December 21, 2024

You are here: Home / Archives for glut

Theater Owners Call for Fewer R-Rated Movies

April 17, 2013 by Leave a Comment

The movie business has never been healthier, except that attendance in North America is down 12 percent so far this year compared to last. There was a plea for fewer R-rated movies, followed by chest-thumping from Universal Pictures about its crude comedy “Ted.”

And sitting in a darkened theater, attendees were told, has never been more enjoyable, unless you are attending CinemaCon, where you will be harshly advised to refrain from using your phone to illegally record movies. (Theater chain executives need to be reminded of this?)

Studios approach this convention, attended by about 5,000 people, as a crucial opportunity to get out their pom-poms and promote coming releases; if theater owners like what they see, it can help secure additional auditoriums during the gridlocked summer and holiday seasons. Studios enlist stars to help woo the theatrical troops — who fly in from spots like Kansas City and Knoxville — as Brad Pitt did on Monday night on behalf of his June release, “World War Z.”

For the National Association of Theater Owners, CinemaCon is an opportunity to discuss new audio technology, brainstorm about how to fight camcorder pirates and sample the latest and greatest in popped corn. This year, John Fithian, president and chief executive of that trade organization, also used the spotlight to complain about a glut of R-rated films.

He said attendance had suffered this year because of “the weight of too many R-rated movies.”

“Make more family-friendly films and fewer R-rated titles,” Mr. Fithian said. “Americans have stated their choice.”

Appearing with Christopher J. Dodd, chairman of the Motion Picture Association of America, Mr. Fithian also unveiled minor tweaks to the way ratings for individual films are advertised. The labels will include more thorough descriptions of why a movie received a certain rating. Theaters will also begin running a ratings-related public service announcement.

Mr. Fithian’s criticism of R-rated movies comes after the school shootings last year in Newtown, Conn., and shootings last summer at a movie theater in Aurora, Colo.

After Mr. Fithian was Adam Fogelson, chairman of Universal Pictures. He began his presentation with an off-color scene from the R-rated “Ted” and then unveiled clips from two coming films that will be rated R. “2 Guns” is about undercover agents set up by the mob; “Kick-Ass 2” stars the young Chloë Grace Moritz as an (extremely) foul-mouthed crime fighter.

Mr. Fogelson also discussed lighter films planned for the summer, like a sequel to “Despicable Me” and the crime comedy “R.I.P.D.,” about undead police officers working for the Rest in Peace Department.

Article source: http://www.nytimes.com/2013/04/17/business/media/theater-owners-call-for-fewer-r-rated-movies.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

DealBook: As Citigroup’s Profit Surges, Skittish Borrowers Hurt the Consumer Unit

April 15, 2013 by Leave a Comment

A Citibank branch in New York.Keith Bedford/ReutersA Citibank branch in New York.

8:34 p.m. | Updated

Citigroup beat earnings expectations on Monday as net income surged by 30 percent in the first quarter of 2013. But beneath the banner results, the bank is grappling with a sluggish economy and skittish American consumers who are still wary of shouldering fresh debt.

The bank, which has been aggressively working to slash costs and slog through a glut of soured assets, reported a profit of $3.8 billion, or $1.23 a share, for the first quarter. Revenue rose by 3 percent to $20.5 billion.

Still, Citigroup’s results were dampened by largely stagnant revenue growth in the consumer banking unit and persistent difficulties in Asia and Latin America. One challenge: the United States consumer.

Borrowers are still unwilling to take on new loans, even with interest rates hovering at near-record lows.

Related Links



“I don’t think we’ve got a real strong consumer driving the economy,” John Gerspach, the bank’s chief financial officer said on a conference call on Monday. He added that “we are seeing a certain amount of deleveraging.”

For Stephanie Sanyour, 25, “deleveraging” felt like a tremendous relief. Ms. Sanyour, a television producer who lives in Des Moines, said she had devoted an entire paycheck this month to wiping out her debt on a Citigroup credit card. While the monthly payments were manageable, she said that the debt felt like a “chain on my ankles limiting my flexibility.”

