El joven confirmó que había descargado más de 800 canciones desde 1999
BOSTON — Un estudiante de la Universidad de Boston acusado de intercambiar música ilegalmente en internet, admitió hoy en un tribunal que ha bajado y compartido centenares de canciones de grupos como Nirvana, Green Day, The Smashing Pumpkins y otros.
Joel Tenenbaum, un estudiante de posgrado de 25 años, originario de Providence, Rhode Island, fue citado a declarar por abogados de la industria discográfica, que lo acusa de haber violado los derechos de reproducción.
Este es el segundo caso en Estados Unidos relacionado con la descarga de música que va a juicio. El mes pasado, un jurado federal sancionó a una mujer de Minnesota a pagar $1.92 millones por violar los derechos de reproducción.
Usualmente, la industria ha ofrecido resolver casos como éste por con pagos de $5,000, aunque dijo que dejó de presentar esas demandas legales en agosto pasado y que en lugar de ello está trabajando con los proveedores de servicio de internet para combatir a los peores infractores. Sin embargo, los casos ya presentados están procediendo a juicio.
Tenenbaum admitió que había descargado más de 800 canciones desde 1999 y que mintió en declaraciones antes del juicio, cuando dijo que sus dos hermanas, amigos y otras personas pudieran haber sido responsables por la descarga de las canciones a su computadora.
Tenenbaum dijo que desde muy joven habían sido un amante apasionado de la música y que ahorró el dinero que ganó en su trabajo temporal en McDonald’s y compró hasta $110 en discos compactos de una sola vez. Dijo que comenzó a descargar música usando Napster, y luego Kazaa.
“Fue como una discoteca gigante enfrente de uno con todas esas canciones”, dijo.
Tenenbaum dijo que compró unos 100 discos compactos durante el tiempo en que estaba descargando música.
El abogado del estudiante, Charles Nesson, un profesor de derecho de Harvard, dijo que Tenenbaum “es un chico que hizo lo que hacen los chicos” y no debería ser castigado tan duramente por avances tecnológicos a los que las compañías han demorado en adaptarse.
Pero Tim Reynolds, uno de los abogados que representa a la industria, dijo que personas como Tenenbaum mellan severamente los ingresos del sector, y los de cantantes, acompañantes, ingenieros de sonido y otras personas que se ganan la vida en la industria discográfica.
Friday, July 31, 2009
Thursday, July 30, 2009
Cierran Preferred Health
Decenas de empleados quedan en la calle tras orden para liquidar a la aseguradora
SAN JUAN — La aseguradora médica Preferred Health fue cerrada hoy por la Oficina del Comisionado de Seguros (OCS) por falta de liquidez.
La OCS acudió al tribunal para obtener una orden judicial para incautarse de los bienes de Preferred Health al informar una reducción en los activos de la empresa de $11.3 millones.
“El Comisionado de Seguros... radicó ante este tribunal una petición solicitando una orden para liquidar a la organización de servicios de salud Preferred Health Inc. por encontrarse en tal condición financiera que, de seguir tramitando negocios, resultaría peligroso para sus suscriptores, acreedores y el público en general”, reza la orden interlocutoria de 25 páginas.
La orden dictada por el juez superior de San Juan Carlos Dávila Vélez tiene carácter perentorio y otorga a Preferred Health 10 días para demostrar al tribunal por qué no debe convertirse en permanente o para solicitar una vista.
El comisionado de Seguros, Ramón Cruz Colón, aseguró que esta medida llegó tras varios intentos fallidos de su oficina para alcanzar una solución junto a ejecutivos de Preferred Health.
“La acción que tomó esta oficina se tornó en inminente e inevitable, habida cuenta de la persistencia de una situación insostenible bajo el estado de derecho vigente”, indicó el Comisionado de Seguros en un comunicado.
Entre las consecuencias directas de esta intervención, se encuentra la cancelación de los contratos que tenía Preferred Health.
“Se ordena la cancelación de todos los contratos, convenios, planes, pólizas, evidencia o certificado de cubierta o seguro, emitido por o a nombre de Preferred Health por los que se provea servicios de cuidado de salud, los cuales quedarán cancelados y sin efecto a la fecha de la orden”, indica.
Sin embargo, según la OCS, “se han tomado las medidas necesarias para que aquellos suscriptores afectados puedan mantener la protección que necesitan”
“Los empleados públicos acogidos a este plan tendrán un término de 30 días para suscribirse a un nuevo plan de servicios de salud y podrán utilizar los formularios correspondientes en la oficina de recursos humanos de la agencia, departamento o corporación donde labora, de igual manera que cuando se acogió a Preferred”, precisó Cruz Colón.
El alguacil Carlos Stubbe indicó que, a eso de las 2:30 de la tarde, se ejecutó la orden del tribunal, que dejó todos los bienes de la aseguradora en manos de la OCS.
“El tribunal emitió una orden para que el alguacil se incautara de Preferred Health y le hiciera entrega al Comisionado de Seguros de todos los bienes aquí en Preferred Health (por) procedimientos de liquidación”, dijo Stubbe en entrevista radial (WKAQ).
“Ya yo le hice entrega al Comisionado de Seguros de todos los bienes. Ellos (el personal de la OCS) ya desde mañana (viernes) van a hacer un inventario... y estarán viernes, sábado, domingo, haciendo inventario”, precisó Stubbe, quien agregó que, con este procedimiento, Preferred Health “ya se liquidó”.
Las oficinas cerradas ubican en Hato Rey, Ponce y Mayagüez, según el alguacil.
Como parte de la orden de Dávila Vélez, se realizó un proceso de liquidación que incluye la declaración de Preferred Health como insolvente y la prohibición de operaciones.
“Preferred Health deberá entregar al Comisionado de Seguros su certificado de autoridad para operar y, si no lo hiciere, se considerará que lo hizo al recibo de la orden de liquidación”, sostiene el documento.
En cuanto a los expedientes médicos de los pacientes que mantenían contratos con la aseguradora, que operaba como tal desde 1987, Dávila Vélez ordenó a la OCS entregarlo a todo aquél que lo solicite.
La orden de liquidación no tiene sólo efectos directos entre los asegurados sino que también afectará los pleitos judiciales en los que estuviera involucrada la empresa.
“Se ordena que todo pleito pendiente o que se radique contra Preferred Health sea desestimado y se remita al foro administrativo del procedimiento de liquidación”, acota.
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Ahora en Portada5:10 PM
noticias
Cierran Preferred Health
05:04 p.m. Decenas quedan en la calle, tras el Comisionado de Seguros pedir la liquidación de la aseguradora
Intereses por retraso en reintegros
02:57 p.m. Pagarán un 6% a los que no lo reciban antes de mañana
Aclárenos estas dudas, doctora...
Usuarios le hacen preguntas a Ángeles Rodríguez, ex epidemióloga del estado
noticias
Gatti se suicidó
01:51 p.m. El ex campeón de boxeo fue encontrado muerto a principios de julio en un centro turístico de Brasil y su esposa era la principal sospechosa del crimen. Mira la fotogalería
Dieron positivo en 2003
12:58 p.m. David Ortiz y Manny Ramírez consumieron sustancias para mejorar su rendimiento
Pellot es el MVP
11:48 a.m. El alero terminó la temporada como el mejor anotador del torneo al acumular 681 puntos
Fortuño evita juzgar el trabajo de Rullán
04:41 p.m. Sin embargo, deja la puerta abierta para que el nuevo secretario de Salud lo mantenga como epidemiólogo del Estado
noticias
Revela detalles de su boda
04:11 p.m. En entrevista para People en Español, Alberto Cutié aseguró que siempre quiso casarse y tener hijos
Padre por cuarta vez
10:34 a.m. Jude Law tendrá otro hijo, producto de una corta relación con una mujer desconocida
Campanas de boda para Christian y Génesis
12:25 p.m. El actor peruano viajó a Miami con su familia para pedir la mano de la hija de El Puma
Asegura que Omer Bhatti es su nieto
01:21 p.m. "Parece un Jackson, actúa como un Jackson y puede bailar como un Jackson", dijo Joe Jackson
por dentro
Boutiques a la carta
La nueva actitud al vender y comprar ropa femenina
Allen tenía razón
No a muchos hombres les da un ataque de llanto por las libras de más
¿Querida suegra?
Psicóloga estadounidense explora la dinámica entre nueras y suegras y ofrece sus consejos
El método saliva
06:14 a.m. Relacionan los bajos niveles de progesterona con el hecho de tener un embarazo prematuro
Hombres y mujeres ven diferente
04:35 p.m. Los varones tienen una mayor capacidad de distinguir a larga distancia y las féminas enfocan mejor a corta distancia
SAN JUAN — La aseguradora médica Preferred Health fue cerrada hoy por la Oficina del Comisionado de Seguros (OCS) por falta de liquidez.
La OCS acudió al tribunal para obtener una orden judicial para incautarse de los bienes de Preferred Health al informar una reducción en los activos de la empresa de $11.3 millones.
“El Comisionado de Seguros... radicó ante este tribunal una petición solicitando una orden para liquidar a la organización de servicios de salud Preferred Health Inc. por encontrarse en tal condición financiera que, de seguir tramitando negocios, resultaría peligroso para sus suscriptores, acreedores y el público en general”, reza la orden interlocutoria de 25 páginas.
La orden dictada por el juez superior de San Juan Carlos Dávila Vélez tiene carácter perentorio y otorga a Preferred Health 10 días para demostrar al tribunal por qué no debe convertirse en permanente o para solicitar una vista.
El comisionado de Seguros, Ramón Cruz Colón, aseguró que esta medida llegó tras varios intentos fallidos de su oficina para alcanzar una solución junto a ejecutivos de Preferred Health.
“La acción que tomó esta oficina se tornó en inminente e inevitable, habida cuenta de la persistencia de una situación insostenible bajo el estado de derecho vigente”, indicó el Comisionado de Seguros en un comunicado.
Entre las consecuencias directas de esta intervención, se encuentra la cancelación de los contratos que tenía Preferred Health.
“Se ordena la cancelación de todos los contratos, convenios, planes, pólizas, evidencia o certificado de cubierta o seguro, emitido por o a nombre de Preferred Health por los que se provea servicios de cuidado de salud, los cuales quedarán cancelados y sin efecto a la fecha de la orden”, indica.
Sin embargo, según la OCS, “se han tomado las medidas necesarias para que aquellos suscriptores afectados puedan mantener la protección que necesitan”
“Los empleados públicos acogidos a este plan tendrán un término de 30 días para suscribirse a un nuevo plan de servicios de salud y podrán utilizar los formularios correspondientes en la oficina de recursos humanos de la agencia, departamento o corporación donde labora, de igual manera que cuando se acogió a Preferred”, precisó Cruz Colón.
El alguacil Carlos Stubbe indicó que, a eso de las 2:30 de la tarde, se ejecutó la orden del tribunal, que dejó todos los bienes de la aseguradora en manos de la OCS.
“El tribunal emitió una orden para que el alguacil se incautara de Preferred Health y le hiciera entrega al Comisionado de Seguros de todos los bienes aquí en Preferred Health (por) procedimientos de liquidación”, dijo Stubbe en entrevista radial (WKAQ).
“Ya yo le hice entrega al Comisionado de Seguros de todos los bienes. Ellos (el personal de la OCS) ya desde mañana (viernes) van a hacer un inventario... y estarán viernes, sábado, domingo, haciendo inventario”, precisó Stubbe, quien agregó que, con este procedimiento, Preferred Health “ya se liquidó”.
Las oficinas cerradas ubican en Hato Rey, Ponce y Mayagüez, según el alguacil.
Como parte de la orden de Dávila Vélez, se realizó un proceso de liquidación que incluye la declaración de Preferred Health como insolvente y la prohibición de operaciones.
“Preferred Health deberá entregar al Comisionado de Seguros su certificado de autoridad para operar y, si no lo hiciere, se considerará que lo hizo al recibo de la orden de liquidación”, sostiene el documento.
En cuanto a los expedientes médicos de los pacientes que mantenían contratos con la aseguradora, que operaba como tal desde 1987, Dávila Vélez ordenó a la OCS entregarlo a todo aquél que lo solicite.
La orden de liquidación no tiene sólo efectos directos entre los asegurados sino que también afectará los pleitos judiciales en los que estuviera involucrada la empresa.
“Se ordena que todo pleito pendiente o que se radique contra Preferred Health sea desestimado y se remita al foro administrativo del procedimiento de liquidación”, acota.
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*
*
*
*
Ahora en Portada5:10 PM
noticias
Cierran Preferred Health
05:04 p.m. Decenas quedan en la calle, tras el Comisionado de Seguros pedir la liquidación de la aseguradora
Intereses por retraso en reintegros
02:57 p.m. Pagarán un 6% a los que no lo reciban antes de mañana
Aclárenos estas dudas, doctora...
Usuarios le hacen preguntas a Ángeles Rodríguez, ex epidemióloga del estado
noticias
Gatti se suicidó
01:51 p.m. El ex campeón de boxeo fue encontrado muerto a principios de julio en un centro turístico de Brasil y su esposa era la principal sospechosa del crimen. Mira la fotogalería
Dieron positivo en 2003
12:58 p.m. David Ortiz y Manny Ramírez consumieron sustancias para mejorar su rendimiento
Pellot es el MVP
11:48 a.m. El alero terminó la temporada como el mejor anotador del torneo al acumular 681 puntos
Fortuño evita juzgar el trabajo de Rullán
04:41 p.m. Sin embargo, deja la puerta abierta para que el nuevo secretario de Salud lo mantenga como epidemiólogo del Estado
noticias
Revela detalles de su boda
04:11 p.m. En entrevista para People en Español, Alberto Cutié aseguró que siempre quiso casarse y tener hijos
Padre por cuarta vez
10:34 a.m. Jude Law tendrá otro hijo, producto de una corta relación con una mujer desconocida
Campanas de boda para Christian y Génesis
12:25 p.m. El actor peruano viajó a Miami con su familia para pedir la mano de la hija de El Puma
Asegura que Omer Bhatti es su nieto
01:21 p.m. "Parece un Jackson, actúa como un Jackson y puede bailar como un Jackson", dijo Joe Jackson
por dentro
Boutiques a la carta
La nueva actitud al vender y comprar ropa femenina
Allen tenía razón
No a muchos hombres les da un ataque de llanto por las libras de más
¿Querida suegra?
Psicóloga estadounidense explora la dinámica entre nueras y suegras y ofrece sus consejos
El método saliva
06:14 a.m. Relacionan los bajos niveles de progesterona con el hecho de tener un embarazo prematuro
Hombres y mujeres ven diferente
04:35 p.m. Los varones tienen una mayor capacidad de distinguir a larga distancia y las féminas enfocan mejor a corta distancia
Cierre temporal de rampa hacia Bayamón
La salida desde el expreso José de Diego hacia la PR-5 permanecerá cerrada esta fin de semana
La rampa de acceso hacia la carretera PR-5 en dirección hacia Bayamón estará cerrada este fin de semana debido a trabajos de reparación, informó hoy el Departamento de Transportación y Obras Públicas (DTOP).
El cierre iniciará a las 9:00 p.m. de mañana, y se extenderá hasta el lunes de agosto a las 6:00 a.m.
Los conductores que utilizan esa rampa tendrán que tomar la salida anterior en dirección a Cataño y virar a la izquierda en el próximo semáforo.
También podrán tomar la salida posterior hacia el Barrio Palmas (PR-869) y doblar a la izquierda en el próximo semáforo, desde donde podrán acceder la Calle Marginal sur que conecta con la carretera PR-5, en dirección a Bayamón.
Otras rutas alternas que se pueden utilizar son las salidas anteriores hacia las carreteras PR-2, PR-165 y PR-28 ó la salida posterior hacia la carretera PR-167, las cuales conducen hacia Bayamón.
“Exhortamos a los conductores y al público en general a estar atentos a las señales de tránsito y otros dispositivos para el control del tránsito a ser instalados en el área para su seguridad y orientación. Solicitamos su indulgencia por los inconvenientes que esta medida de carácter temporal le pueda ocasionar”, sostuvo la agencia en un comunicado.
La rampa de acceso hacia la carretera PR-5 en dirección hacia Bayamón estará cerrada este fin de semana debido a trabajos de reparación, informó hoy el Departamento de Transportación y Obras Públicas (DTOP).
El cierre iniciará a las 9:00 p.m. de mañana, y se extenderá hasta el lunes de agosto a las 6:00 a.m.
Los conductores que utilizan esa rampa tendrán que tomar la salida anterior en dirección a Cataño y virar a la izquierda en el próximo semáforo.
También podrán tomar la salida posterior hacia el Barrio Palmas (PR-869) y doblar a la izquierda en el próximo semáforo, desde donde podrán acceder la Calle Marginal sur que conecta con la carretera PR-5, en dirección a Bayamón.
Otras rutas alternas que se pueden utilizar son las salidas anteriores hacia las carreteras PR-2, PR-165 y PR-28 ó la salida posterior hacia la carretera PR-167, las cuales conducen hacia Bayamón.
“Exhortamos a los conductores y al público en general a estar atentos a las señales de tránsito y otros dispositivos para el control del tránsito a ser instalados en el área para su seguridad y orientación. Solicitamos su indulgencia por los inconvenientes que esta medida de carácter temporal le pueda ocasionar”, sostuvo la agencia en un comunicado.
Alertan sobre fraudulento sorteo de auto
Bella Group denuncia esquema de llamadas a las consumidores pidiendo envíen $500 para cubrir los gastos de un auto nuevo que se ganaron.
Bella Group denunció hoy un esquema fraudulento en el que personas identificadas como empleados de la compañía le informan por teléfono a las personas que son ganadoras de un Honda Accord 2009, pero que para recibirlo deberán enviar $500 para cubrir ciertos gastos.
“La modalidad que se está dando es que la persona, alegando haber obtenido al azar el número de teléfono, llama al consumidor y le indica que es ganador, y le persuade a depósitar $500 para cubrir el costo de la tablilla, el marbete, el seguro y los gastos administrativos a través de una conocida compañía de envío de valores”, explicó Ambar Rodríguez, portavoz de Bella Group.
También le solicitan a las personas sus datos personales y dirección residencial, para supuestamente entregarles el vehículo.
La portavoz de Bella Group señaló que la empresa se enteró del esquema cuando las personas que han sido víctimas de dicho fraude telefónico comenzaron a llamar reclamando el auto que se ganaron.
Rodríguez informó que Bella Group radicó una querella con la Policía y alertó al Departamento de Asuntos al Consumidor (DACO) sobre el esquema.
Exhortó al público a no proveer información personal por teléfono y, de tener dudas, asesorarse con el DACO, la Policía de Puerto Rico o cualquier otra agencia concernida.
Bella Group denunció hoy un esquema fraudulento en el que personas identificadas como empleados de la compañía le informan por teléfono a las personas que son ganadoras de un Honda Accord 2009, pero que para recibirlo deberán enviar $500 para cubrir ciertos gastos.
“La modalidad que se está dando es que la persona, alegando haber obtenido al azar el número de teléfono, llama al consumidor y le indica que es ganador, y le persuade a depósitar $500 para cubrir el costo de la tablilla, el marbete, el seguro y los gastos administrativos a través de una conocida compañía de envío de valores”, explicó Ambar Rodríguez, portavoz de Bella Group.
También le solicitan a las personas sus datos personales y dirección residencial, para supuestamente entregarles el vehículo.
La portavoz de Bella Group señaló que la empresa se enteró del esquema cuando las personas que han sido víctimas de dicho fraude telefónico comenzaron a llamar reclamando el auto que se ganaron.
Rodríguez informó que Bella Group radicó una querella con la Policía y alertó al Departamento de Asuntos al Consumidor (DACO) sobre el esquema.
