July 25, 2014 in Daily Bulletin
The Economist wrote about how global markets respond to what many consider to be the pariahs of the international political order:
- Russian stocks are valued at just 5.2 times their annual earnings.
- The average in emerging markets is 12.5. If Russian stocks traded at this ratio then their valuation would more than double, or increase by close to a trillion dollars, to $1.77 trillion.
- The reason why shares trade at such low values is likely due to its government led by President Vladimir Putin, which has jailed those who advocate for good corporate governance and anti-corruption efforts.
- All in all this is making each Russian citizen about $7,000 poorer.
- This phenomenon is known as the “Discount for Obnoxious Governments” (DOG) phenomenon.
- The stock market valuations of Argentina and Iran are also about half what they should be, making the countries billions of dollars poorer.
- It’s not just DOG that makes financials difficult for governments. Leaders also have to pay far more in interest to borrow funds.
Read more about DOG, how it is calculated, why citizens of the countries don’t necessarily notice the impact it’s having on their lives, and more over here.
Source: The Economist
July 23, 2014 in Daily Bulletin
Emily Badger looked at some data that suggests that Uber might be reducing DUIs:
- Services such as Uber are particularly popular with younger individuals that are more likely to go to bars.
- While these individuals could always have taken cabs, there is some evidence that indicates that Uber users aren’t just using it in lieu of cab rides – they’re actively expanding the market for them.
- Uber claims that its arrival in Seattle helped reduce DUIs by about 10%.
- Data from San Francisco also indicates that DUIs trended downwards after Uber and other quasi-taxi services were launched.
Read about the caveats of the numbers, the role that the recession might have played in boosting DUIs, and more over here.
Source: The Washington Post
July 22, 2014 in Daily Bulletin
Christine DiGangi wrote about a survey of the amount paid to the child labourers that American parents keep on their payrolls:
- The average child up to the age of 10 makes about $1,360 a year.
- This includes allowances, bribes, rewards, and gifts.
- 55% of parents pay bribes to make their children behave better, and 44% pay underage labour below market rates to do chores.
- 65% of parents would like to cut their payroll costs but are unable to because a fair number feel they’re competing with other parents.
Read more about the findings of the survey, and what it might mean for the finances of families over here.
Source: Credit Blog
July 21, 2014 in Daily Bulletin
Douglas A. McIntyre put together a list of brands that won’t survive to see the next American President take office:
- Its been several years since Zynga, the maker of Farmville, scored a hit, and the ending of its “special relationship” with Facebook has shrunk its marketing reach.
- Research in Motion made the list last year, and the prediction was technically correct – the company was renamed Blackberry – but continued failures in a competitive mobile space probably mean it’ll soon be sold.
- Russell Stover, known for assorted chocolates, makes about $600 million in revenue, but its managers have put it on the market. Hershey is a leading contender to take it for a price tag that could reach $1 billion.
- Teens seem to prefer cheaper clothes these days, and that’s causing Aeropostale’s sales to tank. Abercrombie & Fitch may soon follow.
Read the full list of brands you should enjoy while you can over here.
Source: 24/7 Wall Street
July 20, 2014 in Daily Bulletin
The Liberty Bell is an American cultural artifact in Philadelphia on public display, which was believed to have rung when the American Declaration of Independence was read.
Taco Bell, the American-Mexican fast food restaurant, told the word it was buying it in 1996. Zachary Crockett wrote:
- In 1996 Taco Bell executives were looking for a way to play an April Fool’s Joke
- Then, as today, worries about debt were creating concerns for the nation, and executives decided to announce that as a way to alleviate debt problems, Taco Bell would purchase the bell from the American government, and rename it the “Taco Liberty Bell”.
- The outrage was immediate. Angry letters and senior government officials got involved.
- All in all the ad cost $300,000 – including a $50,000 apology donation for the maintenance of the bell in response to the uproar against the company.
- In return the company is estimated to have gotten about $25 million worth of publicity.
