Global Variance in the Price of Gas
Another riveting article title COMING AT YOU! I should write romance novels.
Anyhow, I know I write about oil and gas almost as much as I write about retail. Stories about fossil fuels tend to dominate financial news because fuel determines how much transport costs, and transport affects many businesses. Fuel prices can even affect how some businesses develop- back in January I wrote about the state of “brick and mortar” businesses. These businesses must routinely pay to have product shipped to stores all over the country. That can get pricey, and as such many retailers are exploring digitized content like e-books or MP3s which do not require physical delivery.
So, gas gets things from one place to another place. Great. But what makes gas cost more or less from country to country? CNNMoney.com posted a great article about why gas prices “at the pump” vary so much internationally. It can mainly be chalked up to government taxes or, alternately, government subsidies. Some countries like Norway tax their gas heavily (gas is currently $9.28 per gallon there). Other countries like Venezuela decrease the cost of gas for consumers (Venezuelans paid about 12 cents per gallon during the epic gas hikes of 2008). The United States falls between these two extremes.
Proud Iowan Moment
Check it out! According to an article in my hometown Des Moines Register, Men’s Health magazine has named Des Moines one of the 18 “coolest places to live in America”. I couldn’t agree more.
The article cites our growing technology sphere and cultural hotspots like the Pappajohn sculpture park. It also touts Des Moines as having a cost of living 10 percent below the national average (I didn’t know it was that low!). The article kind of goofed up listing Dell as a “strong presence” in the local employment scene, but whatever. The thought is there.
My favorite part about living in Des Moines is how we have everything a city boy like myself wants and needs, but in many cases we have JUST ONE. Just one Trader Joe’s, just one Apple store, just one art museum, just one Imax. Why is that a good thing? Do I enjoy driving all the way over to West Des Moines for fancy groceries or first-hand iPods? Not exactly. But there is something cozy about the shared experience- if someone says they “went to the Apple store” last weekend, I know exactly where they’re talking about. It creates a unified city spirit in a way.
Go Des Moines!
Wal-Mart Takes Sustainability Into its Own Hands
Wowzers. This article in Advertising Age absolutely delights my imagination. Apparently Wal-Mart has a set of policies that rewards suppliers who adhere to certain sustainability parameters and initiatives. These include reducing greenhouse emissions, investing in “community-development” activities, and even reducing sodium and sugar in food products!
There’s more: old Wally World is actually spearheading an initiative to create a “Sustainable Product Index” that they can slap on products. Initial going has been tough, but they are 19 months into the effort and show no signs of giving up.
Like any half-aware midwesterner I grew up nursing a wary love-hate relationship with Wal-Mart. Or should I say, I had a hate-hypocrisy stance whereby I railed against Wal-Mart while still shopping there on a more or less regular basis. A lot of recent developments are really making me question the dogma. I still believe that Wal-Marts squash local economies, and that’s awful, and their treatment of employees is suspect, but… but… now things are more complicated.
Regardless of my personal beliefs, Wal-Mart is a treasure trove of retail case studies and general interest. I will continue to keep a keen eye on their social and environmental policies (and watch out- I might take a look at some of the economic aspects as well).
Retail Poised for Big Gains
Sure, oil prices are skyrocketing and rising gas prices might doom us all. Let’s not worry about that right now. Check out what’s going on in RETAIL! According to this article on Marketwatch, retail is set to make a big splash when February numbers are reported. Year-on-year sales are set for a whopping 9.3% gain, the largest gain since March of 2000.
We are still expecting a small slide in consumer confidence due to the aforementioned oilmaggedon*, but this retail health should help sustain economic growth until the world’s political stage stabilizes a little bit and pump prices head back down.
*I should probably trademark that.
Unemployment Drops to 22-month Low
Woohoo! The national unemployment rate dropped to 8.9% in February, its lowest point since April of 2009. Check out the lack of “yes, but”s that I gleaned from a CNNMOney.com article:
- The drop was NOT caused by people giving up hope. The number of people who do not count as “unemployed” because they aren’t looking for work remained steady at 2.7 million.
- The drop was NOT caused by temporary government hiring. Quite the opposite- state and local governments cut 30,000 employees.
- The drop was NOT expected! CNN’s analysts had predicted a rate around 9.2%.
This is a huge positive sign for the economy with virtually NO hidden downside. So stop reading now.
…because oil is heading back up again and it caused the Dow Jones Industrial Average to plummet 1.2%. Oy. It’s the weekend, folks. Let’s all head out and party until we forget that last bit.
