The euro has received some additional love this morning, as the Eurozone’s economic growth printed better than expected, albeit still negative… But… Germany and France showed growth, which I must say is very unexpected! That means that both Germany and France have exited the recession… Well, that is at least for now! For those of you keeping score at home, Eurozone GDP fell -.1%, which is far better than the -.5% that was expected… Oh! And this is for the 2nd QTR… You would have to think that data like this would be very good for the euro, and from the looks of it, that’s exactly what’s happening!

Whenever the Big Dog, (euro) gets off the porch to chase the dollar down the street, all the little dogs get to chase too… And so, the usual suspects have posted gains since yesterday morning, like Norway, Switzerland, Aussie and so on…

The BIG news yesterday was from the FOMC meeting, where the Fed Heads left rates at near zero, but were kind enough to tell us that their Quantitative Easing would remain in place through October… That’s all nice and sweet, eh? So… What, are they going to do here, Buy some Treasuries out in the open and say see we told you we were going to do this, and then go back to the dark, smokey room and buy some more from the Primary Dealers just for GP? That just ticks me off! But there’s not a darn thing I can do to stop them!

What I would like to do is to start a movement to abolish the Fed… OK, who’s with me? I just had a chuckle, because that reminded me of the Will Ferrell Old School movie when he’s trying to get people to streak to the commons… Come on now, if you’ve seen that movie, you know you’re laughing right now!

I had a guy one time tell me, I know of no one that can talk serious one minute and go right into some funny thought, sing a song, or whatever the opposite reaction would be to the serious thought, like you do, Chuck… I thanked him!

But getting back to the thought of abolishing the Fed… Think about this for a minute… What good are they? Have we not had dozens of recession and one Great Depression since they were created? Have we not seen a 95% loss of purchasing power for the dollar since they were created? Let me tell you something else, folks… If the markets set the interest rates based on activity, we would never experience inflation or deflation…

OK, I’ll stop there, I know that I’ve ticked off a few people that think the Fed walks on water, and is here to protect us financially…

Well… In news you won’t hear on radio or TV… The U.S. Budget Deficit swelled to $180.7 Billion in July, from $102.8 Billion in June… Hmmm… Think about that for a minute folks… In June, when quarterly tax receipts should be enough to cover the expenditures, they not only were not enough, but they fell short by $180.7 Billion dollars! This is a combination of slower tax receipts because of the depression were in, and… The unsustainable deficit spending by the Gov’t. Oh! And the Budget Deficit year to date is now $1.27 Trillion… But you don’t see the knuckleheads in Washington D.C. doing anything about it, except for coming up with new things to spend more money on… I say fire them all!

Speaking of tax receipts… My friend, and writer & Marketing genius extraordinaire, David Galland, had this to say recently in one of his most excellent news letters… Here’s David…

“I like the idea of also forcing the government to stop automatically withdrawing taxes from paychecks. Instead, wage earners would be responsible for sending out their tax payments on a monthly basis. By my back-of-the-envelope calculations, it would take about two months of writing out the big checks to Uncle Sam before people came to grips with just what government (or, in this case, one slice of government) is actually costing them… and out would come the pitchforks. We cannot afford our current level of government, and the sooner we get around to cutting it back, the better. Period.” — Thanks David… As always you think on a different level than the rest of us!

The Trade Deficit also grew larger in July as Oil prices rose… The Trade Deficit moved to $27 Billion from $26 Billion… Now, the Trade Deficit is much smaller than it used to be thanks to the depression, but, the fact remains that it is still nipping at the heals of the dollar like one of those small dogs, and whenever it is that the U.S. comes out of this depression, this figure will balloon once again…

Today’s data will be dominated by Retail Sales for July, which because of the CARS program, will be stronger than usual, probably getting quite close to a positive 1% for the month… Less Autos, the data would be quite disappointing at just .1%, but, you know me… I don’t like that taking this, that and the other thing out just so things look the way you want them to look!

It’s also a Thursday, so the Weekly Initial Jobless Claims will also print. Recall that on Monday of this week I told you the data would get going again this week? Well, we’ve got it going on today for sure!

