Capitalogix

KFC's Double Down Sandwich - The New Health Food?

KFC's new Double Down sandwich has been getting tons of press since its ingredients were revealed. Some blogs are calling the sandwich "disgusting", while others gleefully talk about their eating experience.

The Double Down is essentially a sandwich with two chicken fillets taking the place of bread slices. In between are two pieces of bacon, melted slices of Monterey Jack and Pepper Jack cheeses, and a "zesty" sauce (you know, things your cardiologist is secretly happy you're putting into your system).

How Bad For You is Eating Something Like This?

While it certainly doesn't qualify as health food ... it also doesn't have bread.  Further, according to KFC, it weighs in at a reasonable 540 calories, 32 grams of fat, and (a less reasonable) 1,380 milligrams of sodium,  Other sources argue that the calorie count is much higher.

Regardless, there are lots of fast foods worse for you than this sandwich (click here to see the rankings).  Some even claim the Double Down is healthier for you than a salad (see why).

It Might Not Be Great Food, But the Marketing Is Working.

The marketing has been pretty effective driving demand and generating buzz in the media.  Here is one of their commercials.

After seeing it, my teenage son begged me to get him one. Okay, it didn't take much persuading.

Nonetheless, I've been counting calories, recently, and logging what I eat in an attempt to eat healthier and lose weight. Like my wife, my skinny pants (still patiently waiting in an under-used corner of the closet) hoped I would put up more of a fight than I did.

In advertising, attention is good (even if some of it is controversial). It looks like the folks at this Pepsi spin-off, Yum Brands, have a hit. Not only are people who wouldn't normally eat at a KFC, now eating at KFC ... There's a bunch of folks fighting about whether this is a good or bad thing.

When Wendy's came out with the Clara Peller commercials, with the tag-line: "Where's the beef?" ... it changed their business. Kentucky Fried Chicken needs a tag-line (or brand promise) that will capture more than the disgust of the American public, if they want this to last.

Now that KFC is getting buzz, the bigger questing is whether it will have a lasting impact on their sales?

Other Links.

• ZeitGeist: KFC's shocking new sandwich (YouTube)
• KFC's Double Down: A cheesy, sodium-filled sandwich -- will you be buying? (LATimes)
• Here is KFC's Press Release about the sandwich. (KFC)

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• Kentucky Fried Chicken Double Down Sandwich (bacontoday.com)
• Dr. Susan Albers: Warning: The KFC Double Down Could Be Hazardous to Your Health (huffingtonpost.com)
• Confirmed: KFC Has A MONSTER Hit On Its Hands With The Double Down (YUM) (businessinsider.com)

Capitalogix Commentary for the Week of 04/26/10

The rally has been strong. With the Dow Jones Industrial Average above 11,200, some are calling for an extended Bull market.

How Strong Has Breadth Been?  The Answer is "Pretty Strong".

With the advance over the past two months, the percentage of stocks above their 50-day moving average surged back towards prior highs. This chart shows that indicator is above 85% for the first time since January.

Some commentators take this as a strong bullish sign.  It helps to think of this indicator like a momentum oscillator. As such, it can become overbought and remain overbought during a strong uptrend. While relatively high readings may be considered overbought, it is also a sign of strength as long as this indicator remains at high levels. However, as the chart shows, a sharp decline below this level would increase the odds of a correction unfolding.

What is the State of the Current Economy?

Russell Investments publishes a nice summary of Market indicators.  In general, it shows that interest rates are high, and mortgage delinquencies are nearly off-the-chart, while most other indicators are at the low ends of their typical ranges.

Also worth noting, here, the VIX decreased to its lowest month-end level in over 33 months.

Volatility is Coming Back to the Markets, Though.

When the SEC announced civil fraud charges against Goldman Sachs, its shareholders proceeded to lose $12 billion.

Here is what their stock is doing now.

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View the full NYSE:GS chart at Wikinvest

If you are interested, the lawsuit stems from Goldman's 2007 Abacus deal.  Here is the presentation document they used to sell that deal. 

Here are some of the news items about this that caught my eye:

• Why The SEC's Theory Against Goldman Will Fail. (Forbes)
• Goldman Sachs & the SEC - Greedy Until Proven Guilty. (Economist)
• Goldman Sachs and America's Regulation & Supervision Paradox. (Globalist)
• Financial Reform? Obama to Wall St.: ‘Join Us, Instead of Fighting Us’. (NYTimes)

The Lighter Side of the Issue.

 Did you hear that Goldman Sachs made the Iceland volcano erupt? It did pretty well shorting airlines. 

The Goldman Sachs lawsuit and financial reform are becoming common topics of every-day humor.

