Australian dollar lower on plane crash

On Friday morning, the dollar was trading at 93.56 US cents.

On Friday morning, the dollar was trading at 93.56 US cents.
Source: Supplied

THE Australian dollar is lower after US and European stocks tumbled on news of a plane crash in rebel-held east Ukraine.

At 0630 AEST on Friday, the local currency was trading at 93.56 US cents, down from 93.71 cents on Thursday.

A Malaysian airliner carrying 295 people from Amsterdam to Kuala Lumpur has crashed in rebel-held east Ukraine in what has been called a “terrorist” attack.

Mansions for under $1 million

  • Price: $450,000
  • Beds & baths: 5 & 5
  • Square feet: 6,584

In 19th century New Bedford, the well-to-do lived in comfortable homes uphill from the harbor’s hustle and bustle. This house was built in a well-kept neighborhood of wood frame homes in 1855, when the city was at the height of its whaling industry wealth.

The house is all angles and wings with gabled roofs, porches and trim. Inside is a light-filled solarium, a skylight kitchen, parquet floors and pocket doors. There’s an attached guest house, as well as a lush private garden with a brick patio, flower beds and shade trees.

It’s in excellent shape, according to real estate agent Collette Lester, and priced at a fraction of what the house would cost to reproduce today.

For further information: Trulia

$85b takeover offer ‘hard to resist’

Rupert Murdoch’s film and entertainment group 21st Century Fox is negotiating one of the

Rupert Murdoch’s film and entertainment group 21st Century Fox is negotiating one of the world’s biggest media mergers.
Source: News Corp Australia

TIME Warner’s New York billionaire shareholders have declared it’s “tough to say no” to Rupert Murdoch’s bombshell $85 billion bid to merge his 21st Century Fox with its global entertainment and media empire.

The audacious bid to create the world’s biggest media and entertainment company, with a market value of $160 billion, would be the biggest play of the 83-year-old’s lifetime of deal making.

As shares in Time Warner soared 17 per cent to a few dollars shy of Mr Murdoch’s offer price, billionaire fund managers who own shares in Time Warner said the board would find it tough to resist, particularly if Mr Murdoch comes back with a higher offer.

Ken Griffin, chief executive of hedge fund firm Citadel, said the deal made sense for the company’s shareholders.



And Mario Gabelli, chief executive of Gamco Investors, called it “hard for a board to turn down.”

“It’s going to get tough to say no,” Mr Griffin said at a conference in New York overnight on Thursday.

“Murdoch has a history of being willing to go the extra mile to get deals done that are important to him.”

Mr Griffin’s $20 billion investment firm held stakes in both 21st Century Fox and Time Warner as of March 31.

The takeover bid is not expected to end with Time Warner’s knock-back on July 3, but for now it is keeping a firm hold on its prized assets, including CNN, Warner Bros films and HBO.

Time Warner.

Time Warner.
Source: News Corp Australia

Time Warner’s board rejected the offer of $85 a share, despite the $US25 billion mark-up on its company value, saying in a statement that its own strategic plan would deliver more value.

Analysts speculated this would be the opening salvo in what could be months of negotiations as Time Warner declared its strategy “superior to any proposal that 21st Century Fox is in a position to offer”.

But Time Warner is understood to be seeking another $US30 billion.

In a statement on Thursday 21st Century Fox confirmed the offer and the knock back.

“We are not currently in any discussions with Time Warner,” the statement said.

Time Warner shares in New York soared 17 per cent to $83.13, the biggest gain in 14 years, after news of the deal broke on Wednesday night local time.

Shares in 21st Century Fox lost ground, closing 4.64 per cent down at $32.57.

If Mr Murdoch’s “mega bid” gets over the line, Australian viewers are expected to share in the spoils, analysts say.

The offer revealed how much value 21st Century Fox is placing on content.

