Monthly ArchiveDecember 2006
Nintendo will replace the strap on its wireless, motion-sensitive controller for the Wii gaming machine after lots of reports of it breaking sending the controlling flying in any direction. Company spokesman Yasuhiro Minagawa said, “People tended to get a bit excited, especially while playing Wii sports and in some cases the control would come loose from their hands. The new strap will be almost twice as thick.” Bad straps have been the only downside in the Wii’s successful debut. NPD Group estimates Nintendo has sold twice a many Wiis as Sony has sold Playstation 3s.
Economy 14 Dec 2006 02:11 pm
The Treasury Department appealed a judge’s decision to redesign the currency so it’s more useful to the blind. They argue making changes would be too costly to the government and vending machine operators. Christopher Gray, president of the American Council of the Blind, is willing to wait for the next counterfeit-preventing redesign. “We would be happy to wait until the next change in the bills and build accessibility in at that time,” Gray said. “Surely, if you did it that way, the costs can’t be anything like what is being claimed by Treasury.” Marc Maurer, president of the National Federation of the Blind, opposes the ruling writing in USA Today [via twoorthree.net], “The cost to society in changing machines that accept currency, such as vending machines and ATMs, will be much greater than the small convenience afforded to the blind by being able to identify money by touch.”
Real Estate 14 Dec 2006 01:39 pm
AP Business Writer Mark Jewell has a lengthy article on the housing market in 2007. Rough summary: it’s frozen. With rising interest rates buyers want deals while sellers wish for the days of double-digit growth in the value of their homes. Jewell illustrates this with Antioch, CA’s Donald Anthony. He dropped the price of his 4-bedroom ranch by $80,000 and spent $40,000 on improvements. He still has no buyers and doesn’t have the urge to lower his price any further.
Economy.com forecasts “the first decline for an entire year in U.S. home prices since the Great Depression of the 1930s.” Once hot housing markets on the coasts are seeing the most dramatic effects. In the San Francisco Bay area [via Louis Brown]:
Last month’s sales count was the lowest for any November since 2001, when 6,644 homes sold. Since 1988, November sales have ranged from 5,579 in 1994 to 10,897 in 2004. The average is 7,725.
Ben Jones at The Housing Bubble Blog links a bunch of stories showing the lackluster housing market is negatively affecting mortgage firms. Will this spread to the rest of the economy? Not according to this week’s retail sales numbers.
Economy 14 Dec 2006 08:00 am
Put away any thoughts of turning that big booze bottle full of coins into valuable industrial commodities. Because it’s getting so expensive to make coins the U.S. Mint is outlawing the melting of pennies and nickels. You can’t take more than $5 of the coins with you when you leave the country and can only ship $100 abroad. A little ingenuity can solve that. Just find your nearest international drug dealer and make a deal. The mules he uses to smuggle in the smack can be the same ones to transport your coinage. That’s of course if the condom’s don’t break on the way into the U.S.
If you’re really in the mood for some metal mayhem you could try cornering the silver market, but you’d probably wind up worse off than the Hunt brothers.
Food 13 Dec 2006 11:29 pm
The health Sherlocks think they finally found the source of the E. coli that got 71 people sick in the Northeast. It wasn’t the cheddar cheese or the ground beef. It was the lettuce:
“That I would say is the most likely vehicle. I would warn we are not done with the investigation,” Dr. Christopher Braden, a medical epidemiologist with the Centers for Disease Control and Prevention, told reporters.
The lettuce hasn’t been tested. It’s a statistical inference. Scientists came to their conclusion via spreadsheet. The AP’s Andrew Bridges writes, “it was the item that victims most commonly reported eating.”
Health officials in Iowa and Minnesota also think bad lettuce is the source of an E. coli outbreak at Taco John’s. With 200 people getting sick this fall from tainted spinach McDonald’s must be glad they didn’t re-launch the McDLT.
Seriously, the bad news from the past few months could really hurt vegetable farmers. That’s why Congressman Sam Farr (D-CA) said in a statement, “This outbreak highlights the need for additional research into E. coli and fresh produce so that the industry, food processors, retailers and consumers can make the best food safety decisions possible.” There will be plenty of hearings on this subject.
At least in New South Wales, Australia their leafy veggies are ok. You can eat like a rabbit to your heart’s content.
We know where all the private equity for airlines went: down under:
QANTAS Airways has accepted an $11 billion takeover offer from an international consortium including Macquarie Bank of $5.60 a share in the biggest private equity deal in Australian history.
Qantas’s non-executive directors have unanimously recommended that shareholders accept the offer from the consortium known as Airline Partners Australia (APA) after it was bumped up from $5.50.
Qantas chairman Margaret Jackson said the offer from the Airline Partners Australia consortium was 33 per cent higher than Qantas’s closing share price of $4.20 on November 6, when the prospect of a bid was first raised.
“The directors believe this offer allows Qantas shareholders to realise significant value for their shares that has not been fully recognised in the public market,” Ms Jackson said.
“If this acquisition is successful, Qantas will remain a majority Australian-owned, Australia-based airline,” Ms Jackson said.
The investor group sweetened the deal after it was rejected the day before.
On the heels of buying part of Sabre Holdings Texas Pacific Group grabbed a chunk of Qantas. Rumor has it a piece of the moon is next on their list.
