Category Archives: Economy

PAUL RYAN: ‘The Sequester Is Going To Happen’

via Business Insider:

Republican House Budget Chair Paul Ryan has predicted a grim outcome for the next fiscal cliff battle.

“We think these sequesters will happen because the Democrats have opposed our efforts to replace those cuts with others,” Ryan said during an interview with David Gregory on Meet The Press Sunday. “We passed legislation, I voted and passed it in the House, twice to replace those sequesters with cuts in other areas of government. So we’ve shown precisely how we should protect defense spending by cutting spending in other areas.”

“But we think these sequesters will happen because the Democrats have opposed our efforts to replace those cuts with others and they’ve offered no alternatives,” he added.

Watch the full interview below, courtesy of MSNBC: 

Visit NBCNews.com for breaking newsworld news, and news about the economy

The Surest Sign Yet That The US Deficit Wars Are Coming To An End

via Business Insider: 

Eric Cantor

Something we’ve been tracking lately is the fact that folks on both sides of the aisle are talking less and less about the urgent need to slash the debt right now.

It’s still a widely held belief that the US has a big long-tern debt problem (owing to healthcare costs) but the need to make big cuts now is a passing fad.

The latest to shift?

Of all people, it’s House Majority leader Eric Cantor.

NYT’s Jonathan Weisman (via Morning Money) reports:

After more than two years of budget fights, the majority leader, more than anyone else in the leadership, is said to want to broaden the discussion. His mantra behind closed doors is “How do we make life work better?” aides say, and he would like the next two years to be at least as much about job creation and economic opportunity as about spending cuts and changes to entitlement programs.

This isn’t to say that Cantor doesn’t care about the debt, but clearly the message is changing. The cut-first political message has dramatically lost its appeal.

And remember, during the debt limit fight of 2011, it was widely seen that Cantor was driving the much harder bargain than Boehner was.

That Eric Cantor was about to make this shift started becoming clear last week. His interviews from Davos were a tad more conciliatory than usual.

And as we noted a few days ago, a top Cantor ally, Brad Dayspring, tweeted:

The US “fiscal cliff” battle isn’t over. There’s the sequester, the continuing resolution, and the next debt ceiling hike.

But so far things have gone smoother than anyone would have guessed, and there may be more reason to hope that both sides aren’t going to be locked in a death match in the battles over the next couple of weeks.

The 20 Most Inspiring Companies Of 2012

via Business Insider: 

Many local and global companies make it a priority to give back to their communities, whether it is a core part of their mission or not. 

This year, we’ve seen many companies go above and beyond to protect the environment, help people in need, and solve the world’s biggest problems.

We compiled a list of the 20 most inspiring companies based on their actions for good this year. These inspiring organizations, listed alphabetically, are role models for their efforts in social responsibility year-round.

 

Airbnb

Airbnb

Who they are: billion dollar startup which lets people rent out their apartments to other people for short periods.

Why they’re inspiring: Last year saw some less than flattering headlines about destroyed or ransacked apartments, but the company’s more than made up for it this year. In the aftermath of Hurricane Sandy, Airbnb not only waived its fees for hosts and guests in the affected area, but created a whole new platform for discounted and free listings for refugees.

Clever

Clever

Who they are: A startup launched in June of this year, which helps third party developers integrate school data with their apps.

Why they’re inspiring: From attendance records to grades and test scores, students produce a great deal of data, which schools keep electronically. Unfortunately, there’s no standard way that this data’s organized. Clever is attempting to solve that problem and create an API for education, so developers can create products that are tailored to individual students.

 

Code for America

Who they are: An organization that pairs professional coders with city governments to create accessible and efficient apps.

Why they’re inspiring: Code for America brings innovative ideas and cutting-edge technology to local government. Programs like these are increasingly important for areas looking to serve their citizens well with reduced budgets.

The group’s professional coders have already developed 28 apps for cities from Philadelphia to Chicago and beyond. This year, the organization launched an accelerator for disruptive civic technology startups and over 235 companies applied.

Flowers For Dreams

Flowers For Dreams

Flowers for Dreams

Who they are: A flower delivery service and floral event caterer that donates a backpack full of school supplies to a student in need for every bouquet sold.

Why they’re inspiring: The Chicago-based business was started in March of this year by Steven Dyme, who believes there should be a social impact in everything you do. The company’s flowers are sourced organically, grown sustainably, and delivered locally in and around Chicago and Boston.

After their first six months of operating, Flowers for Dreams had donated 1,750 backpacks to students in Chicago and 525 to students in Boston, according to Dyme.

Girls Who Code

Who they are: An organization that teaches high school girls coding, programming, and computer science.

Why they’re inspiring: Girls Who Code was founded by Reshma Saujani, a local New York City politician who saw the gender income gap and the inequalities girls faced in the tech industry.

Girls involved in the program “learn how to build websites and mobile apps and start their own companies. There will also be workshops on topics such as financial literacy, computer science and robotics,” according to the Wall Street Journal. The program launched this past summer and Saujani hopes to expand to other cities in 2013.

Goldman Sachs

Who they are: A major global investment banking and securities firm.

Why they’re inspiring: This past year, Goldman started the 10,000 Small Businesses (10KSB) program, an initiative to help entrepreneurs create jobs and economic opportunity by providing greater access to education, capital, and business and legal support services. The program has already helped entrepreneurs start 881 businesses in 10 different cities.

