Unspoken Link Between Credit Cards and Colleges

Fabrizio Constantini for The New York Times

Bank of America employees on the campus of Michigan State University in East Lansing, Mich., offered give-aways like water bottles, backpacks, games and other items, trying to persuade students to sign up for credit cards and other banking services.

By JONATHAN D. GLATER

Published: December 31, 2008

EAST LANSING, Mich. — When Ryan T. Muneio was tailgating with his parents at a Michigan State football game this fall, he noticed a big tent emblazoned with a Bank of America logo. Inside, bank representatives were offering free T-shirts and other merchandise to those who applied for credit cards and other banking products.

“They did a good job,” Mr. Muneio, 21 and a junior at Michigan State, said of the tactic. “It was good advertising.”

Bank of America’s relationship with the university extends well beyond marketing at sports events. The bank has an $8.4 million, seven-year contract with Michigan State giving it access to students’ names and addresses and use of the university’s logo. The more students who take the banks’ credit cards, the more money the university gets. Under certain circumstances, Michigan State even stands to receive more money if students carry a balance on these cards.

Hundreds of colleges have contracts with lenders. But at a time of rising concern about student debt — and overall consumer debt — the arrangements have sounded alarm bells, and some student groups are starting to push back.

CLICK FOR THE REST OF THE ARTICLE

-wall street lingo - Bears

The term bear refers to the given market conditions. Bull and bear are probably the most familiar terms onMain Street. Bear markets are rife with pessimism and negative sentiment. Typically, a bear market is one that has experienced declines of at least 15-20% and lasts more than two months. Probably the most famous bear markets occurred in 1929, which some believe caused the Great Depression.  Unfortunately, economic indicators in 2008 have drawn comparisons to the Great Depression of 1929. The severe housing and credit bubbles originating in the first decade of the new millennium in the United States burst abruptly in 2007, and this credit unwinding, or "deleveraging" had a negative ripple effect on economies and markets worldwide. Venerable institutions, such as Bear Sterns and Lehman Brothers were wiped out by this bear market. Stock markets across the globe also experienced severe downturns. Governments engineered financial rescue packages for many large banks and insurance giants to avoid global financial markets meltdowns

Recession Proof Businesses

Recession-Proof Businesse

1. SOUP

Most of the time, it's sex that sells. But in a down economy, soup ain't doing so bad either. It's one of the few things, besides hamburgers, that you can eat when you're broke. And most people will tell you it's healthy. Campbell reported that its soup sales were up 12% in the most recent quarter. Not surprisingly, the key message in the company's stepped-up marketing efforts is value. Campbell touts five of its condensed soups as "the original dollar menu."

2. MOUTHGUARDS

More layoffs and fewer bonuses lead to greater stress. And more stress leads to ... mouthguard sales? Indeed, according to anecdotal reports. Pink-slipped Wall Streeters have been flocking to the dentist to seek reprieve from their nightly stress-induced teeth grinding, which can damage teeth and lead to jaw trouble. Of course, custom-fitted mouthguards are hardly recession-priced -- they run between $300 and $700.

3. BANKRUPTCY LAW

This should start with a good joke about bankruptcy lawyers, but it turns out there aren't any. But, hey, they've got job security, which is more than can be said for the rest of the legal industry for the first time in many years. Bankruptcy practices started staffing up back in 2006, when the wave of foreclosures began to appear inevitable. Meanwhile some major law firms, including Orrick, Herrington & Sutcliffe, have been laying people off.

4. WALMART

It's only natural the name synonymous with low prices would fare well in a recession. Thanks in part to the giant retailer's laser-like focus on its economically downtrodden clientele via its "Save money. Live better" ads, and the downtrodden getting a lift from lower gas prices, "this is Walmart time," as President-CEO Lee Scott said.

5. THRIFT STORES

Even before Sarah Palin emerged as the industry's celebrity endorser, thrift stores were doing quite nicely in the recession. Sales were up 7% through the first eight months of 2008 at U.S. Goodwill stores, beating even Walmart's (especially on the apparel side). Maybe Ms. Palin's favorite Wasilla thrift store will accept all those GOP-financed duds from Nordstrom and Bloomingdales on consignment, adding some more fuel to the fire.

6. LAXATIVES

Apparently nothing clenches the sphincter quite like plunging stocks and soaring unemployment. But consumers are doing their part to restore liquidity. Laxatives traditionally do well in recessions, and this one is no exception. Information Resources Inc. data show laxative liquids and powders up 20.9% for the 52 weeks ended Nov. 2. All that growth came from Miralax, which switched from prescription to over-the-counter in April 2007. But category sales were still up 7% in the third quarter from a year ago.

7. CABLE TV

Finally, cable TV's failure in advertising is starting to pay off -- or at least it will keep the likes of Comcast, Time Warner Cable and Cablevision from getting hurt as badly as their brethren in a killer media recession. Take Comcast: In Q3, ad revenue took a 10% hit, but since advertising accounts for a tiny portion of Comcast's business (less than 7%), overall revenue was up 10%. Sure, some strapped consumers will look to their cable bills when trying to reduce home expenses, but will many do without cable? Doubtful.

