Tom Johansmeyer
Smoke and mirrors: Cigarette tobacco makers alter labels to sidestep tax hike
A major tax increase on loose cigarette tobacco has caused pipe tobacco sales to surge dramatically this year. Historically, the tobacco industry manufactured around 270,000 pounds of pipe tobacco per month. Yet, in April, it hit 566,000 pounds, ultimately skyrocketing to 1.7 million pounds in August. While pipe smoking has risen somewhat in popularity since the recession began, mostly because it's a less expensive alternative to cigars, that dynamic is but a rounding error in the spectacular growth seen this year.
So, what's behind the pipe tobacco explosion? The real answer lies in another question: What's in a name?
Facebook shares up, but value down by a third: Ready for the IPO?
Facebook looks like its worth close to $10 billion right now, based on actual transactions in the stock. The social networking site has seen its shares surge on an exchange for private companies, suggesting that the company is perceived to be headed in the right direction. Of course, private companies don't have to disclose all their dirty laundry, so assume that the current "market" value is based on only the rosiest of impressions. Some see this as a leading indicator of a Facebook IPO, which is bound to ignite unparalleled excitement.
There's room for a little common sense, though, and investors should take advantage of it. Facebook remains down 33% from its 2007 peak value of $15 billion, and the recent trading activity implies a value slightly below that defined by the latest investment in the company. It probably makes sense to keep the corks in the champagne bottles a little bit longer, but only because the vintage isn't quite right yet.
The Madoff auction take shows Bernie-mania is hardly waning
There was some doubt headed into Saturday's auction of Bernard Madoff's belongings. Strong interest was anticipated, though many thought the public was tired of the Madoff saga. The asking prices for his (former) Manhattan and Palm Beach homes had just been cut by 10% and 7%, respectively. Presale estimates were kept to reasonable levels. Simply, everything was priced to move.
When the gavel came down for the last time, though, expectations were shattered. The personal effects that once belonged to the architect of the world's largest Ponzi scheme fetched as much as 20 times the presale estimates. It looks like bidders will always shell out for even small pieces of sordid history.
How Twitter gets drivers through the gridlocked streets of Caracas
The streets of Caracas are crammed with three times as many cars as they can handle. And why not? Gas is cheaper in Venezuela than anywhere else on Earth. The consequence, of course, is nasty traffic, made only worse by potholes, police checkpoints and other impediments to smooth vehicular movement.
The situation is one that apparently has no solution on the drawing board. Yet, that doesn't mean drivers must suffer without any relief at all. Thanks to social media tools, according to a Bloomberg News report, smartphone-toting drivers have been participating in an emerging answer to Venezuela's gridlock nightmare.
First U.S. marijuana cafe opens for business in Portland
Cancel your flight to Amsterdam – the U.S. just got its first marijuana cafe on Friday. Located in Portland, Ore., the Cannabis Cafe shows how attitudes have changed since the Obama administration moved into the White House. A month ago, President Barack Obama told federal attorneys to ease off medical marijuana prosecutions.
The widening use of medicinal marijuana has forced governments into a tenuous legal balancing act, according to a Reuters report. Some states passed legislation to allow it, starting with California in 1996. Nonetheless, a federal ban remains in place. The operation of businesses like the Cannabis Cafe, as well as marijuana establishments in California, has been possible as long as federal authorities have chosen not to pursue them. Unlike the shops in California, though, the Portland establishment is the first in the U.S. where certified medical marijuana users can both acquire and consume their marijuana, as long as they stay out of public view.
Solar glut is temporary, demand to catch up by 2012
The oversupply problem plaguing the solar panel industry may be coming to a close. A glut of panels caused prices to plunge this year, calling into question the future of the industry, as well as the individual fortunes of manufacturers. An increase in demand from Germany is helping to consume the excess inventory on the market, according to a new report by research firm iSuppli, which should provide some support to the manufacturers.
Close to half of all solar panels manufactured this year will not be sold in 2009, iSuppli says, and it forecasts that the glut will continue until 2012. In August, the company pegged oversupply at 92% for 2009, but it recently revised the overage rate to 66%.
Art funds follow hopes of market recovery
Ask any investor, and he'll tell you the best place to enter the market is at the bottom. Buy low and sell high, right? The institutional crowd knows this lesson best, and after a rocky year in traditional financial markets, many are now drawn to what seems to be the market bottom for a more unusual asset class: art. The market for art appears to have a lot of promise, particularly given that the art market has suffered even more than the traditional domain of financiers.
With auction markets showing signs of recovery -- or at least wanting to recover -- capital is surging into funds focusing on these asset classes. In addition to the high net worth investors who have tended to invest in these assets and the specialty funds that operate in these spaces, institutional investors are showing more interest in the world's oldest media sector.
Costco opens in Manhattan: Big box retailer for shoe-box living
Manhattan just got its first Costco (COST). The store on E. 116th Street opened on Thursday, making it the first discount club to open in the borough. The experience isn't entirely new, however, as many club members already live in the city. Now, they'll be able to enjoy a shorter jaunt to the nearest Costco.
The store boasts more than 105,000 square feet of selling space and 3,500 products, according to the New York Post. There's an optical department (with doctor), pharmacy and enormous fresh foods area, along with a photo center and food court ... basically, the Manhattan Costco has everything, as the rest of the country already knows, and it comes in one size: huge.
Pentagon to KBR: Cut workforce in Iraq
The Iraq war is getting too expensive, according to Defense Department auditors, and KBR is part of the problem. The contractor faces close to $200 million in penalties for keeping too many bodies on its payroll in Iraq, and it is being pressured to cut back.For six years, KBR has increased its staff, even as troop levels have declined. "Each day that passes without taking action results in continued overstaffing and inefficiency," says a report from the Defense Contract Audit Agency quoted by The Associated Press. On the other side of the issue, though, is a $33.8 billion, 10-year contract with KBR signed in 2001.
The recent flare-up over billing and management practices isn't new. KBR and Defense Department auditors have battled over billions for several years, with critics of the contractor claiming its inefficiency has risen to the level of price-gouging and even fraud.
Office holiday parties go on hiatus, but the risks remain
Whether the office holiday party is a chance to unwind with colleagues or an evening of forced fun with people you're already sick of seeing all day, it's an institution of corporate America. The food is abundant, the liquor flows, and for a few hours, your colleagues are human beings. Then the next morning, you return to work with a hangover and with the same beefs you had before the party.
There's only one thing worse than having to go to the holiday party, and that's to learn that yours has been canceled. When corporate penny-pinching axes the event, that sends an unequivocal message about the company's financial strength and puts everyone on edge.














