It's one thing when the business press writes about a topic, it's another when it is the subject of a David Letterman Top-10 List, an on-going discussion on Jon Stewart, and the opening segment of Saturday Night Live.  What do you think it means that this issue is now in the mass media?

Business Posts Moving the Markets that I Found Interesting This Week:

• Intel Profits and Outlook Blow Past Expectations (DailyFinance)
• IBM Q1 Earnings Beat Street: Growth May Be Returning To The Tech Sector. (InfoWeek)
• Data Shows U.S. Service Sector is Expanding. (Time)
• Speculators Predict A 20% Collapse In The NASDAQ. (BusinessInsider)
• Louis Navellier on Why the Market's Rally Will End Next Week. (Forbes)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• Third of U.S. Teens With Phones Text 100 Times a Day. (Reuters)
• Arizona 'Birther Bill' Requires Obama to Show Birth Certificate. (Newser)
• Next Generation iPhone Found in a Bar. Here Are the Details. (YNews)
• Cirque du Soleil Plans Michael Jackson Shows. (WSJ)
• Does Brain Training Work? Doing Anything is Better than Nothing. (NewScientist)
• More Posts with Lighter Ideas and Fun Links.

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• Headlines Exaggerating Economic Strength (pragcap.com)
• I have just hedged my equities by going long volatility (investmentpostcards.com)
• The VIX FAQ (by Steve) (slopeofhope.com)
• Nasdaq TICK At Decade Lows, While Index Powers Ahead (tradersnarrative.com)
• [Abacus] The prospectus (ftalphaville.ft.com)

Dancing With Obama

How does President Obama's popularity and approval rating compare to past presidents?  This chart surprised me a little.  It turns-out that the steep decline of his approval ratings is a little unusual, but not unprecedented.

The real issue is whether the Democrats will lose control of the House of Representatives in the next election.  Jeff Miller has a good article about that on A Dash of Insight.

Dancing With Obama.

Domestic politics aside, apparently, the President is still pretty popular.  While nuclear summits aren't usually a source of humor, the New York Times may have unintentionally struck gold with this time-lapse video. Watch the absurdity of presidential photo-ops as President Obama works the event, shaking one hand after another.

Read more about the video here.

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• Obama Approval Inches Up Slightly (politicalwire.com)
• JOHN HINDERAKER: "Whenever President Bush talked about immigration, his approval ratings went down.... (pajamasmedia.com)
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Watch as Texas Stadium Implodes

Whether you love or hate the Dallas Cowboys, you might enjoy watching the demolition of Texas Stadium.  It was vacated when the Cowboys moved to their new $1.2 billion plus home last year.

Texas Stadium was built in 1971 at a cost of $35 million.  The implosion cost $6 million.

What's Next for that Land?

The Texas Department of Transportation is paying $16 million to rent the space, for 84 months, as a staging zone for construction projects.

Here Are Some Videos.

Here is a video from the outside.

Here is a 360° immersion video of the explosion. You can click and drag to see different perspectives of how it happened, from inside the Stadium.

Other Resources.

• Here is what the Dallas Morning News had to say.
• Here is what that site looks like now.
• Here are links to other videos of the demolition.

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• Texas Stadium Implosion Captivates YouTube [VIDEO] (mashable.com)
• Texas Stadium imploded by huge blast of dynamite (thestar.com)
• Gone in 60 seconds: old Texas Stadium (sportsillustrated.cnn.com)
• Texas Stadium leveled in successful implosion (sports.espn.go.com)

Did You Claim the Banks as Dependents On Your Taxes This Year?

Tax-Time came and went last week.  Can you imagine all the calls the IRS had to take from Tea-Party participants and other citizens.

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• IRS Planning More Audits This Year; Know What to Do If You're Audited [Tax Time] (lifehacker.com)
• Top 400 Taxpayers (ritholtz.com)
• Harvard Business: Does Tax Time Need To Be So Taxing? (blogs.hbr.org)
• Dear Rich People, The IRS Chief Announced A New, Globalized Effort To Go After You (businessinsider.com)

Capitalogix Commentary for the Week of 04/19/10

At the end of the week, the markets were pretty much where they started.  So nothing happened, right?

Sometimes weeks like this are important.  The Japanese candlestick chart pattern this type of action produces is called a Doji.  After a long up-trend, this pattern often marks a turning-point.

Here, there is a Doji resting on the recent up-trend line (drawn with the red arrow) and the support-resistance level (noted with the orange dashed line).  This creates an easy decision-zone to watch.

From my perspective, a little pull-back would be welcome here.

Earnings Season Is Here.

During the past few quarters, companies have shown that they can cut-back and save money.  Now may be the time investors want to see some sales growth. 

The results are not as important to me as the market's response.  Are people going to keep buying, or start selling the news?  Here are a few items that caught my eye this past week.