Rich People Loooooove Fast Food
I live for stories like this. According to this article at CNNMoney.com, rich people are eating more fast food. I totally get it. Chipotle tastes good no matter how much money you earn. My wife and I ate it four or five times per week for several months back in 2005. But this post isn’t about my eating habits past or present. It isn’t even really about rich people eating bad food. It’s more about the interesting organizations I learned about in the article’s references.
The article cites American Express Business Insights as saying that among American Express’ top 10% most affluent customers, fast food purchases are up 4%. The aforementioned AEBI is an organization that leverages American Express’s vast transaction data warehouse to deliver all kinds of data to consumers.
The other interesting nugget hidden in the article is a quote from the Luxury Institute. Who? The Luxury Institute is an organization that studies spending habits of extremely wealthy consumers. They have published white papers with titles like “Wealth & Luxury Trends: 2011 and Beyond” and “12 Rules for the 21st Century Luxury Enterprise”. It’s really interesting what you find when you follow a news article a little further!
Wow This is Cool!
One of the keys to learning about business and the economy is saturation. I listen to business podcasts every day, I monitor several business-themed websites, and I read the Wall Street Journal every time some kind soul leaves it in my work bathroom.
Rejoice! Thanks to an article on about.com I found a wonderful resource on the website of the Federal Reserve’s New York branch:
This, my dear readers, is an economic indicators calendar.
This lays out a day-by-day collection of links to all kinds of great information such as consumer credit reports, construction starts, and price indexes. I intend to monitor this site daily over the next several months to get a better feel for what makes the economy tick. You should do the same!
Image Credit: Kittikun Atsawintarangkul / FreeDigitalPhotos.net
Oil Prices Rising
Crude oil hit $103 a barrel today, according to this CNNMoney aritcle. Political unrest in Libya is causing the price to soar. There are a few interesting points in the article that I’d like to highlight:
- This week oil reached $100 a barrel for the first time since the dreaded 2008. In this New York Times article an Edward Jones investment strategist commented that “we would have to see higher oil prices stay around for longer to have much serious impact [on the market]”. However, when gas prices rose back in 2008 consumer spending dropped a whopping 3.5% according to this Yahoo News article.
- I am interested in how the impact of Libya’s upheaval is magnified in the price increases. Oil jumped 11.3% between February 14 and today, yet Libya produces less than 2% of the world’s oil. It seems like fear might be trumping observable global impact!
10 Worst States for Retirees
Topretirements.com recently published a list of their “Top Ten” worst states to retire in. This list has been analyzed by multiple blogs (check out this great article over at Marketwatch).
The list is very comprehensive- it folds in many important factors including tax laws, climate, and transportation services. The original article looks ahead and predicts civil unrest in the worst states and communities as their older populations grow angry and disenfranchised due to rising costs and declining services.
My main concern is not quite so dire. One thing I did not see discussed in these articles is that retirees are something of a “boom market”. Because of advances in health care, we have more and more elderly people every year. States and communities should be proactive in marketing to this population. If spun the right way, an elderly population could become a very profitable population. It will require a combination of shrewd policy, forward-thinking tax laws, and strategic services. Which states are up to the challenge?
Borders Files for Bankruptcy: A Historical Perspective
I grew up with Borders. I remember visiting their stores when my family would travel out-of-town, and then I remember when the first Borders opened in the Kansas City area down in Overland Park. My family made the 45-minute drive south once or twice a month to wander around the sprawling bookseller. Over the next ten or twelve years I spent many an afternoon…
Woah, I didn’t see you standing there! Enough with my memory lane- cut to the present! As we reported recently, Borders is in some trouble. This article at CNNMoney.com details a bankruptcy filing that surprised exactly no one. Borders will close 200 stores (just under 1/3rd of its current locations) and reduce overall staff in the re-structuring.
Some chains persist after such drastic cutbacks. Reducing headcount, locations, and geographic breadth can be beneficial. One example is the fast food chain “Rax” that I remember from my youth: they still exist, but in an extremely reduced form (franchise-only) and only in five states.
Other chains, such as Circuit City, can lose their brick and mortar presence entirely over the course of several downsizings. Sometimes bankruptcy is an opportunity to regroup, and sometimes it is the beginning of the end. One thing is for sure: in order to succeed, Borders will need to focus their e-book strategy- that’s a growing field (as we reported some time ago (and for some reason the page is missing so I can’t link to it)).
