Tag Archives: U.S. Economy

More Proof That The Gray Lady Is Hurting !

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Street level view of the new New York Times building (photo credit: pentagram.com)

Five months ago, we wrote about job cuts at the New York Times (a.k.a. “The Gray Lady“). This week, the New York Times announced their latest price increase. Once again, Times readers will pay more, but get less (that is, those readers who remain readers despite the price increase). And New York Times readers don’t even get their favorite comics. To our knowledge, the New York Times has never had a comics section.

The weekday editions will go from $1.25 to $1.50, a 20% increase. This increase comes just twelve months since the Times raised their cover price 25% for weekday editions, and about 15% for the Sunday edition. Prior to the last price increase, the Times was able to do without a price increase for eight years. Viewed another way, these two price increases in one year’s time equal a 50% increase in the cover price of the New York Times weekday editions. Our salary hasn’t increased 50% in the past year …has yours? Sadly, the New York Times print editions may just be a luxury we can no longer afford.

More frequent price increases for many consumer products is the norm these days, We believe it is further evidence of an economy in deep trouble. Newspapers are getting it from all sides… Advertising revenue is drying up, readership is down, and production costs are way up, particularly paper, electricity and fuel. As if that wasn’t bad enough, the Internet and “new media” have turned out to be the newspaper industry’s worst nightmare. Newspapers are trying to embrace the brave new digital world, but it looks like they may be waging a loosing battle.

The squeeze has been evident to readers of the Times for quite a while now. The paper is shrinking. Their flagship product, the Sunday New York Times, is a shadow of it’s former self. Help wanted display advertising in the Sunday business section, once perhaps 75 or 100 pages every Sunday, has completely disappeared. Complete Sunday sections have disappeared. What’s left is an anemic Sunday edition that sells for an incredible $4.00 !

The voracious technology hounds at Routing By Rumor like to read the New York Times on Tuesdays, for the Science section, which has been contracting as well. We used to enjoy the Circuits section on Thursdays, but that section has disappeared, replaced by one to two pages of articles buried towards the back of the Thursday Business section. We suspect the Science section will go A.W.O.L shortly, as well.

All this bad news at the New York Times just happens to come at a time when people seeking their 15 minutes of fame have been flocking to the new building the Times has built, one block from New York City’s Times Square (named for the site of a previous building the New York Times’ occupied at One Times Square,  during the early 1900’s). It seems people have an irresistible urge to climb up the outside of the their brand spanking new skyscraper, like so many spidermen.  The fact that their new building sports what amounts to ladders on it’s exterior walls is too much for some adventure or publicity seekers to ignore.

Hu Totya/Wikipedia)

The New York Times building under construction, 9/16/2006 (credit: Hu Totya/Wikipedia)

We propose a solution that could only happen in New York City, home to Coney Island’s famed Parachute Jump, the Empire State Building, Yankee Stadium, and the site of the deadliest attack in our nation’s history.

Why not sell permits to climbers who want to scale the New York Times building, sell tickets to the spectators, sell the television rights to one of the networks, and use all the money they earn to subsidize the print editions of the New York Times. They could even place corporate logos on each floor, similar to how ball parks plaster sponsor’s ads on every nook and cranny at the ball parks. This plan may be so successful, they will be able to give away the Times for free. Remember, you heard it hear first.

Of course, safety will be an important part of this plan. Climbers will need to have the proper climbing equipment, safety nets will need to be installed, and spotters will have to supervise the climbing. Perhaps some bleachers can be built along Eighth Avenue. A giant LCD screen in Times Square (like there aren’t enough of those already) could let people follow the climbers.

David Scull/New York Times)

Alain Robert climbs the New York Times building on June 5, 2008 (photo credit: David Scull/New York Times)

Think this plan is crazy? Then you probably won’t think much of the latest attraction a few blocks away in New York’s Central Park. For the incredible price of $25, you can ride a helium balloon 300 feet above Central Park. Really! …And you thought the helium balloons in the Macy’s Thanksgiving Day Parade were cool.

Only in New York.

– Routing By Rumor

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Filed under 9/11, Journalism, Life, News, Routing by Rumor, Terrorism

March 17, 2008 – A Gathering Storm On Wall Street

The stunning collapse of investment banking firm Bear Stearns over the weekend, and it’s fire-sale purchase for pennies on the dollar by JP Morgan Chase has is just the latest bad news rattling investors’ nerves.

Oil, which crossed the $100 / barrel mark less than a month ago, hit another record high of almost $112 / barrel on world markets today. Gasoline prices have followed suit, hitting new highs on a daily basis, with no end in sight. Rising fuel prices prompted United Airlines to raise round trip fares as much as $50 last week.

The Federal Reserve enacted another emergency rate cut over the weekend, with yet another cut of up to 100 basis points expected later this week.

The U.S. dollar continues to weaken, making foreign goods more and more expensive for Americans.

