Posts by Rick Newman

  • Tiny theater chain wins big by showing Sony’s 'The Interview'

    Rick Newman at Yahoo Finance 4 days ago

    When your competitors zig, zag.

    That ancient business advice has found fresh meaning now that Alamo Drafthouse, a small theater chain with just 20 outlets in 10 states, has manned up and made a deal with Sony (SNE) to show its film The Interview starting on Dec. 25—the film’s originally scheduled release date.

    The Interview , of course, is a goofy comedy starring Seth Rogen and James Franco as two journalists recruited by the CIA to assassinate North Korean dictator Kim Jong Un, which would never happen in real life. It’s also part of a bigger geopolitical drama in which North Korea seems to have retaliated for the film by hacking into Sony’s computer system and publishing a trove of material deeply embarrassing to Sony, which also would never happen in real life.

  • The economic recovery has finally arrived

    Rick Newman at Yahoo Finance 4 days ago

    This is what’s supposed to happen after a recession. It’s just five years later than expected.

    The economy (measured by GDP) grew 5%, adjusted for inflation, from July through September, after 4.6% growth in the prior quarter, the Commerce Department reported Tuesday. One three-month period of turbocharged growth might be a fluke, but two is fairly convincing. The recovery that’s been limping along since mid-2009 finally seems to be hitting its stride.

    GDP growth is likely to cool down to around 3% through the end of 2014 and stay there through 2015. But modest growth, on top of recent gains, will most likely allow the Federal Reserve to continue its monetary stimulus with only slight tightening. The whole economy, in fact, is hitting a sweet spot that could arguably be described as the return of prosperity, after many false starts since the tepid recovery officially began in mid-2009. Here are a few big things, in addition to strong GDP growth, that are going right:

    Interest rates remain remarkably low, with rates on 30-year mortgages and car loans around 4% for the best-qualified borrowers.

  • How Ford plans to sell cars when nobody wants to own one

    Rick Newman at Yahoo Finance 4 days ago

    Why buy if you can rent?

    That’s the central premise of the so-called sharing economy, in which firms such as Zipcar, Uber, Airbnb and Rent the Runway offer cheaper alternatives to once traditional—and sizeable—financial commitments. While they save consumers money and represent a vibrant new part of the economy, however, as-needed products and services have become a major threat to some established and even dominant consumer brands.

    Ford (F), like other automakers, worries about the sharing economy and the reluctance of younger consumers to commit to big purchases like a car. “They’re becoming increasingly commitment-averse,” Sheryl Connelly, Ford’s futurist, tells me in the video above. “The future of the automobile will be tied to new models of ownership.”

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    Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success . Follow him on Twitter: @rickjnewman.

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  • Needed in 2015: Middle-class wealth gains

    Rick Newman at Yahoo Finance 5 days ago

    If the economy really bounces back next year, we’ll know because ordinary people will feel it—for the first time in years.

    So far, we’ve had a five-and-a-half-year recovery that has mainly benefited the wealthy, while the middle class waits for relief to trickle down. The latest evidence of this hardening economic segregation is a Pew Research study showing the wealth gap between the rich and the rest hit the widest levels on record in 2013, the last year for which data is available. The gap probably widened further in 2014, since the stock market performed well—benefiting those lucky enough to have such investments—while housing sputtered and the typical family struggled just to keep up with inflation.

    Pew found that upper-income families had a median net worth of $639,400, compared with $96,500 for a middle-income family. That’s a ratio of 6.6 to 1. In 2010, the ratio was 6.2, and back in 1983 it was a mere 3.4. Those numbers are consistent with worsening income inequality and middle-class living standards that have been stagnant fore more than a decade.

  • Another Obamacare disaster that hasn’t happened

    Rick Newman at Yahoo Finance 8 days ago

    Many grim developments -- both real and imagined -- have been blamed on the Affordable Care Act, also known as Obamacare. But the ACA continues to be less disruptive than its toughest critics predicted.

    One big concern has been the eventual demise of the employer-based healthcare system, which is how 55% of nonelderly Americansget their coverage. But in its first full year of operation, the ACA has had virtually no affect on this core pillar of the U.S. health system, according to a new study published online by the journal Health Affairs.

    In the study, researchers at the Urban Institute analyzed the percentage of companies offering insurance, the percentage of employees accepting it and the ultimate coverage rates during two different time frames: June 2013 and September 2014. Since the ACA went info effect Jan. 1 of this year, that provides before-and-after snapshots.

    Here’s a summary of the numbers for nonelderly workers:

  • How Obama (and Bush) helped drive down oil prices

    Rick Newman at Yahoo Finance 9 days ago

    Few people foresaw the nearly 50% plunge in oil prices this year. But the forces reshaping the oil market have been aligning for nearly a decade, with part of the impetus coming from Washington.

