Category Archives: News

From Soldier to Asset Manager: Reade Griffith

In a recent entry for Institutional Investor’s new series War Stories Over Board Games, Polygon founder Reade Griffth discussed how his experiences as a soldier in the First Gulf War have contributed to his leadership skills and ability to perform within the often volatile global market.

Insurers Grapple with Economic Costs of Cyber Attacks

Lloyd’s of London partnered with risk-modeling firm Cyence to publish a report examining the potential economic losses which would be incurred from a major hack of a cloud service provider or a cyber-attack on computer operating systems which are used by business across the planet.

The report estimated that a major, global cyber-attack could result in an average of $53 billion in economic damage. That figure is on par with the cost of mega-disasters of the recent past, like Superstorm Sandy of 2012 and other unprecedented natural disasters.

“Because cyber is virtual, it is such a difficult task to understand how it will accumulate in a big event,” Lloyd’s of London chief executive Inga Beale stated.

The economic costs of an attack on a cloud provider could make the $8 billion in damages of the “WannaCry” ransom attack look like peanuts. That attack, which occurred this past May, spread to 100 countries.

The economic costs typically include interruptions in business plus the cost of fixing computers damaged in the attacks.

The report from Lloyds comes on the heels of a US government warning to industrial companies to be aware of a hacking campaign which could target the nuclear and other energy sectors.

In June a virus labeled “NotPetya” spread from infected computers in Ukraine to businesses all over the world. It worked by encrypting data on infected computers, thus causing them to be unusable. The attack interfered with activity at ports, factories and law firms. “NotPetya cost the world $850 million in economic losses.

American Express Cuts Costs for Small Businesses

American Express has moved to expand its reach by reducing small business fees by as much as 1%. The company hopes the change will double the number of small businesses that accept the card over the next two years.

Until now, Amex payments have been known to be a more costly service than those of other cards, resulting in many shops and other small retailers placing higher credit card surcharges on the customers, or simply not accepting Amex cards at all. The Reserve Bank states that the average merchant pays Amex service fees of 1.58% for each transaction. MasterCard, Visa and Diner’s Club all have fees that range from 0.78-0.8%. Small businesses can be greatly affected by this discrepancy, especially because larger stores are charged less for accepting American Express cards.

“We want to make it a lot easier for merchants to accept American Express,” said Katrina Konstas, head of the small merchant’s business at Amex. “For some businesses, it will be a reduction of whole percentage point.”

As part of their recent efforts, Amex has signed a deal with the Commonwealth Bank that, to a certain extent, will enable small businesses to process Amex payments at the same cost as other credit cards.

Claire Roberts of CBA explained: “Consumers want flexibility in the way they pay for goods and services and by adding American Express we are now providing small businesses with card payment options at the same rate.”

Nestle Considering Sale of Its US Chocolate Arm

Picture credit: Steven Depolo.
Pile of Crunch, Butter Finger, Snickers, and Baby Ruth Candy Bars.

The new head of Nestle SA, Mark Schneider, is considering selling its US chocolate division due to sluggish sales and a move toward faster-growing businesses like health care and coffee.
Schneider became the CEO of the Swiss-based corporation in 2016 after working for many years in pharmaceuticals and medical products.

The US division is had revenue of about $923 million last year. Recently the food industry has come under increasing pressure to reduce costs. After Kraft Heinz made an unsuccessful bid to purchase Unilever at the beginning of 2017, even the largest companies are fearful that they could become targets of buyouts from rival companies. This is even more of a worry for candy companies as sales in the US of chocolate slow due to the American disavowal of sugar as a source of nutrition. Last year Hershey Co repelled a takeover bid by Mondelez International Inc, and just six months later, last March, Hershey announced its intention to reduce its workforce by 15%.

“This might seem small stuff, but in our view, it could be a significant step by new(ish) CEO Mark Schneider,” James Edwardes Jones, an analyst at RBC Capital Markets, said in a note. “The possible disposal of the U.S. business is not everything we had hoped for, but might be the start of something bigger.”

Canine Flu on the Rise

Photo courtesy of Yoel Ben-Avraham.

Certain parts of the US are seeing a significant uptick in the number of pet dogs coming down with the flu. Although it is not contagious to people, or life-threatening to dogs, it is still a concern to pet owners in Arkansas, Florida and North and South Carolina, where the epidemic is at its worst.

According to the American Veterinary Medical Association as much as 80% of dogs that are exposed to canine flu catch it themselves, making it hard to control once it is in the environment. Of course, the worst places are where dogs are kept close together, such as in shelters or boarding facilities.

Symptoms of dog flu are like that of human flu: sneezing, runny nose, and frequent coughing are probable signs your doggie is infected. Owners can expect their pets to recover within a few days to a week. Very rarely the illness turns life-threatening, and that is usually only in the severest cases or when another infection develops later.

The University of Florida College of Veterinary Medicine advises owners to call the vet before taking your dog in for treatment if he exhibits any of the above symptoms. Your dog is still contagious, and bringing him unnecessarily to the vet’s office could expose otherwise healthy dogs to the flu. The American Veterinary Medical Association suggests keeping your dog away from other dogs for at least three weeks until there is no chance of passing on the virus.

