Archive for November 20th, 2008

Dirty Dozen … there must be a special spot in hell for these greedy lowlifes

November 20, 2008

Excerpted from WSJ, “Before the Bust, These CEOs Took Money Off the Table”, Nov. 20, 2008

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Fifteen corporate chieftains of large home-building and financial-services firms each reaped more than $100 million in cash compensation and proceeds from stock sales during the past five years, according to a Wall Street Journal analysis.

Four of those executives, including the heads of Lehman Brothers Holdings Inc. and Bear Stearns Cos., ran companies that have filed for bankruptcy protection or seen their share prices fall more than 90% from their peak

Charles R. Schwab                                    $816,606,046
Dwight C. Schar (NVR)                              $626,322,372
Angelo R. Mozilo (Countrywide)               $470,686,861
Robert I. Toll (Toll Brothers)                     $427,768,300
Richard D. Fairbank (Capital One)            $245,344,205
Richard S. Fuld Jr. (Lehman Bros)             $184,613,049 
James E. Cayne (Bear Stearns)                  $163,240,403
Bruce Karatz (KB Home)                           $191,806,999
R. Chad Dreier (Ryland Group)                 $181,420,943
Maurice R. Greenberg (AIG)                      $132,833,450
Paul C. Saville (NVR)                                $130,460,697
Lloyd C. Blankfein (Goldman Sachs)         $130,116,843

Full details, full list:
http://online.wsj.com/public/resources/documents/st_ceos_20081111.html

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Ken’s Take: How about some speedy action in Congress to pass a windfall profits tax: say, 95% on any income over $50 million … retroactive to January 1, 2008. 

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Posted in Executive Compensation, Taxes | Leave a Comment »

Part 2 … Declaring war: First shots fired in tax payers’ revolt .

November 20, 2008

President-elect Obama has a mega-challenge: he has promised many additional high cost government programs, but his plan reduces the number of folks paying taxes, the slow economy is cutting incomes (hence, there’s less to tax), and if my observations are right, the surviving group of tax payers is working feverishly to pay as little in taxes as the law allows.

So, one might ask: where is the soon-to-be President Obama going to get the money he needs to fund his ambitious programs?

Option 1: Go through the budget “line by line with a scalpel” and redeploy the freed-up money.  Nice try, but every spending line in the budget has a sponsor and a constituency. And, practically every cut ultimately calls for lopping off some government workers (who may be union members or protected by Civil Service) or contractor employees.  As VP, Al Gore took a noble shot at “reengineering” the government for greater efficiency.  He eventually gave up and went after a more modest challenge: global climate change.

Option 2: Raise corporate taxes, ostensibly by just closing loopholes.  Remember every so-called loophole has a constituency and a purpose. Does this seem like a time to further threaten global competitiveness and risk spiraling the recession into a depression?

Option 3: Hit the top 5% with even bigger tax hikes.  Despite it’s inherent populous appeal, this tactic could just aggravate another cycle of aggressive tax avoidance.

Option 4: Take back the “tax relief” promised to the 95% and make everybody buy a ticket to ride – even if their “fair share” is just a small token amount.  This approach could raise some serious money since there are a lot of people in the 95%. But it wouldn’t be politically survivable.  Just ask President Bush Forty-One.

Option 5: Continue to deficit-spend like drunken sailors. After all, it was easy to approve a $700 billion bailout, complemented with $150 billion in earmarks.

Sure, the last option – more deficit spending — would pass another trillion or two in national debt on to our sons and daughters. So what? The overwhelming majority of them craved change and voted for Obama. It’s poetic justice for them get stuck with the bill.

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Posted in Government & Politics, Taxes | 1 Comment »

Glub, glub, glub … mortgages under water.

November 20, 2008

Excerpted from WSJ, “How to Help People Whose Home Values Are Underwater”, Feldstein, November 18, 2008

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More than 12 million homeowners now have mortgage debt that exceeds the value of their homes.

That gap is typically already very large. Half of the homeowners with negative equity now owe more than 120% of the value of their homes … on average, that’s about $40,000.

If  house prices continue to fall at the current rate for the next 12 months, as experts generally expect, the median loan-to-value ratio of negative-equity homeowners will increase to more than 135%.

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These negative-equity homeowners have an incentive to default because mortgages are generally “no recourse” loans. That means creditors can take the property if the individual defaults, but cannot take other assets or income to make up the difference between the unpaid loan balance and the lower value of the house. As a result, mortgage default rates are now rising rapidly and are expected to go much higher.

