March 2009 Archives

- The Forests provide habitat for at least 70 amphibians and reptiles, 200 species of birds, 100 species of freshwater fishes and mussels (26 of which are listed as threatened, endangered, or sensitive).

- Located within eight major river basins.

- Mount Rogers, which at 5,729 feet is Virginia's tallest peak, is located in the Forests.

 - Around 2,000 miles of hiking trails, including the famed Appalachian National Scenic Trail, cross the Forests.

 

I had a rough March. For starters I disbanded NATO. A day later I just avoided making the G20 foot its own bill at the local Best Western. Assuming BB&T comes through next week I can avoid having to tell some of the most powerful countries in the world that next year's lunch won't be free, and it certainly won't be from the Southern Inn.

 

Despite common misconceptions, I have not been tapped by Barack Obama to hold a global summit on the economy or anything else; rather, I am in charge of ROCKMUN, a collaborative Model United Nations conference held every March for high school students in southwest Virginia. For those unfamiliar with Model United Nations programs, they are essentially moderated simulations of the major bodies of the real United Nations with predetermined topics. Our program is young, only in its third year, but we have- or rather, had - high hopes for this year's program. Granted, the quality continued to improve over years past, our secretariat is top notch, and I've finally learned to delegate some responsibilities. But the delegates couldn't come... at least not in the number's I and my staff had hoped.

 

Our first year we had about 90 high school students arrive, bleary eyed and ready to caucus-our fun term for debate- their little hearts out. The next year, through some finagling, we shot up to 160 kids. Two weeks after the conference we met to start planning for the 2009 conference, and projections were as high as 200. Kids from Episcopal in northern Virginia and McCallie in Chattanooga were emailing me to see how to get into this hot new conference.

 

Then the emails, along with the economy and Tom Daschle's tax returns, just kind of stopped. We didn't kid ourselves with delusions as to why. We knew our program was on its way to being top notch. We read the sterling evaluations. It was the economy. Oh, the economy!

 

You see, when little, rural school systems face million dollar deficits - it sounds big, but it's bigger than it sounds. And, though I pour my heart into the program, I realize there are more important matters at hand than a glorified debate team renting a bus, paying a registration fee, and booking a hotel so that Timmy, excuse me, the honorable delegate from Burkina Faso, can have a sort-of-informed discussion on nuclear nonproliferation treaties with someone from two counties away. I get it. Really, I do.

 

Luckily for us, the last minute recruitment of a few private schools from Roanoke got our delegate count back to about 112, still a significant loss from last year. But that's the problem: this is supposed to be for public school kids. This program was created explicitly to provide, for one weekend a year at an affordable price, some tangible experience in multiculturalism for the youth of Southwest Virginia. Some of these kids have never left the country, let alone the region. And though much more likely than say, 50 years ago, some still may never leave. Part of what makes the weekend so endearing is watching a kid representing Iran get, like, totally called out for supporting pro-American ideals. Over a weekend you can really see these kids learning and growing, their minds and horizons expanding.

Watching a Botetourt County freshman with an intense Southern drawl declare Jihad over trade embargos.... well tell me that wouldn't bring a tear to your eye.

It's terribly depressing to imagine a world in which the kids that can afford to go to private school are the only ones that can attend our conference, and in many ways I see it as defeating the point. For now we'll weather the storm the same way everyone else is, cutting costs where possible and trying to make things as affordable for our base as we can.

 

For next year though: don't worry, I'm already drafting my proposal for some of that stimulus money.

 

Recession: 1

The Honorable Delegation of Mauritania: 0

-Michael White

c/o 2010

For all those who thought the economy might be on the verge of recovery, think again.  President Barack Obama encouraged General Motors Chairman and CEO Rick Wagoner to step down Monday as part of the government's bailout plan for the car manufacturer. 

Wow.  Things must be pretty bad.  When was the last time you heard about a U.S. President influencing a high-powered CEO to resign?   It's not the first time something like this has happened, though it's certainly not a common occurrence.

Wagoner had worked with GM for 32 years, nine years as CEO.  GM vice chairman and chief operating officer Fritz Henderson replaced his position.  Many critics argued that Wagoner, despite his attempt to improve GM's situation, did not take action quickly enough. 

The current economic crisis is definitely making history, and GM must be in pretty bad shape if the government must take these measures to save the company from bankruptcy.  This decision also proves, however, the government's push for serious change and improvement from GM. 

