The Agonist - Business

Keeper of Coke's secrets forced to sell $2bn stake

Wed, 23 Jul 2008 04:13:31 -0700

July 23

The Guardian - SunTrust, the bank which holds the secret formula for Coca-Cola in a vault in Atlanta, has been forced by the credit crunch to sell its $2bn stake in the soft drinks maker.

The Atlanta-based bank has held on to its Coca-Cola stake - regarded as its "family silver" - for almost 90 years, but decided to offload the 43.6m shares to bolster its capital position after mounting mortgage losses led to a 21% drop in second-quarter profits.

SunTrust said yesterday it had sold 10m Coke shares in June and donated 3.6m shares to its charitable trust. It has also set up a process to sell another 30m Coke shares over the next seven years.

The two companies have been tied together for more than 100 years, and SunTrust has held Coke shares since 1919, when its predecessor, Trust Co of Georgia, helped take the soft drinks maker public. It also has a copy of the secret formula used to make Coke.

Ford: About Five Years Too Late

Mon, 21 Jul 2008 22:11:52 -0700

Stupid, silly Ford. Seems they are ready to make a bet on smaller cars? Sure, want to make a bet the Giant's will beat the Patriots now that the Superbowl is over? Idiots:

The Ford Motor Company, which devoted itself for nearly 20 years to putting millions of Americans into big pickup trucks and sport-utility vehicles, is about to drastically alter its focus to building more small cars.

And to think I actually believed it when the younger Ford who was running the company a few years ago said that Ford was going to start focusing on smarter, more economical and efficient cars. Seriously, that was five years ago.

And don't give me the excuse that it takes time to design new models, re-engineer plants and all that crap. It's nonsense. Ford manufactures small cars in Brazil, Europe and I think even in Asia. I saw a lot full of small Fords just the other day riding the MRT out towards Boon-Lay. And yet, that's exactly the excuse Ford is offering:

And as part of the huge bet it is placing on the future direction of the troubled American auto industry, Ford will realign factories to manufacture more fuel-efficient engines and produce six of its next European car models for the United States market.

They were pig-headed because they believed the lies they told themselves about such good profits being sustainable. I've seen executives convince themselves their own lies were true before. And I'm sure it will happen again. I swear to God I could have run Ford better the last five years than they have and I'm just a DFH.

Commercial bankruptcies soar, reflecting widening economic woes

Sun, 20 Jul 2008 05:51:12 -0700

Tony Pugh | Washington | July 20

McClatchy - Driven by a sour economy and skittish consumers, U.S. business bankruptcies saw their sharpest quarterly rise in two years, jumping 17 percent in the second quarter of 2008, according to an analysis by McClatchy.

Commercial filings for the first half of 2008 are up 45 percent from last year, as the national climate for commerce continues to deteriorate amid rising energy and food costs, mounting job losses, tighter credit and a reticence among consumers to part with discretionary income.

From April through June, 15,471 U.S. businesses called it quits, according to data from Automated Access to Court Electronic Records, an Oklahoma City bankruptcy management and data company.

Swiss bankers trained to avoid detection

Fri, 18 Jul 2008 13:15:25 -0700

Greg McArthurs | Washington | July 18

Globe & Mail - Swiss bankers with financial giant UBS were trained how to detect and evade suspicion from law enforcement officials during overseas trips to recruit wealthy Canadian clients, a United States Senate subcommittee revealed yesterday.

According to the subcommittee, the training was all part of an intensive effort to target wealthy North Americans and help them evade taxes.

Facing mounting criticism over its conduct, the bank announced at yesterday's hearing that it is no longer providing offshore banking nor securities services to U.S. residents.

"I am here to make absolutely clear that UBS genuinely regrets any compliance failures that may have occurred," Mark Branson, chief financial officer of UBS Global Wealth Management and Business Banking, told the subcommittee.

Will a global trade treaty hurt more than it helps?

Fri, 18 Jul 2008 02:46:26 -0700

Laura MacInnis | Geneva | July 18

Reuters - Many poor countries fear they will lose jobs and revenue from a new global trade treaty that trade ministers will try to push towards conclusion next week.

This anticipated hardship is one of the main reasons a World Trade Organisation (WTO) accord on tariff and subsidy cuts -- in its seventh year of negotiation -- has proved so hard to clinch. Conventional wisdom dictates that increasing export opportunities can help poverty reduction by raising incomes in developing countries, whose farmers and manufacturers often struggle to sell their wares abroad.

