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The Goldman Sachs hearings on Capitol Hill were painful to watch for many reasons. Lloyd Blankfein, Goldman’s CEO, was questioned closely by Senator Carl Levin concerning Goldman’s duties to clients. Senator Levin’s frustration grew as Mr. Blankfein concentrated his answers on the firm’s responsibilities related to trading and market-making, rather than exhibiting a firm grasp on the distinctions in roles the firm plays with its clients in other areas, such as underwriting and asset management.

A particularly telling moment came when Senator Levin questioned a deposition statement Mr. Blankfein had made in earlier testimony. In that statement, Mr. Blankfein had said he did not realize how important a AAA rating is. Senator Levin found that admission unbelievable. Most anyone selling financial products would recognize the importance of the AAA rating to specific kinds of clients.

Mr. Blankfein’s statement is believable, however, when you recognize the fact that his career was straight-lined through the investment bank’s trading arm, according to Goldman’s own proxy. He had no rotation to other areas and no real exposure in the trenches to the different aspects of the bank’s business.

CFO David Viniar and other Goldman executives exhibited similar lacks of broad-based experience during their testimonies, which begs the question: Can a company operate properly with people at the top who have had narrow career experiences?

The troubles Goldman (GS, Fortune 500) is now experiencing relate very much to this tragic set of circumstances.

Up until now, the company’s board of directors hasn’t seemed to play a very big role in succession planning, which includes assessing the developmental needs of its CEO and senior executives. According to Goldman’s own shareholder proxy this year, the nominating and governance committee of the board "review and concur in the succession plans for our CEO and other members of senior management." This indicates a very passive role — and one that has clearly not served Goldman well.

Whether seeking to make a change at the top — or not — at this critical juncture, the Goldman board needs to step up its involvement and eschew this level of passivity. The board needs to be seriously reviewing its role in succession planning and getting its hands dirty in the details. With continued hits to its reputation, the board must do all it can to ensure that Goldman has and will have the right people in place to move the company forward. This means education and exposure to all aspects of the business.

Goldman’s board needs to get to work immediately to assess its own and senior executives’ training and development needs with respect to the various lines of business and the ethics and compliance associated with each. Once they all have a better understanding, it’s time to explore rotational moves and an organizational restructure so it is easier for staff to sort out ethical dilemmas and for managers to manage them.

–Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance, a board advisory firm. 

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> First of a three-part series

For a long time, St. Louis has been falling behind.

You know the story. The long, slow drift from grand Gateway to the West to the faded outpost of flyover country. The shuttered factories and the departed corporate headquarters. The bleeding away of the best and the brightest.

It’s almost a clich

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San Antonio’s residential real estate market may have suffered a few bumps and scrapes over the past year. However, there were still individual agents who fared well in the home-sales market.

The San Antonio Business Journal produced a listing of the Top 50 Individual Real Estate Agents, the Top 25 Team Leaders and Top Farm and Ranch Agents in the 2010 Executive Home Guide.

Overall, home sales were down for 2009; yet some agents saw their sales rise. Many of the agents interviews indicated that sales in recent months have been on the upswing, indicating that a housing recovery may have begun no fax cash loans.

The Business Journal created a database whereby readers can search for the top agents in San Antonio’s real estate market. To access this user-friendlym searchable database on the Top 50 Individual Real Estate Agents, the Top 25 Team Leaders and Top Farm and Ranch Agents, please go to this link.

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County assessors will mail 2009 personal property forms to business owners this month.

Oregon law requires all business owners — even owners of home-based businesses — to file a personal property tax return with their county assessor every year.

Business owners must complete and return them to their assessors by March 1, 2010. Tax owed on personal property is shown on property tax statements and is due Nov. 15, 2010.

Completed returns must include a detailed list of all business-related personal property, along with equipment purchase and lease dates, and original costs.

Personal property may include office furniture, personal computers, easily moved machinery, and even off-road vehicles and display cases if they are used in the business. It also includes leased equipment such as copiers and power washers.

The county assessor calculates the tax due each year based on the business owner’s personal property return. The assessor may cancel the tax if total personal property is valued under $15,000.