Unless a rival bid emerges, potentially from a Silicon Valley heavyweight such as Google, Mr Murdoch is looking at a much greater arsenal of content choices – from US college basketball to HBO’s Game of Thrones and Warner Brothers movies – to attract and retain viewers.

How that content reaches Australian viewers could change significantly.

Already companies such as Netflix, Google and Apple have invested heavily in subscriber-based versions of TV stations, while for Fox, apps modelled on Time Warner’s successful HBO Go could be introduced here.

Game of Thrones.

Game of Thrones.
Source: Supplied

The Big Bang Theory.

The Big Bang Theory.
Source: Supplied

Ellen DeGeneres.

Ellen DeGeneres.
Source: News Limited


Source: Supplied

Originally published as $85b takeover offer ‘hard to resist’

Non-bank loans: Quick, easy…and addictive?

alternative lending combo


During the recent recession, many traditional financing options for small businesses dried up. Even when the economy started to rebound, banks increased loans to large businesses while scaling back financing for smaller firms.

Today, the odds of a small business actually receiving a bank loan are about 50-50, according to a recent survey by Pepperdine Private Capital Access Index and Dun & Bradstreet Credibility Corp.

This has opened doors for alternative lenders, which don’t require business owners to have flawless credit or go through months of red tape. They often look beyond credit history and factor in other indicators of business health, like transactions and revenue.

While they still provide just a fraction of the funds of traditional lenders — several billion compared to hundreds of billions — non-bank financial providers have grown 100% since last year, according to Bill Phelan, president of PayNet, a small business credit ratings company.

Alternative lenders offer quicker turnarounds and more personalization, but they also come with significantly higher interest rates. And because financing amounts tend to be much smaller than those offered by traditional banks — and for shorter terms — it can lead to an endless cycle of loans.

“Small business owners need to carefully evaluate lending options and understand that not all lenders are created equal,” said small business adviser Mike Periu. “It’s up to the borrower to do their homework.”

Banks won’t lend? Use these guys instead

Alternative lenders fall into three main categories:

Working capital loans: Short-term loans for day-to-day financing needs. Interest rates tend to fluctuate depending on the term length and one’s business risk. But experts warn that the annual percentage rate can run as high as 170%.

Manny Skevofilax of Portal CFO Consulting said if a company needs temporary funds, the first question to ask is “why”?

“You have to be looking at [options] before the jam happens,” Skevofilax said. “If you know ahead of time what’s causing the problems in your business, it would mitigate you having to go out and take a loan.”

Skevofilax said seasonality could be a legitimate reason, but with high interest rates, this should still be a last resort.

Should you drain your 401(k) to start a business?

Peer-to-peer lending: Virtual marketplaces where individuals or companies invest in small businesses.

A platform like Lending Club ranks small businesses ‘A’ (low-risk) through ‘G’ (high risk). Many investors choose to auto-invest their dollars in businesses with the lowest risk.

These options tend to be transparent about fees and interest rates, but Mitchell D. Weiss, adjunct finance professor at the University of Hartford, said borrowers need to be fully aware of all terms and conditions.

“Focus on the default and remedies clauses,” advised Weiss. “If you miss a payment, do you have an opportunity to remedy it?”

Merchant cash advance: Business owners essentially borrow money from themselves (from revenue they’ve yet to receive) and pay it back in small daily remittances, plus a flat fee. Companies like Square offer these to merchants that use their payment systems.

Square’s cash advance: Don’t call it a loan

Unless businesses are rapidly growing or use the cash advance to increase revenue, experts say it can be difficult to ever get out of the red.

“Merchant advance is the financial equivalent of crack,” said Weiss. “When used repeatedly, these arrangements can seriously erode profitability. It’s important for business owners to determine why this type of financing has become necessary.”

The advances are typically smaller than a bank loan (CAN Capital, for instance, offers anywhere from $5,000 to $150,000), so business owners take them out more frequently, tacking on an additional fee each time. Weiss recommends calculating the annual percentage rate using a calculator like eFunda’s.

