My Blog

Category: Business

  • Jim Rogers: Worry About 2013, Panic About 2014

    If you don’t know Jim Rogers you should.  I first heard about him maybe 15 or so years ago.  I was riding my Harley around and someone gave me Jim’s book, Investment Biker.  It’s a great read and for several months I wanted to grow-up to be Jim Rogers.

    Also interesting, from Wikipedia:

    In December 2007, Rogers sold his mansion in New York City for about 16 million USD and moved to Singapore. Rogers claimed that he moved because now is a ground-breaking time for investment potential in Asian markets. Rogers’s first daughter is now being tutored in Mandarin to prepare her for the future.

    He is quoted as saying: “If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia.”

    The man is prescient.  So if he’s got something to say, we should be listening.  There’s a few new articles sharing with us what he has to say:

    Experts have been saying that 2013 is the year to worry about, not 2012. Jim Rogers agrees.  The commodities guru was on CNBC’s The Kudlow Report last night saying again that 2012 will see money pumped into global markets because it is a year choc-a-bloc with elections.

    Rogers said “This year’s fine. Worry about 2013.  Be panicked about 2014.  This year, a lot of good news is coming out.” Speaking of the U.S. economy specifically, he said the Federal Reserve’s balance sheet is bloated referencing M2, a measure of money supply. He also added that President Obama is spending a huge amount of money ahead of the elections:

    via Business Insider.

    Same series, different story:

    At what level do you think oil prices will break the back of the American recovery?

    We are going to have a slowdown. Such is the staggering debt that America has, it has caused more and more of a drag on our economy. I would also point out to you that every four to six years we’ve had an economic slowdown in the U.S., since the beginning of time, so by 2012, 2013, 2014, we are well overdue for an economic slowdown for whatever reason. Whether it’s caused by high oil or what, we’re going to have a slowdown in the foreseeable future.

    How do you see oil prices impacting consumers in emerging markets, especially in Asia, when many of them are struggling to rein in inflation and drive growth?

    Everybody is paying higher prices for oil and that obviously impacts consumption everywhere and its not just oil, its food and everything else that’s going up. There’s inflation everywhere, the U.S. lies about it, I mean the U.S. government lies about inflation but there’s inflation everywhere. I mean I don’t know if you go shopping, but if you do, you know prices are up. The government says they’re not, I don’t know where they shop. Everybody else’s prices are up.

    via Business Insider.

    Indeed.  Boxes of food are getting smaller but the pricing has gone up.  Everything at the store is more expensive with the possible exception of electronics.  The U.S. Government’s removal of energy costs from the inflation index was a telling sign that they simply don’t want to give the folks the real bad news.  They’d rather stick their heads in the sand and pretend everything is ok.

  • You’d Be A Fool To Hold Anything But Cash Now

    David Stockman was Reagan’s budget director and quit because he thought there was too much deficit spending.  Then he went to Blackstone and really learned the pro’s and con’s of using debt to make things happen.

    Q: How do investors protect themselves? What about the stock market?

    A: I wouldn’t touch the stock market with a 100-foot pole. It’s a dangerous place. It’s not safe for men, women or children.

    Q: Do you own any shares?

    A: No.

    Q: But the stock market is trading cheap by some measures. It’s valued at 12.5 times expected earnings this year. The typical multiple is 15 times.

    A: The typical multiple is based on a historic period when the economy could grow at a standard rate. The idea that you can capitalize this market at a rate that was safe to capitalize it in 1990 or 1970 or 1955 is a large mistake. It’s a Wall Street sales pitch.

    Q: Are you in short-term Treasurys?

    A: I’m just in short-term, yeah. Call it cash. I have some gold. I’m not going to take any risk.

    via Business Insider.

    The whole article is worth reading.  Amazing stuff.

    Another little tid-bit I can’t help sharing:

    Q: But the unemployment rate is falling and companies in the Standard & Poor’s 500 are making more money than ever.

    A: That’s very short-term. Look at the data that really counts. The 131.7 million (jobs in November) was first achieved in February 2000. That number has gone nowhere for 12 years.

    Another measure is the rate of investment in new plant and equipment. There is no sustained net investment in our economy. The rate of growth since 2000 (in what the Commerce Department calls non-residential fixed investment) has been 0.8 percent — hardly measurable. (Non-residential fixed investment is the money put into office buildings, factories, software and other equipment.)

