Financial thoughts

Social Security beneficiaries will see no increase in their benefit checks next year, the federal government said on Friday.

For more than 58 million seniors and other Social Security beneficiaries, 2011 will mark the second year in a row without an inflation adjustment.

Inflation has been low in the past two years because of the recession. The Bureau of Labor Statistics on Friday morning reported prices were up only slightly over last year.

The last Social Security inflation adjustment was in 2009: Beneficiaries got a higher-than-normal 5.8% increase because of a temporary spike in energy prices in the third quarter of 2008.

Soon after, however, energy prices plummeted. Then the bottom fell out of the economy and by the third quarter of 2009 overall price levels had fallen 2.1% from the same period a year earlier. That meant no increase in 2010 Social Security benefit checks.

This year, while there has been some inflation, prices remain lower than they were in the third quarter of 2008 — and that’s the quarter that counts.

By law, the Social Security Administration is required to track inflation using the most recent third quarter that led to an adjustment. So the 2011 decision is based on the change in inflation between the third quarter of 2008 and the third quarter of 2010. (’What deflation — prices are rising!’)

The finance and economics blog Calculated Risk noted recently that even though retirees will go two years without an increase, "those receiving benefits are still ahead because of the huge increase [they got in 2009]."

Out-of-pocket health costs rising: Even if that is correct mathematically, the idea of another year without a pay hike isn’t likely to be popular with the people who receive Social Security retirement, disability or supplemental income benefits.

"[T]he average senior can still expect to see 27% of his/her Social Security check eaten away by Medicare premiums and out-of-pocket costs next year," said Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.

There is, however, a "hold harmless" provision that protects more than 70% of beneficiaries from having to pay higher Part B Medicare premiums, should they increase, the Social Security Administration said. (Social Security: Take the quiz)

Push for extra help: The Obama administration made a failed push last year to offer $250 payments to Social Security recipients to compensate for the lack of a COLA and to serve as economic stimulus. Such a move would have cost roughly $14 billion.

This week, House Democrats said they will try to push a similar measure when Congress reconvenes after the mid-term elections in November. And on Friday morning the White House said President Obama would renew his call for the extra $250 payment.

Critics of the idea have pointed out that Social Security benefits are intended to maintain purchasing power — which by the inflation measures used they have. And, they noted, benefits don’t decline when prices decline, which happened in 2009.

For high-income Americans still in the labor force, there’s a bit of bright news: Since there is no COLA for 2011, there will also be no increase in the amount of earnings subject to the Social Security tax, which is currently assessed on the first $106,800 of a person’s wages. 

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After days of mixed results, Hawaii stocks finally followed the overall stock market as it went higher in Monday trading.

The Dow Jones Industrial Average closed at 10,544.13, up 81.36 for the day, while the Nasdaq was up 43.23 to close at 2,285.71.

An international banking agreement signed over the weekend in Basel, Switzerland, was getting much of the credit for pushing markets higher. In fact, the six largest banking companies in the United States each were up more than 2 percent. Bank of Hawaii and Central Pacific Financial Corp. were among the Hawaii-based companies trading higher.

Gainers were:

Hawaiian Electric Industries Inc. (NYSE: HE), which closed at $23.16, up 7 cents.

Alexander & Baldwin Inc. (NYSE: ALEX), which closed at $35.11, up 32 cents.

Hawaiian Holdings Inc. (Nasdaq: HA), which closed at $5 fast cash.07, up 13 cents.

Bank of Hawaii Corp. (NYSE: BOH), which closed at $47.38, up 63 cents.

Central Pacific Financial Corp. (NYSE: CPF), which closed at $1.59, up 1 cent.

Maui Land & Pineapple Co. (NYSE: MLP), which closed at $4.54, up 44 cents.

ML Macadamia Orchards (Other OTC: NNUT), which closed at $2.57, up 7 cents.

Hoku Corp. (Nasdaq: HOKU), which closed at $2.50, up 10 cents.

