In debates over how to boost the flagging recovery, promoting exports isn’t usually at top of the list. But it should be. Export growth can make this recovery job-filled rather than jobless.
And the White House and allied business leaders agree. They’ve been discussing how to achieve the “new goal” that President Obama set in his last State of the Union speech: double exports over the next five years.
Beyond the usual discussion of exchange rates and trade barriers, however, any successful export strategy requires a look at where U.S. exports come from.
Chrystia Freeland moderates a Brookings Institution panel on an unexpected way to bring America out of the recession.
America’s export geography is highly concentrated in the top 100 metropolitan areas. In a new research report , we found that these population centers produced an estimated 64 percent of U.S. exports in 2008 — that’s over 62 percent of manufactured goods and 75 percent of services.
Three quarters of computer and electronics exports are manufactured in the top 100 cities. More than 80 percent of smaller service exports, such as management and consulting, film and television, computer services and insurance, are concentrated there. This is especially important because the United States has a trade surplus in commercial services — $152.5 billion in 2008. And it is poised for a quantum leap in exportable services.
The nation’s four largest exporting metros, New York, Los Angeles, Chicago and Houston, are the top performers, exporting more than $50 billion apiece in 2008. Three quarters of computer and electronics exports are manufactured in the top 100 cities.
Other major metros — Dallas, San Francisco, Boston, Philadelphia, Detroit and Seattle — are also global players. These 10 large metros generated 28 percent of national exports in 2008.
A different group of smaller and medium-sized places, like Wichita, Toledo and Greensboro are oriented toward exports in ways larger metros are not. Exports contribute more than 15 percent of gross metropolitan product in these and seven other U.S. cities, compared to the largest 100 metros’ average of 10.9 percent.
To leverage this powerful export activity, the Obama administration should connect its macro vision for export growth with the metro reality, where most of the doubling could happen. Only one percent of U.S. companies export, reflecting our vast internal market and cultural insularity. Think of the economic potential if we can make that 2 percent.
While other nations promote exports through sophisticated outreach and, in some cases, major subsidies, U.S. efforts tend to be timid and fragmented. More will be needed to help firms, particularly small ones, enter foreign markets. This can be done by expanding the President’s Export Council to include state and local leaders and revamping current export guidance and support delivery.
The U.S also needs a national freight strategy to maximize our export business. Currently, the U.S. freight system is undermined by aging infrastructure and congested transport networks. Despite rising imports and exports, the federal government and the states disperse scarce infrastructure dollars based on political rather than market returns.
The many calls from the Obama Administration, Congress, governors and mayors for a National Infrastructure Bank are long overdue. The bank would invest through public/private partnerships and aim to unclog our ports, improve passenger and freight rail, and revamp our electrical grid.
Just as the President has set an export goal for the nation, metros should set their own export goals as well.
For too long, the debate over export policy and practice has been the exclusive domain of policymakers in Washington and a narrow clique of trade constituencies. It is time to widen the circle, to include a larger portion of the business sector and the places where exporting companies can thrive.
Only then can this metropolitan nation realize its potential as an export nation.
The following is a guest post on Reuters by Bruce Katz, Emilia Istrate and Jonathan Rothwell. Mr. Katz is the editor of several books on transportation, demographics and regionalism, including “Elevate Our Cities.” Ms. Istrate is a senior research analyst with the Metropolitan Infrastructure Initiative. Mr. Rothwell is a senior research analyst at the Metropolitan Policy program focusing on urban economics, innovation, and economic opportunity. The opinions expressed are their own.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Saturday, July 31, 2010
A midlife crisis for Africa by Dr Adekeye Adebajo
During the annus mirabilis of 1960 17 independent African states were born, creating great expectations for the rebirth of a continent. Unfortunately, while these countries celebrate their 50th birthday this year, Africa seems to be suffering a severe midlife crisis. The continent remains the world's poorest and most conflict-ridden, with about 70% of its 800-million people living below the poverty line and less than 2% of world trade crossing its borders.
Contemporary Africa still suffers from a curse invoked in one of Europe's most cosmopolitan cities, Berlin. The 1884-85 Conference of Berlin, overseen by Germany's "iron chancellor", Otto von Bismarck, effectively set the rules for the partition of Africa as the "scramble" for the continent's riches got under way. Europeans divided the continent into artificial nation states, in the process establishing a proliferation of unviable, dependent economies, imported political systems, weak and Balkanised countries and insecure borders.
