Archive for January 2, 2013

Sandy Relief Bill Passed, Millions Still Wondering Why it Took Three Months to Do

In early January there was a lot of stuff going on for the House of Representatives.  For whatever reason they were expected to solve the fiscal problems their terrible decisions and political stubbornness caused, so they were

Actual picture of somebody being too busy

focusing on passing something to get the American people off of their backs.  Sometime around the end of December the Senate passed a $60 billion relief package for victims of Hurricane/Superstorm Sandy, but since there was a lot of stuff going on the House didn’t really have time to look it over.

On January 2nd John “The Weirdest” Boehner took time to politely explain that he totally intended to pass the relief bill in Congress, but since the House was super busy he was going to wait until the 113th Congress began.  His decision would mean that the Senate would have to draft and pass an entirely new bill for the 113th Congress, but since America is usually a pretty laid back guy he knew that he wouldn’t care.

Unfortunately Boehner wasn’t aware that America wasn’t as chill as he used to be.  America had thrown away his beer can collection, got a haircut, and was expecting the rest of his friends on the Hill to shape up and follow suit.

Come on America you used to be cool

It would be pretty unfair to claim that the Republican Party was solely responsible for the Sandy gaffe.  Even though quite a few Republicans felt pretty “meh” about helping Sandy victims, Peter “I Hate Foreigners” King (R-NY) and famously Chris “The Adonis” Christie (R-NJ) were pretty disgusted at the lack of action from the Hill.

To be fair some members of the House probably thought that their lack of action wouldn’t be noticed.  After all the country was sort of freaking out over the fiscal cliff, Obama’s re-election, and pop music loving teenage mothers, so they probably safely assumed that nobody would really care.  Unfortunately the thousands of Sandy victims who were homeless, bankrupt, and generally destroyed by the storm weren’t distracted by pop culture noise because they were more concerned with survival.  It literally took about a day for Boehner to say that he changed his mind and that they were going to vote on it soon.

After a few weeks of wondering why relief was taking so long, Barack Obama signed the Sandy relief bill into law on January 29th.  New Jersey’s   minority leader Steve “The Whiniest Liberal” Sweeney proposed a measure to appoint accountants and other officials to monitor the dispersal of the Sandy relief funds to ensure that they’re being used properly.  As you can imagine people are upset about this, but that is a blog post/rant for another day.

 

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Detroit Homes Are Helping The Motor City’s Economic Woes

Either way it’s better than being America’s Crud Bucket

In geographic terms New Jersey may be America’s armpit, but when it comes to property value, safety, and human decency, Detroit takes the pit prize.  Out of all the American cities that experienced economic upheaval from the end of the country’s industrial days, Detroit has had it the worst.  They’re one of the poorest and most dangerous cities located in the Rust Belt, and Michigan’s State Treasurer Andy Dillon recently recommended that a financial review team be appointed to the city because of its massive economic problems.

Since the economic downturn in late 2008 people have heard very few encouraging stories about improvement in The Motor City.  We’ve heard about promising urban gardens and have seen many car commercials that have remixed Eminem’s “Lose Yourself” in order to highlight the city’s tough nature, but it wasn’t until recently that some people saw a chance for true economic revival in the city.

His palms are sweaty, knees weak, arms spaghetti
There’s vomit on his spaghetti already,
Mom’s spaghetti
He’s nervous, but on the surface he
looks calm spaghetti
To drop bombs, but he keeps on spaghetti

The city’s glut of foreclosed homes has made it an investment haven for people who are interested in purchasing inexpensive and foreclosed properties.  Tax-delinquent property auctions have attracted both American and international investors to the city to scoop up some extremely cheap real estate.  Some people have paid as little as $500 for foreclosed property in the city, and if current trends continue one of America’s most troublesome cities could have a chance for some true economic revival.

In 2012 Wayne County sold 10,461 of the 18,897Detroit properties that were up for public auction. More than half of the homes sold for peanuts, and many savvy buyers have been trying to snag as many properties as they can.  It’s important to mention that these cheap properties aren’t only going to rich foreign investors or even rich American buyers, many Detroit residents have used the cheap home sales to build their own real estate nest egg.  In the previous link a Detroit native named Jasmine McMorris bragged about the 332 Detroit homes she has purchased over the past two years.  McMorris and other Detroit residents have purchased and repaired homes for a few thousand dollars, and have been able to earn ridiculously high returns on their property investments.