• JPMorgan Earns $3.3 Billion in 1st Quarter, a 55% increase of Profits. (DealBook)
• GM Posts $4.3 billion Loss, Says 2010 Profit Possible. (Reuters)
• Intel Profits and Outlook Blow Past Expectations   (DailyFinance) 

Of course, the news that the government was suing Goldman Sachs also moved the market.  How it ultimately moves Goldman is still to be seen.  Again, though, what I'll be watching is whether this will become a buying opportunity or a trigger for further selling.  That will likely tell us how healthy the rally remains.

Banks Were Masking Risk Levels From the Public.

On a related topic, according to the WSJ, major banks have masked their risk levels in the past five quarters by temporarily lowering their debt just before reporting it to the public.  Here is an interactive graphic to illustrate what happened.

More Banks Are Closing.

Also, Regulators shut down eight more banks last week; that makes 50 so far this year. Last year saw 140 bank failures, the highest annual number since the 1992 Savings & Loan crisis.  In comparison, only twenty-five banks failed in 2007 or 2008. Another chart to put this in perspective is here.

Expect to Hear A Lot More About the Need For More Regulation.

Business Posts Moving the Markets that I Found Interesting This Week:

• Bernanke's Dilemma: Hyperinflation and the U.S. Dollar (SeekingAlpha)
• A Dangerous Omen Looms for Bonds. (Money)
• Three Ring Circus: Labor Statistics, Treasury & Commerce Dept. (Sutton)
• Firesales Being Held By Bankrupt States: What Can We Learn? (BusinessInsider)
• Innovation, by Order of the Kremlin - Russia's Silicon Valley. (NYTimes)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• Twitter Predicts Box-Office Sales - Will It Soon Predict Markets? (FastCompany)
• Is the EMP the Next Weapon of Mass Destruction? (Time)
• Cosmic Archaeology - Looking for New Ways of Finding Signs of Life. (Economist)
• 21st Century Makeover: Shakespeare's Romeo & Juliet in Twitter Twist. (Reuters)
• Fighting Allergies by Mimicking Parasitic Worms? (TechnologyReview)
• More Posts with Lighter Ideas and Fun Links.

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• JPMorgan gets paid to borrow $271 billion from the government (nakedcapitalism.com)
• U.S. Stock Futures Fall as Goldman Faces Europe Probe (Correct) (businessweek.com)
• Don McNay: Goldman Sachs: Too Big For Jail? (huffingtonpost.com)
• Big week on Wall Street (money.cnn.com)

The Internet Is Apparently for Porn

My Internet provider recently doubled the speed of service in our area.  Seemingly everyone I tell makes a joke about quicker access to porn.  In that spirit, here are two videos poking fun at that.

First, the Onion jokes that Congress passed the Pornographic Media Concealment Act, to hide this generation's porn habit from future generations. 

Congress Announces Plan To Hide Nation's Porn From Future Generations

And here is "The Internet Is For Porn", a number from Avenue Q. Here are the lyrics.

That was a funny show, and worth seeing if you get the chance.

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• How Big Is the SEC's Porn Problem? (abcnews.go.com)
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I Played With an iPad, and I Liked it

The iPad is a revolutionary machine. I had a chance to spend time using one this weekend.

Overall, the experience was impressive and compelling.

The screen was beautiful. Looking at a website was better than expected. For example, reading the New York Times online (using their iPad App) was, in many ways, a better experience than with the actual paper. Likewise, the e-book interface was stunning, easy to use, and also more compelling than paper.

An Incredible "Consumption" Device.

At first glance, the iPad seems like an incredible tool to consume media.

• If you like to sit on your couch and read the paper or magazines, the iPad will clearly make that better.  Why?  Because you will have a much wider range of reading material available in one place, along with access to multimedia, streaming video and internet links.
• If you play Sudoku or crosswords, again, the iPad will clearly make that better. You will have access to extra games, more varieties of games, and the ability to play against other people.
• If you want to do research for something you're writing, it's the perfect platform to browse through websites, blogs, or to launch a news reader to scan RSS feeds.
• You can even use it to watch videos and browse through pictures.

Here is a video review.

So, will I buy one?  Not yet; and I do have some mixed feelings about this device.

So What Was "Wrong" With It?

To be sure, it is fast and powerful enough to do many of the things I do on a laptop. However, I don't think that it's a great "creation" device (at least for me). In other words, I don't believe that I would want to use it to do extensive writing, spreadsheet editing, or that type of "computer" work.

Also, its big beautiful screen makes the device "too big" for me to imagine carrying around.

One of the primary benefits of my iPhone is that I have it with me everywhere.  That means I use it at the grocery store, while I'm waiting for my car at the car-wash, and to look up something during a business meeting or lunch.  That wouldn't happen with the iPad. 

