Here are a couple of charts that put things in perspective
Ask yourself: Which one doesn’t isn’t like the others?
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Consumers have been deleveraging.
The ratio of mortgage debt to disposable income has retreated by 20 percentage points and continues to fall.
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More broadly, the percentage of disposable income servicing household debt is at a historic low …
According to Slate: Male jurors are more likely to find fat women guilty.
A team of Yale psychologists released a study indicating that male jurors were more likely to hand a guilty verdict to obese women than to slender women.
About 29% according to JP Morgan Wealth Management …
I expected the number to be much higher
Financial assets are more than half.
Material “stuff” such as autos is less than 10%
In nominal terms, the aggregate consumer balance sheet has just about fought its way back to pre-crash levels.
So, why does it feel so bad?
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Punch line: Coca-Cola is defending itself with a new TV Campaign that focuses on the health benefits of Coca-Cola’s products.
Say, what?
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Excerpted from brandchannel.com’s, “Coca-Cola Addresses Obesity Critics With U.S. TV Campaign”
The Coca-Cola Company on Monday evening began airing a two-minute spot on U.S. cable news networks.
The subject, in a first for the company: America’s obesity debate, in a bid to defend its brands ahead of looming beverage size controls.
The world’s biggest beverage company debuted the “Coming Together” commercial in hopes of flexing its marketing muscle in the debate over sodas and their impact on public health.
The theme ties into the company’s “Live Positively” and “Open Happiness” campaigns.
Another ad, which will run later this week during American Idol and before the Super Bowl, is much more reminiscent of the catchy, upbeat advertising people have come to expect from Coca-Cola.
It features a montage of activities that add up to burning off the ‘140 happy calories’ in a can of Coke: walking a dog, dancing, sharing a laugh with friends and doing a victory dance after bowling a strike.
The ads are intended to address “confusion” about the number of calories in soda.
Hmm.
Think “sharing a laugh with friends” can really burn off 140 calories?
Beats the old treadmill, for sure.
Edit by BJP
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You guessed it, Kentucky Fried Chicken.
Yum has been one of the most successful foreign companies in China.
Yum has more than 4,000 KFC outlets and more than 700 Pizza Huts.
Yum gets about 50% of its revenue from China.
Nice to see the Chinese adopting a wholesome American diet …
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Nice recap courtesy of JP Morgan Wealth Management …
Easy facts to remember:
Note that Social Security & Medicare spending is about twice what’s taken in via “Social Insurance” … aka. “payroll taxes”.
Also note how big that dashed Borrowing box is.
We don’t have a spending problem.
Yeah, right.
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Chart Tip: Being picky, but they should have put Social Insurance at the bottom of the sources’ stack so that it lined up with Social Security and Medicare.
Every list should have a logical order … and that order is rarely the order that you thought of things.
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Excerpted from “Kicking The Can: Campbell’s CEO Bets On Soup-In-A-Bag For 20-Somethings”…
Denise Morrison, Campbell’s new CEO, is determined to shake things up.
She was hired to stabilize the soup and simple meals businesses, expand internationally, grow faster in healthy beverages and baked snacks.
Dubbed “the savior of soup”, she’s driven Campbell’s innovators to launch more than 50 new products in her 1st year.
For example, Campbell’s launched Go Soups, a six-flavor line in plastic pouches meant to convey freshness while capturing millennials’ adventurous tastes.
Ken’s Take:
This one strikes close to home.
Article in this morning’s WSJ E-Filing and the Explosion in Tax-Return Fraud
Over 80% of individual returns were e-filed last year.
As a direct result:
Here’s why I don’t just shrug off those stats.
Even the lowest information voters should have realized by now that their paychecks have shrunk by 2% … since the Feds didn’t renew the 2% payroll tax holiday.
The big question for the economy as 2013 gets underway is how America will react to their smaller paychecks.
Punch line: Cloaked in green, Patagonia’s proposition — that you not buy its clothes — is resulting in some of its best sales ever.
