Business English Practice: Sony announces $3.2b biggest ever loss amid sickly sales & writeoffs

Click on the linked picture above to go to a newsy.com video about Sony Corp.'s newest and biggest $3.2 billion loss for the financial year. You can also find the written transcript together with the video at [ http://www.newsy.com/videos/sony-reports-3-2b-loss/ ].

In fact, the last time Sony made any money was in 2008, making a loss for the first time ever in 2009 after markets plunged in late 2008. And the last time total sales were this low was in the last century! (SEE Sony Group Financial Information Historical Data.)


SOME EXTRA BACKGROUND:

The man in charge since 2005 is Howard Stringer - a Welsh-American heading Japan's iconic technology company. After some 30 years at American network giant CBS - rising from journalist ultimately to president in 1988 - Stringer was hired by Sony in 1997 to be the President of Sony Corp. of America.

The 90's is well known as the "lost decade" for Japan's economy. Large foreign rescue investors brought in their foreign CEOs. Ford brought Henry Wallace into Mazda in 1995. In 1999, Renault famously brought in Carlos Ghosn who turned Nissan around. However, Howard Stringer was brought in and promoted by Sony itself - as its self-administered rejuvenating medicine - and not by a foreign investor.

After Howard Stringer came in as President of Sony Corp. of America in 1997, Sony Corp's group performance continued to stumble and Stringer's career, at the age of 55, continued to rise ever swiftly. In 1999 he was given a place at the international Sony Corp. as a director, and in 2003 was made Vice-Chairman. Ultimately in 2005 Stringer cemented his position as Chairman and CEO - despite being reported to have given up on learning the Japanese language (and still until today only spending half his time in Japan)! Later in 2009, Stringer further absorbed the position of President into his responsibilities.

The President, Chairman, CEO and white knight savior for Sony Corp., Sir Howard Stringer
and his... junior, shorter, executives

 Despite Stringer's late but stellar rise beyond his CBS-President career, Stringer has only had one year of outstanding results since taking over the helm in 2005 - that was in the 2007 financial year. Since then, as we know, Sony has fallen into a pit of ever widening losses.

With powerful and bright companies strongly competing against Sony in almost every product category - with the likes of Apple, Nintendo, Microsoft and Samsung - the future is a troubled one for Sony; even with their appointed skin-white-knight at its helm.





Some notes on the language:

The announcement of loss came as part of a regular report on accounting results. So let's take a look at some accounting vocabulary used:


net (sometimes spelled "nett") - "Sony suffered a $3.2 billion net loss" - In English, "net" has two main meanings.

The most common meaning of "net" is related to a web-like material - for example: used for catching fish. This is not the meaning here.

The opposite of the meaning of "net" used in the video is "gross". "Gross" is a larger whole total sum amount before considering any other amounts that you would like to deduct from this "gross" amount.

A "net" amount is the "gross" amount minus whatever deduction(s) you wish to deduct from that "gross". For example, your income minus your income tax can be called: "after tax income", "income after tax" or "income net of tax".

Much of modern accounting systems originates from Italy. The term used in Italian accounting, "netto", has the same meaning as the "net" in English. "Netto" originated from a Latin word that meant "cleaned, polished, shining" - so you can imagine a "net" amount as a "polished or cleaned" version of the "gross" amount!

We polish and clean off the layer of dirt from the crude or "gross" amount to give us the shining "net" amount.

writeoff - "... Sony wrote off years worth of tax credits. The writeoffs are due to lowered profit expectations..." - A "writeoff", or to "write off" is an accounting term meaning to reduce the value of something, especially of an asset, often meaning to reduce the value to zero. The term comes from the physical act of writing amendments in accounts to take values off the accounts. In English, the term "writeoff" has been extended from accounting to assets such as real estate or vehicles (even if no accounting is involved) which have been destroyed such as to have almost zero value - the destroyed property can be termed "writeoffs".

To reduce the book value of an accounting item, usually assets, and often reduced to zero value: "writeoff"

in the black - "Sony still expects the coming year to keep them in the black, despite the rash of bad news." - In accounting, the opposite of "in the black" is "in the red". In previous times (and perhaps still kept by some) red ink and black ink were used in accounting to write negative values and positive values respectively. Thus, in the Profit & Loss Account, a balance written in black would indicate a profit, and a balance written in red would indicate a loss. Another English idiom related to this is "red ink" to mean financial losses; for example, this headline from the New York Times: Insurer of Pensions Sees Flood of Red Ink.

In traditional accounting, a loss balance in the Profit & Loss A/c would be written in red ink. In this cartoon by Bill Day , from the political humor blog BartCop.com, presidential candidates McCain and Obama ponder the huge pool of American "red ink" that is the large national budget deficit left by outgoing President Bush.

Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

Don't be scared if there is a lot that you don't understand. As long as you learn a little something new, then that is valuable: learning bit by bit is natural learning. By watching and listening, you will also be more exposed to, and more familiar with, various sentence structures and other language techniques used by English speakers.

I'll be happy to receive QUESTIONS and COMMENTS from English learners, and I'll try to answer your queries here about the language in this video. I look forward to your comments!

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English by clicking on the Advisor button below.]

Business English Practice: New Car from Jaguar Costs $1 Million Dollars - an Electric Hybrid!

Click on the linked picture above to go to a newsy.com video about the C-X75, a new luxury super sports car to be made by Jaguar and sold for over a million dollars each - a luxury sports car powered by a  hybrid electric engine. You can also find the written transcript together with the video at [ http://www.newsy.com/videos/jaguar-to-produce-1-million-hybrid-supercar ].