Yesterday, Norway’s Norges Bank met, and while they left rates unchanged, they became the first Central Bank to move to a tightening bias! YAHOO! And the krone was the best performing currency yesterday and overnight on that news, as it should! Long time readers know my affection for the krone due to a number of reasons, but none so important than the fact that Norway has a financial surplus, has had one, has one, and will have one for as long as I can see… Norway didn’t get involved in the sub-prime bond buying game… And they have a very strong Central Bank in the Norges Bank… Last spring, the NY Times, which I don’t read for a number of reasons, but had this sent to me, called the Norwegian krone the safest currency in the world. Now… I like it when someone other than me climbs out on that limb, especially if your going to climb that far out!

Tonight, the Gov. of the Reserve Bank of Australia (RBA), Stevens will provide a testimony to the Parliament regarding the economy, etc. I think that the A$ traders are holding their breath until he speaks, as this could be a real market moving speech! But then it could also be as dull as watching paint dry…

The A$ is back above 84-cents after spending a couple of days down in the 82-cent handle…

OK… So… We had good news from Germany, France and Norway this morning… Not so good news from the U.S. though…

Realty Trac Inc. is reporting this morning that a total of 360,149 properties received a default or auction notice or were seized last month. UGH! Foreclosure filings in the U.S. climbed to a record for the third time in five months in July. All those jobs that were cut and still being cut, are having a real negative affect on this, and personally, I don’t see this getting any better any time soon! UGH!

There’s been a lot of talk about the news the other day that China’s loan growth had seen a huge fall last month… A lot of people think that this is the end of China’s growth… I see it differently… I see it as China just taking some air out of the balloon… They saw their economy moving ahead of the rest of the world at a very fast pace, and didn’t want it to: 1. overheat, and 2. Have nowhere to go with everyone else in recession… Now, I’m sure a lot of you will say, Chuck… Doesn’t China risk the chance of popping their economic bubble altogether? Well… Yes, they do… But, they knew how to administer stimulus to make the economy click, I assume they know how to pull some if back when they need to…

And… I just think about the fact that since 2003, I’ve seen story after story by writers that thought they knew what was happening in China, say the economic growth was going to slow down… And they were WRONG!

And with that thought… No wait! I’ve got another thing from David Galland… He said that Dan Ferris sent this to him… “Members of Congress should be compelled to wear uniforms just like NASCAR drivers, so we can identify their corporate sponsors.” yeah, right on! Now that’s change that’s really change!

Currencies today 8/13/09: A$ .8440, kiwi .6795, C$ .9245, euro 1.4275, sterling 1.6625, Swiss .9315, rand 7.9675, krone 6.0220, SEK 7.1475, forint 188, zloty 2.88, koruna 18, yen 96.20, sing 1.4415, HKD 7.7515, INR 48.10, China 6.8337, pesos 12.84, BRL 1.8385, dollar index 78.50, Oil $71.64, 10-yr 3.73%, Silver $15, and Gold… $957.15

That’s it for today… I had a long time reader send me a note yesterday and tell me that I have enough to worry about with the Fed, Treasury, deficits, etc. and shouldn’t get worked up when the Cardinals lose a game they should have won… HA! Yes, that’s correct! It is just a game… And yes, I’m talking about baseball, not the Fed, Treasury and deficits! HA! Well… I go to the knee doctor today, I’m afraid of what he’s going to find… All I know, is that the pain, swelling and stiffness is much worse in this knee than it was in the right knee that I had scoped in 2003! UGH! My little buddy, Alex is home. He seemed to have grown 6 inches while at camp! OK… I must really be running late, as Mike, Suzy Q, and Mary are all here! So… Get that Tub Thumpin’ Thursday going!

Source: Germany & France Exit The Recession

Assets like iron ore and copper would suddenly look bullish. Countries like Australia, Brazil and Canada would suddenly have brighter prospects. Asia as a whole would be more attractive to investors.

“I think it will take only three to four years for China to overtake Japan as the second-largest economy in the world,” Merrill Lynch economist Ting Lu, told the Associated Press. Catching up with the United States could take decades, he added.

In a complicated recalculation, the Chinese government yesterday (Thursday) revised its growth figures for 2007 from 11.9% to 13%, bringing its estimated gross domestic product (GDP) to $3.4 trillion – about 3% larger than Germany’s $3.3 trillion for the same year, based on World Bank estimates.

The news came sooner than expected, confirming a seismic shift in global economic power. It took just two years to complete the move from fourth to third after China overtook Britain in 2005.

Germany’s per capita GDP, at $38,800, is still far ahead of China’s $2,800 per capita GDP in 2007, as the country has wide disparities of wealth and poverty. Chinese officials say more than 100 other countries have a higher income per person, the Associated Press reported.