But some economists believe that the Doha round deal under negotiation would open up borders too abruptly, flooding vulnerable markets with cheaper foreign goods and services, and make developing countries worse off.

"Many developing country negotiators are asking themselves if the emerging deal is better than no deal at all," said Tufts University economic researcher Timothy Wise, who co-authored a new study warning unfettered trade could harm poor farmers.

"It is not hard to understand why many developing countries are questioning the value of a Doha agreement," he added, estimating poorer governments will lose four times more in tariff revenue than they get from a trade-boosting deal.

Intel Accused of Bribery, Coercion in Europe

Fri, 18 Jul 2008 02:15:44 -0700

July 18

Deutsche Welle - US chip-maker Intel, already under scrutiny in Europe for alleged anti-competitive practices, faces new charges this week. European regulators say Intel used bribery and corruption to monopolize the European market.

The European Commission said that it had sent another so-called "statement of objections" to Intel alleging it has tried to exclude its leading competitor Advanced Micro Devices, Inc. (AMD) from the x86 central processing unit (CPU) market.

The letter, sent late Thursday, July 17, accused Intel of having offered discounts to a major European personal computer distributor to favor its product. Intel also allegedly paid a PC maker to delay marketing a model line using AMD chips. It also paid the same un-named PC maker to use Intel's own microprocessors over those of AMD.

Oil prices threaten Latin America's economic gains

Fri, 18 Jul 2008 01:48:28 -0700

Marla Dickerson | San Salvador | July 18

LA Times - Are exploding oil prices about to burn Latin America?

With the largest petroleum reserves outside the Middle East, the region has been on a roll in recent years. Record exports of crude and grain fueled economic growth not seen since the 1970s. The region's stock markets roared. Easier credit spawned a consumer class that snapped up homes and cars. About 26 million Latin Americans climbed out of poverty between 2002 and 2006, United Nations figures show.

But the same forces behind that prosperity are now, paradoxically, creating misery in the midst of bounty. Surging fuel prices have ignited inflation throughout the region, driving up the cost of food, whose prices were already on the upswing thanks in part to ravenous global demand for Latin America's farm products.

A gallon of gas now costs more than a typical day's wages in some countries in the region. Food prices have escalated an average of 15% over the last year, according to the U.N. Economic Commission for Latin America and the Caribbean. Prices of many staples have increased much more than that.

Also see: Soaring inflation undermines sustainability of Persian Gulf region

Rescue Sought for Fannie and Freddie

Sun, 13 Jul 2008 15:29:26 -0700

Stephen Labaton | Washington | July 14

NYT - Alarmed about the sharply eroding confidence in the nation’s two largest mortgage finance companies, the Bush administration will ask Congress to approve a rescue package that would give the government the authority to buy billions of dollars in stock in Fannie Mae and Freddie Mac and also lend to the companies to meet their short-term funding needs, people briefed about the plan said on Sunday.

The plan calls on Congress to give the government the authority over the next two years to buy an unspecified amount of stock in the two companies. Over the same period of time, it would permit the companies to have greater access to the Treasury, by expanding the credit line that each company has from the Treasury. Each company now has a $2.25 billion credit line, set nearly 40 years ago by Congress. At the time, Fannie had only about $15 billion in outstanding debt. It now has total debt of about $800 billion, while Freddie has about $740 billion.

GE looks to spin off light bulb business

Fri, 11 Jul 2008 09:54:29 -0700

AP & Frank Bentayou | July 10

AP - General Electric Co. said Thursday it is focusing on spinning off its entire consumer and industrial businesses, which include its iconic appliances and lighting products.

The announcement by the Fairfield, Conn.-based diversified conglomerate is the latest aggressive and symbolically significant move to shed slower growth businesses by one of the world's largest companies.

The unit has 50,000 of GE's 300,000 employees, sales of $13.3 billion and a profit of slightly more than $1 billion last year. GE Lighting invented the world's first incandescent light bulb in 1879.

Down and out in Las Vegas

Mon, 07 Jul 2008 03:57:38 -0700

Las Vegas | July 7

Independent -

The good-time capital of the US has hit a losing streak. Guy Adams reports on an epidemic of bankruptcies, foreclosures and mass lay-offs

The onset of global slowdown, high petrol prices, and a nation-wide housing slump is spelling disaster for a town that owes every aspect of its wealth – from that gaudy replica of the Eiffel Tower to those scale models of Venetian canals and the Pyramids of Egypt – to its ability to inspire free-spending hedonism.

