Written by Bob Meyer, Editor of BarterNews

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We Hear From Our Readers...

Every time I read your publication, BarterNews, or the Tuesday Report, I come away with a valuable insight. Last week I read with interest your reporting regarding the $23 incremental cost of frequent flyer rewards—wow! By the time I get enough miles to reward myself with a free trip, they (the airline) have sold my credit card company 25,000 miles at 2% ($0.02) or $500...not bad eh?

My kind regards,
Peter Tucker

Editor's Note: From our first issue 23 years ago, our goal, as noted in that issue's Editor's Note, remains: "Our purpose at BarterNews is to provide you, our readers, with a storehouse of information, ideas and contacts."

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Barter Is A Form of Securitization

Ever since Fannie Mae and Freddie Mac got the ball rolling in the mortgage market (making illiquid assets liquid by packaging them into securities), securitization has expanded into a variety of other markets, including credit-card debt, auto and home-equity loans, commercial mortgages, and trade receivables.

That practice allows originators to sell assets from their balance sheets and devote their capital to generating new business. Thus, securitization has enabled the extension of credit to a much greater number of individuals and businesses in the United States.

Companies Unused Capacity A Financial Tool

Barter provides real benefits to the undercapitalized small business owner. Because any time a company can take its unused or excess capacity and package it so it can be traded, the company is making a wise move. The proceeds obtained, either goods/services on a direct basis or trade dollars on an indirect basis, can then be used in a variety of ways such as defraying overhead expenses, gaining market share, and paying down debt.

Get New Money-Making Ideas And Valuable Contacts!

You can obtain useful, informative ideas and contacts in every available back-issue of BarterNews.

Marketing Budgets Changing Amid Declining TV Viewers

At the recent American Association of Advertising Agencies' (AAAA) Media Conference and Trade Show in Orlando, ad-buying marketers and executives spent most of their time talking about how best to reach increasingly fickle audiences.

Jim Stengle, chief marketing officer of Procter & Gamble told the attendees that he is open to forging new partnerships with people who have big ideas, because today's marketing model is broken. He also warned that brands that rely too heavily on mainstream media will lose touch.

Stengle pointed out that although P&G spent 90% of its marketing dollars on TV in 1994, that's no longer the case today. (P&G spends around $4 billion on ads globally.)

At another conference held recently by trade publication Advertising Age, John Hayes, American Express's chief marketing officer, said that company now spends about 35% of its marketing budget on TV advertising. A far cry from the nearly 80% spent in 1994.

Marketers are expected to put more emphasis on public relations, product placement, and events marketing as they move forward to answer the challenges of ad clutter and declining TV viewers.

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Here & There...

• India and China will barter films, and explore the distribution and co-production of animation films for children for their respective state-run television channels.

• Beer radio is now offered for syndication on a barter basis. For more information about Beer radio contact Joe Gardenghi at: (410) 744-6585 www.BeerRadio.com.

• The U.S. Department of Labor reports that the secret to job market growth is you, the consumer. According to the Occupational Outlook Quarterly, published by the Bureau of Labor Statistics, "About 61% of all jobs in 2010 are expected to be the result of consumer expenditures."
  
  The report says that consumer spending creates jobs in all occupations to some extent, whereas other components of the gross national product, such as investment, have a more restricted effect on occupations.

• The National Association of Homebuilders reports that consumers spent $170 billion on renovations last year.

• Twentieth television has cleared CBS's sitcom "Yes, Dear" across 67% of the country for off-net syndication, with 4.5 minutes to the stations and 2.5 minutes to Twentieth for ad spots.

• Revlon is using a trading strategy, exchanging equity—stock—with bond holders. The debt-for-equity swap will reduce the company's bond indebtedness by $930 million (about 50% of the $1.9 billion debt load) and provide the cosmetics company with greater flexibility.

• Reinforcing the ubiquitous of barter: the movie director with the best box-office record in history, Steven Spielberg, routinely eschews salary and upfront fees for his creative efforts...choosing instead to trade for 17.5% of the movie's gross receipts.

• Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) and sign up!

• Another way to earn frequent flier miles has been introduced by Fidelity Investments and United Airlines. By opening up a new $50,000 account with Fidelity you will earn 25,000 miles, which for UAL's Mileage Plus members is enough to get one domestic round-trip ticket. The airline has a similar arrangement with Ameritrade.

• An Alliance Capital Management study says that manufacturing production has risen about 40% in the U.S. over the past decade. Despite lower wages abroad, foreign firms have chosen to use high-wage workers here to produce cars, including Honda in Ohio, Mercedes-Benz in Alabama, BMW in South Carolina, and Toyota in California.
  
  Of course, the share of the American workforce in manufacturing has fallen steadily over the postwar period due to vast increases in productivity...but this is a world-wide phenomenon. Between 1995 and 2002, China, Japan, Brazil and other countries lost more manufacturing jobs than did the U.S., according to the study.

• Africa has more cross-border trade among countries than does the Middle East, notes economist Glenn Yago, director of capital studies at the Milken Institute in Santa Monica.
  
  Sanford Millara, a Los Angeles-based international attorney with clients in Egypt, Lebanon and Saudi Arabia, says the biggest stumbling block to more investment is that most Middle Eastern countries mix commercial law with Islamic religious law. He says that until one is sure of a predictable rule of law, money won't come into the area.

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