Archive for Begging Bowl

One weird (and costly) trick

Although you can’t blame them for wanting to preserve the business:

Prostitutes in the Russian Arctic port of Murmansk have unexpectedly hiked prices for their services by up to 40%, blaming the tumbling rouble exchange rate for their decision, it seems.

They also want to peg the cost of services to the dollar in the longer term if the situation doesn’t improve, sources at one brothel tell the local FlashNord news agency. Two hours with a prostitute in Murmansk cost 3,000-7,000 roubles ($57-132; £36-84) before the price rise, the agency says. The management of another brothel says it’s “trying to keep prices down, but the cost of living is rising and the girls can’t work at a loss”. The rouble has lost more than 40% of its value against the dollar and 60% against the euro since the start of the year, as a result of Western sanctions over Russia’s involvement in the eastern Ukraine insurgency and a fall in oil prices.

Vladimir Putin surely never anticipated this.

(Via Interested-Participant.)

Comments (1)




Kicked to the curb

I’ve kicked into several Kickstarters over the years; most of them eventually reached their funding goal, though a couple missed the mark. It could have been worse, though: suppose there were no backers at all?

This happens more often than you (or at least than I) think, which is why there is Kickended. Buzzfeed (!) explains:

Kickstarter projects have a success rate of about 40%, according to Kickstarter’s site. Among the failed 60%, some come close to their goal, but some sad ones fail to get even a single donor.

These $0 are the ones that Italian artist Silvio Lorusso is interested in. That’s why he created Kickended, a museum of failed Kickstarters that couldn’t raise a single cent. Since it’s actually rather difficult to search Kickstarter for failed projects, Lorusso uses Kickspy, a site designed to help people find projects to fund. Lorusso automatically scrapes projects with $0 from Kickspy and feeds them into his site. So far, he has over 8,000 $0 projects archived. Unlike other collections of bad Kickstarters, Kickended’s interface looks the same as the real Kickstarter. It’s a weird, sad mirror image.

As Lorusso describes it on the site, these failed projects are “free from the pressure of money raising, these retain the purity of abstract ideas.”

Going to Kickended gets you a random project from Lorusso’s collection. The first one I got was called The Nu Envy Experience Fashion Show, from a woman in Memphis who has since deleted her blog.

(Seen here.)

Comments (5)




Toll you so

Surely somebody could have seen this coming:

In 2006, then-Governor Mitch Daniels (R) leased the 157-mile Indiana Toll Road to Cintra and Macquarie Bank, operating as the ITR Concession Company, in return for an up-front payment of $3.8 billion. Daniels promised to use that money to build new roads over ten years under a program he called “Major Moves,” while the consortium was allowed to charge motorists steadily rising tolls until the year 2081.

The consortium came up with the cash by borrowing $4.1 billion off the prospect of a “guaranteed” stream of future toll returns.

And both sides of this deal got squat:

Motorists paid $196 million to use the road last year while the consortium owed $193 million in debt service payments. This left just $3 million to cover the cost of 244 employees, maintenance, capital upgrades and related expenses. Reserves were exhausted in December, and the consortium missed a $102 million interest payment in June. With interest, the consortium’s total debt obligation now stands at $6 billion.

The promise of the Major Moves Fund also failed to deliver. The $2.6 billion fund was supposed to have been set aside from the $3.8 billion payment to the state government. It was to grow by 5.25 percent annually from investments. That did not happen, and the money ran dry in 2013, though tolling will continue for at least another 69 years.

If Daniels still has a wisp of presidential ambition, this should kill it once and for all: I got 99 candidates, and Mitch ain’t one.

(Via Fark.)

Comments (2)




Sign of the Times

The Los Angeles Times cuts its home-delivery price, if not to the bone, certainly to a sinew or two:

Los Angeles Times subscription card

I mean, three bucks a week will barely buy you that much wood pulp.

I do hope, though, that no one (1) fills in a credit-card number and (2) drops the card in the mail. (In very tiny print at the bottom, the Times suggests you mail it in an envelope.)