Almost every day, you hear of another major retailer reporting dismal sales figures.

Saying that the U.S. real estate market is in a slump is like saying that the Titanic sprung a minor leak.

The Dow finished last week below 12,000. Overseas markets have dropped sharply today, down between 4% and 5%. Fasten your seat belt when the U.S. markets open today.

Will today come to be known as the St. Patrick’s Day Massacre on Wall Street, or will it simply be another roller coaster ride for investors?

More and more lately, it seems that “no news is good news”.

And yet the Bush administration still can’t bring itself to  accept the fact that the U.S. economy is in a recession.

– RoutingByRumor

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Late Breaking News From The White House: “The Economy Has Slowed”

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Mr. Magoo

Well, duh !

President Bush just might be the last person on the planet to have figured out that the U.S. economy is in trouble. He really needs to get out more often. Looking at the nation through rose-colored glasses while sitting in the Rose Garden, it’s hard to see what has been happening to the economy.

Last Friday, Mr. Bush announced with a straight face “it’s clear our economy has slowed”. That’s sort of like a physician standing over a corpse and announcing “it’s clear the patient’s condition is deteriorating”.

What’s next, a news flash from the Oval Office announcing that the Titanic has hit an iceberg? …or news of the Hindenburg disaster?

Not only is the President’s news flash embarrasingly late, but it also reeks of an administration in denial. We’re not in a depression. Not even in a recession. It’s just a wee bit of a slowdown. Nothing to worry yourself about, laddie.

Unless, of course, you home is being foreclosed, (foreclosures up 57% in the first month of this year) your job has been shipped to China, you can’t afford groceries or gasoline, you have no health insurance, your investments and retirement accounts have evaporated into thin air, and you won’t be able to retire until you’re 175 years old.

Mr. Bush’s also mentioned last Friday that “the long-term outlook is good”. That reminds us of nothing as much as it does “Mr. Magoo“.

By the way… You know all those shipping containers flooding our ports, laden with stuff made in China? Bet you thought all those containers are empty on their return trip to Asia. Wrong!!! We pack those containers with millions of high-paying American jobs before they are loaded onto ships for their journey home.

– RoutingByRumor

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Filed under Business, China, Consumerism, Deception Engineering, Employment, Jobs, Labor, Money, News, Politics, Routing by Rumor

$4.00 / Gallon Gasoline Is On It’s Way. Can You Say “Fill’er Up”?

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Tom’s Shell in Madison, Wisconsin (photographed 4/25/2001)

And you think things are tough now?

Just when you thought it was safe to pull into the gas station, the experts are predicting that oil prices are going to continue their upward climb.  Oil has been closing at new record highs almost every day lately.

Actually, we think that all Americans expect to see  $4.00 $5.00/ gallon gasoline pretty soon.  Well, all except President Bush. He hasn’t been in the loop when it comes to energy prices (or most anything else, apparently). Here’s a CNN video of the February 28, 2008 press conference where Mr. Bush expresses his utter bewilderment that the experts are predicting $4.00 / gallon gas. Kinda surprising, considering that he is from an oil family, from Texas, and the leader of the free world. Then again, we don’t think Mr. Bush has had to pull any of his limos up to the pump lately. To be fair, he did say he knew “it was high”. Speaking of being high…

We think he would have been just as surprised to hear that gas has been over $3.00 / gallon for some time already. Here’s the full transcript, (where you will also find a link to video) of the entire press conference.

We know you don’t get out much these days, George. What, with the war in Iraq, and having to give orders to shoot down spy satellites and save the world from deadly hydrazine and all. But you DO surf the Web, don’t you? You do read this blog, don’t you?

We were actually hoping the spy satellite would land in our backyard. Your car gets twice as good gas mileage on hydrazine as it does on unleaded premium. We would have dragged that sucker into the garage and pumped it’s tank dry.

If high gasoline prices cause you to run out of gas when far from home, here’s one solution.

Readers can do their part. Next time you’re at the gas station, snap a picture of the gas prices, and e-mail it to the President. Unfortunately, the White House contact page lists Vice President Dick Cheney’s e-mail address, but not the President’s. Send Mr. Cheney the photo, along with a note asking him to please wake up the President and show him the e-mail. While he’s at it, perhaps Mr. Cheney can have Al Gore pay Mr. Bush a visit, and teach him how to use the Internet. After all, he did invent it.

Next time your gas gauge says “empty”, don’t bother pulling in and asking for five or ten bucks worth of gas. They’ll laugh you right out of the station. Could the $100.00 fill-up be too far off? Gas is reportedly already above $4.00/gallon in some places, such as San Francisco. Once it tops $5.00, that $100.00 fill-up could be the new reality. Can Americans afford this? What about the impact this is having on the cost of consumer goods!

