Category: Business

Capital Flight

Business, Marxists, Politics

I haven’t spoken at all about the situation in Hong Kong before, mostly because there wasn’t much to be said:  (somewhat) free colony opposes colonial power’s aggression, mayhem ensues.

Several people have wondered why the ChiComs haven’t sent in the tanks, à la Tienanmen Square, to crush the waves of protests, but the answer is simple:  Hong Kong provides a means whereby the ChiCom government can move money around the world without provoking too much notice because currency movement in Hong Kong is completely unregulated.  Crush the protests, make Hong Kong just another province (like, say, Jiangxi or Shandong) and that flexibility disappears.

It is, however, a two-edged sword.  What has transpired since the protests began is that capital (money owned by individuals, that is) has been pouring out of Hong Kong and flooding into Singapore — to name just one such destination — thence on to parts unknown.  Which means that if Beijing does finally send the tanks into Hong Kong, they’re likely to find, like Old Mother Hubbard, that the cupboard is bare.  And the flow of  money is truly a deluge:  if you study how many major corporations have been purchased by Chinese-sourced money over the past few months, you’d be amazed.  Even better is that by and large, the corporations being thus purchased are characterized by their cash flow operations — in other words, the Chinese billionaires, canny businessmen that they are, are not just parking their money under an offshore mattress, they’re putting that cash to work and generating a revenue stream.

The ChiComs may not only be running out of other people’s money — they may soon be running out of their own.

Couldn’t happen to a nicer bunch of totalitarians.

By the way, you may have noticed that the above is somewhat short of details;  that’s because if I say more, I could jeopardize my several sources who are not only well placed in the area, but who do a ton of business there too and are close to said wealthy people.  One can never be too careful when dealing with Commie bastards.

And Speaking Of Commies…

Business, Marxists

I see that the strike at GM has ended:

Negotiations between General Motors and the United Auto Workers reached a tentative contract deal on Wednesday that could end a month-long strike that brought the company’s US factories to a standstill.

Good.  Now they can go back to making mostly crappy cars* that few people want to buy.

Driven up by the longest economic expansion in American history, auto sales appear to have peaked and are now heading in the other direction.

I would be curious to see how the auto sales numbers break down between new and used cars.  Also, between cars and trucks/SUVs.  Anyone have any ideas or info on this?

But here’s an interesting statement as to perhaps a good reason why GM is tanking:

GM and other car makers are also struggling to make the transition to electric and autonomous vehicles.

…which very few people want to buy.  Nothing like a sinking company investing in products that people either don’t want, don’t need or hate the thought of.

Maybe they should trash all their current car designs and go into the retro/mod business:

Hell, they probably would;  except that, knowing GM, they’d make them electric-only and ergo  doomed.

*  Except for maybe some Cadillac models and the Corvette.  Note that I’m specifically excluding GM trucks, which are generally quite good, from the above comments.

Why Bother?

Business

As Longtime Readers may remember, I was involved for many years with the “customer loyalty” business — specifically in the supermarket arena, but tangentially in a couple other industries — so I kinda know what I’m talking about when it comes to this stuff.  (As an aside:  if you use a Kroger Rewards card when you shop there, I’m at least partially responsible;  sorry.)

Back when I lived in Chicago, I used to fly in and out of O’Hare Airport about 50-60 times a year, and was a member of both the American AAdvantage and United Mileage Plus programs.

Once I even spoke to the head of one of their programs, complaining that my friend used to fly internationally once a quarter and accrued thereby a massive number of miles, whereas I flew rather fewer  miles and couldn’t get to his level of “SuperDuperPlusGoodPlatinum” level in their program.  This, despite the fact that he was making four purchase decisions a year to fly with them, while I was making that many purchase decisions every month.  But my flights were Chicago-Kansas City, Chicago-Minneapolis, Chicago-Des Moines and so on, while my friend’s were Chicago-Singapore, and I felt that I was being short-changed for my loyalty.  Rather to my surprise, the program director agreed with my logic, and although this had probably been planned anyway, about six months later the policy was changed to factor in the number of flights (“segments”) as part of the loyalty determinant.  Only then — and far too late — did my “status” improve.

In the rather interesting George Clooney movie Up In The Air, much is made of his goal to reach ten million air miles (with American, as it turns out), and the status that this conferred on him.  There’s no doubt that this gave him something  desirable (as far as he was concerned, anyway), but it’s interesting to note that had the movie been made today, those ten million miles would have made him rather less valuable a customer.

A new era of airline loyalty programs has arrived. United Airlines announced this week that the criteria for elite qualification in its MileagePlus loyalty program would change dramatically next year. Starting in January of 2020, United’s loyalty members will earn elite status based on Premier Qualifying Flights and Premier Qualifying Segments only. Flight miles, the traditional metric by which frequent flyers used to earn status, are no longer going to be considered.
It wasn’t too long ago that frequent flyers on American, Delta, and United earned elite status based solely on how far they fly. If a passenger flew 100,000 miles or 100 segments on any of the carriers, for example, top-tier (published) status was awarded, yielding perks such as upgrades, free checked bags, and free seat assignments.
In 2013, however, that formula changed when Delta introduced qualifying dollars to its equation for calculating for elite status. From that point forward, frequent flyers needed to earn a baseline number of miles or segments and also spend a companion amount of cash — up to $15,000 for the top published tier — to earn the same status as before. American and United quickly followed suit.