Across the nation, banking analysts say, consumers like Ms. Sanyour are working to pay off their bills and stay out of debt. Such a tepid appetite for loans underpinned Citigroup’s results on Monday. While total loans inched up slightly in the first quarter to $539 billion, the bulk of the growth stemmed from demand among corporate clients beyond the United States. Consumer lending rose just 1 percent in the first quarter. In North America, revenue in the global banking unit stagnated, falling by 1 percent to $5.1 billion.

“The environment remains challenging and we are sure to be tested as we go through the year,” Michael L. Corbat, the bank’s chief executive, said in the earnings release.

Citigroup’s quarterly earnings underscore broader challenges buffeting the United States banking industry. On Friday, JPMorgan Chase and Wells Fargo reported declines in revenue, slowed in part by mortgage machines that are beginning to sputter. The refinancing boom, fed by federal largess that drove down interest rates and spurred a flurry of refinancings, is showing signs of petering out.

Combined with Citi’s earnings Monday, the results are propelling worries that banks are floundering to offset income sapped by a spate of new financial regulations and a lackluster economy. Sluggish loan demand is renewing those concerns. Jamie Dimon, the influential chairman and chief executive of JPMorgan, called loan growth “soft” for the quarter when the bank reported earnings on Friday.

Beyond the banking results, other indicators of economic health have proved dispiriting as well. Retail sales in the United States fell by 0.4 percent in March. Even though unemployment is falling, consumers remain unconvinced.

Part of the wariness among consumers, banking analysts say, arises from broad skepticism about the housing market. Even though housing prices have been rising recently, the improvements won’t rouse consumers until they remain steadily high for a longer stretch, according to analysts. “If housing prices start to stall even a little bit, then we are going to see an even greater retreat from consumers,” said J. J. Kinahan, a strategist at TD Ameritrade.

Even bank executives are skeptical about the housing market in the United States. “I wouldn’t say I am positive about the housing market,” Mr. Gerspach said.

Citigroup has pinned some of its hope for future profitability on its vast international footprint, but some regions produced lackluster returns. Revenue from consumer banking in Asia fell in the first quarter to $2 billion, down 1 percent from the same period a year earlier. The bank is struggling to navigate the shifting regulatory landscape in Asia. In South Korea, for example, national officials placed a cap on the interest rates of a range of consumer loans. Mr. Gerspach said that there were “still headwinds” in the region.

Despite the challenges, Citigroup showed strengths in other parts of its business. A bright spot in the first quarter was the securities and banking group, which was bolstered by strong gains in investment banking, fixed income and equities.

Revenue in that unit surged 31 percent, to $6.98 billion, while net income was $2.3 billion, up 81 percent from the period a year earlier. For Citigroup, the unit has been a consistent focus. Mr. Gerspach reiterated that on Monday, saying the bank continued to make “steady progress” in its share of a “client’s wallet.”

Much of the gains in securities and banking came from Citigroup’s investment banking unit, which was buoyed by increases in debt and equity underwriting. The unit’s revenue increased to $1.1 billion, up 22 percent from the period a year earlier.

Over all, investors seemed pleased with the quarterly results. Citigroup’s stock rose 9 cents to $44.87 on Monday, after trading in the morning above $46, on a day when there was wide selling in the stock market.

The quarterly report is the second under the leadership of Mr. Corbat, who took over after the abrupt ouster of Vikram S. Pandit. In October, Michael E. O’Neill, the bank’s forceful chairman, pushed Mr. Pandit out in favor of Mr. Corbat.

Mr. Corbat has vowed to continue reorienting the bank toward its core business while shedding less-profitable units. That cost-cutting began under Mr. Pandit, who helped return the bank to profitability after presiding over a turbulent chapter in its history when Citi received a $45 billion federal lifeline.

Citigroup has been aggressively whittling down a morass of soured loans and cutting less-profitable business lines to reduce costs. In December, it said it would eliminate 11,000 jobs worldwide. Within its Citi Holdings unit, Citigroup reduced assets by $60 billion in the first quarter.

Citigroup continues to be haunted by its mortgage woes. Last month, it agreed to pay $730 million to settle claims that it had persuaded investors to buy securities backed by shaky mortgage loans. The bank did not admit any wrongdoing. Cautioning investors on Monday, Mr. Gerspach said that legal expenses remained “volatile.”

