Recently in Business Category

A wonderful idea - Autarky

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From the InfoGalactic entry:

Autarky
Autarky is the quality of being self-sufficient. Usually the term is applied to political states or their economic systems. Autarky exists whenever an entity can survive or continue its activities without external assistance or international trade. If a self-sufficient economy also refuses all trade with the outside world then it is called a closed economy.

Autarky is not necessarily an economic phenomenon; for example, a military autarky would be a state that could defend itself without help from another country, or could manufacture all of its weapons without any imports from the outside world.

Autarky can be said to be the policy of a state or other entity when it seeks to be self-sufficient as a whole, but also can be limited to a narrow field such as possession of a key raw material. For example, many countries have a policy of autarky with respect to foodstuffs and water for national security reasons.

Looking at this list makes me smile:

Opponents of autarky:

    • Proletarian internationalism, World communism, Stateless communism, World revolution, Permanent revolution
    • Trotskyism, Fourth International
    • Classical liberalism, Neoliberalism
    • Neoconservatism
    • Libertarianism, Libertarian conservatism
    • Liberal internationalism
    • Anarcho-capitalism

Does not have to be total but I would love to see our manufacturing base return to within our borders. Sure, I want fresh fruit from Chile in the winter and Taiwanese or Indian machine tools (profoundly better quality than Chinese) and Japanese ham radio electronics but this is a mercantile decision on my part. To have the US make itself open for business again would be a very good thing for everyone here.

Without a doubt - capitalism

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Captain Obvious to the white courtesy phone please - Mark Cuban from FOX News:

Mark Cuban predicts 'we are truly going to see the best of capitalism' after coronavirus 'recession'
Dallas Mavericks owner and billionaire entrepreneur Mark Cuban joined the "Fox News Rundown" podcast Thursday to offer guidance to small businesses struggling through the coronavirus pandemic.

"They're terrified," Cuban said. "Business has dried up from doing great last month or two months ago to almost nothing. And that's terrifying to anybody who's ever started a business.

And more:

"I truly believe in American exceptionalism," he added. "There's no other country in the world that's going to be able to figure out like we can, we'll use this opportunity, we'll use the situation."

"If the American dream was not alive and well until this point, it just truly got ignited," Cuban concluded.

Striking a rare political tone, Cuban said the outbreak will serve as an example to those who supported socialism, and predicted a newfound entrepreneurial spirit that will "bring out the best of capitalism."

"We've had a taste of socialism right now ... giving money and redistributing wealth ... that's okay," he said. "But, I think we are truly going to see the best of capitalism when we come out of the other side, because this is where people are going to be entrepreneurial."

Capitalism is the only way to go. Period. Socialism has never ever worked. Period. Glad to see Cuban speaking truth to power.

Very cool idea - Amazon

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They are busy with the panic buying. They are willing to give you a couple bucks if you can delay the shipping of your item. From their website:

20200323-amazon.jpg

Great idea - helps everyone out.

Heh - Costco returns

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I was at Costco this morning as part of my errand run. Saw a sign saying that they will not allow returns on Toilet Paper, wipes, clorox, dried beans and rice.

Look for really cheap tp for your bunghole at garage sales next summer.

Really nice move - Uber Eats

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Great move from a good company - from their website: UBER Newsroom

Supporting the restaurant industry through an uncertain season
It’s Uber Eats’ mission to deliver food experiences that fuel everyday life. But today the world feels anything but business as usual. As we face the uncertainty of this health crisis together with our restaurant partners, we are thinking about how best to support independent restaurants in the U.S. & Canada that have been most significantly affected.

Supporting local business with no Delivery Fee
Uber Eats US Eat LocalWe know the success of every restaurant depends on customer demand. That’s why we’re working urgently to drive orders towards independent restaurants on Eats, to help make up for the significant slowdown of in-restaurant dining.

As more customers are choosing to stay indoors, we’ve waived the Delivery Fee for the more than 100,000 independent restaurants across US & Canada on Uber Eats. We will also launch daily dedicated, targeted marketing campaigns—both in-app and via email—to promote delivery from local restaurants, especially those that are new to the app.

Really nice touch - they did not have to do this. Yes, this will work out well for them in terms of future sales and growth but there is nothing wrong with that. A nice altruistic move and they were the first so any other companies that try this will be seen as copycats. Well done UBER

Not good for Boeing - more 737MAX woes

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From local newspaper The Everett Herald:

Boeing finds debris in wing fuel tanks of several 737 Maxs
In the latest of a string of quality control issues, Boeing discovered debris that mechanics left inside the wing fuel tanks of several undelivered 737 Maxs during the aircraft assembly process.

Boeing has ordered inspections of all the undelivered Maxs, about 400 of which are stored at various locations.

Regarding the additional 385 Maxs that were delivered to customers but have been grounded for almost a year and are parked at airfields around the world, company spokesman Bernard Choi said Boeing is recommending inspections for those airplanes that have been in storage for more than a year. “It’s still undecided if we will inspect the rest” of the delivered Max fleet, he added. “Obviously, we’ll do what’s right for safety.”

Not good. This stems from a defective corporate culture. The workers need to take pride in their work. A good corporate culture has to come from the top and percolate down through the corporation. It is not something that can be mandated by middle-management. Boeing needs to get their mojo back again.

