Foreign-Currency Debt Hits Hard In Central Europe

August 5th, 2010

In Europe’s tight quarters, borrowing from your neighbor across the border could lead you down a bumpy road.

  • Central European households and small businesses are struggling under the weight of foreign-currency debts.
  • The fluctuation in interest rates and currency values associated with foreign-currency lending has put many into debt, resulting in stalled economies as people try to pay off loans.
  • Governments are scrambling to implement preventative regulations, including legislation to ban foreign-currency mortgage loans and a government buyout fund that would allow borrowers to convert their foreign loans to their native currency.

Facts & Figures

  • In Hungary, nearly 70% of the country’s total household debt was borrowed in foreign currency.
  • In the Baltic states 70-90% of household borrowing is in foreign currency.

Best Quote

“Hungary is close to its non-performing loan peak.” – Sandor Csanyi, Chief Executive, OTP

Nike Pays Up After Closing Honduran Factories

August 4th, 2010

A big corporation actually responds positively to student pressure.

  • Nike will pay $1.54 million to 1,800 workers in Honduras who lost their jobs after Nike closed two Honduran factories.
  • The workers compensation was a response to pressure from several universities and the nationwide group, United States Against Sweatshops who pegged Nike for failing to pay a $2 million severance package owed under Honduran law.
  • The University of Wisconsin discontinued its licensing agreement with Nike because of the dispute and Cornell threatened to do the same, forcing an image-conscious Nike into action.

Best Quote

“This may be a watershed moment. Up until now, major apparel brands have steadfastly refused to take any direct financial responsibility for the obligations to the workers in their contractors’ factories. Now the most high-profile sports apparel firm has done just that.” – Scott Nova, Executive Director, Worker Rights Consortium.

Ford Gives The U.S. Hope

August 4th, 2010

Ford reports an exceptionally strong first half of 2010 and causes optimism for the U.S. auto industry.

  • Ford’s second-quarter earnings were much stronger than expected and the company is on track for “solid profits” in 2010.
  • Ford plans to discontinue its Mercury brand and sell Volvo to China’s Geely in the 3rd quarter because it wants to focus on mass marketing Ford and Lincoln brands.
  • Ford was the only large U.S. automaker to avoid bankruptcy in 2009, and is therefore in greater debt than GM and Chrysler.
  • Ford paid back 7 billion dollars of debt in the 2nd quarter (now $27.3 billion in debt) and plans to continue debt reduction.

Facts & Figures

  • Second-quarter net profits were $2.6 billion, compared to $2.26 one year ago.
  • Ford revenue increased by $4.5 billion to $31.3 billion.
  • This is the 4th consecutive quarter that Ford has reported profits.

Best Quote

“We delivered a very strong second quarter and first half of 2010 and are ahead of where we thought we would be despite the still-challenging business conditions.” -Alan Mulally, Ford Motor Co., Chief Executive

Cool Electronics Move Ahead Of Clothes And Appliances

August 4th, 2010

Second-quarter reports indicate that Americans have changed their spending priorities from appliances to new and improved electronics.

  • Rather than purchasing appliances and clothing, Americans now tend to put their money toward new electronics and in their savings.
  • Electronics are constantly evolving to become newer, cooler and better–causing an incentive to buy the latest items.
  • Some clothing retailers, such as American Eagle Outfitters and Macy’s, are giving consumers electronic incentives to buy apparel (like giving away smartphones).

Facts & Figures

  • Sales of televisions, computers, video and telephone equipment grew 1.8% in the first six months of 2010.
  • Spending on appliances decreased 3.6% and spending on furniture decreased 11%.
  • The U.S. savings rate increased to 6.4% from May to June.
  • In the first 6 months of 2010, Americans spent $534 billion on durable goods, up 5.9% from last year.

Best Quote

“But who needs to buy more ties? I mean, come on, I have a great computer.” -Spence Witten, 27-year-old consumer

Audi Is Catching Up To BMW And Mercedes

August 3rd, 2010

Audi sales continue to exceed expectations as it plans to emerge as a luxury car leader.

  • Thanks to very strong car sales, Audi’s second-quarter earnings were “very significant” when compared to those of 2009.
  • Sales of new Audi’s reached a record high in 2008 when more than 1 million cars were sold.
  • Demand for luxury cars declined when the economy fell, but has since recovered faster than expected.
  • Audi plans to reach 1.5 million cars sold in 2015, but now thinks it will do so much earlier.
  • New models, the small A1 and luxury coupe A7, have just been released.

Facts & Figures

  • In the first half of 2010, Audi’s car sales jumped 19% to 554,950.
  • Audi is owned by Volkswagen.
  • Audi plans to sell about 200,000 A7 cars over the course of 7 years.