Mark Fields Receiving $51.1 Million to Step Down

After three years as CEO at the Ford Motor Company, Mark Fields, age 56, will be leaving the company with a compensation package valued a $51.1 million. The pay-off will be in a combination of cash, stock awards, and pensions.

During his tenure as CEO Fields made historic profits for the company. Now, however, the stock price has eroded by 40 percent due to slipping confidence by investors in the future of the company.

Fields’ compensation package was calculated by the executive compensation tracking firm Equilar for the benefit of the Associated Press.

He will be eligible for $22.1 million in stock awards, will receive about $17.5 million in pension benefits, and could earn an additional $3.6 million bonus, as long as he is not hired by one of Ford’s competitors.

The former CEO also has $7.9 million in vested stock options. However, other stock options have no value at the moment since the company’s stock price crashed.

Alexium Takes the Prize

The premier business awards program in the United States announced its winners of the 15th annual prize. The Alexium International Group took a prize, which will be presented in New York in June.

The CEO and executive director of Alexium, Nicholas Clark, was awarded the Silver Stevie Award for Executive of the Year in the chemicals division.

Australia-based Alexium is the patent holder for cutting-edge technologies designed to provide flame resistance to a broad spectrum of materials. Many industries can, and will, benefit from the use of the company’s environmentally friendly flame retardants. The materials can also be customized.

The company also has other products such as water repellents, antimicrobials, and phase-change materials; and can combine these into uniquely useful products.

Multi-Tasking with Garbage Trucks

Talk about multi-tasking. MIT’s Senseable City Lab, which tries to find ways to better understand modern cities, has a great new program called City Scanner. They are taking single-purpose garbage trucks and turning them into multi-tasking centers. There are currently five trucks in Cambridge, Massachusetts that are measuring many variables including air pollution, traffic status, landfill use and infrastructure decay. They have managed to identify energy leaks in buildings, potholes that need repairs and much more.

Data they collect is transferred to Wi-Fi hotspots and MIT is considering this a living experiment. They are also hoping, at MIT, to reduce the size of the kit they have created so that they could get similar information from smaller vehicles including school buses.

At the moment, the kits cost $1000 each. But Carlo Ratti, the MIT Senseable City Lab Director points out that with just a few sensors you can scan the whole city on a regular basis.

Certainly, this is a creative idea and for companies that have landfills like the Bridgeton, this could allow for interesting partnerships and a real way to multi-task while offering waste management services.

New Alibaba Program to Facilitate US Small Business Sales in China

Reach back in memory to January and the well-publicized meeting between newly inaugurated US President Donald Trump and Executive Chairman Jack Ma of Chinese mega-company Alibaba. At that meeting Ma made a pledge to launch an online sales platform which would give at least 1 million small US businesses a chance to market their wares to the seemingly endless Chinese marketplace.

This week Ma will make another announcement promising to make good on that promise with a first giant step: teaching US businesses how to sell to Alibaba’s 443 million Chinese customers. The education will take place at a conference in Detroit scheduled for June 20-21, 2017.

The world’s two largest markets for small businesses are in China and the USA, so ““connecting them seems like a good idea – good for the United States and good for China,” said Michael Evans, Alibaba president.

Today there are only 7,000, mostly large, US businesses on Alibaba, the world’s largest on-line retailer, which is orders of magnitude larger than Amazon. Alibaba hopes to get that number up to 1 million within the coming five years, most of them small businesses. Trump stated back in January that this would create about 1 million new jobs in the USA.

Ma stated in an open letter to US farmers, entrepreneurs and businesses, that Alibaba’s goal is to make it simple for American small business owners to “take advantage of the China opportunity.”

Saffron Coming to the USA?

Saffron threads. Photo by Hubertl.

Researchers at the University of Vermont have been working to encourage the cultivation of the world’s most expensive spice, saffron. The exotic spice comes from a fall-flowering crocus, which is now grown mostly in Iran. U of V scientists have already been raising the flower and extracting the valuable spice, and now would like to see others get involved.

Interest is growing as potential cultivators discover that the spice is harvested in late fall, when most other crops have already died. It is also tolerant of extreme climates and the short growing season of the Northeast. It is also lucrative, selling for $19 per gram.

One woman who attended a U of V sold-out workshop, asked if “this is the red gold we’ve been looking for?” Potential growers of saffron attended the workshop from New England, Indiana, and even California.

U of V researchers said that yields can deliver about $4.03 a square foot, comparing favorably with tomatoes at $3.51 a square foot and $1.81 a square foot for winter leafy greens. Saffron grown in high tunnels, a greenhouse-like structure without heat, on an acre of land could bring in as much as $100,000 each season.

The crocus produces stigmas in the plants purple flowers, which are removed and dried into small red threads. The spice can be added to a large variety of foods like paella, bouillabaisse, and rice. It is also valued as a natural dye, used as a medicine, and even put in the warm baths of Cleopatra.