    We’re stalled, stuck.

    You’ve been warned.

  • High Gas Prices Raise Airline Ticket Costs

    “[R]ising jet fuel costs put significant cost pressure on the airline industry,” Steve Lott, vice present of communications for Airlines for America told CBSDC. “Regarding fuel, it was the airline industry’s largest expense in 2011, representing 35 percent of total costs. In 2011, the price of jet fuel reached a record high of $3.00 per gallon for the year.  …

    “As with any business, if [an airline] pays more for fuel and operational costs, they need to pass that cost on to the consumer,” she told CBSDC. “There have been [similar] effects in the past.”

    via CBS DC.

    The article cites way that airlines try to reduce the impact of rising fuel prices, include “single engine taxi” which is just as it sounds.  One issue with this practice is that jet engines are really designed to run “at operating temperature” and not take to the air immediately upon start-up.  Naturally the airlines’ practices are pretty safe, but I would suggest this particular solution is less than ideal.

  • GM (Temporarily) Laying off 1300 Due to Low Volt Sales

    General Motors Co. announced the temporary suspension of Chevrolet Volt production and the layoffs of 1300 employees, as the company is cutting Volt manufacturing to meet lower-than-expected demand for the electric cars.

    “Even with sales up in February over January, we are still seeking to align our production with demand,” GM spokesman Chris Lee said. The car company had hoped to sell 45,000 Chevy Volts in America this year, according to the Detrot News, but has only sold about 1,626 over the first two months of 2012.

    “GM blamed the lack of sales in January on “exaggerated” media reports and the federal government’s investigation into Volt batteries catching fire, which officially began in November and ended Jan. 21,” the Ann Arbor (Mich.) News reported.

    The laid-off employees will be rehired April 23rd, when GM resumes production of the Volt.

    via Washington Examiner.

    I kinda think the headline should be, “People don’t want a car that starts on fire; Media to blame.”

    This is the kind of story that would only appear in a country where the government ran the auto company… oh, wait….

  • Businesses Get the Old Yes No on the G-8/NATO Summits

    Well which is it?

    Mayor Rahm Emanuel was asked Thursday whether businesses located within the inner-most security perimeter will have a process to recover lost profits incurred during the May 19-21 events at McCormick Place.

    “The [NATO and G-8] Host Committee is working on it. They’ll have a process for that,” he answered.   …

    Later, after some reflection:

    His answers to the questions, once reported online Thursday, set off a flurry of denials. A spokeswoman issued a statement saying: “We have no plans to reimburse businesses – the city is open for business.”

    When Jennifer Martinez, a spokeswoman for the NATO and G-8 Host Committee, was asked about compensation, she said: “The plan is for all businesses to be open. We do not anticipate businesses being closed. We will not reimburse businesses that decide to close on their own.”

    via Chicago Sun-Times.

    Oh, I see.  I guess they didn’t want businesses closing to protect themselves and their employees from what might be 50,000 nutty protesters.  I mean, other businesses are going to be doing just that:

    Already, DePaul University has decided to close its Loop campus on the day before and the day after the summits and deny access to classrooms, labs, the cafeteria and offices in the Loop campus over a four-day period.

    That seems a bit extreme for a private university.  If there’s one thing the protesters understand it’s education.  They want more of it for free.  So why bother a university?  Maybe DePaul knows something they’re not telling.

    The Federal Reserve Bank of Chicago has said it has “extensive contingency plans” that would allow its employees to “work from home” or from an “off-site location” in the event that demonstrations turn ugly during the summits.

    The Federal Reserve Bank of Chicago is an old building that has few doors and no windows.  It has it’s own very intense security barriers between the street and the building itself and 24 hour armed guards in the adjacent alley.  It is a fortress.  And yet this place is making plans for employees to work from home or from an off-site location. If this place ain’t safe what chance does the rest of the city have?

    And the Chicago Sun-Times reported earlier this week that the civil courtrooms at the Daley Center … could be closed down for security reasons in the days surrounding the unprecedented gathering of world leaders.

    Earlier this month, United Airlines employees worried about how they will get to Willis Tower during the summits questioned Emanuel during a roundtable about the potentially $65 million event expected to turn the world spotlight on Chicago.

    So it’s safe to say that a lot of people appear to have some very reasonable concerns.  It’s not a much ado about nothing situation.

