Self- Incriminating Pension Shortfall

It was way back in 1982 while negotiating the longshoreman master contract in San Francisco on the management side of the table (I am sooooooo mercenary!) that I first heard the term "unfunded pension liability".  It was the strike issue.

Well, can't squeeze blood out of a turnip, and there was just no way promises made could be kept.  Slowly but surely, and I believe Hoffa was murdered to make the point labor was not to push this, one labor group after another folded.

Anyone who entered into pension agreements of any sort should have noticed they were not being honored.  For the last 35 years.

To the degree to which anyone believed that a pension would await them is guilty of self-delusion and willful ignorance.  One would have to assume the economy of the last 40 years was rational, just, fair, and equitable.  The the degree one is so self-deluded is the degree to which they will engage the fight for scant resources and massive unfunded liabilities.  It is gaining momentum...  quarter million truckers will see pension cut 23%..

More than a quarter of a million active and retired truckers and their families could soon see their pension benefits severely cut — even though their pension fund is still years away from running out of money.
Within the next few weeks, the Treasury Department is expected to announce a crucial decision on whether it will approve reductions to one of the country’s largest multi-employer pension plans.

We all believe we will be exempt, we all have special pleading ready.  And this ignores the fact that at zero and negative interest rates, there are countless pensioners right now suffering want.  They all expected promises to be kept. Now to whom can they turn?  They no longer produce anything, who will champion their cause?  Whatever you do, make sure you are paying taxes until the day you die, or you'll be a liability, not an asset.

The great default is already underway, and the suffering is real, but just beginning.  People will vote for one of the above, simply because they believe they have a case.    But to vote for any of the above is to admit you believe you have no other option but to fight over the diminishing asset base.

O well, you'll just work at Starbucks?  Good luck.  You'll be far better off starting your own hole in the wall coffee stand.  Don't let the hegemon hear he is your only hope.  Abandon your pension claims and pick another battle.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Listen: Obey Your Customers

Anonymous, the most prolific commenter on my site pointed out this article, along with his concerns:

Nordstrom is one of my target specialty retailers, should we specialty product entrepreneurs be worried?

The only worry we should ever have is we get slack on listening to customers.  Should Nordstrom begin to go under, as your question implies, part of listening is comparing their ideas to those of your thriving customers.  You'll hear whether theya re in trouble or not, from what they say.

And by the way, the word obedient comes from Latin, to listen.  You stay out of trouble by listening, obeying, your customers.

As to the article itself, it suggests the 2008 repeat crash we've been expecting has happened, just our attention is on the stock market and not that we are being burned on gas, medicine, food, etc.  What jumped to my mind reading the article is the build-up of the wrong inventory at retail (and how I need a couple of things, so I'll be stopping in to Nordstroms to see what I can find at a good price.)  Also, the Nordstrom outlet just offered lawn furniture on sale...  well, it's been no secret their outlet has been flogging product not their own for a while, but this suggests they are scouring for profits.

But back to the article, I think the writer got it backwards.  It is not buyers demanding discounts, it's buyer not wanting to pay top dollar for product not quite right.  In 2009 as I wrote back then, the store shelves and the pipeline were groaning with products designed for a real estate boom milieu.  That ended.  The shelves remained stacked and the pipeline clogged.  Prices were slashed to clear the shelves, it was slow for the product mix did not match the demand of the new milieu.  Happily for zombie retailers, the taxpayer bailed big business out so they could borrow their way through this.  Mom had to eat Alpo, but hip young things could get cool T shirts and jeans to wear from Nordstroms again.

Here is the money quote in the article:

Restoration Hardware, which also caters to high-end customers, has said that discounts of 20% to 75% off everything in the store have been failing to boost sales as much as in previous years.
"Our attempt to drive incremental revenue through increased promotional activity in the fourth quarter was less successful than in prior periods, signaling a further pullback by the high-end consumer," Restoration Hardware CEO Gary Friedman wrote in a letter to shareholders last month.

Perzactly!  The first part of the story should have been the second:

Nordstrom said on Monday that it was slashing 400 jobs at its corporate headquarters.The move comes two months after the department store chain reported a 3% drop in comparable sales for its fourth quarter, and forecast that profit per share would fall 30% in the first half of this year.The cuts confirm a terrifying new reality for high-end retailers: Wealthy shoppers are reining in spending and — along with the rest of American consumers — refusing to pay full price for anything.

Well when you see what is passe on the shelves, you know it is going to be discounted soon if not very soon.  Why buy it now?

