Thursday, March 12, 2009
Friday, March 6, 2009
RECIPE FROM KFC
 | INGREDIENTS 4 Eggs, slightly beaten 1 cup dark corn syrup pinch of salt 1/3 cup sugar 1 Tablespoon lemon juice or vinegar 4 Tablespoons melted butter 2 teaspoons vanilla 2/3 cup pecan halves 1 9-inch unbaked pie shell INSTRUCTIONS |
Starbucks’ strange brew of business plans
When Starbucks Chief Executive Howard Schultz announced that he was taking back the reins at the company he had built to glory, the recession had just begun and the foreclosure and banking crises were far from apparent.
A little more than a year later, the economy is considerably more troubled and so, potentially, is Starbucks. Over the past 12 months, the Seattle-based coffee chain has said it would close hundreds of stores and lay off thousands of workers, and made substantial changes in its management ranks. Shares in Starbucks have fallen by nearly 50 percent.
Meanwhile, the company has rolled out an increasingly broad array of products and initiatives aimed at helping Starbucks find its footing in a vastly different economic environment. The latest, and perhaps most surprising: instant coffee, launched this week.
The fast-paced series of changes have left some hopeful that the company is taking the necessary steps to get through the crisis, while others wonder whether the company has lost its vision.
“It’s actually split,” said R.J. Hottovy, an equity analyst with Morningstar who follows Starbucks.
Starbucks acknowledges that it has made a lot of changes in the past year, which it says are partly a reflection of its broader goals and partly an effort to respond quickly to the recession.
“There are long-term strategies and plans in place that have not changed at all, but, that said, we have had to adjust because of the economy, just like every other business,” said Deb Trevino, a Starbucks spokeswoman.
Schultz, who led the company through its explosive growth in the 1980s and 1990s, announced in January of 2008 that he was returning to the chief executive position, while maintaining his role as chairman of the board. The news came amid growing worries that Starbucks had expanded too quickly, and in the process lost some of the touches — including a focus on coffee and an attention to the customer — that had made it such a success in the first place.
Schultz pledged to remind customers about the things that brought them to Starbucks years ago. Executives rolled out fancy new espresso machines and a new blend of coffee, Pike Place Roast, that baristas were instructed to grind fresh in their stores. The company even shuttered the doors of its shops for three hours one evening, so baristas could review their latte-making skills, and said it would add high-end Clover coffee makers in some of its stores.
Starbucks also said it planned to get rid of its meat and cheese breakfast sandwiches, which were popular but also had been much derided for their fast food smell.
But as 2008 wore on, it became clear the economy was deteriorating, leaving millions of Americans worried about gas and food bills, and job security. For many newly budget-conscious consumers, a mocha Frappuccino or a pumpkin spice latte was the first thing to go.
Starbucks was forced to change tactics, and talk of Starbucks shifted from recapturing the Starbucks experience to laying off more workers and closing more stores. While the company continued to push ahead with its plans to refocus on coffee, it also began to branch out, launching a line of blended drinks and an array of healthier breakfast options such as oatmeal.
The hot breakfast sandwiches also stayed, although Starbucks tweaked the recipe to reduce the smell. Next month, it plans to further expand the lineup of breakfast sandwiches, as part of an initiative to offer $3.95 “pairings” — the company’s version of the value meal, and a response to customers’ money worries.
The move toward more budget-oriented offerings also comes as Starbucks faces another foe: growing competition from the likes of McDonald’s, Dunkin’ Donuts and even the local gas station. Such companies have pushed aggressively onto Starbucks’ turf just as the deteriorating economy left people more open to trying a cheaper coffee drink.
“On the one hand, the coffee space has become infinitely more competitive since Howard rejoined the firm, (and) in response to the competitive pressures they’ve had to take a new approach and try out a lot of things,” said Hottovy, the Morningstar equity analyst. “On the other hand, a lot of the things that they have tried haven’t really panned out.”
Hottovy sees a lot of potential for Starbucks in the company’s expanded breakfast choices, especially now that it is facing more pressure from food-oriented retailers such as McDonald’s.
“Customers come to expect that from a chain that sells coffee,” he said.
But he’s more skeptical about the instant coffee, called VIA.
