Holiday Sales

This christmas it will be interesting to see what kind of sales will take place. Just with Thanksgiving sales the retailers did not get enough sales. In an article on MSNBC it talks about how well retailers did for the two days following thanksgiving. Companies such as JC Penny's, Sears, and Roebuck and Co did really well in its sales. The one company that did not do well was Wal Mart. It was said that because Wal Mart did not lower its sales enough like it did last year it was hurt by low sales on the days following thanksgiving. Most sales are expected to be online this year. Stores are worried about sales being better than they have been in the past. Will they get better?

Daylight Saving Time

Daylight Saving Time can be a real pain come April and October of each year. Why do we really have Daylight Saving Time anyways? I've always thought that we could just have one set time that everyone follows. Of Course, my idea would probably cut down on a lot of confusion, but according to a recent article I found on the internet we would miss out on a lot of energy saving opportunities. The article stated that, "one of the biggest reasons we change our clocks during Daylight Saving Time is that it saves energy. Energy use and the demand for electricity for lighting our homes is directly connected to when we go to bed and when we get up." The article also said that on average about, "25 percent of all the electricity we use is for lighting and small appliances, such as TVs, VCRs, and stereos." Therefore if we can cut down on the amount of time we use these types of applicances we can conserve energy, and Daylight Saving Time does that.

I never really realized how much the time of day could affect our energy consumption, but the idea makes a lot of sense. The United States is not the only country that practices Daylight Saving Time either. The Daylight Saving Time concept is one that is practiced worldwide. Some countries begin and end Daylight Saving Time on different months than the United States, but the idea is basically the same. Some countries are even known to adjust their clocks up to two hours forwards or backwards. Sometimes the time changes can be a hassle, but the logic behind this concept is really quite interesting. I highly recommend you read the article that I have hyper-linked to this post.

Shoplifting Costs Increasing

A recent article on msn.com discusses the increased proliferation of shoplifting and the subsequent costs incurred on suppliers. Heading into the busy holiday shopping season, two recently released reports state that theft costs are starting to become a national problem and a growing financial burden. Companies must spend more money on surveillance equipment, training, and the legal costs associated with theft.

According to the 16th Annual Retail Theft Survey by Jack L. Hayes International, nearly $2 billion was lost to shoplifting and employee theft in 24 U.S. retail companies in 2003. Retail theft -- both by employees and shoplifters -- increased 4.7 percent last year from 2002.

Increased shoplifting is causing an increase in supplier costs which in turn could result in higher prices for consumers.

Many Federal Employees Can Retire in Five Years

Washington may soon be facing a problem when "roughly half of current employees will be eligible to retire between now and the end of 2008, including aslmost 70 percent of supervisors." The article, written in U.S. News and World Report, is calling the potential problem a "brain drain." Many of the departments and agencies are noticing that many of their employees are going to become eligible for retirement in the next few years and are trying to create incentives to retain its workforce until qualified individuals can replace them. Some agencies have begun to market themselves to potential applicants the same way a company would in the private sector. One example is NASA has started putting booths at job fairs at many colleges and universities around the country to attract younger applicants. Incentives such as above-minimum starting salary, and payment for interview expenses may also be used to make the job more attractive.

This may be to the advantage to many of us who are looking for jobs right out of school. The article does point out that many choose to work in the private sector because more money can be made outside government agencies. There are several jobs that pay really well, but those jobs are so competitive that it is nearly impossible to get those jobs. Maybe now that the need for new employees is going to go up in the near future, the job market will become stronger and be to the advantage of the job seeker than to the advantage of the company.

International Pressure to Fix Trade Gap

America's international trade deficit has continued to grow for many year, but economists and those on Capital Hill have put it on the back-burner and now that has drawn the attention of many in the global market. "Overseas officials and international trade organizations have called on the U.S. to deal with the problem before it inflicts global pain," states the author. At the same time the U.S. has become somewhat dependent of global economy. So many solutions and strategies are proposed by policymakers, but the author writes that there is no easy solution. Increased international demand could help the U.S. exports, but growth in both the European and Japanese regions did not meet recent expectations and are thus becoming less dependable for the U.S. to increase its exports. Another idea mentioned would be to increase U.S. savings because it would decrease the need for the U.S. to depend on international funds.

