Random Economic Posts

[LFC]

Pandora is turning its back on mined diamonds. I wonder if this is a growing trend and the market is starting to truly shift. Diamonds are ridiculously expensive for what they are due to market manipulation and of course the process of mining them comes all with sorts of baggage.

Pandora, one of the world's largest jewelry suppliers, has announced that it will be ditching selling mined diamonds as it launches the company's first-ever lab-created diamonds.

Alexander Lacik, Pandora CEO, told the BBC that this shift was part of a broader sustainability drive at the company. The launch of the sustainably acquired diamonds "marks a new milestone for Pandora as it will no longer be using mined diamonds," the company said in a statement. "Going forward, mined diamonds will no longer be used in Pandora’s products."

Lab-made diamonds are cheaper than traditional diamonds but identical to those dug up from the ground in terms of optical, chemical, thermal, and physical characteristics. They are also graded by the same standards: cut, color, clarity, and carat.

Mined diamonds on the other hand come with environmental and ethical considerations, as they are finite resources that can take billions of years to form and are often found in countries without the infrastructure to ensure conflict-free production.

A 2020/2021 Bain report found that "Sustainability, transparency, and social welfare are priority issues for consumers, investors, and the value chain," once a growing issue but now firmly part of the industry, retail, and consumers decision-making process. That lab-made diamonds come in at a lower cost without the concern for where the diamond was sourced is a large appeal for younger customers, the report found.

[LFC]

I guess you don't work on Capitol Hill for the great wages, especially in a high priced town like D.C.

Thirteen percent of congressional staffers make less than a living wage, report shows

[Bact PhD]

Jan 26, 2022 15:48:55 GMT LFC said:

I guess you don't work on Capitol Hill for the great wages, especially in a high priced town like D.C.

Thirteen percent of congressional staffers make less than a living wage, report shows

Haven't read the article, but I believe it. It's all for the "honor" of the job...and possible future opportunities. I've heard something similar about those employed by the House of Mouse -- for the position (and I'm not just referring to the street sweepers in the theme parks), the wages/salaries are pretty bad...something about the "honor" of working for The Company. Yeah, well, "honor" doesn't pay the crazy mortgage on a dwelling in Orlando...

[LFC]

Another Panama Papers style leak, this time out of Credit Suisse.

Credit Suisse (CSGN.S) was plunged into a dirty money scandal on Monday after media outlets reported the Swiss bank had managed accounts for human rights abusers, fraudsters and businessmen who had been placed under sanctions.

One person leaked information on the accounts, which were held in decades ranging from the 1940s to 2010s, to Germany's Sueddeutsche Zeitung. The German daily then shared it with the Organized Crime and Corruption Reporting Project and 46 other news organisations including the New York Times, Britain's Guardian and France's Le Monde.

The Panama Papers-style investigations were published on Sunday and come as Credit Suisse, which denies any wrongdoing, tries to shake off a series of risk-management scandals and a 1.6 billion Swiss franc ($1.75 billion) loss in 2021 that has pummelled its stock. read more

The New York Times said the leaked data covered more than 18,000 accounts collectively holding more than $100 billion.

The revelations also turned the spotlight on Switzerland only a little more than three years after it ditched, under U.S. pressure, a centuries-old culture of secrecy that had made the Alpine state a global no-questions-asked vault for the world’s rich.

[LFC]

Yeah, I can see where 24 x 7 businesses in residential neighborhoods could be an issue. This is Amsterdam, not in the U.S., but I could see similar issues cropping up here.

In May 2021, grocery delivery company Zapp moved into a small garage, squashed between red brick apartment buildings on a residential street called Fagelstraat in Northwest Amsterdam. Many locals had never heard of dark stores, the mini warehouses grocery apps use to dispatch local deliveries. “We didn't know exactly what they were doing or what type of business it was,” says local resident Alex (not his real name).

In less than a year, that small Fagelstraat garage has become an extreme example of how dark stores can clash with local neighbors. Alex, who has lived on the street for seven years and requested anonymity to avoid further conflict with riders, says there are now 10 to 15 deliveries each day, and giant lorries regularly block the narrow road. “It's a 24/7 business,” he says, “so riders are coming in and out late at night and early in the morning. At 2 am, I often have people standing in front of my window, smoking and talking really loudly while they are taking a break.” After a month of this, riders and residents started squaring off as tensions boiled over, Alex says. “There's been a few instances when I almost got into a fight,” he says. “One [rider] was completely in my face. It was pretty frightening.”