In November, Warren Buffet met with participants of the 10KSB program in Cleveland, where business owners could deliver their growth opportunities pitches to him and receive advice.

Härnu

Who they are: A website that encourages people around the world to discuss global issues and foreign news in their own languages.

Why they’re inspiring: Härnu, which is Swedish for “here” and “now,” hopes to inspire people around the world to have direct conversations, form friendships, and talk about issues and news in their areas.

Härnu co-founders started the site earlier this year when they became troubled by the increasing lack of interest in foreign news, especially among Americans. Co-founder Jason Gowans tells us that within the first few months thousands of users from more than 100 countries signed up for Härnu. These users are posting articles from their local papers and engaging in thoughtful conversations and live group chats.

IBM

Who they are: One of the world’s largest technology companies.

Why they’re inspiring: IBM was recently named the world’s greenest company by The Daily Beast. It’s at the forefront of helping companies measure, and then reduce, their resource consumption. It puts those tools into action itself, and uses water that cools a supercomputer in Zurich to heat nearby buildings.

On the social front, IBM’s CEO and Chairman is Virginia Rometty, one of the most powerful female CEOs in the world and the most powerful woman in business according to FORTUNE Magazine. She also may have indirectly caused indirectly caused the Augusta National golf club to finally get rid of its policy prohibiting female members.

Karmio

Who they are: Karmio is an e-commerce site that promotes local businesses while benefiting global nonprofits.

Why they’re inspiring: Karmio’s goal is to help local businesses thrive while encouraging them to give back to the community and the world. The startup, which just launched this year, brings deals and discounts on anything from clothing to furniture to piano lessons from your favorite local stores and retailers. Those businesses then donate a portion of their sales to nonprofit organizations.

Sibté Hassan, founder and CEO of Karmio, wants to drive a movement for “business-led consumer empowerment” on the web. Hassan says that what makes Karmio different from its competitors, like Living Social or Groupon, is that anyone with anything to sell can sign up, as long as they partner with a nonprofit and donate a part of the sales they bring in through Karmio to that nonprofit.

Here’s how it works: the business signs up on Karmio and posts a deal or discount for a product or service. The business then picks the nonprofit they want to partner with and designates the percentage of each purchase that will go to that nonprofit. Both the business and the nonprofit organization will advertise the deal to capitalize on the partnership.

Khan Academy

Who they are: A non-profit that provides free, world-class education to anyone anywhere in the world via video-recorded lessons.

Why they’re inspiring: Sal Khan, founder of Khan Academy, believes that quality education is a right, not a privilege. Khan, who has three degrees from MIT and an MBA from Harvard, left his hedge fund job and founded Khan Academy in 2008.

The site, which has demos, live examples, and homework lessons, now has over 3,600 video lessons, some of which have been adopted in some schools. Celebrities, such as LeBron James, serve as guest teachers, making classwork fun for students.

Khan Academy also released an app for iPhone and iPad.

Kiva.org

Who they are: A non-profit organization that arranges microloans for aspiring entrepreneurs in underprivileged areas around the world.

Why they’re inspiring: Kiva’s mission is simple, but very ambitious: to alleviate poverty around the world by giving entrepreneurs the starting capital they need to run successful businesses. And Kiva is making tremendous progress. Since the organization was founded in 2005, they have generated $386,557,225 in loanswith the help of 859,659 lenders in 67 different countries.

And the entrepreneurs pay back their lenders; Kiva.org sees a 99.01 percent repayment rate among the entrepreneurs receiving loans.

Novo Nordisk

Who they are: A Danish pharmaceutical company which focuses primarily on diabetes equipment and medicine.

Why they’re inspiring: Novo Nordisk takes its responsibility to the environment very seriously. It was named the world’s most sustainable company this year by Corporate Knights.

Though the company makes a point of having low carbon emissions, their commitment to sustainability goes beyond that. Susanne Stormer, the company’s vice president of global sustainability, told us that the forward-thinking company factors in society and the environment in all of its endeavors.

“If we want, as a company, to be sustainable, it means we have to [be in] business for the next 100 years,” Stormer said. “We have to consider, how do we interact with society and what does society look like? So the basis for our sustainability work is to say we believe that a healthy society, healthy environment, and healthy communities are the foundation for success as a business.”

The company reports its social and environmental targets and results right next to its financial results in its annual reports to investors, which Stormer credits with keeping them accountable.

Neighborland

Who they are: A tool to help you connect with your neighbors and make your city a better place.

Why they’re inspiring: Neighborland allows residents anywhere in the U.S. to connect with and get the support of their neighbors to make improvements to their neighborhoods.

Neighborland started as an experiment in New Orleans in 2011, and quickly caught on in other places in America. And it seems to actually be working. Already this year, users banded together to reprogram a dangerous traffic light in Houston and launch the first mobile transit app in New Orleans. New York City Mayor Michael Bloomberg is using Neighborland to rally support for a plan to end gun violence in Manhattan, in light of the Sandy Hook shooting.

Quicken Loans

Who they are: An online retail and residential mortgage lending company.

Why they’re inspiring: Quicken Loans founder Dan Gilbert is moving his company from the suburbs to the city of Detroit in order to encourage other businesses to move there and stimulate the city’s economy. The company will even cover the Detroit income tax for its 1,700 employees.

Gilbert grew up in Detroit, so he feels a personal stake in the city’s well-being. Some of the efforts he is spearheading include financing efforts to improve the city’s riverfront,  developing a light rail system, and providing seed capital for other entrepreneurs in Detroit. Forbes calls him “the city’s most visible champion these days.”

