Krispy Kreme Stocks Drop

Anyone who watches the stock market knows that the values are constantly changing. They rise and fall for many different reasons, many having to do with the economy. However, have you ever heard of stocks falling because of a diet? The carb-counter crazies may be partly at fault for the 16% decrease in the value of Krispy Kreme Doughnuts. New diets and higher interest in "healthy" foods have caused consumers to be more weary of the junk food that they eat. A regular glazed doughnut has 200 calories and 12 grams of fat.

Trouble in the company first arised in May and shortly after, many new store plans were cut and existing factories were shut down. Investors also believe that the company expanded too quickly when they began selling in gas stations, supermarkets, and other convenience stores. You can even buy Krispy Kremes through school fundraisers! Before, these doughnuts could only be bought in Krispy Kreme stores.

Since its stock hit a lifetime high of $49.74 in August 2003, Krispy Kreme has lost more than 80 percent of its market value. During this session, the stock hit a record low $9.37. Could this dramatic decrease be all because Americans are becoming more health conscious?

Wal-Mart's next victims

When Toy's R Us in August said that stiff competition from Wal-Mart was making it consider whether or not to exit the toy industry, had struck fear in the hearts of retailers everywhere. Toy's R Us was the first to pioneer the idea of the "category killer" that is now used by many big box specialty retail stores including Best Buy, Home Depot and Bed, Bath & Beyond. These retailers giant specialty stores that cater to one particular product segment of the U.S. economy. Wal-Mart is the antithesis of a category killer with isles filled with a vast amount and variety of many different products is posing a threat to many of these "category killer" stores.

Walmart is threatening many of these "category killer" stores with their expansion and improvement in many of the different types of products they offer. They are looking into expanding into gasoline, a better and expanded fashion line to compete with stores like JCPenney and Target, drugstores, an extended line into electronics, and even are considering getting into the business of banking. This has many other stores worried. Although Wal-Mart does have more competition with the merger of Sears and KMart.

I find this story to be scary. I know it is a long way away but if Wal-Mart eventually becomes the only store in a town will they then raise there prices because there will be no competition to go against them. I think in the future they may become a monopoly and in some smaller towns where they are the only retail store they already are.

What is wrong with Monopoly Game

We learnt "Monopoly" lately, which made me remembered a game I played when I was a child. It is Parer Brother's board game Monopoly. It is considered as a game to teach children do business. I think most of you had ever played it. I forget specific details in this game. But I still remembered that I always lost in this game, and I felt boring about it, because I always could not decide what I want to buy or do but followed what the cards said. And when you want to buy something, there are only one seller who can decide price, and sometimes the cards will also have right to decide price. I thought I cannot be a business person, but now I am majoring in Economics. And I know the situation the game gave to us was not a real world. Most of the markets are competitive, there are many competitors, and government Macroeconomics control cannot always be effective. Now I feel interesting about this game, and I recommend this article http://www.mises.org/fullstory.aspx?control=1451. May be it can make you recollect something in your childhood.

Need a Textbook?

As some of you know, and others may not, Follet Books has exclusivity rights on the Marietta College campus, meaning that the Administration has granted Follet a monopoly on this campus. However, many options have presented themselves to students here, and at other institutions across the country as similar situations have arisen. Many of the alternatives exist on the web, with half.com, and amazon.com being the main two companies. A new site, swichtextbooks.com will soon be open for business. The site is supported by Baltimore Solutions and the United States Postal Service. The site will allow students to submit a list of books they have, as well as books they need, and the computes will automatically match the your need with someone’s book. This new site presents many different issues for Follet, if this site can be publicized on this campus, and all the students use the service, what is Follet going to do? Well, as the Supply of books increases and all else remains constant, prices will fall, and Follet will have to keep up. As the price of the books fall students will experience increased consumer surplus. Hopefully this will happen, and we can all pay a little bit less for our textbooks.

Retail Wars

This week, a merge between Sears and KMart has been completed. The new company, to be called Sears Holding Corp, has a lot of goals. At the top of the list: Take down Wal-Mart! The battle against Wal-Mart will start by creating a more efficient supply chain, lowering prices, and promoting Sears and KMart owned brands. All this will result in a larger consumer surplus among that American people. They help out consumers and manage to diminish the control that Wal-Mart seems to have over retail. Sears and KMart hope to cut their combined costs by $300 million and increase their profit by about $200 million. However, Wal-Mart, and other stores like Target, will not simply sit in their chairs and watch. This will ultimately start a price war resulting in a constant battle for lower prices. Sears and KMart may not 'beat' Wal-Mart, but for the time being, their merger will certainly have a large affect on the retail industry.