Comments off




The last Saab story ever?

Maybe. The company that makes Saab cars — except, of course, that it’s not actually making any cars right now — has won protection from its creditors, but at a dear price:

China’s National Electric Vehicle Sweden (NEVS), which bought bankrupt carmaker Saab in 2012, won protection from creditors from a Swedish court on Friday while it concludes funding talks.

The decision gives the company, which has not built any cars since May because of a shortage of money, breathing space from creditors to whom it owes some 400 million Swedish crowns ($57.56 million).

There’s just this one minor detail:

Separately, Saab AB, the defense firm from which Saab Automobile was created in 1990, added to NEVS’ troubles on Friday by saying it had withdrawn its right to use the brand name Saab.

Swedish business daily Dagens Industri quoted a Saab AB spokesperson as saying NEVS’ application for creditor protection gave Saab AB the right to cancel the brand agreement.

So there will be cars from NEVS, maybe, but with a new brand name — unless they can pull off something miraculous like persuading General Motors to sell them Pontiac or Saturn. Fat chance of that.

Comments (2)




Yes, we have no [anything]

For those of you who thought things would improve in Venezuela once Hugo Chávez passed on, you might want to think again. Now there are food shortages, and the word from Caracas is that the government is going to Do Something. Unfortunately, it’s going to do what a Chavist government can’t help but do, and that’s muck things up worse:

Rather than understanding that the problem is due to a drop in production and a drought in foreign currency to buy the products required by the population, now the “queues” making the lives of consumers miserable every day get the blame. A few days ago, Andrés Eloy Méndez, the newly appointed Superintendent of Socio-Economic Rights, announced that the Government will start a “war against queues” at supermarkets, another fictitious conflagration that adds to the so-called “economic war” [Nicolás] Maduro frequently resorts to.

The first mistake, of course, is appointing a Superintendent of Socio-Economic Rights, which in terms of functionality is right up there with establishing a Ministry of Play-Doh.

Anyway, you may be sure that Méndez takes his phoney-baloney job seriously:

From this “battle” of audits arose the erroneous idea that one of the main causes of people spending up to three and four hours in a commercial establishment is that supermarkets have a significant number of checkout counters closed. And a couple of supermarkets were fined over this, including the Bicentenario Plaza Venezuela in Caracas, where only 26 checkout counters out of 60 were operational. Also, the Bicentenario branch was requested to outline a plan to cover and ensure the operation of all counters in the future.

Of course, opening more checkout counters will not add one single banana (probably imported from Colombia) to the stocks in Venezuelan food stores.

But wait! It gets worse:

[I]t has just been announced that the ministries of Science and Technology and Food are developing a biometric fingerprint recognition system that will allow to monitor “who buys and how he/she does it” and to control the so-called “bachaqueo” (a type of smuggling activity common in the Venezuelan border with Colombia), according to Méndez. This mechanism would be put into operation for both private and public network supermarkets by early 2015.

Number of additional bananas to be sold as a result: zero.

These ideas are so horrible and have such minimal potential positive impact that I expect Harry Reid to propose at least one of them before too long.

(Via Interested-Participant.)

Comments (5)




A shortage of pixie dust

Is the economy well and truly dead? Well, no. But it’s fading. Think Tinker Bell, if Tink had to contend with the Federal Reserve:

The economy is an area in which belief equals reality or, at least, belief has an important effect on behavior which produces the reality. That’s what John Maynard Keynes referred to as “animal spirits”, an important force in pulling economies out of recessions.

Welcome to roadkill. Where did all the spirited critters go?

Whatever his failing, Bill Clinton was a relentless and indefatigable cheerleader for the economy. His confidence built confidence in others… George W. Bush didn’t have that same quality and neither does Barack Obama.

Of course, neither W. nor BHO had the benefit of various 90s booms, and neither of them could conceive of a budget that wasn’t deeply in the red. And Clinton had had hard-nosed Congressional Republicans of the Newt Gingrich stripe who kept the pressure on. Today’s GOP, by comparison, has a collective proboscis made of rubber baby buggy bumpers or something.

