The U.S. Postal Service‘s regulator has approved price increases amounting to 6 percent on most mail, a step the service’s board called a “last resort” forced by Congress’ failure to pass cost-cutting legislation.
A first-class stamp will cost 49 cents, up from 46 cents, starting Jan. 26.
Similar changes will apply to magazines, bills, and advertising mail. The increases of 4.3 percent approved Tuesday are on top of the 1.7 percent, an amount equal to inflation, approved last month.
The Postal Regulatory Commission, in a 2-1 vote, rejected a Postal Service request to make the higher rates permanent, saying they will probably need to end in less than two years. The increase is designed to boost revenue by $1.8 billion a year to make up for losses during the economic downturn in 2008 and 2009, the order says.
“The Postal Service is disappointed in the Postal Regulatory Commission’s split decision to limit the duration of a modest exigent rate increase,” Roy Betts, a postal service spokesman, said in an email.
The Postal Service, which is supposed to fund its operations through postage sales, can’t increase prices by more than the inflation rate without the regulator’s blessing.
The commission disagreed with the postal service’s argument that it had lost $6.6 billion in revenue from the recession. Some of the decline has been owing to the growth of Internet-based communications as a substitute for mail, which the service isn’t allowed to make up through price increases, it found.
The Postal Service’s revenue from the increase beyond inflation will be limited to $2.8 billion, according to the commission.
“The commission’s decision closely follows the law we are charged by the president and Congress to uphold,” Chairman Ruth Goldway said in an emailed statement.
The Time publishing unit of Time Warner Inc. and a trade group representing financial institutions, including Bank of America Corp., were among large mailers opposing the increase request.
The New York-based Association of Magazine Media trade group, in an email, called the decision counterproductive and harmful to the postal service’s long-term prospects.
“It will drive more customers away from using the Postal Service and will have ripple effects through our economy – hurting consumers, forcing layoffs, and impacting businesses,” Mary Berner, president of the group, said in the email. “It doesn’t delay the inevitable but will hasten it.”
The group is considering a court challenge, Berner said.
The Postal Service, which lost $5 billion in the 2013 fiscal year ended Sept. 30, is trying to close its budget gap with cost cuts and revenue increases.
Postal management has few options to make large-scale cost cuts without changes the U.S. Congress must allow, the board said in September. Such measures in the U.S. House and Senate are stalled.
Postal unions last week said they oppose a legislative compromise proposed by Sen. Tom Carper, a Delaware Democrat, that would allow the service to end Saturday mail delivery if volume continues to decrease.
The service’s board in September asked the regulatory commission for permission to raise prices by more than the inflation rate, repeating a 2010 request the regulator rejected.
Growing up in destitute Haiti, all 10-year-old Marie Louise ever knew was poverty and hunger pangs. The things most Americans take for granted—sitting at a table to eat a full meal, not to mention the use of utensils—were completely foreign to her and the other children in her village. Instead, she was all too used to scooping a handful of dirt or even cement into her mouth simply to have something in her stomach to keep her from starving to death.
But then God’s love, in the form of a Florida-based nonprofit ministry called Feeding Children Everywhere, found its way to Marie Louise’s village. Through founder Don Campbell’s connections withOpen Door Haiti and its founder, local pastor Wiljean Compere, the young girl now eats three healthy meals each day and has been spared the life of disease and hunger for which she was formerly destined.
That’s not all. Her story is being replicated by millions around the world as Feeding Children Everywhere (FCE) rapidly expands to make its mark nearly, well, everywhere.
FCE’s journey has taken Campbell and his wife, Kristen, from feeding their neighborhood to embarking on seasons in which the couple mobilized churches throughout Central Florida, ran a local branch of a Minnesota-based nonprofit and, in 2010, launched into Haiti. Today the organization provides 15 million meals annually to hungry children in the U.S. and around the world, all in the name of Jesus—and with the financial support and volunteer manpower of mega-corporations such as Bank of America, JPMorgan Chase, K Force, Johnson & Johnson and many others (including entire sports associations).
Major secular organizations helping to support a ministry? How did that happen?
From his youth, Campbell always believed his working career would somehow involve food. Forced to become the man of the house at age 10 after his father took his own life, Don became the family chef and learned to cook for his mother and sisters. As he grew up, food and soccer became his passion.
