Re: Why Fracking Matters A Lot

Brian Irwin’s blog Why Fracking Matters A Lot brings up the interesting point of corporate responsibility in the oil and gas industry. Brian’s blog talks about a new technique, hydraulic fracturing, which involves pumping water into shale rock to withdraw the oil and natural gas within. Brian points out that this technique could make America self-sustainable with respect to the oil and gas industry by 2035.

Corporate responsibility is the theme of Brian’s second paragraph, as he goes on to say that this new technology is irresponsible and impactful to the environment. I would have to agree with Brian on this matter. Not only does the world need to look for substitutes to fossil fuels as the environment is deteriorating, the amount of water used per year in the USA for this technique would be equivalent to the water consumption of about 70-80 cities. And this water will become groundwater, with toxins and other chemicals mixed in. This new method has disastrous concequences for the environment. Technology needs to move towards cleaner and safer ways of fossil fuel extraction, with the hope that one day, fossil fuels will no longer be needed. Advances like this are really steps in the wrong direction if the best interests of our planet are to be kept in mind.

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Lucas Films Ltd’s Sale to Disney

I was reading through a whole host of CNN’s business blogs the other day, and i came across Kevin Voigt’s post about the sale of Lucasfilms Ltd. to Disney. I thought his blog was very insightful, and reflects the true Star Wars fan’s worry, will the new movies be done well? Kevin Voigt goes on to talk about what really went on behind the scenes of this deal, with quotes from George Lucas himself. Lucas says that he wants to head toward retirement to do “philanthropy, more experimental films, but I really couldn’t drag my company into that.”

At the end of his blog, Voigt asks, “Is Lucasfilm backed by the Force of Disney a good thing or a drift toward the Dark Side?” I think that the sale is a good thing for the Star Wars franchise. Disney has not created a decent science fiction movie in a long time, and now has the back bone of a story to do somethin really fantastic with the acquistion of the Star Wars franchise. Also, Disney can continue to grow as a company, as no doubt original as well as new fans will flock to the theatres to see the new movies. Disney has made a sound business decision, and hey, Lucas donated all of the money from the sale to charity.

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Fiscal Cliff Feared: Tough Christmas Season for Retail?

The recent election in the US left the Democratic party in control of the White House, while leaving the Senate to the Republican party. This division of the political system leaves a division in theories of how to run the economy. Republicans traditionally support lower taxes and less equality while the Democrats tend to favour more taxes for the rich, and less for the poor.

Tax cuts in place from the Bush administration are set to expire at the end of this year, leaving retail companies across North America to wonder, will taxes be hiked considerably and ultimately effect my business? Investors are left to wonder whether consumers will protect themselves this holiday season by cutting their spending on presents for loved ones. The traditional “Christmas Season,” at least among retail stores, launches Friday morning, following US Thanksgiving.

Many well informed consumers will cut their spending if a deal is not reached in the next few days. Black Friday, at least at my place of work at Park Royal Shopping Centre, is a massive time for profits. Ultimately, if a deal is not reached, the struggling world economy will be plunged back into recession. Consumers will protect themselves from such an event, and will cut their spending accordingly. I predict that stores will see large hits in sales, especially on the East Coast of the US as their are so many people that are well informed about the economic situation.

Read More:

Fears of U.S. fiscal cliff to set the pace on stock markets

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K-Mart’s Ongoing Struggles About to Make the “Big Three”, the “Big Two”

K-Mart has had a rough year. After a much less than average Christmas 2011, the individual company filed for bankruptcy in February 2012. Sears Holding, the company that owns K-Mart, saw massive declines in stock prices. The discount retail market, traditionally dominated by the so-called “Big Three” (Target, Walmart, K-Mart) has been ravaged by the exponential growth of Amazon.com.

Companies in the discount retail market are in a constant struggle for lowest prices. K-Mart has not been able to compete with the low prices because of supply chain issues, and not enough advertisement. While Walmart and Target have aggressive marketing campaigns, K-Mart has sat idly in the background and can no longer compete in such a quick-moving market. Although all three companies are taking losses as Amazon increases its market share, K-Mart has taken the most losses. They have become irrelevant as a company.

In a market where the only point of difference between companies is price, companies must cut costs wherever they can. Amazon is now offering free shipping to anywhere in North America, which other companies simply can’t compete with. I think K-Mart will take a long time to go away, but the company’s days are numbered. Sears Holding is in a pattern of liquidation, as they are seeing larger and larger losses on every quarterly report.

Article Here

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Iconic “Twinkie” Company Hostess Brands Inc. Going Out of Business

Hostess Brands Inc. has asked for the US court’s permission to liquidate its assets. This decision was made after a nation-wide workers strike has been taking its toll on the company. Hostess Brands Inc. was best known for its delicious snack cake, the Twinkie.

Workers at the company have been very unhappy for a long time, and recently have taken to the picket lines to protest low wages, company instability, and poor working conditions. The company warned its workers that if they did not go back to work soon, it would close all stores and fire most of its 82,500 employees.

The Canadian owned companies that own the rights to Hostess’ Twinkie and Wonderbread brands have said that it will be business as usual, as neither is interested in acquiring the US based company. These companies already make their own versions of the products that Hostess offers.

This article was particularly interesting to me, as it showed that a workers strike can have extremely negative effects on the workers themselves. They went on strike for higher wages, and ended up losing their jobs in the process. The company will only need 3,500 employees to start the liquidation process, and 200 after six months. Most of the 82,500 people will be out of work, and maybe won’t be so quick to jump to a strike if their next job has problems to sort out.

