Biz Snaps

  • Early Wednesday morning Israeli warplanes hit targets in the Gaza Strip in response to rocket fire toward Israel. This was the first air strike launched by Israel since the informal cease-fire ended cross-border fighting between Israel and Gaza. Palestinian officials reported that no one was hurt and no damage was reported in northern Gaza despite the Israeli military issuing a statement that they targeted “two extensive terror sites” with “accurate hits”.

This was the first attack since President Barack Obama’s visit two weeks ago. There has not been any responsibility placed on a specific, part however the Israeli military says it holds Gaza’s Islamic Hamas rulers responsible for any attack against the Jewish state. AA Rocket strikes have been rare since the ceasefire was reached last November. The agreement was created following eight days of considerable violence where over 1,500 rockets were fired leaving 175 dead with a multitude of damage.

  • The housing market is in full blown recovery mode. Housing numbers from March show that the S&P Case-Shiller Index is rising more quickly on an annual basis since 2006. In the past 12 months home sales have experienced year-over-year price increases and new home sales have increased by 29% from a year ago.

In a new study released by PulteGroup which interviewed generation Y renters (ages 18 to 34) they found that 65% of respondent’s intentions to buy homes had increased over the past year. Additionally, 52% of millennials indicated a desire to own and build equity. There are approximately 90 million living members of the generation Y group making them the largest demographic group in United States history.

This provides an opportunity that could create a housing boom larger than anything the country has ever seen. While 98% of millennials said they would be living with someone, the most important feature to them was the layout of their new home. Some 69% of respondents desired an open kitchen and family room space for entertaining purposes. These are promising signs but Jonathan Miller, President and CEO of Miller Samuel says, “It’s still very early in the process”. “The idea of people living with their parents because they can’t afford to go out on their own has been a problem since the credit crunch began five or six years ago”. In addition, he remarks on how millennials are faced with record high rent rates.

Nevertheless, most people of this generation are first time owners which means they do not have to worry about selling another home or coming from a home that has lost significant value. Thus making the housing market more accessible to them.

  • 2012 was a very rough year for J.C. Penney and CEO Ron Johnson. Their store sales were down 32% in the fourth-quarter in addition to the retailers losing over $4 billion in sales in the 2012 fiscal year. The current trading price for JCP is $14.43, less than half of its value before Johnson became CEO in 2011.

Following the year of poor performance, J.C. Penney is cutting Johnson’s pay by 97% to $1.9 million. 97% sounds much more significant than it actually is. His expected salary was to be $3.375 million in 2012, but the real money came with the stock options of more than $50 million which they used to lure him away from Apple. In comparison Kevin Mansell, CEO of Kohl’s, made $7.8 million in 2012.

JCP has suffered through heavy controversy since Johnson has come aboard. He first tried to do away with sales but subsequently brought them back after customers complained. Later he set out to redesign and completely modernize the company’s stores but ended up leaving many stores in a frozen time zone of construction. He also introduced a three-tier pricing model which turned out to be too confusing to customers. On top of all of this, they are currently engaged in a costly legal battle with Macy’s over signing a deal with Martha Stewart Living Omnimedia to carry its home products.

However, Johnson was not the only one feeling the compensation crunch. JCP’s senior management was granted no bonuses or raises last year. There has been no sympathy for Johnson as he has failed in every performance related task. The real sympathy lies with stockholders who have lost significant money since Johnson’s arrival.

  • The first reports from the Alpha Magnetic Spectrometer, a $2 billion cosmic ray detector on the International Space Station has brought back some considerable results. It has found the first significant hint of dark matter, the mysterious substance that is believed to hold the cosmos together but has never been directly observed or proved.

The ray detector was first sent into space two years ago and it has gathered evidence of a new physics phenomenon that could be the strange and unknown matter, an international team at the European particle physics laboratory near Geneva announced Wednesday.

Samuel Ting, Nobel-winning physicist and team leader, said he expects a more conclusive answer within months. The data being collected will be analyzed at the European Organization for Nuclear Research, also known as CERN, which is located along the French-Swiss border. The first results from the detector are substantial, because dark matter is thought to make up a quarter of all matter in the universe. Deciphering the mystery of dark matter could help scientists better understand the make-up of our universe and more importantly, what holds galaxies together.

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