Mid-Life MBA: The Art of Business

Not to beat it to death since the early news has already been out for a couple of weeks or more but the economy has shown definite slowing in the 1st quarter with GDP increasing only by an annualized 1.3 percent according to the Bureau of Economic Analysis.  This is in comparison to the 4th quarter of 2006 where real GDP increased by 2.5 percent. The bureau cautions however that 1st quarter numbers are subject to revision and that the official, preliminary numbers will not be realeased until May 31st.

First quarter increases mainly reflected personal consumption expenditures (PCE) as well as state and local government spending.  These numbers were undermined however by the negative contributions from residential fixed investment, private inventory investment, and federal government spending.  The report also points out that imports, which are a subtraction in the calculation of GDP, increased.

The report summarizes…

“The deceleration in real GDP growth in the first quarter primarily reflected a downturn in exports, an upturn in imports, a deceleration in PCE for nondurable goods, and a downturn in federal government spending that were partly offset by a smaller decrease in private inventory investment, an upturn in equipment and software, a smaller decrease in residential fixed investment, and an acceleration in PCE for durable goods.”

I was surfing through Churchbusiness.com when I noticed a recent “culture of accountability,” webinar and felt palpably startled.  The site said the webinar would be about “accountability,defined as “ the acknowledgement and assumption of responsibility for actions, products, decisions and policies, including the administration, governance and implementation within the scope of one’s job.” Accountability also encompasses the obligation to report, explain and be answerable for results and consequences.  (Godevenos)“For some strange reason, it doesn’t come easy to theology students or church leaders in general; yet, accountability has been around since the beginning of man, from the early chapters of Genesis to the Jesus’ parable of the talents,” Godevenos continues. “It’s still going strong today in our public and private systems of governance. It involves either the expectation or assumption of account-giving behavior.”

In its simplest form, accountability has also come to mean “the willingness to stand up and be counted,” he says – but how do we get our staff (and possibly our congregants) to do just that?

Awareness of this concept in the church is critical but it is also critical that the concept have a context for without grace, accountability will turn an institution that is to be a ministry of grace into just another form of the law. This is not to say however, that the concept has no place–it does.  A pastor, for example, may not be able to guarantee a 20% increase in giving or in membership of a particular church, but it should guarantee that the pastor is indeed preparing well for his preaching, visiting well to support his congregation, and finding creative ways to reach his surrounding community. Accountability is an important concept for annual evaluations in the church but the challenge will be to properly place it in the broader context of church life.

Centene Corp is a managed care provider for Medicaid, Medicare, and Schip, services. It is the 4th largest provider in the USA and it closed on Friday at $21.00, down from $24.00 earlier in the week and down from an all time high of $28.00.

With 1st quarter earnings of 26 cents per share, excluding firstguard activity, it may not be a bad deal right now. Have a look at the Morningstar ratings below. A good deal of its success will hinge on currently pending contracts for services in Maricopa county, Arizona.

Centene’s managed-care organizations served more than 1.1 million members in six states as of March 31, up from nearly 875,000 on the same date in 2006.

A continued possibility of rising inflation may be responsible for some of the overall lack of direction in the market. The Federal Reserve Board’s release of minutes from a March meeting of the Federal Open Market Committee said the “predominant policy concern” is that future inflation won’t moderate. For the week, the S&P 500 Index rose 0.6% to 1,453, and the yield of the 10-year U.S. Treasury note rose 1 basis point to 4.76%.

Producer prices are up with the Producer Price Index (PPI) rising 1% over the last month. This is the 4th large increase in the past 5 months and is largely due to increased food and energy costs.

The trade gap however, continues to narrow and has narrowed for every month since August 2006 with the exception of December. Many analysts had expected the gap to widen in February. The gap was a record 68.9 billion dollars in August of last year but was 54.8 billion in February.

In the week ahead we look forward to a Consumer Price Index update on Tuesday as well as updates on industrial production and residential construction that same day.  On Thursday the Conference Board will release a report on leading economic indicators.

Here is a WSJ video, on the fine art of tying a necktie. A video demonstration illustrates the “four in hand,” “the half-Windsor,” and, the mother of all knots, “the full-Windsor.”

Most of us learned the “Four in Hand,” but alas big knots are now “in.”  What to do?  Turnbull & Asser and the WSJ to the rescue.
link.brightcove.com/services/link/bcpid452319854/bctid627954944

In his state of the union address, President Bush outlined plans to boost use of renewable and alternate fuels to 35 billions gallons by 2017, a replacement for 15% of estimated gasoline consumption in the same time-frame. With a current demand of 10 billion gallons for blending purposes, the current 5 billion gallons of production capacity plus the 6.1 billion gallons of capacity in development would push supply well past demand without the measure.

To add insult to injury, ethanol production is at least momentarily reliant on federal subsidies that contribute an estimated 51 cents for every gallon of ethanol, an important incentive as ethanol trends downward in price with gasoline.

Under consideration is a measure to boost ethanol production to 60 billion gallons by 2030.

Currently, according to Forbes, “Net of the tax subsidy, the price of ethanol is $2.04 a gallon, which is 70 cents more than the $1.34 wholesale price of gasoline. And the energy content of ethanol is only two-thirds that of gasoline.”

Sweden.Se says that Sweden’s trade surplus widened in November to 12.3 billion Kroner (over 1.7 billion dollars). The value of Swedish exports came to 98.4 billion kronor, an increase of 10 percent from the figure for November 2005. Imports totalled 86.1 billion kronor, a rise of nine percent.

It must feel a lot better to be holding the IOUs than to be writing them!

According to the BBC, Vodafone has confirmed that it is considering a bid for a majority stake in Hutchison Whampoa’s Indian mobile phone business. Vodafone is expected to offer as much as $13.5bn (£6.9bn) for Hutchison Essar. This overture is consistent with Vodafone’s strategy of expanding in fast-moving markets to offset slow European growth. Whether it will be successful or not remains to be seen.

The BBC release went on to say that Vodafone already owns 10% of Bharti Airtel, the market leader in India, but is keen to build a more substantial presence in the world’s fastest growing telecoms market.  Hutchison revealed that several other companies have expressed similar interest.

Foreign firms are limited to owning 74% of Indian mobile phone providers.

‘Tis the season for customary, post-Christmas, stock market gains and today’s figures show a market up-tick on news of increased consumer spending and consumer confidence.

Spending in November increased by 0.5% from 0.3% in the month previous. Analysts see a possibility of interest rate cuts by policy makers in the new year. This is all around, good news to an economy where two thirds of GDP is dependent on consumer spending.

Factory orders for big-ticket items such as appliances rose 1.9% in November after an 8.2% tumble in October.

On the first Friday after thanksgiving 140,000,000 shoppers spent slightly more than $360 each, up by 18.9% from last year. The first Friday after Thanksgiving is known as Black Friday because as the official kick off to the Christmas, shopping season, it marks the point in the year when traditionally, retailers’ balance sheets move into the black.
“Each year, consumers have greater expectations for doorbuster specials, forcing retailers to raise the bar,” said NRF President and CEO Tracy Mullin in a statement. “This year, stores did not disappoint.”

The NRF survey said that one-third of shoppers had hit the stores by 6 a.m. and that more than half had visited at least one store by 9 a.m.

The NRF anticipates holiday sales will grow 5 percent to $457.4 billion, slower than last year’s 6.1 percent increase.

The WSJ reports concerns on the part of economists however, that increased sales may represent only deep discounts instead of fundamental strengths (see WSJ Why the Economy Needs Consumers to shop), particularly in light of consumers’ decreasing wealth in a softening real estate market.