Friday, July 22, 2016

Retail Hours Per Square Foot Open

When we switched from lending money to lending credit, circa 1971, we also morphed from a materialistic society to a consumeristic society.  Where USA was known for over-engineered goods and services, very high quality, we began to create disposable goods and services to match the false economic sense of the masses.  A high-quality car or couch or toaster one kept and passed on to the next generation, vs the items we throw away every couple of years.  People once maybe had one home a lifetime, now most have several.

To sell the more on offer, of lesser quality, therefore disposable, required more square footage at retail.  The first expansion was not in building new stores, but being open more hours.  In my youth, all stores were closed on Sundays. Everything.  So the first expansion came in a change where stores began opening on Sundays.  Womens' liberation provided the divorced moms to staff the Sunday open hours.

Macy's is now cutting back hours, 10-6 in Many stores, fewer hours Sunday.  They are not tearing down buildings, but there are less Square Feet at retail open hours.  Someone oought to be tracking this.

I noted Bank of America branch with hours of 10-6 daily and 10-1 Saturdays.  Here again, before say 1973 banks were open 10-3 Mon- Thu, 10-6 on Friday (to accept paycheck deposits) and closed Ssturday.  Anyone who knocked off early from worked was accused of having "bankers hours."  Banks had to expand to handle all of the credit for a consumeristic society passing through their branches.  As the consumeristic credit society dies, less hours are needed.

There are opportunities here.  Macy's already leases out shoes, books, jewelry, carpets, etc departments.  If you have a good product or range at retail, approach the local store manager about setting up shop in their store.  Drive a hard no-risk-to-you bargain.  Figure they earn 6% of what passes through the till.  Based on your sales, this will often be better than they do.

I am writing in coffee shop now.  It's independent and its hours are 7-3.  That means the whole operation is closed, and available from say 4-midnight.  Test out your new idea without a $250,000 up front store investment.  Use the excess production capacity of retail square footage closed.  Fix your offer, and then later go into your own digs, with a customer base ready to follow you.

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Thursday, July 21, 2016

Will Turkey Invade USA?

No informed USA intel or law enforcement person believe Osama Bib Laden had anything to do with 9-11.  The FBI most wanted poster offering $5 million for his capture did not even mention 9-11.  He was not involved.

Nonetheless, USA demanded he be extradited to USA from Afghanistan after 9-11 to stand torture in our legal system.  The Taliban who had been guests in the White House to discuss oil a year before required legal proof OBL was involved before they would entertain the notion, in spite of the fact there was no extradition treaty between the two nations.

Instead of providing evidence, the USA attacked and invaded Afghanistan, a war crime.

Now, Turkey is demanding USA extradite a similarly situated OBL-type living in USA, maybe involved with he Turkey coup.  In spectacular hypocrisy,   USA requires evidence.
Virtually from the Turkish coup’s onset, Erdogan began demanding that Washington arrests and extradite Gulen back to Turkey. After calling Turkish accusations that the US played any role in the attempted power grab“utterly false and harmful,” fork-tongued John Kerry stated that if Ankara hands its evidence over to US authorities that prove the imam is, in fact, responsible for the coup, then the US government will send Gulen back to face trial, but not until then. But because Gulen has been such an integral influential presence and asset in both America’s foreign policy as well as worldwide propagandizing as a school of terrorism machine, the odds are extremely nil that the exiled leader would ever be forced to return to Turkey to face sure death.
So will Turkey attack and invade USA, following USA precedent?  Probably not, but WWIII, necessary to change the topic from economics to something else, will begin over something just as silly.

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Wednesday, July 20, 2016

Guide Your High Schooler Through College With No Debt

Mish decries an Obama study that claims $1.3 trillion in student loan debt is good for the economy.  Debt at interest always deleterious to an economy, and having millions of people stuck in indentured servitude is not good.  Those millions of unemployed (roofers who went back to school to learn java coding, and java coders who went back to school to learn how to be roofers) or english majors now have unbankruptable debt.  Like Uber drivers who qualify for a car loan only because they are Uber-qualified, these people now live to pay their debt.  This surely is good for AN economy, and THE economy the Hegemon now largely runs, but is outright evil.

First off, if you are above 28, for get about any more formal education.  It will never pay off better than you putting your resources into your own business.  Starbucks prefers a 22 year old college graduate to a 32 year old one.  And so does everyone else.

Perhaps it is condign punishment to be so indentured for having believed the false economy had anything to offer except misery for people.