Exhortó al público a no proveer información personal por teléfono y, de tener dudas, asesorarse con el DACO, la Policía de Puerto Rico o cualquier otra agencia concernida.
Wednesday, July 29, 2009
Fire destroys Jacksonville auto repair business
Taxi driver reported the early morning fire
Investigators have not yet determined what caused a fire this morning that destroyed a Jacksonville auto repair business though the blaze is not suspicious, a spokesman for the Jacksonville Fire and Rescue Department said.
Tom Francis said firefighters had to break their way inside H and T Auto Repair in the 4000 block of St. Augustine Road when they responded to the 3:30 a.m. fire reported by a passing taxi driver. Francis said flames were coming through the roof and that firefighters backed off from an initial interior attack due to concerns about highly combustible materials that might be inside.
No one was injured in the fire.
A water cannon was used to extinguish the fire in the single-story, concrete block building. The garage had four work bays and vehicles inside were also destroyed. Francis said the fire was put out in about 30 minutes.
He said businesses located feet from either side of the auto repair shop were kept from being damaged. Damage to the business is estimated at $200,000.
Investigators have not yet determined what caused a fire this morning that destroyed a Jacksonville auto repair business though the blaze is not suspicious, a spokesman for the Jacksonville Fire and Rescue Department said.
Tom Francis said firefighters had to break their way inside H and T Auto Repair in the 4000 block of St. Augustine Road when they responded to the 3:30 a.m. fire reported by a passing taxi driver. Francis said flames were coming through the roof and that firefighters backed off from an initial interior attack due to concerns about highly combustible materials that might be inside.
No one was injured in the fire.
A water cannon was used to extinguish the fire in the single-story, concrete block building. The garage had four work bays and vehicles inside were also destroyed. Francis said the fire was put out in about 30 minutes.
He said businesses located feet from either side of the auto repair shop were kept from being damaged. Damage to the business is estimated at $200,000.
NYC offers free airfare to homeless to leave city
NEW YORK — New York City is buying one-way plane tickets for homeless families to leave the city.
It's part of a Bloomberg administration program to keep the homeless out of the expensive shelter system, which costs $36,000 a year per family. More than 550 families have left the city since 2007. All it takes is for a relative to agree to take them in.
The city employs a travel agency for domestic travel and the Department of Homeless Services handles international travel.
City officials say there are no limits on where a family can be sent and families can reject the offer.
Families have been sent to 24 states and five continents, mostly to Puerto Rico, Florida, Georgia and the Carolinas.
City officials say none of the relocated families have returned to city shelters.
It's part of a Bloomberg administration program to keep the homeless out of the expensive shelter system, which costs $36,000 a year per family. More than 550 families have left the city since 2007. All it takes is for a relative to agree to take them in.
The city employs a travel agency for domestic travel and the Department of Homeless Services handles international travel.
City officials say there are no limits on where a family can be sent and families can reject the offer.
Families have been sent to 24 states and five continents, mostly to Puerto Rico, Florida, Georgia and the Carolinas.
City officials say none of the relocated families have returned to city shelters.
Report: Cruises slide in US as total rises in '08
MIAMI — Fewer Americans took cruises in 2008 than 2007, according to new industry data, showing that cruising's core constituency may be weakening despite continued growth in the pastime worldwide.
For the first time since 1998, when the Cruise Lines International Association started publishing economic impact reports, fewer cruise ships set sail from U.S. ports in 2008 than the previous year.
As recently as 2004, American embarkations accounted for 77 percent of all cruises. By last year their share had fallen to 69 percent as business grew in Europe.
Norwegian Cruise Lines, for example, re-christened its Pride of Hawaii as the Norwegian Jade and now sails it year-round in Europe. The Pride's departure and that of a sister ship moved from Hawaii to Miami are being blamed for Honolulu's 59 percent drop in embarkations, while cruise traffic from Miami rose 11 percent.
But the decline in American cruises didn't keep overall traffic or revenue from growing between 2007 and 2008. Last year 13.05 million people worldwide vacationed on one of the giant, seafaring ships — a 4 percent increase. Gross revenue rose 9 percent to $24.88 billion and total spending in the U.S. rose 2 percent to $19 billion, though that was the smallest hike in the report's history.
"In 2008, considering all that's going on, we're reporting a 2 percent increase. There's a lot of businesses out there that would love to be reporting any increase," said Bob Sharak, executive vice president of the Cruise Lines International Association. "The biggest point to take away is when other people are suffering greatly, we're able to show an increase."
American passenger traffic increased each of the previous few years, though by shrinking percentages, and finally turned negative in 2008. About 9.3 million passengers took cruises originating in the U.S. in 2008, a 1.7 percent decline.
In addition to Honolulu's traffic loss, American cruising took a hit from Hurricane Ike in Galveston, Texas, where embarkations fell 28 percent. And New Orleans lost 30.6 percent of its embarkations. Florida, which accounts for 57 percent of all cruise ship departures, saw a 2.7 percent increase to 5.1 million.
Sharak doesn't think the American market is done growing. He said the industry was doing fairly well in 2008 until the economic crisis escalated in September.
Carnival Cruise Lines, for example, is positioning its new ship Carnival Dream year-round in America. Spokeswoman Jennifer de la Cruz said the company would carry more North American passengers in 2009 than any year in company history.
But operators may not be poised to recover quickly from the downturn. Royal Caribbean in January reported a 98 percent drop in fourth-quarter earnings. And it saw a $36 million loss in the first quarter of 2009. The company is expected to release second-quarter earnings results on Wednesday but cautioned last month that rising fuel prices and the swine flu outbreak will hurt its full-year results.
Both Royal Caribbean and much larger competitor Carnival have slashed rates to fill ships in recent months — with mixed results. In the quarter that ended May 31, Carnival's profit dropped 32 percent from the previous year, but the company still netted $264 million. However, it also lowered full-year guidance citing high fuel prices.
For the first time since 1998, when the Cruise Lines International Association started publishing economic impact reports, fewer cruise ships set sail from U.S. ports in 2008 than the previous year.
As recently as 2004, American embarkations accounted for 77 percent of all cruises. By last year their share had fallen to 69 percent as business grew in Europe.
Norwegian Cruise Lines, for example, re-christened its Pride of Hawaii as the Norwegian Jade and now sails it year-round in Europe. The Pride's departure and that of a sister ship moved from Hawaii to Miami are being blamed for Honolulu's 59 percent drop in embarkations, while cruise traffic from Miami rose 11 percent.
But the decline in American cruises didn't keep overall traffic or revenue from growing between 2007 and 2008. Last year 13.05 million people worldwide vacationed on one of the giant, seafaring ships — a 4 percent increase. Gross revenue rose 9 percent to $24.88 billion and total spending in the U.S. rose 2 percent to $19 billion, though that was the smallest hike in the report's history.
"In 2008, considering all that's going on, we're reporting a 2 percent increase. There's a lot of businesses out there that would love to be reporting any increase," said Bob Sharak, executive vice president of the Cruise Lines International Association. "The biggest point to take away is when other people are suffering greatly, we're able to show an increase."
American passenger traffic increased each of the previous few years, though by shrinking percentages, and finally turned negative in 2008. About 9.3 million passengers took cruises originating in the U.S. in 2008, a 1.7 percent decline.
In addition to Honolulu's traffic loss, American cruising took a hit from Hurricane Ike in Galveston, Texas, where embarkations fell 28 percent. And New Orleans lost 30.6 percent of its embarkations. Florida, which accounts for 57 percent of all cruise ship departures, saw a 2.7 percent increase to 5.1 million.
Sharak doesn't think the American market is done growing. He said the industry was doing fairly well in 2008 until the economic crisis escalated in September.
Carnival Cruise Lines, for example, is positioning its new ship Carnival Dream year-round in America. Spokeswoman Jennifer de la Cruz said the company would carry more North American passengers in 2009 than any year in company history.
But operators may not be poised to recover quickly from the downturn. Royal Caribbean in January reported a 98 percent drop in fourth-quarter earnings. And it saw a $36 million loss in the first quarter of 2009. The company is expected to release second-quarter earnings results on Wednesday but cautioned last month that rising fuel prices and the swine flu outbreak will hurt its full-year results.
Both Royal Caribbean and much larger competitor Carnival have slashed rates to fill ships in recent months — with mixed results. In the quarter that ended May 31, Carnival's profit dropped 32 percent from the previous year, but the company still netted $264 million. However, it also lowered full-year guidance citing high fuel prices.
Problem employees present opportunity, not just obstacle
Problem employees are an unavoidable part of the working world. We all have had to work for, work with or supervise a difficult employee.
Although in many cases you inherit the problem worker, he or she is still your responsibility. As for just getting rid of the person, that's an unreasonable solution for many reasons.
I do not think there is a clear definition of a problem employee. What is clear, however, is that these employees tend to affect the morale of the entire organization and make your life very difficult. Too often, the implicit assumption is that a replacement worker must be better, however, this is frequently not the case.
How would a manager make a decision on a piece of equipment that was causing a maintenance headache? Well, before it was replaced, I guarantee that a thorough analysis of the problem would be conducted, and possible alternatives for fixing it would be evaluated. It is just good business to make sure the problem cannot be corrected before a new asset is purchased.
Yet, this same type of analysis is not done on employees who are having difficulties. Often, I see employers letting staff go simply because they did not give the manager what they wanted. However, when I go back to the staffer and ask if they understood what was expected of them, the majority says no. In these instances, management never attempted to work with them to see if it was possible to overcome the problem.
The cost of replacing a worker is either unrealized or is perceived as inconsequential. There is no question in my mind that if you fully account for all of the time and effort involved in hiring a replacement, plus numerous other indirect expenses, the cost of replacing a worker amounts to at least 100 percent of the annual salary.
If the cost to replace a worker is so high, why do so many firms keep on doing this over and over? I think it's because many managers lack the skills to deal with problematic employees or behaviors. For example, if you have a worker that has been coming in late to work, and you are disappointed because you believe you have made the company policy clear to everyone, maybe the issue is that you are not connecting with the employee, being clear about the expectations or there is something going on in their personal life that is influencing their behavior.
Changing behavior is especially difficult if it has been tolerated for a period of time. However, working to overcome an employee's problem rather than seeking to hire a new worker will often pay off in the long run.
In looking to overcome behavioral issues, consider the root cause of the problem. For example, is there something in the company culture that is contributing to the problem behavior? In the case of the late employee, maybe you are being inconsistent about enforcing company policies. Are some people allowed to come in late due to personal circumstances that are not explained to the other employees? Are you holding people accountable, or do you let things slide?
Once you have determined the reason behind the behavior, there are many things that you can do to turn the situation around. First, provide specific guidelines and processes to help clarify expectations. Secondly, ensure open communication with managers and employees to help resolve minor issues before they become serious problems.
A third possibility is the use of incentives, rewards and recognition as ways of reinforcing the change you seek. I have seen some managers simply start acknowledging positive changes in behaviors, and that has been the key to effecting the change. For example, with the habitually late worker, offer a kind word about the improvement the employee is showing by successfully arriving on time three days out of five.
The bottom line is that an employee's problem behavior should not necessarily mean termination. Rather, it should be thought of as an opportunity to turn this person into a great employee.
You can do this!
Although in many cases you inherit the problem worker, he or she is still your responsibility. As for just getting rid of the person, that's an unreasonable solution for many reasons.
I do not think there is a clear definition of a problem employee. What is clear, however, is that these employees tend to affect the morale of the entire organization and make your life very difficult. Too often, the implicit assumption is that a replacement worker must be better, however, this is frequently not the case.
How would a manager make a decision on a piece of equipment that was causing a maintenance headache? Well, before it was replaced, I guarantee that a thorough analysis of the problem would be conducted, and possible alternatives for fixing it would be evaluated. It is just good business to make sure the problem cannot be corrected before a new asset is purchased.
Yet, this same type of analysis is not done on employees who are having difficulties. Often, I see employers letting staff go simply because they did not give the manager what they wanted. However, when I go back to the staffer and ask if they understood what was expected of them, the majority says no. In these instances, management never attempted to work with them to see if it was possible to overcome the problem.
The cost of replacing a worker is either unrealized or is perceived as inconsequential. There is no question in my mind that if you fully account for all of the time and effort involved in hiring a replacement, plus numerous other indirect expenses, the cost of replacing a worker amounts to at least 100 percent of the annual salary.
If the cost to replace a worker is so high, why do so many firms keep on doing this over and over? I think it's because many managers lack the skills to deal with problematic employees or behaviors. For example, if you have a worker that has been coming in late to work, and you are disappointed because you believe you have made the company policy clear to everyone, maybe the issue is that you are not connecting with the employee, being clear about the expectations or there is something going on in their personal life that is influencing their behavior.
Changing behavior is especially difficult if it has been tolerated for a period of time. However, working to overcome an employee's problem rather than seeking to hire a new worker will often pay off in the long run.
In looking to overcome behavioral issues, consider the root cause of the problem. For example, is there something in the company culture that is contributing to the problem behavior? In the case of the late employee, maybe you are being inconsistent about enforcing company policies. Are some people allowed to come in late due to personal circumstances that are not explained to the other employees? Are you holding people accountable, or do you let things slide?
Once you have determined the reason behind the behavior, there are many things that you can do to turn the situation around. First, provide specific guidelines and processes to help clarify expectations. Secondly, ensure open communication with managers and employees to help resolve minor issues before they become serious problems.
A third possibility is the use of incentives, rewards and recognition as ways of reinforcing the change you seek. I have seen some managers simply start acknowledging positive changes in behaviors, and that has been the key to effecting the change. For example, with the habitually late worker, offer a kind word about the improvement the employee is showing by successfully arriving on time three days out of five.
The bottom line is that an employee's problem behavior should not necessarily mean termination. Rather, it should be thought of as an opportunity to turn this person into a great employee.
You can do this!
Could Earth Be Hit, Like Jupiter Just Was?
The recent bruising Jupiter received from a cosmic impact is a violent reminder that our solar system is a shooting gallery that sometimes blasts Earth.
Still, what are the odds of a cosmic impact threatening our planet?
So far 784 near-Earth objects (NEOs) more than a half-mile wide (1 km) have been found.
"If an object of about the same size that just hit Jupiter also hit Earth — it was probably a typical cometary object of a kilometer or so in size (0.6 miles) — it would have been fairly catastrophic," explained astronomer Donald Yeomans, manager of NASA's Near-Earth Object program office at the Jet Propulsion Laboratory in Pasadena, Calif.
Scientists have ruled out the chances of an Earth impact for all of these 784 large NEOs. Still, lesser objects also pose a risk, and researchers estimate more than 100 large NEOS remain to be found.
Small risk
Billions of years ago, impacts were far more common. Our moon retains a record of the pummeling it and Earth took: the moon's craters remain, while on Earth, most scars of ancient impacts have been folded back into the planet or weathered away.
Today's solar system is far less crowded, and in fact Jupiter, having more mass and gravity, scoops up a lot of the dangerous objects, as does the sun.
Currently just one NEO of all the objects scientists are tracking poses any significant chance of hitting the Earth — 2007 VK184. If this roughly 425-foot-wide (130 meters) asteroid hit our planet, it would strike with an energy of roughly 150 million tons of TNT, or more than 10,000 times that of the atom bomb dropped on Hiroshima.
Roughly 100 telescopic observations made so far suggest that 2007 VK184 has a 1-in-2,940 chance of hitting Earth 40 to 50 years from now. However, if the past is any guide, further observations to refine computations of its orbit very likely will downgrade its probability of hitting Earth to virtually nothing, Yeomans said.
Of remaining concern are the NEOs that we do not see. Researchers suspect about 156 large NEOs 1 kilometer in diameter or larger remain to be found, and when it comes to dangerous NEOs in general, "when we get down to 140 meters (460 feet) or larger diameter objects, we think we've discovered about 15 percent of them, and with 50 meters (164 feet) or larger diameter, we've discovered less than 5 percent of them," Yeomans explained.
On average, an NEO roughly a half-mile wide or larger hits the Earth roughly every 500,000 years, "so we're not expecting one anytime soon," Yeomans explained.
"For 500 meters (1,640 feet), we're talking a mean interval of about 100,000 years," he added. "When you get down to 50 meters, the mean interval is about 700 years, and for 30 meters (98 feet), about 140 years or so, but by then you're getting down to a size where you won't expect any ground damage, as they burn up in the atmosphere at about 25 meters (82 feet) in diameter and smaller, probably for an impressive fireball event."
When it comes to truly monstrous NEOs some 10 kilometers (6.2 miles) or larger, of the size thought to have helped kill off the dinosaurs, "that's a 100 million year event, and in fact, I don't think there is anything like that we see right now," Yeomans said. "The largest near-Earth object that can actually cross the Earth's path, Sisyphus, has a diameter of 8 kilometers (5 miles), and the largest that is termed a potential hazard is Toutatis, which has a diameter of approximately 5.4 km (3.35 miles)."
Keeping watch
There are currently four teams worldwide actively looking for both large and small NEOs, Yeomans said. "We're concentrating on the large ones for now, but hopefully with the next generation of search, we'll be more efficient in finding the smaller objects, to find 90 percent of the total population of potential hazards larger than 140 meters," he added.
Keeping an eye on NEOs might not just be healthy for humanity, but also help lead us out into space.
"They're easy objectives to get to, and asteroids have significant metal resources that can be mined, while comets have significant water resources for space habitats or travel," Yeomans said. "If you want to build a habitat in space, you're not going to build it all on the ground and launch it up, since that's too expensive — you want to go up and look for resources instead."
Furthermore, asteroids and comets are among the objects that have changed the least since the birth of the solar system roughly 4.6 billion years ago, and might reveal vital clues behind the mysterious process.
"They may well have delivered the water and carbon-based molecules to Earth that allowed life to form, so they're extremely important for study in that direction," Yeomans added.
Still, what are the odds of a cosmic impact threatening our planet?
So far 784 near-Earth objects (NEOs) more than a half-mile wide (1 km) have been found.
"If an object of about the same size that just hit Jupiter also hit Earth — it was probably a typical cometary object of a kilometer or so in size (0.6 miles) — it would have been fairly catastrophic," explained astronomer Donald Yeomans, manager of NASA's Near-Earth Object program office at the Jet Propulsion Laboratory in Pasadena, Calif.
Scientists have ruled out the chances of an Earth impact for all of these 784 large NEOs. Still, lesser objects also pose a risk, and researchers estimate more than 100 large NEOS remain to be found.
Small risk
Billions of years ago, impacts were far more common. Our moon retains a record of the pummeling it and Earth took: the moon's craters remain, while on Earth, most scars of ancient impacts have been folded back into the planet or weathered away.
Today's solar system is far less crowded, and in fact Jupiter, having more mass and gravity, scoops up a lot of the dangerous objects, as does the sun.
Currently just one NEO of all the objects scientists are tracking poses any significant chance of hitting the Earth — 2007 VK184. If this roughly 425-foot-wide (130 meters) asteroid hit our planet, it would strike with an energy of roughly 150 million tons of TNT, or more than 10,000 times that of the atom bomb dropped on Hiroshima.
Roughly 100 telescopic observations made so far suggest that 2007 VK184 has a 1-in-2,940 chance of hitting Earth 40 to 50 years from now. However, if the past is any guide, further observations to refine computations of its orbit very likely will downgrade its probability of hitting Earth to virtually nothing, Yeomans said.
Of remaining concern are the NEOs that we do not see. Researchers suspect about 156 large NEOs 1 kilometer in diameter or larger remain to be found, and when it comes to dangerous NEOs in general, "when we get down to 140 meters (460 feet) or larger diameter objects, we think we've discovered about 15 percent of them, and with 50 meters (164 feet) or larger diameter, we've discovered less than 5 percent of them," Yeomans explained.
On average, an NEO roughly a half-mile wide or larger hits the Earth roughly every 500,000 years, "so we're not expecting one anytime soon," Yeomans explained.
