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Business Editing in Depth -- 10 Things You'd Better Know by Merrill Perlman (webinar)


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Merrill Perlman, former director of copy desks at The New York Times, presents "Business Editing in Depth: 10 Things You'd Better Know," a free, Reynolds Center webinar geared toward journalists.

For more information about training for business journalists, including free workshops and webinars, please visit

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Business Editing in Depth -- 10 Things You'd Better Know by Merrill Perlman (webinar)

  1. 1. Business Editing in Depth:10 Things You’d Better Know May 1, 2012
  2. 2. Business editing can be tricky. We’llcover 10 things that frequently trip upeven the seasoned business pro —and help your stock as an editorreach record heights.
  3. 3. • About bankruptcy• The World Bank and the IMF• Debt vs. deficit• Treasury securities• Company designations• Trademarks• The SEC• How to keep numbers relevant• Rating agencies• Stock-price reporting
  4. 4. Quiz Question #1:What’s (probably) wrong about this statement?Bloomberg news reports that US Airways, thenation’s sixth largest airline by traffic, is talkingwith creditors of bankrupt American Airlines,and negotiations, thus far, have reportedlybeen positive.
  5. 5. BankruptcyU.S. bankruptcy filings come in three common flavors: Chapter 7 Chapter 11 Chapter 13 They are for different circumstances.
  6. 6. BankruptcyChapter 7 bankruptcyis for business or individuals. •As soon as Chapter 7 is filed, debt collection actions cease. •A business is usually liquidated, its assets sold to pay off creditors. •An individual’s personal assets, such as a car and a home, are generally protected, and the debts are simply dismissed. Pockets: danielmoyne/Flickr Bennigans: infrogmation
  7. 7. Bankruptcy If a business files for Chapter 7, you can say it is “in bankruptcy.” Not “bankrupt.”Once it’s been dissolved, you can call it“bankrupt.” But if parts were sold, its name canlive on, and it’s no longer the same “bankrupt”company. Ed Yourdon-Flickr
  8. 8. BankruptcyChapter 11 bankruptcy is usually for businesses.• The business seeks protection from its creditors, sothey won’t foreclose on assets.• The business usually continues to operate, with atrustee appointed by the court, as it seeks to restructureitself or renegotiate its debts.
  9. 9. Bankruptcy Chapter 11 is not a death knell. Many businesses emerge from bankruptcy andgo on to profitable futures. That’s why it is crucial to say a company “hasfiled for bankruptcy protection” or is “operating inbankruptcy.” Never “is bankrupt.”
  10. 10. BankruptcyChapter 13 bankruptcyis for individuals orunincorporated businesses. • The individual cannot have more than about $350,000 in unsecured debt (like credit cards) and more than about $1.1 million in secured debts (like mortgages). • Chapter 13 works for individuals similar to the way Chapter 11 works for corporations. The person is not “bankrupt.” 401k-Flickr
  11. 11. Quiz Question #2:You want to invest in a new business in a poorcountry. Are you more likely to get help fromthe World Bank or the International MonetaryFund?
  12. 12. World Bank and IMF The World Bank and theIMF are very similar yet verydifferent. They were even formed atthe same time (Bretton Woods in1944.)
  13. 13. World Bank and IMFThe World Bank is really adevelopment fund: It gives grantsand loans to poor countries.The International Monetary Fund isreally an international bank: It triesto keep money flowing among all itsmember nations.
  14. 14. World Bank and IMFIf it makes you feel any better,even John Maynard Keynes,who helped found them, wasalso confused by what theirroles were.
  15. 15. World Bank and IMFThe World Bank tries to lift nationsout of poverty at little or no cost to the nations’ governments, through loans or grants . World Bank
  16. 16. World Bank and IMFThe International MonetaryFund lends money, too, butmainly to countries havingtrouble with loans, debts andother parts of their monetarysystems.
  17. 17. World Bank and IMF Think of the World Bank as the Red Cross and the IMFas your rich but stern AuntAgatha. One won’t ask manyquestions; the other will requireyou to curb your lifestyle.
  18. 18. Quiz Question #3:What’s the difference between the national debtand the national deficit?
  19. 19. Debt vs. DeficitThe national deficit is thedifference between what thegovernment takes in (in taxes andother income) and what it spends.It’s calculated by the current fiscalyear’s budget.
  20. 20. Debt vs. Deficit The national debt is the money the government owes when it borrows to cover its deficit.Think of the debt as accumulated deficits. Rafiq Phillips/flickr
  21. 21. Quiz Question #4: What’s (probably) wrong with this sentence?The government auction of 10-year T–billsyielding 3 percent was successful.
