Archive for June 12th, 2009

WASHINGTON (Reuters) — U.S. import prices rose 1.3% in May, the Labor Department said Friday, but the gain was powered by petroleum prices and underlying import price pressures were more muted.0:00
/3:24Clunker bill motors onAnalysts had forecast import prices would rise 1.3% after a revised 1.1% rise in April, previously reported as a 1.6% increase. May’s gain was the largest since a 1.4% advance in July 2008.Recent declines in the dollar might press import prices higher and contribute to inflation, but year-over-year, import prices declined by a record 17.6%, indicating little threat of this at the moment.”The data still suggest a lurking inflation threat, but that’s not likely to perturb the markets just yet given ongoing weakness in economic growth,” said Action Economics in a note to clients.On the other hand, there were signs that prices had arrested their prolonged slide in the face of the most severe worldwide economic slowdown in a generation, chiming with other evidence that a recovery may be drawing near.Non-petroleum import prices rose 0.2% in May, the first increase since July 2008, although they were down a record 5.8% over the year.The Labor Department said the increase in non-petroleum prices was driven primarily by a 0.6% increase in prices for non-petroleum industrial supplies and materials, also the first rise for that index since last July.Higher prices for automobiles and for foods, feeds and beverages also contributed to May’s overall increase in non-petroleum prices, the Labor Department said.Export prices rose 0.6% in May compared with forecasts for a 0.4% gain. They rose 0.4% in April and are down 6.5% over the year.Imported petroleum prices were up 8.3% in May, the fourth consecutive gain after bottoming in January, but are 51.4% lower over the year.

