I Want What Boeing Gets...
Subsidized interest rates and loans to customers guaranteed by USA taxpayers...
click and read on....
I want what Bank of America gets...
the right to leverage my investments 30 to one, with risk at taxpayers expense.
I want what General Motors gets...
competitors who agree to voluntary restraints, forcing prices higher at consumers expense.
I want what C&H Sugar gets...
competitors have to pay a 50% duty to bring their products in, forcing prices higher at consumers expense.
I want what Microsoft gets...
a consent decree that outlaws how I got rich, after I got rich, so I'll never face a competitor, denying competition at consumers expense.
I want what drug companies get...
a government enforced monopoly, denying competition at consumers expense.
I want what Halliburton gets...
cost plus multi-billion dollar contracts, denying competition at consumers expense.
I want what Archer Daniels Midlands gets...
export subsidies and a requirement the taxpayers pay 3 times the going freight rate for grain exports, at taxpayers expense.
I want what CBS gets...
rules based on a bogus "natural monopoly" theory, denying competition at consumers expense.
I want what rush Limbaugh gets,
government ads that yield me tens of millions in payola each year...
I want what United Airlines gets...
taxpayers pick up the tab for security and the airport infrastructure, at taxpayers expense.
I want what the NY Times gets...
a Supreme Court ruling named after me that allows me the ability to libel with no fear of lawsuit.
I want what REITs get...
Section 8 housing that allows me to artificially inflate rents and protects me from risk at taxpayers expense.
I want what Ted Turner gets...
government paid content for my media, at taxpayers expense.
I want to have a GSE like Freddie Mac so I know I will always be bailed out.
I want to be wildly successful, like Goldman Sachs CEO Hank Paulson, who is "obliged" to sell his 500 million stake in Goldman Sachs to become Treasury Secretary, but since he was obliged to sell, he had to pay no taxes on his $500 million windfall.
Even with these advantages, these companies fail. No, I will not get any of these goodies. Since I am self-employed, I will merely pay for them.
.
Thursday, October 2, 2008
I Want What Boeing Gets...
I Hoped You Were Right
My architect dropped by today to take pictures of my home. Business has slowed down, so she is taking the time to go back to projects and update her portfolio, something she never had time for during the boom. We had lunch and she astonished me by saying I had predicted this economic bust several years ago, and even specifically mentioned Washington Mutual would go out of business.
I assured her I was relying on better minds for my opinions, but I asked her what she thought when I first said those things, since things were booming at that point.
She said "I hoped you were right."
?!?!?!?!
She explained with all of the lands being torn up to build huge ugly homes and the poor transportation infrastructure planning and the environmental degradation and so on, she hoped it would end sooner than later.
Indeed, that is another downside to these booms, which are fomented by the central bank, requirement #5 in Karl Marx's Communist Manifesto. It is wonderful to see these democrats and republicans scurrying to save an element specifically recommended by Karl Marx. They are bailing out a system, not the system. When they do, we will have a bit more of what my architect dreads, and then the bust will be all the worse.
Hybrid Car Bailout
While everyone is watching the bankers get bailed out, quietly on the side failed USA automakers are being bailed out, to the tune of $25 billion. We are told this is for hybrid cars. If this launches sales for 1 million cars, the subsidy will amount to $25,000 per car. Money directed to people who have failed so far. Honda, Toyota and other USA auto makers promised not to apply for any of the money. Because they do not need it (but of course because they are productive taxpayers, they will end up iin part paying for the subsidy.) The entire thing is madness.
And it seems those who buy a hybrid car are not a happy crew.
In a free market we'd likely have cheap clean mag lev transportation.
Vote third party. Any third party.
And Another Thing...
Who writes those headlines at the financial websites like CBSMarketwatch, Yahoo Finance and CNN? Here is Reuters Wednesday a couple of hours between these two headlines regarding the Nikkei, the Japanese stock market, as reported on yahoo news:
Stocks gain on optimism about bailout vote
Nikkei down as economic worry outweighs bailout vote
Now the foolishness here is the conceit that someone knows the reason why markets move one way or the other. The man behind this curtain is some sleepy Reuters editor who has to come up with headlines every few minutes, and his only job is to mask the fact that the market is tens of millions of people acting with reasons unique to each, and they make make a market. The editors job is to make you think the market is a single entity which can be known, measured, and controlled. There is only one possible headline that would be credible at any time when it comes to the stock market:
Whiskey Tango Foxtrot! Here We Go Again!
