President Trump, Build Up That Wall!

How can a free market anarchist call for Trump to build the wall?

Depends on the wall.

Now keep in mind the law, passed by democrats in 2006, requires the president to build that wall. So Trump is simply enforcing the law.

Again, depends on the wall.

To be politically correct, since walls are so Soviet-like (and we a soooo anti-communist) it is called the build the "fence " act...  of course the fence being a high tech surveillance full-employment act, with anyone crossing anywhere being picked up by sensors and then intercepted at Border Patrol's leisure.

But Trump campaigned on the politically incorrect "wall" meme.  This is good.

So what would the wall look like?  Well first, it should be about 20 miles wide, and 2000 miles long, covering the entire USA/Mexico border.

What's inside this 20 mile by 2000 mile wall?  Well, in essence, a 40,000 square mile free trade zone, Hong Kong like. No one owns the land, all real estate is on a 99 year lease system.   Anyone can enter this zone from Mexico freely, and anyone can enter from USA freely.  So this means anyone: tourists, medical patients,  refugees, asylum seekers, criminals, shoppers, vacationers and anyone else who can find an invitation to access anyone's property in this zone.  

Of course anyone leaving by land route would need to clear Mexican or USA Customs, respectively to get into those countries.  But otherwise the zone is free access.  All you need is a hotel reservation if you are staying overnight.

The optimum permanent population would be about 7 million people;  it needs an international airport, and a seaport at the point where the Rio Grande meets the Golfo de Mexico.

OK.. so where to start?  One mustn't just decide to have a free trade zone ala Hong Kong running for 2000 miles.  One needs to ease into this, people cannot handle freedom.  So start with a test pilot, and I have just the place:

 Though only 75 miles runs along the Mexican border, the reservation is about 2.8 million acres or roughly the size of Connecticut and has about 30,000 members. The tribe’s official website says that nine of its communities are located in Mexico and they are separated by the United States/Mexico border. “In fact, the U.S.-Mexico border has become an artificial barrier to the freedom of the Tohono O’odham,” the tribe claims. “On countless occasions, the U.S. Border Patrol has detained and deported members of the Tohono O’odham Nation who were simply traveling through their own traditional lands, practicing migratory traditions essential to their religion, economy and culture. Similarly, on many occasions U.S. Customs have prevented Tohono O’odham from transporting raw materials and goods essential for their spirituality, economy and traditional culture. Border officials are also reported to have confiscated cultural and religious items, such as feathers of common birds, pine leaves or sweet grass.”

But that is a drug transfer point!  Well, it is a drug transfer point not allowed by the hegemon, who controls the drug trade.  And otherwise, the Indians are only permitted to engage in vices, - gambling, cheap booze and cigarettes, fireworks.  Aside from that, the Indians have had their loaf of bread taken away and are invited to apply for a grant of crumbs.

But in a free trade zone, the Indians could be sponsoring the finest of everything in the world, by not having subsidies and monopolies.  The could be like the Scottish royals, have no property, but in charge.  They set the (anarchistic) rules, and they otherwise work at what they love alongside all other people in the territory. 

Once this has proven successful, the wall can be extended from the Pacific Ocean to the Golfo de Mexico.

Why not?  It's just a matter of honoring the treaties with the Indians.

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Time or Money?

If you worry more about money than time, you are poor.

If you worry more about time than money, you are rich.

So what is the amount where you worry more about one than the other?

Subjective, isn't it?

Self-employment is lifestyle, the emphasis is on time, not money.

Happy New Year!

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Enough With the Terrorist ID Left Behind

Just stroll through "terror" cases and what you have is the odd coincidence (?) of how often the "terrorist" leaves his ID behind.  Not just this last one in Berlin, but as a regular event, going back to the 9-11 federal failure day.

The 21-year-old's ID was found under the seat in the lorry used to murder 12 people and maim dozens of others

Russ Baker noted this a couple of years ago,  noted this actually goes back to James Earl Ray, who conveniently left his ID behind with the rifle that killed Dr. King.

And open court of law found that active U S Military sniper teams and Intelligence Squads (filmmakers) were present at the scene of the murder of Dr. King.  Next, what were they doing there?  That case is not moving any faster than teh first one, finsihed in 1999, over thirty years after King was murdered.

How about those Seahawks!?

One reason Donald Trump won is people no longer believe the nonsense stories being peddled by the media. The media is apparently the last to question the sheer nonsense of the government line.

We need ruth commissions, not state-mismanaged "criminal justice."

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Tontine / Private Micro Banking

Well Fargo got busted slamming customers, a term used for creating accounts a customer did not authorize.  They were fined   Bankers could give a $#*+ when they are fined, because the fine is like taxes, paid by their customers.  The managers who gained $60 million or whatever in bonuses pursuing the scam do not go to jail, nor get their bonuses clawed back.  Hence there is nothing to keep other bankers from doing more of the same.  Since there is no rule of law when it comes to banking we have this kind of chaos, bankers slamming customers.  There is no rule of law because we have regulatory capture, the regulated dictate the rules to the regulators, and then whimsically ignore them anyway.  For their part, it is well documented the regulators simply spend their time watching porn on the internet.  And then they wonder how someone like Trump could get elected.  People want to escape the chaos of failed government policy.

Odd, then comes the story of a government turning to anarchy to curb banker's excesses.

NEW YORK — The state of Illinois is suspending most of its banking relations with Wells Fargo.
Illinois is the second state, following California, to punish Wells Fargo with a one-year business moratorium in the wake of the bank’s fake account scandal.

This is how anarchy works.  When someone misbehaves, others in the community withdraw their support.  If it gets bad enough, you are so shunned you are reduced to living in the woods to survive.  No prisons, but condign punishment.

People who kill murderers and pederasts are also judged, and shunned or not, depending on the community opinion of the action.  Here courts are truth commissions, not "criminal justice" charades.

Since banking in capitalism is necessarily chaos, one ought to establish micro free market banking on one's own.  There is something called a tontine everyone should employ, much diminishing the hegemon's banks.

A tontine is an accommodation of any number of people, say at least four, but can be thousands, who pool contributed funds into an account on say a monthly basis.  Say the four put in $50 each a month, then in a year, the account has $2400, the next $4800, then $7200,  and so on.  More anon, but first a bit of history.

One of the precipitators of the French Revoluton was when the hegemon, in this case the King and his courtiers, had seized the tontines of the common man and used them to finance Versaille, war and other frivolities.

Tontines were formed by a group who each month contributed a set amount to a fund, and then as they aged the fund grew.  The point was to form a pension for anyone who made it to old age.  If you died, well, you did not need anything, so the survivors got the balance. A group of twelve might make it to 45, when the tontine was spit up by the survivors.

The funds were never enough to murder over, and the participants friends and family, enough to maybe open a barber shop or something to do for income into old age.  Not enough to retire on, since the idea of "retirement" was alien, if not evil.