China set out on the road from communist central planning to a market-style economy in 1979 when its GDP was just $300 billion – one-tenth of the 2007 level – according to the International Monetary Fund.

Now, it has set its sights on Japan. Although the world’s top economies – the United States and Japan – are suffering through a withering recession, even the most pessimistic growth estimates for China’s GDP in coming years run about 5%.

If China were to maintain its current level of growth, it would overtake Japan – with a current GDP of $4.3 trillion – in just a few short years.

The U.S. economy, the world’s largest, was about $13.8 trillion in 2007. At its current rate, it would take China just 18 years to depose the United States as the world’s No. 1 economy, according to the Washington Post.

However, the question of whether or not China will continue to grow at its current pace has been complicated by the global recession, which has resulted in massive layoffs and waves of factory closures, especially in southeastern China, the center of its export-driven economy.

Michael Santoro, author of the 2008 book “China 2020,” told CNN. China will have other problems to overcome if it is to maintain its rapid expansion.

“It’s no longer sufficient for China to become a manufacturer of sneakers or toys and the like,” Santoro said. “Now they’re looking to become players in the area of pharmaceuticals and foods and other high value-added products, where safety and quality are important characteristics for improving in the global economy.”

Independent economists estimate China’s economy grew by another 9% in 2008 despite the global downturn. Figures for 2008 are expected to be released this month.

But economists have slashed 2009 forecasts to as low as 6%. That would be the highest of all the world’s major economies, but still worries communist leaders who need to satisfy a public already concerned over thousands of recent manufacturing layoffs.

But don’t expect China to sit by twiddling its thumbs while the recession hammers its economy.  In a Money Morning Outlook 2009 report we described how the People’s Republic has already announced a $586 billion (4 trillion yuan) spending package.

To put that in perspective, this plan amounts to a staggering 20% of China’s gross domestic product (GDP). Compare that to the $1 trillion in U.S. bailouts, which equate to about 8% of GDP.

And in further response, China’s State Council on Wednesday laid out a new plan to boost its steel and auto industries – including about $1.5 billion to develop alternative-fuel vehicles.

Source: China Now the World’s No. 3 Economy, Supplanting Germany

Like a crackhead kicking a trash can reverberates through your hangover headache, the folks from the S&P/Case-Shiller Home Price Index updated their data this morning:

“Home prices are back to their March, 2004 levels,” reports David Blitzer, one of the index’s stewards. “Both composite indices and 14 of the 20 metro areas are reporting new record rates of decline. As of October 2008, the 10-City Composite is down 25.0% from its mid-2006 peak, and the 20-City Composite is down 23.4%.”

Phoenix, Las Vegas, San Francisco, Miami and LA remain the worst housing markets in the country, in that order. Dallas and Charlotte are the “bright” spots, having fallen only 3-4% annually.

The entire financial world had placed a wild bet that house prices in the U.S. would go up indefinitely. The year 2008 will go down in history as the year that proved them wrong… and then all hell would break loose.

The reverberations will continue to reach far and wide in 2009. As a sign of things to come, the first post-Christmas retail bankruptcy occurred Monday. “Parent Co.,” an ironically named retailer of children’s products, filed Chapter 11 yesterday. Our bold, out-on-a-limb forecast for the day: They will not be the last.

Parent Co. joins the ranks of well-known bankrupt retailers like Circuit City, Boscov’s, Sharper Image, Mervyn’s, Linens ’n Things, Whitehall Jewellers and Steve & Barry’s

“If some miracle doesn’t happen,” notes Bill Bonner, “this will go down as the worst year in Wall Street history. Worse than ’29? A lot worse.

“1929 had been a big winner for investors before the crash began in the last quarter. When the champagne was finally poured on New Year’s Eve, investors were less than 10% below where they began the year.

“This year has been all bad. Investors are looking at a loss over 40%. The typical investor in the stock market has probably lost half his money.”

U.S. indexes showed no indication of a year-end miracle yesterday. The Dow inched down steadily as the day progressed, fueled mostly by Middle Eastern news — Kuwait’s broken deal with Dow Chemical and the war in Gaza.

Without any compelling reasons to buy, most major indexes drifted down about 0.3%.

