As American shoppers flee big box stores to do more of their shopping from the comfort of their homes, Kellogg is changing its delivery model to adapt to the trend. If shoppers aren't even going to stores, Kellogg won't either. Instead the company will be delivering its products to grocery warehouses where the grocer will decide what to move to retail aisles, and what to keep on hand to fulfill online orders. Annie Gasparro explains the choice at The Wall Street Journal: Kellogg Co. is abandoning its traditional way of delivering some snacks to stores in an effort to cut costs, though it … [Read more...]
Archives for February 2017
This Has Only Happened Three Other Times in the Last 117 Years
The Dow has now increased for the twelfth day in a row. Since 1900, the Dow has achieved this feat on only three other occasions—once in July of 1929, again in December of 1970, and then finally in January of 1987. The good news is that on all three occasions, the Dow went on to rally double-digits. The bad news: those gains didn’t last. Stocks crashed hard in 1929 and in 1987. The best year out of the bunch was 1970 when over the subsequent 12 months, stocks rallied and then corrected, but never fell far below their December 1970 level. A sample size of three doesn't provide a … [Read more...]
What happens when the low-cost producer loses its edge?
China has gained massive market share in manufacturing over the last 15 years. Cheap labor and a managed currency helped China become the world’s go-to factory. But as the FT reports, China has now lost its edge in labor. Wages in China are now higher than they are in Brazil, Argentina, and Mexico. What happens to the low-cost producer when it loses its edge on cost? China could either try to regain competitiveness by devaluing the yuan (a bad choice) or attempt to move up the value chain (a better choice). Whichever direction the country takes, the global economic landscape is likely to … [Read more...]
Taxes Undermine, Exploit and Punish the Productive
Cato Institute's Dan Mitchell details the results of a European Policy Information Center study on how non-income based taxes, like consumption taxes and payroll taxes, affect high income earners. He begins: Back in 2014, I shared some data from the Tax Foundation that measured the degree to which various developed nations punished high-income earners. This measure of relative “progressivity” focused on personal income taxes. And that’s important because that levy often is the most onerous for highly productive residents of a nation. But there are other taxes that also create a gap … [Read more...]
How Much Surprise are You Looking for in Retirement?
Your answer to this question is probably not a whole lot, at least in terms of your investment portfolio. Some surprises may be great, like if you've saved more than you needed, but you could also be devastated by not planning for things like medical expenses. In The Wall Street Journal Glenn Ruffenach writes that retirees often find themselves in surprising situations, whether for better or worse. The surprises ran the gamut, from the wonderful to the devastating. Many readers told us they were surprised that their savings are holding up just fine, although several said that household … [Read more...]
What is Gold Saying about the Market Now?
After selling-off as interest rates spiked following the election, gold has made something of a comeback in 2017. Gold is up over 9% YTD compared to about a 6% gain in the S&P 500. The rally in gold seems at odds with the prevailing sentiment in the stock market. Stock market investors are bullish. The Dow has been up for ten consecutive days. Gold and stocks don't often rise in tandem like they have over the last two months. Is gold trying to tell us something? Is calamity on the horizon? Are rising gold prices a signal that goods inflation is about the rear its ugly head? Is the … [Read more...]
Do Farmers Fear a New Surge of Foreign Organics?
Just exactly where does the flour for that organic bread you've been making your sandwiches with come from? And are the standards there the same as they are in the United States? I've written before that even USDA organic standards are pretty low for anyone looking for the healthiest food. Now American organic farmers are facing a wave of competition from places like Turkey and Ukraine, from which so-called organic grains are pouring in to meet American demand. Jacob Bunge writes in The Wall Street Journal that American farmers are calling the looser standards on overseas organics … [Read more...]
Is Nascar’s Stunning Decline Now Irreversible?: Part II
Yesterday I wrote about the decline of Nascar: Lot's to think about in terms of why there has been such a huge decline in Nascar's ratings as we enter Daytona 500 weekend. Reporters at The Wall Street Journal analyze Nascar's decline. Nascar threw a bash at Kansas Speedway in October to thank Sprint Corp. for being stock-car racing’s top sponsor for 13 years. More than 800 Sprint employees received hot dogs, burgers and seats to a nail-biting race. One thing was missing: a new sponsor. Despite knowing for two years that Sprint was leaving, Nascar didn’t announce a replacement until … [Read more...]
The Stunning Collapse of the Economy in China’s Liaoning Province
Analysts who have followed China closely over the years have always had a difficult time believing the official numbers that come out of the country. To many, China's growth always seemed too smooth and too close to government targets to be believable. But there was never hard evidence that the data was being manipulated. Now there is. The FT reports that growth in Liaoning Province shrank 23% last year partly as a result of officials' attempts to undo the effects of previous over-reporting. Economic output in China’s northeastern industrial province of Liaoning shrank by 23 per cent in … [Read more...]
New Jobs and Growth in Not-so-Isolated Gulf City
The explosion of new oil and gas being produced in America's shale basins is unleashing growth and expansion in cities from Pennsylvania to the Permian Basin of Texas and beyond. Along the Gulf of Mexico, oil towns are growing and connecting as jobs and industry find their way to the coast. ExxonMobil's Energy Factor details the changes happening in Baytown, Texas. The small Gulf Coast city, however, is very much connected and not just to nearby Houston. Baytown boasts a thriving petrochemical and manufacturing hub that is linked to a larger set of communities dotting the Gulf Coast. It’s an … [Read more...]
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