The new unemployment numbers came out today, and who you listen to may decide how you see them. The Labor Department reported the economy added 120,000 jobs last month. The unemployment rate also dropped to 8.2 percen, which is the lowest level since January 2009. These are great numbers right?
President Obama was quoted as saying "we welcome today's news that our business created another 121,000 jobs last month and the unemployment rate ticked down." However, GOP candidate Mitt Romney views these statistics as more proof that there needs to be someone else in the White House.
Romney stated that "this is a weak and very troubling jobs report that shows the unemployment market remains stagnant." He says this for good reason too. This is the first time since November that the new jobs figures fall below gains of 200,000. Romney also stated, according to FoxNews, that "more and more people are growing so discouraged that they are dropping out of the labor force alltogether."
Romney has a point that this is troublesome news, and that it appears that the slow economic recovery may be stalling even more. However, it is important for those reading these news stories and listening to the politicians do some research on their own.
For example, I am not sure where Romney sees that last claim. Although the Bureau of Labor Statistics makes the point that the number of discouraged workers is about the same as last year (not seasonally adjusted), the numbers released show that there are approximately 865,000 discouraged workers. This is down from over a million from last month.
In other words, people who will be voting in November should look up some of this information on their own to make up their own minds on the progess of their country.
Follow this link to see the report for yourself and make up your mind:
http://www.bls.gov/news.release/pdf/empsit.pdf
Luis Alexander
Friday, April 6, 2012
Thursday, April 5, 2012
Community Outreach in Lexington
Today I had the pleasure of speaking with Ms. Raven Williams, the head of Sales and Development at Sweet Frog. She was kind enough to answer a few questions I had regarding their company structure and growth.
If you are unaware of what Sweet Frog is, you should go visit the frozen yogurt hangout located next to the Subway on Hunter Hill. Williams explained they currently have 50-60 establishments, but they plan to expand to nearly 180 stores in 15 states by the end of the summer. This impressive growth is nothing when you consider the other expansionary ideas Derek Cha, the founder of Sweet Frog, has for his company. Children’s books, mascots, television shows, and video games are just some of the projects Cha is working on.
Some may find this to be a bit too ambitious; however, Cha has faith and relies on God to guide his company. In fact, the “frog” in Sweet Frog stands for “fully rely on God.” Williams described this Christian background as the backbone of their company, and “corporately our main goal is to do outreach in the community.”
Their goal to reach out to the community happens to also be one of their big methods to differentiate from other established frozen yogurt chains. For example, Sweet Frog mascots visit the children’s hospital in Richmond.
I have to say it was refreshing to hear someone talk about the importance of reaching out and performing acts of charity in the communities this company becomes involved in. I know this is already a common practice, but I wonder what kind of outreach would be best for Lexington.
Lexington is different from other towns Sweet Frog does business in because college students play such an important role in this establishment’s business. It would seem to me that the best option for Sweet Frog to get involved with charities that the fraternities and sororities are supporting. Donating frozen yogurt and money to the events that the fraternities and sororities host for charities, like Muscular Dystrophy Association and Relay for Life, would be a good start.
I wish Sweet Frog good luck and plan on eating there on many occasions this Spring Term.
Companies Rethink the Value of Business Majors... uh oh
Today the Wall Street Journal published an article about corporate recruiters questioning the value of business degrees despite the fact that one in every five American students are business majors.
Seriously, how many more hoops does my generation need to jump through to get a job in this world?
Our frantic race to a jobless economy started in the 10th grade when we began wasting away our high school youth by getting tutored for SATs that became completely irrelevant to our lives the second we got into a school. I fondly remember being told that me and my friends needed to be kids, needed to get outside and get off our computers. This advice echoed through my head as I longingly stared at the blue sky and green grass from the window of my SAT tutor classroom. (Editor's note: this actually never happened because the classroom was in a basement). Upon entrance at our college, we flocked like blind sheep to majors that we thought were popular and would get us a job based upon the advice of others (hey, we were 18 at the time, we literally were blind sheep). Now, as we enter the work force, we find an economy without jobs because it got screwed up by an irresponsible older generation. Apparently, even if there were jobs, companies wouldn't hire us because they have decided that they don't value the skill sets we have acquired.