“The first choice would be to see if you can find some bank financing — that tends to be the cheapest,” said Skevofilax. “But you need to be in business for at least two years.”

Is peer-to-peer lending online the future?

Despite the risks, alternative lenders can be vital for helping some small firms grow their business.

Marlon Davis, who owns Nesberrys in Hempstead, N.Y., needed a loan in order to increase storage space for his ice cream business.

He didn’t even attempt the bank. Instead, he turned to Lendio, a broker between loan providers and small business owners, which helped him get a $12,000 working capital loan from OnDeck. He’s been paying back daily amounts of about $75. By September, he will have successfully paid back a total of $14,250.

He paid a 19% markup for the funds. For some owners, that wouldn’t be worth it if future sales don’t increase. But for Davis, getting the funding in May enabled him to purchase more freezers and add more storage space. He estimates a 40% increase in sales at his two store locations and a 20% increase in his wholesale sales.

“Prior to this, we would probably [have] run out of the product to sell,” he said.

‘What homelessness taught me’

Jamie Green started One Night Stand after a rough patch in his life.

Jamie Green started One Night Stand after a rough patch in his life.
Source: Supplied

The ad for the Make a Stand crowdfunding campaign by One Night Stand sleepwear to tackle youth homelessness. Courtesy: YouTube/One Night Stand Sleepwear

TWO years ago, 25-year old Jamie Green found himself sleeping rough on friends’ couches and on the floor of his floundering cafe. Now he’s running a fledgling social enterprise and giving something back.

Mr Green has been a perennial entrepreneur since he was 17 when he started his own line of jewellery products. A couple more successful enterprises led him to amass the funds for his fourth business, a Melbourne cafe.

Within six months, the Queensland native found everything was going wrong. Mr Green moved out of his rented accommodation as he desperately diverted his money into his business, trying to keep it afloat.

“I couldn’t afford to pay rent and started couch surfing and then slept on the floor of the cafe,” he told “At the time I didn’t think too much of it as I was a battling entrepreneur. Later on, as I was reflecting on the situation I developed a strong passion for youth homelessness, how people ended up in that situation and what support was available.”

Luckily for Mr Green, he managed to sell the cafe and used the proceeds to pay off his debts.

In thinking about his next venture, he started looking into starting a not-for-profit or becoming a social worker. “But that wasn’t in my personality,” he said. “I’d always been an entrepreneur. So I picked up this book by Richard Branson called Screw Business As Usual which talked about using business as a force for good.

Richard Branson served as an inspiration for Jamie Green.

Richard Branson served as an inspiration for Jamie Green.
Source: News Limited

“I hadn’t thought about the two — business and social enterprise — together until then.”

From that revelation, Mr Green was accepted into an incubator program which helped him form his concept for One Night Stand, a sleepwear brand that seeks to alleviate youth homelessness.

After months of testing, One Night Stand was officially launched with an experiential stunt and crowd-funding campaign through ING Direct’s Dreamstarter program. Mr Green stood on a Melbourne CBD street inside a Perspex box for 24-hours to raise awareness of his company and cause. It brought in $27,000 within the week from people pre-purchasing his sleepwear range. It was enough money to kick off manufacturing the first line.

Taking inspiration from US shoe brand Toms (which gives away a pair of shoes to an impoverished child with every pair sold), Mr Green’s model works on that with every purchase from One Night Stand, his company will provide a meal to homeless youth.

Working with Open Family Australia, he said it’s not just about providing a meal. “The meal is just an attraction for homeless youth, it’s about building relationships and rapport with people, and having a chat, helping them into programs and employment, and gaining skills and confidence.

“Homelessness is such a huge issue and it’s so broad. There’s no one solution for the problem. There are many different tiers and it includes not having a job and sleeping in your car. Actors and comedians often get themselves into that situation.

“Everyone’s different. Some are really keen to study and get a job. For others it’s hard because once you start running in that circle, it’s hard to break out of it. My experience led me to a different path.”

Jamie Green borrowed his concept from Toms.

