Archive for April, 2013

Air fares: Public weighs in …

April 30, 2013

According to a YouGov.com survey reported by  NBC News  …

Survey says: 4 in 10 Americans  wouldn’t mind being publicly weighed at the airport.

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Source

The results suggest that a once-unthinkable concept of differential fares based on size could become a fact of life for fliers.

Here are some verbatims:

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Nums: More about the declining LFPR … blame teens, not old folks.

April 30, 2013

Remember March’s employment numbers?

Despite paltry job growth – less than population growth — the unemployment rate went down – because about 500,000 folks dropped out of the labor force.

The LFPR (labor force participation rate) dropped to 63.2%.

The Atlantic published an interesting recap of LFPRs by age group over time.

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Note that the LFPR has been   …

  • Increasing for all age groups over 35
  • Holding steady at about 80% for folks 35 to 34
  • Dropping for folks 20 to 24.
  • Dropping big-time for teenagers

While older folks are participating more in the labor force, their LFPR is substantially less than other age groups (except teens) … so the aging population is “mixing down the overall LFPR.

What’s up with teens?

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Amazing infographic: Life inside Baltimore’s jails …

April 29, 2013

From the you can’t make this stuff up file …

There’s a notorious gang – the Black Guerrilla Family (BGF) —  that is, one could say, well represent in the Baltimore prison population.

Well, court documents have been filed in a massive racketeering case accusing 13 female corrections officers of colluding with the BGF — seven male inmates and several outside gang members.

Colluding may be a gross understatement.

Corrections officers allegedly smuggled  contraband such as cellphones, drugs, and weapons to BGFers, and turned a blind eye on the BGF leaders running the outside gang from prison.

You know, garden variety collusion between guards and prisoners.

But, it turns out that several of the guards are also accused of being literally “in bed” with the BGF inmates.

Four of the officers became pregnant with prison gang leader Tavon White’s baby.

One of them got pregnant twice.

Say, what?

The web of relationships got sufficiently complicated that the Baltimore Sun developed an extraordinary infographic.

Don’t squint, below I’ll walk you through it and give you the link.

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OK, here’s a key to the info graphic …

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Vanguard CEO: “Uncertainty the enemy of the economy” … I disagree”

April 29, 2013

In a WSJ editorial today, Vanguard CEO Bill McNabb says that …

Americans who seek to earn a living and save for the future are confused and discouraged.

Concerns of investors are asking: How does this affect my retirement fund? What about my college savings account? How does this affect my taxes? Would I be better off putting my savings under the mattress?

Firms can’t see a clear road to economic recovery ahead, so they’re not going to hire and they’re not going to spend.

It’s what economists call a “deadweight loss“.

He points to economic research that indicates U.S. economic policy uncertainty has been 50% higher in the past two years than it has been since 1985.

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Source: PolicyUncertainty.com 

The uncertainty revolves around regulatory policy, monetary policy, foreign policy and, most significantly, uncertainty about U.S. fiscal policy and the national debt.

Vanguard estimates that the rise in policy uncertainty has created a $261 billion cumulative drag on the economy … which adds up to more than one million jobs that we could have had by now, but don’t.

Mr. McNabb makes a strong argument.

But, I respectfully disagree.

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Tsunami Alert: NYU b-school prof blasts high MBA tuitions …

April 26, 2013

In a Financial Times article,  NYU Stern School of Business professor Larry Zicklin, says the days when getting an MBA costs well north of $100,000 are coming to an end.

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Zicklin argues that  …  b-schools face an existential threat … and that they aren’t aware of the tsunami that’s about to hit them.

The era of charging $100,000 for an education is over.

Here’s why …

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Cajones: Congress considers an exemption to ObamaCare … to themselves!

April 26, 2013

From the you can’t make this stuff up files …

During the 2009-10 battle over what’s now dubbed Obamacare, Republicans insisted that Capitol Hill hands must have the same health care as the rest of the American people.

