The 5 dumbest things on Wall Street
TSA security frenzy quickly becomes holiday yawn. Record profits at US companies aren't leading to new jobs. Dick's called 'anti-Christmas' by Christmas advocacy group.
5. Non-news event of the week: TSA security opt-outs
The hullabaloo surrounding the Transportation Security Administration's use of full-body scanners reached a fever pitch this week, thanks to “National Opt-Out Day.” The idea was that flyers, outraged by their privacy being invaded in the name of safety, would say no to scanning and pat-downs on one of the busiest flying days of the year.
Even as news stations air footage of screaming children being inspected, Thanksgiving travelers were more concerned about getting to their destinations. By noon Wednesday, media outlets were reporting business-as-usual conditions at most major airports.
4. Poisonous kiddie cups
The McDonald's (MCD) recall of 10 million Shrek drinking glasses in June should have been a warning to companies that use trinkets to entice children. But Time Warner's (TWX) Warner Brothers and Coca-Cola (KO) didn’t get the message.
Lab tests commissioned by the Associated Press found that some of the most popular comic book or movie-themed glasses contained up to 1,000 times the amount of lead permitted by Federal limits for children's products. The tests, conducted by ToyTestingLab in Rhode Island, were conducted on superhero and “Wizard of Oz” glasses bought from the Warner Brothers Studios store in Burbank. They found that decorations on the glasses were 16% to 30.2% lead, far exceeding the federal limit of 0.03% for children's products.
About 160,000 glasses have been recalled. Coke said it is recalling more than 88,000 glasses.
3. Profits don't lead to jobs
A Commerce Department report this week said that American businesses earned profits at an annual rate of $1.66 trillion in the third quarter, the highest figure recorded since the government began keeping track more than 60 years ago.
Despite these record profits, 10 million Americans are expected to remain jobless through the 2012 elections, according to Federal Reserve estimates released this week. The 9.6% national unemployment rate might fall to 9% by the end of 2011 and 8% by 2010.
Even with the big rebound in corporate profits -- 28% in the third quarter – the Commerce Department said spending by corporate America on compensation for employees in the past year has only risen by 7.6%.
2. The great cocoa panic
Start rationing your Hershey's bars now because chocolate candy as we know it may disappear in the near future. That’s what the Cocoa Research Association declared last month, when it said that global chocolate consumption was increasing faster than production, a situation it deemed unsustainable, according to Britain’s Telegraph.
Cocoa prices are climbing and consumption is on the rise, but the same could be said for almost any commodity as the population grows. Hedge fund manager Anthony Ward sent prices soaring when he purchased 240,100 tons of cocoa beans for $1 billion, prompting speculative buying.
Popular Science also notes that major chocolate manufacturers such as Hershey's (HSY) and Mars are working to genetically engineer cocoa trees to boost chocolate production. Mass-market chocolate, especially in the U.S., doesn't use a lot of real cocoa anyway.
1. Christmas wins the war against Christmas
For almost 10 years, the American Family Association has waged a war on retailers who express "holiday" spirit rather than "Christmas" spirit in their marketing. Since the AFA began its campaign, the percentage of retailers embracing Christmas-specific advertising has risen from 20% to 80%, according to AdAge.
Dick's Sporting Goods (DKS) raised the group’s ire when it hosted an online "Holiday Shop," without singling out Christmas in its advertising. Last Friday, the AFA urged its 2.3 million supporters to boycott Dick’s until Dec. 25.
"In our research of the Top 100 retailers in America, Dick's advertising is likely the most 'anti-Christmas' of all," the AFA told members.
Dick’s responded by renaming its online holiday shop the “Christmas Shop,” and specifying Christmas in its advertising.
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