http://www.forbes.com/2010/03/16/starbucks-mcdonalds-retail-markets-equities-instant-coffee.html
Terms
1. UBS- is a global firm providing financial services to private, corporate and institutional clients
2. earnings momentum- a term used to describe a pattern of performance where a stock shows increased value from one period to another.
3. VIA instant coffee- microgrinded coffee that preserves all of their essential oils and flavor
Explanation
Starbucks shares went up to a 52- week high on March 20,2010. Each Starbuck share was $25.29. Accoriding to UBS analyst David Palmer, Starbucks had "increased sales and earnings momentum." David Palmer says that UBS is "upgrading Starbucks based upon our belief that sales and earnings momentum can drive ongoing, significant earnings revisions over the next two or more years." Starbucks has created their VIA instant coffee. If VIA instant coffee sales are stong,then as much as 15 cents could be added to Starbuck shares over the next three years. David Palmer predicts that Starbucks could earn between $1.09 and $1.14 per share.
Prediction
I agree with David Pamler. If Starbucks' new VIA instant coffee is a success with customers all over the world,then their shares will definitely go up. Also, if Starbucks created another new product, such as VIA instant teas for non-coffee drinking customers, their share prices could even double.
Saturday, March 20, 2010
Saturday, March 13, 2010
Slowly, Americans are regaining their lost wealth
http://www.forbes.com/feeds/ap/2010/03/11/personal-finance-us-net-worth_7429532.html
Economic terms
1. portfolios-the securities held by an investor
2. net worth-the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards
3. mortgage-a conveyance of or lien against property (as for securing a loan) that becomes void upon payment or performance according to stipulated terms
Explanation
Americans are gradually regaining their wealth. Household net worth rose last quarter because the economy boosted their stock portfolios. According to the Federal Reserve, Americans' net worth rose 1.3 percent in the fourth quarter to $54.2 trillion. However, economists say that consumers need a much stronger and longer wealth increase if they are going to spend more money. In the second quarter of 2009, net worth had risen by 4.5 percent. In the third quarter, net worth had risen 5.5 percent. Before the recession, Americans' net worth was $65.9 trillion. In order to regain the $65.9 trillion, Americans' net worth would have to increase by 21 percent. During the October to December 2009 period, growth in stock portfolios gave the biggest rise to net worth. When the recession began in December 2007, Americans' net worth was $48.5 trillion. This caused Americans to be hesitant to spend. In 2009, consumer spending dropped 0.6 percent. According to the National Association for Business Economics, "the economy and financial conditions slowly recover, consumer spending is projected to grow around a modest 2.2 percent."
Prediction
It's hard for me to predict whether the economy will have any robust improvements, especially since the stock market and jobs are unpredictable. If the stock market and jobs become more stable, then people would spend distinctive amounts of money and buy more assets that could increase the overall American net worth. If more jobs are lost and the value of stocks decline, then Americans will spend less and their net worth will not increase.
Economic terms
1. portfolios-the securities held by an investor
2. net worth-the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards
3. mortgage-a conveyance of or lien against property (as for securing a loan) that becomes void upon payment or performance according to stipulated terms
Explanation
Americans are gradually regaining their wealth. Household net worth rose last quarter because the economy boosted their stock portfolios. According to the Federal Reserve, Americans' net worth rose 1.3 percent in the fourth quarter to $54.2 trillion. However, economists say that consumers need a much stronger and longer wealth increase if they are going to spend more money. In the second quarter of 2009, net worth had risen by 4.5 percent. In the third quarter, net worth had risen 5.5 percent. Before the recession, Americans' net worth was $65.9 trillion. In order to regain the $65.9 trillion, Americans' net worth would have to increase by 21 percent. During the October to December 2009 period, growth in stock portfolios gave the biggest rise to net worth. When the recession began in December 2007, Americans' net worth was $48.5 trillion. This caused Americans to be hesitant to spend. In 2009, consumer spending dropped 0.6 percent. According to the National Association for Business Economics, "the economy and financial conditions slowly recover, consumer spending is projected to grow around a modest 2.2 percent."