The Japanese economy

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It goes through the usual boom and bust cycles - people never learn. It was doing great and then some politicians decided to tap some of that business energy for their own pet projects. They raised taxes. From CNN:

Japan's economy is shrinking and a recession looks 'all but inevitable'
Japan's economy is flirting with recession, and the novel coronavirus could push it over the edge.

The world's third-largest economy shrank 1.6% in the fourth quarter of 2019, according to a government estimate released Monday. The decline from the third quarter is the biggest contraction since 2014.

The drop was even more severe — a 6.3% plunge — when measured as an annualized rate.

The fact that growth slowed in the three months to December wasn't a surprise. Analysts had been expecting as much as the country absorbed a sales tax hike and grappled with the aftermath of Typhoon Hagibis, a powerful storm that hit the country last fall.

Want my 2¢ - get rid of the sales tax, cut corporate taxes by 10% and stand back. Watch what happens. Taxes are not a source of free money - there are always economic consequences to imposing them.

The joys of single-sourcing

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You never want to have only one source for critical components. Witness this with Apple:

Investor update on quarterly guidance
As the public health response to COVID-19 continues, our thoughts remain with the communities and individuals most deeply affected by the disease, and with those working around the clock to contain its spread and to treat the ill. Apple is more than doubling our previously announced donation to support this historic public health effort. 

yadda yadda yadda and then:

As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors.

The first is that worldwide iPhone supply will be temporarily constrained. While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated.

And to make matters more interesting:

The second is that demand for our products within China has been affected. All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic.

Events like the Kung Flu have repercussions that ripple through everything. If Apple also manufactured in the Phillipenes or Viet Nam, there would not be this problem. Always keep options for sourcing your materials.

From the United States Department of Education:

U.S. Department of Education Launches Investigation into Foreign Gifts Reporting at Ivy League Universities
The U.S. Department of Education announced today it is launching investigations into both Harvard and Yale Universities after it appears both Ivy League higher education institutions potentially failed to report hundreds of millions of dollars in foreign gifts and contracts.

In recent weeks, the Department discovered Yale University may have failed to report at least $375 million in foreign gifts and contracts, choosing not to report any gifts and contracts over the last four years.

The Department is also concerned Harvard University may lack appropriate institutional controls over foreign money and has failed to report fully all foreign gifts and contracts as required by law. This comes after Dr. Charles Lieber, chair of Harvard University’s Chemistry and Chemical Biology Department, was indicted for lying about his involvement with the Chinese government’s Thousand Talents Plan and admitting that Harvard lacks adequate institutional controls for effective oversight and tracking of very large donations.

“This is about transparency,” said U.S. Secretary of Education Betsy DeVos. “If colleges and universities are accepting foreign money and gifts, their students, donors, and taxpayers deserve to know how much and from whom. Moreover, it’s what the law requires. Unfortunately, the more we dig, the more we find that too many are underreporting or not reporting at all. We will continue to hold colleges and universities accountable and work with them to ensure their reporting is full, accurate, and transparent, as required by the law.”

Section 117 of the Higher Education Act requires American Title IV-eligible colleges and universities to report gifts from, and contracts with, any foreign source that exceed $250,000 in value and to disclose any foreign ownership or control, twice each year.

There is a reason the liberals cried when she was appointed. She is going to take away their slush funds and kick over their rice bowls. They might actually have to start relying on their tuition income to make ends meet. And, obeying the law.

The title of the post? Mos Eisley of course.

I could have told them that. What you get when an ont-of-state developer puts up a luxury building.
From The Seattle Times:

A tower of luxury condos with almost no parking? This experiment seems to be failing
Seattleites want to live more like Manhattanites.

Or at least, that was the gamble made by developers of The Emerald, a 40-story luxury condominium near Pike Place Market, when they decided to include fewer parking stalls than any comparable new residential tower in the city.

But it looks like even Teslas on demand and the thrill of sharing an address with the priciest listing on the waterfront aren’t enough to prompt potential buyers of Seattle’s luxury condominiums to give up their cars.

The relative dearth of parking at The Emerald has been jeopardizing sales there, local condo brokers say.

A mere 62 parking stalls will serve the 40-story building’s 262 residences, the lowest stalls-per-unit ratio of any new residential tower downtown. Coincidentally or not, The Emerald has attracted fewer preopening buyers than Seattle’s average under-construction condo.

One of the draws of Seattle is that there is so much to do within an hour or two drive from the city. Most of these sites are not served by public transportation. Manhattan does not have the glorious outdoors on its doorstep so people moving there are more into the immersive urban-only experience. Not so with Seattle as this local boy says:

“Any developer in the last two years who bought into the idea that parking wasn’t important missed the mark,” said Windermere broker Jeff Reynolds, who focuses on the Seattle condo market. 

Yeah - anyone who comes in from the outside (the developer in this case is based in Hong Kong - another Manhattan). One of the primary factors for success in business is the ability to "read" your customer base and understand THEIR needs and desires. Just because your ideas have worked in other large cities does not mean that they will work here.

Got to love Capitalism and Adam Smith's idea of the invisible hand. Works every time. Can not say the same for top-down decision making, centralized planning and the other accouterments of socialized government.

Free and Open Markets

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This is a big thing. Excellent analysis at the Foundation for Economic Education:

Why First World Countries Have Third World Cities
As I avoided the potholes, ignored the sounds of guns, and walked past beggars throughout the streets of New Orleans, I could not help but be reminded of my travels in Phnom Penh, Cambodia. With their mass poverty and crumbling infrastructure, the two cities differ in one key area: Phnom Penh is in a developing country and New Orleans is in a developed country.

