Tuesday, May 10, 2011

In-and-Out Burger Baby

“In-and-Out Burger” Is heading for big D town. Over the years the California chain of In-and-Out- has decided slowly but surely to expand it’s horizons to other states. And expanding I meant tip toeing since only three other states, besides California and soon to be Texas, have In-and-Out Burgers; Arizona, Nevada, and Utah. The scarcity of this burger place around America sharply raises it’s demand for these burgers. And when I say sharply, I am probably under exaggerating. The In-and-Out Burger franchise is flying out their top “burger makers,” as they are calling them, to Texas to make sure that the burgers are made correctly. Not only will this increase in jobs around the Dallas area, but also intensify the battle of the burgers. Competition of other burger joints like Whataburger, Mcdonalds, and any other fast food place that sells burgers, will increase dramatically. But, one question does remain. Will this trend of opening and establishing of In-and-Out Burgers happen all over the country? If so, will the demand of burgers from In-and-Out drop to a point that the uniqueness of these burgers are lost?

Small comfort: Gas prices break their streak

Finally, after a more than a month of gas prices rising daily, the price of gas fell one tenth of a cent ($3.984). Over the past couple of months, consumers have been spending thousands of dollars on gas alone, leaving many questioning the future prices on gas. Although this decrease of one tenth of a percent is a change from the constant rising prices, does it provide a sense of comfort for the consumers? Oil is cheaper than gasoline, and when measured, for every $1 of oil a barrel is dropped, 2.2 cents off of gas prices are knocked off. With $10 falling in the stock market of crude oil, gas seemed to have a stand still. As the price of oil lowers, gas should be at ease for a little. Gas is an inelastic demand, though, meaning no matter the change in prices, the demand for Gas will always stay the same. It’s a necessity to the everyday life of a consumer. But this doesn’t stop them from cutting back. If consumers cut back, investors grow nervous and jobs are then lost and economy starts declining. Summer trips planned by families across America are in question to be carried out or not. With gas prices, for the moment, standing still, can there be a short sense of comfort for the price of gas in the future or not? Or will gas continue to rise?

Banks lending, consumers borrowing

According to a report by the New York Federal Reserve, more consumers are willing to borrow money from banks, and in connection with, banks now and days are more willing to lend out loans. In 2008 the U.S. hit a meltdown point of debt and ever since, debt is increasing. But is debt, to a certain degree a bad thing? Debt, in terms of good can very much so stimulate the economy. If consumers feel that they are, at a comfortable time then others, able to buy more products, then isn’t that beneficial to the economy? It’s the simple rule of economics. If consumers buy, businesses are happy. Businesses are profiting, making more money and growing. This benefits the economy in so many ways. If businesses grow, job opportunities sky rocket through the roof. Unemployment rate has a chance to drop, money Is being circulated more fluidly than before. The economy has a chance to regain it’s footing. But too much debt is of course dangerous. The problem is that consumers borrow too much money then they could possibly pay off later. When consumers can’t pay off their debts, businesses, banks, or any other loaners aren’t paid. This can cause a chain reaction that isn’t wanted. When loans aren’t paid off, the economy suffers. Jobs and money are both lost. If consumers are starting to borrow more and banks are willing to lend a little more, maybe the best idea is to be cautious. To be careful on how much is lent and borrowed.

Brazilian Blowouts

            Brazilian Blowouts have been all the rage in the fashion world. This styling technique provides the person with the treatment several months of straight, frizz free hair. Recent studies, however have shown a secret dark side to this treatment. Formaldehyde is one of the ingredients used to straighten hair, and the Brazilian Blowout process exposes both the stylist and the customer to this dangerous chemical. I think that this is definitely a situation where the tradeoffs presented show a clear decision to be made. Before this study was published, there was a large incentive to get a Brazilian Blowout that was sleek smooth hair. But now, that incentive is not enough because the incentive of not getting one is your health.  This could hurt the economy however, because people who had specialized in these blowouts will be getting less income. Then, they will spend less, which will lower GDP. Also, businesses will be spending less because they will not be buying the equipment necessary to provide the service any more, and this will also lower GDP. However, it is necessary to get rid of this service because of the health risks it poses. I do not think that this change will impact the economy severely.

