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“A man claiming to be the spokesman for pirates holding a Ukrainian ship laden with Russian tanks said they wanted $35 million to set it free.”
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Full article:
http://www.timesonline.co.uk/tol/news/world/africa/article4836974.ece
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Ken’s POV: Since when do pirates have a “spokesman” ?
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Millions of baby boomers are delaying retirement because their IRAs are tanking; millions of retirees are crushed by rising energy and food costs.
Attack these two “kitchen table” issues directly:
1) Increase Social Security benefits by 10% (to help Seniors with rising living costs)
2) Make IRA withdrawal taxable at capital gains rates (they’re currently taxed at ordinary tax rates)
3) Make the first $100,000 of annual capital gains tax-free (they’re currently taxed 15% for many folks)
The last initiative would effect more than retirees, but would exclude “fat cats”. And, the move would certainly buoy the stock market — at least a little.
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Excerpted from WSJ: “The GOP Blames the Victim”, Thomas Frank, Oct. 1, 2008
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“Capitalism sure is fragile if subprime borrowers can ruin it.”
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We hear from some on the right that the disaster on Wall Street was the handiwork not of those with unbridled pecuniary motives but of Fannie Mae and Freddie Mac, which were government-sponsored enterprises and therefore partially exempt from market discipline and of theoretical necessity the sole culprits.
There is no doubt that Fannie and Freddie enabled the subprime neurosis, but for certain conservatives they are virtually the only malefactors worth noting.
The dirge goes like this: Fannie and Freddie were buying up subprime mortgages, and they were doing it for (liberal) political reasons. Mortgage originators thus had no choice but to hand out mortgages like candy. Had market forces been in charge, loans would, no doubt, have been administered with (more) rigor and sternness
Bill Black, a professor of economics and law at the University of Missouri-Kansas City and an authority on the Savings and Loan debacle of the 1980s, … points out that, for all their failings, Fannie and Freddie didn’t originate any of the bad loans — that disastrous piece of work was done by purely private, largely unregulated companies, which did it for the usual bubble-logic reason: to make a quick buck.
Most of the mistakes for which we are paying now, Mr. Black told me, were actually made “by four entities that under conservative economic theory should have exercised effective market discipline — the appraisers, the originators of the mortgages, the rating agencies, and the investment banking firms that packaged the subprime mortgage-backed securities.” Instead of “disciplining” the markets, these private actors “served as the four horsemen of the financial apocalypse, aiding the accounting fraud and inflating the housing bubble.” It is they, Mr. Black says, who “turned a crisis into a catastrophe.”
Ah, but truth is no ally to a conservative with his back to the wall. So much more helpful are the trusty narratives on which the movement was built. So when we have dispatched this first canard, we learn from other conservatives that it is the sub-prime people who are to blame; that by taking out loans they couldn’t possibly pay off, these undesirable borrowers have ruined us all.
Full article:
http://online.wsj.com/article/SB122282690823092989.html
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Ken’s POV:
Bailing out greedy Wall Streeters irks most folks– me included. So does bailing out people who lied on their mortgage application (even if coached to do so by an unscrupulous originator), who put little or no money down, and made few if any payments (some of which may have been interest only — at low teaser rates). These folks are culpable, too. “Keeping them in their homes” is nonsense. What makes them “their” homes ?
Denying government’s role in encouraging the drop in loan criteria is also nonsense. Fannie and Freddie played a mega-role in creating the crisis. Period.
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Excerpted from Forbes “J&J Gets Proactive About Bad News” by Lisa LaMotta, September 27, 2008
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Sometimes being proactive can be your best bet in countering a bad situation.
In an effort to be transparent, the U.S. Food and Drug Administration has been rigorous in issuing early communications to the public whenever problems, large or small, arise that are even remotely related to a drug. These early communications often come out before the FDA has had time to investigate the underlying cause of the problem, and they can have detrimental effects on a pharmaceutical company and its pipeline.
