Signs are growing that frugal American consumers are staying at home for breakfast, extending a trend that has hit evening sales at US restaurant chains.
General Mills, whose brands include Cheerios cereals and Yoplait yoghurt, estimated yesterday that total US breakfast cereal sales rose about 5 per cent in June to August from a year ago. Its US sales of breakfast cereals rose 10 per cent, while its yoghurt sales were 19 per cent higher.
Ken Powell, chief executive, said the company's products, which also include Progresso soup and home baking brands, have in general benefited from a shift away from eating out in the evening.
But the increased sales of cereal and yoghurt were consistent with the hypothesis that the same thing is happening in the morning, he said.
Until recently Americans have increasingly eaten breakfast on the way to work, and the trend has supported the growth of breakfast offerings from fast-food restaurants such as McDonalds and from Starbucks and other shops that sell coffee.
Early this year Jamba Juice, a chain built around the sale of fresh fruit “smoothies”, began to offer food as well. It said the baked goods sector was the “fastest growing day part” in the quick service restaurant business.
But David Palmer, a consumer goods analyst at UBS Equity Research, observed in a note to clients: “US restaurant breakfast traffic was flat in the June quarter for the first time since 2004.”
This trend could benefit not just General Mills but also its cereal rival, Kellogg's, he said.
Mr Powell said General Mills' yoghurt sales also seemed to be benefiting from a growing readiness to save money by making a “brown bag” lunch at home rather than eating out.
“Generally we are reading and seeing a shift to dinner [at home], and the percentage of consumers who brown-bag and bring their own lunch is also going up a bit,” he said.
General Mills also reported strong growth in sales of its soup brand. Progresso sales were up 9 per cent in the quarter.
Its rival Campbell's has also seen strong soup sales this year.
Saturday, September 20, 2008
Tuesday, September 16, 2008
China cuts benchmark interest rate for first time since dotcom bust
China's central bank cut the country's benchmark interest rate for the first time in more than six years last night, in the face of global financial turmoil and signs of a slowing domestic economy.
The People's Bank of China lowered the one-year lending rate by 27 basis points, to 7.2 per cent per annum, after years of gradual rises aimed at fighting inflation and reining in what some saw as an overheating economy.
The PBoC also said it would reduce the amount that smaller domestic banks must hold in reserve with the central bank by one percentage point to 16.5 per cent from September 25, freeing up funds for those banks to lend. That will be the first drop in the reserve rate requirement since 1999 but does not extend to the country's five largest banks or the postal bank.
“This is a response to global events and shows policymakers are more worried about the export machine grinding to a halt in the face of global worries,” said Ben Simpfendorfer, chief China economist for RBS.
“But this is probably insurance rather than signalling serious concern over domestic worries and we should not overplay this decision.”
China's consumer price inflation fell to 4.9 per cent last month, its lowest level in 14 months, after peaking at a 12-year high of 8.7 per cent in February.
In announcing the cuts, the central bank did not mention the global credit crisis but said the moves were intended to “solve prominent problems in the current economic operation” and “ensure steady, rapid and sustained development”.
However, Stephen Green, Standard Chartered's head of China research, said: “The timing likely has something to do with the Asian equity market sell-off today [Monday], on the back of the Lehman collapse and fears of more financial contagion in the US.”
The People's Bank of China lowered the one-year lending rate by 27 basis points, to 7.2 per cent per annum, after years of gradual rises aimed at fighting inflation and reining in what some saw as an overheating economy.
The PBoC also said it would reduce the amount that smaller domestic banks must hold in reserve with the central bank by one percentage point to 16.5 per cent from September 25, freeing up funds for those banks to lend. That will be the first drop in the reserve rate requirement since 1999 but does not extend to the country's five largest banks or the postal bank.
“This is a response to global events and shows policymakers are more worried about the export machine grinding to a halt in the face of global worries,” said Ben Simpfendorfer, chief China economist for RBS.