Best Quote

“We will exceed the 1 million [car sales] significantly this year.” -Rupert Stadler, Audi, Chief Executive

The Housing Market Is Still Stalling

August 3rd, 2010

Homes aren’t selling and construction on new homes is slowing.

  • The stalling housing market can be attributed to global economic turmoil, falling stock prices, and slow labor markets.
  • Signed contracts in May and June have fallen dramatically.
  • Despite low mortgage rates, tighter lending standards are preventing buyers from getting a loan and purchasing a new home.
  • The two major issues in the job market are that there are too many homes and not enough demand.

Facts & Figures

  • An unprecedented number of homeowners owe more than their homes are worth.
  • Demand for mortgages is at a 14 year low.
  • Last week, the average rate on a 30-year fixed-rate mortgage was 4.57%, which is the lowest its been since 1971.

Best Quote

“The sellers think the market’s coming back. They’ve tacked on an extra 5 to 10 to 15%. The buyers aren’t going for it. It’s going to feel like a double-dip because sellers are going to have to lower their prices” – Jim Klinge, a real-estate agent in Carlsbad, California

Today at TILE… The Deflation Scare

August 3rd, 2010

Today at TILE, we talked about the prospect of deflation in the economy. Is it really happening? Why does it seem economists and the markets keep changing their minds on the subject? What can even be done about it?

Imagine you are camping in a forest and you’ve made a fire to cook with – if it gets out of control, everything burns up and eventually you’ll have a problem on your hands. That’s kind of like rapid inflation. But if it burns out, you’ll end up cold, hungry, and probably pretty miserable. That’s more like deflation, and if there’s too much, it can be really hard to get that fire going again. In the world of economics, the goal is to have slow and steady growth – not too much and not too little. In other words, inflation is when the economy “heats up” – prices rise faster than the value of the currency being used to purchase goods and services. In contrast, deflation is when the economy “cools off” to the point where the world becomes too sluggish – prices of goods and services even start to contract, such that a vicious spiral of non-growth or negative growth can overtake us all.

Read the rest of this entry »

Head of WITNESS on Filming the Truth

August 2nd, 2010

yvette-alberdingkthijm.jpg Yvette Alberdingk Thijm is the Executive Director of WITNESS, an awesome TILE Human Rights charity. Yvette has ultimate responsibility for envisioning, conceptualizing and implementing WITNESS’ overall direction. She leads efforts to carry out the programmatic, organizational and funding strategies necessary to ensure her organization’s mission and health. She’s also responsible for overseeing the organization’s compliance with legal and regulatory requirements. What a job.

TILE: How do issues relating to human rights affect young people?
Yvette:
All over our globe, we want the same things: access to education, clean water, non-discrimination. We want to be treated fairly and with respect; we’re global citizens and the future is ours – we need to protect it and the earth.

TILE: What’s the most important thing we can do to affect human rights around the world?
Yvette:
WITNESS says: see it, film it, change it! You’ve got the power. Tell your story. Get involved your community, neighborhood, school, and use your iPod or cellphone to document what’s going on around you and change it!

TILE: What’s the biggest challenge you face in your work?
Yvette:
All the injustice in the world can feel overwhelming. But anyone can make a difference and when we work together we can change a lot.

TILE: What’s the best advice you would give to your teenage self?
Yvette:
Get involved and stand up for what you believe in. Your voice is important. Make sure it’s heard and help others’ stories get out there.

TILE: How do you think young people can play a role in the changing landscape of philanthropy?
Yvette:
Young people understand what it’s like to be connected digitally, and can make a big difference easily through Twitter, Facebook and social networks – it’s a lifestyle: if you decide to care, people will listen and join you.

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.

Have a burning question or an expert you’d like to see interviewed? Just Ask TILE!

Founder of charity: water Explains What Happened

July 30th, 2010

scott-harrison.jpg Scott Harrison spent 10 years promoting chic events in New York City, but the lifestyle left him feeling selfish and empty. So he did what any late-night party type would do: he founded an innovative organization that provides clean water to communities in developing nations throughout the world. 1 billion people lack clean water to drink. But so far, charity: water has funded more than 2,500 water projects in 16 developing nations. Those projects will provide over 1,100,000 people with clean, safe drinking water. That’s cooler than any party we’ve ever been to.

TILE: Why should young people care about clean water?
Scott: Most of us never have to think about where our water comes from. We take it for granted, that we can turn on the faucet and it’s there. But right now, almost a billion people on the planet don’t have access to clean, safe drinking water. That’s one in eight of us. It’s a big problem – but there are simple solutions that can help change it.