Throughout the United States, I frequently come across what I call "third world cities in first world countries" - whether it is Detroit, Baltimore, or even my beloved New Orleans. These third world cities all have one thing in common: an absence of free and open markets.

The unifying traits to those cities? Burdensome tax rates, they are unfriendly to business and are Democrat ruled.

Wonderful news - public-sector unions

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No need for these. Labor unions definitely had their place in the early 1900's but they failed to evolve and now do not really serve their workers, only their leadership. Private sector unions are still viable - electricians, automotive and aerospace workers, etc. but public sector unions should never have been implemented - teachers, government workers, etc...

From City Journal:

Labor’s Love Lost
Government-union membership fell again in 2019, continuing a decade-long decline. Workers in public-sector unions now number 7.066 million, representing a drop of nearly 100,000 in one year and the smallest government-organized labor membership in 20 years. Since 2009, when the ranks of government-union members peaked at 7.896 million, public-labor groups have lost more than 10 percent of their membership. The percentage of government workers belonging to unions has dropped to 33.6, the smallest proportion of the government workforce since 1978. The most recent numbers illustrate how government unions continue to suffer from the hangover of the recession of 2008-2009, in part because of a slow rebound in government employment during the economic expansion that began in 2010. The numbers may also reflect some losses that unions have suffered in the wake of the 2018 Supreme Court Janus decision, which gave public-sector workers the right to opt out of joining a union or paying fees.

The trends are particularly ominous for public unions because 2019 should have been the year that they started bouncing back. In the tenth year of an economic expansion, state tax and local collections grew robustly, increasing by 9 percent in the second quarter and 5.6 percent in the third quarter, according to government surveys. States and municipalities subsequently hired more workers. The number of local government employees, for instance, jumped by nearly 100,000 in 2019, to 14.573 million. But these gains haven’t translated into increases in union membership, particularly in municipal government, the largest segment of public-sector employment. The total government workforce in America has returned to its pre-financial crash levels, but union headcount has failed to follow suit.

Let's see now - public sector union membership peaked in 2009. What happened on January 20th of 2009
Stands to reason - the Democrats rallied behind him, put him behind the Resolute Desk with his pen and his phone and he proceeded to pay his people back. Belly up to the trough. Here is a sterling example of what happens when the teachers union gets free money to play with - from CATO Institute:

cato_education.jpg

It comes from page two of this PDF report: State Education Trends - Academic Performance and Spending over the Past 40 Years by the CATO Institute.

The teachers unions are not there for the teachers. They are not there for the kids. They are there for themselves - they have political power and they do not want to lose it.

Michigan teachers got Right To Work legislation passed six years ago. Teacher's Union membership is no longer mandatory. Guess what. From Michigan's Capital Confidential:

Dues-Paying Membership In Teachers Union Has Collapsed Since Right-To-Work
By December 2013, Michigan’s new right-to-work law had been in effect for nine months.

The Michigan Education Association was collecting dues from 113,147 active members. Its spokesman said the union’s response to the new law was to get the word out to members about what the MEA could do for them.

And the result six years down the road?

Six years later, the MEA’s active, dues-paying membership has fallen to 78,475, down 31%. That is despite the sales pitches and contract extensions.

Under right-to-work, employees in workplaces organized by a union – including people in most government and school jobs – can no longer be compelled to pay union dues or fees as a condition of employment.

“We don’t know what to expect,” the MEA’s Doug Pratt told the Detroit Free Press when the law was enacted in December 2013. “What we can do is continue to explain to our members why membership is of value. Have we had to increase our efforts on that? Sure we have.”

They were not offering anything of perceived value so the customers stopped buying once it was no longer mandatory. Classical example of market forces.

Do not get me wrong - unions very much had their place in the American work force 100 years ago. Workers were being horribly exploited, the idea of picking up and moving to a different city was completely foreign to most people and the wages were not sustainable. The unions helped a lot but they have not kept up with the times.

What is worse is that in some cases, they have negotiated unreasonable benefits and pensions and the employers (State of Illinois - I am looking at you) are unable to fund them.

Aaaand he's out - Boeing CEO

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From Seattle station KOMO:

Boeing CEO Dennis Muilenburg to step down immediately
Boeing's CEO is resigning amid ongoing problems at the company over the troubled Max 737 aircraft.

The Chicago manufacturer said Monday that Dennis Muilenburg is stepping down immediately. The board's current chairman David Calhoun will officially take over on January 13.

The board said a change in leadership was necessary to restore confidence in the company as it works to repair relationships with regulators and stakeholders. The Max was grounded worldwide in March after the second of two crashes of its jet, killing a combined total of 346 people.

Good - the 737 was a good airplane until they added a much larger engine and tried to adjust the flight performance in software. Never a good idea. Time for the 737-Max to be consigned to the dustbin of history.

Totally free for basic stuff. They get you for processing payments but no more than Square or any of the others. They also charge for payroll but not that much either. Looks really good. Check out Wave Financial

They were started in 2010 and were recently acquired by H&R Block so they are not going anywhere soon. Have to try it out for my blacksmithing business.

In other words - they can not fix it.

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From the Everett Herald:

Boeing to indefinitely suspend 737 Max production in January
The Boeing Co. will indefinitely halt production of the grounded 737 Max in January, a move that will deepen the crisis engulfing the planemaker, complicate its eventual recovery and ripple through the U.S. economy.

