Hospital costs surge. Home prices increase slowly. Hillshire to hold discussions with its suitors, Tyson and Pilgrim's Pride. US Steel idles plants. And 76 Minnesotans get "Free Beer for Life".
Home prices reflect smallest gain in 14 months
US home prices rose in April compared to a year ago, however, the increase was the smallest in 14 months. According to the Associated Press, prices rose 10.5 percent in April compared to 12 months earlier. While it is a healthy gain, it is down from March’s 11.1 percent increase and February’s 12.2 percent increase. Higher mortgage rates, tight credit and a limited supply of homes have slowed the recovery. Sales of homes ticked up in April, after falling to a 20 month low in March, but they were still 6.8 percent lower than a year ago. Nationwide, home prices are still 14.3 percent below the peak in April 2006.
Hospital costs surge for common treatments
Charges for some of the most common inpatient procedures surged across the country in 2012 compared to a year earlier, according to the New York Times. In data released on Monday by Medicare officials, hospital costs increased at four times the rate of inflation. Medicare beneficiaries generally pay significantly less than the uninsured or those covered by private insurance. Charges for chest pain rose 10 percent to an average of $18,505 in 2012, compared to $16,815 in 2011. Average hospital charges for digestive disorders climbed 8.5 percent to $22,000, up from $20, 278 in 2011. Hospitals charged more for every one of 98 common ailments in 2012. Between 2011 and 2012, however, Medicare increased its payment rates by only 1 percent, leaving the increased charges to fall upon the private sector. Despite this, hospital charges represent nearly a third of the nation’s $2.7 trillion health care bill.
Hillshire to hold discussions with Tyson and Pilgrim’s Pride
A bidding war has erupted for the maker of Jimmy Dean sausages and Ball Park hot dogs. The Associated Press is reporting that one day after Pilgrim’s Pride increased its bid for Hillshire Brands to $55 per share, or $6.8 billion, Hillshire has announced it would like to hold separate talks with Pilgrim’s Pride and with Tyson. Last week, Tyson bid $50 per share or $6.2 billion. The takeover bids are being driven by the desirability of brand-name processed products like Jimmy Dean breakfast sandwiches. The convenience foods are more profitable than fresh meat, which is currently at very hire prices. Selling more types of products would give the companies a buffer from the volatile price swings of the meat industry. Both offers are contingent on Hillshire abandoning its plan to acquire Pinnacle Foods, which makes Birds Eye frozen vegetables and Wish Bone dressings.
US Steel to idle plants in Texas and Pennsylvania
The Wall Street Journal is reporting that US Steel plans to temporarily close plants in Bellville, Texas and McKeesport, Pennsylvania. The company blames the closures on illegally-priced imports from China and South Korea. TMK Ipsco, one of the largest producers of tubular steel, is also considering similar production cutbacks. Steel exports to the US from South Korea have increased 73 percent in the first four months of this year compared to a year ago. US trade officials determined in February that South Korea wasn’t “dumping” steel or selling at unfair prices. The US steel industry disputes that and claims that the South Korean government is subsidizing steel and allowing it to be sold at a 10 to 20 percent discount.
76 People in Minnesota get “Free Beer for Life”
The founders of “Northbound Smokehouse & Brewpub”, in order to raise money to open their restaurant, turned to crowdsourcing. For $1,000, investors would receive free in-house beer for the rest of their lives, or for however long the establishment remained open. USA Today also reports that for the same investment, participants could also receive 0.1 percent nonvoting equity in the company. A third option allowed investors to receive 0.5 percent in equity and free beer for life for a $5,000 investment. In the final tally, 76 people signed up for free beer for life and the restaurant raised $238,000. Northbound gives away about 17 beers per day. The restaurant has been very successful because the free beer drinkers bring their friends and family. The concept has caught on in the St. Paul area and now some coffeehouses are seeking to raise money in a similar manner.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.