mm271: The automobile post – diesel / electric

January 31, 2008

MUDGE’S Musings

Don’t spend much time reading Forbes any more. Guess I’ve given up the dream: to be a capitalist.

My dear grandmother gave me a gift subscription when I was 21 years old. Found it interesting and aspirational, then. The politics made little impression (and maybe in the early 70s were less obstreperous).

But, it was really business news I hungered for, rather than investment advice (I was investing in my domicile and groceries at the time). For advice on decisions made in my favorite field of battle, the business world, Business Week became my regular read, and has continued to be for more than 30 years.

Read the rest of this entry »


mm166: Economic Miscellanea

October 10, 2007

MUDGE’S Musings

shortattention_thumb2_thumb2

Short attention span blogging: Item 1:

Three totally different, but intriguing takes on financial and economics news found over the past few days caught our interest.

The first from an interesting business blog long since added to our blogroll, The Cenek Report.

cenekreport

A Modern Parable

Tuesday, June 12, 2007 at 08:16PM
Robert Cenek

A Japanese company ( Toyota ) and an American company (General Motors) decided to have a canoe race on the Missouri River.  Both teams practiced long and hard to reach their peak performance before the race.  On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat.  A management team composed of senior management was formed to investigate and recommend appropriate action. Their conclusion:  The Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.

The lesson is short, but telling, and I dare not quote more of it than I have, so please read it for yourself.

[Please click the link below for the complete article — but then please come on back!]

The Cenek Report – Journal

MUDGE wants to support the U.S. automobile industry. Instead, for many years, his family has supported U.S. automobile workers, as well as Japanese automobile workers, as he and his loved ones haven’t found a suitable Big 3 product for more than 20 years, yet we certainly haven’t stopped buying cars. Just Big 3 cars.

The ongoing arguments in the MUDGE family aren’t Ford vs. Chevy vs. Dodge, it’s Honda vs. Toyota, and throughout the MUDGE and MUDGElet families, a pretty even split between the two maintains.

Short attention span blogging: Item 2:

From Slate, the always approachable and most readable Daniel Gross writes about an increasingly pervasive trend:

slate

How Wal-Mart and the government are killing the incandescent light bulb.

By Daniel Gross
Posted Saturday, Oct. 6, 2007, at 6:53 AM ET

Light bulb. Click image to expand.Is the incandescent light bulb on its way out?

Compact fluorescent bulbs cost more than regular incandescent bulbs. But according to the U.S. Department of Energy, they last up to 10 times longer, use about one-fourth the energy, and produce 90 percent less heat. Over its life span of four and a half years, a CFL more than repays its higher cost in energy savings: $62.95 per light bulb. Oh, and they’re good for the planet, since they produce fewer emissions. But while they’ve grown in popularity, CFLs have yet to emerge as a household staple, in part because consumers can’t see beyond the shock of the sticker price to the long-term savings. “When you buy a compact fluorescent bulb at the cash register, you experience the higher cost vividly and all at once,” says Robert Frank, a Cornell economist and author of The Economic Naturalist. “But when your electric bill goes down as a result, the savings are not as evident.” Consumers routinely make such short-term economically irrational decisions.

As it aims to vanquish Thomas Edison’s filament bulb—and save the Earth—the CFL is running into the brick wall of human nature. But the CFL is getting a lift from two of the globe’s most powerful forces: image-conscious Western governments and Wal-Mart.

MUDGE remembers the days, now long past, and in the same classification of even earlier cultural artifacts as twice daily (and once on Sunday!) home postal deliveries (it’s true, but not since the ’50s in Chicago), when light bulbs were free, provided by your friendly electric company (“Little Bill”).

You went to some unlikely place (our local bank I think I remember) and traded a copy of that month’s electric bill for 10 bulbs. One only purchased bulbs, at the ma and pa hardware store or maybe an Ace or True Value store, when something unusual was necessary, like a 4-foot long fluorescent tube for a kitchen or garage.

So the first displacement occurred when everyday bulbs needed to be purchased, as the electric monopoly’s free bulb policy went the way of 29¢/gallon ethyl.

And now, the newest displacement, when instead of the familiar globular bulbs, the odd, curly CFLs, so much more  expensive, and still not providing quite white illumination, seem to be the purchase of choice when replacing lighting.

OF course, bleeding edge as always (ha!), we’ve been replacing incandescents with CFLs here in MUDGEland for many years.

We will never go vegan (don’t get me started!); we recycle but haven’t graduated to reusable grocery bags*; and sorry, the economics of hybrid cars just don’t compute for this family. But compact fluorescent lighting — we’re there (but never, ever to be purchased at Wal-Mart!).

[Please click the link below for the complete article — but then please come on back!]

How Wal-Mart and the government are killing the incandescent light bulb. – By Daniel Gross – Slate Magazine

And did you catch the WIWICWLT moment?

It takes more than one market force to change a light bulb.

Short attention span blogging: Item 3:

Finally this, from Paul Krugman of the NYTimes, unshackled from the newly abandoned pay per view policy, and whose blog has also recently joined the L-HC blogroll.

Here, he illuminates yet another instance of the distorting spin that the perfidious administration of George III has used when announcing economic statistics.

nytimes

Pathetic — Paul Krugman — The Conscience of a Liberal

The new White House “fact sheet” on the economy declares that job growth since August 2003 is the “longest continuous months of job growth on record.”