It may not have been much money for each group, but it was collectively a massive amount tempting even the King.  He stole it and paid for it with the lives of himself and his family.  By the time of the French Revolution, the elements of modern banking were in place, and the problems emerged and the system failed much faster.

The idea of the tontine is good if one goes back to the older (even older than the 1700s) notion of banking, and that is currency issued against money, as in gold or silver.

Now I know I have been disparaging holding gold or silver, at least speculating in money, but the idea of forming a tontine, with say 4 people kicking in $50 a month, $200 a month being invested in say silver coins, and left in a coin shop.  Coin shops today often will store the gold and silver of their customers in their vaults, like the original banks (banque, a shelf where gold and silver workers stored customers' bullion.)

Two years in, this tontine has $4800 in silver sitting in the dealers shop.  Someone's auto transmission goes out, and they need $3 grand to replace it.  The tontine makes a loan (no interest) to the member, who repays it in time.  No banks involved (except for the dealer, acting as an original-style banker.)

Can you imagine how much income generation banks would be denied if this practice were reintroduced.  Can you imagine the strides toward peace and prosperity we could make if people got their money to fix the transmission from their own tontine, instead of the modern bank?  Can you imagine the personal transformation people would need to go through to save each month and be responsible to each other?  What a contrast to banking today, where no one is responsible to anyone else.  Ever.

"But but but, no interest?  With the magic of compounding interest, I can be rich at retirement if I contribute $50 a month starting in my youth. "

No you can't.  In a ponzi scheme, which underlies the interest compounding game, it stops all of a sudden.  This is just the start:

The Dallas Police and Fire Pension System's Board of Trustees suspended lump-sum withdrawals from the pension fund Thursday, staving off a possible restraining order and stopping $154 million in withdrawal requests.

The smart money, those who made the most, got out first.  Saps are left behind, with empty bags.

The banks are our enemy.  They charge too much to do too much, and distort the economy.  Withdraw your consent to work with them.  Escape the chaos of no-rules bankers, and flea to anarchy.  Form a tontine, find a coin dealer from which to buy silver and store it for you, and then get some popcorn, and sit back and watch as cops go into retirement impoverished.

And the rich build doomsday bunkers.

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Was The Oakland Warehouse Anarchy?

No, it was government provisioned chaos, another government policy failure.

The warehouse was the site of an artists' collective known as The Ghost Ship, and many of the victims were either associated with the group or with the local creative community; musicians, tech professionals, students and free spirits.

In a free market, all associations would be voluntary, such as the Catholic Church.  No one has to join, anyone can leave.

In a managed market, and especially capitalism, everything is "mother-may-I?" because your actions must be constrained to not interfere with the sinecures of those who hold the commanding heights of capitalism.

All Hegemons offer the central demand of people: fight our battles for us.

¹⁷ Your flocks also he will tithe, and you shall be his servants.¹⁸ And you shall cry out in that day from the face of the king, whom you have chosen to yourselves. and the Lord will not hear you in that day, because you desired unto yourselves a king.¹⁹ But the people would not hear the voice of Samuel, and they said: Nay: but there shall be a king over us.²⁰ And we also will be like all nations: and our king shall judge us, and go out before us, and fight our battles for us.

Of course that means literally, the king leads the forces onto the field for battle  (guess where he gets his soldiers!?) but it also means he sets rules for warehouse occupancy so neighbors do not have to work out among themselves how to behave.

In anarchy, as in the 400 years of anarchy Israel enjoyed before they began the horrifying descent recorded in the Bible once kings were installed, there was largely peace and prosperity and people were responsible for working out among themselves relationships.

Today we have rules, but they are not enforced, giving us chaos.  The "Ghost Ship" (prophetic, that) was famous and notorious and only "on the list" to be inspected.  The fact is government inspection is risible, there is simply not enough money to do proper inspections in any category.

In the wake of disasters, the inspectors announce rules were broken, tsk tsk, mistakes were made, time to move forward.  Inspectors rewarded with a bigger budget next term.

I see this in importing, whereas we have a massive inspection bureaucracy, there simply is not enough inspectors to be effective.  To be effective, the Federal government would near have to direct every single federal worker to the task of inspecting food imports, meaning Donald Trump himself would have to be on the docks opening boxes, and nothing else.  (Actually, not a bad idea.)

Having Hegemon's inspections fool people into a false sense of security.  Disaster follows.  Free markets punish people doing wrong in a perfectly condign manner.  In a free market there would be competing artis cooperatives, not just illegal ones mulcting the free spirits whose confidence in the Hegemon is unshakeable.

Get rid of inspections, and ell people the truth.  You have to fight your own battles.

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Indian Warship Falls Over

Yikes!

On Tuesday, the tilted warship was floating in water in the dry dock. "The dock can't now be deflooded as it could further damage the hull of the ship. Also, the dock can't be flooded because any further water ingress through the damaged part will create further problems. The authorities are in a fix because this is the first such incident the Indian Navy has witnessed and foreign experts may have to be called," said the officer.

Physics tipped it over, and physics will be used to set it aright.  They will flood the drydock slowly after shifting ballast and sealing off sections.  As the drydock floods, the ship will stand up right again.

Now, who wasn't paying attention when the boat tilted?

But more to the point.  India has a long war-history, but a splendid pacificism history too.  Well, they have a great history in every department, even an outstanding Islamic-pacificist movement against the British (I highlight a book on this over on the left column).

Less military, more freedom, I always advise.

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Start-up Requires No Funding

Funding a start-up is risky, and as Drucker noted, entrepreneurs never take risks.

The risky part is not for those who assign a bit of ex nihilo credit tally to a given start-up, but to those who sign the slave papers in return for the granting of ex nihilo credit.  Now that is risky. You might end up like a college graduate today, huge debt and unemployed. No need to do that when starting up, for a proper start-up takes no money or credit to speak of.

The banks promote the idea of "risk taking" by entrepreneurs as a means to unload the unlimited ex nihilo credit, the granting of which is no risk to them.

We have at least one generation that has been trained to lose:

get enough funding to live off of for a year or two, and blow through it... who cares if anything succeeds, cuz you get to play "business" for a year or two...  and who knows, great resumes have serial start-up experience.  Those days are over, but the idea is embedded in a generation core curriculum at the universities.  (And as Drucker said you can tell when information is obsolete, the universities make it core curriculum.)

If you are serious about start-up, you must have a business plan that moves forward without funding.  If you are saying "I just need funding" then you are deluding yourself.  If you are saying "I just need customers" you are at least assessing the problem correctly.

Start-up is about creating customers and innovating in the redeployment of excess capacity (or lessor demand capacity) to the end of solutions to problems. (And as Drucker says, there is no solution that cannot be imporoved upon.)

It takes no money to conceive of the solution.

You must speak to the customer at some point, why not first?  It takes no money to do so.  And you walk away from this phase with ideas and contacts, with which you begin to fill your rolodex and files.  And this is critical, to begin to build your "world trade organization" that is the people you've met, with whom your synergies will produce more than otherwise possible.