The C-X75 - from Jaguar, the luxury car maker now owned by India's largest conglomerate, Tata group - is an expensive car, with a price tag of over a million dollars each - but it LOOKS like it's worth every single dollar! Just checkout the photo slideshow below from "Jaguarcars" at flickr.com:


Created with Admarket's flickrSLiDR.

SOME EXTRA BACKGROUND:

Popular hybrid cars today are essentially gasoline powered cars that save on the amount of gasoline used by running on a special in-built electric motor when the special electric battery has enough charge.

The present top selling model of ALL cars in Japan, Toyota's Prius, is already a hybrid technology vehicle. The Prius is also the number one selling hybrid vehicle in the much larger U.S. market; however, the Prius, or any other hybrid vehcle for that matter, has yet to even enter the top 20 most popular models in th U.S., let alone challenge for the top position.

In this special project, Jaguar have called the famous British Williams Formula One motor racing team onboard, who will "provide their engineering expertise in areas including aerodynamics, carbon composite manufacture and hybrid technologies".

Jaguar itself had a Formula One Racing team under its own name from 2000 to 2004, during its ownership by the America's Ford Motor Company (1990-2008). Ford, sold Jaguar to Tata, India's largest business group, for $2.3 billion in June 2008 (making a loss, having originally purchased Jaguar for $2.5 billion way back in 1990), just prior to the great stockmarket panic later in that year. According to The Detroit News:

Ford bought Jaguar in 1989 for $2.5 billion -- far more than conventional wisdom held the brand was worth. It was widely viewed as a vanity purchase. Since then, Ford has invested about $10 billion in the brand, including a $1.2 billion bailout in 2005.

So not only did Ford sell Jaguar for a lower price than it was bought 18 years prior, they also added $10 billion in investments, $1.2 billion in a bailout; and what is more, Jaguar is thought to have made a loss for Ford every single year of its stewardship prior to 2007.

Even in the year that Ford first offered for Jaguar, a newspaper in 1989 showed:

Jaguar's future alone was dim if not nil... The company was losing money, building only 50,000 cars a year..."

In 1935, the Jaguar name first appeared on cars produced by in Coventry, England; although the company can trace its beginnings through the founder and long term Managing Director, Sir William Lyons, for more than ten years prior to that, in 1922. The company made a name for itself in sports cars.

In 1965, British Motor Corporation (BMC - which then held brands such as Austin, Morris and MG) bought a critical supplier to Jaguar, Pressed Steel, that fabricated bodyshells for Jaguar.

By now Lyons was nearing retirement, and did not have a viable succession plan within the company. His only son John had been killed in a car accident in 1955, and his other board members were of a similar age to himself. In addition, the bodyshells for Jaguar production were fabricated by Pressed Steel, a supplier critical to Jaguar Cars and now controlled by BMC.

From the BMC perspective, Jaguar Cars was attractive because it was a success in the US market, and was thereby hugely profitable at a time when BMC lacked the funds to invest sufficiently in modern production facilities or new models. [source jaguar-enthusiasts.org.uk]

So in 1966, Jaguar was merged into BMC to become British Motor Holdings (BMH). But Britain's motor industry had already begun its long decline from the late 1950s. According to Wikipedia, the group that Jaguar belonged to, BMH, was struggling and the Government had to broker a merger just two years later in 1968, with another British motor giant, Leyland Motors, to form British Leyland Motor Corporation (BLMC). At this stage, BLMC was the last remaining major car manufacturer in Britain that was still in British hands. However, that mega-merger was not enough to make things better. Things got so bad that BLMC had later to be nationalized by the Government in 1975, changing its name slightly to British Leyland. The British group to which Jaguar was a member, "at one time held some 40 per cent of the British car market" and at one later stage shrunk to as little as 16%, according to CNN.

The Conservative powerhouse, and the first and only female Prime Minister of the U.K., Margaret Thatcher, came into power in 1979. In a series of large scale privatizations beginning in 1981, Jaguar was separated from its group and floated on the stockmarket in 1984, leading to its subsequent takeover by Ford in 1990 and eventually Tata in 2008. Throughout the troubled period of over 40 years from the 1960s through to 2008, perhaps Jaguar had not seen a period as profitable as back before 1966 when Sir William Lyons was still leading the corporation.

The brand may have been losing money for close to half a century of its 70 year history, but their cars sure look like a million dollars!


Some notes on the language:

Here is some vocabulary from the video which you may not have heard of before:

"wowed" - "Wow" is an informal word, an exclamation to show amazement, wonder etc. Its main classification is as an interjection. It is sometimes, as here in this video, used as a verb: "to wow", to impress others such as to cause amazement, wonderment etc.: "super-car that wowed spectators".

"hook-up" - This phrase is used in the video as a noun, meaning a connection of one entity to another entity: "(t)he Jaguar-Williams hook-up"... just as objects can be physically hooked up one to the other with a hook and chain/string.

"out-green" - This seems to be a newly coined phrase. "Green" is a an adjective, noun and sometimes a verb, associated with ecological and environmentalist issues - maybe because environmentalists love green trees. "Out" is sometimes used as a prefix, meaning to exceed in, or do or be more of something to a greater degree, such as in the words "outlast", "outdo", "outbid", "outgrow", "outgun", "outhit", "outpunch", "outlive", "outrun", "outperform", "outsmart" and "outspend". Thus to "out-green" is to be "more green" than others: "competition among automakers to out-green each other".


Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

Don't be scared if there is a lot that you don't understand. As long as you learn a little something new, then that is valuable: learning bit by bit is natural learning. By watching and listening, you will also be more exposed to, and more familiar with, various sentence structures and other language techniques used by English speakers.

I'll be happy to receive questions and comments from English learners, and I'll try to answer your queries here about the language in this video. I look forward to your comments!

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English by clicking on the Advisor button below.]

Business English Practice: Going Public in IPO for Dunkin Donuts

Click on the linked picture above to go to a newsy.com video about Dunkin Donuts' filing of papers to begin its IPO public share offering. You can also find the written transcript together with the video  at [http://www.newsy.com/videos/dunkin-donuts-announces-plans-to-go-public/].

What is an IPO?

An IPO is an abbreviation using the initial letters of "initial public offering". It is an offering of shares in a company for sale to the public, for the first time by a private company, that will, through this sale, turn into a public company - whose shares, after this IPO, will be publicly traded on the open market.

SOME BACKGROUND ON DUNKIN DONUTS:

Dunkin Donuts is a very large food and beverage franchise chain that specializes in coffee and donuts. It has about 9,700 stores in total: around 3,000 outlets in 30 overseas countries and around 6,700 in the United States. To compare Dunkin Donuts to other multinational F&B franchise chains:

Number of Retail Locations

	FRANCHISE	Overseas	USA	TOTAL
	Starbucks coffee	6000	11000	17000
	Burger King	4000	8000	12000
	Dunkin Donuts	3000	6700	9700
	Domino's Pizza	4000	5000	9000
	Wendy's hamburgers	700	5900	6600

(source: dowloadable information from the respective corporate websites)

Dunkin Donut's sister company is the famous Baskin-Robbins ice cream specialty chain, both presently owned by the private holding company Dunkin Brands.

Dunkin Donuts' parent company purchased the second largest donut franchise, Mister Donut back in 1990, and essentially amalgamated it with Dunkin Donuts. The strange thing is, Mister Donut's master franchisee in Japan, retained the rights for Mister Donut throughout Asia, and to this day Mister Donut competes against Dunkin Donuts (which in the U.S. would be its sibling company) in many Asian countries.

This IPO is just one in a long line of transformational corporate maneuvers since DD beginning in 1950:

• The first Dunkin Donuts was opened in 1950 by Bill Rosenberg in Quincy, Massachusetts, now part of metropolitan Boston.

• Bill and his family grew Dunkin Donuts into market leadership for 40 years until it was acquired by the giant British liquor and food group, Allied Lyons, in 1990. (Baskin-Robbins was acquired much earlier by J. Lyons & Co. in 1973, which itself was later merged into Allied Lyons in 1978.)

• Allied Lyons acquired the second-largest donut chain, Mister Donut, in the same year, 1990. Looks like 1990 was a big year in donuts for Allied Lyons!

• Allied Lyons merged with Pedro Domecq (a leading producer of brandy and sherry based in Spain) to become Allied Domecq in 1994.

• Togo's great sandwiches joined the Alled Domecq stable when acquired in 1997.

• Dunkin Brands Inc., for the three restaurant brands, was created as a subsidiary of Allied Domecq in 2004.

• Allied Domecq was acquired by the French spirits giant, Pernod Ricard in 2005.

• Pernod Ricard, later in 2005, sold Dunkin Brands to "a consortium of private equity firms consisting of Bain Capital, The Carlyle Group and Thomas H. Lee Partners". (Togo's was sold off  by Dunkin Brands to "Mainsail Partners, a San Francisco−based private equity firm" in 2007 [http://en.wikipedia.org/wiki/Togo's]).

• The private equity owners of Dunkin Brands file for an IPO in May 2011.

  (For reference see [http://www.dunkinbrands.com/aboutus/history.html].)

It took Bill Rosenberg five years before he started franchising (1955). He was so successful that he was a leading founder of the International Franchise Association another five years later in 1960, an association which calls itself "the world’s oldest and largest organization representing franchising worldwide" [http://www.franchise.org/aboutifa.aspx]. Thus Dunkin Donuts has been central to the franchising industry since its early beginnings. The Association now represents over 1,300 franchising systems in different industry sectors, and includes all the leading franchising names.


Some notes on the language:

The video mentions some popular concepts in modern consumer retail marketing. Let's examine some of them:

• brand loyalty - This is what all brands seek to achieve: the increased tendency to repurchase one particular brand over other competitor brands. "Loyalty" is to follow very strongly and very strictly something regarded as superior. Thus businesses wish to have "loyal" consumers to the name/image/identity of one of their products - that is, loyal consumers towards their "brand". 

• in-store promotions - This is part of the promotional, advertising and communications mix of a commercial enterprise - all part of the mix that happens inside the physical retail store. This includes in-store displays, "point-of-sale promotions", product demonstrations, and various "merchandising" activities, and also often includes "sales promotions" inside the store.

• gift cards - Since their general introduction to the United States in the 1990's, gift cards have now become the No. 1 gift choice among Americans [Gift Card Trends at Deloitte.com]. It is a card, usually given as a gift, with some monetary value that can be spent according to the conditions of that card - usually within the one retail company. It has now become a very important marketing tool for retailers and very important to their total sales.

Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

Don't be scared if there is a lot that you don't understand. As long as you learn a little something new, then that is valuable: learning bit by bit is natural learning. By watching and listening, you will also be more exposed to, and more familiar with, various sentence structures and other language techniques used by English speakers.

