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Tech Crunch Personal Finance News & Advice Guide To Financial Fitness Money Game
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Tech Crunch Personal Finance News & Advice Guide To Financial Fitness Money Game
Here's the news from Spain last week, in case anybody missed it: huge cuts in government spending; higher taxes; biting austerity; unemployment higher than in Greece; big and growing demonstrations in Madrid; violent clashes with police; and in Catalonia, a rising clamour for secession. The only hope on the horizon takes the ambiguous form of an expected financial rescue package, with still more austerity strings attached, from the richer countries of the north.
Such help, however, will offer no more than temporary relief unless Spain addresses a deeper problem that it can only sort out on its own. It's a problem that has a decisive impact on the country's capacity to remain a competitive global player and that will be terribly difficult to solve because it is embedded in the national DNA.
During the 14 years I've lived in the country, I've talked with many Spaniards about this. But the most forthright and revealing group has been those who work abroad – in London, Holland, Germany, the US. They all miss the sunshine, the food, the strong family bonds, the warm, easy Spanish way of living. They also share – and here is the thing – an exasperation with the Spanish way of work.
I'm thinking, say, of two young men, in their early 30s, who moved to London six years ago, before the economic crash. They've done well. One, who started out as a waiter, is now the operations manager of a successful restaurant chain. "To have got ahead the way I have in London I'd need an uncle with good connections. I didn't, so I left."
The other works in the digital video industry. He had entered some work for a prize, but a number of prestigious British companies were running against him so he had no expectation of winning. Yet win he did. On pure merit. The notion of an unconnected unknown like him winning an equivalent prize in Spain was, he said, unthinkable.
The lessons from these two stories, entirely typical of Spaniards abroad, are clear: the Spanish are not inherently idle; the labour market in Spain does not sufficiently reward talent and hard work. The Spanish disease that both these young men said they had fled was "amiguismo" –"friendism" – a system where one gets ahead by who one knows.
Reams of opinion columns in the Spanish press in recent months have pointed to amiguismo in the political classes. Which is no doubt largely true but fails to acknowledge that corrupt or lazy or incompetent politicians do not inhabit a closed ecosystem but behave in a manner in keeping with the way society operates at large.
It is true that Spain had enjoyed a sustained economic boom for the best part of two decades. The usual explanation is that the country benefited from fluid access to cheap northern European credit. But there is a little more to it than that. There are also some mightily well-run and successful Spanish companies, such as the multinational retail clothing colossus Inditex, which owns Zara, or, like it or hate it, the Banco Santander. Yet I am afraid that these are the exceptions and not the rule.
I recently asked a boss at a well-known Spanish company what percentage of the 300 or so middle-class staff under him did their jobs to the best of their abilities. Despondent, he replied: "The number is low." The deeper sin lies in an institutionalised Spanish system where both the financial and moral incentives to work well are undercut by the perception that if you do not know the right people there is little point in giving the best of yourself at work.
Where does all this come from? It might be tempting to dwell on the peculiarly closed-minded, our-fate-is-in-God's-hands brand of Catholicism that reigned in Spain for half a millennium but I think I'll stick for now to the prevailing educational system. Going to school in Spain is a pretty deadly business. The emphasis is all on learning by rote. Creativity and curiosity are not part of the package. School is not, remotely, fun. Work, the idea is instilled ominously early on, cannot be much fun either.
I have a large Spanish family, with 25 first cousins on my Madrileña mother's side alone. About 15 years ago, when the Spanish economy was buzzing, a male cousin came to visit me in Washington, where I then worked. I told him one night at a bar that I enjoyed my job. He said nothing in reply but, as I discovered two days later, he'd been mulling over what I said, deeply troubled. "What you told me the other night," he said, "about enjoying your job… you weren't serious, were you?"
Here was an employed, friendly, middle-class 36-year-old Spaniard and he had never, ever had wind of the notion that someone might feel enthusiasm for what he did for a living. For my cousin, as for so many Spaniards, work is a necessary evil, a nuisance to be dispensed with as briskly as possible before turning to the serious business of life – drinking, nibbling tapas, hanging out with friends until the small hours.
