June 14, 2005
by Bob Meyer, Editor of BarterNews
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International Monetary Systems Shatters Monthly Revenue Record
Don Mardak, CEO of International Monetary Systems (OTCBB:INLM), proudly reported on the company’s recent activity, “This is a historic achievement for our company, as we have substantially surpassed the half million dollar mark in sales for May. Our three most recent acquisitions in Hartford (CT), Chattanooga (TN), and Reno (NV) were key factors in achieving these record numbers. Once again demonstrating the wisdom and success of our industry roll-up strategy.”
IMS, through its Continental Trade Exchange subsidiary, processed more than $5.2 million worth of trades which produced a gross income of $540,000. This represented an increase of 53% over the same period in 2004, and an increase of 31% over the company’s April 2005 sales. For more information go to www.internationalmonetary.com.
“What we have here is a failure to communicate!”
Years ago, one of the most visible people in the barter industry said the #1 reason why the industry wasn’t farther along in its development was due to a “failure to communicate” by those in the business.
This realization was the genesis of The Competitive Edge newsletter, now into its 18th year of publication. Trade exchange owners who use this powerful marketing and promotional tool are never guilty of “failing to communicate.”
As the owner of a trade exchange you must stay in front of your clients. Informing, educating, and inspiring them, because your clients’ bartering is a relatively small percentage of their overall business. So if you don’t keep their interest and enthusiasm for trade at a high level, you lose.
Your primary aim, like all other businesses, is to get your clients coming back for more. Every extraordinary business (and every trade exchange owner who wants to be extraordinary) knows that the customer you have, is a lot less expensive to sell than the customer you don’t yet have!
Want to take your exchange to a higher level? Use The Competitive Edge newsletter in your operation—it “sells” the many benefits of working through your trade exchange like nothing else!
To learn more about The Competitive Edge newsletter and how it can help build your trade exchange, click here
ITEX Reports Third Quarter Highlights
ITEX Corporation has announced its third quarter results of fiscal 2005, ending April 30. Here are the highlights:
- Revenue for the quarter was $2,387,000, compared to $2,275,000 in the third quarter of fiscal year 2004. Revenue for the first nine months of the fiscal year was $7,661,000 compared to $7,770,000 for the same time period in fiscal year 2004.
- Income from operations for the quarter was $148,000, compared to $451,000 in the same quarter for the prior year. Net income in the quarter ending April 20, 2004, included several non-recurring income items.
- Total net income was $2,132,000, or 11-cents a share, for the third quarter of 2005, and includes a $1,960,000 income tax benefit. Total net income for the first nine months of fiscal year 2005 was $2,965,000, or 16-cents a share.
- Assets increased to $5,881,000 compared to $2,923,000 at the end of the previous fiscal year, July 31, 2004. An income tax benefit was attributed to $2,260,000 of the asset increase, or 12-cents a share.
- Cash increased to $1,268,000 compared to $215,000 at the end of the previous fiscal year. The company has no long-term debt.
For more information go to www.itex.com.
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Digital Signs Make Billboards More Valuable
The AM-PM billboard is now a reality, as Clear Channel, Viacom, and Lamar are selling digital signs in Cleveland, New York, and other cities. Made from LED, the signs let several companies share one space and target messages based on “day-parts.”
In the morning a department store could advertise a sale, and in the afternoon a bar might promote happy-hour specials. Michael Hudes, executive VP for corporate development at Clear Channel Outdoor, explained, “We’re moving from selling space to selling time.”
Breaking up the billboard’s day should bring in big bucks. Clear Channel, for example, will charge advertisers $40,000 to share time on seven billboards for four weeks, compared with $10,000 for one standard billboard. Spending like that could revitalize the $5.8 billion outdoor market, which is now less than 3% of all ad spending.
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Shiller Says Today’s Housing Mirrors Ponzi Scheme
Yale economist Robert Shiller has a second edition of his bestseller, Irrational Exuberance, now in print. It includes a new chapter making the case that we are in a housing bubble. But there’s still that pesky question of when it all will end. He says real estate in the U.S. has enough upward momentum to keep going for a while, but it’s inevitable that prices will drop.
The author contends that an asset derives its true value from the income that it will throw off in the future. (With a stock that means, strictly speaking, the dividends it pays.) With an owner-occupied house, it’s what economists call “imputed rent”...what you would have to pay to rent an equivalent house.
In many U.S. markets today, the monthly cost of buying a house is significantly higher than the monthly rent on an equivalent house. So by the “imputed rent” test, it makes no sense to buy.
Shiller says people buy anyway because they assume that house prices will keep rising, meaning they can sell out later for a profit. That of course requires that another buyer will come along who also assumes that prices will keep rising, which will require yet another such optimistic buyer down the road...and so on, and so on.
This happens to be the definition of a Ponzi scheme, Shiller says. He maintains this real estate market craziness cannot continue. But to make a bet about when it’s going to end—now that would be really crazy.
Editor’s Note: The World Wealth Report, produced by Capgemini and Merrill Lynch, shows that Americans with $1 million or more in liquid assets cut back real estate holdings to 13% of their portfolios in 2004. Their drop in real estate holdings is a contrast to everyday consumers who continue to buy up homes and drive up prices. Market experts say the wealthy are often at the forefront of investing and financial trends, and this shift could be a leading indicator of a market peak.
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Many magazines are struggling as ad dollars flee to the web. Yet last year 1,006 new titles were launched, up from 953 in 2003 and the first time since 1998 that new titles totaled more than 1,000. Industry experts say any new magazine is still a gamble, with odds running 4-to-1 against a title surviving.
Tom Cruise has moved ahead with another barter agreement (he takes no salary, instead getting a percentage of the studio’s gross receipts) to film the movie, Mission: Impossible 3 .
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The hotel-condominium hybrid concept is a hot topic these days. Virtually every major hotel owner in the country is looking at hotel condos, hotel condo conversions, or hotel condo construction to see if it fits their situation.
Driving this move are the baby boomers approaching retirement who want to invest in a second home. Condo-hotel developments are also easier to finance, as the developer is required to come up with much less investment than that of a traditional hotel, where about 40% equity is needed.
Economist Adam Posen, an expert on the European Union (EU) at Washington’s Institute for International Economics, says changes are needed in Europe “to end restrictions on retail hours and protections for special interests, and to ease the multitude of regulations that discourage new business.”
The economies of France, Germany, the Netherlands and Italy, the big four of the original six founders of the Common Market, are growing at less than 1% this year and unemployment rates are as high as 12%. Another of Europe’s big problems is high taxes, for most EU countries the government’s tax grab amounts to 45% to 50% of the national gross domestic product. (People complain about taxes in the U.S. which has a 32% rate.)
Microfinance loans, which average about $50 to $75, to help poor people with ventures such as raising chickens, are growing in use. The Grameen Foundation, based in Washington DC, recently received pledges of $9 million from the founder of eBay and two retired mutual-fund managers. (The Grameen Foundation operates in 21 countries, including the U.S.)
Former Fed Chairman Paul Volcker says the Fed should focus more on the nation’s current account deficit (foreigners holding U.S. dollars), by putting added weight on keeping inflation under control. “It is critical that foreigners remain confident that those trillions of dollars they are piling up are going to be protected against inflation.”