Easy Money

This type of 'legalized' theft has to stop, as it’s purely the rich stealing from the poor:

http://cincinnati.bizjournals.com/cincinnati/stories/2009/12/21/daily32.html?ana=yfcpc

I've seen the shareholders of various companies over the past several years far victim to this, where an investment company buys an undervalued company. In some cases, they've used the method of loan the target company money via a convertible note, later exercising, and voting all of the shares 'yes' to sell to themselves for a ridiculously low price (think: Conseco several years ago vs. a small insurance company they acquired via this method).

Mark my words, too: the buyer will take it private for a year (maybe two) and then do an IPO, once they've parted off anything they can in their 'chop shop'.

The victims? Those are the long-term investors, who believed in the original company & trusted the Board of Directors with their hard-earned savings. It's call 'fiduciary responsibility' and more Boards need to learn this.

[End of Rant]

Chrysler Sale Affects Teachers, State Troopers, & All Hoosiers

The Indiana State Teachers Retirement Fund, Indiana State Police Pension Trust, and Indiana Major Move Construction stand to lose millions, even as secured creditors of Chrysler. The federal government, using taxpayer-funded TARP monies, is trying to take on higher-priority status than these secured creditors, according to State Treasurer Richard Mourdock.

According to documents, not only are the Feds trying to push the sale of the Chrysler through quickly, but offering these Indiana pension and construction funds only pennies on the dollar to sell the Company’s assets to foreign-owned Fiat.

Here is the Treasurer’s Press Release:
http://www.in.gov/tos/files/TreasurerMourdockObjectiontoChryslerBankruptcy.pdf

Here is Indiana’s court objection:
http://www.in.gov/tos/files/Docket_1185.pdf

An Image Makeover

For those of you noting the commotion at the local Wal-Mart, it's all part of the plan: the image makeover plan, that is. Almost all stores nationwide will be receiving a cleaner looking, brighter space. More info about the new image can be found here in an article from the Arizona Daily Star: http://www.azstarnet.com/allheadlines/293181

Making a Buck on the Dollar Menu

There’s an interesting article on the profit margins for some of the fast food 'dollar menu' promos of late, which can be found here:

http://finance.yahoo.com/career-work/article/107106/Can-They-Really-Make-Money-Off-the-Dollar-Menu?mod=career-selfemployment

New Considerations When Buying a New Car

A New York Times article sums up some important considerations before buying your next vehicle, especially those made by GM or Chrysler:

http://www.nytimes.com/2009/04/25/your-money/25money.html?8mon&emc=yma1

CEOs: It’s Good To Be Fired

Getting fired isn’t so bad for corporate CEOs in America these days. Take the recent ‘retirement’ of GM's Rick Wagoner, who received $20 million to ride off into the sunset, according to this ABC story: http://abcnews.go.com/Blotter/story?id=7208201

At that pay rate, I’d gladly volunteer to get fired -- daily.

Mickey Mouse Goes ‘Cold and Calculated’

Accusation are being made that Walt Disney Company is laying off lots of workers, but in numbers that fall just under the threshold to report such layoffs.

Could Mickey Mouse be so ‘cold and calculating”? Some say, “Yes!”

Read more from Florida news WFTV here: http://www.wftv.com/news/19031584/detail.html

KFC Leaving Its ‘Mark’ on Roads

In a unique effort to gain goodwill and increase its public relations, the fast food chicken chain, KFC, is repairing potholes and stamping “Re-freshed by KFC," with a chalk-like stencil on the repair site.

Read more from Advertising Age here: http://adage.com/article?article_id=135534

Insert bad "Why did the chicken cross the road?" joke here...

Employer Beware: Info Theft

If you’re an employer, you may find this article about employee theft of company records & information a little disturbing:
http://www.symantec.com/about/news/release/article.jsp?prid=20090223_01

Funny How History Repeats Itself

Remember Drexel Burnham Lambert? How about Michael Milken?

DBL was the company driven to bankruptcy by illegal activities, and Michael Milken went to jail.

Well, guess who formed the financial products segment of AIG, the business segment that is reportedly the downfall of AIG today? Would you believe former Drexel Burnham Lambert employees?

http://www.portfolio.com/news-markets/top-5/2008/09/28/AIGs-Derivatives-Run-Amok?page=1#page=1

The Greater Fool + We Want That Back

Amex is bribing bad customers to ‘just go away’ by giving them $300 if they pay off their cards by a certain deadline. Obviously, they’re just using money from another lender to pay these balances off, so I wonder who the greater fool will be? (Perhaps Citi?!)

