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Category Archives: business

IRS Seizes Assets on Suspicion Only

For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

Critics say this incentive has led to the creation of a law enforcement dragnet, with more than 100 multiagency task forces combing through bank reports, looking for accounts to seize. Under the Bank Secrecy Act, banks and other financial institutions must report cash deposits greater than $10,000. But since many criminals are aware of that requirement, banks also are supposed to report any suspicious transactions, including deposit patterns below $10,000. Last year, banks filed more than 700,000 suspicious activity reports. Owners who are caught up in structuring cases often cannot afford to fight. The median amount seized by the I.R.S. was $34,000, according to the Institute for Justice analysis, while legal costs can easily mount to $20,000 or more.

In one Long Island case, the police submitted almost a year’s worth of daily deposits by a business, ranging from $5,550 to $9,910. The officer wrote in his warrant affidavit that based on his training and experience, the pattern “is consistent with structuring.” The government seized $447,000 from the business, a cash-intensive candy and cigarette distributor that has been run by one family for 27 years.

http://www.nytimes.com/2014/10/26/us/law-lets-irs-seize-accounts-on-suspicion-no-crime-required.html?_r=1

 

 
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Posted by on November 11, 2014 in banks, business, economy

 

Olive Garden Is Evidence Of A Huge Problem In The Economy…

Struggling are Olive Garden and Red Lobster, which are largely geared toward middle-class customers, who have been squeezed during the recession and slow recovery. Families with young children cut back on restaurant spending during the downturn, and they haven’t come back, according to a recent survey by restaurant research firm NPD Group.

Same-store sales, a measure of performance at restaurants open a year or more, dropped 3.5 percent at Olive Garden and 5.6 percent at Red Lobster over the quarter. At Long Horn Steak House, Darden’s middle-of-the-road steak chain, same-store sales rose 2.4 percent, but traffic — the measure of how many people are actually coming through the door — dropped over the quarter.

On the other hand, at Darden’s Capital Grille, where most dinner entrees fetch more than $40 each, same-store sales increased 4 percent over the quarter. That makes sense, too: Over the past few years, the kinds of people who can afford a fancy dinner have seen their incomes grow, even as everybody else’s incomes have stayed flat.

 

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Posted by on June 22, 2014 in business, food, trends

 

American Banks closing muslim accounts…

“We see a type of pattern taking place in the Muslim/Arab community,” Dawud Walid, executive director of CAIR–MI, said Wednesday. “Bank accounts are being closed with no real justification … so it appears on the surface that there could be some sort of bias involved.”

One of the latest reported incidents, according to CAIR–MI, involved Alif Arabic, a business described as teaching Arabic to American citizens online. Officials there were notified May 30 by JPMorgan Chase their bank account would be terminated within 10 days. JPMorgan Chase officials did not detail why, according to the letter.

When an Alif Arabic employee asked the bank for clarification, they were told an analytical tool “alerted them that Alif’s account could pose a possible risk,” the letter read.

Walid said such a move could suggest discrimination based on religion and ethnicity. “We need answers and the bank is not giving answers,” he said.

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Posted by on June 21, 2014 in banks, business, immigration

 

Rajat Gupta, another big fish gets hooked for insider trading…

Gupta, whose net worth was once estimated at around $130 million, is fighting to save from forfeiture his many properties, including a waterfront home in Westport, Connecticut that once belonged to the co-founder of J C Penney that he bought for more than $6 million. Legal stratagems include moving his domicile to Florida, which has more lenient bankruptcy laws that protect personal property.

Read more here…

 
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Posted by on June 18, 2014 in business, economy, investing

 

Chipotle Mexican Grill knows how to do food business

Chipotle Mexican Grill’s assembly-line business model of slinging burritos and carnitas had a banner day on Wall Street. As the much of the market saw increased volatility Friday, Chipotle saw record highs, boosted by much better-than-expected earnings.

Much of the company’s solid growth came from its ability to quickly serve long lines of hungry customers during peak rush hours, a concept known as throughput, said Stephen Anderson, a restaurant analyst with Miller Tabak & Co. The efficiency at which customers move through Chipotle lines during busy hours seems to be increasing, he said.

Check out the CNBC video

What separates Chipotle from peers?
Over the last five years, Chipotle’s stock has surged an incredible 1,030% as the company has become one of the largest restaurants by market capitalization in the market. The reasons for its success during this period are plentiful, but they can be traced back to three core explanations.

1. Chipotle was one of the first fast-casual restaurants and really formed the business model for the segment, which is growing three to five times faster than any other segment in the restaurant industry in any given quarter.

2. Product Innovation: Chipotle continues to add new foods to its menu, and it has successfully grown beyond Mexican food into Asian food. It is now bringing its fast-casual business model to the pizza industry. Thus, Chipotle’s growth has never been an issue.