It takes no money to talk to your customers.

You have no credibility as a start up, so you borrow authority from target customers... talk to them first...  do they say yours is a good idea and does not otherwise exist?

Then you begin to work on the design, which the best is on a royalty basis. Again, done right, no money up front. And as to design, you work only to achieve "enough design" to generate enough orders to cover the suppliers minimum order requirement. Repeat this mantra: customer is the most important thing in business, getting the design right is the hardest.  But even with this in mind, people fail by working way too hard on the design.  Learn from Steve Jobs.

https://en.wikipedia.org/wiki/Apple_I

You learn quickly that in the real world "intellectual property rights" thinking is counterproductive.  Forget about patents, copyrights, trade marks, you get nothing you can use for your time and money. You leave all that behind. With necessary and sufficient product design you expand your world trade association. You begin to discover those whose expertise is in your area, and gather their advice: freight forwarders, customshouse brokers, 3PL, and with it the realities of logistics and costs of your product.  You do not waste time and money becoming expert in international trade, you become expert merely in the international trade of only your items.

It takes no money to gather to get this far.

Please note what "snowballs" here is your solution with customer feedback packed around it. It is what is rolling and why all the other people you contact stick to it getting bigger and ever more momentum (and value).  Each door is opened because of the work getting the previous door opened.  You have not made any money yet, but you haven't spent any either.

Now, you propose importing or exporting (or both?)  Neither importing nor exporting is a business. They are steps in business.   In essence, authentic international trade is simply accessing optimal excess production capacity to the end of production.  Business is buying and selling, not making.  The world is full of production that created no demand.  We do not want to join the 80% of start-ups that fail.

Customers (there is that word again) call forth the product.  We are the impresarios who gather the players necessary to respond to that call.  Yes, we suggested the solution, but the customers power the rationale for all the players you collect to act.  (And I might add, dealing with very talented people each in his own narrow field is a privilege and often breathtaking.  It is also tempering, you just know not to waste these peoples time, you know you must do your best work. Re: best work, see below.)

With importing, you are moving from general (the domestic market) to specific, the best supplier in the world.  In exporting, you are moving from specific to general, the best supplier in the world, to any buyer worldwide. With either, you are discovering markets no one else considered, directions informed with data no one else has created and studied.

This costs you nothing, and you cannot buy it anywhere, it is not for sale.  It is free.

For specialty, the best source is rarely, if ever, the cheapest.  Usually it is more expensive.  We are not achieving perfection in initial product design, any more than Apple's first product was perfect.  We are achieving milestone #3, enough orders to cover the supplier's minimum order requirement, in a workable amount of time, profitably.  Again, learn from Steve Jobs.

https://en.wikipedia.org/wiki/Apple_I

Then you find the best sources for production, and discuss what you've done so far. And now this is where you do your best work, as paranthesied above: you promise nothing except to test this very well informed (by now) idea, by presenting the sample of what you created in the form of products, agricultural items, services, you name it, back to the customers you first encountered in your start-up.

What you are offering is new market study at no cost to the supplier.  Your compensation comes only from customers you create.  Everyone involved gets something for nothing, and you get paid by customers (your markup on all the discovered costs) if you get the design right.  Never promise anything more than to report back on a test.  No one needs anything more, expects anything more, nor would believe you if you promised anything more.

You form a hypothesis and shift from passion/joy to science. You seek out valid and reliable information about the market, you search and learn the contours of a market no one else yet sees.

You may of may not pay for samples, but otherwise it does not cost you money to pay your dues. The less money you spend and the more time you research, the better off your start up. As the carpenters say, measure twice cut once.

Now, here is where people those with funding fail:  since they did not start with the customer, they promise the supplier much in the way of flash and imagery but no customers (or worse, assumed customers).  The wrong suppliers respond to that (or just plain scammers.)  Just as these people begin "selling", things go bad fast.  (Alibaba is the world center for failure match-up.  Amazon and eBay is the medium upon which failure occurs.)

What we promise all of our associates is not a single order.  What we promise is to test against samples the most informed hypothesis of whether there is enough customers collectively to cover the supplier's minimum production run in a workable amount of time, profitably.

Sound complicated?  No, it is quite simple, and may take some unlearning to "get it." It is what the best suppliers expect.  And so far it costs nothing to speak of.

That minimum production run requirement is specifically the LCL MOQ FOB:  Less than container load, minimum order quantity, priced free on board country of origin port of lading.  That is often merely a pallet load.

 In importing we are the ones buying the lcl moq fob, in exporting, we are the ones selling the lcl moq fob.

And if we do achieve the initial goal of enough orders to cover the suppliers minimum in a workable amount of time, profitably, then we execute.  And we are talking a min order qty of one maybe one pallet, no more than say $5000 worth.  Do you really need a venture capitalist for this?  Or a banker? Or even a rich uncle?

And if we do not achieve it, then what we have in hand is market feedback, what is wrong (shape, weight, color, size, package, material, speed, flavor?) with our product.  Aren't you glad you only have samples, not a garage full?  You can go back to your world trade association you built and fix the problem.  And then go at the market again.  These is no excuse for failure, or especially burn out.

You may fantasize some business in which you are paragraphed in the Wall Street Journal.  Sure, if you want, but both Apple and Vandor started the same way.  Vandor never got above $3 million in sales (at least when I was managing it) and you've never heard of it.  The first company I was working for was at that time the same size as NIKE, tiny.  Phil Knight knew no bounds. But the owners of all had all of their material wants met by the business.  Business is about lifestyle, not accumulation, another conept the last two generations need to learn.

And start-up is not about funding. Anyone investing more than $900 or ninety hours before discovering whether they have enough orders from customers to cover the suppliers minimum order requirement in a workable amount of time, profitably is wasting time and money.  I am often pointing out where people are wasting either in their pursuits.

Now as simple as this is, there is many a slip twixt the cup and the lip.  I came of age when it was no problem to walk down a street and see a "help wanted" sign in the window of an import-export company and after two years of learning every part of the business, be travelling the world as a buyer.  Ex nihilo cedit ended all that for now, but the ex nihilo credit regime is over.  Thirty years ago I could see this de facto apprenticeship program ending, so I began to lecture at colleges and wrote a book to fill-in the gap formed when getting a job and working your way up ended.

Those were boom years, and the damage is done during the boom years.  Now it is the bust, where the losses are laid on the living (the rich take the profits, the poor take the losses) and the work of rebuilding a natural, authentic economy is at hand.

Pro sports bore me.  I spend the time most people devote to pro sports teaching, writing and lecturing.  I find it fun and fascinating.  And writing is how I get paid for time spent thinking. The rest of the time I spend working on my own business.  Lifestyle, not accumulation.

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The King is Dead. Long Live the King.

As all major religions note, usury leads to destruction, and is a recognized means of war.  Ex Nihilo Credit is usury on steroids.  We are watching yet another "end of America" where every 15-20 years our country changes radically.  The ex nihilo credit regime is dead, and the big question is, what is next?

