Wal-mart isn’t “putting” other stores out of business. The businesses are putting themselves out of business. Wal-mart comes into town and the first thing these mom and pop shops and small chains start trying to do is beat Wal-mart at their own game. These shops start a price war that they are never going to win. These smaller companies are not going to beat Wal-mart on price. Wal-mart is cutting costs all the way back to raw materials, not just at the retail level. You don’t beat an enemy by continuously slaughtering your own troops against there most powerful strong hold. Like Achilles, even the great Wal-mart has weaknesses. If companies would capitalize on those weaknesses and stop battling with price they would have much better chances at survival and even possibly come off triumphant.
This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
11/11/2004
Halo 2
On Wednesday, Microsoft announced that 2.4 million copies of Halo 2 were sold within the first 24 hours of the game being on store shelves. Sales reached up to $125 million! That’s 25 % more than what was predicted. One retailer sold 200,000 copies of Halo 2 before daybreak!
This is exciting news for Micosoft! I think it is amazing to have such hot items to keep a company in business after their main product has already reached an almost mature stage in its life cycle. Halo 2 provides an incredible competitive advantage for this company. I find the video game industry very interesting in terms of business and technology.
On a different note, just to spark some conversation, what does this news tell us about American culture? In just one day of sales, over 2.4 million copies were sold. How many of those do you think are burned and copied by now? That means, at this moment, at least 2.4 million people and their friends are crowed around a T.V. playing a video game! Just think how many people will be playing this after Christmas morning?
There are so many issues that this news can spark...
This is exciting news for Micosoft! I think it is amazing to have such hot items to keep a company in business after their main product has already reached an almost mature stage in its life cycle. Halo 2 provides an incredible competitive advantage for this company. I find the video game industry very interesting in terms of business and technology.
On a different note, just to spark some conversation, what does this news tell us about American culture? In just one day of sales, over 2.4 million copies were sold. How many of those do you think are burned and copied by now? That means, at this moment, at least 2.4 million people and their friends are crowed around a T.V. playing a video game! Just think how many people will be playing this after Christmas morning?
There are so many issues that this news can spark...
Walmart Getting Too Big For Some
With Walmart getting so big lately it is no wonder why so many businesses are going out of business. Walmart has put Kmart out of business in its own industry lately and now it is working on other industries. Toys R Us is saying that Walmart could put them out of business. Toys R Us started the business of specialized stores. From Toys R Us came stores such as Best Buy, Home Depot, and Bed, Bath and Beyond. It is said that Walmart could start taking out stores in the consumer electronics, banking, pharmacy, gasoline, and fashion industries. Walmart is the worlds largest retailer. It is number one in sales for food, apparel, jewelry, and home furnishings. Walmart may be getting too big for its own good.
11/10/2004
Europeans Looking to Dump Microsoft
European governments are becoming more and more discouraged by the American giant Microsoft and are looking for an alternative to improve their role in the software industry. Many consider Linux as having the best chance to improve that role because of its European base. A number of large cities in Europe have already begun to switch to Linux. In an article written in Business Week, the author writes that Microsoft has launched an offensive to keep European governments from switching to the Linux operating system by discounting up to 35% to stay with Windows. Mircosoft has set up a website which contains statements from customers and problems that have been found in the Linux operating system. One problem that many companies are facing in deciding whether to switch to Linux is the cost to train their employees on the new system, and many notice the savings by sticking with Microsoft.
The fact the European governments want an increased role in the software industry is understandable. They see the American-base company as a monopoly and want a share of it. Microsoft shows that it will do what it takes to maintain its dominant position by discounting and continuing to be the leader in the innovation.
The fact the European governments want an increased role in the software industry is understandable. They see the American-base company as a monopoly and want a share of it. Microsoft shows that it will do what it takes to maintain its dominant position by discounting and continuing to be the leader in the innovation.
Maine's Rural Towns Increase Taxes
High property taxes in Maine are leading to the demise of many small towns. Maine is the postcard happy place that many people see it as - nice coastal towns. No, rural Maine is falling apart as property taxes increase. Small rural towns with only 100-200 residents aren't great attractions. Business go out of business, the population is aging so they just hand everything over to the state government and don't worry about anything. By so doing the local taxes decrease while government costs are increasing. Small rural towns just become "unorganized territory" that don't have any local government. By doing so, is this going to cause our taxes to increase to help Maine's state government take care of everything from education to snow removal for all these rural towns that are benefited by not doing anything?
11/09/2004
Online Music
Thanks to the fast-moving technology, millions of songs are available on the internet and we are able to download - legally or illegally - songs we want in minutes. In recent years, digital music players like iTunes have made it possible for consumers to download and carry over 100 songs wherever we wish. Online music has proved that it is here to stay. Unfortunately, these new advancements have led to a contant decline in CD sales which have also led to many artist complaints. Now the question is (thinking economically)what about the musicians? Will the decline in CDs sales and other money making opportunities that were lost resulting from file sharing be enough to keep new musician from entering the industry? Or are concerts, fame, and other money making opportunities enough for artist to keep entering? What incentives are keeping complaining artist in the industry? And if artist are staying in the industry, there must be more incentives to keep them in the industry. If that is so, is file sharing such a big deal?
Outsourcing
One of the bloggers from Marginal Revolution and another economist had a debate set up by the Wall Street Journal about outsourcing. We all know that outsourcing is a controversial subject. But it all depends on how we look at it. For one, in certain industries, it is not just a matter of being cheap and wanting higher profits by cutting labor costs. For some, it is a matter of staying competitive and surviving.
If we take a look a the situation through partial equilibrium analysis we conclude that outsourcing causes unemployment. Yet, in general equilibrium analysis we consider the interdependence of all factors in the economy. Take the example of a production worker who makes cars loses his job as his company sends labor overseas. Without looking at the whole picture we conclude that outsourcing causes unemployment. But let's consider that the country where the car manufacturer moved production imports steel from the U.S. By looking at the big picture we can see that demand for labor in the car industry went down and the demand for labor in the steel industry went up. Not only that, the price of cars goes down and many people can benefit.
Check out the debate. It was interesting.
If we take a look a the situation through partial equilibrium analysis we conclude that outsourcing causes unemployment. Yet, in general equilibrium analysis we consider the interdependence of all factors in the economy. Take the example of a production worker who makes cars loses his job as his company sends labor overseas. Without looking at the whole picture we conclude that outsourcing causes unemployment. But let's consider that the country where the car manufacturer moved production imports steel from the U.S. By looking at the big picture we can see that demand for labor in the car industry went down and the demand for labor in the steel industry went up. Not only that, the price of cars goes down and many people can benefit.
Check out the debate. It was interesting.
11/08/2004
Cellular's data fixation
The newest trend in wireless services is data trafficking. Currently there are 35 million subscribers in the United States, a number which is expected to expand to 73 million dollars by the year 2007. Currently Sprint is the earliest leader in data services with 150% year over year growth and 24 billion dollars in total revenues per year. Perhaps one of the biggest developments in data services is television quality video available on some types of cell phones. This recent development is leading some analyst to make some radical prediction for the industry over the next four years.
A recent study predicts that adult wireless content will be a 1 billion dollar industry by the year 2008. This is due to a long history of adult content jump starting quickly into new technologies, as with video, internet, and pay per-view content. Of course the true amount of revenue derived from adult content is somewhat muddled, media giants like Comcast and Dish Network gain large profits from pay-per-view adult content but the profits from porn aren't separated from other business activities. That aside the recent innovations in wireless data trafficking make companies like Sprint an attractive investment avenue.
Wireless content is defiantly a booming sector by all accounts, but I'd hope that our society isn't so fixated with porn that it will be demanded on cell phones. Morally and culturally this study is frightening, because the adult industry is believed to be more profitable than MLB, NFL, and the NBA combined, it is likely that this study could be very close to actual outcomes in the year 2008. That aside wireless video technology is an exciting new innovation that has a promising outlook for large future profits.
This article was found at: http://money.cnn.com/2004/10/27/technology/techinvestor/hellweg/index.htm
A recent study predicts that adult wireless content will be a 1 billion dollar industry by the year 2008. This is due to a long history of adult content jump starting quickly into new technologies, as with video, internet, and pay per-view content. Of course the true amount of revenue derived from adult content is somewhat muddled, media giants like Comcast and Dish Network gain large profits from pay-per-view adult content but the profits from porn aren't separated from other business activities. That aside the recent innovations in wireless data trafficking make companies like Sprint an attractive investment avenue.
Wireless content is defiantly a booming sector by all accounts, but I'd hope that our society isn't so fixated with porn that it will be demanded on cell phones. Morally and culturally this study is frightening, because the adult industry is believed to be more profitable than MLB, NFL, and the NBA combined, it is likely that this study could be very close to actual outcomes in the year 2008. That aside wireless video technology is an exciting new innovation that has a promising outlook for large future profits.
This article was found at: http://money.cnn.com/2004/10/27/technology/techinvestor/hellweg/index.htm
11/06/2004
The Low-down on Low-Carb
At the beginning of this current year it seemed that the low-carb diet was the answer to American’s problem of obesity. Food advertisements everywhere were promoting this new wave dieting technique. Companies that didn’t jump on the low-carb band wagon were left behind by advocates of this low-carb craze. Like any other diet, the craze didn’t last long. The low-carb advertisements that used to be so prevalent are now a thing of the past. Occasionally, we still see companies hanging on to the concept of low-carbs for the die hard dieters out there, but it appears that the Atkins diet trend is beginning to slowly fade.
Recently a study done by the NPD Group, a research firm, stated that, “the percentage of Americans following diets like Atkins and South Beach dropped to 4.6 percent in September from 9 percent in January.” What would be the cause of this drastic downturn in demand? According to ACNielsen LabelTrends, “dollar sales of such foods rose 6.1 percent during the 13 weeks ended Sept. 25, down from double and triple-digit gains in the previous six periods.” Could the increased price for low-carb products be the cause of this decline in demand or was the low-carb diet just a fad that was destined never to succeed?
Recently a study done by the NPD Group, a research firm, stated that, “the percentage of Americans following diets like Atkins and South Beach dropped to 4.6 percent in September from 9 percent in January.” What would be the cause of this drastic downturn in demand? According to ACNielsen LabelTrends, “dollar sales of such foods rose 6.1 percent during the 13 weeks ended Sept. 25, down from double and triple-digit gains in the previous six periods.” Could the increased price for low-carb products be the cause of this decline in demand or was the low-carb diet just a fad that was destined never to succeed?
11/05/2004
Look Out: Here Comes Hillary!
In a recent Associated Press article, many Democrats are being mentioned as possible candidates for a run in the 2008 presidential election. Hillary Clinton just happens to be one of those posturing for an eventual run at the White House. She already has name recognition and a wide following. Other contenders named were John Edwards and possibly John Kerry. It will be an election in which both the Republican and Democratic nominations will be up for grab.
If given the Democratic nod to run in 2008, Hillary might find herself suffering the same fate as would be president John Kerry did in 2004. Namely for reasons like being a liberal Democrat coming from the Northeast. I think Hillary will be given the 2008 Democratic nomination, but I just don't see her being moderate enough to get elected. I do believe however that she would put up one heck of a fight and I do think that she would win a couple of southern states- namely Arkansas. It makes me laugh to think of Bill being the first First-man in the White House. I think Hillary would find much of her time going to making sure Bill kept his hands off of any female staff or visitors.
If given the Democratic nod to run in 2008, Hillary might find herself suffering the same fate as would be president John Kerry did in 2004. Namely for reasons like being a liberal Democrat coming from the Northeast. I think Hillary will be given the 2008 Democratic nomination, but I just don't see her being moderate enough to get elected. I do believe however that she would put up one heck of a fight and I do think that she would win a couple of southern states- namely Arkansas. It makes me laugh to think of Bill being the first First-man in the White House. I think Hillary would find much of her time going to making sure Bill kept his hands off of any female staff or visitors.
Thinking on the Margin
Everyday we check the news and there is always something involving oil. Today it is considered common understanding how oil can have an effect on everything. Marginal analysis started a long time ago by forerunners such as Leon Walras, Carl Menger, and William Jevons. This evolved into neoclassical thinking by pioneers such as Alfred Marshall. Much of the principles of economics that we study today come from these schools of thought.
Walras is credited with furthering marginal analysis through general equilibrium. Through this he was able to demonstrate the effects of changes in supply and demand in all markets and not just a single one, for instance oil.
Partial equilibrium analysis held that everything remained unchanged, except for the variable being studied. General equilibrium analysis shows the how other factors can change. In the case of oil, a reduced quantity of oil will drive prices up. But this will also affect the demand for substitute goods such as coal. It also affects the price of gasoline and even things sucn as a the demand for automobiles and car washes.
All of this pertains exactly to managerial economics as we study regression analysis and use econometrics to find the demand for a firms product and the demand for inputs.
Walras is credited with furthering marginal analysis through general equilibrium. Through this he was able to demonstrate the effects of changes in supply and demand in all markets and not just a single one, for instance oil.
Partial equilibrium analysis held that everything remained unchanged, except for the variable being studied. General equilibrium analysis shows the how other factors can change. In the case of oil, a reduced quantity of oil will drive prices up. But this will also affect the demand for substitute goods such as coal. It also affects the price of gasoline and even things sucn as a the demand for automobiles and car washes.
All of this pertains exactly to managerial economics as we study regression analysis and use econometrics to find the demand for a firms product and the demand for inputs.
11/04/2004
Trump Hotels Files for Chapter 11
On Thursday Trump hotels filed for chapter 11 bankruptcy protection, after reaching an agreement with bondholder to recapitalize debt. The plan will ease Trump's 1.8 billion dollar bond debt. the bankruptcy plan calls for 400 million dollars in debt reduction with an 8.5 % reduced interest rate. These measures should save the casino giant 98 million dollars a year in interest payments. Mr. Trump remains as chairman of the board and chief executive of THCR (Trump Hotel and Casino Resorts) Trump is expected to renovate and expand many of its existing properties, such as Trump Taj Mahal, Trump Plaza, and Trump Marina.
