Posts Tagged ‘economy’

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A Business From A Buck

Monday, August 16th, 2010

In an economy like this one, it seems unlikely that any bright business idea could be realized without a significant amount of startup cash. However, a few savvy entrepreneurs are making it work.

  • Small businesses are getting their start from very little money.
  • The Wall Street Journal found three booming businesses that were launched on only a couple of hundred dollars.
  • Technology plays a large part in helping new businesses because professional looking websites and automated phone systems are widely accessible.

Facts & Figures

  • About half of all start-ups close within five years, usually due to lack of capital.
  • Babson College estimates that it costs up to $65,000 to start a business.

Best Quote

“It’s gotten so much easier to reach mass markets and test out ideas. This is something that’s becoming accessible to anyone with an idea.” – Bo Fishback, Vice President of Entrepreneurship, Ewing Marion Kauffman Foundation

Affordable Vacation Homes For The Wealthy

Friday, August 13th, 2010

In this market the affluent still want an island getaway home – just for a lower price tag.

  • Real estate developers are marketing affordable vacation homes to wealthy clients in a tough market.
  • Developers are trying to avoid lowering the price on existing homes, and instead are advertising affordable second, third and even fourth homes that offer extra amenities like pools and beach access.
  • The goal is to play to value and convenience, while still including the perks of a vacation house.

Facts & Figures

  • At a sporting club in central Florida, members can buy 1,500 square foot cabins starting at $600,000.
  • On a private island in the Turks & Caicos clients are able to purchase small houses for as low as $1.4 million, which is 44% less than the $2.5 million required for the island’s least expensive property and home previously.

Best Quote

“We’re trying to get the point across that you can have a great place in a wonderful island for, quite frankly, a reasonable price.” – Steve Schram, Chairman, DPS Sporting Club Development Co.

More Concerns About The Economy

Wednesday, August 11th, 2010

The U.S. is still slowly recovering from the worst recession since the 1930s.

  • The economy has now grown (slowly) for four straight quarters.
  • The slow economy growth has made little impact on the unemployment rate.
  • New home construction, imports, and business investments all increased in the second quarter.
  • Consumer spending, which normally accounts for 70% of U.S. economic activity, didn’t rise as much as expected.

Facts and Figures

  • The current unemployment rate is 9.5%.
  • While imports increased by 28.8%, exports increased by 10.3%, creating a trade deficit.
  • Business investment increased by 17%, which was the largest increase since the beginning of 2006.
  • New home construction increased 27.9%.

Our Ever Weakening Dollar

Tuesday, August 10th, 2010

As concerns about the struggling economic recovery rise, the U.S. dollar falls.

  • The dollar index has hit a 3 month low (81.354) after reports were released that the economy slowed 2.4% in the second quarter.
  • Other currencies, like the Euro, Sterling, and Aussie, increased.
  • Experts said that the rise in other currencies is unlikely to continue if the U.S. economy continues to struggle.

Facts & Figures

  • The Euro rose 0.2% to $1.3072, nearing a 3 month high.
  • The Sterling hit a 6 month high of $1.5820.
  • The Yen fell from an 8 month high.

Best Quote

“We’re seeing a disconnection as U.S. data stays weak yet risk appetite is strong. Weak U.S. data will translate into risk aversion at some point.” -Tom Levinson, Currency Strategist, ING

With India and Britain, The Empire Doesn’t Strike Back

Friday, August 6th, 2010

India experiences colonialism role reversal as Britain scrambles to hook into their budding economy.

  • The British Prime Minister, David Cameron, plans a visit to India that will focus on increasing trade between the two countries.
  • Mr. Cameron’s trip indicates the global economy’s shift towards developing nations and his commitment to latch onto India’s booming business world.
  • During Cameron’s trip he will ring the opening bell on the Bombay Stock Exchange, introduce a solar-powered mobile handset and deliver a speech entitled “U.K. and India: A New Economic Partnership” to bankers and businessmen.

Facts & Figures

  • British companies Marks & Spencer and Bentley Motors have started investing in India in recent years to tap into new wealth.

Best Quote:

“India is an incredibly dynamic market that will grow substantially in the next five to 10 years.” - Stephen Phipson, President, Smiths Detection.

Jobless Claims And Recovery Concerns Rise

Thursday, August 5th, 2010

As jobless claims rise, Americans are becoming even more concerned about the economic recovery.

  • New unemployment claims rose last week, which may indicate a weak economic recovery.
  • The unemployment rate is expected to climb to 9.6% (up from 9.5% in June).
  • While growth expanded 3.7% in the first quarter of 2010, it fell to a 2.4% annual rate in the second quarter.
  • Generally speaking, consumers have cut spending.

Facts & Figures

  • Claims for state unemployment benefits rose 19,000 (the highest since April).
  • 4-week average of new jobless claims rose 5,250 to 458,500.
  • Jobless claims fell in 2009 but have stalled this year.
  • The number of people on emergency benefits rose 60,993 to 3.31 million in mid July.

Best Quote

“The bottom line is that any recovery in employment is going to be very slow. It’s likely that we’re still 9.5 percent unemployment or awfully close to it by the end of the year.” -Scott Wren, Senior Equity Strategist, Wells Fargo Advisors in St. Louis

Foreign-Currency Debt Hits Hard In Central Europe

Thursday, 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

Ford Gives The U.S. Hope

Wednesday, 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

Wednesday, 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

The Housing Market Is Still Stalling

Tuesday, 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

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