The two companies that lost ground on Monday were:

Barnwell Industries, Inc. (AMEX: BRN), which closed at $2.88, down 1 cent.

Cyanotech Corp. (Nasdaq: CYAN), which closed at $2.55, down 9 cents.

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Graphic Packaging International Inc. plans to close its beverage-packaging plant in Golden at the end of October.

The plant at 4455 Table Mountain Drive employs about 150 workers. Most are in manufacturing jobs, and Graphic Packaging hopes to be able to move them to its other facilities around the country, said company spokeswoman Cindy Baerman. About 12 research-and-development employees will remain in Golden, she said.

In a statement, Graphic Packaging said the Golden shutdown “reflects the company’s ongoing efforts to align its manufacturing footprint to the changing needs of its beverage customers and improve its cost structure and margins to better position it for future growth.” It said the plant’s business and equipment will be moved to the company’s other U.S. locations.

“While closing the Golden facility is a difficult decision, it is necessary to ensure that we are able to consistently serve our customers and meet their changing needs from a solid network of efficient, low-cost manufacturing facilities, even in the face of the ongoing economic challenges of today’s marketplace,” David Scheible, the company’s president and CEO, said in the statement.

Graphic Packaging International is a unit of Graphic Packaging Holding Co. (NYSE: GPK), of Marietta, Ga. The company, which has about 15,000 workers worldwide, makes paperboard packaging for food, beverages and other consumer products and is a major producer of folding cartons, coated-recycled boxboard and specialty bag packaging.

The company is a descendant of Coors Paper Packaging, a packaging arm of Coors Brewing Co. that was launched in the 1970s.

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Google moved quickly over the weekend to try to contain mounting criticism of Buzz, its social network, apologizing to users for features widely seen as endangering privacy while announcing product changes to address those concerns.

Todd Jackson, product manager for Gmail and Google Buzz, wrote in a blog post on Saturday that Google had decided to alter one of the most-criticized features in Buzz: the ready-made circle of friends the service provided to new users based on their most frequent e-mail and chat contacts in Gmail. Instead of automatically connecting people, Buzz will in the future merely suggest to new users a group of people they may want to follow or be followed by, he said.

Jackson, who said that the auto-follow feature had been designed to make it easy for people to get started on Buzz, acknowledged the criticism that was heaped on Google in the last few days.

“We’re very sorry for the concern we’ve caused and have been working hard ever since to improve things based on your feedback,” Jackson wrote. “We’ll continue to do so.”

The startup for Buzz, which Google introduced Tuesday as its answer to Facebook and Twitter, drew angry responses on technology blogs and beyond, as users feared that the names of their e-mail correspondents would be publicly exposed. A set of changes that Google announced Thursday failed to quell the uproar.

Some critics said the latest modifications to Buzz, which is tightly coupled with Gmail, appeared to have addressed the most serious privacy concern.

“Turning off the auto-follow was a huge improvement,” Danny Sullivan, a longtime Google analyst and the editor of SearchEngineLand, said in an e-mail message.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, said his organization was still intending to file a complaint with the Federal Trade Commission this week pending its review of Google’s changes.

“Even with these changes, there is still the concern that Gmail users are being driven into a social networking service that they didn’t sign up for,” Rotenberg said in an interview on Sunday.

The privacy concerns about Buzz, and Google’s rapid efforts to address its critics, echo incidents that have bedeviled other social networks, most notably Facebook personal business card. None of those incidents have slowed the growth of Facebook, which recently said it had reached more than 400 million users. Gmail has 176 million users, according to the research firm comScore.

“I think the privacy issues earlier this week with Buzz will blow over and not harm the product in the long term,” Sullivan said. But privacy will continue to haunt Google, he said, and many people will point to the release of Buzz as an attempt by Google to overreach and a reason that the company could not be trusted.

The change in the enrollment of new users of Buzz was the most significant of a series of modifications that Jackson announced on Saturday.

