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Small Business Owners Say They’ll Stockpile Cash For Now

The office equipment-maker, Brother International, published the results of its annual Brother Small Business Survey, and the results indicate small business owners feel more confident about the economy compared to the previous year.

When asked whether or not small business owners preferred to invest or stockpile cash, 51-percent of respondents preferred to stockpile cash, versus 47-percent who responded they would rather invest capital towards gaining a competitive advantage over competitors.

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Groupon IPO Could Value Company at $25bn

Bloomberg is reporting Groupon’s valuation could now be pegged at $25-billion, according to confidential sources that spoke to the publication who were familiar with discussions taking place between Groupon and investment banks as the company looks for an initial pubic offering (IPO).

Groupon generates revenue by splitting revenue with merchants that offer deep discount limited-time deals exclusively for Groupon users. Groupon currently has about 75-million users, and the company continues to expand into new markets.

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Obama Could Veto Just Approved $61bn House Spending Cut Vote

WASHINGTON—Early this Saturday morning, the United States House of Representatives voted 235 to 189 in favor of trimming $61-billion in federal spending costs off of the $1.2-trillion federal budget for fiscal 2011.

The Republican controlled House vowed to cut spending in a bid to avoid any future tax hike, even adding new limitations to the access of money that would have been earmarked to support Obama’s health-care reform plan.

Democrats will not accept the spending concessions, and as an early March spending deadline looms, the government could be shut out if lawmakers don’t reach a consensus on spending.

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“Outgoing” Google CEO Schmidt to get $100mn equity award

Update: Schmidt’s new post at Google could be short lived, as he is reportedly seeking a career in television, according to a report from the New York Post, which says he is in negotiations with CNN executive producer Liza McGurk on developing a show featuring himself.

The world’s largest online search engine, Google Inc., has announced plans to replace the current company chief executive officer, Eric Schmidt, with Google co-founder Larry Page, effective April 4, 2011.

Eric Schmidt has served as the chief executive at Google since August 2001.

As part of a reward package to Schmidt, Google confirmed it would give him a $100-million equity bonus over a four-year period.

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Google Board Approves Hefty Executive Compensation Raises


The world’s largest online search company, Google, significantly increased employee payouts effective January 1, 2011, according to a public 8-K securities and exchange (SEC) filing published late last week by the company.

The Google Board of Directors approved the hefty increase in base salaries with added stock options for top-level executives at the company.

Four executives, including Patrick Pichette (Senior VP, CFO), Nikesh Arora (President, Sales & Business Development), Alan Eustace (Senior VP, Engineering, and Jonathan Rosenberg (Senior VP, Product Management), will all receive a significant 30-percent increase in their respective base salaries, bringing their new annual base salaries to $650,000.

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U.S. puts mounting pressure on Chinese monetary policy to encourage floating currency


75th U.S. Treasury Secretary Timothy Giethner under the Obama Administration

The Chinese economy largely relies on exporting manufacturing goods to other economies like to the U.S.

The Chinese government designs its monetary policy to essentially peg its currency, the Yuan, to ensure a stable value that would hedge against appreciation in order to give the country a competitive advantage in the global market place when it comes to exports.

Pegging its domestic currency against a government set policy, instead of allowing the currency to float in the international markets, distorts the real fair value of the currency and continues to help fuel future economic growth in the country from increasing volumes of exports by saturating markets with its cost-competitive goods.

Developed nations, including the United States, have largely criticized Beijing’s monetary policy, arguing it is unfair to nations that allow their currency to float which could cause appreciation.

U.S. Treasury Secretary Timothy Giethner said today at a speech delivered at the Brookings Institution, that there is a dangerous economic threat when nations collude to keep their currencies from appreciating. He went on to say it is unfair to countries that have floating rates, and that nations that keep their currency undervalued could face further challenges as economies they rely on to export goods are saving more and more amid intensifying economic volatility. Additionally, when one nation keeps its currency undervalued, it encourages emerging economies to do the same in order to maximize net exports, at least in the short run.

A new U.S. bill introduced to Congress would add new duties to Chinese-made goods, effectively making them more expensive.

The new legislation would only apply to goods deemed unfairly priced relative to domestic substitute goods manufactured in the U.S.

Ahead of the last G20 meet, which took place in Toronto, Canada, Beijing said it would make changes to its policies that should see at least some marginal appreciation of its currency.

To date, that has not happened, and the Yuan is believed to be undervalued by about 40-percent.

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Starbucks price hikes coming as raw materials costs spike

The Seattle-based premium coffee brewer, Starbucks, has announced it would raise prices of already aggressively priced coffee beverages.

The company says variable costs, in particular, raw materials, have seen significant price increases over the last decade, with some key ingredients like green arabica coffee trending upward to a 13-year high.

Starbucks also noted dairy, sugar, and cocoa as other primary raw materials that have materially increased in costs.

Starbucks CEO Howard Schultz said in a statement today that the company absorbed the higher costs in the past, but would now have to shift the costs to consumers given the upward trend and continued volatility.

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BMW banking on Mexico to cut costs as demand jumps

The world’s largest luxury carmaker based in Munich, BMW Group, today announced plans to increase purchases from Mexico in a bid to lower total costs under a new cost cutting program.

More specifically, BMW will buy more auto parts that are manufactured in Mexico for its vehicles that are assembled around the world, particularly in Germany and the United States.

BMW said it would more than double auto part purchases from Mexico over the next few years, starting two years from now.

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Beijing says more flexible yuan currency policies coming

Nations, in particular, the United States, have long expressed concern over Beijing’s policy to peg its currency, the yuan, to the American dollar.

Beijing’s policy serves as a mechanism to keeping the value of the yaun discounted in order to give the country a competitive advantage in the global markets when it comes to exports by making their domestic products more attractive to international buyers due to a price advantage.

The result has been firm’s ceasing production in more expensive markets like North America in favor of moving manufacturing to China due to the lower prices.
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BMW Group reports strong net sale gains across all brands in May

New 2010 BMW 5-Series

The luxury German carmaker, BMW, today released sales figures for the month of May 2010.

The company reported strong year over year gains in sales for select brands and models, including the super expensive Rolls-Royce Ghost that saw sales grow by more than 330-percent compared to the same period last year, as global economies slowly recover from the credit crisis.

The BMW brand sold 101,775 vehicles in May 2010, marking a significant 12.3-percent increase over May 2009.

The BMW 7-Series and the company’s new 5-Series models helped fuel sales.

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