I should point out that for Oz’s Qantas Airlines, this has always been their policy because all their flights are long-haul, so it made sense to reward spending rather than just miles.

That’s not true for our local Murkin companies, of course, but it’s unsurprising that United (motto:  “We’re the Friendly Skies, until we have to break your nose“) and American (motto:  “We cancel flights, just for spite”) would make this change, because they’re a bunch of bastards.  (I can’t speak for Delta as I’ve only flown with them a few times.)

As I’ve said many times before, I know that to the airlines I’m just self-propelled cargo, but I don’t want to be treated  that way.  So they’re making flying even less attractive for people — and screwing up their programs in the process.

Needless to say, the Usual Suspects (i.e Gummint) are horning in on the action:

Air miles reward schemes should be banned because they ‘stimulate demand’ for excessive flying, according to a report commissioned by the Government’s climate change advisers.
The Committee on Climate Change (CCC*) commissioned report says that frequent flyers should also be hit by an ‘escalating air miles levy’ to put them off flying too much, but measures should not raise prices for people taking an annual holiday.
There [are] approximately 220 frequent flyer clubs with an estimated total membership of 200 million across the world, many of whom take additional flights to ‘maintain their privileged traveller status’.
The new suggestions are aimed at reducing air travel for the 15 per cent of the UK population estimated to be responsible for 70 per cent of all flights.

The latter would be people like Mr. Free Market, who don’t have any choice but to fly as their business is 90% international.  And gawd forbid people should actually be productive and, you know, earn salaries for themselves and profits for their companies — I think Marx had some ugly things to say about that — when they’re polluting the atmosphere and stuff.

I have an idea for improving our planet’s well-being, but as it involves rounding up all the the eco-loons and climate freaks and converting their bodies into fertilizer, no doubt someone’s going to have a problem with this.

I don’t know why they’re trying to kill off frequent flier programs, when the airlines are perfectly capable of doing it all by themselves.  But that’s Big Gummint for ya.

*Actually, that’s not what “CCC” stands for;  it’s “Climate Change Cunts”, i.e. all of them.

Forward Buying

Business, Food & Drink, SHTF

This term defines when one buys something in greater quantities than normal, in anticipation of the supply thereof being interrupted, or to hedge against price increases.  Which was all brought to mind by this post of Insty’s:

“The U.S. plans to swiftly impose tariffs on $7.5 billion in aircraft, food products and other goods from the European Union after the World Trade Organization authorized the levies Wednesday, citing the EU’s subsidies to Airbus. . . . The Office of the U.S. Trade Representative said it would impose the tariffs starting Oct. 18, with 10% levies on jetliners and 25% duties on other products including Irish and Scotch whiskies, cheeses and hand tools.” [emphasis added]

In other words, this weekend should be devoted to laying in a hefty supply of yer favorite single malts, and those snot-textured Frog cheeses (if you’re that way inclined).

Aaaargh.  As always, this is never a simple operation for me.  Do I go for variety?

…or volume?

And don’t give me that “embrace the power of and ” nonsense.  If I do both, then I can’t buy any more of this:

It’s hell being in the working class, I tell ya.

Luddism

Business

It began, as so many of these things do, with the French, over two centuries ago.  Now we have this:

UK workers are sabotaging and assaulting workplace robots in an attempt to stop them taking their jobs, finds study.
…
But for some manual workers they have found their own ways of stopping the robots’ rise to world domination – by confusing them.

I predict that this is going to become more, not less common.

“But why, Kim,” you may ask, “is this happening at all?  Aren’t robots / A.I. / Smart Stuff going to be the Way Of The Future? ”

Here’s a hint:

The report also predicted 20 million people will have been replaced by the machines in the work place by 2030.

That’s just in Britishland.  And let’s not hear the tired old “buggy-whip maker” argument again.  With the trend which is taking place, robots and A.I. will soon have the capacity to take over jobs which may now seem intrinsically human, but aren’t, e.g.:

A backlash is not at all out of the question.

Part Of A Trend

Business, The Gun Thing

A number of people have been angered by Walmart’s recent decision to stop selling guns and ammo of various types.  I’m a little angry myself, but no that much — because I was wise to Walmart’s game a long time ago.  Here’s what I wrote about the giant chain back in 2003 (!!!):

Guns, And Walmart

February 26, 2003
8:10 AM CDT

I’m aware that a whole bunch of people out there buy guns and ammo from Wal-Mart (not to mention all the other household stuff), and that’s fine.  A couple of people know that I don’t especially care for Walmart myself, and have written to talk about it.