Sherpaa

Sherpaa

Who they are: A startup that provides companies with affordable health care and round-the-clock access to doctors.

Why they’re inspiring: The founder and CEO, Jay Parkinson, is a doctor himself and hopes to solve what he sees as some huge problems in healthcare. He lays it out succinctly in his blog:

Say, for example, you cut your finger slicing a bagel a few minutes ago. You send us an email with a photo you just took with your iPhone. We look at it and then text it to our network of plastic surgeons in the area to see who has the bandwidth to sew you up in the next hour or so.

Our goal is to give you a great experience, and as a side-effect, also decrease your costs. Because it’s quite idiotic that triage has been allocated to the ridiculously expensive ERs and ridiculously inaccessible primary care doctors.

Social+Capital Partnership

Social+Capital Partnership

Treehouse

Who they are: A venture capital fund from former Facebook Vice President Chamath Palihapitiya, whose investors include Peter Thiel and Reid Hoffman.

Why they’re inspiring: The fund focuses particularly on technically risky, early stage investments in healthcare, education, and financial services, which Palihapitiya thinks are most resistant to change.

The company seems to believe that venture capital “can solve the biggest problems, filling a void left by the shrinking scientific ambitions of governments, foundations, and international organizations,” according to Bloomberg Businessweek.

Social+Capital Partnership has invested in Integrated Plasmonics, a low cost medical diagnostics startup that uses nanotechnology; Brilliant, which gives gifted kids around the world a shot at Western universities; and Yammer, an enterprise social network which made the fund money after Microsoft bought it.

SolarCity

Who they are: The company helps governments, businesses, and homeowners design, finance, and install solar power systems.

Why they’re inspiring: SolarCity is bucking a trend in which a number of high profile solar ventures have faltered. Backed by Elon Musk (he’s the chairman), SolarCity went public in early December and the stock is up 30 percent since.

One of the company’s most innovative solutions is a solar lease program that significantly reduces, and can even eliminate, the upfront costs for homeowners or businesses that want to use a more sustainable form of energy.

Tesla Motors and Space X

Tesla Motors and Space X

Tesla Motors

Who they are: Respectively, an electric car manufacturer and space transport company, both started by PayPal co-founder Elon Musk.

Why they’re inspiring: Space X was founded in 2002 and Tesla Motors a year later in 2003, but both companies have taken huge leaps in 2012.

Tesla’s Model S sports car was named car of the year by Automobile Magazine, the first fully electric vehicle to win that honor. It won based on performance, design, and innovation, rather than its loftier goal of reducing greenhouse emissions.

SpaceX made history in May when its Dragon capsule became the first private craft to successfully dock with the International Space Station. That was a test run, and it successfully brought cargo to the station in October.

Virgin Group/Virgin Unite

Who they are: The non-profit arm of Virgin Group, created by Richard Branson and Virgin employees in 2004.

Why they’re inspiring: Unite was formed to be a model for businesses, with a voice that says corporations can, and should be, forces for good. Virgin Unite operates in three areas to create lasting impact: Business Action, to provide businesses with different services and advice; Leadership and Advocacy, to incubate new leadership initiatives and global advocacy campaigns; and Our Community, to bring together a group of people who want to do what’s right for people and the planet.

In 2012, Virgin Unite partnered with Virgin Galactic and UNCF to launch a STEM (Science, Technology, Engineering, Math) scholarship program for young women who want to pursue the sciences in college.

Zappos

Zappos

Aimee Groth, Business Insider

Who they are: An online shoe and apparel retailer headquartered near Las Vegas, Nev.

Why they’re inspiring: Zappos CEO Tony Hsieh is investing $350 million of his own money into revitalizing downtown Las Vegas, where the company is based. (The company is in the process of moving its headquarters from suburban Henderson, Nev., to Las Vegas’s old City Hall building.)

Through the Downtown Project, Hsieh is investing $200 million into real estate and residential properties, $50 million into tech startups, $50 million into small businesses, and $50 million into arts, education and culture.

Hsieh’s goal is to foster a thriving community where people can live, work and play within walking distance. Essentially, he wants to create one of the world’s next greatest cities.

And his enthusiasm has caught on: many Zappos employees and friends of Hsieh have devoted themselves to the Downtown Project and are bringing new life to the city.

20 Inspiring Rags-To-Riches Stories

via Business Insider: 

In a time of rising inequality and sluggish growth, rags to riches stories are harder than ever to come byIndeed, many of the richest people in the world were born into their wealth. 

That makes it even more essential that we remember the people who started with nothing, and through hard work, talent, grit, and a bit of luck, managed to rise to the very top.

These 20 stories remind us that it’s possible to overcome just about anything, from parents passing away, to extreme poverty, and more.

 

Maria Das Gracas Silva Foster escaped a Brazilian shantytown to become Petrobras’ first female CEO

The current head of Brazilian oil giant Petrobras spent her childhood in Morro do Adeus, an extremely poor neighborhood that became a shantytown. Her mother worked constantly and her father was an alcoholic. She collected cans and paper to make extra money.

She started as an intern at Petrobras in 1978, but broke through barriers to become the company’s first female head of field engineering. Bloomberg reports that her tireless work ethic has earned her the nickname Caveirao, for the armored vehicles police use to clean up crime ridden Brazilian neighborhoods. She became the company’s first female CEO in February.