As we can see in these days, all the kings horses and all the kings men cannot put this Humpty Dumpty back together again (and next it is the insurers who need to be bailed out.) The market is countless individuals, and a regime based on the premise that the market is a coherent entity that can be measured and controlled is untenable and will fail. Has failed.
During the Vietnam War there was a young sportswriter in Alaska who drew the graveyard shift monitoring the newswires when a story rattled over the telex regarding something like 3 US soldiers being killed in a fight that saw some 21 Viet Cong killed. The lad changed the headline to "USA at Quang Binh - US 21, VC 3" and relayed it off to the rest of the newsrooms in USA. Of course he was fired, but it was sheer poetry, and the kind of art you would get if the press was not government-controlled in the USA.
The news is a field that is wide open for innovation. The proof is that a gift shop clerk became the # 1 headline writer in USA, Matt Drudge, within the relative freedom of the internet.
Buffett Repeats Trope
Here he goes again, this time on Charlie Rose, calling a crisis for a certain regime "an economic pearl harbor." Of course Charlie Rose, who owes his job to government monopoly would not asked "who launched a sneak attack on us?" Charlie Rose has his job because he would never ask such a question.
We are also being told the banks suffer from "toxic investments" as though they have been poisoned from the outside, as though they are victims.
They have changed calling theft from bailout to rescue, because everyone wants to do a rescue.
I was wondering who would be the Bernard Baruch of this era, and it is Warren Buffett. Baruch was the Buffett of his time for his sagacity, and he also talked up the market as countless people followed his advice into financial ruin in the depression. Baruch got richer doing the opposite of his advice to everyone else. Say it ain't so, Warren!
Wednesday, October 1, 2008
When Your Child Is Ill...
And there is no cure, remember today the senate passed the billionaire bailout bill and the money was directed away from the free markets and into the hands of billionaires, to save their system. The effort will fail, the money will be gone, and you will have less than you need. Also, the SEC extended the ban on shortselling, or the ban on protecting your money from theft by billionaires. My positions are grandfathered in, but the government says it is too late for you.
Of course they can get away with it, because the vast majority will vote for Obama or McCain, and as Obama kept saying to McCain in their "debate" ... "We are saying the same thing." Exactly. Obama would not be up there if he said anything else.
It is not going to be any fun living with people becoming progressively poorer.
Wrong!
This governor gets it exactly wrong... any small business having trouble with credit is poorly run, and needs to fail, not get bailed out. The damage was done during the boom, now it is a question of who pays... Quote:
Alabama Gov. Bob Riley, a Republican and former member of Congress, said he would have voted for it.
"Congress exists for one reason and one reason only, and that's to help us," Riley said in Montgomery. "That's why anybody should be in public service, to help the people out there that are paying the bills every day, who are getting up and going to work every day."
Riley said there is pain the housing market and small businesses don't have enough access to credit.
"When you hear of businesses now that are closing daily, then I think everybody recognizes that something has got to change and change relatively quickly," he said.
What Is Different
I was speaking to a school administrator recently who wanted to know what was different about my course and book. She replied, "oh everyone says that."
Very true!
So what is different? AS far as I can tell, what I learned from the people I worked for is how integrated the customer is from the very beginning, integral to the process of confirming the premise of your business (the value you provide) while the idea is still in your head, integral in the development of the product, integral into its source and the distribution, and everything that follows.
And it is not a arms-length integration, it is repeat visits to the very customers you propose to have someday.
Our schools tend to mislead people in the process. they say "customer" and then send people off in the wrong direction. Know your customer, but learn from reports and books. It does not work.
The artist and the scientist are two distinct types that face challenges when integrating the customer. The artist believes he has an innate understanding of what the customer will buy. No. The scientist believes he can study the facts and develop what the customer will buy. No. Both swear the customer is integrated, but it is not true. The only way you find out what the customer thinks is ask the customer.
It is sort of Zen, but a business is all customer, zero you. The more you realize this, the more you integrate the customer, and the more you succeed. Paradoxical.
Slow Motion Crack Up
In a storm you still have sails out, just different sails.
Anyone who took on more credit that they can now handle is in trouble.
There is nothing the government can do to solve the problem. The damage was done during the boom. Now the question is who will foot the bill? The government can only decide who suffers: the people who caused the problem, or the people who had nothing to do with it. Further, any action whatsoever they take will only make matters worse, later.
