mayerAmerican Corporate Fitness: PepsiCo Edition

Employer wellness programs “have become increasingly popular, as companies aim to lower their medical costs and lift productivity by promoting healthier behavior among workers.  About half of employers with at least 50 workers offer them, as do 90 percent of employers with more than 50,000 employees.”  A new study by Pepsi suggests that programs with a focus on chronic illness management are more effective in net savings than weight-loss or stress management programs.  They estimate that “for each dollar spent, the disease management program saved an average of $3.78, compared with 48 cents for the lifestyle offerings.”  The benefits of a healthy lifestyle are well documented.  Maybe this business strategy’s return on investment can be measured in something other than dollars?  Can someone put a price on health, fitness and overall corporate wellness?  Funny you should ask: another study shows that “a good-looking C.E.O.’s appearance had “a positive and significant impact on stock returns surrounding the first day when the C.E.O. is on the job,” worth about 43 basis points in increased stock value compared with a C.E.O. 10 percent less attractive.  A one-point increase in attractiveness on a scale of 1 to 10, the study also found, “is related to a $873,000 increase in total wage.”  By the way, do you have any idea how hard it is to reach 10,000 steps every freaking day?

Central Banks Diverge Over Gold, Interest Rates

The Swiss National Bank lost $16.6 billion on its gold reserves last year as the precious metal saw a 28% decline in 2013.  The bank managed to hedge some of its loss on foreign currency bets, however the $10bn “paper loss” will force the bank to not only cancel dividends to shareholders (first time it has done so since it was founded in 1907), but also the bank won’t be able to make payments to Switzerland’s 26 cantons (states) or the federal government for the first time since 1991.  Interestingly enough, the United States does not have this problem: their gold is “held in vaults by the Fed and the US Mint but is owned by the Treasury [which] has valued its gold at $42.22 an ounce by law since 1973.”  Venezuela holds 70% of its foreign-exchange reserves in gold.  Meanwhile, as the United States Federal Reserve begins its tapering this month, it’s worthwhile to point out the probable divergence among central banks in 2014.  “Since the ECB started operation in 1999, its policy interest rates have moved only three times in a different direction from the Fed’s, and each time the uniformity of direction was quickly restored.  The Bank of Japan’s rate, which has been below 1 percent since 1995, has also risen and fallen along with the global tides.”

Brits Buy More Cars, Nissan Wants In

UK car sales roared up 10.5% (alt) in 2013 while the Eurozone saw a 2% decrease in automobile sales.  “Abundant cheap credit and improved consumer confidence” appear to be driving the increased household spending in Great Britain, currently only 1.5% lower than in early 2008.  “Roughly three of every four cars bought by individuals are bought on credit, up from one in two before the recession, as increasing numbers of buyers take advantage of rock-bottom interest rates.”  Meanwhile, Nissan is pushing (alt) into the competitive London Taxi market.  “There are 25,000 licensed cabdrivers and 22,500 licensed [cabs] in London,” 20,495 such venerable black cars belong to London Taxi Co. and Mercedes-Benz Vito makes up the remaining 2005.

USA: Yellen Confirmed To Lead Federal Reserve; Republicans Vote No

Janet Yellen “will become the first woman to lead the Federal Reserve in its 100-year history and just one of a handful of women heading central banks globally.”  Yellen’s nomination margin (56-26) is the lowest in the history of Fed Chairperson nominations; the previous low was 70-30 for Bernanke’s reappointment in 2010.

China: Ends Ban on Foreign Game Consoles (Alt)

“China’s State Council has formally lifted a 14-year ban on foreign-made game consoles, unlocking a potentially huge profit pool that has so far eluded the likes of Microsoft, Sony and Nintendo.”  The Chinese market has been closed to (legit) gaming console peddlers since 2000.  The new rules will allow foreign-invested companies to sell their consoles in Shanghai’s new free trade zone.  Seems like this is great news for Gamestop (GME) which, on the back of Microsoft’s Xbox One and Sony’s Playstation 4, saw a 100% rise in 2013.  Then again, “more than 70 percent of Chinese gamers earn less than 4,000 yuan ($634) a month.”  One Chinese gamer says the cost of purchasing a game would be unbearable.

Global: Home is Where the Heart is, Sovereign Rating Edition

Two economists say that home bias is important to credit rating agencies after looking “at the ratings produced by nine agencies in six countries for 143 sovereign issuers.”

Global: Trash Tycoon Wants to Buy the New York Times

EU: Surprise Drop in Euro Zone Inflation Shows Deflation Risk

Eurostat: “Consumer price inflation in the 17 countries then sharing the euro stood at 0.8 percent year-on-year in the last month of 2013, compared with 0.9 percent in November.”  ING’s chief Eurozone economist says “While we believe that for the time being the ECB will keep its monetary policy unchanged, not much is needed to push the central bank into action.”



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