Source:CNN

PHOENIX (Fortune) — Did you happen to see the latest home-price stats from S&P/Case-Shiller, or did you avert your eyes? Here’s what struck me: As of March 2009, every metro area in Case-Shiller’s 20-city index, without exception, has fallen double digits from its peak. Ten are down more than 30%. Eight have dropped more than 40%. Las Vegas is down 50%. Phoenix? It doesn’t get any worse than Phoenix. According to Case-Shiller, between June 2006 and March 2009 the average house in Phoenix lost a staggering 53% of its value. Possibly during the Great Depression, but almost certainly at no time since then, have house prices in a major metropolitan area fallen by more than half. It’s almost unbelievable. Brother, tell me you didn’t buy a house during the boom in Phoenix! I’ve been to Phoenix twice in the past six months to look at real estate. The first time, in November, I squeezed into a crowded white stretch limo and rode around town all day looking at foreclosures on a tour led by an energetic realtor who wore Chanel sunglasses. Time to buy, she assured us, and who could argue? Prices had come way down. When I went back in May, however, prices were still going down. And while the pace of home sales had picked up, nobody I talked to was ready to call a bottom – not with any conviction anyway. “I think if we reach our toe down, we can kind of feel the bottom,” real estate investment adviser Robin Reed, president of ProEquity Management in Scottsdale, told me over lunch at a strip-mall bistro on my first day in town, “but we can’t rest solidly on it yet.” My focus on this trip was a little different. I was looking at places where retired people live. I wondered about the specific impact of the bust in those places: How have homeowners fared during the downturn? What are the prospects for newcomers who might want to buy now? To be blunt, are there screaming bargains to be had? Here are the short answers: Retirement communities in and around Phoenix got smacked (“same as other places,” says Reed; “it’s real estate”) but, in a surprising twist, not as violently as the broader market; the price drops were less dramatic and there haven’t been nearly as many foreclosures. Is it a good time to buy? Yes. Will you find a screaming bargain? You might, if you’re patient and alert to the peculiar inefficiencies of the retirement market (more on that later), but not as easily as you could elsewhere in Phoenix. That’s okay, by the way. Too many bargains implies a market defined, historically, by too much volatility and pain. You don’t need that when you retire. Phoenix is where the seemingly oxymoronic concept of an active retirement was born nearly half a century ago. Today it’s famous for its many acres of planned, age-restricted communities built around golf courses, swimming pools, and artificial lakes, where property taxes are low because there aren’t any schools (there aren’t any kids), yard work is a breeze (yards are all gravel), and street-legal golf carts serve as second cars. The granddaddy of Arizona retirement meccas and the first development of its kind anywhere in the country, Sun City, turns 50 next year. It was built by the legendary Del Webb, a hard-drinking, nonsmoking former owner of the New York Yankees who made his fortune building military bases (and a Japanese internment camp) in the Southwest during World War II, and later Minutemen missile silos in Kansas and Montana, a 30,000-acre housing development for NASA workers in Houston, the Beverly Hilton, and several Las Vegas casinos. Bob Hope, Bing Crosby, and Howard Hughes were among his pals. Sun City was a big hit from the day it opened, Friday, Jan. 1, 1960. In its first weekend, according to an account in Time, Webb sold 272 of the “neat and gay pastel houses” at prices ranging from 8,750 for two bedrooms to 11,600 for three bedrooms and two baths. Phase one was completed in the ’60s, phase two in the ’70s, phase three in the ’80s, block after block of new construction displacing irrigated fields of grapes and cotton, gaily marching north up the valley. In the ’90s came Sun City West, Sun City Grand, Corte Bella (that one’s gated), and just in the past couple of years, Sun City Festival, which sits 10 miles beyond the western limits of developed greater Phoenix in a dusty, whistling wasteland at the base of the White Tank Mountains. Today more than 100,000 people live in the combined Sun Cities, on curvy, desert-landscaped streets, interlaced with close-cropped fairways and dotted with lakes and bustling rec centers (supported by a modest annual assessment) where residents, when they’re not golfing, can swim, bowl, play shuffleboard, and make pottery and stained-glass trinkets. You (or your roommate) must be at least 55 years old to live here. Children under 19 can visit, but they can’t stay longer than three months. The newer the development, the nicer the homes, the classier the amenities, the more you’ll pay. (Every house gets garbage pickup twice a week; not all come with fancy granite countertops.) If you’re prepared to spend nearly 1 million, you can have two bedrooms, a patio suitable for a presidential fundraiser, and a stunning fairway vista in Sun City Grand. Farther south in phase one, meanwhile, just over 100,000 buys a cozy cottage on 107th Avenue that’s walking distance from the Sun Bowl amphitheater, which hosts free outdoor concerts in the spring and fall. Reed had warned me at lunch that given the economic downturn, the mood in Sun City might be grim. “It’s one thing to be 40 or 50 and know that you’ve got 10 years for the thing to turn back around, and that in the meantime you can go out into the job market, you can do something,” he said. “People in their sixties and seventies really can’t do that. They’re feeling a despair right on the heels of what previously had been kind of a wisdom – ‘We’ve been here before, we know how to batten down the hatches.’ For them it was never about consumption. But they did expect their savings to be savings and their investments to be investments and their pensions to be pensions. It went from wisdom to concern and then, in some cases, outright fear.” That may be true for retirees in general, but inside the walls that surround places like Sun City the impact of the downturn is muted. At the Sun City Visitors Center on the corner of 99th and Bell, I meet volunteer greeter Bill Burt, 76. He isn’t grim at all. Red-faced and barrel-chested, with a shock of salt-white hair sprinkled with pepper, Burt grew up driving a cotton picker in fields not far from where he now lives. He was a “blood banker” when he still worked, he says, building and managing blood donation centers all around the country. Ten years ago he came home. Burt and his wife bought a duplex condominium in an older section of Sun City. Two years later, in 2001, they sold at a small loss and traded up to a nearby duplex on a lake for 161,000. Then came the boom. By 2005, if we can believe Zillow.com, the Burts’ house was worth more than 300,000. And today? Zillow says 173,000, or 40% below its peak. Burt just grins and shrugs. It was only a paper gain; now it’s a paper loss from that high. Meaningless, in other words, unless he decides to sell, which he has no intention of doing. He’s happy, his wife’s happy. His only regret is that he didn’t move to Sun City 10 years earlier. “When