Now, according to left-leaning Politico, “Congressional leaders in both parties are engaged in high-level, confidential talks about exempting 535 lawmakers and their aides from the insurance exchanges they are mandated to join as part of ObamaCare.”

“The lawmakers — especially those with long careers in public service and smaller bank accounts — are concerned about the hit to their own wallets.”

Obviously, “by removing themselves from a key ObamaCare mandate, lawmakers – who passed the law — and aides would be held to a different standard than the people on whom they’re imposing the law.”

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Picture credit

Politico keenly observes: “If Capitol Hill leaders move forward with the plan, they risk being dubbed hypocrites by their political rivals and the American public.”

You think?

Good for us, bad for them.

Hmmm.

There’s more. Here’s the real head-scratcher …

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Huh: Home Depot using a cat to up its likability …

April 25, 2013

According to BrandChannei

“Richard the Cat, a.k.a., Pundit of People, remains Home Depot’s meme of choice as the brand welcomes spring some out-of-character humor.

The orange feline follows a human family as they pursue scores of DIY projects with questionable results and predictable mishaps.”

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“Everyone has elves, reindeer, Santa, but one of the biggest things followed in the social space is cats”

HD is taking a chance on the cat meme since the two are an odd pairing.

The Home Depot brand is authentic, innovative and attainable, while Richard’s cat-sona is sarcastic, superior and refined.

HD’s CMO says: “When I shared this with our leadership team, our CEO got it immediately.

We’re very lucky we have one of the hippest CEOs out there.”

Hmmm.

Here may be the rub for Home Depot …

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Biz Insider: “Krugman won, austerity lost” … say what?

April 25, 2013

Yesterday, Business Insider guru Henry Blodget wrote: The Economic Argument Is Over — Paul Krugman Has Won

I haven’t been a big Blodget fan since he was run off of Wall Street for hyping internet stocks during their pre-bubble bursting run-up.

I think he’s trying to balance the scales these days … leaning far left to – he hopes – increase his odds of getting through the Pealy Gates.

The essence of his article is that the only thing wrong with the economy is a lack of adequate aggregate demand.

So, the government should keep borrowing and spending  … and things will right themselves,

The economic water level will rise to a point that reluctant CEOs will have no choice but to start hiring and building plants to meet demand.

That’s not a patently dumb notion … it’s just flat out wrong.

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Here’s what’s wrong with Blodget’s argument …

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Uh-oh: Where did the bombers get the money?

April 24, 2013

I’d been wondering – since there has been no mention of jobs – how the bomber brothers got the dough to (a) live (b) travel to Russia for 6 months and (c) construct weapons of mass destruction.

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The older brother didn’t have a job and the younger one was a pot-smoking college student.

The Boston Herald has just surfaced one avenue: that they (and their parents) were on the government welfare dole … so, in effect, taxpayers were paying their way.

Hmmm.

That’s bad, but is welfare enough to fund a terror plot complete with trips to Russia?

Doubt it.

So where did the rest of the money come from.

DHS Chief Napolitano says there’s no way they got it from terrorist groups.

Oh really, Janet.

No way?

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Debunk: Air traffic controllers, sequestration and delays …

April 24, 2013

Flight delays at major airports because of Sequestration.

Say, what?

Here’s a smoking gun chart right from an official FAA report.

According to the FAA, the number of controlled flights (i.e. “systemwide traffic”) has dropped  23% since 2000.

During that same period, the number of air traffic controllers has remained essentially constant.

Said differently, each controller is handling 23% fewer flights than in 2000 … when, to the best of my recollection, the skies were pretty darn safe.

Note that since 2005, the number of flights has gone down 14% and the number of controllers had increased 7.5%.

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FAA: A Plan for the Future – 10-Year Strategy for the Air Traffic Control Workforce 2012 – 2021

Here are some verbatims from the FAA report and an out-of-box idea …

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MBA: Career-switching is back in fashion …

April 23, 2013

According to Business Week: “More MBA grads are switching careers as the job market improves.”

