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Miller Brewing wants to get further into the sub-premium U.S. beer market by rolling out a big campaign for Milwaukee’s Best.
As the Journal reports:
“We want to reach out to the working-class hero types, who listen to Springsteen, read Playboy magazine and don’t want to spend a lot of money on beer,” said Peter J. Marino, a Miller spokesman.
That’s a category that includes, what, a few thousand people? I know the Midwest can be a bit behind the times, but these guys seem to be, like, stuck in 1985.
Playboy (this is a family blog, find your own link) is still a mass circulation magazine. It claims U.S. circulation of three million (2.95 million of which get it only for the articles). But I’m guessing the prototypical Playboy reader is a guy in his mid- to late-50s—hardly a growth market for beer drinking. Meanwhile, teenagers, college students, and post-adolescent males—the people Miller wants to sell it’s cheapo brew to--choose to access photos of topless women on a free venue. (It’s called the Internet.)
And while Bruce Springsteen may sing about working-class heroes, it’s also a safe bet the demographics of his core audience are more akin to those of Business Week or Foreign Affairs than Playboy. As Bruce’s fans have aged, many have evolved from scruffy Jersey teens into prosperous Jersey brokers and financial analysts. Born to Run? More like Born to Run Spreadsheets!
Posted by dan at 06:49 AM
Katrhyn Kranhold reports in the Wall Street Journal:
General Electric Co. agreed to pay about $500 million to acquire a 49.9% stake in one of Central America's largest banks, BAC International Bank Inc., according to people familiar with the deal, marking the conglomerate's entry into consumer loans and retail banking in the region. . .BAC International has 178 branches in Panama, Guatemala, Honduras, El Salvador, Costa Rica and Nicaragua. Its credit-card unit, Credomatic, is considered the biggest credit-card issuer in the region, analysts say.
Mark Begor, chief executive and president of GE Consumer Finance-Americas, said GE has been looking at the region for more than four years, waiting for the right investment. He said, Central America, with 40 million citizens, is "a sizable place to play. It's an attractive place to grow. . .
The move into Central America comes as the region's consumer banking is drawing more interest from foreign financial institutions including Bank of Nova Scotia, HBSC Holdings PLC and Citigroup, Inc., according to people familiar with the region. Until now, most of the banks have been owned by local interests who are slowly starting to expand beyond their own countries in the region.
Posted by dan at 06:29 AM
The Washington Post reports on President Bush's assets:
The president reported having at least $4.95 million in Treasury notes,
Posted by dan at 06:14 AM
From today's Wall Street Journal editorial page:
"The unions are blaming United management for the pension fiasco, and not without some cause. But they have helped to put the industry into its current state by using the whip hand they are given under the Railway Labor Act to threaten strikes and force up labor costs in the good times. Now the unions are discovering that they will lose some of the pension benefits they bargained for."
Workers forcing up labor costs during good times? Lord, What dastardly scheme will they think of next to destroy capitalism.
Earth to the defenders of free minds, men, and markets: workers are supposed to force up labor costs in good times. See, when the economy is robust and expands at a rapid pace for several years in a row, there comes a time when the supply of labor doesn't grow quite as rapidly as the demand for labor. Workers--unionized and non-unionized--thus gain what's known in the trade as bargaining power, and force their employers to provide better wages and benefits. The workers, in turn, have more cash to spend on products and services, which drives further growth. And that's precisely what happened in the 1990s.
Of course, the Journal's editorial page preferred world would be one in which workers meekly accept whatever crumbs management deigns to throw their way. It would be one in which unions are weak. It would be one in which workers' wages and benefits barely keep pace with inflation in good times. It would be on in which workers' wages and benefits get crammed down at the first whiff of trouble.
Come to think of it, it would look an awful lot like Dow Jones & Co.!
Posted by dan at 04:29 PM
The Senate yesterday passed a highway bill that would spend $11 billion more than President Bush wants.
Per the Times.
I would challenge anyone to match my conservative performance and credentials," said Senator James M. Inhofe, Republican of Oklahoma and chairman of the Environment and Public Works Committee. "And yet, I've always said that when you come to this body there are two areas where conservatives are big spenders. One is national defense, and one is in infrastructure."
And one is Medicare. And one is the Farm Bill. Oh, and don’t forget education. Or Iraq and Afghanistan. There’s something almost charming about the way these people beat their chests and proclaim themselves to be fiscal conservatives even as they pile on oodles of more debt every month.
There's more:
Senator Christopher S. Bond, Republican of Missouri and chairman of the appropriations subcommittee responsible for road money, said, "We have to have this money for safety, for economic development, for continued growth and the health of our economy."
