From David Nicklaus’ Mound City Money blog. STLtoday.com/moundcitymoney
Unanimity is rare in surveys of businesspeople, but the St. Louis Fed found it among area car dealers. The Fed’s latest Burgundy Book survey says all the dealers it talked to expect lower sales this year. Other retailers aren’t quite as pessimistic, but half expect sales to fall and only one-third expect sales to rise.
If Kansas City’s leaders want to learn about the economics of a 1,000-room convention hotel, they could drive 250 miles east and talk to the folks who recently foreclosed on the Renaissance Hotel in downtown St. Louis. Instead, they’re spending $500,000 for a feasibility study. According to the Kansas City Star’s Kevin Collison, our neighbors to the west are also establishing a 20-member steering committee to think about the idea.
We St. Louisans could save them plenty of time and money. Here are three pieces of free feasibility advice:
— It won’t work without a huge public subsidy.
— It won’t magically generate more convention business
— Even with a huge subsidy, it might not succeed.
The ESOP Association estimates that 10 million U.S. workers, about 10 percent of the private-sector work force, participate in employee stock ownership plans at 11,500 companies. Many people would look at those numbers and see upbeat, motivated employees, their incentives fully aligned with the employers’ goals auto one car insurance.
Sean Anderson, a visiting law professor at the University of Illinois, looks at ESOPs and sees a disaster waiting to happen. In an upcoming article, he says Congress should ban employer stock from all company-sponsored retirement plans. Here’s an Anderson quote, from a U of I News Bureau summary of the article that will appear in the Loyola University Chicago Law Journal. :
"ESOPs have a lot of intuitive appeal — the idea of having workers own a piece of the company they’re working for. But they’re Enron on steroids. At the end of the day, they put workers at terrible risk and more often than not work as a tool that benefits the company, not employees."
ESOPs prevent workers from diversifying their retirement savings, and workers don’t even control the price at which they invest.
My guess is that any proposal to abolish ESOPs would run into a firestorm of criticism from many of those 10 million employee-owners. I’ve talked with people who get a special sense of pride from working at an employee-owned company such as Graybar Electric or McBride & Son Homes. Any reformer would also have to contend with the ghost of Louis O. Kelso, the Cold-War-era thinker who conceived of ESOPs as a way to keep workers engaged with capitalism and opposed to communism.
Australia's Qantas Airways Ltd. said Friday it had canceled orders for 15 Boeing 787s and delayed the delivery of a further 15 aircraft due to turbulent market conditions.
Qantas Chief Executive Alan Joyce said the decision had not been influenced by Boeing Co.'s announcement earlier this week of a design issue in the 787 and further delay to the aircraft's first flight. He said discussions with Boeing about the order had started some months ago.
Qantas said it had reached a mutual agreement with Chicago-based Boeing Co. to defer the delivery of 15 Boeing 787-8 aircraft by four years and cancel orders for 15 Boeing 787-9s (which are slightly larger) scheduled for delivery in 2014 and 2015.
Joyce said Qantas remained committed to the 787 as the right choice for the international expansion of Jetstar, its low-cost subsidiary, and as an eventual replacement for Qantas' Boeing 767 fleet.
The 787 is the first commercial jet made mostly of light, sturdy carbon-fiber composites instead of aluminum. Large parts of the plane, such as the fuselage sections and wings, are made in factories around the world and flown in a huge modified 747 to Boeing's widebody plant in the Seattle area, where they are essentially snapped together no fax payday loans.
Boeing said Tuesday that it needed to reinforce small areas near the connection of the wings and fuselage before conducting a test flight of the jet.
Boeing spokesman Miles Kotay said Friday that Qantas remains one of Boeing's largest customers for the 787, with 50 still on order.
"They are committed to the 787 for their own growth and to replace their aging airplanes," he said.
The cancellation of orders for 15 787-9s would reduce the group's aircraft capital expenditure by $3 billion based on current list prices, Joyce said.
He said Qantas announced its original 787 order in 2005 and the “operating environment for the world's airlines has clearly changed dramatically since then.''