That’s literally true – the Bureau of Labor Statistics data from the great jobs boom of the 1990s do show a couple of scattered months of job decline, although these are probably statistical blips. But by any reasonable standard, job growth in the Bush years has fallen way short of growth in the Clinton years.

All the data are available at the BLS web site.

Over the whole of the Clinton administration, the economy added 22.7 million jobs – 237,000 per month.

Over the whole of the Bush administration to date, the economy added only 5.8 million jobs – 72,000 per month.

Pathetic – Paul Krugman – Op-Ed Columnist – New York Times Blog

One no longer is surprised, or even disappointed. Just incrementally more angry.

January 20, 2009

Bush’s last day

It’s it for now. Thanks,

–MUDGE

*Non-commercial Note!: the link to greensak.com used above is for the convenience of faithful reader and represents no commercial relationship whatsoever. Left-Handed Complement should be so fortunate as to ever collect remuneration of any kind for this endeavor. I can link, so I link. It’s technology. It’s cool. Deal with it.


mm147: The Crazy Eddie economy

September 20, 2007

MUDGE’S Musings

Always one of MUDGE‘s favorite reads, Daniel Gross enlightens us about the true nature of our economy, in this Slate story regarding a couple of recent very visible pricing actions.

crazyeddy

slate

The alarming lesson of the iPhone price cut.

By Daniel Gross
Posted Thursday, Sept. 20, 2007, at 4:31 PM ET

Crazy Eddie, the electronics retailer who advertised insanely low prices, went out of business nearly 20 year ago. But the company’s spirit is thriving in blue-chip American corporations. On Sept. 5, Apple sharply cut the price of the 8GB iPhone from $599 to $399. Last weekend, Hovnanian, the big home-builder, held a highly promotional “Deal of the Century” campaign, slashing prices for 72 hours on new condominiums. In some Hovnanian developments, prices were cut by up to 25 percent. Other builders are now following suit. Welcome to fire-sale nation!

High-profile price-chopping tends to occur whenever companies freak out about the vicious combination of a slowing consumer economy and the prospect of getting stuck with big inventories of unsold goods. The tactic often works in the short term. The hype over insanely low prices functions as a form of free advertising, and the lower prices tend to attract buyers. Apple announced on Sept. 10 that it had sold its 1 millionth iPhone. Hovnanian’s preliminary results show that it notched sales of 2,130 units over the weekend. (The company reported inventory of about 3,200 homes on July 31.) For the entire third quarter, Hovnanian delivered about 3,500 homes.

I’m not an iPhone user (see below) but who could miss all of the hype, which during all of 2007 has rivaled or even exceeded the last Harry Potter for consumer interest?

And, how did it make you feel, iPhone owner or not, to hear that the price was suddenly reduced by $200, and in (partial?) assuagement present owners would receive a $100 store credit?

As Mr. Gross puts it, I would probably be iPissed. (WIWICWLT!)

But, in true economist fashion, from this example, as well as the Hovnanian (not a name this observer knows — must be less active in the Midwest? Or perhaps it’s because this writer has never purchased a new-built home?) home price cuts, Gross builds a convincing case for how damaging this tactic is for the companies, and for perhaps the economy at large.

[Per L-HC’s reformed process, please click the link below for the complete article — but then please come on back!]

The Crazy Eddie economy. – By Daniel Gross – Slate Magazine

From my many exhausting and tortured years in entrepreneurial business, I know too well that there’s no such thing as too low a price, and if price is the only grounds for competition, you are doomed to bankruptcy.

Gross points out the domestic U.S. auto manufacturers as perfect examples of the walking dead, the zombie behavior caused by selling a product no one will pay full price for.

Ask a bank that writes auto leases what it thinks of Detroit-origin cars, compared to Toyotas and Hondas, which may have spot incentives to correct the occasional inventory imbalance, but usually never very high in comparison, nor very long.

Now about that phone.

This is not meant to start warfare: I simply have always been resistant to Apple’s lovely, but oh so expensive charms, be it computers, music players, and now smartphones.

When it came time for me to upgrade my personal cell (it’s a BlackBerry 8703c for work, tyvm) I found that I had En-V envy.

En-V

Yes, it’s the LG 9900, known for some reason as the En-V. Candy bar (a fat one) on the outside (nice 2MP camera opposite), and it flips open to reveal a pretty fair keyboard and nice large display. MUDGElet No. 3 likes to text — now I can text back.

It’s been two months; I like it. Call quality (it is, first and foremost, meant to be a phone, after all!) is best I’ve ever had, regardless of network (and in MUDGE‘s part of the world, Verizon’s is pretty good).

The camera produced that ad hoc shot I shared after the Boston conference.

0808071931a

For a larger view, click here.

The navigator feature gave us spoken turn by turn instructions to a restaurant, complete with a changing map on the bright display as we drove. Not too shabby.

And with a 2-year contract (is there any other way these days?) and loyalty discounts, it was $50. $599 or even $399 for a phone? Not this curmudgeon. Can’t feel like a chump, no matter what happens to the price from here!

That’s the best pricing power a consumer has, really. Finding a good, maybe great product, at an everyday competitive price. I’m not bankrupting LG (the phone, popular as it is, has been out for most of a year, very mature for technology these days, so you have to figure they’re making piles on it), nor Verizon (per the 2-year contract), nor, hopefully, myself.

Win-win-win.

It’s it for now. Thanks,

–MUDGE