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Here are the details …

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What’s the difference between Krispy Kreme doughnuts and gourmet cupcakes?

April 23, 2013

We’re not talking baked goods quality, we’re talking quality of the earnings baked into stock market valuations.

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And, the answer may surprise you.

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$$$: How much do MBA interns get paid?

April 22, 2013

According to Business Week, top school MBAs haul in an average of about $1,750 per week for their summer internships.

At HBS, the median is $7,000 per month … that’s about $1,650 per week … which annualizes to about $90k.

Of course, there’s wide variation based on the school and the industry.

Note that Kellogg –- a general management and marketing school – tops the list

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An IRS agent, an FBI agent and a gardener ….

April 22, 2013

No, this isn’t the lead line of a bad joke.

It’s a question of priorities.

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Let’s start with the gardener …

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Nums: Obama was right … it’s a matter of trust.

April 19, 2013

For the record: I love kids (especially my grandkids), I lived in the city adjacent to Newtown for 7 years, and I’m definitely not a gun hawk – I’ve never owned one, never shot one and don’t plan to do either.

I think most people are reading this week’s gun control vote all wrong.

First, it’s repeatedly reported that 80% to 90% of Americans support background checks.

That’s probably true, but a practical  overstatement because “while about 80 percent of those Americans think that background checks sound like a reasonable idea, they don’t really care much …   only 4 percent of Americans consider guns to be the “most important” issue facing the country.” NRO

Second, I think that President Obama had it right a couple of weeks ago when he pitched: “People say they don’t trust the government.  But, we are the government.”

Yep, he has it right … people don’t trust government.

At least the Federal government.

Here’s some evidence …

A recent Pew survey shows that trust in government took a major hit during the Johns0n-Nixon-Ford-Carter years … and has been cycling around the 30% mark since … currently, a little over 20% of the population trusts the government.

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Think about that for a moment …

Even assuming that – at an extreme – no Republicans trust the current administration … it means that less than half of all Democrats trust the administration.

Hmmm.

Here are some more interesting nums …

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Gotcha: You probably paid too much … especially if you’re bad at math.

April 18, 2013

Awhile ago, we reported a study that consumers almost invariably pick 33% more stuff than a 33% price discount.

Ouch.

Consumers are notoriously bad at spotting real values. Why?

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According to the Atlantic ….

  • First: Consumers don’t know what the heck anything should cost, so we rely on parts of our brains that aren’t strictly quantitative.
  • Second: Although humans spend in numbered dollars, we make decisions based on clues and half-thinking that amount to innumeracy.

More specifically, here are some more ways consumers end up paying too much …

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Nums: Do big companies or small companies create more jobs?”

April 18, 2013

Bit of a trick question since the constant refrain is that small companies are the ones that generate job growth.

According to a Business Week analysis of ADP National Employment data …

Since the U.S. economic recovery began in june 2009, big employers have increased employment 7.5%, while small employers have boosted payrolls only 4.9%.

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Mark Zandi, chief economist of Moody’s Analytics, was on the McCain team in 2008 but has changed sides and now regularly advocates for the Administration of TV.

He says: that there are three explanations for why large employers (1,000 employees and up) grew faster than small ones (fewer than 50 workers).

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Before you cut the football team, band, honors classes and hot lunches …. consider these places to cut government spending

April 17, 2013

According to an IBD recap

The Government Accountability Office’s latest annual report on government waste and duplication found 31 areas in the government that overlap, duplicate efforts or are egregiously inefficient.

That’s on top of the 131 found in its previous two annual reports …. the vast majority of which have been totally ignored by Obama’s crack team of budget-cutters.

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Sen. Tom Coburn (R-Okla.), who pushed for this report, figures the latest examples alone add up to $95 billion — more than the spending cuts under this year’s “sequester.”

Here are some of head-scratchers that the GAO found …

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Nums: Still, blaming the declining LFPR on seniors retiring …

April 17, 2013

Former Obama economic adviser Austan Goolsbee was back on TV saying that more than 60% of the decline in the labor force participation rate (LFPR)  is simple demographics … old people retiring.

