Monday, February 3, 2014

New Year Economics

2013 AUTO SALES - Volkswagen said Thursday it topped rival General Motors Co. for second place in global sales among all automakers. VW said it sold 9.73 million cars and trucks in 2013, compared to GM’s 9.71 million.

The German automaker’s tally includes heavy-duty truck sales from its MAN SE and Scania AB units, so some still say GM is the second-best selling automaker among light-duty vehicles.

Toyota Motor Corp. sold 9.98 million vehicles in 2013, retaining the title as the world’s largest automaker for a second straight year. Its tally includes sales from its Hino Motors and Daihatsu units.

Toyota was also the top-selling automaker from 2008-10, but GM regained the title in 2011 after Toyota production sank because of natural disasters in Asia. GM was the world’s largest automaker from 1931 through 2007.

RETAIL TROUBLES - Best Buy tried an inventive strategy to attract customers this past year: inviting them to test out products in stores and buy them for less online. But the electronics retailer on Thursday became the latest chain to post weak holiday results. A deep malaise that seems to have struck malls and big-box retailers: the fast rise of e-commerce. We find that the Web not only depresses sales, but also hurts the means by which traditional retailers turn a profit. A definite change in consumer habits, noting a decrease in impulse buys and store visits. Some companies claim online operations can supplant sales at physical stores; others say the retailers are in for an uphill battle. "If people don't come to your stores, it reduces the possibility shoppers will buy anything," noted one analyst.

CHINESE ECONOMY - One of the most troubling outcomes of the largest migration in human history: abandoned children. We find that the flow of Chinese migrant workers into big cities from rural areas, along with strict government rules controlling the movement of people, has left millions of children in rural China living largely on their own. About 61 million, or one of every five Chinese children, haven't seen one or both parents for at least three months, by one count. While parents believe they are raising the standard of living back home, we note that the abandonment seems to come at a long-term cost: More than 70% of kids in rural China show signs of mental-health problems, says one researcher.

GOOGLE SNAPS UP NEST - Google has made a bold bet on the emerging 'internet of things' with the $3.2bn acquisition of Nest Labs, a four-year-old start-up founded by Apple veterans that makes 'smart' thermostats and smoke alarms for the home. The deal is the second largest in Google's history, behind its $12.5bn Motorola acquisition in 2011 ...
The move is [Larry] Page's latest foray beyond Google's core business of online advertising into hardware and connected devices, following experiments with self-driving cars, its wearable technology Glass, and acquisitions in robotics. ... With their sleek design and intuitive interfaces, Nest's products have made it a poster child for the so-called internet of things, the idea that a large variety of devices, from the domestic to the industrial, can be improved through online connectivity.

BEHIND EL-ERIAN DEPARTURE - Long hours and a frequently fractious relationship with Pimco's founder Bill Gross prompted Mohamed El-Erian's resignation as chief executive of the world's largest bond house, say people familiar ... Mr. El-Erian often sparred with the company's founder over strategy, in a workplace that insiders say rivals any investment bank for fierce arguments and a hard-charging culture. ... His resignation on Tuesday evening came as a shock to those both inside and outside of Pimco but his plan to leave had been known to a small group of senior executives for several months.

Mr. El-Erian, whose day in the office starts about 4.15am in Newport Beach, California, told colleagues he wanted to write a book and spend more time with his family. He said he was looking for a 'third career' after spending 15 years at the International Monetary Fund and 17 years in investment management, both at Pimco ... and a two-year stint managing Harvard University's endowment. The resignation was not related to Pimco's recently lackluster performance, the people said.

PIC DU JOUR: This is the BlackBerry (old school!) of Nels Olson, vice chairman of Korn Ferry, who was a birthday boy yesterday. This cracked, mangled device holds some of the biggest secrets in Washington - many futures get decided here.

THE TONIGHT SHOW - It's really goodbye this time End nears for 'Tonight Show' host Jay Leno, host city Burbank," by Scott Collins: "The sign advertising his show still looms over the NBC parking lot, and for a few more days throngs of fans will crowd the studio gates in Burbank before tapings. But Jay Leno says he's ready to leave-and this time, he says he really means it. After more than 40 years, "The Tonight Show" is leaving Southern California and heading back to New York, with the 63-year-old Leno, who first became host in 1992, handing off the show to Jimmy Fallon, just 39.

