Archive for January 26th, 2011

Pro-business, except for …

January 26, 2011

Oil companies, banks, insurance companies, manufacturing companies with global footprints.

Hmmm.

Tax rates for high-earners are going up to fund “investments” in things Americans are clamoring for … like high speed rail between Disneyland and Las Vegas, and wiring up rural America (when the rest of the world is going wireless).

Corporate tax rates coming down, but corporate taxes staying the same or going up … huh?

Closing corp tax loopholes except for windmills, solar shingles, etc.

Don’t even think about touching ObamaCare … except the 1099s for small businesses.

Bottom line: I lost, you won, I don’t care, business as usual.

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Most notable:  Colleges should welcome back military recruiters and ROTC.

Silliness: “Sputnik moment”, faces in the crowd, weird stories of visits to community colleges and shingle companies.

Most surprising: Even the Dems in the crowd looked bored.  My imagination, or were some doing Siduko puzzles?

So “do it” moment: overlapping functions across executive branch agencies (e.g. the salmon story) … they’re under your management Mr. President. So, fix them and stop yakking … !

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

If you’re running short of $$$ this month, will you (a) pay your mortgage or (b) buy a new big screen TV?

January 26, 2011

Interesting point raised by new Senator Pat Toomey in the WSJ regarding the debate on raising the national debt limit:

For months, some political leaders have argued that failure to raise the debt ceiling would necessarily cause the U.S. to default on its debt.

President Obama’s Council of Economic Advisors chairman, Austan Goolsbee, recently warned, “If we get to the point where you’ve damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity. I don’t see why anybody’s talking about playing chicken with the debt ceiling.”

In fact, if Congress refuses to raise the debt ceiling, the federal government will still have far more than enough money to fully service our debt.

Next year, for instance, about 6.5% of all projected federal government expenditures will go to interest on our debt.  Why would we ever default?

To make absolutely sure (we don’t), I intend to introduce legislation that would require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised.

This would not only ensure the continued confidence of investors at home and abroad, but would enable us to have an honest debate about the consequences of our eventual decision about the debt ceiling.

WSJ, How to Freeze the Debt Ceiling Without Risking Default, Jan. 19, 2011

In rough numbers, the U.S. is paying about about 1.5% in annual interest to service the $13 billion national debt … that’s about $200 billion.

Tax collections are a tad over $2 billion annually; spending is running about $3.5 billion … for an annual deficit of $1.5 billion.

In other words, $3.3 billion – almost 95% of total expenditures are for stuff other than interest on the debt.

Why not follow Toomey’s advice?  Pay the interest, and shave 6% off the rest of the spending.

Makes sense to me

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For numbers galore:
http://www.federalbudget.com/HistoricalTables.pdf

Posted in Budget - Deficit | Leave a Comment »

How do you say “M’m, m’m, good” in Chinese?

January 26, 2011

TakeAway: Campbell Soup wants to boost its business in China via a joint venture with the conglomerate Swire Pacific Ltd. to sell soup and broths.  Swire has been the company’s distribution partner in China, but with its varied business lines (it is also the largest Coca-Cola Co. distributor in China), Campbell can now access broad distribution channels in China.

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Excerpted from WSJ, “Campbell-Swire Venture To Market Soups In China” By Paul Ziobro, January 12, 2011

Campbell, which has slowly been building its business in the emerging markets of China and Russia, will control 60% of the joint venture, called Campbell Swire, which will launch early this year. The partnership will manufacture, distribute and market Campbell’s soups, broths and stocks in China. Profits and losses will be shared according to ownership.

Faced with slower growth in the U.S., food companies have focused on developing markets to inject growth into the business. China represents one of the biggest opportunities, with 1.3 billion consumers that have the spending power of the U.S. population, according to a recent PricewaterhouseCoopers LLP report. But challenges lurk in trying to develop enough scale to turn a profit and navigate a complex distribution network.

The arrangement has the potential of helping Campbell accelerate its growth there without having to pay most of the costs, although it is sacrificing some potential profits.

For Campbell, the prize in China is a demographic with one of the highest rates of per-capita soup consumption in the world, although most of it is homemade. Campbell says Chinese consumers have nearly 355 billion servings of soup a year.

Campbell will keep ownership of its brands and recipes, and license them to the joint venture.

Edit by AMW

 

Posted in Mktg - Market Development | Leave a Comment »