Why not wait until the things you want, given the new milieu, start showing up   (And that is our job.)

Circa 1984 Nordstrom became a billion dollar company, and the CEO at the time was giving a talk to a small group at UW, noting his company was the largest specialty retailer in the world (at the time).

Well, like everyone else that got big, Nordstrom complied with the federal government policy of get big or get out, and borrowed massive amounts of credit to grow.  They killed off people who did not want to get monstrous, like I Magnin in Seattle.

Forty years after that game began, 30 years after Nordstrom got to huge, that game is over.  What will become of Nordstrom?  Doesn't matter.  What matters who who grows in this new milieu.  Our job is to constantly test and search out customers.  It's what I teach, have always taught, that does not change.

At the same time Kevin sends me an article where Costco is financing start-up organic farms to meet the demand in their stores.  Customer financing instead of Vendor financing?  Wow.

Sure, lettuce is easier to call than chemise, but it is clear Costco listens what little they must. (Costco also sells ghastly farmed salmon, and because of demand, lots of it.)  That's a hint of who will survive.  The vacuum created by the dying dinosaurs who took advantage of the malcredit available to those who bought into the USA federal policy of Get Big or Get Out for the last forty years is now creating interesting reactions.

To win you have to get in the game.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Is Mish Tech-struck?

Calm down Mish... many a slip twixt the cup and the lip... today Mish reports Uber has over taken rental cars:

Since 1st quarter of 2014, Uber’s percentage of ground transportation business booked on Certify, the second-largest provider of expense software in North America, has soared from under 10% to 43%.
Taxi usage plunged from over 35% to a mere 14%
Rental car usages dropped from 55% to about 40%, making Uber the leader for business travelers.

Mish knows from sampling and trends...  is Certify a valid population from which to survey?  Something tells me it is biased toward young hip smartphonies (people with smartphones have no idea what they are missing.)  Let's have demographics, plus how much of the total market are we talking here?

Next, a one-quarter one off does not tell us much.  All this Mish knows, but he is seduced by the automation trend, but I think I see his blindspot - the human action dimension.

These hip young false economy folks expense off all of the car expenses, and UBER can cost far more than a rental car, especially if like me a rental is multi-destination.

In the two main cities I visit, SF and LA I rent cars for $25 a day, all in.   I am picked up at the curb if during 9-5 MF biz hours, otherwise I can pick up cars and drop them off after hours. No hassles, because the owner now knows me. I found this company because I got tried of paying the massive taxes (often more than the car rate and standing in line to do so.

The dotcom boom wrecked SFO OAK and SJC, once charming and efficient airports.  They are now ugly stalags, where people are lined up to be convenient targets.  They built monstrous car rental collectives where it takes forever to get through, after a dreadful bus ride.

The same malcredit that allowed the ruin of car rental at airports spins off extremely cheap used cars in which a young man can make $$$ renting cars at $25/day just off the airport.

UBER is another intel gig, like google, facebook, etc.  (Is is not interesting the primary chip maker for all this intel self-reporting is called Intel?)  It is wrecking cabs which is largely based on non-reporting income to smartphones and rides by people who could really care less what the ride costs, since it is expense account anyway.  What happens as he false economy continues to fade?  I think Mish knows better, but he is tech-struck.

Maybe it doesn't matter.  Being self-employed in organic real economy work is full of human alternatives.  The question is which will win out, false economy or real economy?  Everyone is watching as to how the false economy will end, so they can play it right.    Can't be predicted, can't be played right.  You can only be in the right place when the time comes: self-employed.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

LCL MOQ FOB

For 35 years I've been teaching this since no one else has...  order the smallest amount rational, not the largest amount possible.  Economies of scale for small business is poppycock.  HKTDC.com has always been on board with this...

In this new economy, they now push it:

The owner and general manager of Aeskimo Co Ltd is one of hundreds of small suppliers who are benefiting from the Small Orders online platform launched by the Hong Kong Trade Development Council (HKTDC)... 
Please credit and share this article with others using this link:http://www.bangkokpost.com/news/asia/937521/small-orders-big-opportunities. View our policies at http://goo.gl/9HgTd and http://goo.gl/ou6Ip. © Post Publishing PCL. All rights reserved.

Exactly. The world is catching up to what I've always taught.  Soon I can quit teaching.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Exciting News: Fake Goods Now 2.5% of World Trade

This exciting tidbit just in:

Counterfeited and pirated goods accounted for up to 2.5 per cent of world trade, or as much as $461-billion, 

But the the article goes off into delusional land:

significantly damaging companies and state coffers, the Organisation for Economic Cooperation and Development (OECD) said on Monday.