History suggests sluggish and lame markets can — and do — last for much longer than most investors believe is possible. Exhibit A: The Japanese stock market closed out 2008 this morning — its worst year ever – long after its equity and real estate bubbles popped in the early ’90s.

Despite the Nikkei 225’s 1.3% rise today, the index fell 42.1% for the year. The closest comparison would be the 39% annual dive in 1990, after the great Japanese stock bubble popped so magnificently. Still, even compared to that incredible fallout, 2008 takes the cake.

The Nikkei closed today at 8.859. Another 10% or so, and the Japanese market will be flirting with a 25-year low. How does one say “ouch” in Japanese? Itai!

Rather than commit hari-kari… let’s do something unusual and try to think, umn, positive… it is the holidays, after all. How will we know when the bear market is bottoming? And what should we buy when it does?

“Normalized earnings for the S&P 500 could be $60-70,” Agora Financial’s managing editor, Chris Mayer, opined this morning, taking a shot at an answer.

In layman’s terms, that’s a possible low of 600-700 for the S&P 500… 30% lower than it is today.

“The S&P at 600 is entirely possible,” Mayer continues. “So we could have more room to go. But it doesn’t have to go there. Signals to watch — when earnings stop falling quarter to quarter. I actually think we’ll see a big rally early 2009 a la 1930, when the Dow was up 48% from its bottom by April. Big rally coming, and that will be your last chance to dump your weaker holdings.

“If you are going to invest in stocks in 2009,” Mr. Mayer suggests, “stick with hard assets, management teams with proven track records, strong balance sheets and businesses with good disclosures (i.e., no black boxes or funny business). Ag-related stocks will have a good year, I think — fertilizer stocks, in particular. Oil stocks will come back, too, particularly oil field service stocks.

“Natural gas stocks will do even better, particularly the low-cost producers.

“I think now is a good time to pick up India’s blue chips, if you can sit with them for a while. I like emerging markets still. This is a pause, and not the end, of the emerging market growth story. It’s much bigger than most people think. India has less exposure to exports than China, has a lot of savings, little debt, a very young population (half under the age of 25) and some leading companies dirt-cheap…

“Lots of problems, to be sure, as all emerging markets do, but India will come back.”

Of the 100 biggest companies in the world by market value, only 29 are in a net cash position — more liquid assets than debt.

Here are the top four, as listed by the Financial Times:

Berkshire Hathaway — $106 billion in net cash
Bank of China — $101 billion
Industrial and Commercial Bank of China — $89 billion
China Construction Bank — $82 billion

If this isn’t a sign of the times, we don’t know what is.

But “the Chinese growth miracle has reached its pinnacle,” opines our Byron King, contrary to the evidence above.

“During the run-up to the Olympics, the Chinese government closed tens of thousands of factories in and around Beijing, just to control the air emissions and help to create blue skies for the Olympiad. It seemed to work as pageantry. By the time the marathon runners were trotting past the Great Hall of the People, Beijing looked like a picture postcard in its splendor.

“But how many of those closed factories have not yet reopened? All across China, we now learn, several hundred thousand factories are closed, with numerous millions now unemployed. All across the Middle Kingdom, owners and investors are closing factories faster than they are opening new ones. The export-led model of development has hit the rocks. Exports are down, incomes are falling, labor strife is up. This is bad for social harmony.

“It will doubtless get worse in 2009. Yet the larger truth is that China’s problem is part of a global phenomenon. From New York to London to Dubai to Shanghai, trillions of dollars of global capital have vanished — wrecked by deleveraging and associated market losses. The global banking system is in ruins. Trust is ofttimes gone, and scarce in the best of cases. Capital flows are being interrupted by new Chinese Walls the likes of which not even ancient emperors could have dreamed.

“With the export model broken, the mercantilist money machine is also perturbed. This will impact — negatively — Chinese willingness to continue to buy U.S. Treasuries. Which will impact — negatively — the U.S. ability to fund its chronic national deficits and long-term debts.”

The other hallmark drama for the year continues unabated. The U.S. Treasury piled us all deeper in debt last night when it threw GMAC a $6 billion life preserver.

Turns out the auto loaner couldn’t wait for its “bank holding company” upgrade from the Fed. Thus, Paulson and company were “forced” to pull another $6 billion from the TARP to keep GM’s financial arm afloat. $5 billion will be loaned straight to GMAC, and the government will get an 8% coupon. The other billion goes to GM, which has been ordered to increase its 49% stake in GMAC.

