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Teri Bernstein, MBA, CPA has been teaching full time in the Business Department of Santa Monica College since 1985.  Prior to that, she worked in Internal Audit and Special Financial Projects for the 1984 Los Angeles Olympics, CBS, Inc., and Coopers & Lybrand (which is now part of PricewaterhouseCoopers).  She attended the University of Michigan and Wayne State University.

  • A social network just for college students...sound familiar?

    image of Evan Rosenbaum, Akash Nigam and Matt Geige of Blend. It's " deja vu all over again." Blend is a social networking site that is for college students only. This might sound familiar because that is how Facebook started, on Harvard's campus. I remember my students telling me...back in 2006...that they could "get me onto Facebook" because I had an email address that ended in .edu, but that most "grown-ups" were excluded. Now the demographics of Facebook have shifted. According to iStrategyBlabs , 3 million young people (under 25) have left Facebook within the last three years...while the number of users over 55 years old have increased by 80%. Does this sound like a "party" you'd like to be at as a college student? Here is how Blend works: A theme is posted each day, such as "Tailgate Saturday, Library Shenanigans or My Pet Is Better Than Yours." Users post photos relevant to the themes. Other users can "snap" the photos they "like." Photo-posters can earn points based on the number of snaps received to be redeemed as gift cards for Blend advertisers. Ads are inserted between every six photos. Blend has set up 4 seasonal campaigns a benchmarks for advertisers. Student "influencers" approve potential advertisers, and act as their representatives on each campus. Observers have tracked steady growth for Blend. Where will it be 3 years from now? Source: " A Social Network That’s Just for College Students ," by Eileen Zimmerman, the New York Times--You're the Boss, February 6, 2014. Follow up: How much do you use Facebook? How about other social networking sites? Make a pie chart showing the relative amounts of time you spend on various sites. What is your reaction to Blend ? What do you think of its motto: "Share, snap, score"? Evaluate its business and monetization strategies. What are some indicators of Blend's future success or failure? To whom is the phrase "it's deja vu all over again" attributed, and why is it funny?
  • "Bull Market's 5th Birthday" may be its last...

    It seems as though the celebration of five years of a Bull Market , which I wrote about last week, was the last bit of stock market cheer we might be hearing for a while. Investors seem to be responding to several negative economic factors, and the Standard & Poor's 500 stock index is down 5.8% since January 15th.The S&P 500 index was at 1741.89 at the end of trading on Monday, February 3rd. Some of the negative economic factors include: the pullback of "quantitative easing" by the Fed, which stimulated the money supply the global response to the change in U.S. monetary policy a manufacturing industry survey released on February 3rd (whose "bad" numbers were a result of this winter's bad weather) Observers are now awaiting the market's response to the employment numbers which will be released later this week, on Friday, February 7th. Source: " As Recovery Looks Weak, Stocks Take a Deep Dive ," by Nathaniel Popper, The New York Times Dealbook, February 4, 2014. Follow up: What is the annualized percentage decrease, based on the 5.8% number noted above, that might be projected if the current bear trend goes unchecked? [Hint: it is an appallingly large number, and it is unlikely that the market will continue to plunge at the rate it has been falling over the last 2 weeks. Nevertheless, it is an interesting number to compute, to put the percentage in an annualized perspective.]
  • Businesses track and respond to the erosion of the middle class

    Image from Even if politicians and media celebrities debate whether the middle class is struggling in these economic times...the debate means little if corporations are already reacting to their conclusion about this matter. Business entities, in preparing sales and production budgets, have already noted and responded to the current state of affairs: the upper class is buying and the middle class is not. In the Chelsea district of Manhattan, the Loehmann 's discount store is closing and the upscale Barneys store is taking its place. Red Lobster and Olive Garden flounder but the Capital Grille thrives. Only demand for the high end appliances is soaring; mid-range appliance demand is faltering. According to Steven Fazzari (Washington University) and Barry Cynamon (Federal Reserve Bank of St. Louis), in 2012 the top 5% of earners consumed 38% of the domestic product. This was up from 28% in 1995. They also noted that top earners' purchases have been driving the current economic recovery. Sources: " The Middle Class Is Steadily Eroding. Just Ask the Business World ," by Nelson D. Schwartz, The New York Times, February 3, 2014. " The Middle Class Falls Further Behind ," by Aaron Smith, , August 22, 2012. Follow up: What DID go wrong for Olive Garden and Red Lobster? Read the article that is linked to those chains above. Do you consider yourself middle class? What does that mean to you in terms of your current and future financial life?
  • Job creation in North Carolina