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Excerpted from Fast Company’s, “How Patagonia Makes More Money By Trying To Make Less”
Instead of blasting sales prices and urging consumers to load up their virtual shopping carts, Patagonia encourages consumers to buy less.
First, a definition: anything less than 2 inches doesn’t count as a “real” snow event …
According to the Wash Post, the frequency of 2” snow storms per year has been steadily declining.
And, the answer to the question …
Trick question.
Of course not. None of us were around in 1800 .
Cool chart below from FlowingData.com …. reporting Census Bureau data massaged by researchers at the Univ. of Nebraska.
With NYC pegged as the destination, the isolines show how long it took to get from wherever to NYC.
Chicago is on the 6-week isoline.
Ouch.
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The bigger question: why did it take so damn long?
Here’s a promotion that’s likely to cause some commotion.
click pic to view video
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The Telegraph reports that McDonald’s is about to become UK’s largest book distributor.
Say, what?
Yep.
Here are the details …
As loyal readers know, I’m a bear on the economy and the stock market.
That said, there are some indications that the economy’s water level is slowly rising … as evidenced in light vehicle sales (cars and small trucks) and housing starts.
Source: JP Morgan Wealth Management
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So, why my pessimism?
Here’s a great recap prepped by the Heritage Foundation with links to deeper details …
Key takeaways:
Read ‘em and weep …
Georgetown was gridlocked yesterday.
A troubled dude was threatening to jump from the Key Bridge, so police shut down the bridge, M Street and many of the area’s side streets.
Virtually impossible to get out of G-town heading to the Verizon Center … or any place else.
Couple of thoughts:
This is a relatively simple financial math question that most people I’ve asked have gotten wrong.
Answers have ranged from less than 8.8% – since only capital gains are being taxed (huh?) … 8.8% – because that’s how much the marginal rate is going up … to more than 8.8% – “otherwise you wouldn’t be asking the question”.
First, what’s magic about 8.8%?
Well, Obama did what he promised and jacked capital gains tax rates from 15% to 20% … and, don’t forget ObamaCare has a 3.8% non-payroll payroll tax on investment income starting in 2013.
So, the effective capital gains tax rate is going from 15% to 23.8% … a delta of 8.8%.
That 8.8% increase will cut after-tax capital gains by 10.35% !
If you don’t believe me, here’s he math …
Just read an interesting McKinsey study: Education to Employment – Designing a System that Works.
The focus of the study:
Worldwide, young people are three times more likely than their parents to be out of work.
Paradoxically, there is a critical skills shortage at the same time.
In other words, there are two related global crises: high levels of youth unemployment and a shortage of people with critical job skills.
This report focuses on skill development, with special attention to the mechanisms that connect education to employment.
More specifically:
An obvious conclusion: employers need to work with education providers so that students learn the skills they need to succeed at work
The pivotal finding: Employers, education providers, and youth live in parallel universes.
Don’t fret, MSBers.
Today’s WSJ article — which quotes MSB prof Brooks Holtom (below) — portrays a dismal ROI picture for the typical MBA … but points out that the economic crunch is not as severe for prestigious school grads (think, MSB).
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Debt-to-compensation ratio
First the numbers.
The WSJ tracked the average comp levels of young MBAs and matched it against their school debt loads.
The conclusion: an average young MBA has carries a school debt roughly equal to 1-years gross compensation … call it about 2 years of after-tax comp.
Note that the gross comp to student debt ratio was about 4-to-1 in 2001 … during the dotcom land rush.
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So, what’s going on?
Take a guess …
No good reason for anybody to know.
It’s a mapgraphic depicting the 1,540 Walmart stores in 1990.
So what?
Here’s what makes it interesting.
For a cool, dynamic visual showing how & where Walmart has grown over the years, click the link to view FlowData.com’s Walmart growth map.
The content is interesting, and it’s a nice way to present geo-time series data over time.
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Here’s an encore presentation of a HOT: Homa Online Tutorial originally posted before the election.