And whatever Bill did in the 90s won’t redound to Hillary’s credit in 2016, since nobody can imagine her as a cheerleader, for the economy or for anything else.

Comments (3)




Would you have any grey coupons?

“The bad news for news isn’t over,” says Jeff Jarvis:

The last best category of advertising in newspapers is the distribution of FSIs, free-standing inserts — circulars and coupons — which by one account adds up to 30-50 percent of newspapers’ retail advertising (though retail advertising continues to plummet). The last, best reason to keep printing and distributing a newspaper is FSIs. When you see papers cut frequency of printing or distribution to a few days a week, those are not hot news days; those are the days that bring FSIs and their revenue.

I’ve been saying here for some time that FSIs will go away. About two years ago, I asked a big-box retailer that makes much money from its circulars (from charging brands for presence in them) how long it would be before the circulation of print newspapers would fall below critical mass. The reply: 24-36 months. Note how long ago that was.

A typical Sunday Oklahoman has maybe 110 pages of actual broadsheet; all the rest (except for Parade, I suppose) is FSI. The classifieds, once 60-70 pages, are now down to 16. I’m not sure what mass is considered “critical,” but I do know that thirty years ago, they were moving twice as many papers, and those papers were 50 percent thicker.

Comments (1)




I feel bad for you, son

Well, we’re having sales problems, really under the gun,
We’ve sold 99 Cadillacs, the product’s done.

Comments off




Quote of the week

Tam explains the debt ceiling, starting with the reason why “debt ceiling” is an inaccurate term:

Why do they even call it a “limit” or “ceiling”, anyway? In aircraft terms, a “ceiling” is an altidude beyond which the plane cannot climb; in political terms, a “ceiling” is just any one of a series of ever higher points on a curve that went asymptotic long ago.

In the world of personal finance, credit card limits work because your credit card magically stops being able to buy stuff when you reach them. Congress, on the other hand, just tells the cashier “Run it again, it’ll work,” and it does!

Come to think of it, we have customers who believe in that mantra with all their flinty little hearts.

Comments off




In precisely that order

I’m assuming this is true for all law students, not just those at ‘Bama.

the stages of law school.

1 — yay, I’m in law school I’m going to get some great job and make millions.

2 — I’m not going to accept any summer job less than like $20 an hour, $10 is insulting.

3 — $10 isn’t as bad as it sounds, I mean it’s something, right?

4 — do you think if I emailed this person they would let me intern? i mean hell I’ll do it for free, i just want the experience.

5 — OMG will I ever find a job?

With modifications, this will fit rather a lot of situations.

Comments (1)




While the ball drops

It is a tradition in parts of South America, says Fausta, to wear fresh yellow underwear to ring in the New Year:

Among the traditions, is wearing yellow underwear at the moment when New Year arrives. According to beliefs, doing so brings wealth and prosperity in the coming year.

Venezuela, the country with the least prosperity, had difficulty following the tradition:

Agencia Carabobeña de Noticias (News Agency of Carabobo, ACN) reported that this year, Yellow Underwear is Rare and Costly, with panty prices increasing by 73% and 185% (depending on the shop) since 2012. Bra inflation was worse, with prices increasing by 300% to 500%. Men’s underpants doubled in price (the article doesn’t specify jockeys or boxers). ACN also itemized the rise in prices in the foods traditionally served on New Year’s Eve, with similar results.

The Venezuelan government, still emotionally wedded to the halfwit Marxism of Chávez, presumably blames gnomes.

Comments (3)




One of your safer bets

General Motors has announced that Holden, its Australian brand since 1931, will be reduced to a sales-and-parts facility: actual production of Holden cars and utes will be moved offshore after 2017.

This drew more anguish in the Australian press than the similar move announced earlier by Ford, perhaps because Ford is, well, an American brand at heart, perhaps because the Australian government has turned rightward since then and therefore the political left, fond of anguish as a motivational tool, can now blame it all on the government.