This "original sin" caused untold suffering in the colonial and post-colonial eras. To compound the treachery, the travelling Cold War circus arrived in Africa in 1960, further distorting the continent's political and economic development. In 50 years of independence, Africans have largely failed to reverse this blighted legacy amid profligate corruption and autocratic misrule.
As the Cold War was coming to an end in 1989, events in Berlin would once again have an enormous impact on Africa. The fall of the Berlin Wall marked the end of the division of Germany and Europe as well as the demise of communist rule in Eastern Europe.
But the Bismarckian curse remained to haunt Africa's future. Conflicts, some resulting from the colonial legacy of Berlin, continued in Ethiopia and Eritrea, Nigeria and Cameroon. Other crises were caused by internal ruptures. Where Africa had once feared intervention during the Cold War, now, in the post-apartheid era, marginalisation had become a greater concern.
It became increasingly apparent that Africans had failed to overcome the colonial legacy. The continent's economic and political systems were still tied to those bequeathed by imperial statesmen in Berlin. African leaders had also failed to create effective regional integration schemes to liberate their nations from the bondage of the old colonial boundaries.
To lift the curse woven by Bismarck's geopolitical sorcery, Africa has been forced to pursue a quest for three "magic" kingdoms: security, hegemony and unity.
In the area of security African actors have sought greater autonomy within the international system to promote their interests. Such autonomy has been pursued through the African Union and subregional bodies such as the Southern African Development Community, as well as the New Partnership for Africa's Development.
To break the chains of "global apartheid", a stronger African voice has been sought within inequitable international institutions such as the United Nations, the World Bank, the International Monetary Fund and the World Trade Organisation.
Africa's quest for security has been evident in post-Cold War efforts to improve the effectiveness of regional bodies and to establish new governance structures such as the African Peer Review Mechanism. But these institutions have mostly proved to be weak. The UN has thus had to play a leading security role, with 70% of its peacekeepers currently deployed in Africa.
The quest for the hegemonic kingdom by African actors such as South Africa and Nigeria -- particularly under the respective presidencies of Thabo Mbeki and Olusegun Obasanjo between 1999 and 2008 -- can also be understood as a search for more autonomy within the international system. The aim has been to establish what Kenyan scholar Ali Mazrui described as a Pax Africana in conflict zones, while increasing Africa's leverage over the international economic system through initiatives such as Nepad.
These efforts have so far yielded only limited success. China's increasing role on the continent may result in reduced dependence on Western powers. But it is far from certain that African governments will be able to craft a multilateral approach to engaging Beijing for mutual benefit. South Africa could also increasingly find itself in economic competition with the Asian giant, creating negative perceptions of both the springbok and the dragon.
Africa's quest for the final kingdom -- unity -- has seen several of its leaders seeking to promote regional integration and build global alliances. But, as with many other continental efforts, a lack of capacity and cooperation has often frustrated this quest. The AU should carefully examine whether there are lessons to be learned from the European Union, the world's most successful supranational body. Africans must also continue to use their large diaspora in the United States to influence Washington's policy towards their ancestral home, particularly given the historic election in 2008 of Barack Obama, an American president with African roots.
Further afield, the Afro-Asian coalition born at the Bandung Conference in 1955 has largely been frustrated in its efforts to shape global political and financial institutions in ways that could increase the autonomy of the Third World in dealing with powerful Western actors.
The past 50 years, however, have however, seen monumental changes in Africa: the death of the Organisation of African Unity and the birth of the AU in Durban in 2002; the liberation of South Africa, the continent's richest and most industrialised country; the hegemonic peacekeeping role pursued by the Nigerian Gulliver in West Africa; the election of two Africans -- Egypt's pharaonic Boutros Boutros-Ghali and Ghana's prophetic Kofi Annan -- as UN secretaries general; and Afro-Asian cooperation that has seen China and other Asian countries investing, and keeping peace, in Africa in a bid to revive the legacy of Mahatma Gandhi that helped to liberate both continents.
In some ways Africa can look forward with hope to the next 50 years. Yet new geopolitical pressures are emerging that may delay the continent's achievement of its quest for true liberation. China's current building of railways and roads to secure Africa's raw materials and minerals has followed a similar pattern to that established by European imperial powers more than a century ago (although with the important difference that Beijing is not setting up administrations and armies to control countries).
Present widespread concerns among Western and South African entrepreneurs that China could exclude their firms from these territories are reminiscent of the fears that drove Bismarck to call the Conference of Berlin in 1884.
Will the world's contemporary "great powers" contemplate another economic partition of the continent, or can Africa's leaders muster the political will and craft regional arrangements strong enough to forestall such a ghastly outcome?
