Heineken USA Cuts 15% Of Workforce 

A few weeks ago, when observing the collapse in consensus Q1 EPS estimates, we noted that the “profit party” is over and the era of near-record earnings growth was about to end as a result of the recent barrage in profit warnings from US companies. One industry that has suffered in the earnings slowdown has been mass-market beer makers.

Beer companies, like Anheuser-Busch, MillerCoors, Constellation Brands and Pabst Brewing, have recently made significant cuts to their respective workforces, in response to slowing sales.

Brewbound is reporting that Heineken USA (HUSA) is the latest mass-market beer maker to announce significant layoffs.

HUSA spokesman Bjorn Trowery said in a statement that 15% of its entire workforce will be eliminated amid restructuring efforts.

“Today, we announced that we are modifying our sales team structure to align with our strategy and to enable more efficient ways of working,” he wrote.

This will help Heineken USA be more cost effective, and allow us to reinvest behind our brands and business in the U.S. While change that impacts our people is always difficult, we believe these changes will better position Heineken USA for the future.”

Some indicate that big brewers are losing drinkers becuase millennials are switching to craft beers.

However, that might not be the case, as well-known craft beer companies, including Heineken International-owned Lagunitas, Deschutes Brewery, and New Belgium Brewing, have all recently cut a significant amount of their respective workforce, citing lowered growth ahead.

Industry-wide layoffs are a result of declining beer sales in the US. Though off-premise sales at retailers jumped 2% in 2018, according to research firm IRI, however, shipments of beer made domestically dropped 2%.

According to the latest earnings report, HUSA, the US operating company for Heineken International that imports, warned that its brands, as well as Dos Equis and Tecate, among others, could experience weak sales in 2019.

So did the American beer bubble just go flat?

via ZeroHedge News https://ift.tt/2IJFCmz Tyler Durden

South Korean FinMin “Closely Monitoring Markets” After Exports Collapse

Between the failed Trump-Kim talks in Hanoi and now this collapse in exports (and imports), South Korea’s finance ministry has been quick to reassure investors that it will “closely monitor” financial markets…

South Korean exports tumbled more than expected in February, as slowing growth in China and falling semiconductor prices take a toll on Asia’s fourth-largest economy.

Shipments fell 11.1 percent from a year earlier, versus economists’ median forecast of a 9.5 percent drop.

Additionally, South Korean Chip exports fell 24.8% YoY in Feb (worse than the 23.3% YoY drop in Jan) as chip prices fell.

As a reminder, South Korea releases its trade data earlier than most other major economies and is a key link in the global supply chain, making it a bellwether for trade.

“Beijing is Seoul’s largest trading partner, with exports to China amounting to about 10 percent of Korea’s GDP,” said Bloomberg Economics’ Justin Jimenez.

 “Our base case is that a continued cool down in Sino-U.S. tensions will provide some relief to China’s economy — and in turn, South Korea’s. A breakdown in talks though, remains the key risk.”

Imports fell 12.6 percent in February, compared with an 11.6 percent drop forecast by economists.

Just as with last night’s collapse in China’s PMIs, South Korean officials are blaming the trade collapse on a few shorts days in February due to the lunar new year.





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“I Want To Buy…” – Peak Confidence, Trough Savings

Authored by Jessica Rabe via DataTrekResearch.com,

“I want to buy…” 

If you type those four words into Google’s search engine, it will auto populate the rest of the sentence with frequently associated completions to that query. The first two that come up: “a house” and “a timeshare”. Those have been popular searches during the current US economic recovery, showing robust interest in home ownership. To give you a comparison of this kind of attention, bitcoin topped the list back in Q1 2018 after its dramatic increase in price. Now, it’s not even included. “A car” and “stock” round out the top four currently.

Given recent concerns of potentially fewer new home sales this year after yesterday’s weak housing starts data, we also turned to Google Trends to gauge demand at this late point in the cycle. If you missed it, housing starts dropped 11.2% y/y in December, the slowest rate of construction in over two years; they are also down 10.2% y/y. For those unfamiliar, Google Trends measures search volumes for any term or phrase back to 2004. We looked at queries related to Americans’ interest in buying houses and updating their homes as those searches are reliable leading indicators of future demand.

Here’s what we found:

US Google searches for “buy a house”: reached a record in January 2019, although it is only a smidge higher than January 2017/2018. The most popular times for searches of this phrase are in the beginning of the year and over the summer.

“New bathroom” searches:record hit in April 2016, but interest right now is up 10% year-over-year. Searches here usually pop at the turn of the calendar to a new year as well.

“New kitchen” searches:peaked in December 2017 and are roughly unchanged y/y. This is also a New-Year’s favorite.

“New pool” searches: this term spikes each June. The record was in June 2016, but 2017 and 2018 got close in the same month.

