Archive | May 2, 2013

G.M. and Mountain Dew Drop Ads After Criticism

Viewers and critics often analyze advertisements for racism. Recently, General Motors was accused of referencing to Chinese people in the 1930s. The foreign language was found in their background song with lyrics such as “ching ching, chop suey.” General Motors altered the ad immediately by editing lyrics out of the song. The company ultimately retrieved their newest ads because they do not want to risk the spreading of rumors and negative news. Another ad that portrayed racism was through Mountain Dew’s ad featuring African-American men. The agency implicitly linked violence with African-Americans. Both companies have taken their ads off public displays.

Although we are in the twenty-first century, racism still exists across the country. Campaigns against racism have little effect. Furthermore, it exists in working environments, limiting many people from job opportunities. These companies have to retrieve their ads because of public dissent. However, little is done to prevent racism from occurring elsewhere.

 

Written By: Melody Mark

Source: http://www.nytimes.com/2013/05/02/business/media/gm-and-mountain-dew-pull-ads-after-criticism-for-racial-insensitivity.html?_r=0

Retailers Wage War Against Long Lines

New technology involving infrared vision to detect body heat above the entrances and cash registers are being used in the supermarket giant, Kroger Co., and has shown a decrease to the customers average wait time to twenty-six seconds. Before these cameras were installed it took an average of four minutes. Retail strategist, Kurt Kendall claimed that since the checkout is the last experience in the store, it is important that they do not have a bad experience or it will affect their overall profits and customers that wouldn’t return. Other stores such as McDonalds and Wal-Mart are also seeking to improve their customer service through the use of technology, where McDonalds plans on using a new ordering system that will pay closer attention to hospitality, and Wal-Mart that is planning to us a “Scan & Go” system. Technology is constantly changing the way customers are shopping in their supermarkets, retail stores, or fast food chains because they are using their mobile devices to make their lives simpler.

This new change in technology allows companies to better their overall profits, as the line wait will decline making more purchases over time.  Not only does the new technology provide efficiency, but it also allows to track and collect data about what items that customers are buying and what times that the lines fill up fast. Overall this provides better business for the American companies that consumers return to after receiving good customer service.

Written by: Samantha Chin

Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887323798104578453293807869744.html?mod=WSJ_business_LeadStoryRotator

LinkedIn’s Shares Decrease 8.6%

LinkedIn Corp is a professional social network which has a total of 218 million members. The stock has increased 76% so far this year as memberships and premium subscriptions have surged. The company’s projected revenue has increased from $1.43 billion to $1.46 billion for this year; however second-quarter estimates are $2 million lower than previously forecasted. LinkedIn has added a number of features to users’ profiles and news feeds to keep up with rivals. The company’s “talent solutions” segment which is the largest part of the business grew 80% in the latest quarter; ad sales grew 56% and premium subscriptions rose 73%.

LinkedIn’s figures have been great yet its shares dropped 8.6% to $184.25 after market hours today as the company issued poor projections for the second quarter. As the job market becomes more and more competitive, having a LinkedIn profile is becoming the norm. Even my roommate who is a pre-med student has one… just for the sake of having one.

Evan Chang

Source: The Wall Street Journal

China Affair With Cheap Diamonds Heats Mass Market: Commodities

Before, the trend in China for the demand of luxury goods, such as diamonds, was that the consumers wanted the best of the best. Only the richest elite could afford luxury goods. However, a shift in the demand for diamonds specifically points towards a new trend of a growing middle class, both in size and in income. Lower quality diamonds are now being purchased, and although they are lower in price, they make a much higher portion of diamond makers’ revenues now.

“China surpassed Japan in 2011 to become the biggest diamond consuming nation behind the U.S.” The fact that most of these diamonds are now lower quality, the indication is that the majority of the population are buying them. Specifically, the urban population, of which China has seen a growth of 230 million people since 2000, “the greatest urbanization in history.” Also, income has seen a growth of 13 percent, or about $330 a month, allowing greater spending on luxury goods.

The long term view of the diamond industry is that the population and consumption of goods will only increase in China through 2020. This means diamond producers will have to expand their resources to try and ensure that their supply can meet demands.

Source:

http://www.bloomberg.com/news/2013-04-30/china-affair-with-cheap-diamonds-heats-mass-market-commodities.html

Hedge Fund Trader Is Sentenced to 4 1/2 Years in Insider Case

Another hedge fund trader was recently sentenced for insider trading. Todd Newman the latest member to who got caught for insider trading traded at Diamondback Capital Management earned more than $10 million in just five years of work. The insider case focused mainly on Todd Newman’s insider trading on NVIDIA and Dell. Trading on insider information, Todd Newman with six others earned an estimated $70 million. It seems like no matter how many hedge fund traders get caught with insider trading, people just don’t learn. Trading on insider information is not only unfair but also comes with severe consequences. As Todd Newman stood before the judge, he was sentenced with four and a half years of prison term.

In my opinion, trading on insider information is not a good tactic for making money. Most hedge fund managers trade on insider information because it is easy money but they don’t realize that if they get caught, all of it would have been in vain. Most of the cases involving insider trading results in pleading guilty because there is no defense against it. Not only is insider trading illegal, it has a detrimental effect on the economy. It can shut down businesses and costs families their fortune.