people leave here, they usually go out in a box,” Burt says. “Or they’ve been cremated, you know. They go out in a bottle.” According to the latest MLS data, Sun City, while definitely hurting, is a lot better off than its neighbors. The median sales price in April for a single-family dwelling in surrounding Maricopa County (Arizona’s populous region that includes Phoenix, Mesa, and Scottsdale) was 125,000, down from 230,000 a year ago. That’s 46% in 12 months. Ouch. In Sun City during the same period, home prices fell just 24%. What’s killing Maricopa County is foreclosures. Even as home sales rise, cheap, bank-owned properties are flooding the market: 1,042 in April alone, plus 8,396 new pre-foreclosures, where the borrower has stopped paying and the eviction process is underway. Foreclosures during the same month in Sun City? Six, representing an infinitesimal one-hundredth of 1% of Sun City’s single-family homes. Fewer foreclosures equals greater stability. It’s a pattern that seems to play out nationally. While there’s been little research on how retirement markets have fared specifically, experts say that the same profile – minimal foreclosures, less severe price drops – is true of retirement communities across the country (for more examples, see our gallery of deals across the nation). Says Bill Ness, founder of the retirement website 55places.com: “It is a common understanding among most agents that real estate values have held up better in active adult communities than in other non-age-restricted communities.” There could be a simple explanation for this: Old people aren’t as stupid and greedy as young people are. Or maybe they’re just not as stupid and greedy as they were when they themselves were younger. “By the time you’re retired,” says Phil Andrews, 85, a Vietnam vet and 10-year resident of Sun City West, “you’ve got a little bit of sense about buying a house. You’re not going to buy one you can’t pay for.” It’s true. Ask the local realtors about the exotic variable-rate mortgages that suckered so many younger homebuyers into borrowing more than they could ever hope to repay, and they just shake their heads; not in Sun City. In fact an astonishing 61% of Sun City residents have no mortgage at all. Bob Bleasdell, for example. He’s a 73-year-old retired obstetrician who lives in Sun City Grand. The night before the full moon in May, Bleasdell and I sit talking for an hour on his patio at dusk while he smokes a 5 cigar. “I retired in 1995 at 61,” Bleasdell says. “If you’re going to retire early, you can’t have a lot of wives you’re paying, you sure as hell can’t have kids in college, and you can’t have a lot of debt. You gotta get your debt down, get your bills paid, pay for your car. And then when hard times come, you don’t participate. My IRA’s down 40%; I don’t sell it.” Bleasdell and his wife paid 220,000 for their house in 2003. Two years later they might have been able to sell it for 400,000, but why would they do that? Bleasdell likes it here, enjoys sitting outside in sandals and shorts under a soft blue blanket of sky by a blooming palo verde tree, listening to the quail and the doves, calling out to neighbors as they pass. He plays golf three days a week, with three different foursomes, rotating among four different courses, none of which takes more than five minutes to get to in a golf cart he parks in its own little garage. Bleasdell says he has no idea what his house is worth today, and furthermore, he doesn’t care. His kids might care someday, he allows, but that’s neither here nor there. “We don’t owe ‘em anything,” he says. “I helped buy a house for my daughter. I take my son on fishing trips up to British Columbia. I’ve done enough for them. If they get anything out of us, it’s just a bonus. Don’t count on it.” Next day I’m driving around the nicest parts of Sun City with realtor Renee Chipules, trying to get a feel for what’s out there. First-quarter sales were down slightly this year, Chipules says, in stark contrast with the rest of Maricopa County, where sales were up 79%. One reason for that we already know: Sun City doesn’t have nearly as many foreclosures, which tempt investors and first-time homebuyers with irresistible discounts and are fueling a sharp rebound in sales in some parts of the country. But there’s also the ripple effect. No one has to move to a retirement community; when people can’t sell their houses back home, they tend to stay put. “It used to be the case that people would come in, buy the house they liked, and feel confident that when they went home their house would sell within 60 or 90 days,” Chipules says. Now they’re waiting for their homes to sell before plunking down for another. Chipules and other realtors I spoke to think there’s a huge, pent-up demand for retirement homes. Once the market recovers nationally, the argument goes, Sun City and other places like it will get a big bump, especially as the coming wave of baby boomers starts to retire. Chipules shows me three houses – similar sizes (about 3,000 square feet), similar layouts (two or three bedrooms, all on one floor), similar amenities (marble everywhere, hot tubs, curved-glass showers), all of them situated directly on or within sight of a golf course. But the asking prices are all over the map: 425,000 in Sun City West, 699,000 in Corte Bella, and 949,000 in Sun City Grand. Why the disparity? Well, for the one in Grand, it could be the fairway view; it truly is spectacular. “What’s going to happen with that particular piece of property,” says Sun City realtor Norm Brenna, who knows the house, “it’s going to be somebody who pays cash, and it’s going to be somebody who walks in and says, ‘This is me, here’s my money.’ That’s where that’s going to sell.” Still, if this one sells for anything close to what the current owners are asking, it would be shocking; they paid 895,000 near the peak in April 2007. The one in Corte Bella? Possibly it’s overpriced, even fully furnished. Its owners paid 491,000 in June 2006, so they’d be making money too. Not likely, says Brenna: “Everybody I’ve been involved with over there wants to list way more than they can currently get.” That’s why things are slow, he says. “If you watch the listings over there, when they sell, they definitely come down in price.” And Sun City West for 425,000? A bargain, Chipules believes. Priced to sell at two-thirds of its peak value in late 2007. But the current owner was there long before the big run-up in prices; she’s got other houses, and she just wants her equity. Sure enough, after 12 days on the market, she gets an offer at asking price, sale pending. All of this, says Chipules, is evidence of a turbulent and inefficient market. No one really knows what anything is worth anymore. Some sellers appear to be kidding themselves, even now, though a patient, sober buyer will indeed find bargains, even screamers. (Here’s a tip: Heirs are motivated sellers. Says resident Tom Mays: “The kids, they’ll probably accept the first offer that comes, just to get out.”) But don’t get too excited. Excitement is over in real estate. On the other hand, if you’re thinking about moving soon to Sun City or someplace like it, you’re in luck. You won’t have any trouble finding a terrific house, and it shouldn’t cost you nearly as much as it would have just a couple of years ago. Congratulations.