Instead, I'd want one in my briefcase, another one in the living room, and another in the bedroom.

Again, the iPad seems designed to be a "consumption" device for media.  As the price point comes down, I believe that consumers will buy several of them (much the way they have TVs in different rooms).

Even though it so impressive and compelling, I will probably wait for its next generation before buying. 

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• iPad: The First Real Family Computer (readwriteweb.com)
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• The 10 Top Free Apps For The iPad [Mac] (makeuseof.com)
• iPad + Hype = App Inflation (thebigmoney.com)
• AT LAST! The iPad Lets Me Sit On My Couch Again (businessinsider.com)
• The eight best iPad apps so far (macworld.com)

Reminiscences of a Retreat

I just got back from a weekend retreat with a group of entrepreneurs.

It consistently surprises me how valuable it is to take time to get away from your daily routines, in order to focus on the bigger picture.

Part of the benefit is simply taking the time to do it.  Another part is listening to others, and hearing a fresh perspective.

Having fun helps too. 

I've watched my kids play Guitar Hero and Rock Band on their gaming systems; however, it was quite a different experience watching a bunch of middle-aged children play it at the retreat.

I was particularly embarrassed that I knew so few of the songs.  And when I tried participating ... I reminded myself more of my father, than of a rock-star. 

Yet, for what it's worth, it turned out to be a great group activity to loosen-folks-up at the retreat.

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• Silicon Alley Insider: Activision Sued Over 'Guitar Hero' Patent Claims (businessinsider.com)
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Capitalogix Commentary for the Week of 04/12/10

The Dow Jones Industrial Average traded above 11,000 for the first time since 2008. The real question is whether that is a sign of continued strength or that the rally has climbed too far, too fast?

Smart Money - Dumb Money Confidence Index.

The chart, below, compares the bets made by small traders (a.k.a. the "Dumb Money"), to those of large commercial hedgers (a.k.a. the "Smart Money").

In practice, Confidence Index readings rarely get below 30% or above 70% (they usually stay between 40% and 60%). When they move outside of those bands, it's time to pay attention.

Even more noteworthy is when there is a wide confidence spread with bullish bets by the Dumb Money and bearish bets by the Smart Money. This type of sentiment spread only happens a few times a year. We often get substantial bullish reversals when that happens.

Conventional trading wisdom says that Crowds are usually wrong at turning-points.  That doesn't mean they are wrong all the time (yet I take special notice when the Smart Money clearly disagrees).

Consumer Credit Woes Adding Fuel to the Doubt Fires.

Here is a chart from BusinessInsider showing the Fed's latest consumer credit reading. After starting to recover, total outstanding consumer credit had a massive month-over-month decline.

It is tough to stage a lasting recovery without consumers. 

So Where Is the Money Coming From?

U.S. Federal debt has increased rapidly.

In a related chart, Doug Short created an inflation-adjusted view of the debt and an overlay of the tax brackets.  With the 2001 and 2003 tax cuts expiring this year, the question is whether the gross federal debt will be a factor in determining the direction of future tax rates? Perhaps, like a young household with good jobs buying a home, the US can afford the rising level of debt?  What do you think?

Speaking of Debt-Laden Countries.

European governments on Sunday offered debt-laden Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates as they try to end Greece's fiscal crisis and restore confidence in the euro.

Business Posts Moving the Markets that I Found Interesting This Week:

• Double Dip Watch: Brown Shoots? (Yelnick)
• Geithner Speaks: No End to U.S. Housing Handouts. (WSJ)
• Lehman Chief Warns of More Big Bank Failures. (CreditWritedowns)
• Speculators: The Early Warning System for Markets. (NYTimes)
• Seabreeze's Kass on U.S. stocks: 'I Have Been Wrong'. (Reuters)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• Math Genius Turns Down $1M Prize For Solving Proof Problem. (Newser)
• Why Starbucks' Pricing Challenges Are About to Get Worse? (Minyanville)
• The Caffeine Debate Continues. (TonyHorton)
• Has Viral Gone Viral? Chatroulette has 1M daily visitors, in just 3 months. (NYTimes)
• Game of Death: French TV Shocks with Torture Experiment. (Time)
• More Posts with Lighter Ideas and Fun Links.

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• Sentiment Overview: Week Of April 9th, 2010 (tradersnarrative.com)
• Fed keeps eyes out for speculative bubbles (sfgate.com)
• Putting Consumer Credit in Context (benzinga.com)
• The Great Debt Pay-Down Resumes: Consumer Credit Fell by $11.5 Billion in February (dailyfinance.com)
• Asset Bubbles and the Implications for Central Bank Policy (ritholtz.com)