My Blog

Category: Business

  • Chicago Business Round-Up

    Cruising the local business section I found the following:

    Caterpillar Opening Facility in Mexico
    Peoria-based Caterpillar said Friday it is building a parts distribution center in Mexico that will employ up to 150 people.  …

    The 500,000-square-foot facility will be in San Luis Potosi, and it’s expected to be operational in mid-2013. The new plant will be under the company’s logistics unit, which has also opened distribution centers in California, Ohio, Washington, Texas and Dubai

    via Chicago Tribune.

    Strike One!

    Business in the Midwest Slips
    Business activity in the Midwest decreased slightly in March due to a decline in new orders and employment, according to a monthly survey of members of the Institute for Supply Management-Chicago.

    The Chicago Business Barometer fell to 62.2 in March from 64 in February. A reading above 50 indicates expansion in the regional economy.  …

    Businesses said they are being affected by high oil prices, which are increasing transportation costs and raising the price of commodities

    via Chicago Tribune.

    Strike Two!

    R.R. Donnelley Closing Mendota Plant
    R.R. Donnelley & Sons Co.will close its Mendota printing plant at the end of May in a move that will affect 207 employees.

    The pending closure will be devastating for the city, Mayor David Boelk said Thursday. Boelk said the company’s announcement caught him off guard, adding that he learned about the closing on Wednesday when an employee called him in tears.  …

    R.R. Donnelley is one of the largest employers in the city of 7,340 residents. As such, the closing will affect other businesses, including the local post office, which Boelk said was spared in the latest round of Postal Service closings because of the volume of mail generated by the plant. Boelk said he hopes to find a buyer for the plant that could rehire the workers.  …

    R.R. Donnelley has sought to adapt itself to an increasingly digital world in the last eight years. As part of that reorganization, it laid off 2,899 workers in 2011.

    via Chicago Tribune.

    Strike Three!!

  • Building a New Chicago

    I was skeptical of Rahm coming in as mayor.  But as time goes by I’m getting more and more impressed by his ability to take on the unions, manipulate the media, get things done, outmaneuver worthless alderman, and most importantly develop and articulate his vision for the city.  (It appears that) He gets it.   You can say a great number of things about Rahm Emanuel; but you can’t say that he doesn’t think big.

    There are several stories out this week about Rahm’s Building a New Chicago plan.

    Unveiling a plan for “Building a New Chicago,” Mayor Rahm Emanuel on Thursday promoted a package of infrastructure initiatives that included very little that was new — except for its $7 billion price tag and its ambitious framing as a mission comparable to the city’s rebuilding after the Great Chicago Fire.

    via Chicago Tribune.

    The Tribune’s piece quotes local hacks:

    “It was a State of the Union speech in Chicago.  I think it was a good blueprint for Chicago’s future.”
    — Alderman Richard Mell (33rd Ward)

    … and the not so hacky:

    “I think this speech was aimed toward Chicagoans in general, and aimed toward business, because actually, these types of pronouncements are out there to encourage businesses to say, ‘I’m thinking of coming to Chicago, I want to open a place in Chicago, I want to do business in or with Chicago.’  These are all speeches geared toward making us an attractive option in a very global economy.”
    — Alderman Patrick O’Conner (40th Ward)

    This is where the Sun-Times nails it:

    Mayor Rahm Emanuel on Thursday urged major airlines squeezed by skyrocketing fuel prices to come to the table a year early and negotiate a fourth new runway at O’Hare Airport as part of a $7.3 billion plan to rebuild Chicago’s infrastructure and create 30,000 jobs.

    via Chicago Sun-Times.

    O’Hare.

    It’s almost as an afterthought it mentions some of the other projects, the story’s nearly last paragraph:

    Other projects include: fixing 26 miles of CTA slow zones and renovating, repairing or rebuilding 100 CTA stations over the next ten years; building a new Green Line station at 22nd and Cermak; acquiring 180 acres of park land over five years and building 12 new parks, 20 new playgrounds, and eight artificial turf fields; building a new Malcolm X College and a new classroom building at Olive-Harvey College.

    Companies will come to Chicago because of O’Hare.  People will want to live here because of O’Hare.

    Rahm’s not wrong to make the comparisons to rebuilding after the Chicago Fire.  The Chicago Fire permitted the city to change the entire layout of the downtown area, build Grant Park, move the stockyards, and become a the Midwest rail transportation center for the country.  St. Louis could have easily bested Chicago due to it’s Mississippi River and centralized rail center location.  It was the Chicago Fire that really permitted Chicago to become what it was… not St. Louis.

    Airplanes are today’s rail cars.

