The Connection with Cuba (O La Conexión con Cuba)

The United States and Cuba, long frozen in a political stalemate lasting more than half a century, could finally be turning towards a more open and collaborative relationship with each other. This is exciting news for both citizens and businesses looking to travel, exchange culture and develop trade opportunities. On December 17, 2014 both Barack Obama and Raul Castro held simultaneous press conferences announcing their intention to begin normalizing diplomatic and trade relations. Given the deep and stormy history, reconnecting with Cuba serves as an important and symbolic step for connecting with the rest of Latin America.

While discussions likely started well before December, the administrations no doubt had this week in mind when they made their original announcement.  Starting Friday, April 10th is an important meeting for the entire Western Hemisphere: the Summit of the Americas hosted in Panama City.

In preparation for this week's summit and for an upcoming business trip, the Chamber of the Americas brought in an internationally renowned expert on US-Cuba relations, Arturo Lopez-Levy. In addition to being a professor on Latin American politics and comparative politics, the Cuban-American has in fact written the book on "Raul Castro and the New Cuba". ICOSA Media and the Colorado Business Roundtable would like to thank Gil Cisneros and Laura Frigo from the Chamber of the Americas for bringing in such a high caliber expert on this timely subject.

While the luncheon was not filmed, he covers a small selection of the same perspective below in this interview following the December 17th announcements. For future events and for information regarding the upcoming trip to Cuba, please visit http://www.chamberoftheamericas.com/

You can read more about US-Cuba relations from Arturo's perspective here or by following him on twitter @turylevy

Documentary Collection: Importing Veterinary Tools From Pakistan

Trade Acceptance, Bankers’ Acceptance, Draft, Collection, Letter Of Credit, Beneficiary

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DOCUMENTARY COLLECTION: TRADE ACCEPTANCES

As in any business, trade buzzwords exist in the international arena and each has its own particular and sometimes peculiar meaning, such as “trade acceptances” and “bankers’ acceptances.” In keeping with the theme of this book, let’s develop some scenarios rather than furnish dry academic definitions.

EXTENDING CREDIT TERMS

An importer in the United States purchased veterinary tools from a supplier in Pakistan. He developed a high level of trust after several years of a satisfactory working relationship. As a result, the supplier extended 90 days terms to the importer.

The supplier wanted to strengthen his balance sheet to impress his banker in order to obtain financing. He requested an obligation from the buyer to provide something a little stronger than “foreign accounts receivable” on his financial records. At the time of each shipment, the supplier prepared typical shipping documents plus a draft drawn on the buyer payable in 90 days.

The supplier presented the draft with attached shipping documents to his bank on a collection basis. The supplier’s bank couriered the documents to the buyer’s bank in the United States, which then requested the buyer to acknowledge his obligation to pay in 90 days by accepting the draft. The bank stamped the face of the draft with a stamp which said, “Accepted,” and asked the buyer for a signature and date on the draft. At this point the buyer has a legal obligation to pay when it matures in 90 days.

TRADE ACCEPTANCES VS BANKERS' ACCEPTANCES

This is known as a “trade acceptance” to distinguish it from a “bankers’ acceptance,” drawn and accepted by a bank.

Bankers’ acceptances most commonly occur in letter of credit transactions. The terms of the letter of credit require the beneficiary to present a draft for acceptance and state that it is payable at some future date. When a bank accepts a draft, they obligate themselves to pay at maturity. Investors generally perceive that bankers’ acceptances carry less risk than trade acceptances. In fact, a secondary market exists for bankers’ acceptances, which allows investors to readily buy and sell them. No established secondary market exists for trade acceptances.

Leadercast 2015 - Brave Moves for Boring Meetings

Leadercast is a brand that builds Leaders Worth Following. We believe that leadership is not reserved for those with a ‘C’ in their title. We need better leaders in our communities, businesses, organizations, and in homes across the world. Leadercast exists to serve individuals and organizations across all sectors who want to become intentional about raising their standard of leadership. Leadercast Live will be simulcast from KNUS 710 on May 8th.  Leadercast Live is a one-day leadership event broadcast from Atlanta to hundreds of locations globally.   Speakers include Rudy Giuliani, Aja Brown, Malala Yousafzai and Seth Godin. I took a look at the Leadercast website, and found an April's Fools day blog post titled, "Brave Moves for Boring Meetings," I had to share.  Below is that blog post.

We’ve all had to experience those terribly boring meetings where every ten minutes feels like an hour. Have you ever wondered what it would look like if someone actually acted upon some of the thoughts we’ve all had while sitting in one of those meetings? For April Fools Day, we put together a short video to show a lighter side of bravery with 10 bold moves you probably shouldn’t pull in your next meeting…

1. Obnoxiously send emails with your speaker volume up.
2. Bring fajitas for lunch.
3. Don’t know someone’s name? Just take a guess.
4. Tell them how you really feel.
5. I mean, if the donuts are free, just take seven. No one’s looking…
6. Synchronized pen clicking: The new way to annoy your boss.
7. Interrupt the meeting to encourage a nice team outing to the Cheesecake Factory.
8. Attach fundraising forms to the meeting agenda. A little hint never hurt anyone.
9. Arm wrestling: Hey, at least we learned Stan’s name! That’s a point for productivity, right?
10. Multitask with no shame. #SorryNotSorry

Now it’s your turn:

Have you experienced some bold moves in your meetings? Share it with us on Facebook. We will re-post our favorites!

To experience a different level of bravery and hear from some of the bravest leaders in sports, business, government and more, join Leadercast Live.

Letter of Credit: History of the Red Clause

Red Clause, Letter Of Credit, Beneficiary, Draft, Applicant

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RED CLAUSE RESULTED IN $70,000 SAVINGS ANNUALLY

A US company importing mosaic ceramic tile sent an annual payment on January 1st to their Italian supplier for the entire year’s purchases. The supplier always performed and presented no obvious risk of nonperformance.