I'll be happy to receive questions and comments from English learners, and I'll try to answer your queries here about the language in this video. I look forward to your comments!

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English by clicking on the Advisor button below.]

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Business English Practice: Iceland public refuses to repay in bankrupted Iceland bank case, casualty of Financial Crisis

Click on the linked picture above to go to a newsy.com video about a referendum in Iceland which rejected further compensation for overseas savers in the U.K. and Netherlands who suffered massive losses after the 2008 Financial Crisis collapse of Icelandic banks. In that aborted deal, Iceland would have had to use an amount equivalent to about 3% of GNP for the repayments. You can also find the written transcript together with the video at [http://www.newsy.com/videos/icelanders-say-no-to-repaying-britain-and-the-netherlands/].

The economic crisis that crystallized in late 2008 was a financial crisis - and nowhere was this truer, nor crisis greater, than in the very small nation that had very large banks... Iceland.

Iceland only has a population of around 300,000. However, their banks had overseas, many more customers than their entire national population - particularly in the United Kingdom and Netherlands. Banking assets in Iceland were at mind numbing levels of over 1,000% of GDP. However if we look at the figures below provided in 2010 by the economics editor of The Atlantic, many nations have surprisingly high ratios of bank assets to GDP. Greece, Italy, Portugal and Spain were "only" at ratios of 141%, 151%, 188% and 251% respectively. France was at a high level of 338%, and the following countries were much higher, in ascending order: Sweden, Belgium, the United Kingdom, the Netherlands, Denmark and Switzerland. The microscopic banking haven of Luxembourg topped the list at 2461%, with Ireland coming second at 872% - and so Ireland is now experiencing similar problems to what Iceland had to endure.

Bank Assets as a Percentage of GDP

COUNTRY	%	COUNTRY	%
Luxembourg	2461	Austria	299
Ireland	872	Spain	251
Switzerland	723	Germany	246
Denmark	477	Finland	205
Iceland	458	Australia	205
Netherlands	432	Portugal	188
U.K.	389	Canada	157
Belgium	380	Italy	151
Sweden	340	Greece	141
France	338	U.S.A	82

source: The Atlantic

If you remember, the wheels began coming off the US economy from late 2007, and economic problems began to pile up. In mid September 2008, after a frantic weekend of meetings between the U.S. Treasury Secretary, the Federal Reserve and some of the nations top bankers, it was announced on Sunday Sep 14 that America's fourth largest investment bank, Lehman Brothers would be made bankrupt (the fifth largest, Bear Sterns, had already gone under earlier in March and sold off to JP Morgan Chase Bank). One week after that, all top five investment banks were no longer there. (The ailing Merrill Lynch was sold off to Bank of America, and the the remaining top two, Morgan Stanley and Goldman Sachs, converted to more regular bank status to take advantage of easier capital conditions.)

Conditions in Iceland had also been deteriorating for over a year. After the September seismic shock from Wall Street, naturally,things got much worse. By the end of September, it was clear that Iceland's banks could not survive and the entire situation crashed in an alarmingly swift and abrupt fashion (with the same urgency that Wall Street had experienced). Glitnir and Landsbanki were placed into receivership on Oct 7; and after events in the U.K., the last remaining major Icelandic bank, Kaupthing, was also placed in receivership on Oct 9. During the entire period of chaos, the value of the Icelandic krona collapsed and inflation was out of control.

By January, popular protests brought about the collapse of the government, and elections were held on April 25, 2009. Iceland was the country hardest hit by the Financial Crisis, and was the "first government to fall as a direct result of the global economic crisis" said Reuters. The protests were popularly known as the "saucepan revolution": the protests were made by creating a  lot of noise with whistles, horns, and quite often with saucepans and pot lids. Timesonline.com wrote:

"When MPs gathered after their winter break on Tuesday, they were met by a large crowd creating a cacophony with everything from pots and pans to empty paint cans, whistles and musical instruments... Haarde has decided not to seek reelection as leader of the Independence party and announced that his party is willing to hold elections in May. After the saucepan revolution, it seems voters are going to get their demand for a new government."

Here are some photos of the Great Saucepan Revolution in Iceland, from flickr.com:

by olikristinn (Olafur Olafsson)

by olikristinn (Olafur Olafsson)

The British and Dutch governments compensated their local depositors for the collapse of the Iceland banks and contend that it is the Iceland government that should be liable for this compensation - but those in Iceland say those are private losses made with private banks. So far, the British and Dutch governments have not obtained full satisfaction for these claims against the Icelandic government.

The U.K. and the Netherlands have tried to negotiate deals with Iceland since the 2008 crisis. After much toing and froing, finally a bill implementing the agreement was successfully passed through the Icelandic parliament right at the end of 2009. However, Iceland's President (first elected to the presidency in 1996!) refused to sign the bill which had been passed, and he put the issue to a popular referendum in accordance with Iceland's constitution. The referendum, on March 6, 2010, rejected the agreement.

2010 passed, and a reworked agreement was accepted by Iceland's government and put to its parliament in December 2010 - but only completed its passing by February 2011. Bloomberg reported in January: "A majority of voters would back the latest deal, a Jan. 25 poll published by newspaper Frettabladid showed." And in February, it was approved by parliament with a handsome majority : the "plan was approved by a 44-to-16 vote in the 63-seat parliament." Once again, however, the President refused to sign the bill into law and put it to referendum one more time; and again the plan was rejected by voters, about 60% vs 40%. The results of this April referendum is the subject of this video.

