Category: Economics & Business

I’m impressed

When completed, the Eckerd drug store under construction about three-quarters of a mile from NewMexiKen will be the closest commercial establishment. Understandably the building’s appearance has been a concern to this hitherto undeveloped community. The newest Homeowners Association newsletter has this welcome report:

At what will prove to be a considerable expense to themselves, Eckerd put together a “crash” program to redesign the store’s appearance to be more pleasing….The rooftop “cupolas” will be changed from the triangular design to much lower flat structures, and tinted windows will be installed on the storefront to reduce lighting emissions during the evening. As Eckerd explained, they wish to be good neighbors and they were quite apologetic that any controversy had occurred.

That’s the good news. That bad news is that Eckerd has been sold by its parent company J.C. Penney to CVS. The worse news is that the structure going up next to the drug store is a quick lube place.

Original Dow Jones

The original 12. (On the first day, May 26, 1896, the average stood at 40.94).

American Cotton Oil
American Sugar
American Tobacco
Chicago Gas
Distilling & Cattle Feeding
General Electric
Laclede Gas
National Lead
North American
Tennessee Coal & Iron
U.S. Leather
U.S. Rubber

The Dow Jones 30

The Dow Jones Industrial Average began in May 1896 with 12 companies; increased to 20 in 1916; 30 since 1928. (General Electric is the only one of the original 12 still included.) Here are the 30 after the changes that took place at the beginning of the week.

Alcoa
Altria Group (Philip Morris)
American Express
American International Group (AIG)
Boeing
Caterpillar
Citigroup
Coca-Cola
DuPont
Exxon Mobil
General Electric
General Motors
Hewlett-Packard
Home Depot
Honeywell International
Intel
IBM
JP Morgan Chase
Johnson & Johnson
McDonald’s
Merck
Microsoft
3M
Pfizer
Procter & Gamble
SBC Communications
United Technologies
Verizon
Walt Disney
Wal-Mart

Added April 8:
AIG
Verizon
Pfizer

Removed (with years included):
Eastman Kodak (1930-2004)
AT&T (1916-1928, 1939-2004)
International Paper (1956-2004)

Dow Jones

The Dow Jones Industrial Average closed above 3000 for the first time just 13 years ago today (1991).

The Dow’s all time high was 11722.98 on January 14, 2000.

Economic realities

From the Arizona Republic:

When more than 8,000 people apply for 525 Wal-Mart jobs, it raises the question: What’s really happening in our economy?

The world’s largest retailer will open its newest Arizona Supercenter today in Glendale at 56th and Northern avenues with help from the lucky few who were able to snag one of the coveted positions. The applicant-to-new-hire ratio means one in 15 applicants will be soon be sporting a blue Wal-Mart vest.

Starting hourly pay: $6.75, which is on par with competitors Target Corp. and Kmart, say Wal-Mart Stores officials. When the store opens about 90 percent of those jobs will be full time, although that number will likely drop to 70 percent.

James Cash Penney

opened his first retail store, called the Golden Rule Store, in the mining town of Kemmerer, Wyoming, on this date in 1902. In 1913, the chain incorporated as J.C. Penney Company, Inc.
JCPenney.gif
The first store, as seen in 1904.

Druggies

NewMexiKen was surprised to learn that it’s J.C. Penney that owns Eckerd Drug, or at least did own it. Penney is selling the 2,800 Eckerd stores to CVS and a Canadian firm, Jean Coutu Group Inc. The deal will give CVS 1,280 new outlets to pass Walgreens as America’s largest drug store chain. Eckerd/CVS has several stores under construction in Albuquerque.

So what ever happened to Rexall?

An aside: NewMexiKen actually met Jack Eckerd, founder of Eckerd Drug, when Eckerd ran the U.S. General Services Administration under President Ford.

World’s richest

From Yahoo! India News —

STOCKHOLM (Reuters) – Ingvar Kamprad, the Swede who founded furniture retail chain IKEA, has overtaken Microsoft’s Bill Gates as the world’s richest man, Swedish TV news reported on Sunday.

Citing next week’s edition of the Swedish business weekly Veckans Affarer, public service SVT2 television said Kamprad, 77, has a personal fortune of 400 billion crowns ($53 billion).

