• Bank of America settles shareholder lawsuit...with shareholder money

    Bank of America will be paying $2.43 billion to settle a lawsuit brought by B of A shareholders.  Here's what happened: In September 2008, just as the financial crisis was burgeoning, Bank of America's Board of Directors decided to purchase Merrill Lynch.  But Bank of America, during the weeks required to complete the purchase, found out that Merrill Lynch was in serious financial trouble.  Instead of disclosing these irregularities to their investors, or cancelling the purchase, Bank of America finalized the deal, to the detriment of its stockholders.

    Here's the hitch: When a corporation has to pay out a settlement to its shareholders, where does the money come from? It comes from the corporation, so any payout lowers the value of the corporation. Therefore the value of the shareholders' investment in the corporation also decreases. Even more ironically, before the money gets paid to the shareholders, the lawyers get their fees paid.  So the hit taken to corporate value is more than the payout to the shareholders.

    Nevertheless, in terms of the whole economy, many observers feel that the rescue of Merrill Lynch made a positive difference, even though Bank of America shareholders paid the price.

    Follow up:

    • If the shareholders knew that the settlement of their lawsuit against Bank of America would be paid out of corporate funds that would then lower the value of their investment in the bank, why would they sue?
    • Is there any way that shareholders could manipulate the timing so that they would come out ahead?  Who is guaranteed to come out ahead in this deal? Who else benefited?
  • Comcast closing all of its California call centers

    image from popsci.com


    Does it matter to anyone that Comcast is closing all of its California call centers?  Where are they moving them?

    What is interesting, from a Business Communication perspective, is that Comcast officials back-tracked from the information given in their original announcement, which was: 

    "...Citing the state's 'high cost of doing business,' a regional Comcast official said the company's Natomas, Livermore and Morgan Hill call centers will be shuttered on Nov. 30. Overall, about 1,000 jobs will be relocated to existing centers in Portland, Seattle and Denver."
                        ...from the article linked below

    Later, after the California's Governor's Office and State Senate intervened, Comcast said the closures were "needed for cost efficiencies and to consolidate its Western call centers from 13 to 10, based on customer needs."

    Hmmm. Talk about spin. Still, if a state has a reputation for "high income tax rates, regulatory barriers, nuisance lawsuits and wage/hour restrictions that discourage companies from starting or staying here," which were reasons cited by Sacramento Chamber of Commerce representative Roger Niello, then it can be tough to convince a company to stay put in a hostile business environment.

    Nevertheless: who are really affected?: the employees losing their jobs, and the customers losing the local contact.

    Does this matter in today's increasingly digital age? Maybe it doesn't, in terms of whether basic needs can be met. But it may make a difference in how customers feel they are being served.  If that matters.

    The business environment in Sacramento has changed with respect to call centers, and that may be part of the problem for Comcast and other businesses.  There seems to be a global shift from call centers outsourced to Asian and other locations, to a competitive marketplace on US soil.

    Source:  Sacramento Bee, "Comcast to close all its California Call Centers" by Claudia Buck, September 26, 2012

    Follow up:

    • Where will the new call center nexus be located? What will be the major and minor factors affecting that location decision?
    • Describe your most positive call center experience. Describe your most negative experience. Analyze what made the difference between the two and write a letter to providers, as a customer representative or consultant, to suggest what would make the call center experience a positive factor in brand loyalty.
  • Slow growth curve for "mobile wallets"

                                  image from siliconangle.com

    The Wall Street Journal doesn't seem to think that the marketplace is ready for the "Mobile Wallet." The fact that there is no dedicated computer chip for processing mobile payments in the new iPhone 5 is one of the reasons cited in the article below.  One of the issues is that the market has not settled on one "standard" for mobile apps. This is like the old videotape battle between Beta and VHS. Or even the ongoing platform battle between PCs and Macs. I don't even want to think about the "if-it-ain't-broke-why-did-you-try-to-fix-it" replacement of Google maps by the new Apple Map app in IOS 6.