This is all very well, even admirable from a certain philosophical point of view. Nor did it seem to matter very much while the Spanish bubble grew. But it is dangerously infantile in the present circumstances. Now that the bubble has burst, people's approach to work matters a great deal. The brightest, the boldest or the most restless young people go abroad for money and fulfilment; the rest, half of whom are unemployed, stay at home – baffled, desperate, increasingly angry, kicking out at government and being kicked back.
The government does carry its share of the blame. But it is a symptom – a big, glaring symptom, for sure – and not the root cause. What's needed if Spain is not to sink gradually back into a sort of bucolic, early 20th-century Mediterranean poverty is a revolution across the board in attitudes to work. Like it or not, the system has to be overhauled and replaced by one where the rules are fair and merit is rewarded. Everywhere.
Catalonia is a much more productive region than Andalucía, as the independentists will never cease to remind you, but the difference as far as amiguismo goes is only one of degree. There is much talk now of a huge financial rescue plan from the north. Good. It will bring much-needed relief. But it will be no more than a passing cure so long as the corruption of amiguismo continues to stain Spain's otherwise warm and delightful soul, hampering the country's capacity to compete in the grown-up world.
This article originally appeared on guardian.co.uk
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Lawyers – what would we do without them? More than half of the signers of the United States Declaration of Independence were lawyers, including John Adams and Thomas Jefferson. 19 of 43 presidents have been attorneys. More than a third of the House of Representatives are lawyers, along with 60% of the senators. For better [...]
How to Find a Good Lawyer and Pay Attorney Fees is a post from the Money Crashers personal finance blog.
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Personal Finance News & Advice Guide To Financial Fitness Money Game Tech Crunch
Next week Meg Whitman will be meeting with analysts to discuss HP's planned turnaround.
But Jefferies analyst Peter Misek jumped the gun with a report yesterday that not only advised investors to sell HP's stock, but warned that HP could be heading for another huge write-off, to the tune of $3 billion, reports the Silicon Valley Business Journal.
Misek estimates that HP's stock will hit $14 a share in the next 12 months. It's been trading near $17 recently. Other analysts, on average, think HP will recover to $24. Misek isn't the only bear. Earlier last month, UBS Analyst Steven Milunovich also recommended that investors sell the stock.
But Misek takes it a step further. He's predicting that HP could announce an additional $3 billion write-off related to last year's $11.7 billion purchase Autonomy.
Last month, HP wrote down $8 billion, due to a goodwill impairment on its $13.9 billion EDS acquisition
Autonomy has been an Albatross around Whitman's neck. In May, Whitman told investors that sales of Autonomy were "disappointing" and that the former Autonomy CEO Mike Lynch was out the door.
UPDATED: Although HP hired a well-known software guy, George Kadifa, in May, to run HP's software business, Autonomy wasn't part of his job. Earlier this month, Microsoft’s North American President Robert Youngjohns was hired run Autonomy.
HP doesn't separately report Autonomy's financial results, but on its last earnings statement, it said that HP's Software unit includes $14.6 billion of goodwill, of which $6.9 billion relates to Autonomy.
Software accounted for $2.9 billion in net revenue for the nine months ending July 31, a lot less than the company's other business units like the Personal Systems Group ($27 billion), the Imaging and Printer Group ($18.4 billion), the Services Group ($26.2 billion) and the enterprise hardware group ($15.3 billion).
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Markets got hit by some disappointing economic data today.
First the scoreboard:
Dow: 13,437, -48.8, -0.3%
S&P 500: 1,440, -6.4, -0.4%
NASDAQ: 3,116, -20.3, -0.6%
And now the top stories:
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Before any military member goes on a mission, he or she gets an operations order spelling out the succession of command, plus instructions and resources in case the mission goes bad. Essentially, this is what life insurance does for your family. Life insurance provides emergency money to see your family through in case the plan [...]
Life Insurance for Military Members – Death Gratuity and SGLI is a post from the Money Crashers personal finance blog.