“When I was a kid, I always wanted to be a pro soccer player, and I still play with a group of men,” he says. “But I’ve always had this food thing at the core of me too. I love good food, and I love to entertain. That’s where my heart is. To tell you the truth, I always thought that I would open up a restaurant. But obviously God took me in a different direction—a wonderfully different direction.”
The first steps of that “wonderfully different direction” began when Don served at the Central Florida Dream Center in 2002 and then became a staff pastor at Family Worship Center in Sanford, Fla. But he and his wife, Kristen, weren’t satisfied with simply working with youth on Sunday mornings and Wednesday nights. They longed to make a bigger impact.
“Jesus was extremely relational in everything He did,” Campbell says, “and we are super relational people as well. We started learning to connect with people and honoring relationships over promotion, if you will. By doing that, we have been promoted.”
The FCE dream started small—just by meeting a community need of feeding neighborhood children from their dining room table. As word began to spread, the Campbells’ work expanded in their community and eventually with a Minnesota-based nonprofit. After years of volunteering and feeding children from their home, the couple took their entire life savings of $9,000 and rallied friends, family and volunteers—and FCE was officially born.
But it wasn’t until an event no one could have foreseen that the ministry really took hold. In January 2010, following the devastating 7.0 earthquake in Haiti and the numerous aftershocks that left more than 200,000 dead and hundreds of thousands in need of aid and food, the ministry pushed into deploy mode.
Campbell approached Doug Holliday—a friend who also happens to be the U.S. president of the humanitarian aid organization Open Door Haiti—to explore a partnership for helping destitute children affected by the earthquake. Open Door Haiti became FCE’s first international feeding partner, and FCE organized packing events with local churches to raise money to fund the project and ship 250,000 meals to hungry children in the nation.
According to Campbell’s estimates, FCE has grown 200 percent every six months since its inception and is one of the fastest-moving nonprofit organizations in the world. He describes FCE’s vertical growth during the past three years as “nothing short of miraculous,” and the evidence certainly supports this.
In the last two years, FCE has expanded beyond its corporate headquarters in Longwood, Fla., to include facilities in Hartford, Conn., and Los Angeles—with plans to launch offices in other regions as well. Despite the increasing space and staggering amounts of food passing through these facilities, the ministry staff is kept intentionally lean—FCE currently has 15 full-time employees and 60 interns working at its Florida location—as it continues to prioritize volunteer training.
And yet the rapid growth of the ministry doesn’t surprise Campbell. The Holy Spirit’s leading through divine business appointments—which is how virtually every corporate connection has come—and the ministry’s heart to do things God’s way have made FCE an easy sell to corporate partners, he says.
Instead of approaching businesses and asking them simply to write a check, FCE has devised a way for corporate employees to get involved with a hands-on approach to alleviating local and global hunger. In an era in which most companies see the value in blending social justice advocacy with their own corporate values and culture, FCE has found a sweet spot. The nonprofit organizes events and allows corporations to bring teams of individuals to get physically involved in the food-packing process. In turn, employees leave the events with a sense of personal satisfaction, having helped to make a difference in the lives of hungry children across the U.S. and around the world.
“You have companies like JPMorgan Chase and Bank of America—two of the larger companies in this country—that have executives and people that want to do something good and noble from a social responsibility standpoint,” Campbell says. “We’ve found a niche where they can take the dollars they normally contribute and instead use those dollars to mobilize their staff and deploy their donation into their community and ultimately impact the lives of children locally and globally.
“We approached them and told them that we have volunteer opportunities—philanthropic opportunities—that they can attach to their check and give them a feeling of pride that they’re doing something to impact the world. You might be surprised at just how eager people are to help when you’re asking them for more than simply money.”
Eager indeed. Jodie Hardman, senior vice president and market manager for Bank of America, says that when bank employees are asked to gather for a packing event, there is usually a waiting list of at least 150 to 200 people.
“It fills up pretty quickly,” says Hardman, who herself has participated in past packing events. “People don’t have to have a special skill or a special gift to give back to the community. Knowing that you’re helping others, you feel good, and it gives you a lot of pride that you’re making a difference. It’s a great lesson you can teach to your kids.”
Hardman says that although there are many worthy charities to choose from, FCE is exactly the type of organization Bank of America looks for in its community investment program.
“It all goes back to the simplicity of their process,” she says. “Their events are so spirited. A lot of times when you’re asked to do something for the community, it can be a somber event when you’re serving. But with FCE, there’s a lot of spirit around it. It’s fun, and it’s fulfilling.”