It is guaranteed those who had nothing to do with it will be obliged to pay for those who had noting to do with it.
None of this was unpredictable, since I am in business, I know there are plenty of people who spotted this. I am shorting all of the averages now, have been since those who know said so, last October, and of course I am making money. I am not at all smart. But being in business for yourself allows you to hear and see things others don’t. Since you are on your own, you are free. Your perspective is better from which to observe, and the advice of those around you is better.
If you work for a huge company, they tell you all is well the night before you are wiped out.
This does not mean that all is lost. You can certainly thrive in this system.
First,you must be self-employed. Look to work in which you get your daily bread, money transactions. Watch out for anyone who has debts greater than they can handle. They will believe the government will help them, but there are no actions a government can do to help anyone. Trust no one in debt. There are too many people who are thriving to waste time with people going under. If you wish to make donations, do so, but don’t let fools take you down.
Top doctors and dentists are giving huge discounts for cash payment. Time to rethink insurance.
Being self-employed will be the best credit possible. No matter what you need, space, equipment, people, deals can be cut now where you pay no one until they have made you money. I am expanding into this terrible economy on precisely this basis.
America needs you to do well for us to lead everyone out of this mess, so be glad if you have money, access, privilege while others face foreclosure. (In fact, no one should face foreclosure... if you cannot pay, the banks will cut a deal. I know specific instances where people CAN pay and are forcing the banks to make concessions.)
These eras come and go. I’ve seen lighter versions, and I think this will be heavier than anything before. But there is no reason why you personally cannot do well. Just know that like in Hurricane Katrina, you are on your own. Serve others, and you will do well.
Warehousing & Logistics
On Sep 30, 2008, at 6:55 AM, Dave wrote:
Hey John,
Thanks for the quick response. Let me fill in some of the blanks.
In order to produce a 4-piece ceramic dinnerware set this was just about the smallest run we could do in Asia. The CBM number is a little misleading as it was closer to 7 CBM but we switched the packaging to have 4 pieces per box vs. 6 pieces per box to correspond to our minimum orders thus the volume increased by 50%. I am very much in agreement with you on keeping the orders at the factory minimum.
This brings us to your golden rule, having orders before you produce. I think your book lays out a great, very low risk system. We have taken an admittedly riskier approach. The main reason we made this decision is that in speaking to retailers and sales reps we determined that we would have a very hard time selling a product that could not be delivered for at least 3 months.
***A hard time, not too hard. And if too hard, the answer would be redesign the product so enough people would wait the time amount required.***
To reduce this risk we got feedback from multiple retailers and reps and did a survey of over 200 consumers to determine whether their would be a market for our product.
***I like what Drucker says about "entrepreneurs eliminate risk." To survive you eliminate it earlier or later. The problem is the later to work on risk the harder it is to eliminate. Although the discussion with reps and consumers and surveys is not bad, it does not equal the mitigation of risk that orders in hand would be. Not trying to scare you, just want to get to hard reality.***
So I can concentrate fully on selling I would like to set up a warehousing fulfillment system as you describe in the book with your warehouse in Sparks.
***If you had orders already, then you would not be concentrating on selling, you'd be concentrating on developing what is next, where you should be. I am not sure you should set up fulfillment yet, and I'll explain why below...***
Our margins are such that we can afford to cover the warehouse and fulfillment charges when looked at by the piece, but I am not positive that will add up to the minimum monthly charges the warehouses are asking for, as until we begin selling I am not positive what our monthly sales will be.
***Very good.***
We had someone in place with no minimums, but I recently got an email saying they were full. This brings me back to the question of where/how to find a pick and pack warehouse for a new business. I will take a look at where competitors are shipping from and see what I can find out. Any additional advice is appreciated.
***The inevitable is the ideal. I know much more than I say, simply because people tell me it is overwhelming what I do say. When the "right plan" is followed, I don't have to say much more anyway, because it works. This situation may allow me to say more...
I've seen this economy before, and there is trouble ahead. Had you orders already, then things would be simpler. But here is what you will face: good retailers will tell you they have no open to buy. As you get turned down, keep a record of them, since they will be your best customers. bad retailers will order from you, and terrible retailers will order lot. Neither will pay you in the end. The good smart customers will honor the orders they have placed, will work thru these times, and be the customers standing afterwards. The ones who say no are the ones you want.