The debt restructure is in exchange for 74 million dollars in cash, 395 million dollars in common stock, and 1.25 billion dollars in new debt at the reduced interest rate of 8.5 percent. This restructuring seems like a fairly unfavorable use of chapter 11 bankruptcy. The reduction is debt is only 550 million dollars, with a fairly large increase in outstanding shares of common stock.
This report is after Donald Trump nearly was fired by his shareholders for consistent losses for all investing shareholders. The trouble that Trump is having also points to a lack of ability for Atlantic City casinos to be able to compete with the more family oriented Vegas gambling houses. Vegas' competitive advantage starts with more activities for all ages, including amusement parks, arcades, shopping and entertainment for families. Vegas' departure from adult only activities led Las Vegas into its largest economic boom in history.
Article found at: http://msnbc.msn.com/id/6305752/
The debt restructure is in exchange for 74 million dollars in cash, 395 million dollars in common stock, and 1.25 billion dollars in new debt at the reduced interest rate of 8.5 percent. This restructuring seems like a fairly unfavorable use of chapter 11 bankruptcy. The reduction is debt is only 550 million dollars, with a fairly large increase in outstanding shares of common stock.
This report is after Donald Trump nearly was fired by his shareholders for consistent losses for all investing shareholders. The trouble that Trump is having also points to a lack of ability for Atlantic City casinos to be able to compete with the more family oriented Vegas gambling houses. Vegas' competitive advantage starts with more activities for all ages, including amusement parks, arcades, shopping and entertainment for families. Vegas' departure from adult only activities led Las Vegas into its largest economic boom in history.
Article found at: http://msnbc.msn.com/id/6305752/
11/03/2004
Wall Street the Day After
What an interesting day on Wall Street. The day George W was decided the victor indices world wide made large gains. At the opening bell, the Dow Jones jumped 180 points. At the end of the day, the down jones industrial index closed a good 101.32 points higher then it did the previous day. Bond prices fell as investors jumped on top of stocks.
The correlation with the re-election of George W and the strong day on Wall Street is due to business friendly Bush platforms. Market strategists said Wall Street was pleased with the outcome. There was evidence of world wide confidence of Bush with the gains in global indices.
Relief set in as a clear victor was named promptly following election day. In 2000 the official results of the Presidential Election took a month leaving investors unsettled. The rally today may be a bit temporal however, as some analyst speculate that other news regarding labor, oil, and other factors will damped the optomism.
A clear positive was seen in the drug sector. The Bush’s administration is expected to reduce the threat of government-imposed price cuts on drug makers. John Kerry said he wanted Medicare to negotiate price cuts on drugs. Threatening profits to the drug sector. Today turned out to be a strong day for the economy, but will these rallies continue, or are domestic and foreign problems too great to overcome?
www.msnbc.msn.com/id/3683270/
The correlation with the re-election of George W and the strong day on Wall Street is due to business friendly Bush platforms. Market strategists said Wall Street was pleased with the outcome. There was evidence of world wide confidence of Bush with the gains in global indices.
Relief set in as a clear victor was named promptly following election day. In 2000 the official results of the Presidential Election took a month leaving investors unsettled. The rally today may be a bit temporal however, as some analyst speculate that other news regarding labor, oil, and other factors will damped the optomism.
A clear positive was seen in the drug sector. The Bush’s administration is expected to reduce the threat of government-imposed price cuts on drug makers. John Kerry said he wanted Medicare to negotiate price cuts on drugs. Threatening profits to the drug sector. Today turned out to be a strong day for the economy, but will these rallies continue, or are domestic and foreign problems too great to overcome?
www.msnbc.msn.com/id/3683270/
Five Convictions in Enron-Merrill Trial
Four Merrill Lynch executives were prosecuted Wed. November 3, 2004 for conspiracy and fraud. This was the first criminal trial to emerge from Enron’s 2001 demise.
The details involve the counterfeit sale of interest in power plants mounted on barges to Merrill Lynch. The purpose of the sale was to bolster Enron’s sales in order deceive the general public of Enron’s earnings capacity. The sale was to be bought back in six months. Enron in turn promised to compensate Merrill Lynch in the future by giving them more lucrative business partnership.
Merrill avoided prosecution for their involvement in Enron’s collapse last year by paying a substantial $80 million to the SEC. The compensation settled civil allegations concerning the barge deal, and Merrill never admitted wrong doing.
www.msnbc.msn.com/id/6401108
The details involve the counterfeit sale of interest in power plants mounted on barges to Merrill Lynch. The purpose of the sale was to bolster Enron’s sales in order deceive the general public of Enron’s earnings capacity. The sale was to be bought back in six months. Enron in turn promised to compensate Merrill Lynch in the future by giving them more lucrative business partnership.
Merrill avoided prosecution for their involvement in Enron’s collapse last year by paying a substantial $80 million to the SEC. The compensation settled civil allegations concerning the barge deal, and Merrill never admitted wrong doing.
www.msnbc.msn.com/id/6401108
"Great" President
We have witnessed another presidential election. Bush wins! But what kind of president will he be or what kind of president has he been so far? Does the outcome of Iraq effect how we view President Bush? What makes a great president? We all know the names George Washington, Thomas Jefferson, Abraham Lincoln; we all consider them great presidents. What about those that are not admired? "The Great Engineer, Herbert Hoover, took the oath of office in 1929 as the most admired politician in America and left four years later at the depth of the Great Depression as its most reviled." Was this president just a victim of circumstance that perhaps was started before his administration and was beyond his control?
Who do we consider great presidents and who do we consider not so great? Is a great president determined by circumstance and what he does during that circumanstance?
Who do we consider great presidents and who do we consider not so great? Is a great president determined by circumstance and what he does during that circumanstance?
The election is over.....did you do anything to help?
The debate comes up every election year. Does voting matter? Looking at the margin, probably not. Especially if you live in Utah. Others suggest that there is more to voting than the motive of swaying the decision. Some, or most, see it as a moral obligation-their patriotic duty. Personally, this has to be the reason for voters in Utah where the majority goes to Republicans and where the electoral votes really don't matter. Yet, maybe in states such as Ohio, it does matter even at the margin. The coach of the Ohio State Buckeyes football team required all 105 of his players to vote in yesterday's election.
One writer at "Marginal Revolution" gives some suggestion on how instead of voting, one might better serve their fellow man.
I once had an Econ professor who lived by this principle and refused to vote. He argued that his vote would not matter. I don't know if he was Republican or Democrat, but he seemed to be at peace with himself knowing that his vote didn't matter.
Of course, proving this would not change the way people act. I agree that the moral and emotional elements are far too influential to stop people from voting. The paranoid public who do vote would always be asking themselves, "What if I don't vote? What if nobody votes?". Maybe next election I will heed the suggestions of certain bloggers who said working in a soup kitchen or even driving people to the polls.
One writer at "Marginal Revolution" gives some suggestion on how instead of voting, one might better serve their fellow man.
I once had an Econ professor who lived by this principle and refused to vote. He argued that his vote would not matter. I don't know if he was Republican or Democrat, but he seemed to be at peace with himself knowing that his vote didn't matter.
Of course, proving this would not change the way people act. I agree that the moral and emotional elements are far too influential to stop people from voting. The paranoid public who do vote would always be asking themselves, "What if I don't vote? What if nobody votes?". Maybe next election I will heed the suggestions of certain bloggers who said working in a soup kitchen or even driving people to the polls.
11/02/2004
Small Business and Your Candidates
Both President Bush and John Kerry know first hand about the challenges of owning and operating a small business.
First, Pres. Bush founded Arbusto a small energy company that he started through a trust fund. Soon after President Bush sold his equity in the company and moved to the Texas Rangers. Both ventures were short lived.
John Kerry's experience was much different. After law School John Kerry and a friend started a cookie and muffin shop in Boston's Quincy Market. This venture also was short lived and quickly thereafter John Kerry moved into politics.
The differences of the candidates are quite different when it comes to small business. Bush wants to give tax breaks and less regulation on small business, and at the same time minimizing the Small Buisiness Administration (a low interest loan company that grants small business easy access to loans).
John Kerry wants to increase federal support to the SBA granting more money and lower rates to Small Business ventures.
If rates become lower for small business, then barriers of entery decrease as well as lowering the return on debt. This will only propetuate government assistance and dependance. Masking the actual demand of small business.
www.msnbc.msn.com/id/5961811
First, Pres. Bush founded Arbusto a small energy company that he started through a trust fund. Soon after President Bush sold his equity in the company and moved to the Texas Rangers. Both ventures were short lived.
John Kerry's experience was much different. After law School John Kerry and a friend started a cookie and muffin shop in Boston's Quincy Market. This venture also was short lived and quickly thereafter John Kerry moved into politics.
The differences of the candidates are quite different when it comes to small business. Bush wants to give tax breaks and less regulation on small business, and at the same time minimizing the Small Buisiness Administration (a low interest loan company that grants small business easy access to loans).
John Kerry wants to increase federal support to the SBA granting more money and lower rates to Small Business ventures.
If rates become lower for small business, then barriers of entery decrease as well as lowering the return on debt. This will only propetuate government assistance and dependance. Masking the actual demand of small business.
www.msnbc.msn.com/id/5961811
catastrophic losses
Insurers got zapped this year. Specifically, third quarter storms accounted for 21.3 billion in insured property insurance. Insurance payed out $24.7 billion for the first nine months of 2004. This years first nine months losses is second only to 2001's first nine month losses of $26.1 billion. Majority of losses incured during 2001 is mostly do to 9/11 terrorist attacks.
This year four major hurricanes in Florida accounted for $20.5 billion-a bit more then the $20.3 billion loss caused by Hurricane Andrew in 1992. The frequency of catastrophic storms in a given 40 day time frame is very unusual and were far from the calculation of premiums.
However, there have been very few insurance insolvencies, indicatina that the market will remain strong, and be able to rebound from this storm season.
With such catastrophic losses the demand of storm insurance will likely climb as well as the premiums. Although insurance companies as a whole were able to absord such a catastrophic third quarter, the likelyhood that insurance companies will be able to absord a similar blow in the near future without some major changes in premiums is highly unlikely.
www.msnbc.msn.com/id/6392536/
This year four major hurricanes in Florida accounted for $20.5 billion-a bit more then the $20.3 billion loss caused by Hurricane Andrew in 1992. The frequency of catastrophic storms in a given 40 day time frame is very unusual and were far from the calculation of premiums.
However, there have been very few insurance insolvencies, indicatina that the market will remain strong, and be able to rebound from this storm season.
With such catastrophic losses the demand of storm insurance will likely climb as well as the premiums. Although insurance companies as a whole were able to absord such a catastrophic third quarter, the likelyhood that insurance companies will be able to absord a similar blow in the near future without some major changes in premiums is highly unlikely.
www.msnbc.msn.com/id/6392536/
Shove This Up Your Bruttosozialprodukt !!
The Germans have a funny, catchy little tune about their GDP. Here's part of the chorus:
ja ja ja jetzt wird wieder in die Haende gespukt,
wir steigern das Bruttosozialprodukt...
It means now we're going to spit in our hands because the GDP is rising. Here is a basic definition of GDP; Gross Domestic Product. The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.
I found a lovely site that shows how US GDP compares to other countries. The U.S. is of course in first place. But I have a plan to make GDP rise to even higher levels. The plan is this: We should include all of the work thateveryone does. For example, as a housewife, the work I do is insignificant when calculating the GDP. But I am producing something, namely well adjusted, hard working adults that, with any luck, wont crowd the prison system. What about college students? I, for one, am trying to produce a happy i.e. well paid CPA with my efforts on things like this blog. Why don't we give homework a value in the GDP?
If you look at what goes into the GDP you can see what our society values, and more importantly what it does not (me). I'm not sure having a high GDP is all that important anyway, but if we're going to have one I would like to be included.
ja ja ja jetzt wird wieder in die Haende gespukt,
wir steigern das Bruttosozialprodukt...
It means now we're going to spit in our hands because the GDP is rising. Here is a basic definition of GDP; Gross Domestic Product. The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.
I found a lovely site that shows how US GDP compares to other countries. The U.S. is of course in first place. But I have a plan to make GDP rise to even higher levels. The plan is this: We should include all of the work thateveryone does. For example, as a housewife, the work I do is insignificant when calculating the GDP. But I am producing something, namely well adjusted, hard working adults that, with any luck, wont crowd the prison system. What about college students? I, for one, am trying to produce a happy i.e. well paid CPA with my efforts on things like this blog. Why don't we give homework a value in the GDP?
If you look at what goes into the GDP you can see what our society values, and more importantly what it does not (me). I'm not sure having a high GDP is all that important anyway, but if we're going to have one I would like to be included.
11/01/2004
Toyota, records Record Sales and Profits
Toyota reported record sales and profits for the period ending Sept. 30th. The extraordinary results cam after strenuous cost cutting and marketing effort by the Tokyo-based auto maker. The auto makers net profit jumped 11.4 percent from a year earlier 584 billion yen, or form 153 yen per share to 176 yen per share. Also Toyota Consolidated posted a record high 1.16 trillion yen of net profit for the business year ending March 31st 2004. Toyota said that cost-cutting efforts and marketing boosted net profits by 260 billion and 70 billion yen respectively.
With such phenomenal results from cost-cutting and marketing, American manufacturers must be wondering what marvelous cost cutting maneuvers have the Japanese invented now. If anyone is wondering why American jobs being outsourcing is such an attraction for American businesses, this is a prime example why. With consolidated net profit of 1.16 trillion yen in a single business year, American businesses must able to cut cost wherever possible. There hasn't been this large of a increase in Toyota's implementation of JIT, and other cost cutting manuevers of the 1980's.
This was found at http://www.msnbc.msn.com/id/6380984/.