3. Organic and healthy focus: Many thought healthy consumption was a fad, but it has proven to be a long-term lifestyle that Chipotle’s peers are now racing to satisfy. Chipotle saw this trend coming, and it has positioned its menus to meet this need.

Is Chipotle still the BEST?

Fast Casual Versus Fast Food

One trend that you might want to take notice of is the shift from quick-service (fast food) and casual dining restaurants to fast casual restaurants.

For proof, consider a recent quote from Bonnie Briggs, an NPD restaurant industry analyst:

“Overall, restaurant customers are trading down, foregoing some of their visits to full service places while increasing the number of visits made to fast casual restaurants. Fast casual concepts are capturing market traffic share by meeting consumers’ expectations, while midscale and casual dining places continue to lose share.”

Fast casual vs. fast food

Fast food is the same thing as quick-service. The name has been changed to “quick-service restaurants” due to the negative connotation associated with the phrase “fast food.”

 

According to the NPD Group (a global information company), the foodservice industry still hasn’t recovered from the recession. Still, the fast casual dining space has performed well. In 2013, fast casual restaurant visits increased 8% versus 2012. If that’s not impressive enough, spending at fast casual restaurants jumped 10% over 2012. Comparatively, total spending at all restaurants improved just 2%.

The reason for the superior performance has to do with better service than fast food restaurants and more affordability than casual dining restaurants. Food served at fast casual restaurants is believed to be fresher than what you find at fast food restaurants.

The chart below shows the difference between fast food foot traffic and fast casual foot traffic since 2009 — all numbers are year over year:

Year Fast Food Traffic Fast Casual Traffic
2009 Down 3% Up 4%
2010 Down 1% Up 6%
2011 Flat Up 6%
2012 Up 1% Up 9%
2013 Flat Up 8%

As you can see, the fast casual space is growing at a decent clip. Also, keep in mind that the average check size is higher at fast casual restaurants than at fast food restaurants: $7.40 vs. $5.30. The average check at full-service restaurants is $13.66, but that doesn’t mean much without increased traffic.

Part of the reason for growth in the fast casual space is increased unit growth. For instance, fast casual units grew 6% to 16,215 in 2013. This might make the numbers above seem skewed, but only restaurants that are bullish about their futures will add more locations. Restaurant chains that are struggling will close locations to free up cash flow to pay off debt or reinvest that capital into better-performing locations.

Panera Bread and Chipotle Mexican Grill are the top performers in the space, but is one a better option than the other?

More details here

 
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Posted by on February 21, 2014 in business, food, trends

 

Finance And Economics Comparison

Economics and finance are both business degrees. The difference is 5 or 6 classes taken at the end of college.

Here is a brief comparison…

Management Profession economists are hired as consultants by private and public sector. Finance is managed by individuals in families or by banks or other institutions.
Related Courses Philosophy of Economics, Laws and Economics, Political Economics. Accountancy, Chartered Financial Analyst and other
Definition Economics is a social science that studies the management of goods and services, including the production and consumption and the factors affecting them. Finance is the science of managing funds keeping in mind the time, cash at hand and the risk involved.
Branches Branches of economics include macro and micro economics. Branches of finance include personal finance, corporate finance and public finance.

Although they are often taught and presented as very separate disciplines, economics and finance are interrelated and inform and influence each other. Investors care about these studies because they also influence the markets to a great degree. Here we take a look at finance and economics, what they can teach investors and how they differ.

 
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Posted by on December 26, 2013 in banks, business, economy, education

 

Subrata Roy : Will he keep his multi billion dollar empire?

Over the past 35 years, Roy has built an empire that Sahara valued at $11 billion at the end of 2012. It owns properties such as New York’s Plaza Hotel, London’s Grosvenor House and at least 120 companies, including television stations, a hospital, a dairy farm, retail shops selling everything from detergents to diamonds and a 42.5 percent stake in India’s Formula One racing team. Sahara also owns 14,600 hectares (36,000 acres) of land, an area the size of Liechtenstein.

Subrata_Roy_Sahara

While Roy says his personal wealth amounts to less than $1 million, if the assets of the closely held group, including the Mercedes-Benz S350 he’s chauffeured around in, were counted as his own, he’d be the fifth-richest man in India, according to the Bloomberg Billionaires Index.

He joined a struggling lending company called Sahara Finance in 1978. Roy took over the firm and has changed its deposit-collection model at least six times as regulation tightened. Today, he supervises 1.1 million employees working out of 4,512 offices across the country.

Sahara, which means “support” in Hindi, collects sums as small as 20 rupees (32 cents) a day from rickshaw pullers, laundry washers and tire repairmen. Agents working for the company on commission promise to return an agreed-upon amount after a specified period — sometimes enough accumulated savings to pay for a daughter’s wedding or a plot of land. Roy says he performs a critical service, which he calls “parabanking,” his term for shadow banking.

read more from bloomberg

 

 
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Posted by on December 6, 2013 in business, investing

 

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