Month: October 2011

Money Can Buy You Class

Bread, water, air, and now it seems a college education are something people can’t live without. Despite rapidly rising tuitions, a record number of Americans have decided to enroll in higher education this year. In doing so, they have amassed a record amount of debt: over $1 trillion in federal student loans remain unpaid. In an attempt to address the issue while reigniting waning support among young voters, President Obama has announced a few modifications to save graduates a few bucks, literally.

Under the plan

– Monthly repayments will be capped at 10% of income as opposed to the current 15%
– Student loans will be forgiven after 20 years as opposed to 25
– Graduates with several different government loans will be able to consolidate their debt

The plan is being dismissed by some as ineffective, but is raising concern among economists who are afraid of the government moving on to forgiveness of all student debt, which would send the student loan market into chaos.

While the oil, casino, and drug industries among others are often labeled “greedy” for the profits they make, rising tuitions at both public and private institutions are rarely questioned. Whether wastefulness, slow productivity growth, or rising costs are to blame, the choice of some to college should be reevaluated as it obviously does not pay for itself a lot of the time.

Technology

Chevy Volt Supply Chain Needs a Jolt

Post author By konrad
Post date October 30, 2011
No Comments on Chevy Volt Supply Chain Needs a Jolt

Chevrolet Volt Electric Vehicles Loaded for Distribution — Image from egmcartech.com

General Motors’ “green” automobile is not bringing in much green.

Since before it was unveiled, industry experts questioned whether the plug-in electric Chevy could compete against popular hybrids with its $40,000 asking price. According to GM, the reception so far has been good. The Volt has managed to attract high income customers, 80% of whom are first-time Chevrolet customers.

So why is GM falling short of its goal of 10,000 sales in the first year?

One big reason is a slow supply chain. Hamtramck Assembly, the factory where Volts are assembled, only started to work at full capacity last month after being closed for four weeks for retooling. At the moment, over two thousand dealerships are still waiting for demo units to be able to begin selling the new car. With the one year anniversary of Volt sales just weeks away and sales at around 4500 units at the end of last month, GM will probably not reach its sales goal. The automaker is betting on the new technology however, and plans to produce 60,000 plug-ins in the next year when the Volt will be sold worldwide.

Financial Technology

Investors Sprinting from Sprint

Post author By konrad
Post date October 10, 2011
No Comments on Investors Sprinting from Sprint

With market share falling, Sprint, currently the U.S’s 3rd largest wireless provider, is banking on technological improvements as well as the new iPhone to reverse its course. While in the long run the tactics may bring in new customers, the company is having to deal with shareholders who are unhappy with the short term outlook and who are doubting the worthwhileness of the investments. Overhauling Sprint’s sluggish 4G network will require the company to borrow substantial amounts of money, resulting in a negative cash flow for the next two years. Adding to the concerns is the fact that the carrier will be selling its iPhones at a loss, hoping to eventually profit from monthly charges.

In its strategy to gain more customers, Sprint has come up with some tactics that are sure to be effective as iPhones and faster service are in high demand. The conflict, however, arises from a disagreement on the time value of money. Investors are not satisfied with the profits they predict the upgrades will bring over the next few years.

It is safe to say that you will not be able to hear a “1-800-PIN-DROP” at a Sprint shareholders’ meeting anytime soon.

Business & Government Financial

Wage-less on Wall Street

Its a strange sight when floor traders aren’t the most frenzied people on Wall Street.

That title is now held by the crowd composed of unionized workers and left wing activists participating in the “Occupy Wall Street” demonstrations. While this is hardly the first protest of its kind, it is arguably one of the hardest to understand as the frustrated demonstrators don’t seem to have any clear objectives. One 18 year old told a reporter

….at the end of the day we’re all here because we’re all f****ing unhappy.

For most, the unhappiness likely results from cuts in wages or benefits, or unemployment which are inevitable effects of an economic slump. But the demonstrations have become increasingly irrational and mob like. On Saturday, 700 “occupiers” were arrested for swarming the Brooklyn Bridge and blocking traffic.

At times of unrest, financial corporations are often the top target of disgruntled citizens. The government bailouts American banks received have reaffirmed the image of greed the financial sector is sometimes associated with.

It remains to be seen whether the OWS crowd will change anything for “the 99%” they claim to represent; for now their behavior is disrupting the life of many of these individuals.