“M&A is the new R&D,” don’t wait for big corporations or government to bail you out, and more tidbits can be found in this TIME magazine article. FYI the government can and does bail out, but not individuals. 🙂
Is It Bad Enough Yet? – NYTimes.com
On the lines of my previous post…
It will be interesting to see how much more dysfunctional our congress + executive branch will be next year. I suspect it will get worse.
Now, what financial instrument can help us make money given an increasingly dysfunctional government? Buy more Citigroup stock since the current spending bill rolls back some regulation in favor of Citigroup? By the way, why on earth should Citigroup be allowed to resume the same reckless risk taking that preceded the most recent crisis? Who voted for congressmen and senators that would even entertain adding these unrelated items to a budget? Also, I believe I saw something in the spending bill descriptions about government supported terrorism insurance. If that doesn’t sound fishy I don’t know what is.
Never mind. Ideas on how to make money in 2015 anyone? 🙂
http://mobile.nytimes.com/2014/12/14/opinion/sunday/mark-bittman-is-it-bad-enough-yet.html?referrer=
More on alternative taxation systems…
I recently posted a Fortune magazine article where Bill Gates of Microsoft and Robert Frank of Cornell advocate a progressive consumption tax system to combat the widening wealth gap. A commentator on LinkedIn suggested I posted the article in jest. I assure you I did not. Allow me to explain.
I agree the “keeping up with the Joneses” mentality is flawed. However, Robert Reich (Aftershock) makes a valid point about the “broken bargain” in America. The bargain: labor leads to “an increase of purchasing power on the part of all the people (Eccles).” That bargain does appear to be broken. The income gap is a at record levels and expanding every day. I believe that fact is irrefutable (LA Times article, USA Today article, among others).
How to fix widening wealth inequality, or whether to fix it at all, is up for debate. Personally, I believe it needs fixing. Reich identifies economic and political threats of growing inequality. Economic: without a flourishing middle class America can not consume what it is capable of producing. This translates into low growth, recessions, bubbles & bursting, etc.
On the political side, we already see inequality-induced manifestations of instability: Occupy Wall Street, Tea Party extremism, protests about police killing unarmed black people (one person chocked to death over $6 in cigarette taxes?), cutting of pension payouts to retirees by 1/3, etc.
No one has a monopoly on the truth. No one. Bill Gates and Robert Frank believe a progressive consumption tax system will work. The LinkedIn commentator disagrees. I thought the progressive consumption tax was an interesting idea but I agree with the commentator: by itself a progressive consumption tax system is not a silver bullet. Reich believes in a reverse income tax system among other prescriptions. Others have suggested taxing wealth not income, flat income taxes, etc.
I presume very few believe the status quo (complicated loophole-ridden consumption and income tax system) leads to a flourishing middle class. The few that like the status quo are those (the 1%) that benefit the most from the status quo. See my Cadence of Finance presentation for more on the widening wealth gap, ineffectiveness of the current tax system, and other (possibly more important) contributing factors.
The widening inequality issue is complicated and will not be solved on LinkedIn nor EfficientMinds.com this week. Hopefully authentic dialogue, where no one believes they have a monopoly on the truth, occurs in the right places so the middle class is restored in America. I agree with Reich on this one: America’s greatness is unsustainable without a flourishing middle class. The status quo is not working.
Ideas anyone?
-Dr. Moore
Fortune magazine: Bill Gates’ solution to income inequality
What is Mr. Gates’ solution: consumption tax. I find the progressive consumption tax by Robert Frank of Cornell University interesting.
Here is the article:
Opening stores on Thanksgiving doesn’t boost sales – Nov. 26, 2014
Walmart CEO:
“It’s absolutely appropriate that we open at 6 p.m. [on Thursday],” WalMart’s U.S. CEO said in defense of the practice that has been criticized widely.
Sure, as long as it adds to the bottom line (which it apparently does not) and the CEO stays home with his family on Thanksgiving day. I know some will say “well, don’t go to work that day” or “stay home from shopping that day.” I totally agree with the latter, don’t shop on Thanksgiving day. But then again, I don’t know what is better for someone else.
However, regarding the former “just don’t go to work that day,” there may be consequences. Your unwillingness to work on Thanksgiving if requested may be seen as insubordination by management. There may be retaliation. Future hours could get cut. Your schedule may change to something undesirable. You may get fired. Quote from a related article:
A lawmaker in Ohio wants stores in the state to pay triple wages for employees who work on Thanksgiving; an effort that comes as Macy’s, the holiday’s quintessential retailer, is allowing its workers to choose whether to work that day.
Both are attempts to counter frustration among workers and their families over holiday store hours that have expanded into the holiday. State Rep. Mike Foley, a Democrat from Cleveland, said his bill would allow employees to bow out of the holiday shift without job sanctions while protecting family time from excessive consumerism.
In a new trend I am going to finish my commentaries on articles with “What can you do?” ideas.
WHAT YOU CAN DO: On Thanksgiving day, don’t go out shopping. Enjoy the company of your family and friends. If their presence wears thin, go take a walk and get fresh air. The absence of customers on Thanksgiving day may shift the focus away from buying more things to time with your family and friends.
http://money.cnn.com/2014/11/26/news/economy/stores-open-thanksgiving-no-sales-boost/?iid=TL_Popular
Opening stores on Thanksgiving doesn’t boost sales
NEW YORK (CNNMoney)
WalMart, Target, Macy’s, Kohl’s, Kmart, Toys R Us. All of these stores open on Thanksgiving Day.