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Last week, I posted a back of the envelop analysis that said  seniors retiring is less than 1/3 of the blame.

Today, let’s do the analysis more rigorously, using a technique that I teach called PVA – Profit Variance Analysis ….

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Pssst: Facebook is stalking you in stores ….

April 16, 2013

Why?

Ostensibly to see if its sponsors’ ads are working.

But, some skeptics (e.g. me) think that there may be other motives, too.

Here’s the scoop.

Last year, Facebook entered into a partnership with a company called Datalogix.

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Everybody knows what Facebook does.

Datalogix, not so much.

Datalogix is a firm that records the purchasing patterns of more than 100 million American households.

When you stop by the supermarket … you probably hand the cashier a loyalty card to get a discount on your items.

That card ties your identity to your purchases.

Your sales data is sent over to a server maintained by Datalogix, which has agreements with hundreds of major retailers to procure such data.

Source: Slate

Hmmm.

Facebook and Datalogix … why the hook-up?

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Taxes: In total, how much do Americans pay in taxes? For what? To whom?.

April 16, 2013

Since yesterday was tax day, I thought you might like to see a recap of how much dough (some) Americans fork over to the government …

Americans pay a tad over $5 trillion in taxes to the Feds, States and Local Governments.

Technical note: In government parlance, the taxes are called “revenue”.

By taxing authority

Drilling down, the $5 trillion is split roughly 50%-30%-20% to the Feds, States and Locals, respectively

Here’s more detail …

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Nums: What percentage of Facebook users click on the ads?

April 15, 2013

According to an AP-CNBC poll

User clicks are a critical part of an advertiser’s calculus when gauging the effectiveness of those ads and how much they’re willing to pay for them.

So, how does Facebook do?

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Here are some survey results …

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Taxes: How about an Alternative MAXIMUM tax ?

April 15, 2013

Interesting idea in today’s WSJ …  introduce an alternative maximum tax.

Here’s the gyst of the idea:

We need an alternative maximum tax as a simple, rough-and-ready way to limit the economic damage of increasing taxes. 

How much is the most anyone should have to pay? When do taxes indisputably start to harm the economy and produce less revenue — when government takes 50% of people’s income? 60%? 70%?

I like half, but the principle matters more than the number.

Once the country settles on a number, each of us gets to add up everything we pay to government at every level: federal income taxes, yes, but also payroll (Social Security, Medicare, etc.) taxes, state, city and county taxes, estate taxes, property taxes, sales taxes, payroll taxes and unemployment insurance for nannies, household workers, or other employees, excise taxes, real-estate transfer taxes, and so on and on, right down to your vehicle stickers and those annoying extra taxes on your airline tickets.

Once this total hits the alternative maximum tax, you’ve done your bit and federal income taxes can take no more.

You compute federal income taxes as usual, but then you get to reduce the “tax due” that the total is less than the alternative maximum.

For the dude’s supporting argument, see the the article America Needs an Alternative Maximum Tax

The plan has some holes, but it has potential …

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Nums: Are women still at a disadvantage in the workplace?

April 12, 2013

According to a recently released WSJ poll

“Women in large numbers believe they face more discrimination in the workplace than in other situations.”

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= = = = =
The “disadvantages” include lower pay than men …

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Nums: What percentage of Americans prepare their own taxes? How many of them like it?

April 12, 2013

According to Pew Research

Overall, 33% of Americans say they do their own taxes while 56% say someone else prepares their taxes.

  • Note 1: 11% don’t know who does their taxes or were befuddled by the question
  • Note 2: The folks in the 11% get to vote in Presidential elections (ouch!)

A majority of Americans (56%) have a negative reaction to doing their income taxes 1 in 4  say they hate doing them.

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Among those who dislike or hate doing their taxes, most cite the hassles of the process or the amount of time it takes:

About a third (34%) say they either like (29%) or love (5%) doing their taxes.