Dead or alive, you’re revitalizing the city with me!

Usually a large scale home buying spree can hurt local economies, usually because of unscrupulous landlords who rent their new properties and refuse to properly maintain them.  So far the mass property buy outs in the city have been beneficial, home prices in Detroit have actually been slowly rising.  In November 2012 home prices were up 3.4% from the previous year, and since over ¼ of Detroit properties are currently vacant it’s very likely that property values could improve in some of the city’s worst areas.

High property values can’t rescue a city from economic destruction, but it certainly does help.  If you’re looking for some houses to flip check out Detroit, or any of the other cities where there is an alarming amount of houses up for tax-delinquent property auctions.

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Apple’s Perfect Closing Price Probably Didn’t Happen Because of a Conspiracy

On Friday January 18th Apple stocks closed out the week at a healthy $500 a share.  Some people see the unusually high amount as a sign that they invested in the right company, others see it as undeniable proof of a twisted conspiracy plot that Apple has been planning for months.

The notion of an Apple stock conspiracy is in no way new, people have been coming up with conspiracy theories about Apple since the company made its debut.  The reason people were riled up on Friday had to do with the suspiciously   perfect closing price.  It closed at $500 on the dot, not $499.99 or $500.0182487, but a neat little $500.  Their perfect price announcement also comes after Apple insiders have been discussing the relatively low demand for the latest iPhone.

Now we may not be able to complete debunk the rumor/theory that Steve Jobs and Steve Wozniak made a pact with Satan in order to ensure that their computers sell, but there is a simple explanation for their “impossibly perfect” closing price.

Friday the 18th was an option expiry day, that magical day when all of the calls and puts (guess/hunches about whether a certain stock will rise to the income heavens or crash and burn in bankruptcy hell) make it to put up or shut up time.  These puts and calls give owners the ability to make stock transactions on a certain date for a specific price (also known as the strike price because financial terms aren’t already difficult enough to learn).  When expiry day rolls around all of the puts and calls disappear to make way for new estimations, and on this day many investors go absolutely insane buying and selling.  The perfect $500 is probably the result of investors with high hopes, not an elaborate price fixing plan.

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Atari Declares Chapter 11 Bankruptcy, Millions of 20 and 30 Somethings Weep Bitter and Nostalgic Tears

Good night sweet prince, may pixelated and absurdly difficult angels fly thee to thy rest

After four decades in the video game industry Atari declared chapter 11 bankruptcy yesterday.  On Monday January 21st joysticks and comically large buttons fell silent as news spread of Atari’s business troubles.  This isn’t the first time Atari has run into financial trouble, despite being hit hard financially the company managed to survive the North American video game crash in the 80s.  Lately the company has been focusing on releasing their classic games and developing new games for smartphones and tablets, and so far their decision to focus on a new market has been a good one.

The bankruptcy news was surprising to many because the company had a relatively good year.  For 2012 their digital and licensing revenue grew and contributed to a sizable chunk of their overall earnings.  The bankruptcy filing had nothing to do with revenue, and everything to do with a bad business relationship.

Like it was previously stated Atari managed to survive the great video game crisis of the 1980s, but the company was a far cry from the industry giant it used to be.  Back then it was a bit easier to copy a game and pass it off as your own, so majority of popular Atari games were being bootlegged for other systems (look at the first picture, notice anything off?).  Even though almost every pizza place and hip dentist office had a Pacman arcade machine in their lobby, they were also losing a substantial share of the market.  The NES debuted in North America and people decided that they would rather control a plumber in a bizarre mushroom induced fantasy world than help a frog cross the street.

This business savvy frog clearly has somewhere important to be. Why won’t you help him?!

In 1984 the company was sold to Jack Tramiel and was renamed the Atari Corporation, and for the next decade or so they released one failed system after another.  Eventually the company tried to sue Nintendo for allegedly having a monopoly on the video game industry, and they promptly and hilariously lost the case.  In 1998 Hasbro took over the company and it became a part of their new toy line Hasbro Interactive, and soon Hasbro Interactive was taken over by Infogrames Entertainment.

The Atari we’ve come to know and love today is the adorable pixilated child of Infogrames Entertainment, Atari’s French parent company.  In 2008 Infogrames Entertainment changed its name to Atari S.A., and since then has been riding a roller coaster of dizzying success and nauseating failure.  In December Atari S.A. announced that its main investor BlueBay was pretty sick of their crap, and that the credit agreement it had with BlueBay would lapse at the end of the year.