Anyone who is still buying given the economy the last few weeks is foolish or criminal. The smart ones will wait and see. Meet them, but be prepared to be turned down...
The ones who turned you down, visit them once every 2 weeks or so, to see if they need a fill in order (which you have in your trunk) Be positive, and very brief... mention who is selling your wares. offer a small $250 assortments... NEVER suggest or accept "consignment sales" or in any way guarantee sales. Your terms are the same as everyone else... the only thing different is you will deliver quick and easy.
A retailers dream is product that can be bought low minimum and quickly resupplied... they will likely give you prime space. This of course means you will running around like crazy, but you won't have the pick and pack expense.
I think a pick and pack operation now will mean no quick response. Well, it was about time you cleaned out the garage anyway, wasn't it? If no garage, a mini-warehouse...
Or , this is something I might do. Mall owners are in trouble. I was in SF last week in Westfield Center on Market Street, probably one of the heaviest trafficked malls in USA. Nordstrom, godiva all the top retailers. "Available for short term lease" said a prime 1000 space. They know they will not lease it to a long term renter before Christmas, and they don't want it empty. They are looking for someone to come in for three months.
Your deal is ceramics that cost you 4 retail for 20 and you split the net 50/50. You set up 8 nice place settings showing your ceramics are good as casual to formal, then stack them high and watch them fly. Otherwise do not put a dime into presentation. Have gift wrapping for a nominal fee, and bring in subcontractor "save the whales" charity crew to handle that. Offer assortments at the 19.95, 24.95, 29.95, 49.95, 99,95, and 199.95 price points.
You'll need credit card capability, and if you don't have it yet, you are not likely to get it now. Work this to your advantage. Tell the mall managers you'll use their cash registers and credit card capability and they can handle the receivables, paying you weekly.
At the same time you can try to unload on other retailers too, but this way you will have your goods in front of paying customers. Start at the top end malls and move down to the best that will cut the deal.
Just an idea...
John
Melamine in Food
Good informed discussion on food and imports over at chowhound...
A couple of Fundamentals:
!. China has been trading worldwide for a very long time, but the Communist revolution suppressed and dispersed its business class. The people doing ill are newbies or the unscrupulous, who in time will be weeded out.
2. Chinese as businesspeople operate around the world delivering product to specification, on time at a fair price. That is how they are getting rich. Yes, there are unscrupulous people in China, just like anywhere. The question is how do you operate in such a world?
3. Back in the 1960’s “Made In Japan” was a warning label. Coming out of WWII, the Japanese economy was a wild west show, like China today. China is specifically emulating USA and Japan in their march into the modern economy. There is nothing coming out of China that we have not seen come out of USA suppliers onto the USA market. To identify it as a “China” problem is a mistake.
4. There is a sleight of hand: since we have government inspectors and regulators, products must be safe. Consumers are confident they may consume what is on the shelves. Some retailers are confident as well. When you buy the product you are trusting the retailer, who is trusting the governmnet. The unscrupulous maker can combne with the unscrupulous importer, and bring the bad stuff in.
Enough people know this to know their products, and avoid the unscrupulous. Those in the know will survive. Those who shop on price only and trust the government risk seeing their puppies and infants die.
Enough people know this to know they cn import enough bad stuff to make a killing and move on with a few hundred thousand profit never to be caught. The trick is not to be “anti-Chinese” or more regulations or more government, the trick is to get back to caveat emptor, you are on you own, so be careful. It is true anyway, but when you know it, you hold your retailer more closely accoountable. They in turn hold the importer more accountable, and so on. It is the natural regulation.
As for those looking for revenge, don’t worry. The people the Chinese have arrested will be shot. The Chinese are in a hurry to get where USA is, and this might be just the shortcut.
Monday, September 29, 2008
Anthony Gets It Exactly Right
This is just novice speculation, but I think now is probably the BEST time to start a business.
You'll be jumping in at a low point.
Retailers will be more desperate than usual for "what's new".
Manufacturers will be anxious to use excess capacity to produce your product.
As the economy improves and starts to grow again, you'll be in a position to grow along to glory and riches.
Just thoughts...
Anthony
And real estate is very cheap... I have one owner offering me free office space if I will rent out the rest to others, plus I can have anything in rents above his expenses for my trouble... you have customers, you are king.
John
Bailout Anyway
Like the war in Iraq, congress will vote to cover themselves, and the President will do whatever he pleases anyway. They want 700 billion, and the Fed forked over 350 billion today anyway, no vote needed.