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Well, Obama got his dream to come true — capital gains rates have been jacked from 15% to 23.8% …. the basic capital gains tax rate went from 15% to 20% … and ObamaCare has a 3.8 non-payroll payroll tax on investment income starting in 2013.
So, the effective capital gains tax rate goes from 15% to 23.8% … a delta of 8.8%.
That 8.8% tax rate increase will cut after-tax capital gains ROIs.
By how much?
Answer: The pre-tax ROI times 8.8%.
Here’s the math …
This chart can’t be shown too often
Remember when Obama’s crack team of economic advisers said “Give us a trillion dollars and we’ll keep unemployment under 8%”?
They also said that the unemployment rate would be about 5.2% right about now.
Well, we’re at 7.8% … a mere 50% miss.
Wish I’d been held to those accountability standards when I was working in corporate America.
Source: AEI
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I used to be a big Southwest fan.
I used to perversely enjoy watching the clock tick so I could get in the “A” boarding group by hitting the enter button exactly 24 hours before flight time.
Then the jabrones at SWA took the fun out of the process by letting online slackers buy their way into the A group for 10 bucks … an “early bird” check-in.
Worse still, when my friends would flaunt their AMEX black cards, I’d charge everything to my SWA-Visa … earning a free flight for only a gazillion “flight legs”.
Then, the SWA jabrones changed their credit card program … making it less lucrative and way more confusing.
Nice recap in the WSJ today outing the pork that was sausaged into the deficit-adding Fiscal Cliff Bill:
Here’s a sampling:
The WSJ gave special recognition to Chris Dodd, the former Senator who lobbied for Hollywood’s movie studios … getting a provision that allows film and television producers to expense the first $15 million of production costs incurred in the United States … this Hollywood special will cost the Treasury $430 million in 2013 and 2014.
Consumers will get tax credits for buying plug-in motorcycles ($7 million).
Do the jabrones in Washington have no shame?
You can’t reduce the debt by adding to the deficit.
It’s that simple guys.
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I was chatting with a friend of mine who is a middle school teacher is suburban Baltimore.
He was telling me about his schools online grading system that regularly emails parents with detailed tracking of their kids’ performance – grades on tests, whether or not homework was turned in, etc.
I asked: What percent of parents are on the system – getting the emails.
He said about 75%.
The other 25% either don’t have internet access (a few) … or either don’t care or are single-parents stretched thin (a lot).
That got me wondering about the number of kids who are structurally disadvantaged by having only one parent present to raise them
Well, it turns out that the Washington Times just did an analysis of Census data to answer the question.
Since the answer may be a bit controversial, I’ll just stick to the facts …
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Drilling down, here are some details from the analysis …
Back in early December, Obama reeled in corporate CEOs.
He insinuated that corporate rates would be coming down next year if the CEOs would just get in line and back his current round of individual tax increases.
The CEOs bought it line hook, line & sinker.
Now, Obama says he’s coming at their companies for tax revenue.
After the House the acted on the Fiscal Cliff by passing the Deficit Increase Act of 2013, President Obama warned Republicans:
“The deficit is still too high and I’ll stick with my demands for a “balanced” approach blending spending cuts with revenue increases, notably from the rich and wealthy corporations.”
Surprise, surprise, surprise.
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Several companies launched new logos in 2012.
There were a couple of themes to the changes.
Some – like JC Penney — were trying to disconnect from their devolving legacies and present a new “fair & square” image.
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Other brands changed logos for apparently different reasons …
Partially obscured by the hoopla on Times Square and the bizarre Fiscal Cliff legislative process, is a simple fact: Your taxes have gone up … even if you’re not a millionaire or billionaire making more than $200,000 (oops, I meant $400,000)..
There are 2 big ones: elimination of the 2% payroll tax “holiday” … and the ObamaCare tax on “unearned income”
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Payroll Tax
For the past 2 years, payroll taxes – you know, the automatic deductions for Social Security and Medicare – were reduced by 2% to stimulate the economy.