The economists at RoutingByRumor predict that you’ll see gasoline break the $4.00/gallon mark this summer. And if unforeseen problems arise in the Middle East, you could see it go much higher than that. When your economic stimulus check arrives, don’t forget to take it with you to the gas station. Just think of it as President Bush’s gift to “big oil”.

If you think inflation is out of control now, you ain’t seen nothin’ yet. See our recent post about what the price of oil is doing to the U.S. economy.

As Esso (or was it Humble Oil) used to say, “Happy Motoring”.

Hybrid and electric vehicles are looking better all the time.

– RoutingByRumor

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Oil Closes Above $100.00/Barrel, Toilet Paper Closes Above $1.00/Roll, Wal-Mart’s Quarterly Sales Surpass $100 Billion and Postage Rates Are Going Up Again !

All of these increases are related, and they all spell serious trouble for the U.S. economy.

Energy costs are driving up the price of all consumer goods and services. Raw materials, production and transportation costs are all being pushed higher because of the price of oil.

U.S. crude for March delivery jumped $4.51, closing yesterday at $100.01 a barrel on the New York Mercantile Exchange. The previous record close was $99.62 on January 2, 2008. It has never closed above the century mark until now.

In a recent shopping trip, we found single rolls of Scott toilet tissue selling at a national drugstore chain for $1.15 a roll. I’ve never seen single rolls of toilet paper priced at or above $1.00 a roll. The cost of paper products seems to have increased 25-30% within the space of a few weeks.

And with Americans hard pressed to stretch every dollar, Wal-Mart continues to post record sales figures despite the widespread belief that retailers such as Wal-Mart are major contributors to the nation’s economic problems. The United Food and Commercial Workers (UFCW) union says Wal-Mart employs more than one million U.S. workers, earning an average of $8.00/hour.

If you need a better feel for what $100 billion actually means, it’s the same as saying “one hundred thousand million dollars”. It’s $100,000,000,000.00 …and that’s just for the fourth quarter of 2007. That works out to more than $1 billion a day, or put another way, more than a thousand million dollars every day. That translates to $400 billion a year if they continue those figures for four quarters. At this rate, Wal-mart, the world’s largest retailer and the largest private employer in the U.S. (see this UFCW fact sheet), will have a trillion dollars in annual sales before long.

The prices mentioned above are significant milestones, even if the specific numbers are not economically significant. It’s similar to when U.S. gasoline prices went above $1.00/gallon for the first time, back in the Summer of 1979. We feel that they portend even higher prices in the near future. Expect sharp increases to continue in the cost of living and inflation. Expect the size of those rolls of toilet paper to continue shrinking, while the price continues heading North. If you have any letters to mail, better do it soon. On second thought, use e-mail.

Trips to the supermarket are getting more painful every week. All of the basic grocery items, bread, milk, eggs, cereal, etc. are rising sharply. For instance, we’ve seen the price of a dozen eggs almost double in the last few months. Too bad gasoline doesn’t taste better, because milk is now almost double the price of gasoline, per gallon. It makes you wonder if the cows are the ones who are getting milked. We’ve seen some bakeries raising prices so often that they don’t even wait until their old packaging is used up before they raise the price. They are covering the printed prices on their plastic bags with stickers showing the new price. I’ve seen that some boxes of cereal have shrunk to less than 9 ounces. For instance, I spotted a 8.9 ounce box of General Mills Cheerios.

Who decides on these strange product sizes? Did a committee of pricing experts say that 9 ounces was way too big, but 8.75 ounces looked too small ? It’s voodoo marketing. It’s deception engineering. What’s next? The 8.1275 ounce box of Kellogg’s Frosted Flakes?

We can’t remember any time in the past 30 years that the cost of living has risen so sharply and for so long a period of time.

Just nine months ago, the Postal Service raised the first class postage rate (up to one ounce) by two cents, to 41 cents. They have just announced another increase to take effect this Spring. No wonder they introduced their “Forever” stamp. They saw these frequent rate increases coming, and probably wanted to limit the public outcry. Unless you have lots of money to tie up in “Forever” stamps, the idea of locking in your postage rate is pretty meaningless. You’d be much better off investing your money anyway. What we need is the “Forever” gallon of gasoline and the “Forever” quart of milk. Shoppers going to the supermarket are behaving more and more like stock market speculators every day. Should I buy that loaf of bread today? I really don’t need bread yet, but it might be 30 cents more tomorrow. Better fill up the car today, because the radio just said the price of a barrel of oil hit a record high yesterday, and that means the price at the pump will be going up in the next couple of days.

With these almost daily price increases and product downsizings, what we need is a new way of tracking the true cost of living. Forget about the U.S. government’s inflation index. Forget about the “market basket” price surveys. Forget about The Lundberg survey of gasoline prices. What this country needs is “The RoutingByRumor National Toilet Paper Price Survey”, adjusted of course, for the shrinking size of toilet paper rolls. Laugh all you want. We think it will be a very accurate gauge of inflation.

– RoutingByRumor

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