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Chart of the Day: Ratio of Negative to Positive Earnings Guidance stands at a record high; At 3.5 negative updates for every positive one, that is by far the highest ratio since FactSet began tracking such data in 2006.

Updated April 1, 2013, 9:06 p.m. ET

Investors Ignore Negativity at Their Peril
By SPENCER JAKAB

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Recent months have offered yet more proof that markets love to climb a wall of worry. Hand-wringing, whether from retail investors or professional pundits, often precedes heady gains. But some people’s anxiety counts for more than others. While last week the S&P 500 finally erased all its bear-market losses and strategists are falling over one another to raise their year-end targets, the only people in the market with legal inside information are surprisingly cautious. As the first quarter drew to a close, 86 companies in the S&P 500 issued negative guidance for what they expect to report in earnings for that period. Just 24 issued positive guidance. At 3.58 negative updates for every positive one, that is by far the highest ratio since FactSet began tracking such data in 2006.

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The last of the metal-bashers; In odd corners of the country British industry clings on

Manufacturing towns

The last of the metal-bashers; In odd corners of the country British industry clings on

Mar 30th 2013 | BARROW-IN-FURNESS, CORBY AND PENDLE |From the print edition

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TO WALK into Devonshire Dock Hall, in Barrow-in-Furness, a town of 70,000 in England’s north-west, is to walk into the heart of a community. Some 260 metres long, this cathedral of industry houses three part-built grey and black nuclear submarines. Workers in blue overalls and hard hats are busy assembling the vast machines. Among them are “fourth- or even fifth-generation shipbuilders”, says Alan Dunn, the operations director at the plant. “When people here go to the pub, they talk about submarines. The yard dominates everything we do.”

In most parts of Britain, manufacturing has all but disappeared in the past half-century. In 1997 about 4.4m people worked making things; now, just 2.8m do. North of Birmingham the urban landscape is characterised by redundant factories and the glitzy regeneration schemes intended to replace them. And yet in a few places, such as Barrow-in-Furness in Cumbria, or Pendle in Lancashire by the Yorkshire Dales, manufacturing and engineering continue to thrive. If there ever is a new “march of the makers”, as George Osborne, the chancellor of the exchequer, hopes, these places will be where they head for. Read more of this post

Canada’s economy on thinning ice; Disappointing exports, stalled investment and fiscal austerity leave the overstretched consumer as Canada’s only hope for growth

Canada’s economy on thinning ice

Disappointing exports, stalled investment and fiscal austerity leave the overstretched consumer as Canada’s only hope for growth

Mar 30th 2013 | OTTAWA |From the print edition

WHEN the world financial system collapsed in 2007, triggering a global recession, Canada recovered faster than any of the other members of the G7 group of large developed countries. Its banks remained solid, while low interest rates encouraged consumers to borrow and spend. But five years on, consumers are showing signs of flagging. The economy is set to expand by a paltry 1.6% this year. So the authorities are casting around for another source of growth. The trouble is they cannot seem to find one. Government, both federal and provincial, is trying to curb deficits swollen by stimulus spending. Companies are restrained by uncertainty prompted by Europe’s woes and the stand-off over fiscal policy in the United States, Canada’s main trading partner. Exports have still not returned to their pre-recession peak. As for consumers, after 11 consecutive years in which household spending has exceeded disposable income, they are deeply in hock. Just over a year ago, Craig Alexander, chief economist at Toronto-Dominion Bank, predicted the debt build-up “is going to end in tears”. The ratio of household debt to disposable income has continued to edge up (see chart 1). An increase in unemployment (from 7% at the moment) or a rise in interest rates could push some households into bankruptcy and puncture a housing bubble inflating in several Canadian cities.

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Is it a phone, is it a bank? Safaricom widens its banking services from payments to savings and loans; 15m Kenyans use M-PESA for everything from paying electricity bills to school fees, thanks to a simple text-based menu that is accessible on even the most basic mobile phone

Mobile banking

Is it a phone, is it a bank? Safaricom widens its banking services from payments to savings and loans

Mar 30th 2013 | NAIROBI |From the print edition

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Loans as well as phones

SWAHILI continues to creep into the language of global finance. M-PESA, a thriving money-transfer system run by Safaricom, a Kenyan mobile-phone operator, and named after the word for “cash”, has already entered the lexicon. Having persuaded millions of Kenyans to send cash through an SMS network, Safaricom is now trying to tempt them into a savings-and-loans service called M-Shwari, after the Swahili for “cool” or “calm”.