With such phenomenal results from cost-cutting and marketing, American manufacturers must be wondering what marvelous cost cutting maneuvers have the Japanese invented now. If anyone is wondering why American jobs being outsourcing is such an attraction for American businesses, this is a prime example why. With consolidated net profit of 1.16 trillion yen in a single business year, American businesses must able to cut cost wherever possible. There hasn't been this large of a increase in Toyota's implementation of JIT, and other cost cutting manuevers of the 1980's.
This was found at http://www.msnbc.msn.com/id/6380984/.
Check This Out
Unbelievable!
Oil dipped today below $50 a barrel. Oil closed just above $50 which is remarkable do to the fact that just a week ago the price per barrel was just over $55 with no ceiling in sight. After prices reached $55 a barrel pressure was put on world suppliers to bolster the oil supply. The next day supply increased dropping prices. The reaction in the markets today was a mass “short covering”. What this means is people who sold oil to people at a specified price at a specified time in the future bought oil today at or around $50 a barrel. The significance of this transaction is that analysts feel that the price of $50 a barrel is highly discounted and the price of oil will more then likely increase substantially.
The information that analysts are using to calculate possible oil increases are alarming. In Nigeria the average worker gets paid just over a dollar a day, while Royal Dutch/Shell is reaping record breaking profits off of Nigeria’s rich oil fields. The largest workers union in Nigeria has threatened to walk out and go on Strike. Nigeria is the US’s fifth largest supplier of oil.
Argentina is another large provider of oil to the US. The Argentines labor force historically has been less then spectacular. And with the turmoil in the middleast and a lack of overall supply to boot the outlook for oil is very unstable.
One potential temporary solution as mentioned by many analysts is the supply of the U.S Strategic Petroleum Reserves to provide some easement of oil prices. The SPR consists of 727 million gallons that are only to be tapped when a major interruption such as war has occurred. The Bush administration has made a strict policy regarding the use of the SPR denying access to the public.
Kerry on the other hand has considered some moderate usage or at least retention of supplying the SRP.
The fact is that oil is fast on its way to becoming a scarce resource and the world’s excess capacity is currently one percent of the world’s daily consumption of 82.4 million barrels.
www.msnbc.msn.com/id/5612507/
Oil dipped today below $50 a barrel. Oil closed just above $50 which is remarkable do to the fact that just a week ago the price per barrel was just over $55 with no ceiling in sight. After prices reached $55 a barrel pressure was put on world suppliers to bolster the oil supply. The next day supply increased dropping prices. The reaction in the markets today was a mass “short covering”. What this means is people who sold oil to people at a specified price at a specified time in the future bought oil today at or around $50 a barrel. The significance of this transaction is that analysts feel that the price of $50 a barrel is highly discounted and the price of oil will more then likely increase substantially.
The information that analysts are using to calculate possible oil increases are alarming. In Nigeria the average worker gets paid just over a dollar a day, while Royal Dutch/Shell is reaping record breaking profits off of Nigeria’s rich oil fields. The largest workers union in Nigeria has threatened to walk out and go on Strike. Nigeria is the US’s fifth largest supplier of oil.
Argentina is another large provider of oil to the US. The Argentines labor force historically has been less then spectacular. And with the turmoil in the middleast and a lack of overall supply to boot the outlook for oil is very unstable.
One potential temporary solution as mentioned by many analysts is the supply of the U.S Strategic Petroleum Reserves to provide some easement of oil prices. The SPR consists of 727 million gallons that are only to be tapped when a major interruption such as war has occurred. The Bush administration has made a strict policy regarding the use of the SPR denying access to the public.
Kerry on the other hand has considered some moderate usage or at least retention of supplying the SRP.
The fact is that oil is fast on its way to becoming a scarce resource and the world’s excess capacity is currently one percent of the world’s daily consumption of 82.4 million barrels.
www.msnbc.msn.com/id/5612507/
Spending jumped in September
Consumers slowed down their spending in the late summer. However, the lack of spending was made up in September. Consumers boosted their consumption by .6 percent in the month of September. The gain in spending outpaced the growth in income.
The commerce department follows consumer spending closely because it accounts for one third of all economic activity. Researchers attribute the growth to big ticket consumption. Big ticket items include cars, or other big cash items.
Income growth increased to .2 percent, following a .3 percent rise in August. Economics illustrates, the greater the inflow of income the greater the inflow of consumption. The moderate spending in August bolstered savings. In September another growth in earnings attributed to a less thrifty consumer.
Third quarter GDP results were reported earlier in the week. Although GDP grew to 3.7 percent in the July-September quarter, GDP for the year is lower then expectations. Consumer spending which contributes to GDP was up 4.6 during the third quarter. However, the second quarter had anemic growth of 1.6. While GDP is rising is a good thing, the growth is less then analyst expectations. Sup par reports mean sell offs on Wall Street, which despite a few days here and there is what is being observed in the markets.
www.msnbc.msn.com/id/6380810/
The commerce department follows consumer spending closely because it accounts for one third of all economic activity. Researchers attribute the growth to big ticket consumption. Big ticket items include cars, or other big cash items.
Income growth increased to .2 percent, following a .3 percent rise in August. Economics illustrates, the greater the inflow of income the greater the inflow of consumption. The moderate spending in August bolstered savings. In September another growth in earnings attributed to a less thrifty consumer.
Third quarter GDP results were reported earlier in the week. Although GDP grew to 3.7 percent in the July-September quarter, GDP for the year is lower then expectations. Consumer spending which contributes to GDP was up 4.6 during the third quarter. However, the second quarter had anemic growth of 1.6. While GDP is rising is a good thing, the growth is less then analyst expectations. Sup par reports mean sell offs on Wall Street, which despite a few days here and there is what is being observed in the markets.
www.msnbc.msn.com/id/6380810/
10/31/2004
"The oil-rich keep on getting richer"
Many Americans have chosen the SUV as their mode of transportation and those that control the oil market are absolutely loving it. The cost to fill up an SUV compared to a small economic- friendly vehicle is taking its toll on those consumers. With the prices being at the current, there may no longer be an economic-friendly vehicle, no matter what the size. In an article written in the Salt Lake Tribune, the author writes that "market constraints underlying high and volatile energy prices suggest that higher oil prices could be here to stay." The higher oil prices may have an impact on your next vehicle purchase, but American's are a "drive-at-any-price" culture and we will still continue to pay for the gas because of our dependence on our vehicles. With our culture being so dependent of car's, those that own and control the oil industry will continue to reep the reward and we will continue to pay the high price.
10/30/2004
Kerry and Bush Tax Difference
The largest topics during this election have been foreign policy, economy, health care, and military. When economy comes up and possible solutions arise Kerry and Bush have seemingly night and day views when it comes to tax cuts. The truth is that Kerry supports all of Bush's tax cut except for the cut for the ritch. However, the difference is not astounding according to Clint stretch, director of tax policy. A family consisting of two children earning an annual household income of $250,000 can expect to pay $1,300 more under Kerry's tax plan. The same family making an annual income of $180,000 would see no change under John Kerry's tax platform. However, Kerry promises that the ritch will be supplying the military with additional aid, healthcare reform along with more affordable healthcare coverage, and cut the deficit by 50% in four years. Kerry's arithmatic in terms of costs for his platforms and the inflow from his tax plan seem far fetched. There will be no change from Bush's tax plan on the poor and middle class.
www.msnbc.msn.com/id/6336867
www.msnbc.msn.com/id/6336867
10/29/2004
Utah Power
As of April 1, 2005, you can expect your power bill to go up by about $4.75 a month. The Public Service Commission (PSC) is experimenting on how electricity rates are set for Utah consumers. Utah Power is seeking permission to raise its rates 11 million. The full story about this is published in the Salt Lake Tribune.
The main difference in this new procedure on trial, is that the rates will be based entirely on projected costs that the utility expects to incur in the 12 months after the new rates go into effect. Utah Power believes using a so-called "future test year" to determine rates, instead of basing them on historical costs, the traditional method used by the PSC, will be more fair to the company as well as its customers. They say that these projected costs will eliminate the problem of "regulatory lag;" which is when a utility spends money on behalf of its customers but must wait for the PSC to approve those costs.
My question, along with everybody elses', is "Are these projected costs reasonable?" I thought that historical costs were used to determine projections. So what is making the difference here, and why are our electricity bills going up almost $5 a month? That's sixty bucks a year!
The main difference in this new procedure on trial, is that the rates will be based entirely on projected costs that the utility expects to incur in the 12 months after the new rates go into effect. Utah Power believes using a so-called "future test year" to determine rates, instead of basing them on historical costs, the traditional method used by the PSC, will be more fair to the company as well as its customers. They say that these projected costs will eliminate the problem of "regulatory lag;" which is when a utility spends money on behalf of its customers but must wait for the PSC to approve those costs.
My question, along with everybody elses', is "Are these projected costs reasonable?" I thought that historical costs were used to determine projections. So what is making the difference here, and why are our electricity bills going up almost $5 a month? That's sixty bucks a year!
Southern Utah Wilderness and Our Economy
Proposals to extend wilderness protection to significant additional lands in Utah are regularly criticized on economic grounds. This economic conclusion is based upon two assumptions: wilderness locks up natural resources and the primary reason for wilderness is to provide free recreational opportunities.
The primary economic activities that would be restricted by wilderness classification is commercial extraction of timber and minerals. In southern Utah, it is primarily mineral extraction that would be restricted. In addition, there are fears that grazing would be restricted. the assumed negative impact of wilderness designation is tied to the "locking up" of those minerals and forage. When mining and grazing are analyzed in the context of the overall Utah economy, this is seen to be a seriously exaggerated claim. The transformation of the Utah economy from heavy reliance upon extractive natural resource use is well underway and it will continue. The Utah Office of Planning and Budget projects that employment in agriculture and mineral extraction will continue to shrink as a percentage of the total Utah workforce over the next twenty years despite an optimistic projected "mini-boom" in the mineral extraction industries.
Protected landscapes have economic impacts far beyond their borders because they provide the high quality environmental backdrop that makes an area an attractive place to live, work, and do business. In that sense, the protected landscapes become an important part of an area's economic base and economic vitality. This is the reason that wilderness counties tend to show such dramatic economic vitality.
Wilderness protection does not impoverish communities by locking up resources. Rather, it protects the economic future of those communities by preserving high quality natural environments that are in increasing demand across the nation.
The primary economic activities that would be restricted by wilderness classification is commercial extraction of timber and minerals. In southern Utah, it is primarily mineral extraction that would be restricted. In addition, there are fears that grazing would be restricted. the assumed negative impact of wilderness designation is tied to the "locking up" of those minerals and forage. When mining and grazing are analyzed in the context of the overall Utah economy, this is seen to be a seriously exaggerated claim. The transformation of the Utah economy from heavy reliance upon extractive natural resource use is well underway and it will continue. The Utah Office of Planning and Budget projects that employment in agriculture and mineral extraction will continue to shrink as a percentage of the total Utah workforce over the next twenty years despite an optimistic projected "mini-boom" in the mineral extraction industries.
Protected landscapes have economic impacts far beyond their borders because they provide the high quality environmental backdrop that makes an area an attractive place to live, work, and do business. In that sense, the protected landscapes become an important part of an area's economic base and economic vitality. This is the reason that wilderness counties tend to show such dramatic economic vitality.
Wilderness protection does not impoverish communities by locking up resources. Rather, it protects the economic future of those communities by preserving high quality natural environments that are in increasing demand across the nation.
Delta Takes One Step Away From Bankruptcy
Everyone knows the woes of Delta airlines. They have been on the brink of bankruptcy for a while now with another $651 million loss in the third quarter. Strategies to put their heads securely above water have included salary concessions from their 7,000 pilots, cutting 7,000 employees, and offering notes to investors that are collateralized by debt-free aircraft, simulators, and other equipment.
It looks that just yesterday Delta took a great step away from bankruptcy as it appears the pilots have come to an agreement with management allowing for $1 billion in concessions. While this is good news, it only skims the top of the lake of debt that Delta has incurred. Of course, Salt Lake's economy will likely benefit from the closing of Delta's Dallas hub which will expand operations in Salt Lake.
It looks that just yesterday Delta took a great step away from bankruptcy as it appears the pilots have come to an agreement with management allowing for $1 billion in concessions. While this is good news, it only skims the top of the lake of debt that Delta has incurred. Of course, Salt Lake's economy will likely benefit from the closing of Delta's Dallas hub which will expand operations in Salt Lake.
Are Consumer Cost of Goods About to Rise?
In a recent article by Andrew Ward, the trucking industry was highlighted. Currently, drivers are not being adequately compensated for their work and consequently there is a problem of supply not meeting demand when it comes to new drivers entering the industry. Historically, consumers have had lower prices at firms such as Target, Wal-mart and many thousands of other places due to the fact that industry drivers have had the burden placed on their wages. This could be a real problem if we lose quality drivers that aren't willing to struggle to make ends meet any longer.
Many people in our society do not realize what it takes to get these items into our homes and often times we take that luxury for granted. Drivers are not fortunate enough to enjoy a quality of life that most of us have come to demand. True, they ultimately must make a choice as to whether or not they want to continue doing what they do, but the answers that will rectify this situation will not just be to simply ignore their needs and demands. With supply growing at 1% and demand for new drivers growing at 3% annually, something needs to be done soon in order to remedy this situation. If we were all faced with the choice of not getting goods in a timely fashion or paying drivers what they deserve, it would be an easy choice for many when consumer goods suddenly aren't on the shelves in our favorite department stores.
Many people in our society do not realize what it takes to get these items into our homes and often times we take that luxury for granted. Drivers are not fortunate enough to enjoy a quality of life that most of us have come to demand. True, they ultimately must make a choice as to whether or not they want to continue doing what they do, but the answers that will rectify this situation will not just be to simply ignore their needs and demands. With supply growing at 1% and demand for new drivers growing at 3% annually, something needs to be done soon in order to remedy this situation. If we were all faced with the choice of not getting goods in a timely fashion or paying drivers what they deserve, it would be an easy choice for many when consumer goods suddenly aren't on the shelves in our favorite department stores.
Mid-size Sedans or Tanks?