    image from "Promise Zones." The phrase implies hope and focus. The new initiative was presented at North Carolina State University, which is leading a group that hopes to "reinvigorate the nation’s manufacturing economy." The intention of the program is to bring manufacturing jobs back to America. The new program redirects existing funding, rather than requiring additional tax dollars. Deciding when and where to create the manufacturing institutes has required a lot of planning. A competition will be held to decide which proposals will actually be funded. According to the article, "This is the first of three such institutes the White House plans to announce in the coming weeks. It will be financed by a five-year, $70 million grant from the Department of Energy, which will be matched by funding from the consortium members, including the equipment maker John Deere and Delphi, an auto-parts maker." This specific initiative will focus on advanced semiconductor technology in order to create energy-efficient devices for various industries. Source: " Obama Announces Institute to Create Manufacturing Jobs ," by Mark Landler, The New York Times , January 15, 2014. Follow up: Is "Promise Zones" an effective name for marketing this new initiative? In what ways does it "work"? Can you think of a better name to describe this effort?
  • Part Time Nation: good jobs turn permanently bad

    image from What usually happens during a recession is that people lose their jobs, and the economy slows. As the recession ends and growth recovers, jobs have returned and people can once again find full-time employment. Something different has happened in the recent recession and partial recovery. There have been rehires...but not for full time jobs. And those who managed to stay employed had their hours cut. New employee hires as the economy improved kept everyone in a part-time, no-paid-vacation-or-sick-leave, no-benefit status. Barbara Garson writes about the specifics relevant to this recession: " 21% of the jobs lost ...were low wage, meaning they paid $13.83 an hour or less. But 58% of the jobs regained fall into that category." "...employers used the downturn to dump entire departments and reorganize themselves so that the same work, the same jobs, requiring the same skills, would henceforth, in good times and bad, be done by contingent workers." D uring the course of the recent recession " ...corporate profits went up by 25%-30% , while wages as a share of national income fell to their lowest point since that number began to be recorded after World War II." Part time employment has traditionally been a "stop-gap" measure. But can productivity and quality be maintained over the long term by a part-time labor force? That remains to be seen. Source: " Abracadabra You're a Part Timer ," by Barbara Garson, Le Monde Diplomatique, English edition, August 20, 2013. Follow up: What was your experience in the job market over the last three years? If you are looking for your first full-time job after college, what kinds of positions have you been offered? Are the pay and benefits what you expected?
  • San Diego mayor and sexual harassment

    [View: :550:0] from YouTube July 11, 2013 Bob Filner, mayor of San Diego, has been accused by several female colleagues of sexual harassment. The video posted above was his initial apologetic response, but he hedges his apology with this statement: " It is a good thing that behavior that would have been tolerated in the past is being called out in this generation for what it is: inappropriate and wrong. " He seems to be justifying his behavior as being acceptable based on the standards of a previous time period. Observers have complained that Mayor Filner has not resigned his office, but instead has chosen to govern in absentia. Mayor Filner made another statement (in the video linked below) explaining that governing issues will be handled well while he takes a leave of absence for sexual harassment training. Source: " Video of San Diego mayor announcing his plans to undergo therapy ," by Robert Mackey, New York Times: The Lede , July 26, 2013. Follow up: What do you think of the Mayor's apology and refusal to step down? What are the parameters and consequences for sexual harassment in your workplace or school? Do you think Mayor Filner is correct in stating that sexual harassment standards were different a few years or decades ago? If so, when did they change? Are standards different in other parts of the world or in other cultures? Explain the differences. What do you think the standards of behavior should be?
  • Standard & Poor's-500 stock index at record high