Eventually it looked like the only way to save the company was to declare bankruptcy and hope for a better tomorrow.  Yesterday both Atari S.A. and Atari U.S. declared bankruptcyin their respective countries.  The company hopes to either sell all of its assets or have solid restricting plan in 3-6 months, and if all goes well we may see the company re-emerge in a year or so.  Until then you’ll have to rely on your cheap TV plug in systems for your 16-bit fix.

Or you could be awesome and buy your own arcade cabinet like a boss

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Boeing Stock Crashing Like Their 787s

America’s favorite multination aerospace and defense corporation is in trouble again.  This time it isn’t about union strikes or disgruntled pilots, apparently one of the main airplane manufacturers in the world has been having some trouble keeping their massive 787s from not bursting into flames or dramatically cracking apart.  The flames of Boeing hatred started on the 7th of this month when there was an electrical fire on board one of Japan’s Boeing manufacturers GS Yuasa.  It only took 9 days for the Federal Aviation Administration top stop all flights of the 787 Dreamliner, and boy oh boy has it made their stocks plummet.

Good luck next time Boeing, sorry it didn’t work out man :(

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Lance Armstrong: The Newest Blacklisted Celebrity Corporate Sponsorship

just kidding guys, i totally did all of the drugs ever

Lance Armstrong probably wants to let you know that he’s sorry for lying about his doping habits for a decade.  This past Monday Armstrong filmed an interview with Oprah where he admitted to doping and lying to millions of people.  Ever since Armstrong charmed the nation with Livestrong bracelets there have been people that have accused the cyclist of doping.  Trainers, journalists, and even Armstrong’s own teammates have made a variety of complaints about the Livestrong founder’s performance enhancing drug use, and each time Armstrong vehemently denied every accusation.

When the United States Anti-Doping Agency (USADA) accused Armstrong of both doping and the trafficking of drugs in June 2012 the cyclist celebrity could have handled it better.  He filed a lawsuit in Texas in hopes of barring the USADA from pursing its case against Armstrong and issuing any sanctions against him because he felt that the organization was violating his constitutional rights.

(Fun fact: The US constitution protects citizens from being called out on their blatant lies)

Up until that point the public didn’t seem to take the allegations seriously and rallied behind Armstrong, but that all changed on August 20th when the US District Judge Sam Sparks ruled in favor of the USADA.  Four days after the ruling the USADA stripped Armstrong of all competitive results from August 1, 1998 up until the present time.

The fallout from the USADA ruling was pretty typical for celebrity scandals, but it still dealt a heavy blow to Armstrong’s wallet.  RadioShack and Nike officially dropped Armstrong as their sponsor on October 12th, and on the same day Anheuseur-Busch made an announcement that they would not continue their relationship with Armstrong after 2012.  24 Hour Fitness, Trek Bicycle Corporation, Giro, and nearly every business that was endorsed or involved with Armstrong cut ties with him.  The organization people are most worried about taking a big financial blow from the scandal is Livestrong, and some worry that it may not ever be able to make the money it used to.

The interview aired on OWN yesterday, and today people are wondering what consequences the interview will have.   Armstrong wasn’t exactly beloved in America before his interview, but this interview made sure to crush any more support for the man who used to be the country’s go-to guy for inspirational stories. Others in the business world are using the interview as an opportunity to examine the troublesome side of corporate sponsorship.

There is one thing we can be sure of, Oprah’s struggling network OWN got a nice amount of publicity from the interview.  At least when we reflect on the impact Armstrong had on our society we can know that when he went down in roid fueled flames he helped out America’s #1 inspirational story.

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One Coin to Rule Them All

Actual picture of proposed coin

So far January has been loaded with business news stories, and we haven’t even reached the middle of the month yet.  The US was (sorta) saved from going over the fiscal cliff, AIG nuked the 1% of respect it still had from Americans after threatening to sue to US over their bailout, and people are coming up with some very interesting solutions to the debt crisis. There are plenty of ways we could lessen our nation’s debt, but some people would rather have the government create a onetime use currency to get rid of our debt problems.

Despite what Fox News and your angry uncle who is threatened by minorities succeeding said, the trillion dollar coin plan was not thought up by White House officials.  As of right now nobody in the Obama administration has endorsed it.  Like most major news stories today, the coin speculation came from a couple of bloggers (some think the idea solely came from everybody’s favorite Anglo-Saxon monster slayer), and some have even been discussing the possibility to create a coin to wipe away national debt since 2009.