“But this is probably insurance rather than signalling serious concern over domestic worries and we should not overplay this decision.”
China's consumer price inflation fell to 4.9 per cent last month, its lowest level in 14 months, after peaking at a 12-year high of 8.7 per cent in February.
In announcing the cuts, the central bank did not mention the global credit crisis but said the moves were intended to “solve prominent problems in the current economic operation” and “ensure steady, rapid and sustained development”.
However, Stephen Green, Standard Chartered's head of China research, said: “The timing likely has something to do with the Asian equity market sell-off today [Monday], on the back of the Lehman collapse and fears of more financial contagion in the US.”
Kill or cure for the Wall Street malaise
The world has not ended. The international economy has not yet collapsed. But one thing is now quite clear: the banking system as we know it has failed.
Following the disappearance of Bear Stearns in March, and now the bankruptcy of Lehman Brothers and the surprise plans for Bank of America to absorb Merrill Lynch, three of Wall Street's five big independent investment banks have disappeared inside six months. After an astonishing weekend it is too early to predict the future shape of investment banking with confidence, but business as usual is not one of the possibilities.
Lehman is entering bankruptcy because the US Treasury refused to subsidise a rescue. That is a change of policy after Bear Stearns and a stark contrast to the nationalisation of Fannie Mae and Freddie Mac. It is emphatically a courageous call. The Bear Stearns bail-out was motivated, and probably justified, by the fear that a collapse of Bear would wreck the entire financial system, so interconnected was the bank with its peers.
Those concerns also apply to Lehman Brothers. But the US government does not have limitless resources; even if it did, the challenge in a serious financial panic is for the government to choose the right place to draw the line. Allow a Fannie Mae to collapse, and the US economy might well collapse with it. Yet bailing out anyone who asks nicely is a recipe for promoting (even more) recklessness and yet another crisis in the future.
So while the Treasury's decision is hugely risky, that risk may pay off. An important distinction between Lehman and Bear is that, while Bear failed suddenly, Lehman Brothers has been struggling for months. Those exposed to its failure have had time to hedge their risks and tidy up their transactions, so the financial system, rocky as it is, may be able to handle the unwinding of Lehman's financial contracts in an orderly fashion. If so, the decision by Hank Paulson, the Treasury secretary, will be seen as the moment when investors and bankers had at last to take responsibility for their own risky decisions.
That is the potential reward for courage. Still, it is rather early to pronounce the tough love policy a success. Wall Street has not seen the bankruptcy of an investment bank since Drexel Burnham Lambert in 1990, and the sector's interconnectedness through the credit derivatives market has since grown beyond recognition. These are uncharted waters.
The immediate market reaction has been restrained. Equities fell when markets opened yesterday, with some European bank stocks particularly hard hit. The gold price rallied and the cost of insuring against defaults by big banks has shot up. Yet panic would be too strong a word to describe this – the US authorities will be hoping that it is the return of realism.
If the markets survive the immediate aftermath of the disappearance of Lehman Brothers, that will be a big step away from the precipice. The likely takeover of Merrill Lynch is another one. While it may seem disturbing that the “thundering herd” feels vulnerable enough to seek a stable at the Bank of America, the truth is that, with Lehman gone, attention would have turned next to Merrill. Whatever influenced John Thain, Merrill's chief executive, he has proved himself more pragmatic and more flexible than Dick Fuld, the chairman and chief executive of Lehman. In finding shelter he has helped to create a welcome firebreak against panic.
The future of Goldman Sachs and Morgan Stanley, the last two independent investment banks, is now an open question. Goldman has survived not because of a fundamental difference between it and Bear, Lehman and Merrill, but because it took more successful bets. Investors may be happy to bet that the run of success will continue, but regulators may not: expect capital requirements to be tightened.
