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September 30, 2008

Written by Bob Meyer, Editor of BarterNews

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From the desk of Bob Meyer...09/30/2008

Jet Blue Barters With Texas University

In exchange for advertising, Jet Blue will provide the University of Texas athletic department with tickets and vouchers for air travel. The University of Texas athletics will in turn provide video board animation advertisements for JetBlue at sporting events, which will include football as well as men’s and women’s basketball games.

Airlines have previously been sponsors for UT athletics...the Longhorn Sports Network had agreements with American Airlines and Southwest Airlines in the past.

Swap Your Clothes...Change Your Wardrobe

Looking to make a clothing change without spending a lot of cash? Check out these web sites http://www.bigwardrobe.com and http://www.whatsmineisyours.com.

Fifty Percent, Or More, Of Homeowners Income Going For Housing!

Fifteen percent of American homeowners with a mortgage (7.5 million households) are spending 50% of their income or more on housing costs, according to 2007 data released this month by the U.S. Census Bureau. That’s up from 7.1 million from the year before.

Scheduled Holiday Fairs

·         San Diego ITEX Trade Show will be held Sunday, November 2, from 10 AM to 4 PM at Party Pals. Contact Charissa.novak@itex.net.

·         On Sunday, November 23, Trade American Card will hold their 30th Annual Holiday Barter Expo. The affair will be from 10 AM to 5 PM at the Grove of Anaheim. Call (714) 532-1610 for more info.

 All back issues of "From the Desk...” can be accessed by clicking here.

(Please feel free to forward our newsletter to your friends and colleagues. We have a “box” at the end of the newsletter for your convenience. See you next week. . .)


IMS Obtains Global Board Seat & Industry Honors At IRTA’s Barter Conference

International Monetary Systems (OTCBB:INLM) a worldwide leader in business-to-business barter services, announced that its CEO, Don Mardak, has been elected for a three-year term to the Global Board of Directors of the International Reciprocal Trade Association (IRTA). The IRTA annual meeting of its members was held last week in Orlando, Florida.

IRTA Executive Director Ron Whitney pointed out, “IMS is one of the premier modern trade and barter companies in the world. IRTA is delighted to be able to benefit from Don Mardak's enormous industry expertise and wisdom. He will undoubtedly play a key role in helping IRTA achieve its many ambitious initiatives.”

“I am honored to serve on this board,” Mardak asserted, “along with representatives of the international barter industry from North America, Europe, and Asia. Together we can provide a complementary currency that will enhance the economies of each of our countries in these very difficult times.”

In addition to addressing industry issues, IRTA’s annual conference also serves as an educational forum that culminates with industry recognition and awards. IMS was awarded Most Educational Video Production for their online video that explains how modern barter works through their system.

This is the first time that a barter company was recognized by the IRTA for contributions made through web-based video productions. The video can be viewed on the company’s web site. Additional recognition and award was given to Kim Strabley, IMS’ travel and reciprocal accounts manager, for contributions to IRTA’s Universal Currency (UC) system. The UC is a global network through which IRTA members can seamlessly trade with each other using a widely accepted global barter currency.

For more info on IMS to go http://www.imsbarter.com.


·         International visitors look for BARTER CONTACTS in our Global Barter Section. If YOUR exchange isn’t listed see the forms on the lower left of the page. (Click here.)

·         Attention trade exchange owners...thousands of visitors every month visit our BARTER CONTACTS section on our web site where we have names & addresses of barter companies in the USA. If YOUR exchange isn’t listed, or the information is incorrect, you can correct the situation by using the forms to the lower left of the USA map. (Click here.) 

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Product Placement In Similar Position As Advertising Decades Ago

As products are finding their way into movies, television, music, books and video games, it would seem like there's nowhere else to go. But with digital technology continuing to skyrocket in both form and function, there's a seemingly endless stream of new and innovative ways to put products in front of potential consumers.

Whatever the future holds, there's no doubt you'll continue to see many of your favorite stars holding, handling and using products of all kinds on the big and small screens for years to come. The Kluger Agency, an entertainment marketing and branding firm, believes product placement in song through brand integration is one of the most valuable ways to establish brand power.

“Product placement has existed within lyrics since the early 1900’s. From Janis Joplin to Kanye West, it’s been going on forever, making brands millions upon millions of dollars. We are just financially taking care of the people that should be taken care of,” says Adam Kluger CEO.” If an artist like Sheryl Crow has the same target audience as XZY brand, we feel it’s nothing but a strong and strategic way to pinpoint a market.

