Europe, where it is consistent with growth that is just below trend. Businesses are reporting that their fixed investment and hiring has picked up in recent weeks.
    • NAHB Housing Market Index
    • Homebuilder optimism decreased three points to 36 in March. Overall, the index is down noticeably in every component except traffic of prospective buyers, which dropped from 29 to 28. However, 28 is an exceedingly low number and indicates the housing market may represent a significant drag on the economy this spring, especially since the Fed does not seem willing to adjust the interest rate target.
    • New Residential Construction (C20)
    • Housing starts increased 9.0% to 1.525 million units in February. Housing permits decreased 2.5% during the month. An uptick in housing starts from January to February is expected. Next month will give a clearer signal if the housing market is going to slow economic growth this year.
    • MBA Mortgage Applications Survey
    • Mortgage demand decreased 2.7% in the week ending March 16. Purchase applications decreased 0.9% and refinance applications decreased 4.5%. The housing market is flat and dampening domestic growth, but purchases fell only modestly as the primary housing market gets under way for much of the country. Optimists are focused on the FOMC meetings that conclude today, hoping for a rate cut to stimulate this market.
    • Chain Store Sales
    • Chain store sales rose 0.4% in the week ending March 17. The latest gain comes on the heels of a 0.7% increase the week prior. Year-over-year growth improved to 2.7%, a four-week high. Warm weather reportedly supported sales in the latest week.
    • Oil and Gas Inventories
    • Crude oil inventories rose by 4 million barrels for the week ending March 16, according to the Energy Information Administration, far above expectations of an 800,000 barrel build. Gasoline stocks fell by 3.4 million barrels, far greater than the 1.7 million barrel draw expected. Refinery activity held steady. Distillate inventories fell 1.7 million barrels, above the 1.3 million barrel draw expected. Despite the surprise build in crude, the sharp draw in gasoline makes this a bullish report for prices.

  • This Weeks Leads:
    • Greenberry’s Coffee & Tea
    • Greenberry’s Coffee & Tea operates seven locations throughout VA.
    • The coffee shops occupy spaces of 1,100 sq.ft. to 2,000 sq.ft. in freestanding locations, specialty and strip centers and downtown areas.
    • Plans call for 10 openings throughout metro Washington, DC during the coming 18 months, with representation by JBG Rosenfeld Retail.
    • For more information, contact
      • John Mitchell or Billy Orlove,
      • JBG Rosenfeld Retail,
      • 4445 Willard Avenue, Suite 700,
      • Chevy Chase, MD 20815;
      • 301-657-0700,
      • Fax 301- 657-9850;
      • Email: jmitchell@jbgr.com;
      • Website: www.greenberryscoffee.com.
    • Mori Luggage & Gifts and Mori Classics
    • Mori Luggage & Gifts, Inc. trades as Mori Luggage & Gifts and Mori Classics.
    • The 27-unit chain operates locations throughout AL, FL, GA, SC and TN.
    • The shops, selling luggage and gift items, occupy spaces of 2,000 sq.ft. to 2,500 sq.ft. in malls and lifestyle centers.
    • Plans call for three openings throughout the existing markets during the coming 18 months.
    • Typical leases run seven to 10 years.
    • A vanilla shell and specific improvements are required.
    • Preferred cotenants include Neiman Marcus, Nordstrom and Saks.
    • Preferred demographics include a population of 300,000 within four miles earning $60,000 as the average household income.
    • Competition is cited as department stores.
    • Mail site submittals to:
      • Jean Mori,
      • Mori Luggage & Gifts, Inc.,
      • 3595 McCall Place,
      • Atlanta, GA 30340-2801;
      • Web site: www.moriluggage.com

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