NEW YORK (Fortune) — There’s heavy turnover in the C-suite these days. The latest CEO transition came this week, when Robert McDonald was named the new CEO of 84 billion Procter & Gamble, the successor to nine-year chief A.G. Lafley, who will step down July 1. The announcement at one of the country’s oldest and best-regarded companies was most notable for its lack of drama. It was that rare event in business: a CEO transition that drew kudos rather than anxious selling. “The real story here is the non-story,” says author and management guru Jim Collins. “This reflects the way things should work.”The relative lack of ripples is all the more unusual in a treacherous environment in which CEOs are getting the boot on a regular basis: 115 departures in May alone, according to outplacement firm Challenger, Gray & Christmas. 0:00
/21:45One-on-one with Google’s CEOThe credit in P&G’s case belongs to Lafley and his board, which organized a careful and deliberate succession process in which the only surprise was the timing. But despite the fact that McDonald, a 30-year P&G (PG, Fortune 500) veteran who joined out of the Army, is highly regarded both inside and outside the 172-year old company, the transition from a long-admired CEO to a new one is still fraught with peril.While making it to the top of the pile is hard work indeed, many leadership experts caution that a new executive’s ultimate success may hinge as much on the transition itself as the process of getting there. After all, fully one in three CEOs doesn’t last more than three years in the job, observed McKinsey consultants Kevin Coyne and Bobby Rao, in “A Guide for the CEO-Elect,” which appeared in the McKinsey Quarterly. Based on the research of Coyne, Rao and other experts, here are a few rules for successful CEO transitions:1. ) Make it clear who’s in charge.It’s not easy to walk in the shoes of an iconic CEO like Lafley, particularly when he’s sticking around as full-time chairman. “It’s true,” says John Pepper, P&G’s onetime CEO and chairman. “He’s a tough act to follow.” Nor is it easy to manage a relationship in which the power dynamic has shifted; after all, Bob McDonald has worked with, and primarily for, Lafley for close to 30 years. One of Lafley’s most important jobs, says Bill George, the former CEO of Medtronic (MDT, Fortune 500) and now a professor of management at Harvard Business School, will be to make clear to the board and the employees that the ultimate decision now belongs to McDonald. The former CEO “can be the wise man, or a confidant,” he says. “Otherwise it’s hard for the new CEO to feel fully in charge with the longtime CEO still in the office.”Certainly, there are many situations, particularly in founder-run companies, where a meddling chairman who is not quite ready to give up all of his authority can be toxic to a new leader. In this case, however, P&G watchers think that’s unlikely. “What makes this work is the relationship,” says Pepper, who notes that the two at the top of P&G are extraordinarily close. “Lafley’s role is to support Bob, full stop.”2.) Use the interim period wisely.It would be natural to think of the period between the announcement and the actual changing of the guard as something of a honeymoon for the new CEO, who has all of the accolades but none of the responsibilities yet. But that’s a missed opportunity to build board relationships and other external interactions that will soon become key, say McKinsey’s Coyne and Rao. It’s also, they say, a great time to bone up on skills that are missing from the new CEO’s repertoire. Some of the CEOs they interviewed on this topic did such things as take a crash course in chemical engineering and hire a private coach in preparation for their new role.3.) Stay confident — but remember how much there is to learn.Robert McDonald knows P&G inside and out. He has lived on several continents for years at a time, run many P&Ls, and is a longtime friend and confidant of the CEO. That doesn’t mean he’s totally prepared for the job. Lafley himself, writing in the Harvard Business Review last May, described how surprised he was to find that the role of the CEO was so different from that of other operating roles; only the chief executive, he says, can “link the external world with the internal organization.”McDonald will have to learn this on his own, while at the same time keeping his confidence up at a time when P&G has had to revise its sales estimates downwards and to reconsider its emphasis on premium brands. At the same time, he must be humble enough to understand that he has much to learn — and he must not be afraid to find his own sounding board. After all, it may well turn out that Lafley’s strategy was appropriate for a very different environment.McDonald’s friends and colleagues say he’s up to the job. “Right from the beginning, I knew he was going to be very successful,” says Pepper, who met McDonald during the future CEO’s first week in the package, soap and detergent division. “He had a sense of purpose, excellent standards, enormous energy and a great depth of caring about what he was doing.” But the pressure is on, even as McDonald says he thinks he can grow P&G’s stable of 1 billion brands to 30 in the future, from 23 currently. If he acts quickly and wisely, he’ll make the leap to success that his predecessor did –and that so many others fail to do.