Jamie Green borrowed his concept from Toms.
Source: Supplied

According to the Australian Bureau of Statistics, there were 26,238 homeless people aged between 12 and 24 on Census night in 2011. But the ABS warned homeless youth are likely to be underestimated because many young people couch surfing with mates weren’t distinguishable from people who were just visiting friends for the night.

Mr Green said he has also started looking into how One Night Stand can launch an employment program for young people. In the meantime, he’s focused on getting One Night Stand stocked in a large retailer and looking to partner with someone who can help them reduce their international shipping costs with 20 per cent of the business’ sales coming from the US.

This week, the G20 Young Entrepreneurs Alliance will convene in Sydney to tackle the issue of global youth unemployment and underemployment.

One Night Stand’s range.

One Night Stand’s range.
Source: Supplied

While Australia has compared favourably with many countries around the world, including those which were hit by the eurozone crisis, the issue of youth unemployment has again come to the fore locally with controversial budget proposals which would see young people stripped of Centrelink benefits for six-month blocks.

The EY G20 Entrepreneurship Barometer found small businesses accounted for 69 per cent of overall employment growth in Australia.

G20 Young Entrepreneur’s Alliance spokesman Aaron McNeilly said in a statement: “I invite Australia’s leading entrepreneurs, small business owners and the organisations that support them to join us at the G20YEA Summit to instigate change and ultimately transform the lives of youth not only in Australia, but from all over the world.” chief executive Matt Barrie, a speaker at the event, said: “Entrepreneurship is the solution for young people in Australia, and globally, who are struggling to find work.”

Here are 7 ‘cheap’ stocks

cheapest stock valero energy

  • Forward P/E: 7.6
  • 2014 stock performance: -0.8%

Valero Energy (VLO) may be the cheapest stock in the S&P 500.

Investors like to value stocks based on their projected profits, or forward price-to-earnings (P/E). Based on that measure, Valero’s price tag is the least expensive among S&P 500 companies with a market value of at least $15 billion.

Why? The market is clearly spooked by America’s decision to allow some ultra-light crude oil to be exported. The fear is the move could boost domestic oil prices and raise costs on American refiners like Valero, which tumbled about 10% on the June 25 export announcement.

Yet Wall Street is signaling the selling may be overdone.

A lofty 71% of analysts who cover Valero have a “buy” rating on the stock, up from 61% in April. And the average price target of nearly $64 is well above the current price of around $50.

That means either Wall Street needs to ratchet its targets down, or the market may be undervaluing Valero shares.

‘We will regret day’ carbon tax axed

Climate Spectator’s Tristan Edis explains how direct action works, how it compares to the carbon tax and whether Australia should just buy permits from overseas to meet its obligations.

Political editor Malcolm Farr tells us what to expect now the carbon tax has been repealed.

Finally able to raise a smile ... Treasurer Joe Hockey during Question Time at Parliament

Finally able to raise a smile … Treasurer Joe Hockey during Question Time at Parliament House today.
Source: Getty Images

JUST as the sky did not fall in when the carbon tax was introduced, nor will the sunshine break with its repeal.

Today is a triumph of short term politics over long term policy making.

CARBON TAX AXED: Tony Abbott finally gets his way

POLL: Most voters want carbon tax scrapped

At the margins, certainty on the repeal of the carbon tax will give business confidence. But they’ll remain nervous about the Senate’s plans to derail the government’s budget fix.

Longer term, climate change remains a real threat to our economy, which is already prone to drought and floods.

CARBON TAX .. CO2 Polution Pic. Thinkstock Pic. Thinkstock

It won’t suddenly disappear … climate change remains a real threat to our economy. Picture: Thinkstock
Source: Supplied

60 HOURS OF DEBATE: Carbon tax bites the dust

CARBON TAX: Your questions answered

The overwhelming majority of scientists still believe increasing concentrations of greenhouse gases in our atmosphere will trap heat close to the earth, warming temperatures, heating oceans and changing weather patterns.

