Amazon vs. Wal-Mart

Amazon vs. Wal-Mart

American consumers will soon have an easier time: they will shop at either Amazon or Wal-Mart. That’s overstating the situation, but after Amazon announced that it was buying Whole Foods for $13.7 billion and Wal-Mart (which last year bought fledging Amazon competitor for $3.3 billion), said it had purchased online men’s retailer Bonobos for $310 million, the retail landscape shifted once again. Both transactions signify that to succeed, companies will need robust digital as well as a brick and mortar beachheads. Whenever big deals are announced, it can make you feel like there are going to be three or four companies left in each sector. In the past, there have always been cycles of expansion and consolidation and just as big conglomerates were created, they could also be pared down.

The Key to Economic Growth: Productivity

The Key to Economic Growth: Productivity

Forget job creation, tax cuts and returning any sector back to its glory days. After running into (read: stalking) former Federal Reserve Chair Ben S. Bernanke in the CBS This Morning Green Room last week, he reminded me that the REAL key to boosting economic growth and more importantly, your living standard, is labor productivity. The reason is easy to understand: “In the long run, what we can consume as a nation is closely tied to how much we can produce,” wrote Bernanke more than a decade ago. 

“The Economy Doesn’t Stink”


The Greek debt crisis is temporarily on the back burner, so back to our regularly scheduled fixation: When will the Federal Reserve raise interest rates? During her semi-annual testimony before Congress, Federal Reserve Chair Janet Yellen said “If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate.” After Representative Scott Tipton (R-CO) got testy and said that the Fed is keeping rates low, because “our economy stinks right now,” Yellen responded by underscoring that the central bank is on the cusp of a rate lift off and when that happens, the Fed will be saying: “No, the economy doesn’t stink”.

There is plenty of corroborating evidence that Yellen can trot out to make her case. Last week, home builder confidence jumped to a 10-year high; Housing Starts and Permits showed continued progress; a report on consumer prices showed that core CPI was up 1.8 percent in June from a year ago, within striking distance of the Fed’s 2 percent target; and the Fed’s Beige Book indicated a general tightening of labor market conditions around the country.

When I discuss these improving trends on the air, I inevitably receive nasty-gram tweets or long-winded e-mails explaining that I am sugar coating “the truth about the economy”. My favorite last week was “Do you ever say anything not officially handed to you by someone inside a #CentralBank? FYI, OUR ECONOMY SUCKS. #cheerleader”.

The rancor is understandable: just because the economy is on a positive trajectory does not mean that it is on fire. Pokey growth, combined with flat productivity is not on any economist’s wish list. As the WSJ’s Timothy Aeppel pointed out, with productivity “at a 2 percent annual growth rate, it takes 35 years to double the standard of living; at 1 percent it takes 70. Low productivity slows the economy and holds down wages.”

Yet despite relatively slow growth, low productivity and lots of disgruntled Twitter users, there is enough evidence of economic progress to prompt the Fed to start nudging up rates as early as September. 

MARKETS: Investors breathed a sigh of relief after Greece and the Euro Group agreed to fresh bailout. The deal will not resolve the long term issue that there is no chance that Greece can repay the more than $330 billion to the Europeans, but for now, the heat is down. With the inking of the Iran nuclear deal and the end to economic sanctions, the International Energy Association forecasts Iran, which has the fourth largest proven crude oil reserves in the world, will ramp up production and bring new supply to the market. Crude oil is down by over 10 percent over the past two weeks.

  • DJIA: 18,086 up 1.8% on week, up 1.5% YTD
  • S&P 500: 2,126, up 2.4% on week, up 3.3% YTD
  • NASDAQ: 5,210 up 4.3% on week, up 10% YTD (New closing high)
  • Russell 2000: 1267, up 1.2% on week, up 5.2% YTD
  • 10-Year Treasury yield: 2.35% (from 2.41% a week ago)
  • September Crude: $51.21, down 3.5% on week
  • August Gold: $1,131.80, down 2.2% on week
  • AAA Nat'l avg. for gallon of reg. gas: $2.76 (from $2.76 wk ago, $3.59 a year ago)


Mon 7/20:

Halliburton, Hasbro, Morgan Stanley

Tues 7/21:

Apple, GoPro, Microsoft, Yahoo

Weds 7/22:

Boeing, Coca-Cola

10:00 Existing Home Sales

Thurs 7/23:

3M, Amazon, AT&T, Caterpillar, GM, McDonald’s, Starbux, Visa

Fri 7/24:


10:00 New Home Sales

Procrastination Nation


Last month, I had the privilege of interviewing productivity guru David Allen, who wrote a seminal work on the topic called “Getting Things Done: The Art of Stress-Free Productivity”. At the Financial Planning Association’s Annual Conference, David captivated 1,800 CFP® professionals with a terrific explanation of how easily we can be distracted and the best way to find focus and vision. I thought about David after trying to conduct research on why people procrastinate. It’s not that we are inherently lazy, and according to Joseph Ferrari, a professor of psychology at DePaul University, “It really has nothing to do with time-management…As I tell people, to tell the chronic procrastinator to just do it would be like saying to a clinically depressed person, cheer up.”

Ferrari has found that as many as 20 percent of people may be chronic procrastinators and it causes them stress, a drop in overall well-being and not surprisingly, it can cost them money too -- think late fees on credit cards, which add up to billions of dollars annually; filing taxes at the last minute, which prevents many from claiming many deductions to which they are entitled; and of course, failure to save for retirement, which can create financial problems in the future.

It’s not that procrastinators don’t know what to do—they understand that they really should track their expenses or draft a will, but they can’t bring themselves to do it. Ferrari says that some procrastinators avoid making financial decisions due to a psychological reluctance to be held responsible for a decision. Perhaps one spouse avoids all of the financial and investment decisions not because he or she “isn’t good at that stuff”, but the uninvolved spouse wants to retain the right to second-guess the money-managing spouse later!

How can procrastinators bridge the gap between intention and action? David Allen says that part of the problem is that all of the things we have to do are rattling around our brains, causing us to drive ourselves a little crazy. He notes, “Until you see yourself doing it, you won’t see how to do it”.

The good news is you can actually change your attention and focus by firing your neurons to be sensitive to the tasks that need addressing. Allen’s system starts by capturing all the things that need to get done; imposing discipline so that you are in control; and then creating a plan for next actions. Once you get the stuff out of your brain and write it down, you need to schedule time to check in on your progress. It can help to do this at the time of day when you have the most energy. Also, when you are addressing those hard-to-accomplish tasks, try to limit distractions. I know that may sound nearly impossible in our hyper-connected world, but for some chunk of time, remove audio and visual alerts of new messages, do not log into social media and avoid opening too many windows on your browser.

According to experts, pre-committing to goals can help. You can start by making a public declaration, because your friends and family can help you stick to your pledge. “We know from research that you are more likely to do something if you publicly post it,” Ferrari says.

There are also some concrete steps to take in your financial life, like establishing automatic deductions from your paycheck to a savings account, enrolling in a retirement plan and setting up auto-pay on as many bills as possible. If you think you need professional help, schedule that appointment and keep it!

Ferrari advises rewarding yourself for completing that to-do. It’s fun to share your accomplishment with one of your cheerleaders (spouse, parent, pal); spending extra time with your kids, your friends; or giving yourself a mental break by doing something physical. Finally, you can also treat yourself by spending small dollars on something…after all, you’ve earned it!