"Delaying delivery, and reducing overall B787 capacity, is prudent, while still enabling Qantas and Jetstar to take advantage of growth opportunities and market demands, both domestically and internationally," he said in a statement.
The commercial was a LONG way from Budweiser Clydesdales and Dalmatians.
The plot: A guy stops by a convenience store to pick up a six-pack of Bud Light — as well as lip gloss, batteries and a pornographic magazine. Things quickly go downhill. A cute girl walks up — "Jim? Jim Scott? I haven’t seen you since prom!" — and is instantly scandalized. Jim tries to beat a hasty retreat but is taken hostage by a pistol-wielding robber. TV crews show up, identifying him by name as the "local porno buyer."
You won’t see the ad on TV. Not in this lifetime. Anheuser-Busch, maker of Bud Light, couldn’t get this ad past the network censors, even if it wanted to do so. (It doesn’t.)
Instead, the ad was made to live only on the Web. Quietly unveiled in February after the Super Bowl, "Magazine Buyer" was a "secret" spot, available at first only to viewers who had text-messaged Anheuser-Busch and then logged on to BudBowl.com.
The commercial is a prime example of how companies are using the Web to venture into edgier territory as they try to grab the attention of elusive and increasingly distracted consumers.
The loose, largely unregulated ethos of the Web allows mainstream brands like Bud Light — America’s bestselling beer, backed up by $500 million in measured advertising over three years — to try racier content.
"There are many more vehicles available to advertisers which accept advertisements that push to the edge, if not go off the edge of a cliff," said Dan Howard, professor of marketing at Southern Methodist University.
Numerous big advertisers have used the Internet to explore the boundaries of good taste. In 2006, electric razor maker Philips rolled out a website called shaveeverywhere.com. The site encourages "male bodygrooming," i.e., shaving … but not the face.
Anheuser-Busch has been evaluating its ability to push the envelope online as a way to build buzz among a target audience. For Bud Light, that’s guys ages roughly 21-27.
One Internet-only ad from 2007 portrays "Scott" seeking forgiveness for making a naughty video with a lady friend, and then selling it to a chain of video stores to pay for lap dances. Scott resolves the situation by getting a robot named "Apology-Bot 3000" to deliver a Bud Light to the lady.
But a Bud Light commercial called "Swear Jar" may be the granddaddy of all Internet-only ads. The plot: Office workers have to pay a quarter for every curse word, with the proceeds going to pay for Bud Light. The result: rampant and ferocious — albeit bleeped-out — cursing.
The commercial swiftly went "viral" after its 2007 launch. It has been viewed more than 12 million times on the Web, a level of exposure that a lot of TV advertisers would love to have.
Rather than passively watching, Web surfers seek out or make a decision to click on an online video. Advertisers covet that engagement.
"You’ve got to go on the Internet and look for that ad, find it and then watch it," said Howard instant payday loans. "Who’s going to do that? People who want to, who have heard it’s a great commercial."
Keith Levy, Anheuser-Busch’s vice president of marketing, said in a statement that the "Magazine Buyer" spot carried on the company’s tradition of sending outrageous humor onto the Internet.
A-B tested the "Magazine Buyer" concept extensively to make sure adult consumers appreciated the humor, Levy said.
Apparently, they did. Even though the video began its life as a "secret" spot on BudBowl.com — an A-B website that requires visitors to enter a birth date showing they are 21 or older — it quickly migrated to YouTube. It has been viewed more than 700,000 times.
Of course, testing the bounds of appropriateness doesn’t just happen on the Internet.
Hardee’s, which became infamous for ads featuring Paris Hilton washing a Bentley and another woman riding a mechanical bull, continues to use sexual innuendo. But Hardee’s, the St. Louis-based subsidiary of CKE Restaurants, is not alone. Quiznos’ TV commercials now make risqu
The Toronto Real Estate Board terminated a member’s access for the first time in its history because the realtor’s website "misappropriated" listing data to build a competing business, a court has been told.
"This was a dramatic event, since it represented a significant change in the way business was being conducted," TREB lawyer Bill Sasso told Justice David Brown in the Ontario Superior Court of Justice yesterday.
"It was the first time that a member sought to take all residential listing data and republish it and make it available as a website. No one had ever done that before."
