mm403: Blast from the Past! No. 26

June 7, 2008

MUDGE’s Musings

We embark this weekend on a business trip to a conference in Boston. As conferences usually take up a great deal of uptime, without the downtime associated with a normal schedule, we will probably cover many of our daily blogging deadlines with Blasts from the Past!

The conference itself, designed to illuminate the social networking phenomena in the context of business and corporate conduct, may provide the opportunity to blog, as blogging in the corporate environment is one of its key topics. So we may be able to mix business interests and responsibilities with our avocation in this space. Should be interesting!

There’s most read, and then there’s favorite. This is a post which yr (justifiably) humble svt is, regrettably, but not regretfully, not at all humble about.

lhc250x46_thumb2

Blast from the Past!

A post we really, really loved to write, and read, and re-read…

From last summer, originally posted September 10, 2007 and originally titled “China – Two interesting aspects”.

MUDGE’S Musings

China is always in the news. Two stories from the past few days illuminate why in some interesting ways.

First, from the LA Times, a look at how we have become victim’s of our unlimited appetite for everyday low prices.

latimes_thumb2

Analysts expect prices in the U.S. to creep up as safety standards are reevaluated. Buyers and retailers may share the impact.

By Don Lee and Abigail Goldman
Los Angeles Times Staff Writers
September 9, 2007

SHANGHAI — Get ready for a new Chinese export: higher prices.

For years, American consumers have enjoyed falling prices for goods made in China thanks to relentless cost cutting by retailers such as Wal-Mart and Target.

But the spate of product recalls in recent months — Mattel announced another last week — has exposed deep fault lines in Chinese manufacturing. Manufacturers and analysts say some of the quality breakdowns are a result of financially strapped factories substituting materials or taking other shortcuts to cover higher operating costs.

Now, retailers that had largely dismissed Chinese suppliers’ complaints about the soaring cost of wages, energy and raw materials are preparing to pay manufacturers more to ensure better quality. By doing so, they hope to prevent recalls that hurt their bottom lines and reputations. But those added costs — on a host of items that include toys and frozen fish — mean either lower profits for retailers or higher prices for consumers.

“For American consumers, this big China sale over the last 20 years is over,” said Andy Xie, former Asia economist for Morgan Stanley, who works independently in Shanghai. “China’s cost is going up. They need to get used to it.”

Read the rest of this entry »

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mm396: It’s an oil spill!

May 30, 2008

MUDGE’s Musings

Oil prices. A very hot, very sticky, very crude topic. We’ll look at four versions of reality.

MUDGE‘s reality: $4.259/gallon at his neighborhood Shell.

From the mosaic, we can hope that some kind of truth emerges.

No question that we are living in interesting times.

“May you live in interesting times”

mm381: Crime’s up. Economy’s down. Next question?
mm380: The return of cheap gasoline
mm370: How can you tell our president is lying?
mm347: It’s official, we’re depressed — er, recessed
mm344: Welcome to interesting times
mm337: Dare we trust the guys who got us into this mess?
mm335: Are you prepared for interesting times?
mm334: Rearranging deck chairs
mm333: “Great people shouldn’t have a resume”
mm331: Obama at Cooper Union: Lincoln?
mm328: Today’s economics lesson: Depression 101
mm309: The news Bush really hates you to hear
mm289: Recession: Paying the price for our power
mm285: Mayor Mike tells some hard truths
mm263: This man -so- wants to pull the trigger…
mm257: The R-Word – Not that racy television show
mm256: I don’t hate big corporations, either

Oil spill no. 1. How high is up?

$200 a barrel petroleum. If you think your world is changing around you, buckle up.

theamerican[4]

Will Oil Really Hit $200 a Barrel?

By Desmond Lachman | Friday, May 30, 2008

Rudi Dornbusch, the renowned economist, once said that he did not understand how Mexico’s central bank board members could make the same mistakes time after time. Looking at the ongoing frenzy in the global oil market, one appreciates what Dornbusch meant. Once again, many market participants appear to believe that oil prices can only go up. It seems that the painful lessons of the 2001 dot-com bust have been forgotten, as have the lessons of the much more recent U.S. housing crash.

In their state of forgetfulness, many pension funds and insurance companies have built up very large open positions in the oil futures market. These positions are now estimated to total over $200 billion, roughly the equivalent of a full year of Chinese oil demand. They have contributed to the recent spectacular run-up in oil prices.

Read the rest of this entry »


mm138: Tired and Disgusted, Stop the Lies!