Maybe the international attention will raise the sense of urgency by the U.S. and the U.S. will realize the enormous impact we have on the global economy. The global economy is so dependent of the U.S. and hopefully economists and Capital Hill will find a strategy that will be effective for both the U.S. economy and the global economy.

Tuition Hike Protest

Approximated 7000 college students from around the state of California protested against a proposal that would increase tuition by 44%. Governor Schwarzenegger outlined this proposal do the overwhelming debt that California has witnessed in the last four years. After the increase, the cost of tuition would still be greatly subsidized by the state. States have increased their tuition far higher then the rate of inflation in the last 15 years, and enrollment hasn’t subsided. The demand for higher education has accelerated right along with price keeping a steadily increasing equilibreum. A competitive job market is making the demand for schooling increase. Students don't want to pay higher prices for school but the alternative is not a viable option. No degree makes the individual in many circumstances less marketable. The guestimation is that although students will kick and scream and protest, in the end you will find them in the classroom.

The Story About Postal Rates

If you believe this article stamps should cost around 24 cents right now. But the price of stamps keeps rising faster than overall inflation. That is partly because the post office has to support itself with its own revenue, without any additional funding from the government. (Even if the government provided funding consumers would still have to pay through taxes). In a lot of ways the post office operates like a private business, and has to deal with heavy competition from companies like UPS and FedEx as well as e-mail. Recent terrorism threats have increased costs as well. Continuously raising prices might drive away customers, and create a need to raise prices still higher.

The U.S. postal service is getting faster though. 15 years ago sending a letter from the U.S. to Europe took around 2 weeks, whereas now it takes 5 days. While e-mail seems more practical for writing to friends in Europe, it is still sometimes necessary to send tangible letters or cards. But how much will postal prices rise? International friends are becomming more and more expensive.

David Stern is A Chump

Just about everyone in the sports world knows about what happened Friday night between the Pacers and Pistons. For those of you who don't there was a brawl that broke out between fans and players. Artest and Stephen Jackson went a little beyond the scope of sanity; but does this warrant a 5 foot nothing fat out of shape chump without a stitch of athletic experience to judge the most athletic entertainers in the world. David Stern has no idea what it is like being pushed to your limits by media and drunken fans day in a day out. Stern doesn't have the credentials to judge these men as peers. It is dusturbing that the NBA (most likely featuring the best athletes in the world) has a chump governing it. In terms of economics, David Stern is most concerned about dollar signs. He wants fans to generate revenue by following the NBA and participating as much in the game as possible. In this case the fans were behaving like monkeys. Throwing beer and other drinks on men who are playing a game with high end emotion is unbelievable. Drunken fans talk trash about wives, family members, and ridicule the most intimate aspects of one’s life. Often times these fans are overheard by those very players immediate friends and family who went to support and enjoy the loved athlete. When heckling ones most intimate emotions is combined with physical abuse, you have one heck of a problem. The David Sterns knows nothing of physical competition or the emotions that come with pushing oneself to the brink of mental and physical stress. Many argue that Artest is a psychotic along with Stephen Jackson, and Jermain O'neil. Columnist Bill Simmons blames Artest for “going after the wrong guy” Simmons says “It wasn’t that guy but the guy behind him who threw the cup of beer”. When you temporarily lose sanity do to the abuse of 20,000 it is hard to tell one apart from the other. Although only say 30 people were guilty of throwing things, most everyone is guilty of defemation of ones character.

The Red Hat Society

A new craze has increased the demand for red hats and flamboyant purple outfits. The Red Hat Society is an organization for fun loving ladies over 50. In the past couple of years, there has been a large increase of chapters, web sites, and merchandise related to the Red Hat Society.

The owner of a Merle Norman store started selling Red Hat items about a year ago. She had a lot of inquiries and people were finding it difficult to find a red hat or any kind of accessories that go with a red hat.

What a great idea...all around us are little ideas just waiting to be found that would have great market potential.

Brain food

If you had the chance to take a pill that would enhance your memory and sharpen your mental response would you? Who wouldn't? But why do we need these pills? If these pills can help the ill then they should be sold. But why are they needed by those who are healthy?

In the past decade there has been much advancement in genetics, molecular biology, and brain-imaging technology. There are over 40 potential enhancers currently being developed. This can help cure the 4.5 million people that suffer from Alzheimers. In 15 years, an expected 6 million will be diagnosed with it. I personally can tell you that this would be a miracle. Some people do not know how hard it is to look at a family member and tell them you love them when they have no idea who you are. Live's can change if these new drugs become a success.