"For 500 meters (1,640 feet), we're talking a mean interval of about 100,000 years," he added. "When you get down to 50 meters, the mean interval is about 700 years, and for 30 meters (98 feet), about 140 years or so, but by then you're getting down to a size where you won't expect any ground damage, as they burn up in the atmosphere at about 25 meters (82 feet) in diameter and smaller, probably for an impressive fireball event."
When it comes to truly monstrous NEOs some 10 kilometers (6.2 miles) or larger, of the size thought to have helped kill off the dinosaurs, "that's a 100 million year event, and in fact, I don't think there is anything like that we see right now," Yeomans said. "The largest near-Earth object that can actually cross the Earth's path, Sisyphus, has a diameter of 8 kilometers (5 miles), and the largest that is termed a potential hazard is Toutatis, which has a diameter of approximately 5.4 km (3.35 miles)."
Keeping watch
There are currently four teams worldwide actively looking for both large and small NEOs, Yeomans said. "We're concentrating on the large ones for now, but hopefully with the next generation of search, we'll be more efficient in finding the smaller objects, to find 90 percent of the total population of potential hazards larger than 140 meters," he added.
Keeping an eye on NEOs might not just be healthy for humanity, but also help lead us out into space.
"They're easy objectives to get to, and asteroids have significant metal resources that can be mined, while comets have significant water resources for space habitats or travel," Yeomans said. "If you want to build a habitat in space, you're not going to build it all on the ground and launch it up, since that's too expensive — you want to go up and look for resources instead."
Furthermore, asteroids and comets are among the objects that have changed the least since the birth of the solar system roughly 4.6 billion years ago, and might reveal vital clues behind the mysterious process.
"They may well have delivered the water and carbon-based molecules to Earth that allowed life to form, so they're extremely important for study in that direction," Yeomans added.
Tuesday, July 28, 2009
Summer war brewing over $1 billion beer industry
Coors Light and Medalla Light battle over island’s No. 1 spot; summer beer sales to drop 8% to 12% due to new beer tax
Editor’s note: Not since the mid-1990s has Puerto Rico seen the makings of a real consumer product battle like the cola wars of that time–where, as is still true today, Coca-Cola dominated both in dollar sales volume as well market share. But not even at the height of the cola war did the market see the kind of fierce battle that is brewing for the island’s No. 1 best-selling beer spot.
Following is the first article of a two-part series on Puerto Rico’s beer war.
Heating up the beer war is Gov. Luis Fortuño’s new beer tax—30¢ a gallon on all imported beer and 40¢ a gallon on locally manufactured beer—which will force all beer companies to increase prices and result in the inevitable shrinkage of the beer category by an estimated 8% to 12%.
Let’s get ready to rumble! On one end, with a 33.6% volume market share during the initial two months of the May-August summer season, is Coors Light—the incumbent No. 1 best-selling beer in Puerto Rico for the record 10-plus-year stretch. On the other hand, is Puerto Rico’s own Medalla Light, brewed by Mayagüez’s Cervecería India, which a little more than 10 years ago didn’t even register on the sales radar.
Now, as the hot summer season gets underway, accounting for the second-most-important sales period of the year, Medalla Light closely trails in second place with a 33.1% volume market share—a mere 0.5% away from the No. 1 spot in volume sales, according to the latest market study from Information Resource Inc. IRI’s market study tracks the island’s beer retail sales, not including wholesale. Still, IRI’s report captures more than 80% of the local beer-market activity.
Both Coors Light and Medalla Light are pouring huge amounts of money into either protecting or snatching the coveted No. 1 beer spot. CARIBBEAN BUSINESS estimates this year’s total beer advertising and promotions investment from all beer companies during the four-month summer period will exceed $250 million—an increase of $50 million over last year’s already high investment.
New beer tax sparks beer war
Adding excitement to the mix are higher beer retail prices, driven by Fortuño’s newly imposed beer tax, a reversal from the governor’s promise to beer and other alcoholic beverage companies.
The new tax not only is going to impact immediate sales but, for the first time, it also will likely change market composition, explained IRI’s Commercial Director Edwin Aquino.
The new tax, primarily 30¢ a gallon on all imported beer and 40¢ a gallon on locally manufactured beer, is one of several economic-recovery initiatives included in Fortuño’s criollo economic-stimulus package.
The new law also leaves intact the tax scale applied to locally manufactured beer, which essentially maintains local beers’ preferential tax, primarily applicable to Medalla Light, manufactured by Cervecería India, while aggravating taxes on all imported beers.
Beer-tax revenue in 2008 reached $198.9 million, a sharp decline from the $223.3 million in 2003. “This will make those tax-revenue projections even more difficult to attain since the locally manufactured beer (i.e., Cervecería India’s Medalla Light) is still paying $1.80 less per gallon in taxes than imported beer under the new law. The Puerto Rico Treasury Department (Hacienda) stands to lose $1.8 million in tax revenue per million gallons of shifted sales from imported beer to local beer,” Aquino explained.
The Fortuño tax, deemed by many industry insiders as a total reversal of the governor’s initial commitment, comes as a hard blow to an industry that was slowly on its way to recovery from former Gov. Sila Calderón’s 2002 Silazo tax.
Will Puerto Rico get a new beer champion?
Thanks to the new beer tax, for the first time in history, Medalla Light will increase its aggressive 99¢ for a 10-ounce can to $1.25 plus the sales & use tax—thus challenging Medalla Light customers to truly evaluate if they have been drinking the local brew because it was the cheapest or because they truly liked its flavor. As the old saying goes…the jury is still out on that one.
“The new beer tax will also hit imported beers, particularly market leader Coors Light, which now sells for more than $1.40 plus the sales and use tax for the same 10-ounce can. Pundits speculate that if Coors Light plays its cards right and substantially invests in protecting its market share, many Medalla Light customers will graduate to Coors Light, a bit more expensive than the local brand but, for just a little bit more money, consumers may perceive they are getting a better-quality beer,” IRI’s Aquino said.
Meanwhile, premium brands such as Heineken, the industry’s third-best-selling beer, probably will retail for more than $2 plus the sales tax. However, as the leading premium beer in the market, more sophisticated consumers and even some of those Coors Light consumers who are getting older, may choose to stick with a more grown-up lifestyle-beer choice such as Heineken.
In addition to Fortuño’s beer tax, other ingredients making this industry even more interesting are a recessionary economy; an important shift in demographics that continues to influence consumers’ choices; newcomer brands such as Peroni and Stella Artois that have comfortably found their spot in the beer category; and the government-employee layoffs that will directly impact consumer confidence.
On the subject of taxes, Javier Soler, regional vice president & general manager of MillerCoors Brewing Co., continues to fight the fight of imported beers, which would like the preferential tax afforded to Medalla Light eliminated.
However, after six years of losing legal wars all the way up to the U.S. Supreme Court, their hopes of seeing any kind of a level playing field in this area may be dwindling.
“For instance, if a case of beer sells for $22.50 locally, more than $9 of that goes to the government via sales and excise taxes. Undoubtedly, that is affecting product consumption which, in the end, affects tax-revenue collections for the government. Meanwhile, we remain grateful for the unwavering loyalty of our customers,” Soler said.
A lot is at stake
For starters, Puerto Rico’s beer industry, although it has been shrinking at an annual rate of 2% to 5% in sales during the past-five-consecutive years, still accounts for nearly $1 billion in annual sales that help support 5,200 direct and indirect jobs. Beer-industry executives expect the additional 800 to 1,000 summer jobs typically created as a result of companies’ emphasis on promotions and special events will also be reduced as a result of the beer-tax hike.
Notwithstanding, the promotions category continues to show growth as a percentage of beer advertising dollars, accounting for as much as 40% of summer beer budgets. Summer beer sales alone contribute well over $200 million in retail dollar sales to fuel local economic activity.
Luis Álvarez, vice president of Méndez & Co.’s liquor division and exclusive distributor of Heineken, reflects on the current market conditions, stating: “Indeed, we are seeing a beer category that is contracting due to a number of factors but primarily because there is less available income in consumers’ pockets. As key industry players, I welcome difficult economic times as it challenges us to reinforce the value proposition of our products and stand behind the real benefits our brands deliver to customers,” the Heineken executive said.
“Like Darwin’s theory of the survival of the fittest, those who adapt will survive. The same will happen to beer companies. The real fight for the survival of the best beer brands begins right now with the beginning of the toughest summer season our industry has ever seen,” Álvarez continued.
Beyond taxes, other factors threaten to flatten beer sales this summer. “There are important changes like crude-oil prices, which have slowly declined and, if they remain at a fairly stable level, the rest of the year should give beer companies some breathing space. However, we are most concerned by the shift in population demographics, a rapidly aging population coupled with worrisome levels of local unemployment. All this will also impact beer sales in the long run,” IRI’s Aquino said, adding the summer battle will be waged as a “price vs. value war. This beer war will be very tactical. We have yet to see which beer will make this summer cooler, who will top the advertising scale and who can go the longest in this very tough beer war.”
Will Coors Light prevail?
The summer season represents one-third of the segment’s annual sales, or roughly $300 million during the four-month period. Against all odds, beer players interviewed by CARIBBEAN BUSINESS said they are ready for the fight of their lives and committed to give local customers a fun-filled summer.
Stopping at nothing, the beer war has already begun as companies pour an estimated $270 million into the local economy to make their summer advertising, marketing and promotions the most appealing for consumers.
So, will Coors Light prevail as Puerto Rico’s best-selling beer? “That’s our goal,” MillerCoor’s Soler quickly replied.
“We are 100% committed to this market, among the country’s top-performing markets for Coors Light, and to the values the brand delivers for our customers. The new beer tax took us by surprise, but we are ready and looking forward to a very successful summer season,” he said.
“In terms of IRI’s projections, the latest report for the summer season covering May and June contemplates Medalla Light as having grown from a volume standpoint because, for that period, Medalla Light was the only one that didn’t increase prices, so it grew in volume but not in value, while Coors Light maintained a 6% lead in value as category leader,” Soler explained, adding he is skeptical about the IRI report, which doesn’t cover wholesale and military-store sales, both which, according to Soler, represent a large portion of segment sales through Sam’s, Montalvo Cash & Carry and the military stores.
IRI’s Aquino quickly replied, adding, “That is correct. However, our report, which covers retail, picks up the vast majority of wholesale through the retail channel, accounting for more than 80% of the market activity, more than enough to provide an accurate picture of market trends and important changes as has been our forecast with Medalla Light closely inching to the No. 1 spot, ever so slowly, over the past six years.”
Medalla Light after the gold
Meanwhile, Puerto Rico’s own local beer continues its pursuit of the golden No. 1 spot. Going into the summer season, Medalla Light is fortunate recent plant layoffs by the Mayagüez brewery haven’t affected its product image. In addition to the new tax hike, Cervecería India recently increased its regular price, leaving behind the attractive under-$1 claim.
“Our beer is our strength,” insists Camalia Valdés, president of Cervecería India, brewery of Medalla Light. “Our most powerful weapon to fight the present economic situation and the imposition of new taxes as well as our competitors is the renowned quality of Medalla Light. We are confident about our consumers’ loyalty.”
Editor’s note: Not since the mid-1990s has Puerto Rico seen the makings of a real consumer product battle like the cola wars of that time–where, as is still true today, Coca-Cola dominated both in dollar sales volume as well market share. But not even at the height of the cola war did the market see the kind of fierce battle that is brewing for the island’s No. 1 best-selling beer spot.
Following is the first article of a two-part series on Puerto Rico’s beer war.
Heating up the beer war is Gov. Luis Fortuño’s new beer tax—30¢ a gallon on all imported beer and 40¢ a gallon on locally manufactured beer—which will force all beer companies to increase prices and result in the inevitable shrinkage of the beer category by an estimated 8% to 12%.
Let’s get ready to rumble! On one end, with a 33.6% volume market share during the initial two months of the May-August summer season, is Coors Light—the incumbent No. 1 best-selling beer in Puerto Rico for the record 10-plus-year stretch. On the other hand, is Puerto Rico’s own Medalla Light, brewed by Mayagüez’s Cervecería India, which a little more than 10 years ago didn’t even register on the sales radar.
Now, as the hot summer season gets underway, accounting for the second-most-important sales period of the year, Medalla Light closely trails in second place with a 33.1% volume market share—a mere 0.5% away from the No. 1 spot in volume sales, according to the latest market study from Information Resource Inc. IRI’s market study tracks the island’s beer retail sales, not including wholesale. Still, IRI’s report captures more than 80% of the local beer-market activity.
Both Coors Light and Medalla Light are pouring huge amounts of money into either protecting or snatching the coveted No. 1 beer spot. CARIBBEAN BUSINESS estimates this year’s total beer advertising and promotions investment from all beer companies during the four-month summer period will exceed $250 million—an increase of $50 million over last year’s already high investment.
New beer tax sparks beer war
Adding excitement to the mix are higher beer retail prices, driven by Fortuño’s newly imposed beer tax, a reversal from the governor’s promise to beer and other alcoholic beverage companies.
The new tax not only is going to impact immediate sales but, for the first time, it also will likely change market composition, explained IRI’s Commercial Director Edwin Aquino.
The new tax, primarily 30¢ a gallon on all imported beer and 40¢ a gallon on locally manufactured beer, is one of several economic-recovery initiatives included in Fortuño’s criollo economic-stimulus package.
The new law also leaves intact the tax scale applied to locally manufactured beer, which essentially maintains local beers’ preferential tax, primarily applicable to Medalla Light, manufactured by Cervecería India, while aggravating taxes on all imported beers.
Beer-tax revenue in 2008 reached $198.9 million, a sharp decline from the $223.3 million in 2003. “This will make those tax-revenue projections even more difficult to attain since the locally manufactured beer (i.e., Cervecería India’s Medalla Light) is still paying $1.80 less per gallon in taxes than imported beer under the new law. The Puerto Rico Treasury Department (Hacienda) stands to lose $1.8 million in tax revenue per million gallons of shifted sales from imported beer to local beer,” Aquino explained.
The Fortuño tax, deemed by many industry insiders as a total reversal of the governor’s initial commitment, comes as a hard blow to an industry that was slowly on its way to recovery from former Gov. Sila Calderón’s 2002 Silazo tax.
Will Puerto Rico get a new beer champion?
Thanks to the new beer tax, for the first time in history, Medalla Light will increase its aggressive 99¢ for a 10-ounce can to $1.25 plus the sales & use tax—thus challenging Medalla Light customers to truly evaluate if they have been drinking the local brew because it was the cheapest or because they truly liked its flavor. As the old saying goes…the jury is still out on that one.
“The new beer tax will also hit imported beers, particularly market leader Coors Light, which now sells for more than $1.40 plus the sales and use tax for the same 10-ounce can. Pundits speculate that if Coors Light plays its cards right and substantially invests in protecting its market share, many Medalla Light customers will graduate to Coors Light, a bit more expensive than the local brand but, for just a little bit more money, consumers may perceive they are getting a better-quality beer,” IRI’s Aquino said.
Meanwhile, premium brands such as Heineken, the industry’s third-best-selling beer, probably will retail for more than $2 plus the sales tax. However, as the leading premium beer in the market, more sophisticated consumers and even some of those Coors Light consumers who are getting older, may choose to stick with a more grown-up lifestyle-beer choice such as Heineken.
In addition to Fortuño’s beer tax, other ingredients making this industry even more interesting are a recessionary economy; an important shift in demographics that continues to influence consumers’ choices; newcomer brands such as Peroni and Stella Artois that have comfortably found their spot in the beer category; and the government-employee layoffs that will directly impact consumer confidence.
On the subject of taxes, Javier Soler, regional vice president & general manager of MillerCoors Brewing Co., continues to fight the fight of imported beers, which would like the preferential tax afforded to Medalla Light eliminated.
However, after six years of losing legal wars all the way up to the U.S. Supreme Court, their hopes of seeing any kind of a level playing field in this area may be dwindling.
“For instance, if a case of beer sells for $22.50 locally, more than $9 of that goes to the government via sales and excise taxes. Undoubtedly, that is affecting product consumption which, in the end, affects tax-revenue collections for the government. Meanwhile, we remain grateful for the unwavering loyalty of our customers,” Soler said.
A lot is at stake
For starters, Puerto Rico’s beer industry, although it has been shrinking at an annual rate of 2% to 5% in sales during the past-five-consecutive years, still accounts for nearly $1 billion in annual sales that help support 5,200 direct and indirect jobs. Beer-industry executives expect the additional 800 to 1,000 summer jobs typically created as a result of companies’ emphasis on promotions and special events will also be reduced as a result of the beer-tax hike.
Notwithstanding, the promotions category continues to show growth as a percentage of beer advertising dollars, accounting for as much as 40% of summer beer budgets. Summer beer sales alone contribute well over $200 million in retail dollar sales to fuel local economic activity.
Luis Álvarez, vice president of Méndez & Co.’s liquor division and exclusive distributor of Heineken, reflects on the current market conditions, stating: “Indeed, we are seeing a beer category that is contracting due to a number of factors but primarily because there is less available income in consumers’ pockets. As key industry players, I welcome difficult economic times as it challenges us to reinforce the value proposition of our products and stand behind the real benefits our brands deliver to customers,” the Heineken executive said.
“Like Darwin’s theory of the survival of the fittest, those who adapt will survive. The same will happen to beer companies. The real fight for the survival of the best beer brands begins right now with the beginning of the toughest summer season our industry has ever seen,” Álvarez continued.
Beyond taxes, other factors threaten to flatten beer sales this summer. “There are important changes like crude-oil prices, which have slowly declined and, if they remain at a fairly stable level, the rest of the year should give beer companies some breathing space. However, we are most concerned by the shift in population demographics, a rapidly aging population coupled with worrisome levels of local unemployment. All this will also impact beer sales in the long run,” IRI’s Aquino said, adding the summer battle will be waged as a “price vs. value war. This beer war will be very tactical. We have yet to see which beer will make this summer cooler, who will top the advertising scale and who can go the longest in this very tough beer war.”
Will Coors Light prevail?
The summer season represents one-third of the segment’s annual sales, or roughly $300 million during the four-month period. Against all odds, beer players interviewed by CARIBBEAN BUSINESS said they are ready for the fight of their lives and committed to give local customers a fun-filled summer.
Stopping at nothing, the beer war has already begun as companies pour an estimated $270 million into the local economy to make their summer advertising, marketing and promotions the most appealing for consumers.
So, will Coors Light prevail as Puerto Rico’s best-selling beer? “That’s our goal,” MillerCoor’s Soler quickly replied.
“We are 100% committed to this market, among the country’s top-performing markets for Coors Light, and to the values the brand delivers for our customers. The new beer tax took us by surprise, but we are ready and looking forward to a very successful summer season,” he said.
“In terms of IRI’s projections, the latest report for the summer season covering May and June contemplates Medalla Light as having grown from a volume standpoint because, for that period, Medalla Light was the only one that didn’t increase prices, so it grew in volume but not in value, while Coors Light maintained a 6% lead in value as category leader,” Soler explained, adding he is skeptical about the IRI report, which doesn’t cover wholesale and military-store sales, both which, according to Soler, represent a large portion of segment sales through Sam’s, Montalvo Cash & Carry and the military stores.
IRI’s Aquino quickly replied, adding, “That is correct. However, our report, which covers retail, picks up the vast majority of wholesale through the retail channel, accounting for more than 80% of the market activity, more than enough to provide an accurate picture of market trends and important changes as has been our forecast with Medalla Light closely inching to the No. 1 spot, ever so slowly, over the past six years.”
Medalla Light after the gold
Meanwhile, Puerto Rico’s own local beer continues its pursuit of the golden No. 1 spot. Going into the summer season, Medalla Light is fortunate recent plant layoffs by the Mayagüez brewery haven’t affected its product image. In addition to the new tax hike, Cervecería India recently increased its regular price, leaving behind the attractive under-$1 claim.