The video refers to this dispute going to the European Free Trade Association (EFTA) Court. Iceland is not yet a member of the European Union (EU), although it applied for membership directly after the post-crisis election in 2009 as promised by the newly elected government. Yet CNN reported that the measure was only "narrowly" passed "by 33 votes to 28". However, Iceland is one of the only four remaining members of the much older EFTA (1960), together with the small nations of Liechtenstein, Switzerland and Norway. And together with Norway and Liechtenstein, made the small addition to the massive European Union in the 1994 creation of the slightly larger "European Economic Area" (EEA). The U.K. and the Netherlands will have to use the regulations of the EEA and EFTA to try and force Iceland to pay up.


Some notes on the language:

Here is a language activity based on the language in the video:

VOCABULARY - WORD POWER - The following words are often used to discuss the legal aspects of business relationships:

A) Can you guess what was the word used in the video...?
(For quick ANSWERS, just mouseover the blanked vocabulary item, and mouseover text will appear with the answer.)

1) Icesave collapsed in late 2008, and Britain and the Netherlands compens_______  their nationals who lost 3.9 billion euros in savings.

2) Iceland will hope for the ruling to decide that it does not have a legal oblig_______  to repay the four billion euros.

3) The Government is now expected to lodge a claim against Iceland, although the case could take years to resol_______ .

4&5) The authority says Iceland vio________  rules by not backing Icesave depositors - and by reim__________  domestic depositors but not foreigners.

6) It has signed up to many of the European Union's financial and trade rules - among them a requ________ that countries maintain deposit-insurance systems.


B) Once you are familiar with the vocabulary above, now let's try to use that vocabulary. Can you decide what is the correct NOUN or VERB form of the vocabulary above to use in the following sentences? How good is your grammar? (I have added a few letters to the blanks to give you extra help in finding the right word. For quick ANSWERS, just mouseover the blanked vocabulary item, and mouseover text will appear with the answer.)

When you buy a car to drive, you are 1) _______ir______ to pay insurance for that car in case of damage or injury that your car could cause. This is a legal 2) _____ig_______ set out by statute law. That law 3) _____ig_______ all car owners to purchase car accident insurance. It is a 4) _______ir______ that no car owner can avoid. If you 5) _____la______ this law, then you will be punished with a fine.

If your car is damaged in an accident and you have to repair your car, you will want to be 6) ________ur______ by your insurance company. If someone is injured in that car accident, they will seek 7) ______en________ . Hopefully, your insurance will help to 8) ______en________ that injured victim. If you cannot get money from your insurance company and you have to pay the injured victim yourself, then it will be difficult to get 9) ________ur______ from anyone else at all.

When liability is in dispute, instead of going to court to determine the amounts of money to be paid, people sometimes go to a less expensive arbitrator to find a 10) ___es________ to the dispute. This should be a much quicker and cheaper way to 11) ___es________ the dispute.

So when you are driving, be careful. Try to avoid any 12) _____la______ of the traffic rules - it could end up to be quite expensive!


ANSWERS:
A 1) compensated, 2) obligation, 3) resolve, 4) violated, 5) reimbursing, 6) requirement
B 1) required, 2) obligation, 3) obliges OR obligates, 4) requirement, 5) violate, 6) reimbursed, 7) compensation, 8) compensate, 9) reimbursement, 10) resolution, 11) resolve, 12) violation


Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

Don't be scared if there is a lot that you don't understand. As long as you learn a little something new, then that is valuable: learning bit by bit is natural learning. By watching and listening, you will also be more exposed to, and more familiar with, various sentence structures and other language techniques used by English speakers.

I'll be happy to receive questions and comments from English learners, and I'll try to answer your queries here about the language in this video. I look forward to your comments!

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English by clicking on the Advisor button below.]

Business English Practice: US Dollar Near Record Lows

Click on the linked picture above to go to a newsy.com video on the low value of the US dollar. You can also find the written transcript together with the video at [http://www.newsy.com/videos/u-s-dollar-reaches-three-year-low/]

SOME EXTRA BACKGROUND:  Despite periods where the value of the US dollar spiked in the early 1980s and also for the most part of a decade around the turn of this century when the US dollar surged; the value of the US dollar as measured by the US Dollar Index created in 1973 has mostly been in broad decline. Starting at an index value of 100 in 1973, the index reached record lows around the low 70s mark not long before the Great Financial Crisis in late 2008. The market uncertainty of the Financial Crisis caused the value of the US dollar to shoot up. As that crisis becomes more distant, the value of the US dollar once again is testing the record low 70s range of 2008.

The video points to US debt from the Government deficit for this weak currency situation. A low US dollar means most everything measured against the US dollar is very high in US dollar terms. The video mentions the price of oil.

Commodity prices slumped in late 2008; however as the USD continued to weaken after its late 2008 spike, the USD value of commodities also continued on their rise to new records, as indicated in this Yahoo Finance chart, by market indices for oil in blue, copper in green, silver in red, and gold in brown.

Oil has now climbed over the the $US 120 mark, triple the financial crisis low of $US 40 set in early 2009. It has not been at this level since 2008, the year it went to a historical high of over $US 140 (the period when the US dollar was also at a record low) prior to crashing during the Great Financial Crisis.

The issue is even more stark in the metals sector of the commodities market. Gold, silver and even the industrial mainstay, copper - having gotten over the Financial Crisis - have punched through 2008 levels and are at highs never before seen in modern history. Things valued higher in dollar terms - that is exactly what inflation is; the very last item mentioned in the video.

