Archive for September 17th, 2010

Larry Summers: “Better uses for the $700 billion”

September 17, 2010

Obama econ advicer was asked by CNBC about the tax hike on the so-called wealthy taxpayers.

Keep in mind that Obama’s rap is that “we can’t afford to keep tax rates for the weathy where they are now” … implying that the money would go towards deficit reduction.

Well, Summers blew it.

His answer: “There are better uses for the money”

He clarified: maybe more targeted tax breaks or stimulative spending.

Deficit reduction didn’t make his list.

Oops …

The CNBC shills didn’t follow-up on the obvious slip.

Posted in Taxes | Leave a Comment »

Consumer de-leveraging … by the numbers.

September 17, 2010

Total consumer credit outstanding fell 0.1 percent in July, marking the 20th monthly decline in the past 22 months.

Top-tier borrowers retain access to credit, but these lower-risk consumers continue to impose austerity measures as they de-leverage in the wake of the recession.

At the same time, less creditworthy borrowers have been substantially cut off from credit due to high levels of lender risk aversion.

Bottom line: Tighter Consumer Credit Poses Headwind To Recovery

Ken’s Note: And the impact of FinReg hasn’t been felt yet.  It’s called unintended consequences …

Source: Marcus & Millichap
http://blog.marcusmillichap.com/2010/09/14/tighter-consumer-credit-poses-headwind-to-recovery/

Posted in Financial Crisis | Leave a Comment »

Where to invest: United States, Russia, Venezuela ? … or, none of the above?

September 17, 2010

Punch line: Washington’s shakedown of BP may cause other multinationals to flee to a more hospitable haven: Canada.

Side note:  I’ve often said that the discarding of established bankruptcy / contract law to pay off the UAW before GM’s secured creditors was a defining moment for US commerce.  So, the BP action shouldn’t have surprised anyone.

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Excerpted from The Globe: The great drain, August 26, 2010          

Assume you are a big-name international resource producer, maybe an oil company.

From the following selection, choose two countries where you would most want to operate:  Canada, United States, Russia, Venezuela, Bolivia and Ecuador.       

That’s easy.

You’d pick the first two, because the others have had scant regard for  the rule of law.

At one point or another, each has been accused of expropriation or other  acts of aggression toward foreign investors.

Since you are accountable to your shareholders,  you strike those countries off your list.                            

Today, however, you might want to strike the United States off the list, too.

The  response of the Obama White House and Congress to the BP oil leak in the Gulf of Mexico is  sure to have foreign investors trembling.

As the damage claims roll in like a hurricane, BP  has become the world’s biggest ATM.

BP never expected to pay the ultimate price for the sub-sea blowout.

That’s because of the 1990 Oil Pollution Act  placed a $75-million liability cap on monetary damages payable to public and private
parties (except where negligence was proven).                        

In BP’s case, that cap was quickly deemed null and void.

In short, the U.S. government dictated financial responsibility in a politically  driven way well before blame for the leak had been determined in a court of law.

BP’s now massive liability may downgrade the world’s view that the United States is  an investment haven.

America’s loss could be Canada’s gain.

Full article:
http://www.theglobeandmail.com/report-on-business/rob-magazine/the-great-drain/article1683458/

Thanks to JWC for feeding the lead

Posted in Obama Administration, Oil & Energy | Leave a Comment »

Repositioning: Making the Old New Again at Ethan Allen

September 17, 2010

TakeAway: Ethan Allen has launched a new ad campaign, which aims to convince consumers that they don’t have to splurge on lots of furniture to create a stylish home. 

The home furnishings retailer is introducing a series of TV, print, online and direct mail ads with a recessionary pitch. 

Ads position Ethan Allen as an “aspirational” and “attainable” brand through slogans like:

“A great room starts with a great piece.” And: “Relax. You don’t have to do it all at once.”

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KEH Note: Is it just me or are those slogans a bit ‘odd’? 

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Excerpted from Brandweek, “Ethan Allen Pitches ‘Attainable’ Furniture” By Elaine Wong,September 9, 2010

The new campaign is part of the company’s strategy to reposition itself with younger consumers.

Americans in their 40s, 50s and 60s currently make up the brand’s core demographic.

But Ethan Allen is looking to connect with consumers in their 30s and 40s, who also have some discretionary income to spend.  Market research revealed that many consumers previously thought of the brand as unaffordable.

A 30-second spot, titled “Falling,” shows a woman falling slowly backwards in a bare room. As she leans back—as if to sit—a comfortable cushioned chair appears and she takes in the moment. A voiceover coaxes, “Get that one piece right, and the rest of the room will just fall into place,” as other furniture appears in the room.

The ads give Ethan Allen a contemporary twist. “Like a lot of classic American brands, [Ethan Allen has] become so well known that people’s perceptions of them become somewhat out of date,”

The campaign positions the brand as “elegant, yet approachable . . . and a little more modern than you might have thought.”

Edit by AMW

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Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/retail-restaurants/e3iff28983151fb56b19121e78b5ff9467c

 

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Posted in Mktg - Positioning | Leave a Comment »