All posts by Michelle Grathers

Michelle Grathers

About Michelle Grathers

Michelle Grathers is an international tax expert. She has consulted for a variety of firms and high net worth individuals on all tax- and legal-related issues. She also helps new companies develop payroll services, statutory audits and mergers and acquisitions. Contact Michelle at michelle[at]businessdistrict.com

Eighteen More Oil Rigs Bodes Well for Oil Economy

U.S. offshore natural gas production wells in the Gulf of Mexico and Southern California.

With the addition of two new oil rigs operating in the Gulf of Mexico 16 new ones across the US, there are now a total of 653 drilling for oil and gas.

It is good news for the oil industry, but those numbers are far below the number of rigs operating in 2014 and 2015. According to numbers released last week by the Houston-based oilfield-services company Baker-Hughes, this year’s number is lower by 47 since last year, and is still 65 percent lower than the 1,882 which were pumping out oil and gas at the end of 2014.

Of the 653 rigs working today, 129 are looking for natural gas and the remainder, 523, are bringing out oil.

The oil industry has been suffering as an oil glut continues to keep prices of oil low. Caused by a growing trend of drilling in US shale fields, combined with increased oil production by OPEC, the oil glut brought oil prices to half, and lower, than their mid-2014 high of $115 per barrel.

Lower oil prices froze exploration for new sources of oil and natural gas, and many people in the industry were laid off. The fact that the US rig count has been growing and now is higher than its been since January, could be a harbinger of better times for the industry.

Larger Women Growing as a Fashion Market Force

Armed with the knowledge that larger women control a large and growing chunk of the fashion sector pie, clothing retailers are beginning to understand how to lure this market and boost sales.

The first step is perhaps surprising: to eliminate the so-called “Plus-size” section of the women’s clothing department and mainstream sizes 16 and above into the center of the sales floor.

Meijer Inc, a Michigan-based retailer, has already made the switch in 15 of its 230 stores, placing the extended sizes on the same racks as the “straight sizes.” Their goal is to have the plus size section fully integrated into the straight sizes department in all of their stores by early 2017. The result will be that the majority of their fashion offerings will come in all sizes; from small to XXXL.

“We really felt all customers should have the exact same experience at Meijer,” said Annette Repasch, vice president of Softlines. “Not only by style, but by price and by location.”

Repasch added that until now the fast majority of plus-size fashion was conservative, and being relegated to the back of the store made the shopping experience less enjoyable for this sector of consumers.

The plus-size consumer is a growing segment of the market, according to a new study conducted by International Journal of Fashion Design, Technology and Education. They found that the the average American woman wears a size 16-18, up from a size 14 not too long ago. The NPD Group says that spending on plus-size clothing will reach and estimated $20.4 billion this year. That is an increase of 17 percent from 2013 and is outpacing the overall US apparel market by twice. The NPD Group also estimates that the percentage of teens purchasing plus-size clothing will reach 34 percent. In 2012 that number was 19 percent.

Noble Group Selling Off US Energy Business to Calpine Corp.

In order to generate cash and improve liquidity, commodity trader Noble Group Ltd. Inked a deal to purchase its American energy business to US power generation company Calpine Corporation for $1.05 billion.

The deal is the latest action in a series of undertakings designed to lower its debt as well as improve its reputation. Shares of Noble have staggered badly since February 2015, when an anonymous research group accused it of questionable accounting methods. Noble insists it did nothing wrong, and even accelerated disclosures. Poor showing of commodity prices did not help the poor earnings experienced by the company.

Therefore, in order to create cash and ease liquidity, Noble announced a series of sales of assets and reduced expenditures.

In a statement released to the Singapore Exchange, Noble announced that it will receive $800 million for Noble Americas Energy Solutions. It will be paid an additional $248 million for the US unit’s working capital.

Calpine describes itself as America’s largest generator of electricity from natural gas and geothermal resources. In July it its third quarterly loss in a row.

McDonald’s Introduces the McFloat for First Time in USA

Grand Chicken Classic burger, fries & McFloat (McDonald’s) Photo by
Debbie Tingzon.

A drink that has proved popular in McDonald’s fast-food restaurants around the world, is finally making a debut appearance in a few select stores stateside. The McFloat is a combination of Dr. Pepper and soft-serve ice cream, and it will be selling for $1.99, at least for now, in the McDonald’s in Park Slope, Brooklyn and in San Francisco. The introduction of the McFloat is part of McDonald’s larger exploration into a more direct satisfaction of local tastes, such as offering garlic fries in San Francisco and Chobani Greek yogurt in 800 California branches.

“As part of our journey to build a better McDonald’s, our franchisees have more flexibility than before to offer new menu items like breakfast bowls, Gilroy garlic fries and yes, the Diet Dr. Pepper Float,” McDonald’s spokesperson Terri Hickey.

Across the globe the McFloat has taken on a variety of personas. Most international locations offer a Coke McFloat, but in the Philippines a thirsty customer can get a Green Apple Sprite McFloat. In Indonesia the locals love Iced Coffee McFloats.

McDonald’s is also considering the introduction of fresh beef, and is currently testing this item in 14 of its restaurants. If fresh beef is a hit, McDonald’s, floats or no floats, will never be the same.

The Best Places to Live in America

Denver Skyline. Photo by Hogs555
Denver Skyline. Photo by Hogs555

Every year US News and World Report evaluates US cities to find the 50 best places to live. Many parameters are universally desired, such as how affordable is the housing, are there well-paying jobs in the vicinity, are other expenses low, how are the schools, and what is the quality of the healthcare? Other issues are more subjective, such as the weather, the politics, and how far away are family members.

The newspaper then got the data on 100 US cities and divided it all into five main indexes: job market, value, quality of life, desirability, net migration. “Value” is a combination of annual household income versus the cost of living. “Quality of life” looks at crime, college readiness, commuting, and other factors.

Here are the top ten of the top fifty places to live in the USA:

  1. Denver, Colorado
  2. Austin, Texas
  3. Fayetteville, Arkansas
  4. Raleigh-Durham, North Carolina
  5. Colorado Springs, Colorado
  6. Boise, Idaho
  7. Seattle, Washington
  8. Washington, DC
  9. San Francisco, California
  10. San Jose, California