The London Metal Exchange, with over 400 years of history, is the major world
market for physical gold as well as other metal contracts such as contracts for copper. This
picture comes from a story on record copper prices from the Guardian newspaper.

The NYMEX (New York Mercantile Exchange - now part of the Chicago Mercantile Exchange
group) - from a Guardian picture - is the major market for oil trading, as well as a major
trading venue for gold, silver, copper and many other mineral related contracts.

Some notes on the language:

- deficit - This is a word commonly used for discussion of economics (but not as common in casual everyday conversation). It refers to a "lack" of something, and  in economics it often refers to a situation where the value of something is negative. Hence in this video, "trade deficit" and "national deficit" are used. "Budget deficit" is also a common term in economics. Please note that prepositions often found with the noun "deficit" include "in" and "of". For example: "There was a deficit of funds, which is why there was a deficit in our budget." The opposite of "deficit" is "surplus".

- ceiling - This word which commonly refers to the upper overhead surface of a room, can be used figuratively. Here it is used in the term "debt ceiling" - that is, an upper limit to debt which should not be breahced. Another example of the figurative use of the word people say: "There is a glass ceiling for the career path of women in this organization."  This means that there is no explicit ban against promoting women to the highest positions in the organization, but women are never placed higher than a certain level - such that the ceiling is real, but the ban is not made explicitly visible as if it were made of "glass".

- "turn around and say" - This is a useful phrase. Although it can simply mean to physically turn around and say something, it can also be used to criticize people for trying to say or do something which seems to go in the opposite direction of their previously stated position. For example, to paraphrase what was said in the video: "You can't vote to spend more money in the federal budget, then turn around and say you don't want to raise the federal debt ceiling."


Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

Don't be scared if there is a lot that you don't understand. As long as you learn a little something new, then that is valuable: learning bit by bit is natural learning. By watching and listening, you will also be more exposed to, and more familiar with, various sentence structures and other language techniques used by English speakers.

I'll be happy to receive questions and comments from English learners, and I'll try to answer your queries here about the language in this video. I look forward to your comments!

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

Business English Practice: Negative Outlook Placed by S&P on US Government Debt - first time ever!

Click on the linked picture above to go to a newsy.com video on the revision of the credit outlook on US government debt down to "negative", by the world's oldest and biggest credit rating agency, Standard & Poor's (S&P) - the first time ever! You can also find the written transcript together with the video at [http://www.newsy.com/videos/s-p-takes-first-plunge-declares-negative-debt-outlook/]

Thus there could be a risk that the US Government's AAA rating could be cut lower than that of other leading AAA rated nations such as Germany, Switzerland, the United Kingdom and Canada. [CLICK here for S&P's Ratings List for all the countries it rates.]

After the announcement, the Dow Jones Industrial stock market index which rose consecutively over the three previous trading days for a total 70 point gain, lost double that three day gain on just the one day of April 18, slumping by 140 points, or over 1%. Strangely, the effect was even greater in Europe, with London's FTSE index, the Frankfurt DAX index, and the Paris CAC 40 all experiencing very sharp drops of over 2%. (Greater perhaps because "sovereign" risk is even greater amongst Europe's PIGS - Portugal, Ireland, Greece and Spain. SEE the BBC article: Europe's PIGS: Country by Country.) The next trading morning, stock markets in Asia fell across the board, with Tokyo's Nikkei index, Seoul's KOSPI, the Shanghai Stock Exchange composite index, and Hong Kong's Hang Seng index all falling by over 1%.

Here is the sharp drop in the stock market on Apr 18 upon S&P's "negative outlook"
announcement on US government debt - from Google Finance.

What is the reason for S&P's negative outlook? The reason, according to S&P's own media release on the day, is

"because the U.S. has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us,"

 S&P goes on to explain:

"In 2003-2008, the U.S.'s general (total) government deficit fluctuated between 2% and 5% of GDP. Already noticeably larger than that of most 'AAA'rated sovereigns, it ballooned to more than 11% in 2009 and has yet to recover."

 According to OECD statistics, the US Government deficit as a percentage of GDP went from 2.9% in 2007 to 6.3% in 2008, and 11.3% in 2009 (and in 2011 is still expected to be at almost 9% of GDP). To see a comparison of the American deficit against some of her "peers", I have created here a list of deficit infamy among certain major economies:

List of Deficit Infamy (data source: OECD)

	Deficit as % of GDP
	2007	2008	2009
U.S.A.	2.9%	6.3%	11.3%
U.K.	2.8%	4.8%	11.0%
France	2.7%	3.3%	7.6%
Japan	2.4%	2.1%	7.1%
Canada	surplus	surplus	5.5%
Germany	surplus	surplus	3.0%
South Korea	surplus	surplus	0.0%

So, for the US, that is the biggest percentage in the biggest economy on the world. That's a lot of deficit! The US Government annual budget deficit for 2011 is expected to be an all time high of $USD 1.5 trillion (that is $1,500 billion; or $1,500,000,000,000). Clicking on this Google search will give you a good range of articles on America's new record deficit. That means that the U.S. Government will spend in 2011 around $USD 4,800 per citizen more than it will actually get in revenue for the year. Not only will the deficit be a record in absolute terms, you will see if you use the interactive chart here at usgovernmentspending.com, that, other than during the two World Wars last century, the US budget deficit as a percentage of GDP after the late 2008 Financial Crisis has never been higher.

Who knows for sure how this record deficit will play out ....?