8. GUNS

Maybe people do cling to their guns after all. Barack Obama's stance on gun control and the teetering economy have proven to be a potent stimuli for the gun industry. Government and trade-association data reveal a 10% increase in sales of firearms and ammunition in the months leading up to the election. Now, with Mr. Obama on his way to the White House and the nation officially in recession, we can only imagine that rifles will top many a holiday wish list.

9. SPAM

Spam -- the canned meat, not the unwanted e-mail -- was invented during the Great Depression. Sales are up by double digits, and it has been getting support from BBDO, Minneapolis. A Hormel exec told Ad Age he wouldn't peg Spam's success to the economy, but The New York Times noted last month that Hormel's Austin, Minn., plant has two shifts working seven days a week to meet demand.

10. CHEAP BEER

Goodbye, Budweiser; hello, Busch. If you are selling cheap beer, you have nothing to fear in a recession. Bottom-shelf dwellers such as Keystone and Miller High Life have seen sales surge as the economy has bottomed out. Consumers have traded down from pricier brews like Corona and Heineken, which have seen once-hot sales cool dramatically of late

-Youngest African American CEO of a Publicly Traded CO.

-quote of the day

"Since the market tends to go in the opposite direction of what the majority of people think, I would say 95% of all these people you hear on TV shows are giving you their personal opinion. And personal opinions are almost always worthless … facts and markets are far more reliable."

William J. O'Neil

-investment game

So, you think you're the next Warren Buffett?

Well join the BCC Finance Club Investment Game

Stay tuned for complete rules and details.

-Isn’t it time you stopped pretending to understand what a hedge fund is? We tell you all you need to know, in plain English

Just what is a hedge fund? 
It’s only a vehicle for investing, albeit one that happens to be less constrained than most. Your run-of-the-mill mutual fund, for example, buys stocks and bonds, and that’s pretty much it. Most are not even allowed to employ short selling, a way of betting that the price of a security will fall. Hedge funds can employ whatever investing tools they want, including leverage, the use of derivatives like options and futures, and short sales. The New YorkTimes decided years ago to incessantly refer to hedge funds’ use of these instruments as “exotic and risky,” thereby adding to their aura of mystery. The funny thing: Practically all financial institutions use these “exotic” instruments.

There’s a much simpler way of putting it, offered by one of the industry’s luminaries. According to Cliff Asness of AQR Capital, “Hedge funds are investment pools that are relatively unconstrained in what they do. They are relatively unregulated (for now), charge very high fees, will not necessarily give you your money back when you want it, and will generally not tell you what they do. They are supposed to make money all the time, and when they fail at this, their investors redeem and go to someone else who has recently been making money. Every three or four years, they deliver a one-in-a-hundred-year flood.”

Although the origin of hedge funds dates back to Alfred Winslow Jones and the fifties, it wasn’t until the late sixties that the category became a recognizable seedling of its current state: a group of highly skilled traders catering to a very wealthy clientele willing to gamble to get humongous returns. The first true stars of the hedge-fund universe—people like Soros, Michael Steinhardt, and Bruce Kovner—were experts in commodities and currencies and figured out how to exploit inefficiencies in those markets. Because they raised money privately—largely from friends and business associates—they avoided most of the disclosure requirements of U.S. securities laws. That meant they didn’t have to explain to anybody how much money they had or what exactly they did with it. The deal, in effect, was this: Rich guys could gather up money from other rich guys without oversight, so long as they agreed not to utter a word to the general public that could be construed as “solicitation,” including “communication published in any newspaper, magazine, or similar media.” Not that there was any point in soliciting the public anyway. To get into a fund, you had to invest $2.5 million. Managers were expected to have their own money in the fund, an informal check against reckless risk-taking.

This article appeared in the NYT magazine.

Term of the Day

Nasdaq Composite Index

A market-value weighted index of all common stocks listed on Nasdaq. The Nasdaq Composite dates back to 1971, which is when the Nasdaq exchange was first formalized. The index is used mainly to track technologystocks, and thus it is not a good indicator of the market as a whole. Unlike the Dow Jones Industrial Average(DJIA), the Nasdaq is market value-weighted, so it takes into account the total market capitalization of thecompanies it tracks and not just their share prices

-President

Thank you to all that attended the second meeting of the BCC Finance Club. We are off for winter recess and will have our fist meeting in the new semester on Jan 28th. 

-club

Meeting Today 

Room C-313

5:15PM

Join Us!

-Wednesday Dec 17th Itinerary

We will assign posts to all members and discuss...

-2 community service activities (required by the school)

-2 fundrasing events (required too)

-The Forming of the Club's first project 

The Bcc Bulletin Board where we look to better the communication infrastructure at Bergen and earn revenue for the club.

And the start of the Finance Club Investing Challenge

Join Us!