They justify opening on the famous American holiday because of competition. Others are doing it, so they have to as well or they’ll lose out on sales.
“It’s absolutely appropriate that we open at 6 p.m. [on Thursday],” WalMart’s U.S. CEO said in defense of the practice that has been criticized widely.
Yet opening on Thanksgiving does little to boost sales, according to the data from recent years. Instead, it merely shifts some shopping that would have been done on Black Friday to Thursday.
Related: What’s open and what’s not on Thanksgiving
“Ultimately, if you look over the course of the holiday selling season, the fact the stores are opening on Thanksgiving as opposed to Black Friday doesn’t lead to increased sales,” says Howard Feller, a Partner at MMG Advisors, an investment bank specializing in retail and fashion.
If anything, opening earlier and earlier has reinforced to consumers that they might get better deals if they wait, Feller says. Promotions no longer feel exclusive.
Related: Why Black Friday deals aren’t really deals
Many headlines touted a record for Thanksgiving Day sales last year. Over $2.5 billion was spent in stores that day, according to ShopperTrak, a substantial increase from 2012.
Yet sales over the full four-day period from Thanksgiving to “Black Sunday” rose only 1% from 2012 to 2013. That’s anemic growth in the retail sector.
“You’re staffing stores to be open longer for just a little bit more revenue,” says Ike Boruchow, a managing director at Sterne Agee who covers the retail sector.
A closer look at the data is even more revealing: From 2012 to 2013, Black Friday sales shrunk by $1.5 billion while Thanksgiving Day sales grew by $1.8 billion, according to ShopperTrak.
That’s nearly a one-to-one tradeoff. Black Sunday sales also declined in 2013.
“It’s not good for profitability. It’s not good for the fact that you have retail workers leaving families because they have to work at a store,” says Boruchow of the sales starting earlier and earlier.
Opening a retail store is expensive, and adding extra workers to handle Thanksgiving Day crowds can cut into margins.
Related: These Christmas light displays cost thousands
On top of that, more people are shopping online, and brands now have deals all week to lure shoppers. Waiting for a certain day — whether it’s Thanksgiving or Black Friday — to start deals is becoming outdated.
Mike Moriarty, a partner in the retail practice of A.T. Kearney, predicts gift cards and “self-gifting” where people buy something for themselves will be the big trends this year. Neither of those are likely to be top priorities on Thanksgiving Day.
There’s modest optimism about Black Friday weekend spending growth in 2014, but so far opening on Thanksgiving has proven to be a zero-sum game.
First Published: November 26, 2014: 6:41 AM ET
Earnings and unemployment rates by educational attainment
More education leads to employment and more money. I am searching for something to motivate students to do better, to do more than “just get by.” I foresee suffering and unhappiness in the future of those who subscribe to “Cs get degrees.” Perhaps this simple chart will serve as a wake up call.
On the other hand, not everyone is cut out for college. Unfortunately, manufacturing jobs have been sent overseas and vocational jobs may not pay well. So, it does not look good for those who lack the will or ability to do well in college.
The choice may be simple for our youth: do well in college or live with a lower standard of living.
Brands Are Wasting Money on Facebook and Twitter, Forrester Says – CMO Today – WSJ
More on the Facebook value proposition, and I quote:
“wasting significant financial, technological, and human resources on social networks that don’t deliver value”
I am not a marketing person. I don’t have a Facebook account either. Maybe television, radio, and old fashioned billboards are okay but could use an interactive twist.
California’s 28% tuition boost pits Napolitano against Brown – Chicago Tribune
Why does it always come down to money? Allow me to quote the article:
“Napolitano’s tuition proposal comes two months after the regents approved pay increase of as much as 20 percent for four chancellors and increased the base salary for a new chancellor by 23 percent from his predecessor”
My suggestion: How about a balance of across the board cuts (administrative compensation, faculty compensation, staff compensation, pension payouts) and tuition increases? I don’t have the numbers in front of me but I wonder if this shared sacrifice approach would cause minimal pain for all parties. For example, what if this translated into a simple 0.1% across the board compensation cut and 0.1% tuition increase?
http://www.chicagotribune.com/news/sns-wp-blm-news-bc-calif-tuition19-20141119-story.html
If UC managed its endowment better, it could skip tuition increases – SFGate
Maybe the Sacramento State Student Investment Fund should take this over…
http://m.sfgate.com/news/article/If-UC-managed-its-endowment-better-it-could-skip-5902321.php
British and U.S. Regulators Fine Big Banks $3.16 Billion in Foreign Exchange Scandal – NYTimes.com
It takes awhile but Goldman Sachs receives mention in this article. I find it interesting hearing Goldman’s name in the Illegal FX manipulation discussion after the FAME VI conference this past weekend. During that conference a Goldman representative stated he didn’t like equities but does like FX.
Also, lawmakers are “considering whether to police more benchmarks” after nabbing the LIBOR and FX bandits. I wonder if there is any manipulation in benchmarks such as the S&P500 that many of us own…
Efficient Minds™ 