The biggest business stories of the week
With the highly anticipated release of Fifty Shades of Grey slotted for Valentine’s Day weekend, sex toy manufactures are looking to turn high profits off the blockbuster. The film, which centres on the BDSM world, features multiple extras in the bedroom, which retailers – including Target – have been stocking up on over the past few weeks. Since the release of the first book in 2011, retailers have seen a 7.5 per cent increase in sales, the movie’s release is predicted to bring the margins for profit increase even higher. In an industry that already reports close to a $1 billion in turnover, many are looking to the market for major returns post-Valentine’s Day.
The continuing slump in oil prices is presenting the historical patterns of pressure and investment opportunities once again. Many companies, which only a few months ago were the toast of high-yield debt and initial public offering markets, cannot raise additional equity or sell bonds. Others, however, see this need for investment as an opportunity.
“The single best opportunity to invest is distressed debt in energy,” David M. Rubenstein, co-founder of the Carlyle Group, declared, adding that one promising strategy might be to “buy the debt at a discount and take control of these companies.” Still, the struggle continues as oil companies continue to be reluctant to give up control and investors keep their purse strings drawn tight.
A new study by the Washington Center for Equitable Growth has determined that raising educational standards throughout the U.S. could lead to economic growth the world over. The United States, who lags behind most advanced countries in math and sciences, could add 1.7 per cent to their Gross Domestic Product (GDP) over the next 35 years, if they were to raise themselves from 24th to 19th in educational ranking. This could mean $900 million in government revenue. If America matched Canada’s educational ranking, it could add upwards of 6.7 per cent, or $10 billion, to its GDP. As such a powerhouse in the global economy, this economic growth could benefit those outside of U.S. borders and potentially combat the issue of the shrinking middle class.
An up-and-coming trend may be a new way of teaching your children about money. Parents have recently taken to telling their children exactly what they make and explaining where it all goes through dollar bills. The hope is that children will slowly build knowledge of financing and budgeting that could be the most important lesson of their lives. By educating youngsters on the “mysteries of money,” the constant want for more may be minimized or altogether stopped. By explaining to children just how much they make, parents may be able to actually communicate the importance of reducing consumerist behaviors.
The continuously low price of oil has struck Canada at its heart – in the Oil Sands. With thousands of employees feeling the pressure of job cuts, and investments dropping by upwards of 27 per cent, like Cenovus Energy, one would think that oil production projects would be slowed or put to a halt. However, this doesn’t seem to be the case, as these projects are too hard to stop once they have started. A frequently cited study by the U.S. State Department estimated that projects become unprofitable when barrel prices are between $65 and $75. The current price of $50 per barrel has severely impacted the oil market and production within Canada, and has many wondering what the future will hold.