Source: Bloomberg

Do Won Chang worked three jobs to make ends meet before starting Forever 21

Do Won Chang and his wife, Jin Sook, moved to America from Korea in 1981. When they first arrived, Do Won was forced to work three jobs at the same time to support them, as a janitor, a gas station attendant, and in a coffee shop. Eventually, they were able to open their first clothing store in 1984.

That one store grew into Forever 21, which pioneered fast fashion and is now a multi-national, 480 store empire that generates around $3 billion in sales a year. It’s a family business, with the couple’s daughters Linda and Esther helping to run the company.

Source: Forbes

Harold Simmons grew up in a shack without electricity and became a multi-billionaire

Now a billionaire several times over, Harold Simmons grew up in the extremely rural town of Golden, Texas, where he lived in a “shack” that had no plumbing or electricity. He still managed to make it to the University of Texas, and graduated Phi Beta Kappa with a B.A. and masters in Economics.

His first venture was a series of drugstores, the first of which was almost entirely financed with a loan. That became a 100 store chain that he sold to Eckerd for $50 million. From there he went on to become a master of the corporate buyout. He currently owns 6 companies traded on the NYSE, including Titanium Metals Corporation, the world’s largest producer of titanium.

Source: ForbesD Magazine

Zdenek Bakala fled communist Czechoslovakia with only $50 and is now a coal magnate

In 1980, when he was 19 years old, Bakala fled communist Czechoslovakia with a $50 dollar bill wrapped in plastic wrap hidden in a sandwich. He made it to Lake Tahoe, where he washed dishes at a Harrah’s casino.

He eventually got an undergraduate degree from UC Berkeley and an MBA from Dartmouth. He went into banking, and eventually back to his home company, opening Credit Suisse First Boston’s first officer in Prague after the Wall fell. presides over a coal company with a $2.52 billion market cap and eight production sites across Central Europe, which broke ground on the first privately owned coal mine in Central Europe since 1992.

Source: The Wall Street Journal

George Soros survived the Nazi occupation of Hungary to become one of the world’s most successful investors

George Soros survived the Nazi occupation of Hungary after his father paid a government employee, whose Jewish wife he had helped hide in the countryside, to let him pose as his godson. After the war, he escaped the country, which had come under communist rule, in 1947, to stay with relatives in London. Soros put himself through the London School of Economics by working as a waiter and railway porter.

After graduating, Soros sold goods at a souvenir shop before writing managing directors at merchant banks in London until he finally got a job. That was the beginning of a long and enormously successful career in finance, including his famous bet against the British pound in 1992, which earned him more than a billion dollars in profit in one swoop.

Source: Soros: The Life And Times Of A Messianic BillionaireThe Telegraph

Guy Laliberté ate fire on the streets before introducing Cirque du Soleil to the world

Guy Laliberté ate fire on the streets before introducing Cirque du Soleil to the world

mission_canadaviaFlickr

The Canadian-born Laliberté began his circus career busking on the streets: playing accordion, walking on stilts and eating fire. He gambled by bringing a successful troupe from Quebec to the Los Angeles Arts Festival in 1987, with no return fare. The bet paid off, and the circus group was eventually brought to Las Vegas, where they became the world famous Cirque du Soleil we know today.

Today, Laliberté is the CEO of Cirque, a professional poker player and space tourist, with a total net-worth of $2.5 billion.

Source: Celebs101

John Paul DeJoria lived in his car before John Paul Mitchell Systems took off

John Paul DeJoria lived in his car before John Paul Mitchell Systems took off

Getty Images

As a first generation American, DeJoria had it rough from the beginning. His German and Italian parents divorced when he was two, and he sold Christmas cards and newspapers to help support his family before he turned 10. He was eventually sent to live in a foster home in Los Angeles.

DeJoria spent some time as an L.A. gang member before joining the military. After trying his hand as an employee for Redken Laboratories, he took a $700 dollar loan and created John Paul Mitchell Systems. He hawked the company’s shampoo door-to-door, living out of his car while doing so. But the quality of the product could not be denied, and now JPM Systems is worth over $900 million annually. He also created Patron Tequila and has a hand in a variety of industries, from diamonds to music.

Source: Forbes

Ursula Burns grew up in a housing project on Manhattan’s Lower East Side and now runs Xerox

Ursula Burns grew up in a housing project on Manhattan's Lower East Side and now runs Xerox

Before the Lower East Side was cool, it was a hub for gangs. Burns was raised by her single mother in a housing project there. Her mother ran a daycare center out of her home and ironed shirts so that she could afford to send Ursula to Catholic school. She went to NYU, and from there became an intern at Xerox.

She’s now Xerox’s CEO and chairwoman. Burns is the first African-American woman to lead a Fortune 500 Company.

Source: Bloomberg

Howard Schultz grew up in the Brooklyn projects before becoming CEO of Starbucks

Howard Schultz grew up in the Brooklyn projects before becoming CEO of Starbucks

AP

Schultz grew up in the Bayview projects of Canarsie, Brooklyn. He always wanted to climb “over the fence” and go beyond the lifestyle provided by his truck-driving father. Despite destitution, he excelled at sports and earned a football scholarship to the University of Northern Michigan.

After graduating with a degree in communications, Schultz went to work for Xerox before discovering a small coffee shop called Starbucks. Enamored with the coffee, he left Xerox to become the company’s chief executive in 1987. After beginning with 60 shops, Starbucks now has over 16,000 outlets worldwide, giving Schultz a net worth of $1.5 billion. He even went on hiatus and came back as CEO to lead Starbucks out of a decline.

