Archive for May 12th, 2008
Filed under: International markets, Products and services, Industry, Competitive strategy, China, Boeing Co (BA), Headline news
 Several leading business journals have reported that China has created its own regional jumbo jet company to compete with Boeing Co (NYSE: BA) and Airbus.
The Financial Times (subscription required) reports, “China has unveiled a state-owned aircraft manufacturer intended to eventually challenge Boeing and Airbus’s control of the global market in massive airliners.” The Times characterizes the Commercial Aircraft Corporation of China (CACC) as “a significant step in Beijing’s drive to create an advanced civil aviation manufacturing sector able to help meet the country’s rapidly growing demand for regional and bigger jets.”
Reuters noted that, “many analysts have expressed skepticism about the commercial prospects of a large jet designed and manufactured entirely in China, given the country’s limited experience in huge aircraft.” Not sure what analysts know, I’m skeptical just as much of them.
According to Bloomberg, “China aims to build a 150-seat aircraft by 2020 to support the expansion of its domestic travel market and to compete with Boeing and Airbus overseas.” In terms of expansion, the country plans “to triple its fleet of passenger and cargo planes to 4,000 by 2020 as economic growth lifts travel demand in the world’s second-largest aviation market, according to the General Administration of Civil Aviation.”
It should be of no surprise to anyone that China would pursue the expansion of its aviation industry. While some may scoff at China’s current technological capability, it would be an error to underestimate the ability of a focused and well-financed competitor. In terms of the time frame for this fledgling industry that too isn’t truly relevant — it isn’t a race and whatever they develop, and whenever they develop it — it will be more than they’ve now. They have the market size and they’ll gain market share.
They’re also prone to gain from reverse engineering of Boeing and Airbus designs, saving R & D money all along the way. This story will be playing out over decades.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.He writes the columns Chasing Value and Serious Money.
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Posted by: in Housing
Filed under: Forecasts, Consumer experience, Penney (J.C.) (JCP), Kohl’s Corp (KSS), Economic data, Housing, Federal Reserve, Recession
 I know that what you probably wanted to hear most is that the economy’s slowdown is at an end so that some of your beaten-down stocks could enjoy a nice recovery. When the stock markets started declining towards the end of last year, SmartMoney tells us that analysts began to place bets on when we might see stocks rebound. Back then, many fund managers had expected a rally in the second half of 2008.
The Federal Reserve’s decision to slash interest rates several times certainly gave a temporary boost to stocks — not enough for a long-term rally, though. Daily concerns such as the deep housing slump and the rising inflation today give the impression that a second-half comeback is but a dream; it that would be quite hard to accomplish.
While analysts on Wall Street mostly believe a long-term rally isn’t too realistic now, they believe a moderate boost, stemming from the Fed’s rate cuts and the $117 billion in tax rebates going into banks’ accounts, is likely. On the other hand, looking at corporate profits, Citigroup analysts believe that predictions related to stocks’ earnings figures are too high when taking the challenging market conditions into account.
There’s some good news, though. Citi analysts stated they see one sector outperforming: retailing. Retailers have a good opportunity to overcome the weak economy, they say, helped in part by the tax-rebate checks. They picked J.C. Penney Inc. (NYSE: JCP) and Kohl’s Corp. (NYSE: KSS) as they’ve already slashed their first-quarter earnings estimates so that “the bad news is priced in.”
But, despite all of this, analysts agree that the economy is still in bad shape. April’s Federal Reserve Beige Book report was quite disappointing, showing an economy in worse shape compared with the beginning of the year. This was the result of continued concerns about consumer spending, soft labor markets and soaring prices for food and energy.
But don’t be too scared. Only a few analysts anticipate times to get too much worse. So there still is a chance to see a recovery faster than expected.
Eliza Popescu is a financial writer for the on the web investment advisory service Investor’s Observer.
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paradoxSpirit writes “Physorg has a paper comparing the cost of text messaging versus the cost of getting data from Hubble Space Telescope. From the article: ‘The maximum size for a text message is 160 characters, which takes 140 bytes because there are only 7 bits per character in the text messaging system, and we assume the average price for a text message is 5p. There are 1,048,576 bytes in a megabyte, so that’s 1 million/140 = 7490 text messages to transmit one megabyte. At 5p each, that’s £374.49 [$732.95] per MB — or about 4.4 times more expensive than the ‘most pessimistic’ estimate for Hubble Space Telescope transmission costs.” “Hubble is by no means a cheap mission — but the mobile phone text costs were pretty astronomical!””
Read more of this story at Slashdot.