    Miami International put together an interesting document which ranks airports for 2010:

    NATIONALLY

    • Total Passengers  –  O’Hare  is 2nd
    • International Passengers  –  O’Hare is 5th
    • Total Cargo  –  O’Hare is 5th
    • Total Freight  –  O’Hare is 5th
    • International Freight  –  O’Hare is 4th
    • Total Aircraft Movements  –  O’Hare is 2nd

    O’Hare is the lifeline we need to dig out of the hole we’ve (Daley’s) made for ourselves.  It’s right to prepare O’Hare for the next 50 years of service when we’re going to ask more of it.

    The plan’s not perfect.  But perfect if the enemy of good.

  • Spain – The New Greece (and we’re next)

    Spanish trade unions are holding a general strike across the country today to protest new labor reforms, and by all accounts it has been a largely peaceful protest.

    While for the most part conditions on the ground are relatively normal, photos from Madrid, Barcelona, and Pamplona indicated that some young protestors are escalating the angst, painting symbols supporting anarchy on walls, and causing small bouts of destruction.

    Such events are reminiscent of similar protests in Syntagma Square, Greece, where groups of youthful protestors turned riotous despite generally calm strikes.

    Two major points give us particular trepidation: the fact that these and similar protests closely resemble early protests in Greece a few years ago—when almost no one realistically considered the possibility of a Greek debt restructuring—and the sheer scale of Spanish youth unemployment.

    As in Greece, young people have been seen as responsible for escalating peaceful political protests to violent riots. Spain’s unemployment data suggest that protests there could eventually be much larger—nearly half of young people are already unemployed and they face a tough future and a shrinking social safety net amid economic contraction and austerity measures.

    via Business Insider.

    For sixty years liberals and academics have been telling us to be more like Europe.  This has been a mistake.

    The only way for our youth (especially minority youth) is to improve our schools, reduce government waste, and grow the private sector so our newly educated children can get jobs.  But our schools are current not providing the education needed in order to succeed.  That needs to change.

    In the meantime… we need the unions, religion, politicians, and community organizers to begin an honest dialog — toning down the language (e.g. denouncing the #KillZimmerman hashtag) and finding productive ways to work together instead of just yelling at each other.

  • Starbucks’ Bugs … Ya, Bugs!

    Bet’cha didn’t know:

    Starbucks is getting backlash from the vegan community after changing how it colors its Strawberry Frappuccino, reports Bruce Horovitz at USA Today.

    It’s using ground up cochineal beetles.

    Gross, right? Perhaps, but the type of food coloring is government-approved and widely used throughout the food industry.

    via Business Insider.

    To see a slide show of the bug to dye process click here.

    UPDATE:  Oh ya, forgot.  For more gross stuff that you eat everyday — like fish bladders, sand, human hair, and you won’t believe what beaver anal glands — click here.

  • Countries Move to Isolate the U.S.

    Are other countries planning for a U.S. demise?

    “I was in Australia earlier this month and there, as elsewhere on my recent travels, the consensus among the politicians I met (at least in private) was that Washington lacked the will for meaningful course correction, and that, therefore, the trick was to ensure that, when the behemoth goes over the cliff, you’re not dragged down with it. It is faintly surreal to be sitting in paneled offices lined by formal portraits listening to eminent persons who assume the collapse of the dominant global power is a fait accompli. . . . Greece’s total debt is a few rinky-dink billions, a rounding error in the average Obama budget. Only America is spending trillions. The 2011 budget deficit, for example, is about the size of the entire Russian economy. By 2010, the Obama administration was issuing about a hundred billion dollars of treasury bonds every month — or, to put it another way, Washington is dependent on the bond markets being willing to absorb an increase of U.S. debt equivalent to the GDP of Canada or India — every year. And those numbers don’t take into account the huge levels of personal debt run up by Americans. College-debt alone is over a trillion dollars, or the equivalent of the entire South Korean economy — tied up just in one small boutique niche market of debt which barely exists in most other developed nations.”

    Same page there’s this:

    I’m a Canadian, and you might be interested to know that the Harper government are working very hard (in the background) along the same lines as the Aussies. They are doing everything possible to diversify Canada’s export markets away from the US as fast as possible, for example the pipeline to move Alberta and Saskatchewan oil to world markets via the sea, not to the US. Ditto aeroplanes, rail cars, fibre-optic electronics, robotics, lumber, and a wide range of other products.

    The quiet back-room planning is driven by the alarming extent to which the Obama administration has already deeply damaged the US economy (compared to Canada) with its policies, actions, and insane deficits. The Harper government are now moving to shut down US environmentalist activity in Canada — “We’re not going to be your National Park.” says the PM — and are already developping scenarios for maximum-possible disconnect from the States in the event Obama and his crew are returned to power in the coming elections.

    via Instapundit.

    Hummm… not good.  Not good.