Source: Mirror News

Li Ka-shing quit school at 15 to work in a plastics factory and is now the world’s richest East Asian

Li Ka-shing quit school at 15 to work in a plastics factory and is now the world's richest East Asian

The family of Li Ka-shing fled mainland China for Hong Kong in 1940, and Li’s father died of tuberculosis when  he was just 15. Quitting school to work to support his family, Li made plastics and later plastic flowers for U.S. export.

By 1950 Li was able to start his own company, Cheung Kong Industries. While at first manufacturing plastics, the company later moved into real estate. Similarly, Li expanded his ownership of different companies, and today has his hand in banking, cellular phones, satellite television, cement production, retail outlets, hotels, domestic transportation, airports, electric power, steel production, ports and shipping, and investing in cool apps, among other industries.

Source: Harvard Business Publishing

Francois Pinault was a high school dropout who now leads luxury goods group PPR

Pinault quit high school in 1947 after being teased for his poor background. He joined his family’s timber trading business and in the 1970s began buying up smaller firms. His ruthless business tactics — including slashing jobs and selling his timber company only to buy it back at a fraction of the cost when the market crashed — gave him a reputation as a “predator.” He had similar tactics in the real estate business, and did well buying French junk bonds and taking government money to save businesses from bankruptcy.

His self-made worth helped him start PPR, a luxury goods group that sells brands like Gucci and Stella McCartney. At one point the richest man in France, Pinault and his family are now worth an estimated $13 billion, and have historic homes around the world.

Source: xfinity

Leonardo Del Vecchio was an orphaned factory worker whose eyeglasses empire today makes Ray-Bans and Oakleys

Leonardo Del Vecchio was an orphaned factory worker whose eyeglasses empire today makes Ray-Bans and Oakleys

Getty Images

Del Vecchio was one of five children who could not be supported by his widowed mother. After growing up in an orphanage, he went to work in a factory making molds for auto parts and eyeglass frames, where he lost part of his finger.

At 23, he opened his own molding shop. That eyeglass frame shop expanded to the world’s largest maker of sunglasses and prescription eyeware. Luxottica makes brands like Ray-Ban and Oakley, with 6,000 retail shops like Sunglass Hut and LensCrafters. His estimated net worth is now $11.5 billion dollars.

Source: Forbes

Kirk Kerkorian went from boxer and Royal Air Force pilot to Las Vegas mega-resort owner

Kirk Kerkorian went from boxer and Royal Air Force pilot to Las Vegas mega-resort owner

scenestriz5viaFlickr

Kerkorian, who learned English on the streets, dropped out of 8th grade to become a boxer. His family was a casualty of the Great Depression, and Kerkorian went about finding skills to help bring income home. He became a daredevil pilot for the Royal Air Force during World War II, delivering supplies over the Atlantic on routes that would crash one in four planes.

From the money he made running supplies, Kerkorian became a high roller on the craps table and eventually a real estate magnate in Las Vegas: he bought The Flamingo and built The International and MGM Grand, stalwarts of the Vegas scene. He’s worth a few billion dollars today.

Source: Smart Money Daily

Sheldon Adelson is another Las Vegas hotels magnate who tried his hand at a few industries

Sheldon Adelson is another Las Vegas hotels magnate who tried his hand at a few industries

the7eye.orgviaFlickr

Adelson grew up in tenement housing in Massachusetts, where he shared a bedroom with his parents and three siblings.  His father was a Lithuanian taxi driver and his mother had a knitting store. When he was 12 years old, he started selling newspapers and a few years later ran a vending machine scheme on the same corner.

Adelson tried his hand at a few different industries, from packing hotel toiletries to mortgage brokering. His biggest break came from developing a computer trade show. He turned that wealth into a purchase of the Sands Hotel & Casino, and later the mega-resort The Venetian.

Source: Minyanville

Ingvar Kamprad was born in a small village in Sweden and created a mail-order business that became IKEA

Ingvar Kamprad was born in a small village in Sweden and created a mail-order business that became IKEA

Getty Images

Kamprad lived the farm life growing up. But he always had a knack for business, buying matches in bulk from Stockholm to sell to his neighbors. He later expanded to fish, Christmas decorations, and pens.

Not satisfied with the small stuff, Kamprad took money from his father (a reward for good grades) and created a mail-order business that eventually became IKEA (the name comes from his initials plus those of his village and family farm). Furniture became the company’s biggest seller, and Kamprad’s use of local manufacturers kept his prices low. Once one of the world’s richest men, his net worth has fallen recently to a an estimated $3 billion.

Source: Smart Money Daily

Roman Abramovich was an orphan who turned an expensive wedding gift into an oil empire

Roman Abramovich was an orphan who turned an expensive wedding gift into an oil empire

Getty Images

After his parents died when he was just four, the Russian Abramovich was raised by his uncle and grandmother. Abramovich got his first break from an expensive wedding gift from his in-laws. He dropped out of college to pursue his entrepreneurial interests, which at first included selling plastic ducks out of an apartment in Moscow.

He managed a take over of oil giant Sibneft at a bargain price in 1995. He continued to flip his investments into even larger acquisitions, including Russian Aluminum and steelmaker Evraz Group. Over the years Abramovich has been accused of shady dealings, from paying out bribes and protection money to having a role in the gang feuds over aluminum smelters. It seems that being ruthless has paid off for the billionaire: he now owns the largest private yacht in the world, as well as a ton of other cool stuff. He’s also the owner of the Chelsea Football Club.