Here are some details re: the “likers” and lovers … 

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Dx: Sir, you have a ‘Marie Antoinette’ complex

April 11, 2013

Now, everybody’s piling on Ron Johnson – the former Apple exec who flamed out trying to turnaround JC Penney.

He didn’t seem to value JCP’s employees (which might be understandable) .. and he didn’t seem to value JCP’s customers (ouch).

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One pundit says that Johnson’s downfall was his inability to connect with JCP’s core customers.

Mark Ellwood, a retail expert, says that Johnson’s obliviousness to the plight of his value-conscious customers begs comparison to another doomed leader.

“Ron had a Marie Antoinette-ish approach to the customers … He always seemed slightly embarrassed that he was dealing in middle market product.”

Like the “let them eat cake” French queen, Apple store prodigy Johnson could not relate to the people who will still coming to the JCP stores..

Penney’s customers became frustrated and confused when JCP stopped discounting merchandise.

Johnson’s alma mater, Apple, almost never has sales, but that approach doesn’t work for JCPenney shoppers, writes Dale Buss at Forbes.

“His attitude … was very much along the lines of ‘let me tell them what’s good for them,’ rather than ‘tell me what you want as a customer and let me see how I can achieve that.'”

“[Johnson should have gotten] to know J.C. Penney shoppers a bit before he decided to treat them all like eager iPhone buyers who are so enamored of the merchandise that they don’t pay any attention to price”.

Source

Bottom line: selling commodity rags is a bit more difficult than selling early generation  iPhones …

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Taxes: Did you hear me screaming yesterday?

April 11, 2013

Timing is everything, right?

Yesterday, like many – err, make that some Americans, I was putting the finishing touches on my 2012 tax returns (which are due in a couple of days).

Like some – err, make that a few Americans, I have to pay income taxes.

Yesterday morning I swallowed hard and wrote out the check … the big check.

Lots of money … at least half of it will be out-and-out wasted by a cost-bloated government machine,

Most of the rest will be spent on stuff that I don’t agree with or support.

OK, it’s still my civic duty, right?

Tried to put taxes out of my mind.

Then, President Obama unveils his new budget.

The chart below tells the story.

Lots of taxes and some phony “savings” against grossly escalating budgets.

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Source

Bottom line: those who already paying all the taxes should pay even more …

Couldn’t the President at least had the courtesy of waiting for the ink to dry on my check before calling me out as a piker and saying I wasn’t paying my fair share.

Gimme a break, man.

You’re making ME want to stop working …

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Nums: Ask why … not just how many.

April 10, 2013

Some highlights from an HBR article:  The Hidden Biases in Big Data 

These days the business and management science worlds are focused on how large datasets can decode consumers’ behavior patterns … enabling marketers to laser-target high potential prospects with finely-honed messages, offers, and “attention”.

“Big data” … becomes problematic when it adheres to “data fundamentalism” … the notion that correlation always indicates causation, and that massive data sets and predictive analytics always reflect objective truth … that  “with enough data, the numbers speak for themselves.”

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Big data has hidden biases in both collection methods and analysis …

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Nums: What do corps do with their cash?

April 10, 2013

Well, besides sitting on it – on-shore or off-shore — corporations have five basic uses for the cash that they bring in:

  1. share buybacks;
  2. dividends;
  3. acquisitions;
  4. research and development;
  5. capital expenditures

Bellow is Goldman Sachs’ estimate of the split.

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Source

Bottom line: about a 60% – 40% split between growth (acquisitions, R&D, and CapEx .… and shareholder distributions (stock buybacks & dividends).

Historically, the split was more like 75%  – 25%.

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Uno’s 9-grain pizza crust … bet you can’t name the 9 grains!

April 9, 2013

Having spent 3 tours of duty in Chicago, I’m a deep dish pizza aficionado … and loyal to Uno’s — the best!

Well, last trip in, the server directed our attention to a new twist on the menu:

Nearly 70 years after inventing deep dish pizza, last year Uno’s introduced a new deep dish crust in honor of National Pizza Month.

