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“HEALTH TAX” NOW ACCEPTED BY MOST AMERICANS
Washington, DC (pa)- After initially opposing the new “health tax,” critics of the plan have generally fallen silent as the American people have come to accept the increased costs of so-called “dangerous products” in exchange for a national, universal health care plan. Because they were deemed by a special commission under the direction of the US Surgeon General and the Secretary of Health and Human Services to be damaging to human health and in part responsible for many of the health care problems experienced in the United States, relatively heavy taxes were placed on such products as new car sales, truck sales, equipment with motors of all types, guns, ammunition, televisions, cigarettes, cigars, chemicals, batteries, fireworks, sports equipment, toys, liquor, sugar and other sweeteners, food oils, red meats, and salt. The tax was levied on firms importing or manufacturing these products and is subject to a five year review. The review will measure a firm's current status regarding medically related injuries and/or health related costs and set a new, and hopefully, lower tax rate on those products.
“For most of American history such a universal healthcare plan and such a widespread tax on so many products would never have been accepted in American society, where individualism, freedom of choice, and free commerce are prized and government is expected to uphold these values,” said Orman Nornstein, expert observer of American politics. “Years ago the healthcare plan would have been attacked as ‘socialized medicine’ and a new administration would never have had a chance of getting such a plan implemented. And the tax on so many products that Americans consider part of their national culture would have been considered not only insulting but possibly ‘unpatriotic’ as well. But recent years have shown that global and domestic circumstances dictate a change in beliefs, attitudes, and behaviors, and the American people by-and-large have taken up this challenge. For example, those who still say they oppose the new taxes now number less than 20%, and even among Republicans more than two-thirds say they support the new taxes,” said Nornstein.
Breaking News: As we go to press, a BBC news story indicates that Iranian military assets are being relocated closer to their border with Iraq. The information could not be substantiated but governments in the EU as well as the US are taking the matter seriously.
Economic News
The sharp increase in interest rates did not stop economic growth in its tracks as many investors had forecast. Growth was modest, sustainable and most welcome. The T-Bill rate remained in the 7% range. Central banks (NAFTA and EU), indicated that they would take a ‘wait-and-see” approach before initiating any changes in current monetary policy. The stock market responded in a positive manner to the solid economic news.
Forecasters expect Q3 to be stable with some suggesting that the mild growth trend will continue. Q4 should be one of the best holiday seasons on record. Demand in NAFTA is coming back slowly as Obama ’s plans take root in the U.S. economy. The exchange rate stabilized and is expected to move in a narrow range as both economies appear stable for the near future.
Firms 37, 43, 45, 47, 48, 95, 103, 104, 163 will be fined in Quarter 3, 2010 for illegal dividend issues and/or stock repurchases made in Quarter 2, 2010. Remember that it is illegal to issue a dividend and/or repurchase stock if your firm will end the quarter with negative retained earnings. Doing so will put your firm at risk for substantial fines and penalties.
Manufactures were pleased to see raw materials decrease in price. Raw material prices should dip again in Q3 and perhaps in Q4.
The big news is that the benefits of the new U.S. health care program are beginning to reduce per hour costs in many firms, particularly in U.S. scent industry firms. Canada offset the new lower U.S. labor costs with a tax credit policy that in effect, keeps labor rates equal and competitive to those in the United States. Mexico has not been able to devise such a plan and thus rates remain the same as before (their labor rates were and remain substantially less than in the U.S.).
Health care and future inflationary effects in health care costs have reduced labor costs in the U.S. scent industry by as much as $.75 per hour which should show up in firm reports as a lower unit manufacturing costs. Note that P1 and P2 have different hour requirements in the stages and thus the savings per unit will not be the same.
Firms will need to analyze production costs and demand issues in order to revise strategies matching production needs and costs to market demand and marketing strategies.
Demand in the U.S. P2 market grew in 8% in Q2 and is expected to increase by another 8% by Q4 as the U.S. economy recovers. P1 may also increase but at a slower pace. Demand in the EU for P1 remains constant to slightly lower while P2 is constant but expected to increase about 7% by Q4.