Long-term, he said, there might be an opportunity for Starbucks to take some market share away from more traditional instant coffee companies like Folgers. But in the short-term, the company is up against the strong perception that instant coffee just doesn’t taste as good as the real thing — a perception formed in part by Starbucks itself, which has done a lot to sell Americans on freshly brewed, high-quality coffee.
“It’s going to be an uphill battle,” Hottovy said.
Meanwhile, Starbucks also is facing other challenges. A series of layoffs, store closures and changes to worker benefits could mar its reputation as a good employer, and also impact morale. And on a broader level, there is the question of where Starbucks will be left if and when economic conditions improve.
Andrew Hetzel, director of the coffee industry consulting firm Cafemakers, said he had high hopes for Starbucks when he heard that Schultz had returned to the CEO job, and grew even more confident after hearing about plans to refocus on premium, fresh-brewed coffee, such as using the upscale Clover coffee maker.
But he has grown disillusioned as he’s watched Starbucks branch out into such things as smoothies, breakfast sandwiches and now instant coffee.
“There have just been so many mixed messages,” Hetzel said
READ MORE - Starbucks’ strange brew of business plans
A little more than a year later, the economy is considerably more troubled and so, potentially, is Starbucks. Over the past 12 months, the Seattle-based coffee chain has said it would close hundreds of stores and lay off thousands of workers, and made substantial changes in its management ranks. Shares in Starbucks have fallen by nearly 50 percent.
Meanwhile, the company has rolled out an increasingly broad array of products and initiatives aimed at helping Starbucks find its footing in a vastly different economic environment. The latest, and perhaps most surprising: instant coffee, launched this week.
The fast-paced series of changes have left some hopeful that the company is taking the necessary steps to get through the crisis, while others wonder whether the company has lost its vision.
“It’s actually split,” said R.J. Hottovy, an equity analyst with Morningstar who follows Starbucks.
Starbucks acknowledges that it has made a lot of changes in the past year, which it says are partly a reflection of its broader goals and partly an effort to respond quickly to the recession.
“There are long-term strategies and plans in place that have not changed at all, but, that said, we have had to adjust because of the economy, just like every other business,” said Deb Trevino, a Starbucks spokeswoman.
Schultz, who led the company through its explosive growth in the 1980s and 1990s, announced in January of 2008 that he was returning to the chief executive position, while maintaining his role as chairman of the board. The news came amid growing worries that Starbucks had expanded too quickly, and in the process lost some of the touches — including a focus on coffee and an attention to the customer — that had made it such a success in the first place.
Schultz pledged to remind customers about the things that brought them to Starbucks years ago. Executives rolled out fancy new espresso machines and a new blend of coffee, Pike Place Roast, that baristas were instructed to grind fresh in their stores. The company even shuttered the doors of its shops for three hours one evening, so baristas could review their latte-making skills, and said it would add high-end Clover coffee makers in some of its stores.
Starbucks also said it planned to get rid of its meat and cheese breakfast sandwiches, which were popular but also had been much derided for their fast food smell.
But as 2008 wore on, it became clear the economy was deteriorating, leaving millions of Americans worried about gas and food bills, and job security. For many newly budget-conscious consumers, a mocha Frappuccino or a pumpkin spice latte was the first thing to go.
Starbucks was forced to change tactics, and talk of Starbucks shifted from recapturing the Starbucks experience to laying off more workers and closing more stores. While the company continued to push ahead with its plans to refocus on coffee, it also began to branch out, launching a line of blended drinks and an array of healthier breakfast options such as oatmeal.
The hot breakfast sandwiches also stayed, although Starbucks tweaked the recipe to reduce the smell. Next month, it plans to further expand the lineup of breakfast sandwiches, as part of an initiative to offer $3.95 “pairings” — the company’s version of the value meal, and a response to customers’ money worries.
The move toward more budget-oriented offerings also comes as Starbucks faces another foe: growing competition from the likes of McDonald’s, Dunkin’ Donuts and even the local gas station. Such companies have pushed aggressively onto Starbucks’ turf just as the deteriorating economy left people more open to trying a cheaper coffee drink.
“On the one hand, the coffee space has become infinitely more competitive since Howard rejoined the firm, (and) in response to the competitive pressures they’ve had to take a new approach and try out a lot of things,” said Hottovy, the Morningstar equity analyst. “On the other hand, a lot of the things that they have tried haven’t really panned out.”
