All posts by sarahfoster2018

Beige Book’s impact extends to everyday individuals, businesses

By Sarah Foster
Medill Reports

This is the final installment of a multi-part series on the Federal Reserve System Beige Book. Read the previous article: “Despite falling under regional banks’ purview, Fed’s Beige Book excludes territories, commonwealths”

Four years ago, Bethany Sanchez received a surprising inquiry: A request from the Federal Reserve Bank of Chicago to participate in the Beige Book survey.

It wasn’t as if Sanchez was new to the Federal Reserve System, whose policymaking arm determines the direction of interest rates. The fair lending director of the Metropolitan Milwaukee Fair Housing Council had previously met with former Fed chairmen Alan Greenspan and Ben Bernanke through her involvement with the National Community Reinvestment Coalition, an organization that promotes access to banking and financial services among underrepresented groups. She knew, however, that the report primarily surveyed executives at companies, not directors of nonprofits.

Continue reading

Despite falling under regional banks’ purview, Fed’s Beige Book excludes territories, commonwealths

By Sarah Foster
Medill Reports

This is the continuation of a multi-part series on the Federal Reserve System Beige Book. Read the previous article: “Fed’s Beige Book draws skepticism from economists, academics”

Antonio Fernos, associate professor at the Interamerican University of Puerto Rico, has grappled with the same question for more than a decade: Why does the Federal Reserve Bank of New York not include Puerto Rico in its section of the Beige Book?

Answering the question has been so important that Fernos has approached multiple members of the mainland reserve bank’s research and statistics group over the years in an attempt to get an answer. The 12 reserve banks nationwide need to keep up-to-date information on the regions they manage, he said, to properly fulfill the Fed’s dual mandate: stable prices and maximum employment.

“I’m not putting the Fed on checkmate for saying this, but if you don’t know what’s going on here, how are you to explain that you’re doing your job well?” said Fernos, who teaches courses in finance and economic theory and previously served as a portfolio manager at Banco Santander Puerto Rico, one of the island’s main banks. “If you can’t measure it, you can’t manage it.”

Continue reading

Fed’s Beige Book draws skepticism from economists, academics

By Sarah Foster
Medill Reports

This is the continuation of a multi-part series on the Federal Reserve System Beige Book. Read the previous article: “Content simple, but impact significant for Fed’s Beige Book report”

Bill Bergman isn’t a stranger to Beige Book skepticism.

The former research economist for the Federal Reserve Bank of Chicago knows the report that summarizes economic activity by industry across each of the 12 regional Federal Reserve districts is often discredited by other economists or colleagues because it relies upon anecdotes instead of numbers, information that may be based on a person’s emotions or opinions rather than data or statistical evidence, he said.

Still, Bergman’s support for the document that consumed the first five years of his 13-year career at the Chicago Fed remains unwavered. Fieldwork, he said, is useful.

“It’s not sitting behind a computer doing your equations and progression models,” Bergman said. “It’s getting out and talking to people and asking them what’s going on. Real business people are in the line of fire.”

Continue reading

Content simple, but impact significant for Fed’s Beige Book report

By Sarah Foster
Medill Reports

The words remind him of shuffling through yellow pages inside a library, calling auto dealers at random for informational interviews. The phrase evokes scenes of yelling over large stacks of research documents atop his desk — the only way he could communicate with nearby colleagues.

These practices were more than just habits. They were sacred rituals, essential for success during the first five years of his 13-year career as an economist at the Federal Reserve Bank of Chicago. It didn’t take much for him to remember these days, but it all come back to him with the utterance of three words: the Beige Book. Continue reading

Motorola Solutions CEO brings in $15 million pay package

By Sarah Foster
Medill Reports

The head of Motorola Solutions Inc. is reaping the financial benefits of leading a well-performing company, analysts and compensation experts said.

The company’s directors raised CEO Gregory Brown’s salary by 27 percent in 2017, a year when Motorola Solutions grew profits and adjusted income, completed multiple acquisitions and launched 85 new products, according to its most recent proxy statement, which was filed on March 28 with the U.S. Securities and Exchange Commission. Last year, Brown complemented a $1.25 million base salary with additional incentives worth $13.81 million, making his total compensation package $15.06 million, the statement said. The Chicago-based company provides telecommunications equipment for public safety officials.

Brown’s total compensation package has nearly doubled since 2014, when he received $7.61 million, according to the company’s 2014 proxy statement. At the same time, Motorola stock price has nearly doubled over the past three years as well, analysts said.

“He’s benefited just as much as shareholders have,” said Keith Housum, managing director and equity research analyst at Northcoast Research.

Continue reading

Wrigleyville memorabilia shop brings history to life

By Sarah Foster
Medill Reports

Tom Boyle can’t help but poke through his shelves. He’s in search of a movie poster that only he can visualize. It’s somewhere among the newspaper clippings, the vinyl records, the buttons and the books.

“Let me see,” he says, furrowing his brows and shuffling through his inventory.