- During the week of the prank, Taco Bell’s sales spiked by $600,000 compared to the week before.
Read more about the stunt, how it worked, the ad that was announced to the world, and more over here.
July 17, 2014 in Daily Bulletin
The sprightly chaps over at OpenRest, an online ordering system for restaurants*, looking into their data during the World Cup and came up with some fascinating insights:
- The team that’s playing affects the type of food that is ordered. During a match featuring Italy sales of pizza spiked.
- Eaters prefer to use phones over other computers to get food – they may be afraid of missing something like the three goals that Germany scored in three minutes against Brazil during the semi-final.
- People are also more likely to order online rather than over the phone during games – probably because phone hold times are longer on match day.
The full article has many more insights, including the ‘ground floor anomaly’ and numbers about how much sales increase by. Read it here.
*An earlier version of this post incorrectly stated that OpenRest is a food delivery service. This has been updated. Sorry.
July 14, 2014 in Daily Bulletin
Amazon has asked the government for permission to experiment with drones for package delivery. Dan Frommer uncovered their true motives:
- Amazon’s drone campaign is great for recruitment. Talented individuals who would normally choose to go to Microsoft or Facebook might opt for Amazon instead because of the drone program.
- It is a great bargaining tactic when it is negotiating rates with its current shipping providers. It can threaten to make them obsolete by launching its own rival service.
- The program is also giving Amazon a lot of favourable coverage, keeping it on top of people’s minds.
- Finally, some day many years into the future, drone deliveries might make a lot of business sense. Amazon is just getting into the gig early.
Read more here.
July 13, 2014 in Daily Bulletin
Crumbs, the chain of cupcake stores, has shut its doors. Lisa Wirthman took a look at where it all went wrong:
- In an increasingly health conscious world selling cupcakes with 800 calories in them probably wasn’t a winning strategy.
- It had too many stores. Manhattan alone had 20, and they all cannibalized each other’s sales.
- The bakery made the fateful decision of expanding into suburban markets, but its business model really only works in busy cities.
- Crumb stores were much bigger than they needed to be and this led to high rents and unused capacity.
- In contrast Magnolia, another cupcake maker, has remained successful due to diversification of products, and fewer stores.
Read more about what Crumbs did wrong and what Magnolia did right over here.
Source: Mid Market Pulse
July 11, 2014 in Daily Bulletin
Zachary Crockett investigated the death of Domino’s mascot, Noid:
- During its early years Domino’s launched “Noid” a troll dressed in a rabbit suit onesie.
- It was a play on the word “annoyed” and the advertising strategy was that the company’s 30 minute delivery promise helped customers “avoid the Noid”.
- The strategy was, surprisingly, successful, and in the late 80s Domino’s even launched a computer game featuring the popular character.
- Then in 1989 a schizophrenic man took employees hostage at a Domino’s store, believing that the Noid was targeting him.
- Newspapers went crazy with the story with headlines such as “Domino’s Hostages Couldn’t Avoid the Noid This Time”. The blow was fatal. Domino’s executives gently put an end to Noid.
Read more about Noid’s successes, the brief few moments in 2011 the chain breathed life back into the character, and more over here.
July 10, 2014 in Daily Bulletin
Helene Cooper writes that bombers may soon no longer be a part of the US Air Force:
- The country’s bomber fleet is ageing. It still uses 50 year old B-52s.
- In that time potential American adversaries have upgraded their air defenses to make it more difficult for America’s current fleet of bombers to attack.
- Some argue that bombers have become obsolete with submarines able to strike the same targets with greater ease.
- The air force takes various steps to increase the usefulness of bombers by, for example, altering the circadian rhythms of crew members to make them more alert during mission critical stages such as refueling and attacks.
- The Air Force is working to develop a next generation bomber with advanced stealth capabilities which would cost about $550 million per plane.
Read more about the roles that bombers have played in this decade, why they have been regulated to a support role, and more over here.
Source: The New York Times