    Anyway, some players have committed big bucks to investment in this new technology. Check out this Google long-form demo/advertisement:


    Link also available directly from YouTube

    Source: Wall Street Journal, "What's in your Mobile Wallet? Not Much" by Robin Sidel and Amir Efrati, September 27, 2012.

    Follow up:

    • Have you seen mobile payment systems work? Read about Mobile Payments. Compare and contrast the different types? 
    • What are the pros and cons of mobile payments?
    • What additional factors might hinder their adoption, or market saturation?
  • NFL referee labor dispute settled after Monday mishap


    If embedded link does not work:
    Link to CNN video about the bad call and aftermath

    To everyone but the referee that really mattered, the catch in the Monday night football game looked like an interception. But the official called it a touchdown, and the ensuing furor about the lockout of the "real" referees put pressure on the owners to settle the pension dispute and put the regular officials back to work.

    It is not the first time that outside pressure to settle a labor dispute has made a difference. That is the power that a strike can have when negotiations are at impasse.  The southern California supermarket strike in 2003-2004 caused many shoppers--unwilling to cross picket lines, and in support of the requests of the striking workers--to stop shopping at major chains (including Albertson's and Ralph's).

    This recent labor dispute rested on an issue that is typical in recent years. The owners wanted to switch the referees from a "defined benefit" pension plan to a "defined contribution" plan.  The defined benefit plan would guarantee them a certain percentage of their salary as retirement income. The defined contribution plan would shift all of the investment risk away from the team owners and onto the employed officials.

    This kind of shift might make economic sense for a small business operating on small profit margin, but the NFL team owners operate in an arena of huge risks and rewards. The risk related to the relatively small referee pensions is minimal compared to the risks associated with multi-million dollar contracts with players in a contact sport. And the earnings differential for the players involved in Monday night's flipped result makes the cost/benefit of prolonging the strike a major factor.

    Source: "'Sorry about that,' NFL chief says of replacements" by Michael Pearson, CNN

    Follow up:

    • Use web resources to define the following labor relations terms
    • lockout
    • impasse
    • strike
    • What were the general terms of the settlement of the referee's contract?
  • No need to pay those huge CEO salaries after all

    image from businessinsider.com

    The conventional wisdom rationalizing the huge increase in CEO salaries over the last 30 years has been this: if the big bucks aren't paid, the talented CEO's will jump ship.

    However...a new study by Charles M. Elson (director of the John L. Weinberg Center for Corporate Governance, University of Delaware) and Craig K. Ferrere (an Edgar S. Woolard fellow at the Center) finds that CEO skills cannot transfer well from one corporate culture to another.  What makes a CEO valuable is his or her very specific knowledge about one business. 

    The "conventional wisdom", however, has made CEO pay increase seemingly without a ceiling. According to an article earlier this year in the Huffington Post , the median CEO salary of $9.587 million is 636 times the salary of a minimum wage worker, and 244 times the average salary of an American worker.

    Those supporting high pay, according to the NYT article linked below, say that the "generalist" skills in economics, finance and management can make managers successful in many companies.  The recent research, however, tracks the actual moves of top executives, and their successes after those moves. This data does not support escalating pay to prevent executive flight, since no real competitive market exists.

    So what is an "honest day's pay" for an executive? Shareholder compensation committees will probably be the ones to wrestle with this issue.

    Source for the Elson/Ferrere study:  NYT Business Day: "CEO's and the Pay 'em or Lose 'em Myth" by Gretchen Morgenson, September 23, 2012.

    Follow up:

    • What do you think is a fair basis on which to figure executive compensation? Should it be a multiple of lower salary pay, as some compensation theorists have proposed? (see LINK) Should it be a mix of base pay and compensation based on financial performance?
    • Should there be tax disincentives for excessive corporate executive pay? Should there be a limitations when there are lay-offs of workers, or downsizing or other corporate events?  How would you structure the arrangement?