  22. 22. TreasuriesTreasury bills are short-termsecurities, for a year or less.Buyers get no interest during theterm; they buy T-bills at somediscount off of face value.• For example, a one-year T-bill might sell for$750. At the end of its term, it can beredeemed for $1,000.
  23. 23. Treasuries Treasury notes are longer term, from 2 to 10 years.They pay interest twice a year.
  24. 24. TreasuriesTreasury bonds are even longer term, up to 30 years.They pay interest twice a year.
  25. 25. Treasuries• The price of a note or bond at issue isdetermined by its interest rate and its “yieldto maturity” (how much profit you’d get if youheld it until it matured).• The higher the interest rate, the lower theprice.
  26. 26. Treasuries Most government securities can be traded.• The interest rate does not change, but the price andyield might.• “Yield” and “price” move in opposite directions: Theamount you get at the end of the bond doesn’t change,but if you pay more for a bond than it sold for originally, itcuts into your profit, so the yield goes down.
  27. 27. Quiz Question #5: Which of these is not a trademark?• Jet ski• Thermos• Kleenex• Frisbee
  28. 28. TrademarksTrademarks are a company’s way of protecting its brand• Anyone can trademark anything (that is notalready trademarked), depending on jurisdiction,just by putting the symbol ™ next to the productname.• A trademark is a lot like a copyright; it does not have to be registered, just declared.
  29. 29. TrademarksRegistered trademarks are stronger legal protection of a brand.• Registered trademarks are listed with the U.S. Office ofPatents and Trademarks.• Only a registered trademark can use the symbol ®.
  30. 30. Trademarks Overuse of a trademark to refer to something not of that brand can result in the loss of the trademark.• That’s what happened to aspirin,escalator, kerosene, laundromat, thermos, zipperand even Webster’s dictionary. Thermos: towodo/flickr Zipper: cursedthing/flickr
  31. 31. Trademarks If you don’t know that the thing you’re mentioning is a brand name, use a generic term.• One clue: If the name is also a logo, it’s probablya trademark.• Search TESS (the U.S. Trademark Electronic SearchSystem) or the International Trademark Associationchecklist for trademarks.• Warning: Neither list is comprehensive!
  32. 32. Trademarks Frequently misused trademarks and alternatives• AstroTurf: artificial turf • Realtor: real-estate agent• Band-Aid: bandage • Rollerblade: in-line wheeled skates• Dumpster: waste container • Speedo: swimsuit• Frisbee: flying disk • Styrofoam: plastic foam• Jet Ski: water scooter • Taser: stun gun• Jetway: jet bridge • Velcro: hook-and-eye fastener• Onesies: baby crawlers
  33. 33. Trademarks What about ?It’s still a trademark, as a noun for a specific searchengine. As a verb, it’s still a trademark, but: • Even its founders have used “google” as a verb. • Some dictionaries include “google” as a verb. It’s probably only a matter of time before Googleloses its trademark.
  34. 34. Quiz Question #6:What’s the difference between a company anda corporation?
  35. 35. Co., Corp., Inc., LLC, etc.All Corporations are companies. All Companies are not corporations. How a business entity is formed determines what designation it can put after its name.
  36. 36. Co., Corp., Inc., LLC, etc.“Company” is both a generic term for anybusiness entity and one way of setting up a business.A business can also be set up as a “sole proprietorship” or a “partnership.” Both are simpler to set up, but can put the owners’ personal assets at risk.
  37. 37. Co., Corp., Inc., LLC, etc.A “Corporation” is a business that has been set up with shareholders (even if it is notpublicly traded), to protect the owners from being held personally liable.
  38. 38. Co., Corp., Inc., LLC, etc.An “LLC” is a “limited liability company.”• An LLC is a combination of a corporation and apartnership.• Many small businesses are formed as LLCs.They are more flexible than corporations, withtheir shareholders and structures, but still offerthe owners protection for personal assets.
  39. 39. Quiz Question #7: What is (probably) wrong with this sentence?The SEC filed criminal charges against theinvestor, claiming he made $5 million frominsider trading.
  40. 40. Securities and Exchange CommissionThe SEC watches over the stock, bond,currency and other markets.• It sets requirements for what information about abusiness or investment instrument needs todisclose, and how.• It rose out of the stock market crash of 1929.
  41. 41. Securities and Exchange Commission When something goes wrong …• While it is a law enforcement agency, the SEC makesrules, not laws.• It investigates allegations of insider trading, irregularitiesin markets, etc.• It cannot impose criminal charges, though it can requestthat other law-enforcement agencies bring them.
  42. 42. Securities and Exchange Commission The SEC brings civil or administrative actions. Many cases are settled.• Until recently, a company or person could settle SECcases that had accompanying criminal cases withoutadmitting or denying guilt.• A company can still settle SEC administrative or civilcases without admitting or denying guilt.