I was reading Gerard of Siena.  He makes some distinctions I found interesting.  For example the prohibition to not "eat of the fruit of the tree of knowledge of good and evil" is a prohibition for no apparent reason.  The tree is fine in and of itself, the prohibition is to teach people to remain humble and obey the Creator.  An important lesson in life is we cannot have everything we want immediately.

Then there are prohibitions in place because in all places and all times the activity causes harm.  For example, usury, such as student loan debt.  Just do not do it. We can have usury-provisioned instant gratification, but never escape the usury-provisioned perdition.

My last child graduated from college with zero student loan debt.  That makes three.  That makes us fairly unique.  It is not at all difficult, you must simply "think outside the box" and refuse the seemingly easy way.  Each kids story is unique.  Each kid (being girls) was required to acquire domestic arts, so one did sewing, another did cooking, and the last home ec, before they got a BA.  (If I had sons, they'd be like carpenter, plumber, etc.)  You gotta have a fallback skill.  We all fall back.

Next, I insisted on not wasting the bachelors degree, so I forbid any pointless degree like pre-law, business, pre-med, computer science, etc.  What a waste of human life!  My eldest has a comparative religion degree, my middle a Latin degree (Summa Cum Laude) and the youngest, a "humanities" degree, whatever that is.  Who cares, as long as it was not one of those "career-prep" degrees the curriculum of which crowds out any chance of getting an education.  I say "atta girls!"

While their peers languish with debt and unemployment, the eldest is a features editor of a major newspaper in LA, the middle one is on a full-ride phd-program scholarship in Paris at the Sorbonne, and the last one summiting peaks days off while learning the fancy restaurant business nights from the trenches.  Who knows where that will go?  At least she will not be rendered desultory by the hegemon.

Each followed a fairly unique way to accomplish their goals, but some principles.

1.   Never take the student loan.  It causes harm in every instance (and it is not necessary.)

2. While in the 1970s you could work summers and pay for the school year, and the 1980s you could work summers and 12 hours per week part time to pay for the school year, by the 90s you need to take a year off to pay for a year in school.  OK, do that.  BA credits never time out, so take 8 years instead of four, if you have to.  (Also, summer school is cheaper, faster than the other three quarters, so if you are only taking a quarter a year off, maybe take winter quarter off to work in ski resorts, and go to summer school to stay on schedule.)

3. The last two kids were 1/2 done with college before they graduated from high school.  This is not tough.  Neither high school nor college is anywhere near as demanding as they were in the 1970s. A college degree today is on par with a high school diploma circa 1968.  If a kid today studied as much as was required back then, they could easily do this.  These programs are called running start, etc. The classes are usually free for high school kids, but the credits count toward a college degree.  Astronomy 101 in a community college has 24 students.  At a State University it has 300 students.   And in any event, the content of both is the same as the high school astronomy course (if not even the textbook), so double dip!

4. School libraries often have a copy of the course textbook.  Once you are enrolled in a class, check that book out.  if not, go crying to the teacher about being a poor highs chool kids.  he has a desk copy he got for free.  he may loan it to you.  If not, buy a Thai edition of the USA text book, $25 vs $300 for the same book.

5. Don't follow the rules about class loads, etc.    Take a full load of night classes while a full load at high school.  Instead of wasting time during high school hours, do your college class homework.  Questions on college work?  Ask a high school science teacher, or whomever.

6.  Never take any online college credit classes.  They are a complete rip-off, because they are not an education.  They say it costs maybe 1/2 as much, but you get maybe 1/8th the education, in effect you pay 4 times as much. At least 1/2 of what you learn is face to face with peers in the classroom, and the sage on the stage is exponentially more valuable.  And this from me who pioneered online ed back on AOL and got in at 10 cents a share and sold at $13 something during the dotcom boom (and bust.)  At best, online courses are equal to being in a library with a librarian (somethig I value highly, and necessary for a good education, but not sufficient.).  Education means to "lead-out" (presumably into the light) and pixel mediation is not what they meant.

Instruction means to build brick by brick, and to take out the face to face with the cohort and the sage on the stage is woefully limited.

7. Education is chock full of people of good-will who go home every night an weep copiously over the waste fraud abuse endemic in education. They rend their clothes and struggle against substance abuse to ease the pain they experience seeing so much in the way of resources yield a woefully net negative.  When a student comes to them and says, "You know, I don't want to do that, I want to do this..." you might as well have announced the Second Coming.  They will leap for joy at finding a student who has eschewed the three tracks on offer at USA high schools: Indentured servitude, poverty draft or incarceration prep.  Any high schooler can truly write his own ticket in USA.  Your kid learns to see reality, act on it, and also demur when offered instant gratification when it comes with Hegemonic strings attached.