When the US company learned of the red clause letter of credit, they realized it could save them money. Issuing a red clause letter of credit to the supplier would enable them to borrow money from their own bank and pay interest instead of using the importer’s money interest free. After issuing a letter of credit with the red clause, they estimated that they saved $70,000 the first year.

WHY IS IT CALLED "RED CLAUSE?"

A red clause letter of credit, originally so called because of a clause printed in red ink on the face of the letter of credit, permits the beneficiary to obtain advance funds from the letter of credit with the intent to repay the funds at the time he presents documents for payment. The red clause typically restricts the advance to a certain percentage of the letter of credit, say 30%. When the beneficiary presents documents for payment, the bank uses 30% to repay the loan and the beneficiary receives the remaining 70%.

ORIGINS OF THE RED CLAUSE

Several versions of the history of the red clause letter of credit have circulated. Jim Harrington believed it began in the Philippine Islands. The Philippines established home-based businesses to produce lace tablecloths. Eager buyers filled a demand of a ready market in the United States. Buying agents would call on home-based businesses throughout the Philippine Islands agreeing with each to order a certain quantity of tablecloths.

The agents discovered they could get better prices by paying for a portion of the goods in advance because the households needed money for living expenses and also to purchase needles and thread to make the tablecloths. The red clause allowed the agent to borrow from the Philippine bank, pay the households and then store the tablecloths until he had enough to make a shipment and draw a draft against the LC. The proceeds of the draft paid off the borrowed money.

The applicant of the letter of credit should understand the risk: The beneficiary could get the advance and disappear with the money. In that case, the bank which made the advance has recourse to the applicant. As in any other transaction, a high level of trust reduces the risk.

Because of the risk, buyers rarely use red clause letters of credit. However, buyers such as the mosaic tile importer, who have to pay cash up-front, may consider the red clause letter of credit as a viable alternative.

In one of his workshops, Jim Harrington stated that he wanted to put to rest a myth. With a twinkle in his eye, he explained that the red clause has nothing to do with lobsters whose claws turn red when placed in boiling water.

The State of Immigration: U.S. is Far Behind in the Race for Global Talent

The Business Roundtable has found that the U.S. is Far Behind in the Race for Global Talent.

Based on a comprehensive examination of 10 advanced economies to identify and evaluate the best immigration policies to promote economic growth, the United States ranked 9th out of 10 competitor countries, ahead of only Japan, a country historically closed to outsiders.

This analysis found that America’s near-bottom ranking among major advanced economies is due to U.S. laws and regulations that impose unrealistic numerical limits and excessive bureaucratic rules on hiring workers that the country’s economy needs.

For example, while Germany has a high approval rate for skilled foreign workers, the US limits the number of H-1B visas so much so that they run out almost immediately. In fact, starting today, the United States Citizenship and Immigration Services agency starts assigning H-1B visas for the year. By next week, the full 65,000 cap will be reached. Demand far outpaces supply.

This morning in the Wall Street Journal, Gary Beech writes about the issue. He, like many people on both sides of the political spectrum, is advocating for the removal of the H-1B visa cap. Start learning more about the arguments for and against this action by reading his full article here: http://blogs.wsj.com/cio/2015/04/01/remove-the-h1b-visa-cap/

It's a bipartisan opinion: let skilled, hardworking employees and entrepreneurs build their businesses here in America.

(Click the Business Roundtable graphic to view the full size)

Volvo Plant in U.S.

State to be chosen in a month; car maker says labor rates are just part of it

Written by John D. Stoll of The Wall Street Journal

After years of losing out to Mexico in the race for new automotive assembly plants, the U.S. is about to notch a victory.

Volvo Car Corp., owned by a Chinese company, will spend $500 million to build a new vehicle plant in the U.S. The decision comes weeks after Daimler AG plans to spend a half-billion dollars to build a Mercedes-Benz van factory in South Carolina, a move that followed a string of auto makers choosing to locate new factories in Mexico instead of the U.S.

In an interview, Chief Executive Håkan Samuelsson said Volvo is making the move to smooth out its international presence. With plants in Europe and China, the executive wants a North American factory to be closer to one of its prime markets, take advantage of attractive labor rates and protect against currency fluctuations.

“This will complete our industrial footprint,” Mr. Samuelsson said. Volvo is also aiming to reiterate its commitment to the U.S., a market it has been in since 1957. In recent years, Volvo has struggled to sell cars in the U.S., forcing the auto maker to adjust its strategy several times.

Mr. Samuelsson said Volvo is still considering a handful of states for its new factory, and will announce its pick in about a month. The plant will build vehicles off the company’s new “SPA” platform, an engineering architecture that will serve as the blueprint for several vehicles, including the new XC90 SUV hitting the market this year.

Volvo, bought by Zhejiang Geely Holding Group Co. in 2010, sold 466,000 vehicles in 2014, a record amount of cars globally. But momentum has come from gains in China and Europe; U.S. sales fell 8% to 56,000—short of the 100,000 vehicles Mr. Samuelsson says the brand needs to prove viability.

Mr. Samuelsson said there is no current plan to share the plant with Geely. Volvo is, however, working with its partner on developing small cars, and the factory could eventually be an avenue for the Chinese auto maker to distribute cars in the U.S.

For now, Mr. Samuelsson is working to freshen the product lineup, boost marketing spending and offer better financing options.

Some European auto makers have been successful at capping labor costs in the U.S. Volkswagen recently opened a plant in Tennessee, and its hourly labor rate—including benefits—equals $38 an hour, $10 less than Fiat Chrysler Automobiles and $20 less than General Motors Co.

Volvo’s move stems the tide of investment aimed at Mexico, where labor rates are a fraction of the U.S. costs. Auto makers and parts suppliers have earmarked more than $20 billion of new investments, with many executives citing an array of free-trade pacts as the reason for the decisions.

Mr. Samuelsson said Volvo considered Mexico, but the benefits of building cars in the world’s most-profitable market tipped the decision in America’s direction.