Employees at the Renton factory where the Max is built will continue 737-related work or be temporarily reassigned to other programs, the company said in a news release Monday.

The 737 was a decent airplane. Their mistake was trying to graft a much larger engine on it and then to "fix it in the software". Not gonna happen...

Grouchy Old Cripple delivers a fine rant:

OPEC Is In Trouble
Came across this story in the Atlanta Urinal and Constipation.

VIENNA — The countries that make up the OPEC oil-producing cartel ended talks late Thursday without an announcement on possible deep cuts to production that would support the price of fuel around the world.

The price of oil is dropping because there is a glut of oil. Even with the loss of the oil production of the socialist utopia of Venezuela and sanctions against Iran there is still an oversupply of oil.

Hey! Whatever happened to peak oil? Remember that? We were supposed to run out of oil by now. Of course we were also not gonna be able to produce enough food to feed the planet either.

Whenever booger eatin’ moh-rons like Paul Ehrlich speak, ignore them. Same goes for the climate crisis dipshits. It’s all bullshit.

Denny is just getting started... Truth to power

Meet Jim Biden - just as creepy

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Joe's brother is being sued. From the Knoxville, Tennessee Knox News:

FBI probing terroristic threat against McMinnville couple suing Joe Biden's brother
The FBI is investigating the delivery — via the mail — of a terroristic threat to a McMinnville couple who are suing the brother of Democratic presidential hopeful Joe Biden, Knox News has confirmed.

The threat came in August in a plain white envelope to the McMinnville home of Michael Frey and his wife, Natalie Frey, just days after Knox News publicly revealed their claims of fraud and deception against Biden’s brother, Jim Biden, in a federal lawsuit.

Inside the envelope was what appeared to be blood-stained currency from a Middle Eastern country commonly known as a haven for terror groups and a “torture ticket” — a voucher for the infliction of torture.

The Freys revealed the receipt of the threat in an exclusive interview with Knox News late last month. The U.S. Attorney’s office confirmed this week the threat was under investigation by the FBI. The office and the FBI declined to comment further.

The lawsuit:

The Freys founded Diverse Medical Management and partnered with Dr. Mohannad Azzam to create a blueprint for turning struggling rural hospitals into one-stop shops for physical and mental health services for residents.

The Freys and Azzam say in a lawsuit filed earlier this year in U.S. District Court by attorney Robert Peal that Jim Biden used his brother’s star power to convince them to turn over that blueprint and then stole it — pitching it to Turkish investors as a “white paper” bearing the names of “His and Her Excellency Jim and Sarah Biden" and omitting the names of Frey and Azzam.

A very sordid mess - there is a lot more detail at the site. Jim Biden is an odious man.

Now this is big - oil exports

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From Yahoo / Bloomberg:

U.S. Posts First Month in 70 Years as a Net Petroleum Exporter
The U.S. solidified its status as an energy producer by posting the first full month as a net exporter of crude and petroleum products since government records began in 1949.

The nation exported 89,000 barrels a day more than it imported in September, according to data from the Energy Information Administration Friday. While the U.S. has previously reported net exports on a weekly basis, today’s figures mark a key milestone that few would have predicted just a decade ago, before the onset of the shale boom.

President Donald Trump has touted American energy independence, saying that the nation is moving away from relying on foreign oil. While the net exports show decreasing reliance on imports, the U.S. still continues to buy heavy crude oil from other nations to meet the needs of its refineries. It also buys refined products when they are available for a lower cost from foreign suppliers.

“The U.S. return to being a net exporter serves to remind how the oil industry can deliver surprises -- in this case, the shale oil revolution - that upend global oil prices, production, and trade flows,” said Bob McNally, a former energy adviser to President George W. Bush and president of the consulting firm Rapidan Energy Group.

Thank you President Trump. Unraveling Obama's "legacy" bit by bit.

And the mainstream media will cover this in 3... 2... 1...

...

...

--- crickets ---

President Trump and China

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Trade wars work - from agricultural news site Ag Web:

In a China Win for Trump, U.S. Can Now Ship Rice for First Time
The U.S. can now ship rice to China for the first time ever, signaling a win for President Donald Trump in his efforts to reshape the trade relationship just after talks between the nations broke down Wednesday.

Officials from the nations finalized a protocol to allow for the first-ever American shipments, the U.S. Department of Agriculture said Thursday in a statement. China is the world’s biggest rice consumer, importer and producer.

The rice deal comes just a month after China reopened its market to U.S. beef imports for the first time in more than a decade and is the latest in a flurry of trade negotiations between the nations. China is also approving more biotech products and increasing U.S. natural gas imports.

Wrap your brain around this: President Trump just sold rice to China.

Is there nothing that he can not do (except getting the liberals to grow the fsck up).

Another business bails from the PRC

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That would be the People's Republic of California - a real worker's paradise. From retired journalist Don Surber:

Schwab Inc. leaving SF for Texas
Pooping in the street has consequences.

In announcing it will acquire TD Ameritrade, Charles Schwab and Co. Inc. announced it will move its headquarters from San Francisco to Dallas/Fort Worth.

The San Francisco business reaction:

The San Francisco Chronicle reported, "Charles Schwab has been headquartered in San Francisco since its founding in 1971, while TD Ameritrade is based in Omaha, Neb.

