BLS story idea

http://bls.gov/news.release/empsit.t14.htm

This chart, A-14, show unemployed by industry sectors. Most sectors do not have a substantial shift from each year, but construction does. Unemployment in this sector dropped from 17.3 to 13.7, an increase in 316,000 jobs over the year. A 21% decrease in unemployment in the sector as well.

The first step would be to interview the top management at the largest construction firms. Ask why the increased hiring, and how long they expect it to continue. Is this a short peak in hiring, or do they expect the trend to continue? Where is the increased demand coming from? The next step would be to interview government agencies who watch this industry. People at the BLS might have some knowledge. Other departments such as HUD (Housing and Urban Development) may have insight as well. An obvious hypothesis is that the stimulus bill signed in 2009 is having some effect on this number. This would be worth investigating.

Southwest Second Story

Southwest Airlines reported a third quarter net loss of income of $140 million or $.18 per share despite posting an all-time quarterly record of $4.3 billion. Southwest blames the shortfall on its use of fuel hedging.
Fuel hedging is a form of risk-management that allows the company to buy future fuel at a pre-established price, thus protecting itself against fluctuations in the price of fuel. That policy seems to have backfired in this quarter.
“In accordance with fuel hedge accounting rules,” Gary C Kelly, Chairman of the Board, President and CEO said, “Our third quarter GAAP net results included $227 million of unrealized, noncash mark-downs relating to future periods’ fuel hedges. These special items resulted in a GAAP net loss for the quarter; however since September 30th, market prices have rebounded, and our future fuel hedge portfolio has gained back over $300 million in fair value.”
According to David Koenig of Businessweek, Southwest would have earned $122 million ($.15 per share) without the fuel hedging and mark-down expenses.
On Southwest’s quarterly report, it reported fuel costs at $1.6 billion, as opposed to $926 million for last year’s third quarter. This is a sharp rise of 71 percent. For the year Southwest reported $4.1 billion in fuel costs, also a steep jump over the same point last year of $2.7 billion.
Southwest reported a net profit of $205 million last year. The difference in fuel costs from each year’s quarter more than explains the $345 swing in profitability. The company’s recent acquisition of AirTran seems to have boosted profit for the quarter, helping to insulate some of the damages caused by fuel hedging. “[W]e have produced $60 million (before taxes and profitsharing) in annualized cost synergies, primarily attributable to renegotiation of certain AirTran contracts.”

Beige Book assignment

The most interesting story from the Saint Louis Beige Book report would concern the
automobile industry. There appears to be an enormous degree of vertical integration in the Saint Louis region on this one industry, with lots of changes happening right now. The report says manufacturing for automobiles, automobile parts, and even railroad rolling stock all plan to expand operations and therefore increase hiring. This runs contrary to a decades long trend of layoffs and outsourcing in these industries. It is possible the railroad industry would not be germane.

Additionally the “primary metals” is one of many industries going in the opposite direction.
Thecensus defines primary metal process: Industries in the Primary Metal Manufacturing subsectorsmelt and/or refine ferrous and nonferrous metals from ore, pig or scrap, using electrometallurgical and other process metallurgical techniques. Establishments in this subsector also manufacture metal alloys and superalloys by introducing other chemical elements to pure metals. The output of smelting and refining, usually in ingot form, is used in rolling, drawing, and extruding operations to make sheet, strip, bar, rod, or wire, and in molten form to make castings and other basic metal products.”

This does not clarify the definition much for me, but it seems those products listed at the end of the definition are used in auto and auto-part manufacturing. The easiest way to know would be to ask the auto-manufacturers.

Lastly, the report says that auto dealerships have seen a high level of sales this year, but do not expect strong sales in the final quarter of the year.

A story in this region could begin with the primary metal manufacturers (if their products are the right ones) continue to the auto parts manufacturers, then to the auto manufacturers and finish in the dealership offices.

Recessions since 1947

Seems to be two ways they measured GDP. Percent changed based on current dollars and percent changed based on chained 2005 dollars.

Recessions based on current dollars:
1949 q1-q2
1953 q3-1954 q1
1957 q4-1958 q1
2008 q3-2009 q2
4 periods of recession

Recessions based on 2005 chained dollars:
1947 q2-q3
1949 q1-q2
1953 q3-1954 q1
1957 q4-1958 q1
1974 q3-1975 q1
1980 q2-q3
1981 q4-1982 q1
1990 q4-1991 q1
2001 q3-q4
2008 q3-2009 q2
10 periods of recession

Southwest Airlines Story

Southwest Airlines Co. (LUV) reported a loss of $140 million in earnings for the third quarter of 2011, down from a profit of $205 million last year.

"Our economic fuel costs per gallon," Gary C. Kelly, Southwest CEO and Chairman of the Board said, "increased approximately 34 percent compared with the third quarter last year. This surge in fuel costs caused our quarterly profits to decline despite record revenue results."

Southwest's expenses ballooned from about $2860 million last year to $4537 million, when all expenses were accounted for. As Kelly reported, Southwest revenue rose, reporting $4311 million in revenue, compared with the $3192 million reported last year.

