The Sacramento Executive was pleased to hold a joint event with the Sacramento Area Regional Technology Alliance and the Sacramento chapter of the American Electronics Association on July 19th. Attached are pictures from the event - thanks to Geof Lambert for being the photographer! Each of our events has consistently attracted more than 100 attendees. This event had more than 160. And valuable connections are being made at each and every event.

Plan on attending our next event on September 20th. Details will be revealed in the next few days.

The biggest thank you goes to our sponsors and to our attendees. Thanks for your support of Sacramento Executive so it can continue 'linking executives to all that is great in Sacramento".

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 2:50 PM | Permalink

Do you want to be a Sales Guru? If so, practice what Jeffrey Gitomer preaches - Principle 5 of his 12.5 principles in his book The Little Red Book of Selling,

"It's Not Work, It's NETwork!"

Hey Gillian, shouldn't we make this our mantra here at Sacramento Executive? After all, "The Sacramento Executive links executives to all that is great in Sacramento." Our quarterly networking events are a key part of this strategy.

Mr. Gitomer offers three "Red Bites" on networking:

1. Get face to face first.
2. Networking eliminates cold calling.
3. Networking leads to referrals.

How important is networking?Real important.
What can networking do for your relationships?Build them.
What can networking do for your sales?Make them.
What can networking do for your success?The right contacts and connections can make or break it.

Making connections: Gillian Parrillo is claiming a success for Sacramento Executive, the networking group she and husband Pierre Cutler founded before the duo's recent move to Dallas.

Parrillo met former Hewlett-Packard and Agilent exec Julie Morris and realized she had perfect skills for local startups. She invited Morris to the group's April meeting, held at the Supper Club. And there, at the chocolate-dipping fountain, Morris started chatting with biotech entrepreneur Pam Marrone.

Marrone asked for a résumé and ended up hiring Morris as the first employee for her new Davis firm, Marrone Organic Innovations.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 8:45 AM | Permalink

You know a product has become mainstream when you see it on the shelves in Costco. While dragging my over-filled cart around the local store the other day, I noticed a new piece of technology that I thought was still being held hostage by the geeks and early adopters in high-tech land. There on the shelves, besides the flat-panel TVs and Ipods was a grey and silver box called ‘LocationFree’ by Sony. This little box and a similar one by Slingbox will change the way we watch television. The concept is pretty straightforward, you hook the box up to your TV, DVR or Cable/Satellite Box and plug another cable into your home Internet connection. Through the marvels of modern technology, you can now watch your TV wherever you are by simply turning any Internet-connected PC into your personal TV.

The possibilities appear endless. You’re sitting in an airport half way around the world connected to the internet via wi-fi. Your boss wants you to download your email and work on it before your 14 hour flight home. But what if you could connect to your DVR at home and watch last night’s episode of ‘The Sopranos’ , or better yet, watch the latest breaking news on BBC America. With placeshifting it’s all possible. If you’re lucky enough to be on a plane with an Internet connection, you can continue to watch your favorite programs at 30,000ft. Finally, you can control what you watch and when to watch it. No more watching some ‘b’ grade movie on a 2 inch screen with inferior sound while trying to cut your mystery meat with your plastic fork. You can even pause, stop and change channels just like you could if you were sitting in front of your TV at home. Got a favorite XM radio station? With placeshifting, you can ‘listen’ to it even if you’re not in the satellite’s broadcast area. Just connect your laptop to the internet and change the channel to the station of your choice and you’re listening to music wherever you are. The days of downloading an old episode of Desperate Housewives onto your Ipod, and squinting to view it while on the way to your meeting in San Francisco are over. Find a seat in one of the carriages on the Capital Corridor with wi-fi and you can watch it live on your laptop’s big screen. Who said you have to use the internet to do serious stuff for the boss every day?

So how much does all this technology cost? The magic boxes retail for around $200. If you have a high-speed internet connection at home, then you won’t need anything else. Just a laptop with wi-fi capability and a internet connection to ‘plug’ into wherever you are. With more competitors expected into the market in the coming months you can expect the price of the boxes to drop. But why wait? The technology is here today and it’s just amazing.

Paul Robinson

Posted by Gillian Parrillo at 3:33 PM | Permalink

Forbes Magazine has just released their lists of the world's most expensive homes. Topping the list is Updown Court Palace. It is a brand new home built outside of London near Windsor Castle.

Want to borrow a cup of sugar from the neighbors? If the Queen or Elton John are at their homes, I am sure they will be glad to help out.

Have a big family or expecting alot of visitors? The 103 rooms and 5 pools should be more than adequate.
And you can bring all your guests in via helicopter that lands at your heliport, or failing that, limo them in. There is room for several limos in the garage and the driveway is marble and heated to boot.

If they aren't awed enough, wait until they get a glimpse of your gold leafed study floor.

Price tag: Cheap at the price - $140M.

I am sure there isn't one good argument to be made regarding diminishing your carbon footprint if you own this house.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 3:03 PM | Permalink

I receive a bill from AT&T in the mail. The balance is 3 cents. For a moment, I wonder if it is possible to write a check for 3 cents before the sheer ridiculousness of the situation occurs to me. What, on earth, is AT&T thinking about when they send out a bill for 3 cents? Or more precisely, why doesn’t AT&T think? The process of collecting the data, analyzing it, tabulating it, putting it to paper, putting it in an envelope, paying the postage – how much did that cost? More than 3 cents, I would bet.

I call AT&T to get them to do what they should have done without my help – credit my account. Otherwise, heaven forbid, if I just ignore it, I can imagine this escalating, going to collections, getting on my credit report and other unimaginable out of control consequences. I get through all of the push this, push that, etc. etc., enter this, enter that, enter your underwear size, etc. etc. and can’t find a good solution for – my bill is ridiculous, let me talk to a real person. I finally reach a customer service rep who, as is usual with all those companies that make you input huge amounts of data while waiting, has no idea of my phone number, let alone my mother’s maiden name. They sympathize about my bill, say they can’t help me, but are transferring me to the department that can. I arrive in collections, which is a little concerning because I just received the bill an hour ago. Collections wants to know how I got to them, like I have any idea, and transfers me to someone who can really help me. Of course each of these transfers requires me to re-identify myself with multiple pieces of personal information.