One Victoria Rollison, described by Telegraph columnist Tim Blair as a “caring leftist,” sent an open letter to Holden chairman Mike Devereux which ended with “Please let me know if there’s anything I can do to help keep Holden here.”

Blair scoffed: “Buying a new Holden would help.” And then he offered to put his money where his mouth is:

Readers are invited to speculate in comments about the car Victoria currently owns. If she provides proof that it’s a non-secondhand, locally-made Holden, I’ll walk into my nearest Holden dealer and hand over a $250 donation.

“Caring leftists,” after all, don’t buy big rear-wheel-drive sedans. (Well, Barack Obama did, once upon a time, but he decided that his Chrysler 300 was a campaign liability, and he went out and bought a hybrid.) No chance Tim Blair has to part with a single Australian dollar on this one.

Comments (1)




Say hello to Patsy

First female CEO at General Motors. Historic moment? Maybe — or maybe not:

I am not as thrilled as the rest of the country seems to be by the appointment of a woman to lead General Motors. If not for the $10.5B-losing bailout, GM would have have had to examine their practices, make changes and compete in the real world market place. The Saturn never would have been killed and Cadillac models would once again have names instead of numbers. As it stands though, the bailout provided a soft landing for all of their stumbles and they are now upright and undamaged. But are they changed? If they’re not, God Help Mary T. Barra the first female CEO of GM and the patsy set up to take the blame for the coming fall.

In defense of Barra, she does seem to understand cars, something no one ever would have said of predecessor Dan Akerson.

Comments off




Instant justification

“Whew! That was a close one!” we’re supposed to be saying as the Treasury disposes of the balance of its holdings in General Motors, although Treasury — and therefore taxpayers — lost ten and a half billion dollars on the deal:

Without the bailout, the country would have lost more than 1 million jobs, and the economy could have slipped from recession into a depression, Treasury Secretary Jacob Lew said on a conference call with reporters.

Which is what he’s required to say: everything the government does, from handing out cell phones to putting tariffs on Chinese tires is justified by “the alternative would have been worse.”

Not that we can actually prove any such assertion, of course:

Well, if Jacob Lew says the alternative was worse than losing $10.5 billion of taxpayer money, who are we to disagree? Because the effects of hypothesized alternative scenarios are always subject to speculation, officials can justify any policy by declaring that things would have been worse if we had done something different. (Let’s keep this principle of Liberal Logic™ in mind: Next time some hippie peacenik tells you that Bush’s Iraq policy was a failure, just remind him that an imaginary hypothetical alternative — e.g., Saddam Hussein’s army invading Connecticut — would have been much worse.)

Oh, and that blue floodlight out in the yard? It keeps tigers away.

Comments (1)




The ’14 Grand Damn

“Maximum Bob” Lutz, presumably at a safe distance, discloses that the Feds ordered the death of Pontiac:

“The Feds basically wanted to get GM down to Cadillac and Chevrolet. They said, ‘you don’t need all these brands. You need one prestige brand, and one mass-market brand.’ And we said ‘well we can’t get rid of Buick because Buick is important in China, and if Buick becomes an orphan in the United States then the Chinese are no longer gonna be interested in it.’ And the Feds said ‘Fair enough, but everything else goes.’ We said well we’d also like to keep GMC. They said ‘well, GMC is basically just like Chevrolet,’ and we said ‘that may be true, there may be a lot of shared components, but GMC has an entirely different image, a different customer base, and people are willing to pay different prices for a GMC, and here’s the profitability,’ and the Feds said ‘whoops, okay, keep GMC.’