The results of GMAC’s huge debt-to-equity exchange Friday are still a mystery. Judging by the Treasury’s sudden injection, it didn’t go so well.

Unfortunately, the initial phase of Paulson’s bailout plan, the clunkily acronymed TARP, is already out of money. The $6 billion going to GMAC is actually money that’s already been allocated toward the bank recapitalization project.

If Congress does not approve the second half of the TARP bailout, the Treasury will bounce some pretty large checks.

Following events from a safe distance, a former Russian KGB analyst says the outlook for Americans is dire. And predicts the breakup of the United States by mid-2010.

“There’s a 55-45% chance right now that disintegration will occur,” Igor Panarin told The Wall Street Journal this morning. “One could rejoice in that process. But if we’re talking reasonably, it’s not the best scenario — for Russia.”

“Mr. Panarin posits,” according to the WSJ, “that mass immigration, economic decline and moral degradation will trigger a civil war next fall and the collapse of the dollar. Around the end of June 2010, or early July, he says, the U.S. will break into six pieces — with Alaska reverting to Russian control.”

But the professor is not necessarily happy about it. “Though Russia would become more powerful on the global stage,” he says, “its economy would suffer because it currently depends heavily on the dollar and on trade with the U.S.”

Hmmn… we’re trying to imagine some cowboy from Bakersfield submitting to Chinese rule. Or a Texan taking his orders from Mexico City. Heh.

After briefly falling below 80 yesterday, the dollar index has stabilized around 80.6 today.
The euro and pound are on the verge of parity for the first time ever. The pound, slammed by a large U.K. recession, housing crisis and lower-than-normal rates, has weakened to 98 pence per euro. Year to date, it’s down 25% versus the multination currency.

The approaching parity is reflected in the dollar exchange, as well. A euro today goes for $1.40… the pound a “mere” $1.45.

Commodity traders are taking profits today after Monday’s rally. Oil jumped as high as $42 a barrel, before retreating to $38.

Ditto with gold. It rose as high as $885 yesterday, but goes for just above $870 as we write.

“I believe oil and gold are the places to start getting well positioned in for 2009,” writes a reader, “if one hasn’t already. Oil especially is being primed for a V-shaped recovery. If investors are paying attention, they understand that the unrealistically low price of oil is just that — unrealistic.

“Many oil and gas exploration and production projects have been shelved due to the financial crisis and falling price. Some major oil exporters have exhausted their reserves, Mexico being one. Oil exploration and production require oil prices to be over $100 to be profitable. OPEC drastically cut production levels, due to falling demand. Problems of shortages and spiking oil prices are looming.

“Gold is also primed for a spike as the bailouts and stimulus package get under way. Great way to make up for the losses in 2008 if you’re ready for the ravages that will come along with this!”

“I believe 2009,” writes a reader with his own year-end forecast, “is going to be the beginning of a ‘rich get richer’ story that will reach levels never previously even imagined. This is how I see it playing out. There are many solid companies that have more than sufficient cash to get through the upcoming tough times, but are trading at huge discounts to their historic value. At the moment, the real estate- and energy-related sectors seem to have more of these companies than some other industries, but they exist everywhere. As is often the case, Mr. Market has overreacted and taken down the good with the bad.

“I predict that once there is even a hint that the economy is starting to turn around, there will be a flood of leveraged buyouts whereby those with access to cash will be buying the best companies for a fraction of even their future one-three-year value. And the banks will rush in to provide the financing with the cash they got from the Fed and currently have sitting on the sidelines.

“Bottom line is that Joe the Plumber will find out about a year from now that the only companies still in his portfolio are the companies that the buyout companies did not want. For buyout firms like KKR and Carlyle, this is going to better than robbing a bank, since it is legal. I suggest you provide some guidance as to how to share in this upcoming M&A activity.

“Even a master list of companies that are beaten down but still are earning good money and have plenty of cash would be a start.”

The 5: We’re on it.

Source: How to Spot the Bottom… Then What to Buy, Home Prices Crash, Has China Peaked? And More!

Yum! Brands Inc. (NYSE:YUM) expects another year of double-digit profit growth.

For nearly everyone else, 2009 won’t be just “another year.” Nearly every economist expects the first half of the New Year to bring more of the same, a deepening global financial crisis that’ll throw an even bigger, wetter blanket on economic growth than it did this year.