It’s really up to all of us, all ages, to help. But I think there’s a unique connection with young people. 4,500 kids a day die from water-related illnesses. And half the world’s schools don’t have clean water or sanitation. When we tell kids this, they’re devastated. We’ve had kids raise tens of thousands of dollars to help build clean water projects all on their own. The will of young people that try to imagine living like the almost one billion without water is incredible. And I really believe that if young people act now, they can see the water crisis end in their lifetime.

TILE: How did you get started in this work?
Scott: I worked years as a nightclub promoter in New York until I finally realized that I was an incredibly selfish person and I couldn’t keep denying my responsibility to give back to the world. I served as a volunteer photographer on a ship that provided surgeries and medicine to people on the coast of Liberia. My experience there changed my life forever. Many of the diseases we saw on the hospital ship were a direct result of contaminated water and lack of sanitation. So I made it my mission to provide clean and safe drinking water to those in need.

TILE: What’s the most important factor that influences whether someone has access to clean water?
Scott: There are many. Money and lack of infrastructure, mostly. Much of the world’s clean water resides right under us, in aquifers too deep in the ground to access with a simple shovel. Some areas, like many in East Africa, require digging deep boreholes – it’s an expensive project that governments don’t (or can’t) provide and local people don’t have the money to invest in. But once these deep water wells are drilled, the pumps can be maintained by the communities, which can collect minimal dues and take care of the spare parts and small repairs.

For other communities, lack of education or training limits safe water access. Take Cambodia, for example, where there is plenty of groundwater, but most of it is too contaminated to drink. Here, we help fund reliable filtering technologies that purify groundwater to be safe enough to use. Our program requires training and the families construct the filters themselves so they know how they work.

TILE: What’s the best advice you would give to your teenage self?
Scott: Go travel. It’s the most immediate and effective way to open up your mind and educate yourself on what’s going on in the world. If you don’t have the opportunity to travel, take advantage of everything that the Internet has to offer. Watch videos and documentaries, follow people you admire or can learn from on Twitter, keep up with them on Facebook. Technology has given us the chance to connect with people all over the world like we never could before. Tap into this. Figure out which issues ignite something in you.

TILE: How do you think young people can play a role in the changing landscape of philanthropy?
Scott: Young people want to actively participate. They don’t want to just write a check and call it good. They want to get deeply involved with what we do. One example – a nine-year-old girl named Riley Goodfellow from California. She asked her friends, family and church to help her fund a water project – she ate beans and rice for four months to prove she was serious – and ended up raising enough money for three (that’s more than $15,000). She’s not alone. Last September, we built a fundraising site to make it easy for people like Riley to join our mission. And since then, they’ve raised more than $2.5 million, all for clean water projects.

So how important are young people in changing philanthropy? Crucial. They get it done. They need little direction when they have passion for what they do. They just take care of it. The tens of thousands of mycharity: water members prove this. Every day, we’re excited to see more and more young people come up with creative ideas to fundraise for water projects. They’re changing the face of philanthropy by involving their personalities and their hobbies in giving and by trying to connect with those they help. It’s so exciting to see.

>> TILE brings you exclusive opinions, explanations, and interviews from experts in every industry. To read more, click on Ask the Experts in the TILE Library.

Have a burning question or an expert you’d like to see interviewed? Just Ask TILE!

New Health Care Law Shifts Funds Toward Younger Patients

July 30th, 2010

Costs from the health care overhaul are largely being covered by cuts to health care programs for the elderly.

  • Although the new health care law provides coverage for the uninsured, it will also result in cuts to Medicare. This marks a change in the state of affairs in this country: we are accustomed to a system in which the young support the old.
  • The elderly won’t lose any benefits that the law guarantees them, but many Medicare programs are hybrids of public and private insurers, and these will be adversely affected.
  • The change has some seniors worried about a decrease in their quality of life, even as the previously-uninsured are looking forward to an increase in theirs.

Facts & Figures

  • Medicare Advantage, a combination of public and private insurance for the elderly, currently supports 11.3 million people. Cuts to these plans will pay for 15% of the health care bill’s costs.
  • The bill will cost $938 billion over ten years. $455 billion of that money will come from cuts to Medicare and two other federal programs.
  • Medicare Advantage customers will have their benefits reduced by an average of $68 per month by 2019, the Congressional Budget Office says.

Best Quote

“I’m sure that some of those additional benefits have been nice. But I think what we have to look at here is what’s fair and what’s important for the strength of the Medicare program long term.” – Nancy-Ann DeParle, White House Office of Health Reform