But personal fulfillment isn’t the only benefit participants receive. When God opens the door—and He frequently does—FCE’s staff seizes the opportunity to share His love to whoever will listen.
Ron Johnson, senior pastor at One Church in Longwood, and one of the Campbells’ biggest spiritual supporters, says people are more apt to receive the gospel message when they aren’t simply listening to a sermon but instead are seeing Jesus’ love in action.
“That’s the genius of the model, the fact that Don and his people are taking kingdom principles and bridging them while addressing a major need in the world—hunger,” he says. “They are reaching people that may never darken the door of a church. The reason it’s working is that they don’t have to convince people by their words. What they are doing—feeding hungry children—touches the core of our humanity.”
For Campbell, the work comes as a direct response to Jesus’ frequently quoted but rarely followed words in Matthew 25: “For I was hungry and you gave Me food; I was thirsty and you gave Me drink” (v. 35).
Campbell says it’s clear that feeding people and meals around the table were at the heart of Jesus’ ministry. And he believes that God wants to do great things through His kids using that same model. “If we’re willing to move in faith, the Bible says that pleases God,” he says. “If you move in big faith, God can do big things.”
It’s because of the “big things” God is doing through FCE, along with Campbell’s personal integrity, that he has earned the respect of many pastors in the Central Florida area. Among those is Jeff Krall, under whom Campbell served as youth and family life pastor at Family Worship Center.
“Don has told me that he has had conversations with people in the secular world, and they look at him and say, ‘You’re a different kind of Christian,’” Krall says. “They tell him, ‘I think you’ve got the words and actions of life.’ The universal appeal of what he is doing with FCE is amazing.”
Twitter Inc. didn’t need more than 140 characters to tell the world it was going public. With today’s regulatory filing, it became an #openbook.
In what is the most anticipated technology company offering since Facebook Inc., San Francisco-based Twitter made public its S-1 prospectus today and said it is seeking to raise $1 billion in its initial share sale. The company didn’t specify the number or price of shares it will offer, using the $1 billion as a placeholder to calculate registration fees.
The prospectus removes the veil of secrecy that surrounded Twitter’s financials since the company said on Sept. 12 it had filed confidentially for an initial public offering. It underlines how the microblogging service, founded in 2006, has evolved from a simple site for 140-character updates to a booming online-advertising business that generated more than $253.6 million in the first six months of this year.
“It’s a hot area,” said Francis Gaskins, president of IPOdesktop.com, who added that Twitter’s broad appeal will make the share sale one of the most watched in recent history. “People understand this and they use it.”
With Twitter taking the wraps off its S-1, the company will soon embark on a roadshow to market to investors. The IPO will test a market that has been burned in recent years by the offerings of Internet companies such as Facebook, Groupon Inc. and Zynga Inc., all of which plunged below their offering prices within six months of going public. While Facebook shares have since climbed back, Groupon and Zynga are still trading below their IPO prices.
The offering will be pivotal for Chief Executive Officer Dick Costolo, who in 2010 became Twitter’s third CEO in as many years. He is credited with bringing management discipline, rapid hiring and a business plan to a company that was bogged down by a lack of focus and frequent technical outages.
Twitter’s S-1 showed that revenue in the first six months of the year was $253.6 million, up from $122.4 million in the first six months of 2012. It said advertising revenue per timeline view in the three months ending in June was 80 cents, up 26 percent from the same period a year ago.
Twitter posted a net loss of $69.3 million in the first six months of 2013, compared with a net loss of $49.1 million in the same period a year ago.
“The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock and enable access to the public equity markets for us and our stockholders,” Twitter said in its prospectus.
Buffett’s Berkshire Hathaway Inc owns more than 80 businesses in such areas as insurance, chemicals, railroads and clothing, and has well more than $130 billion of equity and fixed income investments.
U.S. politicians look headed for a prolonged squabble over raising the U.S. debt ceiling to allow the government to keep borrowing money to pay its bills. That decision is expected to come to a head later this year.
A similar impasse in 2011 cost the United States its triple-A credit rating from Standard and Poor’s.
Thursday at an event at Georgetown University, Buffett said that the Federal Reserve’s eventual exit from its monthly bond-buying program will carry unforeseen risks.
“We are in an experiment which hasn’t really been tried before,” he said, adding that “buying securities is usually easier than selling securities.”
