Archive | April 11, 2013

Less People File For Unemployment

The number of people filing for unemployment has recently decreased by 42,000 from the expected 360,000. The spring season usually creates an increase of people filing for unemployment benefits due to vacation periods such as spring break for those who work in a field related to education. This is good news because it makes up for the bad news that was reported a few days ago about the slowing down in job additions.

This report is very beneficial especially since the Fed and many investors were relying on further information about the job market to take action. The Fed can now continue to consider cutting back on their buying of mortgage securities and investors can now rebuild their confidence and continue to invest their money. This decrease in people filing for unemployment is a good sign that our economy is starting to heal. Not only does this news have economic benefits, but it is also beneficial to the government since they no longer have to give out as much money.

Written by: Jessica Ho
Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324695104578416363323808272.html?KEYWORDS=US+jobless+claims+drop+by

Hot Demand For Canadian Currency

Canada, once seen as a sidelined country that was not a topical discussion in its role in top moving markets, has now reached a new height of spotlight. The Canadian Currency has recently reached a new 7 week high streak. The strengthening of the currency may be due to a stronger reported housing price, growing 0.2 percent from reports and 0.1 percent from last months price. As many has seen, most of the negative news has already been exploited; however, good news are just beginning to emerge. Previous forecast of negative news such as oil pricing, has made a turn for a more favorable affect on the Canadian economy. Furthermore, the Canadian Bank has put a projection of a increase in interest rates.

The currency rate of Canadian dollar has rose .4 of a percent in comparison to the USD. The conversion rate for 1 Canadian dollar is equivalent to $1.0105 U.S dollar. Canadian bond rates however, decreased, where a the 10 year bond dropped .02 percent to rate of 1.78 percent.

Written by: Victor To

Source: http://www.bloomberg.com/news/2013-04-11/canadian-dollar-reaches-7-week-high-on-commodity-linked-demand.html

Au, Stop Buying Gold

Only two years after gold reached its highest price in years, the price is falling fast. Since late 2011, the price of gold has fallen 17 percent, a decrease of $28 to $1,558 an ounce. Considered the safest long time investment of all, Wall Street analysts have noted that prices have dropped so fast that they are saying the golden age of gold has come to an end because the last time its price dropped so low, which was during the 1980s, it took 30 years for prices to recover.

Although some might ask what went wrong, in fact, the question ought to be what went right. It’s only natural that gold prices decline after an astonishing 650 percent rally from August 1999 to August 2011. Hedge fund managers and normal savers all gathered to gold during the financial crisis, but now that we are recovering from the recession, “things are looking up for the economy and, as a result, down for gold.” For a generation of investors, the golden age created a false image that the price of gold would always be rising.

Written by Kevin Zhang

Source:Popper, Nathaniel. “Gold, Long a Secure Investment, Loses Its Luster.” The New York Times. The New York Times, 11 Apr. 2013. Web. 11 Apr. 2013. <http://www.nytimes.com/2013/04/11/business/gold-long-a-secure-investment-loses-its-luster.html?ref=business&gt;.

Tumblr to End Storyboard And Dismiss 3 Employees

Many people blog to connect with people around the world. One of the most popular blogging sites is Tumblr. Its structure allows users to blog and re-blog posts. However, it has decided to close Storyboard, its multimedia news blog. The company does not offer an explanation as to why this service was shut down. Analysts believe that this service is not profiting. Although journalism is different from blogging, Storyboard was designed to market Tumblr and relate news to the community at the same time. This tactic is rarely used in social media sites partly because it does not profit in the industry.

Tumblr attempted to branch out into a new field with Storyboard. Unfortunately, the public is not ready to accept this new approach to business. In the future, Tumblr plans to search for other channels to profit aside from sponsored blogs on the page. Sadly, analysts do not see journalism as a channel that will profit online.

 

Written By: Melody Mark

Source: Kaufman, Leslie. “Tumblr to End Storyboard And Dismiss 3 Employees.” The New York Times. The New York Times Company, 11 Apr. 2013. Web. 11 Apr. 2013.

McDonald’s Tackles Repair of ‘Broken’ Service

McDonald’s Corp. is battling a challenge with a long-term issue of their poor customer service.  Their sales have slipped last year and plan on improving their staff due to the large amount of complaints on their rude or unprofessional employees. The company’s new focus has moved to customer satisfaction to build the brand on sales and to maximize their potential. After missing two consecutive quarters in the Wall Street’s earnings expectations, the company in the past has stuck to its strategy of remodeling and tidying up restaurants and introducing new menu items.  McDonalds ranks low among its competitors such as Wendy’s Co. and Chick-fil-A that have among the top friendliness ratings.

Although the service received at McDonald restaurants will vary depending where customers go, it is important that they resolve this issue of large complaints about their customer service. The relationship between a company and its consumers is a crucial factor to determining the sales and profits of the company, because the company can decline with less foot traffic in their restaurants. McDonald’s should definitely focus more on building a better customer service or their competitors will surpass them in sales.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324010704578414901710175648.html?mod=WSJ_mgmt_LeftTopNews

The Problem Child

North Korea has been in the news more frequently as of late, increasing tensions throughout the world with their announcement of a new missile test. Countries such as the United States, Taiwan and Japan have strongly advised their citizens to abort travel plans to South Korea in light of the heightened tensions. While the rest of the world patiently waits to see what North Korea’s next move will be, life in South Korea continues as it always has. South Koreans have developed a sense of tranquil acceptance of their neighbor to the north; since the ceasefire of the Korean War in 1953, North Korea has consistently vowed to bring destruction to the South and turn Seoul into a “sea of fire.”