If we ever do get jobs though, we can look forward to giving all our money away to an unsustainable social security system to take care of the people that have secured this wonderful future for us.
Businesses today are looking for innovative, flexible thinkers with a well-rounded base of knowledge. Essentially, businesses want people with a liberal arts education, and thankfully, W&L lives up to its motto: "Not Unmindful of the Future" in the development of its curriculum.
As a Mass Communications major here, I am required to take 90 credits outside of the Journalism school. This has allowed me to take classes in a variety of subjects, and has left me with an education that is thorough and well-rounded. Unfortunately, students who do not go to a school such as ours may not be so fortunate.
I will conclude my gripes and belly aches with The Talking Heads' song "Road to Nowhere" because I think David Byrne says it best.
http://www.youtube.com/watch?v=JtdBtZOG17E
- Bryan Stuke
Seriously, how many more hoops does my generation need to jump through to get a job in this world?
Our frantic race to a jobless economy started in the 10th grade when we began wasting away our high school youth by getting tutored for SATs that became completely irrelevant to our lives the second we got into a school. I fondly remember being told that me and my friends needed to be kids, needed to get outside and get off our computers. This advice echoed through my head as I longingly stared at the blue sky and green grass from the window of my SAT tutor classroom. (Editor's note: this actually never happened because the classroom was in a basement). Upon entrance at our college, we flocked like blind sheep to majors that we thought were popular and would get us a job based upon the advice of others (hey, we were 18 at the time, we literally were blind sheep). Now, as we enter the work force, we find an economy without jobs because it got screwed up by an irresponsible older generation. Apparently, even if there were jobs, companies wouldn't hire us because they have decided that they don't value the skill sets we have acquired.
If we ever do get jobs though, we can look forward to giving all our money away to an unsustainable social security system to take care of the people that have secured this wonderful future for us.
Businesses today are looking for innovative, flexible thinkers with a well-rounded base of knowledge. Essentially, businesses want people with a liberal arts education, and thankfully, W&L lives up to its motto: "Not Unmindful of the Future" in the development of its curriculum.
As a Mass Communications major here, I am required to take 90 credits outside of the Journalism school. This has allowed me to take classes in a variety of subjects, and has left me with an education that is thorough and well-rounded. Unfortunately, students who do not go to a school such as ours may not be so fortunate.
I will conclude my gripes and belly aches with The Talking Heads' song "Road to Nowhere" because I think David Byrne says it best.
http://www.youtube.com/watch?v=JtdBtZOG17E
- Bryan Stuke
The IPO model
I recently read an article in Wired Magazine saying that Mark Zuckerberg must be furious about Facebook getting ready for its IPO. This first stunned me because how could someone be mad that they are about to be a multi billionaire? However, as I continued to read I began to understand why a tech company going public may not be as celebratory as one would expect.
The article titled Why Going Public Sucks discussed how venture capitalists have a way of forcing companies to grow too fast, which in turn causes their demise. The author, Jesse Lenz, said that Facebook is somewhat of a different case because Zuckerberg will still have 56.9 percent of all votes on company business, so in theory it is still his personal private company.
Lenz says that for some companies going public causes a “death spiral of unsustainable growth.” The article says that when a company goes public, it becomes too caught up in stock prices and only focuses on short-term moves that will boost stock and make the investors happy, instead of focusing on more long term goals to make the company more stable. Companies like Google and Facebook don’t have this problem because they were so big by the time they made an IPO, but this hasn’t worked out so well for others.