September 11, 2007

MUDGE’S Musings

Poking around this evening, looking for some perspective on this day in recent history, as well as the 2nd day of the Congressional hearings on the Iraq war.

Faithful reader may recall seeing our anticipatory post the other day.

Found this fiery analysis:

smirkingchimp

by Timothy Gatto | Sep 11 2007 – 3:26pm |

Today is September 11th, 2007, and we have finally heard from “The General” on the situation in Iraq. Let me be the first to thank him, before yesterday I thought we were just treading water, now thankfully, I know that the forces of “good” and the soldiers of “Christ” are actually winning this confrontation with the forces of evil. I am so glad that I took time from my busy day to hear his report. I can now hold my head high, for now I understand, thanks to General Petraeus, where we are headed in our “Global War on Terrorism”; we are “turning the corner” and with that statement, I would just like to comment on this fact. The truth is, we have turned the corner so many times, we are precisely at the point at which we took up this journey, the corner is familiar and I realize that beyond this corner is another, and beyond that another…

The other shoe fell, and we did not learn anything new.

The time for “listening” is rapidly coming to a close. The American People have been listening to this administration and we have heard nothing except misinformation and propaganda. The very same lies that the government told during the Vietnam War are being told today. The same results that we achieved in Vietnam will no doubt be echoed in Iraq. The very idea that you can win an “occupation” of another nation is the question here, not the question of whether or not we can defeat an “insurgency”. The fact remains that if we don’t ask the right questions, or if we don’t face the truth about what we are really doing in Iraq, we can’t possibly expect a favorable outcome, especially if we can’t even decide what it is that we seek.

Check out the balance of Gatto’s argument:

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

Tired and Disgusted, Stop the Lies! – The Smirking Chimp

What grabbed me was this challenge:

Americans can accept that we have no voice as to what is being done in our name, or we can stop blindly accepting authority and stand for what we believe. We can link arms and stand our ground, or be swept away like so many in history before us. We can argue about the correct way to demonstrate and oppose what our government is doing until our voices are permanently silenced, or we can put away the semantics of dissent and do whatever it takes to get the truth to the American people.

I looked back on a story we clipped from mid-July, a story from the Fox News watching heart of this country:

“I don’t know that you can win,” she said of the chances of victory in Iraq. “But if you can’t accomplish what you need to accomplish, get them out of there. There’s been enough. One is too many.”

What’s it going to take to galvanize this country to make the changes that must be made?

It’s it for now. Thanks,

–MUDGE


mm136: China – Two interesting aspects

September 10, 2007

MUDGE’S Musings

China is always in the news. Two stories from the past few days illuminate why in some interesting ways.

First, from the LA Times, a look at how we have become victim’s of our unlimited appetite for everyday low prices.

latimes

Analysts expect prices in the U.S. to creep up as safety standards are reevaluated. Buyers and retailers may share the impact.

By Don Lee and Abigail Goldman
Los Angeles Times Staff Writers
September 9, 2007

SHANGHAI — Get ready for a new Chinese export: higher prices.

For years, American consumers have enjoyed falling prices for goods made in China thanks to relentless cost cutting by retailers such as Wal-Mart and Target.

But the spate of product recalls in recent months — Mattel announced another last week — has exposed deep fault lines in Chinese manufacturing. Manufacturers and analysts say some of the quality breakdowns are a result of financially strapped factories substituting materials or taking other shortcuts to cover higher operating costs.

Now, retailers that had largely dismissed Chinese suppliers’ complaints about the soaring cost of wages, energy and raw materials are preparing to pay manufacturers more to ensure better quality. By doing so, they hope to prevent recalls that hurt their bottom lines and reputations. But those added costs — on a host of items that include toys and frozen fish — mean either lower profits for retailers or higher prices for consumers.

“For American consumers, this big China sale over the last 20 years is over,” said Andy Xie, former Asia economist for Morgan Stanley, who works independently in Shanghai. “China’s cost is going up. They need to get used to it.”

The low hanging fruit of lowest prices for decent quality has run into a rising standard of living in China, and the results have been ugly.

The bulk of the world’s toys are made in southeastern China, where wages have shot up in the last couple of years amid greater competition for workers and increases in minimum wages and living costs. Booming demand has pushed up commodity prices. The appreciation of the Chinese yuan, up 9% against the dollar in the last two years, also has hurt some factories, as they are paid in dollars.

Follow the link to the rest of the story, reported from Shanghai.