Write to John D. Stoll at [email protected]

Letter of Credit Rules: Comparing Apples with Oranges

UCP, Letter Of Credit

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LETTER OF CREDIT RULES

The rules for Letters of Credit, the UCP (Uniform Customs and Practices for Documentary Credits), states, “The description of the goods, services or performance in a commercial invoice must correspond with that in the credit” (Article 18 c). Banks typically have interpreted this to mean a verbatim description, letter for letter, and punctuation for punctuation, in accordance with the letter of credit.

The UCP further provides, “In documents other than the commercial invoice, the description of the goods, services or performance, if stated, may be in general terms not conflicting with their description in the credit” (Article 14 e).

APPLES, ORANGES AND FRUIT

Note the use of the words, “not conflicting.” If a letter of credit states “Apples” as the merchandise description, then the invoice must read “Apples.” Other documents, such as the bill of lading, may state “Fruit,” and be considered acceptable because "Fruit" does not conflict with “Apples.”

A bill of lading which states, “Oranges” does conflict and is unacceptable. Interpretation of this policy is more difficult for a banker who has no knowledge of the merchandise or if the merchandise is highly technical.

In recent years I have seen documents prepared by freight forwarders showing all documents, not just the invoice, with the merchandise description identical to the letter of credit. Undoubtedly, this safe method leaves no need on the part of the bank to interpret the description from document to document.

An uncertain bank will take the safe, conservative approach, and ask for replacement documents, refuse payment, or obtain a waiver of the discrepancy from the applicant, if the documents do not strictly match the letter of credit.

Business Leaders to Congress: Pass Long-Term Ex-Im Bank Reauthorization

Dear Speaker Boehner, Leader McConnell, Leader Pelosi and Leader Reid:

On behalf of the Business Roundtable, I write urging passage of a multi-year reauthorization of the U.S. Export-Import (Ex-Im) Bank as soon as possible before its short-term extension expires at the end of June.  Such a long-term reauthorization is urgently needed to address growing uncertainty among U.S. companies, of all sizes, that rely on Ex-Im Bank to enable their exports.

In today’s highly competitive global marketplace, there are more than 60 export credit agencies (ECAs) providing their own exporters with aggressive financing packages to compete for and win international sales.  Ex-Im Bank is critical to helping American companies and workers fairly compete for such sales.  It does so by seeking to offset at least some of the financing provided by foreign ECAs to foreign competitors.

Ex-Im Bank has long played an important role in helping support U.S. exports and jobs.  For example, in FY2014, it provided financing for $27.5 billion worth of U.S. exports through its approval of over 3,700 transactions for U.S. companies, including more than 3,300 for small businesses.  These exports supported an estimated 164,000 American jobs at these companies as well as companies in their U.S. supply chains.  Since its founding in 1934, Ex-Im Bank has supported more than $600 billion of U.S. exports.

Ex-Im Bank carries out its mission at very little risk to taxpayers.  Borrowers have defaulted on less than two percent of all Ex-Im Bank loans since its creation and only 0.175% of loans in FY2014  – rates well below those of most commercial banks.  In FY2014, Ex-Im Bank generated more than $674 million for the U.S. Treasury (from fees or interest charged for its services) after covering its expenses.

If Congress fails to reauthorize Ex-Im Bank, it will threaten the ability of thousands of U.S. companies to compete for international sales and put hundreds of thousands of U.S. jobs at risk. With more than 95 percent of the world’s population and 80 percent of the world’s purchasing power outside the United States, Congress should not make it harder for U.S. companies to compete for and win sales around the world.  Failure to reauthorize Ex-Im Bank would unfairly advantage foreign competitors that will continue to get significant financing from their countries’ own export-import banks.

For the above reasons, Business Roundtable urges you to act quickly to pass a multi-year reauthorization of Ex-Im Bank to help support U.S. exports and the American companies of all sizes and workers that depend on them.

Sincerely,

Thomas Linebarger

Chairman and CEO, Cummins Inc.

Chair, International Engagement Committee, Business Roundtable

Letter Of Credit Discrepancy Created A New Market For Greek Candy

Letter Of Credit, Shipment Date, Applicant, Negotiate Documents

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LETTER OF CREDIT REQUIRED A LATEST SHIPPING DATE

A US importer applied to a New York bank for a letter of credit for candy from a supplier in Greece. The letter of credit stipulated a shipment date which would insure arrival of the candy in time for a particular Greek festival.

LETTER OF CREDIT PAYMENT REFUSED

Unfortunately, the supplier dispatched the candy one day after the latest date allowed for shipment. When the issuing bank noted this discrepancy, they contacted the applicant for approval to pay, but the applicant declined because the late shipment meant missing the festival date. The Greek bank was notified that payment had been refused.

Since the Greek bank had negotiated the documents and already paid the supplier, they were now the sweet owner of the candy and promptly contacted the New York bank for assistance in finding a new buyer for it.

"NEGOTIATING" A LETTER OF CREDIT

Let’s clarify the technical term “negotiate.” According the UCP, “Negotiation means the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank” (Article 2).

In other words, a bank other than the issuing bank may purchase the beneficiary’s documents before the issuing bank receives the documents and consents to payment. This provides an advantage for the beneficiary who receives the money faster. It also provides income to the negotiating bank by collecting fee income plus a fee to compensate them for the cost of “float,” or interest on the money, which they paid but have not yet collected from the issuing bank.

The negotiating bank, however, takes the risk of the issuing bank not paying. In this story, why the negotiating bank chose to purchase discrepant documents remains unclear. Apparently, unable or unwilling to recover the payment from the beneficiary, they solicited the issuing bank’s assistance in the matter.

CREATING A NEW MARKET FOR THE CANDY

Fortunately, the story ends well. The New York bank discovered an agent who was willing to sell the candy for a 20% commission. He traveled the country and successfully established ecstatic buyers for the candy. After he kept 20%, the New York bank remitted over $143,000 more than the draft amount to the Greek bank and the agent launched a new market for the candy.

Thank you to Jim Harrington for another entertaining story.