(Maybe it's actually a good business model for other businesses too? Who knows!)

Read more here in the Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2009/02/23/AR2009022302673.html?wprss=rss_business

Oh, and also in that article, what do you think about MSFT wanting part of those payouts back?

Good luck with that.

Kimball Cuts Salaries, Slashes Dividend

Yesterday afternoon, Kimball International (KBALB) of Jasper, Indiana announced an across-the-board salary cut. Part of the announcement was as follows:

“Approved by the Committee was a reduction in compensation for Kimball CEO Jim Thyen, who will receive a 10% cut in annual base pay. The Company will also reduce base pay compensation for all Officers by 5%, as well as a 3% reduction for all other salaried personnel. It is estimated the pay reductions will total approximately $3 million in annual savings. The reductions will go into effect with pay periods beginning February 23, 2009 for Mr. Thyen and the Officers, and with pay periods beginning March 23, 2009 for all other personnel.”

In a separate press release, it announced the slashing of its dividend -- horrendously slashing. Here's an excerpt:

"This dividend represents a reduction of 11 cents per share, or approximately 70%, from the quarterly dividend rate paid in 2009’s first quarter. "

$400 Million Burning Hole in Citi's Pocket

OK, I've been on a little bit of a Citi kick lately ( http://magiccoalcity.blogspot.com/2009/01/citi-responds-to-my-disgust.html ), but with good reason... They canceled the $50 million corporate playtime jet, now this...

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Let’s see here, our stock has tumbled to about 10% of what it was just a year ago, and now we have all of this government money given to us… let’s go put our name on the new Met’s stadium.

Great idea! *heavy sarcasm*

Stupendous idea! *heavier sarcasm*

Here’s a reply from Citi concerning their $400 million expenditure to slap their name on the new Met’s stadium in Queens (they're beginning to hate me):

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Thanks for your email regarding Citi’s advertising and marketing. We appreciate hearing from you again.

Citi's business partnership with the Mets was forged well before the current global financial crisis. We remain committed to this legally binding agreement that is an important marketing priority for the company.

As we work to continue to strengthen our business, Citi Field provides a positive way for Citi to support our community and to connect with present and future customers. Our partnership with the New York Mets establishes a powerful platform to promote our brand, enhance our relationship with current clients, and attract new customers. The partnership expands our considerable community, educational and civic efforts in the region, which is one of the largest business and sports markets in the world.

The partnership has accelerated Citi's significant commitment to the community and education with new resources to develop and launch outreach platforms and programs in and beyond New York City , including extensive support of educational programs such as the Jackie Robinson Foundation and Jackie Robinson Museum .

The scope of the sponsorship will also provide extensive brand visibility throughout a new state-of-the-art ballpark, as well as integration into television-, print-, radio- and on-line media advertising.

No TARP capital will be used for Citi Field or for marketing purposes. For a complete report of Citi’s deployment of TARP funds, please visit http://www.citigroup.com/citi/press/2009/090203a.htm.

We appreciate your feedback and thank you for your continued support.

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If they wanted to support baseball (or softball), receive great marketing, and become ‘good corporate citizens’ again, why didn’t they make available up to, say, 40 grants of $10,000 per youth baseball / softball league in each of the 50 states throughout the United States for the next 20 years in lieu of this deal? Citi could have made a great contest out of it, such as having the teams submit photos with the Citi logo somewhere in it. The press would have been all over that.

That, my friends, would have done a whole lot more good for Citi, small-town America, local merchants, & most importantly America’s youth…

Boral Brick: Too BIG?

Tuesday afternoon of this week, the TribStar broke a story about a temporary shut-down at Boral Brick on the south side of Vigo County (huge new facility across from the school on US41).

As you may recall, less than a year ago, Boral opened its largest brick facility ever – and reportedly the biggest of any manufacturer in the nation – and now is ‘temporarily’ shutting down for an indefinite period of time to reduce inventory. The most alarming piece of this story is that they never got to a point where they ran a second shift and ran at half-speed, according to one man at the company:

“We never got to go to two shifts,” Camp said. “We have run half-speed because of what we have seen in the economy. I could not put the other personnel on. We filled the yard running half-speed and never stretched our legs to run at 120 million bricks a year,” Camp said.

