Category: Economics

Not Just China

Bad News, Economics

Via Insty, this little snippet:

The danger for China is deflation could snowball by encouraging households reeling from falling paychecks to cut back on spending, or delay purchases because they expect prices to fall further. Corporate revenues will suffer, stifling investment and leading to further salary cuts and layoffs, bankrupting families and firms.

China?  How about right here in the U.S.?

The Fed’s beige book, a survey of economic conditions in the US compiled by the regional Fed banks, suggested that the US economy was slowing. Five out of the 12 Fed districts reported flat or declining economic activity, three more than in May’s survey.

And just for (bitter) laughs:

“Inflation has also fallen faster than expected, hitting 3 per cent in June.”

Tell that to my grocery, fuel and utility bills.

More News From Little Big Horn

Business, Economics

Nice of you guys to finally realize this:

Breitbart Business Digest: The Wheels Are Coming Off the U.S. Economy

The Manufacturing Sector Sees Slower Demand, Falling Production, Declining Employment

…now apply that metric to just about every other sector of the U.S. economy (i.e. retail and wholesale) for the complete picture.

There are a few relatively simple solutions to this, but here’s a clue:  they’re unlikely to be implemented in the numbers or at the scale required for them to work — and that’s under a Republican administration.  Under a Harris/Walz regime, not only will the solutions not be enacted, but the precise opposite will take place:  more government spending, more choking of key industries, more and higher taxes, and so on.

In the meantime:  buy ammo, not shares.

And send it to Gen. George Custer;  it sounds like he may need some more.

What He Said, And More Besides

Bureaucracy, Economics, Management, Marxists

Actor James Woods is a well-known conservative, despite his profession and location, and in this case he’s right on the money, as usual:

Specifically, here, is the fact that Democrats make it almost impossible for small companies to survive, weighing them down with not only horribly-burdensome but hostile regulations (as above) like minimum wage dictates.

Then, when the inevitable happens and the small companies go out of business or sell out to larger ones, the socialists like Warren moan about the concentration of trade and the need for “more competition”.  (“Price gouging” as referenced by Warren here is meaningless and a red herring.)

May we remind ourselves of food rationing, endless lines formed to get what little food there was, and fixed pricing which led to the ford shortages in the first place?  Where was this so prevalent… wait, it’s all coming back to me…

Ah yes, in the Soviet Union, where the State owned all means of production and likewise the entire food chain.

And Warren, lest we forget, is an outright Stalinist whose remedy for the current situation here would involve State control of pricing (and of course of production and the entire food chain), just to make the market more “efficient”.

Do people like this ever experience cognitive dissonance between what they think and say, while constantly seeing evidence that completely repudiates their worldview?

Clearly not, and Woods has the absolute truth of it.

Ripoff?

Business, Economics, Retailing

Let’s say you went into a little seaside diner feeling peckish, and saw that they had a menu item that read:  “2 slices of buttered toast”.

Sounds okay, yes?  (I’m going with “normal-person peckish” and not “American peckish” which would apparently require the entire loaf to satisfy that hunger pang.)

Then you see the price:  $5.00 for the two slices of buttered toast.

Ripoff?  Let’s analyze the thing.

I’m going to give the diner the benefit of the doubt here, and allow their claim that this isn’t Wonderbread and store-label butter, but a “premium” offering.  I’m also, for the purpose of the analysis, going to allow that they purchased the ingredients thereof at retail prices (they didn’t).

Our diner, by the way, would be located in the equivalent of coastal Florida, up in the Redneck Riviera.

So using my local gourmet store (Central Market) as a price guide, let’s look at the thing:

Let’s see what the unit cost is.  Assuming you’re doing thick-ish (e.g. “not-quite-Texan”) slice size, you’re going to get about 16 slices out of that loaf, assuming that we discard the ends, of course.  So: $5 / 16 = 31.25 cents ($0.3125) per slice; or 62.5 cents in total for the two.

Now the butter:  even assuming you slather the butter on like I typically do, you’re still going to use about 1/32oz per slice, ergo ending up with (8x 32 = 256;  398 / 256 = about 1.5 cents per slice or 3 cents for the menu item.

Total “cost”:  (31.25 + 1.5) x 2 = 65.5 cents ($0.655) for the two slices of buttered toast.

Now for the tricky bit.

Restaurants, from back when I still managed one, typically have had to mark up “cost” by 600% just to break even.  (Don’t even get me started on whether that’s the case in NYfC or Califuckingfornia:  it isn’t.)  This takes into account fixed overhead like salaries, supplies & equipment, utilities, real estate and so on (i.e. what it costs your diner each day before you get a single customer in the door).