“Our beer is our strength,” insists Camalia Valdés, president of Cervecería India, brewery of Medalla Light. “Our most powerful weapon to fight the present economic situation and the imposition of new taxes as well as our competitors is the renowned quality of Medalla Light. We are confident about our consumers’ loyalty.”
Cervezas del Sur begins brewing February 2010
New $20 million plant under construction; locally brewed beer to hit shelves in April; aimed at becoming the beer of the new generation, with focus on quality
This year’s sensation at the MIDA (the Spanish acronym for the Chamber of Food Marketing, Industry & Distribution) food-trade convention was the “coming soon” teaser campaign launched by Cervezas del Sur, Puerto Rico’s new brewing company, scheduled to begin brewing a new premium-quality beer by next February, CARIBBEAN BUSINESS learned. The new corporation, backed by a group of local investors, among them Méndez & Co., as well as outside partners who hold 20% of the project, is brewing up some tough competition.
With an initial $20 million investment, the new brewery will be in a Ponce industrial park formerly occupied by Textron and Hanes manufacturing operations. The movie-like Cervezas del Sur trailer focused on the quality of the new beer product and some of its attributes like freshness, quality ingredients and an elaboration process of excellence. Although the new beer hasn’t been named yet, campaign images of a golden sun may provide valuable insight as to the future beer brand.
The new brewery will have the capacity to produce 2.6 million gallons of beer and malta annually.
“Cervezas del Sur should be receiving the equipment in August and September, and we will commence the insulation process in October. If all goes according to plan, we should be brewing by January and going to the market by next April,” said Luis Álvarez, principal of Cervezas del Sur, who credited two young North Carolina entrepreneurs, Geoff Hanson and Gregg Clucas, for the original project vision.
Regarding skeptics who questioned Méndez & Co.’s decision to establish its own local brewery, and perhaps in direct competition with its own Heineken distribution, he simply said: “We fought a tough and fair fight to eliminate the preferential tax that has given Cervecería India a tremendous competitive advantage in the local market over the years. We took our fight all the way to the highest court in the land, the federal Supreme Court, and we lost. I am a firm believer in adapting and evolving; our initial route didn’t yield the results we—as an industry—would have wanted, so I am adapting to the market. Only those who find the way to adapt in a changing market will survive to tell their story.”
In addition to leveraging the local tax situation to jump-start the new brewing company, Álvarez is tapping into his vast branding and marketing experience handling the Heineken-brand legacy. “The Heineken experience has prepared me for this new challenge, developing a quality product that is respectful of what consumers want,” he said.
We won’t be the cervecería llorona (the whining beer company), Álvarez noted, perhaps referring to Cervecería India, which often complains about local tax increases even when the existing preferential tax structure benefits their local production. “Ours will be a great beer, with fantastic ingredients, and consumers will drink it, not because it is the cheapest, but because we will offer the best value for the money and make them proud to give Puerto Rico a quality beer formulated with the utmost respect for the consumer,” he added.
This year’s sensation at the MIDA (the Spanish acronym for the Chamber of Food Marketing, Industry & Distribution) food-trade convention was the “coming soon” teaser campaign launched by Cervezas del Sur, Puerto Rico’s new brewing company, scheduled to begin brewing a new premium-quality beer by next February, CARIBBEAN BUSINESS learned. The new corporation, backed by a group of local investors, among them Méndez & Co., as well as outside partners who hold 20% of the project, is brewing up some tough competition.
With an initial $20 million investment, the new brewery will be in a Ponce industrial park formerly occupied by Textron and Hanes manufacturing operations. The movie-like Cervezas del Sur trailer focused on the quality of the new beer product and some of its attributes like freshness, quality ingredients and an elaboration process of excellence. Although the new beer hasn’t been named yet, campaign images of a golden sun may provide valuable insight as to the future beer brand.
The new brewery will have the capacity to produce 2.6 million gallons of beer and malta annually.
“Cervezas del Sur should be receiving the equipment in August and September, and we will commence the insulation process in October. If all goes according to plan, we should be brewing by January and going to the market by next April,” said Luis Álvarez, principal of Cervezas del Sur, who credited two young North Carolina entrepreneurs, Geoff Hanson and Gregg Clucas, for the original project vision.
Regarding skeptics who questioned Méndez & Co.’s decision to establish its own local brewery, and perhaps in direct competition with its own Heineken distribution, he simply said: “We fought a tough and fair fight to eliminate the preferential tax that has given Cervecería India a tremendous competitive advantage in the local market over the years. We took our fight all the way to the highest court in the land, the federal Supreme Court, and we lost. I am a firm believer in adapting and evolving; our initial route didn’t yield the results we—as an industry—would have wanted, so I am adapting to the market. Only those who find the way to adapt in a changing market will survive to tell their story.”
In addition to leveraging the local tax situation to jump-start the new brewing company, Álvarez is tapping into his vast branding and marketing experience handling the Heineken-brand legacy. “The Heineken experience has prepared me for this new challenge, developing a quality product that is respectful of what consumers want,” he said.
We won’t be the cervecería llorona (the whining beer company), Álvarez noted, perhaps referring to Cervecería India, which often complains about local tax increases even when the existing preferential tax structure benefits their local production. “Ours will be a great beer, with fantastic ingredients, and consumers will drink it, not because it is the cheapest, but because we will offer the best value for the money and make them proud to give Puerto Rico a quality beer formulated with the utmost respect for the consumer,” he added.
The secret is out
Victoria’s Secret eyes Puerto Rico for long-term expansion; retail scouts attend Sephora opening; ongoing talks with Plaza Las Américas point to 2012 opening
They may have tried to keep their visit under wraps, but CARIBBEAN BUSINESS learned that real-estate and marketing representatives from Victoria’s Secret attended the recent opening of the first Sephora store in Puerto Rico at Plaza Las Américas.
Representatives from the lingerie chain came to Puerto Rico exclusively for the Sephora opening, which could provide good insights into local market acceptance of a potential local Victoria’s Secret store. A Sephora-store executive confirmed the not-so-secret visit by Victoria’s Secret, but provided no details.
Although Plaza Las Américas officials were unaware of Victoria’s Secret visit, they confirmed conversations with the lingerie chain date back many years. However, for the first time in more than a decade, there is a letter of intent from Victoria’s Secret expressing interest in the Puerto Rico market—specifically at Plaza Las Américas.
“But that won’t be in the near future, rather it points to a 2012 development if ever confirmed,” explained Plaza Las Américas spokeswoman Lorraine Vissepó, adding that the opening of Sephora, another retailer long sought by the Hato Rey mall, topped all expectations.
Industry experts agree a local Victoria’s Secret would be a big draw. Many Puerto Rican women have long been familiar with the brand through frequent trips stateside and through its popular catalogs.
The quick visit to Puerto Rico is consistent with Limited Brands CEO Leslie Wexner’s annual report expressing interest in exploring expansion opportunities for the company’s top brands outside the North American territory. Puerto Rico, part of the U.S. market and among the country’s top-10 retail markets in sales per square foot, is a natural fit for Victoria’s Secret, as well as Bath & Body Works, another Limited Brands company.
Victoria’s Secret, dedicated to the sale of women’s intimate apparel, personal care, beauty products and accessories, operates more than 1,043 stores in the U.S. mainland and 322 in Canada under the La Senza brand. It posted net sales of $5.6 billion in 2008. Bath & Body Works, with 2008 net sales of $2.37 billion, is a leading retailer in the personal care, beauty and home fragrances business.
They may have tried to keep their visit under wraps, but CARIBBEAN BUSINESS learned that real-estate and marketing representatives from Victoria’s Secret attended the recent opening of the first Sephora store in Puerto Rico at Plaza Las Américas.
Representatives from the lingerie chain came to Puerto Rico exclusively for the Sephora opening, which could provide good insights into local market acceptance of a potential local Victoria’s Secret store. A Sephora-store executive confirmed the not-so-secret visit by Victoria’s Secret, but provided no details.
Although Plaza Las Américas officials were unaware of Victoria’s Secret visit, they confirmed conversations with the lingerie chain date back many years. However, for the first time in more than a decade, there is a letter of intent from Victoria’s Secret expressing interest in the Puerto Rico market—specifically at Plaza Las Américas.
“But that won’t be in the near future, rather it points to a 2012 development if ever confirmed,” explained Plaza Las Américas spokeswoman Lorraine Vissepó, adding that the opening of Sephora, another retailer long sought by the Hato Rey mall, topped all expectations.
Industry experts agree a local Victoria’s Secret would be a big draw. Many Puerto Rican women have long been familiar with the brand through frequent trips stateside and through its popular catalogs.
The quick visit to Puerto Rico is consistent with Limited Brands CEO Leslie Wexner’s annual report expressing interest in exploring expansion opportunities for the company’s top brands outside the North American territory. Puerto Rico, part of the U.S. market and among the country’s top-10 retail markets in sales per square foot, is a natural fit for Victoria’s Secret, as well as Bath & Body Works, another Limited Brands company.
Victoria’s Secret, dedicated to the sale of women’s intimate apparel, personal care, beauty products and accessories, operates more than 1,043 stores in the U.S. mainland and 322 in Canada under the La Senza brand. It posted net sales of $5.6 billion in 2008. Bath & Body Works, with 2008 net sales of $2.37 billion, is a leading retailer in the personal care, beauty and home fragrances business.
The iPod Is Dead. Long Live the iPod
Traditional versions of the iconic device are a thing of the past, but future iterations will have a long and vibrant future.
I was recently cleaning out a closet and came across an interesting artifact: my first iPod.
It was nearly eight years ago that I was among the very first people in New York City to carry around the first-generation iPod. About the size of a pack of cigarettes, it was advertised with the tagline "A thousand songs in your pocket." I can even remember the song used in the first TV spot: Take California by The Propellerheads.
Since then, I've upgraded to a 2007 model boasting a 160-gigabyte hard drive that makes holding a mere thousand songs seem quaint. Before long, I will no doubt be waxing nostalgic about this music player as well—one that, at not even half full, holds 5,231 songs, 141 videos, and 228 podcasts.
First Quarterly Drop in iPod Sales
The iPod as many of us have known it is on the wane and giving way to a more feature-rich family of devices that in time will bear little resemblance to the trailblazing digital music players that helped Apple capture 70% of the North American market. Evidence of the iPod's decline came July 21, when Apple disclosed its first quarterly decline in iPods sold. In the three months ended in June, Apple (AAPL) sold 10.2 million iPods, versus 11 million a year earlier.
Anticipation of the drop-off is "one of the original reasons" Apple developed the iPhone and the WiFi-enabled iPod touch, Apple Chief Financial Officer Peter Oppenheimer said on a July 21 conference call with analysts. Apple is prepared for lower sales of what it calls "pocket products:" the iPod shuffle, nano, and classic.
At the same time, the iPod business "will last for many, many years," Apple believes. The company has good reason to want to extend the life of a product line that's generated $38 billion on sales of 218 million units, catapulting Apple ahead of SanDisk (SNDK), Microsoft (MSFT), Toshiba (6502.T), and others.
Flash Memory Is Cheaper
What will iPod's next generation look like? Most of Apple's energy is going to be devoted to the iPod touch, the most advanced and versatile version of the iPod.
My prediction is that one of the first casualties of Apple's emphasis will be the hard drive-based iPod classic. Flash memory is cheaper, consumes less power, and resists abuse better than hard drives, so future high-capacity iPods will most likely be based on flash.
I'm also betting those high-capacity models will look more like the iPod touch, and less like my iPod classic. If history is any judge, Apple will revise its iPod lineup in September, as it has every year since 2005.
A Mic Would Broaden Appeal
Besides a refresh of the iPod nano (it's been revised every fall since its introduction), you can also expect a more advanced version of the iPod touch. The next touch will come with 64GB of flash memory.
And since it runs virtually all of the same applications that the iPhone does, then it stands to reason that the touch will starting taking on more hardware features to accommodate applications. Aside from music and video, it's now already marketed as a handheld gaming machine, a communications device, and a handheld Web device. In a limited way it can even be used for navigation.
Over time, the touch will do even more. Consider its appeal if Apple were to add a microphone that lets you make calls on Skype (EBAY) or other Internet-calling services, without the need for the awkward headset that's required for such calls now.
You could talk on it as if it were an iPhone, and the mic would put in double duty for simple audio recordings like meetings, lectures, and voice memos.
How About a Camera?
The touch should really have a camera, too. And is there any reason why that camera can't be better than the one in the iPhone? The latest iPhone 3GS sports a 3-megapixel camera sensor, while the latest phones from Nokia (NOK) have an 8-megapixel sensor. Apple could split the difference and give the touch a 5- or 6-megapixel sensor, giving it the ability to take really gorgeous pictures.
And if the touch has a camera, then it should support video. All that added memory leaves plenty of room for clips, and the Wi-Fi connection makes it easy to send them directly to YouTube (GOOG) and other video-sharing sites. And while Apple has resisted adding memory-card slots to its handhelds in the past, now that the Mac has a slot for SD memory cards, is there any reason the iPod touch (and for that matter a future model of the iPhone) can't have a slot for Mini-SD cards for added storage capacity?
While we're wish-listing, why should the iPhone be the only device in Apple's lineup that can help you get from one place to another? Why not add a GPS chipset, and let the iPod touch become a full-fledged personal navigation device? The touch's limited navigation features currently only work when Wi-Fi is present. This is fine when you're in a city, but no help when you're on the road. With excellent personal navigation devices from Garmin (GRMN) and TomTom (TOM2.AS) selling for as low as $120—more than $100 below the entry-level touch—why consider navigation a premium, iPhone-only feature?
However Apple answers that question, what's clear is that traditional versions of the device are a thing of the past—and future iterations will have a long and vibrant future.
I was recently cleaning out a closet and came across an interesting artifact: my first iPod.
It was nearly eight years ago that I was among the very first people in New York City to carry around the first-generation iPod. About the size of a pack of cigarettes, it was advertised with the tagline "A thousand songs in your pocket." I can even remember the song used in the first TV spot: Take California by The Propellerheads.
Since then, I've upgraded to a 2007 model boasting a 160-gigabyte hard drive that makes holding a mere thousand songs seem quaint. Before long, I will no doubt be waxing nostalgic about this music player as well—one that, at not even half full, holds 5,231 songs, 141 videos, and 228 podcasts.
First Quarterly Drop in iPod Sales
The iPod as many of us have known it is on the wane and giving way to a more feature-rich family of devices that in time will bear little resemblance to the trailblazing digital music players that helped Apple capture 70% of the North American market. Evidence of the iPod's decline came July 21, when Apple disclosed its first quarterly decline in iPods sold. In the three months ended in June, Apple (AAPL) sold 10.2 million iPods, versus 11 million a year earlier.
Anticipation of the drop-off is "one of the original reasons" Apple developed the iPhone and the WiFi-enabled iPod touch, Apple Chief Financial Officer Peter Oppenheimer said on a July 21 conference call with analysts. Apple is prepared for lower sales of what it calls "pocket products:" the iPod shuffle, nano, and classic.
At the same time, the iPod business "will last for many, many years," Apple believes. The company has good reason to want to extend the life of a product line that's generated $38 billion on sales of 218 million units, catapulting Apple ahead of SanDisk (SNDK), Microsoft (MSFT), Toshiba (6502.T), and others.
Flash Memory Is Cheaper
What will iPod's next generation look like? Most of Apple's energy is going to be devoted to the iPod touch, the most advanced and versatile version of the iPod.
My prediction is that one of the first casualties of Apple's emphasis will be the hard drive-based iPod classic. Flash memory is cheaper, consumes less power, and resists abuse better than hard drives, so future high-capacity iPods will most likely be based on flash.
I'm also betting those high-capacity models will look more like the iPod touch, and less like my iPod classic. If history is any judge, Apple will revise its iPod lineup in September, as it has every year since 2005.
A Mic Would Broaden Appeal
Besides a refresh of the iPod nano (it's been revised every fall since its introduction), you can also expect a more advanced version of the iPod touch. The next touch will come with 64GB of flash memory.
And since it runs virtually all of the same applications that the iPhone does, then it stands to reason that the touch will starting taking on more hardware features to accommodate applications. Aside from music and video, it's now already marketed as a handheld gaming machine, a communications device, and a handheld Web device. In a limited way it can even be used for navigation.
Over time, the touch will do even more. Consider its appeal if Apple were to add a microphone that lets you make calls on Skype (EBAY) or other Internet-calling services, without the need for the awkward headset that's required for such calls now.
You could talk on it as if it were an iPhone, and the mic would put in double duty for simple audio recordings like meetings, lectures, and voice memos.
How About a Camera?
The touch should really have a camera, too. And is there any reason why that camera can't be better than the one in the iPhone? The latest iPhone 3GS sports a 3-megapixel camera sensor, while the latest phones from Nokia (NOK) have an 8-megapixel sensor. Apple could split the difference and give the touch a 5- or 6-megapixel sensor, giving it the ability to take really gorgeous pictures.
And if the touch has a camera, then it should support video. All that added memory leaves plenty of room for clips, and the Wi-Fi connection makes it easy to send them directly to YouTube (GOOG) and other video-sharing sites. And while Apple has resisted adding memory-card slots to its handhelds in the past, now that the Mac has a slot for SD memory cards, is there any reason the iPod touch (and for that matter a future model of the iPhone) can't have a slot for Mini-SD cards for added storage capacity?
While we're wish-listing, why should the iPhone be the only device in Apple's lineup that can help you get from one place to another? Why not add a GPS chipset, and let the iPod touch become a full-fledged personal navigation device? The touch's limited navigation features currently only work when Wi-Fi is present. This is fine when you're in a city, but no help when you're on the road. With excellent personal navigation devices from Garmin (GRMN) and TomTom (TOM2.AS) selling for as low as $120—more than $100 below the entry-level touch—why consider navigation a premium, iPhone-only feature?
However Apple answers that question, what's clear is that traditional versions of the device are a thing of the past—and future iterations will have a long and vibrant future.
Have You Ever Been Caught Having Sex?
You will not believe what I just witnessed...
In plain view of just about my entire floor, a couple in the building across the street was getting it on--hardcore. As in sex. In a fully windowed corner office. With no curtains or blinds. With a view clear enough that I could see the guy's behind pressed up against the glass.
"I was on the phone, and I suddenly realized i couldn't formulate a sentence," says the coworker who first spotted the couple. "I looked over in the corner office across the street and saw people making out. And then I realized the guy didn't have any pants on...and I saw the woman taking her clothes off."
It took the diddling duo exactly 12 minutes (during which time the dude actually managed to check his BlackBerry at least once) to realize they had amassed quite an audience, at which point they quickly pulled up their pants and scurried away.
Sexual harassment is one thing,but what about when it's consensual? Tons of people fantasize about having sex at the office, but I've heard of very few who've actually done the deed--and even fewer who've pulled it off during business hours. So I'm curious: Have you ever had sex at the office? What about getting caught mid-nookie in general? Ever catch someone else in the act? Would you be offended if you saw what our office did? Share below, and be sure to take our sex and the workplace survey while you're at it!
In plain view of just about my entire floor, a couple in the building across the street was getting it on--hardcore. As in sex. In a fully windowed corner office. With no curtains or blinds. With a view clear enough that I could see the guy's behind pressed up against the glass.
"I was on the phone, and I suddenly realized i couldn't formulate a sentence," says the coworker who first spotted the couple. "I looked over in the corner office across the street and saw people making out. And then I realized the guy didn't have any pants on...and I saw the woman taking her clothes off."
It took the diddling duo exactly 12 minutes (during which time the dude actually managed to check his BlackBerry at least once) to realize they had amassed quite an audience, at which point they quickly pulled up their pants and scurried away.