There will now be renewed calls for more regulation, and understandably so. But it is naive to think that the right regulatory response is obvious. From poor governance to flawed incentives, incompetent risk management to foolish strategies, the failures of the financial system have been so widespread as to render a coherent regulatory riposte impossible. The likely outcome is that tight capital requirements will be forced to serve as a catch-all response to risk. If so, the banking sys- tem will look more like that of the 1960s – a low-risk, low-return utility business. The ambitious and the avaricious will no doubt seek more ex- citing hunting grounds with hedge funds and private equity groups.
For now, the Treasury's calculated risk looks better judged than those of a banking system intoxicated by bail-outs. Yet even well-judged gambles often fail.
Following the disappearance of Bear Stearns in March, and now the bankruptcy of Lehman Brothers and the surprise plans for Bank of America to absorb Merrill Lynch, three of Wall Street's five big independent investment banks have disappeared inside six months. After an astonishing weekend it is too early to predict the future shape of investment banking with confidence, but business as usual is not one of the possibilities.
Lehman is entering bankruptcy because the US Treasury refused to subsidise a rescue. That is a change of policy after Bear Stearns and a stark contrast to the nationalisation of Fannie Mae and Freddie Mac. It is emphatically a courageous call. The Bear Stearns bail-out was motivated, and probably justified, by the fear that a collapse of Bear would wreck the entire financial system, so interconnected was the bank with its peers.
Those concerns also apply to Lehman Brothers. But the US government does not have limitless resources; even if it did, the challenge in a serious financial panic is for the government to choose the right place to draw the line. Allow a Fannie Mae to collapse, and the US economy might well collapse with it. Yet bailing out anyone who asks nicely is a recipe for promoting (even more) recklessness and yet another crisis in the future.
So while the Treasury's decision is hugely risky, that risk may pay off. An important distinction between Lehman and Bear is that, while Bear failed suddenly, Lehman Brothers has been struggling for months. Those exposed to its failure have had time to hedge their risks and tidy up their transactions, so the financial system, rocky as it is, may be able to handle the unwinding of Lehman's financial contracts in an orderly fashion. If so, the decision by Hank Paulson, the Treasury secretary, will be seen as the moment when investors and bankers had at last to take responsibility for their own risky decisions.
That is the potential reward for courage. Still, it is rather early to pronounce the tough love policy a success. Wall Street has not seen the bankruptcy of an investment bank since Drexel Burnham Lambert in 1990, and the sector's interconnectedness through the credit derivatives market has since grown beyond recognition. These are uncharted waters.
The immediate market reaction has been restrained. Equities fell when markets opened yesterday, with some European bank stocks particularly hard hit. The gold price rallied and the cost of insuring against defaults by big banks has shot up. Yet panic would be too strong a word to describe this – the US authorities will be hoping that it is the return of realism.
If the markets survive the immediate aftermath of the disappearance of Lehman Brothers, that will be a big step away from the precipice. The likely takeover of Merrill Lynch is another one. While it may seem disturbing that the “thundering herd” feels vulnerable enough to seek a stable at the Bank of America, the truth is that, with Lehman gone, attention would have turned next to Merrill. Whatever influenced John Thain, Merrill's chief executive, he has proved himself more pragmatic and more flexible than Dick Fuld, the chairman and chief executive of Lehman. In finding shelter he has helped to create a welcome firebreak against panic.
The future of Goldman Sachs and Morgan Stanley, the last two independent investment banks, is now an open question. Goldman has survived not because of a fundamental difference between it and Bear, Lehman and Merrill, but because it took more successful bets. Investors may be happy to bet that the run of success will continue, but regulators may not: expect capital requirements to be tightened.
There will now be renewed calls for more regulation, and understandably so. But it is naive to think that the right regulatory response is obvious. From poor governance to flawed incentives, incompetent risk management to foolish strategies, the failures of the financial system have been so widespread as to render a coherent regulatory riposte impossible. The likely outcome is that tight capital requirements will be forced to serve as a catch-all response to risk. If so, the banking sys- tem will look more like that of the 1960s – a low-risk, low-return utility business. The ambitious and the avaricious will no doubt seek more ex- citing hunting grounds with hedge funds and private equity groups.