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Full article:
http://online.wsj.com/article/SB122697004441035727.html

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Purina Joins "Marley & Me" in Hollywood

November 20, 2008
Excerpted from Brandweek “Pet-Friendly Purina Pounces on ‘Marley & Me'” by T.L.Stanley, November 2, 2008
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Before there’s a script, or A-list stars or name brand director, what’s to love about a feature film in its most nascent stages?

Answer: A big, goofy, trouble-making dog.
 
Nearly as soon as 20th Century Fox secured the movie rights to Marley & Me: Life and Love with the World’s Worst Dog, Nestlé’s Purina was ready to pounce.
 
That was long before Jennifer Aniston and Owen Wilson made deals to star in the comedy, and Oscar-winning director David Frankel was hired.
 
The pet products marketer signed on as a promotional partner for the all-family comedy…worked with Frankel for product integration, designed a national contest and agreed to hype the DVD as aggressively as the feature release. The details are noteworthy because Purina is a newbie to Hollywood tie-ins..
 
Frankel…will serve as the spokesman and top judge for Purina’s “send us your Marley moments” contest, asking consumers to submit videos of their rascally mutts. In what could be a first for the medium, the Marley DVD will contain some of those consumer-generated videos as bonus features.
 
Marley & Me fit seamlessly into the existing Purina ad campaign that focuses on the endearing qualities of man’s best friend under the tagline, “Long Live Your Dog.”
 
The contest, via longliveyourdog.com, will get its first national TV boost during the Thanksgiving airing of The National Dog Show, a Purina-sponsored event on NBC..
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The brand will appear in key mischief-making scenes in the movie where Marley is ripping into a bag of Puppy Chow and being bribed with Dog Chow by a hapless pet sitter..
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“We know we really need to stand out,” said Rita Drucker, Fox’s senior vp-feature film promotions. “We can’t bank solely on the awareness and popularity of the book. So we put together deals that would help convey the big broad appeal of the movie.”
The PG-rated comedy will be positioned as perhaps the one choice at the multiplex that everybody in the family can agree on, Drucker said. With the success of Beverly Hills Chihuahua and another Disney dog picture, Bolt, on deck, could there be canine overload at the box office? It’s doubtful, said Paul Dergarabedian, president of tracking firm Media by Numbers. “They’re thematically different enough that it likely won’t matter that they’re coming close together. Besides, dogs are hot right now.”
 
Edit by SAC

Full article:
httphttp://www.brandweek.com/bw/content_display/news-and-features/licensing/e3i397aa99d2932d77d4691144ef42c8dbe

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Excerpted from Brandweek “Pet-Friendly Purina Pounces on ‘Marley & Me'” by T.L.Stanley, November 2, 2008

Posted in Mktg - Promotion | Leave a Comment »

Head to Japan, Not China for New Product Launches

November 20, 2008

Excerpted from Ad Age “Want to Know Where to Launch a New Product?” by Marissa Miley, October 28, 2008 

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The best place to introduce a new product: Japan. The worst place: China.

Those are among the findings of a new study…called “Global Takeoff of New Products: Culture, Wealth or Vanishing Differences,” which claims to be the first global analysis of its kind…

The study…looked at data for consumer household products over 50 years and across 31 developed and developing countries. To rank the countries, they created an “innovativeness metric” based on the time it takes for new products to take off in a particular country.

A product “takes off” in a country…when it has started to grow rapidly, moving from being used by a few people to being used by the mass market. The time it takes depends on a number of variables: the economic strength and cultural mores of the country, as well as the price and category of the product. Nations with the shortest time to new-product takeoff landed at the top of the list.

Japan, Norway and Sweden came in first, second and third, respectively. The U.S. came in sixth…Oddly, two of the countries normally considered fast-growing, India and China, were on the bottom…

The study can save marketers “a lot of time [and] get quick results…This ranking of countries tells you which to launch in first.” The authors recommend a “waterfall” approach to launches, staggering them from one country to the next, and they created a hazard model for the study to determine how many years it will be before products “take off” in a national market.

For the study, the co-authors analyzed two different kinds of consumer household products: “fun” products that provide entertainment, such as MP3 players and cellphones; and “work” products that improve work efficiency, such as microwaves and washing machines…”fun” products take off far more quickly than “work” products (7 yrs vs. 12 yrs), and therefore require different marketing strategies.

Fun products take off more quickly because they are “more glamorous, more visible…We don’t go house to house boasting about our vacuum cleaner, but we do for our cellphones.” In these cases, the authors suggest that marketers might benefit from using the “sprinkler” strategy, launching products in several countries at once.

Edit by SAC  

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Full article:
http://adage.com/cmostrategy/article?article_id=132082

 

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Posted in Mktg - Product & Innovation | Leave a Comment »