Hottovy sees a lot of potential for Starbucks in the company’s expanded breakfast choices, especially now that it is facing more pressure from food-oriented retailers such as McDonald’s.
“Customers come to expect that from a chain that sells coffee,” he said.
But he’s more skeptical about the instant coffee, called VIA.
Long-term, he said, there might be an opportunity for Starbucks to take some market share away from more traditional instant coffee companies like Folgers. But in the short-term, the company is up against the strong perception that instant coffee just doesn’t taste as good as the real thing — a perception formed in part by Starbucks itself, which has done a lot to sell Americans on freshly brewed, high-quality coffee.
“It’s going to be an uphill battle,” Hottovy said.
Meanwhile, Starbucks also is facing other challenges. A series of layoffs, store closures and changes to worker benefits could mar its reputation as a good employer, and also impact morale. And on a broader level, there is the question of where Starbucks will be left if and when economic conditions improve.
Andrew Hetzel, director of the coffee industry consulting firm Cafemakers, said he had high hopes for Starbucks when he heard that Schultz had returned to the CEO job, and grew even more confident after hearing about plans to refocus on premium, fresh-brewed coffee, such as using the upscale Clover coffee maker.
But he has grown disillusioned as he’s watched Starbucks branch out into such things as smoothies, breakfast sandwiches and now instant coffee.
“There have just been so many mixed messages,” Hetzel said
Thursday, February 26, 2009
Exxon, Chevron Would Pay More Under Obama’s Plan
By Daniel Whitten and Tina Seeley
Feb. 26 (Bloomberg) -- President Barack Obama is seeking to raise at least $31.5 billion over 10 years by raising royalty fees and imposing new taxes on oil companies. Exxon Mobil Corp., Chevron Corp., and ConocoPhillips would be among companies subject to new costs under the plan.
Obama’s fiscal 2010 budget proposal, released today, would apply new excise taxes on Gulf of Mexico oil and gas leases, end oil company benefits from a U.S. manufacturing tax credit and repeal credits for older drilling projects.
“The public receives over $12 billion annually from fees, royalties, and other federal payments related to oil, gas, coal, and other mineral development,” according to the Obama budget document. “That return could be improved by closing loopholes, charging appropriate fees, and reforming how royalties are set.”
During his campaign, Obama proposed a windfall-profits tax on oil companies to pay for clean-energy programs. He backed off of that plan as oil plummeted below the $80 per barrel level that would have triggered the tax.
The new taxes “could reduce our nation’s energy security by discouraging new investment in domestic oil and natural gas production and refining capacity and pushing those investments - -and American jobs -- abroad,” said Jack Gerard, president of the Washington-based American Petroleum Institute, the oil and gas industry’s biggest trade group.
Crude oil for April delivery rose $2.50, or 5.7 percent, to $45.07 a barrel at 11:15 a.m. on the New York Mercantile Exchange. Futures touched $45.25, the highest since Jan. 27. Prices are down 69 percent from their record of $147.27 a barrel last July.
Spending More
Without offering details, the budget says there’s a need to spend more on clean and renewable energy and reduce U.S. reliance on foreign oil.
The budget proposal includes a $5.28 billion “excise tax on Gulf of Mexico oil and gas.” The tax, which would begin in 2011, would raise at least $500 million a year through 2019 “to close loopholes that have given oil companies excessive royalty relief,” according to the spending plan.
Congress has tried to close a loophole in leases issued in 1998 and 1999 that had the effect of allowing oil companies to produce oil and gas without paying royalties.
The plan would repeal $13.3 billion over 10 years in benefits for oil companies for a manufacturing tax credit still available to other U.S. industries and an $8.25 billion tax break for production in depleting oil and gas wells.
New Leases
It also would impose a $1.16 billion fee for companies that have “non-producing leases.” Congress failed last year to approve legislation preventing companies from getting new leases to drill for oil and gas until they can certify they are developing on 68 million acres of already-leased areas.
Obama’s budget plan would end payments to coal-producing states that no longer need funds to clean up abandoned coal mines, saving $1.52 billion through 2019.
It proposes charging user fees to oil companies for processing the permits for operations on federal lands, and would increase returns from development of oil and gas by “reforming royalties and adjusting rates.”