This time the agent tells me he will check to see if he has authority to credit 3 cents and comes back to tell me that this would require a senior specialist. I want to ask him what his limit is, 1 cent, but decide this has become a serious matter with no room for levity. Next transfer, I am back in collections again. This time the rep assures me they will stay on the line with me until we reach someone who can help, really. Next thing I know I am back in the automated system punching buttons to input all that personal data again. Once I reach another rep, she seems amazed that I would imagine that AT&T would ever credit the balance off a bill, no matter the amount. “No, “ she says, “You have to pay it.” “Do you want me to tape 3 one cent coins on the bill, or what would you suggest?” I say as sarcasm and frustration and my lack of ability to exert any sort of control over the situation hit me. I get put back into the automated system at the very beginning again.

One hour and twenty minutes later, I am now talking to the 15th or so rep, my frustration level is extremely high. “Let me see what is going on here,” she says after I passed the personal question test with flying colors, even prompting her on the next question as I am now so familiar with the questions! “Oh” she says, “your balance was credited off already!” “When?” I ask. “Three hours ago,” she tells me. I didn’t know whether to kiss her or kill her. During this entire time, not one person had thought to check?

Later that day, I heard that AT&T had just announced record earnings. So, I guess the Chairman of the Board isn’t interested in hearing from me about how they could save a few bucks by crediting off anything under $1 (or whatever the costs are for sending out an insignificant bill and spending 1.5 hours of customer service time with a customer – let alone how much it costs to have a very unhappy customer).

If I needed one last reason to be pushed to try Skype, I guess it happened today.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 8:52 AM | Permalink

As a followup to a previous post this blog had on the genocide in Darfur, we have been asked to inform our readers of a rally on August 8th. Here are the details:

Who: The Sacramento Committee on Conscience and the Sudan Divestment Task Force

What: Rally to promote awareness of AB2941, which proposes to divest California’s public funds from Sudan.

When: August 8th Noon to 1:00

Where: South Steps of Capitol

Why: More than ten years have passed since the world stood by while a genocide destroyed the lives of nearly one million Tutsis in Rwanda. When it was over we promised never to let genocide happen again. However, for three years the government of Sudan and its Janjaweed militia have been killing, raping, and mutilating the black African tribes of Darfur, and little has been done to stop the conflict. Over 400,000 civilians have been killed and more than two million have been displaced in what the United Nations calls the worst humanitarian crisis of today. The United States Congress, former Secretary of State Colin Powell, Secretary of State Condoleezza Rice, and President George W. Bush have all gone a step further and labeled the crisis genocide. Despite this, California has remained invested in companies whose dollars support the regime committing these atrocities.

The Sacramento Committee on Conscience, Sudan Divestment Task Force and NAACP are sponsoring AB 2941 (Koretz), which calls on CalPERS and CalSTRS to stop doing business with companies supporting the genocide in Sudan. By divesting CalPERS and CalSTRS from these companies, we would send a strong message that the State of California will not support genocide.

The Sacramento Committee on Conscience will be holding a rally on August 8th to promote awareness of the bill. Assemblymembers Paul Koretz (D-West Hollywood), Jerome Horton (D-Inglewood), and Joe Coto (D-San Jose) will be speaking, as well as a representative of the NAACP and other sponsors of the bill. For more information, please contact Rachel Burns at (916) 220-2898 and rachelfburns@yahoo.com or Ian Lobel at (916) 806-2617 and IM_Lobel@yahoo.com.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 2:20 PM | Permalink

Check out a very interesting site, NPost. It’s devoted to interviews of CEOs and Founders of startups and small companies. It was started by Nathan Kaiser as a way to conduct informational interviews to help him with his business career. It has since grown to include networking events and a job board.

There are over 100 interviews, including executives of such well-known companies as:

NetFlix
Meetup
LinkedIn
GoDaddy
Wikipedia

I found it just as interesting to figure out what companies are out there with great ideas. I already downloaded a couple of products to try out and found them very useful – e.g., try Browster – a whole new way to browse.

This is a must site for entrepreneurs or potential entrepreneurs. Visit often to see the latest and greatest. There are also opportunities to publish content from the site on your own website - sounds like an idea worth pursuing.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 9:07 AM | Permalink | Comments (2)

Join Bill Sullivan, President and CEO of Agilent Technologies, for an exciting discussion on the state of innovation in our country. He will share his insights on how to keep innovation alive in large and small organizations.

Bill led the transformation of Agilent from a diversified technology company to a focused measurement company that leads in its industry. Learn from the expert on how to instill innovation in your company and the key role CEOs and entrepreneurs play in making a company grow through innovation.

Bill understands that making an organization creative and more innovative is a complex task. He will share the key elements that can grow your organization and increase value to your stakeholders. Learn how to stay ahead of the curve and which areas are ripe for innovation and development.

Don’t miss this opportunity to hear Bill Sullivan talk about innovation and the challenges that lie ahead for organizations in the US. Bill will address:

What areas are ripe for innovation and development
Specific advice for CEOs and entrepreneurs
How to promote intrapreneurship
What does he see as the growth path for Agilent
Where does he see opportunities in the tech and telecom sectors

Where: Sheraton Grand
Networking begins at 6PM
$60 for non-members of the sponsoring group TechCoire

RSVP here

More than 150 executives are signed up to attend!

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 4:25 PM | Permalink

From Bob Shallit's July 26th column in the Sacramento Bee

Making connections: Gillian Parrillo is claiming a success for Sacramento Executive, the networking group she and husband Pierre Cutler founded before the duo's recent move to Dallas. Parrillo met former Hewlett-Packard and Agilent exec Julie Morris and realized she had perfect skills for local startups. She invited Morris to the group's April meeting, held at the Supper Club. And there, at the chocolate-dipping fountain, Morris started chatting with biotech entrepreneur Pam Marrone.

Marrone asked for a résumé and ended up hiring Morris as the first employee for her new Davis firm, Marrone Organic Innovations.