Tattered Cover Bookstores are Sold

Joyce Meskis is selling the Tattered Cover Book Store after four decades. Len Vlahos and his wife, Kristen Gilligan will be senior management as of July 1, and after two years will gain controlling interest of the book store. Masks plans to retire and be available as a consultant. The financial terms of the deal are being kept confidential. Aldo Svaldi of the Denver Post writes;

"It was a confluence of circumstances," Meskis said. "They were ready to think about the world of bookselling as a part of their professional lives.  At my age, I have been thinking about what if this or that happens."

Tattered Cover operates four retail stores in the metro area: on East Colfax Avenue near East High School, in Lower Downtown, at Denver Union Station and one relocating to the Aspen Grove Shopping Center in Littleton.

Tattered Cover has three store locations licensed at Denver International Airport, with a fourth planned.

Meskis purchased  Tattered Cover in 1974, when it was a small, struggling shop in Denver's Cherry Creek North neighborhood.

Tattered Cover, known for a high level of customer service, managed to survive the expansion of the big-box booksellers, the shift to online book sales and the advent of digital books.

"It has always been tough," Meskis said. "It is a challenge every day of the week."

Tattered Cover gained an international reputation as a leading independent bookseller, and its stores have become Denver tourist destinations.

Meskis has brought thousands of authors to Denver over the years and is known as a vocal defender of freedom of speech, including fighting and winning a case 15 years ago that protected the privacy rights of book buyers.

"There has never been a greater opponent of censorship than Joyce Meskis," said Denver attorney Dan Recht, who represented her in a case in which the U.S. Drug Enforcement Agency attempted to get her to turn over sales records. "Joyce is a committed, staunch, unwavering First Amendment advocate and has been for her whole life."

Vlahos and Gilligan, a former Boulder resident, will relocate to Denver from Stamford, Conn., as part of the transition.

Vlahos is the executive director of the Book Industry Study Group, a national nonprofit that promotes innovation and shares best practices within the book-publishing industry. He spent 20 years at the American Booksellers Association, where he got to know Meskis, and was the group's chief operating officer when he left in 2011. He also is  author of the young-adult novel "The Scar Boys."

Gilligan spent a decade at the trade association, where she was director of meetings and events. Meskis is a past president of the group.

Stretching the sale out two years will give the new owners time to learn the business and get grounded in the community, Meskis said.

"She believes in the mission of making literature available to a community and the free flow of ideas," Vlahos said. "That drives her and the staff. It is almost like a higher calling."

Vlahos also described Meskis as "one of the smartest business people I know." He said he and his wife plan to build on what Meskis has created.

Meskis said her two daughters pursued other careers, ruling out a family transition. She also said she is coping with Parkinson's disease. While not an immediate impediment, the condition motivated her to plan ahead — something that, she said, is in her nature.

"I believe in the store, and I believe in it as a service to the community. And I want to see it continue in good hands," she said.

Once retired, Meskis said she plans to support the new owners as needed and read more books, adding people shouldn't be surprised if they see her hanging out among the towering shelves at one of the Tattered Cover stores.

"Who knows what the future may hold," she said.

Aldo Svaldi: 303-954-1410, [email protected] or twitter.com/aldosvaldi

U.S. Dollar's Strength Weighs on Inflation

Justin Lahart says inflation's direction is a result of both the strength of the U.S. Dollar and job market. Lahart predicts that the strength of the dollar will for the next few months be the more important factor in determining inflation.  Lahart continues his article below; The Labor Department on Tuesday reported that consumer prices rose 0.2% in February from January, putting them even with their year-earlier levels. Core prices, which exclude food and energy, also rose 0.2%, for a year-over-year gain of 1.7%. The report implies that the Federal Reserve’s preferred measure of core inflation from the Commerce Department was up 1.4% on the year last month, calculates Morgan Stanley, still well below the Fed’s 2% target.

ENLARGE

What’s more, annual core inflation figures will likely ease in the months ahead. One reason is that there was a run of fairly strong readings last spring, so the marking of their anniversaries will limit comparative price gains.

But the more important factor will be the dollar.

The currency’s strength, despite losing a little ground over the past week, is already taking a bite out of inflation. Prices for core goods, which include items easily traded across borders, such as car tires, were 0.5% below their year-earlier level last month. Given that there is a lag between moves in the dollar and when these show up in prices, core goods prices will likely show further weakness in the months ahead.

Prices for core services, which aren’t so easy to trade (think haircuts) were up 2.5% versus a year earlier. That is in keeping with the trend of the past three years, indicating that despite increased spending power provided by an improving job market, consumers still aren’t willing to pay up.

The Fed last week signaled that it isn’t likely to start raising rates until September. The way things are going, even that expectation may need trimming back.

Write to Justin Lahart at [email protected]

Mobile Apps Track Your Location More Often Than You Think

A Carnegie Mellon University study shows that roughly every three minutes or 50 meters location data is collected by mobile apps. Over a two-week time frame the research concluded that a dozen or so popular Android apps excessively collected location data. Apps such as Groupon, the Weather Channel and Google Play are mentioned in the article below, written by Elizabeth Dwoskin. The research comes at a time of increasing concern about electronic privacy. A 2014 Pew survey found that more than 90 percent of Americans feel they’ve lost control over personal data. While savvy users understand that using mobile devices entails some privacy tradeoffs – for example, a navigation app will reveal their location to the app’s publisher – most don’t realize the extent to which such information is collected and distributed, the researchers said.

The researchers recruited 23 users of Android version 4.3 from Craigslist and the Carnegie Mellon student body. Participants were allowed to use their own choice of apps after installing software that noted app requests for a variety of personal information; not only location but also contacts, call logs, calendar entries, and camera output. They weren’t told the purpose of the study and were screened to weed out people who had a technical background or strong views about privacy.

The researchers found that even apps that provided useful location-based services often requested the device’s location far more frequently than would be necessary to provide that service, the researchers said. The Weather Channel, for example, which provides local weather reports, requested device location an average 2,000 times, or every 10 minutes, during the study period. Groupon GRPN +0.46%, which necessarily gathers location data to offer local deals, requested one participant’s coordinates 1,062 times in two weeks.