For now, the Treasury's calculated risk looks better judged than those of a banking system intoxicated by bail-outs. Yet even well-judged gambles often fail.
Saturday, September 13, 2008
Dual Paralympian Jones wins first Summer Games medal
The big story in Paralympic sports this summer has been the efforts of two South Africans trying to earn the right to compete against able-bodied athletes at the Beijing Olympics. Natalie du Toit was successful in the open-water swim, and track athlete Oscar Pistorius will continue his quest toward 2012. In their shadow are athletes who push the limits of versatility by excelling in two sports in different seasons. This year, the lone American doing the summer/winter Paralympics double is cyclist-alpine skier Allison Jones.At the 2006 Torino Winter Paralympics, Jones won a gold medal in the slalom, and at the 2002 Salt Lake Games, she earned silver medals in giant slalom and super-G at age 17. In between, she made her summer Paralympics debut at the 2004 Athens Games, competing in the one-kilometer sprint on a track bike and the 21-kilometer time trial on the road. In Beijing earlier this week, Jones competed in the 500-meter time trial, finishing sixth and the three-kilometer individual pursuit, finishing eighth. On Friday, Jones captured her first Paralympics Summer Games medal, winning a silver medal in the 24-kilometer time trial on the road.On Friday, Jones was able to pass three competitors that started before her and did not get passed by Germany’s Natalie Simanowski, who started behind her. “I just rode my heart out,” she said after the race.Jones was born without a femur in her right leg, a non-hereditary birth defect called proximal femoral focal deficiency. Her tibia and fibula were located where the femur should have been, and when Allison was seven months old, doctors amputated her foot and fused the hip socket. Four months later, she received her first prosthetic leg, but Jones does not wear it when she competes in either sport. Jones had been a skier all her life, but she didn’t start cycling seriously until 1999. “I live a stone’s throw from the velodrome [at the Olympic Training Center] in Colorado Springs,” she said by phone from Beijing earlier this week. “At night you can see the lights from our house. Whenever they were on, my mom would take me to see the races. One night, we saw the lights and assumed it was a local race, but it turned out to be the 1998 IPC Disabled World Championships. When I got there I saw a bunch of gimpy people riding around the track and thought, ‘Well, I can do this, too.’“I had never ridden more than a kids’ bike,” she said. “My mom grabbed the first American we could see, and it happened to be Chris Carmichael [who went on to coach Lance Armstrong to seven Tour de France victories]. Chris was just starting his coaching business, and he pointed me to a local coach.”So in early 1999, while waiting for the snow to thaw on the velodrome, the local coach taught Jones to ride a track bike on a grassy field. She was hooked. Jones competes with minor modifications to her bike. There is no pedal on the right side. Until 2005, she rode with her right side unsupported and unprotected, except for a little piece of tape on the bike that would let her know where the rear wheel was.“Some of the male riders [with one leg] would use devices for stability,” she said. “But I ruled it off because I have good balance from ski racing. I said, ‘I don’t need it.’Jones has an undergraduate degree in mechanical engineering and her father, Jay, builds Formula 1 racing airplanes. The two started tinkering and came up with a useful device Jones calls a “stump cup,” a carbon fiber attachment on which she can rest her right side. “It doesn’t turn the crank arm, but it grounds my stump so I can get more leverage on my sound [left] side,” she said. “I can stand on the climbs and sprints now. It allows me to get full extension on my leg and lets me put full weight on the pedal without having to stand up and sit down all the time. I changed the design two months ago, and it’s 90 percent to my satisfaction.” Jones used her updated version on her track bike and the older one on her road bike.In the three-kilometer individual pursuit in Beijing, Jones placed eighth and broke her personal record by six seconds -- a margin so large, she said, “It’s nuts! And it’s the event that I hate the most. It’s four minutes of pure and agonizing pain, and you might realize at the end that you [made a mistake] at the beginning but it’s too late. Whereas in the 500, if