What?  How?  How do companies suffer when some else sells something to people said company would never serve?  That makes no sense at all.  And people selling "fake" goods can no more escape taxes when they buy food, fill up a gas tank, pay rent, etc, than people who sell originals.

What are the authors of this article thinking?  Why does mainstream media try to make good news into a bad thing?

People who sell fake goods run all of the risks and have as much time and expense in doing their business as the originals do running theirs.  The people selling fakes serve people who could never buy originals, nor would the original folks ever sell to the people buying fakes. The only difference between the two is the rest of us have to pay for putting the people selling fakes into prison.  Why can't the people selling originals pay for that themselves?  Why do the rest of us have to pay for it?

IPR regimes are so anti-human.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Analyzing Trump On China

Deng Xiao-ping, circa 1979, when he finally overcame the Maoists, toured USA, then visited with Lee Kuan Yew of Singapore, some Hong Kong Billionaires and others and consulted on how to play his hand.

Brilliantly! USA was in the early but irreversible stages of lending malcredit at usury and the hollowing out of USA industry, small manufacturing first, then big manufacturers was well underway.  It would be merely a few years before USA needed massive new factories and management to COPY what USA makes in state of the art new factories.

The great roll-up of the family-owned USA small business occurred over the 1980s, with the capitalists and the communists co-operating in the collectivization of the USA economy.  Get big or get out is the stated economic policy of the USA.

For those unemployed new welfare programs were created, students loans could be given to create the impression of advancement, and Starbucks became the new hiring hall.  Whoever you are, no matter your circumstances, the Man can make up some life-support system for you, and simply put it on the tab of future generations, since there is no rational limit on malcredit.  If and when a culling is necessary, why, we have Obamacare ready.

Now comes comments from Trump:

And I'm not angry about China, in fact I respect them, I made a lot of money with China... I'm not angry at China, I'm angry at our leaders for being so incompetant that they allow it to happen. 
And I said this as part of my response to the Wall Street Journal when they just called.
I said, in the history of the world, this is the greatest theft ever perpetrated by anyone or any country, what China has done to us. 
It is the greatest single theft. They have taken our jobs, they have taken our money, I mean I see the empty buildings all over Staten Island... I see them all over... Really really sad. That's not going to happen anymore with me... 
The truth is, we have all the cards.

So he starts off right, merely stating knowing the score, he too played his cards right.   He also notes the problem is the USA, not the Chinese.  Just so. The he switches "...what China has done to us."  But Trump, they played their hand to the objective detriment of USA just as you did, so by the same token, you condemn yourself.  This of course is lost on the crowd cheering Trump waving red meat of blame China.  The Chinese see what he is doing, telling the Chinese Trump understands perfectly well what is going on, AND Trump is waving red meat in front of his adoring crowd, who haven't a clue. China gets Trump, helps him by objecting to him, and are no too worried that USA will ever be a viable threat.

China has as many empty building as USA, and as many problems.  But China can say to its youth, "go west, young man!" with its Belt and Road initiative integrating Beijing with Berlin.  Indeed, an ancient fairy tale "Journey to the West" is getting multi-decade continuous play in China.

USA has no such West, unless you mean analogously "war."  That is all USA does now, and that is not working out so well as an economic policy.

We do hold all of the cards, since China still copies and we can get creative.  But under capitalism, with our banking system and IPR, it is not possible in USA for good ideas to move forward.  Mag Lev comes up, it gets crushed by "self-driving cars."  New medicines and cures advance, Big Pharma shuts them down.  People try to protect nutritious food, they are thrown in jail for patent infringement.  Countless creative people have fallen through the looking glass of their smartphones, likely never to return.  People with smartphones have no idea what they are missing.

Sure, if we were to deregulate banking, medicine, education, and get rid of our IPR regime, we could be free, just, prosperous and peaceful.  But no, check out this youtube.

Marvin Gaye and Stevie Wonder saw all this long ago, at the beginning:




And of course...


 Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Starving Children in USA

"Eat your organic kale, don't you know there are children starving in Tacoma?"

More than a third of USA children in USA are obese or overweight  (which is on the way to obesity.)  So how can anyone talk of starvation when the trend is the poorer the kid, the fatter?

What is starvation except a lack of nutrients in diet to maintain health?  Starvation is pernicious, but so is obesity.  You get killed either way.  Both ways your body is not getting the nutrition it needs.