“Does Groupon really need to know where you are every 20 minutes?” asked Norman M. Sadeh, a Carnegie Mellon professor who co-authored the study. “The person would have to be accessing Groupon in their sleep.”

Groupon and the Weather Channel did not respond to requests for comment.

App publishers have ample incentive to gather as much location data as they can. Marketers pay 10% to 20% more for online ads that include location information, said Greg Stuart, chief executive of the Mobile Marketing Association. In previous research, Sadeh and his colleagues found that when an app requests location, 73% of the time it shares the information with an advertising network.

Location data can make ads more relevant to consumers, by making it possible to draw inferences about what audience members are interested in, Stuart said. The data can be used to show an ad for a store to a potential customer who is nearby, a technique that boosts store traffic 40%, according to Mobile Marketing Association research. Or it can be used to present ads for store items to shoppers who are already inside. Users often aren’t aware that their location played a role in being shown a particular ad, Stuart added.

Among the software that handled the most location data were programs pre-installed on the device that couldn’t be easily deleted. Google Play Services, which distributes information to a variety of apps, computed location an average 2,200 times during the study period.

Google declined to comment.

In addition to tallying app requests for personal data, the Carnegie Mellon researchers explored a conundrum: Despite these widespread worries about information leaks, few users take actions that would plug them, such as downloading privacy software or adjusting their device’s settings.

The researchers sent to study participants a daily message – a “privacy nudge,” as Sadeh called it – telling them how many times apps collected their personal data. After receiving the nudges daily, 95% of participants reported reassessing their app permissions and 58% chose to restrict apps from collecting data.

Privacy nudges no longer can be implemented on Android. Operating system updates since the study was concluded removed the software that gave the researchers access to logs of app requests for personal information.

Letter Of Credit Rule #1: Strict Compliance: What Are Adzing Machines?

Letter Of Credit, Issuing Bank, Strict Compliance

LETTER OF CREDIT: STRICT COMPLIANCE

One cardinal rule of letters of credit always prevails: strict compliance. Early in my career as an international banker, a lawyer wisely told me, “Roy, when processing a letter of credit, your job is to compare; not interpret.” That advice has helped me on numerous occasions to keep issues in perspective.

It would have helped another banker in this lesson, too, if she had received the same advice.

Before the electronic computer age, international banks typically communicated with each other by telex. A bank in Greece issued a letter of credit by telex and advised it through a New York bank. Upon receipt of the letter of credit, the New York bank followed their policy to re-type the information on their own letterhead and send it to the beneficiary.

BAD JUDGMENT

As the typist transferred the information onto the bank’s letterhead, she came across the merchandise description, which read, “1,000 adzing machines.” In her best judgment, the bank in Greece had made a mistake, so she altered it to read, “1,000 adding machines.”

Upon receipt of the letter of credit, the beneficiary shipped the adding machines and presented documents to the New York bank, which made payment because the documents correctly complied with the terms of the letter of credit.

ISSUING BANK REFUSED TO PAY

The New York bank couriered the documents to the issuing bank in Greece which promptly refused to honor them because their customer had indeed ordered 1,000 adzing machines, an ancient wood-working tool.

The bank in Greece held the New York bank responsible and returned the shipment. The New York bank, left holding the bag so to speak, ended up with 1,000 adding machines. Unable to sell them to recover their losses, the bank made a decision to use the adding machines in their next promotional offer.

"COMPARE, NOT INTERPRET"

If the bank had simply instructed their letter of credit staff to compare, not interpret, this story would have had an uneventful ending and would have never made it into this blog.

Letter of Credit Non-payment Resulted in Paper Slippers Becoming a Tax Deduction

Letter Of Credit, Beneficiary, Applicant

LETTER OF CREDIT ISSUED FOR THE PAYMENT

A New York bank issued a letter of credit for the importation of paper slippers used in medical clinics and hospitals. The patients donned the disposable slippers as they strolled through sanitary areas of the hospital. The merchandise description on the letter of credit read as follows: “paper slippers with soles double-stitched.”

"DISCREPANCIES" IN THE DOCUMENTS

The documents presented by the beneficiary did not properly indicate double-stitched soles. The issuing bank inadvertently overlooked this requirement and honored the beneficiary’s request for payment.

When the applicant received the slippers and inspected the incorrect documents, he rejected them, demanding that the issuing bank refund their money. Since the bank had already paid the beneficiary, the bank became the unwilling owner of single-stitched paper slippers with little hope of selling them to recover their loss.

DONATE THE SLIPPERS

An official at the bank ingeniously suggested they donate the slippers to a Veterans Administration hospital and capture a tax deduction. The savings resulting from the tax deduction nearly compensated the bank for its loss.

Another lesson learned, thanks to Jim Harrington.

The Strong Dollar Is Weighing On Major U.S. Exporters

Kate Davidson, of the Wall Street Journal published today that the stronger U.S. dollar can hurt exporters in the areas of capital spending and hiring plans. The following is her article on that subject. The stronger U.S. dollar has hurt exporters and could dampen their investment plans for next year, top business executives said in a new survey.

The quarterly Duke University/CFO Magazine Global Business Outlook Survey, released Wednesday, polled about 1,000 business executives–mostly CFOs–around the world.

Two out of three big U.S. exporters–those with at least one-fourth of their total sales overseas–said the appreciation of the dollar has had a negative impact on their businesses. And nearly one-fourth of big exporters said they have reduced their capital spending plans as a result.

Executives across many sectors–from construction to manufacturing to healthcare–pointed to the strengthening U.S. dollar against most major currencies as an emerging risk that has developed over the past six months.

“We are in a midst of an ugly contest to see whether the eurozone, Japan or Canada can depreciate the most against the U.S. dollar, and China is probably next,” said Campbell R. Harvey, a professor at the Duke Fuqua School of Business and a founding director of the survey. “U.S. exporters are being punished by these competitive depreciations and this will lead to lower profits and less employment.”

