Submitted by Alan Beaulieu on Mon, 06/09/2014 - 15:46
The European Central Bank (ECB) introduced negative interest rates for the first time in its history. This historic action caught the attention of the press, so I thought you might like a quick look at what it means without having to listen to a long lecture that will make the details on the back of your library card look interesting.
Trouble Between EU and Russia Fails to Create Market for US Natural Gas
Submitted by Alan Beaulieu on Thu, 05/29/2014 - 15:36
There have been hopes that troubles between the EU and Russia over Ukraine would produce a market for US natural gas, most likely in the form of LNG. We have been skeptical of that from the beginning of the crisis, stating that the Russian oil and gas will flow through the Ukraine pipelines because Russia needs the hard currency generated from energy exports. That is indeed what is happening. In fact, shipments are up year-over-year. Investors in hopes of a quick return based on massive exports to Europe have been severely disappointed.
Submitted by Alan Beaulieu on Thu, 05/15/2014 - 09:52
Retail Sales were in the news on Wednesday, and the headlines/lead broadcast comments were not encouraging. The news anchor said retail sales were disappointing and probably related to weather (again with the weather!). Retail Sales (excluding auto sales and not adjusted for inflation) were off 0.58% from March to April. As I write this the pundits are saying that the winter weather hurt retail sales in March and April. Really? Let’s look at the numbers.
Submitted by Alan Beaulieu on Thu, 05/01/2014 - 13:58
The European Central Bank (ECB) announced that business and non-business loan activity increased in the first quarter of 2014, and concurrently, an easing of lending standards in European Banks. The increase in loan demand was small at 2.0%, but a whole lot better than the -11.0% of the last quarter of 2013.
Submitted by Alan Beaulieu on Tue, 04/29/2014 - 14:28
A study by the Boston Consulting Group shows that traditional views on low-cost manufacturing are not true anymore. The last 10 years has seen a shift in the lost-cost advantage away from China. China is still ranked the lowest cost by some measures, but the all-in cost, including quality, has resulted in a new look at other manufacturing centers, including the US. China’s cost advantage in manufacturing is now less than five percent. Mexico is now lower-cost than China, and the US is on par with Eastern European costs.
Submitted by Alan Beaulieu on Thu, 04/24/2014 - 09:23
Rising costs are creating a margin squeeze on businesses. We have been encouraging readers and listeners alike to take preemptive action against these rising costs, and hopefully, you have. Act quickly if you have not because material and labor costs are going up. According to the National Association of Business Economics (NABE), twice as many businesses reported higher material costs in the first quarter of 2014 as compared to the last quarter of 2013 and 35% reported higher labor costs. This is a tough environment in which to raise prices, but do so if you can as
Submitted by Alan Beaulieu on Tue, 04/22/2014 - 16:09
Romania, one of Europe’s growing countries, is cutting taxes to spur more growth. They are planning on eliminating the business profits tax on profits reinvested into the country, lower the social security tax, and lower the value-added tax (VAT) on some foods. Eventually it hopes to reduce the income tax on lower income earners. The government will either freeze or cut expenditures at the same time in order to reduce their deficit and compensate for the lack of tax revenue. Romania seems to have the political will to put together what should be a winning formula to
We Listened: Coming Improvements to the ITR Economics Trends Report
Submitted by Alan Beaulieu on Tue, 04/15/2014 - 16:27
In May 2014, ITR Economics’ lead publication, the ITR Economics Trends Report, will be moving to a new all-digital platform. The ease of accessibility and the benefits of flexibility found in a digital publication work to enhance the same insight and analysis you’ve come to expect from the team at ITR Economics.
Submitted by Alan Beaulieu on Fri, 04/11/2014 - 09:08
France has a new Prime Minister, Mr. Manuel Valls. He spoke before France’s Parliament and announced that he will work to make their economy more competitive by cutting taxes and federal spending. He said those spending cuts will not amount to austerity, but they will slow the rate of growth in federal spending and hopefully trim the budget deficit to 3.0% of the GDP by the end of 2015 (it is currently at 4.3%). Doing so will keep France within EU guidelines.
Submitted by Alan Beaulieu on Thu, 04/10/2014 - 12:25
Do you remember last week’s USA Today headline article about CEO wages? CEOs making $10 million a year? Others were reported at earning over $100 million a year. That’s right; I said “earning” because they are being paid to do a job. Their pay is set by the Board of Directors, and the Board is established by stockholder/investors. They decide whether the pay is reasonable or not. A salary level is not a function of voter referendum or public opinion. The people who have a financial stake in the financial success of the firm determine whether the CEO