When you drive your car down the road do you ever think about what might happen if somebody collided with you? Does your car have the necessary safety features to keep you alive? Most studies you see about car safety tests demonstrate what might happen in a head on collision, but according to an article I read on Dateline NBC, “The risk of dying or being seriously injured, if you're struck in the side right where you're sitting is much higher than the typical frontal crash.”
The article reports on an IIHS side impact crash test results study. This study smashed different mid-sized sedans with a simulated SUV force on the driver's side of the car. Most of the cars tested didn't receive very good marks, implying that today's cars are not safe enough. Studies like this can really hurt the image that a car company may be trying to portay. The only way the company can keep its image is to spend more money trying to make its car more safe. Should we really have these types of programs that show us how unsafe our cars are? In my opinion we shouldn't.
The entire notion of trying to make cars safer reminds me about the "seat belts cause more accidents" scenario. If we make our cars more and more safer, we will begin to drive more and more unsafely. Where does it all stop? Before you know it the only way to get to work safely will be to drive a tank there.
The article reports on an IIHS side impact crash test results study. This study smashed different mid-sized sedans with a simulated SUV force on the driver's side of the car. Most of the cars tested didn't receive very good marks, implying that today's cars are not safe enough. Studies like this can really hurt the image that a car company may be trying to portay. The only way the company can keep its image is to spend more money trying to make its car more safe. Should we really have these types of programs that show us how unsafe our cars are? In my opinion we shouldn't.
The entire notion of trying to make cars safer reminds me about the "seat belts cause more accidents" scenario. If we make our cars more and more safer, we will begin to drive more and more unsafely. Where does it all stop? Before you know it the only way to get to work safely will be to drive a tank there.
10/28/2004
The Right Price
I have had my eye on a pair or Wilson Gold Seal figure skating blades for months. They are really the best blades out there...a solid base, tapered blade with a huge toe pick and the rocker is in just the right place to really spring up into your jumps and they have great balance on spins. The world champion wears these of course and I want some too. The problem is they cost around $500. (Boots to mount the blades on are between $500 and $600.)
Last week a pair of these delicious blades (in my size no less) were auctioned off on e-bay for around $150 !!! That is a price I would be willing to pay. What if everything were auctioned off, would more sales/profit be made? If the price these blades fetch on e-bay is this low maybe manufacturers will have to lower their prices? These dream blades are actually made out of the same materials as cheaper blades but they are in high demand because they are worn by skating stars. Maybe they will go out of style and then I can get some.
Demand really does push the prices up on goods :(
Last week a pair of these delicious blades (in my size no less) were auctioned off on e-bay for around $150 !!! That is a price I would be willing to pay. What if everything were auctioned off, would more sales/profit be made? If the price these blades fetch on e-bay is this low maybe manufacturers will have to lower their prices? These dream blades are actually made out of the same materials as cheaper blades but they are in high demand because they are worn by skating stars. Maybe they will go out of style and then I can get some.
Demand really does push the prices up on goods :(
What's New in the Market 10/28/2004
After two and three quarter days of trading the bullish rally that was seen has now taken a bearish turn. The slip in oil prices gave stimulation to the market. However, growing concerns regarding the oil price relief has grown to a worry. Mendelson a well followed analyst suggests that this decline in prices is likely do to a large sale of gas by a large player and we might see prices surge to$56 a barrel. Exxonmobil has posted large third quarter profits, but not large enough to offset the news of falling oil prices. Pfizer is down .8% as the drug maker’s board has approved a $5 billion stock buyback. DaimlerChrysler swung a third quarter profit. However, the SEC is filing a minor investigation after an employee of the company reported an allegation. The US dollar has depreciated against the Yen and Euro which is both a negative and positive. The positive aspect is that American exports will be able to be bought a bit cheaper, making American goods more affordable to oversea markets.
http://biz.yahoo.com/cbsm-top/
http://biz.yahoo.com/cbsm-top/
Fed Reports Continuing Economic Growth
Despite many economic concerns, the U.S economy continues to grow. Surveys of business activity and data collected from the fed’s 12 regional banks gave evidence of a growing economy. “Economic activity continued to expand in September and early October,” the fed said.
At this point in time Analysts are speculating a raise in interest rate. The central bank will likely push up rates for a fourth time this year to guard against inflation pressures. The fed argues that the economy should grow at a decent pace even if there are some potholes along the way.
The fed also has speculated that the rise in oil prices have somewhat stymied the progress of the economy. However, the fed did not signal concern that this year’s oil price surge will be catastrophic enough to send the economy into a recession as it did in the 1970s and 1980s.
Other news regarding commerce and home sales were optimistic. Big ticket sales items in commerce were up a couple points, as were home sales. Some 2.7 million jobs that were lost in the manufacturing sector since 2000 have shown signs of rebound. On a final note farmers in most parts of the country were having a good year.
http://biz.yahoo.com/ap/041027/economy_12.html
At this point in time Analysts are speculating a raise in interest rate. The central bank will likely push up rates for a fourth time this year to guard against inflation pressures. The fed argues that the economy should grow at a decent pace even if there are some potholes along the way.
The fed also has speculated that the rise in oil prices have somewhat stymied the progress of the economy. However, the fed did not signal concern that this year’s oil price surge will be catastrophic enough to send the economy into a recession as it did in the 1970s and 1980s.
Other news regarding commerce and home sales were optimistic. Big ticket sales items in commerce were up a couple points, as were home sales. Some 2.7 million jobs that were lost in the manufacturing sector since 2000 have shown signs of rebound. On a final note farmers in most parts of the country were having a good year.
http://biz.yahoo.com/ap/041027/economy_12.html
Suddenly, satellite radio matters
The two major satellite radio companies have announced deals that have sent their stocks through the roof. Sirius Radio Inc. Announced a few weeks ago that they had signed Howard Stern, the announcement sent Sirius' stock up 15%. XM just announced that they have radio rights to Major League Baseball, this announcement sent XM's stock prices up 10%. These recent actions have many analyst wondering can satellite radio really become a powerful force in the entertainment world, and which of the two strategic actions will have the biggest payoff.
Howard Stern has a cult following of listeners from coast to coast, from his late night TV show to his syndicated radio show that was broadcast in most major metropolitan areas. Satellite Radio provides a FCC-less format where Stern can be as vulgar as he wants to be. The price that Sirius paid to acquire Stern was far less than the price that XM paid to acquire rights to Major League Baseball, and therefore Sirius will have a much easier time recouping its investment in Stern as opposed to XM's investment in MLB.
I believe that Sirius' move in acquiring Stern will turn out to be the most profitable move of the two companies, because of the fact the Stern holds so much power in the radio world, and Sirius has gained absolute control over where Stern is broadcast. Therefore there is a greater incentive for potential customers to go to Sirius for Stern as opposed to XM for Major League Baseball. Major league baseball is broadcast on network TV and several cable stations, and by observation one might easily conclude that most people would rather watch a baseball game on cable.
Howard Stern has a cult following of listeners from coast to coast, from his late night TV show to his syndicated radio show that was broadcast in most major metropolitan areas. Satellite Radio provides a FCC-less format where Stern can be as vulgar as he wants to be. The price that Sirius paid to acquire Stern was far less than the price that XM paid to acquire rights to Major League Baseball, and therefore Sirius will have a much easier time recouping its investment in Stern as opposed to XM's investment in MLB.
I believe that Sirius' move in acquiring Stern will turn out to be the most profitable move of the two companies, because of the fact the Stern holds so much power in the radio world, and Sirius has gained absolute control over where Stern is broadcast. Therefore there is a greater incentive for potential customers to go to Sirius for Stern as opposed to XM for Major League Baseball. Major league baseball is broadcast on network TV and several cable stations, and by observation one might easily conclude that most people would rather watch a baseball game on cable.
10/27/2004
Complete Protection
Australian Trade has a problem. The Australian veiw of protection from plant/animal pests and other diseases has been characterized as "Complete protection whatever the cost." Australia has very strict quarantine policies. Importers have to wait years or even decades in some instances to get a complete scientific assessment of import risk.
Recently the Europeon Union has formally challenged the policy in the WTO. The Europeon Commission stated, "The EU does not dispute Australia's right to set an appropriate level of protection. The EU does however consider that Australia should not unfairly protect its own market and producers by imposing quarantine rules which block imports without scientific justification, often for many years."
Although the amount of trade lost due to the quarantine is hard to quantify. However, the commission showed the EU exports of fresh vegetables in Australia were 8,000 tons compared to the 35,000 tons exported to Canada (a comparable market).
I don't think that having any economic policy enforced "whatever the cost" is ever a good idea. There has to be some cut-off point where it is realized that the benefits of a policy are for overshadowed by the costs. I think this is the case with Australia's quarantine. Some sort of change needs to take place in order to relax the strict policy and increase imports.
Recently the Europeon Union has formally challenged the policy in the WTO. The Europeon Commission stated, "The EU does not dispute Australia's right to set an appropriate level of protection. The EU does however consider that Australia should not unfairly protect its own market and producers by imposing quarantine rules which block imports without scientific justification, often for many years."
Although the amount of trade lost due to the quarantine is hard to quantify. However, the commission showed the EU exports of fresh vegetables in Australia were 8,000 tons compared to the 35,000 tons exported to Canada (a comparable market).
I don't think that having any economic policy enforced "whatever the cost" is ever a good idea. There has to be some cut-off point where it is realized that the benefits of a policy are for overshadowed by the costs. I think this is the case with Australia's quarantine. Some sort of change needs to take place in order to relax the strict policy and increase imports.
U.S Confidence is dealt another blow
Boom! another hit. Continuing job worries have worsened consumer confidence in October. If it weren't for the optimistic news of oil today, it may have been business as usual on Wall Street and Corporate America, crapy. It seems like news just seems to get drearier by the month with no end in sight. Unless: oil prices get down to thirty bucks a gallon, Iraqi diplomacy succeeds to make Iraq a safe and terrorist free democratic state, and jobs become in rich supply the outlook for consumer confidence in America seems bleak. According to consumers' assessment of overall current conditions in the economy is short of okay. Despite the troubles of Iraq, and oil consumers are fearing the ability to get and sustain a well paying job. The lack of growth in the world economy has cut job growth which has in turn dealt a blow to the average consumer who can no longer help sustain a growing economy. The supply for jobs or investment just isn't there according to analysts.
www.msnbc.com/id/6335941
www.msnbc.com/id/6335941
Stocks surge as crude price drops
Since January of this year, the S&P has been consistently volitile with minimal growth. Many factors have contributed to the pessimism in the market. One of the greatest factors has been oil prices. Oil prices have struck the pockets of every oil consumer in the world. Today, the 27th of October news arose regarding a surplus in oil inventories. This news came shortly after Opec suggested America tap its strategic oil supply to lessen the burden of oil prices by bolstering supply. In a modest reaction to the news of the surplus indexes jumped upward with a higher then usual volume, and a much higher then usual gain.
With oil prices going up, complimentary goods such as automobiles should go down. With many american owning larger vehichles such as trucks, and suvs, one might think that resale values will start to decline as the price of owning one increases greatly. Since the begining of this year, oil prices have increased over sixty percent to over fifty two dollars a barrell. This is a tremendouse increase in price in a reletivly short period of time.
Now, oil is an less elastic good then say orange juice, and the price hasn't decreased oil demand substantially; however, if the rate of oil price hikes continue consumers are going to see lower resale value amongst their automobiles and wealth in general.
Price hiking that has been encountered this year with oil prices is suspiciouse. Prices are increasing at an alarming rate with no decrease in supply. The hike in price without a justified cut in supply is rather perplexing. Why would the government allow an increase in prices without the justified reduced supply?
Perhaps the vast oil fields world wide are being used up an alarming rate, causing government officials to raise rates to a point where demand falls. If this is the case, how much oil is really left? How long before the oil supply is exhausted? How much will my car or truck be worth in a month from now?
www.msnbc.msn.com/id/3683270/
With oil prices going up, complimentary goods such as automobiles should go down. With many american owning larger vehichles such as trucks, and suvs, one might think that resale values will start to decline as the price of owning one increases greatly. Since the begining of this year, oil prices have increased over sixty percent to over fifty two dollars a barrell. This is a tremendouse increase in price in a reletivly short period of time.
Now, oil is an less elastic good then say orange juice, and the price hasn't decreased oil demand substantially; however, if the rate of oil price hikes continue consumers are going to see lower resale value amongst their automobiles and wealth in general.
Price hiking that has been encountered this year with oil prices is suspiciouse. Prices are increasing at an alarming rate with no decrease in supply. The hike in price without a justified cut in supply is rather perplexing. Why would the government allow an increase in prices without the justified reduced supply?
Perhaps the vast oil fields world wide are being used up an alarming rate, causing government officials to raise rates to a point where demand falls. If this is the case, how much oil is really left? How long before the oil supply is exhausted? How much will my car or truck be worth in a month from now?
www.msnbc.msn.com/id/3683270/
Hummer Light
GM is introducing a new Hummer - the H3. The H3 is actually much smaller; its more like the size of a Jeep Liberty instead of the regular Hummer that we are used to. With this new Hummer, GM addresses the major complaint that they received with the H1 and H2 - cost. Not only is the H3 more affordable than the other Hummers, but it also has better gas mileage. It is said that the new Hummer can get up to 20 miles per gallon. The H3 also has a 5-cylinder engine with most of the off-road capabilities that the regular Hummer offers.
GM is trying to increase the demand curve of the Hummer. They are doing this by using price as a tool to increase demand. The H3 is more affordable both directly (cost of vehicle) and indirectly (cost of gas) and more people with different income levels can afford it; thus shifting demand.
GM is trying to increase the demand curve of the Hummer. They are doing this by using price as a tool to increase demand. The H3 is more affordable both directly (cost of vehicle) and indirectly (cost of gas) and more people with different income levels can afford it; thus shifting demand.
Privatize Social Security Before it’s to Late.