If you’re a business owner, you must file a return each year even if:

• You didn’t receive a tax return from the county in which your property is located;
• The assessor cancelled your tax in prior years;
• You sold or closed your business during the year; or
• You sold or disposed of your personal property.

“If a business owner doesn’t file, penalties range from 5 percent to 50 percent of the taxes due, depending on when they file returns from previous years,” said Syndi Gates, a department tax analyst.

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Investment bank Lazard Ltd said on Sunday that Chairman and Chief Executive Bruce Wasserstein, a legendary dealmaker, had been hospitalized for an irregular heartbeat.

Wasserstein’s condition is serious, but he is stable and recovering, Lazard said, adding that it will not be providing updates at this time.

Wasserstein, a rainmaker since the 1970s, has most recently been involved in the looming takeover battle between Kraft Foods Inc and Cadbury PLC.

The Wall Street veteran achieved fame as an adviser to buyout house KKR on its unprecedented acquisition of RJR Nabisco in 1989, which was recorded for posterity in the book, “Barbarians at the Gate,” by Bryan Burrough and John Helyar no faxing payday loan. Until a few years ago, the RJR takeover was the largest leveraged buyout in history.

(Reporting by Paritosh Bansal; Editing by Jan Paschal)

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Brocade Communications Systems Inc has put itself on the block and Hewlett-Packard Co is one of the companies that could be interested in buying the network equipment maker, people familiar with the matter said.

Brocade, which sells routers and switches as well as software to help companies manage data networks, has shopped itself around to potential buyers for a few weeks, the sources told Reuters on Monday. They said the process is still in preliminary stages.

One source described it as “feelers” rather than a formal process, and said a deal may not happen.

A deal for Brocade, whose equipment and software make it attractive to companies seeking to boost their presence in corporate data centers, would be the latest in a whirlwind of technology dealmaking in recent weeks.

One possible buyer is Hewlett-Packard, the world’s No. 1 personal computer maker, which also makes server computers used in corporate data centers.

Sources said HP has looked at Brocade’s assets, but has not yet made a formal bid. That could be because HP is potentially interested in acquiring only certain components of Brocade, one source said.

HP wants to fill holes in its portfolio, especially after Cisco Systems Inc moved into its traditional server turf earlier this year, and people familiar with the company’s strategy have said it is looking at both software and networking acquisitions.

Shares of Brocade, which bought Foundry Networks last year and has expanded sales partnerships with large technology vendors such as IBM and Dell Inc, rose as much as 19.9 percent after The Wall Street Journal reported that it was up for sale.

The Journal also named Oracle Corp as a possible buyer of Brocade, which entered the day with a market capitalization of $3.2 billion.

Oracle executives were not immediately available for comment. Brocade and HP executives declined to comment.

FOR HP, A SENSIBLE BUY

Brocade is a top pick for HP, the sources said. One reason is that HP needs to develop more security and “cloud” technology that enables access to software and services over the Web.

“HP has no security offering, no real cloud-enabled technology except through partnerships and no real presence in systems and network management,” one of the sources said. “It’s a no-brainer that they’re looking at all these.”

A deal for Brocade could satisfy any need for HP to boost its storage and IP (Internet protocol) networking, Brocade’s expertise, UBS analyst Nikos Theodosopoulos said.

He said Juniper Networks Inc, another network equipment maker, could also be a potential buyer. 

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WASHINGTON — Signaling that manufacturers are leading the economy into a recovery, output from the nation’s factories, mines and utilities posted widespread gains in August.

The August gains in industrial production marked the second straight increase after the global recession dried up the appetites of customers worldwide. Output rose 0.8 percent, the Federal Reserve said Wednesday, beating analysts’ estimates.

In part, the improvement reflected auto sales that were boosted by the government’s now-ended Cash for Clunkers program. But analysts were impressed that output rose broadly across industries. Even with autos and parts stripped out, manufacturing activity gained 0.4 percent last month.

"Vehicles are not the whole story," Nigel Gault, chief U.S. economist at IHS Global Insight, said in a note to clients.
Gault noted that production rose in five out of 10 categories of durable goods, including machinery and electrical equipment.

The pace of growth is expected to slow later this year. That’s partly because the stimulative effect of the clunkers program, which issued rebates for people who traded in older gas-guzzlers for new, fuel-efficient models, will fade.