After searching for a few minutes himself, he sends his colleague over to the other corner of the store, hoping he can help find it. Poking and prodding through the posters, the pair finally pull it out of the pile: “A Stratton Story.” Their eyes glance over the picture depicting the 1949 film about an injured baseball player. They notice the faded red-and-white hues and the way James Stewart embraces June Allyson.

“This is it,” Boyle says with a smile.

But they weren’t searching through their inventory for fun. They were hoping to retrieve the poster for a customer, who has the same last name as Stewart’s character.

“It’s like finding a home for abandoned children,” Boyle said. “When we can find a good home for these items, it makes us happy.”

Intimate customer service and an ability to provide rare items from the past are exactly how Boyle’s store, a memorabilia shop called Yesterday, has managed to stay open for 42 years.

Continue reading

Japanese politician fights for gender equality

By Sarah Foster
Medill Reports

Tokyo—There would be nothing special about the night of Oct. 22.

There would be no front-page stories to commemorate her, no newspaper headlines to honor her. No confetti would fall from the ceiling; no balloons would bounce to the floor.

Instead, she would spend her night alone, sitting somberly in a single-room hotel. She would wait for the results to pour in, to confirm what she’d already known.

Noelle Takahashi knows what they’re looking for.

Most of the time, it’s not someone like her.

Continue reading

Target shares fall following earnings miss

By Sarah Foster
Medill Reports

Target Corp. reported healthy increases in sales figures for the fourth quarter ended Feb. 3, but when it came to profits, the company barely hit its bullseye, and shares fell.

In accordance with GAAP, new U.S. tax legislation helped boost profits up 34.7 percent to $1.10 billion, or $2.02 per diluted share, in the fourth quarter, compared with $817 million, or $1.46 a share, in the year-earlier period. The company reported Tuesday a benefit of 64 cents per share related to the new tax law.

But adjusted earnings, which exclude tax-related savings, fell short of analyst expectations, causing shares to plummet nearly 5 percent. Adjusted diluted earnings per share reached $1.37 compared with expectations of $1.38.

Sales climbed 10 percent to $22.77 billion from $20.69 billion a year earlier, slightly beating expectations of $22.52 billion, thanks to robust consumer spending both in stores and online and an additional week in the quarter.

These gains, however, were offset by various company-wide investment efforts that ate into its fourth-quarter profit. The company aims to invest more dollars into its online shopping experience and increase wages to $15 by 2020, CEO Brian Cornell said at an annual gathering of Target analysts in Minneapolis.

Continue reading

Tyson tops estimates with first quarter earnings

By Sarah Foster
Medill Reports

Ready-to-eat meals and a major tax overhaul helped Tyson Foods Inc. beef up its bottom line, soaring past analyst expectations, for the first quarter ended Dec. 30.

Profits for the U.S. meat giant, known for its Ball Park hot dogs and Jimmy Dean sausages, soared nearly three times to $1.63 billion, or $4.40 per diluted share, from $594 million, or $1.59 per diluted share, a year earlier. Diluted earnings per share nearly tripled analyst expectations of $1.50 per share.

The lowered U.S. corporate tax rate allowed for more than $300 million in savings, positively impacting the company’s profits. Tyson announced plans to invest more than $100 million back into the company, offering 100,000 eligible frontline employees one-time bonuses starting next quarter.

Excluding the tax overhaul, adjusted earnings per share rose to $1.81 compared with $1.59 a year earlier, topping analyst expectations of $1.50. Adjusted net income reached $670.1 million, compared with $593 million.

Sales rose 11.4 percent to $10.23 billion from $9.18 billion, also ahead of analyst forecasts, of $9.91 billion.

Shares climbed about 5 percent to $77.20 in pre-market trading after the company announced Thursday its second strongest operating income in company history.

“We’re creating a modern food company with a diverse portfolio of protein brands,” said Tom Hayes, the company’s president and CEO, during a conference call with investors. “We delivered solid results in all of our segments: beef, pork, chicken and prepared foods.”

Continue reading

McDonald’s reports strong adjusted earnings

By Sarah Foster
Medill Reports

McDonald’s Corp. supersized its adjusted profits and sales, exceeding expectations, for the fourth quarter ended Dec. 31, as cheap meals and promotional deals successfully lured more customers into stores.

Adjusted profits for the world’s largest fast-food chain, before a big tax charge, soared 9 percent to $1.89 billion, or $1.71 per diluted share, compared with $1.73 billion, or $1.44 per diluted share, in the year-earlier period. Wall Street analysts predicted that adjusted profits would reach $1.23 billion, or $1.59 per diluted share.

The company’s adjustment excluded a $1.2 billion tax charge associated with the new U.S. tax code’s treatment of repatriated earnings held abroad. Without the adjustment, fourth-quarter profits for the company reached $698.7 million, or 87 cents per diluted share, compared with $1.19 billion, or $1.44 per share.

“Our top priority in 2017 was serving more customers more often, and we did,” said CEO Steve Easterbrook during an earnings conference call. “This was our first full year of positive comparable guest count growth since 2012,” referring to an increase in visits to comparable restaurants, those open at least 13 months.

Continue reading