“Buy refrigerator” searches:peaked in November 2017, but almost reached that level last November. Year-over-year, interest is currently down slightly by 3%.

“Buy paint” searches: peaked in July 2015. People look this up most often over the summer, but it’s down 6% y/y as of this month.

“Home Depot/Lowes” searches: peaked in May and July of 2018 and are up slightly over the last year.

“Renovation” searches:peaked in April 2016 and got close the summer of 2017. The high for interest last year in August was down 5% y/y. Searches are up 7% y/y as of this month.

Our take on these searches:

  • Americans’ interest in buying houses is still at record levels, at least by Google’s measure.Millennials are driving this trend as those aged 37 and younger have accounted for the largest share of home buyers for the past several years according to the National Association of Realtors. This cohort was a drag on household formation following the Great Recession due to a weak labor market, tepid wage growth, and outsized student loan debt. More recently they’ve benefitted from years of strong economic growth and started reaching the age when they want to settle down, albeit later in life than their parents.
  • The top of the current cycle for homeowner renovations and updates was likely in 2016/2017.That makes sense as it gave consumers plenty of time to save up and increase their earnings power before spending money on improvements following the Great Recession. It’s now slowed since homeowners don’t make changes too often in terms of buying durable goods or renovating rooms, but interest remains at healthy levels. That’s a positive sign given the importance of strong consumer spending for economic growth and the home improvement sector’s corporate earnings this year.

*  *  *

ZH: All of these still exuberant buying attitudes brought to mind a cyclical factor that appears to be peaking out just as it did in 2000 and 2007…

The yawning gap between the savings rate (low and getting lower) and consumer confidence (high and getting higher) reflects American consumers’ aptitude to borrow and spend at just the wrong time.

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Martha Stewart Gets In On The Weed Game At 77

Martha Stewart is teaming up with the world’s largest cannabis company, Canopy Growth Corp. in an advisory role to help develop a “broad new line” of products for both people and animals. 

“I am looking forward to working with the Canopy Growth team,” said the 77-year-old Stewart in a Thursday statement reported by the Los Angeles Times. “I’m especially looking forward to collaborating on developing products that can help people and their treasured animal companions.”

Stewart co-hosts a cooking show with rapper and giant pothead Snoop Dogg, and knows how to roll a joint

Via the LA Times

Canopy, based in Smiths Falls, Canada, is conducting several clinical trials exploring how cannabis compounds can improve human and animal health, including research into the effectiveness of CBD, a non-intoxicating compound, to treat anxiety in animals. Cannabidiol, its formal name, has soared in popularity and is thought by its proponents to help with everything from stress to inflammation and insomnia.

“It’s really about duration and quality of life for animals that respond well to CBD,” said Canopy CEO Bruce Linton in an interview – adding that hemp is an easy to digest protein which can be utilized in pet food. 

Canopy announced in January that it will spend upwards of $150 million to build a hemp facility in New York State – which will be its first US-based production plant. Eventually Linton hopes to expand to other states following the passage of the U.S. farm bill in December which legalized CBD derived from hemp under certain circumstances. 

And, as we’re sure Martha Stewart would agree, that’s a good thing… 

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The Draft Should Be Abolished For Everyone – Not Just Women

Authored by Ryan McMaken via The Mises Institute,

On Friday, Federal Judge Gary Miller declared the federal government’s policy of male-only conscription to be unconstitutional.  Miller ruled that past prohibitions on women in combat may have legally  justified the all-male policy, but since the military has integrated women into combat positions, the past policy can no longer be constitutionally justified.

The ruling can be taken two ways.

  1. It can be seen as a ruling that expands federal powers to conscript through the Selective Service system, and thus expand the military’s power over the everyday lives of Americans. This is true in the strictly legal sense.

  2. On the other hand, the ruling could be interpreted as a political blow against conscription since the number of voters negatively impacted by conscription is now far higher than before.

Apparently sympathetic to this latter interpretation, USAToday described the ruling as  “the biggest legal blow to the Selective Service System since the Supreme Court upheld the draft registration process in 1981.” After all, those who brought the lawsuit, an organization called “The National Coalition for Men” was expressly attempting to highlight the injustice — from a male point of view — of being the only group legally obligated to submit to what is essentially registration for possible future slave labor. (Miller, however, does not actually order to the Pentagon to expand Selective Service eligibility. Any concrete legal action will likely come in the future, but those seeking to make such a move will be emboldened by Miller’s declaration.)

Experience suggests, however, that an expansion of the Selective Service requirement will manifest itself largely as a matter of “equality” rather than as a ploy to highlight the general injustice of conscription overall.

The “Equal Right” to be Enslaved by the Draft

For example, during a 2016 GOP presidential debate the candidates were asked if they would support mandatory registration for women with the Selective Service System now that women are allowed combat positions in the US military.