By the way, Parrillo flies back to town for each Sac Exec gathering and remains president of the Sacramento Entrepreneurship Academy. But there are signs she's being won over by Big D. She reports the city has "100 times" the downtown activities of Sacramento. And, she gloats, "we already have our arena."

Come to our next event scheduled for September 20th at Lomo's Argentine Grill in Old Sacramento. If you are new to town, you can meet lots of companies looking for help in various forms - employees, advisers, board members, investors. Or if you are a company, start-up or established, come check out the amazing talent ready to jump in and help your company - and be creative about how...it doesn't always have to mean a paycheck every pay period.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 4:08 PM | Permalink

Ed Ring, the editor of Ecoworld, sends this interesting blog on how to counteract global warming

If increasing levels of atmospheric CO2 could be the ”tipping point,” catalysing the warming of a world already warming from more water vapor because the sun is hottor this millenium compared to the last - the sun does flicker - then why isn’t the “urban heat island effect” a tipping point too? Human civilization is now nearly 50% urban with the percentage rising every year. Densely-packed habitat and urban infrastructure for three billion people creates heat sinks on a planetary scale. Why don’t we plant millions and billions of big canopy trees in every city on earth? Why isn’t every urban heat island on the planet already carpeted with cooling canopies of big shade trees? It wouldn’t cost even one-millionth as much as converting to hydrogen fuel cell cars.

Nobody can say for certain if the glacier on Kilimanjaro is melting away because of more heat, or for lack of precipitation. Certainly with a little more rainfall, that peak would be white year-around through another epoch. So where did the forests go that once marched for thousands of square kilometers up her slopes, bringing rainclouds with them, and why don’t we put them back? If you want a bigger global carbon sink, you could sure make a good start with billions of new trees right there on the slopes of Kilimanjaro, and on all the other denuded slopes in the world, and across the tropics, and everywhere else.

If you are willing to regulate carbon, going to the point of classifying it as a pollutant, why don’t you reforest the Congo basin instead, to absorb more carbon? Why not dig a water tunnel north from the Ubangi River into the Lake Chad watershed? The water might even be gravity-fed, or lifted with pumps powered by thermal collectors. Let’s refill Lake Chad with water from the Ubangi river, and re-green the vast expanses of the Sahel with carbon-absorbing plants.

There seems to be no doubt that the earth is warming. But if the looming catastrophe is so huge we must avoid it at all costs, why don’t we build non-carbon emitting nuclear power plants in Siberia to move 25+ cubic kilometers of fresh water per year from arctic-bound rivers to refill the Aral Sea, and replant the Aral basin? This would help counteract the fresh water being introduced by icecap melt, and would bring the moderating effects of life back to one of the most desicated places on earth. The disappearance of the Aral Sea has been called by Al Gore the biggest environmental disaster in human history.

For the money we would spend on bureaucrats and lawyers every year trying to regulate carbon emissions, we could easily build 50 gigawatts per year of photovoltaic panels that require minimal maintenance. For even less, today, we could do the same with windmills, and we should. Why don’t we stop spending billions on experiments with hydrogen, and instead increase our photovoltaic and windmill capacity so that within twenty years they generate up to 200 quadrillion BTU’s per year?

If the precautionary principle must be invoked - and carbon emissions must be banned - because the potential catastrophe is so huge, then why is a discussion of the risks and benefits of genetically modified crops so unspeakable? If algae was successfully genetically modified to efficiently produce ethanol feedstock, we might have a carbon-neutral biofuel source capable of worldwide production of 50+ million barrels per day.

It is difficult to have a vision of nature and technology in harmony that wouldn’t permit one to believe nuclear power of any kind will ever be feasible. Fusion energy uses limitless fuel and consumes its own waste. Should we forget about that? Genetic modification is bringing us cures to deadly ailments, and preventing countless others. Should we stop learning about that, too? Who can dogmatically say on what grounds an environmentalist might excommunicate an environmentalist?

Reforest the planet, the far flung open forests and the urban forests, everywhere. Maybe that is something we can all agree upon.

Ed Ring
Editor
EcoWorld

Posted by Gillian Parrillo at 10:54 AM | Permalink

From an article entitled A Flowering Evil written by Mark Seal in the August 2006 issue of Vanity Fair

The Lake Naivasha area [Kenya] provides the perfect conditions for growing roses, carnations and other cut flowers. One of the area's most successful farms, Pserian, was established in 1969..the owners first began flower farming in 1982. But the real influx begain the late 1980s, and soon a new gold rush was on. With few environmental or zoning restrictions, and almost no government controls, Dutch, British, and African flower concerns began leasing and buying up prime sections of lakeshore, which they covered with vast white plastic hothouses. In these hothouses, grow lights blaze day and night, disrupting the normal life cycle of insects..known to be the foundation of all other life-forms. The hothouses also limit the nocturnal feedings of hippos and other animals on land, while sucking up water for irrigation and spitting back fertilizer and pesticides. By 2000, Kenya had become one of the world's major producers of cut flowers....

Bad enough, but the industry also depends on cheap labor to process the flowers. In a country where jobs, even very low paying jobs, are very scarce, the promise is a magnate for thousands - many more than the jobs available. The population of the region has grown almost ten-fold to approximately 300,000 from 1990 to 2002. Those who are lucky to be employed, mostly women, earn approximately $3 per day. The rest fall to lawlessness, including overfishing the lake without regard for licenses or the size or number of fish allowed to be caught, dooming the future of the lake.

Says Dodo Cunningham-Reid, who owns an upscale lodge on the lake, "If consumers in Europe knew the misery caused by one rose, they wouldn't buy it."

This is but one example of how an industry's desire for short term profits are creating destruction upon our beautiful and fragile world. And how, if the story were widely known, consumers would gladly change their buying habits. As consumers, it is up to us to do our research and then request and require more responsibility on the part of industry.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 1:31 PM | Permalink

Doug Bandow, a senior fellow at the CATO Institute wrote a piece in 2004 entitled Government-Funded Stadiums Not Worth the Price of Admission. You can read the whole article here.

