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The 'frugal consumer' era continued this summer

One of the benefits of vacations is that you get to sample economic conditions in different regions of the United States, and the world, if one travels abroad.

A recent vacation visit to the seashore community of Mystic, Connecticut, which borders Long Island Sound, provided more data points on the current economic state-of-things and perhaps the U.S. economy-to-come.

Continue reading The 'frugal consumer' era continued this summer

Club Mediterranee increases profits with its new business model

Come fly with me to Club Mediterranee. With all the bad news filling up the major newspapers, television and the internet its time to take a break, forget your troubles, enjoy yourself and just have fun.

That is what is going on at Club Mediterranee, which just posted a $2.6 million dollar profit from a year earlier. Sales rose 5.7%. Some of the gains were partly due to the sale of assets. Club Mediterranee selling 80% of its gym business.

So with so much of the world losing sales and business what is Club Mediterranee doing to stay ahead of the curve? Go upscale and attract wealthier clients. Is it working? Judging from the result the answer is: Yes. Revenue per available bed, which is a measure of profitability, rose 7.5% from the previous year and the group brought in 61,000 extra clients to its five-star hotels.

So why not turn off your cell phone and your computer and meet me in Cancun?

Is global tourism harming the environment?

One wouldn't think someone would criticize one of the few growth sectors in the United States that has managed to remain intact and in good health during the nation's decade of economic descent, but that's what author Elizabeth Becker does.

In an op-ed article in The Washington Post, Becker argues against global tourism -- one the few bright spots in the U.S. economy, and also increasingly a source of income for many developing nations -- saying it's "a planet-threatening plague."

The U.S. unemployment rate is rising. The U.S housing sector is in its worst slump in a generation. Oil prices remain sky high. Business investment is sluggish. The investment banking community and most in the financial community in/around Wall Street, have a perpetual look on their faces of 'waiting for the other shoe to drop.' And now an argument is being made against one the U.S.'s few growth sectors -- tourism. You can just see the late Jackie Gleason, The Great One, looking down upon all this and saying, "What is the world coming to?"

Continue reading Is global tourism harming the environment?

Amid oil's pull-back, U.S. gasoline prices fall ... but slowly

For U.S. consumers, there's good news and bad news on the gasoline price front.

First the good news: U.S. retail gasoline prices have fallen every day for about a month, CNNMoney.com reported Monday, citing motorist group AAA data.

Now the bad news: Prices are not falling nearly as fast - - or as proportionately - - as they rose, given the same dollar-move in a barrel of oil.

The AAA said the national, average price for a gallon of regular unleaded has fallen 30 cents to $3.81 from a record high of $4.11 set on July 16, 2008, CNNMoney.com reported Monday.

Gasoline prices: Quick to rise, slow to fall

However, during that time period oil has fallen about $25 to roughly $115 per barrel. Given the roughly 2-cent to 2.5-cent move for every $1 move in the price of oil, gasoline prices should have fallen 50-62 cents per gallon. Why haven't they?

Economist Peter Dawson told BloggingStocks Monday the answer is complex and contains many variables, but the strongest factors today appear to be gasoline station cash flow, and profit maximization.

As soon the price of oil increases, some gasoline stations will increase the price of gasoline, in anticipation of a price increase the oil company will institute for the next gasoline delivery, he said. "Failure to do so would create a monthly cash flow deficit for the gas station," Dawson said. "It's sort of like an additional monthly expense."

Continue reading Amid oil's pull-back, U.S. gasoline prices fall ... but slowly

U.S. drivers cut back on gasoline consumption


The highly improbable may be happening. U.S. gasoline consumption may be arcing downward, The Wall Street Journal reported Monday (subscription required).

Confronted with near-record gasoline prices, an anemic-growth U.S. economy, and rising food costs, among other living expense increases, U.S. gasoline consumption has fallen about 1.1% in the past six weeks, on a year-over-year basis, The Journal reported Monday, citing U.S. Government data. Further, excluding Hurricane Katrina in 2005, which destroyed energy facilities, the six-week drop in demand is the longest drop in 16 years.

If the 'mini' trend strengthens or at least holds on a year-over-year basis, experts say it will limit gasoline price increases that typically occur during the summer driving season - - a period when U.S. gasoline consumption historically increases and oil companies increase gasoline prices to take advantage of that higher demand.


Continue reading U.S. drivers cut back on gasoline consumption

For Boeing, Airbus, another record year

Regarding the Dubai Air Show, it looks like Boeing (NYSE: BA) and Airbus are eyeball-to-eyeball, and so far, neither has blinked.

This year's Dubai Air Show has ensured that 2007 will be a record year for commercial jetliner orders, Reuters reported, with the two aerospace giants signing more than $82 billion in orders at the show.

For 2007, Airbus' orders should surpass the 1,111 amassed in 2005, Chief Executive Officer Tom Enders said. Boeing, which had 956 orders through Oct. 6 and does not forecast orders, is within 66 planes of having its third straight record year, Bloomberg News reported.


Continue reading For Boeing, Airbus, another record year

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