Earnings per share declined 18 cents, while last year's quarter reported a gain of 27 cents.

Kelly was optimistic about the company's future. "While it is disappointing to report a decline earnings excluding special items, I was pleased with our strong third quarter revenue performance," he said.

Southwest purchased AirTran in May of this year. The company was also optimistic about this acquisition. "I am pleased with the overall progress we are making on our AirTran integration," Kelly said. He expects to have both flight networks connected by the first half of next year.

Fifth Third Bank 1 year stories

Fifth Third's stock shot up at the end of 2010. News articles from that period indicate they had just settled an overdraft lawsuit at $10 million and their 3rd quarter earnings reported as more than doubled. This news came out right before the stock rose.
The stock steadily declined from that high, but then dropped precipitously from late June 2011 to early August. It was difficult to find any news stories that explained this behavior, but the stock does mirror the overall pattern in NASDAQ and DOW indexes.
The stock has, in recent months, steadily climbed upwards. Recent news stories report that banks overall did well in the 3rd quarter of 2011, and that Fifth Third's profits increased 2.5 times in that quarter.

http://www.bizjournals.com/louisville/news/2011/10/20/fifth-third-profits-more-than-double.html
http://www.cleveland.com/business/index.ssf/2010/12/fifth_third_settles_overdraft.html
http://www.thestreet.com/story/10930418/1/us-banks-earned-145-billion-in-q3.html
http://www.cleveland.com/business/index.ssf/2011/07/fifth_third_profits_increase_2.html

Story Ideas about SWOT analysis

One of the major threats listed on the SWOT analysis for Fifth Third Bank is forthcoming regulations in the Dodd-Frank bill. A reporter could try to interview people at the bank and ask what specifically they are concerned about. They could then follow up by trying to interview people in the government involved in financial regulation, and ask about the changes in the industry because of this bill. This threat is especially interesting for Fifth Third which has listed as one of its strengths that it had "nil exposure to exotic securities." I don't know much about financial regulation, but it seems like Fifth Third might actually fair better than other banks under new regulations since those exotic securities were a major problem in the 2008 stock market crash and ostensibly will be major targets in Dodd-Frank.

FITB

2010 Earnings per Share: 17.1

Alternate Walmart Story Leads

Boston residents and community activists work to block Walmart's expansion into the city, while the company looks to expand its customer base by appealing to high income consumers.


Walmart has had success appealing to thrifty grocery consumers, but hopes to reach a new source of revenue--the high income grocery shopper.

Story Ideas

Working with the group on Tuesday we came up with story ideas about Publix grocery store. Mainly investigating how they are able to maintain such a high ROE over their competition. Also their unusually high percentage of assets in inventory.

Some story ideas from my own research. I found the federal funds purchased item in the banks interesting. I'm guessing this could refer to bailout money. Bank of America has a high percentage. Bank of America was also different in other ways, having much lower liabilities in deposits, much more in long term debt. With the assets Bank of America is also different in that they have fewer loans and leases, more in securities and short term investments, and more in cash and other assets.

Bank Name	Fifth Third	Bank of America	PNC
2008 Return on Equity	(17.5%)	2.3%	3.3%
2009 Return on Equity	3.8%	2.7%	7.4%
2010 Return on Equity	3.6%	(0.1%)	10.3%
2010 Assets
Cash and due from banks	1.9%	4.8%	1.2%
Securities and short term investments	17.8%	37.2%	28.3%
Loans and Leases	67.1%	39.7%	55.1%
Premises and Equipment	2.6%	1.3%	0%
Goodwill	2.2%	3.3%	3.1%
Other Assets	8.4%	13.8%	12.2%
Total Assets	100%	100%	100%
2010 Liabilities
Total deposits	73.6%	44.6%	69.4%
Federal funds purchased	0.3%	10.8%	1.6%
Short term borrowing	1.4%	8.3%	13.4%
Accrued taxes, interest, and expenses	0.8%	6.4%	1.2%
Long term debt	8.6%	19.8%	0%
Other	2.7%	0%	2.0%
Total Liabilities	87.3%	90.0%	87.6%
2010 Shareholders' Equity
Common stock	1.6%	6.7%	1.0%
Preferred stock	3.3%	0.7%	0%
Capital surplus	1.5%	0%	4.8%
Retained earnings	6.1%	2.7%	6.0%
Other	0.2%	0%	(0.4%)
Total Equity	12.7%	10.1%	11.4%
Total Liabilities and Equity	100%	100%	100%

Fifth Third Bank CEO pay:
2010: $4.8 million
2009: $5.2 million
2008: $3.4 million

Stock Price: (End of each year)
2010: 7.65
2009: 9.82
2008: 14.39

Income statement assignment

Fifth Third Bancorp

All numbers in millions.