The latest drug to be part of an early communication is Johnson & Johnson’s Eprex, or epoetin alfa, which is approved for the treatment of anemia and is currently being tested in high doses to treat patients who have had an ischemic stroke. The FDA announced on Friday that it had received preliminary information from a study that J&J is conducting in Germany, which showed patients taking Eprex in high doses, about 40,000 units daily for three days, had a higher incidence of death than those in the placebo group. About 14.0% of the Eprex patients died, compared with 9.0% of the placebo group patients.
J&J is also taking a transparent approach, which seems to have limited the damage to its shares. Its subsidiary Ortho Biotech issued a statement last week informing the FDA of the abnormal occurrences in the data…The FDA has yet to determine the underlying cause of the deaths and whether it’s related to the high doses of Eprex…Shares of J&J were little changed, rising 4 cents, to $69.40.
This hasn’t had a large effect on J&J thus far, but other companies have not been so lucky. Amylin Pharmaceuticals has been under fire for deaths reported by the FDA that were loosely linked to its blockbuster diabetes drug Byetta. While the cause of most of the deaths has been attributed to factors other than Byetta, Amylin’s share price has dropped dramatically, about 39.3% since the news broke in August.
Edit by SAC
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In late 1982 Johnson & Johnson recalled over 30 million bottles of Tylenol after several bottles were found laced with cyanide in Chicago, IL. J&J has been widely praised for its reaction, which included the recall of $100 million worth of product, heavy use of PR, and paid advertising to communicate with consumers followed by reformatted product packaging and heavy use of promotions for the product re-launch. After dropping from 35% to 8% market share at the time of the incident Tylenol regained its market share within a year.
The J&J Credo, which speaks to putting its people and consumers first always has guided the company’s decisions since 1943; long before the Tylenol incident of 1982 and through the Eprex situation today.
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Full article:
http://www.forbes.com/2008/09/27/jnj-fda-closer-markets-equity-cx_lal_0926markets34.html
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Excerpted from BusinessWeek, “Best Global Brands: Gutsy marketers spend into the teeth of a recession”, by Burt Heim, September 18, 2008
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Every time a recession threatens, executives glare at the balance sheet and wonder aloud about one particular expense: brand building. Trimming the marketing budget can seem eminently sensible. After all, doing so won’t hurt product quality or, most likely, next week’s sales. As the business climate has worsened in recent months, a number of blue-chip companies have announced plans to cut marketing costs.
Then there are the other guys—companies that refuse to let tough times distract them from their long-term brand-building efforts. Sometimes they see a recession as the perfect moment to get a leg up on a weakened rival. Others strengthen their brands to ward off discount competitors. Still others feel they have a knockout new product that requires support.
“There’s always pressure to cut,” says Jez Frampton, chief executive of Interbrand, a brand consultancy, which typically advises clients to spend harder during a recession. Consumers, he argues, “are more conscious they’re spending their hard-earned money. It increases what they expect they should receive in return.”
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Still, it requires a gutsy chief marketing officer to ask the boss to invest in something as squishy as brand-building when the economy softens. CEOs typically set marketing budgets as a percentage of expected future revenue, a number that often shrinks in a downturn. Results-hungry investors, meanwhile, want marketing money spent on activities that ring cash registers now, like promotions or coupons. Even the competition can create temptations to play it safe. Advertisers closely monitor how often their ads appear vs. the competition’s. They call this their “share of voice.” A pullback by a timid rival gives penny-pinchers an excuse to pull back while still preserving share and save money. And most companies succumb to the pressure. During the last two recessions, in 1991 and 2001, overall ad spending fell.
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Real life isn’t so simple, of course. Many factors determine whether spending into a downturn will work, not least of which is the quality of the product and the advertising. Plus, the consumer you thought you knew, pre-recession, can be almost unrecognizable. When times get tough, people reexamine old habits and brand loyalties. Their tastes shift dramatically as they cut back. “The rate of change can be phenomenal,” says John Hayes, CMO at American Express. In the past year alone, he notes, consumers have far more negative perceptions of debt and spending on themselves.