The suit filed by Toronto realtor Fraser Beach alleges his access to the Multiple Listing Service, a database of homes available for sale, was shut down three days after he started his business in May of 2007.
Beach’s lawyer, Randy Pepper, denied the intent was to build a competing organization. He argued in court filings that what really worried the board was the presence of discounters who would "offer real estate brokerages at lower rates."
Pepper said Beach’s website, www.realestateplus.ca, since sold, operated like any other realty website offering listings to consumers.
"Quite frankly we were no different than other member websites," said Pepper affordable health insurance low income. He submitted into evidence other realty websites for comparison, including former TREB president Dorothy Mason’s. Mason led the board at the time.
The landmark case is being monitored by the Competition Bureau, because it could determine whether Toronto’s real estate board can block similar competitors. Beach is not asking for damages, but for his membership to be reinstated.
TREB lawyer Sasso argued the case had nothing to do with TREB’s stand on discount brokers who lower agent commissions, but simply whether Beach, a member, and his then partner, BNV Real Estate, a Bell Canada subsidiary, broke rules.
Under Bell’s business plan, it would invest $29 million to start a "lower-cost-offering" service that would charge consumers 25 per cent less than current commission rates charged by realtors. The telecom is not a part of the lawsuit.
Sasso sought to have one of Beach’s lawyers, Lawrence Dale, removed as a counsel for contempt of court, alleging Dale submitted data to the Competition Bureau in violation of restrictions. Brown will rule on the matter later.
The World Bank has cut its 2009 global growth forecast, saying the world economy will shrink by 2.9 percent and warning that a drop in investment in developing countries will increase poverty.
"The global recession has deepened," the Washington-based lender said in a report.
Global trade is expected to plunge by 9.7 percent this year, while total gross domestic product for high-income countries will contract by 4.2 percent, the bank said. It said economic growth in developing countries should slow to 1.2 percent — but excluding China and India, developing economies will contract by 1.6 percent.
The bank’s latest forecast is a sharp reduction from its March prediction of a 1 fast cash advance.7 percent global contraction, which it said then would be the worst on record.
Economic damage to developing countries "has been much deeper and broader than previous crises," warned the report.
The global economy should start to grow again late this year, but "the expected recovery is projected to be much less vigorous than normal," the report said.
I have enough. I hope you find you do, too, when you consider what’s really important in your life.
I’ve pondered the question of how much is enough after receiving a perceptive e-mail from a reader and copies of two thought-provoking books.
The e-mail, from a longtime reader in Wisconsin, embodies the philosophy guiding my own semi-retirement.
"Many of my 50-something friends are wasting some invaluable time that they’ve been given on Earth," this reader said. They are caught up in an "earning and spending cycle" (must keep working hard so they can keep buying things they don’t really need) while worrying they’ll need to save a lot of money to retire.
"I can’t believe the number of smart, talented friends I have who are not particularly happy doing what they are doing," the reader said. But they believe "they must continue so they can stop working at (fill-in-the-blank age) to play golf or sit by the pool."
I must agree. What a waste, doing something you don’t like so eventually you can stop and do … nothing?
Why not pursue your passions even if the pay is less? (This reader did, returning to school for a degree in a different field.) If you love what you do, you may never feel the need to totally retire, or at least won’t mind working a few more years. "Retirement," as this reader said, would be a time to work for joy and learn new things.
That’s what I did in 2000 when I quit my full-time job at age 55, even if half a dozen online calculators I checked estimated I was as much as $250,000 short of what I needed to retire.
And yet, I’ve done just fine. By phasing down my writing rather than stopping completely, I’ve remained active, earning income doing something I enjoy but without the stresses of a 24/7 newspaper job business card templates. I’ve found more time for family and friends, for hobbies and community. I’m taking music courses and volunteer as a chess teacher at two elementary schools, activities I enjoy immensely but had no time to do before.
Other things my wife, Georgina, and I find most gratifying — simple things such as daily walks on the beach — cost little or nothing. We are certain we have enough, not just enough money to live on, but enough time to do the things we like and enough balance in our lives.