Here is an excerpt, which seems very appropriate vis a vis the recent announcement regarding the proposed new Sacramento arena:

Stadium advocates have been amazingly successful in taking from the poor and giving to the rich. Some wealthy sports moguls, such as Managing General Partner Al Davis of the NFL Oakland Raiders, have turned mulcting taxpayers into an art form. Raymond Keating, chief economist for the Small Business Survival Committee, estimates that government has poured more than $20 billion (in current dollars) into sports ventures in recent decades.

Yet such facilities once were and continue to be built privately. The only reason more franchise owners decline to construct their own stadiums is because taxpayers so often relieve them of the need to do so.

But there's no reason to sacrifice the interest of taxpayers to that of sports fans. Stadiums are not a good financial investment. Public finance experts Roger Noll and Andrew Zimbalist concluded: "no recent facility appears to have earned anything approaching a reasonable return on investment and no recent facility has been self-financing in terms of its impact on net tax revenues."

Even an attractive project such as Baltimore's Camden Yards, the home of the baseball Orioles, requires upkeep subsidies. Observed F.W. Walz, a Cleveland city councilman, who in 1928 opposed the nation's first subsidized sports facility: "Of course, they say the stadium will pay for itself, but we've heard that story before."

Moreover, new sports projects usually rearrange rather than increase local economic activity and tax collections. For instance, University of Maryland economists Dennis Coates and Brad Humphreys estimated that sports-oriented tax revenues and personal earnings from sports were well under a percent of total revenues and earnings for Baltimore and Maryland.

In fact, sports spending is primarily substitutional. Stanford University economist Roger Noll figured that only 5 percent to 10 percent of those attending games live elsewhere. Local fans divert their outlays from other leisure activities and other areas within the region.

Thus, government stadium "investments" have consistently generated meager results. Robert Baade and Allen Sanderson looked at a dozen metropolitan areas for The Heartland Institute and found no net employment hike. Separately Baade reviewed 36 cities and found no net statistical increase in economic growth.

There's a more important philosophical point. Taxpayers do not owe their lives to franchise holders, restaurateurs, or property owners. Any increased profits for the latter are a private, not public, benefit.

Would a new stadium add value to wherever? Sure. But so would a new retail store or library. Or new cafes and restaurants.

Of course, as long as some politicians somewhere are willing to make their populations pay, sports moguls can threaten to leave. But so what?

Sometimes the threat is empty. Relocation is costly and risky, and thus rare. In any case, which city has suffered from losing a major league team?

Los Angeles prospers without a football franchise; Washington has lost little without a baseball team. People aren't likely to flee San Diego if the city council ever has the courage to say no to endless financial extortion by the Chargers and Padres.

If the only way to prevent a team from moving is to shovel cash into some billionaire sports mogul's hands, it isn't worth it.

After his election win, Marion Barry offered some uncommon wisdom: "Unemployment is going up. Jobs are being cut and you want to spend taxpayers' dollars for a stadium? Give me a break."

Washington, D.C., New York City, or San Diego, city officials across the nation should welcome major league sports teams. But only if they are willing to pay their own ticket.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 10:19 AM | Permalink

Watch for an exciting new entry on the independent films scene. Shiny Object Digital Video, Inc. is working with Fools Foundation (located next to the Old Spaghetti Factory downtown) to begin a weekly series of film screenings of independent, foreign and documentary films.

If you happen to have 100 or so folding chairs to donate, they are looking and could even be persuaded to offer a sponsorship for the donation. Let me know and I will pass on the info.

Sort of the urban equivalent of funding a chair at a university?

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 8:10 AM | Permalink

Google the term "I love Sacramento" and you get 909 hits. Google the term "I love the
Sacramento arena deal" and you get zero hits. Why? Perhaps because it is a bad deal for the people of Sacramento? Economics 101 taught me that if it is a good business deal for an owner to finance and build a new stadium, then the owner would to so. The Maloofs are good business people (and they show a mastery of basic math) - not only did they get the Sacramento political community to agree to fund the vast majority of the project, the Maloofs will get the financial windfall when the arena is built.

Look at the simple math - If 18,000 people attend 50 events a year, and pay $25 each towards the construction fund, and the building has a useful life of 25 years, then the building fund would equal $562,500,000 - roughly the current expected cost to build the new arena. Is this good math? Is this a good business decision?

What kind of business people are our politicians? Not that good. What kind of business people are the voters of Sacramento? I suspect very good, as I predict they will nix the deal in the fall election.

People will not support being taxed to line the pockets of the rich. I think the local politicians are in for a rough fall.

Pierre Cutler
The Sacramento Executive

Posted by Gillian Parrillo at 6:41 PM | Permalink

In a recent MARKET OUTLOOK, Jeff Mortimer, CFA, Chief Investment Officer, Equities, Charles Schwab Investment Management, Inc. states:

The stock market took investors on a stomach-churning roller coaster ride over the past few months, hitting multiyear highs in early May, only to plunge to fresh lows for the year, then rebound, and then drop again. We expect that volatility to persist for a while as geopolitical tensions, interest rates, inflation and the economy continue to rattle investors. Is the bull market that began in 2002 over? We think it might be, which means the market could get worse before it gets better. Although valuations, earnings growth and overall corporate health remain favorable, we see mounting signs that these supportive conditions may be beginning to deteriorate. Plus, we’re in a seasonally weak quarter for stocks.

What to do?

Our advice to clients can be summed up in a single word: caution. Don’t abandon your long-term asset allocation plan. But if you want to be more proactive, since June we’ve advocated trimming back from your strategic allocations to U.S. and international equities by as much as 5% each, while increasing cash by as much as 10%. For example, if you’re a moderate investor whose long-term target is 60% equities, 35% bonds and 5% cash, we recommend trimming stock holdings to 50% of your portfolio and boosting your cash to 15%.

Cracks in the bullish case

One of the key tenets of the bullish case over the past couple of years has been the strong health of U.S. corporations. That was no different in the first quarter of 2006, as earnings continued to grow. Second-quarter earnings figures, now trickling in, may continue to show strong corporate health. However, a look under the corporate hood suggests a less sanguine view. Keep in mind, earnings slowdowns have typically lagged market slowdowns. If you wait until earnings turn south, you may end up reducing equity exposure too late.

