May 25, 2022

Archives for July 2013

An Economic Puzzle – Consumer Confidence Hits Six Year High While Majority of Americans Say U.S. Still in Recession

courtesy: forbes.com

If everyone from the Fed Chairman on down to the average man in the street seems confused about how the economy is doing, well, it’s because they are. The economy is still in a recession, a depression or an emerging boom depending on who you listen to. Two recent news articles published days apart highlight the divergence of opinion on the state of economic affairs.

Consumer Confidence Revisits High Set in 2007

Americans are more confident about the economy than at any time since July 2007, a survey found, suggesting consumers will spend more and accelerate growth in the months ahead.

The University of Michigan said on Friday that its final reading of consumer sentiment in July was 85.1. That’s up one point from June and nearly 13 points higher than a year ago.

Rising home prices and steady job gains are bolstering household wealth and income. The proportion of Americans who expect their inflation-adjusted incomes to rise in the coming year is greater than at any time since late 2007, the survey found. And the percentage of Americans who say their home values have risen is also at a six-year high.

Majority of Americans Say U.S Still in Recession

The economy may be sputtering along. But it hasn’t been in recession for more than four years. More than half of Americans think it still is.

A majority of people — 54% — in a new McClatchy-Marist poll think the country is in an economic downturn, according to the survey conducted last week and released Tuesday.

The McClatchy-Marist poll found that Americans who earn less are more likely to think the economy is in a recession. Of those earning less than $50,000 a year, nearly two-thirds say the downturn is still underway. For those earning more than that, only 47% think so.

Is it any wonder that Bernanke swings from tapering to easing in the same week? The Federal Reserve, packed with PhD economists, seems as equally confused about the state of the economy as the average consumer.

After considering the divergent opinions, two general conclusions regarding the economy are possible here.

-Predicting the future is a fool’s game, and
-Consumers who have well-paying jobs, money in the bank and rising incomes are far more likely to be optimistic about the future than someone with no job and no money.

Google Chromecast Is 2013’s Smash Hit Electronic Wonder

 

Google has done it again with the release of the Google Chromecast streaming media player.

It wasn’t enough that Google (GOOG) developed and offered for free the Android operating system.  As an open source OS, Android quickly became the world’s most widely used smartphone platform.  Due to its low cost and flexibility, Android is also becoming the software of choice for a wide range of other electronic devices including televisions, video games and digital cameras.   

Google has quietly been coming out with a string of ingenious devices which will bring fundamental changes to the economy and revolutionize the way we live.  Who would have thought that Google would make a self-driving car a reality so quickly or allow us to merge our lives with the internet with Google Glass?

Although the Chromecast  HDMI streaming media player does not seem like that big of a deal compared to other ingenious Google products, it threatens to fundamentally change the multi-billion dollar cable industry, perhaps in the same dramatic fashion that Apple’s IPod changed the music industry.  As media inexorably moves to the internet, who needs the expensive and clunky cable companies with their hideous black cords running all over the house when you can wirelessly connect your TV to the internet with Chromecast?  High monthly cable bills could become a thing of the past.

For only $35 dollars and two minutes of installation time, Chromecast  uses your smartphone, laptop or tablet to stream pretty much anything  you want from the internet to your TV.  As word of Chromecast spreads, it has quickly sold out at major retailers such as Best Buy and Amazon. 

If you use Netflix (NFLX) or want to sign up for Netflix the Chromecast is essentially a free giveaway to consumers since existing or new Netflix customers will receive three months of free service which is worth about $35.

Google is quietly establishing itself as one of the most innovative companies in the world.  It’s hammer lock on internet searches provides billions of dollars in profits that are being used to develop new products and technologies which in turn provide Google with massive amounts of information on consumer preferences and buying habits.  The massive data bases gathered on consumers using Google products in turn allows Google to charge advertisers higher ad prices through focused marketing and the profitable circle is completed.  If anyone is looking for the first trillion dollar market cap stock, Google is a prime candidate.