Berkshire owns more than 80 businesses in such areas as insurance, chemicals, railroads and clothing, and has more than $130 billion of equity and fixed income investments.
Some of its money went to Bank of America in August 2011, when Buffett announced a surprise $5 billion investment in the second-largest U.S. bank, which has been plagued by bad mortgages and legal liabilities mainly tied to the former Countrywide Financial Corp.
The investment included preferred shares with a 6 percent dividend, plus warrants to buy 700 million shares at about $7.14 per share, and has given Berkshire a paper profit of several billion dollars because the bank’s shares have doubled.
Brian Moynihan, chief executive of Bank of America Corp., said the bank has contracted in size and put many regulatory issues behind it, leaving it to focus on how best to grow in a slow-growth economy.
“You have an economy which we see very constructive, growing at 1.5 to 2 percent,” he said. “We don’t see a lot of downside risk… Until unemployment is down, (Fed Chairman Ben Bernanke) has to keep this economy going in the right direction.”
One side effect of the economic stimulus has been low interest rates, which Buffett called a “terribly important” variable in determining asset prices.
With major stock indexes at or near record highs, it has been harder for the 83-year-old Buffett, the second-richest American, to pursue his value investing strategy at Berkshire.
Stocks “were very cheap five years ago, ridiculously cheap, and that has been corrected,” Buffett said. “They’re probably more or less fairly priced now… We’re having a hard time finding things to buy.”
Buffett had invested $5 billion in preferred stock of Goldman Sachs Group Inc. and $3 billion in General Electric Co. preferred stock at the height of the 2008 financial crisis. That gave him a reputation as a possible lender of last resort during times of stress.
It said the government’s “impermissibly selective, punitive and meritless” lawsuit was brought “in retaliation for defendants’ exercise of their free speech rights with respect to the creditworthiness of the United States of America.”
S&P seeks to dismiss the lawsuit with prejudice, meaning it cannot be brought again. The August 2011 downgrade of the U.S. credit rating to “AA-plus” from “AAA” reflected concern about Washington’s ability to address the nation’s swelling debt.
A Justice Department spokeswoman declined to comment.
On February 5, Associate Attorney General Tony West, who then held that role in an acting capacity, said there was “no connection” between the downgrade and the filing of the lawsuit. The government said its investigation began in November 2009.
In its lawsuit, the government accused S&P of inflating ratings to win more fees from issuers, and failing to downgrade collateralized debt obligations despite knowing they were backed by deteriorating residential mortgage-backed securities.
In Tuesday’s filing, S&P estimated that more than $4.6 billion of the alleged losses may have resulted from CDOs that were structured, marketed or sold by Bank of America Corp. or Citigroup Inc. It also said more than $1 billion came from debt that was never issued in the first place.
The government has in recent months made more use of FIRREA, which was passed after the 1980s savings and loan crisis, in part because of its lower burden of proof and longer statute of limitations than other laws.
S&P has said its own statements about the independence and objectivity of its ratings were “puffery” that could not be taken at face value.
On July 16, U.S. District Judge David Carter called that proposition “deeply and unavoidably troubling,” in a decision denying S&P’s bid to dismiss the government’s case.
S&P is separately trying to dismiss similar lawsuits by 15 U.S. states now pending in the U.S. District Court in Manhattan. The states want these cases moved to state courts.
While hiring remains weak, “the level of firings, believe it or not, is at an all-time low.”
In addition, what Rosenberg terms the “take this job and shove it index” — the number of people voluntarily quitting their jobs — has gained 7 percent during the last year.
“For those that have the skills and are employed, things are getting better,” Rosenberg explains, adding that pay and hours worked are rising.
Still, Rosenberg remains a bear on the U.S. economy, which he believes has “no momentum” now.
“Fiscal policy is acting as a drag on the economy,” he states. “We haven’t seen the full impact of the tax hikes and the sequester.”
And Rosenberg thinks it “will remain feeble for quite a long period of time,” with trend growth around 1.5 percent.
Not everyone is so upbeat about U.S. jobs data. “Most American companies are still lean and mean,” Ethan Harris, co-head of economic research at Bank of America, tells Bloomberg.
“They’ve been very disciplined about controlling their work force, their spending and investment. This is really a story about the fiscal austerity hitting an otherwise improving economy and delaying what should be an improvement in growth.”