Source: Hubpages

Richard Desmond went from living above a garage to creating an empire that published magazines like Penthouse

Desmond grew up the son of a single mother after his parents divorced. The two of them lived above a garage, during which time Desmond described himself as “very fat and very lonely.” He quit school at 14 to focus on being a drummer, working as a coat-checker to help pay bills. Though he never became rich from his own musical talents, he later opened his own record shops.

Eventually Desmond published his first magazine, International Musician and Recording World. The Desmond magazine empire would expand to publications like a British version of Penthouse and Ok!, a worldwide favorite. He now owns publications around the globe and is involved in philanthropic work.

Source: The Observer

J.K. Rowling lived on welfare before creating the Harry Potter franchise

J.K. Rowling lived on welfare before creating the Harry Potter franchise

In the early 1990s, Rowling had just gotten divorced and was living on welfare with a dependent child. She completed most of the first “Harry Potter” book in cafes, as walking around with her daughter, Jessica, was the best way to get her to sleep.

The “Harry Potter” franchise has become a worldwide success and J.K. Rowling is now worth an estimated $1 billion.

Source: Biography

Before Sam Walton founded Wal-Mart, he milked cows and sold magazines in Oklahoma

Before Sam Walton founded Wal-Mart, he milked cows and sold magazines in Oklahoma

Walton’s family lived on a farm in Oklahoma during the Great Depression. In order to make ends meet, he helped his family out by milking the cow and driving the milk out to customers. He also delivered newspapers and sold magazine subscriptions.

By 26, he was managing a variety store after graduating from the University of Missouri with a B.A. in economics. He used $5,000 from the army and a $20,000 loan from his father-in-law to buy a Ben Franklin variety store in Arkansas. He expanded the chain, and then went on to found Wal-Mart and Sam’s Club. He died in 1992, leaving the company to his wife and children.

Source: Biography

Oprah Winfrey turned a life of hardship into inspiration for a multi-billion-dollar empire

Oprah Winfrey turned a life of hardship into inspiration for a multi-billion-dollar empire

ap

Oprah spent the first six years of her life living with her grandmother wearing dresses made out of potato sacks. After being molested by two members of her family and a family friend, she ran away from home at age 13. At 14, her newborn child died shortly after he was born. She went back to live with her mother, but it wasn’t until her mother sent her to live with her father that she turned her life around.

She got a full scholarship to college, won a beauty pageant —where she was discovered by a radio station — and the rest is history. The Oprah name became an empire, and according to Forbes she is worth $2.7 billion.

Source: Academy of Achievement

 

Paul Krugman Is Very Concerned About The Ominous Threat Posed By Robots

via Business Insider: 

The focus of a few of Paul Krugman’s recent blog posts and his most recent New York Times column is robots and how they are fundamentally changing the U.S. labor market.

Paul Krugman

The upshot of Krugman’s argument is this: income inequality has been increasing for years in the United States, but one of the major drivers that no one talks about is the increasing use of robotics in manufacturing and other industries to do jobs traditionally done by human laborers.

One conclusion Krugman reaches is that even the highly-paid, highly-skilled workers who have dominated the share of income growth in the U.S. over the past several years will be increasingly affected going forward by the rise of the machines:

About the robots: there’s no question that in some high-profile industries, technology is displacing workers of all, or almost all, kinds. For example, one of the reasons some high-technology manufacturing has lately been moving back to the United States is that these days the most valuable piece of a computer, the motherboard, is basically made by robots, so cheap Asian labor is no longer a reason to produce them abroad.

In a recent book, “Race Against the Machine,” M.I.T.’s Erik Brynjolfsson and Andrew McAfee argue that similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers.

Indeed, we’ve seen this taking shape even on Wall Street, where investment banks like UBS are laying off credit derivatives traders and replacing them with computers that trade off signals generated by internal algorithms.

That example reflects another of Krugman’s assertions: the robotics revolution may be a major driver of increasing income inequality.

Krugman writes in another post:

If this is the wave of the future, it makes nonsense of just about all the conventional wisdom on reducing inequality. Better education won’t do much to reduce inequality if the big rewards simply go to those with the most assets. Creating an “opportunity society”, or whatever it is the likes of Paul Ryan etc. are selling this week, won’t do much if the most important asset you can have in life is, well, lots of assets inherited from your parents. And so on.

I think our eyes have been averted from the capital/labor dimension of inequality, for several reasons. It didn’t seem crucial back in the 1990s, and not enough people (me included!) have looked up to notice that things have changed. It has echoes of old-fashioned Marxism — which shouldn’t be a reason to ignore facts, but too often is. And it has really uncomfortable implications.

Finally, Krugman offers a few alternative explanations for the increasing shift of income distribution toward capital and away from labor that don’t feature robots so prominently. One is the idea that monopoly power – made more ubiquitous by growing business concentration in the United States which allows big producers to control prices more effectively – may be a bigger culprit.

Izabella Kaminska, who has prepared an excellent primer on the subject over at FT Alphaville, comes to a slightly different conclusion:

Our own personal view is that this is because we’ve now arrived at a point where technology begins to threaten return on capital, mostly by causing the sort of abundance that depresses prices to the point where many goods have no choice but to become free. This is related to the amount of “free working” hours now being pumped into the economy — the result of crowd sourcing and rising productivity levels — thanks, in part, to the sort of gadgets that allow everyone to work anywhere and anytime, in a work environment that’s generally speeding up as everyone tries to keep up with the competition by doing yet more hours voluntarily.