Nearly one-third of business executives expect the value of the dollar to increase 10% relative to the euro, according to the survey. Among executives who expect at least 10% dollar appreciation, 13.8% said currency values will have a negative effect on capital spending plans, and 8.6% expect a negative effect on hiring plans. (The survey was conducted through March 6; the dollar has strengthened further since then.)

A robust dollar and a strengthening economy are giving Americans more buying power, especially for products made overseas. At the same time, growth in Europe and Japan is lackluster and output in several major emerging markets is cooling, undercutting demand for U.S. products abroad.

That has led to a record high U.S. trade deficit and has implications for the overall health of the U.S. economy. Total exports as a share of gross domestic product have grown steadily over the past several decades, and export stagnation could undermine growth.

That’s one reason Federal Reserve officials are looking carefully at growth trends as they mull when to raise interest rates.

Fed officials expect the increase in the foreign-exchange value of the dollar will be a persistent source of restraint on U.S. net exports, according to minutes from the central bank’s latest policy meeting, and a few participants pointed to the risk that the dollar could appreciate further.

Also in the Duke survey:

• About 70% of U.S. companies said they expect to increase wages by at least 3%. Wage growth should exceed 3% in the tech, services and consulting, manufacturing and health care sectors; wages in the energy, retail and communications sectors are expected to increase less than 2%.
• On a scale from 0 to 100, U.S. CFOs rate the economic outlook at 65, the most optimistic expectation for the U.S. economy since 2007.
• Only 23% of European CFOs believe the European Central Bank’s quantitative easing program will actually increase inflation.

Written By: Kate Davidson of The Wall Street Journal

Why Self-Managed Teams Are the Future of Business

Could you build a business around teams of people who have no manager and who report to no one up a "food chain"? If you want your business to thrive going forward, you just might want to

Self-Managed Teams Are Already A Proven Success

A recent Harvard Business Journal article was titled, "Are We Ready for Self-Management?" as if this is a new, experimental thing. The fact is that many large, highly successful companies like W. L. Gore, Semco, Barry Wehmiller and countless others have been structured this way for up to fifty years.

Command and control freaks still talk as if this is some kind of fringe thing. But self-managed teams are time-tested, proven and here to stay, and a tidal wave of companies are moving in that direction, because the data on why you should do it is irrefutable.

It's Not The Team, It's Ownership

The magic isn't in the concept, but in the principle behind it--ownership stemming from the power to make decisions. When people are encouraged to bring the whole, creative, messy person to work, and make important decisions, they take ownership in ways they never would before. That's important, because ownership is the most powerful motivator in business. A business that motivates everyone to take ownership has found the holy grail.

Responsibility, Not Tasks

The archaic Industrial Age system employed by most companies today would have you believe that a single manager is better at making decisions than the ten people who work under them. But in the emerging work world of the Participation Age, a company believes that the ten people most affected by the decision will be better at making it. The result of both mindsets are revealing. The Industrial Age manager takes the responsibility to make the decisions, and then doles out tasks for the team to complete. But the Participation Age company delegates responsibility to the team, for them to make those decisions. When you assign tasks ("put this nut on that bolt"), people feel used, but when you delegate decision-making responsibility ("make a great washing machine"), people take ownership. Of course this only works if you believe that one manager is not smarter than ten people who are closer to the problem. As Janice Klein of MIT found, a few companies attempted a form of this in the 1980s, but didn't dismantle the management structure that would have reduced their command and control. It's not a management tactic as they discovered, but a culture shift. If you're not totally convinced, don't attempt self-managed teams. You'll just get hives and make a mess of the whole thing.

More of Everything

Many companies have benefited for decades from giving people back their brains. These companies grow faster, are more productive and more profitable, have lower turnover, and have increased longevity. As more and more owners and investors see the numbers, they will demand that their companies move in this direction.

It's Simple, Just Not Easy

Are you motivated to enter the Participation Age with self-managed teams? It won't happen overnight. A century of "bosses" have taught people they are not quite as smart and motivated as managers. You have to reverse that notion, and it will take time for people to trust you really are doing it.

Here's how:

1) Form a team around anobjective(i.e. 4-12 people) 2) have them FIRST clearly define the desired result, 3) then the process(es) needed to get that result. 4) Then THEY set metrics for steps in the process and 5) for pay based on the result desired (quality, quantity, speed, etc.,) 6) finally THEY decide what happens if the metrics aren't met and how to move team members along if they are not contributing appropriately. 7) Leadership approves. 8) Run it.

Safeguarding Your Future 

In the Participation Age, people don't want jobs that just pay the bills, they want work that allows them to be fully human, make decisions and own their stuff. As more companies leave the Industrial Age management structures behind and invite people to decide, they are more likely to retain the great people they have. Giving people their brains back is becoming a necessity for keeping them. Self-managed teams is one great way to do that.

Does The Letter Of Credit Police The Transaction? Which Seems Better? New Or Reconditioned?

Letter Of Credit, Confirming Bank, Issuing Bank, UCP

LETTER OF CREDIT WAS PAID BY THE BANK This insightful story, told by Jim Harrington, concerns a company that builds equipment for manufacturing cans used in the food and beverage industry. The manufacturer received a letter of credit to pay for a shipment of one machine. Since the documents complied with the terms of the letter of credit, the confirming bank in the Unites States made payment and sent the documents to the issuing bank in Brazil. The issuing bank in Brazil inspected the documents and also honored the payment.

BUYER CLAIMED IT WAS A USED MACHINE, NOT NEW

When the goods arrived in Brazil, the buyer discovered that the vintage machine, manufactured in the 1920s, did not meet the conditions of the contract, which indicated a new machine.

BANKS DEAL IN DOCUMENTS, NOT IN GOODS

When the buyer complained to the issuing bank in Brazil, the bank explained that they deal in documents, not in goods, and that the buyer had no claim against the bank because the documents complied with the terms of the Letter of Credit. As a courtesy, the issuing bank sent a message to the confirming bank, which in turn contacted the beneficiary to inform him of the mistake. Upon checking his records, the beneficiary discovered that through a computer error, a reconditioned machine left their warehouse instead of a new machine.