The end of apartheid in South Africa and the election of the revered Nelson Mandela as its president in 1994 effectively marked the attainment of legendary Ghanaian leader Kwame Nkrumah's famous call for Africa to seek first the political kingdom. But, tragically, all other things were not added unto it, and the search for the socioeconomic kingdom continues. Until that quest is complete, the curse of Berlin will continue to hold the continent in thrall.
Dr Adekeye Adebajo is executive director of the Centre for Conflict Resolution, Cape Town, and author of The Curse of Berlin: Africa after the Cold War, published by UKZN Press/Columbia University Press/Hurst
Source: Mail & Guardian Online
Web Address: http://www.mg.co.za/article/2010-07-30-a-midlife-crisis-for-africa
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Contemporary Africa still suffers from a curse invoked in one of Europe's most cosmopolitan cities, Berlin. The 1884-85 Conference of Berlin, overseen by Germany's "iron chancellor", Otto von Bismarck, effectively set the rules for the partition of Africa as the "scramble" for the continent's riches got under way. Europeans divided the continent into artificial nation states, in the process establishing a proliferation of unviable, dependent economies, imported political systems, weak and Balkanised countries and insecure borders.
This "original sin" caused untold suffering in the colonial and post-colonial eras. To compound the treachery, the travelling Cold War circus arrived in Africa in 1960, further distorting the continent's political and economic development. In 50 years of independence, Africans have largely failed to reverse this blighted legacy amid profligate corruption and autocratic misrule.
As the Cold War was coming to an end in 1989, events in Berlin would once again have an enormous impact on Africa. The fall of the Berlin Wall marked the end of the division of Germany and Europe as well as the demise of communist rule in Eastern Europe.
But the Bismarckian curse remained to haunt Africa's future. Conflicts, some resulting from the colonial legacy of Berlin, continued in Ethiopia and Eritrea, Nigeria and Cameroon. Other crises were caused by internal ruptures. Where Africa had once feared intervention during the Cold War, now, in the post-apartheid era, marginalisation had become a greater concern.
It became increasingly apparent that Africans had failed to overcome the colonial legacy. The continent's economic and political systems were still tied to those bequeathed by imperial statesmen in Berlin. African leaders had also failed to create effective regional integration schemes to liberate their nations from the bondage of the old colonial boundaries.
To lift the curse woven by Bismarck's geopolitical sorcery, Africa has been forced to pursue a quest for three "magic" kingdoms: security, hegemony and unity.
In the area of security African actors have sought greater autonomy within the international system to promote their interests. Such autonomy has been pursued through the African Union and subregional bodies such as the Southern African Development Community, as well as the New Partnership for Africa's Development.
To break the chains of "global apartheid", a stronger African voice has been sought within inequitable international institutions such as the United Nations, the World Bank, the International Monetary Fund and the World Trade Organisation.
Africa's quest for security has been evident in post-Cold War efforts to improve the effectiveness of regional bodies and to establish new governance structures such as the African Peer Review Mechanism. But these institutions have mostly proved to be weak. The UN has thus had to play a leading security role, with 70% of its peacekeepers currently deployed in Africa.
The quest for the hegemonic kingdom by African actors such as South Africa and Nigeria -- particularly under the respective presidencies of Thabo Mbeki and Olusegun Obasanjo between 1999 and 2008 -- can also be understood as a search for more autonomy within the international system. The aim has been to establish what Kenyan scholar Ali Mazrui described as a Pax Africana in conflict zones, while increasing Africa's leverage over the international economic system through initiatives such as Nepad.
These efforts have so far yielded only limited success. China's increasing role on the continent may result in reduced dependence on Western powers. But it is far from certain that African governments will be able to craft a multilateral approach to engaging Beijing for mutual benefit. South Africa could also increasingly find itself in economic competition with the Asian giant, creating negative perceptions of both the springbok and the dragon.
Africa's quest for the final kingdom -- unity -- has seen several of its leaders seeking to promote regional integration and build global alliances. But, as with many other continental efforts, a lack of capacity and cooperation has often frustrated this quest. The AU should carefully examine whether there are lessons to be learned from the European Union, the world's most successful supranational body. Africans must also continue to use their large diaspora in the United States to influence Washington's policy towards their ancestral home, particularly given the historic election in 2008 of Barack Obama, an American president with African roots.
Further afield, the Afro-Asian coalition born at the Bandung Conference in 1955 has largely been frustrated in its efforts to shape global political and financial institutions in ways that could increase the autonomy of the Third World in dealing with powerful Western actors.
