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Walmart execs preach ethics

MikeDuke

Walmart held its annual shareholder meeting, facing investors for the first time since the New York Times blew the lid off an executive-level scandal at the company, involving the bribing of Mexican officals.

In preparation, the company also addressed a gathering of thousands of workers, including 1,300 international ones. Instead of addressing the scandal directly, the Wall Street Journal reports, CEO Mike Duke called for "keeping" integrity Walmart's highest priority.

Duke, who has been asked to step down from his post by activist pension funds and proxy firms, preached integrity to the crowd.

"Football, soccer, cricket, the one thing that's always important is playing by the rules," Duke said, according to the journal report.

DougMcMillon

Shelly Banjo of the Journal continues:

International division chief Doug McMillon emphasized that despite pressure to grow, employees and management needed to comply with government laws even "when no one is watching."

"Is this clear?" he shouted sternly to the arena filled with workers.

The executives' grandstanding reeks of hypocrisy, according to critics including Kevin Coupe of MorningNewsBeat.com:

If I were a Walmart shareholder - or an employee, or business partner - I think I'd be less concerned with unethical behavior in the ranks than I would be with such transgressions at the highest levels of the company. They can make it sound like rogue employees wandering around Mexico handing out bribes, but the Times story suggested that the bribery was both systemic and systematic, and that they were covered up in Bentonville. That's what top execs will have to answer for . . . . There are those at Walmart who would like people to think that all the ethical transgressions took place south of the border, but to me, that seems unlikely.

Movie and a cocktail, anyone?

Amc

How would you like to order dinner and a martini next time you're out at the movies?

In an attempt to win back theater-goers who have abandoned outings to the movie theater in favor of watching newly released films on their giant flat screen TVs at home, AMC Theatres is trying out a new concept that gives patrons a luxury dinner-and-a-movie experience.

The movie theater chain has started construction on the first of the new-concept theaters in Marina Del Rey, Calif. which is slated to open in November.

Here's more from AMC:

Food

AMC Marina 6 will offer six Cinema Suites auditoriums, which combine restaurant cuisine and cocktails, the ultimate comfort of luxury recliners, and AMC’s noted immersive theatre experience.

Guests will enjoy restaurant-style dining combined with the most current movies, presented in the immersive, big-screen viewing environment of an AMC theatre. Moviegoers will have the opportunity to order from an extensive menu of appetizers, sandwiches, entrees, desserts, beer, wine and cocktails, as well as traditional theatre concessions. The renovated auditoriums will also feature spacious, comfortable seating and service at the push of a button.

The AMC Dine-In Theatres Cinema Suites concept will be available in all six auditoriums:

Cinema Suites®

  • Premium, upscale dining
  • Reserved seating in power recliners
  • 7.5 feet of row spacing
  • A personal call button that discreetly alerts a server
  • A wide variety of alcoholic and non-alcoholic specialty drinks, beer and wine
  • Guests must be at least 21 years old

For more information about the AMC Dine-In Theatres experience, visit dinein.amctheatres.com.

Collaboration among colleges may help

Competition is always a good thing in business, unless that business is a college or university, says a recent editorial from Bloomberg.

Mark C.Taylor writes:

[In] higher education, competition often discourages risk taking, leads to overly cautious short-term decisions, produces a mediocre product for the price, and promotes excessive spending on physical plants and bureaucracies.

Collegepalace

The construction arms race on campus is the most visible example of competition run amok. To become more attractive to potential consumers, many colleges and universities undertake overly ambitious expansions. In some cases, new facilities contribute to educational programs, but too often they are tangential and trap institutions in a costly cycle: The new athletic center, dorm or student center starts to look faded when competing schools open theirs, and it never ends.

Rather than compete, the solution for higher education is to collaborate. Taylor suggests cutting costs and sharing resources by pooling faculty and outsourcing some classes. Harvard and Massachusetts Institute of Technology are teaming up to offer free online courses, which he says is a good start.

Commenters on Bloomberg.com, however, offered their own solutions.

William Knorpp wrote:

GradsHere's a better idea: get rid of useless, bogus majors like business, "communications" and x studies for most values of x. Quit spending vast sums of cash on student amenities and ports, and quit hiring too many administrators and paying them too much. Of course there are deadbeat professors in every department (I'm a prof myself, so I know whereof I speak), but, sadly, nobody knows how to root them out without doing more damage than its worth.

Gordon disagreed with the source of the problem:

This isn't a problem of competition.  It is one of over supply.  There are far too many universities that will admit just about anyone.  Degrees are conferred for doing little more than showing up and, of course, paying your bill.

Kevin Cahill had other ideas: Textbooks

As a first step toward academic sanity, American colleges and universities should end intercollegiate athletics and instead encourage all their students to play intramural sports.  Such a policy would save money and make 99 percent of their students healthier and better able to study and learn.

Cellisis had a practical, economics-based solution:

why don't they compete for lower tuition instead? i am sure that many student will go for the low tuition and good education over anything else.

 

Behind HSBC's money laundering scandal

HSBC

HSBC Bank will further shrink its presence in Western New York by laying off 77 employees here and shifting its money-laundering prevention unit from Buffalo to New York City and Delaware.