Corporations: trouble under the hood

For the first time in five years, corporate debt is growing at an above-average rate. It was up 8.9% year-over-year in the first quarter vs. a 53-year average of 8.5%. Meanwhile, capital spending is exceeding corporate cash flow, as indicated by the “corporate financing gap,” which dipped into negative territory in the first quarter of this year. True, profit margins and return on capital continue to increase. But any further deterioration in corporate balance sheets could begin to affect earnings growth. We believe analysts’ forward-looking forecasts could be a bit too optimistic. Also, let’s not forget the connection between consumer and corporate spending. If consumers pull back sharply, companies are apt to get stingy.

The Fed: rate hikes may not be over

Two years have passed since the Federal Reserve began raising interest rates. In late June, the Federal Open Market Committee raised rates by 25 basis points for the 17th consecutive meeting, bringing the federal funds rate to 5.25%. The language that the Fed used, however, gave the market some hope that the rate hikes may be over, as the Fed said the “extent and timing of any additional firming” will depend on incoming data, dropping the reference to the likelihood that more firming may be necessary. The committee also acknowledged that economic growth is moderating, while indicating that “some inflation risks remain.”

Though the language led many investors to believe a near-term pause is possible, the risk remains that new information about the economy and inflation could prompt more rate hikes. What’s more, even if there is a pause, that doesn’t necessarily mean an end to the tightening cycle overall.

The U.S. economy: signs of weakening

While most major economic indicators point to a strong economy at present, forward-looking indicators point to slower growth and possibly a recession. The two wild cards right now are housing and energy prices. If the slowdown in the housing market gains traction and if energy prices remain high, both consumers and corporations would be impacted. That could lead to an especially troubling scenario: a slowing economy with rising inflation. The Federal Reserve, while it has already hinted that a pause may be in the offing, might be forced to continue to raise short-term interest rates in the face of a slowing economy.

Economic data released during the second quarter revealed continued strength in manufacturing, a healthy labor market and a surprisingly resilient consumer. Nonetheless, some signs of deterioration are evident, especially in the housing market. Historically, low rates have led to mortgage refinancing and home equity booms, preventing the economy from going into a major slump. But over the past two years, the Fed has been busy taking that extra liquidity out of the economy.

The consumer, who rode the now-subsiding swell of easy money, could face shoals ahead. Home builders are already starting to feel pain. One of the more popular affordability indexes, the National Association of Home Builders/Wells Fargo Housing Opportunity Index, recently posted its largest eight-month drop in history. The index measures the percentage of homes sold that are affordable to families earning the median income during a specific quarter.

The share of our income now devoted to spending on “essentials” is at an all-time high of 55%.1 There has also been a sizable swell in the inventories of both existing and new homes. While other factors such as the labor market remain positive for consumers, the slowdown in housing will indeed be something to monitor going into the second half of the year, as a severe pullback in housing prices could seriously dampen consumer spending and potentially worsen the outlook for the U.S. economy.

Inflation and interest rates: mounting concerns

While signs of slower economic growth may begin to dominate investor sentiment in the coming months, inflation continues to be a worry. The core consumer price index, which excludes the volatile food and energy components, rose 0.3% for the third consecutive month in May, putting the annual rate at 2.4%, its highest level since March 2005. Market volatility has risen in part because of this uncertainty. Higher inflation generally leads to lower price/earnings ratios. Even if earnings remain strong, investors tend not to want to pay as much for the underlying stocks.

Interest rates were on the rise for much of the second quarter. If the 10-year Treasury yield continues to climb, we could see a breakdown in the long-term downtrend in rates that began in the 1980s. Even more worrisome for stocks: the risk of a sustained yield curve inversion (long-term rates lower than short-term rates), especially if the markets perceive the Fed has gone too far and the economy is headed for a slowdown.

Yet another risk is that the global economy could soften, as demand from China and other emerging economies may be slowing. Without China and the U.S. running on all cylinders, investors may be more concerned about global growth.

In the face of such rising risks, we think it’s wise to be cautious.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 1:00 PM | Permalink

As we wrote previously, the Sacramento Speakers Series has a first class lineup planned for its upcoming season. One of the speakers, Ken Burns, has a new documentary scheduled for release in September 2007. The documentary, entitled The War, examines how World War II affected four cities across the Nation. The city from the West just happens to be Sacramento. Should be a very interesting evening at the Sacramento Speakers Series when Ken Burns shares local stories and interviews on April 24th, 2007.

If you would like to have a preview of what's in store, be sure to catch his interview on Monday, July 24th on KXJZ Capitol City Radio’s “Insight” show with Jeffrey Callison from 2p-3p. PST.

For more information on purchasing tickets for the upcoming Sacramento Speakers Series, visit their website

For more information on Ken Burns' interview on PBS visit their website

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 4:38 AM | Permalink

High School Sports Information Leader MaxPreps Announces Series B Financing Sacramento - Lead Investor Dolphin Equity Partners, and BEV Capital, Join Previous Investor DFJ Frontier in Oversubscribed Round

Cameron Park – MaxPreps, Inc., the leader in high school sports information and media, today announced it has completed a Series B round of venture financing with participation from BEV Capital, DFJ Frontier, and lead investor Dolphin Equity Partners. MaxPreps also announced that Salvatore Tirabassi of Dolphin Equity Partners and Mike Majors of BEV Capital will join MaxPreps’ Board of Directors. With $7 million in Series B financing MaxPreps will increase marketing and distribution, add new senior management and expand business development efforts.

“We’ve spent the last few years building a nationwide content network to create a single source for high school sports information,” said Andy Beal, MaxPreps’ CEO. “Now, with the capital and expertise provided by our new investors, we’re going to extend the reach of MaxPreps and continue to build agreements with other top-tier information properties like our recent deal with ESPN.”

MaxPreps, launched in 2003, publishes highly detailed high school sports information to a nationwide audience through MaxPreps.com. MaxPreps aggregates its sports information from a network of thousands of high school coaches, professional photographers and freelance writers.