Upon this news, GM stock plummeted over 25 percent, as shareholders remained nervous about the company's restructuring plans.    GM has accumulated over $82 billion in losses over the past four years, and many wonder if this bailout will provide the appropriate fix factor.  

With the bailout also comes the threat of moral hazard, as some critics wonder where government intervention draws a line when deciding which companies to bail out during this crisis.  GM is not the only car manufacturer receiving government aid, though the GM management changes surely stands out as stipulation for the bailout plan.

So, will Wagoner's resign actually make a difference for GM's future?  I guess only time will tell. (Yahoo Finance article)

--Lauren Miller, '09

            With the stock market rallying much of the past week, the Dow Jones Industrial Average climbed to nearly 7800 points. The Dow has now increased for the past three weeks, its longest streak of weekly gains since last May. Another positive sign for the economy is blue-chip stocks rose an average of 6.84 percent. As a result, there were some pretty hefty gains this week, but as always, there were companies that took a hit. Here's a look at some of this week's best and worst stocks on the NYSE:

 

Best:                                                                Percent Change            Closing Price

 

CB Richard Ellis Group Inc (CBG)                   80.1%                          4.25

 

Barclays ADR (BCS)                                       76.0%                          9.89

 

Suntech Power Holdings (STP)                         68.6%                          11.65

 

LDK Solar Co Ltd (LDK)                                68.4%                          7.19

 

Trina Solar Ltd. (TSL)                                      64.6%                          12.33

 

Worst:

 

Southern First Bancshares Inc (SFST)             -27.3%                           4.86

 

BancTrust Financial Group Inc (BTFG)           -20.5%                            6.98

 

Osiris Therapeutic Inc (OSIR)                         -20.2%                            14.40

 

 

With the stock market's recent upward trend, is now the time to buy?

 

 

 

-Hank Nathan '10

Well, for those of us following the tournament-it has been an exciting month (or not, if you have a failing bracket...). But what a lot of people are wondering is if the economy is affecting ticket sales for the 2009 NCAA men's basketball tournament??  We do know that it hasn't negatively affected advertising, as http://www.cbssports.com/ reported $30 million in advertising just for March Madness On Demand! That is an increase of over 20% from last year. And there are still major sponsors of the tournament, including AT&T, Coca-Cola, and Pontiac.  In what should not be a surprise to anyone, General Motors cut their marketing spending in this year's tournament. 

The New York Times brought together four top notch economists Tuesday to discuss the bank bailout plan that Treasury Secretary Tim Geithner announced Monday. You can read the full discussion here, but I wanted to discuss some of the things said by Mark Thoma, the University of Oregon economist whose blog I've been reading throughout the year.
Thoma said the key to telling if the government's plan is working is to watch private money. Once private investors -- who will be able to take advantage of government insurance to help cover their losses if things go bad -- start to buy up large quantities of toxic assets, the long-awaited clearing process will be underway. But as the government offers up this insurance as well as loans to help private investors fund their purchases of toxic assets, Thoma argues that it's important to keep an eye on how many of those loans go bad. If we run into another A.I.G. scenario, where a company takes government money and then uses the cash in a way that angers the American public, already low public support for bailing out banks may hit zero.
Along with all this, Thoma said that the U.S. must take major action to set up a process that would allow major commercial banks (Bank of America, Citi, Wells Fargo, J.P. Morgan, etc.) to fail in a future crisis. Because banks were so large and interconnected this time around, the government had no safe or effective way to let them fail, necessitating the enormous bailout payments. If there had been a mechanism set up and if banks were forced to remain smaller, it might have been possible to let weaker banks fail and allow the stronger ones -- the ones who avoided the subprime mess -- to expand their market share.

-- Jacob Geiger

The Dow Jones rallied last week, clawing its way back over 7,200 points.  But of course not all companies rode the wave of resurgence.  Here's a look at the best and worst performers on the NYSE last week.

WORST                                           % change              value

Lehman ABS Corporation (XFP)         - 20.68%                 $2.80

Capital Trust, Inc (CT)                       - 17.51                    1.79

Media General (MEG)                       - 17.35                     1.81

NCI Building Systems Inc (NCS)        - 17.01                     2.44

Ferro Corporation (FOE)                    - 15.66                    1.40

BEST

Time Warner Cable Inc.                       206.36%               $25.52

Colonial Capital Trust IV                      52.19                     4.87 

The Colonial BancGroup, Inc.              46.17                     5.35

Capitol Trust XII                                  39.95                     5.22

Hovnanian Enterprises, Inc.                 37.50                     1.10

 

- Joel Poelhuis

Reporting students have been tracking a number of Economic blogs since January. On the new page, "Econoblogs" you can read their reviews of the stellar, and less-than-stellar, blogs.