** Firms should consider strategies for meeting Q4 demand given:
- the anticipated extraordinary demand coming in Q4;
- changes in manufacturing costs due to U.S. and Canadian cost of labor decreases;
- increases anticipated in P1 and P2 demand in NAFTA;
- anticipated increases in P2 demand in the EU;
- drop in raw material prices
Administrative Notes and Reminders to Firms:
- Special Reports are available from your simulation administrator. The Special Report contains additional reporting information about ROE, ROI, Engineering Efficiencies gained through Engineering Budget expenditures, as well as average compensation for sales staff for all firms in a market group. If your firm would like to receive a Special Report you must order one from your simulation administrator, Kristi: globalview@earthlink.net Reports are updated after each quarter and historical copies of reports are not archived so if you would like to receive a copy of a Special Report for a given quarter you must order it in advance of the following quarter's deadline. The fee for the report is $2000.
- Remember to set Capacity and Stock Issue decisions to zero! Many firms forgot to reset these change variables in their Quarter 2, 2010 decisions, which resulted in their original Quarter 1 decisions being duplicated in Quarter 2.
- If your firm has an excessive special loan (in excess of 2 million dollars) please contact your simulation administrator for special refinancing options.
- Remember that it is illegal to issue a dividend and/or repurchase stock if your firm will end the quarter with negative retained earnings. Doing so will put your firm at risk for substantial fines and penalties.
Peacock is closed to all firms in Market Groups 5-17, except Firms 85, and 96 which can buy P1 and P2 at opening Peacock prices. Any other Advanced firms in market groups 5-17 that enter contracts with Peacock will have their contracts cancelled.
Firms in Market Groups 3 and 4 can buy from Peacock at the following Prices:
P1 = $85 per unit
P2 = $120 per unit
Intro Firms in Market Groups 2 and 18 can buy from Peacock at the following Prices:
P1 = $80 per unit
P2 = $115 per unit
Firm-to-Firm Contracts:
Industry 2
Acceptor Buyer Seller Item Quantity
22 22 42 Finished Goods P1A1 2000
22 22 42 Finished Goods P2A1 2700
22 22 42 Finished Goods P1A2 1850
22 22 42 Finished Goods P2A2 6000
Industry 3
Acceptor Buyer Seller Item Quantity
32 32 43 Finished Goods P1A1 7130
32 32 43 Finished Goods P2A1 10660
37 37 44 Finished Goods P2A2 2000
Industry 4
Acceptor Buyer Seller Item Quantity
42 45 42 Finished Goods P1A2 8000
42 47 42 Finished Goods P2A1 3000
42 45 42 Finished Goods P1A1 3000