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Tech Crunch Personal Finance News & Advice Guide To Financial Fitness Money Game
Nike just reported earnings of $1.23 per share, better than consensus estimates of $1.13.
The apparel manufacturer also beat on the top line, reporting revenues of $6.67 billion versus the $6.44 billion expected.
However, Nike also said global futures orders ex-currency were up 8 percent in the quarter versus the 10 percent expected.
Shares are trading down nearly 5 percent in the after-hours session.
North America orders were up 13 percent versus the 14 percent expected.
Western Europe orders were up 6 percent versus the 4.2 percent expected.
China orders were down six percent versus the 1.2 percent rise that was expected.
Emerging markets orders also missed estimates, up 14 percent versus the 18 percent expected.
NBG retail analyst Brian Sozzi weighed in on Nike's report in a flash to clients after the announcement:
This time around, the market appears to be upset with reported sales weakness (includes currency) in Western Europe (missed consensus), Central Europe (missed consensus), and emerging markets (missed consensus). Further, Japan on a reported and currency neutral basis came nowhere near consensus. To add insult to injury, or further support to the bear camp, currency neutral future orders fell short of consensus by 200 bps.
...
Where the tricky aspect arises is that Nike’s inventory position appears to be in better shape (gives hope on China concerns being alleviated), China ex. currency sales actually trumped consensus (likely as prices were cut to move excess inventory), and there was a stronger tone around gross margins (which marginally beat consensus, giving hope to the bulls that want to finally see price increases filter through into gross margins).
A bunch more information needed on the earnings call to determine whether to buy the weakness in the morning. For now, the stay on the sidelines call still in play.
More on the sales picture:
North America sales came in up 13 percent at $2.71 billion versus estimates of a 14 percent rise.
Western Europe sales came in at $1.17 billion.
Japan sales were $183 million.
Greater China sales were $572 million.
Footwear accounted for $3.69 billion of revenue, while apparel accounted for $1.76 billion and equipment accounted for $386 million.
*BEAVERTON, Ore.--(BUSINESS WIRE)-- NIKE, Inc. (NYSE:NKE) today reported financial results for its fiscal 2013 first quarter ended August 31, 2012. Strong demand for NIKE, Inc. brands propelled first quarter revenue to new record highs. As expected, diluted earnings per share were lower due to lower gross margin, higher SG&A and an increase in the tax rate.
“We had a strong first quarter and a great start to the fiscal year. NIKE, Inc. delivered an amazing array of innovation across some of the biggest moments in sport,” said Mark Parker, President and CEO, NIKE, Inc. “Innovation is how great companies sustain growth and build competitive separation,” Parker added. “We’ll continue to make strategic investments across our portfolio of businesses to capture our full potential over the long term and drive shareholder value.”
First Quarter Income Statement Review
August 31, 2012 Balance Sheet Review
Share Repurchases
During the first quarter, NIKE, Inc. repurchased a total of 8.2 million shares for approximately $779 million as part of its four-year, $5 billion share repurchase program, approved by the Board of Directors in September 2008. As of the end of the first quarter, the Company has purchased a total of 58.5 million shares for approximately$4.9 billion under this program. On September 19, 2012, the Company announced that its Board of Directors approved a new four-year, $8 billion program to repurchase shares of NIKE's Class B Common Stock. During the second quarter of fiscal 2013 the Company's current $5 billion share repurchase program was completed, and the new program commenced.
Futures Orders
As of the end of the quarter worldwide futures orders for NIKE Brand athletic footwear and apparel, scheduled for delivery from September 2012 through January 2013, totaled $8.9 billion, 6 percent higher than orders reported for the same period last year. Excluding currency changes, reported orders would have increased 8 percent.*
Conference Call
NIKE management will host a conference call beginning at approximately 2:00 p.m. PT on September 27, 2012, to review first quarter results. The conference call will be broadcast live over the Internet and can be accessed at http://investors.nikeinc.com. For those unable to listen to the live broadcast, an archived version will be available at the same location through 9:00 p.m. PT, October 4, 2012.
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Tech Crunch Personal Finance News & Advice Guide To Financial Fitness Money Game