The legislative branch knows the Social Security (SS) system sucks. If it SS was a good thing would not our representatives be on it with us. The truth is SS system is no good and they know it so they legislate themselves a new retirement system. How fair is this, they not only get a better retirement, but it is funded by the US taxpayer. That right there makes me want to run for congress. The truth is the government knows the SS system is going to fail, they (meaning all politicians) are afraid of the AARP (American Association of Retired Persons), because they are the ones that vote and cause the biggest stink on capital hill. The truth is those of us under the age of 50 would be better off to vote for representatives that would do away with SS and privatize it. (I’m sorry but this may cause some of the stupid people to go hungry and cold, but remember we can’t always help the stupid people, those that won’t save for the future)
Mini-size Hummer
Hummer has now introduced a smaller size Hummer that is appealing to more consumers. Instead of driving a full size Hummer around, one can drive one similar in size to a Jeep Liberty. The smaller Hummer is powered by a 220 horsepower 5-cylinder engine. This will be the first Hummer available with a manual transmission. Gas is expected to be close to 20 miles per gallon which is much better than the past Hummers.
Are midsize SUV's what people want? Or does it just give more people a chance to say they drive a Hummer? The new Hummer is 17 inches shorter than the H2 and 6.5 inches narrower. It still will be able to drive through 16 inches of water at 20 miles per hour and can climb a 40 degree incline. It's a mini-Hummer. This will allow more people to have the car of their dreams for a cheaper price.
Are midsize SUV's what people want? Or does it just give more people a chance to say they drive a Hummer? The new Hummer is 17 inches shorter than the H2 and 6.5 inches narrower. It still will be able to drive through 16 inches of water at 20 miles per hour and can climb a 40 degree incline. It's a mini-Hummer. This will allow more people to have the car of their dreams for a cheaper price.
New Cars With New Presidency
What will happen to the auto industry after the elections? Cars and gasoline are becoming an extremely popular topic lately. With oil prices up and cars sucking the gas, the two candidates for president are giving their thoughts on the topic. Also, the CO2 from the cars have been getting many scientists worried about global warming because one-third of CO2 is distributed from the vehicles we drive.
President Bush wants to increase the tax credit from purchasing a hybrid, $1,500 up to $4,000. He and Congress have also approved $300 million for the research of hydrogen fell cell cars. With the prices increasing for oil, we need to do something with the cars that we drive. Kerry also wants to raise the mile per gallon on economy cars from 24 to 36 within the next 10 years. The problem is the auto industry and the workers don't like it. So, Kerry will probably raise the tax credit up to $5,000 for the purchase of hybrid cars.
I believe that something has to be done about the rising prices we are seeing from oil. I don't believe the government should get involved with the gas prices or hybrid cars. If the market wants hybrid cars then the people will get the cars.
President Bush wants to increase the tax credit from purchasing a hybrid, $1,500 up to $4,000. He and Congress have also approved $300 million for the research of hydrogen fell cell cars. With the prices increasing for oil, we need to do something with the cars that we drive. Kerry also wants to raise the mile per gallon on economy cars from 24 to 36 within the next 10 years. The problem is the auto industry and the workers don't like it. So, Kerry will probably raise the tax credit up to $5,000 for the purchase of hybrid cars.
I believe that something has to be done about the rising prices we are seeing from oil. I don't believe the government should get involved with the gas prices or hybrid cars. If the market wants hybrid cars then the people will get the cars.
New Cars With New Presidentcy
What will happen to the auto industry after the elections? Cars and gasoline are becoming an extremely popular topic lately. With oil prices up and cars sucking the gas, the two candidates for president are giving their thoughts on the topic. Also, the CO2 from the cars have been getting many scientists worried about global warming because one-third of CO2 is distributed from the vehicles we drive.
President Bush wants to increase the tax credit from purchasing a hybrid, $1,500 up to $4,000. He and Congress have also approved $300 million for the research of hydrogen fell cell cars. With the prices increasing for oil, we need to do something with the cars that we drive. Kerry also wants to raise the mile per gallon on economy cars from 24 to 36 within the next 10 years. The problem is the auto industry and the workers don't like it. So, Kerry will probably raise the tax credit up to $5,000 for the purchase of hybrid cars.
I believe that something has to be done about the rising prices we are seeing from oil. I don't believe the government should get involved with the gas prices or hybrid cars. If the market wants hybrid cars then the people will get the cars.
President Bush wants to increase the tax credit from purchasing a hybrid, $1,500 up to $4,000. He and Congress have also approved $300 million for the research of hydrogen fell cell cars. With the prices increasing for oil, we need to do something with the cars that we drive. Kerry also wants to raise the mile per gallon on economy cars from 24 to 36 within the next 10 years. The problem is the auto industry and the workers don't like it. So, Kerry will probably raise the tax credit up to $5,000 for the purchase of hybrid cars.
I believe that something has to be done about the rising prices we are seeing from oil. I don't believe the government should get involved with the gas prices or hybrid cars. If the market wants hybrid cars then the people will get the cars.
Diesels & Hybrids combine
Trying to make the most fuel-efficient vehicle is a challenge. Right now with the prices of gas, it is a good time to try and introduce a new product. Hybrid vehicles, which use an electric motor that is powered by batteries, are merging with diesel. These two complement each other in giving a car with power and acceleration. The diesel engine gives the "torque" necessary for pulling a heavy load, and hybrid motors draw electricity from the batteries providing sudden acceleration.
Diesel engines could be improved by up to 10 miles per gallon. Nothing has been set in stone for producing hybrid-diesel vehicles. School buses and large utility vehicles will be first to test out the hybrid-diesel technology.
Money is always an issue. By buying a hybrid-diesel vehicle one may save hundreds of dollars on gas. But, will these cars be cheaper? No. These hybrid-diesel cars will cost a couple thousand more than a regular diesel or gasoline engine car. Metropolitan areas can benefit because the air will be of better quality. Are people willing to spend thousands more on a car in order to help clean the air? Will these cars just be out on the market with few buyers? Are these cars a step towards a new car of the future?
Diesel engines could be improved by up to 10 miles per gallon. Nothing has been set in stone for producing hybrid-diesel vehicles. School buses and large utility vehicles will be first to test out the hybrid-diesel technology.
Money is always an issue. By buying a hybrid-diesel vehicle one may save hundreds of dollars on gas. But, will these cars be cheaper? No. These hybrid-diesel cars will cost a couple thousand more than a regular diesel or gasoline engine car. Metropolitan areas can benefit because the air will be of better quality. Are people willing to spend thousands more on a car in order to help clean the air? Will these cars just be out on the market with few buyers? Are these cars a step towards a new car of the future?
Durable Goods Rise Slightly
September showed a slight increase in the orders for durable goods-somewhere near 0.2%. One reason is the recent demand for communications equipment. Durable goods include things like cars, regfrigerators, and washing machines. Demand for such items is usually more volatile than non-durable goods because consumers can choose to pay for repairs and maintenance rather than buying a new unit if the economy is poor and income is l0w.
This rise in demand could be a sign that the economy is improving as more people have an increase in income which allows them to buy more instead of postponing purchases and maintaing their existing units.
However, the demand for such things has been see-sawing over the last year. June and July posted a rise after a big decrease in April and May. We'll have to see if the rise will continue. Surely the Presidential candidates are paying close attention to this.
This rise in demand could be a sign that the economy is improving as more people have an increase in income which allows them to buy more instead of postponing purchases and maintaing their existing units.
However, the demand for such things has been see-sawing over the last year. June and July posted a rise after a big decrease in April and May. We'll have to see if the rise will continue. Surely the Presidential candidates are paying close attention to this.
Where the Real Power of the Country Lies.
The issues of the presidential election have changed! The economic policies and war a on terror policies just don’t seem as big an issue to me with the possibility of appointing one new high judge with the possibility of two more vacancies opening up within the next four years. The big issue now will be what kind of judges you want appointed to the high court, conservative or liberal. Judges that observes the constitution (conservative) or judges whose wish is to do the jobs of the legislative and executive branches of government by writing new law from the bench (liberal).
Let’s make sure the right appointments happen by electing the right man for the job. These appointments to the high court will have more long run influence than any bills that are passed by either of the other branches of government.
Let’s make sure the right appointments happen by electing the right man for the job. These appointments to the high court will have more long run influence than any bills that are passed by either of the other branches of government.
10/26/2004
Airfares, Pay Less For More
I was booking my flights for the upcomming vacation, and of course I couldn't get a direct flight to where I wanted to go. It is cheaper to go on more flights. In fact, the more flights you are willing to take to the same destination, the less you have to pay. Souldn't flying more cost more?
I also noticed that a flight to Moscow is not much more expensive than a flight to North Carolina. So you might as well go on a really cool vacation to Europe instead of visiting your family for Christmas since you can fly a lot farther for hardly anymore cash.
I also noticed that airfares are still around what they used to be about 10 years ag0. If you haven't looked lately check it out.
I also noticed that a flight to Moscow is not much more expensive than a flight to North Carolina. So you might as well go on a really cool vacation to Europe instead of visiting your family for Christmas since you can fly a lot farther for hardly anymore cash.
I also noticed that airfares are still around what they used to be about 10 years ag0. If you haven't looked lately check it out.
Life looks down on the elderly
For those individuals on low or fixed monthly incomes life keeps looking worse, especially for the elderly. On top of the shortage of flu vaccinations, those who depend on fuel assistance will have some cold homes this winter. The rising prices of crude oil have a lot to do with this. With such high prices and so many hurricanes during the fall, refiners have been cut off from stockpiling crude oil. If we have the cold winter that is predicted the demand for natural gas will surely rise which worries a lot of people. Energy trader Phil Flynn says, "We’re drilling more (natural gas) and producing less, our rig counts are up but our supplies are declining." A prolonged winter could prove fatal.
What are the cold elderly to do? Sit in there cold homes and freeze, I don't think so. Maybe we just hope for an abnormally warm winter, or is there something the government can do to help pay for the rising prices of oil and heat?
What are the cold elderly to do? Sit in there cold homes and freeze, I don't think so. Maybe we just hope for an abnormally warm winter, or is there something the government can do to help pay for the rising prices of oil and heat?
Life looks down on the elderly
For those individuals on low or fixed monthly incomes life keeps looking worse, especially for the elderly. On top of the shortage of flu vaccinations, those who depend on fuel assistance will have some cold homes this winter. The rising prices of crude oil have a lot to do with this. With such high prices and so many hurricanes during the fall, refiners have been cut off from stockpiling crude oil. If we have the cold winter that is predicted the demand for natural gas will surely rise which worries a lot of people. Energy trader Phil Flynn says, "We’re drilling more (natural gas) and producing less, our rig counts are up but our supplies are declining." A prolonged winter could prove fatal.
What are the cold elderly to do? Sit in there cold homes and freeze, I don't think so. Maybe we just hope for an abnormally warm winter, or is there something the government can do to help pay for the rising prices of oil and heat?
What are the cold elderly to do? Sit in there cold homes and freeze, I don't think so. Maybe we just hope for an abnormally warm winter, or is there something the government can do to help pay for the rising prices of oil and heat?
Life looks down on the elderly
For those individuals on low or fixed monthly incomes life keeps looking worse, especially for the elderly. On top of the shortage of flu vaccinations, those who depend on fuel assistance will have some cold homes this winter. The rising prices of crude oil have a lot to do with this. With such high prices and so many hurricanes during the fall, refiners have been cut off from stockpiling crude oil. If we have the cold winter that is predicted the demand for natural gas will surely rise which worries a lot of people. Energy trader Phil Flynn says, "We’re drilling more (natural gas) and producing less, our rig counts are up but our supplies are declining." A prolonged winter could prove fatal.
What are the cold elderly to do? Sit in there cold homes and freeze, I don't think so. Maybe we just hope for an abnormally warm winter, or is there something the government can do to help pay for the rising prices of oil and heat?
What are the cold elderly to do? Sit in there cold homes and freeze, I don't think so. Maybe we just hope for an abnormally warm winter, or is there something the government can do to help pay for the rising prices of oil and heat?
Life looks down on the elderly
For those individuals on low or fixed monthly incomes life keeps looking worse, especially for the elderly. On top of the shortage of flu vaccinations, those who depend on fuel assistance will have some cold homes this winter. The rising prices of crude oil have a lot to do with this. With such high prices and so many hurricanes during the fall, refiners have been cut off from stockpiling crude oil. If we have the cold winter that is predicted the demand for natural gas will surely rise which worries a lot of people. Energy trader Phil Flynn says, "We’re drilling more (natural gas) and producing less, our rig counts are up but our supplies are declining." A prolonged winter could prove fatal.
What are the cold elderly to do? Sit in there cold homes and freeze, I don't think so. Maybe we just hope for an abnormally warm winter, or is there something the government can do to help pay for the rising prices of oil and heat?
What are the cold elderly to do? Sit in there cold homes and freeze, I don't think so. Maybe we just hope for an abnormally warm winter, or is there something the government can do to help pay for the rising prices of oil and heat?
10/25/2004
"Carbon Copy Christmas"
Consumers are dreading their Christmas shopping. Not because of lines, but because they do not know what to buy. There are no new, different or unique products being sold. Electronics and gadgets do well every year but apparel may take a dive.
Also, people do not want to shop for themselves because they cannot afford to. Consumers feel that if gas prices were lower they would be able to spend more for Christmas. Gas prices are up 30% from where they were last year at this time. An estimated $7 less per week will be spent over this holiday season.
Lower-income consumers will be affected most by the price of gas. "High-end shoppers" are less affected. Luxury items will still be bought. A senior retail analyst at Bernard Sands', Richard Hastings, feels that "consumer spending will see more of a marginal change rather than a substantial change."
Will gas prices really affect Christmas shopping? I don't think so. Christmas shopping always becomes a concern and people use gas prices this holiday season for their way out.
Also, people do not want to shop for themselves because they cannot afford to. Consumers feel that if gas prices were lower they would be able to spend more for Christmas. Gas prices are up 30% from where they were last year at this time. An estimated $7 less per week will be spent over this holiday season.