Sexual harassment is one thing,but what about when it's consensual? Tons of people fantasize about having sex at the office, but I've heard of very few who've actually done the deed--and even fewer who've pulled it off during business hours. So I'm curious: Have you ever had sex at the office? What about getting caught mid-nookie in general? Ever catch someone else in the act? Would you be offended if you saw what our office did? Share below, and be sure to take our sex and the workplace survey while you're at it!
Monday, July 27, 2009
The Force Is Not With Him: Anakin Skywalker 10 Years Later
The plucky kid with the pod racer from "Star Wars: Episode I" is not a kid anymore. And Jake Lloyd wants you to know that having a major role in a George Lucas film really put a damper on things when he was growing up.
OK, fine: The guy doesn't really deserve our pity, but think of it from his point of view. Ten years old, getting blamed for ruining the Star Wars series. (Well, that was mainly the fault of George Lucas, but the kid was there, wasn't he?) And people just won't let it go. The Sci-Fi Australia blog caught up with the glum "Star Wars" alum Down Under, who sounds more Eeyore than "Episode One."
While every word drips with sarcasm (he is 20, after all) the Anakin actor also can still speak geek. On college: "You'll never find more intelligent, charming people than the drunk students of the college world." 'Nuff said.
Hey, Jake, don't worry: We know how you feel. Jar Jar Binks pretty much ruined the whole Star Wars thing for us, too.
OK, fine: The guy doesn't really deserve our pity, but think of it from his point of view. Ten years old, getting blamed for ruining the Star Wars series. (Well, that was mainly the fault of George Lucas, but the kid was there, wasn't he?) And people just won't let it go. The Sci-Fi Australia blog caught up with the glum "Star Wars" alum Down Under, who sounds more Eeyore than "Episode One."
While every word drips with sarcasm (he is 20, after all) the Anakin actor also can still speak geek. On college: "You'll never find more intelligent, charming people than the drunk students of the college world." 'Nuff said.
Hey, Jake, don't worry: We know how you feel. Jar Jar Binks pretty much ruined the whole Star Wars thing for us, too.
Friday, July 24, 2009
7 Franchises That Went Bankrupt
When these well-known brands went bust, franchise owners were left to soldier on with a tarnished brand.
Bankruptcy Monster Eats Cookies
Mrs. Fields
Salt Lake City, Utah
In August 2008, Mrs. Fields Famous, the parent brand of 1,200 TCBY and Mrs. Fields Cookies stores, filed for Chapter 11 bankruptcy. It didn't last long.
In October, the company emerged, having restructured its $196 million in debt down to $50 million. Its franchisees kept operating throughout.
Rebuilding From the Ground Up
Cork and Olive
Tampa
This Florida wine retail franchise grew to eight company-owned stores and nine franchisees before filing for Chapter 11 bankruptcy in June 2008, just four years after it opened.
All the company-owned stores shuttered, laying off 40 workers. News of the filing didn't reach franchisees until a laid-off worker from a company applied for a job at a franchisee's store.
Today, the franchisees meet regularly to discuss how to keep their brand alive without the parent company.
Bennigan's: Still Here
Bennigan's
Plano, Texas
The restaurant chain closed all of its corporate locations when it filed for Chapter 7 in July 2008. Its 138 franchisees were left in PR hell, struggling to convince patrons that they were still open for business.
In October 2008, the Eastern District of Texas' bankruptcy court approved the acquisition of Bennigan's by private equity firm Atalaya Capital, which quickly swept in to reopen the closed corporate stores. The effort has been a success -- many franchisees now own and operate former corporate stores in cities such as Santa Clara, Calif.; Charleston, W.Va. and Chicago.
Left in Limbo
Dial-A-Mattress
Long Island City, N.Y.
Catchy 1-800-MATTRES jingles couldn't pull in enough sales as the economy dipped.
The well-known mattress company chipped away its operating costs, closing almost 20 showrooms and warehouses, before throwing in the towel and declaring bankruptcy in mid-March.
Dial-A-Mattress filed for Chapter 7 -- the kind that involves liquidation --before switching several days later to Chapter 11 bankruptcy, which gave it a shot at rehabilitation.
The company tried to sell its assets to competitor Sleepy's that same month, but one of its franchisees attempted to scuttle the sale.
Consolidated Mattress Co., a franchisee that operates 1-800-Mattress' telemarketing business in certain regions, objected to the deal because it gave Sleepy's the option of rejecting existing franchise agreements.
1-800-Mattress went to auction in May and Sleepy's won with a bid of $25 million. The bankruptcy court approved the sale, adding that if Sleepy's chose to reject franchise agreements, that would be an appropriate business judgment decision. Franchisees are waiting for the next shoe to drop.
Repeat Offender
Bally Total Fitness
Chicago
It was a déjà vu for the health club chain in December 2008 when it filed for Chapter 11, a mere 14 months after emerging from its first Chapter 11 filing in July 2007.
Just weeks ago, Bally signed an agreement to emerge from bankruptcy by restructuring the $1.5 billion in debt it had accrued and by granting 94% of the company's equity to lenders such as J.P. Morgan.
A Glutton for Debt
Fatburger
Santa Monica, Calif.
Fatburger Restaurants of California and Fatburger Restaurants of Nevada, both subsidiaries of Fatburger Corp, filed for Chapter 11 in April. According to the Wall Street Journal, the parent company was not included in the filing, but the two subsidiaries accounted for 72% its total revenue in 2008.
The bankruptcy came under pressure from G.E. Capital Business Asset Funding, which Fatburger owned nearly $3.9 million for defaulted loans.
The company's 90 franchise owners are waiting to see what happens next.
A Smaller Buffet
Buffets Inc.
Eagan, Minn.
Citing the depressed economy, Buffets Holdings filed for reorganization under Chapter 11 in January 2008. The steak restaurant chain, which controlled outlets such as the Old Country Buffet, HomeTown Buffet, and Ryan's, had $964 million in assets and more than $1 billion in debt.
While the company initially said that all locations would stay open throughout its bankruptcy, 52 out of the 626 restaurants ended up closing, according to Franchise Times. On April 28, the company emerged from bankruptcy with a new balance sheet and reduced debt.
Bankruptcy Monster Eats Cookies
Mrs. Fields
Salt Lake City, Utah
In August 2008, Mrs. Fields Famous, the parent brand of 1,200 TCBY and Mrs. Fields Cookies stores, filed for Chapter 11 bankruptcy. It didn't last long.
In October, the company emerged, having restructured its $196 million in debt down to $50 million. Its franchisees kept operating throughout.
Rebuilding From the Ground Up
Cork and Olive
Tampa
This Florida wine retail franchise grew to eight company-owned stores and nine franchisees before filing for Chapter 11 bankruptcy in June 2008, just four years after it opened.
All the company-owned stores shuttered, laying off 40 workers. News of the filing didn't reach franchisees until a laid-off worker from a company applied for a job at a franchisee's store.
Today, the franchisees meet regularly to discuss how to keep their brand alive without the parent company.
Bennigan's: Still Here
Bennigan's
Plano, Texas
The restaurant chain closed all of its corporate locations when it filed for Chapter 7 in July 2008. Its 138 franchisees were left in PR hell, struggling to convince patrons that they were still open for business.
In October 2008, the Eastern District of Texas' bankruptcy court approved the acquisition of Bennigan's by private equity firm Atalaya Capital, which quickly swept in to reopen the closed corporate stores. The effort has been a success -- many franchisees now own and operate former corporate stores in cities such as Santa Clara, Calif.; Charleston, W.Va. and Chicago.
Left in Limbo
Dial-A-Mattress
Long Island City, N.Y.
Catchy 1-800-MATTRES jingles couldn't pull in enough sales as the economy dipped.
The well-known mattress company chipped away its operating costs, closing almost 20 showrooms and warehouses, before throwing in the towel and declaring bankruptcy in mid-March.
Dial-A-Mattress filed for Chapter 7 -- the kind that involves liquidation --before switching several days later to Chapter 11 bankruptcy, which gave it a shot at rehabilitation.
The company tried to sell its assets to competitor Sleepy's that same month, but one of its franchisees attempted to scuttle the sale.
Consolidated Mattress Co., a franchisee that operates 1-800-Mattress' telemarketing business in certain regions, objected to the deal because it gave Sleepy's the option of rejecting existing franchise agreements.
1-800-Mattress went to auction in May and Sleepy's won with a bid of $25 million. The bankruptcy court approved the sale, adding that if Sleepy's chose to reject franchise agreements, that would be an appropriate business judgment decision. Franchisees are waiting for the next shoe to drop.
Repeat Offender
Bally Total Fitness
Chicago
It was a déjà vu for the health club chain in December 2008 when it filed for Chapter 11, a mere 14 months after emerging from its first Chapter 11 filing in July 2007.
Just weeks ago, Bally signed an agreement to emerge from bankruptcy by restructuring the $1.5 billion in debt it had accrued and by granting 94% of the company's equity to lenders such as J.P. Morgan.
A Glutton for Debt
Fatburger
Santa Monica, Calif.
Fatburger Restaurants of California and Fatburger Restaurants of Nevada, both subsidiaries of Fatburger Corp, filed for Chapter 11 in April. According to the Wall Street Journal, the parent company was not included in the filing, but the two subsidiaries accounted for 72% its total revenue in 2008.
The bankruptcy came under pressure from G.E. Capital Business Asset Funding, which Fatburger owned nearly $3.9 million for defaulted loans.
The company's 90 franchise owners are waiting to see what happens next.
A Smaller Buffet
Buffets Inc.
Eagan, Minn.
Citing the depressed economy, Buffets Holdings filed for reorganization under Chapter 11 in January 2008. The steak restaurant chain, which controlled outlets such as the Old Country Buffet, HomeTown Buffet, and Ryan's, had $964 million in assets and more than $1 billion in debt.
While the company initially said that all locations would stay open throughout its bankruptcy, 52 out of the 626 restaurants ended up closing, according to Franchise Times. On April 28, the company emerged from bankruptcy with a new balance sheet and reduced debt.
Ways to Win Over Your Date at the Dinner Table
Devastate your date while you dine! From appetizers and entrees to après-dinner drinks, here's how to score major points and make it a night to remember...
* Table Care Guys, stay on top of things and bust a move when your date needs more water, a beverage refill, or a bottle of ketchup for sweet-potato fries. Don't be pushy, just keep an eye out for what's needed by the person in the other seat. This will make that person feel taken care of -- and duly impressed.
* Taste Test Give your date a little taste of your food -- playfully offer a bite from your fork or spoon. It's a sultry move few can pass up.
* Sexy Scents Gals, dab on a gentle fragrance that will waft over and entice your date -- nothing too flowery, sweet, or overpowering. We like Creative Scentualization's Perfect Veil -- the jar lasts a long time and it's also (as the name states) just the "perfect" hint of a soft, sexy scent. Guys, go fragrance-free or stick with something very subtle, like just a swab of deodorant.
* Glowing Recommendation If you're dining in, candles are a no-brainer. Sprinkle a few votives around the dinner table to capture an alluring vibe (go for unscented or lightly scented so you don't knock anyone out with super-strong wafts of jasmine or pine). If you're hitting the town, choose a restaurant that uses candlelight -- not only is it romantic, but it showers everyone in their best light.
* Menu Mix When perusing the menu, choose something a bit adventurous -- not just the same-ol' mixed greens salad with ranch dressing "on the side." Get something you'll enjoy, since no one likes to dine with someone who pokes and picks at the food all night -- yawn!
* Kindness Cue Treat servers and hosts with kindness and you're sure to win big points with your date. No one respects rudeness, so dish out those "thank yous." And prove that your mama taught you well by observing all of your best manners, please!
* Clothes Call Slip into something hot of course. Girls, if you're dining at home why not really turn up the heat by donning a come hither button-down Night Shirt by Stellina. We're suckers for this oh-so-sultry little number that drapes a woman's curves in all the right places. Show up to the dinner table in this baby and let the romancing begin. Guys, stick with clothes that will allow you to move -- like a long sleeve crew neck tee, soft button-down shirt or sweater, and avoid a stiff suit unless you're dining in a five-star setting where one is required.
* A Little Skin Girls, show a bit of collarbone and add a dusting of shimmer powder right there -- sure to make you sparkle in the (aforementioned) candlelight. Laura Mercier's illuminating powder adds just the right touch.
* Some Sugar Sharing a sumptuous dessert is the ideal way to end a romantic meal. Suggest that you and your date split something decadent and he or she just might melt in your hands. Banana split or hot fudge sundae anyone! Really now, how could you resist?
* Table Language While chatting, reach your finely manicured hand onto the table and rest it there -- it's a subtle but suggestive sign of intimacy. Sitting next to one another in a booth, rather than across from each other at a table, is another seductive way to encourage a little tete-a-tete.
* Smooth Tunes If you're wooing your amour at home, fire up a mix of sexy songs (Madeleine Peyroux, Muse, Lenny Kravitz, and some old Ambrosia are always on our playlists). If dining at a local bistro, be sure to choose a place that doesn't blast blaring loud music -- that way you'll actually be able to hear one another without shouting "HUH, WHAT DID YOU SAY?!!" every two minutes.
* The Tab Even though we're a bit old-fashioned and believe guys should generally pick up the check on the first few dates, it's nice for the girl to offer to split (or at least gesture towards her wallet when the check arrives). This way, he doesn't feel like he's just expected to pick it up. After all, recessions are equal opportunity!
* Fresh Idea Carry a tin of mints in your pocket or purse. Pop one in your mouth after dinner to freshen up, and offer your date one as well. Now, you're both ready for a little puckering up, assuming all went well!
* Table Care Guys, stay on top of things and bust a move when your date needs more water, a beverage refill, or a bottle of ketchup for sweet-potato fries. Don't be pushy, just keep an eye out for what's needed by the person in the other seat. This will make that person feel taken care of -- and duly impressed.
* Taste Test Give your date a little taste of your food -- playfully offer a bite from your fork or spoon. It's a sultry move few can pass up.
* Sexy Scents Gals, dab on a gentle fragrance that will waft over and entice your date -- nothing too flowery, sweet, or overpowering. We like Creative Scentualization's Perfect Veil -- the jar lasts a long time and it's also (as the name states) just the "perfect" hint of a soft, sexy scent. Guys, go fragrance-free or stick with something very subtle, like just a swab of deodorant.
* Glowing Recommendation If you're dining in, candles are a no-brainer. Sprinkle a few votives around the dinner table to capture an alluring vibe (go for unscented or lightly scented so you don't knock anyone out with super-strong wafts of jasmine or pine). If you're hitting the town, choose a restaurant that uses candlelight -- not only is it romantic, but it showers everyone in their best light.
* Menu Mix When perusing the menu, choose something a bit adventurous -- not just the same-ol' mixed greens salad with ranch dressing "on the side." Get something you'll enjoy, since no one likes to dine with someone who pokes and picks at the food all night -- yawn!
* Kindness Cue Treat servers and hosts with kindness and you're sure to win big points with your date. No one respects rudeness, so dish out those "thank yous." And prove that your mama taught you well by observing all of your best manners, please!
* Clothes Call Slip into something hot of course. Girls, if you're dining at home why not really turn up the heat by donning a come hither button-down Night Shirt by Stellina. We're suckers for this oh-so-sultry little number that drapes a woman's curves in all the right places. Show up to the dinner table in this baby and let the romancing begin. Guys, stick with clothes that will allow you to move -- like a long sleeve crew neck tee, soft button-down shirt or sweater, and avoid a stiff suit unless you're dining in a five-star setting where one is required.
* A Little Skin Girls, show a bit of collarbone and add a dusting of shimmer powder right there -- sure to make you sparkle in the (aforementioned) candlelight. Laura Mercier's illuminating powder adds just the right touch.
* Some Sugar Sharing a sumptuous dessert is the ideal way to end a romantic meal. Suggest that you and your date split something decadent and he or she just might melt in your hands. Banana split or hot fudge sundae anyone! Really now, how could you resist?
* Table Language While chatting, reach your finely manicured hand onto the table and rest it there -- it's a subtle but suggestive sign of intimacy. Sitting next to one another in a booth, rather than across from each other at a table, is another seductive way to encourage a little tete-a-tete.
* Smooth Tunes If you're wooing your amour at home, fire up a mix of sexy songs (Madeleine Peyroux, Muse, Lenny Kravitz, and some old Ambrosia are always on our playlists). If dining at a local bistro, be sure to choose a place that doesn't blast blaring loud music -- that way you'll actually be able to hear one another without shouting "HUH, WHAT DID YOU SAY?!!" every two minutes.
* The Tab Even though we're a bit old-fashioned and believe guys should generally pick up the check on the first few dates, it's nice for the girl to offer to split (or at least gesture towards her wallet when the check arrives). This way, he doesn't feel like he's just expected to pick it up. After all, recessions are equal opportunity!
* Fresh Idea Carry a tin of mints in your pocket or purse. Pop one in your mouth after dinner to freshen up, and offer your date one as well. Now, you're both ready for a little puckering up, assuming all went well!
Paws up: All-pet airline hits skies
NEW YORK – One trip for their Jack Russell terrier in a plane's cargo hold was enough to convince Alysa Binder and Dan Wiesel that owners needed a better option to get their pets from one city to another.
On Tuesday, the first flight for the husband-and-wife team's Pet Airways, the first-ever all-pet airline, took off from Republic Airport in Farmingdale, N.Y.
All commercial airlines allow a limited number of small pets to fly in the cabin. Others must travel as checked bags or in the cargo hold — a dark and sometimes dangerous place where temperatures can vary wildly.
Binder and Wiesel used their consulting backgrounds and business savvy to start Pet Airways in 2005. The last four years have been spent designing their fleet of five planes according to new four-legged requirements, dealing with FAA regulations and setting up airport schedules.
The two say they're overwhelmed with the response. Flights on Pet Airways are already booked up for the next two months.
Pet Airways will fly a pet between five major cities — New York, Washington, Chicago, Denver, and Los Angeles. The $250 one-way fare is comparable to pet fees at the largest U.S. airlines.
For owners the big difference is service. Dogs and cats will fly in the main cabin of a Suburban Air Freight plane, retooled and lined with carriers in place of seats. Pets (about 50 on each flight) will be escorted to the plane by attendants that will check on the animals every 15 minutes during flight. The pets are also given pre-boarding walks and bathroom breaks. And at each of the five airports it serves, the company has created a "Pet Lounge" for future fliers to wait and sniff before flights.
The company will operate out of smaller, regional airports in the five launch cities, which will mean an extra trip for most owners dropping off their pets if they are flying too. Stops in cities along the way means the pets will take longer to reach a destination than their owners.
A trip from New York to Los Angeles, for example, will take about 24 hours. On that route, pets will stop in Chicago, have a bathroom break, play time, dinner, and bunk for the night before finishing the trip the next day.
Amanda Hickey of Portland, Ore. is one of the new airline's first customers. Her seven-year-old terrier-pinscher mix Mardi and 2-year-old puggle Penny are taking their first flight soon.
Hickey said the service was a welcome alternative to flying her dogs in cargo when she transplants them from her soon-to-be Denver home to Chicago to stay while she and her fiance travel to Aruba to get married.
"For a little bit more money, I have peace of mind," she said.
It was a stressful experience in a cargo hold that spurred Binder and Wiesel to start their airline. Their Jack Russell terrier, Zoe, flew once in cargo and Binder said they worried about how the dog was doing, but were unable to check on her or get information. The couple soon started looking for a better solution.
"One time in cargo was enough for us," Binder said, walking through an airplane hangar as Zoe trotted in front of her. "We wanted to do something better."
The company, which will begin with one flight in each of its five cities, is looking to add more flights and cities soon. In the next three years, Binder hopes to fly to 25 locations.