Will it be taken advantage of? Will people be buying this drug, perhaps on the black market, in order to help themself? Will businesses want this drug so that they can remember everything about their customers? This drug could change everything.

Rap album or NBA?

Indiana Pacers player Ron Artest will now be able to take the time off he asked for a month ago to do his rap album. Not because he asked nicely but because he is suspended from the NBA for the rest of the season. Friday night Artest ran into the stands during a game because a fan threw a drink at him. This fan was upset because Artest had fouled his Detroit Piston, Ben Wallace. This lead to the biggest brawl in NBA's history.

Not only will Artest not be playing this season but he will also not recieve his $5 million salary pay. Sadly, this probably means nothing to Artest. Did Artest really learn a lesson or is he just getting this time off now for his rap album?

Artest was not the only player suspended from Friday nights brawl. Stephen Jackson is suspended for 30 games and Jermaine O'Neal for 25. The home team of Detroit also has players suspended. Ben Wallace will sit out 6 games and Anthony Johnson 5. Four other players are suspended for one game because they left the bench during the fight. These players are Indiana's Reggie Miller and Detroit's Chauncey Billups, Elden Campbell, and Derrick Coleman. All suspensions are without pay.

Are these too harsh? Some say they are because the fans need to be in control. Others say it will continue to happen unless harsh punishment occurs. I think harsh punishment is not a 10 game suspension. Harsh punishment is not allowing them to play in the NBA again. Suspension just holds back a pay check that some can live their entire life off of.

Good Samaritan

Recently there have been many issues of alcohol poisoning. College students drinking too much, passing out on the floor, and others just staring blindly at them. These college students were killed because no one called 911. Others hestitated, making it too late for help. Their friends were underage and did not want to get in trouble.

Is this right? Should a person risk getting a ticket for "minor in possession" for their friends death? Is it right to ticket a person for underage drinking when they are helping save a life? Or does it teach them a lesson as well?

University of Missouri-Columbia has now proposed a "Good Samaritan" policy to help solve this issue. This would excuse any student who reports an alcohol emergency from harsh penalties. Instead this student may be required to take part in alcohol classes.

Is this what should be done for students? Will this increase the number of incidents or will it help save more lives?

K-Mart and Sears Merger

On the 17th of November, Sears Roebuck was acquired in a friendly merger with K-Mart Holdings Co.. The new entity will be called Sears Holdings. The merger worth an estimated 10.9 billion dollars was accomplished in a stock swap Sears stockholders are given the choice of receiving 50 dollars per share of Sears Roebuck common stock, or half a share Sears Holdings common stock per SRC common stock. K-Mart were to receive a share of SHC per K-mart share. K-Mart shares closed at 101&1/4 after the merger was announced.

The most surprising part of the merger is that K-Mart is actually the new parent company, considering that this company has just emerged from bankruptcy this news is quite a favorable assessment of K-Mart's management and there ability to turn what was K-Mart fall apart into a new retail powerhouse.

This new merged company promises to be able to give the number 2 retailer in the US (Home Depot) a run for their money and giant Wal-Mart reason to squirm. With strong exclusive brand names like, Craftsman Tools, and Martha Stewart Living, Sears Holding will slip strongly into the position of 3rd largest retailer in the Untied States.

Record Low Dollar

On Friday, Alan Greenspan warned that two of things that are weakening the dollar - trade deficit and budget deficit - need attention. How does the weak dollar affect us? Rates increase with a weak dollar, meaning the cost of money can affect both us as a consumer and our businesses. Weak rate also lead to a decrease of domestic competitions because goods can be produced cheaper overseas. More imports from Americans can make the problem even worse because it will lead to a larger trade deficit. U.S. companies that buy raw materials and parts overseas will see costs rise in dollar terms. But if they can't raise prices for their products, it could cut into profits and perhaps, hiring. The weak dollar has also hit U.S. consumers by putting upward pressure on oil prices.

Although there are plenty of negative affects from a weak dollar, there are a few positives. Such as, companies that sale overseas have a more competitive market and may see an increase in sales. U.S. tourism is another industry that can increase. Foreigners are more likely to visit since their currencies can buy more here, and U.S. vacationers who might travel abroad are more likely to stay home if dollar weakness makes overseas travel too expensive.