A GOOD DEAL FOR THE BUYER

The beneficiary contacted the buyer in Brazil with an offer to return the used machine in exchange for a new one, or alternatively, accept a credit of $100,000 and keep the old machine. Upon careful thought, the buyer determined that the more stringent manufacturing specs in the 1920s made the reconditioned machine of better quality than a new one, so he decided to keep the old one and accepted the $100,000 credit.

LETTER OF CREDIT RULES WERE FOLLOWED

The rules for processing letters of credit (UCP) clearly indicate that with a letter of credit, “Banks deal with documents and not with the goods, services or performance to which the documents may relate” (Article 5). Any disputes regarding the goods are handled directly between the buyer and seller, properly leaving the bank as an independent paymaster.

New Transcontinental Flights, La Guardia Airport to San Francisco

Long-haul Flights From La Guardia

Flights that are longer than 1,500 miles are currently banned from New York's La Guardia Airport, however regulators are considering removing the ban, and the effect on ticket prices, air traffic, noise and operations. This restriction is decades old, going back to 1984. The Port Authority of New York and New Jersey, are looking into the perimeter rule, “to determine whether it remains in the best interest of the region’s air travelers.” The authority said any change would occur only after thorough analysis and consultation with all interested parties in a public and transparent manner.”

Journalist Andrew Tangle and Jack Nicas reported;

“The mix of flights at La Guardia would change materially,” said Mike Boyd, president of aviation-consulting firm Boyd Group International. “Why would you have a 50-seat jet going to Charlottesville when that slot can be used for a 150-seat jet going to Seattle?”

Discussions on lifting the rule began late last year and have accelerated recently, people familiar with the talks said. The authority plans to study how abolishing the rule would affect air traffic, ticket prices, noise and operations at the region’s airports, these people said. The study could be completed within a few months, and lifting the rule would require approval by the bistate authority’s board of 11 commissioners, these people said. The discussions come as the governors of New York and New Jersey recently backed a report that, in part, called for easing regulatory burdens at the region’s airports.

Delta Air Lines Inc. and American Airlines Group Inc. control 40% and 28%, respectively, of the departing seats at La Guardia. JetBlue Airways Corp. and United Continental Holdings Inc. have much smaller positions there and have instead invested heavily in John F. Kennedy International and Newark Liberty International airports, which could lose some value if travelers can fly nonstop to more destinations from La Guardia.

Officials at two airlines said Delta has been lobbying Port Authority officials to reconsider the perimeter rule. Delta declined to comment.

Rob Land, JetBlue’s senior vice president of government affairs, said officials should complete a long-awaited project to replace a key terminal building before embarking on a rule change that would pack more travelers into an already overcrowded airport.

“The deplorable conditions at La Guardia from a customer perspective as well as an airline perspective operationally are only getting worse by the day and we have yet to begin the yearslong ‘pardon our dust’ period that is the Central Terminal project,” Mr. Land said. “It would seem the last thing we want to do is add more crowds to La Guardia until we appropriately address capacity issues.”

La Guardia’s two main 7,000-foot runways could support aircraft that can reach some near European cities, such as London and Paris, and Latin American destinations like Mexico City and Bogotá, Colombia. But La Guardia lacks a federal border-clearance facility, which is needed to accept travelers from most international airports, and has little space to add one.

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Still, without a perimeter rule, airlines at La Guardia could serve a handful of new international destinations, including Dublin and Vancouver, because those airports can pre-clear U.S.-bound travelers under agreements with U.S. border officials. Airlines already serve Toronto, Montreal, Ottawa and Halifax from La Guardia.

Travelers, politicians and airline officials have criticized La Guardia, built in 1929, for being outdated. Vice President Joe Biden last year said it was out of a “Third World country.”

The next step in a project to replace La Guardia’s 50-year-old Central Terminal Building, known to travelers as Terminal B, has been delayed until at least April pending the outcome of a broader design competition for New York airports. Some industry officials said they worry that lifting the perimeter rule could further delay La Guardia’s overhaul—concerns that are shared by some at the Port Authority, a person familiar with the process said. “Lifting the perimeter rule will absolutely have some impact on the procurement,” the person said.

The perimeter rule has roots in the 1950s, when the Port Authority limited La Guardia flights to within 2,000 miles, according to court documents. The authority formalized the rule in 1984 but tightened the restriction to 1,500 miles, with the exception of Denver. The rule isn’t in effect on Saturdays, and some airlines have experimented with longer flights on that day. Delta currently flies to Aruba and back on Saturdays.

The idea was to limit air traffic at La Guardia to business travelers and steer vacationers taking longer-distance flights to farther-flung Newark Liberty and JFK airports.

An executive at one airline said officials implemented the perimeter rule partly because decades ago, La Guardia’s runways could only handle aircraft that could fly less than 1,500 miles or so. But 30 years later, smaller jets can fly much farther than they used to.

“Today’s aircraft performance is such that it’s a really an anachronistic design to divide markets between La Guardia and the long-haul New York airports,” said Bob Mann, a New York-based airline consultant.

Limiting carriers to a 1,500-mile radius from La Guardia has resulted in nonstop service for a few dozen smaller cities in the eastern U.S., including Roanoke, Va., Lexington, Ky., and Bangor, Maine. Airline officials and consultants said that because slot restrictions prohibit carriers from adding more net flights at La Guardia, airlines would almost certainly drop flights to smaller cities in exchange for new service to the West Coast. Airlines stand to earn far more by flying larger planes to bigger cities than on serving small cities with 50-seat jets.

“This will change [smaller cities’] access to New York,” said Mr. Boyd, the airline consultant. “But it’s good business—the highest and best use of an asset.”"