Exon Mobile

In 2010, Exxon Mobil <http://money.cnn.com/galleries/2011/fortune/1104/gallery.fortune500_most_profitable.fortune/?source=cnn_bin&hpt=Sbin> , the largest oil company in America, reported a total profit of $30.5 billion dollars. As oil prices soar to over $100 per barrel, people around the world are paying some of the highest prices for gasoline in history. This raises the question: are consumers being forced to buy overpriced fuel while the oil companies sit back and reap the benefits? A $30.5 billion profit suggests that this could be true. My family alone spends over $900 a month in gas, and because of the close proximity of our work and school, we fall below the average familial gas consumption. However, Exxon isn’t the only company to blame for high oil prices. The number 3 most profitable and second largest American oil company, Chevron, posted a $19 billion dollar profit for the 2010 business year, making it another huge contributor to high gas prices for consumers. Businesses in the U.S. have also felt the burden of expensive oil; products are now more expensive to manufacture, ship, and sell than in previous years. Nearly every person in America, and a majority of people in foreign countries have been forced to limit their spending in order to cope with increasing fuel prices. The United States government has the power to force oil companies to rethink their rates, but little legislation has been enacted to take advantage of such power. Though President Obama has had a lot to deal with since his election, it has become apparent that gas prices are not high on his to-do list. The bottom line is: oil prices are at an all time high, and consumers are being forced to pay record amounts to simply drive to work or school -- a cost that many people aren’t able to afford in the recent economic downturn. Are oil companies infringing on American gas consumers’ right to life, liberty and property? You decide.

Facebook's Next Economic Move?

Facebook will begin paying users 10 cents if they will watch certain ads. Users will be paid in “Facebook Credits” which will yield about 10 cents per ad. The Facebook credits can be redeemed to purchase goods on Facebook Deals. Facebook Deals is a program similar to Groupon. It is hard to determine whether or not this will be enough of an initiative to motivate users to view ads. Watching an ad can take a long time and 10 cents is not very much money. Although these ads are time consuming Dan Greenberg, CEO of Sharethrough, (the company making these ads), claims that the ads will be more than entertaining. So maybe the entertainment factor will be more of an incentive for users to be motivated to watch these ads. If the popularity of these ads increase the products being advertised will also increase in demand. This is a smart move made by Facebook because they will recieve a lot of revenue from the ad company because the ad company must pay Facebook in order for them to show their ads. It is too early to determine how smart of a move it was for the Sharethrough to pay Facebook to show their ads. The success of their ads will be determined based on whether the entertainment supplied by these ads and 10 cent yield will be enough of an initiative for Facebook users to want to watch the ads. If this new innovative ad idea has a successful outcome, (sucessful, meaning many people watch the ads) than it will be extremely beneficial for the company. If ads offer a good enough initiative for people than the products being advertised will increase in demand dramatically. Since Facebook is such a highly populated website, when the popularity of the ad increases the demand for the product advertised will be extremely wide spread.

Japan Crisis Effect Jaguar Production

The recent earthquake and Tsunami in Japan has caused Jaguar, Now owned by TATA Motors, to have some production problems. Although TATA Motors is based in India, as with the rest of the world, many of their parts and factories are based in Japan. At the current time, little has been released as to what items the company is facing a temporary shortage of. The problem with the companies supply, however, is that TATA Motors sources many of their products from Japan. The earthquake caused a shortage of the parts that come from factories in Japan. Most car companies source their products from other small companies, such as Samsung, or other large part makers. With much production occurring in japan, other companies besides TATA are likely to be suffering from the shortages. The effects on the market of Japan are likely to be catastrophic, because of all the money they will be losing during their time of rebuilding. Their factors of production are severely limited: their land is compromised, their labor is hard to come by, and their capital is extremely limited. Honda Motor Company is another foreign company that is affected by the tsunami. The company although they sell cars in America, has plants located in Japan which have 50% or less production rate at the current time. This is very hard on the market of Japan and also hard on the companies because they may have to spend more on parts. The United States however, may benefit from the tsunami. With the production of foreign cars such as Jaguar and Honda spending more on their parts and possibly having a shortage of vehicles available, American car makers are more likely to have the ability to compete both with price and quantity available. Overall, foreign companies who source parts or have plants in Japan are currently suffering from the earthquake and subsequent Tsunami.

George Collins