-
5 Upsides of $4 Gas
Tweet Share on Facebook May 28, 2008 Comment (219)Nobody wants to hear this, but like oat bran or the Stairmaster, $4 gas may actually be good for you.
Not today, necessarily. There's no doubt that skyrocketing gas prices are crimping family budgets across America and putting consumers in a foul mood about the economy. People are curtailing vacations, eating out less, and going without to help cover those $60 and $80 fill-ups.
But down the road (if we don't run out of gas getting there), expensive fuel today could yield benefits tomorrow. Here are a few:
-
Why Consumers Are Underconfident
Tweet Share on Facebook May 27, 2008 Comment (17)It doesn't add up. American consumers see gloom all around, with new consumer confidence numbers that are the worst since 1992. In other words, the economy is ailing worse than it was after 9/11, or after the tech bubble and stock market run-up that came crashing down early in 2001.
This, even though it's not clear we're even in a recession. Sure, quibbling over whether economic growth is positive or negative doesn't help anybody fill the tank or put food on the table, but overall, the economy isn't nearly as sick as consumers seem to think. Unemployment is a relatively low 5 percent, and some important indicators have recently turned from negative to positive. Some possible reasons why consumers feel more depressed than conditions warrant:
-
Why Small Cars Are a Smart Buy
Tweet Share on Facebook May 16, 2008 Comment (149)I spent a week recently driving the new GMC Yukon hybrid—and couldn't wait to get out of it. Not because there's anything wrong with the strapping, eight-passenger SUV. In fact, it's polished and comfortable, and the hybrid system seems to work great. It's just too darn big.
So are lots of other cars. Over the past 20 years, Americans have grown accustomed to defaulting upward when choosing a car—buying more than they need, rather than less. Now, the trend is reversing. Thanks to record-high gas prices and a tottering economy, sales of the largest cars and SUVs are down 20 percent so far this year. The only category where sales are rising is compact vehicles. A nationwide automotive downsizing is underway.
-
Hewlett-Packard Deal Highlights Life in the Economy
Tweet Share on Facebook May 13, 2008 Comment (2)What's this? A big M&A deal? Maybe the economy isn't so moribund after all.
Hewlett-Packard's plan to buy Electronic Data Systems for about $14 billion is a sensible strategic alignment. HP is mostly an equipment company, with a huge but low-margin personal computer division and a storied business in printers, paper, and ink. EDS is a big information-technology firm that runs back-end computing systems for dozens of big corporations—but has failed to offshore its own operations or cut costs as aggressively as competitors.
-
What Your Car Color Reveals About Your Psyche
Tweet Share on Facebook May 12, 2008 Comment (34)With gas prices nearing $4 per gallon, are there any cheerful drivers left on the road?
Well, if there are, chances are they're driving a green car.
People who own emerald green automobiles, it turns out, have the most positive attitude about the course of their own lives. Dark blue and silver are other colors chosen by upbeat people.
-
What's Going Right With the Economy
Tweet Share on Facebook May 8, 2008 Comment (17)If you follow the news, then surely you're aware that we're in the midst of an epic financial crisis. Perhaps the worst since the Great Depression of the 1930s. Or maybe the Panic of 1819 or even the Tulip Mania of 1637.
How bad is it? Well, never mind that the unemployment rate is a relatively healthy 5 percent, and gross domestic product growth, as far as anybody knows, has yet to tip into a recessionary swoon. If you ask consumers, there's disaster afoot. Consumer confidence is at its lowest level since 1987, and expectations of future economic conditions are at a 35-year low. In other words, the typical American believes we are headed for worse times than the mid-'70s or early '80s, when unemployment approached 10 percent, inflation hit double digits, and wage and price controls seemed like a good idea.
-
Yahoo's Next 5 Headaches
Tweet Share on Facebook May 5, 2008 Comment (1)Yahoo CEO Jerry Yang probably feels he dodged a missile by rebuffing Microsoft's takeover attempt and retaining control of his company. But the incoming rounds are only likely to intensify. With the collapse of Microsoft's $48 billion bid for Yahoo, here's what the struggling online giant will have to contend with next:
A shareholder revolt. The Microsoft purchase would have valued Yahoo's shares at $33 each, a hefty premium over the $19 or so they were trading at before the offer. Since Microsoft withdrew, Yahoo stock has fallen from more than $28 to less than $25, and analysts think the shares could drift all the way back down to $20 or less. For somebody who owns, say, 1,000 Yahoo shares, the difference between the Microsoft price and the post-Microsoft price is a loss of about $9,000.