For Qantas stockholders this is icing on the cake (or another shrimp on the barbie?). The stock has been on a tear since late summer.
Economy 13 Dec 2006 04:56 pm
Along with the news about possible airline consolidation the other surprise news was the growth in retail sales:
Showing surprising strength, seasonally adjusted U.S. retail sales increased by 1% in November, the first gain since July, the Commerce Department reported Wednesday.
Excluding the 0.9% gain in motor vehicle sales, retail sales rose 1.1%, the largest gain since January.
Sales were much stronger than the 0.2% gain expected by economists surveyed by MarketWatch. They expected sales excluding autos to rise 0.3%.
Economists and forecasters are pulling late nights recalculating their models.
Those few shoppers that did make it to the stores must have spent a ton–probably on HDTVs (electronics store sales jumped 4.6%). That fits with Dr. Peter Morici’s view:
Sales of upscale items remain strong. These are powered by recent stock market gains and strong employment and pay increases for professionals and managers well positioned to benefit from globalization, for example in investment banking, law, top levels of corporate management, and accounting.
He calls today’s numbers “decent but modest gains” but “not enough to power robust economic growth.”
Or maybe Britt Beemer isn’t as good of a retail analyst as he thinks he is.
The AP quotes Joel Naroff, chief economist at Naroff Economic Advisors: “No matter what the retailers may be saying, it appears that consumers have taken out their wallets so far this holiday season.” In other words, numbers don’t lie, but they can be revised.
Taco John’s joins Taco Bell by having its own E. coli outbreak:
U.S. fast-food chain Taco John’s said on Wednesday that it is switching produce vendors for about 100 of its Mexican-themed restaurants, after an outbreak of E. coli sickened 54 of its customers.
The illnesses, which coincide with an E. coli outbreak at larger rival Taco Bell, owned by Yum Brands Inc. (YUM.N: Quote, Profile , Research), occurred at three Taco John’s restaurants in Iowa and Minnesota, far from the Northeastern states of New York, New Jersey, Pennsylvania and Delaware, where most of the Taco Bell cases occurred.
Brian Dixon, marketing vice president for Taco John’s declined to name either of the vendors involved. They supply lettuce, tomatoes, cilantro, yellow onions and green peppers to all three restaurants. He did say that his company did not use the same suppliers as Taco Bell.
Just avoid all fake Mexican fast food joints. That’s usually good advice 99% of the time, but there are those late night occasions (usually after consuming lots of alcohol) were a bean burrito sounds really, really good. Resist! At least until the taco twosome can get some clean veggies and tell their employees to wash their hands.
Shopping 13 Dec 2006 02:12 pm
Dog or child? Dog or child? Dogs are Man’s best friend. They can be faithful companions. Children on the other hand smell, make messes, are loud, can be demanding, cost you an arm and a leg to send them to college, and can give you a nervous breakdown for their outrageous exploits. Still, most people, when out for a quick trip to Neiman Marcus, would choose to take the kid with them into the store. Not this Arizona woman:
Gardenia Zakrzewski-Johansson was arrested in the mall parking lot outside Neiman Marcus after valets watched her walk into the store with a small dog under her arm, directing them to watch her car with the child inside.
“I’ll be quick, don’t tell anybody,” Zakrzewski told one of the valets before going into the store for nearly 30 minutes, according to the police report.
The woman’s excuse: the valets were suppose to watch the kid. Next time, get a babysitter. You shop at Neiman Marcus. You can afford it.
The market talk today is airline consolidation. United (UAUA) talking to Continental (CAL) (with Northwest (NWACQ) in the background). AirTran (AAI) talking to Midwest (MEH). This is on top of U.S. Airways going after Delta. I won’t be surprised if defunct Pan-Am rises from the grave and goes after someone. And what about private equity? They’ve been buying anything like their money is burning a whole in their pockets. Let’s get to some details:
From MarketWatch on a possible United-Continental merger:
Analysts have long favored a combination of United’s Asian routes and heavy coverage of the western United States with Continental’s Latin American and European routes and its large and highly profitable hub in Newark, N.J.
On an AirTran-Midwest hookup we have the take from the Milwaukee Journal Sentinel:
A merger of AirTran and Midwest might change the nature of air travel from Milwaukee.
“Milwaukee has been extremely well served by having a hometown-headquartered airline here, and I would hate to lose that,” said Tim Sheehy, president of the Metropolitan Milwaukee Association of Commerce.
“The critical thing here is the quality of the air service,” Sheehy said. “And they have given us better air service than most markets our size.”
Midwest was launched in 1984 as a spinoff from Kimberly Clark’s corporate aviation division. Midwest was founded by Timothy Hoeksema, who remains as chairman, chief executive officer and president.
Midwest competed with much larger airlines by filling a niche. It offered award-winning service, including wide, two-across seating, gourmet meals served on china, and complimentary wine and champagne. That appealed to business travelers, who were more willing to pay the higher fares demanded by Midwest.
The formula worked until the recession hit in 2000, followed by an even greater slowdown in travel after the 2001 terrorist attacks.
Midwest came close to filing for Chapter 11 bankruptcy protection in 2003. The company managed to avoid it through a large refinancing package.
The company renegotiated agreements with aircraft lessors and lenders, and arranged for about $40 million in financing. Also, unions representing pilots and flight attendants agreed to wage concessions.