Tuesday 19 July 2011

Simply Business

There are two interesting business episodes unfolding, which I kinda have an interest in.

First, Borders Books are bankrupt, period.  They thought someone would come out of the shadows and buy them....but the amount of debt and unsustainable profit is an issue.  To be honest, between Amazon and these digital books available....it's hard to be a local neighborhood book store (even in a massive mall).   It is a sign of the times.

A trend here?  Digital books are growing and I would suspect by 2020 that seventy-five percent of all books will be digital, as sales go.  I won't say it's a positive trend, but at least people are still reading.

Borders was this place you go and hang out....picking up an odd book for five minutes and sitting at some easy chair.  If you felt right with the book, you bought it.  Coffee?  Yes.  It was a good atmosphere, I will admit.

The other big story?  Readers Digest wants to sell itself.  Amusingly enough....they want a billion dollars.  Last year, they had around 1.4 billion in revenue, but that equaled around thirty million dollars in losses.  To me.....that's a huge signal that you've got big problems.....over a billion in sales, and you still can't show revenue.

Who buys Readers Digest?  Mostly older folks and medical establishments.  If you go to a routine dentist or doctor's appointment....you typically find it still laid out and offered as reading material while you wait.

As a kid, I remember reading it.  The last time I picked up and read one?  About six years ago.  I actually bought one.  What I found laid out in the one I bought.....one extremely political story in favor of John Kerry, and two stories over the environment and global warming, which tried to sound factual but were loaded with unproven points.  I sat there shaking my head because it'd turned into the National Geographic....just another trend magazine run mostly by a bunch of agenda writers and editors.

Will anyone come up to pay a billion for Readers Digest?  I suspect few if any takers.  They might eventually unload for around $750 million and end up in the hands of some Brazilian or Saudi billionaire.  They would likely hire out a number of cheap writers to contribute and try to remake the magazine into something totally different.  Eventually, it'll fail completely and disappear from the shelves.

So in the end....two more dinosaurs dying out.  

Monday 18 July 2011

Book Review: Reshaping of Everyday LIfe

Once in a while, I will toss out a book review.  Today?  Reshaping of Everyday Life (1790-1840).

It's an odd book, which has been out for over a decade.  To be honest, I doubt if it ever sold any good numbers at all.  You can still find it on Amazon.

It's a book you can read over in a week, and covers everyday American life for a fifty year period in the colonial years.  I would actually like to make it a mandatory reading for every fifteen year old kid in America because it really paints a harsh environment where people were lucky to live to be forty years old.

The book covers love, romance, marriage, houses, food, coffee, entertainment, booze, and just about every situation you can imagine for that period.

In the end....you came away impressed on how people survived and enjoyed what little they did have.  Just having one pair of shoes....would have been a great achievement for most folks.  So if you needed some reading material over American history that would entertain you....order the book and settle back for good reading.

The "Other" Debt

You would think there would be alot more turmoil and protests over the debt games being played out in Washington.  There ought to be protesters....angry mobs hating Republicans....upset Tea Party folks....etc, etc.  But there aren't.  So why?

Well....because Joe, your neighbor, owes $80k in college loans and he admits he won't be finished paying this off for another fifteen years.

Aunt Maude, your beloved aunt, owes near $60k on four VISA cards that she uses regularly to shop QVC....and will likely never pay off the cards before she passes on.

Charley, your favorite barber, owes $44k on a brand-new car that he bought.  He admits that he has never cleared more than $32k a year on salary but he's willing to take out a eight-year loan to get this sports car of his dreams.

Claude, your cousin?  He bought the $350k house back in 2007, with only $35k in the down-payment.  The house has gone down in value to $200k now and Claude is contemplating just handing the keys to the house over to the bank and declaring bankruptcy.

Karl, who lives down the street....wrapping up divorce number three?  He works sixty hours a week and barely takes home $1400 after paying alimony and child-support to the three ex-wives.  He's 42 and says he might find the right woman next time....if not....he'll be bankrupt by that point.

Sid, who bought property in Vegas as an investment in 2004?  The value just dumped by fifty percent and he's still paying $450 a month for this "investment opportunity".  It may take twenty years for the property to get back up to its original value....and maybe sell.

Tim, your buddy from high school?  He finally found a job after three years of unemployment....but had to move to Fargo, North Dakota to achieve this honor.  He lives out of a RV because his wife won't move to Fargo....and most all his check goes to the wife and kids at the old house.  

