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Matters Financial |
25 August 2003
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Dell Cuts Prices Despite Greater Demand
Dell Computers announced last week that is was cutting prices on its computers by as much as 22%. Simple economics says that with demand increasing with back-to-school shopping, suppliers can get more for their products. Then, why the cut? Because contrary to popular opinion, businesses do not simply maximize profits, they engage in fights for market share and positioning in the belief that a sacrifice of gains now will result in bigger stock prices later. Click here to read more.
California -- America's Engine or Millstone
Warren Buffet, Sage of Omaha, Chairman of Berkshire Hathaway, and advisor to Candidate Arnold Schwarzenegger, has said that the troubles in California could tip the US back into a slow or no growth future. The admirable Mr. Buffet is the master of the obvious, but at a time when the economic situation couldn't be murkier, such observations are welcome. California can drag the US down, but it can also pull the US up. And vice versa. Click here to read more.
Fishy Statistics Make Economics a Dismal Science
Justin Lahart, CNN/Money Senior Writer, put together a beautiful piece last week on the significance of the 400,000 jobless claims that has everyone on Wall Street watching as an economic indicator. Mr. Lahart essentially performed the "Emperor's New Clothes" routine on the 400K figure, and backed it up beautifully. Briefly, he proved that there is nothing magic about the number. If only a few more such figures were attacked this way. Click here for our view.