North Korea is like a mentally challenged child with problems of aggression, but what happens if threats of violence finally evolve into a full blown tantrum? This would be a conflict the United States cannot ignore, but is it something our country can afford? With national debt higher than ever, the relatively recent withdraw from two wars and the 10% cut to defense spending, I can’t imagine that another conflict would be beneficial to the economy.

Evan Chang

Source:

The Wall Street Journal

Penney Said to Hire Blackstone to Help Raise Cash

J.C. Penney has had a disaster of a turnaround, unable to raise sales and bleeding revenue quarter after quarter. Their former CEO, Ron Johnson, was ousted as a result of his poor performance. His efforts to redefine the shopping experience failed to bring in new consumers and were a proven failure. Before being removed, Johnson reversed course on his entire plan to lower prices of goods to improve the shopping experience.

Now, J.C. Penney is spending all of their cash reserves at an alarmingly rapid pace. Thus, J.C. Penney is reaching out to Blackrock to raise cash needed to continue the turnaround effort. J.C. Penney has also resorted to their old CEO, Myron E. Ullman III. Even with all of these changes, it may be too late however. The turnaround of Ron Johnson’s vision spent much of J.C. Penney’s cash, and the reserves are running low.

I have been hearing about the floundering of J.C. Penney for a while, and now I am definitely on the side that it will not be able to have a good turnaround. Even if it manages to survive, the company is not going to be restored in any significant manner. The real issue will be when the company is facing the problem of paying back debts in 2015, and I would not be surprised if the company actually faces bankruptcy.

Source:

http://dealbook.nytimes.com/2013/04/11/penney-said-to-hire-blackstone-to-help-raise-cash/

Foursquare Gets $41 Million Investment, Time to Gr

Dennis Crowley’s Foursquare, the location-based social media app, received great reviews when it was debuted in 2009.  However, at this year’s South by Southwest, it did not receive nearly as much attention.  Over the past couple of years, Foursquare’s main source of revenue, ads, has disappointed.  As many companies have struggled to find advertising opportunities with the increased popularity of mobile devices, Foursquare is no different, bringing in only $2 million in revenue last year.  The company got $41 million, mainly in the form of debt, leaving the question about the company’s true value unanswered.

Crowley must make a serious change to his approach to advertising if he wants to grow his company in the coming years.  Foursquare currently allows only fifty companies to buy ad space.  In addition, Foursquare only employs ten people to sell ad space on the app’s search function.  Crowley should realize just how important advertising is to an Internet company and make the necessary adjustments.

Written by: Constantine Kostikas

Source: http://www.businessweek.com/articles/2013-04-11/foursquare-gets-41-million-investment-time-to-grow#r=read

Philips Hopes to Set the World Alight With New LED

Throughout this past decade, the urge to be environmental friendly and go green midnset has been a business model for many companies. Phillips a company that has discovered a new technology for lights which are more efficient than fluorescent tubes and traditional light bulbs. This prototype could produce up to 200 lumens of brightness from one watt of power.

As on right now, LEDs are still the most efficient bulbs in the market. this light that phillps made will be integrated into a functioning LED and that’s how the technology works.

I believe this light could be the future to technology and they might even be able to use it in TV and cell phones and making Phillips a new competitor for Samsung and Sony.

-Derby Ng 

http://blogs.wsj.com/tech-europe/2013/04/11/philips-hopes-to-set-the-world-alight-with-new-led/?mod=wsj_nview_latest

Facebook’s New Friend, A Phone To Relearn

Facebook is coming out with new software which essentially replaces your home screen and lock screen for certain phones running on the Android operating system. Phones like HTC (One and One X),  Samsung (Galaxy S III, S 4 and Note II) and the new HTC First, are the first ones to be compatible with the new software called Home. Home replaces the standard home and lock screen on the phones and replaces it with your Facebook news feed which includes pictures and texts. Later on Facebook will add video posts and also advertisements.

With this innovation comes controversy dealing with the layout, motives and overall reasoning. For this new home screen and lock screen layout you will be sacrificing many of the traditional features you are used to having. The time display, signal strength, battery life, apps, wallpaper, and all of your favorite gadgets are now relocated for the new Home. This is controversial because many critics do not see the point in sacrificing all these essential functions on the home screen for Facebook’s custom company version. Another point that is controversial is the use of ads that may be plastered on your home and even lock screen. I think that this innovation is unnecessary because of the sacrifices you give up for a more expedient Facebook experience.

URL:http://www.nytimes.com/2013/04/11/technology/personaltech/facebooks-grab-for-your-phone-what-gives.html?_r=0

-Jonathan Chan

After KPMG, Audit Firms Reconsider Procedures

KMPG, one of the Big Four accounting firms has suffered a blow to their reputation in a recent scandal involving insider trading. Insider trading usually occurs in investment banking so it is usual for it to be involved with an accounting firm especially when being ethical is such an important feature of being an accountant. Partner in KPMG, Scott I. London has admitted to leaking confidential data to a third party and said that he is embarrassed and regretted his actions. These types of scandals will push new rules for accounting firms to be more transparent. Firms will not have to restructure their internal training to make sure a situation like this does not arise again. The Public Company Accounting Oversight Board proposed that accounting firms have a partners name on the client’s paper and reports to put more pressure on preventing scandals like this. With the recent KPMG situation, the proposal will see a lot more supporters.

Everyone wants to make money by taking the shortest route possible but it does not always work out that way. Insider trading is illegal and can have a large impact on reputation especially when it comes to such a prestigious firm. As an accountant, being ethical is one of the most important aspect of being in the profession. Time after time scandals like this arise which give the public a sense of distrust which will ultimately lead to a decline in trust in accounting.

Written by: Wilson Tang

Source:

http://dealbook.nytimes.com/2013/04/10/after-kpmg-audit-firms-reconsider-procedures/