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

Los Angeles Times: Fixing Chinese goods will be costly

So, what with rising wages, increases in commodity prices, the unexpected new costs of safety inspections, prices for toys, tilapia, luggage, and an entire big box store full of consumer necessities (and not so) will go up.

So, now let’s turn to the other side of the consumer equation, courtesy of the always perceptive Daniel Gross of Slate.

slate

Pundits bemoan our trade deficit with China. But those container ships aren’t heading home empty.

By Daniel Gross
Posted Saturday, Sept. 8, 2007, at 7:59 AM ET

Economists make a big deal out of all the junk we import from China: tainted pet food, lead-laced toys, and enough cheap plastic tchotchkes to load up a landfill the size of Montana. And American industries are clearly being drenched by the rising tide of Chinese imports, which totaled $288 billion in 2006. But as imports from China loudly rise, American exports to China are quietly rising at an even more rapid pace. Would it surprise you to learn that a lot of those exports are … junk?

In an act of macroeconomic karma, materials thrown out by Americans—broken-down auto bodies, old screws and nails, paper—accounted for $6.7 billion in exports to China in 2006, second only to aerospace products. Junkyards may conjure up images of Fred Sanford’s ratty collection of castoffs. But these days, scrap dealers are part of a $65 billion industry that employs 50,000 people, who together constitute a significant arc of a virtuous circle. The demand of China’s factory bosses for junk—which they recycle to make all the junk Americans buy from China—creates jobs, tamps down the growth of the trade deficit, and might help save the planet.

Exports to China second only to aerospace products? Junk?

And this is a good story for all of you greens out there (MUDGE is always happy to assist his environmentally sensitive fellow citizens. Feel free to use yesterday’s post to wrap fish.):

The booming China trade isn’t simply good news for shareholders of Metal Management, whose stock is up 67 percent in the past year. It’s good news for tree-huggers. Every scrap of scrap put on a slow boat to China is one less scrap that winds up in a landfill or an incinerator. Asia’s insatiable demand for scrap has boosted prices, thus encouraging companies to suck more reusable junk out of garbage piles.

An interesting twist, eh? The imbalance is less so. That’s always good news.

Take a look:

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

The junk we send to China. – By Daniel Gross – Slate Magazine

A couple of things about this story are intriguing.

1) The story refers to corrugated paper, a key element of MUDGE‘s once family business. $130 ton for scrap corrugated boxes (the brown shipping containers everything wears to market) is an astounding price.

2) The idea of sending scrap overseas resonates in a slightly unpleasant way with us ancient curmudgeons. MUDGE was born after WWII (believe it or not!), but the lessons of that conflict were fresh.

In the years before Pearl Harbor projected the U.S. belatedly into a conflict that had started up in Asia in the early Thirties, scrap iron and steel in massive quantities made its way across the Pacific to, wait for it, Japan.

It was a bitter realization that many of those junked Model T’s and scrapped steam heating radiators were sent back to our combatants as Japanese aircraft and ships and bombs.

Is it too paranoid to make an association with cheerfully sending our scrap to a rapidly arming and increasingly assertive about its global destiny China?

So, two interesting China stories, one from each container port.

And did you catch the punch line from the LA Times piece?

Meanwhile, Skyway is gearing up to open a factory this fall in Vietnam, where wages are lower.

“I think the consumer will not accept the full impact of price increases from China,” Wilhoit said. “We’re going to have to do things differently, like Vietnam, to get the same quality stuff on the shelf and make money.”

The mind boggles.

It’s it for now. Thanks,

–MUDGE


mm126: Iraq = Vietnam – Compare with Care

September 3, 2007

MUDGE’S Musings

We and the world tackled this topic last weekend, but the NYTimes had something useful to say last Friday:

nytimes

AS the nations of Europe leapt to arms in 1914, President Woodrow Wilson’s mind turned to President James Madison and the war with England in 1812.

“Madison and I are the only two Princeton men who have become president,” Wilson observed ominously in a letter, noting that tensions with Great Britain over its naval blockage of Germany recalled earlier disputes with England about freedom of the seas. “The circumstances of the War of 1812 and now run parallel. I sincerely hope they will not go further.”

His fears were unfounded. Great Britain became an ally in World War I, Wilson’s alma mater notwithstanding. But his knack for reading — or misreading — historical parallels hardly stands out in the annals of American presidents and public officials.