Some notes on the language:

- Terminology here is important. You need to research your understanding of:

credit rating, interest rate.

It would also be good to have a clear understanding of these terms:

budget, deficit, surplus.

- "shot across the bow" - In the old dangerous days of sailing, with oceans filled with wars and pirates, it was essential that ships be able to identify each other before they got too close to each other. They mostly did this by flying flags on their mast. If there was a ship that could not be identified in this way, then the practice was to fire a "shot across the bow" of the other ship, so that they would be warned and notified to identify themselves. Thus this idiomatic expression came to mean a warning, a strong and stern warning. Did you notice its use in the video?

The caption to this picture from [http://truthandgrace.com/muslimslavery.htm] says "A steam pinnache of H.M.S. London puts a warning shot across the bow of a slaving dhow in 1881".

- haven - Use in the video: "America, once the safe haven of financial stability". First, some discussion of LINGUISTICS: Although you might think that "haven" comes from the word "heaven", the origin of the meaning of "haven" is somewhat different. To illustrate, the website dictionary.com lists the following for the origin of "heaven":

"Middle English heven, Old English heofon; cognate with Middle Low German heven; akin to Old Norse himinn, Gothic himins, German Himmel".

 And you will find that the English word "heaven" in the other modern Germanic languages are: German Himmel, Dutch hemel, Danish Himlen, Swedish himlen and Norwegian himmelen.

However, for the word "haven", dictionary.com lists for its origin:

"Old English hæfen; cognate with Dutch haven, German Hafen, Old Norse hǫfn; akin to Old English hæf, Old Norse haf sea".

 So the the meaning of "haven" is related to protection/refuge (from the sea - but now extended to other general situations), rather than the safety of a paradise in heaven. Just like "shot across the bow" above, "haven" is another term related to sailing! And in fact you will find that in all the modern Germanic languages, a sea harbor is: German Hafen, Dutch haven, Danish havn, Swedish hamn and Norwegian havn. Some other common related terms that you can research for Business English are: "tax haven" and "tax shelter".

The word "haven" - another term somehow related to sailing - comes from a word related to well protected/sheltered harbours and ports, rather than from the word "heaven". Thus in English speaking countries and in Northern Europe, "-haven", "-hafen" and "-havn" are common suffixes for names of places with harbours. This is a picture from Anderson Scandinavian Tours of Frederikshavn, a city in north Denmark where one of the functions of the city is to receive Oslo (Norway) ferries which come further from the north .

Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

Business English Practice: Apple sues Samsung for copying iPhone - watch video

Click on the linked picture above to go to a newsy.com video on a new lawsuit by Apple Inc. against Samsung Electronics Co., for "slavishly copying" its market conquering products: the iPhone and the iPad. You can also find the written transcript together with the video at [http://www.newsy.com/videos/complex-relationship-overshadows-apple-samsung-lawsuit/]

Clicking on the copy above of the Apple vs Samsung lawsuit will take you the source of that image: an analysis of the lawsuit at [http://thisismynext.com/2011/04/19/apple-sues-samsung-analysis/] that quotes the allegation that Samsung "slavishly copied" Apple's designs (like a slave copies and follows his master).

Have a look at these photos from daylife.com: Samsung Galaxy phone vs iPhone, and Samsung Galaxy Tab vs iPad. What do you think?

Some background: Apple brought litigation against Taiwan's HTC in March 2010 aiming at HTC's Android powered mobile phones. In October 2010, a mutual litigation war broke out between Motorola and Apple, that included Apple citing infringement, by Motorola's use of the Android based system, of its iPhone user interface and operating system software.

The ironic point in the most recent litigation is that all of Apple's iPhones as well as iPads, from their very first release, have been designed to run their legendary Apple iOS mobile operating system on a Samsung manufactured chip at the heart of each iPhone and iPad (the chips are now built to an Apple design). In this way, Samsung's supply relationship with Apple has been at the heart of the iPhone's success.

But with Samsung's own consumer products increasingly aiming its competition at Apple's market leaders, the iPhone and the iPad, Apple has decided it's time to sue for what it claims are Samsung's illegal product designs. Within the week, Samsung has countersued Apple over various Samsung-owned mobile technology patents. Regardless of the outcome of the litigation, if the supply relationship between these two electronic giants become strained, it is not clear which party will be the loser.


Some notes on the language:

- blatant (used in "blatant copying" in the video) - This is a good word to keep in your vocabulary and to use. It means "very obvious", "openly and clearly obvious". It is usually used to describe things in a negative way.

- tight-knit (used in the video to describe the "tight-knit relationship" between Apple and supplier Samsung) - You can imagine when you knit with woollen yarn, you can do it very tightly, or you could knit more loosely. When tightly knit, it is like the yarn is closely tied together. This gives you the meaning of "tight-knit". GRAMMAR NOTE: This is an example of a "compound modfier": two words brought together by a hyphen, used to modify nouns, and the modifier acts like an adjective. There are many ways that the English language makes compound modifiers. "Tight knit" is one example where an adverb (but with no -ly suffix) and a verb in its past participle form are brought together to become a "compound modifier" that describes a noun. (Actually, this adverb - past participle verb compound modifier means "tightly knit"; here "knit " is the past participle of the infinite verb to knit, whose past simple form can also be "knit".) Further examples of this type of compound modifier are: well-run school, hard-fought battle. (Some other types of compound modifiers: adj. + adj., n. + n., adj. + n., adj. + present participle verb, n. + present participle verb , adv.[no -ly suffix] + past participle verb. SEE some real examples at the University of Sussex website.)