The past 50 years, however, have however, seen monumental changes in Africa: the death of the Organisation of African Unity and the birth of the AU in Durban in 2002; the liberation of South Africa, the continent's richest and most industrialised country; the hegemonic peacekeeping role pursued by the Nigerian Gulliver in West Africa; the election of two Africans -- Egypt's pharaonic Boutros Boutros-Ghali and Ghana's prophetic Kofi Annan -- as UN secretaries general; and Afro-Asian cooperation that has seen China and other Asian countries investing, and keeping peace, in Africa in a bid to revive the legacy of Mahatma Gandhi that helped to liberate both continents.
In some ways Africa can look forward with hope to the next 50 years. Yet new geopolitical pressures are emerging that may delay the continent's achievement of its quest for true liberation. China's current building of railways and roads to secure Africa's raw materials and minerals has followed a similar pattern to that established by European imperial powers more than a century ago (although with the important difference that Beijing is not setting up administrations and armies to control countries).
Present widespread concerns among Western and South African entrepreneurs that China could exclude their firms from these territories are reminiscent of the fears that drove Bismarck to call the Conference of Berlin in 1884.
Will the world's contemporary "great powers" contemplate another economic partition of the continent, or can Africa's leaders muster the political will and craft regional arrangements strong enough to forestall such a ghastly outcome?
The end of apartheid in South Africa and the election of the revered Nelson Mandela as its president in 1994 effectively marked the attainment of legendary Ghanaian leader Kwame Nkrumah's famous call for Africa to seek first the political kingdom. But, tragically, all other things were not added unto it, and the search for the socioeconomic kingdom continues. Until that quest is complete, the curse of Berlin will continue to hold the continent in thrall.
Dr Adekeye Adebajo is executive director of the Centre for Conflict Resolution, Cape Town, and author of The Curse of Berlin: Africa after the Cold War, published by UKZN Press/Columbia University Press/Hurst
Source: Mail & Guardian Online
Web Address: http://www.mg.co.za/article/2010-07-30-a-midlife-crisis-for-africa
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Thursday, July 29, 2010
High unemployment and the education deficit
The following is a guest post by Bruce Yandle, distinguished adjunct professor of economics with the Mercatus Center at George Mason University and dean emeritus of the College of Business & Behavioral Science at Clemson University. The opinions expressed here are his own.
Last month’s report on U.S. employment growth brought no cheer to job-seekers with a high school education.
In June 2010, the unemployment rate for adults 25 or older with a high school diploma was 10 percent. Whereas unemployment among college educated adults was 4.4 percent. (Overall unemployment was 9.5 percent.)
Part of what’s making the unemployment number so high, aside from a dismal economy, is an education deficit. The idea of lining up shovel-ready jobs with stimulus money may sound good, but our economy is not a shoveling one. Instead, our economy is calling for a more educated workforce.
The gap between the U.S. unemployment rate for Americans with high school diplomas and those with college degrees shot through the roof with the Great Recession (See figure 1). Because of this education deficit, the overall unemployment rate will not sink anytime soon.
Of course, a four-year degree is not the only route to improving employment prospects. Adults with a two-year technical education do far better than those with just a high school education. The June unemployment rate for that group of adults was 8.2 percent.
Since December 2009, some 593,000 jobs have been filled in the nation’s economy, including 163,000 in manufacturing. While each job is important, the numbers look pale against the 7.9 million jobs that have disappeared since December 2007, when the recession started.
A quick inspection of Bureau of Labor Statistics data tells us where the action is. Employment gains have occurred in professional and business services, partly accounted for by firms that supply temporary workers, and in education and health services. The last two sectors have been recipients of stimulus money. They also generally require knowledge that goes beyond a high school education.
But the churning of labor markets revealed by the unemployment gap between holders of a bachelor degree and those with a high school diploma reflects more than a stimulus. Hard times bring a sharper definition of the U.S. comparative advantage. As we observe the shuttering of some businesses and the stability or expansion of others, we are seeing U.S. economic muscle laid bare. And, what we see is a knowledge-based economy.
America’s economic edge has come partly from having a competitive education system with the freedom of choice at the post-secondary level. Young people can shift fields of study and go for more education, depending on the employment and earnings prospects available to them. Right now, the higher payoffs for staying in school and building human capital are sending a strong signal to young people to get more education. At the same time, wages forgone are the largest element of cost adults face for continuing in school. When there are no wages to lose, education is on sale.
With the unemployment rate for college graduates at 4.4 percent and the rate for high school graduates at 10 percent, the message is clear: As tough as it may seem, this is the time for young people to find the means to become prepared for the new knowledge economy.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Last month’s report on U.S. employment growth brought no cheer to job-seekers with a high school education.