Despite the weak economy, these facts beg the question if the facility was built too big in the first place. If you can build a smaller facility and run two or three shifts with the same equipment, especially when kilns have to be fired 24/7 to maintain the temperatures needed, it’s a much more efficient use of capital. Reportedly, the kilns are ran on methane from a nearby Republic landfill; however, nothing could be found if this is indeed *free* or if the company does pay some fee to Republic for the gas (the more likely scenario).

Read the full story here: http://www.tribstar.com/news/local_story_041153131.html

Mixed Emotions: ITT & WestGate

An announcement the other day about ITT Corporation opening in WestGate is met with mixed emotions. Greene County certainly needs the 220 jobs, which will be supposedly created; however, after doing just a little research on the Internet, ITT has a blemished past to say the least.

For example, they sold military secrets, resulting in the largest penalty ever assessed by the Department of Justice (DOJ). Strangely, the DOJ allowed them to use half of the fined amount to develop new technology and subsequently provide the rights to the government in lieu. Read more on the whole situation here:

http://www.usdoj.gov/opa/pr/2007/March/07_nsd_192.html

Skipping to environmental issues, ITT apparently has a checkered past in that realm too. In their last annual report filed with the SEC, they disclosed the following (all amounts are in millions, unless otherwise stated):

“As of December 31, 2007, the Company is responsible, or is alleged to be responsible, for approximately 90 ongoing environmental investigation and remediation sites in various countries… The low range estimate for its environmental liabilities is $94.6 and the high range estimate for those liabilities is $213.2."

I realize ITT is a large corporation, and admittedly I need to do some further research to see how other large companies compare; however, these figures seem huge even for a larger company.

Global Financial Crisis Doesn’t Apply in Jasper

The question, ‘What global financial crisis?’ is what you’ll hear in the halls of one bank located in Jasper, Indiana.

The other day, German-American Bancorp (ticker: GABC) reported RECORD financial performance for 2008: http://biz.yahoo.com/pz/090127/158405.html

Maybe Citigroup can take some lessons…

Thank You, Mr. President

If you've been living under a rock, you've probably still not heard that Wall Street executives have been fleecing their corporations, the government bailout, and even their own shareholders. Wall Streeters took out huge bonuses last year, despite losing horrendous amount of money.

In a Bloomberg.com article that I found, the President took the words right out of my mouth:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aHIiSbRd09O0&refer=home

Here's another from Reuters:
http://finance.yahoo.com/news/Obama-big-Wall-Street-bonuses-rb-14198432.html

Citi Responds to My Disgust

I wrote to Citi to share my disgust for their corporate executives’ continuing extravagances. Over the past few days, news reports have indicated Citi’s newest corporate toy: a $50-million dollar Dassault Falcon 7X corporate jet.

Check out the plane at: http://www.dassaultfalcon.com/aircraft/7x/

I suppose with $45 billion in new capital recently injected by you and me, the lowly taxpayers, via the banking bailout, they have money to burn. Here’s how they responded:
_______________

"In 2005, Citi signed a contract for replacement aircraft, which was part of our plan to reduce the number we own and use more fuel-efficient models to save on operating costs. However, we have no intent to take delivery of any new aircraft.

Our policies governing the use of our current aircraft are strict and enforced. We limit use to a small number of executives who fly commercial whenever possible to reduce expenses. To support this effort, over the past eight years Citi has cut back its number of aircraft by two-thirds, and we continue to explore ways to reduce all our assets."

Massive & Numerous Layoffs Nationwide

Not to be pessimistic, but things are looking worse, economically-speaking. I found a website to put the current labor market – and tons of layoffs – in perspective.

Take a look at this: http://www.layoffdaily.com/

It lists layoff announcements in the headlines of many news sources nationally. The length and numbers within each have been staggering lately.

Oink, Oink at HOG

American motorcycle-making icon, Harley-Davidson (ticker: HOG) is trading today at about one-fourth the price of its 52-week high of $48.05.

At the time of this yearly high, I’m sure many bought in thinking it was going to surge back to its higher levels in the low-70’s in previous years. Nope. It just keeps falling.

Is there a safety net anywhere? Somewhere? Please?

Oh, yes, there is one, if you’re the CEO of HOG! CEO Jim Ziemer made a paltry $875,000 last year. To supplement his meager earnings, he exercised $5.34 million in stock options.

It’s a good thing he sold these shares that he had options on, or he’d be stuck like the investors of HOG right now. Oink. Oink.