BOOKS EXPLORE SUBJECT
That’s the point in the book "How Much is Enough? Making Financial Decisions that Create Wealth" by Arun Abey and Andrew Ford. The question "how much is enough?" is not simply about money but about "how much is enough to balance all areas of your life to achieve fulfillment," the authors say.
About the book, first published in Australia, "I was a bit skeptical, as I’m not a big fan of ‘touchy-feely’ planning," said Harold Evensky, a respected certified financial planner in Coral Gables, Fla., who sent me a copy. "Surprise! I thought it was terrific." Evensky liked it so much he wrote the foreword for the American edition.
Another worthwhile book is "The Secret Language of Money: How To Make Smarter Financial Decisions and Live a Richer Life" by David Krueger. Krueger, a clinical psychiatrist and business coach, wisely advises that money "must be balanced with family, work, health, friendships, leisure, making a difference in your community, and taking care of yourself."
U.K. families unaffected by job losses have enjoyed a 25 percent increase in spending money in the past year after mortgage costs and energy bills fell, Ernst & Young said.
The disposable income of the average household, assuming no change in employment status, rose by 200 pounds ($327) a month, the business advisory firm said in a report today. Homeowners benefited after the Bank of England cut the key rate to a record low of 0.5 percent, curbing mortgage costs. Gasoline, gas and electricity bills also fell.
“Even though we’re still in recession, many U.K. householders who have not been hit by unemployment have experienced a dramatic upturn in their monthly budgets over the last year,” Jason Gordon, retail director at Ernst & Young, said in the statement.
Rising unemployment and the worst recession in a generation will probably encourage consumers to pay back debt than spend their extra wealth in the shops, Ernst & Young said. U.K. retail sales unexpectedly dropped in May for the first time in three months, the Office for National Statistics said today.
Waitrose Ltd no teletrack payday loans., the U.K. supermarket chain owned by John Lewis Partnership Plc, still said today it expects revenue to rise faster than the average increase in food sales in Britain this year as the company cuts prices.
Spending Money
The average household has 1,075 pounds to spend every month after paying bills, Ernst & Young said. That amounts to 27 percent of gross income, compared with 22 percent last year.
Weaker home values, which the Bank of England estimates have declined about 20 percent, may still have eroded households’ overall wealth, the report showed.
A surge in oil prices may lift utility bills in the months ahead. Brent crude oil futures traded at $71.66 a barrel today, almost double the low of $36.20 reached on Dec. 24.
Unemployment rose to the highest since 1996 in the quarter through April and the Confederation of British Industry predicted this week that as many as 3 million consumers will be without work by the middle of 2010.
Microsoft Corp’s Bing search engine won more market share from rivals last week, according to new industry data released on Wednesday, but still trails Google Inc and Yahoo Inc.
Challenging market leader Google — which in turn is looking to break into Microsoft’s core software market — is a long-term project, said Microsoft chief executive Steve Ballmer.
"We have had some very good initial response," Ballmer said at a conference in Detroit. "I don’t want to over-set expectations. We are going to have to be tenacious and keep up the pace of innovation over a long period of time."
Microsoft (MSFT, Fortune 500) grabbed 12.1% of U.S. Internet searches for the work week June 8-12, according to data released by industry tracker comScore earlier on Wednesday.
That is up from 11.3% in the June 1-5 period — the week in which Bing was launched — and up from 9.1% the week before that.
For comparison, Google (GOOG, Fortune 500) got 65% of U.S. searches in May, the last full month for which figures are available, followed by Yahoo (YHOO, Fortune 500) with 20.1% and Microsoft with 8%.
Analysts and investors are keenly awaiting data for all of June to see if Microsoft can hold onto early gains.
Ballmer acknowledged the tough task of beating Google, which he referred to as "a big dog competitor".
The world’s largest software company has long been determined to play a major role in the lucrative Web search market after watching upstart Google take a stranglehold.
At the same time, Google is looking to take advantage of its popularity to launch software that competes with Microsoft’s, which has created a new source of tension between the two companies cash loans.
Microsoft ratcheted up that tension on Wednesday by claiming that Google’s new Apps Sync for Microsoft Outlook software — which allows users to share data between their Outlook e-mail and Google’s online offerings — disables a key function in Outlook.