Wal-Mart Dominates Consumer Sales

After reading this article, I would have to reconsider whether to keep shopping at Wal-Mart. It seems absurd that one company can dominate so many market areas while providing 1.2 million workers with low wages and costly healthcare. From this article, I feel that Wal-Mart is the most profitable company because of their lower labor costs and their ability to purchase mass quantities. Wal-Mart drives out competitors because of being able to provide these lower prices because of their purchasing power and lower labor costs. I would much rather shop at smaller establishments but as I have learned in microeconomics, consumers tend to buy where they can get the lowest price. As long as consumers continue this trend with Wal-Mart, more and more competing retail stores will continue to fail. One point about Wal-Mart I feel is against them is their clothing, shoes, and accessories are not high quality. Since these items are mass produced in countries like China, the do not fit as well as higher scale department store items. If they would be able to compete with the higher scale clothing lines, what would be left to dominate? Maybe, Wal-Mart could go into providing medical services. While you wait to see the doctor, you could shop! When it is time for your appointment, it could be announced over the loudspeaker, like the way they do for an oil change. Seriously, though, since Wal-Mart dominates so many market areas, it would seem unrealistic for new entrepreneurs to try to go into retail sales. It would be great if the private establishment of retail could still exist, but if Wal-Mart continues as it has, this will be a thing of the past.

DaimlerChrysler Makes Costly Mistake

Recently Crysler Recalled many of their 2000-2003 models year veichles due to the fact that they were deemed unsafe. Apparently the ball joints on the upper front suspension was deemed unsafe. The company tried to blame this on the materials used to keep roads safe in winter, such as salt or other materials. The salt could have caused these problems but the car should have still withstood these conditions according to the NHTSA. This will probably affect the sales of Chysler quite a bit in the future, especially with the exagerated claims that wheels can go flying off and suspension can fall apart. This is enough to scare anybody.

Big Three set to launch new incentives

The big three automakers in the U.S. are ready to launch new incentives for consumers to buy new automobiles due to a large build up in their inventories. Ford, GM, and Daimler Chrysler with a large increase in their inventories are trying to sell more automobiles by offering more incentives to consumers. The big there automotive makers have seen the highest inventories in the history of their companies. Will these incentives increase sales for the big 3 automakers?

I found it tobe very interesting that foreign automakers seemed to be doing so much better than those that are based in the U.S. with their current stock level and the incentive levels that they offer. I think one reason for the problems for the big 3 are the high gas prices causing people to not want to go out and buy a big SUV or truck which have smaller gas mileage. Why when the incentives are much higher for the big 3 automakers do consumers still purchase from the foreign automakers like Honda and Toyota? Is the quality of there automobiles that much better than those made in the U.S.?

Will Keeping Oil Prices High Develop Growth?

U.S. Treasury Secretary John Snow Says that by keeping oil prices high we are encouraging growth in the area. Recently John Snow formed an agreement to allow oil producers to produce less oil in order to keep prices high. This makes little sense, since affecting the market externally usually leads to inefficiency. This agreement comes at one the worst times of the year since the winter months are approaching soon and many americans will need to heat their houses. This could cause drastic inflation in our country. This makes little sense to me since many americans already struggle to afford current oil and gasoline prices. John Snow sees raising prices as a way to keep jobs. This could make sense but i see little corralation. With less production that would normally mean less workers are needed. Either way something will have to be done because sooner or later very few people will even be able to afford gasoline.

What's Happening to Social Security

Social security seems like a good idea, but it is steadily depleating. It looks as if there is enoung to last the current generation but the future looks dim for the coming generations. The main problem is that there are too many retired citizens collecting social security benefits compared to the number of working people paying into the funds. This could have been due to the past "baby boom" as many like to call it. There have been a few options to counteract the problem. One of the options is to allow people working to defer a portion of their payroll tax into a private account for them to use when they need the money. Either way something must be figured out, but Sen. Harry Reid says that we have up to about 50 years with our current situation. One of the other options is to raise taxes to pay for the deficite. But would a tax really be benficially to stopping the shortage? Could it have other negative effects?