Patent wars, meanwhile… and the rise of companies whose entire raison d’etre is focused on protecting patents… is the ultimate counter force. As a recent Fed paper spelled out, there is real evidence to suggest that idea monopolisation has become a hugely counter-productive force in the economy.

Krugman thus concludes by writing that “the starting point is to realize that there’s something happening here, what it is ain’t exactly clear, but it’s potentially really important.”

 

MEGATRENDS: The 6 ‘Gamechangers’ That Will Impact The Planet For Decades

via Business Insider: 

 

The Office of the Director of National Intelligence is out with its annual forecast of what the world will look like in 2050.

The report focuses on six “gamechanging” trends and events that will shape the world in the coming years.

Some we were mostly aware of — like threats to global economies from developed countries’ deficits.

But many others — like the prospect of new technology and the potential for increased conflict — surprised us.

Read on to see what the world will look like.

 

Gamechanger 1: The Crisis-Prone Global Economy

Gamechanger 1: The Crisis-Prone Global Economy

AP Photo/Thanassis Stavrakis

CRISIS ECONOMY: “Drastic measures” will be necessary to curb growing fiscal liabilities in developed countries.

CRISIS ECONOMY: The global share of financial assets becomes much more evenly distributed.

CRISIS ECONOMY: The global share of financial assets becomes much more evenly distributed.

DNI

CRISIS ECONOMY: Commodity instability will hit China and India, who remain import dependent.

CRISIS ECONOMY: Durations of business cycles will become significantly shorter and less smooth.

Megatrend 2: The Governance Gap

GOVERNANCE GAP: Growing middle classes in developing countries will increase demand for rule of law and government accountability.

GOVERNANCE GAP: Growing middle classes in developing countries will increase demand for rule of law and government accountability.

DNI

GOVERNANCE GAP: About 50 countries qualify as falling somewhere between “free” and “not free.”

GOVERNANCE GAP: And growth in the number of free countries has stalled in the past decade.

GOVERNANCE GAP: Climate stress, which will exacerbate water scarcity, could actually cause some governments to collapse.

Gamechanger 3: Potential For Increased Conflict

CONFLICT: Tensions have increased as the international system has become more fragmented and existing norms of cooperation fall out of favor.

CONFLICT: Tensions have increased as the international system has become more fragmented and existing norms of cooperation fall out of favor.

DNI

CONFLICT: Resource competition will intensify.

CONFLICT: Cyber attacks have increased.

Gamechanger 4: Wider Spread Of Regional Instability

Gamechanger 4: Wider Spread Of Regional Instability

AP

REGIONAL INSTABILITY: The Middle East’s youth population is getting younger, and unemployment is rising.

REGIONAL INSTABILITY: The Middle East's youth population is getting younger, and unemployment is rising.

CFR

REGIONAL INSTABILITY: Defense spending in Asia is increasing.

REGIONAL INSTABILITY: Latin America’s growing middle class will clash with countries’ inherent populism.

REGIONAL INSTABILITY: Using a new global power index, China will still surpass the US, but by 2040 instead of earlier.

REGIONAL INSTABILITY: Using a new global power index, China will still surpass the US, but by 2040 instead of earlier.

DNI

Gamechanger 5: The Impact Of New Technologies

TECH: Three key technology areas will see wide inovation: information, the ability to store which is getting increasingly cheaper

TECH: Robotics and manufacturing, which is already affecting unit labor costs worldwide…

TECH: Robotics and manufacturing, which is already affecting unit labor costs worldwide...

BLS

TECH: And resource technology, which will have to increase to compensate for declining crop yields.

TECH: And resource technology, which will have to increase to compensate for declining crop yields.

GMO

Gamechanger 6: The Role Of The United States

AMERICA: For now, the U.S. continues to dominate the world in a number of areas.

AMERICA: For now, the U.S. continues to dominate the world in a number of areas.

DNI

AMERICA: And the U.S.’s share of the oil market is only going to increase.

AMERICA: And the U.S.'s share of the oil market is only going to increase.

DNI

AMERICA: But by 2050, China will enjoy greater purchasing power parity than the U.S.

AMERICA: Our demographic prosperity window is closing fast, while others’ have just opened.

AMERICA: Our demographic prosperity window is closing fast, while others' have just opened.

DNI

BofA: Here’s The Lowest Gold Prices Will Go

via Business Insider:

BofA Merrill Lynch is fairly bullish on gold over the next few years – they expect the shiny yellow metal to rise to $2400 an ounce by the end of 2014.

gold-rings

Calls like this usually capture all of the attention because everyone wants to know how high gold can really go.

However, in a new report, BofA analysts Michael Jalonen, Mike Parkin, and Lawson Winder look at the other side of the trade. What is the lowest they think gold could go?

The BofA analysts say the floor is in at $1500, owing to increasing demand from emerging markets going forward:

Our analysis shows that investors will have to buy significant amounts of gold to push prices above $2,000/oz this year. However, with emerging markets getting richer, their budget allocation to non-essential items such as gold will likely increase in the long-run. This means that the marginal importance of investors could start to decline in the longer term, likely supporting a gold price floor above $1,500/oz over the next decade. In any case, a firm recovery in the US and global economies will remain the greatest risk to gold prices over this new phase of QE3, as a rapid and disorderly unwind of this monetary easing cycle would likely drive investors out of gold, in our view.