With Americans cutting back on luxuries, and the price of transport rocketing, the so-called "Vegas vacation" is facing the axe. This week, as the nation celebrated Independence Day, major hotels were taking stock of a fall in all-important room occupancy rates from their usually impressive 95 per cent levels to nearer 80 per cent.

More worryingly, new figures showed gambling revenue has also dropped – a further 3 per cent this month – starting a price war between worried firms anxious to lure punters back. Hotel rooms, which last year averaged $130 each, now go for less than $100 (£50).

No tourist resort can afford to lose its buzz. Yet the slump now runs so deep it's starting to hurt even the town's Elvis impersonators, wedding chapels, and sex industry. When money's tight, the prospect of stuffing another $20 bill into a lap-dancer's gyrating stocking-top somehow doesn't seem quite so enticing.

GM May Sell New Mini-Cars to U. S. Buyers

Thu, 03 Jul 2008 08:50:45 -0700

Jeff Green | NY | July 3, 2008

Bloomberg - July 3 -- General Motors Corp., which popularized the 7,800-pound Hummer, may begin selling a mini-car more than a foot shorter than anything else it markets in the U. S. to win back buyers deterred by record fuel prices.

GM may bring the production version of the Chevrolet Beat to the U. S., people familiar with the plan said. The car, which would normally be reserved for markets such as Asia and Latin America, gets as much as 40 miles a gallon, a fuel efficiency topped in the U. S. only by hybrids.

The possible American introduction of the Beat would be one step in a fleet downsizing and shift away from fossil fuel-based vehicles that the people said is already under way at Detroit- based GM. Resigned to $4-a-gallon gasoline and stricter pollution rules, the largest U. S. automaker has recognized that its response must go beyond the mothballing of large truck plants, the people said.

Six Months Of Job Losses

Thu, 03 Jul 2008 05:52:42 -0700

I see there is lots of good news out of the Labor Department these days:

About 62,000 jobs disappeared in June, the government reported Thursday, marking the sixth consecutive month of decline, as businesses laid off workers amid the economic downturn.

Just imagine what the numbers will look like when they get revised. Does anyone really think an Obama or McCain Administration will address the ridiculous fudging of numbers? I certainly don't.

Signs of the times: hard facts from two business giants

Wed, 02 Jul 2008 00:53:18 -0700

Russell Lynch & Matt Dickinson, PA | July 2

The Independent - Two major announcements - from retail giant Marks & Spencer and Britian's biggest house builder Taylor Wimpey - raised fears today that the UK is heading for full-blown recession.

M&S has been bucking the downward trend, but warned today that consumer confidence "deteriorated markedly" in the first three months of its financial year.

And embattled housebuilder Taylor Wimpey today confirmed it was axing 900 jobs to help cope with a "significant downturn" in business.

Both saw their share prices fall, with M&S seeing an early 17pc drop and Taylor Wimpey plummeting about 50 per cent.

Starbucks Closing 600 Stores

Wed, 02 Jul 2008 00:17:05 -0700

It was only a matter of time until Americans got fed up paying $4 for a cup of joe. And it appears that time has now come:

Starbucks Corp. said Tuesday it will close 600 stores in the United States in the next year and cut back the number of new stores it had planned to open.

You know, I'm perfectly happy paying ninety cents for a cup of java at the local mom and pop slop shop. I don't need a triple-latte-soy-whip creme light mochachino. I just don't.

Business In Asia

Tue, 01 Jul 2008 00:21:45 -0700

I don't really have any great or significant observations to make today. Just a few minor ones.

Doing business in this part of Asia really isn't much different that doing business back home--well, India aside, which is a whole 'nuther story as they say.

Things happen pretty quickly here. Singapore is about business, a regional hub, with the harbour facilities being critical to the region. There is a good deal of finance and a lot of software companies are moving in as the government seems to make it easy for them to do so. Besides, Malaysia, Indonesia, Thailand and other nearby countries all have pretty much fully English IT staff.

As for food: man, this place is the food capital of Asia. Wow! I'm just loving it. And the portions are just the right size--not like back home. I never leave a place so full and bloated like I would in Austin.

I'm sure there will be more observations to come, but this place is a very, very English speaking friendly place. Quite different than I expected. But I'm not really sure what I expected anyway.