  • Bank of America speeds up downsizing plans

    image from itsgettinghotinhere.org

    That image isn't exactly right.  The closings aren't temporary: they are permanent.

    It seems that Bank of America (BofA) is speeding up its plans to cut 30,000 jobs and close several branches. But why? When I first heard this story, it included information from a bank official that directly addressed this question, but BofA, through Marketplace, has now issued this correction:  “We are focused on serving existing customers. We will continue to write loans for customers and non-customers alike.”

    Here are the way things seem to stand at this point:

    • Earlier this year, BofA announced it would cut 30,000 jobs over the next few years.
    • Now, the Wall Street Journal reports that BofA will cut 15,000 jobs by December, and be done with the downsizing way ahead of schedule.
    • BofA's primary responsibility is to shareholders--not employees
    • Shrinking its mortgage business is important, since its involvement with Countrywide was a bad business decision
    • Nevertheless, BofA will continue to fund mortgages, primarily to existing customers.

    Source: Marketplace, American Public Media (article and link to podcast): "Bank of America to Cut Home Lending, Branches" by Heidi N. Moore, September 20, 2012.

    Follow up:

    • Why was the purchase of Countrywide a bad business decision for Bank of America?
    • The article does not address the impact of this move on customers. Do additional web research to support your answer to this question: How will this downsizing impact current and future Bank of America customers?
    • What aspect of its business and revenue mix does Bank of America intend to increase, if it is decreasing its revenue from mortgage issuances?


  • German bakers get more $ BREAD $

    from the Wall Street Journal article linked below 9/18/2012


    Wiener Feinbäckerei Heberer GmbH, a German bakery, was having trouble borrowing money from German banks, in the middle of the current Eurobond crisis. Therefore, it took an entrepreneurial approach to high finance: it posted--on fliers, poster, and even bread bags--an invitation to invest in "jubilee bonds" that promised to pay a 7% return.

    The were entering the bond market, small-scale. This represents a new trend for Germany's middle-sized businesses.  It has arisen because loaning to these businesses can't help banks meet the new capitalization rules.


    Source:  Wall Street Journal, "Searching for Fresh Bread in Germany" by Christopher Lawton, 9/18/2012.

    Follow up:

    • Analyze the chart above. By what percent have German small-market bonds increased from 2010 to 2011? By what percent have these bonds increased from 2008 to 2011?  How can the percentage data, as opposed to the actual numerical data, be used to influence the conclusions drawn by readers?
    • Research and list some of the new ways that American entrepreneurs have been using the internet to raise funds (note...check out one of my previous blogs--also with a dollar $ign in the title)
  • Cause-related marketing succeeds...when it doesn't confuse

    poster from YUM Brands partnership with the UN

    "A 2010 study by Cone Communications, an agency that focuses on cause-related marketing, found that 41 percent of consumers had purchased a product within the last year because it was associated with a good cause, up from 20 percent in 1993. Cone also found that 80 percent of Americans were likely to switch to brands that supported a good cause."

    --From "Yum Brands Puts Focus on Hunger Relief"
    [NYT Business, September 21, 2011]

    "Cause marketing" didn't work so well for the image of Yum Brands (the parent company of KFC, Taco Bell and Pizza Hut) during its "Buckets For the Cure" Campaign in 2010. During the campaign, KFC pledged to serve up chicken in pink buckets, and donate 50 cents per bucket to the Susan G. Komen for the Cure foundation (breast cancer).  All parties involved got bad press and were satirized on "The Colbert Report" because of the fried food link to obesity and the obesity link to breast cancer in menopausal women. Nevertheless, the campaign did raise money.