Frankly, we have become a huge debt crowd....in a debt nation, with no real grasp of what it was like in the 1970s.  Before the credit cards, QVC, massive college costs, alimony-on-top-of-alimony, and stupid property prices.....we were living a simple life, without much debt.  The same could be said for the nation itself.  We didn't build museum after museum.  We didn't build bridges on a whim.  We didn't hand out cash to research teams to figure out why bears like honey.

So, as you sit back tonight.....counting the few dollars left in your billfold....and watching a bunch of news folks get excited about the evil Republicans, the dimwitted Democrats, or the President's five-star speeches....you kinda wonder why anyone should get excited.  Until you've charged $80k on a couple of VISA cards....you really don't grasp debt or the depth of problems.  Course, the reverse is true too....if you as a nation owed a trillion dollars.....you really don't know debt.

Only in America.

Sunday 17 July 2011

My Walk

Yesterday, I walked seven miles.  I started out at the Arlington Cemetery.....crossed the bridge to the Lincoln Memorial, and walked all the way to the Capital building, before turning north toward Union Station, and finally ending up almost at the end of H Street in DC.  Naturally, by the end, I was fairly dehydrated and just about on my last cylinder.  Then, the German Biergarden came into focus....I stopped in there....and the kid gave me a cup of ice water and a German beer.  Within fifteen minutes, I felt re-hydrated.

The highlight of this walk?  At the end, I had this chance to watch a DC funeral.  The cops had come and blocked off an intersection to allow the possession to proceed.  There in the front....was a horse-drawn carriage with the coffin.  It was an odd deal....the horse had gold glitter over his hooves.  He was a big fellow and had no problems in pulling this short carriage.

Behind the carriage?  Well....here were two forty-foot long limos.  I'm guessing "special" family members rode in these.  And then came the thirty-eight other vehicles.

At that point, along H Street....I stopped to assess the local environment.  Twenty years ago....I might have been the only white guy on the entire street.  To be honest, H Street is fairly run down and in some kind of private recovery phase.  The city is talking up a trolley car deal, and put the track on the street....although it could be five years before this electrical issue is fixed up (they have a law dating back to around 1910 which says no electrical lines can be laid out to support a trolley car operation).

If you go a street back of H Street....what you find is that the young yuppies of DC have started buying up the rowhouses....tossing in $200k of repairs, and suddenly have a half-million dollar house (least by DC standards).  In effect, they are buying the older black generation out and changing the entire landscape of H Street neighborhoods.

My guess is that half the buildings along H Street will be bought out and torn down within the next two decades....and this new urban mecca will come about.  The comical thing?  The yuppies likely vote Republican and the voting results in ten years might change in a dramatic fashion.

So right now.....you've got the urban yuppies and the remaining hardcore blacks in the same atmosphere.  It wouldn't make any sense, except in DC.      

Friday 15 July 2011

Debt Poker

With all the discussion over the US debt situation....this odd suggestion came up from Senator Mitch McConnell this week (a Republican)....that the Republicans were ready for a possible "plan B".  This idea was that they'd just give the President the power to fix up the debt problem himself, and if they didn't like it....they'd have to muster around sixty percent of the House to fix the problem.  A lot of Republicans came back and really hated this plan.  Some Democrats came on TV and said it was a possible surrender by the Republicans and they could work with this.

I sat for a good long day thinking about the offer, and have now came to realize that this is plain and simple "debt poker".  Basically, if you hold only a pair of aces and really wanted to bluff your way into a poker win....then you'd double up or even triple up the bet....to make everyone quit the game.  Obviously, there are huge risks in doing this.

Here's the outcome of McConnell's offer.  The President would accept and then smile to the public as he now had this power to fix the debt.  The curious thing is that you'd need to show some cuts in order to get things moving in a positive direction.  The President's team would obviously work hard to avoid the cuts and double up on taxes.  You can kinda see where this is going.

So by November....a fair amount of taxes are now being shipped around to companies and rich folks.  They start to pull their money and sit tight.  Without thinking much about the consequences.....you create wave number two of the recession by March of 2012.  Everyone from the banks to Moodys....would now admit that we are in more trouble than we were in July of 2011.  Naturally, we are embarking in the Presidential election period.

So the President walks forward with a fresh new recession....that only he could create, and the only way to fix this is a massive cut in government funding....which he just can't do in the midst of an election year.  Bluntly.....it's a lose-lose situation from that point on.

So what should the President do?

One, accept any deal that the Republicans have on the table today, and offer up fair-sized cuts.

Two, hire some retired Democratic Senator to be your chief negotiation Czar from this point on because you....the commander-in-chief....are lousy at this mess.

Three....haul out to Montana and just camp out for three weeks.  Disappear from public sight.  Rest.  Drink some beer.  Don't show your face around.

