The Buzz

Looking for a stocking-stuffer?

State government might have just what you need.

That’s right.

Do your holiday shopping with the state.

The Kentucky Finance and Administration Cabinet’s Division of Historic Properties has released its 2008 Kentucky State Capitol ornament, the sixth in a limited-edition series.

“This year’s ornament features the west lunette, depicting the Treaty of Sycamore Shoals,” the announcement says. “It is a complement to the 2006 ornament, fourth in the series, which features the Daniel Boone east lunette from the Great Hall of the New State Capitol.”

The 2006 ornament is being reissued at $20 each, the same price as the 2008 ornament.

The capitol ornament series began in 2003 and a few from some previous years are still available.

Proceeds go a preservation fund for the capitol building.

The ornaments are available at Berry Mansion in Frankfort; the Frankfort/Franklin County Tourism office, the Thomas D. Clark Center for Kentucky History in Frankfort and online at

http://www.historicproperties.ky.gov/ornament.htm.

Holiday shopping with state government — what a concept.

“We are hearing a lot of horror stories” because of the recession, says Gene Williams, a partner in Natasha’s Bistro & Bar on The Esplanade downtown. “This is actually good news.”

Natasha’s is finishing a remodeling of its physical space and a restructuring of its business to create what Williams calls a “hybrid restaurant” that is in step with the city’s emphasis on entertainment downtown.

Natasha’s offers dining and music every night, but Williams says it’s more upbeat and up-to-date than a night club. “Night clubs are kind of stuffy and old fashioned.”

The good news is that gross sales from food and entertainment are already up 15 percent so far this year, compared with 2007.

Williams also has taken on a couple of local partners, Art Shechet and Bruce Barnett, to share the financial load and add expertise.

Because of the economy, “we are looking at everything,” he said. “We are asking ‘What will people spend money for in a recession?’”

Fine wine is always a possibility.

Natasha’s has installed a nitrogen gas wine preservation system that will allow the bar to sell more expensive wines by-the-taste or by-the-glass without requiring the customer to buy a whole bottle, Williams says.

There’s some visual fun in the new bar, too — what Williams calls “a very expensive piece of plastic.”

It’s actually the top of a new bar at the back of the restaurant. It’s made by 3form from a high-performance polyester known as Ecoresin that contains recyclables, like plastic milk jugs.

The material is amber in color. But since light can pass through Ecoresin, the color of the bar might be altered by changing the color of the light shining through it.

Sounds like the makings of a pretty good mind game to play on friends, especially those who imbibe a bit too much?

Here’s something to chew on as you eat your next turkey sandwich at Subway: The bird you are digesting might have been a runner-up to a turkey “pardoned” just before Thanksgiving by President Bush.

But there’s more.

Your Subway turkey was raised on feed products made by Nicholasville-based Alltech, chief sponsor of the Alltech FEI World Equestrian Games.

You see, the pardoned turkey came from Iowa’s Circle Hill Farms, a $150 million family business that uses Alltech products to raise 700,000 turkeys a year.

Circle Hill is also a major Subway supplier.

The pardoned turkey was hatched in July and selected when it was 9-weeks old as one of 13 finalists for the White House trip.

Alltech says the finalists were monitored “to determine which one had the best personality to meet the first family and deal with the press.”

(Ever interview a turkey? Don’t get me started.)

A “vice presidential” turkey also was chosen in case the first turkey couldn’t fulfill his duties, Alltech says.

The two birds were flown to Washington, D.C., where they were pardoned before being flown to California to be grand marshals of Disneyland’s Thanksgiving Day Parade. They will live out their lives in the Magic Kingdom.

Meanwhile, “the president and his family will be feasting on two dressed turkeys also raised on our products this Thanksgiving,” notes Alltech President Pearse Lyons.

So a lame duck is eating turkeys that weren’t good enough to be pardoned or bad enough to be cold cuts. Things are tough all over.

Alltech is doing a good deed in China that ought to be recognized.

The international animal feed company based in Nicholasville is sponsoring part of the reconstruction of an elementary school that was destroyed by an earthquake on May 12.

The Xiang-E Elementary collapsed, killing more than 370 teachers and students.

Alltech is joining with the Kentucky Chinese American Association and the Sichuan Earthquake Relief Fund to provide the school with $100,000 for a rainwater collection system, a library and three special classrooms dedicated to music, art, and nature respectively.