Are the 2003 Bush tax cuts creating jobs?

This article demonstrates that job growth was very poor for the month of September. It was not low enough to increase the unemployment rate, but it did not meet the projections that the Bush administration claimed would happen after the tax cuts. Infact, excluding March and April, we have yet to see employment meet the predictions that were supposed to come from the cuts. My question is is whether or not tax cuts influence employment. If a person gets a break in paying their taxes and has more money to spend elsewhere, does that really determine whether or not they can get hired? Based on that question, if tax cuts do not help unemployment...what is the Bush administration going to do in the next four years to lower unemployment?

Would you like to pay more?

When you buy a hamburger, what would you like to do? Do you prefer to buy a more expensive "brand name" hamburger, or just a cheaper store name humburger? Some people want to buy "brand name", because they think that the hamburger is different from others and its taste is better than others. Other people prefer to cheaper hamburgers, because they think there are not definately difference between these two kinds of burgers. Therefore, they would like to spend less. I think that there are not obvious difference on the taste of hamburgers. People want to "brand name" because of their habits. They always buy the same kind of hamburgers and they are accustomed to eating the hamburger. Therefore, they don't want to change to others, even if they know that there are some other cheaper hamburgers. On the other hand, "brand name" hamburgers have enough consumers who always buy their products. They don't worry about those consumers will give up their hamburgers and buy other store name hamburgers. Therefore, "brand name" can fix much higher price than other hamburgers and they also can spend more on advertisement.

NBC back in the market for NFL

NBC is looking to try a new contract with the NFL. NBC has steadily been declining since its hit sitcoms have went off the air. NBC says that they will not over pay, but would like to do a deal. NBC dropped its old agreement with the NFL becuase they had such good numbers coming from sitcoms and really didnt need the NFL and the money it would cost NBC.

Finally, Sweden has something more than a bikini team...

As I post this, the NHL lockout has been in effect for 55 days; 13 hours; 29 minutes; and 55 seconds. That's almost 2 months of agony for anyone who is a die-hard NHL fan (sorry Canada). But across the pond, in the land of "Sveden," things couldn't seem any better...

"With no end in sight for the NHL's labour impasse, more than 55 players have already committed to Swedish Elite League teams and more are expected to follow."

More than 250 other NHL players have committed to other European leagues; however, its drawn criticism from people claiming that NHLers are stealing jobs.

Not Sweden though.

Those "dirty Swedes" (I had to do that in honor of the late John Candy and that awful sailing race movie he made) are excited as can be. They believe the NHL stars will bring new life to the league, and new revenue to the country. People believe that the SEL is much deeper now with the influx of new players coming from the dormant NHL. Hockey arenas are filling up and ticket prices are soaring. Yet the fans don't care, because they know this will be "the season that will never come again."

is it a wise decision to build Three Gorges Dam in China?

Dated to 1919, the a dam on the Yangtze River was proposed to be build for power generation purposes but the idea was shelved due to unfavorable political and economic conditions. Then because of a lot of domestic and international pressure, the Chinese Government agreed in 1989 to start the construction plans for the Three Gorges Dam.
Before the construction, there were many people made a lot of debates because it would benefit many people and also cause serious problems. On one hand, there were a lot of merits after building the Three Gorges Dam. For instance, the dam can control flooding on the lower Yangtze River, which used to be a very serious problem in south of China every summer. The dam could also generate hydroelectric power, which must be a great help to reduce the electricity-lack problem in large cities, for example, Beijing, my hometown. Then it could reduce pollution caused by the burning of coal because most of the people would like to use electricity as their powers. On the other hand, the dam brings a lot of demerits, too. For instance, by building the Three Gorges Dam, there are approximately 15 billion people need to move to other places, which cost the government a huge amount of money. Forty thousand builders will work for 16 years to complete Three Gorges Dam on the Yangtze River, which means they will leave their home, their family and have to stay with the Dam for a really long time. Also many historical relics are being moved while famous scenery will not exist at all. So during 1999 there was a travel boom in Sichuan because it will not be seen forever after the construction of Three Gorges Dam. And because the location of the Three Gorges Dam is very serious and important for the safety of China, as long as a war breaks, the Dam must be the first aim of our enemy. Once they bomb it, the most developed area of China will be under water and the land full of wheat and corn will disappear in one second. Another very serious problem the Three Gorges will cause is earthquakes. A certain expert on geography said the Dam may make a more frequent earthquakes happen. The Dam will eliminate tourist trade to the area and destroy important archaeological artifacts. What do you think of the Three Gorges Dam? Do you think it is a wise decision to build it?

