Ford

Ford announced that it will have 14 percent less profits in 2005 then expected. The article states higher costs of raw materials amid other causes. With competition like Toyota and other Asian car makers offering high quality and more product variation, some think that Ford will go out of business all together. What do you think?

General Motors

An article on General Motors states that GM has stopped advertizing with the LA Times. Considering what we have been learning about oligopolies and how they work, it will be interesting to see how competing car companies will react. Do you think they will cut back on advertizing?

The Cost of a Credit Score.

The article Borrowers Unclear About Credit Scores explains the importance of a consumer’s credit score. The credit score is used as the indicator of consumer-lending risk, but most people don’t know much about them. There are three main credit bureaus: Experian, Equifax, and TransUnion; each with their own calculations for rating a credit score. The factors used in a credit score are payment history (35%), debt to available credit ratio (30%), length of credit history (15%), and applying for new credit (10%). A score generally ranges from 300 to 850 and the number matters. The article said the difference between a 580 and a 720 FICO score could mean a three-percentage-point difference in a mortgage rate, according to Fair Isaac. With a $100,000 30-year fixed mortgage, the higher interest rate would result in additional interest payments of $72,000. Check your credit report at least once a year, it is worth it.

Mortgage rate have fallen

Mortgage rates have fallen for the last seven consecutive weeks. Analysts stated that the reason for this decline was because there wasn’t as great of an increase in job creation as was expected. Since there is less job creation there is less inflationary pressure on the economy. The article also stated that there would be an increase in mortgage rates in the future, but that it will be at a constant, steady rate. The article also went on to say that this steady increase will keep the real estate business able to still make strong sales in the future. Do any of these factors play into the increase sales in real estate market in Cedar? Cedars homes are selling like hotcakes right now. I guess a lot of Cedar sales have to do with Californians escaping. What do you think?

Blogging and Competetive Advantage

Recently an article on web blogs mentioned Mark Jen, a Google employee, who was fired for blogging. "The fired Google worker isn't the only blogger to land on the unemployment lines. Delta Air Lines, Microsoft and Friendster, the on-line social networking service, have all allegedly canned hired help for blogging. Countless other employers are taking steps to prevent loose-lipped workers from disclosing company information on the Internet." The controversy now is whether the trade secrets that make companies different should be protected or the employees' rights to free speech.

President Bush Praises Pope's Stance On Communism-- Ignores Stance On Capitalism

Since the Pope's death last week, I have been reading quite a bit in the press about his life and accomplishments. I just saw this article about President Bush recently praising the Pope's stance against communism throughout his lifetime. He did play a somewhat significant role in the dismantling of communism in Eastern Europe and Russia. It is interesting to note that while the Pope was dedicated to preaching about the evils of communism, he was equally vocal about the corruption of capitalism-- stating that communism and capitalism are "flipsides of the same coin". He often would make the plea to the United States to lower our standard of living and give our surplus to needier nations.

I respect the Pope's works, beliefs, and opinions; however, on this matter, I really couldn't disagree more. With communism, the people are oppressed, forced, and constrained (at least the way we've seen it established), but with capitalism, there is prosperity, progression, and competition in a free market. Naturally, as a business student, I would take this position, but I just wanted to raise the issue to see what others thought about the Pope's view on the relationship of these two very different economic systems.

Wal-Mart Going Upscale?

According to an article I found in the New York Times titled, Wal-Mart is Going Upscale. Well, at Least a Little, says that Wal-Mart is upgrading a lot of its merchandise, while trying to maintain the loyalty of its core customers. Claire Watts, Wal-Mart’s executive vice president for merchandising said that for their new strategy, they will never abandon their core customer, but that they do have 100 million-plus people in their doors weekly and they are trying to reach out. Ms. Watts was quoted as saying “We’ve upgraded some of our fabrics, our linens, our cottons, our silk blends in our sweaters – we’re using a lot of spandex – and we’ve concentrated more on details. At the same time, Ms. Watts said Wal-Mart’s prices for many of these items was still 20 to 30 percent less “than our core competitor.” Do you think Wal-Mart will lose some of their core customers by changing some of their strategy to keep up with Target and Bed Bath and Beyond? Or do you think the demand for their products will continue to grow

America and Sports

Sports have a rich history in our culture and are now a major economic driver in our nation. This article was pretty interesting about how sports help track the seasons of life. For example, to many, the return of baseball each year means the coming of spring and summer. Even deeper, Christopher Hodge Evans says, “It symbolizes hope… it’s the sense of starting over, but it’s also the sense of continuity with the past.” Do you feel like this when baseball season comes around? Some say that sports reflect evolution of a culture. Baseball reflects the era of the 1920s to the 1950s; it is a “rural, agrarian, traditional sport, which harkens back to the past.” Football is said to be “the sport of factories and the machine age,” with emphasis on brute force, skill, and glory (reflecting the 1960s and 1970s). “Basketball (which gained international popularity in the 1980s and 1990s) is the post industrial sport…the sport of offices…and the networked society, suggested Mandelbaum. With the money and time that is spent in regard to the sports world, I would hope that there are some deep, emotional ties to this huge industry.

Postal Service Proposes Rate Increase

The U.S. Postal Service is seeking to raise the price of stamps again. A first-class stamp, if approved, would go up to 39 cents. The move would also raise the price of postage for letters and packages 5.4 percent. The price for an overnight Express Mail package would cost $14.39 instead of the present mark of $13.65. Since 2002, the price of stamps has gone up three times. It’s seems like it is starting to take the pattern of gas prices. Maybe it will fluctuate soon as gas does also.

