National / International News
Like a Halloween ghoul jumping out of nowhere with a pile of candy, Japan's central bank today announced its radically increasing its economic stimulus program. It's an effort to stop deflation and to counter act a hike in the sales tax that depressed consumers in Japan. Up went Japan's Nikkei stock index by 4 point eight percent—That's the like the Dow jumping 825 points. And there were other consequences. More on that. Plus, the two biggest cinema chains in the U.S. reported dismal summer profits this week, even though summer is supposed to be prime movie-going season. We look into the flailing movie theater industry. Plus, we've been calling our sources to see what might next Tuesday's mid-term elections mean for the economy, jobs and businesses.
Exxon Mobil and Chevron report earnings on Friday, and life for Big Oil has been neither light nor sweet lately. Crude prices are at near four-year lows, and that’s not even the whole story.
Even before oil fell below $100 a barrel this fall, big companies were cutting investments and unloading assets. The business is getting more expensive as oil gets harder to find.
“No cheaper, no easier, as the oil company CEOs like to say,” says Steven Kopits of the consultancy Princeton Energy Advisors. “Where they go in deep water, for example, is smaller fields and deeper and more challenging wells. So costs have tended to rise over a period of time.”
It’s true: shale oil from fracking is getting cheaper to produce. But big companies rely on big fields. And now, oil sells for just $85 a barrel. Several majors saw profits fall a third over last year.
The good news: many of them also refine oil. And that’s profitable.
“Companies that have refineries are going to get a boost from refining margins, which is going to offset their upstream losses to a certain extent,” says analyst Amrita Sen of the London research firm Energy Aspects.
Still, low prices mostly hurt companies. And crude could stay south of $100 a barrel for awhile.
The two biggest cinema chains in the U.S. reported dismal summer earnings, not surprisingly, on the heels of a lackluster summer for films.
Revenue was down for films from $4.85 billion in summer 2013 to $4.05 billion this summer, and consequently Regal and AMC announced drops in earnings of 15 and 9 percent respectively.
That’s problematic because summer is when studios work to lure lots of eyeballs with big blockbusters.
"July was really the killer,” says Keith Simanton, managing editor of IMDB which keeps track of box office numbers through its website BoxOfficeMojo.com.
Year over year, July 2014 was down 38.5 percent. Last time it was down that much was in 1995, when "Waterworld" was the big July premiere.
“A number of films did reasonably well,” Simanton says, "but were not the gigantic smashes that was hoped or supposed.”
“Hercules," for example, brought in $99 million domestically and had a production budget that Box Office Mojo estimates at $85 million.
With the bad summer box office news, Regal Entertainment Group, which is the nation’s largest cinema chain, said it’s considering selling itself.
"It’s about the last thing I expected to hear in my lifetime,” says Barton Crockett, a media equity analyst with FBR Capital Markets.
Crockett says Regal might actually be in a position of strength at the moment, because this past summer wasn’t as much a trend as a part of a larger cycle. For one thing, there are high expectations about the slate of movies scheduled for release in 2015.
“It’s kind of smart at one level to think about selling into what seems to be a lot of investor enthusiasm about a strong 2015,” Crockett says.
That enthusiasm includes high hopes for the two films the comic book powerhouse Marvel plans to release next year: “Avengers: Age of Ultron” and “Ant-Man.” Both films are slated for summer 2015.
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The dining hall at Washington College, a small liberal arts school in Chestertown, Maryland, looks more like a high-end food court.
At “The Kitchen,” the lunch menu includes garlic rosemary pork loin, vegetarian stuffed bell peppers, and lemon-glazed turkey with vegetables. At other stations, students can pick up shrimp bisque in bread bowls or gluten-free pizza. Environmentally conscious diners can mix their own smoothies with a bicycle-powered blender.
And if they still don't see something they want to eat?
“You can go up to an associate and tell them what you want, and they’ll make it for you,” says Joe Holt, chief of staff at the college.
All this choice, of course, has a price. Room and board is rising about 6 percent a year at the college, twice as fast as tuition.
Five years ago, Washington College spent almost $24 million to renovate its outdated cafeteria and hired a company called Chartwells to manage it.
Holt says what they do costs more “than the old system where you got the gallon can of corn and you cranked it open and put it in a serving dish, and that was your meal.”
Washington College couldn’t afford not to upgrade, says Holt. The competition for students is fierce, and the amenities arms race is part of what’s driven the price of room and board up 50 percent at private colleges over the last 25 years (after adjusting for inflation), according to the College Board. At public universities, it’s up 67 percent.
Students—and their parents—have higher standards than they used to, says David Bergeron, vice president of postsecondary education policy at the Center for American Progress and a former official in the U.S. Department of Education.
“We’re expecting college students to be exposed to healthier eating options, more fruits and vegetables, better quality food,” he says.
That’s just the “board” side of the equation. Students also want single rooms and private bathrooms, and colleges are building luxury dorms to accommodate them.
But if today’s students are pickier, they don’t necessarily own up to it. Washington College students Michelle Coleman and Leon Newkirk say the dining hall didn’t really figure when they shopped for colleges.
“I’m not a picky eater,” Coleman says. “I’ve always just eaten what’s given to me.”
“Same here,” says Newkirk.
Still, as they load their plates with pierogi in wild mushroom sauce and grilled chicken, both say they like the food and are willing to pay more for it.