"The installation of the Google Apps Sync plugin disables Outlook’s ability to search any and all of your Outlook data," Outlook product manager Dev Balasubramanian wrote on a Microsoft blog. "It is also important to note that uninstalling the plugin may not fix the issue."
The problem, though relatively unimportant to users, represents a crucial struggle between Microsoft and Google for e-mail customers.
Google’s new product allows business users to continue using Outlook for email and other tasks, but the back-end functionality and data storage moves to Google, instead of residing on a company’s internal servers running Microsoft software.
Google acknowledged the Outlook problem identified by Microsoft, and several other issues where its software does not mesh well with others.
"We’re working with Microsoft and other partners to help fix these issues and support additional Outlook features like multiple calendars," said Google Apps senior product manager Chris Vander Mey in a blog post. "We’ll keep you posted on our progress."
Microsoft shares closed up just less than 1% at $23.68, while Google’s fell 0.2% to $415.16, both on Nasdaq.
OTTAWA–The federal government’s projected budget deficit this year ballooned because of the unexpectedly fierce economic storm that hit Canada in early 2009, says Finance Minister Jim Flaherty.
"The recession in the first half of this year has been deeper and broader than was anticipated by the private sector economists and (than) was anticipated by us," Flaherty told the House of Commons finance committee today during a discussion of the Conservatives’ economic strategy.
Between January and June, Flaherty’s predicted budget shortfall for this year rose to $50.2 billion from $33.7 billion. But he told the committee that the larger budget deficit was the result of necessary pro-growth spending during the economic downturn.
Flaherty noted that the government is supplying $9 billion in loans to bail out the auto sector and an additional $2.8 billion for benefits to the unemployed in 2009-10.
Liberal MP John McKay told Flaherty the issue is not whether the spending was worthwhile but "the enormity of your error" in projecting Ottawa’s fiscal position creditscores. McKay said the size of the deficit overrun "completely erodes" the finance minister’s credibility.
Flaherty defended the government by pointing out that the Liberals have been demanding additional spending, which would make the deficit even larger. "So the hypocrisy is breathtaking," he said in reference to McKay’s point.
Flaherty also insisted that, because a lot of this year’s spending is a one-time payment, the government will still be able to end its deficit-financing in 2013 as planned. But the Liberals said that, given the size of the current $50.2 billion deficit, it’s unrealistic to think Ottawa can return to budget surpluses in only four years.
Charter Communications Inc.’s plan to reorganize in bankruptcy has "improper" legal releases for Paul Allen, the controlling chairman, and other company officers, said the U.S. Trustee, an arm of the Justice Department.
Diana Adams, acting U.S. Trustee, said in court documents filed Friday that the cable-TV provider’s reorganization plan shouldn’t be confirmed due to legal shields that protect officers and directors, including Allen, from lawsuits for violating state or federal law.
At a minimum, the plan shouldn’t release those parties from lawsuits brought by equity holders, the trustee said.
The "releasees appear to be acting in their own self-interest and seek to use those actions to justify enjoining equity holders, whose rights are extinguished under the plan," Adams wrote.
Under Charter’s proposed reorganization, secured claims will be reinstated and unsecured claims will be paid in full. Interest holders other than Allen, including common stockholders, will get nothing.
The legal releases say "holders of interest," including parties who signed a settlement with Charter, along with officers, directors and financial advisers will be released from lawsuits bad credit payday loans.
Also, U.S. Bankruptcy Judge James Peck in Manhattan has approved the "disclosure statement," or rough outline of how Charter intends to reorganize, and has said various objections, including one from by JPMorgan Chase & Co., will be considered at a confirmation hearing where Peck will be asked to approve or reject the plan.
Charter’s plan had already been amended last month to answer some concerns of the U.S. Trustee, an arm of the Justice Department that oversees bankruptcies.
JPMorgan and other creditors have argued that Charter’s debt can’t be reinstated, or replaced on existing terms, because Allen, Microsoft co-founder and the controlling chairman, cedes control of the company through its reorganization plan.
Town and Country-based Charter filed for bankruptcy protection in late March.
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