“Now, we don't want an artist to write a song specifically to promote a brand, we just feel that if it’s a product that’s admired by the artists and fits his/her image, we now have the capability of leveling out the playing field and making things financially beneficial for all parties involved. Brand-dropping is the term our agency coined to describe discreetly advertising by product mentioning in song, and we feel we can make this the way of the future without jeopardizing any artists’ creativity or typical style.” 

In today’s day in age, criticism is found all over the web pertaining to such styles of marketing. Yet, it seems the only people who aren’t criticizing these types of practices are the brands that are financially benefiting. It’s hard to judge what will become an inevitable part of future culture, however, when television commercials first appeared the criticism was much fiercer than today’s product placement debate.


Money-Making Reports Available From BarterNews


$700 Billion Bailout Wastes $7,000 for Each American Family

by Chet Billingsley

PART I – HOMES:

Starting in 1995, rules were changed and federal agencies were encouraged to loan to not only the rich, and financially qualified, but also to everyone else. Since not much economic support was required for a loan, LTV ratios for many borrowers were allowed to climb to 98% or even 105% The easy credit resulted in grand homes with equity tapped for cars, toys and a nice lifestyle for many.

A recent downward shift in the perceived value we place on having a big home relative to gas, bread and savings caused the price we assigned a typical house, that had bubbled up 100%, to now lose 20% of its inflated value. The unqualified and over-leveraged slipped into trouble.

To alleviate the tax pain felt by the those who got themselves in over their head, a well intentioned Congress eliminated the tax on the gain that people used to have to recognize when they walked away from a loan. Just as the government made it easy to run up a big loan, they now made it easy to step away from that loan. As a result, 6.5% of home loans are now in default.

At the housing level, what then happens is a transfer of wealth. Frugal renters will become happy future buyers, and historically imprudent and aggressive buyers will become future renters. It is a zero-sum game, with the bad for some being good for others. In the end, home prices will have trended down to the new reality, and a greater percentage of the owners of our homes will be those who have been more responsible with their housing investments.

The government bailout upsets this natural balance of reward and punishment in the market. $700 Billion could cover 80% of all defaults and allow the imprudent to stay in their homes (and will make money for us when pigs fly). But, the $700 Billion would have to come from the frugal, who, on average, would be forced by tax to pay $7,000 per family to the wasteful. This reward of waste is not what a great economy is made of. The nation will be better off if the frugal are allowed to keep their $7,000 and use it to buy into their own homes.

PART II – BANKS & WALL STREET:

Since the market seems to be working through the foreclosures, why then are we still considering a $700 Billion bailout? The answer here has to do with the influence and size of the big institutions that received these 98% loans and took on additional risks with them. The many imprudent borrowers got their loans from larger imprudent banks, who passed them through Wall Street, and on to rich investors and institutions in America and abroad. Executives and advisors at these banks, investment banks and institutions knew they were taking risk and went for it. “Go big, or go home,” was the motto and much money was made on the way up. 80% or more of investment bank revenue goes right into lavish salaries.

To make even more profit (and salary) these firms, like their imprudent homebuyers, took on 96% to 98% debt to fund their business dealings. This was allowed in our system, because the rules had been relaxed to promote fairness in lending to the less qualified. When the market turned, some institutions lost tremendous sums on their previously winning bets.

Having bet the firm and lost everything, these Wall Street institutions do not want to leave the privileged trough where they have enjoyed such great paydays. They argue that they are unique and too big to fail. In their self-importance, they actually believe that only they can provide the financial services they have provided. Their messenger is Treasury Secretary Henry Paulson, the former head and 30 year veteran of Goldman Sachs, who now argues for his former investment banking fellows.

In an act of monumental hubris, Paulson asks for Caesar-like power to dole out the $700 Billion to his friends unfettered by courts, laws or review. Perhaps they each should pull their hand out of a bucket of water and contemplate the hole they leave behind.

In reality, better-financed companies with better executive management, will step forward to fill the gap left by the departing investment banks and related firms. Not all firms took great risk.