Google also said that it would create a new Buzz tab in Gmail’s settings page to allow users to hide Buzz from Gmail completely. The page gives users the option to disable Buzz, deleting their posts and removing their Google profile, which in many cases listed publicly their circle of contacts in Buzz.

The new feature could address concerns that disabling Buzz and removing a public profile was a multistep process that confused many users and that some described as a game of whack-a-mole.

Google also will no longer automatically connect public Picasa albums and items shared on Google Reader, another feature that had been widely criticized by some users and privacy advocates.

In the next two weeks, Buzz users will be directed to the new start-up to give them a “second chance to review and confirm” the people they are following, Jackson said.

The changes Google announced Saturday will be imposed in the next few days. While it is too early to gauge Buzz’s success, Google said tens of millions of people had tried the service in its first 48 hours.

Sullivan of SearchEngineLand said that the level of activity on Buzz appeared to be significant. “I suspect Google might have a minor hit on its hands already,” he said.

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Roshni Sircar racked up nearly $20,000 in credit card debt after using a number of special purpose cheques that came with her credit card.

The 75-year-old had never used her American Express card before. But when faced with a family emergency, she began using the special offers to help her grandchildren.

She didn’t know the introductory 2 per cent interest rate was just that – a short-term "teaser" rate. "We were really in a tight spot and we used the money," Sircar said.

As her interest rate began to rise, she missed some payments. Her rate eventually jumped to 25.99 per cent. At that point, Sircar realized she couldn’t pay off her bill.

After writing to the head of Amex Canada, Finance Minister Jim Flaherty and the Star, her rate was lowered to a more manageable level. But she still feels "entrapped" by the special offer.

Banks and credit card companies often argue the popularity of credit cards represents a "democratization of credit." Yet, some experts suggest the current system is fundamentally rigged against the consumer and the merchant.

"In consumer contracts highly sophisticated corporations will often exploit consumers’ behavioural biases," Oren Bar-Gill of Harvard Law School wrote in a paper entitled Seduction by Plastic. "Competition cannot cure such exploitation. On the contrary, competitive forces compel sellers to take advantage of consumers’ weaknesses."

The federal government is facing increased pressure to regulate Canada’s credit card market and has taken steps to respond to consumers’ and retailers’ complaints. Within days, the Competition Bureau is expected to rule on two key issues that could fundamentally alter the payments-industry landscape.

The first deals with a request from the Interac Association, Canada’s non-profit debit network operator, to become a for-profit company better able to compete with Visa and MasterCard as those two multinational giants enter Canada’s $168-billion a year debit market.

The second has to do with allegations that Visa and MasterCard have abused their market dominance in the credit card market, where they hold 94 per cent of market share.

And by Jan. 18, industry members are to issue comments on Flaherty’s proposed voluntary code of conduct for the credit and debit sector. The code contains provisions that would help retailers, especially smaller ones, gain some clarity and clout in dealing with their payment processing fees.

Earlier this year, Flaherty announced new regulations aimed at protecting consumers from some of the problems that may have contributed to Sircar’s situation.

Among other things, these new rules require a "summary box" on all credit-card contracts and applications clearly outlining information about interest rates, minimum payments, annual fees and other applicable costs, including penalty charges for bounced cheques.

But while initiatives like these are helpful, experts say more could be done to help low-income Canadians. They cite innovative new card products that give consumers the power to set their own spending limits, or require Ottawa to be the guarantor on the kind of secured card offered to people consider poor credit risks.

The Canadian Bankers Association says "income is not a factor on who pays off their credit cards" in Canada.

But research by the Bank of Canada this year shows the bottom 20 per cent of earners carry a larger share of credit card debt in percentage terms than other income groups. Additionally, the lowest-income earners have the largest share of "unsecured" debt, which includes credit cards.

Canada’s banks say a multitude of cheaper options, such as low-rate credit cards and personal lines of credit, are available to those consumers who carry a balance.