Remember, since it is an emergency for Wall Street, it must be for us, and so the president can do as he pleases in an emergency.
Resistance is futile? Not at all... foreignoers will be less likely to wish to dominate us if by our resistance to congress we show we are indomitable.
Connie Fears the Worst
Here is the beginning of my post, delete this sentence.
On Sep 29, 2008, at 10:18 AM, Constanza wrote:
FROM: kids clothes start up.
Hello John:
tks for your very informative e-mail.
In view of these uncertain times we have, would you suggest maybe to hold of on
starting a business? I am getting scared with all these situations and the whole mess that
will spiral the bail out.
I am getting my samples made as we speak in Hong Kong,
I am starting on the conservative side and from home.
please keep you e-mails flowing, I love you e-group.
thank you
constanza (connie)
Hey Connie,
The best time to start a business is when you have customers. You are doing what you love, and you get samples. From the samples you get enough orders to cover the suppliers minimum requirement in a workable amount of time profitably. When you do that, you do it again. After 30 years, you've had a career and you are rich. Regardless of the economic conditions at any given time, you are providing a value so you make money.
The damage was done during the boom, what debt people took on when it was apparently cheap and truly easy. Now those businesses are failing and falling apart. Any spiralling out of control will just get the bad stuff, which should be fine. Good stuff will get protected by the free market. In medicine Maggots are nasty beasts, but in medicine they only eat rotten flesh. The crisis may look nasty, but it will only get to the bad. The key predictor is debt, how much did they take on during the boom? Can they eat it? In my book (which you can read for free on google books) I explain how to check credit so you do not get stuck with slow or non-payment. There are enough good customers out there now to float your business. Those customers will survive this, and anything else. There is a strong vibrant responsible swath of business and industry in USA that is doing just fine. Anyone hurting now was exercising the untenable Hamiltonian ethic. The government may try to make the Hamiltonians winners, but it would just mean much worse later. (we are here today because of the mexican bailout of 82, the S&L bailout in the 88's, the LTCM in 97, the dot.com scam, the housing bailout, and so on. ) The Tuskegee Experiments kept getting bailed out, but finally had to end after some 45 years.
Your business can do just fine. The very fact you are in business is part of the solution. The govt rules are "get big or get out." By the time WAMU folded last week, it had acquired dozens of smaller banks over the years, so when wamu ended, all of those did too. America is free because of countless small businesses.
First rate customers, and first rate suppliers. Enough orders to cover suppliers minimum... repeat as necessary. That never changes, and therein lies your security.
Be not afraid. There are too many of us who know what we are doing for you to be afraid.
John
Goods Are Arriving, Now What?
Hi John,
I find your book is more and more helpful as I move forward in this process. Thank you.
One aspect I am having trouble with is finding a pick and pack warehouse. I have googled and called a number of companies and am having a hard time finding someone to take me on without $500-$1000 monthly minimum warehouse fees.
Our product is ceramic tableware and our initial order for the warehouse is about 11 CBM. We are shipping into Long Beach.
Any ideas?
Best,
Dave Harding
dave@inkdish.com
Click thru for answer...
Hey Dave,
The short answer is what do your competitors do? Do you have their catalogs so you can read their terms and conditions of sales (or review their websites?) the best approach is to copy them in terms and conditions. If they tend to say FOB Long Beach, then you are FOB Long Beach. If they say FOB Sparks, then you are FOB Sparks.
Many small businesses will start in their garage. 11 CBM is quite a bit as a starting minimum (I like the smallest minimums, and then do mini-deals over and over, avoiding volume deals. Safer and affordable.) 11 CBM will fill a wall in your garage.
I like Sparks Nevada, where you will find warehouses far more flexible, but you'd have to ship the goods 500 miles now.
So I see a bit of a problem, this should have been worked out by now (and could of, but I show how to do it perfectly, but life is more interesting than perfect.) None of this is fatal, just start studying how you will do it next time.
If you do not have a garage, rent one of those miniwarehouse places, 11 cbm will cost maybe 100/month and do it there...
Also, do yu have orders for all of this (I hope so...) wouldn't it all just be shipped out in a month or two? So $500 to $1000 and you never touch it? Are your margins sufficient to cover these costs?
Tell me more...
JOhn
.
Michael has a Bailout Plan Ready
Hi John
Not sure that anyone cares about my ideas to fix the economy ... but, I'll tell you anyway.