In June 2010, the unemployment rate for adults 25 or older with a high school diploma was 10 percent. Whereas unemployment among college educated adults was 4.4 percent. (Overall unemployment was 9.5 percent.)
Part of what’s making the unemployment number so high, aside from a dismal economy, is an education deficit. The idea of lining up shovel-ready jobs with stimulus money may sound good, but our economy is not a shoveling one. Instead, our economy is calling for a more educated workforce.
The gap between the U.S. unemployment rate for Americans with high school diplomas and those with college degrees shot through the roof with the Great Recession (See figure 1). Because of this education deficit, the overall unemployment rate will not sink anytime soon.
Of course, a four-year degree is not the only route to improving employment prospects. Adults with a two-year technical education do far better than those with just a high school education. The June unemployment rate for that group of adults was 8.2 percent.
Since December 2009, some 593,000 jobs have been filled in the nation’s economy, including 163,000 in manufacturing. While each job is important, the numbers look pale against the 7.9 million jobs that have disappeared since December 2007, when the recession started.
A quick inspection of Bureau of Labor Statistics data tells us where the action is. Employment gains have occurred in professional and business services, partly accounted for by firms that supply temporary workers, and in education and health services. The last two sectors have been recipients of stimulus money. They also generally require knowledge that goes beyond a high school education.
But the churning of labor markets revealed by the unemployment gap between holders of a bachelor degree and those with a high school diploma reflects more than a stimulus. Hard times bring a sharper definition of the U.S. comparative advantage. As we observe the shuttering of some businesses and the stability or expansion of others, we are seeing U.S. economic muscle laid bare. And, what we see is a knowledge-based economy.
America’s economic edge has come partly from having a competitive education system with the freedom of choice at the post-secondary level. Young people can shift fields of study and go for more education, depending on the employment and earnings prospects available to them. Right now, the higher payoffs for staying in school and building human capital are sending a strong signal to young people to get more education. At the same time, wages forgone are the largest element of cost adults face for continuing in school. When there are no wages to lose, education is on sale.
With the unemployment rate for college graduates at 4.4 percent and the rate for high school graduates at 10 percent, the message is clear: As tough as it may seem, this is the time for young people to find the means to become prepared for the new knowledge economy.
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Tuesday, July 20, 2010
Carl Icahn Starts New Bid for Lions Gate at Lower Price After Truce Ends
Billionaire investor Carl Icahn started a new tender offer for Lions Gate Entertainment Corp., after a truce with the film and television studio expired.
Icahn offered $6.50 a share, or 7.1 percent less than his previous bid, according to a statement today. Separately, Vancouver-based Lions Gate issued new shares to MHR Fund Management LLC in a debt exchange, putting 12 percent of the stock in friendly hands and diluting Icahn’s holdings.
The exchange with a fund led by Mark Rachesky, who has a seat on the Lions Gate board, will make it harder for Icahn to gain a majority of the stock or win a threatened proxy fight to replace the management and directors. The swap boosts Rachesky’s stake to almost 29 percent, according to a filing, while cutting Icahn’s to about 33 percent from almost 38 percent.
“This was management’s last chance,” said Matthew Harrigan, a Denver-based analyst with Wunderlich Securities who recommends the shares. “They needed someone with a large position to step up if they were going to stop him.”
A 10-day truce between Icahn, 74, and Lions Gate ended yesterday. The two sides said they discussed potential acquisitions and possible board seats for Icahn. The talks didn’t yield results that would merit an extension, Icahn said. Discussions on acquisitions may continue in the future, he said.
Rachesky, 51, a former chief investment officer with Icahn, increased his stake in a complicated transaction in which one of his investment funds purchased $100 million of convertible notes from Kornitzer Capital Management and then exchanged debt for stock. Kornitzer, based in Shawnee Mission, Kansas, also owns 1.62 million Lions Gate shares, Bloomberg data show.
May Buy More
Rachesky, who is based in New York, said in a statement he bought the shares because they “represented an attractive investment opportunity” and may buy more. He paid $105.7 million in total for the debt, according to the statement.
In July 2009, Rachesky entered into an agreement with Lions Gate in which he agreed to vote his shares in support of management and to join the board. At the time, Icahn was negotiating for as many as three seats on the company’s board. He said he broke off the talks when Lions Gate insisted he adhere to a standstill agreement.
The debt swap increases Lions Gate shares outstanding by 16.2 million, the company said in a statement, or about 14 percent based on 118.1 million shares outstanding previously.