“Dolphin Equity Partners is very pleased to announce our investment in MaxPreps,” said Salvatore Tirabassi, partner with Dolphin Equity. “After researching a variety of content and social networking opportunities, we found that Andy and his team have developed a defensible and growing business model in a highly targeted and attractive demographic. We expect MaxPreps to become synonymous with high school sports.”

ESPN Agreement
MaxPreps also announced it had entered into a new promotional agreement with ESPN. Under the terms of the agreement, MaxPreps and ESPN will improve coverage of high school football through an exchange of content and promotional support.

Previously, MaxPreps has developed content and promotional agreements with USA Today and the NFL. MaxPreps also works with local newspapers to help enhance local presentation of high school sports information. Clients have included the Los Angeles Times, Arizona Republic, Minneapolis Star-Tribune and Detroit News.

About Dolphin Equity Partners:
Dolphin Equity Partners, L.P. specializes in investing in emerging media, enterprise services, technology and communications companies operating primarily in the U.S. and Canada. We help shape the future of these emerging segments by investing in market-leading companies with exceptional management teams. As a trusted advisor and partner, we look to build sustainable value in our portfolio companies through the strategic and operational guidance we provide management. Located in New York City, Dolphin currently manages over $340 million in capital.

About BEV Capital:
BEV Capital is a specialized venture capital fund focused on consumer-oriented businesses. The core of our business is investing in consumer companies. This includes retailers, Internet businesses, consumer products, consumer services, media, and restaurants. We also invest in supporting technologies for consumer companies such as marketing software and services, Internet technologies, retail IT, information services, and analytics. For more information please visit www.bevcapital.com.

About DFJ Frontier
DFJ Frontier is venture capital fund known for visionary early stage investing. DFJ Frontier backs passionate entrepreneurs and provides business assistance, not just capital. We typically lead the first round of investment, taking a significant stake in the company and an active role on the Board of Directors. DFJ Frontier, is an affiliate of Draper Fisher Jurvetson, and has offices in Sacramento and Santa Barbara, California.

About MaxPreps:
MaxPreps, Inc. is dedicated to publishing America's most comprehensive high school sports information web site. MaxPreps.com features stats, stories, and photos featuring high school student-athletes and the outstanding men and women who coach them. MaxPreps is headquartered in Cameron Park, California.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 3:44 AM | Permalink

Start-up entrepreneurs - keep your eye open for the fall application deadline for seed funding by the Y Combinator group. As we reported in February, Y Combinator will be taking applications for the winter session to be held in the San Francisco Bay area this fall. Don't forget to apply - it is a great source of seed funding. For details, check out the Y Combinator website.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 8:11 PM | Permalink

Interesting loft facts:

• Developers in many cities cite the presence of sports arenas as an important decision on where to build new downtown loft housing. Are you paying attention, Sacramento?
• Retirees are a growing population in urban buildings. They cite the closeness of public transportation and the ease of maintenance as key decision factors.
• People who live in lofts participate in greater numbers in cultural events – theaters, museums, and concerts.
• Loft dwellers cite the following factors as pluses of their lifestyle


• Cultural events
• Nightlife
• Convenience
• Ethnic diversity
• Shopping
• Jobs and access to jobs
• Loft dwellers cite the following factors as drawbacks of their lifestyle
• Crime
• Congestion
• Pollution
• Cost of living
• Pace of life
• Don’t forget to check
• Flight patterns
• Reputation of the builder
• Future development plans that could affect your view, etc.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 6:48 AM | Permalink

The kids have flown the coop. Now it’s time to be grown-ups again. Spending every weekend skimming the pool, mowing the lawn and washing the screens is not conducive to this new lifestyle. A light bulb goes off. “Let’s buy a loft. We can walk to restaurants, the theater. No house maintenance every weekend.” And then you remember –you have pets. Back to reality.

This is what happened to us. A job transfer initiated our complete lifestyle change. We had been thinking about it seriously for quite some time. And the past year of everything in our house and yard falling apart (pool filter, pool heater, pool cleaner, furnace, air conditioning unit, microwave, etc. etc.) coupled with a move to a large city, helped cement our decision.

We found a fabulous downtown loft – new, new, and new. We were close to amazing restaurants, a jogging and bike trail, movie theaters, live theaters, and upscale grocery stores. But no yard. Ok, there was a 3ft. square fenced area in the back, which we convinced ourselves, could be used for emergencies. But our dogs had been used to a half-acre fenced lot. And the cat had been used to cruising the whole neighborhood. How were the dogs going to settle in to a new routine of walks? And the cat to being an inside cat? And how were we going to discipline ourselves to walk them several times a day. We convinced ourselves it would work, but in the back of our minds, we were very uneasy about it.

Well, much to our great surprise, our dogs are completely happy with their walks. We have many options in terms of direction, which keeps the daily routine interesting. And we have also discovered several interesting parks in the neighborhood – a couple with dog parks – to which we can easily drive. Meanwhile, our cat has expressed no desire to go out at all. In fact, a couple of times of leaving the door open accidentally and he has made no attempt to bolt.

And the positives are numerous. We are much more involved with our animals than we were previously. By living so closely together we actually get to see their personalities more up close and personally. And walking our dogs has added a whole new level of fitness (and resulting weight loss) to our lives. Plus turning our cat to an inside cat has added years to his life.

We aren’t discussing the claw marks on the wood floors!

So, if you are considering an urban lifestyle, don’t let the pet issue get in the way.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 9:38 AM | Permalink

What's going on with our educational system? It's simple, we created and continue to perpetuate a caste system, based on skin color, sex, parental education level, and income. Our system is heavily biased towards rich white males. The 1954 Supreme Court ruling in Brown vs. Board of Educaction Topeka, Kansas struck down racial segregation in our public schools. This ruling occurred 52 years ago, yet we have not been able to integrate with any significant positive results.