Source:CNN

NEW YORK: Question 1. If a child or a teen who is not 18 receives a credit card in the mail and they decide to sign and use the credit card are they responsible for the payments? Jason, Indiana Bottom line is that if you’re younger than 18, the contract between you and the credit card company is null and void and you would not be legally obligated for the balances. The bank will have to eat that amount. That said, credit card companies know this and they won’t intentionally try to send you a credit card if you’re a minor. Keep in mind that just because you receive a credit card application in the mail, it doesn’t mean you will receive the credit card. And if this is you, don’t use the card if you’re under 18. Question 2. My son is 22 years old and his girlfriend is 24 years old. They are considering marriage. But she has awful credit. If my son marries his girlfriend, does he be affected by her poor credit? Mary, Florida The good news is that your son won’t be affected directly. They can open a joint bank account without giving any thought to their credit scores according to Credit.com. However the couple should avoid opening up a joint credit card. A low credit score may also become an issue if they decide to get a mortgage and buy a house. My best advice here: wait until the girlfriend can clean up her credit score before they go applying for a mortgage. Question 3. If you file for bankruptcy, I understand there is a 5-year payment term to your creditors, at a negotiated rate. During those 5 years, can you purchase anything, such as a new car? Rose, New Jersey You’re talking about a Chapter 13 bankruptcy. According to bankruptcy attorney Claire Ann Resop, you cannot incur more debt until your plan is over and your case is discharged. But there are exceptions. Let’s say your car dies and you need it to get to work. You should ask your bankruptcy trustee for approval and you probably won’t be denied. However you do have to show that your request is necessary and that you’ll be able to make the payments.

Source:CNN

LONDON (Reuters) — Oil eased toward 72 a barrel Friday, a day after reaching a near eight-month high, pressured by a firmer dollar and views that prices have risen too far despite improving economic sentiment.Light, sweet crude for July delivery fell 64 cents to settle at 72.68 a barrel. Despite Friday’s retreat, it was the highest closing price since Oct. 20 after a three-day rally, making it look overvalued to some analysts.”Most commodity markets are still quite overbought and could be subject to a modest sell-off next week,” said Edward Meir, analyst at MF Global. “We are getting to a stage where the steep run-up in prices has arguably over-discounted the modest brightening we are seeing in the U.S. macro picture.”Adding downward pressure, the U.S. dollar rebounded against the euro. A stronger dollar can weaken commodity markets by cutting into the purchasing power of buyers using other currencies.The Organization of the Petroleum Exporting Countries, meanwhile, further reduced its forecast for world oil consumption this year, but said the worst appeared to be over for the oil market.”As the world economy stabilizes, the world oil demand appears to be settling down,” OPEC said in its Monthly Oil Market Report. “There are no significant downward revisions to our previous oil demand forecasts.”0:00
/1:29Unfriendly skies for airlinesTwo other closely watched forecasters, the U.S. Energy Information Administration and the International Energy Agency, slightly raised their demand estimates this week, after months of downward revisions.Stronger-than-expected Chinese economic data helped limit oil’s losses.Official figures showed a rebound in China’s industrial growth and retail sales in May, after U.S. data on Thursday showed an increase in retail sales and a slowdown in weekly jobless claims.Data from China also showed refinery output in the world’s No. 2 energy user rose 10.7% in May versus a year earlier. It was the third monthly rise in seven months to a record high.Concerns over tightening gasoline supplies have given oil an extra boost this week.Energy company Valero (VLO, Fortune 500) said Thursday it will shut its refinery on the Caribbean island of Aruba for the summer due to weak profit margins. The United States has been hit by a spate of refinery outages in recent weeks.