This post has been revised to reflect the following correction:

Correction: April 15, 2013

An earlier version of this article misstated Citigroup’s revenue performance in North America. Revenue fell to $5.1 billion from the period a year earlier, it didn’t increase.

Article source: http://dealbook.nytimes.com/2013/04/15/citigroups-earnings-rose-30-in-first-quarter/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Economix Blog: Unwanted Homes, Unwanted Workers

December 12, 2011 by Leave a Comment

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

Once upon a time, housing looked like a rare, highly valued asset; now, the market has been flooded with unwanted homes. And as I wrote in an article Sunday, economic forces have helped reallocate those excess houses to more productive (and non-residential) uses, like a park, work of art or marijuana garden.

In the course of reporting for this article, I realized that today’s housing problems are not terribly dissimilar from the last time one of pillars of the economy faced sudden devaluation: its labor force, right after World War II.

During the war, able-bodied workers were in short supply relative to the output required to keep the country functioning and pumping out tanks and munitions. To lure more women into the labor market, employers raised wages and the government popularized “Rosie the Riveter.”

Then the war ended. Millions of soldiers flooded back into an economy that had been restructured to operate almost entirely without them. Politicians feared that the markets would again be overwhelmed with excess labor and the Great Depression would resume.

But just as governments are bulldozing away excess housing today, after World War II the government removed some of the surplus labor from the market then as well. It did so through two channels — one for women, and one for men.

DESCRIPTIONTo avoid having a glut of labor, Rosie the Riveter was sent back into the kitchen.

“First there was propaganda to get women out of the home, and then came the propaganda to get women back in the home,” said Lawrence Katz, an economics professor at Harvard who has written about postwar labor markets. Many employers also laid off their female employees to make room for the returning troops, he said.

If the women were re-domesticated, the men were instead educated.

Returning soldiers were offered a free college or technical education by the G.I. Bill – an offer that also happened to delay their entry into the labor force.

“It was a payment for their service, but it was also to keep them from going out and looking for jobs,” said Professor Katz.

There was indeed a brief recession in 1945 as war production unwound, but unemployment managed to stay astoundingly low in the postwar years. Reducing the supply of labor wasn’t the only reason workers escaped devaluation on the scale seen in the recent housing bust; there was also a major postwar increase in demand for workers.

Pent-up demand for products that were rationed during the war and construction for newly forming families also created a lot of new jobs for returning soldiers. (It helped that the United States was the only major developed country whose capital stock hadn’t been bombed out, of course.)

The government bolstered demand for workers too, by creating lots of labor-intensive post-war infrastructure projects.

So what lessons do those policies offer for today’s housing market?

Now, as then, the government has two main ways to stabilize the market (assuming politicians want price declines to stop, and they may not). Government policy can either reduce supply or increase demand — or do both at once, as it did after World War II.

Reducing supply in the housing market means bulldozing more homes or otherwise assigning them to other uses (or at least rezoning houses so that the private sector can assign the buildings to other uses). State and local governments across the country have already begun this strategy.

Increasing demand for homes, on the other hand, is a bit trickier.

One possibility is to increase the population of the United States. Accordingly, Senators Chuck Schumer and Mike Lee have introduced a bill offering residential visas to any immigrants who buy housing in the United States.

There are many opponents to this idea, thanks to fears that bringing in more foreign homeowners means also expanding the oversupply of workers that we have today. (Many economists disagree with this assessment, but that’s a whole other can of worms.)

The United States may not even need more people to move here to absorb excess homes. Maybe all it needs is for its existing population to change its family arrangements.

Household formation has slowed dramatically since the recession began. Over a million homes that should have been formed in the last few years – at least, given demographics — weren’t, according to Mark Zandi of Moody’s Analytics. That’s approximately equal to the country’s current surplus of vacant homes.

Household formation is slowing not because the population is shrinking, but because cash-strapped families are doubling up and unemployed recent college graduates remain tethered to their parents’ couches.

An implication is that to fix the housing market, the government should be promoting job growth, which will enable crammed families to peel off from one another. Now, as in the postwar decade, employment and housing remain inextricably linked.

Article source: http://feeds.nytimes.com/click.phdo?i=1fe56691c9baecf524492543bb98ef2d

Filed Under: Economy News Tagged With: , ,