But industrial stockpiles are so low that production should keep rising even as consumer spending remains weak, economists said. Companies had cut their stockpiles by a record $159.2 billion in the second quarter. Low inventories tend to signal higher output ahead, because companies eventually must produce more to refill their depleted stockpiles bad credit personal loan lenders.

Manufacturers "are in a catchup mode right now," Gault said. "They’re adjusting for the fact that the level of demand didn’t meet their worst fears."

Inflation remains nowhere in sight — The Consumer Price Index rose just 0.4 percent in August, after a flat reading in July, the government said. Prices fell 1.5 percent in the last year, as gasoline prices dropped sharply from record levels last summer. The "core" CPI, which excludes volatile food and energy prices, ticked up a scant 0.1 percent, matching expectations.

Buffett thinks economy has hit bottom — Billionaire investor Warren Buffett says the economy appears to have leveled off at the bottom of the recession over the summer, but Berkshire Hathaway’s CEO still isn’t seeing much improvement. "I think the odds are very much against getting significantly worse. It’s sort of plateaued at the … bottom right now," Buffett said in an interview with CNBC that aired Tuesday and Wednesday.

Labor Department reports weekly jobless claims, Commerce Department reports housing starts. STLtoday.com/business

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My investments need to be a lot more diversified, I was told. Within a split of 55 percent stocks and 45 percent bonds, I was presented a list of 10 mutual funds and exchange-traded funds to buy (plus 23 others as alternatives).

I won’t buy any because the suggestions were based on faulty assumptions. But I appreciated the concept of building a broadly diversified portfolio consisting of different asset classes, including growth and value stocks of large and small U.S. companies, and stocks from foreign companies.

And I relished the idea of keeping costs down by focusing on index mutual funds, exchange-traded funds and low-cost actively managed funds with consistent performance.

I received these fund suggestions from Cake Financial, an online computer-driven mutual fund "engine" that analyzes your investments and suggests and monitors a low-cost diversified portfolio appropriate for your age. For $99.99 a year — there is a 30-day free trial — Cake Financial claims it can save investors many thousands of dollars in the long run by selecting lower-cost and less-risky funds. The site also offers a more basic investment tracking service for free and a fund-comparison service for $29.99 a year, also with a 30-day free trial.

In my case, the fund suggestions were based on the wrong assumption that all my money was in large-company stocks. That’s because Cake Financial can analyze only investments held in brokerage and fund accounts it can link to its site (for a list, to which customers can recommend additions, go https:// www.cakefinancial.com/help/linking-a-brokerage). More than half my assets are outside brokerage accounts.

For investors who have the bulk if not all their retirement savings — including 401(k)s — with brokerage and fund providers, this online fund "engine" can provide a useful service that will add to diversification and keep costs down free credit report and score. The average Cake user is in his early 40s with about $150,000 to $200,000 mostly in mutual funds, said Steven Carpenter, the company’s founder and CEO.

Cake is not the only place you can get fund recommendations online. Several free sites run by investment advisers, such as www.fundadvice.com, list model portfolios consisting mostly of index and other low-cost funds. Of course, the people running these sites are trying to sign you up as a client. The sites of many fund companies provide solid advice on asset allocation and sometimes suggest certain funds or combinations of funds (naturally, the funds they sell). By contrast, Cake is an independent information and screening service that gives you fund choices from which to pick.

"We are not an adviser and we do not effect transactions," Carpenter said, but simply base fund suggestions on computer models that look for strong consistent performance and incorporate fund fees in their calculations.

"We show all the top funds for an asset class and sort them by fees," Carpenter said. "Where we feel we are better than an adviser is that we don’t have" any incentive to recommend one fund over another. A survey by Harris Interactive on behalf of Cake Financial found only 21 percent of Americans who use financial investment firms are confident the firms put customers’ best interest ahead of their own.

To be fair, many advisers who act in a fiduciary capacity focus only on what’s best for the client. Cake Financial does a bare-bones job in estimating how much money you need in retirement and is not a substitute for a trusted financial professional adviser.

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The number of bankruptcies in Canada rose by more than a third in July compared with the year earlier, the latest figures show. But the number fell slightly from June.