Prediction
It's hard for me to predict whether the economy will have any robust improvements, especially since the stock market and jobs are unpredictable. If the stock market and jobs become more stable, then people would spend distinctive amounts of money and buy more assets that could increase the overall American net worth. If more jobs are lost and the value of stocks decline, then Americans will spend less and their net worth will not increase.
Friday, March 5, 2010
Fed Proposes Rules Limiting Credit Card Fees
http://www.forbes.com/2010/03/04/credit-card-rules-fed-personal-finance-fed-rule-changes.html
Terms
1. CARD Act- Credit Card Accountability Responsibility and Disclosure Act
2. revenue- the total income produced by a given source
3. Inactivity fees- A fee charged to investors whose trading activity meets their brokerages' criteria for an inactive account
Explanation
The Federal Reserve thought of a new plan to prevent the credit card industry's ability to "charge certain fees and levy high interest rates." New rules would be added to the CARD Act and could take effect by August 2010. Federal Reserve Governor Elizabeth A. Duke said that the CARD Act would credit card companies from charging large penalty fees and "require issuers to re-evaluate rate increases imposed since the beginning of last year." The CARD Act was passed in May 2009 with bipartisan support. Bank of America and American Express have charged customers inactivity fees for not using their cards often enough. The new rules added to the CARD Act would forbid credit card companies from charging a customer a penalty fee that is much more than the dollar amount involved in the customer's violation. Credit card companies will not be able to charge a customer many times for a single late payment or if the customer goes over his or her credit card limit. Credit card companies will also be required to explain to customers why their interest rates were raised.
Prediction
I think that one of the main reasons credit card companies charge so many fees is so that they can make alot of profit and it's a smart way to make profit. Even though these companies charge alot of fees, people should know that they need to pay their credit card bills on time. It's not like they can decide when their bills will be due, but when they do, they complain that the fees are too high. I do think that these new rules added to the CARD Act will assist people with low incomes who cannot afford to always pay their bills on time. The new rules could possibly prevent some people from going bankrupt. However, the banks will lose alot of profit from the CARD Act and they will have to think of a new way to make profits.
Terms
1. CARD Act- Credit Card Accountability Responsibility and Disclosure Act
2. revenue- the total income produced by a given source
3. Inactivity fees- A fee charged to investors whose trading activity meets their brokerages' criteria for an inactive account
Explanation
The Federal Reserve thought of a new plan to prevent the credit card industry's ability to "charge certain fees and levy high interest rates." New rules would be added to the CARD Act and could take effect by August 2010. Federal Reserve Governor Elizabeth A. Duke said that the CARD Act would credit card companies from charging large penalty fees and "require issuers to re-evaluate rate increases imposed since the beginning of last year." The CARD Act was passed in May 2009 with bipartisan support. Bank of America and American Express have charged customers inactivity fees for not using their cards often enough. The new rules added to the CARD Act would forbid credit card companies from charging a customer a penalty fee that is much more than the dollar amount involved in the customer's violation. Credit card companies will not be able to charge a customer many times for a single late payment or if the customer goes over his or her credit card limit. Credit card companies will also be required to explain to customers why their interest rates were raised.
Prediction
I think that one of the main reasons credit card companies charge so many fees is so that they can make alot of profit and it's a smart way to make profit. Even though these companies charge alot of fees, people should know that they need to pay their credit card bills on time. It's not like they can decide when their bills will be due, but when they do, they complain that the fees are too high. I do think that these new rules added to the CARD Act will assist people with low incomes who cannot afford to always pay their bills on time. The new rules could possibly prevent some people from going bankrupt. However, the banks will lose alot of profit from the CARD Act and they will have to think of a new way to make profits.
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