    image from The Standard & Poor's-500 stock index closed today (Thursday, March 28) at an all-time high of 1569.19. Analysts consider this high to be more meaningful than the record set earlier this year by the Dow Jones Average, because the S&P-500 is a more broad-based sample of stocks in all sectors of the economy. The previous record as of the close of trading was in October 2007--and the mid-day high set then has still not been surpassed (1,576.09). As you can see from the graph above, this index has been trending upward for the past few years--in spite of poor labor statistics and global banking problems. This benchmark was applauded on the floor of the New York Stock Exchange. image from Source: " Broad-based S & P-500 Stock Index Ends at Record High ," by Nathaniel Popper, New York Times , March 28, 2013. Follow up: What occurred when the S & P-500 stock index was at its lowest point since October 2007? Pinpoint on the graph when that happened and do an internet search to determine its cause. In general terms, how is the S & P-500 stock index calculated?
  • Understanding the trillion dollar coin

    During the debt crisis, one "solution" surfaced that was out-of-the-box and surprisingly comprehensive. It was a legal work-around that would theoretically make the fiscal debt-ceiling crisis go away. According to Paul Krugman , here is how it would work: "The Treasury would mint a platinum coin with a face value of $1 trillion (or many coins with smaller values; it doesn’t really matter). This coin would immediately be deposited at the Federal Reserve, which would credit the sum to the government’s account. And the government could then write checks against that account, continuing normal operations without issuing new debt." [from the article linked below] Here is a quick explanation of the debt ceiling problem , and how the coin would solve it: The US government is currently not bringing in enough revenue to cover all of its expenses. A Congressional law limits the amount of debt (overspending) that the government can assume. If the Trillion Dollar Coin was minted, it could be deposited into the government's account, and "Voila!" the US government would no longer be in debt. Weird as this may seem, minting the coin is legal. By the way, the debt ceiling crisis was resolved temporarily by another piecemeal compromise. The threshold for violation will probably arise again in a few months. Perhaps the trillion dollar coin "solution" will be considered once again. Source: " Coins Against Crazies ," by Paul Krugman, New York Times, January 10, 2013. Follow up: What was the law allowing a trillion dollar coin to be minted probably intended for, according to the article? Even though the minting of the coin seems to have no underlying substance, why might it make sense, considering the current structure of monetary policy, both domestically and globally? What are the global economic risks of minting a trillion dollar coin, if any?
  • The History of US Taxation

    image from the New Yorker , November 26, 2012 Businessmen, co-workers, relatives, friends and politicians are all voicing opinions about taxes these days. Many of the statements sound like facts. But few of us have been formally schooled in the actual history of US taxation. In last week's volume of the New Yorker, Jill Lepore tackled the whole complicated mess. image from In her article she delineates the history of business interests fighting against taxes, beginning with Andrew Mellon, who helped re-define American citizens as "taxpayers. She talks about the history of "direct" taxes (real estate) versus "indirect" taxes (sales tax and income tax), and the way those taxes fit into constitutional questions. The take-away, from the article: " Taxes are what we pay for civilized society, for modernity, and for prosperity. The wealthy pay more because they have benefitted more. Taxes, well laid and well spent, insure domestic tranquility, provide for the common defense, and promote the general welfare. Taxes protect property and the environment; taxes make business possible ." Source: abstract of article at: " Tax Time ; why we pay" by Jill Lepore, New Yorker , November 26, 2012. To read the whole article, subscribe at the site, or visit your local library. Follow up: In what year did the Constitutional amendment allowing the US government to levy income taxes pass? What was the number of the amendment? What was the source of money to run the government prior to the income tax? During what period of prosperity was the highest personal income tax rate 92% in the US?
  • Insider trader Gupta gets a 2-year sentence

    image from Reuters by Jane Rosenberg Several months ago, I wrote a blog about the sentencing of Raj Rajaratnam in " Insider Trader Gets Eleven Year Prison Sentence ." This week, another player in that scandal, an insider at Goldman Sachs, Rajat Gupta, was sentenced to two years in prison and a $5 million fine. The sentence was far less than prosecutors requested. Nevertheless, the judge and others deemed Gupta's crimes as "a terrible breach of trust." Gupta leaked information, obtained at a Board meeting, of a pending investment by Warren Buffett. So urce: " Ex-Goldman Director Gupta Gets Two-Year Sentence ," by Grant McCool and Basil Katz, Reuters, October 24, 2012. Follow up: According to the article, what prominent individuals filed briefs requesting leniency for Gupta? Why do you think these individuals supported him?
  • Nobel prize in economics awarded for marketing models