I’ve worked in and around the retail industry for over twenty-five years, for small operations and huge chains, and on two continents, so I know a little whereof I speak.  Here are my thoughts on the matter.

1.  I don’t like one organization, especially a retailer, to have a huge (or near-monopolistic) market share.  I don’t think it’s healthy for the economy, despite the short-term consumer savings that a large organization brings to the market.  When most of the smaller operations get put out of business, the community suffers, both economically and in spirit.

2.  Despite the folksiness of their public demeanor, Walmart is a pretty damned predatory company in their dealings with both suppliers and competitors.  They go after competition with a ferocity and lack of conscience that are truly disturbing.  That’s fine, of course—it’s good business—but at some point, that attitude will turn around and bite the consumer too.  When you become the only game in town, eventually you become arrogant.  If Walmart tries to deny that this will happen to them, they’re ignorant of history:  it always happens.  Always.

3.  Most insidiously, when one store becomes the sole channel for a specific product, it becomes progressively easier for that product to be controlled by legislation.  When there’s only one faucet, it’s easy to stop the flow of water—when there are thousands, it’s more difficult.

4.  Along the way, eventually, product choice becomes narrower when only one or two stores control all the sales.  When all a store cares about is what sells now, the more esoteric items disappear because they either don’t move quickly enough for the store to generate profit, or the price is increased to generate a larger profit.  So you either won’t find it, or it will be too expensive.  This is Retailing 101.

That’s it.  I don’t think that Walmart is good for the country in the long-term:  near-monopolies seldom are.

As far as the gun business is concerned, I don’t think Walmart is good for the country right now.  To their credit, they’ve made guns and ammunition cheaper in rural areas, and many people swear by them.  But when you live in Wahoo WY and Walmart is the only game in town, don’t think for a moment that you’re going to have the ultimate gun store in Walmart, because you won’t.

Frankly, Walmart doesn’t give a shit about the gun business.  It’s just another product category to them, like shirts or jeans, and most of their decisions are made at head office in Bentonville, not at the local level.  If guns and ammo become too problematic for them in terms of regulation, product movement or return on investment, they’ll drop the category without a second thought—once again, that’s good business, and you can’t fault them for it—but gun owners will be totally screwed.

Sure, the gun store is more expensive:  because he doesn’t have the daily profits from other categories like toys, CDs and sweatshirts to keep him in business.  I know how it works:  you shop around at the local gun stores, get all the information from the guys behind the counter, and then go to Walmart because that Remington 870 is $80 cheaper there.  Congratulations.  You got a great deal—and shafted the guy whose entire living depends on your dollars.  If you’ve done this kind of thing before, and this paragraph didn’t give you a twinge of conscience, you ought to be ashamed of yourself.

Walmart can survive without selling guns and ammo.  Your local gun store can’t.  Think about it.

Then in April 2006, I noted this development:

Walmart Stores Inc. has decided to stop selling guns in about a third of its U.S. stores in what it calls a marketing decision based on lack of demand in some places, a company spokeswoman said Friday.
The world’s largest retailer decided last month to remove firearms from about 1,000 stores in favor of stocking other sporting goods, in line with a “Store of the Community” strategy for boosting sales by paying closer attention to local differences in demand.

Once again, Walmart demonstrated that as far as they’re concerned, guns are no different from jeans or audio CDs:  no sales, bye-bye.

None of our Plano-area stores sell guns or ammo, I suspect because there are about a dozen gun stores (including Bass Pro and Cabela’s) in the immediate area;  and I suspect that we’re not a price-sensitive group anyway so cheap shotguns aren’t going to attract too many buyers when for a dozen dollars more you can get personalized service from a proper gun store.  And as far as I can tell, most gun owners up here have been buying their ammo online for over a decade — I being one of them, for sure.  So it’s unsurprising, from a purely merchandising rationale, that Wally World doesn’t stock any gunny goodness in this neighborhood.  Frankly, I wish WalMart would make it policy across all  their stores (although I don’t think they will because of their rural stores’ contribution).

Now read what the CEO of Hornady has to say about dealing with these assholes:

In my previous life, I worked for a company that lived and died by Walmart.  And like many companies, Walmart treated them poorly.  And, as we were going through these things with Walmart, I decided that if I was ever in a situation where I didn’t have to do business with them, I would not.  And when I got to Hornady, we were doing some business with them, it wasn’t a lot, but they started to become difficult to work with again.  I was in a situation where I made the decision for our company to walk away and everybody in the company supported my decision. And we have not looked back.

And here’s my favorite part:

“As long as there is a Hornady at Hornady, we will never sell Walmart direct. They don’t support our industry.” – Jason Hornady, 2007

He points out, by the way, that if perchance you see Hornady products at Walmart, those would have come through a wholesaler — and from his tone, I don’t think Hornady is too happy about it.

So there you have it:  Walmart is not our friend.  Make changes to your own shopping habits as it suits you.  And support your local gun store, regardless.