The article sits Groupon as an example of a company that skyrocketed after its initial IPO then started to lose revenue. In the first quarter of 2011, Groupon’s revenue was $645 million or a 1,357 percent increase in one year. However, recently Groupon reported a loss of $146 million in one quarter. Groupon wasted a large amount of money on advertising rather than looking at its expansion for the long term.
After bashing the IPO model, the article does look at the multiple positive benefits that it brings as well. By going public, the company can now offer stock options to new employees rather than giving them a bigger paycheck, thus saving money in the process.
The main point of the article is looking at how Facebook was basically forced into going public by the SEC. Lenz believes this is an unfair pressure to put on new tech companies, which can result in the loss of a lot of money.
Billy Crosby
The Dangers of Easter Eggs?
By Laura Simmons
This afternoon I spent some time reading articles about Easter and was very surprised when I read that a favorite Easter surprise, the Kinder egg, is actually illegal to import into the U.S. Spending so much time on globalization this semester, I thought this story was particularly interesting and relevant to our class discussions about global markets.
If you don't know, a Kinder egg is a special chocolate egg that comes with a small toy inside. While these are sold globally in many countries, they are not sold in the U.S because they are deemed "too dangerous" by the President, Homeland Security and the U.S Customs and Border Patrol......really?
I have trouble believing that these seasonal chocolate eggs are "dangerous". While the Consumer Product and Safety Commission and the FDA have said that this product is too dangerous because children can choke on the toy, I have to disagree. A kid could choke on a Skittle...Skittles aren't illegal. Similarly, a kid could choke on a Polly Pocket....Polly Pockets aren't illegal. According to the Border protectant agency, however, over 60,000 Kinder eggs were confiscated in 2011.
My first encounter with a Kinder egg occurred over this summer while I taught tennis to a 5 year old girl whose family was from Czech. She would bring one almost everyday with her lunch. It never occurred to me that this 5 year old was smuggling an illegal product....
In terms of globalization, I think this is a really great example of market barriers. For a product to sell on a global level, they want relatively easy or no barriers to entry. The Kinder Egg company may be sold in other countries, but they can not sell their product in the U.S due to market barriers, which can be caused by political, social or other reasons.
In my opinion, I think that the U.S Border patrol should be focusing on more serious and harmful products being smuggled into our country other than little chocolate eggs.
This afternoon I spent some time reading articles about Easter and was very surprised when I read that a favorite Easter surprise, the Kinder egg, is actually illegal to import into the U.S. Spending so much time on globalization this semester, I thought this story was particularly interesting and relevant to our class discussions about global markets.
If you don't know, a Kinder egg is a special chocolate egg that comes with a small toy inside. While these are sold globally in many countries, they are not sold in the U.S because they are deemed "too dangerous" by the President, Homeland Security and the U.S Customs and Border Patrol......really?
I have trouble believing that these seasonal chocolate eggs are "dangerous". While the Consumer Product and Safety Commission and the FDA have said that this product is too dangerous because children can choke on the toy, I have to disagree. A kid could choke on a Skittle...Skittles aren't illegal. Similarly, a kid could choke on a Polly Pocket....Polly Pockets aren't illegal. According to the Border protectant agency, however, over 60,000 Kinder eggs were confiscated in 2011.
My first encounter with a Kinder egg occurred over this summer while I taught tennis to a 5 year old girl whose family was from Czech. She would bring one almost everyday with her lunch. It never occurred to me that this 5 year old was smuggling an illegal product....
In terms of globalization, I think this is a really great example of market barriers. For a product to sell on a global level, they want relatively easy or no barriers to entry. The Kinder Egg company may be sold in other countries, but they can not sell their product in the U.S due to market barriers, which can be caused by political, social or other reasons.
In my opinion, I think that the U.S Border patrol should be focusing on more serious and harmful products being smuggled into our country other than little chocolate eggs.
Unfortunate Confluence
The Labor Department usually publishes the employment report on the first Friday of every month and the timing of Good Friday depends on the cycles of the moon. This year the two events will occur on the same day. Since 1885, except in 1898, 1906, and 1907, the New York Stock Exchange has closed for the holiday.