Safaricom has nearly as many subscribers as Kenya has adults—19m people from a population of 43m. Almost 15m of them use M-PESA for everything from paying electricity bills to school fees, thanks to a simple text-based menu that is accessible on even the most basic mobile phone. The firm, which is 40%-owned by Vodafone, makes its money through transaction fees when customers withdraw or transfer cash at a network of more than 40,000 M-PESA agents throughout the country. Read more of this post

Three Rules for Making a Company Truly Great

Three Rules for Making a Company Truly Great

by Michael E. Raynor and Mumtaz Ahmed

Much of the strategy and management advice that business leaders turn to is unreliable or impractical. That’s because those who would guide us underestimate the power of chance. Gurus draw pointed lessons from companies whose outstanding results may be nothing more than random fluctuations. Executives speak proudly of corporate achievements that may be only lucky coincidences. Unfortunately, almost no one provides scientifically credible answers to every business leader’s basic questions about superior performance: Which companies are worth studying? What sets them apart? How can we follow their examples?

Frustrated by the lack of rigorous research, we undertook a statistical study of thousands of companies, and eventually identified several hundred among them that have done well enough for a long enough period of time to qualify as truly exceptional. Then we discovered something startling: The many and diverse choices that made certain companies great were consistent with just three seemingly elementary rules:

1. Better before cheaper—in other words, compete on differentiators other than price.

2. Revenue before cost—that is, prioritize increasing revenue over reducing costs.

3. There are no other rules—so change anything you must to follow Rules 1 and 2.

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Mattel’s former Chairman & CEO (2000-2011) Robert Eckert: The Two Most Important Words

The Two Most Important Words

by Robert A. Eckert

When I arrived at Mattel, the company was losing almost a million dollars a day, the bonus pool was empty, and equity awards were underwater. I believed that those challenges were surmountable. On my first day, at a “town hall” gathering in the cafeteria, I said, “I know how this works. We will turn things around, and because I’m the new, outsider CEO, I’ll get a lot of the credit. But I know who’s really going to deserve the thanks—all of you. I appreciate what you’re about to accomplish.”

I had just arrived from Kraft Foods, where I spent the first 23 years of my career. By the time I was chosen to lead the world’s largest toy company, I had experienced every layer of organizational life, starting as an entry-level grunt. And although I worked hard, I also had a lot of help. My parents and teachers influenced me in powerful and positive ways. My 15 different bosses at Kraft all supported, guided, and taught me. (Well, all but one—who, by the way, lasted only a year at the company.) I found myself saying thank you a lot. Yet I’m also a learner by nature, as I expect most readers of this column are. So I learned to say thank you even more, because the effect was obvious.

Most people come to work every day aiming to do a good job (even if my one bad boss didn’t believe that). And most people—and, as a result, most organizations—actually do pretty well. What should they get in return? Cosmetics entrepreneur Mary Kay Ash put it this way: “There are two things people want more than sex and money: recognition and praise.”

Now, I’m not Pollyannaish. My colleagues can vouch for my toughness. But what’s wrong with recognizing a job well done? Why not say thank you more often—and mean it? Read more of this post

Video: Haptic-feedback shoes guide blind walkers

Video: Haptic-feedback shoes guide blind walkers

Posted by: Kate Torgovnick

April 1, 2013 at 5:51 pm EDT

The footage in this video — which shows a man, a woman and a teenager walking down paths, around curves, up stairs and across streets — may not at first viewing seem remarkable. But the people in this video are blind — and walking without a cane or guide dog. Instead, they are being guided by their shoes. These shoes, which TED Senior Fellow Anthony Vipin Das introduced us to at TED2013, use haptic feedback and GPS technology to guide the blind. Each pair contains electronic circuitry, sensors and small actuators that give the wearer feedback on their movement as they walk, vibrating to tell them when to turn or lift their feet. (See Katherine Kuchenbecker’s great TED-Ed lesson to the field of haptic technology, which debuted on TED.com just last week.) They use a voice-programmed app that reads local GPS maps and plan routes. They have sensors that note obstacles and tell the wearer to stop. The shoes can also read gestures from the walker — for example, two taps means “take me home.” These shoes are called Le Chal, which means “take me there” in Hindi. And as Vipin Das shared in this Q&A with the TED Blog, they are being tested in their first clinical study at LV Prasad Eye Institute in Hyderabad, India. Expected to be available this year, the shoes can be pre-ordered at Ducere Technology’s website. “It’s very encouraging to see the kind of response we’ve had from wearers,” Vipin Das tells the TED Blog. “They were so moved because it was probably the very first time that they had the sense of independence to move confidently — that the shoe was talking to them, telling them where to go and what to do.”

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