  • U2’s Bono on Band’s Tax Dodging

    U2 singer Bono is known for his antipoverty activism, which includes calls on most world governments to spend more on foreign aid. Yet when it comes to the finances of Bono’s own company, he’s apparently a bit more of a Scrooge. Moreover, he’s loath to admit it, as an interview with author Jason Mattera caught on tape showed. …

    Mattera: By dodging taxes on royalties are you raiding the poverty programs you purport to champion?

    Bono: No.

    Mattera: No? Don’t you want governments to be generous with other people’s money and not yours?

    Bono: I don’t have control over that…

    Mattera: How do you not have control over that? It’s your company. Are you not in charge of your own company?

    Bono: It’s not my company.

    Mattera: You have no say in what U2 does?

    Bono: Not particularly.

    Mattera: You don’t? You don’t have a say in what U2 does?

    Bono: No.

    Mattera: You’re the front man of your band, which has made you hundreds of millions of dollars … you have no idea why it moved from Ireland to Holland?

    Bono: I don’t have that answer.

    Mattera: It wasn’t take advantage of a much lower tax rate?

    Bono: I don’t have that answer.

    Mattera: You are seriously going to say that you don’t have that answer?

    Bono: I don’t have that answer.

    via TheBlaze.com.

    In the end, Bono’s a 1%-er.

    The Laffer Curve is a reality.  When taxes go up too much, revenue goes down.  The revenue just disappears… people move, stop working, go underground, etc.  Sad though that Bono’s such a hypocrite.

  • IMF Chief: Oil Supply Matters

    Yesterday I wrote about the latest meme to come out of the White House: that the president cannot control oil prices.  This is of course ridiculous.  Should the president choose a path that would increase supply — even if not immediately — the price of oil would go down.

    Everyone knows that while the oil market (like all markets) can be manipulated, in the end when supply outpaces demand prices go down; and when supplies are tight relative to demand prices go up.

    More proof:

    IMF chief Christine Lagarde warned Tuesday that crude oil prices may spike by up to 30 percent if Iranian supplies were disrupted, causing “serious consequences” for the global economy.

    The standoff between Iran, the world’s second-largest supplier of oil, and the West over the Islamic Republic’s nuclear program is seen as a flashpoint that could sharply increase world crude prices.

    “Clearly it would be a shock to economies if there was a major shortage of exports of oil out of Iran, it would certainly drive up prices for a period of time,” Lagarde told reporters in New Delhi, wrapping up a two-day visit.

    The International Monetary Fund (IMF) has calculated that an interruption in oil supplies from Iran could increase oil prices by 20 to 30 percent, said Lagarde, who arrived in India at the weekend from neighbouring China.

    via FRANCE 24.

  • Energy Sec. Wanted High Gas Prices

    “Somehow, we have to figure out how to boost the price of gasoline to the levels in Europe.”

    — Steven Chu, President Obama’s Secretary or Energy in 2008

    via POLITICO.

    Gas prices are exactly where Obama wants them.

    Billions invested in bogus and failing technologies.  It’s easy to beat up on oil companies, however they average high tax rates and lower margins than many other businesses.

    He ran as the anti-oil president and he is the anti-oil president.  Now it’s time to reap what you sow.  Obama owns the gas price issue.

  • JPMorgan Bests the Fed

    At 4:30 PM today, the Fed will announce stress test results.

    Whats interesting is that they were supposed to come out on Thursday at 4:30 PM.

    Why the change of schedule?

    Well, basically, JPMorgan came out with its announcement of dividends and buybacks around 3:00 PM.

    In that announcement they said they had passed the stress tests from the Fed, and that forced the Fed to move up their schedule.

    via Business Insider.

    This demonstrates the awesome power that JPMorgan has over the government.  It’s incredible.

    This is one of the “too big to fail” organizations that has only gotten bigger.

    It’s time to look into pulling this beast into pieces.

  • Mayor’s Friend Brings You the Speed Cameras

    When Rahm Emanuel was a first-time candidate for Congress, Greg Goldner was behind him, quietly marshaling the patronage troops that helped get him elected. When Emanuel ran for mayor, Goldner was there again, doling out campaign cash to elect Emanuel-friendly aldermen to City Council.

    And when the rookie mayor was looking for community support for his school reform agenda, there was Goldner, working behind the scenes with the ministers who backed Emanuel’s plan.

    Now, it turns out the longtime allies share another interest — the installation of automated speed cameras in Chicago.

    As consultant to the firm that already supplies Chicago its red-light cameras, Goldner is the architect of a nationwide campaign to promote his client’s expansion prospects. That client, Redflex Traffic Systems Inc., is well-positioned to make tens of millions of dollars from Emanuel’s controversial plan to convert many of the red-light cameras into automated speed cameras.

    via Chicago Tribune.

    The rest of the article is the standard, ‘A has nothing to do with B.’

    Uh huh.  This is still Chicago after all.