Among the big U.S. carriers that offer pet services, AirTran, Spirit, Southwest and JetBlue only allow pets to fly in the cabin. Most U.S. airlines charge between $100 and $125, but Delta and Northwest charge $150 for cabin trips. AirTran is the cheapest among big carriers at $69.
The charge is more to fly in the cargo or check-baggage holds. Delta and Northwest are the most expensive at $275. Alaska Airlines and Midwest charge the least, at $100. Frontier prices its checked pets fees between $100 and $200 and only takes pets as checked baggage.
Anne Banas, executive editor of SmarterTravel.com, questions the viability of an airline with such a specific niche.
"I'm not sure how sustainable it is," she said. "But if people are trying to go for a first-class service, it could make sense."
She said the service's popularity could spike in peak summer or winter months when airlines in some areas don't allow pets to travel.
Betsy Saul, co-founder of Petfinder.com, which has ranked the pet-friendliness of airlines for three years, said she's excited about the expected impact Pet Airways will have on pet travel across major airlines.
"The entire industry will stretch because of Pet Airways," she said. "It's a challenge that says 'let's make this (experience) better for pets.'"
On Tuesday, the first flight for the husband-and-wife team's Pet Airways, the first-ever all-pet airline, took off from Republic Airport in Farmingdale, N.Y.
All commercial airlines allow a limited number of small pets to fly in the cabin. Others must travel as checked bags or in the cargo hold — a dark and sometimes dangerous place where temperatures can vary wildly.
Binder and Wiesel used their consulting backgrounds and business savvy to start Pet Airways in 2005. The last four years have been spent designing their fleet of five planes according to new four-legged requirements, dealing with FAA regulations and setting up airport schedules.
The two say they're overwhelmed with the response. Flights on Pet Airways are already booked up for the next two months.
Pet Airways will fly a pet between five major cities — New York, Washington, Chicago, Denver, and Los Angeles. The $250 one-way fare is comparable to pet fees at the largest U.S. airlines.
For owners the big difference is service. Dogs and cats will fly in the main cabin of a Suburban Air Freight plane, retooled and lined with carriers in place of seats. Pets (about 50 on each flight) will be escorted to the plane by attendants that will check on the animals every 15 minutes during flight. The pets are also given pre-boarding walks and bathroom breaks. And at each of the five airports it serves, the company has created a "Pet Lounge" for future fliers to wait and sniff before flights.
The company will operate out of smaller, regional airports in the five launch cities, which will mean an extra trip for most owners dropping off their pets if they are flying too. Stops in cities along the way means the pets will take longer to reach a destination than their owners.
A trip from New York to Los Angeles, for example, will take about 24 hours. On that route, pets will stop in Chicago, have a bathroom break, play time, dinner, and bunk for the night before finishing the trip the next day.
Amanda Hickey of Portland, Ore. is one of the new airline's first customers. Her seven-year-old terrier-pinscher mix Mardi and 2-year-old puggle Penny are taking their first flight soon.
Hickey said the service was a welcome alternative to flying her dogs in cargo when she transplants them from her soon-to-be Denver home to Chicago to stay while she and her fiance travel to Aruba to get married.
"For a little bit more money, I have peace of mind," she said.
It was a stressful experience in a cargo hold that spurred Binder and Wiesel to start their airline. Their Jack Russell terrier, Zoe, flew once in cargo and Binder said they worried about how the dog was doing, but were unable to check on her or get information. The couple soon started looking for a better solution.
"One time in cargo was enough for us," Binder said, walking through an airplane hangar as Zoe trotted in front of her. "We wanted to do something better."
The company, which will begin with one flight in each of its five cities, is looking to add more flights and cities soon. In the next three years, Binder hopes to fly to 25 locations.
Among the big U.S. carriers that offer pet services, AirTran, Spirit, Southwest and JetBlue only allow pets to fly in the cabin. Most U.S. airlines charge between $100 and $125, but Delta and Northwest charge $150 for cabin trips. AirTran is the cheapest among big carriers at $69.
The charge is more to fly in the cargo or check-baggage holds. Delta and Northwest are the most expensive at $275. Alaska Airlines and Midwest charge the least, at $100. Frontier prices its checked pets fees between $100 and $200 and only takes pets as checked baggage.
Anne Banas, executive editor of SmarterTravel.com, questions the viability of an airline with such a specific niche.
"I'm not sure how sustainable it is," she said. "But if people are trying to go for a first-class service, it could make sense."
She said the service's popularity could spike in peak summer or winter months when airlines in some areas don't allow pets to travel.
Betsy Saul, co-founder of Petfinder.com, which has ranked the pet-friendliness of airlines for three years, said she's excited about the expected impact Pet Airways will have on pet travel across major airlines.
"The entire industry will stretch because of Pet Airways," she said. "It's a challenge that says 'let's make this (experience) better for pets.'"
New pet airline gives Fido the royal treatment
SEVERAL YEARS ago, when I was living in New York, I had a family emergency. I had to drop everything and get back to Oakland.
There was just one problem.
What to do with my dog, Sophie. I rescued Sophie, a Boxer/Beagle/Pit from the doggy gallows in 2001 when she was about 3. She is, shall we say, a "special needs" dog. Sophie suffers from a mental condition called "separation anxiety," which is apparently all-too-common among shelter dogs. That means she flips out whenever she is left at home alone. She has been known to shred curtains, devour sofas, and rip up blinds. Not to mention urinate and defecate all over the house. This state of panic will last for as long as it takes for someone to return. Once I left her on my balcony and she leapt 30 feet to the concrete below. Fortunately, since she is built like a tank, her only injury was a scraped elbow and elevated liver enzymes.
All of which is to say, I couldn't ask a friend living in a tiny New York apartment to mind her for an entire month.
So, I had no choice but to fly the mutt with me.
At 48 pounds, Sophie was too large to fly on board. Only dogs or cats small enough to fit in a kennel that can slide under the seat get to ride with their owners. Real dogs need not apply.
Sophie would have to travel below with the baggage — an idea that made me very uncomfortable. I knew that she would be terrified by the darkness and the sound
of the roaring engines. However, I didn't have a choice.
I rushed out and bought a crate at a local pet store. The vet suggested that I not tranquilize her because the medication had been known to cause heart attacks.
A friend dropped me off at JFK , which was a mob scene. This was in the months right after the Sept. 11, 2001 terrorist attacks at the World Trade Center. The security and baggage check had been moved outdoors to the curb. People were lined up for as far as the eye could see.
Dragging my suitcase, Sophie and the bulky crate, I barely made the flight. Stressed to the max, I settled into my seat.
I hadn't even caught my breath when the flight attendant called my name and asked me to push my call button.
Sophie had escaped from the crate. The baggage handlers needed my help to get her back in.
The flight attendant walked me down a flight of stairs onto the tarmac. The engines were so deafening I could hardly hear myself think. I spotted my dog running with two baggage handlers in hot pursuit.
She was covered and I mean covered in dog mess. The two men had on gloves but clearly were not keen to touch her. Since it was my dog, and though I did not have on gloves, they wanted me to force her back into the crate. Sophie struggled and cried like I was gutting her but I finally managed to force her back in the crate.
Sweating like I'd just run the marathon, I hustled back up the steps of the plane and took my seat.
Five minutes later, the flight attendant was calling my name again. I clearly was not going to make this flight. I grabbed my bag off the overhead and headed for the door. By this time, the other passengers were looking at me with looks ranging from derision to suspicion.
It all worked out in the end. We ended up making a later flight. A very nice man helped fasten the crate door so my canine Houdini couldn't get out.
Alysa Binder and Dan Wiesel also had a bad experience with Zoe, their Jack Russell terrier, when they relocated from the Bay Area to Delray Beach, Fla. in 2005. After spending more than five hours in the hold, the normally gregarious dog was traumatized. That's when the couple decided to start Pet Airways, the first all-pet airline.
The first flight was last week. Now, people with big dogs who happen to be traveling between any of these cities — New York, Washington, Chicago, Denver or Los Angeles — won't have to deal with all that stress.
Pet Airways uses specially retooled planes with carriers instead of seats so that all dogs and cats get to fly in the main cabin. As Pet Airways says on its Web site, your pets aren't packages, they're "pawsengers."
Binder says the airline has been deluged with requests. Pet Airways is already booked up for the next two months. "The response has been very overwhelming and humbling," Binder says.
I'm not surprised. What a huge relief not having to worry about your dog roasting to death in some baggage hold. The price of a ticket on Pet Airways is $199 from New York to Chicago. Delta and Northwest charge $250 for pets to go down below. Some airlines only allow pets to travel in the cabin with their owners. If you do have a smaller dog, or a cat, it's cheaper to fly one of the people airlines, which charge an average of $125 for pets to fly in the main cabin.
But for those of us with non-Paris Hilton dogs, Pet Airways, which hopes to expand to the Bay Area as early as fall, and eventually to more than two dozen locations, is an idea whose time has certainly come.
There was just one problem.
What to do with my dog, Sophie. I rescued Sophie, a Boxer/Beagle/Pit from the doggy gallows in 2001 when she was about 3. She is, shall we say, a "special needs" dog. Sophie suffers from a mental condition called "separation anxiety," which is apparently all-too-common among shelter dogs. That means she flips out whenever she is left at home alone. She has been known to shred curtains, devour sofas, and rip up blinds. Not to mention urinate and defecate all over the house. This state of panic will last for as long as it takes for someone to return. Once I left her on my balcony and she leapt 30 feet to the concrete below. Fortunately, since she is built like a tank, her only injury was a scraped elbow and elevated liver enzymes.
All of which is to say, I couldn't ask a friend living in a tiny New York apartment to mind her for an entire month.
So, I had no choice but to fly the mutt with me.
At 48 pounds, Sophie was too large to fly on board. Only dogs or cats small enough to fit in a kennel that can slide under the seat get to ride with their owners. Real dogs need not apply.
Sophie would have to travel below with the baggage — an idea that made me very uncomfortable. I knew that she would be terrified by the darkness and the sound
of the roaring engines. However, I didn't have a choice.
I rushed out and bought a crate at a local pet store. The vet suggested that I not tranquilize her because the medication had been known to cause heart attacks.
A friend dropped me off at JFK , which was a mob scene. This was in the months right after the Sept. 11, 2001 terrorist attacks at the World Trade Center. The security and baggage check had been moved outdoors to the curb. People were lined up for as far as the eye could see.
Dragging my suitcase, Sophie and the bulky crate, I barely made the flight. Stressed to the max, I settled into my seat.
I hadn't even caught my breath when the flight attendant called my name and asked me to push my call button.
Sophie had escaped from the crate. The baggage handlers needed my help to get her back in.
The flight attendant walked me down a flight of stairs onto the tarmac. The engines were so deafening I could hardly hear myself think. I spotted my dog running with two baggage handlers in hot pursuit.
She was covered and I mean covered in dog mess. The two men had on gloves but clearly were not keen to touch her. Since it was my dog, and though I did not have on gloves, they wanted me to force her back into the crate. Sophie struggled and cried like I was gutting her but I finally managed to force her back in the crate.
Sweating like I'd just run the marathon, I hustled back up the steps of the plane and took my seat.
Five minutes later, the flight attendant was calling my name again. I clearly was not going to make this flight. I grabbed my bag off the overhead and headed for the door. By this time, the other passengers were looking at me with looks ranging from derision to suspicion.
It all worked out in the end. We ended up making a later flight. A very nice man helped fasten the crate door so my canine Houdini couldn't get out.
Alysa Binder and Dan Wiesel also had a bad experience with Zoe, their Jack Russell terrier, when they relocated from the Bay Area to Delray Beach, Fla. in 2005. After spending more than five hours in the hold, the normally gregarious dog was traumatized. That's when the couple decided to start Pet Airways, the first all-pet airline.
The first flight was last week. Now, people with big dogs who happen to be traveling between any of these cities — New York, Washington, Chicago, Denver or Los Angeles — won't have to deal with all that stress.
Pet Airways uses specially retooled planes with carriers instead of seats so that all dogs and cats get to fly in the main cabin. As Pet Airways says on its Web site, your pets aren't packages, they're "pawsengers."
Binder says the airline has been deluged with requests. Pet Airways is already booked up for the next two months. "The response has been very overwhelming and humbling," Binder says.
I'm not surprised. What a huge relief not having to worry about your dog roasting to death in some baggage hold. The price of a ticket on Pet Airways is $199 from New York to Chicago. Delta and Northwest charge $250 for pets to go down below. Some airlines only allow pets to travel in the cabin with their owners. If you do have a smaller dog, or a cat, it's cheaper to fly one of the people airlines, which charge an average of $125 for pets to fly in the main cabin.
But for those of us with non-Paris Hilton dogs, Pet Airways, which hopes to expand to the Bay Area as early as fall, and eventually to more than two dozen locations, is an idea whose time has certainly come.
Teen Burns, Stomps American Flag
Burner charged with desecrating a flag
A teen claimed she was "making a statement" when she lit an American flag on fire with a cigarette lighter and then stomped on it in the middle of traffic, according to police.
The incident occurred just hours after Americans celebrated Independence Day with fireworks celebrations across the region.
Two officers said they saw Rebecca Ellen McKimmie, 18, of Ocean City, Md., light the flag on fire early Sunday morning while standing between two lanes of traffic near the Route 50 Bridge. Police said once it was lit she then stomped on it in the roadway, causing several cars to swerve in order to avoid her.
She was charged with desecrating a flag and disturbing the peace. However, the last time we checked burning a flag was still legal in the United States, so that charge probably wouldn't hold up if pursued.
A teen claimed she was "making a statement" when she lit an American flag on fire with a cigarette lighter and then stomped on it in the middle of traffic, according to police.
The incident occurred just hours after Americans celebrated Independence Day with fireworks celebrations across the region.
Two officers said they saw Rebecca Ellen McKimmie, 18, of Ocean City, Md., light the flag on fire early Sunday morning while standing between two lanes of traffic near the Route 50 Bridge. Police said once it was lit she then stomped on it in the roadway, causing several cars to swerve in order to avoid her.
She was charged with desecrating a flag and disturbing the peace. However, the last time we checked burning a flag was still legal in the United States, so that charge probably wouldn't hold up if pursued.
I Can't Drive 65!
Man pulled over for going too slow
Erik Bonstrom considers himself a safe driver. So imagine his surprise when he was stopped along Route 50 Tuesday evening in Prince George's County, Md., -- for going too slow.
"Coming back on Route 50, the speed limit is 55 and I was pulled over by a Maryland State trooper," Bonstrom said. "When I asked him why, he said I was going too slow and issued me an $80 ticket for going 58 in a 65."
Bonstrom said he tried to reason with the trooper as passing cars whizzed by.
"To me, you are punishing a safe driver and there are many cars that were passing me, and I guess it was just easier to pull me over than the cars that were speeding," Bonstrom said.
Bonstrom said the traffic stop is more puzzling because it came just yards before a 65 mph sign. He said he believes he was pulled over for going 58 mph on a part of the road that is actually a 55 mph zone, not 65 mph like the trooper claims.
A Maryland State Police representative said they are looking into the matter and plan to have a response within 24 hours.
Bonstrom said he plans to fight the ticket in court.
"If I was wrong, if I was speeding, then you got me and I'm wrong," Bonstrom said. "But the fact that I don't believe I'm wrong and that I wasn't breaking any laws -- that's why I'm fighting it."
Erik Bonstrom considers himself a safe driver. So imagine his surprise when he was stopped along Route 50 Tuesday evening in Prince George's County, Md., -- for going too slow.
"Coming back on Route 50, the speed limit is 55 and I was pulled over by a Maryland State trooper," Bonstrom said. "When I asked him why, he said I was going too slow and issued me an $80 ticket for going 58 in a 65."
Bonstrom said he tried to reason with the trooper as passing cars whizzed by.
"To me, you are punishing a safe driver and there are many cars that were passing me, and I guess it was just easier to pull me over than the cars that were speeding," Bonstrom said.
Bonstrom said the traffic stop is more puzzling because it came just yards before a 65 mph sign. He said he believes he was pulled over for going 58 mph on a part of the road that is actually a 55 mph zone, not 65 mph like the trooper claims.
A Maryland State Police representative said they are looking into the matter and plan to have a response within 24 hours.
Bonstrom said he plans to fight the ticket in court.
"If I was wrong, if I was speeding, then you got me and I'm wrong," Bonstrom said. "But the fact that I don't believe I'm wrong and that I wasn't breaking any laws -- that's why I'm fighting it."
Thursday, July 23, 2009
States Where the Unemployed Are Giving Up
In some U.S. states, nearly half of the job seekers who have stopped looking for work have done so because they simply don't believe they'll find anything. Indeed, the number of discouraged workers nationwide has more than doubled in the past year. This trend won't be reflected in the widely publicized unemployment rate, as discouraged workers aren't included among the unemployed. Still, in states as diverse as Mississippi, South Dakota, and New York, the span of this often invisible slice of workers signals a population losing its hope.
Most jobless people who have stopped looking for work are otherwise engaged--they're back in school, taking on family responsibilities, or too sick to search. They, along with workers who have stopped because they're discouraged, make up a group that the Labor Department calls the "marginally attached." They're included in some of the broader measures of unemployment, but they're officially not part of the workforce. While discouraged workers make up about a third of the marginally attached nationwide, their numbers have been increasing.
Between the third quarter of last year and the second quarter of this year, Mississippi averaged the highest percentage of discouraged job seekers among its marginally attached--nearly 50 percent, compared with 32.6 percent nationwide. South Dakota ranked second after Mississippi, with 48.5 percent of marginally attached workers classified as discouraged. Florida, Michigan, Connecticut, West Virginia, and New York followed in ranking for the highest rates of discouragement.
Discouraged workers are characterized by their perceptions. They don't think work is available for them, or they believe they lack the necessary training to be hired. They may be convinced that employers think they're too young or too old, or they believe that they face some other kind of discrimination that prevents them from finding work. And while there are discouraged workers in healthy economies, in a prolonged recession such as this one, worker pessimism tends to skyrocket.
The heights of discouragement in Mississippi are significant. "It says something about the situation in that state when half of the people with a relatively recent commitment to searching for a job have stopped because they believe nothing is available for them," says Thomas Krolik, an economist at the Bureau of Labor Statistics. Between the third quarter of last year and the second quarter of this year, Mississippi's average unemployment rate was 7.9 percent. Add in all the discouraged workers, and the rate shoots up to 8.8 percent, a 0.9 percentage-point jump. Nationwide, the average difference between the unemployment rate and the rate of unemployed plus discouraged workers was about 0.4 percentage point. Michigan and New York also ranked high by that measure.
Charles Campbell, a professor of economics at Mississippi State University, says the state struggles with regions of particularly high unemployment, "where there really are no jobs." Many of the residents of those regions lack the skills and means to find work in outside areas, Campbell says, so they remain unemployed.
In other states, the situation may be more obvious. In Michigan, the demise of the domestic auto industry has brought job destruction far outpacing the national average. Michigan's unemployment rate for June topped 15.2 percent, compared with 9.5 percent nationally. Across the country, Florida has been hit hard by the housing bust, and unemployment in the state reached 10.6 percent in June.
But higher unemployment rates and lousier job markets alone don't explain the high rates of discouragement. Connecticut, New York, and West Virginia have seen their numbers of jobless workers rise during the downturn, but their unemployment rates are all below the national average.
Several things could nudge job seekers toward hopelessness: negative media coverage of the job market; unsuccessful job searches among friends and family; their own long-term unemployment. Also, men are more likely to give up their job search because they've become discouraged--they make up 63 percent of the total group. Younger workers, blacks, and Hispanics are also overrepresented in the discouraged-worker category, according to the Labor Department.