Here are the facts - the SAT scores of 2005 college bound seniors:

1. Race - Whites 1068, Native Americans 982, Hispanics 923, African Americans 864.

2. Sex - Males 1051, Females 1009.

3 Highest level of parental education - No high school diploma 871, high school diploma 950, bachelor's degree 1063, graduate degree 1131.

4. Family income - less than $10K 884, $10-20K 906, $20-30K 937, $30-40K 967, $40-50K 996, $50-60K 1014, $60-70K 1026, $70-80K 1039, $80-100K 1063, more than $100K 1131.

Why do males score higher than females on the SAT? Why to kids score better, if their families earn more money? Why does race matter? Why do parents' educational backgrounds matter?

You see my point? We have a caste system, even 50 years after the courts ruled it unconstitutional.

Education drives income. Those who get educated make more money. Those who score higher on the SATs get into better colleges. Those who get into better colleges get better jobs. African Americans, Hispanics, and women are still way behind.

Are we making an honest attempt to teach women math? The evidence (504 for women and 538 for men) suggests not. Are we making an honest attempt to teach African Americans to be good scholars? The evidence (i.e., Washington D.C., a predominantly African American school district, ranks dead last in SAT scores) suggests not.

Why is the Texas school system performing so poorly (49th on verbal, 47th on math, and 48th overall, and just barely ahead of South Carolina, Georgia and D.C.)? Why is the Florida school system doing just as badly as Texas (45th on verbal, 49th on math, and 47th overall)? Why is Iowa the best (both in verbal and math)? And why are the top ten performing states all midwest states (Iowa, Illinois, North Dakota, Wisconsin, South Dakota, Missouri, Kansas, Nebraska, and Michigan)?

What does this all mean? Those school systems who are leaving their children behind, such as Texas, Florida, and D.C., will produce adults who will be left behind in terms of economic prosperity. Think about it! The midwest is putting a greater emphasis on education and will lead the nation in terms of economic prosperity. But perhaps the saddest fact is women and non-whites will continue to lag white males.

The American caste system continues to roll, without regard to laws and court rulings. America - wise up and let's educate every citizen! It's good for America and it's morally correct!

Pierre Cutler
The Sacramento Executive.

Posted by Pierre Cutler at 10:46 AM | Permalink

Ed Wheeler published an interesting perspective on global warming on Eco World - "Global Warming, Is It Real, Are Humans The Cause, And Can Anything Be Done?"

Our recent tongue and cheek reference to the Global Warmng movie starring President Bush deserves due respect and therefore we are compelled to link Sacramento Executive readers to another side of the global warming debate.

Have fun with this series of global warming posts, but keep in mind this debate is very serious and deserves immediate attention.

Publisher's note: Local Sacramento Executive Ed Ring is the editor/publisher of the popular Eco World website.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 10:24 AM | Permalink

1. Great old neigborhoods.
2. Diversity of people.
3. Burgeoning downtown.
4. Parks and recreation.
5. Delta breezes.
6. The Kings...go Kings!
7. Two rivers.
8. Big city, but small enough for people to make an impact.
9. Proximity to San Francisco, Tahoe, Napa, and Sonoma.
10. Promising future.

Gillian & Pierre
The Sacramento Executives

Posted by Pierre Cutler at 9:42 AM | Permalink

We are fair and balanced here at The Sacramento Executive. About a week ago, we suggested the must see movie "An Inconvenient Truth" - a documentary on global warming (www.climatecrisis.net) from the democratic viewpoint, starring Al Gore. We think it is very important to present the republican view...so here it is...the latest movie starring President Bush.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 8:11 PM | Permalink

For a great PODCAST, check out Tony Robbins TED Talk on Unlocking Your True Potential. This is an incredible speech on personal achievement. A key theme is to be resourceful.

Leadership is resourcefulness - getting the team to be resourceful in achieving measurable results.

The podcast is 26 minutes...but well worth it. Have fun!

And by the way the TED TALKS offer other fantastic speeches - check out Sir Ken Robinson's comments on education on the TEDBLOG.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 9:39 AM | Permalink

First, go see An Inconvenient Truth. That will provide you with lots of motivation. Then go visit www.climatecrisis.org. The website gives many ideas as to how you can reduce your impact. Some of them we know all too well - more fuel efficient cars, insulate your home better, recycle, etc. etc. But some of them were new thoughts to me - and pretty simple too.

Unplug your cellphone charger that sits plugged in waiting for you to charge your phone.

Even when turned off, things like hairdryers, cell phone chargers and televisions use energy. In fact, the energy used to keep display clocks lit and memory chips working accounts for 5 percent of total domestic energy consumption and spews 18 million tons of carbon into the atmosphere every year!

Eat less meat.

Methane is the second most significant greenhouse gas and cows are one of the greatest methane emitters. Their grassy diet and multiple stomachs cause them to produce methane, which they exhale with every breath.

Buy locally grown and produced foods

The average meal in the United States travels 1,200 miles from the farm to your plate. Buying locally will save fuel and keep money in your community.

Buy fresh foods instead of frozen

Frozen food uses 10 times more energy to produce.

Seek out and support local farmers markets

They reduce the amount of energy required to grow and transport the food to you by one fifth. You can find a farmer’s market in your area at the USDA website.

Buy organic foods as much as possible

Organic soils capture and store carbon dioxide at much higher levels than soils from conventional farms. If we grew all of our corn and soybeans organically, we’d remove 580 billion pounds of carbon dioxide from the atmosphere!

For lots more ideas as to how you can make a difference and stop the destruction of our world, visit www.climatecrisis.org

And if you think this is all about Al Gore and his political aspirations, check out Tom Brokaw, the latest convert, when he hosts a program on the Discovery Channel next Sunday (7/16) at 9PM PT. Last I checked, he wasn't running for anything, except retirement!

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 9:06 AM | Permalink

This past weekend I saw the movie "An Inconvenient Truth", starring former Senator Al Gore. This is a must see movie. It is the movie of the year!

I stand corrected. The top two issues of America are not health and education - these are number two and three. The number one issue we face is the environment. The movie was a giant eye-awakening event for me. I just didn't know what has been going on regarding our environment. What's amazing is that since the 1970's, I have had my head in the sand on environmental policies. I should know better, but I chose to avoid the environmental issues...not any more.