    This year, Yum Brands has a different cause-related marketing campaign. It is a World Hunger Relief fund-raiser, benefiting the United Nations World Food Program.  Some of the activities this year include:

    • Christina Aguilera is a spokesperson, singing "The Voice Within"
    • a Jumbotron video in Times Square, NYC
    • Taco Bell will have Feed the Beat musicians highlighting the campaign
    • Pizza Hut will be offering Hulu Plus subscriptions for donors


    Follow up:

    • Read the article.  What is KFC asking followers to do on its Facebook and Twitter accounts as part of the World Hunger campaign?
    • According to the article, how much money did Yum Brands for the Susan G. Komen foundation in the "unsuccessful" campaign in 2010? What was the Susan G. Komen reaction to this donation?
    • Are you, personally, responsive to cause-related marketing?  What purchases have you made that have benefited charities?
  • The business of Seeds

    photo by Sean Gallup for Getty Images

    Seeds are a commodity that have had value since the beginning of time.  What is interesting from a business standpoint, is that seeds were cultivated, owned, and self-propagated up until a few generations ago. Now, because of science and research and--more particularly--genetic modification--seeds are now "rented" and are subject to patents. Even more of a game changer--many of these seeds produce plants that do not produce its own viable seeds, so seeds need to be repurchased from the corporation doing the genetic modification every year. In addition, legal ownership of the seeds remains with the corporation that genetically modified them...not with the farmer that grew them or collected them from his or her plants.

    Some people would just like to "opt out" of this Darwinian tangent...but that may not be possible because seeds in the environment can affect non-GMO (heirloom) seeds, altering the heirlooms to affect their attributes and their ability to reproduce.

    One of the experts interviewed for this piece was Janisse Ray, who wrote The Seed Underground.

    Source:  American Public Media Marketplace, "The Science (and business) of Sowing Seeds" by Kai Ryssdal

    Follow up:

    • Have you ever grown anything from seed? Describe your experience.
    • Research and explain the difference between "hybrid" and "genetically modified".

  • NYSE fined for "favoring" large traders

    image from washingtonpost.com

    The New York Stock Exchange was fined $5 million for not being fair.

    Hmm. I thought that providing a platform for absolutely fair trading was a major factor in its existence. What happened?

    The fine was levied as part of a settlement with the federal government because of these behaviors by the NYSE:

    "The NYSE provides tailored data on stock quotes and trades directly to certain customers. The SEC said that from 2008 to mid 2010 the exchange violated a rule by distributing the data to those customers before putting it in its global information transmissions." [from Source below]

    In other words, the NYSE gave information favorably to certain customers.  There was no determination about whether or not this was intentional. Nevertheless, because there was an SEC "censure" as well, additional penalties will be assessed if the practice is repeated.

    Source:  the Associated Press, via Dailyfinance.com by Marcy Gordon, September 14, 2012.

    Follow up:

    • Does this disclosure of wrongdoing affect your trust level of American financial institutions? Why or why not?
  • GMO right-to-know: Corporate owners betray Kashi and Horizon

    image from facebook.com

    Proposition 37, on the ballot in California this November, would require that genetically modified foods (GMOs) be labeled. It would make sense that organic food businesses, which by law cannot be genetically modified, would support this proposition.  People concerned about what additives they are consuming tend to support the proposition, as its tag line is "GMO Right To Know"--consumers should be allowed to choose foods that have not be genetically modified...or choose those that have been modified.

    There is some cognitive dissonance out here in the marketplace, however.  Some of the most popular brands of "natural" and "whole grain" foods are owned by parent companies that process all types of foods and have given substantial sums to defeat the proposition.

    Kashi--owned by the Kellogg Company; Cascadian Farms--owned by General Mills; and Horizon Organic--owned by the J. M. Smucker Company have all been "betrayed" by their parent corporations. These parent corporations have made contributions to defeat a proposition supported by the organic brands' best customers!  Social media, such as the Facebook post above, are being used to spread the word. 