The internet deserves some credit for the potential trillion dollar plan, but the government helped give them the basis of their idea.  The plan was inspired by a little known law that was created in the 90s that allows the US Treasury to make and issue platinum coins.  This law was mainly created for the Treasury to hawk more useless collector’s coins, but since the language of the law has just the right amount of vague it also gives the Treasury the power to mint coins that are worth an insane amount of money.

Who still has their 50 state quarters collection? Who even bothered to finish the collection before they realized that collecting them was a stupid idea?

In theory the plan could work well.  The Treasury mints the coin, the trillion dollars are deposited in the Federal Reserve, and after it gets moved into the Treasury’s accounts we can all get back to some national fiscal irresponsibility.  CBS News reporter Leigh Ann Caldwell was able to sum up how the hypothetical coin could actually avoid causing any economic catastrophes:

The coin would have no economic impact; it would no cause inflation

The reason this idea is so out of left field is because the Federal Reserve is the entity responsible for printing money, and every dollar the Fed prints must be backed by Treasury bonds and counted toward the U.S. debt. But the Treasury’s printing of a trillion dollar coin would not have any connection to the debt. Because it would sit in a vault and not be part of the money supply and not backed by bonds, it would not skew the economic system and, therefore, can’t cause inflation. But because this coin is sitting in a vault and the Treasury Department determines that it’s worth $1 trillion, it is.

Determining the economic impacts of a trillion dollar coin is important, but others are more worried about the political consequences it would have.  Republicans could accuse the president of wildly overstepping his bounds by bypassing Congress’ system of economic checks and balances.  Others think that minting the coin would only worsen the divide between Republicans and Democrats.

Since the “plan” was made known to the public through the media there has actually been some support for the coin.  Regardless of how much support the idea gets it looks unlikely that the trillion dollar coin will be made.  Our elected officials will try their best to find a compromise that helps the American people.  And when that utterly fails they’ll blame each other and most likely mint a coin that’s work a few million dollars to ensure that they get a raise for all of their hard work.

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The Business of Flirting

Shut up this is totally business news, don’t be so #*$& picky

Remember last week when you flipped out on your girlfriend/wife/ FWB because you thought they were flirting at the office?  They may have called you irrational and begged you to not cause a scene, but your anger was justified.

Last December Confused.com, a British insurance website that clearly has its mind in the gutter, surveyed 2,000 men and women about flirting in the office.  Female respondents were more likely to flirt, and 21% claimed that they flirted in hopes of getting preferential treatment.  Apparently 2012 was a red letter year for learning about office flirting statistics, since this past October a study co-authored by a University of California, Berkeley professor revealed that that some friendly and flirty chatting with men gets women a better deal in zero-sum negotiations.  The study had women greet used car salesmen with varying degrees of friendliness.  Women who were flirty on average had 20% more taken off the final asking price than others did.

There are different reasons why flirting has become common in the workplace.  The changing environment and social attitudes at work play a considerable role in the proliferation of office flirting.   People in the younger generations have made the average office a lot less formal, dress codes have become more flax, bosses have become more flexible, and the attitudes about what makes certain things “work appropriate” have drastically changed.  Co-workers also socialize with their peers a lot more outside of work because of social media, so many of their office peers may seem more like friends than their fellow workers.

This new attitude towards flirting in the workplace doesn’t mean that your office will be getting a make-out closet or condom dispense anytime soon.  Flirting has become more common, but common decency hasn’t changed.  The cute new temp may be smiling and twirling her hair a little more than usual, but that doesn’t mean that anything will happen beyond some PG interaction.

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Whiskey Sales Are Booming in Russia

The sweet full-bodied cause of, and solution to, all of life’s problems

In this world we may all have our differences, but there is one thing that brings people together regardless of race, orientation, or creed: the love of alcohol.  Every country has their own special drink or liquor that they can call their own.  The Japanese have their sake, the nation of Belgium has a group of enslaved monks that are forced to produce beer for the entire population, and in America we have our eye-watering, tough-drinking, bad-decision-making-helper whiskey.

One company had a simple vision: bringing whiskey to the people of Russia.  Beam Inc. is an American spirits company, and when they spun off from Fortune Brands last year they set their sights on making whiskey popular in mother Russia.  This dream may sound simple but in reality it’s anything but.  Russia’s liquor of choice is vodka, 45% of the world’s vodka goes in the cups and glasses of Russian citizens.  There’s also the issue of recent policy changes.  Russian President Vladimir Putin has banned the late-night sale of alcohol, outdoor drinking, and alcohol advertisements on TVs, radios, and billboards.