"'We’re deeply disappointed about it,' said Jay Cheng, public policy director at the San Francisco Chamber of Commerce. 'We probably will lose significant taxes.'"

Wow has the Chamber of Commerce changed.

It is more worried about the government collecting taxes than companies making money.

Create a business-friendly environment and stand back. Corporations will move there. I really wonder if Boeing is regretting moving from Seattle to Chicago - frying pan/fire. Wonder if they will move to Texas as well...

Follow the money - marijuana sales

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California again...  They legalized it and proceeded to tax the hell out of it. From Sacramento, CA station KCRA

Illegal pot sales outpace legal cannabis in California
California’s marijuana industry is undergoing some severe growing pains -- and it’s much bigger than just licensing permits.

Nearly two years after recreational marijuana became legal in California, the black market is still much bigger than legal sales of marijuana.

At All About Wellness, a Sacramento pot shop, business is thriving. In fact, owner Phil Blurton is planning to expand into a bigger building next month. But, he’s also worried about his illegal competitor who don’t pay taxes.

“Our city license now is $20,000 a year,” Blurton said. “The state license is $96,000. Then we pay 8.75% sales tax to the state."

Blurton said he also pays an additional 4% cannabis tax to the city, on top of an additional 15% tax to the state, “which is making the cost of our product so expensive the black market is booming now.”

It's booming to the tune of $8.7 billion in illegal sales this year. That’s more than double the legal market, according to an industry report released by BDS Analytics.

Yikes - talk about an egregious level of taxation. That is not sustainable for any business unless they jack their prices up to well above "traditional" pot prices. No wonder the "black market" sales are going so well.

It is neither Best nor Buy. Seems that their CEO has gotten hisself WOKE so there goes the company. From Vox Day:

The new climate for business
Is one where business is rapidly shrinking. Best Buy's CEO takes a very converged position on corporate profits:

"The purpose of a company is not to make money," says Best Buy CEO Hubert Joly, discussing the need for a re-foundation of capitalism. Purposeful leadership is being clear about your purpose as an individual and how it connects to the purpose of the company where you work.

If you can't see the danger in where this is headed, then you really aren't paying attention. What is the purpose of the company where you work if it isn't to make money?  How long do you anticipate working there without making money yourself? And if the purpose isn't to make money, then why do so many companies nevertheless insist on charging money for their goods and services?

Capitalism doesn't need to be refounded, it is something to which we should return. The modern day financialized corpocracy which funnels most profits to the financial institutions, the government, and the pirate class is simply not capitalism by any measure.

By the way, there is a whole conference devoted to business convergence. Look at the pictures on the linked Twitter account. There is literally zero productive business being discussed there.

Speaking truth to power. 130+ interesting comments - a lot along the line where we should just walk into the local BestBuy and ask for free stuff. To charge money for it would not be purposeful.

The last three years of BBY stock prices are actually pretty decent. We will see what happens:

20191114-bby.gif

From The Seattle Times:

Amazon lost the Seattle City Council elections after a $1 million power play. Will it see a new head tax?
More than a year ago, Seattle City Councilmember Lisa Herbold teared up as she voted to repeal a per-employee tax on high-grossing businesses that would have raised money for homeless housing and services.

“This is not a winnable battle at this time,” Herbold said, referring to a referendum on the so-called head tax bankrolled by Amazon and other large companies. “The opposition has unlimited resources” to spend on turning voters against the tax.

Fast forward to this year’s council elections, and that picture may have changed. An attempt by the Seattle Metropolitan Chamber of Commerce to remake the council and ensure policies like the head tax would never return has been soundly rejected by a progressive-minded electorate, despite Amazon pouring nearly $1.5 million into seven district races through the chamber’s no-limit political-action committee (PAC).

Heh - the progressives want to soak the rich and use the money to fund stuff that sounds good and will buy them votes from the low-information voters. Little do they know that elections have consequences and their pet projects may run out of money in a few years. 30 years ago, Boeing was fed up with Seattle's perennial tax-the-rich policies and moved their head office to Chicago. I bet Amazon will have zero problem doing the same thing. Seattle is not holding up its end of the bargain when trying to keep large businesses in the area. Goose that lays Golden Egg sort of thing...

Amazon has already put their toes in the water with New York City but discovered that AOC was just as entitled as Seattle is - they decided against a move and NYC lost a whole bunch of nice jobs.

The economy of Germany is one of the primary drivers for the whole EU economy. Germany's largest bank is experiencing some serious problems.

Started earlier this year - from February 25th, 2019 - CCN News:

Failing Deutsche Bank Lost $1.6 Billion, Conspired to Hide Bond Bet Gone Wrong
Germany’s largest lender Deutsche Bank is in the news again for the wrong reasons. According to the Wall Street Journal, Deutsche Bank lost approximately $1.6 billion over a decade in a bond bet gone awry.

Interestingly, Deutsche Bank has never publicly revealed the loss. This is likely to generate controversy over the bank’s corporate governance structures. As recently as last year the possibility of restating past financial results to reflect the loss was discussed. However, this proposal was shot down.

