Black Friday shoppers likely helping toy industry deliver its best year in over a decade

This holiday season is projected to be an epic coda for what is shaping up to be the toy industry’s best year in over a decade, one in which a crop of new movies and a spate of technological innovations have already had toys flying off shelves. And on Black Friday, customers were out in droves to make sure they pounced early on the must-have toys on their shopping lists as they worried that in-demand items might sell out if they waited to buy them.
Also online shopping has become a must for all the idle shoppers who do not want to deal with the hustle and bustle of a busy shopping center.
Toy sales are projected to surge between 6.2 and 7.3 percent this year, according to researchers at NPD Group, after swinging between modest sales increases and declines for a decade and improving somewhat to 4 percent in 2014.
Link:
https://www.washingtonpost.com/news/business/wp/2015/11/27/black-friday-shoppers-likely-helping-toy-industry-deliver-its-best-year-in-over-a-decade/

Volkswagen Reveals Emissions Fix for Diesel Cars in Europe

In the continuing Volkswagen saga, VW just announced they are able to update the software to bring their diesel vehicles up to the European clean air standards.

However, this update will only be available in Europe, where it will be installed in early 2016. VW said it would be harder to update US cars because of the stricter rules on emissions of nitrogen oxides.

Because of the big scandal, 8.5 million of the vehicles are in Europe and about 500,000 are in the US. VW also announced eight employees have been suspended in an investigation behind the faulty software.

Is this too little, too late? How do we know that VW is telling the truth this time? I feel like VW is not reliable, so how are we supposed to be able to trust them in telling the truth about the new software?

http://www.nytimes.com/2015/11/26/business/international/vw-diesel-emissions-fix.html?ref=business&_r=0

9 regional Fed banks voted for a discount rate hike in October

9 regional Fed banks voted for increasing the discount rate from 0.75% to 1% in the last discount rate meeting. Last month, there were 8 banks who wanted a rate hike. The nine regional banks that requested a rate hike want to normalize the spread between the discount rate governing the Fed lending to banks and overnight federal funds rate, which is its primary economic lever. According to CME Group's FedWatch, that there is a 74% chance that the Fed will increase the interest rates next month for the first time in almost a decade.
On the contrary, the Minneapolis Fed again voted to cut the discount rate to 0.50% from 0.75%. Those who wanted an increase in the rates said that it is the perfect time to do so since there is improvement in the labor market and also there is a gradual increase in the inflation rate toward's Fed's target of 2%. Some of them also figured that this early increase would help pace the policy normalization adjustments more efficiently.

http://www.businessinsider.com/r-nine-fed-banks-called-for-discount-rate-hike-minutes-2015-11

Ireland is Getting Bigger

As of today, pharmaceutical giants Allergan Plc and Pfizer have agreed to a record setting $160 billion deal. This deal will allow the Dublin-based pharma company, Allergan, to buy Pfizer. Thus, like many pharma companies have been doing, Allergan will be moving its HQ to Ireland for tax reduction purposes. One might wonder how long the corporate tax rate is there, and it is a minute 12.5%. This will allow for increased profit because they are currently paying a 35% corporate tax. What is ironic is that the size of this deal is close to Ireland's GDP last year, which was only $200 billion. The Irish government has no problem with these two companies clearly merging for taxation purposes because both of the companies had previously done business in Ireland. This leniency will most likely encourage more corporations to move their HQ's to Ireland. Not only does this benefit the firms that are located in Ireland, but it should benefit the Irish economy as well: potentially creating more jobs. Do you think that more corporations should be moving to Ireland? Currently, over 140,000 people are directly employed by over 700 U.S. companies in Ireland. Interestingly, Ireland is the biggest foreign economy for U.S. FDI in the chemical sector, which includes drugs.

Is Black Friday Worth It?

The biggest consumer driven time of year is upon us. US citizens are maxing out their credit cards and spending way too much time at the mall. The start of all this madness is known as Black Friday, when retail store have the best sales available for the entire season. A ploy to swarm stores with saving driven shoppers is getting to be a little too much. According to Forbes, one out of three shoppers have seen it get "ugly" on Black Friday. From stampedes to fights over the last product, shoppers are starting to say enough is enough. With the decline in shoppers on Black Friday, stores are starting to make their sales available a few days before the big charge for those consumers who desire to skip the madness. Thus leading us to wonder if Black Friday is really worth it? I know I won't be risking my life to save a few bucks. http://www.forbes.com/sites/kathleenkusek/2015/11/22/is-black-friday-worth-fighting-about-nearly-a-third-of-shoppers-have-seen-it-get-ugly/

Many unhappy returns

Many unhappy returns

Investments returns being lower in the coming decades will be a defining factor in terms of pension funds and college endowments. When final-salary pension schemes ( which are very significant in America’s public sector employees) the decision needs to be made as to how much is put aside to pay pensions. They have to make an assumption about what returns they will earn in the future. Essentially the higher they assume the return will be the less the employers have to contribute today. Similarly endowments have to determine how much to spend every year in accordance with future predictions.

College endowments also have to make similar decisions regarding their funds for future leverage. They have to be very skeptical regarding investment assumptions.

The only good news there is from this is that it a long term issue. However; this is also a drawback since decision makers will eventually leave this problem for their successors, which will eventually make the funding crisis even larger to deal with.

Link:

http://www.economist.com/news/finance-and-economics/21678812-pension-funds-and-endowments-are-too-optimistic-many-unhappy-returns

Fed signals rate hike

The Fed's Vice Chair has suggested that central banks are moving off of the zero interest rate policy. This is because the Fed has met their employment rate quotas. This is expected to keep Asian imported commodities low because of the struggling Asian economies.

There is, however, concern about inflation and global economic risks and what raising the rates would do to world economies. The Vice Chair Fischer says he is not concerned about these issues and raising the rates in the next month or so should be expected.

What do you think, will this harm world economy lenders like the Asian countries or is this a move that will help drive our economy to the 3% expected growth?