Silly Kit. Public investment in the kind of infrastructure that supports economic growth is soooo Democrat-New-Deal-FDR 1930s. (It was also so Ike in the 1950s, but lets forget about that unfortunate period of Republican moderation.) Get with the program. Don’t you know all the economy needs to grow is an extension of the capital gains tax cut and the elimination of the estate tax in 2011?
Posted by dan at 08:32 AM
The reward for a life of service and a vow of poverty is. . . . a cram-down. Vatican-style.
Mary Williams Walsh writes in today’s New York Times.
Seeking to save money, the Roman Catholic Archdiocese of Boston is proposing cuts in its pension benefits for priests. The archdiocese says that its pension fund has had poor returns in recent years and has suffered from many of the same problems as corporate America's pension funds. Previously, however, officials have cited general financial strains stemming from the sexual abuse scandal and a resulting decline in contributions from churchgoers. The archdiocese has begun holding meetings to inform priests of the proposed cuts. They include freezing monthly pension benefits at the current level, $1,889, rather than raising them with inflation, and asking some priests in some case to pick up more of their housing costs.Medical benefits would also be reduced and linked to financial need for the first time. Able-bodied retired priests would be steered away from assisted-living quarters, which are expensive, and encouraged to stay in their parish rectories after retiring. Those who collect Social Security or have other assets, say, from a family inheritance, would have to dip into those funds to pay for assisted living and nursing home care that the archdiocese now provides
Posted by dan at 08:21 AM
Maybe for his next column John Tierney can compare his expected Social Security and 401(K) benefits to the expected Social Security and pension of a United Airlines machinist.
Posted by dan at 09:52 PM
Ever go to a Tower Record store, flip through the racks of discs made by groups and artists you never heard of, and wonder: “who buys this crap?”
One might well ask the same question about one of the companies that stamps out those discs: Warner Music Group.
Warner’s IPO wasn’t so much launched as it was thrown out a third-story window. Because investors fled from the road shows, the number of shares sold and the original price ($22 to $24 a share) were slashed sharply, to 32.6 million shares at $17. But even that wasn’t low enough. WMG fell 3.5 percent on its first trading day.
And who was behind this steaming pile? Why, some of the same folks who earlier this week brought us Lazard’s initial poor offering. (It’s already off 8.5 percent in just five trading days.) Um, isn’t Goldman, Sachs supposed to be an elite firm? And if it’s so elite, how come the high-profile IPOs it shepherds to market act like Chevy Chase doing Jerry Ford? (Hint: investors like it when the company actually gets to keep some of the cash raised in the offering.)
Goldman’s rich well-connected friends who used to get dealt in to hot IPOs, like Ford Chairman Bill Ford, are probably thankful that those horrible regulators banned the practice of spinning.
Posted by dan at 09:38 PM
United Airlines today won court permission to terminate its pension plans. The pensions were underfunded by $9.8 billion.
As per Micheline Maynard in the New York Times:
The government estimated last month that the pension agency would cover about $6.6 billion of United's shortfall. The remainder, about $3.2 billion, will be borne by United's retirees, in the form of benefit reductions.
Tens of thousands of people who worked hard, and played by the rules, who met all their contractual obligations and planned for retirement accordingly--just lost at least one-third of their retirement income. And not because they screwed up and made poor choices, but because the executives who ran the company and willingly agreed to fund the pensions screwed up and made poor choices.
Welcome to the ownership society!
You're up next, Delta employees.
Posted by dan at 08:56 PM
In the issue of Forbes that arrived last Friday, editor (and tech Kool-aid drinker) Rich Karlgaard, urged readers to sell their expensive homes in California and New York and move to the cheap heartland.
“The sophistication gap between the coasts and interior America is shrinking. Sinclair Lewis, in 1930, became the first American novelist to win the Nobel Prize for Literature. He came to fame by skewering small towns (in Main Street) and medium-size heartland cities (in Babbitt). Prohibition was the Blue State-Red State divide of the 1920s, and satirists such as H. L. Mencken had a field day portraying the self-righteous sobersides of the prairies (who often drank homemade corn liquor behind the barn at night). That was then, but the image lingers. The truth is, Google, FedEx and free trade (which makes possible the dispatch of ripe avocados to Fargo, N.D. in the dead of winter) have made heartland living a much richer experience than it was a generation ago. This development is one of the underpromoted stories of American life and is utterly lost on Blue Staters. The last publicly expressible prejudice in the U.S. is that of Blue State sophisticates sounding off about Red Staters. The Red Staters, comfy in their $400,000 five-bedroom homes on two acres, don't much care.”