Draft Drone Rules Rule Out Long Distances

The technological advances of unmanned aerial vehicles (UAVs) have been remarkable over the last couple of years. Their increasing capabilities and affordability promise many opportunities for commercial applications, ranging from farming to logistics. Despite the immense potential, the Federal Aviation Administration (FAA) has long been quiet about the upcoming regulatory framework. Until now.

The FAA has just released proposed rules for commercial drones within the United States.

Although the rules are not as draconian as some people feared, commercial applications for UAVs are still facing limitations compared to other countries.

The FAA isn't requiring commercial drones to undergo a lengthy and costly certification process. UAVs under 55 lbs can be flown as long as the operators have passed a basic aeronautical test.

They must, however, be flown below 500 feet, only in daylight, and remain within view of their operators at all time. They also can not be flown over people, such as at concerts and sporting events.

This is a “good first step”, says the Association for Unmanned Vehicle Systems. It would easily allow, for example, a real estate agent to take aerial photographs of a house being put up for sale. It would also allow for farmers looking to survey crop conditions.

Not being allowed to fly over crowds might prevent television companies from filming sporting events with drones. Perhaps further certifications would allow such maneuvers in the future.

The requirement that the UAVs stay within line of sight is also a big limitation, preventing long-distance flights (inspecting forests and monitoring pipelines, for example). This would also rule out Amazon's plan of using drones to deliver goods ordered online.

Michael Huerta, head of the FAA, says that as drones develop the rules will continue to "evolve."

As the technology improves and operators build experience, perhaps the agency will eventually permit longer-range, out-of-sight flights.

In the meantime, the current proposals will undergo a lengthy period of public comment before being finalized- possibly in 2017.

Drone operations in other countries are already getting airborne with pilot projects. In China, Alibaba has launched a drone delivery service for tea orders. In Europe, the logistics firm DHL has begun delivering medicine and other urgent supplies to a small island off the coast of Germany.

To see some of these pilot programs in action, check out this video from the Wall Street Journal:

Obama Vetoes Keystone XL Pipeline

The Keystone XL Pipeline bill would have authorized a 1,179-mile pipeline. The debate is a hot topic for environmentalists and North America's energy industry. The Keystone Pipeline has been under review for the past six years. Just this past Tuesday, Obama promised to veto the approval. ________

TO THE SENATE OF THE UNITED STATES:

I am returning herewith without my approval S. 1, the "Keystone XL Pipeline Approval Act."  Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.

The Presidential power to veto legislation is one I take seriously.  But I also take seriously my responsibility to the American people.  And because this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest -- including our security, safety, and environment -- it has earned my veto.

BARACK OBAMA

_______________________________

Related article: KEYSTONE XL PIPELINES BIGGEST OPPONENT IS ITS MISGUIDED PUBLIC PERCEPTION

Journalist Amy Harder and Colleen McCain Nelson explain in detail;

"Mr. Obama vetoed the legislation, not the pipeline itself. The administration retains the ultimate authority over the pipeline, and the veto doesn’t affect the review, which is in its final stage.

The move prompted immediate criticism from Republicans, who have described the TransCanada Corp. project as a jobs and infrastructure measure. Majority Leader Mitch McConnell (R., Ky.) said on the Senate floor Tuesday that the chamber plans to hold a vote to override the veto by next Tuesday, although neither the Senate nor the House appears to have the requisite two-thirds of votes for an override.

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Keystone Veto to Test Whether Obama, GOP Can Move Forward Barack Obama Has Issued Fewer Vetoes Than 75% of Presidents Tuesday’s veto was Mr. Obama’s third since he became president in 2009. His other two vetoes were on relatively minor bills: one involving legislation dealing with the notarization of mortgages, and the second rejecting a spending bill for technical reasons.

Many Democrats oppose the project, saying it wouldn’t create many permanent jobs and citing environmental risks that come with pipelines, including spills.

While the rejection of the Keystone legislation was no surprise, it will test whether the White House and Republicans can push forward on some shared interests while undertaking battles on other issues. Mr. Obama has threatened to veto several other Republican bills, among them legislation to alter the Affordable Care Act and to impose new sanctions on Iran.

The Keystone action also comes as a standoff over funding the Department of Homeland Security escalates, with Republicans trying to use the issue as leverage to block the president’s executive actions on immigration.

Republican leaders in Congress and Mr. Obama have pledged in recent weeks to work together on areas such as easing trade deals and overhauling tax laws. But Tuesday’s veto, along with other emerging conflicts, has brought into focus the divisions that could impede efforts for a Democratic president and Republican-controlled Congress to forge deals.

“President Obama has rejected our attempt to work together,” House Majority Leader Kevin McCarthy (R., Calif.) said in a statement.

White House officials repeatedly have said that disagreements over one issue shouldn’t become obstacles to agreement on any other issue. The skirmish over Keystone could test that aspiration.

“The question is whether Congress and the administration will be able to pursue a two-track relationship, where they disagree where they must and agree where they can,” said William Galston, a senior fellow at the Brookings Institution and a former policy adviser to President Bill Clinton.

In a message to Congress, Mr. Obama cited the continuing State Department review as the reason for his veto, saying that the legislation “conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest—including our security, safety and environment.”

Asked if the Obama administration might eventually approve the pipeline after the State Department review is complete, White House spokesman Josh Earnest said Tuesday: “That possibility still does exist. This is an ongoing review.” Yet, Mr. Obama has spoken skeptically of the pipeline in recent months.

As proposed, the Keystone XL pipeline would move as many as 830,000 barrels of oil a day, mostly from Canada’s oil sands to Steele City, Neb., where it would connect with existing pipelines to Gulf Coast refineries. As many as 100,000 barrels of that oil could come from North Dakota’s booming oil fields.

If completed, the pipeline system would span 1,700 miles and cross six U.S. states. TransCanada already has spent $3 billion on the project, and the total cost could surpass $10 billion—more than twice an initial estimate—if it is ever built.

On its website Tuesday, TransCanada, based in Calgary, Alberta, said it “remains fully committed” to its project, despite Mr. Obama’s veto."