- back-room deal - This is an idiom meaning some deal or agreement that is not made in the open for others to see, but is hidden to keep matters secret - where the business is not made at the front of the shop, but completed in a hidden back room. Notice that this idiom can be seen as being made with another compound modifier, an adj. + n. modifier, that describes the type of deal. Here is another example from Britain's "The Independent" newspaper: "a Liberal Democratic Party (LDP) member of the upper house of the Japanese Diet, had done a back-room deal with political opponents to avoid being questioned..."


Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

Business English Practice: Disneyland enters the Chinese market - watch video

Click on the linked picture above to go to a newsy.com video on the beginning of construction on the new Shanghai Disneyland - Disney's entry into "one of the most promising consumer markets in the world." You can also find the written transcript together with the video at [http://www.newsy.com/videos/shanghai-disneyland-smart-move-for-disney-and-china/].

Here is the Disneyland site marked out on OpenStreetMap.org at [http://osm.org/go/5niQTu9d-] around 20 km southeast of the center of Shanghai.

Here are some things I learned in my research about Disneyland's ventures outside of America:

- This will only be the fourth Disneyland outside of the USA, after Tokyo (1983), Paris (1992) and Hong Kong (2005).

- Tokyo Disneyland is only a licensee of Disney and is not owned by Disney.

- Disneyland Paris began Disney's overseas business model of: A) seeking out overseas locations, B) basing the project on negotiations with local authorities for favourable concessions (not least of which is the large expenditure needed for supporting public infrastructure), and C) taking only a minority interest in the ownership (between 40% to below 50% in Paris, Hong Kong and Shanghai).

- Hopefully Shanghai Disneyland does not replicate the early woes of Paris and Hong Kong. The initial financial performance of Disneyland Paris was so bad that the newly listed European public company had to renegotiate its debts in 1994, allowing Disneyland Paris to turn a profit in 1995. The financial performance of Hong Kong Disneyland has been even worse, underperforming attendance projections and losing millions for five straight years - every single year since opening its gates in 2005. However, the majority shareholder in Hong Kong is more subtantial than those that were in Paris - it's the Hong Kong Government itself, funded by all the lucky Hong Kong taxpayers. Attendance at Hong Kong Disneyland has been around 4 million per year since opening in 2005. In comparison, Disneyland Paris went over the 10 million p.a. mark in 1995 after only three years of operation, while Tokyo Disneyland attendance has been over the 10 million mark ever since opening in 1983. The video states that Disney expects 7 million per year at Shanghai.



Some notes on the language:

- merchandise - "Merchandise" used to mean just any type of physical economic goods that is bought and sold. However, in recent times the term "merchandise" has been increasingly used to refer to a wide variety of goods that use designs licensed from the entertainment industry, or from other entities with an image/name to sell - for example, a Mickey Mouse design licensed to a pencil manufacturer. Here is one example of a mechandise licensing agency.

- conglomerate - Separate companies can be grouped together by ownership of the "subsidiaries" by a "parent company" (which can be a company with normal operating business or just a "holding company"). A "conglomerate" is where this group of companies consists, not of very similar subsidiaries, but where the businesses of the group companies are of quite different types. In this case, Disney's partner, the Shanghai Shendi Group, is a conglomerate specially formed by the Chinese Government for this project, of three very different "state owned enterprises" - a property development company, an entertainment company and a hotel hospitality company: Shanghai Lujiazui (Group) Co., Shanghai Radio, Film and Television Development Co. and Jinjiang International Group Holding Company, respectively [SEE shanghaidisneyresort.com.cn].

- mainstay - "Mainstay" is a good word to use, even though it is not often encountered. It is something major that you depend/rely on most of the time. You can find a quotation from George Bernard Shaw that mentions the "atomic bomb" as possibly becoming a "mainstay of Peace", here at quotes.dictionary.com.


Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

Business English Practice: high oil prices and the economic recession - watch video

Click on the linked picture above to go to a newsy.com video on high oil prices and the economic recession, titled "Will High Gas Prices Disrupt Economic Recovery?" That is where you can also find the written transcript together with the video at [ http://www.newsy.com/videos/will-high-gas-prices-disrupt-economic-recovery/ ].

The price of oil in April (Brent crude oil went over $125!) has been the highest since its peak before the 2008 financial crisis. This news story asks if this will cause the economic recession to get worse.

Some notes on the language:

- Of course you know that "gas" here refers to "gasoline" ("petrol" in British English), and it is not used here to refer to the physical state of matter that floats in the air above liquids and solids.

- Language to refer to increases and decreases is very important in describing economic issues. Can you find these mentioned in the video?:

• price increase, hike, are up, high, surge
• going down, less, dip

How many "opposites" can you think of for the increase/decrease vocabulary above?

- "ripple effect" - When some movement occurs on the surface of water, "ripples" spread out from the original point of that movement, so the "ripple effect" refers to changes in once place effecting and spreading to make changes in a wider area.

- "dip" - is a noun as well as a verb meaning to move lower (often to come up again; as in a "dip in the road" or "dipping a spoon in a bowl of soup"). If an economy shrinks, improves a little, then falls some more, then this can be called a "double-dip recession", which is referred to in the video.

Practice your business English by watching and listening to the video above. For more detailed study, you can read the written transcript at the link given above.

[A rare opportunity for you to speak, practice, chat and learn English especially for business, finance, law, international economies & trade at the webpage for Mastery English.]

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