Archive for July 2011
Corporate Profits at Record Levels
Federal Budgeting is Nutty
Debt Ceiling Debacle
Debt Ceiling Debacle: In the foreign exchange (FX) market commodity-sensitive Australian and New Zealand dollars have hit record highs. Gold is also galloping upwards. There is also a strong desire to hold super safe Swiss Francs. Banks and money market funds are also rapidly boosting liquidity (hurting equity prices). All this is being done by…
Read MoreNBA Lockout
With an NBA lockout a possibility some NBA players are threatening to play in Europe. Don’t believe them. Aside from legal issues there are physical worries: an injury suffered while playing in Europe could void a player’s NBA contract. Also, it’s doubtful any European teams could afford any marquee NBA players. Deron Williams just signed…
Read MoreMillenials
The Millennials (born ‘81 and ‘00) are the largest age group in the US, numbering 85 million or 28% of the total US population. By contrast, there are just 79 million Baby Boomers (26%), and 61 million Generation Xers representing 20% of the population and born between ‘64 and ’80. The Millenials, like the Boomers…
Read MoreGimmie Growth
June’s trade deficit swelled 18.8% to $49.9 billion, the highest since 10/08 and much worse than economists (what do they know) predicted. If annualized, the June deficit would be almost $600 billion. That data along with recent inventory data suggest Q2 growth will very sluggish; 1.5%-1.7%. While certainly not recession territory, we have an economy…
Read MoreHow Much Government
Children Bicker, the small minded squabble. When these verbs are used to describe what Boehner, Reid or Obama do it’s implied that they’re arguing about trivia. NOT! They are adults with very different ideas trying to shape public policy as best they can. They argue about vast flows of $ and policies with huge consequences.…
Read MoreAirline Deregulation Hits Airlines
30 years after deregulation most airlines lose money. While high fuel prices don’t help they have only played a role recently. The key factors are plummeting demand following 9/11 that left demand weaker in ’09 than it was in ’00 and large cost difference between legacy carriers (LC) and low-cost carriers (LCC). LC costs have…
Read MoreAirline Bag Fees
US airlines collected $3.4 billion in bag fees in ’10, up 24% from ’09 according to a DOT report. Absent fees, airlines would probably be losing money. Las Vegas based Allegiant generated 29.2% of all their revenue from extra fees, more than any airline in the world. Among US carriers Delta generated the most revenue…
Read MorePro Sport, Small Impact
Despite its popularity, when compared to other industries, pro sports is very small. The $400 million recently paid for the Detroit Pistons is equal to the 468th ranked firm in the S&P 600 Small-Cap index (Stein-Mart). And Stein-Mart makes 10 times the revenue. When sports franchises try to shake down local governments for free stadiums,…
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