Nancy Hughes Anthony, president and chief executive of the Canadian Bankers Association, estimates more than 60 low-interest-rate credit cards are available in Canada. The Financial Consumer Agency of Canada, however, recently told the Senate banking committee that some low-interest credit cards have disappeared.

And critics say low-income Canadians are often denied access to those low-rate cards because they lack sufficient assets. "They don’t have low-cost options at all," said Armine Yalnizyan, senior economist with the Canadian Centre for Policy Alternatives payday loans.

Banks do not release data about the number of low-rate cards they issue compared with the number of applications they receive, and the bankers association has no statistics on the number of Canadians with low-rate cards.

When asked about consumer eligibility earlier this year, Hughes Anthony said acceptance is "determined on a case-by-case basis."

Other alternatives, such as secured credit cards or prepaid credit cards, disadvantage consumers with unfavourable terms or high service charges, experts say.

"For low-income consumers who don’t have access to a conventional credit card, the costs go up much higher," said Michael De Santis, a researcher at the Public Interest Advocacy Centre.

Low-income consumers, those with spotty credit scores and new immigrants are often encouraged to get secured credit cards to build or repair their credit histories.

But many consumers lack sufficient funds to pay the required lump sum. That upfront cost is usually equivalent to or higher than the card’s credit limit. The bank collects that money as security but the funds do not earn the customer any interest, even if the sum remains tied up for years.

In addition, prepaid cards are more costly to use than regular credit cards. Not only must users load their own money on the card, but they are also on the hook for "significant fees," De Santis said.

Those can include upfront fees for the card to be issued, monthly maintenance fees, invoice charges, customer service fees, transaction fees, ATM fees, reloading fees and even cancellation fees.

"It is very expensive to have one of these prepaid cards in your pocket and they don’t offer any advantages over a conventional card other than the fact that they are more available to people who might not otherwise qualify," De Santis said, adding the product does not help build a credit history. "The less fortunate classes actually end up having to pay the greater amount than the more fortunate ones, which I think is a terrible irony."

The advocacy centre is urging the federal government to collaborate with the banking industry on creating a new financial product that could help low-income Canadians, new immigrants and aboriginals build financial credibility and make payments in an increasingly "digital marketplace."

It argues that eligibility "could be proportional to income level, so as to avoid a lower income becoming a barrier to build a level of creditworthiness."

That may involve a new type of secured card, where the federal government provides some security to the lender so the entire burden does not fall on cash-strapped consumers, De Santis said.

Others champion the idea of "self-directed" credit cards. Angela Littwin, an assistant professor at Harvard Law School, says such cards would allow consumers to cap their credit limits and even block the card’s acceptance at certain stores.

Merchants are also lobbying for change. Retailers want Ottawa to quickly set new ground rules for the debit market as Visa and MasterCard prepare to take on the non-profit Interac Association, whose low-cost flat fee model is the envy of the world.

Flaherty’s proposed voluntary code of conduct won praise from merchants when it was announced Nov. 18. But retailers and small businesses fear credit card firms will be pushing Ottawa during the current 60-day consultation period to water down certain key provisions.

One proposal, designed to give merchants more power in dealing with Visa and MasterCard debit, is at greatest risk, the retailers fear.

During the period when Visa and MasterCard are building their debit networks, the credit card companies plan to issue co-badged cards that also run on the more ubiquitous Interac system.

MasterCard says its new debit product will automatically run on its Maestro network, wherever it is present. Visa says it’s giving consumers the choice but merchants says Visa’s network will show up first on the PIN pad and then Interac.

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The U.S. economy has entered a recovery and policymakers should now focus on ensuring it is a durable one, a top Federal Reserve official said on Tuesday.

“Now that growth has resumed, the overall objective of economic policy should be to bring about a durable recovery and an environment that reduces unemployment as quickly as possible while containing inflationary pressures,” Atlanta Federal Reserve Bank President Dennis Lockhart said.