Fast forward to June 17th, 2019 - Forbes:

Deutsche Bank's Latest Restructuring Plan Fails To Impress
Since the failure of merger talks with Commerzbank, there has been speculation that Deutsche Bank would embark on a major restructuring in the hopes of restoring its fortunes. Now, details are beginning to emerge. According to the Financial Times, the bank’s chief executive, Christian Sewing, plans to create a “bad bank” into which will be placed up to €50bn ($56.18bn) of poorly performing assets, mostly from the troubled U.S. investment bank. The bank also intends to make further deep cuts to its investment bank, and pivot to a new focus on transaction banking and wealth management.

And then there is this - from July 17th - Zero Hedge:

Bank Run: Deutsche Bank Clients Are Pulling $1 Billion A Day
There is a reason James Simons' RenTec is the world's best performing hedge fund - it spots trends (even if they are glaringly obvious) well ahead of almost everyone else, and certainly long before the consensus.

That's what happened with Deutsche Bank, when as we reported two weeks ago, the quant fund pulled its cash from Deutsche Bank as a result of soaring counterparty risk, just days before the full - and to many, devastating - extent of the German lender's historic restructuring was disclosed, and would result in a bank that is radically different from what Deutsche Bank was previously (see "The Deutsche Bank As You Know It Is No More").

In any case, now that RenTec is long gone, and questions about the viability of Deutsche Bank are swirling - yes, it won't be insolvent overnight, but like the world's biggest melting ice cube, there is simply no equity value there any more - everyone else has decided to cut their counterparty risk with the bank with the €45 trillion in derivatives, and according to Bloomberg Deutsche Bank clients, mostly hedge funds, have started a "bank run" which has culminated with about $1 billion per day being pulled from the bank.

As a result of the modern version of this "bank run", where it's not depositors but counterparties that are pulling their liquid exposure from DB on fears another Lehman-style lock up could freeze their funds indefinitely, Deutsche Bank is considering how to transfer some €150 billion ($168 billion) of balances held in it prime-brokerage unit - along with technology and potentially hundreds of staff - to French banking giant BNP Paribas.

And now this from last Tuesday, November 5th, 2019 - Zero Hedge again:

The Deutsche Bank Death Watch Has Taken A Very Interesting Turn
Authored by Michael Snyder via The Economic Collapse blog,
The biggest bank in Europe is in the process of imploding, and there are persistent rumors that the final collapse could happen sooner rather than later.  Those that follow my work on a regular basis already know that this is a story that I have been following for years.  Deutsche Bank is rapidly bleeding cash, they have been laying off thousands of workers, and the vultures have been circling as company executives desperately try to implement a turnaround plan.  Unfortunately for Deutsche Bank, it may already be too late.  And if Deutsche Bank goes down, it will be even more catastrophic for the global financial system than the collapse of Lehman Brothers was in 2008.  Germany is the glue that is holding the EU together, and so if the bank that is right at the heart of Germany’s financial system collapses, the dominoes will likely start falling very rapidly.

Much more at the site - things are so bad that they cancelled the Christmas party for their retired executives

This bodes poorly for Europe - I hope that England can Brexit before it all comes crashing down around their ears.

Must be nice - California pensions

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From The Washington Free Beacon:

Calif. Taxpayers on Hook for Six-Figure Government Pensions
Nearly 80,000 Californians collected six-figure taxpayer-funded pensions in 2018, as retirement costs leave half the state's cities at "high risk" of serious financial distress, according to an analysis.

Transparent California, a free-market think tank, found that 6 percent of retired government workers collected more than $100,000 in 2018, an 85 percent jump since 2013. Those payouts represented 20 percent of the $51.7 billion in total pension payments. Taxpayers spent a record-high $40 billion to cover the costs of public sector retirees in 2018, the report also found.

The median household income in California is $75,277. The six-figure payouts propel thousands of retirees into the top 38 percent of all earners in the state, according to census data. About 1.2 million people received pension checks in 2018, including a retired deputy police chief who collected nearly $1.5 million in 2018.

The California state government promissed these pensions so they are obligated to pay them. The problem is that they kicked the can down the road - they promissed this money without having the means to pay for it. They are unable to maintain their infrastructure and now they come crying to the rest of us American's hoping that we will bail them out.

I say no - let them learn from their mistakes.

I really wish that we had this chain up here - great food plus super secret hidden messages:

20191105-epstein.jpg

$2.5 billion?

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That's enough for two or three houses in California - from the Los Angeles Times:

Apple pledges $2.5 billion to address California’s affordable housing problem
Apple said it will direct $2.5 billion toward affordable housing in California, the latest tech giant to pledge money to one of the state’s most pressing problems.

The announcement, made Monday, follows similar big pledges this year from Facebook, Google and Microsoft, which put money toward housing in its home base of Seattle. And it comes amid criticism that tech firms had done too little to ease an affordability crunch that their rapid expansion helped worsen.

Yeah - virtue signalling writ large. Making a grand statement - a promise to DO SOMETHING instead of actually, you know, doing something about the problem.

Apple could move to Detroit - lots of cheap housing there.

Taking back the power - PG&E

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Great news - from Nevada County, Calif. station KCRA:

Nevada County water agency considers PG&E power takeback
About 200 people piled into the Nevada Irrigation District headquarters in Grass Valley on Tuesday night to discuss the possibility of the water agency taking control over the local electric grid amid growing frustration with PG&E power shutoffs.

“It’s about local control,” said general manager Remleh Scherzinger. “It’s about taking back the opportunity to decide how we, as a community, want to run our power system.”

Nevada Irrigation District is an independent agency that supplies water to about 85,000 customers in Nevada and Placer counties. Scherzinger said the district is looking into acquiring local PG&E assets after the community called for action.

