Monthly Archives: January 2009

Royal Caribbean jobs look safe

Here’s a piece of good news: although Royal Caribbean’s profits nearly evaporated in the fourth quarter and management promised more cost cutting at its Thursday call with analysts, jobs at the Wichita call center appear safe for the time being.

Mike Semler, the center’s general manager, said the company cut 20 jobs last summer and that’s it for the foreseeable future. The center employs 550.

Newspaper websites see growth

In all of the bad news surrounding the economy, generally, and my industry in particular, there appeared a tiny ray of (dare I say it) sunshine. A new report from Nielsen Co. showed that the nation’s top newspaper websites are seeing pretty good growth in readership, as is the Eagle’s website.

The catch, of course, is making enough money off of them.

Super Bowl takes an economic hit

You know times are tough when ticket scalpers are having trouble getting what they call value for Super Bowl tickets.

The economic crisis has hit the Super Bowl, according to this article, with premium ticket prices down 20 percent, parties eliminated and scaled back.

What’s next? Scalper layoffs?

Where’s the bottom?

The National Retail Federation is forecasting a very gloomy 2009 retailing year. Big surprise.

But in light of a comment made by Wichita State economist Stan Longhofer last week, I wonder if Wichita’s retailing year won’t be better than anticipated.

Longhofer opined that Wichita consumers – the context was homebuyers, but it’s applicable across many sales sectors, I think – need a little security to buy. They need a sense that the government’s got a grasp on the economic problems, that their jobs are safer, before they spend. Some think that sense will arrive sometime this summer.

Certainly, that sense doesn’t exist yet. I spent a sick day Tuesday drifting in and out of sleep, listening to a steady stream of bad economic news on television, none of which I really question. I hear a lot of businesspeople wanting to kill the messenger, but not a lot of them refuting the reports.

But my sense is that we’re all so hungry for some economic good news that we’ll react strongly. It might be as simple as a big airplane order in Wichita, or as complicated as a return to some form of national economic growth. Whatever the trigger, I suspect retailing in Wichita will rebound faster than people think.

Feds propose deposit interest rate rules on some banks

The Federal Deposit Insurance Corp. board of directors voted today on a proposed rule that would limit the interest rate that banks that fall below “well-capitalized” could offer on deposits, such as certificates of deposit.

Presumably the rule is to prevent more banks from taking on too much brokered deposits. Brokered deposits are deposits that a bank gains by offering above-market interest rates on CDs to large depositors. When the CD term ends, the deposits — which can total in the hundreds of thousands or millions of dollars — leave the bank as quickly as they come, and in certain cases can cause the bank to immediately become illiquid.

Brokered deposits have been linked by regulators to the failure of several banks in the past 12 months, including ANB Financial in Bentonville, Ark.

The FDIC says it expects the rule to affect a small percentage of banks. It says in third quarter 2008 about 154 of more than 8,300 banks nationwide were under the well-capitalized mark.

The FDIC considers a bank well capitalized if it has a total risk-based capital ratio of at least 10 percent.

Was BofA really blindsided by Merrill chief’s activities?

I looks like things are getting a little ugly in the corporate divorce between former Merrill Lynch CEO John Thain and Bank of America chief Ken Lewis.

Last week, Thain, who once was considered in some circles to be Lewis’ successor at BofA, resigned from his Merrill post amid reports that he awarded bonuses to himself and others at Merrill and ordered a cost renovation of his office before the merger between his troubled firm and BofA was completed.

An internal memo by Thain that was released today certainly gives the appearance that Lewis and other BofA execs weren’t that much in the dark regarding Merrill’s balance sheet and Thain’s other missteps during the merger of the investment bank with the nation’s largest commercial bank, according to a Wall Street Journal blog.

Maybe it’s an attempt by Thain to reverse the public damage he’s suffered to his reputation.

But it certainly increases the doubt that Lewis and BofA were completely blind to what was happening at Merrill in its final days of independence.

Which comes first? Special interests or the economy?

For those of you dreaming that Americans might become more statesmanlike in the wake of Barack Obama’s inauguration, here’s a bucket of cold water dumped directly on your heads:

The chief executive of the U.S. Chamber of Commerce and the head of AutoNation are calling for a substantial hike in the gasoline tax, one to finance more road building and the other to jump-start the automakers.

The Chamber chief is at least a tad more noble than his car-selling cohort, in that transportation infrastructure is central to the economy and more of it will create jobs. As for the automakers, at least they want the middle class to subsidize their hybrids, rather than the 12 mpg SUVs they were cranking out as gasoline rose toward $4 a gallon.

Predictably, I suppose, both of these self-serving proposals whiff on the big picture: High gas prices harm the economy, nationally and locally. Drivers spending all their money on gas don’t buy shirts, movies and steak dinners. I can find retailers throughout Wichita who will tell you up front that their current problems began with $4 gasoline.