Energy, Interior Spending
Overall, the new administration proposes $26.3 billion in spending for the Energy Department, a 5 percent increase from the Bush administration’s request for the 2009 year, which began last October. It calls for a 13 percent increase in spending for the Interior Department, to $12 billion from the $10.6 billion Bush sought.
Funding for the Interior Department includes $100 million for national parks and a $75 million fund to fight wildfires.
The budget also proposes increasing funding for the Commodity Futures Trading Commission more than 44 percent from 2008, when funding was $111 million.
To contact the reporters on this story: Daniel Whitten in Washington at dwhitten2@bloomberg.net; Tina Seeley in Washington at tseeley@bloomberg.net.
READ MORE - Exxon, Chevron Would Pay More Under Obama’s Plan
Feb. 26 (Bloomberg) -- President Barack Obama is seeking to raise at least $31.5 billion over 10 years by raising royalty fees and imposing new taxes on oil companies. Exxon Mobil Corp., Chevron Corp., and ConocoPhillips would be among companies subject to new costs under the plan.
Obama’s fiscal 2010 budget proposal, released today, would apply new excise taxes on Gulf of Mexico oil and gas leases, end oil company benefits from a U.S. manufacturing tax credit and repeal credits for older drilling projects.
“The public receives over $12 billion annually from fees, royalties, and other federal payments related to oil, gas, coal, and other mineral development,” according to the Obama budget document. “That return could be improved by closing loopholes, charging appropriate fees, and reforming how royalties are set.”
During his campaign, Obama proposed a windfall-profits tax on oil companies to pay for clean-energy programs. He backed off of that plan as oil plummeted below the $80 per barrel level that would have triggered the tax.
The new taxes “could reduce our nation’s energy security by discouraging new investment in domestic oil and natural gas production and refining capacity and pushing those investments - -and American jobs -- abroad,” said Jack Gerard, president of the Washington-based American Petroleum Institute, the oil and gas industry’s biggest trade group.
Crude oil for April delivery rose $2.50, or 5.7 percent, to $45.07 a barrel at 11:15 a.m. on the New York Mercantile Exchange. Futures touched $45.25, the highest since Jan. 27. Prices are down 69 percent from their record of $147.27 a barrel last July.
Spending More
Without offering details, the budget says there’s a need to spend more on clean and renewable energy and reduce U.S. reliance on foreign oil.
The budget proposal includes a $5.28 billion “excise tax on Gulf of Mexico oil and gas.” The tax, which would begin in 2011, would raise at least $500 million a year through 2019 “to close loopholes that have given oil companies excessive royalty relief,” according to the spending plan.
Congress has tried to close a loophole in leases issued in 1998 and 1999 that had the effect of allowing oil companies to produce oil and gas without paying royalties.
The plan would repeal $13.3 billion over 10 years in benefits for oil companies for a manufacturing tax credit still available to other U.S. industries and an $8.25 billion tax break for production in depleting oil and gas wells.
New Leases
It also would impose a $1.16 billion fee for companies that have “non-producing leases.” Congress failed last year to approve legislation preventing companies from getting new leases to drill for oil and gas until they can certify they are developing on 68 million acres of already-leased areas.
Obama’s budget plan would end payments to coal-producing states that no longer need funds to clean up abandoned coal mines, saving $1.52 billion through 2019.
It proposes charging user fees to oil companies for processing the permits for operations on federal lands, and would increase returns from development of oil and gas by “reforming royalties and adjusting rates.”
Energy, Interior Spending
Overall, the new administration proposes $26.3 billion in spending for the Energy Department, a 5 percent increase from the Bush administration’s request for the 2009 year, which began last October. It calls for a 13 percent increase in spending for the Interior Department, to $12 billion from the $10.6 billion Bush sought.
Funding for the Interior Department includes $100 million for national parks and a $75 million fund to fight wildfires.
The budget also proposes increasing funding for the Commodity Futures Trading Commission more than 44 percent from 2008, when funding was $111 million.
To contact the reporters on this story: Daniel Whitten in Washington at dwhitten2@bloomberg.net; Tina Seeley in Washington at tseeley@bloomberg.net.