  43. 43. Quiz Question #8: What is (probably) wrong with this paragraph? Passenger traffic at JFK, LaGuardia and Newark airportstotaled some 83.9 million, up 3.6 percent from the previousyear. At the agency’s four bridges and two tunnels, totalvehicular traffic, measured in the eastbound direction only, wasapproximately 118 million, a 3.9 percent increase from 1996levels. On PATH, ridership grew 2.6 percent to about 62.2million passengers. Overall, the agency’s gross operatingrevenues rose last year by $52 million to $2.2 billion, andoperating expenses fell $8 million to $1.5 billion. Its net incomerose to $161 million, an increase of $72 million over 1996.
  44. 44. The relevance of numbers The root of “numbers” is “numb”• Keep in mind that many readers’ eyes just pass over numbers.• Limit the number of numbers you use to avoid numbing your readers. • Three per paragraph is a good rule of thumb.
  45. 45. The relevance of numbers Break large numbers down• If, say, a report says 350,000 cars use a local bridgeeach year, break it down into days.• Take that number (about 1,000 cars a day) and compareit to what you know of the traffic on that bridge.• You don’t have to show the reader the math, but it couldhelp you spot errors. Alex E. Proimos/flickr
  46. 46. The relevance of numbers Break large numbers down• For really big numbers, come up with a comparison yourreaders can digest: The wildfire burned nearly 500 square miles,an area half the size of Rhode Island But make sure the numbers are relevant• Equating Bill Gates’ net worth to, say, 400,673,910 top-of-the-lineiPads is meaningless.• Comparing something to the “size of Central Park” is irrelevant toreaders who don’t know how big Central Park is. clearlyambiguous/flickr
  47. 47. Quiz Question #9:The U.S. credit rating was lowered from AAA toAA+ last year. How important is that?
  48. 48. Ratings agencies Rating agencies are to corporate and governmental debt much like Equifax and TransUnion are to consumer debt.• The higher the rating, the lower the interest rate the debt has to offer to get people to buy it (lend money).• The agencies investigate the issuing entity to determine how likely it will be able to pay the interest and/or principal on the debt or bonds it issues.
  49. 49. Ratings agencies Standard & Poor’s• The highest rating is AAA; its scale then goes AA, A, A.; BBB, BB,B, etc. Ratings from AA to CCC can be modified with a + or -.• Anything above BBB- is “investment grade,” meaning the debt islikely to be paid off, so you can invest in it with some confidence.• Below that is considered “speculative grade,” meaning there’s agood chance the debt won’t be paid. Many “speculative grade” bondsare also known as “junk bonds.”
  50. 50. Ratings agencies Moody’s• Moody’s highest rating is Aaa. Its scale then goes Aa, A, Baa, Ba,B, Caa, Ca, C. Ratings from Aa to Caa can be modified with a 1, 2 or3 to indicate how high (or low) in that category the bond ranks.• Debt with any A rating is considered “investment grade.” Baa isconsidered a moderate risk. Below that lies speculative securities.• A C rating means there’s almost no chance any principal or interestwill be recoverable.
  51. 51. Quiz Question #10: Which stock performed better?Landsin jumped $14, to $154; Peach gained$2, to $8.50; and Hermata rose $10, to $354.
  52. 52. Stock reporting Numbers need context.Sometimes percentages tell more than raw numbers. MikeBaird/flickr
  53. 53. Stock reportingFor example, the largest point drop in the Dow Jones Industrial Average was 777.68, in 2008.But the market was at a high then, so the percentage drop, 6.98, was not as great. The greatest percentage drop was 22.61 in 1987. The DJIA dropped 508 points that day.
  54. 54. Stock reporting The higher the number, thegreater the proportional changeneeds to be to have an impact.
  55. 55. Stock reporting For individual stocks, small numbers can yield big changes.• Apple trades around $600 a share. If it goes up ordown by 10 points, that would be a change of lessthan 2 percent.• Microsoft trades around $30 a share. If it goes up ordown by 10 points, that’s a 33 percent change.
  56. 56. Stock reporting Beware of the words• Did Apple stock “soar” by 10 points? Did Microsoft“plunge” by 10 points?• Make the verb match the action. A stock that gained 1percent should not “jump” when a stock that gained 5percent merely “rose.”
  57. 57. Stock reporting Beware of the words• Avoid using the word “crash,” especially when it’s a one-day decline in the Dow.• While there’s no real definition of a “crash,” it’s generallyconsidered to be a broad double-digit decline in themarket over several days.• “Crash” has all sorts of emotional connotations. Letexperts call a “crash.”
  58. 58. Questions?