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QuantumG writes “Greg Zsidisin appeared on The Space Show today to ask Where Are The Space Recommends?. For the first time in decades Space is once again a political issue with all four major presidential candidates having something to state about space policy and yet nothing is being heard from space suggests. As we enter a new “Space Nexus” like we did after Apollo, now is a critical time to let your representatives know how you feel about space exploration, and yet no-one has anything to say.” The show itself is a podcast if you want to give it a listen. Personally I’m hoping that this election puts space exploration back in the public consciousness- Apollo inspired a generation to learn math and science. I want my kid to be inspired by something more massive than that. And as some readers have noted- there are 3 candidates left (and really only two) so the submitter is probably high.
Read more of this story at Slashdot.
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Posted by: in Politics News
Techdirt is reporting that Canada may be considering a “three strikes” policy which could see users internet access privileges revoked for file sharing violations. “Given how secretive the industry and the government have been about new copyright laws, perhaps this isn’t too surprising. We do know that the industry was pushing for greater ISP liability as part of copyright law changes a few months back, so it wouldn’t be surprising if ISPs were negotiating a “three strikes” type rule to avoid the liability issues. Of course, they probably want to keep it secret, as publicity (and resulting anger) about these types of laws in Europe has at least some politicians moving away from them. However, as the entertainment industry does keep succeeding in getting these types of laws to move forward, how long will it be before similar laws are proposed in the US, with “everyone else is doing it” as part of the reasoning?”
Read more of this story at Slashdot.
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Filed under: Major movement, Forecasts, Good news, Products and services, Consumer experience, Competitive strategy
 It’s been brewing ever so slowly, but AnnTaylor Stores Corp. (NYSE: ANN) has finally been able to show the results of its efforts. Shares of AnnTaylor soared about 13% this day after the women’s apparel chain raised its first-quarter earnings forecast.
The company said that better-than-expected results at its LOFT stores as well as lower inventories and superior expense management overall contributed to the results. Yes, surprising investors is always good, but it’s also always good to remain a little cautious with such news. The company itself warned about the rest of the year, leaving its full-year forecast unchanged.
Of course, the question is what’s ahead for AnnTaylor. One answer already came today from the company when it said it would shelve a new store concept targeting baby boomers. But following the success of LOFT, the retailer is aggressively launching an outlet version of the brand. Is it smart? It certainly seems that in the current economic climate increasing lower-priced offerings would grant AnnTaylor to keep cash-strapped customers while offering them budget clothes in a familiar brand.
Flexibility is key in retail and Ann Taylor, at least this day, showed it might be able to adjust to the slowing economy and declining consumer spending. While it suffered some major setbacks the past two years, AnnTaylor’s cost-cutting and management shakeup have been able to bear fruit. Today, management also showed it can read the market and make decisions accordingly, like not pursuing the much-coveted Baby Boomer generation… at least for now. Now, it’s also the time for the company to overhaul its namesake stores which are desperately in need of an overhaul (sales were down 11.5% in AnnTaylor stores). Perhaps by the time the change is completed, the economy will bounce back and Ann Taylor would be there to pounce on the returning consumers.
Still, Ann Taylor is still a retail stock, and more than that, it’s an apparel one (net sales only grew 2% and same-store sales fell 4.3% in this “surprising” quarter). For now, I wouldn’t go near any apparel stocks.
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Filed under: Products and services, Google (GOOG), Microsoft (MSFT)
 Microsoft Corp. (NASDAQ: MSFT) will soon further into the world of on the web video as it has introduced software that will grant customers to watch online videos and chat about them in real-time. Called Messenger Television, the new service will combine Microsoft’s Windows Live instant messaging program with an integrated video player. Windows Live Messenger, though, still is not the world’s largest instant messaging platform. That honor belongs to AIM, one of AOL’s more successful products ever.
Microsoft’s goal in introducing the new instant messaging program with integrated video is to get its customers talking about the videos they are watching, as well as allowing them to watch and share clips from such companies as MTV, Sony BMG and EMI Group, some of the largest music companies on the planet.
Is this yet another attempt by Microsoft to try and “catch the wave” of online video usage? If that’s its thought, it’s already missed the boat. Google, Inc. (NASDAQ: GOOG)’s YouTube is where online video is already at, so this new Messenger TV product needs to offer something new and compelling. Microsoft will be rolling out this new service in Europe first, though, as there are 95 million users of Windows Live on that continent already — the lion’s share of the company’s total base of 240 million customers.
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Posted by: admin in Today News
Altar Call – Beware god of money - The Nation Newspaper
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Science News reports on a study relating (in a loose way) the efficiency of a national government with the size of its cabinet. Researchers in Vienna found that the development level of countries, as a proxy for the efficiency of their governments, is in general lower for countries with more members in the national cabinets. They then went on to model cabinet members as nodes in a network and found support for the observed correlation. There was even specific evidence for the decades-old observation of English historian Cyril Northcote Parkinson that decision-making is severely impaired in committees of more than 20 people. The US is getting close to Parkinson’s cutoff, at 17.
Read more of this story at Slashdot.
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