So the extended cost of that 2-slice item works out to (errr carry the six) $3.93, before adding a single penny for gross profit. (And just so we’re clear:  $5 from $3.93 represents about 27% gross profit — I know, don’t make me laugh.)

Is $5, therefore, a total ripoff?

Not from where I stand, and this kind of analysis explains why you have to take your bank manager along to 5 Guys every time you visit them to get you and your wife a burger.

Here’s the article that prompted this post.

And Fuck Joe Biden, because about three years ago that $5 loaf of bread at Central Market used to cost $2.85, and the $4 butter about $2.75 (because I keep track of this kind of thing, even though the Gummint would prefer that I forget that the chocolate ration used to be 5 grams and not three).

[/Orwell]

Git ‘Er Done

Business, Economics

Looks as though Britishland has just become closer to Texas.

UK Business Secretary Kemi Badenoch welcomed Texas ­Governor Greg Abbott in Westminster to sign the Statement of Mutual Cooperation, hailing it a “landmark.”

The pact will address regulatory barriers to trade between Britain and Texas, helping to boost investment and commerce between the two ­economies and making it easier for companies to do business.

I’ll believe it when I can get Wadworth 6X from my local booze store, there’s a Greggs in the mall up the road, and a chippie in Plano West’s Legacy Hall.

And when I’m Over There visiting the usual crowd of maniacs and drunkards (a.k.a. my dear Brit friends), I expect to find decent salsa and Tex-Mex.  (Okay, I won’t actually eat the stuff, I just want to see it there.  In the battle for my belly between chimichangas and sausage rolls, there can only be one outcome.)

Go to it, Britishlanders.  I will accept no excuses.

Cute Name

Economics

The Daily Mail refers to them as “Rolex rippers” —  a cutesy name for thugs who attack and rob people in the streets for their watches:

A spate of luxury watch muggings in London is putting wealthy owners off flaunting their wrist candy — and may be contributing to collapsing demand for high-end timepieces.

The value of secondhand watches, as tracked by the Bloomberg Subdial Watch Index, is down more than 40 per cent since its peak in April 2022.

Major UK retailer Watches of Switzerland has seen its share price drop by 53 per cent this year after announcing it expects revenue to be 10 per cent lower than forecast, while Richemont, owner of Cartier, has said half year sales are down by 17 per cent.

Typical Mail ignorance used as panic creation.  The “spate of robberies” cannot affect more than a tiny percentage of luxury watch owners, and while London certainly has a large share of sales of these overpriced geegaws, it’s not enough to account for the dip in Richemont’s sales.

Aside:  For those who aren’t aware of the Richemont empire, it includes luxury brands like Montblanc pens, Cartier, IWC, Dunhill and Purdey (!!!).  It’s controlled by a South African one-time tobacco tycoon, Johann Rupert, who founded Richemont as a way to get out of the tobacco business.

What the downturn in Richemont sales would appear to mean is that the demand for luxury items is dipping due to economic concerns (not street thuggery) — except that when it comes to individual wealth, sales are trendy within the various divisions within the luxury market.  Such divisions include real estate, cars, precious metals, clothing, yachts, watches and so on.  And of course, while “fashion” plays a lot in this market, the real motivator for such spending is driven by investment.

Note, by the way, that Richemont doesn’t own Ferrari or Aston Martin (yet), and if Sotheby’s recent auction of “desirable” cars is anything to go by, a larger chunk of disposable income has been channeled in that direction — one 1956 Mercedes 300 SC can buy a couple dozen  Vacheron Constantin watches, for example.  (I’m also told by sources within the collectible car market that sales are softening there too, but the sales of luxury yachts are still firm, even growing.)

We won’t even talk about real estate prices in the South of France or similar “must-have” destinations like the Gulf states.

Against serious high-ticket items like yachts and resorts in the Greek islands, for instance, Montblanc pens and Rolex watches are pretty small potatoes.  That said, however, I certainly wouldn’t risk wearing a luxury watch in London nowadays — although the discreet Patek Philippe is certainly not as noticeable as the chunky Rolexes and Breitlings.

The real story here is not the ups and downs of economic trends or the spending of rich people, but the ever-increasing rise in street thuggery (and not just in London), which law enforcement agencies seem unwilling to address let alone reduce because racism.

I also note that the luxury real estate market in Manhattan seems to be softening, and I’m pretty sure that it’s getting more difficult to sell those $50 million+ condos in an area where increased street thuggery makes London look like a kiddies’ playground.

Unsurprisingly, the Daily Mail  talks hysterically about the thuggery (because hysteria is their stock-in-trade), but not a great deal about lenient prosecutors and police inaction.  That discussion seems to be more acceptable to conservative outlets like Breitbart News.