Lions Gate, distributor of the “Saw” horror films, climbed 50 cents, or 8.3 percent, to $6.53 at 4:02 p.m. in New York Stock Exchange composite trading. The stock has risen 12 percent this year.
Critical of Spending
Icahn, who is Lions Gate’s largest shareholder, previously made a $7-a-share bid, which expired on June 30. He has criticized the company’s spending on films and said in June that he planned a proxy fight to replace management and the board.
Lions Gate’s board said in a statement it will review Icahn’s latest offer. The company, the producer of TV’s “Mad Men,” has also held talks to buy Metro-Goldwyn-Mayer Inc., a person with knowledge of the situation has said.
Under the debt exchange, Lions Gate swapped $36 million of its 3.625 percent convertible senior subordinated notes due 2025 and $63.7 million of 2.9375 percent convertible senior subordinated notes due 2024 in a private transaction.
The debt was exchanged for new notes that were converted into shares at a price of $6.20 each, according to Lions Gate, which is run from Santa Monica, California.
To contact the reporters on this story: Ron Grover in Los Angeles at Rgrover5@bloomberg.net; Katie Hoffmann in New York at khoffmann4@bloomberg.net
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Icahn offered $6.50 a share, or 7.1 percent less than his previous bid, according to a statement today. Separately, Vancouver-based Lions Gate issued new shares to MHR Fund Management LLC in a debt exchange, putting 12 percent of the stock in friendly hands and diluting Icahn’s holdings.
The exchange with a fund led by Mark Rachesky, who has a seat on the Lions Gate board, will make it harder for Icahn to gain a majority of the stock or win a threatened proxy fight to replace the management and directors. The swap boosts Rachesky’s stake to almost 29 percent, according to a filing, while cutting Icahn’s to about 33 percent from almost 38 percent.
“This was management’s last chance,” said Matthew Harrigan, a Denver-based analyst with Wunderlich Securities who recommends the shares. “They needed someone with a large position to step up if they were going to stop him.”
A 10-day truce between Icahn, 74, and Lions Gate ended yesterday. The two sides said they discussed potential acquisitions and possible board seats for Icahn. The talks didn’t yield results that would merit an extension, Icahn said. Discussions on acquisitions may continue in the future, he said.
Rachesky, 51, a former chief investment officer with Icahn, increased his stake in a complicated transaction in which one of his investment funds purchased $100 million of convertible notes from Kornitzer Capital Management and then exchanged debt for stock. Kornitzer, based in Shawnee Mission, Kansas, also owns 1.62 million Lions Gate shares, Bloomberg data show.
May Buy More
Rachesky, who is based in New York, said in a statement he bought the shares because they “represented an attractive investment opportunity” and may buy more. He paid $105.7 million in total for the debt, according to the statement.
In July 2009, Rachesky entered into an agreement with Lions Gate in which he agreed to vote his shares in support of management and to join the board. At the time, Icahn was negotiating for as many as three seats on the company’s board. He said he broke off the talks when Lions Gate insisted he adhere to a standstill agreement.
The debt swap increases Lions Gate shares outstanding by 16.2 million, the company said in a statement, or about 14 percent based on 118.1 million shares outstanding previously.
Lions Gate, distributor of the “Saw” horror films, climbed 50 cents, or 8.3 percent, to $6.53 at 4:02 p.m. in New York Stock Exchange composite trading. The stock has risen 12 percent this year.
Critical of Spending
Icahn, who is Lions Gate’s largest shareholder, previously made a $7-a-share bid, which expired on June 30. He has criticized the company’s spending on films and said in June that he planned a proxy fight to replace management and the board.
Lions Gate’s board said in a statement it will review Icahn’s latest offer. The company, the producer of TV’s “Mad Men,” has also held talks to buy Metro-Goldwyn-Mayer Inc., a person with knowledge of the situation has said.
Under the debt exchange, Lions Gate swapped $36 million of its 3.625 percent convertible senior subordinated notes due 2025 and $63.7 million of 2.9375 percent convertible senior subordinated notes due 2024 in a private transaction.
The debt was exchanged for new notes that were converted into shares at a price of $6.20 each, according to Lions Gate, which is run from Santa Monica, California.
To contact the reporters on this story: Ron Grover in Los Angeles at Rgrover5@bloomberg.net; Katie Hoffmann in New York at khoffmann4@bloomberg.net
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
U.S. exports up, but higher imports widen trade deficit
U.S. exports jumped more than 2 percent in May. But a surge in imports widened the country's trade deficit -- disappointing the effort to even out global trade flows.