The so-called “2% tax holiday” ends on December 31 and there are no apparent moves to renew it.
According to USA Today:
A temporary reduction in Social Security payroll taxes expires at the end of the year and hardly anyone in Washington is pushing to extend it. Obama hasn’t proposed an extension, and it probably wouldn’t get through Congress anyway, with lawmakers in both parties down on the idea.
Even Republicans who have sworn off tax increases have little appetite to prevent this one .
Bottom line: The expiration will cost a typical worker about $1,000 a year, and two-earner family with six-figure incomes as much as $4,500.
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ObamaCare Tax …
According to the Social Security Administration, the number of (former) workers collecting disability benefits hit a record 8,827,795 in December.
I’ll stipulate that the vast majority of the 8.8 million are honest folks who really can’t work because they’re disabled … and, I realize that an aging work force has a higher propensity for disablement.
But c’mon, man … this is starting to smell pretty fishy..
The Feds are dishing out over $135 billion annually in disability payments.
How much of the $135 billion do you imagine is going to the folks that Dateline keeps exposing as frauds?
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Here are some more interesting Social Security factoids …
Answer: The pay gap among graduates of elite business schools is widening, according to new research from Bloomberg Businessweek’s biennial survey of MBA graduates.
Female grads of top MBA programs command only 93 percent of the starting pay of their male classmates. The gap gets bigger as years go by.
Here are some specific findings …
According to new Census data reported in the WSJ …
New York, Illinois, New Jersey, Connecticut and Rhode Island led the country last year in “out-migration” (measured as a share of their population).
The Tax Foundation ranks New York, New Jersey and Rhode Island among the five worst business tax climates.
Connecticut, which raised income, sales and corporate taxes last year to the tune of $1.5 billion, is not far behind.
Illinois also increased income taxes last year by 67% and the corporate rate by 46% and will likely seek to hike taxes again to backfill the state pension fund, which is $83 billion in arrears.
Where are they going?
Somebody explain this to me.
Turbo-tax Tim Geithner sent Harry Reid a conveniently timed letter yesterday, reading in part:
Dear Mr. Leader:
I am writing to inform you that the statutory debt limit will be reached on December 31, 2012, and to notify you that the Treasury Department will shortly begin taking certain extraordinary measures authorized by law to temporarily postpone the date that the United States would otherwise default on its legal obligations.
OK, the fact that the U.S. is broke and has exhausted its credit line is not new news.
Here what I don’t understand.
In a cool 15 minute TED Talk, tech entrepreneur Kevin Slavin tells how algorithms have reached across industries and into every day life.
A couple of lines caught my attention:
Worth listening to this pitch … a very engaging geek who may be onto something big.
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In a prior post My computer’s algorithms tell me that you’re willing to pay higher prices we reported that online retailers were using software that helps them detect shoppers who can afford to pay more or are in a hurry to buy … and, present pricier options to them or simply charge more for the same stuff.
For example:
Cookies stored in shoppers’ web browsers may reveal where else they have been looking, giving some clues as to their income bracket and price-sensitivity.
A shopper’s internet address may be linked to his physical address, letting sellers offer, say, one price for well-to-do zips, another for low income zones.
“Price customization” software can collate such clues with profiles of individual shoppers that internet sellers buy from online-data-aggregation firms … All fairly cheaply.
For example, Orbitz detects whether people browsing its site are using an Apple Mac or a Windows PC and recommends pricier hotels to Mac users.
Some online firms charge people different rates for the same products … for instance, by charging full price for those assumed to be willing and able to pay it, while offering promotional prices to the rest.
Allocating discounts with price-customization software typically brings in two to four times as much money as offering the same discounts at random,
One way to do this is to monitor how quickly shoppers click through towards the online seller’s payment page: those who already seem set on buying need not be tempted with a special offer.
Similarly, companies are beginning to scan Twitter for info on the shoppers since their tweets give useful hints about whether a discount is needed to clinch the sale.