Lockhart, a voter on the Fed’s policy-setting Federal Open Market Committee, said achieving this objective will “necessarily involve judicious removal of government supports and the normalization of monetary policy.”

Lockhart, speaking a week after the U.S. central bank reiterated its pledge to keep interest rates ultra-low for an extended period, struck a cautious note on the recovery. The Fed cut overnight interest rates close to zero in December and has held them steady since.

There are a number of “sobering aspects” of the economic picture, he told a conference sponsored by the Urban Land Institute. However, he said it was possible to envision scenarios in which the Fed had to raise interest rates even with unemployment high.

The U.S. economy grew at a 3.5 percent annual rate in the third quarter, snapping four down quarters and likely ending the recession that began in December 2007.

But labor market conditions remain dismal. The unemployment rate surged to a 26-1/2 year high of 10 bad credit payday loans.2 percent in October, and economists expect it to hit 10.5 percent in mid-2010 before subsiding.

“At this juncture, it’s hard to be encouraged about a fast rebound in job growth,” Lockhart said.

The Atlanta Fed chief said he expects the pace of growth to be “relatively subdued” through the medium-term. He cautioned that while there are signs of improvement, data has been “quite mixed” and the recovery has been supported by temporary government programs.

Lockhart also said policymakers should take into account trends in the ailing commercial real estate sector, as its problems could suppress the pace of the recovery.

A worry, he said, is the link between bank lending, small business employment and commercial real estate values.

However, he said he does not think commercial real estate’s woes pose a broad risk to the financial system.

“As the recovery develops, the (commercial real estate) problem will be a headwind, but not a show stopper, in my view,” he said.

In answer to a question, Lockhart said flat or falling consumer incomes also pose a risk to the residential real estate sector, which has appeared to be stabilizing.

“You could see the development of more stressed personal mortgages,” he said.

(Editing by Dan Grebler)

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The federal government is offering a tax credit worth up to $8,000, or 10 percent of the cost of the house, for people who have not owned a home in the past three years.

To qualify, the home must be a primary residence, and the credit is to be refunded if the buyer moves within three years. The credit is phased out for single people earning $75,000 or more, or married couples earning $150,000, and can be claimed on either 2008 or 2009 returns. Closing must be completed before Dec. 1.

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The collapse of Lehman Brothers was "unfortunate" but spurred the global policy coordination that ultimately saved the financial system, former Bear Stearns chief executive officer Alan Schwartz said in his first interview since Bear’s fall last year.

Schwartz, who is now executive chairman at investment firm Guggenheim Partners, defended regulators’ decision to allow Lehman’s failure a year ago. He said that while Lehman was a "great institution" whose collapse saddened him, saving the firm "could have caused ripple effects" that would have been criticized as well.

"The quarterback that has to call the play … has the hardest job," Schwartz told CNNMoney.com’s Poppy Harlow in an exclusive video interview. The two were joined by Dick Parsons, the chairman of Citigroup (C, Fortune 500) and former CEO of Time Warner, which owns CNNMoney.com and Fortune.

Schwartz said making Federal Reserve emergency loans available to Bear Stearns might have forestalled its collapse in March 2008. But he admitted that the firm might not have survived the "once-in-a-generation tsunami" that swept the capital markets last fall, overwhelming Lehman and prompting the government to prop up Fannie Mae, Freddie Mac and AIG.

"I had hoped that the policies post-Bear Stearns would keep that from happening to any other institution," Schwartz said, referring to government policies that enabled investment banks for the first time to borrow directly from the Federal Reserve. "I felt awful that [Lehman] was going through a situation that I knew they couldn’t control."

Lehman filed for bankruptcy the morning of Sept. 15, 2008, after then Treasury Secretary Henry Paulson and other policymakers failed in their efforts to broker a sale of the investment firm to a better capitalized partner such as Barclays or Bank of America (BAC, Fortune 500).