The housing bust could be partly to blame. Workers may simply give up because there are no openings matching their skill set within their geographical area, Krolik says. If workers own homes they can't sell, their ability to move for a new job is severely limited. The effect could be exacerbated by areas where homes are a particularly difficult sell or homeowners are disproportionately underwater, as those markets have also tended to see higher unemployment rates.
Whatever workers' motivation, many economists are now focusing more on their results. Hoyt Bleakley Jr., a University of Chicago economist, says researchers are paying less attention to how many job seekers say they're looking for work and more attention to how quickly they are actually finding it. With 4.4 million job seekers nationwide out of work for more than 27 weeks or more in June, "those numbers are pretty grim," Bleakley says. "People who claim they're looking for work are not finding it." It's hardly surprising, then, how many have simply given up looking.
Most jobless people who have stopped looking for work are otherwise engaged--they're back in school, taking on family responsibilities, or too sick to search. They, along with workers who have stopped because they're discouraged, make up a group that the Labor Department calls the "marginally attached." They're included in some of the broader measures of unemployment, but they're officially not part of the workforce. While discouraged workers make up about a third of the marginally attached nationwide, their numbers have been increasing.
Between the third quarter of last year and the second quarter of this year, Mississippi averaged the highest percentage of discouraged job seekers among its marginally attached--nearly 50 percent, compared with 32.6 percent nationwide. South Dakota ranked second after Mississippi, with 48.5 percent of marginally attached workers classified as discouraged. Florida, Michigan, Connecticut, West Virginia, and New York followed in ranking for the highest rates of discouragement.
Discouraged workers are characterized by their perceptions. They don't think work is available for them, or they believe they lack the necessary training to be hired. They may be convinced that employers think they're too young or too old, or they believe that they face some other kind of discrimination that prevents them from finding work. And while there are discouraged workers in healthy economies, in a prolonged recession such as this one, worker pessimism tends to skyrocket.
The heights of discouragement in Mississippi are significant. "It says something about the situation in that state when half of the people with a relatively recent commitment to searching for a job have stopped because they believe nothing is available for them," says Thomas Krolik, an economist at the Bureau of Labor Statistics. Between the third quarter of last year and the second quarter of this year, Mississippi's average unemployment rate was 7.9 percent. Add in all the discouraged workers, and the rate shoots up to 8.8 percent, a 0.9 percentage-point jump. Nationwide, the average difference between the unemployment rate and the rate of unemployed plus discouraged workers was about 0.4 percentage point. Michigan and New York also ranked high by that measure.
Charles Campbell, a professor of economics at Mississippi State University, says the state struggles with regions of particularly high unemployment, "where there really are no jobs." Many of the residents of those regions lack the skills and means to find work in outside areas, Campbell says, so they remain unemployed.
In other states, the situation may be more obvious. In Michigan, the demise of the domestic auto industry has brought job destruction far outpacing the national average. Michigan's unemployment rate for June topped 15.2 percent, compared with 9.5 percent nationally. Across the country, Florida has been hit hard by the housing bust, and unemployment in the state reached 10.6 percent in June.
But higher unemployment rates and lousier job markets alone don't explain the high rates of discouragement. Connecticut, New York, and West Virginia have seen their numbers of jobless workers rise during the downturn, but their unemployment rates are all below the national average.
Several things could nudge job seekers toward hopelessness: negative media coverage of the job market; unsuccessful job searches among friends and family; their own long-term unemployment. Also, men are more likely to give up their job search because they've become discouraged--they make up 63 percent of the total group. Younger workers, blacks, and Hispanics are also overrepresented in the discouraged-worker category, according to the Labor Department.
The housing bust could be partly to blame. Workers may simply give up because there are no openings matching their skill set within their geographical area, Krolik says. If workers own homes they can't sell, their ability to move for a new job is severely limited. The effect could be exacerbated by areas where homes are a particularly difficult sell or homeowners are disproportionately underwater, as those markets have also tended to see higher unemployment rates.
Whatever workers' motivation, many economists are now focusing more on their results. Hoyt Bleakley Jr., a University of Chicago economist, says researchers are paying less attention to how many job seekers say they're looking for work and more attention to how quickly they are actually finding it. With 4.4 million job seekers nationwide out of work for more than 27 weeks or more in June, "those numbers are pretty grim," Bleakley says. "People who claim they're looking for work are not finding it." It's hardly surprising, then, how many have simply given up looking.
Cronkite eulogized as newsman, friend, father
NEW YORK – Walter Cronkite was remembered as a great journalist, sailor, friend and father during services that, despite the grandeur of the setting, felt remarkably comfortable — like the man.
"I was often asked, `What he's really like?' And I would always answer, `He's just the way you hope he is,'" said Mike Ashford, a sailing comrade of more than 30 years and one of the speakers at Thursday's funeral.
Another speaker, longtime CBS newsman and "60 Minutes" commentator Andy Rooney, recalled meeting Cronkite when they both were in England covering World War II.
"You get to know someone pretty well in a war," said Rooney, describing Cronkite as "such a good friend."
"I just feel so terrible about Walter's death that I can hardly say anything," he admitted, excused himself and left the pulpit.
The services were witnessed by a near capacity crowd at the elegant, enormous St. Bartholomew's Episcopal Church in midtown Manhattan, where the Cronkite family has worshipped for years.
Broadcast journalists — co-workers, competitors, successors — were on hand, including Connie Chung, Bob Schieffer, Diane Sawyer, Brian Williams, Dan Rather, Barbara Walters, Charles Gibson, Matt Lauer, Tom Brokaw, Morley Safer and Meredith Vieira. Comedians-actors Anne Meara and Jerry Stiller were also in attendance.
But there was also room for members of the public to pay their respects.
James Huntsburg and his wife, Sylvia, visiting from Canada, had heard about the funeral. Admitted to the sanctuary, they took their place in one of the pews.
Huntsburg said he grew up watching Cronkite, who, he said, "touched me."
When he heard of Cronkite's death last Friday at 92, Huntsburg and his wife hadn't yet left from their home near Toronto for their Manhattan vacation.
"I feel blessed to be here," said Huntsburg, visibly moved.
For his reporting, Cronkite came to be called "the most trusted man in America" and was widely considered the premier TV journalist of his time. He anchored "The CBS Evening News" from 1962 until 1981 — a period that included the Vietnam War, the space race, the assassinations of John and Robert Kennedy as well as Martin Luther King Jr. and Watergate.
Sanford Socolow shared anecdotes from his many years working with Cronkite as a producer.
"Once," Socolow recalled, "he had this bizarre idea that he would ad-lib the newscast without a script." As Cronkite's cue for the control room to roll each film clip, he would gently brush his nose with his hand.
"It was utter chaos," said Socolow. "It lasted for two days."
But repeatedly during the ceremony, Cronkite's passion for sailing his beloved boat, the Wyntje, was celebrated.
Ashford offered vivid memories of their sailing adventures.
"Walter, hunched over the helm, would catch my eye, grin, and over the racket of the wind, holler, 'Sen-sational!'"
And veteran TV producer Bill Harbach, a Cronkite friend for a half-century, recited the John Masefield poem "Sea-Fever," movingly addressed to Cronkite.
Chip Cronkite affectionately gave thanks to his father for a host of things — on the water and off.
"Thanks," he said, "for rushing to the side of the boat when a boom knocked me overboard. You stood there ready to jump in after me, and then were glad you didn't have to. Thanks for getting ready to take out my appendix yourself with a sharpened spoon on the African plains, two days' drive for a hospital. That time, I was glad you didn't have to."
A separate memorial will be held within the next few weeks at New York's Lincoln Center for the Performing Arts. Cronkite is to be cremated and his remains buried next to his wife, Betsy, in the family plot at a cemetery in Kansas City, Mo.
"I was often asked, `What he's really like?' And I would always answer, `He's just the way you hope he is,'" said Mike Ashford, a sailing comrade of more than 30 years and one of the speakers at Thursday's funeral.
Another speaker, longtime CBS newsman and "60 Minutes" commentator Andy Rooney, recalled meeting Cronkite when they both were in England covering World War II.
"You get to know someone pretty well in a war," said Rooney, describing Cronkite as "such a good friend."
"I just feel so terrible about Walter's death that I can hardly say anything," he admitted, excused himself and left the pulpit.
The services were witnessed by a near capacity crowd at the elegant, enormous St. Bartholomew's Episcopal Church in midtown Manhattan, where the Cronkite family has worshipped for years.
Broadcast journalists — co-workers, competitors, successors — were on hand, including Connie Chung, Bob Schieffer, Diane Sawyer, Brian Williams, Dan Rather, Barbara Walters, Charles Gibson, Matt Lauer, Tom Brokaw, Morley Safer and Meredith Vieira. Comedians-actors Anne Meara and Jerry Stiller were also in attendance.
But there was also room for members of the public to pay their respects.
James Huntsburg and his wife, Sylvia, visiting from Canada, had heard about the funeral. Admitted to the sanctuary, they took their place in one of the pews.
Huntsburg said he grew up watching Cronkite, who, he said, "touched me."
When he heard of Cronkite's death last Friday at 92, Huntsburg and his wife hadn't yet left from their home near Toronto for their Manhattan vacation.
"I feel blessed to be here," said Huntsburg, visibly moved.
For his reporting, Cronkite came to be called "the most trusted man in America" and was widely considered the premier TV journalist of his time. He anchored "The CBS Evening News" from 1962 until 1981 — a period that included the Vietnam War, the space race, the assassinations of John and Robert Kennedy as well as Martin Luther King Jr. and Watergate.
Sanford Socolow shared anecdotes from his many years working with Cronkite as a producer.
"Once," Socolow recalled, "he had this bizarre idea that he would ad-lib the newscast without a script." As Cronkite's cue for the control room to roll each film clip, he would gently brush his nose with his hand.
"It was utter chaos," said Socolow. "It lasted for two days."
But repeatedly during the ceremony, Cronkite's passion for sailing his beloved boat, the Wyntje, was celebrated.
Ashford offered vivid memories of their sailing adventures.
"Walter, hunched over the helm, would catch my eye, grin, and over the racket of the wind, holler, 'Sen-sational!'"
And veteran TV producer Bill Harbach, a Cronkite friend for a half-century, recited the John Masefield poem "Sea-Fever," movingly addressed to Cronkite.
Chip Cronkite affectionately gave thanks to his father for a host of things — on the water and off.
"Thanks," he said, "for rushing to the side of the boat when a boom knocked me overboard. You stood there ready to jump in after me, and then were glad you didn't have to. Thanks for getting ready to take out my appendix yourself with a sharpened spoon on the African plains, two days' drive for a hospital. That time, I was glad you didn't have to."
A separate memorial will be held within the next few weeks at New York's Lincoln Center for the Performing Arts. Cronkite is to be cremated and his remains buried next to his wife, Betsy, in the family plot at a cemetery in Kansas City, Mo.
Mass. police 'deeply pained' by Obama's criticism
CAMBRIDGE, Mass. – The Cambridge police commissioner says his department is "deeply pained" by President Barack Obama's statement that his officers "acted stupidly" when they arrested a renowned black scholar in his home.
In his first statement since the arrest, Commissioner Robert Haas on Thursday commended the arresting officer, Sgt. James Crowley. Haas said Crowley's actions were in no way motivated by racism.
Crowley, who is white, has been criticized for arresting Henry Louis Gates Jr. last week. Police say Gates flew into a verbal rage when officers asked him for identification while investigating a report of a break-in.
On Wednesday, Obama said officers "acted stupidly" in arresting Gates. On Thursday, he softened his stance and said cooler heads should have prevailed.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
CAMBRIDGE, Mass. (AP) — The white police sergeant criticized by President Barack Obama for arresting black scholar Henry Louis Gates Jr. in his Massachusetts home is a police academy expert on understanding racial profiling.
Cambridge Sgt. James Crowley has taught a class about racial profiling for five years at the Lowell Police Academy after being hand-picked for the job by former police Commissioner Ronny Watson, who is black, said Academy Director Thomas Fleming.
"I have nothing but the highest respect for him as a police officer. He is very professional and he is a good role model for the young recruits in the police academy," Fleming told The Associated Press on Thursday.
The course, called "Racial Profiling," teaches about different cultures that officers could encounter in their community "and how you don't want to single people out because of their ethnic background or the culture they come from," Fleming said. The academy trains cadets for cities across the region.
Obama has said the Cambridge officers "acted stupidly" in arresting Gates last week when they responded to his house after a woman reported a suspected break-in.
Crowley, 42, has maintained he did nothing wrong and has refused to apologize, as Gates has demanded.
Crowley responded to Gates' home near Harvard University last week to investigate a report of a burglary and demanded Gates show him identification. Police say Gates at first refused, flew into a rage and accused the officer of racism.
Gates was charged with disorderly conduct. The charge was dropped Tuesday.
Gates' supporters maintain his arrest was a case of racial profiling. Officers were called to the home by a woman who said she saw "two black males with backpacks" trying to break in the front door. Gates has said he arrived home from an overseas trip and the door was jammed.
Obama was asked about the arrest of Gates, who is his friend, at the end of a nationally televised news conference on health care Wednesday night.
"I think it's fair to say, No. 1, any of us would be pretty angry," Obama said. "No. 2, that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home. And No. 3 — what I think we know separate and apart from this incident — is that there is a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately, and that's just a fact."
In radio interviews Thursday morning, Crowley maintained he followed procedure.
"I support the president of the United States 110 percent. I think he was way off base wading into a local issue without knowing all the facts as he himself stated before he made that comment," Crowley told WBZ-AM. "I guess a friend of mine would support my position, too."
Crowley did not immediately respond to messages left Thursday by the AP. The Cambridge police department scheduled a news conference for later Thursday.
Gates has said he was "outraged" by the arrest. He said the white officer walked into his home without his permission and only arrested him as the professor followed him to the porch, repeatedly demanding the sergeant's name and badge number because he was unhappy over his treatment.
"This isn't about me; this is about the vulnerability of black men in America," Gates said.
He said the incident made him realize how vulnerable poor people and minorities are "to capricious forces like a rogue policeman, and this man clearly was a rogue policeman."
The president said federal officials need to continue working with local law enforcement "to improve policing techniques so that we're eliminating potential bias."
Fellow officers, black and white, say Crowley is well-liked and respected on the force. Crowley was a campus police officer at Brandeis University in July 1993 when he administered CPR trying to save the life of former Boston Celtics player Reggie Lewis. Lewis, who was black, collapsed and died during an off-season workout.
Gov. Deval Patrick, who is black, said he was troubled and upset over the incident. Cambridge Mayor Denise Simmons, who also is black, has said she spoke with Gates and apologized on behalf of the city, and a statement from the city called the July 16 incident "regrettable and unfortunate."
The mayor refused Thursday to comment on the president's remarks.
On Thursday, the White House tried to calm a hubbub over Obama's comments by saying Obama was not calling the officer stupid. Spokesman Robert Gibbs said Obama felt that "at a certain point the situation got far out of hand" at Gates' home last week.
Police supporters charge that Gates, director of Harvard's W.E.B. Du Bois Institute for African and African American Research, was responsible for his own arrest by overreacting.
Black students and professors at Harvard have complained for years about racial profiling by Cambridge and campus police. Harvard commissioned an independent committee last year to examine the university's race relations after campus police confronted a young black man who was using tools to remove a bike lock. The man worked at Harvard and owned the bike.
In his first statement since the arrest, Commissioner Robert Haas on Thursday commended the arresting officer, Sgt. James Crowley. Haas said Crowley's actions were in no way motivated by racism.
Crowley, who is white, has been criticized for arresting Henry Louis Gates Jr. last week. Police say Gates flew into a verbal rage when officers asked him for identification while investigating a report of a break-in.
On Wednesday, Obama said officers "acted stupidly" in arresting Gates. On Thursday, he softened his stance and said cooler heads should have prevailed.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
CAMBRIDGE, Mass. (AP) — The white police sergeant criticized by President Barack Obama for arresting black scholar Henry Louis Gates Jr. in his Massachusetts home is a police academy expert on understanding racial profiling.
Cambridge Sgt. James Crowley has taught a class about racial profiling for five years at the Lowell Police Academy after being hand-picked for the job by former police Commissioner Ronny Watson, who is black, said Academy Director Thomas Fleming.
"I have nothing but the highest respect for him as a police officer. He is very professional and he is a good role model for the young recruits in the police academy," Fleming told The Associated Press on Thursday.
The course, called "Racial Profiling," teaches about different cultures that officers could encounter in their community "and how you don't want to single people out because of their ethnic background or the culture they come from," Fleming said. The academy trains cadets for cities across the region.
Obama has said the Cambridge officers "acted stupidly" in arresting Gates last week when they responded to his house after a woman reported a suspected break-in.
Crowley, 42, has maintained he did nothing wrong and has refused to apologize, as Gates has demanded.
Crowley responded to Gates' home near Harvard University last week to investigate a report of a burglary and demanded Gates show him identification. Police say Gates at first refused, flew into a rage and accused the officer of racism.
Gates was charged with disorderly conduct. The charge was dropped Tuesday.
Gates' supporters maintain his arrest was a case of racial profiling. Officers were called to the home by a woman who said she saw "two black males with backpacks" trying to break in the front door. Gates has said he arrived home from an overseas trip and the door was jammed.
Obama was asked about the arrest of Gates, who is his friend, at the end of a nationally televised news conference on health care Wednesday night.
"I think it's fair to say, No. 1, any of us would be pretty angry," Obama said. "No. 2, that the Cambridge police acted stupidly in arresting somebody when there was already proof that they were in their own home. And No. 3 — what I think we know separate and apart from this incident — is that there is a long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately, and that's just a fact."
In radio interviews Thursday morning, Crowley maintained he followed procedure.
"I support the president of the United States 110 percent. I think he was way off base wading into a local issue without knowing all the facts as he himself stated before he made that comment," Crowley told WBZ-AM. "I guess a friend of mine would support my position, too."
Crowley did not immediately respond to messages left Thursday by the AP. The Cambridge police department scheduled a news conference for later Thursday.
Gates has said he was "outraged" by the arrest. He said the white officer walked into his home without his permission and only arrested him as the professor followed him to the porch, repeatedly demanding the sergeant's name and badge number because he was unhappy over his treatment.
"This isn't about me; this is about the vulnerability of black men in America," Gates said.
He said the incident made him realize how vulnerable poor people and minorities are "to capricious forces like a rogue policeman, and this man clearly was a rogue policeman."
The president said federal officials need to continue working with local law enforcement "to improve policing techniques so that we're eliminating potential bias."
Fellow officers, black and white, say Crowley is well-liked and respected on the force. Crowley was a campus police officer at Brandeis University in July 1993 when he administered CPR trying to save the life of former Boston Celtics player Reggie Lewis. Lewis, who was black, collapsed and died during an off-season workout.
Gov. Deval Patrick, who is black, said he was troubled and upset over the incident. Cambridge Mayor Denise Simmons, who also is black, has said she spoke with Gates and apologized on behalf of the city, and a statement from the city called the July 16 incident "regrettable and unfortunate."
The mayor refused Thursday to comment on the president's remarks.
On Thursday, the White House tried to calm a hubbub over Obama's comments by saying Obama was not calling the officer stupid. Spokesman Robert Gibbs said Obama felt that "at a certain point the situation got far out of hand" at Gates' home last week.
Police supporters charge that Gates, director of Harvard's W.E.B. Du Bois Institute for African and African American Research, was responsible for his own arrest by overreacting.
Black students and professors at Harvard have complained for years about racial profiling by Cambridge and campus police. Harvard commissioned an independent committee last year to examine the university's race relations after campus police confronted a young black man who was using tools to remove a bike lock. The man worked at Harvard and owned the bike.
Minimum wage hike could threaten low earners' jobs
ATLANTA – A federal minimum wage increase that takes effect Friday could prolong the recession, some economists say, by forcing small businesses to lay off the same workers that the pay hike passed in better times was meant to help.