Well, a WSJ investigation revealed that the online pricing tricksters are getting even trickier …
This short video was sent to me by a friend a couple of years ago
It really resonated with me, so I like to share it at Christmas time.
… back with you after the New Year
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click to view (best with audio on)
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In a prior post Nums: Stay in school ! we showed that the unemployment rate for college grads is only about 4% … way below the national average … and well below the rate for other education levels.
But, how well do those college degreed jobs pay?
And, more specifically, which undergrad majors pay the most?
Answer: Why French Parents Are Superior
Punch line: While Americans Fret Over Modern Parenthood, the French Are Raising Happy, Well-Behaved Children Without All the Anxiety.
Excerpt:
The French have managed to be involved with their families without becoming obsessive.
They assume that even good parents aren’t at the constant service of their children, and that there is no need to feel guilty about this.
“For me, the evenings are for the parents,” one Parisian mother told me.
“My daughter can be with us if she wants, but it’s adult time.”
French parents want their kids to be stimulated, but not all the time.
While some American toddlers are getting Mandarin tutors and preliteracy training, French kids are — by design — toddling around by themselves.
Click to view the 9rest of the Top !0 most read WSJ articles
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It seems that all of the fiscal cliff attention is obsessively focused on upping income taxes (oops, I meant raising “revenues”).
Specifically, ideas are being floated to change marginal rates, eliminate deductions and close loopholes. All without dampening employment.
Yeah, right.
If the goal is really to raise tax revenue and boost employment, I suggest that the Feds look someplace else – at the payroll tax system.
For more background details, see our prior post Background: Here’s a way to raise tax revenues & create jobs.
Keep reading for the details …
This Homa FIles brief was originally posted July 23, 2008. It’s long, … loaded with with pivotal facts.
Since expiration of the Bush tax cuts looks increasingly likely, I thought they’re worth another look — just as background
On the 2008 campaign trail, candidate Obama broad-brushed all of the Bush tax cuts as “for the wealthy”.
Now, OMB estimates that extending the Bush tax cuts in their entirety would cost $3.7 trillion over 10 years … of that amount over 80% goes to folks making less than $200,000 – $250,000 annually.
In other words, over 80% of the Bush tax cuts for the wealthy went to Obama-defined “non-wealthy” folks — some of whom pay income taxes, and many of whom don’t.
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Summary: We’ve all heard the rants about the cuts in the top bracket rate, capital gains rate, dividend taxes, and estate taxes.
But, when was the last time that your heard anybody mention the new 10% bracket, larger and refundable child and earned income credits, negative income taxes, elimination of the marriage tax penalty, or expanded college benefits?
Here are the details of the Bush tax cuts …
According to Business Week, Mercedes has bounced back and regained the lead from BMW.
Lexus has fallen to third.
Cadillac has halted its slide and is hanging on to the #4 slot … but, Lincoln is going, going, …
Source: Business Week
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In the fiscal cliff talks, I think that the Feds – both Obama & Congress – are demonstrating “no brain” thinking – working ineffectively on the wrong stuff.
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Specifically, in the fiscal cliff talks, practically all of the focus has been on jacking up the marginal tax rates for millionaires and billionaires making more than $250,000.
Payroll taxes – for Social Security & Medicare – have been largely pushed off-stage.
That’s because both Dems & the GOP seem to agree that the 2% payroll “tax holiday” should be allowed to expire.
That may be true, but I think the payroll tax structure may be the key to hitting the seemingly conflicting objectives of raising tax revenues and creating jobs.
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Let’s lay out some basics:
What happens to whom if the current payroll tax holiday expires?
It’s no secret that there are no secrets on the internet.
Google an item and related ads start appearing on seemingly all websites you visit.
Post something on Facebook, and suddenly ads become a lot more personal.
Pick up the phone during election season and the caller mysteriously knows your’ political hot buttons.
As we posted before, if you think that you’re being followed around on the net … you’re right.
So how do you avoid having your browsing linked to your real identity online?
In the private sector, this would be be grounds for a perp-walk.
But, not in government world, I guess.
