Archive for September 2011
Put on Your Red Shoes and Dance the Blues
The Friday File: Can you trademark a color? Shoe manufacturer Christian Louboutin sued Yves St. Laurent for infringement stating that YSLs use of red colored soles in shades of red close to Louboutins’ violated its trademark won in ‘08. Despite the trademark, a judge has preliminarily ruled in favor of YSL saying that “color serves…
Read MoreHoney, I Shrunk the Paycheck!
For those worrying that the Great Recession may result in a lost decade, relax, it already has! Census has reported that real median household income is $49,445, back where it was in ’96, and 2.3% lower than ’09. The percentage of children living in poverty is 22%, the highest since ’93 and earnings for the…
Read MoreGreeks Bearing Gifts
The chances of a Greek default in the next 5 years is 98%. It now costs $5.8 million upfront and $100,000/year to insure $10 million of Greek debt for 5 years. This is because the austerity plan is failing, the Germans refuse to give the Greeks more money, Greece’s budget gap widened 22 percent in…
Read MoreLosing While Winning
After spending so much to save the banks from collapse the government is now suing them for roughly $30 billion! That’s the amount lost by Fannie and Freddie and attributable to the big banks. Even if these suits have merit, this drama has no winners. If the gov’t wins it still loses as banks will…
Read MoreHurricane Irene; Forecast to do Little for GDP
Hurricane Irene has done immense damage to parts of the east coast. Clean up is estimated at upwards of $30 billion. Yet, this impact will be negligible on future GDP. This is because our economy is very large, about $15 trillion, and because spending resulting from Irene will occur over a period of about 2…
Read MoreUN UNbelievable!
The Friday File: The UN has decided to limit the reports it publishes to a maximum of 10,700 words. They are doing it to save $ and reduce burden on translation services. This will also save a lot of diplomat’s time, which must obviously be worthless. Otherwise, they would have done this long ago. Costs…
Read MoreCheer up, things could be worse!
The Institute of Supply Management’s August manufacturing report was very weak with a reading of 50.4 barely above the 50 level, indicating expansion. And, its steadily decline from a high of 61.4 in Feb is troubling. But, don’t fret. Other manufacturing surveys were better, and, historically, the index must drop to about 42 or 43…
Read MoreAll Talk No Action
The DOJ’s decision to block AT&T’s takeover of T-Mobile is good policy because the loss of T-Mobile would have probably raised prices and reduced handset offerings. But, the win will be phyrric if T-Mobile cannot sell itself soon as it’s German parent has said that it will not invest more to keep it competitive. As…
Read MoreThe Fed, Not Out of Ammo!
The Federal Reserve still has options, short of QE3, if it wants to encourage more lending. First, it can reduce to zero the rate of interest it pays banks on deposits held at the Fed. Second, it could sell short term Treasuries it holds and with the proceeds buy long term Treasuries. This would reduce…
Read MoreClipping Chinese Competition
The Friday File: Though the US no longer makes high-tech stuff like ipads and cell phones, or low tech stuff like shoes, we are a paper clip powerhouse. Most of the 11 billion sold, made in the US. Why? Since ’94 tariffs ranging up to 127% of the base price have protected US makers from…
Read More