Most of the candidates applauded the idea while Ted Cruz denounced the notion. But, as is often the case, Cruz was right for the wrong reasons. Cruz seemed to base his reaction on sentimentalism and gender politics. However, he should have opposed an expansion of the draft not the the basis of some arcane idea of chivalry, but for the simple reason that conscription imposes enormous costs on private individuals by depriving them of control over their own labor.

Chris Christie, on the other hand, pounced on the issue of female conscription and declared it’s important that “women in this country understand anything they can dream, anything that they want to aspire to, they can do.”

After hearing this, one is left wondering if Christie is aware that there’s a difference between being a soldier and being forced to be a soldier by the state.

This sort of confusion is likely to continue.

But make no mistake about it. Expanding Selective Service from 50 percent of young adults to 100 percent is not about equality, or progress, or patriotism. While these notions will no doubt be used to bully people into supporting such a move, the real-world effect will be a massive expansion in government power over the lives of the population. Conscription, after all, is simply a draconian tax on the conscripts who lose their freedom for the duration, but who may also be coerced into being killed in order to promote the state’s policy agendas:

“Conscription is slavery,” Murray Rothbard wrote in 1973, and while temporary conscription is obviously much less bad — assuming one outlives the term of conscription — than many other forms of slavery, conscription is nevertheless a nearly-100-percent tax on the production of one’s mind and body. If one attempts to escape his confinement in his open-air military jail, he faces imprisonment or even execution in many cases.

Conscription remains popular among states because it is an easy way to directly extract resources from the population. Just as regular taxes partially extract the savings, productivity, and labor of the general population, conscription extracts virtually all of the labor and effort of the conscripts. The burden falls disproportionately on the young males in most cases, and they are at risk of a much higher tax burden if killed or given a permanent disability in battle. If he’s lucky enough to survive the conflict, the conscript may find himself living out the rest of his life as disfigured or missing his eyesight and limbs. He may be rendered permanently undesirable to the opposite sex. Such costs imposed on the conscript are a form of lifelong taxation.

Fortunately for those who escape such a fate, the term of slavery ends at a specified time, but for the duration, the only freedom the conscript enjoys is that granted to him by his jailers.

We’re likely to hear a lot about how “fairness” and egalitarianism requires an expansion of the Selective Service System. But those claims are all distractions from the central issue here, which is the state’s power over the citizen.

After all, if women want to go help terrorist groups in Syria (which is what the US is doing there), they are free to volunteer. Whether or not women can be directly involved in blowing up revelers at Afghani weddings is a completely separate issue from conscription and the Selective Service.

Besides, if fairness is a concern, there’s an easy way to achieve fairness on this issue: abolish the Selective Service for everybody. It’s as easy as that. It wouldn’t even cost a dime of taxpayer money. Simply shred the records, fire everyone who works for Selective Service, and lease out the office space to organizations that do something useful. Then, we won’t have to hear anything about “discrimination” or the alleged sexism implicit in a policy that outrageously neglects to force women to work for the government against their will.

But Isn’t This Just a Symbolic Gesture?

Some who want to expand Selective Service for egalitarian reasons are claiming that it’s all just symbolic anyway, because the draft “will never happen.”

“The US hasn’t had the draft since the early 1970s,” one columnist loftily intoned as if that were evidence that the draft could never return. Wow, the 1970s? Did they even have electric lights back then?

Moreover, it’s a mistake to think that the draft could never return because people would overwhelmingly oppose people being forced into combat. Even if that is the case, there is no reason at all why conscription could not be used to draft people for non-combat positions. After all, only a very small portion of the military ever sees combat. The vast majority of soldiers are involved in logistics, transportation, and desk jobs such as computer programming. According to one report sponsored by the Naval Postgraduate School, “only 17% [of active-duty military personnel] are identified as performing combat specialties.”1 Long gone are the days of pouring fresh conscripts into fox holes with little more than a rifle and a shovel.

Only a small portion of military deaths occur in combat. Most deaths in the military are due to accidents.

Additionally, there is no reason that Selective Service could not be modified to be used to draft people for so-called “national service” positions in which conscripts would perform non-combat bureaucratic and manual-labor jobs. Austria and Switzerland (which have conscription) allow this option for those morally opposed to combat. And historically — such as during World War II — “service” was imposed on conscientious objectors who were forced to work on farms or perform other types of manual labor in special camps.

So no, the draft is not “hypothetical,” “symbolic,” or something that “will never happen.”

Numerous countries in Latin America, Europe, and Asia still employ conscription, and it is hardly some kind of never-used relic from the distant past.

Alas, much of the opposition to the expansion of Selective Service has taken the form of National Review’s opposition which is based on the idea that conscripting women is some kind of special unique evil, quite unlike conscripting men. Military service is one thing, the editors write, but forcing women into it is “barbarism,” they admit. They’re half right. It is barbarism to force women to fight wars for the state. But the same is also true of conscription for men.

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