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ConAgra Foods buys RalCorp Holdings, the largest maker of food sold under supermarket and retailer brand names, for $4.95 billon, a 28% premium on RalCorp's share price.

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Andrew Witty, a 43 year old Briton, is taking over as CEO of GlaxoSmithKline. Before this he was in charge of European operations. His first moves include strengthening Glaxo's presence in the emerging markets of Russia, India and China. He has put new managers in charge of these efforts. He sees more opportunities to sell consumer health products in India and other emerging markets where people buy most of their medicines over the counter. He also hopes to make new pricing deals with insurers and governments to persuade them about linking the price of the drugs to how effective they are in treating patients.

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How the definition of liquidity itself has changed with liquidity not thought of in terms of assets based concept bu in terms of credit availability for both companies and households. The conversion of nonmarketable assets into marketable assets by securitization has even further eroded this idea of liquidity. With technology, internet and globalized trading the marketable securities with prices create the idea of a liquid asset and create the false belief that credit is easily available and promote risktaking. Quantitative models and computerized trading create the idea that everything is working fine when actually the quantitative models are not good at incorporating risks in the global environment (political, terrorism etc), and not good at pricing securities especially lower quality securities such as the ones that collapsed in the subprime mortgage market. With these structural changes more crises can be expected as the problems they can create such as excessive risktaking are not going to be fixed unless some new comprehensive approach is developed and there is nothing like this in sight. Financial institutions always face the pressures to ignore better judgement and reason in favor of the false security of quantitative risk models because bonuses and higher profits, underperforming earnings and stock price, market share, all these are at stake. So most finacial institutions will opt to join the bandwagon of aggressive lending and investing. The speed with which this subprime crisis reached Europe through the securities carried by European banks and otther financial institutions shows how global trading and computerized models can now affect all global areas quickly. In fact the ECB was early in its response to inject liquidity into the markets in Europe. Kaufman is not happy with the idea that the Fed should be side tracked by these developments from following its own role in ensuring price stability and controlling inflation, or that the Fed should not let market discipline so essential for free markets to operate. The solution in the meantime will involve some dose of regulation and some dose of market discipline....

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Are lower sticker prices for 2007 compared to 2006 an effort to bring manufacturers suggested prices more in line with the actual price or value pricing, or do they suggest a better deal for buyers in comparison to 2006? It is not clear across all models without doing the arithmetic for each, however cars come with more features than before and it appears that competition and falling sales for the big three make it necessary to attract customers with better buys. But with higher discounts on the models designed to clear inventory, 2006 models can be sold for less than 2007.

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The yuan has gained 16% since the peg to the dollar ended in 2005. For years China has resisted letting its currency appreciate significantly, why the change of heart now? Its seen as a positive thing by China's leaders to let the yuan appreciate and its now part of Chinese policymaking. First it helps keep inflation down, keeps the rising prices of imports energy, commodities, and food under control as they are denominated in USA dollars. Second it sends a signal to manufacturers to move up to more sophisticated value added products that are not sensitive to pricing and can accomodate a stronger yuan, because its precisely the manufacturers who operate on thin margins and make lower end products who will go close down. They also cost the economy in terms of higher pollution and damage to the environment in a way that higher tech products do not. And China wants to undo or limit the damage to its environment. Third by lowering rebates or eliminating rebates and letting the curtrency appreciate its changing the emphasis from exports to domestic markets and domestic consumption. This combined with new laws on wages and benefits is designed to promote domestic consumption which can better carry the burden of economic growth than exports because of the slowing down of the developed western economies especially the USA which is going through what may be a severe and protracted downturn. It also helps that China need no longer be portrayed as taking advantage of free trade through huge surpluses. Its constructive as it will help rebalance the world trading system as the USA can improve its trade deficit and China can accelerate its growth by importing more western machinery and technology and not have to depend on precarious export markets for economic growth that it badly depends on to improve the living conditions of hundreds of millions of its people. By building a large middle class of consumers china can continue growth using its domestic markets at a pace that is still very healthy and not likely to build inflationary pressures which may be a welcome thing....