The classrooms will be named in honor of Kentucky.

“As friends from across the world, we consider it a privilege to participate in creating a brighter future for these children,” says Pearse Lyons, president and founder of Alltech.

Earlier, Alltech raised money for a middle school classroom in Mianyang City, China.

Kentucky knows the company as the title sponsor of the Alltech FEI World Equestrian Games in 2010.

China will know Alltech as a Kentucky company that does more than talk about improving education.

There might be a way to profit from hedge funds even if you don’t have the money to actually be in one.

At least that’s the message you can read between the lines of an article in the Journal of Corporate Finance by University of Kentucky assistant finance professor Christopher Clifford.

Hedge funds are like unregulated private investment clubs for well-heeled investors who can put up lots of money and pay high fees in return for what are often above-average returns.

Clifford says that when a hedge fund targets a company and buys up a lot of its stock, the fund often becomes a shareholder activist by monitoring the top managers and directors, and their decisions and actions.

When this happens, all shareholders benefit, Clifford says.

“When a hedge fund activist targets a publicly traded firm, the firm’s stock price and accounting performance increase sharply,” he says. “Firms targeted by hedge fund activists typically outperform the S&P 500 by 10-15 percent in the year they are targeted.”

So if you are a shareholder of the targeted firm, you will benefit, too, even if you can’t afford to join the club.

Clifford says there has been “bad behavior” by a few hedge fund managers, but “the overall influence of the industry on the marketplace is constructive and helpful. The average hedge fund is down about 15 percent year to date,” he adds, “while the average mutual fund or index is down over 30 percent.”

Stuart Hoffman is “110 percent certain” that the nation is in a recession.

Other economists are still avoiding the R-word on technical grounds, but Hoffman confidently declares that the United States has been in a recession “for at least the last four or five months if not longer.”

Unemployment is up, spending is down and personal incomes are falling — that’s a recession, says the chief economist for The PNC Financial Services Group, the holding company for PNC Bank.

“If it walks like a duck and quacks like a duck …,” he said.

But here’s the best part: Hoffman does not think the recession has reached Lexington and Louisville. In fact, it might not get here until 2009, if it gets here at all, he said during an interview in Lexington on Thursday.

The reason is that Lexington and Louisville are college towns with “more stable” housing markets that don’t generally go through the “boom and bust” cycles faced by the rest of the nation. And when we do have a recession, Hoffman said, it is generally shorter than the national average.

He expects the national recession to last another six to nine months or at least through the middle of next year. “For the most part, 2009 will be a recessionary year,” he said.

How will we know when the downturn is ending?

Hoffman and William Stone, PNC’s chief investment strategist, said the stock market might tell us — if we can spot the signs. The market always begins its recovery well ahead of the economy, they said, although the markers might be easier to spot in hindsight than when they occur.

Don’t confuse the economy with the stock market, Stone warned. Different dynamics are at work and the indicators might not be headed in the same direction.

So where should investors have their money now?

Depending on investors’ ages, part of their portfolio should be “high quality” stocks that can often be bought relatively cheaply in a downturn, Stone said.

What’s “high quality”?

Think Coca-Cola, Wal-Mart, McDonald’s, Procter & Gamble and the like — companies whose products or services are used by consumers even in a recession, Stone said. They are companies with “household names” that will be there when the recession ends.

And if you are holding quality stocks that have been beaten down in price, keep holding them, he said. They will recover, although “you don’t know when that will happen.”

“You’ve taken the pain,” Stone added. “You might as well hold on for the pleasure.”

Maurey Bond

“Iraq is open for business,” says Maurey Bond.

He should know. He’s been working in Baghdad since February.

The 31-year-old Lexington native and University of Kentucky graduate is general manager of the Iraqi Airways International Business Center near the Baghdad International Airport.

The center is in an economic zone that also has a convention center, a 100-room hotel, an eight-story office building and other facilities.

Bond says in an e-mail that Iraq is undergoing an “extraordinary transformation.” Baghdad, a city of 7 million, is growing economically and rebuilding its infrastructure. The projects are creating work for American companies that may need it in the current soft economy.