Reject the Hegemon and all his works.  Don't take his "the first pill is free" offer.  Assume the narrative and common knowledge is nonsense.  Every case is unique, and getting a kid out of college with no debt will be unique in every instance.  It ain't the hand you're dealt, it's how you play the cards.  Make sure your high schooler learns the bigger lesson: you are unique, and there is no program that works for you, so you must design your own.  And you need never take that free first pill.

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Monday, July 18, 2016

The Magic of Compound Negative Interest Rates?

Capitalism 101's first lesson is the magic of compound interest rates.  But what about compounding of negative interest rates?  Well, the negative interest rates are on bonds and only zero-coupon and some bond funds offer compound interest.

On the other hand, the growing pool of negative interest rate bonds has crossed ten trillion worldwide...
The $10tn pile of negative-yielding government bonds is a “supernova that will explode one day”, according to Janus Capital’s Bill Gross, underscoring therising nervousness over the previously unthinkable financial phenomenon.
And that is not about to stop.  How might it end?
Even a relatively modest rise in yields could cost investors dearly. Goldman Sachs recently estimated that an unexpected 1 percentage point rise in US Treasury yields would trigger $1tn of losses, exceeding the financial crisis losses from mortgage-backed bonds.
What we badly need is a crash in real estate, in fact we cannot have an economic recovery without it.  The asset inflation in real estate prices is central to the false economy,  and usually commercial has risen higher and falls farther than residential when the crash comes.

With low, and now negative interest rates, land-banking has been common, using hot money to buy real estate and then just leave it idle.  If interest rates go up, it forces those land-bankers to sell, causing prices to fall.  But who knows?

Negative interest rates reflect a bet that other assets, stocks, real estate, gold, etc will crash more than the  2% you'll lose on negative interest rate bonds.  Who knows what will happen, but 2% bonds corresponds to timing and size of the loss anticipated is exponential in say stocks.  $10 trillion means a whole lot of smart money thinks losing 2% for sure is better than 30-50% maybe in stocks.

And note how capitalism cares not a whit what happens to people on pensions whose yields are largely in bonds.

Just rent.  if you have paycheck, pension or property, the next 40 years is ugly.

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Sunday, July 17, 2016

The Hegemon Has Unlimited Time

Expecting a big, devastating, game changing crash is probably a waste of time.  At most there will be ho-hum crashes like 1929 or 2008, in which every gasps but not much really changes.  In the meantime, expect countless efforts to shake down anyone with anything.

Apropos of another post, someone emailed me that the vast majority of CalPERS (California Public Employee Retirement System) payments go out to retirees in other, low tax states.  How long before some policy wonk notices and reckons how much tax income California is losing paying out to retirees not buying in California, registering autos in California, paying property taxes in California…  hmmm?  Eventually expect "to collect California, reside California."  The Romans were eventually reduced to arresting escaping Romans and force them back to work their lands.   The taxes were so high it was not worth it, and Romans were escaping from the hegemon chaos for the anarchy up North.  The less-government, less tax states around California are in that measure more anarchic.

Now on the other side, states note well retirees can be milked for their income stream.
Tennessee has had a formal retiree recruitment program for the last 10 years. “Retire Tennessee” is managed by Director of Tourism Initiatives Ramay Winchester, who works closely with the Jefferson County Chamber of Commerce on their own “Retire Tennessee” program. The retiree recruitment program has an information booth at ideal-LIVING Trade Shows in New Jersey, New York, Illinois, and the greater Washington, D.C. area this year.
Anyone with a pension, a paycheck or property in the next 40 years is a sitting duck.  Why bother.  Position yourself to own the means of production, a small business.

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Saturday, July 16, 2016

Food Waste: Deregulate Food & End Subsidies

15 And the Lord God took the man, and put him into the garden of Eden to dress it and to keep it.
Exodus 2 15
I've been sent a link to food waste in USA, something with which I have been long familiar. Kudos to Suzanne Goldenberg for an exceptionally thorough and balanced article.  The Guardian is a most admirable paper, but there is this odd side note about how the Rockefeller Foundation picks up the tab for the article.  The camel's nose is in the tent. Discombobulating.

Anyway, one note she makes is 50% thrown away means we divert twice as much water, use up twice the land, lay down twice the pesticides etc, use far more energy, need maybe twice the illegal aliens, and so on for pour food in USA.

Produce is highly regulated under PACA and the solution to this is to get rid of PACA and government marketing orders that tell farmers what they can sell.  American food is also highly subsidized.