Give people something for their $700 Billion - sell them deeply discounted savings bonds ....$1,000 bond for $100, 20 year maturity. Payback becomes part of the budget.
FDIC ups the insurance on savings accounts to $1Million - Treasury subsidizes the interest rate to depositors to 10%. Forces banks to only issue to mortgages with 20% down and proof of income ... who wouldn't put money in a "safe" bank paying 10%?
What do you think?
Michael
Michael,
I think your ideas are at least as good as the best ideas coming out of Washington and New York. (click for more)
Michael,
I think your ideas are at least as good as the best ideas coming out of
Washington and New York. I think the bailout plan will include false promises to benefit USA
citizens.
My objection to the plan is first, why believe there is a crisis for us?
Yes, there is a crisis for some, those who lied, stole, broke the rules, or
foolishly invested in "something-for-nothing plans." Any bailout will save those whose actions
were foolish. What is at risk here is Hamiltonian ascendency, which if allowed to
fail, will yield to jeffersonian sanity. if this goes away, peace and freedom will come back.
They tell you it is a mortgage mess. that is a small part, but by focussing on
mortgages, the average american is drawn in. The damage was done during the boom when
stadiums were built, TSA was set up, countries were invaded. All financed by bonds,
which we cannot pay for, because we do not have the productive base to generate the
income any
longer. The "other stuff" is more than 90% of the ten trillion dollar waste we
are facing. the
mortgage mess is only 10 % of this.
Bankruptcy is the key. if there is a bailout, impressionable newbies in
business will do more of the same. people who are lax and tend to thievery will tend toward
banking business and wall street. if there are bankruptcies, they will not. It is a
matter of cultural capital.
As it stands now, since our masters are selling out to foreignors, the benefits
of our innovation and creativity will go to foreignors who are holding our notes. As
people learn they work and foreigners earn, they will tend to produce less. A downward
spiral sets in. Your kid gets sick, but foreignors get cured. the reason congress is willing to
do this is because no matter what their sensual appetities, to pay off the foreignors and
burn usa citizens, they will remain in office and never lose the access to the limosines,
private jets, caviar and big buttons on their lapels.
By saying "toxic" balance sheets, the banks are victims, not perpetrators. By
saying "mortgage mess" it is your problem not theirs. by paying off the foreignors,
the powers that be keep their hamiltonian positions. If we revert to jeffersonian America,
true america, these clowns will lose their jobs.
Do nothing and the mortgage mess will sort itself out. Here is the reality; the
foreclosure crisis is far larger than is generally known... those loans are so convoluted
they cannot be litigated. Most loans are packaged up and sliced and diced into tranches, and
then sold off... the right to collect the fees on late payments was packaged and sold off
on some tranches... to foreclose on such a property, the person with the "late-fee"
rights is a party to the transaction. A lawsuit nightmare. Plenty of foreclosures are happening,
but there are far more than that practically cannot be foreclosed on. there is simply not
enough capacity in our courts to process all of this mess. Think of the hundreds of
thousands of people involved in writing up all of this paper when all parties were willing,
then think of the court infrastructure to sort out a Foreclosure when all parties are
fighting. It would take million of judges hundreds of years. It will never happen. By allowing the
system to break down, a sane one would emerge. All of the parties would be settling
quickly for pennies oon the dollar than get nothing, ever. We who played right would not be
taxed by those who speculated. Losers would not be rewarded.
"Innocent" homeowners facing foreclosure would have far more leverage if there
is no bailout, than if there is.
Couple of side notes, regarding what foreclosures there will be. Almost nobody
has a mortgage. They have deed of trust. A mortgage has a law behind it where
foreclosure is difficult, a deed of trust can be fast-tracked to throw a person out of his
home. A mortgage carries a homestead payoff which a person gets when he is obliged to
leave, not so a deed of trust. Active duty military cannot be foreclosed on. The new
draft rules are for men and women, up to 29 years old and all people with any medical training.
See a moral hazard here? Attack Iran, start to lose, start a draft, delay the
mortgage reckoning. Doubt Obama would do this? Doubt Mccain would do this? Only war presidents get
to be considered great presidents.
All booms are about malinvestment and misallocation born of central bank
monetary policy failures. Seattle has three 70,000 plus seat stadiums paid for by bonds.
We cannot. Most wars are about destroying excess capacity generated by bad policy and then
starting over.
