Dec 302010

Whenever you buy something from Wal-Mart using your Visa CCard, Visa will charge Wal-Mart a transaction fee. These fees usually cost Wal-Mart about 2.5% of the total transaction amount. But they can vary between 1% to 3% usually depending on which type of CCrd is being used, (air-miles, points, platinum, etc)

Stores who accept CCs, like Wal-Mart, can either let these fees cut into their margins, or they can raise their prices by the same amount so their customers (you and I) end up paying for the CC fees indirectly without realizing we are. Either way, the CC companies get their money and the merchants and consumers pay the price. But these fees are almost never disclosed to the public. So the Better Business Bureau and the governments in both Canada and the US are planning to take steps to limit the amount of fees CC companies can demand from their partnering retailers, which will limit the CC companies’ revenues. When this news was announced earlier this month MasterCard’s stock dropped more than 10%.

Nothing is set in stone yet but the downside for us (CC users) is that we may see higher annual fees for using a CC. After all, Visa, as a business, needs to make money somehow to balance its books and if it can’t get enough money from retailers anymore it’ll be forced to look elsewhere. Or it may have to cut services, eg: no more cash back.  Is it a good idea for the Gov’t to regulate the credit card industry this way?

Dec 292010

There are a lot of good deals on TVs during this boxing week. It’s surprising how TV prices have dropped compared to just last year. Speaking of flat-screen TVs lets talk about these new “LED TVs” on the market. In brief, every LCD screen has a light source behind it, (that’s why TVs, monitors, laptops, etc give off light.)

Traditionally in most large LCD panels like TVs and computer screens the light sources used are CCFLs, or fluorescent lamps, (usually vertical tubes.) But recently geeky scientists have discovered a way to replace these long lamps with smaller LEDs or “Light Emitting Diodes” which offer many advantages over bulky CCFLs such as being more energy efficient. So LEDs change the way the picture is lit but the screen itself is still 100% LCD technology, so you still have slow response times, ghosting, and other problems associated with all LCD displays (top of the line LCDs will mitigate some of these problems eg: 240Hz refresh rate, but you have to shell out more $$$)

So you can have an LED-LCD TV, but you can’t use LED interchangeably with LCD as if a TV can only be one but not the other. The reason LED lit LCDs are marketed sometimes as just “LED TVs” is because consumers who don’t know what a light emitting diode is falsely assume that LED means a new type of screen technology that’s “better than LCDs.” which makes them more willing to pay the extra premium to buy an “LED TV,” or are more likely to upgrade their current CCFL-LCD.

Dec 192010

The economic recovery since the 2008 recessions has not been helping the younger workforce much…
Key points..
Canada has recovered all the jobs it’s lost since the recession but even though the national unemployment rate is 7.6%, young workers in the 15 to 24 year old category are sitting at a higher 13.6%.
While the economy has created 440K jobs since the recession there are actually 228K fewer young people employed which means young workers are actually leaving the workforce while everyone else fills in the gap.

A lot of them probably just went back to school, but some people think that education is not the problem, it’s more to do with their work ethic. The sense of entitlement in young workers may not match the expectations in the real world. I think one thing we can do as country is to give incentives, like tax breaks, for companies to hire younger workers.

I am part of this age group. I understand we may not have the experience businesses are looking for but we have to start somewhere. Most jobs require specific training anyway so we can’t expect schools to prepare us for everything. And when the boomers leave their posts someone else will have to take over. I feel very fortunate to have kept my job during these last couple of years *knock on wood* Best of luck to all the other generation Ys out there.

Dec 142010

I recently read a study by the Chinese government about how inflated they think their real estate market is.

The key points…
Of the 35 major cities surveyed, property prices in 11 including Beijing and Shanghai were between 30% and 50% above their market value, the China Daily said. And in some major cities like Fuzhou, real estate is overvalued by as much as 70%. Massive stimulus measures in 2008 put lots of cash into people’s hands which is blamed for fueling the real estate prices.

Some people say that Canada is also in a real estate bubble, but we’re not as bad. A study by “The Economist” a couple months ago show that Canadian homes are 23.9% overpriced. Our house prices between 1997 and 2010 rose a whopping 70%, the report said. Or about 4% every year on average. Although in cities like Toronto and Vancouver it’s more like 5%.

Here are some other results of The Economist survey and how we compare to other countries:
Overvalued countries:

  • Italy:                 10.5%
  • Ireland:              13.2%
  • Canada:             23.9%
  • Britain:               32.0%
  • France:              42.5%
  • Hong Kong:        58.1%
  • Australia:           63.2%

Undervalued countries:

  • US (Using the Case-Shiller national index): -2.1%
  • Switzerland:      -6.4%
  • Germany:        -12.9%
  • Japan:             -34.6%
Dec 102010

IKEA hands out free bikes to all its employees.
Key Points…
Christmas for Ikea staffs came a little early this year as the Swedish company recently gave out full sized bicycles to all of it’s 12,400 employees in the US. Unfortunately we didn’t get any here in Canada. The bikes are all-terrain, uni-sex, and painted in the Ikea colors of blue and yellow. Ikea’s US President said this was their way to support “a healthy lifestyle and everyday sustainable transport” for their employees.

Of course just like other Ikea products, it comes in a compact box and some assembly is required. What a great marketing move. You can already get these bikes on Craigslist around the $200 range; So much for company loyalty. I wonder what the cost was to make each one for Ikea.