Four.....hire up some economic guy and start tossing out a $500 million cut every day on the US government's requirements.  Close up our bases in South Korea, Japan and Europe. Close down the wars. Find money and just cut.

Five....order any government department that is given money by senators or congressmen....and they didn't ask for it.....to just NOT SPEND it.  Yes, forbid them from taking money unless they really asked for it in the first place.

Six.....if you don't want any advice and you want the absolute power to play debt-king....start asking yourself what you'd like to do in January 2013 when you are out of the President's office.  Return to Chicago?  Run some national charity?  Return to the senate?  Guest-host Saturday Night Live as a ex-President?  Sit around a Presidential library in South Chicago?  Run off to Norway and be a Nobel Committee member to pick future winners?  What if it's that Sarah Palin gal....could you sit there and accept that on election night, being beaten by six percent by the grizzly lady from Alaska?

I kinda think McConnell has played a few games of poker in his life....and knows how to double-up on a bad hand.

Saturday 9 July 2011

European Differences

I had a blog reader comment on this difference thing between various Europeans and Americans.  After traveling around for twenty years of life in Europe....I will offer the following observations.

The most pro-US and friendly place you end up?  Italy.  I admit....you might not run into alot of Italians who do speak English, but you just can't find that many Italians who are anti-US.  Got yourself lost?  An Italian will do his best to layout the direction to get back on course.  Comedians?  Yes, Italians are born comedians and probably have the best sense of humor of any nation in Europe.

In second place?  Denmark.  The Danes have had this fascination with America for 200 years. Danes packed up and ventured to America in the 1800s.  I'd make a guess that sixty percent of the country speaks some English.  It's difficult to find any Dane who'd be anti-American.  They might confess some dislike of Bush, but forty percent of Americans would do the same thing.

In third place?  Netherlands.  The Dutch are pro-International and would just about welcome anybody but the Nazis.  After WW II, there was a huge popular view of Americans and it really hasn't changed much.

In fourth place?  England.  There is this love-hate relationship of the British for Americans.  They can list forty reasons why they have something against America, and then raise a toast to Ronald Reagan or Jerry Lewis.  A Brit could carry on for hours about American TV shows, American confusion over global warming, or talk negatively about American whiskey (it just isn't as good as anything produced on the Isle), then they'd turn around help you fix a flat or find a decent hotel.

In fifth place?  The Germans.  Presently, about sixty percent of German society has something against America.  They'd like to discuss it with you....even though you'd prefer to eat their food, drink their beer, and sip their wine....all in peace.  The other forty percent of the friendly Germans?  They will confess they've had this fantasy of leaving Germany for thirty years and would love to move to Idaho.  This group is pro-US....to the point, that they'd like to be an American.

In sixth place....the Greeks, the Austrians, and Spaniards.  None of them have a really positive feeling about Americans, and frankly...I don't think Americans really care.

Finally, in seventh place....the French.  Here's the thing...the French hate most any visitor to their country.  You could be some alien off a UFO, and most French folks would question the necessity of you visiting France.  The French hate the Germans because of the Nazi invasion.  The French dislike the Spaniards because they are "cheap".  The French hate the British because they drink alot and are snobs.  The French hate the Dutch because they are lousy drivers.  The French dislike the Americans because we mostly have no style, no grace, no fancy nature, and often amazed that a sit-down dinner cost of $44 per person.  Here's the thing though....if you start getting out into the country of France, away from cities....you start to get this feeling that you've arrived in Tupelo, Mississippi.  Folks pretty much accept an American there and there's no anxiety about "visitors".  The issue is that there's not much to see in the country....except wheat fields, apple orchards, and strawberry fields.

To be honest, Americans that show up in Europe....really don't have an idea about the European culture.  We end up sipping some mighty fine wine and beer....eating some decent meals.....and seeing an awful lot of interesting stuff.  Frankly, we don't know a damn difference between Van Gogh, de Bray, or Rembrandt when it comes to painting.  If you asked us to identify the thirty-two different national cheeses of Belgium....we'd be at a loss.  If you wanted to note fancy French Dijon mustard....we'd confuse it with French's mustard that we buy at Piggly Wiggly.  We might be pleased with Audis, but we might say it's as good as a PT Cruiser.

The plain truth is that Americans travel for reasons vastly different from the typical European.  We've come to see different things and mostly just get bragging rights when we go back to Red Bay and talk about the fancy towers in London or the fine cheese we ate in Switzerland.  I'm sorry if Europeans wanted us to be extremely amazed by life in Europe, but after you've toured Beverly Hills, New York City, and New Orleans....it's hard to be amazed about anything.