I don't know where Pat Buchanan got this figure, or over what time frame, but it is the direct result of ex nihilo credit regime of the last 45 years.

They believe Trump alone will secure the borders and rid us of a trade regime that has led to the loss of 70,000 factories and 5 million manufacturing jobs since NAFTA. They believe Trump is the best hope for keeping us out of the wars the Beltway think tanks are already planning for the sons of the “deplorables” to fight.

Those number mean that the average factory employed about 70 people total.  Just so!  Most business is always small business.  And any kid looking for work could find a job easy sweeping floors and work his way up. Two things must happen for this objective good to return:

1. Elimination of the ex nihilo credit regime.  It cannot be legislated out of existence, for it is existential to the bad guys who run things.  But it can be shunned, and and returning to an asset-based, non-usurious credit regime can be achieved to a pitch perfect degree by those who simply choose to exercise that right.

2. Trade lanes need to be opened:  as new factories begin to quicken, the infrastructure to move things has never been better.  But the sales channels have atrophied.  The sooner the F I R E economy crashes, the better, so we can have those sales people back at trade shows, bridging the makers and the retailers.

And it won't hurt to have real estate prices crash, s then necessarily will do.

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Four Truths About USA

The following occasioned this rant, in particular the comments section:

This is not new. In 2014, five black girls, aged 17, 15, 15, 15 and 14, committed three separate attacks on random white people at TempleUniversity. Struck across the face with a brick, a 19-year-old white student suffered a fractured jaw and nearly had her teeth knocked out. Her 15-year-old assailant, Zaria Estes, was given a 2 ½-6 year sentence.

What dad lets a son attend an inner city college unarmed?  What dad lets a daughter date a boy who is unable to defend her?

1. African Americans are the designated despised underclass, and are subject to scientific racist policies designed to exterminate (Darwin's words) them.  They are hammered in food, medicine, education, culture (rap), housing, and "social services" that would disgrace a gulag. The ones thriving are tolerated as stalking horses to get the ones being exterminated. The last Jews the Nazis got around to were the elite. Think Colin Powell, Barack Obama, etc. Until the reality is accepted, there is no solution.

2. The statistics regarding African Americans are all skewed to special pleading, no matter the conclusion.  Don't believe any of it.  There is nothing said today about African Americans that was not said about the Irish in the UK 100 years ago.

3. Victims lash out, and harm the innocent as well as the perpetrators.

4. It is allowed to kill someone, or a group, who is coming at you with intent to harm.

Work against the institutional racism, but be ready to kill any victim who approaches you with intent to do harm.

The end of institutional racism is separatism, an African American Autonomous Region within the borders of USA, subject to American Indian permission.  (Detroit would be peaceful and prosperous, like the Bahamas, if the African Americans there were allowed to achieve that.  See Tulsa Riots.)

Just as with the institution of the country calling itself Israel has made it safe for Jews to live just about anywhere (and the vast majority of Jews do live outside Israel), so an African American Autonomous Region would allow African Americans to live safely in USA.

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Marc Faber Thinks Correctly

Obvious point, well-couched:

Paper money, in general, can then collapse, and it has to a large extent against asset prices like real estate around the world over the last 30 years, against equity prices, against bond prices—which have been rallying since 1981—and against precious metals since 1999.
Asset price inflation is less obvious to the average person in the street. The average American has no money, so he doesn’t care if prices for paintings and real estate go up—until it touches him.

He played the game of an investor, and has done extremely well.  And here is the problem, what he did was valid (it worked) but is unreliable (it does not work for others).  Nonetheless the world is sinking with people trying to make a living on investments (or protect there ex nihilo credit tallies) when it cannot be done.  Read Nassim Taleb on survivorship bias, and that explains Buffett, Soros, Faber etc... and they know it.

There are no doubt a couple of people marketing and making money on the internet, and those would be valid (I haven't seen them) but they are not reliable, they cannot be copied.

What can be copied is process, which is what I teach, and the content is the individual.  And if the content is lacking, ahem, the process feedback becomes a personal transformation engine. That is important, but the real importance of self-employment is the authentic economy it builds, with the concomitant peace, justice and prosperity.  There is no other means to achieve that.

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New Confirmation On the Chipotle Experience

Chipotle experienced a business disaster when unproven charges of offering e coli were levelled against its stores.  With each effort at recovery, came another disaster.  There is plenty to suggest, indeed, there is more evidence Chipotle was sabotaged by Monsanto agents than any e coli emerged from Chipotle. Like Dr. Oz, if you dare condemn GMO foods, you will be lain waste.  For the hegemon, not only must you participate, why, you must praise!  Food is a weapon for USA, and Russia is going non-GMO.  We must have war!

I've never dined at a Chipotle because they never serve beer.  I eat a lot of Mexican food on the road, especially in California where every taquiera serves good food and beer.  Why just last Friday night I ate enchiladas washed down with Negra Modela (on tap, nice!) in Palo Alto.  Alcohol with meals is to be advised when in international trade.

Aside form all that, an article on the Chipotle travails has some notes I found interesting for their confirmations -

Back in Nalon’s office, where an old menu sign from a Chipotle restaurant hangs on the wall opposite a Food With Integrity poster, I ask whether Chipotle could simply move all its food preparation to central kitchens like this one. After all, if the food can taste just as good, why wouldn’t they, especially if it’s safer? "Hmmm, and still be Chipotle? Not everything, no," Nalon says. "I love the fact that they do what they do in those stores, because it is totally unique. You could do everything in central kitchens, but I don’t think that’s exactly what they want. They want to bring as much freshness and as much cooking as they can to the stores. But [some of these items] really need to be done with somebody like us."

Chipotle is small potatoes to an industrial commissary that serves the likes of McDonalds.  Note here again two points:  everyone goes to the same place for production, the only difference is the design.  Next,  these huge central producers love the challenge of the small biz who needs something accomplished.  This massive commissary built a production line to Chipotle specifications.

Chipotle sources pork from the Godfather of good meat in USA.  No Ractomine in this pork, a chemical widely used to build up muscle in USA but banned and criminal elsewhere worldwide.  (Talk about doping scandals.)  But the probable-Monsanto attack on has it sales and the pork producer has supply backlog.

Salatin tells me that Polyface still only provides pork to those two Chipotle restaurants in Virginia college towns. The company, he says, has discussed expanding his pork to 10 restaurants, but it has been "stymied" by its E. coli issues. Chipotle says that it never set a firm expansion goal and states that the issue is more complex. Before the outbreak, Chipotle purchased between 550 and 600 pounds of meat weekly from Salatin. In the immediate aftermath of the crisis, it sometimes bought as little as 100 pounds. Today, Chipotle’s weekly order hovers between 300 and 400 pounds. As a result, Salatin says that he has 9,000 pounds of pork "in the freezer that was supposed to go to [Chipotle] but that they haven’t taken since this debacle occurred. We got pigs in the pipeline, and we can’t afford to keep them on the hoof. For a small business like us, it’s actually very economically devastating."