Uno’s invented deep dish pizza in 1943 and this is another industry first: the nine-grain deep dish crust – which likely cannot be found anywhere else in the world..

Being a curious kinda guy, I asked the server to name the 9-grains.

She named 2 and took off to get the manager.

He named 2 more, but we were still 5 short.

We were talking about the incident at a fam get together this weekend.

The real-time iPhone-Google searches came up short.

But, a friend (and loyal Homa Files reader) dogged for the facts.

Best she could find: Some dude named Bob throws 10 grains in his whole grain hot cereal.

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Now, all we have to figure out is which grain didn’t make Uno’s cut.

Anybody know?

Thanks to MET for feeding the lead.

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Nums: More re: labor force participation rates …

April 9, 2013

Since las t Friday’s jobs report and the flood of misdirection coming out of Washington, I’ve been trolling the BLS numbers.

Here are a couple that caught my eye …

Since 1950, the labor force participation rate (LFPR) among adult males has fallen from almost 90% to below 70% today.

Wow.  Almost 1 of 5 men have opted out.

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= = = = =

During the same period – 1950 to today – adult women’s LFPR has increased from about 33% to about 60%.

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Best hypotheses I can conjure are that

(1) working women  has freed some men to stay-at-me to either be Mr. Mom ,,, or just slack off

(2) more capable women have squeezed men out of jobs?

Any alternative explanations out there?

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Fair & square … and outta there … JCP cans CEO.

April 9, 2013

Ron Johnson had a dream: turn JC Penney stores into Apple Store clones.

You know, cool and trendy … and, of course, no image-destroying sales.

Oops

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Not surprisingly, JCP’s sales, profits and share price fell, and fell, and fell.

Today, the JCP board axed Johnson … and, to add insult to injury, replaced him with the guy who had the job before he came.

Lessons leaned: (1) it’s a lot easier to sell iPhones than commodity rags, and (2) ask your customers and employees what they think

So what?

You can bet that he’s leaving with a pile of gold.

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But, bunnies are supposed to be fast, right?

April 8, 2013

I considered titling this post “Bunny cited by jackass”.

At first, I thought this was probably secularism on steroids … trying to quash Easter.

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Turns out to be a different charge … but equally as ridiculous.

The cop pulled the Easter Bunny over for hopping his ride without a helmet.

Are you kidding me?

Where can the EB find a helmet to fit over those enormous ears?

Or, how can he fit in a car with his head on?

How can he possibly comply?

Murder is running rampant and this jabrone is pinching the Easter Bunny.

Can’t make this stuff up …

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Nums: Labor Force Participation Rate is down b/c old folks are retiring … well, not exactly!

April 8, 2013

Here’s some stuff that you won’t see other places …

OK, everybody knows that – despite paltry job growth — the unemployment rate dropped from 7.7% to 7.6%.

Why?

Because about 500,000 people dropped out of the labor force.

The “Labor Force Participation Rate” dropped to 63.2%

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= = = = =
Note that in the past couple of years the labor force participation rate has dropped about 3 percentage points … from over 66% to 63.2%

So, why is the Labor Force Participation Rate dropping?

Dr. Alan Krueger — Chairman of President Barack Obama’s Council of Economic Advisers – asserted on CNBC that the decline in the labor force participation rate is simply demographics.

Old people are an increasing part of the population and they are retiring.

Hmmm.

Nobody challenged him because it’s obviously true, right?

Not so fast.

Now, here are the nums that you probably won’t see any place else ….

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Norwegian economics professor jumps on the scale … endorses “pay what you weigh”

April 5, 2013

OK, I think this case is now officially done.

It started a couple of weeks ago when Iposted  Why don’t airlines charge more for these bags?

Specifically, I suggested that airlines charge passengers by weight: a base ticket price for the first 175 pounds and then $75 for each 50 pounds (or portion thereof) over the limit.