The increase to $7.25 means 70 cents more an hour for the lowest-paid workers in the 30 states that have lower minimums or no minimum wage. It also means higher costs for employers who feel they've already trimmed all their operating fat.
"How will they absorb the increase?" said Rajeev Dhawan, director of Georgia State University's Economic Forecasting Center. "They will either hire less people or they will do less business."
More than in any period before, businesses are likely to lay off employees and reduce hours, further fueling the economic slump in states seeing double-digit unemployment rates, fiscal conservatives and some economists say.
Minimum wage advocates counter the wage bump will keep more working poor afloat, and say more increases are needed to help stimulate consumer spending and strengthen businesses in the long run.
It's an old policy debate that resurfaced when Congress passed the increase two years ago and has taken on urgency as the nation's fiscal funk has deepened.
In the end, it's the workers and their employers who find themselves caught in the middle.
At Bench Warmers Bar and Grill in the southeast Kansas farming town of Chanute (pronounced sha-NOOT), owner Cathy Matney has decided to let some of her dishwashers go rather than pay all 22 of her employees more.
"It's bad timing," said Matney, whose waitresses and cooks will have to pitch in with scrubbing pots and pans. "With the economy like this, there's a lot of people who are out of work and this is only going to add to it."
Ryan Arfmann, who owns a Jamba Juice shop in Idaho Falls, Idaho, will be cutting hours to his staff, which is made up largely of college students, high schoolers and homemakers who want to make a few bucks.
"Am I going to fire anybody, no," Arfmann said. "But kids understand there's going to be hours cut."
Arfmann said he wishes the increase was spread out over a few more years, to make it easier for him to absorb the costs. He also is concerned that he'll end up having to give everybody raises just to maintain pay differentials between employees.
"People who are already getting paid above $7.25 are going to feel like they need raises as well," he said. "It's harder for me to reward employees that are doing well because of minimum wage being so high."
Backers of the increase say it's long overdue for millions of the nation's working poor. Rep. George Miller, D-Calif., authored the 2007 minimum wage legislation, which increased pay for the first time in a decade.
"A higher minimum wage helps working families' budgets and results in increased spending on local business, which is good for everyone," Miller said in an e-mail. He did not say whether he would have pushed to raise the minimum wage in an economic climate like the current one, and he did not immediately respond to a message left Thursday with his spokesman.
Miller's view is a tough sell to employers of minimum wage workers — from hotels to daycares to burger chains — who find themselves having to cut larger paychecks as their revenues continue to shrink. The effects could be especially harsh in the seven states — Alabama, Florida, Georgia, Indiana, North Carolina, South Carolina and Tennessee — where the pay increase coincides with double-digit unemployment.
"Wherever you have the higher unemployment rates, that's where the business conditions are bad — and that's where a minimum wage increase will have an impact on the negative side," said Dhawan, the economist at Georgia State.
Dhawan said the strain could be felt equally in metropolitan areas, where fast-food chains and franchises employ large numbers of minimum wage workers, and in smaller towns where the bulk of the work force may be concentrated in one, low-earning sector.
Fewer workers employed, meanwhile, reduces the amount of money in circulation — dampening any consumer spending spike the wage boost could have created, Dhawan said.
"The increasing power from the higher wages will be swamped by the losses from the people who lost jobs," he said.
Marilynn Winn, an Atlanta woman who earns $6.75 an hour — a couple of dimes more than the current $6.55 federal minimum — driving cars between auto auctions, worries the pay boost could lead her boss to make cuts, especially to older workers like herself.
Still, she said she'd be grateful for the raise if she gets to keep her job.
"We could use more, the more the better," said Winn, 58.
Sara Campbell, who earns roughly $786 a month cleaning event spaces in Atlanta, said she's unlikely to spend any money she gets from the minimum wage increase, especially since she worries her hours will get cut.
"You never know," she said. "You might lose your job. They might start laying off and if they lay off, I'll have something saved up."
Played out across enough businesses, that pattern could stunt economic recovery nationwide, said Moody's economist John Lonski.
"You're going to get fewer jobs created," said Lonski, who predicted national unemployment would peak at 10.5 percent in the first quarter of 2010. "It's not a backbreaker for the U.S. economy, but it doesn't help stabilize employment, especially since most businesses now suffer from much lower than expected sales."
It's hardly the first time a wage increase has prompted doom and gloom predictions from economists, who point to conventional business thinking that supports the idea that higher costs plus lower revenue equals a shrinking work force.
More upbeat predictions suggest the wage increase could actually play a role in turning around the nation's finances. Labor Secretary Hilda Solis said Thursday that the wage increase will generate an extra $5.5 billion in consumer spending over the next year.
Economists have largely overlooked the positive effect on consumer buying power, according to Holly Sklar, senior policy adviser for Let Justice Roll, a national campaign aimed at increasing the minimum wage to $10 by 2010.
A further wage increase could eventually become a reality: One of President Barack Obama's campaign promises included raising the minimum wage to $9.50 an hour by 2011.
"You can't have an economy that's based heavily on consumer purchasing power, and at the same time, not pay the consumer enough to live on," Sklar said.
The increase to $7.25 means 70 cents more an hour for the lowest-paid workers in the 30 states that have lower minimums or no minimum wage. It also means higher costs for employers who feel they've already trimmed all their operating fat.
"How will they absorb the increase?" said Rajeev Dhawan, director of Georgia State University's Economic Forecasting Center. "They will either hire less people or they will do less business."
More than in any period before, businesses are likely to lay off employees and reduce hours, further fueling the economic slump in states seeing double-digit unemployment rates, fiscal conservatives and some economists say.
Minimum wage advocates counter the wage bump will keep more working poor afloat, and say more increases are needed to help stimulate consumer spending and strengthen businesses in the long run.
It's an old policy debate that resurfaced when Congress passed the increase two years ago and has taken on urgency as the nation's fiscal funk has deepened.
In the end, it's the workers and their employers who find themselves caught in the middle.
At Bench Warmers Bar and Grill in the southeast Kansas farming town of Chanute (pronounced sha-NOOT), owner Cathy Matney has decided to let some of her dishwashers go rather than pay all 22 of her employees more.
"It's bad timing," said Matney, whose waitresses and cooks will have to pitch in with scrubbing pots and pans. "With the economy like this, there's a lot of people who are out of work and this is only going to add to it."
Ryan Arfmann, who owns a Jamba Juice shop in Idaho Falls, Idaho, will be cutting hours to his staff, which is made up largely of college students, high schoolers and homemakers who want to make a few bucks.
"Am I going to fire anybody, no," Arfmann said. "But kids understand there's going to be hours cut."
Arfmann said he wishes the increase was spread out over a few more years, to make it easier for him to absorb the costs. He also is concerned that he'll end up having to give everybody raises just to maintain pay differentials between employees.
"People who are already getting paid above $7.25 are going to feel like they need raises as well," he said. "It's harder for me to reward employees that are doing well because of minimum wage being so high."
Backers of the increase say it's long overdue for millions of the nation's working poor. Rep. George Miller, D-Calif., authored the 2007 minimum wage legislation, which increased pay for the first time in a decade.
"A higher minimum wage helps working families' budgets and results in increased spending on local business, which is good for everyone," Miller said in an e-mail. He did not say whether he would have pushed to raise the minimum wage in an economic climate like the current one, and he did not immediately respond to a message left Thursday with his spokesman.
Miller's view is a tough sell to employers of minimum wage workers — from hotels to daycares to burger chains — who find themselves having to cut larger paychecks as their revenues continue to shrink. The effects could be especially harsh in the seven states — Alabama, Florida, Georgia, Indiana, North Carolina, South Carolina and Tennessee — where the pay increase coincides with double-digit unemployment.
"Wherever you have the higher unemployment rates, that's where the business conditions are bad — and that's where a minimum wage increase will have an impact on the negative side," said Dhawan, the economist at Georgia State.
Dhawan said the strain could be felt equally in metropolitan areas, where fast-food chains and franchises employ large numbers of minimum wage workers, and in smaller towns where the bulk of the work force may be concentrated in one, low-earning sector.
Fewer workers employed, meanwhile, reduces the amount of money in circulation — dampening any consumer spending spike the wage boost could have created, Dhawan said.
"The increasing power from the higher wages will be swamped by the losses from the people who lost jobs," he said.
Marilynn Winn, an Atlanta woman who earns $6.75 an hour — a couple of dimes more than the current $6.55 federal minimum — driving cars between auto auctions, worries the pay boost could lead her boss to make cuts, especially to older workers like herself.
Still, she said she'd be grateful for the raise if she gets to keep her job.
"We could use more, the more the better," said Winn, 58.
Sara Campbell, who earns roughly $786 a month cleaning event spaces in Atlanta, said she's unlikely to spend any money she gets from the minimum wage increase, especially since she worries her hours will get cut.
"You never know," she said. "You might lose your job. They might start laying off and if they lay off, I'll have something saved up."
Played out across enough businesses, that pattern could stunt economic recovery nationwide, said Moody's economist John Lonski.
"You're going to get fewer jobs created," said Lonski, who predicted national unemployment would peak at 10.5 percent in the first quarter of 2010. "It's not a backbreaker for the U.S. economy, but it doesn't help stabilize employment, especially since most businesses now suffer from much lower than expected sales."
It's hardly the first time a wage increase has prompted doom and gloom predictions from economists, who point to conventional business thinking that supports the idea that higher costs plus lower revenue equals a shrinking work force.
More upbeat predictions suggest the wage increase could actually play a role in turning around the nation's finances. Labor Secretary Hilda Solis said Thursday that the wage increase will generate an extra $5.5 billion in consumer spending over the next year.
Economists have largely overlooked the positive effect on consumer buying power, according to Holly Sklar, senior policy adviser for Let Justice Roll, a national campaign aimed at increasing the minimum wage to $10 by 2010.
A further wage increase could eventually become a reality: One of President Barack Obama's campaign promises included raising the minimum wage to $9.50 an hour by 2011.
"You can't have an economy that's based heavily on consumer purchasing power, and at the same time, not pay the consumer enough to live on," Sklar said.
Dow tops 9,000 as home sales rise for 3rd month
NEW YORK – Investors celebrated news of another jump in home sales by propelling the Dow Jones industrials to their first close above 9,000 since January.
The stock market's best-known indicator shot up almost 190 points Thursday to 9,069.29, its highest level since November, and all the big indexes gained more than 2 percent.
News that existing home sales rose in June for the third straight month and by a higher-than-expected amount led investors to extend a buying spree that has now lifted the Dow 923 points, or 11 percent, in just nine days. On paper, U.S. stocks have gained $1.2 trillion in value.
The week's economic news and upbeat earnings reports and forecasts from companies including chip maker Intel Corp. and heavy equipment maker Caterpillar Inc. convinced investors that the bets they've placed since March on a recovering economy were well-founded.
Still, the economy, and in turn, the market, are likely to face more quicksand pits in the months ahead. Many more companies, including retailers, who are a barometer of consumer spending, have yet to announce second-quarter earnings. And many of the corporations that have already released their reports said they made money because they had cut costs so deeply, something that they can't keep doing indefinitely.
There was already some troubling earnings news after trading ended Thursday. Microsoft Corp. missed analysts' expectations for revenue, sending its shares lower in extended trading. American Express Co. and Amazon.com also traded lower after releasing their earnings.
Another ongoing problem is the banking business. Banks are forecasting that they'll continue to suffer losses from loans as consumers keep getting laid off.
But some analysts don't believe investors are caving in to euphoria.
"I don't think the market is signaling that we are fully healed at all but it is telling us that there is a strong likelihood that a recovery is under way," said Ciaran O'Kelly, head of equities, Americas, at Nomura Securities Intl. Inc. in New York.
Analysts also caution that volume remains relatively light, as is typical of the summer months when many traders take vacations. It's easier for the market to make big swings when there are fewer trades.
The Dow rose 188.03, or 2.1 percent, to 9,069.29. It was the highest finish for the blue chips since Nov. 5 and the first time the Dow has traded or closed above 9,000 since January. Even with the gains, the Dow is still far off its peak of 14,165 in October 2007.
The Standard & Poor's 500 index rose 22.22, or 2.3 percent, to 976.29. It hasn't traded or closed above 1,000 since early November.
The Nasdaq composite index rose 47.22, or 2.5 percent, to 1,973.60, its 12th straight advance. The Nasdaq hasn't had a rally that long since a streak that ended Jan. 8, 1992.
About five stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 6 billion shares, compared with 4.7 billion Wednesday.
Bond prices tumbled, pushing their yields higher, as money flowed back into the stock market and out of safe-haven investments. The yield on the benchmark 10-year Treasury note, which is closely tied to home mortgage rates, jumped to 3.67 percent from 3.55 percent late Wednesday.
The Realtors said sales of previously occupied homes rose 3.6 percent in June. Sales came in at 4.89 million, above the 4.84 million analysts expected.
Dealmaking also supported stocks. Investors look to companies' willingness to make acquisitions — and part with cash or take on debt — as a sign of confidence.
In health care, Bristol-Myers Squibb Co. plans to acquire Medarex Inc. for about $2.1 billion. Medarex surged $7.49, or 89 percent, to $15.89, while Bristol-Myers rose 57 cents, or 2.8 percent, to $20.86.
Amazon.com Inc. agreed to buy Zappos.com Inc., a privately held online shoe store, in a deal worth about $850 million. Amazon rose $5.08, or 5.7 percent, to $93.87. It tumbled to $87.58 after its earnings were released.
Among the day's earnings news, Ford Motor Co. announced a profit that was a huge improvement over the record $8.7 billion loss it reported a year earlier. Without one-time gains, the car maker would have lost $424 million, or 21 cents per share. That is still smaller than the loss of 50 cents per share analysts had been expecting. Ford rose 60 cents, or 9.4 percent, to $6.98.
Microsoft, which rose 76 cents to $25.56 in regular trading, fell to $23.62 in after-hours activity. American Express traded at $28.05 in extended trading after rising 69 cents to $29.45 during the day.
Some analysts warn that stocks won't be able to hold their gains if companies can't increase earnings by boosting revenue rather than slashing costs.
"It's like going on a diet. You can only starve yourself for so long," said Lawrence Creatura, portfolio manager at Federated Investors in Rochester, N.Y. "You cannot cost cut your way to prosperity."
Creatura noted that companies are reducing costs in large part by getting rid of workers. That could wind up hurting other businesses as the ranks of unemployed people grow. Unemployment is at a 26-year high of 9.5 percent, and the Federal Reserve predicts it will top 10 percent by year-end.
The dollar mostly fell against other major currencies, while gold prices dipped.
Oil prices rose $1.76 to settle at $67.16 a barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies gained 17.15, or 3.2 percent, to 545.85.
The gains in U.S. stocks pushed markets overseas sharply higher. Britain's FTSE 100 rose 1.5 percent, while Germany's DAX index jumped 2.5 percent and France's CAC-40 rose 2.1 percent. In Japan, where markets closed before U.S. stocks began trading, the Nikkei stock average rose 0.7 percent.
The stock market's best-known indicator shot up almost 190 points Thursday to 9,069.29, its highest level since November, and all the big indexes gained more than 2 percent.
News that existing home sales rose in June for the third straight month and by a higher-than-expected amount led investors to extend a buying spree that has now lifted the Dow 923 points, or 11 percent, in just nine days. On paper, U.S. stocks have gained $1.2 trillion in value.
The week's economic news and upbeat earnings reports and forecasts from companies including chip maker Intel Corp. and heavy equipment maker Caterpillar Inc. convinced investors that the bets they've placed since March on a recovering economy were well-founded.
Still, the economy, and in turn, the market, are likely to face more quicksand pits in the months ahead. Many more companies, including retailers, who are a barometer of consumer spending, have yet to announce second-quarter earnings. And many of the corporations that have already released their reports said they made money because they had cut costs so deeply, something that they can't keep doing indefinitely.
There was already some troubling earnings news after trading ended Thursday. Microsoft Corp. missed analysts' expectations for revenue, sending its shares lower in extended trading. American Express Co. and Amazon.com also traded lower after releasing their earnings.
Another ongoing problem is the banking business. Banks are forecasting that they'll continue to suffer losses from loans as consumers keep getting laid off.
But some analysts don't believe investors are caving in to euphoria.
"I don't think the market is signaling that we are fully healed at all but it is telling us that there is a strong likelihood that a recovery is under way," said Ciaran O'Kelly, head of equities, Americas, at Nomura Securities Intl. Inc. in New York.
Analysts also caution that volume remains relatively light, as is typical of the summer months when many traders take vacations. It's easier for the market to make big swings when there are fewer trades.
The Dow rose 188.03, or 2.1 percent, to 9,069.29. It was the highest finish for the blue chips since Nov. 5 and the first time the Dow has traded or closed above 9,000 since January. Even with the gains, the Dow is still far off its peak of 14,165 in October 2007.
The Standard & Poor's 500 index rose 22.22, or 2.3 percent, to 976.29. It hasn't traded or closed above 1,000 since early November.
The Nasdaq composite index rose 47.22, or 2.5 percent, to 1,973.60, its 12th straight advance. The Nasdaq hasn't had a rally that long since a streak that ended Jan. 8, 1992.
About five stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to 6 billion shares, compared with 4.7 billion Wednesday.
Bond prices tumbled, pushing their yields higher, as money flowed back into the stock market and out of safe-haven investments. The yield on the benchmark 10-year Treasury note, which is closely tied to home mortgage rates, jumped to 3.67 percent from 3.55 percent late Wednesday.
The Realtors said sales of previously occupied homes rose 3.6 percent in June. Sales came in at 4.89 million, above the 4.84 million analysts expected.
Dealmaking also supported stocks. Investors look to companies' willingness to make acquisitions — and part with cash or take on debt — as a sign of confidence.
In health care, Bristol-Myers Squibb Co. plans to acquire Medarex Inc. for about $2.1 billion. Medarex surged $7.49, or 89 percent, to $15.89, while Bristol-Myers rose 57 cents, or 2.8 percent, to $20.86.
Amazon.com Inc. agreed to buy Zappos.com Inc., a privately held online shoe store, in a deal worth about $850 million. Amazon rose $5.08, or 5.7 percent, to $93.87. It tumbled to $87.58 after its earnings were released.
Among the day's earnings news, Ford Motor Co. announced a profit that was a huge improvement over the record $8.7 billion loss it reported a year earlier. Without one-time gains, the car maker would have lost $424 million, or 21 cents per share. That is still smaller than the loss of 50 cents per share analysts had been expecting. Ford rose 60 cents, or 9.4 percent, to $6.98.
Microsoft, which rose 76 cents to $25.56 in regular trading, fell to $23.62 in after-hours activity. American Express traded at $28.05 in extended trading after rising 69 cents to $29.45 during the day.
Some analysts warn that stocks won't be able to hold their gains if companies can't increase earnings by boosting revenue rather than slashing costs.
"It's like going on a diet. You can only starve yourself for so long," said Lawrence Creatura, portfolio manager at Federated Investors in Rochester, N.Y. "You cannot cost cut your way to prosperity."
Creatura noted that companies are reducing costs in large part by getting rid of workers. That could wind up hurting other businesses as the ranks of unemployed people grow. Unemployment is at a 26-year high of 9.5 percent, and the Federal Reserve predicts it will top 10 percent by year-end.
The dollar mostly fell against other major currencies, while gold prices dipped.
Oil prices rose $1.76 to settle at $67.16 a barrel on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies gained 17.15, or 3.2 percent, to 545.85.
The gains in U.S. stocks pushed markets overseas sharply higher. Britain's FTSE 100 rose 1.5 percent, while Germany's DAX index jumped 2.5 percent and France's CAC-40 rose 2.1 percent. In Japan, where markets closed before U.S. stocks began trading, the Nikkei stock average rose 0.7 percent.
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