A narc once told me crack had to be designed for the effect it had, designed by very skilled chemists, and its introduction was necessarily coordinated at the deep state level.  Forensics could tell us who what where and when. It was his theory, but he could not prove it, cuz no one is talking.

On the other hand, it's no secret, and widely documented, fast food is designed to be cheap but leave you hungry for more.   Who designed it, why and when and for what purpose is widely distributed information.  Plenty of people, upon realizing what was going on, quit, retired, blew whistles or whatever.  But if the victims do not complain, who cares?

Yum! (ungh! KFC, etc), got the hegemon to OK EBT cards to be used at gas stations so poor people could get sick when they fill up.  All sorts of nefarious outfits accept EBT.  And one can always simply convert the EBT to cash to buy whatever, contrary to the rules.

School breakfast programs consist largely of breakfast cookies dipped in sugar syrup and whey-less milk products, promising to give the kids a buzz for the first hour or so.  This can contribute to make them at ritalin-risk to calm them down.

Those fat kids are processing massive amounts of subsidized corn and corn by-products, sodium, potato, soy and so one, and taxpayer funded, with not enough nutrition to maintain health.  A body processing that munch gunk starts putting it somewhere, perhaps in some primordial effort at mutation toward processing this alien matter. Kid gets huge.

The too few in the know who care will never overcome the masses who are not about to create change when the victims don't care.

Capitalism lacks the aspect of moral economy.  As long as we allow the hegemon to lend credit at interest, there is no rational limit to the social engineering we endure.  Deregulate banking, end the misery.

So the starvation continues.  Outlawing supersizing won't do it.  Simply end he corporate welfare that provides for this outrage.  And cut our taxes concomitantly.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post

Gold Bugs Correct: Market Fixed

J. K. Galbraith: ‘The study of money, above all other fields in economics, is the one in which complexity is used to disguise truth or to evade truth, not to reveal it.’ Money, p. 5

The author behind Liar's Poker, the expose of 1980s Wall Street corruption was shocked when his mailbox was flooded with the best and brightest graduates from Ivy League Colleges begging him to learn how they could get jobs doing what he exposed.

He figured they just did not get it.  As he wrote more books, he discounted any idea that the entire economic system of USA was completely corrupt.  By the time he wrote The Big Short, he himself was was convinced the whole system is corrupt. It is all fixed.  And those who claimed the gold and silver markets have been fixed?

Deutsche Bank has admitted it rigged both the Gold market and the Silver market. ZeroHedge has the details in his report Deutsche Bank Agrees To Expose Other Manipulators.
Many asked me to comment. I am shocked?
No. In the wake of admissions of rigged LIBOR and rigged Euribor (bank to bank interest rates in dollars and euros respectively), one would really have to wonder “What isn’t rigged?”

Now you know why they actually call it the daily "price fix." But gold and silver don't matter right?  Then why risk prison manipulating the market.  And why murder heads of state over it?  Although right-wingers focus on the killing of the USA ambassador who was gun-running at the time of his death in Libya, a whole lotta other people were killed too, and a country sent into chaos due to western government intervention.

The email provides a peek behind the curtain to reveal how foreign policy is often carried out in practice. While reported in the media that the Western backed Libyan military intervention is necessary to save human lives, the real driving factor behind the intervention was shown to be the fact that Gaddafi planned to create a high degree of economic independence with a new pan-African currency, which would lessen French influence and power in the region.

The Swiss have a members-only currency which remains in the background, not the Swiss Franc. The Russians maintain a gold backed currency alongside the rouble.   Malaysia keeps getting hammered economically. uniquely, and they have been trying to introduce an pan-Islamic gold backed currency.

At least I already knew it was all fraudulent when the correct bet I made shorting the financials in 2007 would pay off big time... and when Christopher Cox, the SEC poodle outlawed shorting the financials  just as I would have cleaned up in 2008, I could not complain.  Of course they cheated.  The whole system was (and is) fraudulent.  Sure, it wiped out a lot of "things" but it did not wipe out me.  I did not see that coming, but ho hum, if they did not rob me this way then they would have eventually another way.

If you are productive then the whole system is geared to exposing you to their social engineering.  Your only possible freedom lies in self-employment.  You better learn the difference between money and credit, malcredit and benecredit; tallies and bank accounts. 

If you depend on paycheck, property or pension, you are toast.  Get out of any and all debt.  Rent.  That's my view.

Feel free to forward this by email to three of your friends.

Bookmark this post --- Email this post