    [View: utility/ :550:0] Video is linked at The Guardian This year's Nobel Prize in Economics went to two academic researchers who separately developed models for "two-way" marketing transactions. These transactions require that both parties to the transaction agree to engage in the transaction before it can take place. Some examples of these transactions are: applying to a college...and either getting accepted or rejected applying to rent an apartment...and either getting the apartment or not speed dating--where both parties must agree to meet again, or no transaction occurs matching kidney donors and recipients Roth, when interviewed after the announcement, said that he was going to teach his classes as usual. " But I imagine that they'll be listening with renewed interest," he said. "I think this will make market design more visible to economists and people who can benefit from market design ." Source: " Nobel Prize for economic sciences awarded to Alvin Roth and Lloyd Shapley-video ." [Note--the first part of the video is sub-titled in English, but the second part is in spoken English]. and " Nobel Prize for Economics Won By Alvin Roth and Lloyd Shapley ," by Larry Elliott and Josephine Moulds, The Guardian , October 15, 2012. Follow up: Read the article. What factor that is usually a major factor in a marketing decision is NOT the deciding factor in these two-way transactions? Why is it not as relevant? Is it still a factor in some or all of the examples listed above? Explain. What other business applications might benefit from this work?
  • The Cloud in the Box: a once-in-a-lifetime business opportunity

    image from article linked below quote: this is a photgraph of Aaron Levie taken by Peter daSilva, NYT Says Aaron Levie, the entrepreneur who started BOX: “ If you think about the market that we’re in, and more broadly just the enterprise software market, the kind of transition that’s happening right now from legacy systems to the cloud is literally, by definition, a once-in-a-lifetime opportunity,” he says. “This is probably going to happen at a larger scale than any other technology transition we’ve seen in the enterprise. Larger than client servers. Larger than mainframes.” The business potential, he adds, seems limitless: “We think we are just 1 percent into that transition. ” --from NYT " Bits " article by Nick Bilton, August 26, 2012 So what the heck is he talking about? What is this business, and why has it attracted the interest of so many high-powered venture capitalists? Levie started his business with Dylan Smith while at the University of Southern California. Levie was the programmer; Smith raised capital by playing poker online (read the article to find out his secret). Seven years later, his Silicon Valley company, BOX , supplies cloud storage services to 125,000 businesses and 11 million people. Business customers are attracted to Box because of the company's responsiveness and flexibility in meeting their needs. But Levie and his company see the shift from mainframe storage to cloud storage as only a small piece of the revolution. The real business revolution is in the vast numbers of mobile device users who rely on cloud storage because their mobile devices are so small. They need the services of cloud computing to switch between devices seamlessly and securely. One of the tenets of Levie's business plan is to "fight" for the consumer and provide secure and easy-access storage for use-anywhere mobile devices--which are increasingly part of the way even corporation employees are doing business. Follow up: Where is "the cloud" anyway? [Hint: check out this LINK ] What is " enterprise software "? Is this the most important part of the business to Aaron Levie? Why or why not?
  • The Hype Report: what cool new technology is almost here?

    image, from linked article, by Lorika13, Creative Commons: image is from the TV show " The Jetsons " Gartner, a research company, has released its latest " Hype Cycle Report ," which tries to predict when new technologies will be available for all of us to use. [by John Moe, Marketplace Tech Report , August 20, 2012--podcast available at link]. When I was a kid, the cartoon show pictured above, The Jetsons , gave us a fictional glimpse of what life would be like now. It had several things right (video phones, eReaders, robots), but food preparation, jet-packs, and personal vehicles haven't caught up yet. Each year, Gartner prepares several Hype Cycle Reports, in different technological areas. Here are some of the predictions, according to Hung LeHong, a spokesperson for Gartner, and one of the authors of the Reports: smartphone payments will be mainstream 2-3 years from now 3-D printing--about 5 years from now total mapping of parking meters, with analytics on the internet--giving us data about open meters and best times to park--10 years from now Jetsons-style jet-packs: not in the foreseeable future I didn't purchase any of the reports from the site, so I didn't get to see the details about variance kinds of voice recognition and speech-to-speech translations, but it looks as though Gartner has some predictions in that area. Meanwhile, if I could just remember the sequence of buttons to push on these remotes so that I could watch something on Netflix... Follow up: What new inventions or technologies do you want to see become a reality? What technology that is in your life right now do you find annoying? Why?
  • Book Club for Business Students