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Defensive Spending
Many companies that continue to invest in their brands during a downturn are not so much going on the offensive as playing defense. AmEx is no exception. CMO Hayes says he has been “doubling down” in recent months on messages that promote trust and security.
Often a downturn ups the ante in a defensive battle companies have been fighting for years. In such cases, pulling back is a false economy. In 2000 Kellogg’s decided to increase its advertising spending to brand its cereals as premium products and avoid being commoditized. The strategy so far has worked. In the first six months of this year, Kellogg’s was able to pass along higher ingredient costs, while many other food companies couldn’t. “We believe it’s critical, when the economy gets tougher, that people should be seeing the value of our brands constantly,” says Mark Baynes, Kellogg’s chief marketing officer. “Brands are much more than flakes in a box.”
Kimberly-Clark, which owns the Kleenex brand, is also playing defense in the U.S. To justify charging more than its rivals, Kimberly-Clark is following the usual playbook for packaged-goods companies: creating new iterations of the same product—extra-soft tissues, anyone? It’s also trying to forge a more personal connection with consumers by spending heavily online and on TV. “The worst thing you can do,” says CEO Tom Falk, “is pull in your brand-building spending and become more of a commodity.”
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Offensive Spending
Then there are the companies that go on the marketing offensive. In some cases, they are perfectly suited to hard times and simply want to remind customers that they represent good value. Wal-Mart Stores, for example, has recently upped its advertising spending and returned to selling itself as a champion of the low- and middle-income consumer.
Some companies, having reached the top, are willing to spend to stay there. Louis Vuitton plans to continue to boost its marketing budget, downturn or not. “We never change the long-term strategy because of short-term problems,” says CEO Yves Carcelle. Louis Vuitton’s aim is twofold: keeping the aspirational masses hooked on classic luggage and handbags and ensuring that fashionistas continue to see the company as edgy.
Even underdogs can show some bite during a downturn. Amid slowing sales in the U.S., Volkswagen is going after a niche its Detroit rivals have pretty much left for dead: minivans. Pushing its new Routan minivan, says VW marketing manager Brian Thomas, strikes at the soft underbelly of his rivals: The Big Three have slashed ad spending on minivans, and the entire industry is running ads promoting fuel efficiency. That makes minivans a comparatively quiet niche, one in which its theoretically easier to grab consumers’ attention.
Edit by DAF
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Full article:
http://www.businessweek.com/magazine/content/08_39/b4101052097769.htm
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Excerpt from Brandweek “Brown Bagging it Becomes Fashionable” by Elaine Wong September 21, 2008
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Noting a shift in consumer behavior, food giants like Kraft and ConAgra are targeting new launches at lunches.
Brown bagging is at an all-time high since 2001, per the NPD Group, Port Washington, New York. Adults ages 18-and-older consumed some 8.5 billion brown-bag lunches last year (38 bagged lunches per capita compared to 35 in 2006).
Nearly 12% of lunchtime opportunities were brought from home as of the year ended February 2008. In contrast, the February 2007 figure was 11.3%. Of those polled, cost-saving was the primary motivation.
“Brown bagging has been on the rise every year we look at it,” said Harry Balzer, vp at NPD Group, Chicago. “The options available to us for carried products do make life easier than people going out to eat at lunchtime.”
The return to brown bagging has prompted food companies to reexamine their portfolio of brands…
Take Kraft, for instance. The maker of Singles cheese slices introduced new packaging for its Deli Fresh Natural Cheese slices, new Oscar Mayer thick-carved and family-sized meat varieties and a mayonnaise with olive oil this summer…
Soup maker Campbell has teamed with Kraft for a joint FSI promotion dropping this November that pairs the two companies’ staple products.
The partnership marks the first time Campbell and Kraft have joined forces in the last five years. Since the introduction of Soup At Hand, Campbell’s heat-and-go line, and microwaveable bowls, the company has seen sales exceed $250 million…
Edit by SAC
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Full article:
http://www.brandweek.com/bw/content_display/news-and-features/packaged-goods/e3ie41d3cb71a4f0067adc18265ee39ef2d
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