Some observers say the data from the Office of the Superintendent of Bankruptcy, released yesterday, show that the tide of insolvency swamping Canadian households is easing, a sign that the worst of the recession may have passed.

Others said the slowdown was typical of midsummer.

There were 10,726 personal and business bankruptcy filings in July, up from 7,908 a year ago, the report showed. That’s an increase of nearly 36 per cent.

Bankruptcy filings were down 5.4 per cent in July from the 11,338 filings in the previous month. The overwhelming majority of filings were by consumers, while the number of business bankruptcies fell from last year.

The data "provide further evidence that the worst of the economic downturn may have passed," Keith Howlett, retail industry analyst with Desjardins Securities, wrote in a report.

In July, 10,294 consumers went bankrupt, up 38.1 per cent from a year earlier, but down 4.9 per cent from the previous month. "This marks the first instance of a sequential improvement in consumer bankruptcy filings since December 2008," Howlett noted.

The number of insolvencies in July has been lower than the number in June eight times in the past 10 years, the agency noted.

"It’s just got to do with the summer," Andy Fisher, trustee with A. Farber & Partners, said of the July decline. "People are putting off the decision to go bankrupt. They want to forget about those problems."

In March and June, the number of bankruptcies rose by more than 50 per cent over the previous year, sharp increases that were not surprising in light of the recession and the rising unemployment rate.

"It’s good that (the overall rate) is improving, but it’s still a concerning trend," Fisher said. "We may have passed the worst of the recession, but things are still bad."

Insolvency is known as a lagging indicator, meaning economists expect bankruptcies to rise even after the economy begins to improve.

Businesses accounted for 432 bankruptcies in July. That’s down 16.1 per cent from the 515 companies that filed in the previous month. It’s also a decline of 5.3 per cent from July, 2008.

Construction, manufacturing and retail accounted for most of the bankruptcies.

The monthly data also show the number of proposals, a last-ditch effort to pay creditors a portion of what they are owed, rose 31.1 per cent.

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U.S. mortgage rates rose in the latest week as Treasury yields climbed, according to a survey released on Thursday, a move that may dampen home loan demand.

Interest rates on U.S. 30-year fixed-rate mortgages averaged 5.29 percent for the week ending August 13, up from the previous week’s 5.22 percent, said a survey released by home funding company Freddie Mac.

Mortgage rates remained above 5 percent for an eleventh straight week. Experts say mortgage rates at 5 percent and below are what is necessary to make a significant impact on home loan demand.

Higher rates have dampened demand for home loan refinancing, a reversal from earlier this year when rates below 5 percent caused refinancing activity to surge.

The mortgage rate was significantly higher than the record low of 4.78 percent set the week ended April 2. Freddie Mac started the Primary Mortgage Market Survey in 1971.

Home buying demand, however, is not as sensitive to changes in rates as in refinancing activity.

David Adamo, CEO of Luxury Mortgage in Stamford, Connecticut, said the overriding driver of the housing market at this point is confidence and not interest rates on mortgages.

“Once the general psychology of the market place returns to normal we will see the purchase activity substantially improve which will restore our housing market and overall economy,” he said.

Treasury yields, which are linked to mortgage rates, have risen recently, with mortgage rates responding in kind fast cash loans.

“Long-term, fixed-rate mortgage rates rose slightly over the past week while initial rates on adjustable-rate mortgages (ARMs) were little changed,” Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement.

The rise in rates is a negative for the U.S. housing market, which has been showing some signs of stabilization, with sales rising and home price declines moderating in many regions of the country.

In fact, home prices in some regions have risen.

Thirty-year mortgage rates had been on a downward trend for most of this year after the Federal Reserve unveiled its plan to buy mortgage-backed debt in late November. But the Fed met resistance in the bond market in recent months.

The U.S. government has embarked on an aggressive plan to bring mortgage rates down to levels that will spur demand and help the hard-hit housing market begin to recover.

The Federal Reserve has set a goal to buy up to $1.25 trillion of agency MBS, $300 billion of Treasuries and $200 billion of agency debt in 2009. The purchases are more than half-way completed and are part of efforts to lower borrowing costs. 

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