    Customers are turning against the brands with corporate ownership, as they do not trust the lack of transparency that opposition to Proposition 37 embodies. Consumers are being made aware of a real difference between the large organic companies with big corporation support, and the smaller, independent farms that are closer to the organic ethic.

    This creates a marketing problem for the bigger brands, and a marketing opportunity for the smaller companies. With all that is required in food labeling (fat content, calories, vitamins...), it is a wonder that the GMO content is also not disclosed.

    Here are some companies that support GMO labeling:

    to be continued...


    P.S.: Coca-Cola owns Odwalla and Honest Tea...and Coca-Cola has put up more than $1,000,000 to defeat GMO labeling.

    image from the Chicago Tribune

     Source: NYT September 14, 2012: "Uneasy Allies in the Grocery Aisle"

    Follow up:

    • Do you read labels? If you had a choice, would you choose a non-GMO food over a GMO food, everything else being equal?
    • Pick a side and argue your case. GMOs: label them...or no-one-needs-to-know ? What marketing opportunities do you see for the side you pick?

  • Tax evasion or tax "planning"? Legality and ethics

    image from federaltax.net

    When does aggressive tax planning cross the line and become illegal? One questionable tax practice has been in the news several times in the last 12 months: the investment banker election to count their fund profits as capital gains, rather than ordinary income.  These fund profits are given the special designation--for investment bankers only--as"carried interest." 

    Why is this an issue?  Because capital gains tax rates are a maximum of 15%; ordinary income maximum rates are 35% for individuals. That is serious tax avoidance!

    I, personally, would like to question the intense lobbying that must have gone on to create this tax loophole, and I would welcome full transparency regarding the campaign contributions to individual legislators responsible for allowing this provision to be lawful.  Nevertheless, the loophole exists as a legal tax strategy...and principals in investment banking companies take advantage of the loophole.  Bain Capital, for instance, re-defined $1.05 billion in management fees, saving the principals in Bain Capital $210 million in income taxes and an additional $28 million in Medicare taxes. 

    image from privateequityblogger.com

    The NYT article by Floyd Norris (linked below) delineates a practice that goes beyond this loophole, however. Several legal scholars have said it is patently illegal, and many investment banking firms have shied away from using it.  (Some, like Bain Capital, however, DO use it.) The IRS, for some reason, has taken a "don't ask, don't tell" stance on this issue. 

    Here is how it works:  Private equity executives earn management fees for processing transactions.  These fees are defined as "ordinary income," subject to rates of up to 35%. BUT...They transfer them into a "preferred profit" segment of an investment fund, where they are almost certain of getting the money back, because of the "preferred" standing. The aggressive tax position is assuming that the nature of the fees have changed by taking on the "risk" of being in the fund. When they are eventually withdrawn, the private equity managers report them as though they are capital gains rather than income--taxed at the 15% rate.

    Is this ethical? It might be a legal loophole, but is it ethical? I would say that if other individuals making an analogous investment are denied the preferential tax rate, that it is probably not ethical.

    Here is a direct analogy: You and I might be able to take a tax deduction of up to $5000 per year if we contribute that money to an IRA (Individual Retirement Account). [Note: this deduction is subject to several limitations: see your tax adviser.] When we withdraw it from the IRA, we are taxed at ordinary income rates on our withdrawals, even though the invested amounts were at risk.  We'd be charged with tax evasion, a criminal offense, if we tried to characterize these withdrawals as capital gains.

    So...how is it that private equity managers get such a good deal? As Floyd Norris says in his article, "If the law lets those who work in private equity do it, Congress should change the law."