Within days, all hell broke loose in the financial markets. Shares of a top money market fund that had been speculating in commercial paper — the short-term loans issued by highly rated corporations — "broke the buck," falling below $1 after Lehman’s default left the fund with millions of dollars of losses.

Soon thereafter, federal officials extended an $85 billion emergency loan to prevent insurer AIG (AIG, Fortune 500) from following Lehman into bankruptcy, and the Federal Reserve hastily converted the two remaining independent investment banking firms — Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) — into bank holding companies to make sure they wouldn’t run out of cash.

By the end of the month, the nation’s sixth-largest bank, Washington Mutual, had failed, and a bigger rival, Wachovia, was being shopped to prospective buyers by the Federal Deposit Insurance Corp. It ended up being sold to Wells Fargo (WFC, Fortune 500) in a deal without taxpayer assistance.

"No one anticipated the results of the Lehman collapse," said Parsons.

Lehman’s failure came six months after Bear ran out of money and was sold with Federal Reserve support to JPMorgan Chase (JPM, Fortune 500). Schwartz, who appeared on CNBC just days before that emergency sale to claim the firm had adequate cash on hand, told CNNMoney.com he believes the firm was a victim of what he called "collusion" among those betting against Bear but admitted that "no one can prove it."

"We believed our liquidity was sound," Schwartz said. "Whether there was collusion involved, nobody knows."

Whatever his regrets about Bear, Schwartz — who had replaced longtime Bear chief Jimmy Cayne as CEO just two months before the firm’s implosion — did see a silver lining in the Lehman fiasco.

Until the firm’s failure, he said, European regulators were loath to join their American and U.K. counterparts in loosening monetary policy and providing emergency aid to the financial sector. But after the freeze of credit markets that followed Lehman’s bankruptcy, global coordination started — and not a moment too soon.

"I think that was a necessary ingredient for saving the financial system," he said.  

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Warner Chilcott, an Irish drugmaker that specializes in contraceptives and female hormone treatments, will buy Procter & Gamble Co’s pharmaceuticals business for $3.1 billion, the companies said on Monday.

P&G’s branded drugs, including osteoporosis treatment Actonel and Enablex for overactive bladder, have annual sales of $2.3 billion. Warner-Chilcott’s annual revenue totals about $1 billion.

“The acquisition transforms Warner Chilcott into a global pharmaceutical company, expands our presence in women’s health care, establishes us in the urology market in advance of the anticipated launch of our erectile dysfunction treatments, and adds gastroenterology therapies to our product portfolio,” Warner Chilcott said in a release.

P&G has failed to realize its ambition of becoming a major force in pharmaceuticals, although Actonel is one of the world’s top-selling treatments for prevention of fractures in post-menopausal women.

Cincinnati-based P&G, best known for its vast array of household consumer products such as Tide detergent and Crest toothpaste, said it was selling its branded medicines to “prioritize” investments in its consumer health care businesses.

The companies said the majority of the 2,300 employees in P&G’s pharmaceuticals unit are expected to transfer to Warner Chilcott.

“For Warner Chilcott, the acquisition expands its presence in existing specialty pharmaceutical markets and provides access to new physician offices in 14 countries,” the companies said.

Warner Chilcott said it expects the deal to close in November and be financed through borrowings.

P&G said the deal will give it a one-time after-tax gain of $1.4 billion, or 44 cents per share. But it also expects profit to be reduced by 10 cents to 12 cents per share in fiscal 2010 due to lost earnings from the pharmaceuticals business.

(Reporting by Ransdell Pierson; editing by John Wallace)

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President Obama and his fellow southpaws have cause for celebration this week: Thursday marks the 18th annual International Left-Handers Day. But for entrepreneur Margaret Majua, founder of Lefty’s San Francisco, every day is an occasion to give thanks for lefties.

Majua spotted an ad two years ago for a strange-looking writing instrument called the Yoropen. Shaped like a grasshopper, the pen was touted as a writing boon for left-handed people because its design allowed lefties to see what they’d just written without smearing it.