    The mayor played down the inconvenience by describing the summits as a “weekend” event, conveniently ignoring the fact that protesters and world leaders are likely to arrive days before the meetings begin.

    But, what was it that the protesters were saying again?  Oh ya…

    On May 1, 50,000 people from all over the world will flock to Chicago, set up tents, kitchens, peaceful barricades and #OCCUPYCHICAGO for a month.

    via AdBusters.

    Note to Rahm:  It’s not the Heads of State breaking windows, blocking traffic, and starting squad cars on fire that people worry about.  It the protesters.  And they plan to be here for a month.

     

  • Workers Occupy Goose Island Plant

    A group of about 65 workers who occupied a Goose Island window factory in 2008 have once again locked themselves inside the plant in a desperate move to save their jobs.

    California-based Serious Energy said Thursday it is closing the plant’s doors and consolidating operations in Colorado and Pennsylvania.

    via Chicago Tribune.

    This is not good on so many levels.  Jobs leaving, union occupying, government failing… etc.

    “Ongoing economic challenges in construction and building products, collapse in demand for window products, difficulty in obtaining favorable lease terms, high leasing and utility costs and taxes, and a range of other factors unrelated to labor costs, have compelled Serious to cease production at the Chicago facility,” the company said in a statement.

    Isn’t this just a nice way of saying, ‘We can no longer afford to continue to operate this plant in Chicago where it’s incredibility expensive to due business’?

    If a company making windows can’t survive in Chicago then what kind of manufacturing jobs can we sustain here?

  • It’s Not All Bad

    It’s important that every once in awhile we remind ourselves that aside from all the corruption, the parking tickets, the traffic, and the weather (generally but what happened to winter this year?) and the massive debt that the Machine has thrust upon us and our children that Chicago totally rocks for business.

    [LevelUp founder Seth] Priebatsch said he was attracted to Chicago because of its size and importance, as well as its active startup community. The company, which has about 120 employees, has opened an office in Chicago with seven people.

    via Chicago Tribune.

    and

    PNC Bank is opening three new branches in Chicago, bringing 200 new jobs to the city by the end of 2013, Mayor Rahm Emanuel

    The positions will be located at the three new branches and at PNC Centre, the company’s regional headquarters at One North Franklin.

    via Chicago Tribune.

  • American And Canadian Homeowners

    We’re alike and yet we’re different.  What I would like to see is this information from 2003 and 2007.

    The Difference Between American And Canadian Homeowners.

  • New Ward Map Confusing? Try Getting a Garbage Can

    Excellent points raised by Greg Hinz over at Crain’s.

    Ask folks at City Hall whether new or old wards apply for purposes of voting, zoning and distribution of services and the like and, after a couple of shrugs, you’ll get a multipart answer fit for an SAT test.  …

    “We’re dealing with the old aldermen,” another official says.  But, just to be safe, the city also is consulting with the new aldermen, too, in the many cases in which blocks or whole neighborhoods are being moved around.  Suffice it to say “there’s at least two aldermen involved in every issue,” that source adds.  “It’s a fairly complicated issue.”  …
    Officially, the new map goes into effect upon publication and approval of the official Journal of City Council proceedings….  But the lines on the new map are so contorted to protect incumbents and racial and ethnic minorities that doing so immediately is all but impossible.  For instance, the council majority and Mayor Rahm Emanuel pretty much hate Ald. Bob Fioretti, 2nd, a rabble-rousing independent sort with a bit of hot dog in him.  So they carved up and parceled out his current ward on the Near South and Near West sides and created a brand-new ward two miles north—not a square inch of which is in Mr. Fioretti’s current ward.  As a result, a 3½-mile stretch of Roosevelt Road that’s now pretty much within the old 2nd Ward has been divided among the new 3rd, 4th, 11th, 25th, 27th and 28th wards.  Man, I’m glad I’m not the executive director of the Roosevelt Road Improvement Association.

    via Crain’s Chicago Business.

    I have no idea how this can be permitted to stand.

  • Athens Burns

    [B]uildings burned across central Athens and violence spread around the country.

    Cinemas, cafes, shops and banks were set ablaze in central Athens as black-masked protesters fought riot police outside parliament.

    State television reported the violence spread to the tourist islands of Corfu and Crete, the northern city of Thessaloniki and towns in central Greece. Shops were looted in the capital where police said 34 buildings were ablaze.

    via Reuters.

    Does anyone think this cannot, will not, happen here?