Anyone already in excellent meat exports really ought to market that meat for Salatin.  9000 pounds is too little for a biggy, and too big for Salatin.  And then once you have helped out the Godfather, then you get the blessings from so many others.

Specialty anything, including foods, has demand that must be discovered by means well known and practiced, but as far as I know, only I teach.  The skill is urgently needed to help expand the production of good food, and to fill the void caused by the ex nihilo credit disaster that gave rise to Monsanto and Frankenfoods.  The Russians once depended on USA grain to survive, but with the embragos, they have switched to producing their own, and are forbidden GMO frankenfoods in their lands. The preference for Russian wheat is so great they have now surpassed USA AND Canada in wheat exports.

Don't tell me there is no GMO wheat, because there is, and it shows up in USA crops.  In the instance it does, Monsanto calls it sabotage.  We judge others by ourselves, and Monsanto would know from sabotage, wouldn't they.

But just as Chipotle leadership began to feel some sense of momentum, an unexpected crisis embarrassed them: Crumpacker was indicted for cocaine possession leading into Independence Day weekend. He surrendered to police and faces seven counts of drug possession; Chipotle placed him on leave, and he checked into rehab.

Of all the toot-snorting ad men in the world, only the one engineering Chipotle's return is arrested.  One scoffs!

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Clown Terror: Hegemon Mocked?

I am surprised how widespread, especially among children, the terror evil clowns has spread.  Is someone mocking the hegemon and the evil "Moslem" narrative?

As to Trump's naughtiness:

I suppose if I win — my poon days are over. —JFK, fall 1960

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Corruption in Small Business

Reading Samuel Pepys, who kept a diary in the 1600s London, I was struck by his admission he took money from people with whom he did official government business.  His claim was he only took money from people with whom he decided to do business anyway, so it was not corruption.

Indeed.

Now here comes an article on getting media attention for your trade show booth:

 I once had a client offer reporters free car service from their hotels at CES and held interviews during the car ride. This was a great way to not only ensure an interview, but a memorable and unique way to building relationships with reporters.

Now note that.  Reporters are usually paid very poorly now, and have expense accounts that would disgrace a hobo.    Anything nice, even like a hired car ride from the Motel 666 to the show in the morning is a big deal to the reporter, but you were going that way anyway, right?

Except you would not have gone by hired car, out of your way, with coffee for two.

I read a story by a new government manager who had received a Holiday Ham from a business being regulated by his department.  He instantly sent it back with a terse note saying he could not have it.  Next year it happened again, and he served it at the office holiday party, why not?  The following year he took it home.  The next year when the ham did not arrive, the manager had his assistant call the business to ask where his ham was.

Back in the early 1980s we gave no charge our products to prop companies who created sets for movies and TV so our products showed up in them,  Not much for sales, but for bragging rights.

The fellow who built Patagonia clothing company prided himself on doing so with a zero advertising budget.  But what he did do, as I recall reading long ago, was anytime his products showed up on the people in the cover action photos of sports magazines, he would send the photographer a $500 bill in a note thanking the photographer.  (Yes, we used to have $1000 bills too).  Well, word gets around among photographers, and soon everyone was featuring Patagonia clothes in the cover shots they were creating.  Think of the cost of a photo shoot (tens of thousands at least) and the cost of advertising in major magazines (hundreds of thousands) and then reflect on what Yvon Chouinard got for $500.

Now this is not longer possible, since it is all pay to play now.  If you see products mentioned in copy or on covers, someone contractually paid to have in there.  A photographer taking $500 to place a product there would be crowding out the $50,000 the publisher would be earning.  Same with movies and TV.

The entire BigPharma is based on doctors finding their family vacations upgraded to first class and penthouse and all activities gratis mediated by sexy coeds recently graduated from college selling the products.  They hire doctors to give risible speeches at conferences for amazing fees. With 50% of drugs ineffective, and overprescription, the drug companies get their corruption's worth.

Or is it corruption?

I find it all distasteful, but then that means I experience it at the level of aesthetics, which is morally neutral.  I also have emotional reservations, which means it is tied up with my maturity level.  Maybe I am merely immature, and need to channel some Bill Clinton.

yeccchhh....

So.  When you are preparing for a trade show, take the advice in the article to which I linked, to key your 'story" in to the show theme, and write six different articles saying the same thing and put a printout in an envelope with a data stick with the article in RTF so the writer can quickly convert it to his own, and put his name on the article to turn in it to his employer as his work.  But wait, there is more.  Clip a $50 on the article in the envelope, with a note saying there is another if and when the article is published and you get a copy.

Pass those out to anyone who comes into the booth and shows you reporter credentials.  For $300 you get massive coverage.

Is that corruption?

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Simple Solution To Vancouver Real Estate Distortion

By definition, real estate property, since it can be sold, is not an inalienable right.

In an article in need of some serious editing, we hear of hot Chinese money bidding up Vancouver real estate:

One month ago, when describing the latest in an endless series of Vancouver real estate horror stories, in this case an abandoned, rotting home (which is currently listed for a modest $7.2 million), we explained the simple money-laundering dynamic involving Chinese “investors” as follows.

• Chinese investors smuggle out millions in embezzled cash, hot money or perfectly legal funds, bypassing the $50,000/year limit in legal capital outflows.

• They make “all cash” purchases, usually sight unseen, using third parties intermediaries to preserve their anonymity, or directly in person, in cities like Vancouver, New York, London or San Francisco.

• The house becomes a new “Swiss bank account”, providing the promise of an anonymous store of value and retaining the cash equivalent value of the original capital outflow.

We also explained that hundreds if not thousands of Vancouver houses, have become a part of the new normal Swiss bank account: “a store of wealth to Chinese investors eager to park “hot money” outside of their native country, and bidding up any Canadian real estate they could get their hands on.”

The article does not mention how come the authorities do not intervene where appropriate, for the simple reason they love the price rises for their tax revenue is based on property values.  Don't count on government intervention.

There is an extremely simple solution. Reduce adverse possession in real estate to one year: open, notorious, exclusive, hostile and continuous.  Once a property falls into hot money hands, and is land-banked, that is it sits empty, a squatter can move into the empty house and begin the free rent occupation until the owner catches on.

To prevent adverse possession, the owner must put a placeholder tenant in there.  That tenant can refuse to pay rent and state he is possessing it adversely.  This would get very sticky for the owner, and the problem would simply move elsewhere.  In any event, Vancouver would see the bubble move elsewhere.

In any event, this problem is self-liquidating, since the hot money is not money at all, but ex nihilo credit, which is drying up.

The ancients had a better way of assessing property values for taxation: each owner stated the price at which he would sell is property, that is to say, all property is always on the market for a price the owner is willing to accept.  Taxes are on the owner's assessed value.

Brilliant.  It will never happen in capitalism.