Written by: Wilson Tang

Source:

http://dealbook.nytimes.com/2013/05/02/hedge-fund-trader-sentenced-to-4-12-years-in-insider-case/?ref=business

The U.S. Long-Term Unemployment Crisis Stumps Economists

While the unemployment rate has been dropping, the U.S. is still facing a serious problem with long-term unemployment.  Long-term unemployment was 3% in January, which is triple the 2001-2007 average, whereas short-term unemployment, which was 4.9% in January, was only 0.7% above its 2001-2007 average.  The level of short-term unemployment, therefore, is starting to return to normal levels, while the level of long-term unemployment remains higher than normal.  Economists are struggling to understand the cause of this problem, considering generous unemployment benefits, erosion of skills, and discrimination by employers as possible reasons.  Peter Diamond, an economist at the Massachusetts Institute of Technology, goes as far as to argue that long-term unemployment poses a larger problem than the national debt. Rand Ghayad, a Ph.D. candidate in economics at Northeastern University, sent out fictitious resumes to employers and found that the resumes of those out of work more than six months had a much harder time attracting employment offers.

This trend of high long-term unemployment should begin to fade as more jobs are created.  When employers are less picky with job offers, the long-term unemployed should have a better chance than they do today.  The only way this can be made possible is with economic growth.  Nonetheless, the fact that 38% of the unemployed have been out of work for six months or more is discouraging.

Written by: Constantine Kostikas

Source: Businessweek.com

Stock Prices Rise Due To ECB

U.S. stocks have been seeing rises due to reports that less people are filing for unemployment benefits, but the stock market also had a positive reaction due to news that the European Central Bank will be cutting some of its main interested rates. The Dow Jones Industrial Average saw an increase this morning, and this increase was significant cause it has seen a large yesterday. The decision of the ECB to cut part of its interest rate was made in order to help to expand their shrinking economy. The ECB is trying to push policies to help their economy, but they do not intend on taking on the same policies that the Fed and the Bank of Japan are currently using.

It is beneficial to the global economy that the ECB is starting to push new changes that would help to stimulate their economy. This scenario well depicts how important the global economy is to the American economy, such news in Europe had a large impact on the American market. If the ECB is willing to take a more active role in helping their economy to recover, the American economy may see large growth as well.

Written by: Jessica Ho
Source: The Wall Street Journal

http://online.wsj.com/article/SB10001424127887324266904578458434262995150.html?mod=WSJ_Markets_LEFTTopStories

Corporate News: YouTube Touts Viewer Growth to Advertisers

Innovation and new inventions sprout daily and can revolutionize the way people live. Specifically it could alter the way news or information is spread. For example, throughout history the travel of information through various mediums have went from radio, then to TV, from network to cable, and now it is through the Internet.

YouTube, owned by Google Inc., has original content that anyone can put up for the rest of the population to view. This is a great platform for advertisers to reach consumers as over one billion people visit YouTube each month. Those viewers spend over six billion hours on the website watching videos. YouTube could potentially be the next place advertisers look to place their ads as an alternative to broadcast television.

YouTube has generated roughly four billion dollars in revenue last year and are projected to grow even more. This change from radio to television and now to internet is an advancement that will affect all of our lives. I am pretty sure everyone here frequents YouTube and has seen ads already on the website. This major shift for advertisers could reach various demographics by doing this and it will alter our video streaming experience that we will notice on a rather constant basis.

URL:http://online.wsj.com/article/SB10001424127887324582004578457253960478548.html

-Jonathan Chan

Intel Names Krzanich as New CEO

Paul Otellini, who is now the former CEO of Intel, had decided to step as CEO. He had been CEO of the chip manufacturing company for eight years and Brian Krzanich is set to take over his position. Krazanich who was the chief operating officer since January of last year and had been working for Intel for about 30 years. He will take over the position during their company’s shareholders meeting. 

This move came after the company reported drops in both net income and in revenue for their first quarter of 2013. The company will also name a new President in effect for May 16th. Their new president, Renee James, who had also taken leadership positions in Intel. Seeing these promotions of Intel, it’s easy to see that most companies usually promote from within the company and in order to move up in the career ladder, it is important for us to start early in taking leadership positions and be as involved as we could.

-Derby Ng

http://online.wsj.com/article/SB10001424127887324766604578458650267324178.html?mod=WSJ_business_whatsNews

Walt-z On Out

Last week in Bangladesh, a building filled with garment factories collapsed and took the lives of around 400 people and as a result, Western apparel countries who have their productions based there, are trying to address growing public concern over safety conditions. Companies like Gap and The Children’s Place plus other retailers huddled to figure out how to improve conditions, and some debated whether to remain in Bangladesh at all. However, one big American company, Walt Disney has decided to leave altogether citing an earlier incident with a fire that killed 112 people.

Although less than 1 percent of the factories used by Disney’s contractors are in Bangladesh, the company ordered the end of production in their Bangladesh facilities. This move by Disney highlights the struggle that companies who have productions in countries such as Bangladesh as they have to balance profit and reputation. As a result of Bangladesh having some of the lowest wages in the world, its government eagerly tries to reel in Western Companies and their jobs but the string of recent disasters prove that there are many perils. “These are complicated global issues and there is no ‘one size fits all’ solution,” said Bob Chapek, president of Disney Consumer Products.

 

Written by Kevin Zhang

Source:

http://www.nytimes.com/2013/05/02/business/some-retailers-rethink-their-role-in-bangladesh.html?ref=business&_r=0