you screw up, it’s over so quickly there’s nothing you can do.”Jones’ times are calculated without modification, unlike some of the other competitors in her class who receive time deductions because they are have less functionality. Each sport has different classifications, and in cycling, Jones is considered to be an LC3 (one lower limb disability and pedaling only on one side). She competes for medals in the same category as LC4 athletes (a more severe disability, usually affecting both lower limbs) and CP3 (cerebral palsy). Heading into Beijing, Jones felt her medal chances were best in road racing’s time trial, but wasn’t sure why. “I do well in it, but I train with the sprint athletes,” she said. “I wouldn’t even race it in the [United] States, but I’d get to an international race and pull a good result. No one could explain it. They don’t know where it comes from because I never train with the distance guys. But this year, we actually focused on [the road more] so I could get a little more out of it.”It paid off. On Friday, the 24-year-old Jones won a silver medal with the fastest time of the day on the 24-kilometer -- mostly uphill -- time trial course. She was edged out of the gold medal by her teammate Barbara Buchan because Buchan, a CP3, received a 5.081-percent time deduction, which translated to a two minute, 14.15 second advantage.Members of the U.S. Ski Team have been watching Jones compete online from their dry-land training camp in Colorado Springs. Fellow skier Brad Washburn, for one, is eager to have her back. Washburn grew up racing with Jones at Winter Park, Colo. At the 2006 Torino Winter Paralympics, he was in the start house for the second run of the slalom and when he saw Jones’ gold-medal [slalom] time on a scoreboard, he said he was “so stoked” that he skied a solid run and moved up five places, into 10th -- “but she knocked that course out of the water.”“I can’t believe she’s doing two sports,” Washburn said. “It’s amazing she can pull it off. Skiing is tough enough.”
Thursday, September 11, 2008
Women para-athletes pursue Olympic spirit
Safia Djelal of Algeria prepares to throw the javalin in the final of the women's Javalin F57/58 event during the 2008 Beijing Paralympic Games at the National Stadium in the Chinese capital on September 11, 2008. [Agencies]
Athletes run in the heats of the women's 200m T46 event during the 2008 Beijing Paralympic Games at the National Stadium in the Chinese capital on September 11, 2008. [Agencies]
Nakhumicha Zakayo of Kenya throws the javalin in the final of the women's Javalin F57/58 event during the 2008 Beijing Paralympic Games at the National Stadium in the Chinese capital on September 11, 2008. [Agencies]
Tang Qi of China cycles during the women's individual pursuit track cycling of the 2008 Paralympic Games in Beijing on September 10, 2008. [Agencies]
Yousra Ben Jemaa from Tunisia takes a throw during the final of the women's discus F32-34 classification event at the 2008 Beijing Paralympic Games in Beijing on September 10, 2008. [Agencies]Safia Djelal of Algeria prepares to throw the javalin in the final of the women's Javalin F57/58 event during the 2008 Beijing Paralympic Games at the National Stadium in the Chinese capital on September 11, 2008.
Paralympics should be renamed 'Superlympics'
Like many people, I've always seen the Olympics as the ‘main' sporting event every four years- the headline act- and the Paralympics as something of an add-on- the supporting act. It you are not disabled yourself it is hard to understand some of the games and the athletes' mobility problems.
But being in the host city for these Paralympics has changed my perspective. I've come to realize these athletes are nothing short of super-heroes. Deprived of physical abilities we take for granted, they make up for them and then some; they test their senses and the boundaries of physical ability to extremes that the Bolts and Phelpses of this world will never have to.
If Usain Bolt had to undergo a double-amputation, I wonder if he would strap two carbon fiber blades to his knees like Oscar Pistorious, aka Blade Runner, of South Africa, and re-learn everything that had once come naturally.
If Michael Phelps suddenly became blind, would he have the courage to still surge through the water, not knowing when he will reach the end of the pool, like Donovan Tildesley? Would any of us have the guts to turn around a life-changing experience like a car crash or bad rugby scrum, and not only get our lives back on track but then strive to be the best at a sport?