I  thought I was on safe ground since a  survey done for the travel website Skyscanner reported that 76% of travelers said airlines should charge overweight passengers more if they didn’t fit in a seat.

But, the idea went over like a lead-butted balloon.

Turns out that, as usual,  we were just a bit ahead of the times.

Yesterday, we reported that Samoa Air became the first airline to start charging by the pound.

For details, see Samoa Air: Pricing by weight is the ‘concept of the future’

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Now, even politically correcct academicians are hopping on the scale.  A Norwegian economist has suggested — in a prestigious academic journal —  a “pay what you weigh” pricing plan that “would bring health, financial and environmental dividends.”

Here’s the skinny on his program …

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Nums: UE rate down to 7.6% … thanks to quitters.

April 5, 2013

The reported unemployment rate dropped to 7.6% despite a meager 88,000 jobs being added in March.

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It’s conventional wisdom that you need more than 200,000 jobs added to move the needle.

So, why did the UE rate go down.

You guessed it: the Labor Force Participation Rate dipped again … more people (about 500,000) stopped looking for jobs … and weren’t counted in the unemployment numbers.

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The administration shills have been harping on the Sequester to explain the numbers (even though it didn’t really kick in during March).

They dismiss the idea that the slowdown could be due to:

  1. Increased taxes … especially the payroll tax
  2. ObamaCare
  3. An anti-biz administration

Nope, just not enough government spending.

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Pizza ! Pizza! … Little Caesar’s "biggest product introduction in the company’s 54-year history."

April 5, 2013

Once again, coincidence strikes.

This week in class we’re doing a a case about a company trying to launch an innovative refrigerated pizza.

Guess this is innovative pizza week.

Leading the charge: Little Caesars

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According to the Huffington Post, Little Caesars — “more known for value than taste” — is launching a big new “higher end” product called the DEEP! DEEP! Dish pizza.

The new pizza is “Detroit-style” — a thick, square-panned pie that’s crispy on the edges, but has a soft, chewy middle.

No kidding, the company is calling it “the biggest product introduction in the company’s 54-year history.”

Hmmm.

I can remember sucking down Uno’s deep dish in Chicago 40 years ago … and, I was a late-adopter.

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I guess that some innovations diffuse through the market at a slower rate than others …

P.S. “Detroit-style pizza” … you gotta be kidding me.

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Nums: Unemployment rate on the rise again?

April 4, 2013

Last month, the BLS reported a decline in the unemployment rate to 7.7%.

Most economists and other pundits are predicting that the March  UE rate – which will be reported tomorrow – will remain at that level.

But, yesterday’s ADP employment numbers were almost 20% below the consensus estimates … 185k vs. 225k.

Today, the BLS reported: “In the week ending March 30, the advance figure for seasonally adjusted initial claims was 385,000, an increase of 28,000 from the previous week’s unrevised figure of 357,000. The 4-week moving average was 354,250, an increase of 11,250 from the previous week’s unrevised average of 343,000.”

Here’s another contra indicator … the Gallup Daily Tracking of Employment.

When the daily numbers for the past 3 months are averaged, there’s a big spike upward from February to March.

Gallup is again pegging the unemployment rate over 8%.

Bottom line: If the consensus 7.7% is the over-under …. I’m betting the over, for sure.

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Uh-oh: Consumer mavens dissing Kraft’s dayglow mac & cheese …

April 4, 2013

Talk about a timely news item.

In class Tuesday, we were talking about food taste & quality.

My teaching point: when the food buyer isn’t the food eater, the buyer may be less sensitive to taste & quality.

My example: millions of mothers serve their little kiddies  mac & cheese that glows in the dark.

A veiled reference to Kraft’s legendary mac & cheese … and, that odd color of orange that happens when those mysterious dry ingredients are stirred into the pasta.

Well, apparently the neon dish also caught the eye of a couple food crusaders who have embarked on a campaign against two of the dyes that Kraft uses to create its trademark color.