What Vancouver did to is make a 15% sales tax on property sold by foreigners, and sales have dropped nearly 10%, and they plan to tax empty homes (by what rationale?)  Anyway, government workers find a solution to all problems in raising taxes.  Instead of putting humans into houses, they just want to fleece homeowners, albeit absentee ones.

This is about grabbing low hanging fruit, not solving problems.

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Where Pat Buchanan Fails

I wonder at Pat Buchanan being allowed in polite society when he has so many radical things to say.  But then he says the following, and I understand why he is allowed a seat at the table.

Earlier, writes Boyle, the WTO ruled that, “without the subsidies, Airbus would not have existed … and there would be no Airbus aircraft on the market.”
In “The Great Betrayal” in 1998, I noted that in its first 25 years the socialist cartel called Airbus Industrie “sold 770 planes to 102 airlines but did not make a penny of profit.

Boeing itself has insisted it would have no overseas customers if not for the welfare program of USA taxpayers giving Boeings overseas customers the wherewithal to buy Boeing products. 

But Boeing officials say the Ex-Im Bank is crucial in allowing the company to compete against export credit agencies in France and Germany, which are only too happy to offer guarantees for the purchase of jets from Airbus, Boeing’s sole competitor in the wide-body market.

So Buchanan is calling the kettle black, and at the same time Boeing is taking $69 million from taxpayers to pay for lobbying for boeing to take money from taxpayers for a business that would not exist without taxpayer subsidies.

Cut every dime of welfare, but cut not one dime of personal welfare until every dime of corporate welfare is cut.

Boeing would go out of business, because it is managed by welfare queens, the people you see at teh check-out counter holding things up as they set aside things they are not allowed or are over budget, and s like Boeing, sometimes shoplifting.  All Boeing executives are the basest of welfare queens.

With Boeing out of business, a few hundred ex-employees would start airline companies, and in 20 years we'd have the leading aircraft industry in the world.  But with Pat Buchanan making sure we ask the wrong questions, we'll never get the right answer.

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New York Times Does Not Know From Free Trade

Amy in Malaysia sends in article from the New York Times.  It is a whopper, an essay on "free markets" and the problems thereof.

These costs have proved overwhelming in communities that depend on industry for sustenance, vastly exceeding what economists anticipated. Policy makers under the thrall of neoliberal economic philosophy put stock in the notion that markets could be trusted to bolster social welfare.
In doing so, they failed to plan for the trauma that has accompanied the benefits of trade. When millions of workers lost paychecks to foreign competition, they lacked government supports to cushion the blow. As a result, seething anger is upending politics in Europe and North America.

Well, that is not free markets.  It is managed trade, and yes it is a mess, and yes government has not, because it cannot, even if it wanted to, ameliorate the damage done.  I am happy to call it "neoliberal" economics, and yes it is a mess.  But free markets are the only antidote to the problem.

In the United States, the Republican presidential aspirant Donald J. Trump has tapped into the rage of communities reeling from factory closings, denouncing trade with China and Mexico as a mortal threat to American prosperity.

Well, I doubt Trump denounces trade with China and Mexico. Sure he denounces the trade deals, and this is typical false-dilemma argument: trade is what the Hegemon calls it, and there is no alternative.  He and Hillary are posing as anti-TPP TTIP candidates, for the time being, but both of them will cut some deal, when the only free market deal is unilateral.  In free trade, we have no opinion on what crosses borders; the legal fiction is the importer is the manufacturer, so we hang USA importers for problems, not blame the Chinese.

“The trade policy of the European Union is paralyzed,” said the Italian minister of economic development, Carlo Calenda, during a recent interview in Rome. “This is a tragic situation.”

Tragic for whom?  For Ministers of Screw-the-Prole?  What does he mean?  Trade in Eurozone has ended?  The only thing that has ended is the game of playing with ex nihilo credit at interest, which has no rational basis, so is ending for no rational reason (meaning we'll never see it coming, nor understand why it ended).

Years of investment manias and financial machinations that powered the job market have lost potency, exposing longstanding downsides of trade that had previously been masked by illusive prosperity.

"the job market" as if the only job market is the one in place, as if it is not a false economy job market.

The worst financial crisis since the Great Depression has left banks in Europe and the United States reluctant to lend. 

This is absurd!  They lend like crazy, for credit cards, autos, student loans: fog a mirror, get a spanking new degree, car or vacation.  Bonds are debt, money lent.  We have 13 trillion in bonds at negative interest rates, which can only be viewed rationally as a mania to lend.  What is ending is people who can take on more debt, or, those who qualify don't want it, those who want it, don't qualify.

And as Pynchon notes, just get them to ask the wrong question, and the answer does not matter. (Classic example: Trump V Clinton.  The answer does not matter.)  We do not need banks lending anything in a free market.  What we need is asset based credit, at no interest, which any business is free to generate on its own.  That is necessary and sufficient for a sound prosperity.

... said Chad P. Bown, a trade expert at the Peterson Institute for International Economics in Washington. “There were people talking about these things, but they weren’t taken very seriously at the time. There’s a lot of policy regret.”
“We do need to have these trade agreements,” Mr. Bown said, “but we do need to be cognizant that there are going to be losers, and we need to have policies to address them.”

"We?"  "Policy regret?'  I shall be sick directly.  As if anyone cared in the slightest about who got hurt as wealth was concentrated, the old tried and true way, through interest.  But on steroids: interest on ex nihilo credit.  As Mr. Bown implies, all policies have winners and losers (except free trade, which is no policy at all) and he has a job talking about what to do with losers.   No, we neither need these managed trade agreements nor policies to address the losers, as no trade policy means no losers.

China targeted crucial industries for domination, lavishing favored companies with sweetheart credit terms while investing aggressively in ports, highways and electrical generation. Anyone with ideas about organizing Chinese labor risked landing behind bars.

Yes, yes, yes.  China adapted exactly the same policies USA used to get some bankers "rich."

The rugged country of western North Carolina suffered mass unemployment as Chinese-made wooden furniture put local plants out of business. So did glassmakers in Toledo, Ohio, and auto parts manufacturers across the Midwest.

No, no, no!  The unemployment started in the 70s and 80s as the roll up of the local retailers by anyone willing to borrow massive amounts of ex nihilo credit (junk bonds, anyone?) Indeed, whoever borrowed the most won. In my book I mention Levitz wiping out Kreoehler, which in the 1960s had 8,000 people making furniture in USA, but by the late 70s was foundering.   They got nailed by the folly of price cutting, "making up in volume what they lose on each sale.." Sports Authority, Petco, Lowes, Micky D, CVS, Safeway, Best Buy, these are the last dinosaurs standing of a economic scam that wiped out USA small retail and gutted USA manufacturing.  Times Kroehler by 10,000 and you see what happened in USA when banks started lending ex nihilo credit at interest.  The program began to die in the late 70's, for as with today, ex nihilo credit leaves a scorched earth.  We had that lats 70s recession.