The US Bank president was roundly criticized for not going into sub-prime loans, but his bank is now solid. Sam Zell sold out of his multi-billion dollar REITs at the peak. Berkshire Hathaway has ample cash and now can invest $5 Billion into Goldman Sachs. Leaving the $7,000 per household in the economy for individuals to spend or invest, sometimes in new mortgages, into these replacement firms or other growing companies is substantially better than throwing good money after bad.

Letting losing financial firms be sold off is part of the creative destruction that strengthens our economy. The winners grow and the losers fade away. $700 Billion in funds should not be pulled from the economy and handed to failed firms to prop up risk taking companies and executives at a cost to every other firm and us all 

PART III – THE END OF THE WORLD:

Because the reverse Robin Hood plan, of stealing from the poor and giving to the rich, is so hard to sell to financially responsible Americans, Wall Street firms argue Armageddon. If you don’t do what they say, the U.S. financial system will suffer dire consequences too terrible to imagine. Since most people are not international economists, how can the average fellow argue? Well, the system just doesn’t work as they say.

It happens that a large percentage of the U.S. mortgages were repackaged and passed on to Chinese, Middle-Eastern, and European investors. The argument goes, responsible American families must make up the losses of the Chinese, Arabs and Europeans. If we don’t make up for the past losses from overextended borrowers, these foreign investors will no longer lend to the US and we will not be able to get any more credit card, student, housing or business loans. This is impossible.

It is impossible because when Arabs send oil to America, we pay them in dollars. When Chinese send us plastic toys or the Germans send us a Mercedes, we likewise pay them in dollars. They then have two choices: they can buy American goods with those dollars, or invest in American stock and assets. If they go to France with our dollars, the French will ask for Euros. If dollars are exchanged for Euros (or Yen), the exchanged dollars will eventually need to come back to America to buy goods or investment. The flow of dollars is always circular.

Arab oil will continue to flow to the U.S., Chinese plastics will continue to be shipped, and Nintendo will continue to be sold here. As a result, these dollars will continue to circle back into the US. In the long-run, the balance between imports and exports of goods and services is always balanced by investment. A trade deficit is balanced by an investment surplus.

To say the countries will not invest in the USA is tantamount to saying the countries will no longer ship oil, plastics and games to the U.S. Nobody suggests the supply of goods in the front half of the investment cycle will vanish, so the return of dollars will continue, also.

Additionally, and not to be hard-nosed about it, let us recognize that the foreign country losses are a sunk cost for them. They took a hit. If they invest with us in the future, they can make fresh profits. We do not need to make up for past losses in order them to make future profits. Having lost, they will be cautious. If we pay them more than they were due because much of the bailout flows to them, they will still be cautious. We gain nothing and only transfer hard earned cash from responsible Americans to overreaching foreigners by entering into a $700 Billion bailout that often ends up flowing overseas.

What should then be done is — absolutely nothing. The government should step back. Let the market sort things out. Treasury, the Fed and the SEC should only supervise the orderly liquidation of the assets that were squandered and not send another nickel to prop up these institutions.

If any much smaller monies should be allocated it should only be sent to firms not involved in the sub-prime losses for the purpose of facilitating substitute avenues for the duplication of the credit functions of the old firms. There will be some tough love disruptions, including a slowing of credit, but these annoyances will be fraction of the pain of taking $7,000 from every American family.

If we take the other path, expanding government’s role, we will be transferring wealth from the frugal homeowner to the wastrel, from the well-run firm to the failures, and from Americans to foreigners. We gain nothing from the future foreign investors who will be doubly cautious, in any case. We also set a bad precedent for jumbo loans coming due in the next few years, credit cards, student loans and other dinosaur companies that are or may shift into trouble.

Personally, I would think you would rather keep your $7,000 down payment and cancel the current program and all future installments.

Chet Billingsley is the President of Mentor Capital, Inc. (Symbol:MNTR) that invests in hedge funds and smaller companies. MNTR has no debt and no exposure to the financial, sub-prime or real estate sectors. Information on the firm may be found at http://www.MentorCapital.com.

(Disclosure: Bob Meyer holds Mentor Capital stock.)


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The Growth and Use of Secondary Capital (New Money) Creates Unprecedented Wealth In Today’s New Age Of Possibility

There are many forms of secondary capital—which can be defined as any financial instrument that measures and communicates value in a common language. Would you like to see and learn more about the many forms of secondary capital?

 We have 70 free, informative and inspiring, articles for you in our “Secondary Capital Section.”

Check it out... www.barternews.com/secondary_capital.htm.


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