A Long Way From Mexico: Company Bets China Has an Appetite for Taco Bell

This article talks about Yum China, the company behind KFC in China, opened up their first Taco Bell last month on the 9th. But the business was not doing as well as planned because of people's unfamiliarities with Mexican food. Many Chinese consumers admire fast food chain from the United States and Europe, such as KFC and McDonald's because they believe in the quality of food in developed countries. Chinese consumers considered the food from Taco Bell as food from a developing country with low quality. To target the consumers in China, Taco bell tried to make their menu more appealing by adding healthier food, getting rid of greasy junky food; they also added Japanese beer and slushes. It did help attract more new consumers especially the younger generations because of their desire to try out new things. Words of mouth and Internet blogs also help to attract more and more people to try out these delicious Nacho chips at Taco Bell.

I am amazed by how fast the economy in China grows. People are happier in general and have more time to enjoy "luxuries". I came from a small developing city in China six years ago. From what I remember, people considered eating out a luxury, and they did not encourage such idea unless it was on very special occasions. The city was not culturally diverse and people were having a hard time accepting foreign things. Even when McDonald's was first open in my city, people were not buying it until later as they learned more about this fast food chain. Last summer when I went back to China, I was stunned when I found out that two Starbucks were open in the city and were doing very well. China is a huge market for foreign brands. Investors would be able to increase their profit significantly if the Chinese consumers have access to learning more about the brands. Platforms such as Facebook and Google would be a great place to learn about all these brands in other countries. However, these platforms are banned in China. Investors might have to try harder to educate the people on foreign brands if they want them to succeed in one of the biggest consumer markets in the world.

Link to article: https://www.nytimes.com/2017/02/10/business/china-kfc-taco-bell.html?ref=business

America, China and the risk of a trade war

The United States and China are major trading partners that have expanded greatly in the wave of globalization led by the US. With the new administration, President Trump has proposed blanket tariffs on many countries including Mexico and even China. President Trump in the past has accused China of not following trade rules. Trade war with China is not something that is conducive to the US economy.

If President Trump decides to implement some tariff or new policy in regards to China, it could lead to retaliation which, would really hurt the US economy. Similarly, certain industries within the US would be crippled by a Chinese boycott and the acquisition of these goods from other countries would stifle economic growth. Examples of these industries are airplanes and soybeans as planes can be acquired from Europe and price drops within the market could affect the US soybean industry.

Hopefully, the WTO can keep the trade system in check as there is a process that countries can resolve issues in but the rules within the WTO are not super clear leading to unclear laws.

President Obama created the Trans-pacific Partnership to create laws that would protect American industry and create better trade relations with the US so that unfair competition could be avoided. This was going to include China in the future however, President Trump discarded it. While many people do not know what the future of trade is going to look like under President Trump, one can hope that a trade war with China can be avoided.





http://www.economist.com/news/finance-and-economics/21715656-trade-tensions-will-mount-destructive-trade-war-can-still-be

Court Refuses to Reinstate Travel Ban, Dealing Trump Another Legal Loss

            The article that I read started out by stating that President Trump’s attempt to reinstate a ban on travel into the United States from seven primarily Muslim nations was appealed by a federal panel on Thursday.  The panel claimed that the Trump administrated had shown “no evidence” that anyone from the seven nations had actually committed terrorist acts in the United States.  The panel not only rejected Trump’s bid to reinstate his ban, but also rejected his claim that courts do not have to power to review a president’s national security assessments.

           

            The travel ban was one of the first orders that Trump issued after taking office.  It attempted to suspend entry into the United States for refugees worldwide and restricted visitors from seven primarily Muslim nations for up to 90 days.  The ban caused nationwide protests and stranded foreign travels at immigration checkpoints.  The State Department reported that up to 60,000 foreigners’ visas were rejected just days after the ban was put in place.  President Trump’s ban appears to violate the due process rights of legal residents, people holding visas, and refugees.  I think that it will be interesting to see how this all turns out.  It is a very controversial subject that has already brought a lot of negative attention and energy to the United States.

Link: https://www.nytimes.com/2017/02/09/us/politics/appeals-court-trump-travel-ban.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=span-ab-top-region&region=top-news&WT.nav=top-news&_r=0

Sears stock soars as ailing retailer maps out survival strategy

I thought that this article was an interesting read because Sears and Kmart have been in the news the last couple years because they were not doing financially well. This article talks about how Sears has this new plan on reducing debt and increasing sales. it will be interesting to see how this works out for them, if there was a time for a company to make a turn around I think this would be the time to do so based on the economic upturn we have going on right now. Sears wants to come up with a system that allows them to have less products sitting in warehouses because inventory costs money so they want to go with a just in time mentality like Walmart does. I'm not sure how this will workout for them because Walmart has a huge following and loyal customers that shop there regularly.