“So now we had Buick, GMC, Cadillac, and Chevrolet, and then, I wanted, badly wanted, to keep Pontiac, because Pontiac was on its way back, and it had been mismanaged for a number of years, you know, with ‘rebuild excitement,’ and the excitement was only in the plastic body cladding, mechanically there was nothing about Pontiac in the 90s that would make your heart beat faster. And with the solstice and solstice coupe, and with the Pontiac G8, which was a great car. We were embarked on a strategy of making Pontiac different from the rest of GM in that Pontiac wouldn’t get any front wheel drive cars, they would all be rear-wheel drive, and the next G6, was going to use the architecture of the Cadillac ATS, it was going to be a 3-series sized rear-wheel Pontiac, with basically the Cadillac ATS ‘de-premiumized,’ obviously, a lot of the cost taken out, but still fundamentally that architecture.

That was going to be the next G6, and I think we could’ve moved Pontiac away from every other American volume brand and really started positioning it as attractive US alternative to some of the, and obviously at much lower prices than the European rear-wheel drive cars, but the Feds said ‘yeah, let’s just, how much money have you made on Pontiac in the last 10 years?’ and the answer was ‘nothing.’ So, it goes. And, when the guy who is handing you the check for 53 billion dollars says I don’t want Pontiac, drop Pontiac or you don’t get the money, it doesn’t take you very long to make up your mind.”

Truth be told, I rather liked that original government pitch: you get one mass-market brand, one premium brand, and that ought to be enough for anybody. (Ford, not incidentally, came to this conclusion on its own.) But notice how the Feds are willing to indulge the Chinese with regard to Buick, which at the time was selling roughly half Pontiac’s volume in the States.

Personally, I think they should have ordered GMC to go a bit farther upscale. And if we’re really concerned with GM’s proliferation of brands worldwide, why is Chevrolet trying to get a foothold in Europe, thereby cannibalizing sales of Opel/Vauxhall?

So now the General is repositioning Cadillac as the purveyor of RWD BMW alternatives, the ATS aimed right at the 3-series, the new CTS going after the 5. I’m not sure where the XTS fits in here, unless it’s just to reassure old farts like me who remember the word “Brougham,” and the ELR, let’s face it, is basically a Voltier Chevy Volt. Neither XTS nor ELR, I submit, would have had any business being a Pontiac.

Comments (6)




Hyundai still has your back

Hyundai’s Assurance plan, which goes back several years, cuts installment buyers some slack during Hard Times. And they’ve now opened it up to include furloughed Federal workers during the current, um, financial unpleasantness:

Hyundai Motor America [1 October] announces the latest addition to its Assurance program with the launch of a new payment deferral program aimed at helping federal employees furloughed during the government shutdown. Under the plan, Hyundai will defer all auto loan and lease payments during the shutdown for current Hyundai owners who are furloughed.

“We recognize the impact on family budgets that the furlough will drive,” said John Krafcik, president and CEO of Hyundai Motor America. “Like we did almost four years ago when we launched Hyundai Assurance, this is our way of saying ‘We’ve got your back’ during this uncertain time.”

Current owners in the Hyundai family will be provided relief from payments for as long as they are out of work. Furloughed employees who wish to buy a car in October will be offered a 90-day payment deferral.

Presumably the balance due will accrue interest during the deferral period, but this is still a seriously grand gesture.

Comments (1)




In other news

Of course, we all know why Jeff Bezos was willing to ante up a quarter of a billion for the Washington Post: he got free shipping.

Still, this question comes up:

In any event, it’s noteworthy that the Boston Globe was sold for $70 million in the same week the Washington Post garnered $250 million. The disparity in sale prices hasn’t been explained.

Two factors come to mind:

  • The Post still moves about 480,000 copies a day, even though a growing percentage of those copies are virtual. The Globe sells about half as many.
  • Several times before, the New York Times Company, which owned the Globe, has sold properties to refocus on the Family Business; it’s possible that they wanted to firm up their balance sheets after paying off Mexican benefactor Carlos Slim three years early.

We will, of course, never know how much Phil Anschutz peeled off for the Oklahoman.