You want to solve the problem?  Get rid of the subsidies and regulations.  Then you'll see noting wasted as people learn how to make money from produce, not gaming the subsidies and regulations.

By the way, here is a fun international trade scam, a fraud that would be a crime under any circumstances.  You take an order for a straight load of 88s US Extra Fancy Red Delicious at $14 a box, 1000 box load.  You buy a straight load of 88s Utility at $7 and have them shipped to a warehouse on the way to the port.  At the warehouse you pull off the lids marked utility and relid with box tops marked US Extra Fancy.  Reload the container.  And ship to the customer.  Assuming they prepaid, you just scammed them for $7000.  In the reverse, you can relid US Extra Fancy as US Utility, declare the price 1/2 of what the shipment is worth, and avoid 50% of the inbound duty as an importer overseas.

The world can be a wicked place, and that is good to know.

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Friday, July 15, 2016

It Does Not Take Much To Compete On Design: Dr Dre Beats

Here an expert disassembled a pair of Dr. Dre Beats headphones to figure out how they are made and what they cost.    Two non-surprises:

1. The $199 retail headphones cost about $17 to make.

2.  The core offer, better sound, comes from off-the-shelf headphone speakers.

Read the article, several more interesting points, such as the psychology of weight in design.  When he says "COGS" that means cost of goods sold.  He is an engineer, so an error on his part is understandable. I understand COGS to be synonymous with landed cost, that is all costs in to arrive at your warehouse ready to ship to customers.  I think he means 'first cost" when he says COGS.

At any rate, my riff is if they cost $17, and land at $20, and wholesale for $50 - $100, and retail for $200, again, that is competing on design.  But here is the thing, Dr Dre has dozens of designs, all at different price points.  Assuming the same guts, each item needs its own marketing campaign.  Selling a low cost one through Walmart ($109.00) can cost more to promote than the $400 "studio set."  But far fewer $400 studio sets are sold, meaning a big portion of the mark-up goes to marketing.

Whatever the markup from cost to wholesale, each item has costs associated unique to the market of that version.  Whole lotta managing going on too. If anything, these margins strike me a tight.

There will be plenty of people who will try to copy Dr. Dre's success.  It's simple: he has added extra weight to fool people into thinking the quality is superior.  Dr. Dre's success is valid, but not reliable.  Even though everyone can know how he did it, no one else can repeat it.  Such is competing on design.

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Got Integrity?

At a meeting where democrats worry about losing to Trump, Hillary assured the huddled masses
“She said there are other issues. People are unhappy and they don’t trust institutions,” the senator explained.
So.  Some of us lost confidence in the hegemon 50 years ago, some 40, some 30, some 20, some 10, some 5, some recently, but by now certainly a tipping point.  A lack of confidence in the integrity of the  presidency, the judiciary, congress, the military, police, medicine, education, religion, and so on.

And the democrats answer to this lack of confidence is to run Hillary Clinton as president.


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Thursday, July 14, 2016

Why Terror Cannot Be Stopped

Every blog item I post, every phone call I make every email I send, every Skype session I attend is monitored and recorded by USA intelligence agencies.  I am searched every time I board a plane.  You too.

I am zero threat.

The FBI specializes in entrapment, forcing people who would otherwise not commit terror to encourage others to do so.  Sometimes these get out of hand, like the case of the Boston Marathon bombing.

Intel agencies spot crime and watch it to see where it will lead.  Police agencies are supposed to arrest crime when they see it.  The two are at odds.

In USA, the police are paramilitarized, and now work with intel ethics.  So the conflict is now less.

The reason terror cannot be stopped is massive resources are misallocated to monitoring someone who is no threat.  Me and you.  They are wasting resources watching the wrong people.

When there is a terror attack, all of this spy superstructure is awarded more money and power. Qui bono?

Eliminate the spy and intel agencies.  Return cops to police work.  Every successful terror attacker in USA was well know to police beforehand.  They we not allowed to stop them.  Security is simple if you handle it right.

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Internet Delusions Exploded

"3500 digital media firms fighting over 10 cent on the dollar of online marketing growth."

If your income or future is in any way WWW-dependent, escape now.  It is hyper-delusionary.

This is a pretty goods, but potty-mouthed, presentation.

The internet has replaced the messenger boy, DHL, the yellow pages, and to an insignificant degree, the paper catalog of offerings and largely the telex and telephone. Know that and you'll deploy it well. It is a waste of time and money as far as a marketing venue.  Know that and you will not waste money. Go get a real job, start your own company.

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