As of today, the markets have continued to slide and it appears that nothing is going to shake the ill feelings on Wall Street this week. The Dow is currently down 3.67 points or less than a tenth of a percent at 13,071.08. The S&P 500 fell 1.4 percent in the past two days.
This may be a result of the Tuesday release of the Federal Reserve’s minutes from its last meeting and an uneasy Spanish bond auction. The rise in Spanish bond yields renewed concerns about the Euro Zone’s financial health. Traders are reluctant to make any significant moves ahead of the Fed’s release of the unemployment rate tomorrow.
Last month, the U.S. economy added 227,000 jobs and the unemployment rate was 8.3 percent. Even though the economy is expected to add at least 200,000 jobs for the fourth month in a row, the unemployment rate is expected to remain at 8.3 percent. Because of Good Friday holiday tomorrow, any market reaction to the employment report will be seen on Monday.
“The stock markets can’t tell the government when to release the data, and the government can’t mandate that stock markets be open,” says Michael James, managing director of equity trading at Wedbush. “It’s an unfortunate confluence of dates.”
The last time the monthly employment report coincided with Good Friday was 2010. U.S. stock-index futures, yields on 10-year Treasuries and the dollar rose on April 2, 2010, after the report showed employers added the most jobs in three years. The S&P 500 future rose 0.3 percent, while Treasuries fell, driving the yield on 10-year notes up to 3.94 percent. The jobs report and Good Friday also coincided in 2007, 1999, and 1996, according to data compiled by Bloomberg.
All of the big nations, except Russia’s equity market, will be shut down tomorrow. While bourses in China and Japan will be open tomorrow, they will have closed by the time the report is published.
It is important to remember that even though every piece of news might move the markets up and down for one day, it does not mean much for long-term investors who are looking for long-term value creation.
- Harlyn Croland
Wednesday, April 4, 2012
Globalization and Buena Vista, VA
With a population around 6,650, it may come as a surprise that within the small town of Buena Vista there is a company turning out millions of tactical accessories and gear to the United States military that is shipped around the world.
In 1987, Scott and Mary Sayre started Sayre Enterprises in their garage with one product–an ankle blousing strap. This strap provides a more comfortable fit for military officers who had to “blouse” their pants. As a result, the Sayres sold over one million blousing strap within the first year of business.
Today, total annual sales top ten million dollars and the company employes around 115 individuals. When examining the total annual sales, 65 to 70 percent of sales are military, 25 percent of sales are promotional and commercial sales claim the remaining percent of sales. Since creating the blousing straps, Sayre Enterprises has branched out to promotional products, collegiate items–such as creating the T-shirts for Washington and Lee University Mock Convention, and additional uniform accessories. Sayre is the number one provider of reflective gear to the military.
Of interest to many Washington and Lee students, Sayre Enterprises is responsible for the embroidery and monogramming of Jcrew’s products. But how does Sayre have a global impact or deal with globalization?
When discussing foreign competition, Mary Sayre, CEO, says it is difficult to compete with labor costs in China because of minimum wage and benefit requirements in the United States. Therefore, Sayre is extremely reliant on its number one client–The United States Military.
However, the US military has many requirements and standard codes that Sayre must meet in order to be certified to work with the military. One of the requirements is that all materials used in military gear must be made in the United States. This creates a small problem for Sayre since they do have China products such as vinyl used in reflective gear.
In order to solve this problem, the company does not keep the China products in its 30,000 square foot Buena Vista manufacturing plant. Instead, they keep the China products in an offsite location and will only bring in the products as needed. This allows Sayre Enterprises to remain consistent with the wishes and codes of the US military.
I find it extremely interesting and surprising that within such a small community like Buena Vista, there is a company with global ties that must deal with the benefits and the obstacles of an increasingly interconnected world.
- Harlyn Croland
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