The headline: GM to Buy Back Stock From Treasury
The story:
General Motors (aka. Government Motors) announced that it will purchase 200 million shares of stock held by the U.S. Treasury Department.
The auto maker will pay $5.5 billion for the shares.
The repurchase price of $27.50 a share represents a 7.9% premium over the closing price on Dec. 18.
After the repurchase, the U.S. Treasury will continue to own approximately 300 million shares of GM common stock, or approximately 19% of the outstanding shares on a fully-diluted basis.
GM expects to take a charge of approximately $400 million in the fourth quarter, which will be treated as a special item.
OK, let work through the pieces …
Even at the inflated price, since the Feds bought i at the $33 IPO taxpayers will incur a trading loss of $5.50 per share … totaling to $1.1 billion.
GM’s largesse in premium pricing the deal “saved” taxpayers about $400 million.
Keep in mind, this is hardly an arm’s length transaction.
And, we the people still own 300 million shares … representing a paper loss of another $2 billion.
Gentlemen start your engines …
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I really don’t understand why Obama and Boehner are having such a hard time resolving the “revenue” issue, i.e. raising taxes.
Make no mistake, I’m opposed to raising taxes and then having Team Obama waste the money … both of which are eventually going to happen.
First, some background, courtesy of today’s WSJ:
The the budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later.
The tax increase now being touted as a sign of “compromise” … are still tax increases, in particular on small businesses that file individual returns.
The Fortune 500 CEOs who are lobbying Republicans don’t mind because they hope to get a cut in the corporate tax rate.
But small businesses will be stuck with a huge immediate tax increase, at least until their owners can scramble to reorganize as corporations instead of Subchapter S companies or LLCs.
OK, so how to break the log jam?
In early November, we posted:
Post-election: Government revenues will soar in Q4 … guaranteed.
The logic was simple: with higher tax rates on capital gains and dividends a virtual certainty, investors would sell appreciated securities (and companies) to lock-in the 15% tax rate … and, companies would accelerate 2013 dividend payouts into the 2012 tax year.
Sure enough.
See Told you so: “Tax induced selling” for some reports of stock & company sell-offs.
Now, I wonder: was it all a big con to generate some tax revenues?
What if tax rates on capital gains and dividends don’t go up?
Could it be the beginning of a new Christmas tradition.
According to AdAge, McDonald’s is “urging U.S. restaurant owners to take the unusual step of opening on Christmas Day to deliver the world’s biggest hamburger chain with the gift of higher December sales.”
The move is a break from the company’s tradition of closing on major holidays.
An internal company memo counseled franchisees: “Our largest holiday opportunity as a system is Christmas Day. Last year, (company-operated) restaurants that opened on Christmas averaged $5,500 in sales.”
Many McDonald’s restaurants were open on Thanksgiving this year.
A former franchisee said: “It’s easy to get kids to work on Thanksgiving because they want to get away from their family, but not on Christmas.”
Ray Kroc must be turning over in his grave.
He is dead, right?
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According to CNBC, fiscal cliff talks moved forward in the past couple of days.
Reminded me of an old W.C. Field’s routine …
Here’s the way the skit goes ..
We’re not talking Hobbit, we’re talking Pepper.
We’re talking a real unexpected journey.
First, some background for non-Georgetown folks.
Theodore Roosevelt Island is a “living memorial” to America’s 26th president, a great outdoorsman and conservationist.
The national park – located across the Potomac from Georgetown – has “miles of trails running through wooded uplands and swampy bottomlands”.
Mapquest says that it’s 3.61 miles from Roosevelt Island to the corner of 34th & O St.
Mapquest’s suggested route is depicted below – follow the windy road out of the park, head over the Key Bridge, turn right on M Street, then head up the side streets.
You probably get the picture.
It’s an easy trip by car, and a nice run on a Sunday morning.
More specifically, it’s a nice run for a well-conditioned guy or gal.
But, what about for a dog?
Here’s where the story gets interesting.
The Homa Files 