Source:CNN

NEW YORK (Fortune) — Dear Annie: I know this probably sounds nutty, with so many companies cutting pay or freezing pay in order to avoid layoffs (or, further layoffs), but I’m thinking of asking for a raise. First of all, my employer has not cut or frozen anyone’s pay — at least not to my knowledge. However, we have had layoffs here, so I’m now doing the work three people used to do.But the main reason I want to bring up money with my boss is that I was hired exactly one year ago at the low end of the salary scale for my position (production-line supervisor), and was told at that time that my pay would be reviewed – with an eye toward increasing it to at least the middle of the range – in six months. Then the recession hit, and no more was said about it. But I think I should ask, especially since my performance has been pretty great. I’ve introduced new efficiencies, cut costs, increased productivity, etc. Any advice on how to approach this? -MartyDear Marty: It takes chutzpah to ask for a raise in this economic climate, but it’s not quite as crazy as it sounds. It seems that a little over two-thirds (67%) of U.S. employers are planning pay hikes for at least some of their employees before the end of this year, according to a new survey of 850 companies by compensation consultants Mercer.Interestingly, however, the extra moolah won’t be doled out evenly across all job categories. Only 56% of executives will get pay hikes, versus 69% of professionals (a group that includes, for example, in-house attorneys), and 73% of those in “trades, production, and service” jobs (that would include you). Positions in manufacturing, engineering, and information technology are most likely to see pay increases, Mercer’s research found, while marketing, sales, and finance jobs earn stagnant or even declining wages. Overall, salary budgets in 2009 will rise by about 3.2%, roughly the average pay hike that prevailed before the recession started.Why the sudden loosening of the pursestrings? “Companies realize that they need to be poised for a turnaround,” says Steve Gross, global leader of Mercer’s compensation consulting practice. “Continuing cost-cutting measures like salary freezes may put them at a disadvantage once the economy recovers.”The fact that your job performance has been, as you put it, “pretty great” is crucial to your argument in favor of more money. Tim Schoonover, CEO of leadership-development and coaching firm OI Partners, has noticed lately that more companies are focusing attention on how to keep their best performers happy.”Top talent will be needed more than ever once the economy picks up again,” he says. “And those people have to feel the love now, because now is when employees who believe they are undervalued make the decision to leave as soon as more opportunities open up. By the time the recovery actually arrives, it will be too late to hold on to them. Their decision to go elsewhere will already have been made.”With that in mind, here are five ways to maximize your chances of getting a raise:1. Document your achievements over the past year. Don’t assume your boss already knows about the efficiencies you’ve introduced and how much they’ve boosted productivity. Prepare your case and back it up with hard facts and figures.To make sure you’re properly valued, it’s essential to “have a very clear idea of higher-ups’ expectations, and then show exactly how those expectations have been met,” Schoonover says. Clear, quantified evidence of your wonderfulness, he adds, will make it easier for your boss to justify a higher salary to anyone else in the company who has to approve it.2. Empathize with the company’s point of view. “This doesn’t have to be an adversarial conversation. In fact, it shouldn’t be,” says Schoonover. “Make sure your boss knows that you understand budgets are tight right now, and that you want to be part of the team and keep helping your employer meet its goals.” In other words, it isn’t all about you.3. Be politely assertive. You were all but promised a raise six months ago, so it’s perfectly valid to broach the subject. But if your boss replies, “Gee, I’m sorry, we just don’t have the money,” don’t just slink away. Instead, Schoonover recommends you politely press for another review, asking: “When can we revisit the subject? Maybe in three months? Six months? What would be a reasonable time frame?” Your boss may have to check with someone and get back to you, Schoonover says, but you’ll at least have made the point that you’re not just going to forget about it.4. Stay open to the idea of other forms of compensation. Many employers are trying to keep base salaries flat, Schoonover observes, but a performance bonus may still be available.”You could look at this discussion as a chance to set goals with your boss, and agree on a bonus for reaching them,” he says. “It’s one way he can give you more money without adding to fixed costs. Or you might ask for more paid vacation time instead of a raise, if that appeals to you, at least until a raise is forthcoming.” If there’s anything else you’ve been hankering after, especially if it’s cheap (a reserved parking space, maybe?), now is the time to ask.5. Keep in mind that, as they say in Brooklyn, “You don’t ask, you don’t get.” As long as you do it in a non-confrontational way, asking for a raise can’t hurt. The worst that can happen is your boss says no, so don’t hesitate to speak up. And who knows, you may be pleasantly surprised.Readers, what do you say? Has your company cut or frozen pay in the past few months? Have you asked for a raise lately? Did you get it? If so, what do you think helped you the most in persuading your boss you’re worth more? Did asking help or hurt your relationship with higher-ups? If you’re in a position to give raises, how do you decide who gets one? Post your thoughts on the Ask Annie blog.