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Here’s their rip and Kraft’s response …

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Blockbusters: Publishers still swinging for the fences …

April 3, 2013

Despite a weak economy, publishing executives are still making what many see as outrageous gambles on new manuscripts.

With double-or-nothing daring, most large media firms make outsized investments to acquire and market a small number of titles with strong hit potential, and bank on their sales to make up for middling performance in the rest of their catalogs.

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Here’s what Prof. Anita Elberse – author of the “Dewey the Cat” case – had to say in the WSJ ….

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Gotcha: Schools copying airlines’ nickel & diming …

April 3, 2013

In recent years, airlines nave become masters at “unbundled pricing” … offering a low base fare and then charging more for bags, heavy bags, priority boarding,window seats, bad sandwiches, soft drinks, blankets and, of course, reservation changes.

According to CNN: Baggage fees alone generate more than $3.3 billion each year, and fees for reservation changes add almost $2.5 billion.

Annoying, for sure … but also a good source of revenue.

According to watchdog group ProPublica, colleges are starting to adopt the airlines’ pricing playbook.

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Specifically, ProPublica says that student fees have become a kind of “stealth, second tuition imposed on unsuspecting families.”

And though their names can border on the comical — i.e., the “student success fee” — there’s nothing funny about how they can add up.

Such fees are on the rise on many campuses.

Here are some specifics:

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Samoa Air: Pricing by weight is the ‘concept of the future’

April 3, 2013

A couple of weeks ago – reacting to SWA charging for an overweight bag – I asked the question:

If airlines charge for overweight bags, why don’t they charge fore for overweight passengers?  After all, a pound is a pound is a pound.

See: Why don’t airlines charge more for these bags?

Specifically, I opined:

There’s a societal cost to somebody’s ample butt hanging over onto somebody else’s seat.

Here’s a novel plan: how about a base ticket price for the first 175 pounds and then $75 for each 50 pounds (or portion thereof) over the limit.

Price the human  heavyweights,well, just like the overweight bags.

Then, rent the seat belt extenders for say $20.

Profit improvement for the airlines and major step forward in the war on obesity.

As President Obama likes to say: “It’s common sense.”

I took some heat for the idea but at least one airline thinks we’re onto something.

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According to The Guardian, Samoa Airlines the first-mover to tilt the scales in favor of fit & trim passengers.

Here’s the skinny on the Samoa Air plan …

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For Sale: Best-seller books … Price: $8 per kilo, hardcovers extra.

April 2, 2013

In one of my classes we study how books are priced.

One team suggested that page count was a relevant criteria … that books with more pages should be priced higher than shorter books.

I summarily rejected the idea and joked at the team’s expense.

Well, the page has turned.

The team went to China and sent me me this picture.

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Lo and behold, in China, they encountered book stores that sold books based on their weight.

A counterfeit version of the Steve Jobs biography (above) weighed in at 360 grams, and was priced by weight at 18 RMB ($2.85). Roughly 50 RMB ($8) per kilo.

The team tells me that all paperback books in that particular shop (located on Nanjing road, main street Shanghai) are sold at this rate; hardcovers are also priced by the kilo but at a higher rate.

OK guys, you get the last laugh.

Thanks to Ash Kaluarachchi & Greg Berguig for feeding the lead

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Tourney economics: Hoyas make one star a multi-millionaire …

April 2, 2013

No, I’m not talking about Otto “Where’s Otto?” Porter, Jr.

I’m talking about Andy Enfield, the  former head coach at Florida Gulf Coast … aka, “Dunk U.”

The guy who became a national sports sensation when his Eagles embarrassed the Hoyas in the first round of this year’s tournament.

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Today, Enfield will be formally introduced as USC’s new head basketball coach.

Here’s the scoop …

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Maybe, the best college essay ever written …

April 1, 2013

Too bad it was written after-the-fact.  After the rejections.

The WSJ published an op-ed by a HS senior: To (All) the Colleges That Rejected Me

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It’s worth reading … says the things that most of us are probably thinking.

Here are some highlights:

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