Pope's Death And World Gathering

Well, Vatican City has certainly been overwhelmingly packed the past week with millions and millions from all over the world. Since the death of Pope John Paul II, there has been a constant poor in of visitors wanting to catch a last glimpse, and/or be part of the funeral. Watching on television it was amazing to see how many people had gathered not only there, but in other places where he had visited and spent time. He has been praised by many of the world leaders and many came to see the funeral. President Bush along with the past two presidents of the U.S. paid their respects. I think something like this, though tragic for much of the world, was certainly something that brought many countries together in peace and harmony. With all that has been going on lately around the globe, I think it was certainly a good dampener and perhaps helped reunify some relationships.

The cost of a commute

In the article “The cost of a commute” Jeninne Lee shows public transportation fees are on an incredible rise. San Francisco with it 57 million dollar debt is proposing to increase the price of a trolley car ride from $3 to $5 dollars! While Chicago Transit faces a similar 55 million dollar budget gap and is looking to increase fares from $1.75 to $3.40. Now are these price jumps only based on the fact that the public transit is in debt? I argue not completely, the increasing price of gas has got to be an issue.

Is Inflation Back

We all believe that Alan Greenspan is increasing interest rates slowly bit by bit to insure that inflationary pressures are at a minimum. In the article “Is Inflation Back” by Daniel Kadlec posses a different concept on the interest rate hikes. He says that Greenspan my be increasing interest rates in part to have room to cut them again given the economy starts to deteriorate. I don’t agree with Mr. Kadlec but I am sure most don’t.

U.S. To Tighten the Borders

For quite sometime, taking a quick get-away from the country and returning has been fairly easy to do. An individual simply needs to show a driver’s license when re-entering the U.S. from Mexico, Canada, and the Caribbean. Federal officials have decided that this won’t be enough in a few years. By the year 2008, Americans will need passports to come home to the United States. This decision was made because of the latest effort to deter terrorists from entering the country. Is this a good decision? For one thing, it will certainly restrict a lot of people. Statistically, only about 20% of the nation’s population have passports. I think there will definitely be some stir over it. Canada has already announced that if this decision is put into effect, they might require passports of Americans.

Lego puts theme parks on the block

The article “Lego puts theme parks on the block” tells how the 4th largest toy company Lego turned in a 300 million dollar loss last year. The company now is downsizing and outsourcing departments in order to focus on the core (colored blocks). Included in the downsizing Lego is selling off its Lego land theme parks. Having visited the original Lego land park in Billund Denmark I noticed that the core attraction of the park was not the rides but the amazing Lego displays. Very different from the standard American theme parks where bigger and better rides are the source of attraction. Now that the Lego corporation is considering selling off their theme parks I fear they will become Americanized and no different than your average Six Flags.

Watch out Boeing here comes Airbus

Watch out Boeing here comes Airbus. The much awaited test flight of the worlds largest passenger plane is just around the corner. In the article “World’s largest passenger plane in ground tests” says that the double-decker Airbus A380 will make its first test flight later this month. This could be a major set back for our domestic aircraft manufacture Boeing. I only hope that Boeing has something up their sleeve to respond soon.

Unions and Communities Vs. Wal-Mart

Wal-Mart has become such a retail "powerhouse" lately that many unions and communities have taken opportunity to battle against it. We see on the news towns and groups that try to prevent the "monster" from entering into their humble towns. It's image has also been degraded because of the claims of worker discrimination and anti-union practices. But Wal-Mart, being set-off by lawsuits and claims of uncompetitive practices, tried to step up and repair this tarnished image on Tuesday. The media was invited and brought journalists to Rogers, Ark., Wal-Mart's headquarters, in a first-ever media event. Wal-Mart, whose annual sales of $256 billion (the equivalent of Austria's GDP), also planned to give reporters a rare peek at some of its operations. Being tipped off on it, a labor union and other groups used the event to publicize complaints and make their voices known in Wal-Mart's hometown of Bentonville in northwest Arkansas. What a battle.

Oil Prices Decreasing?

In the article "Greenspan: Market may cool energy prices" it talks about how Alan Greenspan gave a speech given to the National Petrochemical and Refiners Association, in hopes that it would strike conversation between consumers and producers. It looks like this is helping; a barrel of oil fell by 97 cents. I think prices will fall a little bit but stay high for awhile.

Lexmark

In this article Lexmark created and patented a micro chip technology on their printer cartridges that only allowed Lexmark to refill their empty toner cartridges. A small company called Static Control Components purchased figured out how to reverse engineer the product so they could refill the cartridges. Lexmark then sued for copyright infringement, but lost! What do you think? Should a company be able to reverse engineer a product to for their personal gain?

Oil Merger

Chevron Texaco is the US’s second largest gas and oil company and the fifth largest in the world. In a recent merger, Chevron Texaco purchased Unocal the US’s ninth largest gas and Oil Company. This is just one of many mergers and buyouts that Chevron Texaco has acquired in past months. With the price of oil at an all time high, many thought oil companies would be concentrating efforts and funds toward new explorations. What is on the horizon for the oil industries? If the largest companies gobble up the smaller ones will we be at the mercy of these large oil barons like Standard Oil in days gone by?

Getting Eaten Up

In today’s business environment companies are getting eaten up by each other all the time. In the 1980’s and 90’s, it was quite clear who you were purchasing a product from. A trend started in the late 90’s of larger companies purchasing smaller ones and keeping the merged companies name on the product. This has helped keep strong customer loyalty and market share of the product. One major company that has been absorbed into another while retaining its market identity is Keebler. Is it dishonest by the acquiring company to keep the old company name on a product when the company no longer exists?