From the Washington Post, the same day:
Kansas education authorities put evolutionary theory on trial Thursday in a hearing marked by sharp exchanges over Earth's origins and what students should be taught in science class. . . .Take away the television cameras and the PowerPoint presentations, and Thursday's scene bore a resemblance to the 1925 Scopes trial in Dayton, Tenn., where a high school science teacher was famously convicted of violating a state law forbidding the teaching of evolution. . . .
An early witness was Jonathan Wells, a Discovery senior fellow who described himself as "an old Berkeley antiwar radical" who loves controversy. Wells confirmed during cross-examination that he was a member of the Unification Church when he earned doctorates in theology from Yale and in biology from the University of California at Berkeley. In an Internet posting distributed outside the meeting by Kansas Citizens for Science, Wells refers to church leader Sun Myung Moon, saying, "Father's words, my studies and my prayers convinced me that I should devote my life to destroying Darwinism.
So what if your kids won't learn about Origin of Species in 9th grade biology, and are instead taught that all living species were created in G-d's image in seven days. At least you'll be able to Google Charles Darwin and order a copy from Amazon.
Posted by dan at 03:14 PM
"It takes a lot of paperwork to prove you have no assets."--Georgetown Professor Cindy Mann, quoted in a Portsmouth Herald article on New Hampshire's determined effort to balance its budget by cracking down on the apparently absurd and unacceptable expense associated with guaranteeing minimal health benefits for poor children.
Live Free or Die, indeed.
Posted by dan at 04:45 PM
You would think that if any company could price its IPO properly, it would be an investment bank that specializes in advising companies on issuing stock. Apparently not.
Case in point: Lazard.
There a few different scenarios for an IPO, in descending order of desirability.
A) Price it somewhat below the market—enough so that investors pile on when the shares first start to float and drive the price up, guaranteeing you a nice headline: “The shares of XYZ Corp. rose 8 percent on the first day of trading.”
B) Price it far below the market. The stock gets a huge pop, people fortunate enough to be dealt in on the IPO make huge profits, but the company leaves piles of cash on the table. This happened frequently during the .com era, and guarantees a headline: “The share of XYZ Corp. rose 42 percent on the first day of trading.”
C) Price it above the market. Ask too much for your stock, and pressure starts to mount on the shares the minute they start trading. The underwriters will defend the stock, buying it in the open market and urging their clients to do the same, if only to avoid the embarrassment of having the IPO fall below the offering price on its first day. But after a few hours, nature takes its course. The stock stumbles out of the gate, all the initial investors are angry, and you get a headline like, “The shares of XYZ Corp. fell 4 percent in their first day of trading.”
Now look at this chart of Lazard’s first three days of trading, off 6.4 percent in three trading days.
Perhaps it’s all part of a Machiavellian plan on the part of Lazard to increase market share in the cut-throat underwriting market. Now Lazard can go out to prospective clients and say—look what happenes when you hire Goldman, Sachs to be your lead underwriter.
Posted by dan at 04:31 PM
The U.S. is losing market share in the lucrative global business, according to the head of the Travel Industry Association of America.
As reported in the FT, the number of international tourists rose 12 percent in 2004 to 46.1 million—thanks to the weak dollar.
However, US market share of foreign visitors is still down 38 per cent since 1992, according to the TIA..The number of global travelers has grown 2 per cent to 770m since 2000, but US market share has not kept pace. “Our piece of the pie has shrunk by 5m visitors,” said [TIAA Chief Executive Roger] Dow.
Mr. Dow said rising anti-Americanism had created a feeling that the US was inhospitable and difficult to visit.
“There is a perception of ‘Fortress America’ that is much worse than it really is,” he said
Posted by dan at 02:51 PM
A right-wing, Euro-Socialist-loathing billionaire with a host of immensely profitable businesses and ready access to capital markets and banks around the globe, needs some cash to finance an acquisition spree in Russia. So, where does he look for financing. Why, the European Bank for Reconstruction and Development, naturally.
The FT reports.
News Corp, the US media group led by Rupert Murdoch, is seeking more than $100m from the European Bank for Reconstruction and Development to fund an aggressive acquisition spree for its Russian business.
The development bank - better known for supporting infrastructure projects - has been approached by News Corp to help finance several takeovers by News Outdoor Russia, already the country's largest outdoor advertising business.The EBRD board is due to consider the $130m secured loan at a meeting next week. Bank documents say: "The loan will be used to facilitate creation of a pan- regional outdoor advertising network spanning several former Soviet republics by the company through acquisition of several local outdoor operators."
Posted by dan at 08:57 AM
My article on how economists think the imbalances in the U.S. economy could get resolved (badly) is in today's New York Times "Week in Review" section.
Posted by dan at 07:48 AM