Monday, February 23, 2009
DIFC chief economist urges Gulf gov'ts on sukuks
on Thursday, 19 February 2009
SUKUK CALL: The DIFC's chief economist says there has never been a better time for Gulf governments to issue Islamic bonds. (Getty Images)
There has never been a better time for Gulf governments to start issuing Islamic bonds (sukuks), despite existing issues trading at “outlandish” prices, the chief economist of Dubai International Financial Centre (DIFC) has said.“This is the time for governments to start introducing sukuks as part of public finance,” Dr Nasser Saidi told reporters at a press conference.By using sukuks to finance major projects such as power plants, roads and ports, GCC governments would help the region consolidate its position as an international centre for Islamic finance
“This is the time at which governments should be active with their central banks to create money markets in Shariah compliant instruments that the central banks can then use for assisting and providing liquidity to Shariah compliant institutions,” he said.By simply running down the surpluses accumulated during the six year oil boom governments would risk losing investments that could continue to earn them an income, he noted.Dr Saidi estimated the total size of that surplus to be around $950 billion."As governments develop the debt market, it will encourage the private sector to start issuing debt again," Dr Saidi said.Asked about the low price of Gulf sukuks in the secondary market, he said prices are likely to return to more reasonable levels within the near future.“I think this is a temporary phenomenon. I think the pricing is unrelated to the fundamentals,” he said.“It doesn’t make a great deal of sense to me that you are pricing UAE debt as being more risky than Iceland….
This current pricing is outlandish.”The amount raised globally from sukuk issuance decreased by 54.5 percent in 2008 from the year before to $15.1 billion, while the number of issues rose to 165 from 129, Global Investment House said in a research note on Thursday.“The decline in sukuk issuance is due to the credit crunch that forced investors to step aside from the fixed income market, including the Islamic one,” the investment bank said. “As evident of the credit crunch effect on sukuks, issuances in the fourth quarter of 2008 were weak when compared with other quarters in the same year.”In the first three quarters of last year, the amount raised from sukuks averaged $4.8 billion per quarter, compared with only $0.8 billion in the fourth quarter.GCC countries and Malaysia continued to be the largest markets, accounting for 55.5 percent and 36.3 percent respectively of the dollar amount issued.
READ MORE - DIFC chief economist urges Gulf gov'ts on sukuks
SUKUK CALL: The DIFC's chief economist says there has never been a better time for Gulf governments to issue Islamic bonds. (Getty Images)
There has never been a better time for Gulf governments to start issuing Islamic bonds (sukuks), despite existing issues trading at “outlandish” prices, the chief economist of Dubai International Financial Centre (DIFC) has said.“This is the time for governments to start introducing sukuks as part of public finance,” Dr Nasser Saidi told reporters at a press conference.By using sukuks to finance major projects such as power plants, roads and ports, GCC governments would help the region consolidate its position as an international centre for Islamic finance
“This is the time at which governments should be active with their central banks to create money markets in Shariah compliant instruments that the central banks can then use for assisting and providing liquidity to Shariah compliant institutions,” he said.By simply running down the surpluses accumulated during the six year oil boom governments would risk losing investments that could continue to earn them an income, he noted.Dr Saidi estimated the total size of that surplus to be around $950 billion."As governments develop the debt market, it will encourage the private sector to start issuing debt again," Dr Saidi said.Asked about the low price of Gulf sukuks in the secondary market, he said prices are likely to return to more reasonable levels within the near future.“I think this is a temporary phenomenon. I think the pricing is unrelated to the fundamentals,” he said.“It doesn’t make a great deal of sense to me that you are pricing UAE debt as being more risky than Iceland….
This current pricing is outlandish.”The amount raised globally from sukuk issuance decreased by 54.5 percent in 2008 from the year before to $15.1 billion, while the number of issues rose to 165 from 129, Global Investment House said in a research note on Thursday.“The decline in sukuk issuance is due to the credit crunch that forced investors to step aside from the fixed income market, including the Islamic one,” the investment bank said. “As evident of the credit crunch effect on sukuks, issuances in the fourth quarter of 2008 were weak when compared with other quarters in the same year.”In the first three quarters of last year, the amount raised from sukuks averaged $4.8 billion per quarter, compared with only $0.8 billion in the fourth quarter.GCC countries and Malaysia continued to be the largest markets, accounting for 55.5 percent and 36.3 percent respectively of the dollar amount issued.
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