The latest U.S. trade figures showed American businesses sold $152.3 billion of goods and services overseas in May, $3.5 billion more than in April.
Imports increased 2.9 percent to $194.5 billion.
The Obama administration is pushing to boost exports as a way to create jobs, and the increase was welcome news after a disappointing decline in April.
The overall widening of the country's trade deficit, however, showed how difficult it will be to rebalance the global economy so that the United States does not consume far more than it produces.
The U.S. trade deficit expanded in May to its highest level in 18 months, rising 4.8 percent to $42.3 billion, the U.S. Commerce Department reported Tuesday.
The monthly trade deficit with China alone jumped $3 billion, to $22 billion, a figure that manufacturing groups said showed that a focus on exports alone was insufficient.
The deficit represents "wealth and jobs heading overseas," said Scott Paul, executive director of the Alliance for American Manufacturing.
The trade deficit also represents a drag on overall economic growth at a time when the Federal Reserve and other analysts worry that the country's economic recovery is slowing.
By Howard Schneider Washington Post
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
The latest U.S. trade figures showed American businesses sold $152.3 billion of goods and services overseas in May, $3.5 billion more than in April.
Imports increased 2.9 percent to $194.5 billion.
The Obama administration is pushing to boost exports as a way to create jobs, and the increase was welcome news after a disappointing decline in April.
The overall widening of the country's trade deficit, however, showed how difficult it will be to rebalance the global economy so that the United States does not consume far more than it produces.
The U.S. trade deficit expanded in May to its highest level in 18 months, rising 4.8 percent to $42.3 billion, the U.S. Commerce Department reported Tuesday.
The monthly trade deficit with China alone jumped $3 billion, to $22 billion, a figure that manufacturing groups said showed that a focus on exports alone was insufficient.
The deficit represents "wealth and jobs heading overseas," said Scott Paul, executive director of the Alliance for American Manufacturing.
The trade deficit also represents a drag on overall economic growth at a time when the Federal Reserve and other analysts worry that the country's economic recovery is slowing.
By Howard Schneider Washington Post
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Boeing lands orders for 66 more planes worth $5B
Boeing continued to announce orders on the second day of the Farnborough Airshow in England with new deals for 66 planes worth about $5 billion at list prices.
FARNBOROUGH, England —
Boeing continued to announce orders on the second day of the Farnborough Airshow in England with new deals for 66 planes worth about $5 billion at list prices.
Air Lease Corp. ordered 54 Boeing 737s worth more than $4 billion and has options for six more. Another leasing company, Ireland-based Avolon, ordered 12 Boeing 737s worth nearly $1 billion.
In addition Boeing identified Royal Jordanian at the buyer of three 787s worth about $500 million, which were previously attributed to an unidentified customer.
On the first day of the show Boeing announced orders for 85 planes - 737s and 777s - worth about $13 billion to Dubai-based Emirates, GE Capital Aviation Services and Norwegian Air Shuttle.
The Associated Press
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
FARNBOROUGH, England —
Boeing continued to announce orders on the second day of the Farnborough Airshow in England with new deals for 66 planes worth about $5 billion at list prices.
Air Lease Corp. ordered 54 Boeing 737s worth more than $4 billion and has options for six more. Another leasing company, Ireland-based Avolon, ordered 12 Boeing 737s worth nearly $1 billion.
In addition Boeing identified Royal Jordanian at the buyer of three 787s worth about $500 million, which were previously attributed to an unidentified customer.
On the first day of the show Boeing announced orders for 85 planes - 737s and 777s - worth about $13 billion to Dubai-based Emirates, GE Capital Aviation Services and Norwegian Air Shuttle.
The Associated Press
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
Friday, July 9, 2010
The Vanishing American Consumer and the Coming Trade War
President Obama has vowed to double U.S. exports within the next five years. That’s because exports are critical for rebooting the American economy. It’s clear American consumers can’t get the economy going on their own. They can’t restart the jobs machine. They’ve run out of money and credit.
It’s not just that one out of four Americans is unemployed or underemployed (working part-time, overqualified, or at a lower wage than before). More significantly, the Great Recession burst the housing bubble that had let American consumers turn their homes into ATMs. Now the cash machines are closed.
So the Administration figures foreign consumers will have to fill the gap.
Problem is, most other economies also relied on American consumers. Remember the trade gap? Americans used to be the world’s biggest and most reliable customers – sucking in high-tech gadgets assembled in China, car parts from Japan, shirts and shoes from Southeast Asia, and precision instruments from Germany.
With American consumers pulling back, these other economies have also been slowing down. Their unemployment is rising.