Gates’s fortune is put at $47 billion, according to the latest list of the world’s rich in U.S. Forbes magazine, SVT2 said.

Kamprad, known for frugal habits such as flying economy class, lives in Switzerland and no longer takes part in the daily running of IKEA, but has kept ownership of the company with more than 180 stores in over 30 countries in the family.

SVT2 said the dollar’s slide against other currencies is the main reason why Kamprad has now overtaken Gates.

NewMexiKen won’t be moving to Moraga or Lafayette anytime soon

From the San Francisco Chronicle:

Tim and Trish Davis sold their five-bedroom home in Vacaville in four days. Even with a $150,000 profit from that sale earlier this month, however, they’re fighting to land a house in Moraga or Lafayette, towns closer to their jobs and with strong school systems for their two teenagers.

A week ago, the Davises offered $775,000 for a three-bedroom home listed for $725,000. There were 13 offers, eight above $800,000.

“We knew the base price (in Moraga) would be high,” said Tim Davis, a 45- year-old account manager for Coca-Cola in Oakland. “But what we didn’t realize was that the bidding war was going to be so brutal.”

Read more.

Baby, you can drive my car!

The April Consumer Reports is out; the annual auto issue. A new feature is the Top Pick in each of 10 categories.

Small car: Ford Focus
Family sedan: Honda Accord and Volkswagen Passat
Upscale sedan: Acura TL
Luxury sedan: Lexus LS430

Small SUV: Subaru Forester
Mid-size SUV: Lexus RX330
Three-row SUV: Honda Pilot

Minivan: Toyota Sienna

Green car: Toyota Prius

Fun-to-drive: Ford SVT Focus

NewMexiKen would award the fun-to-drive designation to something a little more Porsche-like.

Breaking promises

slacktivist tells a not too apocryphal story.

So in this story you have an old uncle who lives in a mansion outside of town.

Your uncle owns the valuable mansion outright, but has little else in the way of assets and income.

He proposes a deal. If you will provide him with money to live on, a percentage of your wages, you will be allowed to move into the mansion when you retire and he will leave the grand old house to you.

It seems like a good arrangement.

The cash for your uncle — 11.7 percent of your wages — takes a pretty big chunk out of your paycheck. But you’re glad to know that you’re ensuring the economic security of your older kin. And in return you have received a sacred promise that you, too, will have economic security in your retirement years.

For years the arrangement goes smoothly. Eventually your uncle discovers that the pipes in the basement of the mansion need to be replaced, and you increase your payments to 15.3 percent. Your contributions to your uncle’s care now take a bigger chunk of your wages than even income tax does, but you still consider this a wise investment in both your uncle’s well-being and your own future security.

Then one day you receive a letter from your uncle.

He confesses that he never actually had the pipes in the basement repaired. The resulting water damage has rendered the building unlivable and it has been condemned. He also tells you that he no longer owns the mansion. It now belongs to DiTech, which repossessed the building after he defaulted on the second and third mortgages he had taken out on the mansion. The cash from that refinancing is all gone — your uncle used all that money to pay his living expenses while he squandered all the payments you had been sending on lavish parties for his rich friends.

Your uncle thanks you for looking after him all those years and tells you not to worry about him — he’s moved into the mansion of one of those rich friends and will be able to live well and party on for the rest of his days.

The letter concludes:

Best wishes and good luck with your future.

Your loving uncle,

Alan Greenspan

Intuit, TurboTax and rebates

TurboTax is a useful, staightforward product. It makes preparing a tax return easy and relatively painless. At least it does for NewMexiKen.

However, the only way that TurboTax is reasonably priced is to buy it bundled with rebates — a rebate for the actual purchase price; a rebate for the downloaded state software; a rebate for electronic filing. That’s $55 in rebates.

Two things come to mind.

First, just how much income does Intuit make each year on these interest free loans from its customers? They have our money for “approximately 8 weeks” after they receive the rebate paperwork. $55 times 4.2 million copies sold. Gee, that’s a $230 million float for eight weeks.

Second, I figured out today that I will spend considerably more time completing rebate paperwork for Intuit than I might have spent doing my taxes by hand.