‘What Paralympic sport would you do if you were disabled?', was a water-cooler question I posed today. It's not something you would normally think about. You don't watch TV as a kid aspiring to be a Paralympian. But it takes more than early mornings, training programs and special diets to get to the Paralympics. It takes a tragedy or loss that will have been grieved, worked through and overcome.
If you've ever tried walking with your eyes closed you will know how difficult it is to have the nerve to do so, even if it's in a home you've lived in for years. Now imagine running with your eyes closed… Now imagine running 100m as fast as you can with nothing holding you back. China's Wu Chunmiao did this on September 9 in a time of 12.31 seconds.
Skiing is terrifying enough if you have all your faculties. Standing at the top of a ski slope, it's a battle of wills for most people to launch themselves, but Canada's Donovan Tildesley who has been blind from birth, revealed to a China Daily reporter this week that not only does he already ski, but he wants to take it up competitively.
Super-heroes indeed; each and every one. The Paralympics should be renamed the Superlympics. It's nothing to do with the equality denoted by the Greek “para”, it's about “super” ability, courage and strength that most of us, the top able-bodied athletes of the world included, will never have to muster.
It's worth remembering that many Paralympians are here because they've picked up horrific injuries while living life to the full. You don't get paralyzed sitting at home playing on a Nintendo after all. And having lived life to the full they are not prepared to stop. That's the lesser talked about ‘Paralympic spirit'.
I only hope that if life deals me or my loved ones similar blows we will tackle them in the same way as the men and women we are lucky enough to be sharing Beijing with at the moment.
But being in the host city for these Paralympics has changed my perspective. I've come to realize these athletes are nothing short of super-heroes. Deprived of physical abilities we take for granted, they make up for them and then some; they test their senses and the boundaries of physical ability to extremes that the Bolts and Phelpses of this world will never have to.
If Usain Bolt had to undergo a double-amputation, I wonder if he would strap two carbon fiber blades to his knees like Oscar Pistorious, aka Blade Runner, of South Africa, and re-learn everything that had once come naturally.
If Michael Phelps suddenly became blind, would he have the courage to still surge through the water, not knowing when he will reach the end of the pool, like Donovan Tildesley? Would any of us have the guts to turn around a life-changing experience like a car crash or bad rugby scrum, and not only get our lives back on track but then strive to be the best at a sport?
‘What Paralympic sport would you do if you were disabled?', was a water-cooler question I posed today. It's not something you would normally think about. You don't watch TV as a kid aspiring to be a Paralympian. But it takes more than early mornings, training programs and special diets to get to the Paralympics. It takes a tragedy or loss that will have been grieved, worked through and overcome.
If you've ever tried walking with your eyes closed you will know how difficult it is to have the nerve to do so, even if it's in a home you've lived in for years. Now imagine running with your eyes closed… Now imagine running 100m as fast as you can with nothing holding you back. China's Wu Chunmiao did this on September 9 in a time of 12.31 seconds.
Skiing is terrifying enough if you have all your faculties. Standing at the top of a ski slope, it's a battle of wills for most people to launch themselves, but Canada's Donovan Tildesley who has been blind from birth, revealed to a China Daily reporter this week that not only does he already ski, but he wants to take it up competitively.
Super-heroes indeed; each and every one. The Paralympics should be renamed the Superlympics. It's nothing to do with the equality denoted by the Greek “para”, it's about “super” ability, courage and strength that most of us, the top able-bodied athletes of the world included, will never have to muster.
It's worth remembering that many Paralympians are here because they've picked up horrific injuries while living life to the full. You don't get paralyzed sitting at home playing on a Nintendo after all. And having lived life to the full they are not prepared to stop. That's the lesser talked about ‘Paralympic spirit'.
I only hope that if life deals me or my loved ones similar blows we will tackle them in the same way as the men and women we are lucky enough to be sharing Beijing with at the moment.
Wednesday, September 10, 2008
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