Job Growth

Job growth soared in October, although some economist just believe it shows a "bounce-back" from the hurricanes in September. Although the average work week stayed at 33.8 hours, professional and business services and retail sectors were adding the jobs while there was a job loss in manufacturing. Also, there was an increase of hiring in the construction sector but many are doubtful that it will continue. Interestingly, average pay also increased by 5 cents an hour. Why is labor increasing? Will it continue? What is making more business hire at an increased rate while the amount of hours worked is staying the same?

Consumer Prices on the Rise

I know that this is more of a macro subject, but it caught my attention. Consumer prices rose by 0.2% in October, much greater than was expected. The rise was due mostly to high energy and food prices. The question is whether this will continue and what will be the outcome for the U.S. About a week ago, the FOMC raised the short-term interest rates to 2%, and many economists speculated that this would be a "rest stop" to the let the economy gain even more traction before raising the rates again. Now that with the news of price level on the rise, the FOMC may be forced to raise the interest rate again in December to prevent inflation.

The economy is growing stronger as unemployment rates are dropping, but it isn't as strong as we would like to see it. This could be bad news for the U.S. if interest rates go up to battle inflation because it could reverse the progress we have made recently. Income and spending could go down, and unemployment could go up again. Hopefully the price level subsides and things continue to improve.

Kmart and Sears!?

Who would have guessed that K-Mart and Sears would have merged to create a new company! Sears Holding Corp. is the fresh title. “The new company is expected to have $55 billion in annual revenues and 3,500 outlets. It will be the third largest retailer in the U.S., after Wal-Mart Stores Inc. and Home Depot Inc.”

I am shocked by this merger! I really do wish the best for K-Mart and Sears, but it really doesn’t make too much sense. Both companies have been struggling to keep up as of late, and both companies have different images!

Sears has a great reputation for the quality of their tools and other home appliances. I’m wondering how that will match up with the saying “K-Mart Fall Apart!” Is Martha Stewart still going to be around and involved with Sears Holding Corp.? I really hope that they have some excellent ideas for success, because I think this will be a huge challenge.

Christmas Reading

Truck and Barter has a nice list of reasonable reading in economics (although I would avoind Bucholz).

??? RETIREMENT ???

What should we do about Social Security? Should the government allow individuals to allocate a portion the social security funds? What will the government do about the baby boomers? What will government do about the echo generation? Are these even the questions we should be asking?

The reality staring at each of us is that Social Security, more than likely, will not be there for retirees in the not too distant future. The question each of us should be asking is what am I doing to prepare for retirement? People are saying they can’t rely on Social Security for their retirement, but they still are not saving adequately themselves. Though people’s words are say they can’t rely on Soc. Sec., their actions are saying that they will rely on Soc. Sec. The fact remains that something needs to be done to preserve Soc. Sec., but even if it is preserved Soc. Sec. will still not fully fund a person’s retirement. The question that should be plaguing peoples minds is what should I be doing to fund my retirement?

Oil Supply and Demand

Since the ease of the hurricane season, oil prices have fallen $9 a barrel from the record high of $55 a barrel. The last supply numbers however include ominous signs that price is likely to increase. With winter quickly approaching demand is likely to increase slightly and with production levels at only 1% above demand levels any increase in demand is likely to have proportionate effects on price.

In the latest report by the U.S. Department of Energy said that stockpiles of crude oil rose by 800,000 barrels. However, heating oil and diesel fuel fell by 1 million barrels or 14% below year ago levels. This is why diesel prices are often higher then gas prices at local gas stations.

Diesel fuel prices have soared above $2.10 a gallon up 60 cents from a year ago. U.S. Economic growth has contributed to part of this increase. U.S. consumers have been spending more and many of their purchases are contributed to higher imports. In fact, there has been a 15% increase in imports. Trains and trucks are packed full. Interstate commerce has had their hands full the last couple months and it is taken a toll on the diesel fuel supply.

Oil Traders have been keeping a close watch on oil supplies. Princeton University’s geologist Kenneth Deffeyes predicts global output will reach its limit by late next year and then gradually begin to decline. As price to sustain such production begins to divert consumers, demand will have to fall.

In the more immediate future, other suppliers of oil such as Yukon in Russia, and Nigeria both have political pressures that at any time could cause problems in the business cycle. Any reduction in supply would greatly impact price anywhere from fifty on up per barrel.