Comments off




Advance warning

In the spring of 2012, Advance Publications announced that its New Orleans newspaper, the Times-Picayune, would cut its publication schedule to three days a week in an effort to cut costs, and staff would be commensurately reduced. That fall, the Advocate, a Baton Rouge paper still running seven days a week, added a New Orleans edition. Smarting at this intrusion into what was once their territory, the TP went back to a full schedule, sort of: the broadsheet version still comes out three times a week, but a newsstand-only tabloid edition appears on three other days. (How you count the Sunday paper, which first appears on Saturday, is up to you.)

Advance has now announced the imposition of a TP-like schedule on their Cleveland paper:

While [the Plain Dealer] will continue to publish a print edition daily, the paper will be home-delivered only on Wednesday, Friday, Saturday and Sunday.

Other Advance papers have adopted, or are about to adopt, similar schedules, the major exception for now being the Star-Ledger in New Jersey.

Comments off




The old one-two to the 313

Bill Quick modestly proposes a solution to both illegal immigration and Detroit’s insolvency:

Let’s roast two birds with one stone. Are you an illegal alien? Would you like to become a legal resident? Fine. All you have to do is emigrate to Detroit, pledge never to join a union, and agree not to accept any welfare or other government support payments whatsoever. In turn, Detroit will become a free economic zone with no federal, state, or local taxes, and no government regulations.

This might even encourage some of the 700,000 remaining residents to stick around, assuming the deal was offered to them.

How would this work? Cutting off benefits in that zone could be seen as a violation of equal protection; but they’re not technically being cut off, only being refused by the would-be beneficiaries. I’ve seen thinner hairs than that being split. (It is assumed for purposes of illustration that reneging on that deal would presumably, once the benefits application was received, get you a one-way trip back to wherever.) And truth be told, I like the idea of this purely as an experiment. Surely it can’t be any worse than what’s in Detroit now.

See also this Michael Bloomberg proposal.

Comments (1)




A tale of two budgets

William Crum in the Oklahoman, on the suddenly newsworthy matter of municipal budgets:

Q: How much does Detroit owe?

A: Long-term debt could be as much as $20 billion.

Q: How does Oklahoma City compare?

A: Oklahoma City and its related trusts owe a little more than $1.3 billion. Property taxes are used to make payments on about $600 million in general obligation bonds, meaning taxpayers are on the hook for that money. Revenue bonds issued by related trusts are secured by specific streams of cash — for instance, payments on the $344 million owed by the Oklahoma City Water Utilities Trust are made from money collected for water and sewer services. Nine related trusts borrow to finance public services including airports, the fairgrounds, parking and economic development.

Q: One battle in Michigan is over whether bankruptcy could lead to cuts in pension benefits for retired public employees. Is this an issue in Oklahoma City?

A: Actuarial figures that came out last week show Oklahoma City’s pension system is 99-percent funded. That system covers civilian employees; fire and police are in state pension systems.

State pension funding is running about 65 percent, an improvement over recent years but still a bit short of where it ought to be.

Interestingly, Detroit’s 2013-14 budget calls for $1 billion in expenditures. Oklahoma City, with 100,000 fewer people, has a 2013-14 budget that calls for — um, $1 billion in expenditures. On the other hand, OKC is caught up on its debt service, and legally can’t run a deficit.

Comments (4)




Rubber repossessed

I winced when I wrote the check for those tires the other day — the wrong side of $700, it was — but I take comfort in the fact that I could have done a whole lot worse:

Rent-to-own tire shops are among the newest arrivals to a sprawling alternative financial sector focused on the nation’s economic underclass. Like payday lenders, pawn shops and Buy Here Pay Here used-car lots, tire rental businesses provide ready credit to consumers who can’t get a loan anywhere else.

And, just like those other operations, they work on massive margins:

[A] couple last September agreed to pay Rent-N-Roll $54.60 a month for 18 months in exchange for four basic Hankook tires. Over the life of the deal, that works out to $982, almost triple what the radials would have cost at Wal-Mart.

Still, if you have to scrape to get $14 a week, and there have been times when I have had to, what else can you do? Used tires? Bus passes?

(Via Outside the Beltway.)