Morgan Stanley recently mentioned emerging market central bank demand and a return of the Indian consumer as two bullish developments for gold in 2013.

In Case You Haven’t Realized, Goldman Sachs Is Predicting A Major Economic Turn To Happen In 2013

via Business Insider: 

 

Goldman Sachs continues to dribble out its 2013 forecasts and top trades.

And as the firm peels back more and more, it’s clear that the forecast is for major change to the economy.

This can be seen across multiple calls, from multiple analysts.

It starts with top economist Jan Hatzius, who sees, for the first time since the financial crisis, the economy accelerating to above-trend growth in the second half of next year.

The call is based on an expectation of private sector releveraging, coupled with the end of the fiscal drag.

In turn, Goldman commodity analyst Damien Courvalin is calling for the end of the great gold bull market next year, based on the fact that real interest rates are finally going to start heading higher.

The essence of the call comes down to this chart, which shows the relationship between gold and 10-year real interest rates (when interest rates are ultra-low or negative, holding cash is expensive, this gold is appealing. If real interest rates turn positive, gold loses its luster).

 

gold vs. real interest rates

Goldman Sachs

 

Other big calls follow.

Its top stock idea for 2013 is going long huge megabanks, a trade that’s based on an accelerating economy, an improving housing market, and the efficacy of monetary policy.

They write:

Fed policy is set to remain extraordinarily accommodative, with ongoing MBS purchases and a focus on the housing market as an important channel for monetary policy.

The clearest area of macro improvement in the US so far has been in the housing market, with that trend expected to continue into 2013. Over the past year, many housing indicators – housing starts, home sales, permits issued and house prices – have turned higher. The NAHB Homebuilder survey indicates that although housing activity remains below “neutral” levels, it is improving rapidly. According to our “Housing Swirlogram,” this puts the housing cycle in the “Recovery” phase for now. Given our forecasts, a shift into “Expansion”, when housing activity moves above neutral and continues to accelerate (Tradewinds: A very fine housing market, December 6, 2012), could materialize in the near term.

The call is seen on the non-gold commodities front, as well. After decades of expected price increases, Goldman sees a normalization of the commodity market, as the massive investment from the past decade finally starts to kick in, easing constraints.

Between above-trend growth, housing coming back, the efficacy of monetary policy, the turn in real interest rates, and a new shift in commodity pricing/constraints, it’s clear that Goldman is calling for a huge year.

America Faces Another Cliff That’s $1.5 Trillion High, And It Could Send Interest Rates Plunging

via Business Insider: 

Most of America is focused on the fiscal cliff and the over $600 billion in tax and spending provisions set to expire at the end of 2012.

 

But Gillian Tett at the Financial Times warns of another ‘cliffhanger’ that Americans should pay attention to.

This cliffhanger she writes is the expiration of the Transaction Account Guarantee (TAG) program, introduced by the Federal Deposit Insurance Corporation (FDIC) in 2008.

Bank of America’s Priya Misra and Brian Smedley warned about this in September.

The TAG program allowed companies and individual put any amount of money into a non-interest account, and the entire amount would be guaranteed by the FDIC in the event that the bank went under. Prior to the TAG program the FDIC only guaranteed $250,000.

In the past two years, Tett points out that TAG accounts doubled to $1.5 trillion with over 50 percent of this coming from corporate accounts.

There is a chance that corporates are comfortable with American banks, and they’ll be happy to leave their deposits in place or withdraw them at a slow pace.

But some estimate that about $600 billion could be withdrawn, and with that end of month deadline fast approaching, Tett points out the worst case scenario:

“If those outflows go, as widely expected, into short-term Treasuries, then this could damp yields dramatically. Indeed, investment management groups such as Conning predict that short-term US rates could turn sharply negative next year as a result of going off that TAG cliff.

This prospect appalls some financiers. Consequently groups such as the American Bankers Association are now lobbying to have TAG extended. But although Harry Reid, the Senate majority leader, has introduced a bill calling for that, some Republicans and large banks are fighting back. They insist that extending “crisis” measures such as TAG will simply create even more market distortion, creating more headaches at a later date”

With government support measures facing increased criticism, it will be interesting to watch how this plays out.

Read the entire piece at the Financial Times >
Gilliant Tett

George Will Took A Shot At Paul Krugman Today After Krugman Called Paul Ryan’s Budget A ‘Fake Document’

via Business Insider: 

 

One of the biggest frustrations conservatives have with Paul Krugman is his alleged lack of regard for anyone who disagrees with him.

That ticked off George Will today on ABC’s Sunday show The Week, after Krugman slammed the phoniness of the Paul Ryan budget.

POLITICO:

After Krugman called House Budget Committee Chairman Paul Ryan’s budget a “fake document” and the columnist said he was “amazed that people haven’t gotten that,” Will unsheathed his verbal sword and went at Krugman.

“I have yet to encounter someone who disagrees with you who you don’t think is a knave, or corrupt, or a corrupt knave,” Will said, borrowing a phrase founding father Alexander Hamilton used to rail against those unwilling to respect the good faith of their political opponents.

“No, I’ve got some people,” Krugman said, suggesting that some conservatives are indeed intellectually honest.

Watch the video here, starting around the 6:30 mark.