Four years have passed since NBC botched a similar passing of the torch to Conan O'Brien. This time it's the passing of an era, and not just for Leno, one of the most polarizing figures in show business. It's also a sobering inflection point for the TV industry and Los Angeles generally, both of which are struggling to adapt to economic and technological forces that are threatening a cultural primacy that looked assured back in 1972, when Johnny Carson transplanted 'Tonight' to what he jokingly called 'beautiful downtown Burbank.'" Awesome new promo video

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to: Hank Aaron (80), Sara Evans (43), Laura Linney (50), Tiger Wiliams (60).

COLLEGE HOCKEY PICK OF THE WEEK – Saturday 2/8, 7:00 PM ET, Bravo; #14 Yale Bulldogs (11-6-4) visit #4 Union Dutchmen (17-6-3). Big ECAC game, we like Union to win and win big 6 – 2.  Season to date (2-2).

NFL PICK OF THE WEEK – We lost the Super Bowl pick but still had a good season. See you next fall.  Final Season to date (14-6).

SEATTLE MANHANDLES DENVER - The Seahawks' defense lived up to all the hype and destroyed Peyton Manning and the Denver Broncos, 43-8, in one of the least entertaining Super Bowls (for non-Seattle fans) in recent memory. Percy Harvin provided the offensive spark for Seattle which took a 2-0 lead on a safety on Denver's first offensive play and never looked back. Linebacker Malcolm Smith, who returned an interception for a touchdown and recovered a fumble, took home the MVP. But the award could easily have gone to the entire Seattle defensive unit which made the most productive offense in NFL history look feeble.


Winter Olympic Medal Count: (1) United States 35, (2) Canada 29, (3) Germany 28.

(NCAA Hockey, Feb. 8) #15 Denver Pioneers (13-8-5) @ #6 St. Cloud State Huskies  (14-6-4). Huskies win at Herb Brooks Arena 6 – 6.

(NHL, Feb. 8) Vancouver Canucks (27-20-9) @ Toronto Maple Leafs (30-21-6). Leafs head for the Olympic break on a roll, 4 – 2.

(D-III Game of the Week, Feb. 8) men hoops; Claremont Mudd-Scripps Republicans (14-4) @ Pomona-Pitzer Saghens. Sagehens earn a win to tighten the SCIA race, 70 - 61.

2014 Season to date (8-11)

Quote of the Month: “Your character is what you really are, while your reputation is what others think you are. Be more concerned with your character.”  - Mike Krzyzewski

This Month’s Poll:

Who has better coffee?
Coffee Bean
Roady’s, San Dimas, CA
Bob’s Country Store, Jackson, MI
Circle K
Seven 11

MARKET WEEK - U.S. stock futures were weaker in early trading today, entering February much as they left last month, which saw the Dow drop 5.3 percent and the S&P 500 give back 3.6 percent. Another big test for the markets comes on Friday with the January jobs report.

DRIVING THE WEEK - Janet Yellen will be officially sworn in today as the first woman ever to lead the Federal Reserve. She must manage the wind-down of the central bank's massive and unprecedented economic stimulus program in a way that doesn't crush the global economy. She must appease Republican members of Congress who view the Fed as a dangerous rogue operator. And she must communicate highly nuanced and market-shaking policies to Wall Street traders who know very little about her while simultaneously making clear to the public what the Fed hopes to achieve. ... Few think that Yellen ... will fail. But none of it will be easy for a career academic who by most accounts views the political and media relations aspects of her new job as unhappy chores.

"It seems like every new Fed chair takes over right at the height of major concerns and major potential problems," said Jack Ablin, a close Fed watcher and chief investment officer at BMO Private Bank. 'It was true of Alan Greenspan, it was true of Ben Bernanke and now it's true for Janet Yellen. The Fed is trying to move to the sidelines as quickly as possible, and there is plenty of risk as they do it.'

JACK ASS OF THE MONTH – This month we celebrate the Top Five Jack Asses of 2013. This distinguished group received the most Jack Ass compliments in the last year. Well done men:

Ted Cruz – really?
John Boehner – fake tan
Steve Slakey – the king of the misrepresentations
Pat Robertson – praise the Lord
Donald Trump – President Trump???

Next week: Our 200th Rink Rats, Dear Rink Rats and another famous chili recipe.

Until Next Monday, Adios.

Claremont, CA
February 3, 2014

#IV-42, 199

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