August 25, 2005

Bizzy’s Biz Links of the Evening (082505)

Filed under: Business Moves,Consumer Outrage,Privacy/ID Theft — Tom @ 9:14 pm

Three things I caught in the business news today and why they’re significant:

  • General Motors Continues Employee Pricing–The fact that employee pricing has stayed in place for so long is obviously due to poor sales using the traditional pricing model at GM and Ford. The longer employee pricing stays in place for everyone, the higher the likelihood that the companies will abandon the “haggling with the dealers” selling model that infuriates so many buyers. I personally hope so.
  • Jeff at Credit/Debt Recovery, in the course of discussing subscriber difficulties in cancelling AOL’s service (they seem not to be able to find the “off” button for automatic hits to checking accounts and credit cards), makes a point: “Credit protection plans are completely worthless, despite anything your credit card company tells you. There is no reason to sign up for credit protection plans. Don’t do it. Ever. If you have one, call and cancel now. Do it now!” Hear, hear. Although I suppose at some point someone might structure one of these plans to where they make sense, the current expensive plans that are out there are potential multimillion-dollar revenue hogs that merely take advantage of paranoid consumers and provide little value. Besides, if the credit bureaus and data warehouses do what they should do or (more likely) get forced to do what they should be doing on their own through legislation, consumers will be able to freeze their credit and once-vulnerable data will be routinely encrypted (Solution 1 at the link).
  • Tom Yager at Infoworld has a cautionary tale for those who automatically assume that your card company, even Amercan Express, will remove a bogus charge that appears on your credit card statement. Apparently even a pretty quick response won’t guarantee a favorable resolution.

The Economy (Ho) Hums Away: More Good Economic News They Think You Can’t Use

Filed under: Economy,MSM Biz/Other Bias,MSM Biz/Other Ignorance — Tom @ 11:07 am

In a 15-minute cruise through the major business news sources, I find at least four items of economic news that if they had occurred in mid-late 1990s would likely have received front-page level prominence.

1. Good news in the employment market:

New jobless claims sink: total claims lowest in 4 years

WASHINGTON (AP) — The number of Americans filing new claims for unemployment benefits fell last week and the four-week average of people receiving benefits dropped to the lowest level in more than four years.

The Labor Department said 315,000 newly laid off workers applied for jobless benefits, a decline of 4,000 from the previous week, providing evidence that solid economic growth is showing up in an improving labor market.

2. The same article also contains this hidden gem about likely economic growth in the current quarter:

Many analysts believe the economy, which grew at an annual rate of 3.4% in the spring, is powering ahead at an even faster pace above 4% in the current July-September quarter.

Imagine that.

3. The housing market continues to be strong (so the author has to water it down with bubble worries, even though contrasting data between new and existing home sales would ordinarily reduce the concerns about excessive speculation):

The Commerce Department said Wednesday that new home sales surged to a record in July, fanning the debate about whether the torrid housing market is an investment bubble poised to pop.

New home sales in July grew 6.5% to a seasonally adjusted annual rate of 1.41 million from 1.32 million in June, the government reported.

The government data contrast with numbers released Tuesday by the National Association of Realtors, which showed a slowdown in the market for existing homes. The trade group said July sales of homes fell 2.6% to an annualized rate of 7.16 million from June.

I believe a year from now we’ll still be hearing about the housing bubble that hasn’t happened but is just around the corner. Yes, there are problems with overleverage and loan quality, but the market’s self-correcting mechanisms seem to be reining in some of the excesses, as this article about REITs shows.

4. Finally, good news for long-term wealth distribution–”Biz Startups by Women, Minorities Surge” (with a really dumb mistake in the text):

NEW YORK (CNN/Money) – Boom goes the growth rate of businesses owned by minorities and women.

A Census Bureau survey shows that minority groups and women are outpacing the national average when it comes to owning their own business.

The Survey of Business Owners showed that the total number of businesses in the nation grew to 23 million in 2002 from 1997, with minorities owning about 18 percent of those enterprises.

The surging number of minority- and women-owned ventures helped the nation’s businesses rake in $23 trillion in 2002.

I don’t know what the right number is, but $23 trillion is laughably wrong, given that total GDP for the entire economy in 2002 was about $11 trillion at the time.