Archive for March 6th, 2009

What’s killing the Dow ?

March 6, 2009

Excerpted from WSJ, “Obama’s Radicalism Is Killing the Dow”, Boskin, March 5, 2009

It’s hard not to see the continued sell-off on Wall Street … (and) the realization that our new president’s policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.

The illusion that Barack Obama will lead from the economic center has quickly come to an end. Instead of combining the best policies of past Democratic presidents — John Kennedy on taxes, Bill Clinton on welfare reform and a balanced budget, for instance — President Obama is returning to Jimmy Carter’s higher taxes and Mr. Clinton’s draconian defense drawdown.

From the poorly designed stimulus bill and vague new financial rescue plan, to the enormous expansion of government spending, taxes and debt somehow permanently strengthening economic growth, the assumptions underlying the president’s economic program seem bereft of rigorous analysis and a careful reading of history.

Unfortunately, our history suggests new government programs, however noble the intent, more often wind up delivering less, more slowly, at far higher cost than projected, with potentially damaging unintended consequences. The most recent case, of course, was the government’s meddling in the housing market to bring home ownership to low-income families, which became a prime cause of the current economic and financial disaster.

On the growth effects of a large expansion of government … the European social welfare states have standards of living permanently 30% lower than ours.

A financial crisis is the worst time to change the foundations of American capitalism.

Full article (worth reading):
http://online.wsj.com/article/SB123629969453946717.html?mod=article-outset-box 

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Posted in Financial Crisis, Obama Administration, Stock Market | Leave a Comment »

What’s the exit plan and “date certain”?

March 6, 2009

On the campaign trail,  anti-surge Candidate O derided Bush for not having an exit plan and a date certain for troop withdrawal from Iraq.

OK, since we’re winning in Iraq and can safely pull the troops out, O can keep his campaign pledge and bring combat troops back in 2010.

Seems that  Afghanistan is way different from Iraq since O authorized a surge in troop strength and is mum on the exit plan and withdrawal date.

Hmmmm.

Question: why not just spray the poppy fields with industrial strength weed killer and bring our men and women home pronto ?

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Posted in Obama - Promises Made & Kept, Obama Administration | 1 Comment »

If you can’t fight ’em join ’em … brand names chum it up with private labels

March 6, 2009

Excerpted from WSJ, “Brand-Name Food Makers Woo Retailers With Displays” By J. Jargon and A. Zimmerman, Feb 18, 2009

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Seeking to combat stiffer competition from cheaper store brands, big-name food manufacturers, including Kraft Foods Inc. and General Mills Inc., are joining forces with retailers to promote their brands alongside private-label goods.

In the past, big food companies didn’t worry too much about cheaper store brands encroaching on their turf, because consumers were more loyal to name brands and generally believed better quality justified their higher prices. But in recent years, retailers have improved their store brands, often mimicking the innovations that national brands have introduced …

As private-label items have improved and the economy has slowed, many consumers are wondering why they should pay more when they view a store brand as equally or almost as good. Last year, sales of private-label food and other consumer products jumped 10% to $82.9 billion in 2007 … Meanwhile, sales of branded products increased just 2.8%.

Now, brand-name manufacturers are trying to boost sales and defend their market shares in part by working with retailers to create special displays that allow name brands and store brands to share the promotional spotlight. Their strategy acknowledges that the rise of store brands has been a boon to retailers, whose overall sales have slumped and whose gross profit margins on store brands typically exceed those on branded items by 10% to 12%.

General Mills, for example, is using in-store grocery displays to promote “full meal solutions” that include its brands as well as store brands … [For example], A “pizza night” display featured General Mills’ Pillsbury dough with the retailer’s store-brand tomato products.

The new collaboration with retailers comes as Wal-Mart Stores Inc. prepares for a relaunch next month of its own private brand, Great Value, with improved packaging and quality … By raising the profile of its private label, Wal-Mart could undermine some of the competitive advantage that has set it apart from other food retailers … Gains by private-label products have come largely at the expense of smaller brands. To cut costs and make room for a greater assortment of Great Value products, Wal-Mart has begun removing slower-selling brand names from its shelves …

Until recently, Wal-Mart’s private-label brands didn’t pose much of a threat to branded-food manufacturers. The products’ packaging was lackluster and the quality and consistency of many of them was uneven …

At an analyst meeting last fall, Wal-Mart said it would retool its Great Value line, in an effort to spur sales … The company tested 5,000 Great Value products against national brands and reformulated 1,200 of them.

Edit by SAC

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Full Article:
http://online.wsj.com/article/SB123491694183004377.html

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Rolling Out the Chevy Volt

March 6, 2009

Excerpted from Washington Post, “GM’s Volt to Debut in Washington, Bay Area”, by Kendra Marr, February 5, 2009

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General Motors’ new plug-in electric car, the Chevrolet Volt, will go on sale in Washington and San Francisco first, the automaker announced this week, as it began laying plans to work with area government and power companies to ease the car’s introduction.

The San Francisco Bay Area was an obvious choice to be one of the first plugged-in cities. A warm climate combined with a wealthy, tech-savvy population has boosted sales of the Toyota Prius.

The D.C. region’s relatively high concentration of hybrid vehicles suggested people in this area were also willing to pay more for a vehicle with better fuel economy.

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It also helps to have an iconic car like the Volt close to Washington’s power brokers, who will soon be considering additional federal loans for the struggling automaker.

“You want your clean technologies to be very visible and build trust with public policy makers, even if city isn’t the ideal in demographics or in terms of infrastructure.”

“What we’re talking about is signaling to decision makers in Washington that the car is on its way to not just America, but to your garage.”

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The goal is to create strategies that make the pricey technology more attractive for Washington drivers, in hopes of eventually ramping up production. High manufacturing volumes means cheaper batteries and cheaper cars.

In addition, the automaker hopes the governments themselves will become early adopters, setting an example by buying large fleets of plug-ins.

Edit by DAF

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Full article:
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/04/AR2009020402680_pf.html

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