Monthly Archives: March 2012

Business Roundtable Sees Economy Picking Up Momentum

The Business Roundtable Chairman James McNerney

According to a quarterly survey conducted by The Business Roundtable, a group of CEO’s of firms whose combined yearly revenues come to more than $6 trillion, there is a perception of improved movement of the economic recovery, including plans of increased hiring. This improved optimism comes despite fears of a continuing recession in Europe.

The survey examined the economic outlook for the coming six months and was conducted from March 1st through the 19th and based on the answers of 128 member companies. The index, which showed increased optimism for sales, business investment and hiring, proffered a significant improvement in expectations, registering a score of 96.9 points in March’s survey compared to 77.9 points in January, which measured the economy’s outlook the last quarter of 2011.

James McNerney, chairman, president and CEO of The Boeing Company and chairman of The Business Roundtable said that the significant improvement in the survey “is one of the better moves” since the launching of the series in 2002. This quarter’s gain marks the third in a row, boding quite well for the economy.

However McNerney did not dismiss the European factor emphasizing that “Europe is a real worry.” He pointed out that much of the world is in growth mode, with Asian and Middle Eastern economies growing in the upper single digits. Although it is true that their growth has slowed down, including China’s, “China is still at 7.5 to 8.0 percent.”

"While Asia and China are coming down, it's still at a very high growth rate that we need to hire people for to satisfy their demands," McNerney said.

"So, even though quarter-to-quarter it's slowed down a little bit, Asia's still growing and the US is picking up. Europe is the one that has headed to negative territory. We're all concerned."
 

General Motors Hires Commonwealth to Promote Chevrolet

As any good entrepreneur knows, advertising is key to a successful business. It’s not a surprise, then, that General Motors has hired a new advertising agency for Chevrolet, its largest, most successful automobile brand by sales.

The project will be handed over to Commonwealth Advertising, the partnership between Goodby, Silverstein & Partners of Omnicom Group and Interpublic Group of Companies Inc.’s McCann Erickson Worldwide. GM explained that the move is part of the company’s new marketing plans aimed at saving more than $2 billion over the course of the next five years. Chevrolet, they said, has used more than 60 advertising agencies across the globe.

According to GM’s Joel Ewanick, “This is the first time that two large marketing communications holding companies have come together to form a single company. Commonwealth will be based right here in Detroit, and its only focus will be on strengthening and growing Chevrolet into an iconic global brand.”

General Motors is the biggest automaker in the world today, and is home to the Buick, Chevy, Cadillac, Opel, Holden, GMC and Vauxhall. With business in over 150 countries, the corporation has created 202,000 jobs.

“We win when the customer wins” is one of GM’s trademark statements from CEO and chairman Dan Akerson, and the company’s guidelines reveal their efforts to provide the best service and strong commitment to their partners, customers and employees.

These include: safety first; creating lifelong customers; innovative approaches; long-term investment value; and positive impact.

Quote of the Day: Bernanke Sends Mixed Message About Unemployment

Federal Reserve Chairman Ben Bernanke

Federal Reserve Chairman Ben Bernanke said on Monday that the Feds’ stimulation of the economy has indeed helped reduce the amount of unemployed in recent months, but warned that because of the size and duration of the problem there could result lasting damage to the US economy as a whole.

“Recent improvements are encouraging,” he said. But, he continued, “millions of families continue to suffer the day-to-day hardships associated with not being able to find suitable employment.”

“Because of its negative effects on workers’ skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy.”

Bernanke was addressing a group of business economists in Virginia on Monday.

Jeremy Stretch on the Euro

The debt crisis in Europe has yet to be truly resolved, and the euro has been bobbing up and down in value as the situation changes. This past week, it deterred investors due to an upcoming week of risks such as an additional finance minister summit.

Jeremy Stretch of CIBC World Markets said:

“If the PMIs are any guide, the Ifo business expectations are likely to soften and along with the headline numbers could drive the euro lower.

“Having failed to rise above $1.33, we see the risk of the euro falling with a softer Ifo reading likely to exacerbate the situation as traders will lighten positions.”

Best Carry-on Luggage for Business Travelers

If you travel a lot then you know how important your luggage can be. Today your carry-on piece has taken on even more significance as airlines cut back on luggage allotments and many airlines charge extra for even one piece of checked baggage.

Here is a look at five of the best ranked carry-ons which can save you money and help you travel light in a convenient and efficient manner.

•    Samsonite Winfield 24 inch Hardside Spinner Luggage: Strong and reliable this carry-on is great for both business and weekend travel. It has four wheels, making it easy to transport, and there is lots of room inside. Organizing your stuff is easy with the center divider inside, helping you to keep everything in order.

•    Swiss Army’s Swiss Gear 20 inch Upright: This bag might look small in size, but it is big in function. The unique “never-lost” system lets the traveler attach another bag to this one, helping to ease the travel experience. Inside the bag organizing is the name of the game. Everything has its own place set aside, letting you tightly pack your belongings conserving space so that you can fit more in less. To top it off, the bag is expandable, giving the perfect amount of space, but the traveler is still going light.

•    Studio H by Hartmann: Mobile Office: Designed especially for business travelers, this carry-on resists stains and water while being highly light-weight. The aluminum handle and pushbutton lock makes taking the bag along a pleasure. Inside the bag there are places for your laptop and clothing, while outside there is a smart pocket perfect to put a newspaper, magazine or book.

•    London Fog: Good-looking on the outside and highly functional on the inside, the 21 inch Buckingham Collection carry-on can expand to give the space-challenged traveler 30 percent more room for clothes and other essentials. This classy bag also comes with a see-through bag for your toiletries, making your security check just a bit easier.