Link: http://www.usatoday.com/story/money/2017/02/10/sears-holdings-restructuring-plan/97735498/ 

US Jobless Claims Drops To Near 43-Year Low

This article states how the economy has reached an all time low in individuals filing for unemployment benefits suggesting that the labor market has further tightened. The article mentions,

“Further tightening in labor market conditions could boost wage growth.”

This quote suggests that this tightening of the labor market shows that wage growth would increased, however, what will happen to the qualified labor force that will be looking for jobs in the future considering that the labor market is very tight currently? I think unemployment rate will increase, labor force participation rate might decrease and workers will be discouraged to look for jobs as they will be aware that the labor market is tense.

Moreover, even though it is really encouraging that the economy is currently almost at full employment with an extremely low unemployment rate, the qualified and educated labor force will make looking for more jobs even more competitive and the increase in wage growth would make this low unemployment rate short lived and a sharp increase in unemployment will follow.

Link : http://www.cnbc.com/2017/02/09/us-weekly-jobless-claims-total-233000-vs-250000-estimate.html

Age-Friendly Banking May Grow as US Population Ages

While you may get wiser as you age in many aspects, it does not seem to be the case financially. After 55 years of age, the ability to make good investment decisions deteriorates, especially for those who develop Alzheimer's or dementia. It is estimated that annual losses due to the exploitation and abuse of the elderly is between $3B and $37B, which is a great concern especially as baby-boomers reach old age.

Banks have been slow to respond to this, but are beginning to create ways so that it is easier for the elderly. For instance, Barclays has introduced voice recognition technology to help those who have trouble remembering their password. Banks are also considering giving family members "read-only" access to older loved ones' accounts so that they can monitor their payments and try to ensure that they are not making unwise financial decisions. It's encouraging to see that banks are moving in the right direction with this issue.


https://www.economist.com/news/business-and-finance/21716598-banks-need-strategies-helping-vulnerable-elderly-customers-elderly

Uber CEO quits Trump's economic advisory council

http://www.usatoday.com/story/tech/news/2017/02/02/uber-ceo-leaves-trumps-economic-advisory-board/97415342/

After facing backlash from consumers and employees, Uber CEO Travis Kalanick has decided to step down from President Trump's economic advisor council. Kalanick believes that his participation in the council was misconstrued as an endorsement for Trump's policies. He stepped down on the eve of the first meeting between the council members, which included Tesla CEO Elon Musk, chairman and chief executive of Blackstone Stephen Shwarzman, and other top executives from Wal-Mart, Pepsi, and Disney. Kalanick became concerned over numerous boycotts of Uber, which seemed to have taken a hit on the company. Hours after Trump announced the travel ban, protests by taxi drivers took place at JFK airport, leading Uber to announce a drop in surge pricing at the airport, creating even more trouble for the company. People were under the impression that Uber did this in order to undercut the protesting taxi drivers. The hashtag #deleteuber was created as a result and gained popularity all over social media.

This article illustrates the difficult path ahead for technology companies/executives that decide to work with President Trump. Kalanick tried to inform the public and employees of the company that he was working with the President in order to improve transportation around the globe. It is a shame that Kalanick's agenda was misconstrued, as it is people like him who can really make a difference in the world. It will be interesting to see what other backlash companies and executives who decide to work under Trump will face.

Snap's IPO will be the largest in years

http://www.economist.com/news/business/21716070-app-company-has-pioneered-distinctive-vision-internet-snaps-ipo-will-be-largest

Snapchat has become one of the most daily used social media apps in the west since 2013. 41% of people age 18-24 use the app daily and the estimated value of the company is $20-25 billion. Snap, the parent company of Snapchat is going public in March and is expected to be one of the biggest IPO's in years.

With such a diluted market of social media companies, investors will look to see if Snap will be able to survive and not be bought out by larger companies like Facebook. However Snap is saying that they are a camera company and not a communications company. They have already came out with a new product called spectacles ($130) where someone can put them like glasses and a camera will record from the person's point of view.

There are some negatives to the IPO, like the competition that Snapchat will go up against. It will compete directly with YouTube (owned by Google) for ad dollars and Instagram just came out with 'stories' as well, which when that dropped the usage of Snapchat stories declined.

If Snap wants to survive with these giants they might need to make moves of their own so they aren't bought out. People forget that Facebook offered to buy Snapchat for $3 billion in 2013.