BOSTON (Fortune Small Business) — John Rosenthal has a long history of social activism — and the prison record to prove it. The 52-year-old entrepreneur runs Meredith Management, a Boston-based commercial real estate development company. In the 1970s, Rosenthal joined the No Nukes movement while he was working for a California startup that built solar-powered homes. He was arrested four times for trespassing while protesting nuclear power plants in California and New Hampshire. Between 1977 and 1983 he served a total of 3 months in jail. Years later he launched Stop Handgun Violence, a nonprofit advocacy group dedicated to reducing gun violence without banning guns. Rosenthal was a card-carrying member of the National Rifle Association and an avid rifleman (he shoots skeet, not animals), which makes him a voice of moderation in the often polarized debate on gun control. “I have as deep-seated a commitment to gun rights as I do to gun safety,” says Rosenthal. “The NRA doesn’t buy that, but it’s true.” For more than a decade, Stop Handgun Violence has been erecting provocative, even humorous, signs — 252 feet long and 20 feet tall — along the well-traveled Massachusetts Turnpike. A 2007 billboard, made to look like a kidnapper’s ransom note, read WE HAVE YOUR PRESIDENT & CONGRESS. — NRA.Seen by an average of 200,000 drivers a day, the billboard garnered outrage from the NRA (from which Rosenthal had resigned). When the gun-rights lobbying group challenged him to a series of public radio debates, Rosenthal happily accepted. And he hasn’t let up. The nonprofit’s current billboard is a neon-lettered poke in the eye: WE SELL GUNS! NO ID REQUIRED. NO BACKGROUND CHECKS. CRIMINALS & TERRORISTS WELCOME! Rosenthal takes some credit for the fact that Massachusetts passed some of the nation’s most comprehensive gun laws in 1998. The commonwealth now has the second lowest firearm fatality rate in the U.S. “As I tell my friends,” he says, “if you were halfway as successful in your activism as in your work, imagine what a difference you could make.” Rosenthal knows this firsthand. In 1987 he launched Friends of Boston’s Homeless. Since then, the nonprofit has raised more than 20 million and established three area shelters that provide education and rehab programs. Later he started the organic Farm at the Long Island Shelter — at four acres, Boston’s largest farm — so residents could get valuable job-training skills in food production and preparation. Each year, he says, Friends of Boston’s Homeless moves about 150 homeless people into permanent housing.”Businesspeople solve problems every day; that’s what we do,” says Rosenthal. “If more entrepreneurs involved themselves in activism, we could solve every problem this country has — and for a lot less money.”

Source:CNN

NEW YORK (Reuters) — The dollar rose Friday, rebounding from vicious selling earlier this week, while data showing a plunge in euro-zone industrial production highlighted economic weakness in the region and pushed the euro lower.Other recent top performers, including sterling and the Canadian and Australian dollars, also fell as oil prices dipped and G8 finance ministers prepared to start a meeting in Italy.The dollar had spent most of the week under pressure as investors betting on a global recovery bought higher-yielding currencies and assets such as stocks and commodities, and traders said investors were largely taking profits on Friday.”We’re seeing a classic correction,” said Brown Brothers Harriman currency strategist Meg Browne. “The top performers on the week are the worst performers today, suggesting the move is largely corrective in nature and will not be sustained.”The euro was down 0.9% at 1.3973 while sterling fell 1.1% to 1.6388 after having moved above 1.66 on Thursday. The dollar was up 0.6% at 98.18 yen and surged 1.7% against the Canadian dollar to to 1.1208.Profit-taking on the euro accelerated after data showed industrial production in the 16-country euro zone plunged 21.6% in the year to April, a record fall that was steeper than economists’ forecasts.”I’m not surprised the figures are poor. The euro zone …. will suffer more than the rest of the world, ergo my view that the euro will underperform for quite some time,” said Maurice Pomery, managing director at Strategic Alpha in London.G8 on tapExchange rates are not on the agenda at a two-day G8 meeting that starts on Friday, but analysts said they may come up in light of the dollar’s recent slide, which has undermined euro-zone exports by making them more costly.A French official told Reuters on Thursday that authorities were watching currency fluctuations closely. “What is damaging for the economy is the volatility of the currency markets.”Safe-haven demand boosted the dollar during the bleakest days of the financial crisis last year, but the euro rose 7% last month and is up 5.5% this quarter.0:00
/1:04Recession easing in U.K.An index that measures the dollar against six major currencies is down 6% in the second quarter, reversing a 5% rise in the first three months of 2009.”We wouldn’t be surprised if the weekend meeting concluded with the finance ministers singing the merits of a strong dollar, partly to shore up any lingering worries over demand for U.S. assets … but also to provide (euro zone) economies some support,” strategists at Calyon wrote in a research note.Some analysts, though, said the dollar’s rally may gather steam. Matt Esteve, a strategist at Washington-based Tempus Consulting, said investors see the United States as likely to emerge from recession before the euro zone and are starting to reward the dollar for this.Indeed, the dollar extended gains after a survey showed U.S. consumer sentiment rose to a nine-month high in June while inflation expectations ticked higher. Last week, better-than-expected U.S. employment data even prompted markets to bet the Federal Reserve would hike rates by year end, though Esteve said that’s unlikely before 2010.”The theme emerging is that the U.S. is best positioned for economic recovery,” Esteve said.