Lower-income consumers will be affected most by the price of gas. "High-end shoppers" are less affected. Luxury items will still be bought. A senior retail analyst at Bernard Sands', Richard Hastings, feels that "consumer spending will see more of a marginal change rather than a substantial change."
Will gas prices really affect Christmas shopping? I don't think so. Christmas shopping always becomes a concern and people use gas prices this holiday season for their way out.
10/24/2004
Are athletes at risk?
Everybody knows there is a shortage of flu shots. Those with the greatest risk should be first in line at getting a flu shot. There are lines everywhere across America for them. People are even crossing into Canada in order to obtain a flu shot. But who are the ones with the greatest risk?
Just last week, my teammates and I were to get flu shots here at SUU. Is it fair to give flu shots to athletes just because they are athletes when there is a shortage? Aren't athletes labeled as healthy? Why should athletes be getting flu shots when pregnant women, the elderly, and other people need them more?
I had teammates complain because they had to get a shot. This one shot they had could have been given to another person and in turn save their life. Instead my teammate complains because her shoulder hurts where they poked her. Is this right? Should we really be giving flu shots to athletes who complain about them instead of giving them to someone who needs it?
Just last week, my teammates and I were to get flu shots here at SUU. Is it fair to give flu shots to athletes just because they are athletes when there is a shortage? Aren't athletes labeled as healthy? Why should athletes be getting flu shots when pregnant women, the elderly, and other people need them more?
I had teammates complain because they had to get a shot. This one shot they had could have been given to another person and in turn save their life. Instead my teammate complains because her shoulder hurts where they poked her. Is this right? Should we really be giving flu shots to athletes who complain about them instead of giving them to someone who needs it?
10/22/2004
Equal pay for women? Not till 2050
A recent article, states that women will not achieve equal pay until the year 2050. Women currently make 78% of the wages of a man, those averages differ among different ethnic groups. According to the AFL-CIO, women will make 523,000 dollars less than a man over their lifetime. This issue is one that is very troubling to feminist equality organizations, who feel that the Equal Pay Act hasn't been applied to women as a social group.
Although this issue is one that is highly controversial, there are issues that I believe are not being fairly considered (especially by those that are crying foul the loudest). One major reason that women receive less pay over a lifetime is quite obvious; woman are different from men -- women have children. Women spend less time in the workplace, thus earning less in a lifetime. Traditionally, although the trend is being shunned, women leave the work place to rear their children. This role, although offensive to women's liberation organizations, is one that shouldn't be shoved aside. As women have left the rearing of children to day care facilities in order to take on full time careers, juvenile delinquency has skyrocketed, and America's rising generations have fallen far behind the rest of the world.
Unfortunately there are instances that woman may receive less pay than men because of simple discrimination. These occasions are deplorable. However, I believe that they are less often than women's liberation organizations would like to admit.
This article was found on CNN.com.
Although this issue is one that is highly controversial, there are issues that I believe are not being fairly considered (especially by those that are crying foul the loudest). One major reason that women receive less pay over a lifetime is quite obvious; woman are different from men -- women have children. Women spend less time in the workplace, thus earning less in a lifetime. Traditionally, although the trend is being shunned, women leave the work place to rear their children. This role, although offensive to women's liberation organizations, is one that shouldn't be shoved aside. As women have left the rearing of children to day care facilities in order to take on full time careers, juvenile delinquency has skyrocketed, and America's rising generations have fallen far behind the rest of the world.
Unfortunately there are instances that woman may receive less pay than men because of simple discrimination. These occasions are deplorable. However, I believe that they are less often than women's liberation organizations would like to admit.
This article was found on CNN.com.
More flu vaccine spray on the way.
Today, the manufacturers of FluMist, announced that they will be able to offer 1 million more flu vaccine doses to the public. FluMist is a nasally inhaled flu vaccine that contains weakened live virus, therefore making the doses approved for those ages 5 to 49 only. The vaccine is recommended for health care workers that work with children and high risk elderly patients. The government has been desperately seeking extra doses since 46 million doses from Chiron Corp. Were barred from distribution.
The demand for these doses is highly inelastic, and the supply is limited to what is produced between flu seasons. The conditions caused by the cancellation of 46 million flu vaccine doses could have been catastrophic to average middle class Americans - if there weren't government regulations and oversight in the matter of healthcare. This a strong example of government regulations being of great benefit to the general welfare of the American public.
The demand for these doses is highly inelastic, and the supply is limited to what is produced between flu seasons. The conditions caused by the cancellation of 46 million flu vaccine doses could have been catastrophic to average middle class Americans - if there weren't government regulations and oversight in the matter of healthcare. This a strong example of government regulations being of great benefit to the general welfare of the American public.
Hooters goes to China
Hooters is scheduled to open their first restaurant in China today. It is located in a foreigner-friendly area of Shanghai, which is blossoming as the country's central commercial location. Many are suprised of the venture because China is known for its conservatism. It is an interesting example of how a thriving economy can bring challenges to popular views. Investors are expecting that residents will slowly accustom themselves to the restaurant as attitudes are changing. It will be interesting to see of investors make a big buck or take a hard hit.
Other chains that are located in the area include KFC, TGI-Fridays, and of course McDonald's.
Other chains that are located in the area include KFC, TGI-Fridays, and of course McDonald's.
10/21/2004
Look out Seniors!!!!
Oil prices are going up and energy prices are expected to follow as we head into the cold and flu season. Many seniors who can't afford to pay for the price increases will be vulnerable to the effects. To top it off, the flu shot is in major shortage and this could only add to the nightmare.
This is another witness that something should be done about retirement. Two things will help.
1-Social Security reform: Social Security isn't going to last especially if things don't change.
2-Education about retirement planning: Letting people know how they can plan for retirement will help them avoid these problems. Unfortunately it is too late for a lot of people. Our generation hopefully realizes that they will most likely provide for their own retirement.
This is another witness that something should be done about retirement. Two things will help.
1-Social Security reform: Social Security isn't going to last especially if things don't change.
2-Education about retirement planning: Letting people know how they can plan for retirement will help them avoid these problems. Unfortunately it is too late for a lot of people. Our generation hopefully realizes that they will most likely provide for their own retirement.
10/20/2004
Chrysler recalls Mini-vans
Another car company had to make a recall on one of its vehicles. This time it was Chrysler. It recently recalled its minivans made from 1998-2000. Apparently there is a potential defect with its passenger side air bag. It hasn't been determined approximately how much the recall will cost Chrysler, but surely it won't be cheap. In fact, they had to recall earlier models of their minivans due to the same defect.
An ethical dilemma like this will occur to probably all of us. It seems like more and more, companies are willing to recall vehicle with defects probably because of past settlements and litigation costs. In the past it may have been less expensive for a company to pay the law-suits, but the way things are changing, the cost of settling suits trumps the cost of fixing errors.
Overall, it seems like a good thing because it influences companies to act ethically in order to not only minimize costs but also increase revenues by pleasing consumers.
An ethical dilemma like this will occur to probably all of us. It seems like more and more, companies are willing to recall vehicle with defects probably because of past settlements and litigation costs. In the past it may have been less expensive for a company to pay the law-suits, but the way things are changing, the cost of settling suits trumps the cost of fixing errors.
Overall, it seems like a good thing because it influences companies to act ethically in order to not only minimize costs but also increase revenues by pleasing consumers.
10/16/2004
Indian Outsourcing See's end to U.S. Rhetoric
In Bombay, Indian outsoursing firms suffered little fallout from months of campain debate about the issue of job outsourcing to less expensive countries in Asia. Wipro, LTD. won 34 major new clients last quarter, this was echoed by the two other large outsourcers in India. With the election days away, most of the large Indian service exporters are not concerned about any actions by possible President-elect Kerry to close tax loopholes that are considered to be a major loophole that attracts American companies overseas.
John Kerry is remiss in his belief that simple tax law will keep large American companies from following the lure of low cost labor in Asia. The article cited the fact that many times better educated English-speaking Indians are paid a fifth of the pay that often time less productive American workers are paid for doing the same job. The demand for highly productive, cheap labor is definately high. Countries like India and China with a combined population almost 6 times that of the United States, are providing a seemingly unending supply to meet demand. American labor unions, and blue collar workers had better beware -- If you don't produce results, there are plenty of people that can.
John Kerry is remiss in his belief that simple tax law will keep large American companies from following the lure of low cost labor in Asia. The article cited the fact that many times better educated English-speaking Indians are paid a fifth of the pay that often time less productive American workers are paid for doing the same job. The demand for highly productive, cheap labor is definately high. Countries like India and China with a combined population almost 6 times that of the United States, are providing a seemingly unending supply to meet demand. American labor unions, and blue collar workers had better beware -- If you don't produce results, there are plenty of people that can.
10/15/2004
Funding Utah's Schools
Utah puts more money into public schools than most other states, still spending per student is the lowest in the country. Utah has a comparatively high tax obligation, with 28.8 percent of the state and local tax dollars being spent on education. Funding education in Utah is especially difficult because of the large number of school children.
A recent study shows that Western states fall behind Eastern states in education spending. In the East, per student spending is more than double what it is in the West.
US Representatives Chris Cannon and Rob Bishop argue that the decline in per-pupil spending is directly related to untaxed federal lands. They propose to tax the Federal Government's vast landholdings across 12 Western states which include: Oregon, Washington, Idaho, Utah, Montana, Wyoming, Colorado, Nevada, California, Alaska, Arizona and New Mexico. The quantity of land that is Federally owned for National Parks, national Monuments, National Forests, National Wildlife Refuges, and BLM lands in these states range from 29 to 81 percent of the state's land. No Eastern state has more than 14 percent of its lands federally owned.
These national Parks, national Monuments etc. have been designated for the enjoyment of all people. I believe those same people should be responsible for their proportionate share of the property taxes to fund the schools.
A recent study shows that Western states fall behind Eastern states in education spending. In the East, per student spending is more than double what it is in the West.
US Representatives Chris Cannon and Rob Bishop argue that the decline in per-pupil spending is directly related to untaxed federal lands. They propose to tax the Federal Government's vast landholdings across 12 Western states which include: Oregon, Washington, Idaho, Utah, Montana, Wyoming, Colorado, Nevada, California, Alaska, Arizona and New Mexico. The quantity of land that is Federally owned for National Parks, national Monuments, National Forests, National Wildlife Refuges, and BLM lands in these states range from 29 to 81 percent of the state's land. No Eastern state has more than 14 percent of its lands federally owned.
These national Parks, national Monuments etc. have been designated for the enjoyment of all people. I believe those same people should be responsible for their proportionate share of the property taxes to fund the schools.
The New Russia
Everyone has heard of the economic trouble that has plagued Russia in the past but it seems as if they might actually pull out ot it. An article I read on msnbc.com had some information that I found to be interesting, such as according to Forbes magazine Moscow has the largest contingent of billionaires in the world, and in the real estate industry you need at least $1-2 million to find something decent in the area. Quite the change from 15 years ago.
The change has not affected all areas of Russia, though. It's mostly just the major cities like Moscow or St. Petersburg. 20 miles outside of Moscow many people are still living without many main commodities: running water, electricity, gas, etc.
The growth is not free of concern, though. Russia's agricultural and industrial sectors are both in bad shape. A link off of the previously mentioned article states that Russia's economy doesn't grow unless the price of oil is rising. Many people are questioning what strengths Russia has outside of it's natural resources.
The change has not affected all areas of Russia, though. It's mostly just the major cities like Moscow or St. Petersburg. 20 miles outside of Moscow many people are still living without many main commodities: running water, electricity, gas, etc.
The growth is not free of concern, though. Russia's agricultural and industrial sectors are both in bad shape. A link off of the previously mentioned article states that Russia's economy doesn't grow unless the price of oil is rising. Many people are questioning what strengths Russia has outside of it's natural resources.
What about outsourcing?
In one of the Presidential debates, Senator Kerry claims that President Bush is wrong to provide a tax break for companies who outsource their jobs. If a company is going to be successful, they must control costs. If it is advantageous for the company to employ people in another company, why should we stop them? I'm not so sure about a tax break, but a U.S. company that becomes successful, regardless of outsourcing, will still contribute to our economy and make all of us better off.
Presidential Candidates Avoiding the Deficit
With the presidential debates lately, the candidates are afraid to talk about how they will tackle the deficit. Both have plans in mind but do not want to share them. They are too afraid of what the other candidate will say about it and ruin their campaign. But in an article on MSNBC it talks about what both candidates want to do and it is amazing how they are almost identical.
Senator Kerry wants to increase taxes on the wealthiest 2 percent of Americans and offer new tax credits to help students pay for college. While this may sound good he would like to implement new programs such as health insurance coverage for lower income Americans and a trust fund to improve public education. These programs would add $1.27 trillion in additional cumulative deficit spending which is on top of the $2.29 trillion that is currently already being spent. Bush on the other hand has proposed programs but his main focus is tax cuts. But Bush's idea would add $1.33 trillion in deficits.
Both wanted to cut the deficit in half but with the way they want to run things it doesn't look like they will be doing that any time soon.
Senator Kerry wants to increase taxes on the wealthiest 2 percent of Americans and offer new tax credits to help students pay for college. While this may sound good he would like to implement new programs such as health insurance coverage for lower income Americans and a trust fund to improve public education. These programs would add $1.27 trillion in additional cumulative deficit spending which is on top of the $2.29 trillion that is currently already being spent. Bush on the other hand has proposed programs but his main focus is tax cuts. But Bush's idea would add $1.33 trillion in deficits.
Both wanted to cut the deficit in half but with the way they want to run things it doesn't look like they will be doing that any time soon.
Steel tarrif lifted
In an effort to give the steel industry a chance to consolidate and modernize, President Bush had impose a tariff on imported steel. The President recently announced that the tariff will be lifted. This decision resulted in a negative response from the steel industry who claims that they need protection from unfair foreign competition.
My question is: What about competitive advantage? In Principles we learned that everyone benefits when we each produce what we're good at. We would all get more of everything. High steel prices are reflected in the price of many consumer goods: cars, buildings, etc... Electrolux vacuums has even announced a change in this year's projections because of rising steel prices. Something as small as a screw at the hardware store will go up.
