November 9, 2012
Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are the seven most fascinating ones I read this week.
The New York Times has a great piece on the rise of part-time jobs:
Mr. Flickinger, the retail consultant, said companies benefited from using many part-timers. "It's almost like sharecropping -- if you have a lot of farmers with small plots of land, they work very hard to produce in that limited amount of land," he said. "Many part-time workers feel a real competition to work hard during their limited hours because they want to impress managers to give them more hours."
Ms. Rosser, the Jamba Juice district manager, amplified on the advantages.
"You don't want to work your team members for eight-hour shifts," she said. "By the time they get to the second half of their shift, they don't have the same energy and enthusiasm. We like to schedule people around four- to five-hour shifts so you can get the best out of them during that time."
Taste of things to come?
Business Insider writes that Foxconn -- a manufacturer for Apple (Nasdaq: AAPL ) , Hewlett-Packard (NYSE: HP ) , and Dell (Nasdaq: DELL ) -- is looking to build factories in America:
Chinese manufacturing giant Foxconn is exploring plans to build plants in the United States, DigiTimes reports. It is looking at Detroit and Los Angeles ... its unlikely the U.S. plants would be making iPhones because they are too labor intensive. Instead, they could be making LCD TVs, which are more automated.
The Economist writes about the surge in cash on corporations' balance sheets:
Investment has steadily risen since the recession ended, but not as vigorously as profits. In America, for example, nominal capital expenditure this year (on an annualised basis) has risen by 6% compared with 2007; internal cash flow is up by 32%. Companies have been net suppliers, instead of users, of funds to the rest of the economy since 2008. Firms in the S&P 500 held roughly $900 billion of cash at the end of June, according to Thomson Reuters, down a bit from a year earlier but still 40% up on 2008.
Former FDIC chairwomen Sheila Bair proposes a new way to compensate politicians:
Let's start paying members of Congress and the President half of their compensation in 10-year Treasury debt, which they must hold until maturity. Members of Congress make roughly $180,000, so under this proposal, they would get $90,000 in cash and $90,000 in 10-year Treasuries. (We would add a housing allowance, too, given the high cost of living in Washington.) For the President, it would be $200,000 cash and $200,000 in T-bonds. If the economy does well and if they get our fiscal house in order and institute pro-growth tax and spending policies, those 10-year bonds should hold their value. But if we continue our profligate ways, inflation spikes, and interest rates skyrocket, those bonds may end up being worth as much as the stuff Czar Nicholas issued shortly before the Bolshevik revolution (some of which I bought at a flea market and now use as wallpaper in the bathroom).
Note: I think she's quite wrong about the direction of interest rates. Interest rates will rise, and bond prices will fall, when the economy rebounds. Still, a novel idea.
According to Pew Research Trends:
Record shares of young adults are completing high school, going to college and finishing college, according to a Pew Research Center analysis of newly available census data. In 2012, for the first time ever, one-third of the nation's 25- to 29-year-olds have completed at least a bachelor's degree ... Also, a record share of the nation's young adults ages 25 to 29 (90%) has finished at least a high school education. And another record share -- 63% --has completed at least some college.
Writes the Wall Street Journal:
It is commonly believed in American corporations that a "superstar" CEO brought in from the outside can produce returns far in excess of any internal candidates.
Sorry, but it just isn't true. The CEO so talented that he or she can step into any company and turn it around, or push profit to new heights, is so rare as to be nonexistent.
The idea, however, is so entrenched that a lot of boards end up hiring the wrong people—and paying them way too much.
Instead, to boost profitability, boards typically need to look no further than down the hall. Internal candidates are usually less expensive to hire and, most important, already know the business extensively
What not to do
Ben Stein sits down the Wall Street Journal for a discussion on how to ruin your financial life:
Enjoy your weekend.