Comments (1)




Smaller Government Motors

Fifty million shares of General Motors go on the block today, thirty million from the Treasury, twenty million from the UAW Retiree Medical Benefits Trust, in the hopes that the General’s return to the Standard & Poor’s 500 index (also today) will hype the price a bit.

Of the $49 billion taxpayers put up to bail out GM, almost $32 billion has been recovered; assuming a price in the low-to-mid-30s, the Treasury offering should bring in a billion more. Officially, Treasury plans to exit GM entirely by next April; it’s not likely they’ll break even, but the company may well be helped by losing the stigma of being “Government Motors” — at least in the States. Canada and the province of Ontario, which hold about 9 percent of GM stock, aren’t selling at this time.

Treasury, I have to figure, isn’t particularly thrilled by the fact that much of GM’s market momentum is being propelled by the arrival of new trucks, but I also figure that fiduciary responsibility trumps green posturing elsewhere in Washington. And if it doesn’t, well, it should.

(Via The Truth About Cars.)

Comments (1)




Perón 2.0

Buenos Aires, like Washington, is bothered by tantalizing hints of funds yet untaxed. Unlike Washington, they have a Plan, kinda sorta:

President Cristina Fernandez de Kirchner wants tax evaders hiding about $160 billion in dollars to help finance Argentina’s oil-producing ambitions. Her offer: Buy a 4 percent bond or face the prospect of jail time.

The tax authority announced the plan May 7, highlighting its information-sharing agreements with 40 nations and warning Argentines who don’t use the three-month amnesty window that they risk fines or arrest. Evaders have two options for their cash and the only one paying interest will be a dollar bond due in 2016 to finance YPF SA, the state oil company. The 4 percent rate is a third the average 13.85 yield on Argentine debt and less than the 4.6 percent in emerging markets.

This is not, incidentally, the first time the Argentine government has gone after those wicked rich people:

Many Argentines hide assets to avoid a 35 percent income tax and a levy of as much as 1.25 percent on their personal wealth. Undeclared assets are also beyond the reach of the government, which in 1989 seized bank certificates of deposit in exchange for bonds and in 2002 converted dollar deposits into pesos.

Incidentally, if you didn’t know Argentina had a state oil company these days, that’s also a Fernandez scheme, as is fining economists who suggest that the inflation rate, claimed by Buenos Aires to be 10 percent, is actually more than twice that.

Fortunately, the US has unofficial inflation statistics, far more believable than the government’s official bumfuzzlery.

Comments (4)




Just try to get a buggy whip these days

“The disruption economy,” Dave Schuler calls it, and he has plenty of examples to cite:

[I]magine a world in which not just individual businesses or even industries and trades vanish but in which complete business models, groups of industries, are failing and being replaced by new ones practically on a daily basis.

He cites Aereo, a multi-antenna television service that delivers over-the-air channels to subscribers for about one-fifth what cable companies charge, which has a couple of networks threatening to drop their local signals in response. But that’s hardly the only one:

[H]igher education’s business model is not long for this world. The big law firms’ business model has already changed and there are hundreds or thousands of young lawyers standing dazed in the wreckage. One of the insufficiently remarked-on aspects of the PPACA is how much it changes physicians’ business model.

Retail has been in ferment for decades. Soon there will only be online sales as exemplified by Amazon.com, boutiques (which are mainly a hobby business), and Walmart. J. C. Penney’s problems, still being covered in the business pages, are that there is no room for yet another commodity retailer.

And why do you think your favorite magazines, or for that matter the ones you can’t stand, are so assiduously courting tablet owners?

Thirty years from now, the business landscape will be unrecognizable. (And so will I, but that’s another matter entirely.)

Comments off




Can C789 be far behind?

Bankrupt battery maker A123 Systems, last seen rushing into the arms of Chinese conglomerate Wanxiang Group, has announced a name change — to “B456.” Yes, really:

As part of A123’s bankruptcy proceedings dating to last October, it was required to change its name in order to be purchased by Chinese company Wanxiang. According to the Detroit Free Press, as part of a March 22, 2013 filing with the US Securities and Exchange Commission, A123 declared that its new name is B456.