"At first I thought it was pretty creepy-looking," she says. "Then I thought it might just be weird enough to sell."

Her instinct paid off. The Yoropen is now one of the bestselling items at Lefty’s San Francisco: The Left Hand Store, which Majua opened in March 2008 on San Francisco’s iconic Pier 39, adjacent to Fisherman’s Wharf.

Lefty’s is one of the world’s only brick-and-mortar stores catering to the left-handed. It continues a San Francisco tradition: Thirty-one years ago, Left Hand World pioneered the market, opening on Pier 39 in a tiny 350-square-foot space. The store closed a decade later, but it spawned a solid fan base. The landlord searched for a tenant to continue the store’s theme in the original location, but found no takers — including Majura, a serial retailer who opened her first Pier 39 enterprise, a refrigerator-magnet store, in 1986. Since then, she’s created more than 20 themed specialty stores in tourist destinations such as Las Vegas, Hawaii and Disney World.

Armed with that experience, Majua decided it was time to take the left-handed leap. Fueling her commitment was the discovery that the very few retailers selling left-handed products stocked only items that were already commercially available.

"No one had developed a product line," she says, adding that she wasn’t impressed with what was already on the market. "I knew I had to fill the store, but I also wanted the stuff to look good together. I’m fascinated by merchandising."

As part of her reinvention plan, Majua — who is right-handed — invested about $100,000 to develop a Lefty’s product line of 20 stationery items, such as spiral notebooks, sketchbooks and memo pads, all with the spirals on the right side. She is also developing a dozen kitchen tools, including vegetable peelers, pancake turners, and measuring cups, which are scheduled to be available as gift sets at the end of the year.

"Smaller companies don’t have the financial resources to develop products for left-handers, and larger companies don’t see this as a big enough market," Majua says. "I saw it as niche I could fill payday advance lenders."

Left-handed icons

It’s a niche with a star-studded history. Only an estimated 10% to 15% of the population is left-handed, but the roster includes such luminaries as Leonardo da Vinci, Bill Gates, and five of the last seven U.S. presidents. Lining Lefty’s walls are framed pictures of left-handed celebrities such as Beethoven, Mozart, Judy Garland and Alexander the Great.

Even pop culture is represented. Sandwiched between Queen Victoria and Mark Twain is Ned Flanders, the left-handed character on The Simpsons who runs his own retail store, The Leftorium. In Lefty’s, Flanders has his own 14-inch plush doll, as well as a $5 refrigerator magnet — and he’s been outselling President Obama, who’s represented on a t-shirt with the tag line "Obama is a leftie."

"Customers who don’t know President Obama is left-handed ask us if the tag line refers to his politics," says Kelly Kempczenski, Lefty’s manager. Like Obama, the store’s sales staff are all left-handed, and love demonstrating Lefty’s products for the curious or the desperate.

"Many left-handers have already adapted to regular products, but half of the people who try one of our left-handed products buy it," says Kempczenski, recalling how her elementary school teacher tried to make her use her right hand. "I use left-handed pens and scissors myself, and they’re really useful."

They also sell well. Pens and pencils for lefties account for 25% of Lefty’s sales, with that strange-looking Yoropen — available in four styles in the $6 to $60 price range — responsible for half of Lefty’s pen sales. Notebooks are also popular, especially during back-to-school season. About 20% of Lefty’s revenues come from online purchases, where the average order totals $60.

Majua projects that Lefty’s 2009 revenues will reach the high six-figures. Early next year, she’s planning to move the store to a new location 100 feet away with nearly triple the space. She’ll need it to stock an expanded range of left-handed kids’ products, including guitars, baseball mitts and golf clubs.

She’s also considering selling her custom products to other left-handed retailers. "My ego doesn’t want to, but business reality will probably dictate I will," she says.

There’s another motivation at work as well, she concedes: "My staff has made me really aware of how customers really appreciate the products, which has inspired me to design and stock more of them." 

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