    Source: NYT September 14, 2012: "A Tax Tactic That's Open To Question"

    Follow up:

    • What is your tax bracket? (your marginal tax rate) What did you pay in taxes?  Did you take advantage of any deductions? Have you taken a personal income tax course to learn the basics about taxation practices?
    • What are your thoughts about aggressive tax avoidance? Do you think the same principles apply in business-to-business transactions, or business-to-consumer transactions? Should businesses always try to maximize their profits, using every technique possible?
    • What would be an ideal tax policy?  If you have not formulated an opinion, what kinds of information do you think you should gather before making a decision? 
  • What will be the Big Toys for Xmas this year?

    video linked from:  http://www.youtube.com/watch?v=5X_ryMfrRE0

    Thinking of making a good short term investment? Interested in Holiday marketing strategies?  Or just wondering what is new to buy for friends, family or for yourself this holiday season?  Plenty of observers are publishing their predictions about what will be the Big Toys for this year.

    I am particularly interested in this because my husband, a toy and technology aficionado, has recently acquired a Parrot Drone. Like some of the toys in the video above, it has to be controlled by a tablet computer of some kind. He hacked his color Nook to make it into a tablet computer, and it is completely up to the task.  I was wondering if drones like his new toy were making the lists for most-likely-to-be-popular this season. It looks like they'll be a big seller.

    I know what is on MY holiday list...but I may opt to buy it for myself when my current Droid contract runs out on September 25th...Any guesses about what is on my wishlist? Hint: I thought it was going on sale today, but it will be available September 21st.

    Some other observers predict the following toys will be big sellers:

    While I was researching this, I ran into a video of the Big Boys Toy Show 2012 in Dubai. This is more of a "niche" market, but it is fun to catch a glimpse of the truly incredibly rich pondering  their toys.

    Follow up:

    • Check out "Green Christmas Toys 2012." What makes a toy "green"? Is this a major factor, a minor factor, or unlikely to be a factor for most consumers, in your opinion? Is there an opportunity for a niche market?
    • Which toys do you predict will be good sellers?  Would you consider investing in any of the companies that make these toys?

  • Student loan collections: Arrggghhhh!!!!!

    "Debt Collectors Cashing In on Student Loans" NYT, September 8, 2012.

    Is this real? Is this possible?  Are capitalist fiends attacking students at their most vulnerable place...ruining their futures forever?

    It seems that: YES. That is the case.

    According to an article in the NYT [Business Day, by Andrew Martin, September 8, 2012],  students are up in arms about their student debt. There was a protest where students wrote their debt amounts on T-shirts...[see linked article] but the reality is: debt collectors are harassing and nailing down student debtors as though they were criminals.

    Here is a reality of student debt, from the linked article:  "There is no statute of limitations on collecting federally guaranteed student loans, unlike credit cards and mortgages, and Congress has made it difficult for borrowers to wipe out the debt through bankruptcy."

    What is going on?

    Follow up:

    • Do you have any student loans? What is the interest rate? What are the terms? When do you envision being free of that debt?
    • Do you have student debt? Where you accurately apprised of the terms when you acquired it? What were your thoughts then? What are your thoughts now?
    • What do you think is the correct national policy for dealing with student debt?
  • Customer service: it's actually profitable

    Trader Joe's is one of the companies analyzed for the effectiveness of its customer service, and its relationship to profit, according to an interview with Stephen Dubner on Marketplace [link and radio podcast linked below at "Source"]. As it turns out, customers can be outrageous as well as the would-be customer service representatives. Nevertheless, providing good customer service can both establish a brand, and be good for profits.

    Zeynep Ton was interviewed as a part of this podcast. She teaches management at MIT's Sloan School and she did a study that researched Costco, Trader Joe's, the QuickTrip convenience stores. She says, "If you pay your employees more, you attract a better group of employees and you retain them longer."

    What does this mean? Will it lead to increased profits? Says Zeynep Tom, commenting on her research: "When a retailer doesn't invest in its people, then execution at the stores suffer. You often find products in the wrong locations, promotions not carried out on time or at all, or mistakes at the checkout -- so these operational problems. What was surprising to me was how frequent these problems and how expensive these problems were."