Oh, it gets better:

We’re not sure if anyone at A123 realized the irony — B456 is also the model number for a fire extinguisher made by Amerex that happens to be good for “energized electrical equipment.”

“They’re always changing corporation names,” Grace Slick observes.

Comments (2)




Somewhat put out

Not that you’d remember after ten years, but my agent and I traipsed through ten properties before I decided to buy the eleventh, which is now of course the palatial estate at Surlywood. For the record, this is what I thought of the tenth:

This place was a foreclosure, and it had been suggested in earlier discussions that despite what you see on those TV infomercials, there’s not a lot of benefit to buying these things; apparently, once informed that they’re about to be dispossessed, the occupants avenge themselves by trashing the premises. It was certainly the case here: non-functional appliances were scattered about, the window treatments were more trick than treat, and someone had made off with a couple of downspouts, fercrissake. This will be a beautiful home for someone someday — provided that someone is willing to spend half again the purchase price to restore its dignity. I’m not.

Have things improved in the last decade? Of course not:

When people have little incentive to behave well, and when nobody is watching, what do people do? The last few years have given us millions of opportunities to answer that question as people living in foreclosed homes decided whether to leave those homes in decent condition or to instead pour concrete down the drain.

Warren Meyer notes at Coyote Blog:

These folks are lucky to live in the US — we have the most lenient home mortgage system in the world. Very, very few other countries in the world have no-recourse mortgages where one can walk away only with a ding on their credit record, without even a personal bankruptcy. Almost anyplace else, they would be facing years of garnishments for whatever losses on the loan the bank had after they sold the home.

One could argue, I suppose, that a system that would lend me money is too lenient by definition. Still, despite qualifications that could fairly have been described as marginal, I got the loan, and I’ve never come close to foreclosure; I’ve never even been stuck with a late charge.

Comments (4)




We’ll handle that for you

I’m guessing you’ve probably already figured this out. Bill Quick certainly has:

[I]n an effort to save TBTF banks, the government crashed interest rates into negative numbers (adjusting for inflation) which destroyed the incomes of millions of retirees and others, forcing them to depend entirely on government payments of one kind or another.

At which point the government noticed how dangerous the savings and investment environment had become for older folks, thanks to the government’s own actions — and so it arrogated to itself the necessity of taking over the management of retirement savings for the saver’s own good.

My bank statements come out today, so I can stare in disbelief at the incredibly low interest rate I’m earning, although it’s only half as low as it was last year.

Eventually, I suspect, the Feds will actually try to confiscate those savings, there being no reason to think that Washington is any more competent and/or scrupulous than, say, Cyprus.

Comments (2)




Next: the Nemean Lions

I do not envy this man:

An emergency financial manager with wide-ranging powers has been appointed for the troubled US city of Detroit, in the biggest state takeover for years.

Kevyn Orr, a lawyer who worked on restructuring the carmaker Chrysler after bankruptcy, will be able to override elected officials.

The Motor City is running a deficit in the neighborhood of $300 million and has piled up $14 billion in debt. Michigan Governor Rick Snyder is clearly tossing up a Hail Mary here, but realistically, what choice does he have? It’s not like they can send Kwame Kilpatrick the bill — except for $850,000 or so.

Comments off




Canberra wants your cash

Under previous Australian law, dormant deposit accounts were turned over to the government after seven years. The new rule is three years, and they mean it:

Thousands of bank account holders are being advised to make trans­actions of as little as $1 to avoid ­having their accounts transferred to the Australian Securities and Investments Commission to help plug the federal government’s budget deficit.

Under recent changes to the law designed to raise $109 million this financial year, deposits can be deemed unclaimed if a transaction has not been made on an account for three years or more, down from seven years previously.

Collecting interest, apparently, is not considered a transaction.

Says Tim Blair: “Next up: federal couch inspections.”

Comments (6)