    In 2007, Congress passed the Energy Independence and Security Act, which President George W. Bush promptly signed. The EISA raised federal mileage requirements for passenger cars for the first time since 1990, in an effort to reduce U.S. gas consumption and make America less dependent on foreign oil.

    The new rules required automakers to achieve average fuel economy of 35 miles per gallon among all the new vehicles in their fleet by model year 2020 -- up sharply from a requirement of 27.5 MPG for cars and 22.2 MPG for light trucks (pickups and SUVs) at the time.

    Overall, the MPG improvements have been working, with lower U.S. oil and gas consumption achieved, as this chart shows:

  • By canning "The Interview," Sony is encouraging terrorists

    Rick Newman at Yahoo Finance 10 days ago

    My fellow Americans—

    Seriously? You’re going to let North Korean hooligans manipulate you into boycotting a movie they don’t want you to see? You’re going to cower before a bogus threat of “terrorism” that exists only because provocateurs suspect Americans will stay home at the mere hint of trouble?

    How about you don’t. How about you demand that Sony release its self-censored film, The Interview,  which the studio planned to debut on December 25 but has now mothballed because of punkish threats from anonymous saboteurs. And if theaters choose not to show it, how about we all rush the entire movie industry until studio executives and theater owners show some fortitude.

    That merciless response may entail a vast cyber attack on Sony that began earlier this month and has left the studio in a state of chaos.

    North Korea hasn’t claimed responsibility, but the CIA has now reportedly linked the hacking attack to North Korea--an impressive achievement for a nation that can’t even keep the lights on.

  • 10 people who lost big in 2014

    Rick Newman at Yahoo Finance 11 days ago

    If your investment returns in 2014 tracked the stock market, you’d be up a respectable 8% for the year so far. If you bet big on one of several high-flying IPOs, such as Alibaba (BABA), GoPro (GPRO) or Lending Club (LC), you did a lot better.

    [Get the Latest Market Data and News with the Yahoo Finance App]

    But big personalities tend to take big risks, and sometimes they end up a lot worse off than the average Joe. Here are 10 people who lost big in 2014:

    Harold Hamm

    Jeff Bezos

    Vince McMahon

    Ray Rice

    Mark Karpeles

    Mikhail Prokhorov

    Vladimir Putin

    Steve Wynn

    John Mackey

    The Whole Foods (WFM) CEO earns just $1 per year in salary, plus a bonus, if it applies. This year, it may not. The grocery chain's stock is down 16%, which hurts Mackey along with other shareholders. He owns nearly 1 million shares of Whole Foods, more than any other individual, with the value of his stake down by an estimated $10 million this year.

    Courtney Love

  • Americans are becoming satisfied with less

    Rick Newman at Yahoo Finance 15 days ago

    Big news! Consumer sentiment has roared back to prerecession levels, which means the U.S. economy is …. nowhere near pre-recession levels, actually.

    The University of Michigan sentiment index rose to 93.8 in December, which is the best reading since January 2007, when it hit 96.9. Following the 2008 financial meltdown, it fell as low as 55.3. Yet headlines about confidence approaching an 8-year high convey the false impression that all the damage from the recession has been repaired.

    It hasn’t. The real story may be that Americans have gradually adjusted their expectations downward and are now satisfied with less. Here are a few key data points showing how far behind we still are:

    Number of full-time employees in the U.S. workforce, in 1000s

    S&P/Case-Shiller national home price index

    Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success . Follow him on Twitter: @rickjnewman.

  • The worst executive screw-ups of 2014

    Rick Newman at Yahoo Finance 16 days ago

    The nuts were served without asking.

    This indignity compelled Heather Cho, a Korean Air Lines vice president, to order a departing jetliner back to the gate at New York’s John F. Kennedy airport earlier this month, and boot a flight attendant off the plane. The airline’s policy is to ask first-class passengers if they want nuts, then serve them on a plate if nuts are desired. But on Cho’s flight, the Korean Air flight attendant handed out bags of nuts—not plated—without bothering to ask if anybody wanted them. Some bosses might have corrected the oversight quietly, out of sight. But Cho opted for a grandiose display of authority that delayed a flight with 250 passengers. When the story went public and the inevitable outcry materialized, Cho—the wealthy daughter of the airline’s chairman—apologized and resigned.

    Michael Jeffries

    Emil Michael

    Patrick Henry

    David Tovar

    Desmond Hague

    Justin Mateen

    Rakesh Agrawal

    Tom Perkins

    Donald Sterling

    Gurbaksh Chahal 

    Dov Charney