But then, and I was there to watch it, Deng Xiaoping opened China, and offered USA big business the exact same ex nihilo credit deal Uncle Sam offered in USA.  Uncle Deng gave USA bankers a whole new lease on life, a massive ex nihilo credit pool, and USA industry was completely hollowed out, with our big #1, autos, now gone full Zombie.    Now we lack USA manufacturers, USA small retail, and our pride and joy, the big box discounter, is dying.  We have not much left.  But this does leave a huge vacuum, and opportunity for a renaissance in USA authentic economy.  We'll need to shift back to materialism from consumerism, that is buy a good coat that lasts 20 years (I have a pair of Allen Edmonds shoes I bought in 1984, paid cash, still the best looking shoes I've ever seen.  Resoled countless times and "reconditioned" once.  Consumerism is buying a new pair of shoes each year. On credit.)  All we need is the will to rebuild America in spite of the evil we invited in, accepting ex nihilo credit regime, at interest.  We just man up, and get to work.

“I had to tell my son that he can’t go back to McKendree for his junior year,” Mr. Morrison says, straining to choke back tears. “He has to go to community college.”
He swallows hard. Tears emerge from the corners of his eyes.
“It just crushes you,” he says. “I didn’t get to go to college. I wanted my kids to succeed. When you see the disappointment in your kids’ eyes. …”

Well, spare the rod, spoil the child.  You were willing to slack off during the boom contributing to the damage, and now you just break down and cry when a little adversity strikes?  Now, if a kid has the temerity to look at you with disappointment, then he needs a good slapping around.  The two of you ought to be contributing your unique gifts to building an authentic economy, not crying over disappointments.  Sheesh!

In China, farmers whose land has been turned into factories are making more steel than the world needs.
In America, idled steelworkers are contemplating how to live off the land.

Right.  What goes around comes around.  USA did this to the world, and the world is now doing it to the USA.

Stop our wars.  Deregulate something, anything.  Medicine?  Banking?  Education?  It does not matter what.  Just free a field up, any one of them, for everyone of them has so much repressed potential that the intire USA and its unemployed 94 million, would be offered prosperity and opportunity.

The way out is the way in.  Import what you want, using the excess capacity now overseas, and as you build markets in USA, transfer the manufacturing back here.  If we are still America we can do this.  If we do not wallow in self-pity because a a fantasy did not play out.

The most revolutionary act an American can perform is to start up a business.  I teach that.  You can find links on the upper right of this blog, and at http://www.johnspiers.com/Teaching.html .

Illegitimi non carborundum

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USA As Peace Broker

I teach at UC Berkeley Extension, so I get all sorts of newsletters.

This I liked, it is the way it should be here.

Saudi Arabian, Iranian Students Come Together for New Entrepreneurship Course.

These are enemies in the Middle East, working together here.  You see this with Moslems and Hindus, Brahmins and Untouchables.    It is what USA was supposed to be.

And this:

http://admin.calbears.com/index.aspx?path=olympics

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USA Policy: Food as a Weapon

This is the first I've ever heard of this fellow, but apparently he is a prolific writer.  And here again, example 729,015,991, of Marxists getting their facts straight.  

While leading US corporate executives look to China’s dynamic growth as a source of investments for US elites, Obama warns of Chinese ’security threats’. While former Treasury Secretary Paulson editorializes in favor of greater commercial linkages with Beijing as a vehicle for continued US business growth, Obama works to provoke military hostilities against China among second and third tier Asian countries.

And their analysis is excellent as well. Where Marxists fall down is their prescriptions.  Well, you can't have everything.

Capitalists ac as though Marxism is the source of all evil.  You gotta take the good with the bad, and sort the two out.  Half the world would not have adopted Marxism if it was all evil.  Marxism was so convincing because it was correct on its facts (generally).  But when it came time for a plan, the Monty Python Life of Brian scene in which the Marxists are formulating a plan is spot on.

This writer laments de-regulation.  Ungh!  Each horror he details is precisely grounded in regulations.  These malefactors put massive amounts of money into regulations, which benefit themselves.  It is called regulatory capture, a well-known phenomena (and how!)  The malefactors also pour massive amounts of money into social conditioning, in this case, a achieving a pavlovian response among Americans to wet their pants when someone mentions the word "de-regulation."  In this way, he malefactors will never have to fear for change.

Marxist prescription for change is government action.  No, really, that is what they call for.  I am not making this up.  This writer wants better regulatory oversight to control the demonic forces afoot on our planet.  This will work, they believe, because people become angelic when they ascend to the regulatory commanding heights.

Pynchon said get them to ask the wrong question and the answer will no matter.  "What is the correct regulation?"  At that point, it truly does not matter what regulation is established, the Hegemon wins with regulation.

None of the malefactors would exist in the first place with regulations.  The market will produce the necessary regulations, it always does.  International trade is grounded in Lex Mercatoria, a free market, anarchistic set of rules that work whenever allowed to blossom.  When suppressed, like today, we get chaos.

Look where there is chaos and poverty, and you'll see a regulatory rich environment.  Overcome your social conditioning, embrace free markets.  De-regulate everything.  Watch the malefactors wither on the vine.

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All Hail China Wheat Dumping to USA!

All USA policies have a winner and a loser, and the USA anti-dumping policies harm working families and smart business people and make rich 1%'rs welfare empresses like Cargill and Archer Daniels Midlands.  Here is example 319,392,085,003,914:

US President Barack Obama said that Washington is filing a complaint against China before the WTO due to China’s government setting prices for wheat, corn and rice well above market levels, which has led to unfair government subsidies in violation of WTO rules.

So the Chinese government sets a higher fake price for these commodities than the US Government does.  Both do it.  Setting higher prices calls forth more of these commodities, which in turn are then dumped at lower prices than what it cost to bring them forth.  You can focus on that if you like, but please do note the explicit fact that ex nihilo credit, that facilitates all this, calls forth goods and services that no free market would call forth.  Again and again we see how this happens, but at no point does anyone (except me apparently) question the ex nihilo credit regime that facilitates this malinvestment and misallocation.  Everyone loves a system that might work for them. No matter how much it harms them.

What the Chinese are doing is taking precisely the same steps USA took to become the Hegemon.  USA as a Hegemon is failing for it has run some course which is ending.  It shows up in our military failures worldwide, our odious leaders, and the biggest beneficiaries of the ex nihilo credit regime, the dinosaur corporations.  But that does not stop the 1%'rs from doubling down:

The US president added that if the United States signed on to the Trans-Pacific Partnership (TPP) free trade agreement, it would expand export opportunity for farmers and businesses and set rules for holding our trading partners accountable.

To hold our trading partners accountable? Before China joined the WTO, it was rules everyone haad to follow except the USA.  Now that China is trading as much as USA, the WTO is useless to USA (so Trump can announce he'll leave it), and USA wants to peel off smaller victims in a new org, the TPP.  it ain't selling.