NFL Broadcast Contracts

The NFL has agreed with CBS and Fox for a contract worth $8 billion over the next six years starting after the 2005 season. The negotiations between ABC and the NFL over the Sunday night games and Monday night games has not yet been finalized. Do you think that there is too much money involved in getting the rights to the NFL games? As of now, the revenue is split evenly between the teams in the league. Should the larger market teams who have more of a fan base along with popularity get more money than the smaller market teams? The deals give the NFL the option to move seven late-season games from Sunday to Monday night to feature more attractive matchups. The NFL also can develop late-season prime-time satellite or cable packages of eight games, which would be televised on Thursdays and Saturdays. Or the league could take those eight games and show them regionally in prime-time telecasts on Sundays and Mondays. What do you think about all of the money being put up for broadcats and the NFL? What is your opinion of the article?

Global Economy

In an article from MSN dated November 5, 2004, the dollar has hit an all-time low against the euro. The euro reached $1.2962 Friday. The U.S. dollar buys only about 3/4 of a euro. This is not good news if the U.S. wishes to import goods from Europe or citizens plan to travel to Europe. However, it is good news for U.S. Manufacturers since they could export more goods to Europe because they could buy more goods at a lesser price. This could assist in stimulating the U.S. economy. In time, it appears that the U.S. economy will continue to grow thus leading to higher interest rates and a more attractive dollar. When this does occur, would the U.S. import more goods and export less goods? It would seem it would depend on how fast the U.S. economy is growing and if it is at a point where it would continue stimulating the economy such as consumers purchasing more. This article could be seen as how the global economy works. It shows how the strength of the currency of a country determines its exports and imports, which ultimately could determine the direction of the economy.

Kerry Concedes

What do you all think will happen to the economy with Bush in presidency for another four years? I do not think the outlook is hopeful, but I am saying this out of my opinions, not out of any economic facts, other than Bush has already lost numerous jobs.

Beef is Beef

I for one would not spend extra money on a brand name of beef. There are brand names of jeans and other types of clothes, but each brand name fits differently. The difference in the way beef tastes for the same cut of meat, is how it is prepared after the butcher. The question is, how are they going to make Oregan Trail Beef more desireable to consumers? The chicken industry advertises different brands of chicken, each having thier own unique chicken quality. Tyson chicken advertises that their chicken is not injected with hormones, therefore it is healthier. There are other brand names of chicken that claim to be more tender than others. Unless Oregan Trail Beef can somehow make the beef better for the consumers, the beef market is going to remain perfectly competitive. There are very few people that would pay extra for 'better tasteing' beef, when that can be done in their own kitchen.

http://econ.aplia.com/images/fenner_beef/beef_article.html

Vice Presidential Debate Costs Cleveland

As the campaigning draws to a close tomorrow, we can look back at the more than 45 times that the candidates have visited the great state of Ohio. As a “political battleground state” Ohio has been the target to visits by the Campaign Corps from both of the major political parties. Cleveland, on October 5^th, was host to the Vice President and Senator Edwards (hopefully after tomorrow he will still be just Senator Edwards) as they exchanged ideas in the first and only Vice Presidential debate. As reported in the Cleveland Plain Dealer, the City and Case Western Reserve University were proud to host the event, even though it meant spending large sums of money on safety measures, and cosmetic adjustments to the surrounding areas. The VP’s debate cost Cleveland a reported $227,406. Unfortunately these costs have been bared by cities across our state, each of the other visits costing between $15,000 and $30,000. Not including the costs that the state highway patrol has had to shoulder since last May. The question is whether or not the visits have had a economic benefit on the cities the candidates have visited. Well in my opinion, the hundreds of man hours logged (Most of which are time and a half) must have helped the local economies in some way, shape or form.