42 45 42 Finished Goods P1A2 7000
46 46 42 Finished Goods P1A1 1000
46 46 42 Finished Goods P2A1 3000
44 36 44 Finished Goods P1A2 2000
44 43 44 Finished Goods P1A2 6200
46 46 42 Finished Goods P2A2 4500
44 43 44 Finished Goods P2A2 2500
46 46 42 Finished Goods P1A2 1000
44 36 44 Finished Goods P2A2 5300
48 48 33 Finished Goods P1A1 357
48 48 33 Finished Goods P2A2 3224
48 48 33 Finished Goods P1A2 300
47 47 42 Finished Goods P1A1 1000
42 45 42 Finished Goods P1A1 1500
47 47 42 Finished Goods P1A2 1000
47 47 42 Finished Goods P2A2 4500
Advanced Firm NPV Rankings
Intro Firm NPV Rankings
List of firms in order of net present value
Stock No. NPV Index
131 3.62 1
65 3.03 2
66 2.44 3
56 2.38 4
147 2.02 5
101 1.91 6
55 1.81 7
113 1.22 8
115 1.15 9
111 1.12 10
71 1.10 11
145 0.92 12
64 0.90 13
172 0.90 14
106 0.87 15
134 0.85 16
122 0.63 17
132 0.56 18
54 0.52 19
91 0.49 20
162 0.45 21
116 0.43 22
83 0.41 23
114 0.39 24
61 0.30 25
143 0.29 26
133 0.28 27
157 0.22 28
86 0.21 29
51 0.15 30
141 0.14 31
135 0.03 32
123 -0.01 33
82 -0.02 34
163 -0.04 35
105 -0.06 36
103 -0.12 37
81 -0.20 38
171 -0.20 39
96 -0.20 40
112 -0.26 41
126 -0.27 42
94 -0.29 43
121 -0.34 44
95 -0.35 45
161 -0.35 46
125 -0.39 47
137 -0.40 48
167 -0.43 49
62 -0.44 50
151 -0.46 51
75 -0.47 52
155 -0.51 53
154 -0.59 54
72 -0.62 55
144 -0.69 56
153 -0.70 57
104 -0.74 58
53 -0.75 59
74 -0.83 60
73 -0.92 61
173 -0.99 62
164 -1.01 63
102 -1.08 64
84 -1.17 65
92 -1.22 66
76 -1.27 67
175 -1.51 68
142 -1.55 69
152 -1.63 70
52 -1.88 71
165 -2.17 72
63 -2.18 73
174 -3.00 74
93 -3.06 75
124 -3.57 76
Stock
Number D a t e s
20094 20101 20102
===== ===== ===== =====
51 3.17 3.36 3.66
52 2.93 2.33 1.16
53 2.96 3.36 2.44
54 3.20 3.62 4.10
55 3.39 4.51 5.73
56 4.16 5.80 7.21
61 3.95 4.44 4.69
62 2.97 2.76 2.79
63 2.98 1.45 0.88
64 2.81 3.43 3.89
65 4.46 5.97 7.59
66 3.84 5.63 6.92
71 3.44 4.05 5.01
72 2.80 3.00 2.40
73 3.03 3.13 2.33
74 3.23 2.69 2.65
75 3.45 3.23 3.29
76 3.76 2.70 2.75
81 3.67 3.41 3.83
82 3.18 3.68 3.48
83 3.28 3.61 4.07
84 2.99 2.40 2.01
86 2.78 2.94 3.30
91 4.11 4.60 5.07
92 2.83 2.51 1.78
93 3.34 1.35 0.31
94 2.70 2.37 2.66
95 3.08 3.15 2.96
96 0.00 3.09 3.03
101 2.71 4.52 5.09
102 3.93 4.02 3.14
103 2.87 2.92 2.83
104 3.03 2.37 2.22
105 2.83 2.31 3.05
106 3.18 3.86 4.37
111 3.63 4.71 5.24
112 2.99 2.21 3.01
113 3.95 5.68 5.20
114 2.98 3.21 3.72
115 3.40 4.03 4.67
116 3.16 3.62 3.96
121 3.00 2.96 2.93
122 2.55 2.61 2.98
123 3.57 5.93 3.93
124 4.36 1.69 0.87
125 3.11 2.79 3.00
126 2.79 2.68 2.78
131 3.50 6.83 7.85
132 2.91 3.06 3.73
133 3.52 3.50 4.19
134 2.87 3.66 4.10
135 2.93 2.73 3.26
137 3.14 2.99 3.02
141 2.63 3.25 3.00
142 2.83 2.44 1.41