Bond wants his fellow Kentuckians to know that he is there and can help them get their feet on the ground in a country that might seem strange to them. He came to Iraq in February as business development director for the Iraqi-American Chamber of Commerce and Industry, and moved to his current position in September.

He can be reached by e-mail at maureyb2000@yahoo.com or by telephone at 011-964-790-324-1585.

It’s eight hours later there than it is in Lexington so if you call, do it very early or very late.

BusinessWeek says Lexington has the 13th most recession-resistant economy in the nation.

Here’s why: “Lexington, home to dozens of major companies, the University of Kentucky, and horse farms, is a diverse economy with a mix of agriculture, government, health care, and education,” says BusinessWeek.

One potential weak spot is manufacturing, which employs 12 percent of Lexington’s workforce of 145,485, the magazine says. Manufacturing is often an early casualty in economic downturns.

The city has 38.8 percent of its jobs in “strong industries,” BusinessWeek says, including 6.39 percent in professional, scientific, and technical fields; 12.42 percent in education, 14.2 percent in health care and 3.62 percent in public administration.

Economies like Lexington’s that are “dominated by stable industries, could be relatively well-cushioned” in a recession, the magazine concluded.

If you go to www.businessweek.com to read the article, you may notice a comment by “Vicki,” who says:

“It (the article) is true about Lexington KY anyway. … We are extremely well-insulated against the boom and bust cycles of the economy. We experience very slow growth. Not an exciting place, but you’re less likely to have the economic rug pulled out from under you here.”

We may differ about the level of excitement in Lexington, but Vicki is basically right on target.

The University of Kentucky has chalked up another first — in business, not basketball.

A team from UK’s Gatton College of Business and Economics has been invited for the first time to compete in the prestigious Wall Street Journal National Biz Quiz at Ohio State University Nov. 15-16.

Only 24 universities were selected, including Southern Cal, Texas, Emory, Arizona, Indiana, Maryland, Michigan, Notre Dame, Penn State and Ohio State.

It’s an honor for Gatton and “a wonderful opportunity for our students.” says UK team coach Gordon Holbein.

The program is sponsored by Nationwide Insurance and “Nationwide will be looking at Biz Quiz participants as potential hires for its financial leadership program, one of the top management development opportunities in the country,” Holbein says.

That’s a nice incentive in a tight job market.

Gatton team members are Mark Spurlin, a senior from Danville; Ryan Hayes, a senior from Frankfort; and Jeffrey Howard, a sophomore from Louisville. Greg Curtin, a senior from Atlanta, is the alternate member.

They qualified by getting the top scores in “a rigorous, rapid-fire 100-question current events test covering all sections of the Wall Street Journal over a recent eight-day period,” UK says.

The quiz will be held in a TV studio at Ohio State.

The UK team will “demonstrate to a national audience what makes Gatton students ‘world ready’ and at the top of their field,” says D. Sudharshan, dean of the Gatton College.

No pressure there.

It’s a dream come true, especially for college students.

Think about it: Hot cookies and brownies, and cold milk delivered to your door or dorm in the evening or early morning.

Insomnia Cookies has arrived in Lexington and anyone within a three-mile radius of the University of Kentucky can have this dream come true by making a phone call or visiting the company’s Web site.

For most of us, Insomnia Cookies is a new concept. It doesn’t rely on brick and mortar or a fixed address. Its bakeries at about 18 college campuses are on wheels — trucks with “a full kitchen” in the back, says Mike Bickers, the company’s Lexington general manager.

In Lexington, where the company has operated for about a month, the truck is usually parked at Kennedy Book Store on South Limestone Street from 7 p.m. to 2:30 a.m. to sell directly to students walking in the area.

During exam weeks, the truck is moved to UK’s main library and “our business about triples,” Bickers says. “When students see our truck, it’s like when they were kids and saw an ice cream truck coming down the street.”

But Insomnia’s goodies aren’t just for students. The company will basically deliver almost anywhere inside New Circle Road if the order totals $6 or more and and the customer pays a $1.99 delivery fee.

The mobile kitchen bakes eight different cookies and one type of brownie, with eight possible toppings. It uses ingredients shipped from a commissary in New Jersey.

By baking on the truck, the customer gets hot cookies and brownies, Bickers says.

Orders are placed by calling toll-free 877-63-COOKIE or at insomniacookies.com.