Those changes will negatively impact a range of industries, from agriculture to insurance.

Scrapping the legislation underpinning Australia’s carbon price, as the Senate has today, throws the baby out with the bathwater.

Economists agree a carbon price was the lowest-cost, most effective solution to the problem of climate change.

Australia’s substantial legal framework around emissions trading was almost a decade in the making, soaking up a lot of time and resources to design and put in place.

It should have been allowed to remain in place, albeit with a reduction in the carbon price from a fixed price of around $25 a tonne of carbon to the floating international price, which is more like $7.

Sure, after today, big polluters will pay less thanks to the tax’s repeal. Households — who forget they were already fully compensated for rises in electricity costs through tax cuts and welfare payments — will enjoy a double dividend if the government is successful in getting companies to refund them the cost of the tax too.

But Australia will be left without a market-based policy designed to re-engineer our economy towards a lower carbon path.

We will come to regret this day.

Australia is already prone to drought and flood ... We will come to regret this day.

Australia is already prone to drought and flood … We will come to regret this day.
Source: News Limited

Airlines’ annoying fees add up to $31.5 billion

airline fees data
Airline fees have climbed from $2.8 billion in 2007 to over $30 billion last year, when adjusted for inflation.


Flyers hate paying those bag-check and cup-of-coffee fees. But airlines love collecting them.

Airlines worldwide brought in $31.5 billion in revenue from fees last year, according to a new survey. That’s more than 11 times their non-ticket revenue just six years earlier, adjusted for inflation.

Fees grew far faster than ticket prices, and helped airlines stay profitable. Including a 10% decline in 2009 amid the economic downturn, airline ticket prices climbed only 4% in the same period, according to federal data.

The income from fees was collected and analyzed by CarTrawler, a rental car services company, and IdeaWorksCompany, which helps airlines build these non-traditional revenue streams.

Related: Absurd airline fees and how to avoid them

Part of the increase is due to awareness — more airlines are breaking out non-ticket revenue in their financial reports. The 2013 data includes 59 airlines, while the 2007 snapshot counted only 23.

Less than half of those fees are paid directly from customers’ pockets to the airline. For a typical U.S. airline, about 25% of the revenue comes from baggage fees and 10% come from other a la carte services, such as early boarding and the sales of soft drinks. About 5% comes from package deals, such as hotels, rental cars and insurance programs.

Related: Smart luggage texts you when it’s lost

The largest share — 60% or such revenue — comes from selling frequent-flier program miles to credit card companies and others, who pass out the miles to reward their own customers.

Three leading U.S. carriers — United Airlines (UAL), Delta Air Lines (DAL) and American Airlines (AAL) — topped the list for the most non-ticket revenue last year. United, for example, brought in $5.7 billion.

But it was a discount airline that has made fees the largest share of its business. Over 38% of Spirit Airlines (SAVE)‘ revenue came from fees — such as the fee for printing your boarding pass at the airport or for a drink (even water) mid-flight.

Plane tickets ain’t what they used to be

And this isn’t the peak of airline fees. “We have a fair amount of room to grow yet,” says Jay Sorensen, the president of IdeaWorksCompany. He expects to see baggage fees become even more widespread, especially among European airlines.

Pay cut you didn’t know about

Minister for Health Peter Dutton tells moneysaverHQ’s Moira Geddes why everyone needs private health insurance to stay well.

You may have noticed your pay packet was a little lighter this month.

You may have noticed your pay packet was a little lighter this month.
Source: ThinkStock

DID your pay packet feel a little lighter this week?

You may noticed your take-home pay has gone down a little since the financial year kicked in two weeks ago. You might be scratching your head and wondering if you jumped a HECS bracket or if it was that superannuation increase.

But actually, it’s because the Medicare levy has grown from 1.5 per cent to 2 per cent. With all the kerfuffle surrounding this year’s budget announcements, you’d be forgiven for letting the levy increase slip your mind. It was, after all, announced in the 2013 budget under the previous government and so many other budget-y things have come along since then.