Source:CNN

NEW YORK: You are tethered the office 24/7 through your CrackBerry, and as a result probably make a few (dozen?) personal calls from that phone. To the wife? The babysitter? Dinner reservations, perhaps?Odds are, you don’t pay income tax on that “perk” even though the IRS requires companies to treat personal use of a work cell phone as benefit income that can be taxed. But for the two decades the rule has been in place, it has been largely ignored. Nobody – businesses nor individuals – want to go through pages of cell bills to calculate exactly what portion of your bill is personal and taxable. “Trying to track any personal calls versus business calls is a headache to document,” said Gordon Bernhardt, president of Bernhardt Wealth Management. That would certainly be “cumbersome paperwork” for businesses.0:00
/4:27No surprises, just a new iPhone”In the current environment, the rule as it operates now is pretty difficult to comply with,” agreed an IRS official. Jeff Ready, CEO of Indianapolis-based Scale Computing, remembers tracking minutes and what it headache it was. But he no longer worries about work vs. personal calls. “In the past, there were not unlimited plans and you had to track overage,” he said. “But now, everyone is on a standard plan with unlimited voice and data, so it doesn’t matter.”Even though he and others see this rule as an “outdated concept,” the IRS said it has been approached by some businesses wanting it clarified to make it easier to have employees pick up the tab for their personal calls. As such, this week the agency proposed three new plans it says might make the process less burdensome. It is seeking public comment on the options until Sept. 4. Here are the three proposals currently on the table:Minimal Personal Use Method: Under this plan, the Treasury would allow the entire expense of the business cell phone to be excluded from your personal income tax, so long as you can provide sufficient documentation that you are using a personal phone for personal calls during work hoursAnother option under this plan suggested by the IRS would define certain allowable number of minutes or situations when it would be considered acceptable to use a work phone for personal uses. Safe harbor Substantiation Method: The second proposal from the IRS would consider that 25% of employer sponsored plans are considered personal.Statistical Sampling Method: In the third proposal, businesses would use approved statistical sampling methods to average how much time employees spend using business phones for personal purposes. The company would use the average as a multiplier to determine how many minutes the employee would be responsible for covering. No matter what – if any – changes the IRS makes, Ready says he has no plans to charge his employees for any personal minutes. For him, it would be like determining how much to charge an employee for making a local call from a land line at their desk. “It just seems silly if you put it in the context of a land line.”"When I give you a cell phone, I expect you to carry it,” he added. “To get you to carry it, I expect that you are going to give the number to your spouse. To me, that is no big deal.”

Source:CNN

(breakingviews.com) — The U.S. Treasury bond market has been feeling distinctly unloved. A 10-year bond auction went badly on June 10 after Russia, Brazil and China said they were taking steps to diversify their foreign currency reserves.Worries that Thursday’s 11 billion auction of 30-year bonds would follow suit rattled the market. But central banks flocked to buy the bonds, meaning dollar diversification fears were overblown — at least for now.Treasury officials may be relieved, but they shouldn’t relax. The factors that could push up the cost of issuing U.S. government debt continue to mount. The behavior of the inflation-linked bond market shows investors are beginning to worry more about inflation than deflation, as signs of an approaching economic recovery proliferate. And the sheer volume of debt the U.S. has to issue this fiscal year — 3.25 trillion worth, or nearly four times as much as last year — has unnerved investors.Nonetheless, the 30-year bond auction received a lot more interest than usual. The ratio of total bids to accepted bids, an indicator of demand, was 2.68, up from an average of 2.21 in recent auctions. Encouragingly, foreign investors, mainly central banks, purchased nearly half the bonds. They normally take only about a third.That’s notable because big Treasury bond investors like China have been shifting their purchases toward shorter-term securities to reduce their risk of loss from interest rate rises.And that’s a significant risk. The 4.72% yield at which the bonds were sold was admittedly the highest at auction in nearly two years. But assume inflation returns to a long-term average of about 3%, and the real return on the bonds starts to look parsimonious. Add the likelihood of long bond yields rising significantly at times over three decades, and the price of this bond could slide.While the willingness of foreign central banks to shoulder this risk is encouraging, Treasury officials shouldn’t be high-fiving each other just yet. The long bond has plummeted 10% in price in the last month alone. The patience of many foreign investors is already strained. Some may soon reach their limit.

Source:CNN