President Bush sent historians scurrying toward their keyboards last week when he defended the United States occupation of Iraq by arguing that the pullout from Vietnam had led to the rise of the genocidal Khmer Rouge in neighboring Cambodia. His speech was rhetorical jujitsu, an attempt to throw back at his critics their favorite historical analogy — Vietnam — for the Iraq war. His argument aroused considerable skepticism from historians and political scientists, who note that the United States’ military action in Vietnam was among the factors that destabilized Cambodia. But Mr. Bush’s statement also revived a perennial question. Whenever a public officials starts to say “the lesson of,” is that a cue to stop listening?

The Times references some interesting parallels: the Cuban missile crisis of 1963 (Kennedy denied his advisors’ attempts to justify bombing Cuba by comparing the crisis to the pre-WWII Munich appeasement) is their most interesting example of attempts to find historical parallels where none exist. Take a look:

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

War – History – Iraq – Vietnam – Korea – War of 1812 – New York Times

It’s common to attempt to understand complex situations by making associations to (hopefully) understood events of the past.

But those historic events themselves were of course complex, in the case of Vietnam/Cambodia probably still incompletely understood (after all, who ended with command of the battlefields?) and should resist a simplified reduction. However,

“People alight on the likeness with an event in the past, and it helps them to understand something when they can associate it with something familiar,” Professor May said in an interview.

The key of course is whether the comparison is apt. Just can’t give the Bush administration credit for considered reflection, unless the reflection is about how to award more spoils to their Halliburtons.

Wisdomquotes.com tells me that George Bernard Shaw said, “We learn from history that we learn nothing from history.” Even that concept seems beyond the capability of the intellectually bankrupt administration of our very own George III.

It’s it for now. Thanks,

–MUDGE


mm116: Lies, Lies, and More Lies, in History-Illiterate America – The Smirking Chimp

August 26, 2007

MUDGE’S Musings

There have been a number of refutations of George III’s infamous Iraq/Vietnam comparison statement of this week. Here’s an excellent one:

smirkingchimp

by Larry Beinhart | Aug 25 2007 – 7:44pm |

George Bush — and other Iraq War supporters — have argued that if we withdraw from Iraq the result will be like the slaughters — the killing fields -in Cambodia.

Here are the facts:

  • The killing fields were real. The genocide against their own people was committed by the Khmer Rouge.
  • The Vietnamese — the Communist Vietnamese — were the people who went in and put a stop to it.
  • The United States then supported the Khmer Rouge.

MUDGE isn’t doctrinaire about history. He won’t trot out George Santayana (yeah, okay, “Those who cannot learn from history are doomed to repeat it”).

On the other hand, the world isn’t some Magic Slate, wiped clean every night, starting afresh every day, sparkling and new.

Some middle ground is preferred between codgerdom (we who remember everything, just before we start to forget everything) and Gen Y, who seemingly haven’t bothered to learn anything outside the narrow confines of MySpace and YouTube.

So take a look at the rest of this cogent posting:

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

Lies, Lies, and More Lies, in History-Illiterate America – The Smirking Chimp

The old analogy of ships of state is an apt one. The USA sails through history, accumulating barnacles which slow it down and inertia and ponderousness cause it to stay on a course way longer than necessary or advisable.

And, the generals are fighting the last war (albeit as we heard again from the White House this week with very selective memories).

The result, as we all can see, is that change comes rarely, if at all. War is still prosecuted for the same (often obscure or selfish) reasons; the face of the enemy changes, but that’s a detail.

What the generals have not yet worked out is a successful solution to the conundrum of asymmetric warfare.

Mentioned this in a comment over at Monte Asbury’s Blog (a new regular read, courtesy of A View from the Bridge at ClapSotronics): all of our accumulated $trillions of military spending did not protect us from 19 guys with airline tickets. The $trillions don’t protect Iraqi civilians nor our courageous but under-protected troops from Saudis with a clunker and some plastic explosive.

Vietnam was one of the first indicators that asymmetric warfare was a tougher challenge than the generals and their political masters had ever before faced.

Our vaunted economic might, capable of purchasing the most advanced technology and putting it and manpower in overwhelming numbers into the field, a formula that worked so well in the period roughly corresponding to the Industrial Revolution in North America (i.e., 1830-1950, Mexican Wars through WWII), didn’t protect us from a determined enemy in pajamas (albeit with powerful friends — of course, think of France’s role in our own Revolutionary War).

Have the generals and admirals and the politicians learned from this? Not well enough.

And of course the incredible irony is, that the White House finally agrees with the Cindy Sheehan and the kneejerk peaceniks: Iraq = Vietnam.

It’s it for now. Thanks,

–MUDGE