This is all great news, for once the ex nihilo credit regime dies, or implodes, we can get back to real business, true economy stuff.    And non-issues like "dumping?"  Well, anyone with a wheat market in USA can simply reduce USA supply and by the subsidized China wheat to sell in USA until China goes broke.  Let our fields lie fallow and rest while China slowly dies (assuming dumping is actually happening.

All this is great news for small business.  That which distresses USA big business is advantageous for small business.  The pendulum is swinging back.

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Hanjin "Crisis"Ended Today: Never Was a Problem

So its over, as I predicted.  Ho hum.  But note the hype continues in spite of the facts.

Fresh off of sensationalizing the ITT demise, the Wall Street Journal was just  hyping the Hanjin problem, and Zero Hedge is hyping the hype: ghost ships, crews gone crazy, chaos!  Those were the headlines a day ago.

The very articles promoting the-end-of-the-world internally contradict themselves.  And the search for victims settles on small business.  Small businesses have no problem with this, we know these things happen, so we are prepared and survive.  As I mention how below, but first the hype.

$90 million dollars has been coughed up to address the problem, not a lot when its takes a million to fuel up one of the bigger ships, and there is a lien for a million on the ship.  But it is a start.

Before I address the reality, let's look at the hype:

Zero Hedge quotes a labor Union official:

"Our ships can become ghost ships,” said Kim Ho Kyung, a manager at Hanjin Shipping’s labor union.

Well, now.  "can"? There is a possibility we can all lose sleep over. Except it will never happened.  In salvage law an empty ship belongs to whoever first boards it.  No, a quote including the word ghost might make for exciting copy, it's not in the cards.

As to the earlier fear of cannibalism Zero Hedge hinted at:

As a result, The company has started providing food, water and daily necessities to crews on six Hanjin ships anchored at ports including Rotterdam and Singapore.

Next... an industry finds no problem yet...

Nate Herman, a senior vice president for the American Apparel & Footwear Association, said: “This is not impacting store shelves now,” however he added that “It will impact store shelves if the situation isn’t resolved.” 

And won't since this is over already. And this...

One Hanjin captain operating a ship in international waters near Japan said his vessel has been given permission to enter a Japanese port Wednesday to unload cargo, but will be required to head back out soon after.

Oh.  So if you cannot pay your bills, well, unload the goods and leave.  This is crisis stuff?

And this from a consultant:

The problem retailers face is that there is little precedent how to deal with the fallout. While Hanjin was granted protection by bankruptcy courts in Korea and the U.S., conditions are “bordering chaos,” said Lars Jensen, chief executive of SeaIntelligence Consulting in Copenhagen.

Well, sounds like he is looking for clients, knowing the words "bordering chaos" will get quoted along with him.  As to little precedent, what nonsense.  Admiralty law has thousands of years of precedents, apparently unknown to the consultant.  I do some consulting.  Our industry motto is "seldom informed, never in doubt."  Lars Jensen is stellar.

Recall above Hanjin is sending in food, water, etc to its ships.  Now read this clever piece, again alluding to cannibalism:

But while manufactured cargo can survive indefinitely, crews on ships can not, and as Hanjin ships drift at sea, their crews face increasing uncertainties and diminishing supplies. “We usually have food and water for about two weeks,” said the captain of a Hanjin-operated ship speaking by satellite phone from the South China Sea. But, after 12 days at sea, “everything is getting tight—food, water and fuel,” he said.The captain added that he is rationing water and cutting back air conditioning to save energy.
“The heat is driving the crew crazy,” he said. His ship was carrying lubricants and home appliances from South Asia to a Chinese port, but last Thursday, he was told to stop, as the ship could be seized at its destination.

Spot the problem?  A Hanjin-operated ship?  Meaning an independent tramp steamer who picked up a load for Hanjin on contract.  Who told him to stop?  Hanjin, or the owners of his ship?  If Hanjin is not supplying them, it is only because it's not Hanjin's boat.  Hanjin captains are national navy grade officers.  No responsible officer would talk like that. Also, any ship in distress can ask passing ships for relief and are extremely likely to get it.  That's just the merchant marine.  Sounds like someone trying to shake Hanjin down.

The Wall Street Journal is not very well informed:

Adding to the confusion, the WSJ adds that shippers and brokers said the Korean government has designated only three so-called base ports—Los Angeles, Singapore and Hamburg—where Hanjin vessels can unload shipments without risk of being seized by creditors.

The Hanjin Boston has been seized.

One of three Hanjin ships moored off Southern California’s shores was seized by U.S. Marshall’s officers, officials confirmed Wednesday.

And that is good.  Yesterday the Hanjin Boston, which had been one of the "choatic, crazy-crewed, cannibal ghost ships" referred to by Zero Hedge, unloaded its goods and now sits back in the bay at anchor with a US Marshall on board until Hanjin coughs up the money to pay its bills.

(A seized ship has a marshall on board, so no "ghost ships.")

Seven days ago I predicted the problem would be over in 6 days.  Exactly right.  Zero Hedge was calling it years.  I kept my eye on the Hanjin Boston, which I specifically mentioned,  for that was obviously one of the ships in question.

How come I knew there would be no problem?  Because there is nothing special here.  There is comprehensive law to deal with such common events.  Read this through and you see what the rules are, what happened, and what will happen.

Back to Zero Hedge, this is just odd.

The Korean Shippers Council, which represents more than 60,000 trading companies, said Wednesday  its members “have not been able to figure out the whereabouts of their freight.”

What's your booking number?  Email me, I'll tell you in about 5 seconds where your freight is.  Someone just doesn't have their facts straight.

Meanwhile, executives with freight-booking platform Shippabo warned that companies should expect delays as many cargo containers have been rerouted on different vessels. “For the top 25 importers, this is a blip,” said Frank Layo, a retail strategist at consulting firm Kurt Salmon. “They’re diversified, they’re not shipping it all on one line.” But for smaller retailers with less sophistication, “this could be devastating,” he said.

This is no problem for small businesses.  We know how to deal with this.  We never do volume.  We always do frequency.  There are no practical economies of scale in shipping, no matter what business schools teach.  They are simply wrong.  We don't try to ship the largest amount possible, we ship the smallest amount rational.  We invented "just-in-time' inventory.  If one of our small shipments is held up a week on a ship, no problem anyway, but if a container goes overboard (happens more than you think) and we have a pallet on that can, well, no problem, we have another pallet on another ship coming in a week.

Of course I've been teaching this tactic for 30 years, and I have seminars listed on the upper right corner of this blog page.

The only real news the Zero Hedge has, and this is right, is this:

Another word for devastating? A "justification" to miss earnings for yet one more quarter.

Exactly.  the dinosaurs will use this too as an alternative narrative...  "we are not dying."  O yes they are, but this was a no- event.  They are dying because the ex-nihilo credit regime is over.  And this is great news for small business international trade.

As an aside, if any reporter ants to know what is going on in int'l trade, they should ask me.  But that ain't gonna happen, because no hype quotes rom me.

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