Nationwide, beer sales are on the downturn.

 

Beer sales generally stay strong during economic rough patches, said Beer Marketer's Insights editor Benj Steinman.  The U.S. beer market usually grows around 1 percent per year on average, according to the Associated Press. The past few years have seen even bigger numbers. In 2008, however, sales fell to around half a percentage point.

 

Even the Brits--arguably a nation defined by "a pint of beer in the pub"--are cutting back.

 

And U.S. wine drinkers are finding ways to cut back on their typically more expensive drinking habits.

 

But small college town Lexington, Va. seems to be exempt from these nationwide trends. 

 

Until recently, The Palms Restaurant htm had a monopoly on the over-21 bar-going crowd. 

 

Then came a welcome addition to the Lexington bar and restaurant scene--Macado's.

 

In January, the restaurant (pronounced Mack-ah-doo's) filled almost to its 145-person capacity on Thursdays, Fridays, Saturdays and Sundays, according to The Rockbridge Report.

 

Macado's has the kind of ready-made clientele that other bars in other cities envy: two college campuses, each located within walking distance from the bar, filled to the brim with undergraduates, law students, and cadets eager for somewhere new to go.

 

Students from both Washington and Lee University and Virginia Military Institute state cheap food--and, even more importantly, cheap alcohol--as their main reason for frequenting the establishment.

 

The fact that Macado's stays open past midnight amid a host of Lexington restaurants that close far earlier is another big draw.

 

I recently ate lunch at Macado's when I overheard a VMI cadet angrily stamp his fist on the table.

 

"How can they be out of Bud light?!" he exclaimed.  "This happens every weekend."

 

Despite a nationwide downturn, it seems beer sales in Lexington are doing just fine.

 

-Catherine  Carlock '10

 

            Apparently, the wild craziness that is Mardi Gras was just not as wild and crazy this year. Lifetime Mardi Gras-goers attribute this to the economy.  Jesse Shifalo, a Gulf Coast native, said that this year was noticeably tamer than he's seen in years. He said that people weren't as drunk, as loud, or as many.  Shifalo thinks that it must be the economy - people just aren't willing to spend $100 on liquor, he suggested. He also said that maybe people just aren't in the mood. Everyone down here is finally recovering from Katrina, and now they're being flooded by another storm of sorts.  Shifalo wondered if maybe people just can't take it this year, they need a break and not in the form of a drunken day on Bourbon Street.

            Mind you, all of these comments came while he was making me dinner.  Which was at 7:00 p.m., or approximately 11 hours after he had offered me Crown Royal with breakfast.

            Being a first-time Mardi Gras reveler, I though the whole thing was just an absurd celebration of excess. I had a grand time dancing with a friend in the street, learning the ins and outs of bead, boa, crown, and dabloun catching.

            After watching a middle-aged woman indulge in a beer-bong off the side of a float, the economy was perhaps the absolute farthest thing from my mind. She certainly didn't seem concerned, so why ever would I?

            After Shifalo said this, I wondered if it had any merit or if he was just sitting too far from the parade route this year. So I asked the rest of the Shifalo family.

            Kathleen Boatman, Stephanie's 79-year-old grandmother, said she didn't think it was that much tamer than in years past. She did say that perhaps the crowds were thinner.

            But then again, Boatman's perspective was a little skewed, too; I'm not sure I ever saw her more than fifteen-feet from the road.  Up there, as I can now tell you from experience, the crowds do seem a bit thinner.

            Stephanie, my roommate, had similar thoughts as Boatman.  And, once again, I wonder if her perception wasn't more than a little skewed because of location, and, ahem, other things.

            Mrs. Shifalo, then, may be the only neutral source to ask.  She agreed with Mr. Shifalo.  She was up and down and all around the parade, and said the crowds definitely were thinner and less-rowdy.

            The Wall Street Journal had a similar take on the matter, too. They made the comparison not just to the market but primarily to Katrina Recovery.

            Myself? I'm not so sure I should attend a Mardi Gras when the economy is doing well again...

 

Alicia Budich '11