If the price of consumer goods is held at a lower level, doesn't everyone benefit?
My question is: What about competitive advantage? In Principles we learned that everyone benefits when we each produce what we're good at. We would all get more of everything. High steel prices are reflected in the price of many consumer goods: cars, buildings, etc... Electrolux vacuums has even announced a change in this year's projections because of rising steel prices. Something as small as a screw at the hardware store will go up.
If the price of consumer goods is held at a lower level, doesn't everyone benefit?
10/14/2004
Will the Cowboys be moving?
In three weeks, residents in Arlington, Texas will be voting whether or not to allow the Dallas Cowboys to build a new stadium in their area. The proposal from owner Jerry Jones is to finance costs by raising sales tax in the area. It seems that the majority of the residents are against the idea of raising sales tax and believe that the billionaire should pay for the stadium himself.
Supporters say that it would give a huge boost to the struggling economy by making Arlington a year round destination. The team's campaign is ramping up as the date grows closer. Commercial ads of players planting flowers in city parks and paving roads to give the idea that the team will benefit the area.
It seems that the minimal increase in sales tax will be far outweighed by the benefits of the new stadium. Surely the economy will pick up and property value will probably increase substantially. Looking at the situation solely on economic benefits, the stadium seems like a great idea. However, if you aren't a sports fan or one of those who doesn't encourage change or growth, the stadium could have a very big downside.
Supporters say that it would give a huge boost to the struggling economy by making Arlington a year round destination. The team's campaign is ramping up as the date grows closer. Commercial ads of players planting flowers in city parks and paving roads to give the idea that the team will benefit the area.
It seems that the minimal increase in sales tax will be far outweighed by the benefits of the new stadium. Surely the economy will pick up and property value will probably increase substantially. Looking at the situation solely on economic benefits, the stadium seems like a great idea. However, if you aren't a sports fan or one of those who doesn't encourage change or growth, the stadium could have a very big downside.
martha & prison
Martha Stewart has plans on writing a prison diary during her 5 month stay in prison, a deal worth up to $5 million. Being the business women that she is, she has found a way to make even more money off of her inside trading scandals. If published the book could be out by August 2005. It seems as though some people can turn a criminal punishment into a monetary gain. Martha’s business antics has made her rich and infamous. Her business mal-practice has landed her in the penitentiary. Ethics in business as stated by many is lacking. The lack of ethics is causing ripples of confidence amongst consumers globally and Martha is continuing to make a mockery of the judicial and capital institution of America.
http://money.cnn.com/2004/10/14/news/newsmakers/martha_book/index.htm
http://money.cnn.com/2004/10/14/news/newsmakers/martha_book/index.htm
Poverty Crisis in America?
Did you know that one out of every five U.S. jobs pays less than a poverty-level wage for a family four? It’s true, according to a study done by the nonpartisan Working Poor Families Project. An article was posted about this on Monday, October 11 on the MSNBC News website, called “39 Million Americans in Working Poor Families.”
The article reports that these poor Americans barely have enough money to cover basic needs like housing, groceries and child care. I wonder if these people have television sets, DVD players, and cable…
Where is that poverty line at these days? “A family of four with two children was considered impoverished if its income was less than $18,244 in 2002.” This particular study looked at families with kids that earned no more than twice the poverty level. These people are considered “low-income”, or poor. That is, they have to be making less than $36,488 a year. “The median U.S. income for such families is $62,732.”
Those numbers provide the outcome of “39 Million Americans in Working Poor Families.” In order to rise above “low-income” standards, a person must earn at least $8.84 an hour. Consider our minimum wage at $5.15 an hour.
Suggestions have been made to raise the minimum wage, improve educational opportunities, and make an expansion of the federal earned income tax credit.
This is surely a controversial issue, and one that cannot be resolved by blogging, but there are other things that weren’t mentioned in the article that came to mind.
If the minimum wage increases, the already rising problem of outsourcing will surely mount to outstanding numbers. Also, I’m not sure what families require to get by, but I have a feeling that $36K a year is pretty decent in comparison to actual “poor” people throughout the world. In fact, those folks might appreciate our outsourcing crisis!
The article reports that these poor Americans barely have enough money to cover basic needs like housing, groceries and child care. I wonder if these people have television sets, DVD players, and cable…
Where is that poverty line at these days? “A family of four with two children was considered impoverished if its income was less than $18,244 in 2002.” This particular study looked at families with kids that earned no more than twice the poverty level. These people are considered “low-income”, or poor. That is, they have to be making less than $36,488 a year. “The median U.S. income for such families is $62,732.”
Those numbers provide the outcome of “39 Million Americans in Working Poor Families.” In order to rise above “low-income” standards, a person must earn at least $8.84 an hour. Consider our minimum wage at $5.15 an hour.
Suggestions have been made to raise the minimum wage, improve educational opportunities, and make an expansion of the federal earned income tax credit.
This is surely a controversial issue, and one that cannot be resolved by blogging, but there are other things that weren’t mentioned in the article that came to mind.
If the minimum wage increases, the already rising problem of outsourcing will surely mount to outstanding numbers. Also, I’m not sure what families require to get by, but I have a feeling that $36K a year is pretty decent in comparison to actual “poor” people throughout the world. In fact, those folks might appreciate our outsourcing crisis!
10/13/2004
Oil Technology
Is the new 3D technology for finding oil helping or hurting the market of oil? According to the article, Can Technology Find Oil Fast Enough, it seems to be helping the short-term oil market.
The new technology allows for easier finding of oil. It no longer takes days or weeks to guess about where the oil company may find oil. It is all right there projected on a big IMAX screen. What does this do for the market? It is allowing quicker and more accurate setup time per well. Before, guessing was the best means of where oil was. If that guess isn't correct, that is $40 million wasted on a well that has no purpose.
In the short-run it is good to find the oil and be able to extract it. What is wrong with this. Some people think that the oil supply will run out sooner this way. But, changing the way oil is found does not increase or decrease the amount demanded.
I think it is a great way to save costs, and lower the price of oil.
The new technology allows for easier finding of oil. It no longer takes days or weeks to guess about where the oil company may find oil. It is all right there projected on a big IMAX screen. What does this do for the market? It is allowing quicker and more accurate setup time per well. Before, guessing was the best means of where oil was. If that guess isn't correct, that is $40 million wasted on a well that has no purpose.
In the short-run it is good to find the oil and be able to extract it. What is wrong with this. Some people think that the oil supply will run out sooner this way. But, changing the way oil is found does not increase or decrease the amount demanded.
I think it is a great way to save costs, and lower the price of oil.
Getting the OK on Stem Cell Research
One of the Presidential campaign discussions is the ability to use embryonic stem cells for research. These stem cells from embryos, kills the embryo. Some people argue they are killing life. On the other hand, these stem cells can form into any tissue of the body and may be used to allow tissue regeneration to treat many diseases. Harvard University is asking permission from the review board to produce cloned human embryos for research on diseases. The scientists know they are walking a thin line but they have said they would not attempt to clone a human.
I believe that Harvard should be allowed to uses those cells for disease research. It has the potential of treating many diseases; this alone should be a good reason. Also many countries have already started their research. In the micros, people would have the ability to be treated for diseases; therefore, live a longer and healthier life.
I believe that Harvard should be allowed to uses those cells for disease research. It has the potential of treating many diseases; this alone should be a good reason. Also many countries have already started their research. In the micros, people would have the ability to be treated for diseases; therefore, live a longer and healthier life.
McDonald's raises earnings outlooks
McDonald's reported that they expected higher earnings than previously announced. McDonald's announced 3rd quarter earnings of 61 cents a share, higher than the 49 cents earlier predicted by analyst. McDonalds announced that these eanings were despite the hurricanes and other bad weather that effected the southeast and Atlantic states over the last few months.
This earnings report would suggest that the demand for fast food is inelastic. During hrricanes people are still demanding Big Mac's. After last years release of the documentary "Super Size Me," one might even suspect that the demand for Big Mac's is the same as that of illicit drugs. "Super Size Me" portrayed a vegetarian man who by experiment decided to eat nothing but McDonald's for a month. The man exhibited classic signs of withdrawal due to chemical dependance when he hadn't eaten anything for a while. The man's health deteriorated to near dangerous levels. This didn't even make a serious dent in the fast food Goliath. Instead of cocaine, America is crying for a Big Mac and fries.
www.msnbc.com
This earnings report would suggest that the demand for fast food is inelastic. During hrricanes people are still demanding Big Mac's. After last years release of the documentary "Super Size Me," one might even suspect that the demand for Big Mac's is the same as that of illicit drugs. "Super Size Me" portrayed a vegetarian man who by experiment decided to eat nothing but McDonald's for a month. The man exhibited classic signs of withdrawal due to chemical dependance when he hadn't eaten anything for a while. The man's health deteriorated to near dangerous levels. This didn't even make a serious dent in the fast food Goliath. Instead of cocaine, America is crying for a Big Mac and fries.
www.msnbc.com
10/12/2004
New iPod
Rumors are floating around that Apple will introduce a new 60 gig iPod with color photo capabilities for the holidays. Some speculate that the cost will be around $500. Currently, the iPod ranges in price from $249-$350 depending on the size of memory.
Competitors are trying to catch up to Apple by introducing similar products, some even offer other features such as fm tuners. Noticeably, many of the competitors' prices for similar devices with the same memory or even more, are cheaper than the iPod. Yet, looking at sales, more than 4 million have been sold since its introduction. In the past quarter iPod sales accounted for 12.4 percent of Apple's overall revenue. It doesn't look like things will be slowing down, even if the rumor of the new iPod is just a rumor.
It would appear that the demand for the iPod is inelastic when it comes to cross-price elasticity. It would be interesting to survey if and why consumers prefer the iPod to other similar products. Maybe it is the brand-name that people trust or maybe it is the quality. A regression test could indicate if there is or isn't a relationship between the quantity of iPods sold and the price of competing products.
Competitors are trying to catch up to Apple by introducing similar products, some even offer other features such as fm tuners. Noticeably, many of the competitors' prices for similar devices with the same memory or even more, are cheaper than the iPod. Yet, looking at sales, more than 4 million have been sold since its introduction. In the past quarter iPod sales accounted for 12.4 percent of Apple's overall revenue. It doesn't look like things will be slowing down, even if the rumor of the new iPod is just a rumor.
It would appear that the demand for the iPod is inelastic when it comes to cross-price elasticity. It would be interesting to survey if and why consumers prefer the iPod to other similar products. Maybe it is the brand-name that people trust or maybe it is the quality. A regression test could indicate if there is or isn't a relationship between the quantity of iPods sold and the price of competing products.
Is the Flu Vaccine Outdated?
Recent problems have arisen due to the lack of flu shots available. In the past, there have been many different companies that make flu vaccines for the United States and other parts of the world. There were 25 makers in the 70's and now there are only 2. One of the largest factories of the flu vaccine is located in England and they have been shut down by the British regulators. That factory accounted for 46 million doses of flu vaccine for the United States. Also the flu vaccine that is given is not always dependable because there are hundreds of different types of diseases that can occur and the companies guess only one.
Another problem is how they manufacture the flu vaccine that they will use in the United States. They use a 30 year old system of using chicken eggs to yield a seed vaccine. Then after many months they can make it into a shot. Drug companies and many researchers believe they can update the system with using reverse genetics and then incubating the virus in humans and monkey cells. This will be more effective than eggs. I believe this is important because the flu virus kills an average of 36,000 American and hospitalizes another 114,000 per year.
Another problem is how they manufacture the flu vaccine that they will use in the United States. They use a 30 year old system of using chicken eggs to yield a seed vaccine. Then after many months they can make it into a shot. Drug companies and many researchers believe they can update the system with using reverse genetics and then incubating the virus in humans and monkey cells. This will be more effective than eggs. I believe this is important because the flu virus kills an average of 36,000 American and hospitalizes another 114,000 per year.
10/11/2004
A Substitute Product for Online Dates
Dating services are second only to the porn industry for paid Web content. Until this year, revenues for some of the largest dating services were doubling each year. But all of that is starting to change. Growth has slowed dramatically, and workers are being laid off. The question is why? Isn't the demand for meeting people the same? Are people going back to the old fashioned way of dating? According to the article in the link above, part of the reason is because the novelty has worn off. In economic terms one could say that the marginal utility of using online dating services for some customers has reached 0 (or less). But the change is also due to substitute products. Mobile devices are taking the place of online dating services. Text-messaging services have sprouted up in San Francisco as well as cell phone services that alert a user when a "friend" from the service is in close proximity. The newer services are also doing a better job of matching people with similar interests in chat rooms. I guess you could say the marginal utility for using the new services is higher for some customers for using the new services than it is for the using older online dating services.
Is Starbucks Elastic or Inelastic?
With the oil prices rising, much of the products we take for granted are increasing in price. Oil prices are not the only thing going up. Recently, the price of sugar and coffee beans has had a quick increase in price. Starbucks, one of the leading coffee retailers, has announced an 11 cent increase to their coffee products due to sugar and coffee beans price increases. Starbucks is known for great expensive coffee. Comparing coffee from other stores, Starbucks is one of the most expensive by far. The management is betting on an addiction to Starbucks coffee to keep them from losing business.
I believe Starbucks will do financial fine with this price increase. Coffee is an inelastic good. On the other hand, Starbucks coffee is more expensive than their competitors. But Starbucks sells more than coffee, it is a coffee experience. Starbucks also puts in more caffeine per drink than other companies. This helps with an advantage to keep customers at Starbucks. This is what management is betting on.
I believe Starbucks will do financial fine with this price increase. Coffee is an inelastic good. On the other hand, Starbucks coffee is more expensive than their competitors. But Starbucks sells more than coffee, it is a coffee experience. Starbucks also puts in more caffeine per drink than other companies. This helps with an advantage to keep customers at Starbucks. This is what management is betting on.