-some advice for small business owners

-Newspaper Bubble

The Newspaper Bubble, Too, Has Burst

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By RICHARD PÉREZ-PEÑA

Published: December 9, 2008

The bankruptcy filing of the Tribune Company on Monday is just the latest, largest evidence that the American newspaper industry is suffering the hangover from an immense buying spree in 2006 and 2007 at what turned out to be the worst possible time for the buyers, just as the business was about to enter a drastic decline.

Newspapers would be in trouble either way. The steady leak of advertising and readers from print to the Web has become a widening torrent in this recession year. Most newspapers remain profitable, but the margins are dropping fast, with the industry losing about 15 percent of its ad revenue this year.

For the rest of the article click here.

-Next Meeting Events

The Finance Club's next meeting will be held on Wednesday, Dec 17th at 5:15pm in Room C-313.

Officers will be appointed for the following posts.

-Public Relations Officer

-Chief Financial Officer

-Chief Operations Officer

-Quality Controls Officer

-Chief Marketing Officer

Click to see a brief description of the posts. 

Click here to see the Finance Club Organizing Board and its departments. 

We will also discuss the structure of the club as we get ready for begin our activities in the spring semester. You can comment at the bottom of this post.

-Stocks Gain

Most U.S. Stocks Gain, Led by Energy, Technology Companies 

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By Whitney Kisling

Dec. 9 (Bloomberg) -- Most U.S. stocks gained for a third day as investors snapped up technology and energy shares trading near their cheapest levels on record, overshadowing disappointed forecasts at companies from FedEx Corp. to Danaher Corp.

National Semiconductor Corp., the maker of chips for the five largest mobile-phone companies, jumped 15 percent even after forecasting sales that trailed analysts’ estimates. Chesapeake Energy Corp. jumped 10 percent to lead gains in oil and natural-gas producers. FedEx lost 11 percent after saying a “significantly weaker” economy will crimp profits, while Danaher Corp., maker of Craftsman tools, slid 1.6 percent.

Almost five stocks rose for every two that fell on the New York Stock Exchange. The Standard & Poor’s 500 Index increased 0.4 percent to 913.27 at 10:53 a.m. in New York. The Dow Jones Industrial Average declined 32.42 points, or 0.4 percent, to 8,901.76 and Nasdaq Composite Index added 1.8 percent to 1,599.62.

The S&P 500 extended its gain from an 11-year low last month to 21 percent yesterday, marking a technical end to the 14-month bear market as President-elect Barack Obama pledged the biggest public-works spending package since the 1950s. The benchmark index is down 39 percent in 2008 after the collapse of subprime mortgages curbed earnings for five straight quarters.

European shares rose for a second day and Asian stocks climbed for a third, led by commodity producers and shipping lines, on expectations stimulus plans from the U.S. to India will buoy the global economy.

The gains in computer companies came as companies in the S&P 500 Information Technology Index traded at 13.8 times reported profits, less than half their average price-to-earnings ratio over the last five years.

Energy shares in the S&P 500 traded at 6.7 times earnings, near last month’s low of 5.6, which was the cheapest level since Bloomberg began tracking the data in 1995.

$1 Trillion

More than $31 trillion has been erased from the value of global equities this year, while debt losses and writedowns at the world’s largest lenders and insurers approach $1 trillion.

Stocks will climb in 2009 in the face of falling earnings and a slowdown in economic growth because of cheap valuations, according to strategists at Credit Suisse Group AG, Deutsche Bank AG and Merrill Lynch & Co. The S&P 500 may rise to 1,050 by the end of 2009 from yesterday’s close price of 909.7, a team of Credit Suisse strategists wrote in a note today. Goldman Sachs Group Inc. chief investment strategist David Kostin projected a 21 percent gain by the end of next year as the economy stabilizes.

-Obama on his stimulus plan

He said it's going to get worse before it gets better. How much worse do you think it could get?

-Next Meeting

Wednesday, Decemeber 17th

5:15 PM Room C-313

-post available CMO

Chief Marketing Officer

Promotion and Marketing

will use flyers and presentations to inform BCC's students of the club's activities and events.

Publications

will be in charge of designing and printing all of the club's promotional pieces. 

Registration

will contact students who have expressed interest in the club. Will coordinate any presentations given to Bcc students in behalf of the club.

-What is Short Selling?

-posts avaiable CFO

Chief Financial Officer

Officer will handle all financial matters pertaining to the club. Dealing with school officials to get adequate budgeting for the club's activities.

Income: will handle all monies allotted to the club.

Disbursements will handle all disburses of funds for purchasing any items needed for the club's activities.

Records, Assets and Materiel : will keep accurate records of all financial transactions, book keeping and financial reports .

-Join the Finance Club Open Discussions

With unemployment hitting a 26 year high what ramifications do you think it will have on the ailing economy?

-Post you comments below

-First Meeting

Thanks to all that attended the first meeting!

-12.3.08

-Open Discussions

-First Meeting Today

Room C-313

5:15 PM

All are welcome.

Automakers Seek Bailout

Some say they should be bailed out because of the ramificatons their failure could have. Others think they should let the market correct itself. Comment on what you think should be done.