 

Article here

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Bankrupt Mining Company Bailed Out by Environment

Patriot Coal Corporation, a bankrupt mining company based out of St. Louis, Missouri, agreed to stop mountaintop removal mining today. The company is in Chapter 11 bankruptcy protection, but hopes to emerge as a viable business

Mountaintop removal mining is an environmentally impactful form of strip coal mining. Companies blow chunks of rocks of the tops of mountains, exposing multiple coal veins below the surface of the rock. The rocks are then essentially thrown in the nearby rivers and streams. Recent studies have been looking into the effects of selenium, a naturally occuring element that is released into rivers as a result of this kind of mining, and its effects on both organisms in the rivers effected and humans.

Once held accountable for their actions, companies like Patriot Coal Corp. often can’t pay for the environmental damage that has been done. Companies are often left reading Chapter 11, so to speak, after studies have shown the catastrophic effect of a firm’s business practices. Stories like this one show the fact that being environmentally responsible is both a morally sound and profitable way of doing business.

Now that Patriot Coal has agreed to phasing out its mountaintop removal mining, it is able to postpone $27 million in expenses through 2014 and beyond. The company also agreed to a cap on the amount of coal it is allowed to produce in exchange for additional time to install selenium treatment plants. The company must sell its mountaintop machines, but only to buyers who will not use them in West Virginia, Kentucky, Virginia, or Tennessee.

Make no mistake, the company has a long road ahead to return to profitability, but the company will now be an example of how negative impact on the environment by companies is expensive. Becoming environmentally responsible makes both moral and economic sense.

Article here

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Microsoft About to Shoot Itself in the Foot?

In a time where mobile phones and tablets have undermined the strength PC’s once had, Microsoft has developed a touch screen, mobile-friendly, operating system. Windows 8 is set to launch on October 26th and the forecasted reaction to the system couldn’t be more unclear. Critics that have used the operating system before it’s released to the general public, have said that it will “alienate” and “confuse” long-time users of the Windows operating systems. One tester went as far as to say; “On a desktop, it just felt really weird. It feels like it’s a tablet operating system that Microsoft managed to twist and shoehorn onto a desktop.” – Alex Wukovich, a Londoner.

My question is why does Microsoft have to sacrifice the system that people know and love in order for it to work on phones and tablets better? They already basically have a monopoly on operating systems for PC’s, but the changes may result in people sticking with Windows 7 and not buying Windows 8. Microsoft also has a history in operating systems flopping and consumers refusing to buy. When Windows Vista was released in 2007, many refused to buy the new system as it was seen as “clunky” and “buggy”. If Microsoft’s new system is as hard to use as the critics say, who is going to invest in the new software if they already have a working Windows 7 computer?

Your thoughts?

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Staples Struggling for Growth

Staples Business Depot announced on Tuesday that it must close more stores. They are undertaking new cost-cutting measures as they try to grow as a company in a struggling economy. The problem is that stores like Wal-mart and online distributors like Amazon can sell the very similar products for a much cheaper price. There are no longer points of difference between Staples and discount stores such as Wal-mart, except for the fact that Staples is more expensive. Wal-mart is using its strength as a giant department store to cut prices and put companies like Staples out of business. Another problem is people today are reducing their discretionary spending. People are better informed of what to buy, and will attempt to save money at all costs.

These new measures that Staples is taking reportedly will save the company $250 million by 2015.

What do you think?

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NFL Officials Back To Work

Somewhat in the shadow of the NHL lockout (at least in Canada) was the lockout of National Football League officials, resulting in replacement referees being used for the first three weeks of the 2012-2013 NFL season. In June, officials were locked out as they could not reach an agreement with the NFL. The result of the lockout was the use of minor league officials from lower levels of college and pro football. Unfortunately, the jump to the professional league was not an easy one as the game is much faster paced. The replacement officials took much heat over their three weeks of work, culminating in a spectacular blown call at the end of NFL’s “Monday Night’er” on September 24, 2012.

The officials finally reached an agreement: the turning point was the league offering officials a longer deal. The longer deal promised increased job security as a lockout could not happen for an extra three years. The original deal offered by the league was five years in length, and saw a substantial roll-back to the existing pension plan offered to all officials. The new deal contained a similar roll-back, but was increased to eight years in length. This added length encouraged the officials to make some concessions on what they thought was a fair deal for them, resulting in a win for both sides in my opinion.

Existing NFL officials will still receive their pension benefits, but the NFL will reduce spending in the future as they will not have to pay these benefits to future officials. I see this as a win for both sides. But let’s not forget the real winner here; the fans. Finally we’ll be able to yell at our TV sets about professional officials instead of amateurs.

Full extent of the new deal here

 

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NHL Labour Disputes

As the NHL labour disputes rage on, not much is being done to resolve the issue of the division of HRR (Hockey-related revenue). The NHL Players Association, led by negotiating guru Donald Fehr, would like to see a five-year program averaging 53-54% of revenue for the players, and 46-47% of revenue for the owners. The NHL, headed by Gary Bettman and the owners of the thirty NHL franchises, would like to see a significant reduction of the players’ revenue share to an average of about 48% a year. Both sides seem to be unwilling to come off their positions, or even negotiate towards a more central figure.

It seems to me that if both sides took a 50% share of HRR, we could have a fair division of the proverbial pie, as well as hopefully discouraging any future feuding between the two camps. Yes, there are other issues involved here; the fact that the league currently owns two teams because of bankruptcy issues is alarming, and so is the fact that neither side can agree on the future growth rate of revenues, but if the sides could find a number that suits each of them, they could work together to create a financial program in order to help the teams that are struggling financially. In the end, the real losers are the NHL’s loyal fans, of which 75% say they will come back if a season-long lockout becomes a reality, as well as the employees at the various arenas who are currently out of work.

What do you think about the whole situation?

Click here for a look at some of the numbers involved in offers from both sides.

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