“We would purchase their assets and their property as necessary to begin the service here in our community,” he said.

Makes perfect sense. PG&E has already amply demonstrated that they are incapable of managing their system efficiently. Time to deregulate.

President Trump leaves New York City

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And he tells us why - from the New York Post:

This is President Trump’s ‘Why I’m leaving New York’ essay
Donald Trump is leaving New York.

President Trump on Thursday night explained his decision to ditch the glitzy world of Midtown skyscrapers and — eventually — flee to his Mar-a-Lago resort at the conclusion of his White House tenure.

The Queens native penned a series of tweets about his departure from Trump Tower after reports said he filed documents to change his primary residence to Palm Beach, Florida.

“I cherish New York, and the people of New York, and always will,” Trump wrote.

“But unfortunately, despite the fact that I pay millions of dollars in city, state and local taxes each year, I have been treated very badly by the political leaders of both the city and state.”

This from New York's Governor:

“Good riddance,” Gov. Andrew Cuomo said after news broke of Trump’s impending exit. “He’s all yours, Florida.”

New York does not realize what a benefit Trump is - he turned the city around in the 1970's. It will be interesting to see the downward slide when he leaves. Nothing sudden but still, inexorable. Those Amazon jobs would have been nice - decent tax base too. Thanks AOC.

Management gives little thought to mentoring but in a large organization, mentoring is one of the most valuable things.

#1) - There are things specific to any large organization that take years to learn and
#2) - someone coming in at the entry level will take years to get into a major position (Silverback) so
#3) - it behooves that today's Silverbacks mentor promising FNGies so that when the Silverback is ready to retire,
#4) - they will have a replacement Silverback waiting to take over.

Mentoring smooths the transition of power and guarantees that the organization will function at some measure of efficiency through the decades. This mentoring is something that the top brass understands as they went through the same process themselves until they were tapped for the higher management positions whereupon, they went through a second mentoring period.

Mentoring costs money but the return on the investment is invaluable. It guarantees a consistency to the function of the corporation. Its heartbeat never falters.

Cost-cutting management looks at the H-1B visa program as a win/win - they get highly qualified employees for much cheaper than the home-grown ones. Unfortunately, these new people do not have the benefit of years of learning the corporate culture and it shows. Look at Boeing. Look at PG&E. Look at General Electric. Some of the tech giants are feeling this pain as well...

Whoops - business as usual for Boeing

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But not turning out good at all. From The Seattle Times:

Before deadly crashes, Boeing pushed for law that undercut oversight
With a few short paragraphs tucked into 463 pages of legislation last year, Boeing scored one of its biggest lobbying wins: a law that undercuts the government’s role in approving the design of new airplanes.

For years, the government had been handing over more responsibility to manufacturers as a way to reduce bureaucracy. But those paragraphs cemented the industry’s power, allowing manufacturers to challenge regulators over safety disputes and making it difficult for the government to usurp companies’ authority.

Although the law applies broadly to the industry, Boeing, the nation’s dominant aerospace manufacturer, is the biggest beneficiary. An examination by The New York Times, based on interviews with more than 50 regulators, industry executives, congressional staff members and lobbyists, as well as drafts of the bill and federal documents, found that Boeing and its allies helped craft the legislation to their liking, shaping the language of the law and overcoming criticism from regulators.

In a stark warning as the bill was being written, the Federal Aviation Administration said that it would “not be in the best interest of safety.”

Government oversight can be a very good thing at times and this is one perfect example. The people employed by the Federal Aviation Industry applied for work there because they love airplanes and flying. These are the people you want taking a second look at any new design.

Boeing needs to reorganize itself sooner rather than later - the corporate culture has become toxic. This is what they get for hiring "qualified" engineers from other nations under the H-1B visa program. Much cheaper labor costs but the ineffectual middle management suck-ups do not see the degradation in quality and skill until it is too late.

ineffectual middle management suck-ups? A Seattle punch-line.

Cutting off your nose

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To spite your face. From One America News Network:

San Francisco Blacklists States With Pro-Life Laws
San Francisco is bringing its pro-choice agenda to the national level. The city’s mayor announced a measure last week, which will blacklist 22 states that are considered to have restrictive abortion laws. All those listed have similar time restraints for terminating a pregnancy, ranging from a 13 week to a 24 week cut off.

Mayor London Breed defended the measure by saying, “every day in this country women’s reproductive rights are threatened and we have to fight back.”

Under the law, all San Francisco city workers will be prohibited from taking work-related trips or doing business with companies in those states. However, critics argue the city does not provide those states with enough tax revenue to encourage any real policy changes.

And of course, residents of those states will most likely find reasons to not visit California. Conferences, tourism, shopping. The unintended consequences should be interesting.

Looking at the Boeing 737 problems

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An interesting analysis of the Boeing corporate culture and it's downfall. From David Perell:

WHY DID THE BOEING 737 MAX CRASH?
Airplane crashes capture an outsized share of attention. Even though they represent a small fraction of transportation-related crashes, their rarity and drama hold a steel grip on our hearts and minds. But what if we could understand the systemic issues that cause certain airplane crashes?

And David gets into the problem:

Why did the 737 Max crash? Because of a software failure.

Why did the software fail? Because Boeing’s executive team has lowered its engineering standards.

Why did Boeing lower its engineering standards? To lower costs and increase efficiency — the goal was to save money.