Michael, the fatal flaw in your plan is it is a government solution. Not
sufficient, not necessary. Your guaranteed 10% is too little when inflation is running 300%.
More policy to abuse will not work. the closer we get to a natural law solution the better.
The cultural capital we would gain from letter the criminals and delusional fail, and let the
sane and competent succeed, the better.
A side note on shorting the market. The government has outlawed you protecting
yourself from their policies by outlawing shorting stocks. this rule is now in place.
Since October 07 I have been double-shorting the dow, nasdaq, russel 1000, and S&P. It has
been a very good move. these are funds so there is never a margin call. I am willing to
risk double the losses for double the earnings. It was a safe bet since the govt solutions
were stupid and guaranteed to fail.
(An early and forgotten bailout was a few months ago when some mere 20 billion
was put up to buy a certain kind of "toxic" paper from banks. Paper with these specific
conditions proved time-consuming for the banks to locate and pull out to offer in exchange
under the plan. While the banks were busy locating this paper in their inventory,
market makers went out and wrote up brand new toxic paper that met the conditions. the brand
new stuff was traded for good money. by the time the banks showed up with the old
bad stuff, the money was already gone).
I thought when they were going to outlaw shorting, they would require I unwind
my present short position, at a considerable loss to me. They did not. i still
hold my short positions. Now, with no short selling allowed, we cannot know the real prices
of stocks. Liquidity will now be truly compromised. There is not net under stocks and
bonds. When it crashes the fall will be spectacular. I will benefit, and you cannot. the
bailout may very well put me into a new category of rich. One I have not seen before, nor sought.
Nonetheless, I do not want a bailout, even though I will clean up personally. A
bailout will do so much harm to so many for so long, money cannot compensate. There will not
be enough money to buy the things that will not come forth because our economy and
our people are so compromised in their ability to innovate and produce. I'd rather
be scrambling to limit my losses scrambling to unwind my short positions than see
what will come when my bets pay off big time, and bigger the more the bailout.
(My other hedge is gold. The strangest thing is happening. the price dips a
bit, stays fairly flat, but there is big shortage of coins Then why is the price not
rising to meet demand? Because if no coins exchange, then there is no price set. no exchange,
no price change. people holding gold right now will not sell at these prices, there fore
no change In price, nor availability. Ominous.
why not call it the price?>)
We are truly on our own. Certainly no viable politician, not business, not
academia, not religion, not medicine or labor is opposing this. We can hope for Deus ex
machina. God help us.
Plans and rules and regulations got us here. Human action can get us out. A
free market will sort itself out. No one in a place of "responsibility" is considering that
option. Plenty are calling for a free market solution, and countless americans sense it and are resisting this
bailout. What will happen, who knows?
John
)
Serena Checks in On Texagami
George Bush was born in Connecticut and went to school at Groton and Yale. Here are what real Texans are like.
Duncan Checks in On Strategy
On Sep 26, 2008, at 9:01 AM, Duncan wrote:
Hi John,
In relation to a product I'm about to start working on I remembered your anecdote in the videos about the cordless phone and how it went straight to commodity. The fact that everyone wanted a cordless phone was the reason (although I'm not arrogant enough to believe everyone will want my product, heh). My idea is an improvement to napkins. But I'm concerned that with such a commoditized product and so many companies set up to produce big volumes at low prices, and being a product that anyone uses, that it would easily be copied. And therefore there would be few reorders. What's your view on this? And also, do you think that such a low priced product is suited to small business? I know you say let the customers decide but I couldn't see being able to charge more than triple the price of normal napkins. That means I'd need to move a high volume in order to make this deal work (workable amount of time, profitably).
In the vein of the woman who came to you with a new idea, I've just read how it's possible to hire mechanical engineers or industrial designers on eLance
Thanks and have a great weekend, Duncs.
Sure, there are plenty of businesses selling low priced items, but the items are high profit...specialty... designer paper clips... but too small for big price competitors to bother with...
Well, here are lunch bags that cost 2 cents a piece and the the profit is 10%, there are lunch bags that are covered in lacquer coating and cost 8 cents a piece and the profit is 70%. You get paid for the value you provide in the market. I would guess that indeed, it would be difficult to earn a living not doing very much, certainly less than you are capable... if you had paper bags as your product, I imagine you'd have to have 2 or 300 other products to have a line and a viable business. It is not uncommon for small businesses to have several, if not hundreds of items...
John