Indeed, even more than in 2008, next year will be a real-life case study of the survival of the fittest. And Yum’s certainly fit for the fight.

“Our industry is better-positioned in times like this,” Yum Chief Executive Officer David C. Novak told The Wall Street Journal. “We’re better-positioned than most other categories and industries.”

Already, we’re seeing companies slash work forces, trim (or abolish) dividends, and lock the safe that stores their spending money, sell off holdings or even shut down completely.

Yum’s not immune from the downturn. It, too, is cutting $60 million in operating costs from its U.S. business. It’s also putting a hold on buying back shares next year to preserve cash.

But unlike most, Yum hasn’t red-lighted its 2009 expansion plans – it’s still planning to build as many as 1,400 restaurants in international markets. About 500 of those new stores will be in China. That’s part of the reason the overall company is projecting at least 10% profit growth in 2009.

More broadly, Yum is expanding in the world’s fastest-growing economies and is making its menu part and parcel of every foreign country in which it operates. Two factors have imbued the company with a corporate killer instinct that’s enabling it to survive and thrive in the face of the current harsh economic environment: The innate strength of its own brands and a proven ability to adapt to any market it decides to pursue.

For marketing muscle, the Louisville, Ky.-based Yum has an army of brands – Pizza Hut, Kentucky Fried Chicken, Long John Silvers and A&W – plus its own line of Yum Restaurants that it operates outside the United States.

And its overseas franchises – especially Pizza Hut and KFC – are especially adept at making themselves the people’s favorite local flavor, instead of just their favorite American flavor.

Here’s a look at some of the items on Pizza Hut’s China menu: tuna fish pizza, roasted squid, zesty shrimp soup, a variety of rice-and-meat dishes (kimchi pork, curry beef and Hungarian beef rice), green tea, and chocolate mousse cake.

The bottom line: Yum’s stronghold and growth potential in China is shaping up as one of the most promising investment stories of 2009.

China Stronghold

As far as Yum Chief Financial Officer Richard T. Curucci is concerned, the company’s target for 10% profit growth should be easy to hit.

“We can get these numbers without heroic sales performance” at existing restaurants in China, Carucci said on a Webcast from the company’s analyst meeting, Reuters reported.

While Carucci says that Yum is “still not sure how China’s going to respond to a slowing economy,” he is certain of the company’s master plan which makes the Red Dragon the centerpiece of its growth strategy.

As of now, the United States accounts for 41% of Yum’s operating profits. China accounts for 28% and the rest of the company’s operations around the world account for the remaining 31%.

By 2013, China will account for 40% of Yum’s operating profit, while the United States and the rest of the world will each account for a 30% share, according to company projections.

As this plays out, Yum should outdistance some of its rivals, especially McDonald’s Corp. (MCD). That’s because Yum has done a better job penetrating the China market.

From 2002 to 2007, Yum opened 1,678 new stores in China, for a total of 2,558. In that same span, McDonald’s added 330 stores, giving the Golden Arches’ owner a total of 876 stores in China.

Yum has even stolen McDonald’s thunder in the mascot department. Its KFC mascot, a chicken character (naturally) named “Chicky,” roams stores and interacts with children. And the company’s Chicky program includes in-store birthday parties, kids’ fun camp and school tours of its stores. No wonder that Novak, the Yum CEO, boasted to Business Week two years ago that Chicky had already become “the Ronald McDonald of China.”

“We’re on the ground floor of a booming market, just like when Colonel Sanders started KFC and Ray Kroc started McDonald’s,” Novak told Business Week, noting that he one day wants to have as many restaurants in China as he does here in the United States.

Stateside Strategy

Novak said last week that the United States market was the lone problem the company has had in 2008.

Not only does Yum face a wider number and variety of competitors, but also fighting the headwinds of recession.

In addition to cutting $60 million from operational costs and suspending the company’s share buyback, Yum will offset the planned opening of 200 new U.S. restaurants by closing about the same number.

Other strategies will appear on the menu.

At Pizza Hut, the company is adding lasagna to its new Tuscani pasta line.

At KFC, it’s rolling out a grilled chicken option, a menu item Novak called a “transformational product” at an investor conference last week, The Associated Press reported.

The chicken chain will also create and promote a value menu, featuring items costing from $0.99 to $1.99.

Source: Hot Stocks: Fast Food Restaurateur Yum! Brands Making China its Main Course