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According to the General Accountability Office inquiry, 28 drug products had price increases over 100% in 2000, in 2008 71 drug products had such large increases. Medicines like Adderall for attention deficit disorder, Inderal for chest pain, Sumycin for infections were in the list of 416 brand name drug products where makers or distributors raised prices at least once by 100% or more for period 2000-2008. As large pharmaceutical companies sold their marginally profitable drug products or small selling products to smaller companies, these smaller companies would immediately increase prices to recover the money they paid to the large pharmaceutical companies. 26 of the brand name products saw prices raised 10 fold. A third of the drugs with large price increases treat depression and disorders of the central nervous system.

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A study by AARP of 514 brand name and generic drugs between 2005 and 2009, shows that generic drug prices went down an average of 31% during this period, and brand name drug prices went up by 41%. One of the authors of the report says that it is important to look at individual drug prices and not studies showing total spending on drugs, because this is a significant cost for people paying out-of-pocket, It drives up insurance premiums, and pushes retirees into coverage gaps in Medicare Part D drug program. Analysts indicate pharmaceutical companies are increasing prices on drugs before patent expiration to get as much profit before the patents expire.

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How the Collins and Aikman move will affect purchasing and pricing of auto parts and the auto parts and auto industries. Collins and Aikman made this decision at the cost of losing a large customer. This shows how back to the wall the auto parts industry has become as it restructures to adapt to the needs of a competitive global marketplace.

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Consumer buying habits at Walmart in the last 6 months since the sharp downturn in the economy hit in October 2008. Executives in merchandising at Walmart, Target and other stores discuss trends with the WSJ. There is adisciplined shopper with less browsing on the aisles. FOod is up on the list. Private label groceries at lower cost are selling well. At Walmart sales are up for refrigerated pizza,lower grades of meat. Ground beef and chicken sell way better than steak and beef. And carbohydrates are doing better than protein foods, so that pasta is doing well. Staying at home and entertaining at home is the trend says Fleming of Walmart, from the take and bake pizza at $5 to the movie and popcorn. Which is why the luggage section and trvel is slow, and flat screen tv's are selling well. Vitamins, herbs and plants for vegetable gardens are up as customers try to plant their own vegetable gardens. Car maintenance and repair is big, sales of motor oil, filters and tires. are some of Walmarts big sellers. Whatever makes the car last longer is considered attractive by customers. And home repair items are selling well at Home Depot....

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Tightening budgets in Greece, Spain and Germany, mean that governments are now cutting the prices they pay to pharmaceutical manufacturers. The governments are the largest buyers of pharmaceutical and medical products in Europe.

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Apple launches the iPad Mini at a price of $329 against rival tablet devices, Kindle Fire HD at $199 and Google Nexus 7 at $249. The iPad Mini has a 7.9 inch screen measured diagonally compared to 9.7 inches for the iPad. It weighs about half the original iPad. The screen resolution is lower and the processor less powerful. The Mini iPad is designed to fit comfortably in one hand. Apple executive Schiller says the iPd Mini has two thirds more space than the Google Nexus 7 for surfing the web when turned on its side. The price is designed to maintain Apple's large profit margins and share price.

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A health care practitioner says the real problem is the high cost of medical care in the U.S. when compared to other countries. She points out that the Obama bill in 2008 did not take effective steps to bring down the cost of health care before enacting legislation to cover the uninsured, leading to higher premiums for the middle class. The link between healthcare and profits is seen as the main problem. 

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Airlines are using the savings from lower oil prices to do do much neded upgrading and improvements on planes, for improving airport facilities and to reward employees. Airlines are investing at the best rate in 13 years. Much of the investment goes to upgrade service for business class travel. As planes are full airlines have little incentive to reduce fares. American Airlines says it wil invest $2 billion to improve service inside planes. Air France-KLM says it is spending $1.2 billion to refurbish planes and modenize airport lounges, ground services. IATA estimate is for airline industry profits to go up from $11 billion in 2013 to $19.9 billion, increasing to $25 billion in 2015, almost doubling in 2 years.