President Obama’s number one priority is revitalizing the U.S. economy. That won’t happen with $4 gas, whether it comes from oil companies maximizing profits, the new national obsession with greening everything, updating roads (which can and should be done without a gasoline tax increase) or hybrid-touting automakers with a questionable track record.

Congrats to Edward Jones

Edward Jones, which has a number of offices in and around Wichita, is No. 2 on Fortune magazine’s list of the 100 best companies to work for.

Headquartered in St. Louis, the company has more than 30,000 in the United States. Last year, it had more than 2,000 new jobs, a growth of 9 percent. As of Jan. 13, it had more than 1,000 openings.

From Fortune:

The stock market collapse reduced partner distributions and bonuses, but Jim Weddle, who heads the brokerage, assured associates the firm had no exposure to high-risk mortgages or financial derivatives and no plans for layoffs. Jones hired 698 new financial advisors in the first ten months of 2008 and is building an addition to its St. Louis headquarters for 500 new employees.

No companies based in Kansas were on the list, but some with a significant number employees here were. Those include Cisco Systems (No. 6), Starbucks (No. 24), QuikTrip (No. 27), CarMax (No. 31), Men’s Wearhouse (No. 71), FedEx (No. 90) and T-Mobile (No. 96).

No end in sight for mega-bank bailouts?

While doing my morning scan of bank industry news I ran across an interesting survey on the American Banker Web site.

The survey asks that because Citigroup and Bank of America have gone back to the federal government for more aid, is this the end or will there be more rounds of “too big to fail” banks asking for money?

Here’s the survey and the results on voting thus far:

Citi and B of A have gone back to the government trough — does it end there?

Yes, the rest of the industry is stable and has no need of further infusions
1%
No, Wells bought Wachovia without government aid — they’ll come looking
33%
No, but future assistance will be broader: a facility that buys bad assets from banks
26%
I’ve stopped guessing
40%

I chose the last option. It’s good to see that I’m in the majority, but also a little scary because the assumption is most of those responding to the survey are bankers.

If you use Twitter, read this

Former CBS News correspondent David Henderson has an interesting item on his blog. Seems an executive from big Atlanta PR firm Ketchum recently traveled to Memphis to speak with a client — a little company called FedEx – about social media.

Here’s what the guy posted on his Twitter account upon arriving in Memphis:

“True confession but I’m in one of those towns where I scratch my head and say, ‘I would die if I had to live here.’”

What followed is probably a good lesson for anyone who uses Twitter, or any other social media Web site. Read about here.

The musings of a conflicted cable consumer

At the risk of self-promotion, there was a piece in Sunday’s Eagle business section that I found especially interesting, as someone who’s weighing the future of remaining with Cox or making a switch to a less-pricey provider of bundled communication services.

I don’t live in an AT&T U-Verse area, so my choice is a little more complicated – and complicated even more by some things I really like about Cox: Customer service and high quality HD programming top that list.

But, Cox is pricey in an era when no one’s got extra dollars to devote to a unilateral bill hike. And our relationship has had some bumps: an unusable computer safety software package that brought my state-of-the-art laptop to its knees, the company’s inability to get me into an HD box that works for more than 24 hours without being rebooted.

Plus, I’m a sports viewer. Satellite and U-Verse have an unmatched selection of sports channels to watch that Cox hasn’t matched to date.

I’d rather not switch, frankly, because customer service on satellite is reportedly not very good. On-the-spot troubleshooting is Cox’ strongest feature, in my opinion. But it’s a change I’ll take a close look at if 2009 continues to pinch my budget.

Let’s talk about the options. Where is the battle for communication marketshare headed?

Food is shrinking, prices aren’t

A couple of anecdotes I’ve accumulated about food prices rising, while product shrinks:

One of my copy-editing colleagues mentioned today that he worked a story by Eagle writer Denise Neil about the return of the McRib at McDonald’s. The story caught his eye to the point that he made a trip to the new Mickey D’s at 53rd and Meridian, where he bought one. Except, this time, the McRib was about two-thirds the size of the last one he ate. The price wasn’t.

Fast forward to Dillons, where one of my favorite Private Selection pre-cooked items is a slab of ribs. Back in the day – nine months ago – you could buy a slab for $9.99. Today, the same slab is $12.99, and is conservatively about 20 percent smaller than the spring of 2008.

Now, we were told last summer this would happen – when gas prices spiraled to $4 a gallon and transportation costs exploded. OK, seems fair. But, those transportation costs have receded. Unfortunately, food prices and food portions have yet to follow suit.

I guess it’s like a voter-approved tax that never sunsets.