    Another researcher, Nick Toman, said: "The 'pleases,' the 'thank yous,' the flowery language -- that didn't matter so much. Making things simply easy for customers -- getting a question answered, returning an item, making the burden as low as we can on the customer -- results in the greatest initial economic benefit for the company."

    So why aren't all retailers hiring and training expert customer service people?

    Says Dubner: "Well...most retailers think of labor as purely a cost, as opposed to a way to make more money. And if you're trying to control costs -- which every business is trying to do -- one thing about cutting costs is that you immediately see it as a benefit to your bottom line. Whereas investing more on employees, well that doesn't pay off until later."

    Hmmm...isn't all marketing about "later"?

    Source:  "Providing better customer service is good for business" Kai Ryssdahl, American Public Media Marketplace. June 13, 2012.

    Follow up:

    • Read or listen to the linked radio-cast. What customer behaviors were outrageous? What customer behaviors were effective?
    • What outrageous customer behavior was experienced by an employee in North Carolina? If you were a customer service representative in that situation, how might you have reacted?
    • Do you shop at Trader Joe's? Costco? QuickTrip? What are your thoughts and reactions?

  • Managing your money...Junior edition


    cartoon from the famzoo.com website [link below]

    Did you get an allowance when you were a kid?  How was the money managed--with dollar bills or coins? If you are a student, and get an allowance now, you might be managing it all online.  As it turns out, there are some start-ups that have programs geared to managing the allowances of children using the internet.

    Even if you don't have small children, the idea of managing a child's allowance online is a pretty fascinating business idea. If you do have small children, you already know that even toddlers can be very perceptive about how goods are acquired.  They see the grocery cart full of food, and the card that is swiped in exchange. They totally understand that money exists "somewhere else." Dealing with a paper money allowance is old fashioned, and may be more concrete, but might not be as effective a way of teaching the young how to manage money in today's online world. In "Managing a Child's Allowance, the Online Version," Ron Lieber discusses some of the programs now available, and spoke directly with the principals of Tykoon about what these programs are meant to do. [NYT Personal Business/Your Money, September 7, 2012]

    Some of the programs available to track allowances, spending and chores include: FamZoo, Three Jars, Count My Beanz, My Job Chart, and Tykoon. Their target ages (different for each program) range from about 3 years old through elementary school. Some are set up to encourage kids to budget for saving and charity, as well as to keep track of their allowance money for personal use.

    There are many limitations to these programs--they provide a very small universe of choices. Another possible downside--the parents have to get involved whenever real money is involved.

    But that is, really, part of the idea. Mark Bruinooge, one of the co-founders of Tykoon, said, "It's a multi-year conversation about how your family uses money. We want it to be part of the family routine."

    Follow up:

    • What tools did your family use to teach you about money? How did that work out for you?  What might you do differently?
    • Have a look at the article, or at the website for Tykoon or one of the other programs. Is your current level of record-keeping greater than or less than the level the program provides?  If it were more fun, would you keep better records? Why or why not?
  • Turn your smartphone into a better way to talk

    image from nytimes.com

    Tired of the scratchy, patchy voices you hear on your cell phone calls? Not amused by that pesky auto-correct when you are texting? Ever get your feelings hurt when you have misunderstood the tone in someone else's texted message? Well, how does a 2-way radio--like an old-fashioned ham radio--sound as an alternative? If you are interested, maybe Voxer, Heytell, or Zello are for you.

    These are new "walkie-talkie" apps that work like this:

    • open the app
    • type your friend's name
    • hold down the Talk button
    • start talking
    • straightaway: your friend hears your voice, loud and clear

    These walkie-talkie messages are cheap and efficient--like a cross between a text and phone message; a verbal tweet. How often would you like to have that type of quick communication? Personal, but contained.

    According to David Pogue, who wrote the NYT article on these devices, the hardest part is getting it installed and set up, and being careful about inviting--or not inviting--everyone from your Facebook account to join you.

    Source:  New York Times Business Day Personal Tech: "Smartphone? Presto! 2-Way Radio" by David Pogue, September 5, 2012.