143 3.16 3.25 3.80
144 2.69 3.03 2.21
145 3.03 3.68 4.35
147 3.31 4.99 5.38
151 3.05 2.80 2.85
152 2.80 2.38 1.29
153 3.84 4.52 3.46
154 4.10 3.85 3.87
155 4.30 4.70 4.18
157 2.49 2.56 2.99
161 3.42 3.28 3.38
162 3.07 3.23 3.88
163 3.03 2.53 2.80
164 3.01 2.64 2.21
165 3.67 2.22 1.65
167 2.49 2.07 2.27
171 2.85 2.62 2.92
172 3.04 6.11 4.34
173 2.84 2.72 2.04
174 4.22 1.96 1.34
175 3.49 2.78 2.18
Mkt 3.24 3.38 3.41
TBill 0.0200 0.0175 0.0175
Stock Shares Closing
Number Traded Price Change
====== ======== ======= ========
51 0 3.66 0.30
52 0 1.16 -1.17
53 0 2.44 -0.92
54 0 4.10 0.48
55 0 5.73 1.22
56 0 7.21 1.41
61 0 4.69 0.25
62 0 2.79 0.03
63 0 0.88 -0.57
64 0 3.89 0.46
65 0 7.59 1.62
66 0 6.92 1.29
71 0 5.01 0.96
72 0 2.40 -0.60
73 0 2.33 -0.80
74 0 2.65 -0.04
75 0 3.29 0.06
76 0 2.75 0.05
81 0 3.83 0.42
82 0 3.48 -0.20
83 0 4.07 0.46
84 0 2.01 -0.39
86 0 3.30 0.36
91 0 5.07 0.47
92 0 1.78 -0.73
93 0 0.31 -1.04
94 0 2.66 0.29
95 0 2.96 -0.19
96 0 3.03 -0.06
101 0 5.09 0.57
102 0 3.14 -0.88
103 0 2.83 -0.09
104 0 2.22 -0.15
105 0 3.05 0.74
106 0 4.37 0.51
111 0 5.24 0.53
112 0 3.01 0.80
113 0 5.20 -0.48
114 0 3.72 0.51
115 0 4.67 0.64
116 0 3.96 0.34
121 0 2.93 -0.03
122 0 2.98 0.37
123 0 3.93 -2.00
124 0 0.87 -0.82
125 0 3.00 0.21
126 0 2.78 0.10
131 0 7.85 1.02
132 0 3.73 0.67
133 0 4.19 0.69
134 0 4.10 0.44
135 0 3.26 0.53
137 0 3.02 0.03
141 0 3.00 -0.25
142 0 1.41 -1.03
143 0 3.80 0.55
144 0 2.21 -0.82
145 0 4.35 0.67
147 0 5.38 0.39
151 0 2.85 0.05
152 0 1.29 -1.09
153 0 3.46 -1.06
154 0 3.87 0.02
155 0 4.18 -0.52
157 0 2.99 0.43
161 0 3.38 0.10
162 0 3.88 0.65
163 0 2.80 0.27
164 0 2.21 -0.43
165 0 1.65 -0.57
167 0 2.27 0.20
171 0 2.92 0.30
172 0 4.34 -1.77
173 0 2.04 -0.68
174 0 1.34 -0.62
175 0 2.18 -0.60
Mkt 0 3.41 0.03
Intro Firm NPV Rankings
List of firms in order of net present value
Stock No. NPV Index
188 0.87 1
24 0.39 2
27 0.25 3
184 0.21 4
181 0.20 5
187 0.16 6
185 0.09 7
21 0.06 8
186 0.06 9
182 0.04 10
25 0.03 11
23 0.03 12
28 0.02 13
22 -0.02 14
26 -0.02 15
183 -0.04 16
Stock
Number D a t e s
20101 20102
===== ===== =====
21 3.65 3.90
22 3.32 3.47
23 3.32 3.52
24 3.45 4.03
25 3.31 3.51
26 3.45 3.60
27 3.74 4.19
28 3.09 3.27
181 4.22 4.64
182 2.93 3.12
183 3.35 3.48
184 3.65 4.05
185 3.42 3.69
186 2.89 3.10
187 3.92 4.28
188 3.94 5.05
Mkt 3.48 3.81
TBill 0.0200 0.0175
Stock Shares Closing
Number Traded Price Change
====== ======== ======= ========
21 0 3.90 0.25
22 0 3.47 0.15
23 0 3.52 0.20
24 0 4.03 0.58
25 0 3.51 0.20
26 0 3.60 0.15
27 0 4.19 0.45
28 0 3.27 0.18
181 0 4.64 0.42
182 0 3.12 0.19
183 0 3.48 0.13
184 0 4.05 0.40
185 0 3.69 0.27
186 0 3.10 0.21
187 0 4.28 0.36
188 0 5.05 1.11
Mkt 0 3.81 0.33
