Bite Size Bad News 6--The "Staycation"

I know, I know, the last thing you need is another reason to hate Wal-Mart. But check this out.

Last month Wal-Mart management filed with the US patent office to scarf up the trademark rights to a neologism (one they had nothing to do with coining, incidentally): "staycation."

The idea is pretty clear--what with layoffs, inflation, a recession and $4 a gallon gas, many of us aren't going to be doing much vacation traveling this summer, so let's hang around the crib and Have Fun! It's a "Staycation"!

Rand McNally, the map people, did some polling in April: 57% of American families are trimming their vacation plans this summer, with only 15 % intending to travel for more than five days. One in ten are canceling their plans altogether.

With the trademark application still pending (track it here), Wal-Mart went ahead yesterday and rolled out a widget you can install on your home computer so that every day you can see a nifty new suggestion for Big Fun on your stay-at-home vacation. Most of them, oddly enough, involve the purchase of a barbecue grill, an "inflatable outdoor movie screen" or some other piece of crap from Wal-Mart. (See the press release at this business site--I'm not linking to the swine.)

I wonder what they'll come up with if millions of us find ourselves on permanent "staycation" as the economy continues to go pear-shaped. Waterproof cardboard box liners to keep your new residence dry? Lightweight plastic trays to sell apples and pencils from? 2 for 1 squeegees for the entrepeneurially-minded?

Have a nice "staycation"...

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Bite Size Bad News 4--Candy

Mars just bought out Wrigley in a merger that creates the world's largest candy company with 14% of the global market. This has attracted a lot of attention because financing from the world richest man, Warren Buffett, made it possible.

So this news fits the "bite size" part of the feature like a glove, but where's the "bad news" come in? Well, Buffett is one of the canniest investors ever, and famously stayed away from a lot of the fancy "investment vehicles" which have been imploding so spectacularly over the last year.

Obviously he likes putting together a firm that is the big dog in a monopsonized global market, but a Financial Times columnist, John Gapper, points out that Buffett is also walking the walk on his predictions about the severity of the unfolding recession:

Famously, confectionery companies are often good investments in recessions as people cut back on big luxuries and seek comfort with such small indulgences as chocolate bars.

Uh-oh.

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Bite Size Bad News 3--Oil

The benchmark price of crude oil, which was well below $70 a barrel a year ago, is now flirting with $120.

Think it’s a speculative bubble? Check out the announcement by Petrobras that it has discovered two large new offshore oil fields it hopes will make Brazil one of the world’s largest oil exporters.

There are only few problems, starting with the fact that new technology will have to be developed to deal with a couple of small technical difficulties:

• Much of the oil is 32,000 feet below the ocean’s surface (the world’s current deepest well is about 9,000 feet).
• That means pressures of 18,000 pounds per square inch, enough to crush a pickup truck into an unrecognizable hunk of scrap.
  
• And temperatures of 500 degrees Fahrenheit, hot enough to melt some metals traditionally used in energy production.
• Oh, yeah, layers of salt on top of the oil, a mile or more thick, absorb seismic waves and make pinpointing where to drill much harder than usual.

Get the feeling that if Brazil does get this oil out, it won’t be cheap?

That doesn’t mean that prices will never fall from current levels, especially as the incipient global recession deepens. But upward pressures are growing too—the effort to slow the growth of petroleum consumption in the US, Europe and Brazil by mixing in agricultural ethanol into gas and diesel have been the largest contributing factor in the sudden appearance of an international food crisis, characterized by shortages and spiking prices of staple grains. That looks more like a whipsaw than twin bubbles to me.

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