The money from the half a per cent jump will be placed in the DisabilityCare Australia Fund, which will be used to for any additional costs needed for delivering the National Disability Insurance. Scheme.

So how much extra will you fork out a year?

$30,000 — $150

$40,000 — $200

$50,000 — $250

$60,000 — $300

$70,000 — $350

$80,000 — $400

$90,000 — $450

$100,000 — $500

$100,000 plus – add an extra $50 for every $10,000.

Of course, some people have also seen their take-home pays go down as a result of superannuation changes. If your salary agreement is a package (ie. the figure is wage and superannuation in one), then there’ll be a small decrease of 0.25 per cent which has been redirected to your superannuation payments. Superannuation contributions jumped from 9.25 per cent to 9.5 per cent on July 1.

If your salary is wage plus super, then it won’t have affected what gets deposited into your bank account. And you’ll get a couple of extra bills in your super.

‘Illegal to be homeless’ in growing number of cities

cities implementing homeless bans
More cities are instituting laws against things like sitting or sleeping in public, a new report finds.


A growing number of cities across the country are making it “illegal to be homeless,” according to a new report.

Despite a lack of affordable housing and emergency shelter, many of these communities are implementing laws that ban homeless residents from sitting or lying down in public, loitering, sleeping in vehicles, and begging for money or food.

“More cities are choosing to turn the necessary conduct of homeless people into criminal activity,” said Maria Foscarinis, executive director of the National Law Center on Homelessness & Poverty (NLCHP).

The law center has tracked homelessness criminalization laws in 187 cities small and large since 2011.

Related: Camden shuts down tent cities

During that time, city-wide bans on camping in public — which can include sleeping outside on the streets or in a tent — have increased 60%.

The number of cities with laws prohibiting or restricting people from sitting or lying down in public has jumped by 43%, and bans on sleeping in vehicles have surged 119%. Meanwhile, laws prohibiting people from begging in public and loitering have climbed more than 20%.

And these laws are popping up even when people have few other options for survival, the NLCHP argues.

In Santa Cruz, Calif., for example, sleeping in vehicles and camping, sitting or lying down in public, is criminalized — even though a local survey found that 83% of homeless people don’t have access to housing or shelter.

Related: The rise of Tent City, USA

A spokesman for the city said that attorneys are required to dismiss any citations issued to homeless people who camp outside on nights that shelters in the area are full. Otherwise, the fine for violating the no-camping law is $20 or 8 hours of community service, and the offense is not punishable by jail time.

“The law does not criminalize homeless status, only conduct which is detrimental to community health and environment, i.e. lack of sanitation and degradation of City streets, open space and beaches,” the Santa Cruz spokesman said in an email.

Homeless valedictorian moves to college

Violations do result in arrest in many cities, however. And the NLCHP points to a number of reports finding that the cost of enforcing these laws greatly exceeds the amount it would cost to provide people with options like affordable housing or shelter.

The Utah Housing and Community Development Division found that emergency room visits and jail stays end up costing nearly $17,000 per year for the average homeless person — versus the $11,000 it would cost to provide that same person with an apartment and a social worker.

Related: Homeless valedictorian moves from shelter to dorm

Other analysis from Creative Housing Solutions estimates that providing permanent housing and case managers to Central Florida’s chronically homeless would save taxpayers $149 million over the next decade that they would otherwise spend on law enforcement and medical care.

“Criminalization laws are the least effective and most expensive way for cities to address homelessness in their communities,” said Tristia Bauman, a senior attorney at NLCHP.

And such laws only perpetuate the cycle of homelessness because they don’t get to the root of the problem, the group argues.

“Arrested homeless people return to their communities, still with nowhere to live,” the report states. “Moreover, criminal convictions — even for minor crimes — can create barriers to obtaining critical public benefits, employment, or housing, thus making homelessness more difficult to escape.”