Despite the near impossible odds, Beam Inc. managed to make their dream a reality.  Imported whiskey consumption in the nation grew by 48%, and it’s all thanks to advertising.  Beam’s whiskey brands were advertised as premium high-quality alcohol in Russia, and people loved the image.  Luckily around the world you’ll always find status obsessed people who love making a statement by spending a ridiculous amount of money on things.  That’s why some people in China are willing to pay $44 for a beer people lovingly refer to as canned piss, and that’s why Beam was able to successfully sell their whiskey wares in the country.

Some of you may be wondering how it was possible for Beam to advertise their products in a country where advertising alcohol is banned.  Beam used a stealthy marketing technique.  They had beautiful women in upscale bars offering to buy Jack Daniel’s drinking men a drink made out of “true whiskey” (aka-whatever Beam says is true whiskey).  They held events in yacht clubs, country clubs, and golf courses where Beam whiskey was the main alcohol being served.  Having their alcohol as one of the main focuses at classy events helped them create their high-class image easily, and also helped keep Russian officials off their backs.  Russia’s alcohol crackdown mainly focused on low-end and low-cost spirits that was fueling some alcoholic’s habits.  When you pair that with the fact that whiskey sales only make up a very small portion of the kind of alcohol sold in the country, it was easy for Beam to fly under the radar.

Beam’s market share of US made whiskey in Russia increased by 25% last year, and soon they’re hoping to rival Jack Daniels.  The next time you’re enjoying a tumbler of whiskey, raise your glass (or lower your head in shame, it’s up to you) and celebrate the American spirit makers who are spreading the joy of whiskey around the world.

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All About the Fiscal Cliff

After months of nail biting and media hype the powers that be have finally decided on a deal to avert the dreaded fiscal cliff (AKA: The simple problem that was prolonged by stubbornness that the media blew up to make it seem mildly interesting).  Crowds of people were delighted when they finally saw the puffs of white smoke bellowing from the conclave room of the white house (if you don’t understand this joke you clearly don’t know much about His Holiness) when Obama made his announcement that a deal had been reached.   Want to know the details about this Hail-Mary 11th hour miracle?  There are a few key things:

Nobody “Won”,But Republicans Lost Worse

As we all know, in politics it’s all about winning and making sure that the other side doesn’t get anything that they want.  Republicans were extremely unhappy with the way things went down.  Those famous Bush-era income tax rates that the democrats wanted to abolish will be permanently extended for all tax payers with an income up to $400,000, and any tax cuts that apply to an income above the level will expire.  The capital gains and dividend tax rates for high-income households will increase by 5%.  Limitations will be made on how much people making over $250,000 can take in itemized deductions and exemptions.  The 2 million long-term unemployed citizens can breathe easy for at least another year because of a federal extension of unemployment benefits.  The scheduled 27% cut in Medicare reimbursement was prevented.  On top of it all spending was barely cut, the ratio of revenue to spending cuts in the deal is a whopping 41-1.

Democrats Aren’t Too Happy Either

The republicans may not have gotten the deal they wanted, but democrats aren’t exactly happy either.  Important stimulus changes and measures were cut, and the lack of a payroll tax cut extension could cost our country 500,000 jobs this year alone.  Obama also broke his promise to not go above the $250,000 threshold for higher taxes, it was raised by $200,000.  The real brass ring for democrats, the estate tax, wasn’t grabbed.  The tax will only go up 40%, 5 percentage points short of their initial goal and 15 percentage points below the Clinton-era level.   When all was said and done around a quarter of the $800 billion in revenue Obama lauded was lost.

There Are Still Some Unanswered Questions

Do you want to know if lawmakers will raise the country’s debt ceiling?  Curious about what cuts will have to made in spending to avoid another “cliff” deadline?  What about actual reform over taxes and corporate entitlement?  Well that’s too bad since the lawmakers are wondering the same thing, which is pretty awful since they don’t have much time to find answers to those questions.

On a scale of 1-10, the fiscal cliff deal is a solid “meh”.  If this is a sign of things to come, you can expect more confusion and changes in the first quarter of the year when lawmakers will be debating over the issues they failed to solve during the cliff crisis.

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