Jonathan Epstein gives some background in Friday's Buffalo News:

HSBC has been bulking up its compliance division in response to federal investigations and accusations that the global bank -- which operates in 82 countries around the world -- has been violating U.S. money-laundering rules, particularly provisions of the Bank Secrecy Act, as well as bans on U.S. banks doing business with certain countries or certain foreign individuals.

The laws are designed to prevent the U.S. financial system from being used to support criminal activities, including but not exclusively terrorism. They're also aimed at punishing certain foreign leaders or governments that have been identified as threats or violators of international law.

HsbcChina

But the full story is much juicier. It's almost surreal. 

This special report from Reuters  digs into what's behind the allegations, uncovering what is said to be flagrant flouting of the law and a willful cover-up for known money launderers in order to keep large accounts.

Here's an excerpt from the article by Carrick Mollenkamp, Brett Wolf and Brian Grow:

HSBC [violated the law on a massive scale] by not adequately reviewing hundreds of billions of dollars in transactions for any that might have links to drug trafficking, terrorist financing and other criminal activity.

In some of the documents, prosecutors allege that HSBC intentionally flouted the law. The bank created an operation that was a “systemically flawed sham paper-product designed solely to make it appear that the Bank has complied” with the Bank Secrecy Act and is able to detect money laundering, wrote William J. Ihlenfeld II, U.S. Attorney for the Northern District of West Virginia, in a draft of a 2010 letter addressed to Justice Department officials.

In that letter, Ihlenfeld compared HSBC unfavorably to Riggs Bank. In 2004 and 2005, that scandal-plagued Washington bank was fined a total of $41 million after it was found to have violated anti-money laundering laws, and it was acquired by PNC Financial Services.

“HSBC is to Riggs, as a nuclear waste dump is to a municipal land fill,” Ihlenfeld wrote.

Wegmans...the Musical!

What is it about Wegmans? The Rochester-based grocer doesn't take long to make an impression, that's for sure.

Wegmans

Northborough, Mass., got its first Wegmans supermarket just last fall, but already, the advanced drama class at the town's Algonquin Regional High School has written and performed a musical about it.

Wegmans officials have said they are flattered by the attention and recently gave the school a small thank you.

"This morning, Bill Congdon made a special visit to the drama class at Algonquin Regional High School. The New England division manager for Wegmans Food Markets was there to thank the class for its recent performance of 'Wegmans … the Musical'.

Wegmans

In addition to bringing bagels and cream cheese, donuts, and juice, Congdon surprised everyone at the school by presenting a one-time scholarship certificate of $1,000. 'The students did such a fantastic job of learning about our company, observing what we do, and then telling the story on stage. We wanted them to know that we appreciate their hard work and are honored that they chose us as their subject,' said Congdon," reads a press release on the company's Web site.
Seriously? After all that, they throw the kids some bagels? You'd think they'd at least get a sushi platter or something. And a $1,000 scholarship? That ought to cover a graphing calculator or two. The story of this school's musical, which was like a live-action love letter to the company, got picked up by every news outlet from CNBC to Huffington Post. You can't buy that kind of publicity.

Here are some highlights from the show which, by all reports, was a resounding success.

 

Facebook saga continues.

Zyglis


Facebook's stock has declined again, losing about $10 billion of its market value.

Zuck

So what's the problem? Everyone seems to have a theory.

It's just "reality taking hold," according to Roger Cheng at CNET.com.

"So how did the most heavily hyped stock completely fall on its face? There are a lot of reasons: glitches with the Nasdaq system that slowed early orders, an IPO price that got a last-minute bump, and indications of lackluster demand from institutional investors. But the most important is the underlying concern and growing realization that Facebook just isn't worth $100 billion," he writes.

Forbes weighed in, with an important caveat:

"The Facebook IPO is only disappointing from a deal perspective – it is too early to pass judgment on whether it is a disappointment as an investment. Many great investments don’t have the most auspicious beginnings, while others might jump 50% on the first day of trading, only to flame out later," writes contributor David Maris. "In other words, don’t judge the stock on one day of trading."

Bloomberg took a look at the "blame game" being played: "Facebook’s 11 percent drop yesterday prompted investors to fault everything from Morgan Stanley’s role as lead underwriter, to the company’s greed and the Nasdaq Stock Market."'

So what's next for Facebook? Forbes' Tomio Geron hazards an educated guess.

 

 

 

 

Facebook fizzle?


Looks like the insiders at Facebook took the money when it was to be had.

The hotly anticipated public offering on Friday turned out to be an insiders money grab, with those who had shares dumping them on the market in such quantities, the underwriting investment banks had to buy the shares to keep the price up to at least the initial asking price of $38.

The future may be nicer to Facebook shareholders, but today, the stock continues to swoon.

Reports of our demise?

The news that Warren Buffett's Berkshire Hathaway is buying 63 more newspapers raisies an important question: Are newspapers really dead?

Buffett has made one of the world's greatest fortunes by investing in undervalued companies. And he has done it over and over again.