They divided income into two groups:

Revenue 3 years:

Interest 2010: 4,489

2009: 4,668

2008: 5,608

Non-Interest 2010: 2,729

2009: 4,782

2008: 2,946

Total 2010: 7,218

2009: 9,450

2008: 8,554

Earning 3 years:

2010: 753

2009: 737

2008: (2,113)

Profit margin 3 years:

2010: 10.4%

2009: 7.8%

2008: (24.7%)

500 word local business rewrite

            At the corner of St. Paul Street and Sewall Avenue sits a green and white Edwardian Tudor behind a well-manicured front garden. This is the site of the Bertram Inn, a Bed and Breakfast in a neighborhood, Brookline, and a city, Boston, where they are numerous. There are at least four such businesses within two blocks of Bertram, and according to BedandBreakfast.com, the city of Boston is 7^th in concentration of Bed and Breakfasts in the world.

            Stephen Bareford, the general manager of the Bertram Inn, did not see these other Bed and Breakfasts as his true competition. Just one block north, towers the Holiday Inn, which he considered the real competition. He noted that most Bed and Breakfasts fill up, and the refer excess guests to each other, saying that the Bertram was “fully booked for the next three weeks,” and he was referring new visitors to the Sewall Inn across the street. The two Inns are one business, with the same owner, but different managers.

            Bareford, who has worked at the hote for five years and became the general manager in the beginning of 2011, said the Bertram Inn has a comprehensive staff, many who are fluent in both Spanish and English, including one manager from Argentina, Astrid Poodts. He said the Inn receives thousands of diverse guests every year, and aims for a friendly atmosphere where fellow travelers can mingle. He noted recent guests from Argentina and Japan, and “People from South Africa talking to people from New Zealand” at the breakfast.

            The Inn maintains corporate accounts as well, not just aiming to please tourists, but those on business as well. Bareford said a recent guest was a National Geographic photographer who unrolled the skeleton of an Ardipithecus, an early hominid, on one of the tables in the Bertram’s lounge.

            The Bertram also has special packages for romantic events, and these can attract even some Bostonians and residents of Brookline to the Inn for a night, according to Bareford. These packages include things like chocolates, wines, cheeses, and even a masseuse.

            The Inn’s breakfasts are a source of pride for Bareford, who aims to be more than what he calls a “Bed and Bagel.” The Inn alternates sweet and savory morning meals, offering french toast, and pancakes one day, and eggs, salmon, and bacon the next, always served buffet style. These supplies are bought from a home delivery service, but Bareford likes to visit local markets to find seasonal fruits and vegetables as well. There are snacks such as cookies and dried fruits available all day. He said the Inn spends about $1500 a week on its food supplies, and recalled one breakfast where a large business group helped them go through 60 dozen eggs.

            The Inn has a history stretching back to 1907, built by Carl Kaffenburg for one of his daughters. The hotel hangs a black and white picture of the stern-looking Kaffenburg and his family in the lobby. It later became a boarding house in 1939, and the current owner, Bryan Austin, bought the building in a state of disrepair, with squatters living on the residence, according to Bareford.

500 word assignment

            Boston has dozens of Bed and Breakfast businesses, and is their seventh most popular destination in the world according to Bedandbreakfast.com. Competition is fierce, and as testament to this in one intersection in Brookline there are three neighboring Inns. The Bertram Inn is working and succeeding in offering more than a traditional Bed and Breakfast.

            The proprietors claim that the Inn offers unique packages to celebrate special events in addition to the traditional Bed and Breakfast fare. These packages cater to couples that want to splurge and celebrate a romantic event, such as an engagement or an anniversary. The packages include various amenities, ranging from the typical—cheese, wine, flowers, to the surprising and indulgent such as the services of the Inn’s full-time massage therapist. These events can cost $175 to $375 extra, and the rooms typically cost around $300 a night.

            The current manager, Astrid Poodts, first came to the United States in 2002 from Argentina. She took over management at the Bertram Inn in 2006, helping transform the Inn with a bilingual staff to cater to Spanish speaking visitors to the Boston area.

            The Bertram Inn offers other amenities, typical of the Bed and Breakfasts in the neighborhood such as working wood-burning fireplaces, wireless Internet, DVD player and library, breakfast buffets, and luxurious furnishings and bathroom amenities. 

            The Bertram seems to be succeeding. The management boasts that the Inn’s 16 rooms housed over a thousand guests the previous year. Online review sites such as Bedandbreakfast.com and Tripadvisor.com seem to agree. Reviews on the former site are unanimously positive, with specific praise for the staff and food. Not all visitors have had a positive experience, according to reviews at tripadvisor.com some individuals have complained about the staff having poor English, running out of food at breakfast, and poor climate control for the rooms.

            It is little wonder that the Bertram Inn’s neighborhood of Brookline would be home to such a competitive concentration of Bed and Breakfasts. The neighborhood has large historic homes—The Bertram dates to 1907—spacious, wooded properties, and a quiet atmosphere. The neighborhood’s location provides easy access to the business areas of Boston, and the Bertram is only one block from the Boston green line train service.

First Assignment

Five Prominent Businesses in my life:

Fifth Third Bank
Amazon.com
Microcenter
Barnes & Noble
Procter & Gamble

Five Local Businesses and Addresses:

Chestnut Hill Realty
1223 Beacon Street

Brookline Family Health Care
1223 Beacon Street

The Bertram Inn
92 Sewall Avenue

Taberna de Haro
999 Beacon Street

Superb Bicycle
842 Beacon Street