Hazardous Drivers
When it comes to bad drivers, senior citizens and teenagers take most of the blame. In 2002, America had 35.6 million people 65 years of age and older. That number is expected to double by 2030 as the baby boomer era comes to an end. This generation expects to keep driving and buying new cars for many more years. Furthermore, car companies such as Ford, General Motors, and Honda are working to keep this influential demographic age group behind the wheel by designing cars that could radically improve safety.
These car companies are conducting studies that mimic the effects of aging, such as stiff joints and poor eyesight, to improve their vehicles for the older generation. They are also designing voice recognition systems to monitor the cars various controls, crash proof sensing systems, downloadable improvements and other digital systems.
All of these studies could greatly improve the safety for the baby boomers. And baby boomers aren’t the only ones that will buy these technologically advance vehicles. Will these advancements be as effective, or rather ineffective, as the seatbelt law? Will technological improvements lead to people feeling safer which in turn lead to more hazardous driving?
These car companies are conducting studies that mimic the effects of aging, such as stiff joints and poor eyesight, to improve their vehicles for the older generation. They are also designing voice recognition systems to monitor the cars various controls, crash proof sensing systems, downloadable improvements and other digital systems.
All of these studies could greatly improve the safety for the baby boomers. And baby boomers aren’t the only ones that will buy these technologically advance vehicles. Will these advancements be as effective, or rather ineffective, as the seatbelt law? Will technological improvements lead to people feeling safer which in turn lead to more hazardous driving?
10/10/2004
Hurray for Honda
Honda has announced that with its new hybrid Accord V-6 model coming out, sales of its hybrid vehicles in the United States will catipult to over 45,000 next year. Honda expects that its Accord hybrid sales will amount to some 20,000 cars next year. Honda is planning to market the hybrid to, "affluent, well-educated professional of around 50, with a household income of $100,000-plus."
The microeconomic implication of this recent development is that with hybrid sales taking off, American's are now being seen responding to surges in oil prices. Also, Honda found an incentive in continuing to develop and release models that would further its plans to provide an adequate return on its investment while at the same time further protecting the environment. Consumers are responding to incentives in that the new hybrid vehicles get better gas mileage which means less money at the pump.
The microeconomic implication of this recent development is that with hybrid sales taking off, American's are now being seen responding to surges in oil prices. Also, Honda found an incentive in continuing to develop and release models that would further its plans to provide an adequate return on its investment while at the same time further protecting the environment. Consumers are responding to incentives in that the new hybrid vehicles get better gas mileage which means less money at the pump.
10/09/2004
Factors Affecting Markets
Downbeat Jobs Data Pressure Stocks
Major indexes in the stock market fell this week. Despite 90000 plus jobs created this month, stocks had a hard time keeping up with analyst expectations. Experts contribute the bearish week in the market on a combination of record high closing prices for oil, job growth falling about 60000 jobs short of estimates, and a slip in consumer confidence. Like a regression analysis: log stock market= b0 +b1log oil price+ b2 (estimated job growth – actual job growth) + b3 log consumer confidence + u, experts suggest these three variables are greatly responsible for the lack of performance this week.
The anticipation for a growing market may back fire causing large sell offs if anticipated oil prices and job rates don’t reach their suggested levels.
source: http//www.msnbc.msn.com/id/3686270/
Major indexes in the stock market fell this week. Despite 90000 plus jobs created this month, stocks had a hard time keeping up with analyst expectations. Experts contribute the bearish week in the market on a combination of record high closing prices for oil, job growth falling about 60000 jobs short of estimates, and a slip in consumer confidence. Like a regression analysis: log stock market= b0 +b1log oil price+ b2 (estimated job growth – actual job growth) + b3 log consumer confidence + u, experts suggest these three variables are greatly responsible for the lack of performance this week.
The anticipation for a growing market may back fire causing large sell offs if anticipated oil prices and job rates don’t reach their suggested levels.
source: http//www.msnbc.msn.com/id/3686270/
10/08/2004
U.S. payrolls grew modestly in Sept.
During this electoral year, there isn’t much that democrats or republicans can agree on. One exception is that both parties agree economic growth is inevitable for the next 12 months. Today October 8, 2004 a Job Growth report was published. The report found growth to be not as substantial as was anticipated for the month of September. The democrats are blaming the lack of growth on the republicans, and the republicans are blaming the bad weather in Florida. Regardless, new jobs fell short of expectations. In the vice-presidential debate on Tuesday, Edwards suggested many jobs were lost do to outsourcing of American jobs to a global labor force. This statement drew a bit of a question. In a perfectly competitive marketplace isn’t the greatest optimal market the one in which has the lowest cost perpetuating the highest return? Wouldn’t the outsourcing of jobs be considered a strictly profit seeking motive which would in turn yield a benefit to all Americans?
source: http//www.msnbc.msn.com/id/6205119
source: http//www.msnbc.msn.com/id/6205119
10/06/2004
Emerging From Bankruptcy
United Airlines in an effort to emerge from bankruptcy has begun to reduce the number of flights it makes to the U.S. Glenn Tilton, United Airlines' chairman, president, and chief executive officer said, “fundamental changes in our industry, including ongoing high fuel costs, intense pricing pressure, and continuing overcapacity, demand that we take aggressive steps now in implementing this plan to ensure that United remains competitive.” The business world today is ever-changing and in order to stay in the game businesses will have to make some very important decisions. United Airlines found it necessary to begin downsizing, and some companies may find that they need to completely restructure.
I found this article pretty interesting because it relates to a blog that I did earlier in the semester. My blog was about Aron Ralston, the man that cut off his arm that was trapped by a rock to save his life. Aron found that it was more important to live without an arm than to die ensnared by a large boulder. United Airlines is much like Aron in the fact that they were going no where but down. So in an effort to save their life (business) they had to start cutting costs somewhere. United chose to cut the size of their fleet and to reduce their U.S. flights. Was this a good decision? Well, if the benefits outweigh the costs I believe that it was.
I found this article pretty interesting because it relates to a blog that I did earlier in the semester. My blog was about Aron Ralston, the man that cut off his arm that was trapped by a rock to save his life. Aron found that it was more important to live without an arm than to die ensnared by a large boulder. United Airlines is much like Aron in the fact that they were going no where but down. So in an effort to save their life (business) they had to start cutting costs somewhere. United chose to cut the size of their fleet and to reduce their U.S. flights. Was this a good decision? Well, if the benefits outweigh the costs I believe that it was.
Beef up, Beer down
With the recent over-emphasis on low-carb diets, beef sales are good. They are really good as most would expect. Yet, one idustry that is feeling the effects of the high demand in low carb foods is the beer industry, as well as spirits and liquour. After a steady growth over the past seven years, they have seen a steady decline since 2003.
To relate this scenario to what we've been talking about in class, it would appear that beef and beer are substitute goods in a sense. More specifically, low-carb foods and high-carb foods are reacting oppositely to a change in the publics' preferences. As the demand for low-carb foods goes up, naturally the demand for high-carb foods such as beer goes down.
It would be interesting to research prices and see how they have been affected over the past two years or so. It is interesting how certain things can become trends and then have an affect on something we might not consider to be related. Of course, now beer companies are developing low-carb versions so that they can adjust to tastes and preferences.
To relate this scenario to what we've been talking about in class, it would appear that beef and beer are substitute goods in a sense. More specifically, low-carb foods and high-carb foods are reacting oppositely to a change in the publics' preferences. As the demand for low-carb foods goes up, naturally the demand for high-carb foods such as beer goes down.
It would be interesting to research prices and see how they have been affected over the past two years or so. It is interesting how certain things can become trends and then have an affect on something we might not consider to be related. Of course, now beer companies are developing low-carb versions so that they can adjust to tastes and preferences.
Economy Back On Track
Oil prices have reached record highs earlier in the week. Price hikes have caused much speculation regarding the fickle world economy. Estimations of world economic growth have been estimated to reach 5%. However, with oil prices surging, many economists fear that growth may be replaced by decline. Federal Reserve Bank President Robert McTeer feels that although oil prices are rising the economy is safe from the impact of high oil prices. McTeer compares the price hikes of today to the price hikes in the 70’s. One major difference between the seventies (which resulted in economic burden) crisis and the oil problems today is supply. The price hikes in the seventies was do to a shortage of oil. Today the prices today are caused by demand. Therefore, oil prices are not damaging the economy. Prices aren’t dictated by a shortage of supply, rather the life style of larger cars and other factors that contribute to high demand.
http://www.msnbc.msn.com/id/6185707/
http://www.msnbc.msn.com/id/6185707/
Oil extends record run to $51.48 per barrel
Reuters reported that oil raised to a record high on Wednesday. This has many fearing a supply crunch during the winter. The article cited as the main reason for the price jump as being due to the up coming elections in the United States and instability in Iraq, as well as storms in the Gulf of Mexico, during hurricane Ivan and the other storms there were nearly 453,000 barrels per day that were being kept from arriving on American shores. With OPEC pumping nearly at capacity this gives little leeway for another long lasting disruption in supply.
Supply had been disrupted by natural disasters. The Hurricane season of 2004 caused supply to drop by half the daily number of barrels pumped by Indonesia (the smallest OPEC member nation). The main reason for the extra high prices was the drop in supply, although the instability in the region obviously attributes for the already high oil prices prior to the major hurricane season. Instability in the Mideast is a major concern that is something that has been a cause for rising oil prices since the 70's. The fact that the U elections are a major factor in the rising oil prices may cite that a changing of commander of chief may be beneficial to relations with OPEC nations and help lower ultra-high oil prices.
The article was found at http://story.news.yahoo.com/news?tmpl=story&cid=580&e=3&u=/nm/20041006/bs_nm/markets_oil_dc
Supply had been disrupted by natural disasters. The Hurricane season of 2004 caused supply to drop by half the daily number of barrels pumped by Indonesia (the smallest OPEC member nation). The main reason for the extra high prices was the drop in supply, although the instability in the region obviously attributes for the already high oil prices prior to the major hurricane season. Instability in the Mideast is a major concern that is something that has been a cause for rising oil prices since the 70's. The fact that the U elections are a major factor in the rising oil prices may cite that a changing of commander of chief may be beneficial to relations with OPEC nations and help lower ultra-high oil prices.
The article was found at http://story.news.yahoo.com/news?tmpl=story&cid=580&e=3&u=/nm/20041006/bs_nm/markets_oil_dc
10/05/2004
Ethics 101 for CEO's
Business Week magazine wrote an article Ethics 101 for CEO's (Jan. 26, 2004). Darden Graduate School of Business Administration at the University of Virginia is going to conduct research on developing a business school ethics program, and lead seminars for the nations CEO's. Implementing this program will help set and maintain the highest ethical standards which start at the head of the company. This effort will support CEO's and other business leaders to maintain a culture of ethical business practices. There is a concern whether this program will actually work. Will CEO's with big egos listen on what is good ethics practice? By the time CEO's become a CEO, they are set already in their own ways.
Ethics should play an important role on how a business is run. However, are ethics really practiced? Ethics can be a waste of time because ethical terms are easily shoved aside in the heat of competition. Look at ERON, how ethical where some of the upper management?
Ethics needs to be started from the top. If the CEO of the company is following their ethics codes then lower management and employee's will follow and if not started from the top, the rest of the company will follow. Ethics should be practice in all types of business but will this ethics program/seminars will actually work?
Ethics should play an important role on how a business is run. However, are ethics really practiced? Ethics can be a waste of time because ethical terms are easily shoved aside in the heat of competition. Look at ERON, how ethical where some of the upper management?
Ethics needs to be started from the top. If the CEO of the company is following their ethics codes then lower management and employee's will follow and if not started from the top, the rest of the company will follow. Ethics should be practice in all types of business but will this ethics program/seminars will actually work?
10/04/2004
high oil prices threaten global economy
This article entitled "High Oil Prices Threaten Global Economy" touches on four subjects: China's fixed rate currency, high oil prices, debt relief to Iraq, and debt relief to the world's poorest nations.
China's fixed rate currency is one of particular interest do to it's economic dilemna.
After World War 2 most nations had a fixed rate on their currency. The rate usually followed some other benchmark (the US dollar). These fixed rates for the most part don't exist today except for a few exceptions, China being one of them. China has maintained a fixed rate on the yuan, ironically enough to keep it selling at a discount. The way China keeps their currency fixed is by buying US surplus dollars with their yuan (supply & demand). When China runs out of US dollars it has to buy more with a discounted currency, devaluing the currency further and making a form of loan to the US government.
The reason China wants to keep the yuan cheap is to keep recieving a trade surplus that helps the Chinese economony. At the same time, an estimated 4 million jobs have been lost do to the lopsided exchange rate. The Us can purchase lots from the chinese with a dollar; however, the chinese can't buy much from the US do to the undervalued juan.
OPEC: How Far Is Too Far?
OPEC has been getting media attention lately as oil prices are on the rise. These mostly middle-eastern countries supply about 40% of the world's crude oil resources combined and many countries rely on OPEC, including the US. The OPEC website claims the organizational goal is "to bring stability and harmony to the oil market by adjusting [the] oil output to help ensure a balance between supply and demand." From the point of view of a consumer, this is the absolute opposite of what has been happening in the economy. OPEC is taking advantage of the fact that demand for oil is high by minimizing the available supply and raising prices. The balance they speak of surely is not helping Americans balance their checkbooks every month! In contrast, from a managerial point of view, oil is very inelastic and OPEC can afford to stretch the pocket books of Americans. Yes, there are alternatives to fueled cars - hybrid models, bikes, buses, walking - but no substitutes to oil. Unfortunately, we cannot put milk or coke in our engines. Realistically, driving is more convinient and comfortable; OPEC knows Americans are able and willing to pay, so they are making a desirable equilibrium point to maximize their profits. What good business organization wouldn't do this? Does the phrase, "it's not personal, it's business" ring true in this situation?
On a side note, if OPEC supplies 40% of the crude oil resources, where is the other 60%?
On a side note, if OPEC supplies 40% of the crude oil resources, where is the other 60%?
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