•    Eddie Bauer Westlake Collection Rolling Gear Bag: More duffle bag than suitcase, this sporty and durable bag is mostly roomy. If you’ve got a lot of gear going but not much space, this tote is for you. An interweaving bungee cord lets you attach more items on the outside of the bag as well.
 

Anticipation of Economic Upturn Dampened by Asset Managers

Though the world seems to sense an economic upbeat, an investor with management of over $25 billion has expressed his skepticism and lingering concerns.

According to George Osborne, the Office for Budget Responsibility claims that the UK’s economy is expected to grow throughout 2012’s first quarter. He explained that the OBR expect the British economy “to avoid a technical recession with positive growth in the first quarter,” and that the British economy has “carried a little more momentum into the new year than previously anticipated.”

However, a number of asset managers remain anxious in the face of the economy’s current state.

Neil Woodford of Invesco Perpetual, for example, said: “The current wave of optimism sweeping global stock markets assumes that the developed world will now emerge from the period of low economic growth and that growth will continue to disappoint and, in the near term, will slow in 2012.”

Fidelity’s Trevor Greetham added to the situation, expressing his grim outlook on the UK, saying: “America is experiencing a growing housing market, improved car sales, and more job creation. We should be striving to create these conditions here, but austerity is keeping growth weak in the UK.”

Mike Turner of Aberdeen Asset Management shares an opinion with Greetham, stating: “The Eurozone economy is far from out of the woods, there is no instantaneous solution- sovereign deleveraging will take years to play out- and until Europe is providing the UK with a strong market for exports, we will suffer too. We have our own fiscal drag to consider.”

Even those who see the silver lining remain hesitant, as AWD Chase de Vere’s Patrick Connolly proved when he responded to Woodford’s statement. He said: “I don’t believe there is a current ‘wave of optimism sweeping global stock markets.’ There is just not so much negativity. However, stock markets still overreact to economic data and forecasts both on the upside and the downside, and we still face a huge degree of uncertainty and, while equities offer decent long-term value, it would be no surprise if markets either rose of fell significantly from here.”

Where, then, should people invest? He says, “At these times, investors should stick with experienced managers who will largely ignore the short-term noise and will stick to their longer-term strategy.”

Auto Industry Benefiting from Continuing Economic Recovery

The continuing improvement in the performance of the US economy in recent months has fueled a significant rise in auto sales. As confidence improves consumers feel better equipped to make new car purchases.  There is also a larger than usual number of people replacing old cars due to the fact that they held off making a new car purchase during the bad years of the economic crisis.

Overall car purchases rose by almost16% over the same time last year, during the month of February, while the annual sales rate reached its highest level in four years. According to automotive industry reports there were 1,149,396 cars and light trucks sold during February. Annualized that rate means 15.1 million cars sold in one year.

Individual companies in some cases did even better than the average rate. Chrysler’s February increase in sales was about 40% better over the same time last year. Volkswagen AG went up by 42.5% and Kia had improved sales by 37.3%.

Top Ten Countries for Startups in 2012

This year’s World Bank Doing Business report has listed the top nine countries for startup businesses. The rankings consider the starting ease and conditions, as well as minimum cost, time and available assets. Rather surprisingly, the U.S. didn’t make the list.

These countries did, however:

  1. New Zealand, with 1 day to start a business
  2. Australia, with 2 days to start a business
  3. Canada, with 5 days to start a business
  4. Singapore, with 3 days to start a business
  5. Hong Kong, with 3 days to start a business
  6. Macedonia, with 3 days to start a business
  7. Georgia, with 2 days to start a business
  8. Rwanda, with 3 days to start a business
  9. Belarus, with 5 days to start a business

ECB’s Joerg Asmussen Says Europe Not Out of Crisis Yet

Joerg Asmussen

According to Joerg Asmussen, executive board member of the European Central Bank, it is now time for the ECB to begin planning its “exit strategy” from the unprecedented support the bank has used to prop up banks during the recent, and ongoing, debt crisis.

“The time for an exit depends on what happens on the financial markets,” Asmussen said. “It’s clear that it’s still too early, but we must begin preparing our exit very carefully.”

Ever since the beginning of Europe’s critical debt crisis the ECB has utilized “non-standard” practices to contain the damage to the areas financial system.

The most recent intervention was the non-standard measure to bequeath on banks over 1.0 trillion euros (1.3 trillion dollars) in three-year loans at shockingly low interest rates in December and February.

“The conclusion shouldn’t be drawn that, now that we’ve handed out three-year loans to banks twice, we’ll automatically do it a third or fourth time,” Asmussen said.

In response to a question about whether or not Europe is out of the crisis yet, Asmussen replied,

“No. The markets have calmed down since the beginning of the year, but we don’t know whether this calm is deceptive.

“Member states should therefore take advantage of it to press decisively ahead with the necessary reforms.”

Quote of the Day: New York Fed President William Dudley on Today’s Economy

New York Fed Reserve President William Dudley

The Federal Reserve is still debating whether or not to embark on a third phase of quantitative easing, shorthand QE3, said William Dudley New York Fed president, a close confidant of Federal Reserve Chairman Ben Bernanke. Dudley believes that the economy’s recovery is still fragile, despite the recent signs of improvement. If not handled properly the recovery could easily putter out.

"Nothing has been decided," he said of QE3, in which the Fed would make large-scale asset purchases in an attempt to lower rates and give the economy another controversial shot of adrenaline.

"It all depends on how the economy evolves," Dudley added. "It's about costs and benefits, and if we get to a point where we think the benefits of another program of QE outweigh the costs, then we'll certainly do so."