    Follow up:

    • Read the article: which of the walkie-talkie programs does Pogue give the highest recommendation to, and why?
    • What are the downsides to this type of communication?
    • What do you see as its business applications? What would be the obstacles to setting up business applications of these products?
  • How to manage your money for your whole life

    photo by Dimitry Rukhlenko

    The New York Times and Marketplace Money are collaborating on a special new section that will appear as part of the NYT Your Money internet pages and in radio segments:  "Money Through The Ages." Some of the topics that are covered include:

    • "Balancing Debt against College Choice"
    • "Out of College, Not on Her Own"
    • "Setting up a Plan to Get Back on Track"
    • "Navigating the Benefits Maze"
    • "Pondering Risks in Retirement"

    These articles can be found at the link below.

    Source:  New York Times and American Public Media Marketplace: "Money Through the Ages" beginning September 2012.

    Follow up:

    • Read one of the articles linked immediately above and summarize the strategies recommended.
    • What are your short term and long term financial goals?
  • Eurobonds: What are they?


    This summer, as the European debt crisis has been in the news, "Eurobonds" are discussed frequently. From the newsmedia context, they appear to be an international investment vehicle, but a business economics observer could use a little more information.  This linked Whiteboard animation, "Eurobond: An Explainer" explains what a Eurobond is in straightforward terms. (Animation is fully captioned in linked article).

    In a nutshell, because low-risk countries are part of the same Eurobond investment vehicle as high-risk countries (Greece, Spain), the Eurobond provides a safer investment than investing in the high risk companies (who would have to pay exorbitant interest rates). The cash generated when other countries or multinationals invest in Eurobonds is used to keep the member countries' economies moving. Problems arise, however, when a low-risk country (Germany) would rather be in the market on its own. Over the very long term, however...even Germany has been a beneficiary when its European neighbors have had the upper hand. 

    Source:  American Public Media Marketplace Whiteboard: "Eurobond: an Explainer" by Paddy Hirsch. July 10, 2012.

    Follow up:

    • What is the current situation with the debt crisis in Greece?
    • If you were in Germany's position, what would you do? Where would you draw the line? What controls would you want to have put in place?

  • Social media novelty: "POTUS AMA on Reddit"

    image from karmadecay.com

    "POTUS AMA on Reddit"  Do you know what this means?

    For business people interested in marketing their products, it is important to catch the pulse of what will be the "next new thing." The social media site Reddit bills itself as the "Front Page of the Internet." And on August 30, 2012, they got a scoop.  The President of the United States (POTUS) was on Reddit's forum "Ask Me Anything" (AMA).  Here was the tweeted announcement:

    "Hi, I'm Barack Obama, President of the United States. Ask me anything. I'll be taking your questions for half an hour starting at about 4:30 ET. Proof it's me: https://twitter.com/BarackObama/status/240903767350968320 We're running early and will get started soon"

    It doesn't matter whether you like Obama or not: this was a social media game-changer.  According to Beverly Macy, CEO of Gravity Summit, "For those of us who track the rise of social media in business and government, this is a moment to remember. Clever and down-to-earth at the same time, it speaks volumes about where the future voters, employees, and citizens are gathering."

    Sources:  "Why the POTUS AMA on Reddit is the Best. Thing. Ever." by Beverly Macy for the Huffington Post
    "Left Alone By Its Owner, Reddit Soars" NYT, September 3, 2012 by David Carr.

    Reddit logo

    Follow up:

    • Literacy bump: I used the word "scoop" in the post above.  What does that mean?
    • Check out this transcript of the AMA session provided by The Atlantic. What questions might you have asked to address business issues specifically?
    • What social media sites are fading, in your opinion?  What are up-and-coming? How do you stay current?
    • Check out "Left Alone By Its Owner, Reddit Soars" for more information about the way Reddit is set up and managed.