Why does Boeing save money at the expense of human lives? Because Boeing purchased McDonnell-Douglas in 1997 and absorbed its ultra-corporate culture with relatively low engineering standards. Since the acquisition, the company hasn’t innovated as fast as it once did. In lieu of actual innovation, the company cut corners to maintain growth rates.

Why did Boeing buy McDonnell-Douglas? Because the airplane manufacturing industry is consolidating, and Boeing is pursuing profit at the expense of human lives.

The actual story of the 737 Max crash begins with that McDonnell-Douglas purchase in 1997, 21 years before the first accident in late 2018. Unfortunately, media coverage of the crash mostly ignores Boeing’s corporate history.

This is more than a story about two airplane crashes. It’s a story about an iconic American giant that lost its way because of mergers, risk-aversion, and excessive outsourcing.

Fasten your seat belts, put your seat in the upright position, and prepare for takeoff.

A long but fascinating analysis - really interesting and Boeing is going to have to re-invent itself if it expects to survive.

Boeing knew - 737Max

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Two years before the two crashes - from The New York Times:

Boeing Pilot Complained of ‘Egregious’ Issue With 737 Max in 2016
A Boeing pilot working on the 737 Max said in messages from 2016 that a new automated system was making the plane difficult to control in flight simulators, more than two years before it was grounded following two deadly crashes.

The existence of the messages strike at a central part of Boeing’s defense over how the plane was certified to fly. For months, the company has maintained that the Max was certified in accordance with all appropriate regulations, suggesting that there was no indication that MCAS was unsafe.

Ouch!

This warm fuzzy tongue-bath from The Hollywood Reporter:

Inside the Modern Design of WarnerMedia's New NYC Headquarters With Jeff Zucker
Spread across 25 floors and 1.4  million square feet at Hudson Yards, CNN, HBO and the whole conglomerate are together at last. Says Zucker: "Our new home gives a nod to our history and future."

Well before AT&T cemented its acquisition of Time Warner in June 2018 to form WarnerMedia, the decision to combine all divisions under a single roof already had been made. The strategy to execute a decidedly egalitarian approach soon followed. "This was a very different process than most companies use, where a small cadre of people make decisions behind closed doors," says Thomas Santiago, senior vp global real estate at WarnerMedia. "What we did was consensus-driven and we cast a wide net," he says of the midtown design lab set up to allow staffers to provide feedback on every element of furniture and design in the new offices that landed at New York's mini-city Hudson Yards. "We paraded hundreds of employees through to see and touch and cycled through different finishes, screening-room seating, desks, even ceiling fixtures. We went for the chair that hundreds of employees preferred, not one a guy picked out of a catalog. It proved to be an effective process."

They are clamping their hands over their ears and yelling out: "We Can't Hear You"

I wonder just how long they will enjoy their shiny new offices before they have to sublet like the New York Times.

Unreal - this would be tossed out by any intelligent group of people. From the New York Daily News:

Dental hygienist labeled sexual abuser and stripped of license because he slept with a patient — to whom he is married
The College of Dental Hygienists of Ontario stripped a hygienist of his license and labeled him a sex offender because he had a sexual relationship with a client. It didn’t matter that the client was his wife.

Alexandru Tanase, of Guelph, confessed to cleaning the teeth of Sandi Mullins when on several occasions between April 2015 and August 2016, according to the Canada’s CTV news. They were engaged when the treatments started and are now married.

Despite fighting the case over the past three years, Tanase said he was stripped of his license last month. He was reportedly outed by a tipster who was a social media photo of Mullins flashing her pearly whites following a cleaning by Tanase, who is pictured by her side.

Like I said - unreal...

Roast beef at the legion hall

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Tonight was the roast beef dinner at the American Legion hall. $18 for a big plate of prime rib, vegies and cake.

Sat next to a delightful couple from Australia who were on vacation. They were house (and pet) sitting through the worldwide Trusted Housesitters program. Very clever idea - the house and pet owners as well as the wanna-be sitters each pay $100/year to join the program and then they have a background check. There is an online database that links them up and there is no charge for the visits. Part of the $100 covers insurance for emergency vet care, etc...

The $15 minimum wage

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As expected, it is killing jobs - from the New York Post:

As predicted, the $15 wage is killing jobs all across the city
Just as predicted, the $15 minimum wage is killing vulnerable city small businesses, with the low-margin restaurant industry one of the hardest-hit as it also faces a separate mandatory wage hike for tipped staffers.

In Sunday’s Post, Jennifer Gould Keil reported on the death of Gabriela’s Restaurant and Tequila Bar — closing after 25 years. It struggled all year to find a way out, gradually laying off most non-tipped employees, including some chefs, only to find that quality suffered and customers fled. Owners Liz and Nat Milner finally hung it up.

Other eateries share the pain. In an August survey of its members, the NYC Hospitality Alliance found more than three-quarters have had to cut employee hours, more than a third eliminated jobs last year and half plan to cut staff this year.

“It’s death by a thousand cuts,” the Hospitality Alliance’s Andrew Rigie told The Post, since “there’s only so many times you can increase the price of a burger and a bowl of pasta.”

The unions are the ones pushing this - not only does it kill the small businesses, union saleries are indexed to the minimum wage so an increase means a jump in wages for union employees as well.

Capitalism versus socialism/communism

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Adam Smith always had a way with words:


"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."
--Adam Smith

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