    image from Students spend a lot of time with textbooks, but lively and creative adults who are "lifelong learners" read currently published books. The New York Times publishes lists of both hardcover and softcover business-related bestsellers each week, in addition to its well known lists for fiction and general interest. Last week's Business bestseller list included the following books: Steve Jobs , by Walter Isaacson--a biography of Apple's deceased CEO. Imagine , by Jonah Lerner--a book about how to learn to be more creative. The Power of Habit , by Charles Duhigg--I wrote about this book in a series of posts about habits . Unintended Consequences , by Edward Conard--about America's growing income inequality. Thinking, Fast and Slow , by Daniel Kahneman--about when to trust intuition. The Charge , by Brendan Burchard--which delineates ten human drives that inspire us The Price of Inequality , by Joseph E. Stiglitz--a different take on America's income inequality Screwed! by D. Morris and Eileen McCann--a xenophobic perspective on foreign aid and commerce How Will You Measure Your Life? by Clayton M. Christensen et. al.--finding meaning in life and work End This Depression Now! by Paul Krugman--how government spending could jump-start the economy $100 Start-Up , by Chris Guillebeau--just what it says: how to start your own business with a small investment The Real Crash , by Peter D. Schiff--an argument for American declaring bankruptcy and starting over How Excellent Companies Avoid Dumb Things , by Neil Smith with Patricia O'Connell --8 ways to avoid mistakes Strengths-based Leadership , by Tom Rath and Barry Conchie--how to be a more effective leader Winner Take All , by Dambisa Moyo--China's quest for natural resources I've only read two of these books-- Steve Jobs and The Power of Habit --but several books look good to me. My own personal "best business books" list has some other titles on it. I will share it next week. Follow up: Which of the books on this list appeal to you? What is interesting about them? How many books have you read, outside of schoolwork, in the last year? Have you ever listened to an audiobook? What medium do you prefer? What types of books do you prefer? If you were asked, "What was the last book you read?" or "What book has had an influence on your life?" in a job interview, what would you answer?
  • Brazil's powerful female oil company CEO

    image from The stereotype of "oil magnate" tends to be masculine: JR Ewing of Dallas fame, Daniel Plainview (the character played by Daniel Day Lewis in There Will Be Blood ) ...or an oil sheik (such as in the not-yet-released-in-the-USA film Black Gold ). But in Brazil, Maria das Graças Foster , the head of Petrobras, is the most powerful woman in the oil business, according to a NYT article by Simon Romero. This is news now because Dilma Roussef, the current president of Brazil, is a long-time board member of Petrobras, and she influenced the board to promote Ms. Foster this year. It is also news because Petrobras is investing in oil exploration, according to the article, as much (in time-adjusted dollars) as the US spent sending a man to the moon. Ms. Foster is well qualified to be overseeing the company while it undertakes this project because of her background as a chemical engineer, as well as having earned an MBA. She is dedicated to her work, choosing to live in a non-glamorous apartment. She does not own a car. Like President Roussef, Ms. Foster supports the leftist Workers Party, but also wants to see foreign oil companies in Brazil to compete with Petrobras. Share price of Petrobras jumped 4% on the day that Ms. Foster was appointed to her present position. A major challenge that Ms. Foster faces, is surmounting the hurdles to increase production from 2.3 million to 4.5 million barrels a day. Follow up : Why is it newsworthy that a woman is running a big oil company? What is unusual about this particular woman? How does her career path make sense for her current position? What are the hurdles to increasing oil production that Ms. Foster must overcome?