Archive for February 24th, 2009

How much hope can the market withstand ? … Update

February 24, 2009

For folks who like to keep score:

The Dow closed at 8,228 on inauguration day.

The Dow closed at 7,114 yesterday (Feb. 23, 2009)

A decline of 1,114 points (13.5%) for the presidency to date.

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The Dow dropped 382 points on the day that Geithner’s speech bombed.

The Dow dropped 298  points on the day that Obama signed the non-stimulus package (the first day that the market was open after the bill was passed).

The Dow dropped 468  points on the days after Obama announced his mortgage modification plan.

The total decline since recovery initiatives were mobilized 1,114 points

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Fasten your seat belt for Obama’s announcement of his intention to increase in the capital gains tax rate in 2010.

Keep the change …

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Posted in Financial Crisis, Mortgage Crisis, Obama - Promises Made & Kept, Obama Administration, Uncategorized | 2 Comments »

Just me, or is the tail wagging the dog ?

February 24, 2009

Regarding mortgage modifications, I think this chart says it all. The 93% of folks doing the right thing (and most paying taxes), get upended by the 7% who are irresponsible,

image

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From the Pinocchio Files … President Obama on NAFTA

February 24, 2009

Excerpted from NY Times, “Nafta Looming Over Obama’s Canada Trip”, February 19, 2009

President Obama used his visit to “underscore the importance of what is already a very robust trading relationship” and to “look for ways to grow on that as it relates to new and entrepreneurial and innovative technologies on energy and green technology.”

That is a far cry from the language of Candidate Obama. He said in a Democratic debate last year that the United States should consider leaving Nafta if the agreement could not be renegotiated.

“Ten years after Nafta passed …  I don’t think Nafta has been good for America — and I never have.”

His campaign was caught in a flap over reports that a top economic adviser to Mr. Obama, Austan Goolsbee, had tried to play down the candidate’s remarks by assuring Canadian officials that they were “more reflective of political maneuvering than policy.” The Obama campaign dismissed the reports as untrue.

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Full article:
http://www.nytimes.com/2009/02/19/us/19trade.html?pagewanted=print

Campaign flashback: Ny Times, “Memo Gives Canada’s Account of Obama Campaign’s Meeting on Nafta”, March 4, 2008
http://www.nytimes.com/2008/03/04/us/politics/04nafta.html

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Retailers racing to the bottom with discount prices …

February 24, 2009

Excerpted from Reuters, “”Full price” to take on new meaning in 2009″, by Martinne Geller, January 16, 2009

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Department stores and apparel retailers may have bid farewell to the idea of selling merchandise at full price after taking brutal markdowns during the U.S. 2008 holiday season.

In November and December, consumers were treated to unprecedented discounts on even the most prestigious brands to spur purchases in the recession.

Retail executives now fear they have trained consumers to shop only when there are discounts, prolonging the squeeze on their profit margins. With no major buying holidays between now and the back-to-school season, analysts say consumers could even put off shopping for six months or more.

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A likely strategy is for retailers to lower initial prices to lure shoppers. That could decrease the need to later mark down unsold goods dramatically, analysts said.

Industry analysts expect clothes will come on the market in 2009 about 20 percent lower in price than they did last year, and in some cases, as much as 40 to 50 percent lower.

A smart pricing strategy is key to preserving brand cachet this year.  “I don’t think retailers can survive with a 50-percent-off sign,” he said.

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Retailers are engaging in a “race to the bottom” in terms of pricing, and the economic downturn pits high-end store chains against a growing cadre of lower-cost rivals.  Though higher-end chain J Crew, for example, is striving to sell its clothes at full price, they are “adjusting prices right now” in certain lines, admitting that opening prices were “too high.”

Edit by DAF

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Full Article:
http://www.guardian.co.uk/business/feedarticle/8271675

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Posted in Mktg - Pricing, Retailing | Leave a Comment »

Velveeta: Kraft’s Super Bowl Hero

February 24, 2009

Excerpted from WSJ, “Velveeta Gets Ready to Party” By Julie Jargon

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When the Super Bowls rolls around, thousands of women across the country are expected to welcome friends to their homes not just to watch the Super Bowl, but to dip into bowls of Velveeta ultimate queso dip.

For snack-food manufacturers, including Velveeta maker Kraft Foods, there’s no bigger day than the day of the big game, when Americans eat 46% more chips than on a typical Sunday …

Using its database, House Party emailed Internet-savvy women ages 25 to 50, Velveeta’s target market, offering them the chance to host a game-day party featuring Velveeta. Both House Party and Kraft also promoted the offer on their Web sites. More than 15,000 women applied, and 2,500 Velveeta lovers were chosen.

The hostesses, who won’t be paid for their services, get “party packs” containing a 32-ounce package of Velveeta, take-home plastic Velveeta storage containers for 16 guests, a recipe for chili con queso dip — along with the requisite cans of diced tomatoes and green chilies — a spinach dip recipe, a dip bowl, a couple of bags of Ritz toasted chips, snack-bag clips, Velveeta coupons, Kool-Aid and cups. House Party said it couldn’t estimate the value of the party packs.

“We don’t attend the parties; doing that would hamper the authentic nature of it … We give the hosts the materials, but very much let them create the kind of party they want to create.”

Of course, Kraft and House Party hope that the menu will showcase Velveeta, and that hosts and their guests, after sampling the product, will serve it regularly at home, as well as talk up its taste … Kraft doesn’t break out sales of Velveeta, but sales have declined in recent years in the “processed cheese loaf” category, and that Velveeta’s marketing efforts are designed to make sure “Velveeta is relevant to people today.”

After using house parties to promote its Philadelphia cream cheese and Grey Poupon mustard last year, Kraft is using the same approach for Velveeta … The Velveeta push is designed to appeal to budget-conscious consumers … “you can buy twice as much Velveeta as cheddar for the same price” … 

When House Party publicized the chance to host a Velveeta party on its Web site, Angilyn Mathews, a stay-at-home mother of five who lives in South Jordan, Utah, says she knew she had to apply … “It’s like an honor to get picked for the party … When we got the party pack with all the fun things inside, it was like Christmas.”

Edit by SAC

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Full Article:
http://online.wsj.com/article/SB123318397635126261.html

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Posted in Mktg - Brands, Mktg - Promotion | Leave a Comment »