Lots of comments about the purchase.

From the journalism font, the Poynter Institute:

Some skepticism from the Washington Post:

Some financial background from the Wall Street Journal:

Comments from Buffett on the deal from the Omaha World-Herald.

From Mark Twain, sort of: The reports of our death are greatly exaggerated.

 

Dollar store dilemma

Dollarstore

Dollar stores have a problematic image--low rent, tacky, maybe even dangerous.

Nowhere is this better illustrated than in Vermont's struggle to keep such stores out of the state. Though Vermont has fought valiantly to thwart big box stores from becoming ubiquitous, it's facing a new "threat" from dollar stores. Where Walmart has just four stores in the state, various national dollar chains have 12.

A recent New York Times story shows just how much of a threat Vermonters feel dollar stores to be to the essence of their communities, and outlines their battle to keep them out. Because of dollar stores' small footprint, they're not as easy to block as giant big box stores that can be zoned out for size.

Here is Abby Goodnough writing for the Times:

Chester, with 3,000 residents, has a number of homegrown businesses, many located in Victorian houses along Main Street. But there is little in the way of generic commercial architecture here — a selling point that drew residents like Mr. Veliz and Mr. Cunningham, who moved his family here from Baltimore in 2004.

Vermont

“Most of the people in Chester now are people who have come from someplace else,” Mr. Cunningham said. “It’s like a lot of Vermont. Why come to a place like this only to have it turn into the kind of place you were trying to leave?”

Nodding to that concern, the Development Review Board is requiring Dollar General to use certain materials — the wood clapboard siding, for example, instead of a vinyl alternative that the company wanted. Dollar General on its own proposed a building with a peaked roof, as well as a cupola and a faux hayloft door.

In their decision approving the project, board members noted that a retail store was an “allowed use” in the part of town where Dollar General wants to open. They also said that, by using wood siding, the store would meet a zoning requirement that new buildings “adhere harmoniously to the overall New England architectural appearance” of the town.

Dollarstore

Tawn Earnest, a spokeswoman for Dollar General, said the company had a long history in small towns and rural communities, often serving customers who have few retail options. Opposition to Dollar General, which is based in Goodlettsville, Tenn., is “a rare exception,” Ms. Earnest said, adding, “We have been very thoughtful in the placement and design of the store to benefit Chester.”

Paul Bruhn, executive director of the Preservation Trust of Vermont, said opposition to dollar stores has sprung up in at least four other towns in the state. Mr. Bruhn’s group, which seeks to protect what it calls “the essential character of Vermont,” has been tracking the spread of dollar stores since 2010; it provides grant money to citizens’ groups that oppose them, including Mr. Cunningham’s.

DollarGeneral

“The dollar stores have proliferated in a way that seems a little extreme,” Mr. Bruhn said. “One of the things I think is crucial for Vermont, in terms of maintaining this very special brand that we have, is we don’t want to look like Anywhere, U.S.A. And homegrown businesses are a crucial piece of that.”

The spread of dollar stores has come during a period of decline of the general store, a Vermont institution that in many towns served as a meeting place and all-purpose emporium. This week, the Barnard General Store, not far from Chester, closed after 180 years. Its owners cited the twin blows of Tropical Storm Irene, which badly flooded parts of the state last summer, and a nearly snowless winter that kept skiers away.

Generalstore

Lonnie Lisai, whose family owns Lisai’s Market, said he was already strategizing about how to survive if the Dollar General store opens. A lunchtime salad bar, a selection of fancy cheeses and lower-cost alternatives to popular brands are in the offing, he said.

“If you pay a buck over at Dollar General and you’re going to pay a buck eighty-nine here, it’s, boy, what do you tell the customer?” Mr. Lisai said. “I can’t compete. And hopefully they’ll understand that.”

 

Fracking study has some cracks?

Hydrofracking is getting safer, thanks to better oversight and industry practices, according to a new report from the University at Buffalo.

Considine

The study found that environmental violations related to newly-drilled wells were cut in half from 2008 to 2011.

 "While prior research has anecdotally reviewed state regulations, now we have comprehensive data that demonstrates, without ambiguity, that state regulation coupled with improvements in industry practices results in a low risk of an environmental event occurring in shale development, and the risks continue to diminish year after year," said Timothy J. Considine, a University of Wyoming economics professor and the lead author of the UB report.

But Considine himself has come under fire for his ties to the oil and gas industry. He has been called "the energy industry's go-to academic for highlighting the positives, and not the negatives, of fossil fuel development."

While at Penn State, Considine published a report paid for by the Marcellus Shale Coalition that exaggerated the number of jobs that could potentially be created through fracking and ignored the dangers associated with it. Considine's work has been used by many groups in lobbying for a lift on the hydrofracking ban, as it was In June at the Manhattan Institute.

Funding of UB's Shale Resources and Society Institute has also come into question. And other UB students and professors have come out against it.

"Like the shale itself, UB's reputation is being looted, leaving a mess and a stink. What a forked-tongue piece of laundered frackaganda this is," wrote UB professor Jim Holstun in the Buffalo News comments section under a recent article about the study.

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