Last week I attended a conference with global business executives. When I asked them where they expected to find new customers to replace Americans who are pulling back, they all said China and India and quoted me the same number: 800 million new middle-class consumers from these and other fast-developing countries over the next decade.
Yes, but. As of now China and India are still relying on net exports to fuel their growth. Even if you think their middle classes will eventually become so big and rich they can buy everything these nations will be able to produce, that doesn’t mean they’ll also buy what the rest of the world produces.
Yes, global companies will do wonderfully well. General Motors is well on the way to selling more cars in China than it does in the U.S. But American workers won’t get the jobs, and nor will workers in Europe, Japan, or the rest of the world. GM makes the cars it sells to Chinese consumers in China.
Meanwhile, the productive capacities of China and India will continue to grow: More workers, more factories, more high-tech equipment, more offices. The buying power of their middle classes will have to expand rapidly just to catch up with what these nations will be able to produce.
This means Obama and others won’t easily find the export markets they need to create enough jobs to make up for the vanishing American consumer.
When the world’s productive capacities exceed the buying power of the world’s consumers, every government wants to increase exports and discourage imports. That spells trade war.
Last week the representatives of the world’s 20 biggest economies vowed to slash their budget deficits by half by 2013. The result will be even less domestic demand and even more pressure to export in order to avoid higher joblessness.
We’re unlikely to see a repeat of the disastrous Smoot-Hawley tariffs that worsened and lengthened the Great Depression. But you can forget trade-opening agreements. In Toronto last week, the G-20 leaders dropped their 2009 pledge to finish the Doha round this year. In the U.S., agreements with South Korea, Panama, and Columbia are languishing.
And watch out for under-the-radar protectionist moves. Since the start of 2008, when the Great Recession began, countries around the world have already imposed at least 443 measures to block imports, according to the Center for Economic Policy Research.
This is just the start.
Originally published at Robert Reich's Blog
http://robertreich.org/post/789574303/the-vanishing-american-consumer-and-the-coming-trade
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
It’s not just that one out of four Americans is unemployed or underemployed (working part-time, overqualified, or at a lower wage than before). More significantly, the Great Recession burst the housing bubble that had let American consumers turn their homes into ATMs. Now the cash machines are closed.
So the Administration figures foreign consumers will have to fill the gap.
Problem is, most other economies also relied on American consumers. Remember the trade gap? Americans used to be the world’s biggest and most reliable customers – sucking in high-tech gadgets assembled in China, car parts from Japan, shirts and shoes from Southeast Asia, and precision instruments from Germany.
With American consumers pulling back, these other economies have also been slowing down. Their unemployment is rising.
Last week I attended a conference with global business executives. When I asked them where they expected to find new customers to replace Americans who are pulling back, they all said China and India and quoted me the same number: 800 million new middle-class consumers from these and other fast-developing countries over the next decade.
Yes, but. As of now China and India are still relying on net exports to fuel their growth. Even if you think their middle classes will eventually become so big and rich they can buy everything these nations will be able to produce, that doesn’t mean they’ll also buy what the rest of the world produces.
Yes, global companies will do wonderfully well. General Motors is well on the way to selling more cars in China than it does in the U.S. But American workers won’t get the jobs, and nor will workers in Europe, Japan, or the rest of the world. GM makes the cars it sells to Chinese consumers in China.
Meanwhile, the productive capacities of China and India will continue to grow: More workers, more factories, more high-tech equipment, more offices. The buying power of their middle classes will have to expand rapidly just to catch up with what these nations will be able to produce.
This means Obama and others won’t easily find the export markets they need to create enough jobs to make up for the vanishing American consumer.
When the world’s productive capacities exceed the buying power of the world’s consumers, every government wants to increase exports and discourage imports. That spells trade war.
Last week the representatives of the world’s 20 biggest economies vowed to slash their budget deficits by half by 2013. The result will be even less domestic demand and even more pressure to export in order to avoid higher joblessness.
We’re unlikely to see a repeat of the disastrous Smoot-Hawley tariffs that worsened and lengthened the Great Depression. But you can forget trade-opening agreements. In Toronto last week, the G-20 leaders dropped their 2009 pledge to finish the Doha round this year. In the U.S., agreements with South Korea, Panama, and Columbia are languishing.
And watch out for under-the-radar protectionist moves. Since the start of 2008, when the Great Recession began, countries around the world have already imposed at least 443 measures to block imports, according to the Center for Economic Policy Research.
This is just the start.
Originally published at Robert Reich's Blog
http://robertreich.org/post/789574303/the-vanishing-american-consumer-and-the-coming-trade
US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/
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