Dr. Harrison, I owe you a big apology. You spoke so prophetically in the 1970's on energy, environment, and economics - but no one really listened. Perhaps now they will, thanks to Al Gore's message. Dr. Harrison, my former professor of three classes on the issue of the environment, put his money where his mouth was....he funded the Harrison Program.

The Harrison Program on the Future Global Agenda promotes research, teaching, and public dialogue on issues related to ecological security, long-term sustainability, energy and environmental policy, global governance, and transnational society. Located within the Department of Government and Politics at the University of Maryland, the Harrison Program hosts international visitors, sponsors doctoral students as Harrison Dissertation Fellows, conducts conferences and workshops, sponsors an occasional speaker series, and conducts a vigorous program of research and publication on core program themes.

The Harrison Program is named in honor of University of Maryland Professor Emeritus Horace Harrison, a longtime member of the Department of Government and Politics and a pioneer in university teaching about global issues. Dr. Harrison bequeathed an endowment to the University to support a center and professorship for the study of global environmental problems and related global issues.

I will be writing much more on this hot topic in the coming weeks. To get the juices flowing - does anyone believe global warming is not real?

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 8:15 PM | Permalink

Good news for the Central Valley. Nuts are good for you. Eat lots of them. So says a study out of Spain, and published in the most recent edition of the Annals of Internal Medicine, which studied the effects of a Mediterranean diet on heart disease, diabetes, blood pressure and cholesterol. The results showed that eating the good fats in olive oil and nuts had a much more positive effect on health issues than low fat diets.

So, here's where it gets fun. As if getting to eat lots of olive oil and nuts isn't fun enough. Second highest producing nation of nuts - the United States. And 98% of those nuts come from the Central Valley. (Of course, Lake County, which always seems to be a couple of years out of step, has just ripped up numerous walnut orchards and replaced them with grapevines).

Largest nut producing nation - Iran. Let's hope that's not the next thing we go to war over.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 2:48 PM | Permalink

Often when I read about new innovations, it makes me want to smack the side of my head and say "Duh". They just seem so necessary and so simple and so 'why didn't I (or someone) think of that before?'

Well, today, I found one of those again, but this one is so amazing in that it has the potential to change millions of lives forever. It's not one of those, for $14.99, plus shipping and handling, you can have one of these. Or, if you act right now, you can have two for the price of one. And then, after the first use, it ends up in your closet along with the rest of the junk you have bought. It's a giant leap forward in helping people who are blind live much more self-sufficient lives.

It's a handheld device that takes a photo of printed words - for example, a menu - and then reads the words aloud. The device was unveiled this week at the National Federation for the Blind convention. It was created by inventor Ray Kurzweil in conjunction with the Federation. The Kurzweil-National Federation for the Blind Reader, (needs a marketing type to give it a snazzy name), looks like a PDA attached to a camera. Imagine being able to read your mail unaided for the first time in your life? A truly remarkable breakthrough. The only barrier left to hurdle - how to cover the cost - $,3495 each - for every blind person out there. But then that's all about how individuals and nations set their priorities.

Gillian Parrillo
The Sacramento Executive

Posted by Gillian Parrillo at 6:59 AM | Permalink

Recently Gillian and I relocated to Dallas for the second time in ten years. Each time we contemplated moving to Texas a key selling point by the recruiter was that taxes are lower in Texas because there is no state income tax.

Well, I am here to tell you that as usual, things are bigger in Texas - even taxes. We pay $5,690 more a year in taxes in Texas than in California., even after accounting for a 9.3% California state income tax. How so? Sales tax is higher in Texas. But the kicker is property tax. Californians have it made in this department - 1% of the original purchase price in the city of Sacramento. But if you happen to live in Dallas, it's a whopping 2.96% of the assessed value. Therefore, on a $500K Texas house you would pay $14,900 in property tax of which $8,460 goes to the Dallas Independent School District.

So, the next time the recruiter comes calling, ask her (or him) if a relocation is required. And one other thing - ask her if the new city has police and fire protection, roads, bridges, schools, city officials, and public libraries. Because Sacramento has these items and they get paid from tax receipts. I suspect the new location will have the very same type of services and they too will get paid from tax receipts. Just be mindful, in Texas things are bigger, and you will need to pay a little more.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 6:40 AM | Permalink

Pierre & Gillian
The Sacramento Executives

Posted by Pierre Cutler at 7:33 PM | Permalink

Lindsey Tanner of the the Associated Press poses the question today in her Star Tribune article, "Is it OK for doctors and parents to tell children and teens that they're fat?"

That seems to be at the heart of a debate over a proposal to replace the fuzzy language favored by the U.S. government with the painful truth - telling kids whether they're obese or overweight.

Labeling a child as obese might "run the risk of making them angry, making the family angry," but it addresses a serious issue headon, said Dr. Reginald Washington, a Denver pediatrician and co-chairman of an American Academy of Pediatrics obesity task force.

"If that same person came into your office and had cancer, or was anemic, or had an ear infection, would we be having the same conversation? There are a thousand reasons why this obesity epidemic is so out of control, and one of them is no one wants to talk about it."

Unhealthy Americans is one of the two biggest problems that we face today (in my opinion) - the second being our failing educational system. Actually Ms. Tanner's article is rather timely. This past week while visiting my doctor, Kristen Casenave at the Southwestern Medical Center, I told her I was planning to write a book - The Dumbing Down and Fattening Up of America. We talked about the obesity of Americans and she remarked, "Look, if a person is fat we should tell them they are fat." I agree with Dr. Casenave. How can a person fix a problem, if they don't know they have a problem.

It's simple, if you are fat, then you need to be told you are fat. The consequences of being fat are enormous. Fat people are discriminated against by society - in the business world and the dating game. Fat people die prematurely from being fat. Big is not beautiful. It is deadly. If you love your fat child, and you don't tell them they are fat, do you want to see them die from being fat? I don't. I would. It is the right thing to do.

Pierre Cutler
The Sacramento Executive

Posted by Pierre Cutler at 7:17 AM | Permalink