In the past year, the spread of dark stores has rapidly accelerated as grocery delivery apps Gorillas, Getir, Flink, and Zapp compete to dominate the Dutch market. As of January, there were 31 dark stores in Amsterdam alone. The Netherlands appeals to these companies because the country is small, densely populated, and flat, meaning it’s easy for their couriers to operate, says Yara Wiemer, an analyst at research and consulting company Kantar. Demand is also soaring. The number of Dutch consumers using grocery delivery apps more than tripled to 700,000 between 2021 and January 2022, according to Wiemer. But as the four apps jostle for dark store space in residential areas so they can offer faster deliveries, complaints about noise, bikes blocking pavements, and increased traffic have become common across the country.

In Amsterdam, those complaints also accuse dark store staff of intimidation, sexual harassment, and starting physical fights, and the city’s residents are mobilizing to kick delivery apps out of their neighborhoods.

[LFC]

Don, Jr. gets an idea that's about as brilliant as you'd expect.

Donald Trump Jr. suggested on Tuesday that it could be a "good thing" for China to take over as the world's reserve currency because it would teach Americans a "lesson."

While speaking to conservative host Steve Bannon, Trump attacked President Joe Biden over rising inflation.

"If you're not the world's reserve currency, you don't get to borrow and spend haphazardly," he explained. "Maybe that's a good thing. Maybe we need that lesson. But, man, the price we will pay to learn that lesson the hard way is going to be a disaster."

"You don't get to borrow and run these deficits the way you have in the past," Trump continued. "You know, we've been sort of spending much more than we've been making for decades and there comes a time when you have to pay the piper."

Trump did not acknowledge that his father's leadership of the U.S. resulted in the third-largest deficit increase of any president.

Under Donald Trump's presidency, the national debt rose by $7.8 trillion.

[LFC]

Apple wants your financial business.

Apple plans to build its own in-house technology and infrastructure for financial services, according to a Bloomberg report citing people with knowledge of the matter.

The initiative is internally codenamed "Breakout" as an allusion to the idea of users breaking free from the current establishment players in the financial system.

Apple has long held to a philosophy of controlling as much of the user experience—and its own pipeline—as possible, believing this method offers the dual benefits of better experiences for customers and a bigger slice of the revenue pie for Apple. That control also means Apple can be less affected by surprises or failures from external partners.

That philosophy is now being thoroughly applied to financial services, a rapidly growing but relatively new part of Apple's overall product strategy. According to Bloomberg's sources, the plans would include "payment processing, risk assessment for lending, fraud analysis, credit checks, and additional customer-service functions such as the handling of disputes."

The sources add that Apple's move toward bringing all this in-house is oriented around upcoming products, not current ones. So, for example, Apple Card may still stick with Goldman Sachs.

And in some cases, like the company's planned Apple Pay Later feature, Apple might—at least at first—lean on a partner for some aspects like long-term loans while using its own tech and infrastructure for short-term loans.

[goldenvalley]

Mar 31, 2022 17:07:09 GMT LFC said:

Apple wants your financial business.

Apple plans to build its own in-house technology and infrastructure for financial services, according to a Bloomberg report citing people with knowledge of the matter.

The initiative is internally codenamed "Breakout" as an allusion to the idea of users breaking free from the current establishment players in the financial system.

Apple has long held to a philosophy of controlling as much of the user experience—and its own pipeline—as possible, believing this method offers the dual benefits of better experiences for customers and a bigger slice of the revenue pie for Apple. That control also means Apple can be less affected by surprises or failures from external partners.

That philosophy is now being thoroughly applied to financial services, a rapidly growing but relatively new part of Apple's overall product strategy. According to Bloomberg's sources, the plans would include "payment processing, risk assessment for lending, fraud analysis, credit checks, and additional customer-service functions such as the handling of disputes."

The sources add that Apple's move toward bringing all this in-house is oriented around upcoming products, not current ones. So, for example, Apple Card may still stick with Goldman Sachs.

And in some cases, like the company's planned Apple Pay Later feature, Apple might—at least at first—lean on a partner for some aspects like long-term loans while using its own tech and infrastructure for short-term loans.

Reminds me of Sears going into the optical and insurance business.  

[pnwguy]

Mar 31, 2022 18:04:19 GMT goldenvalley said:

Mar 31, 2022 17:07:09 GMT LFC said:

Apple wants your financial business.

Reminds me of Sears going into the optical and insurance business.  

Most observers thought they didn't have a chance in the mobile phone world, but they came to own it quickly.  

I'm still curious if they will enter branded television and automotive products.  Want to bet an Apple EV will break some new ground?

[goldenvalley]

Mar 31, 2022 21:56:05 GMT pnwguy said:

Mar 31, 2022 18:04:19 GMT goldenvalley said:

Reminds me of Sears going into the optical and insurance business.  

Most observers thought they didn't have a chance in the mobile phone world, but they came to own it quickly.  

I'm still curious if they will enter branded television and automotive products.  Want to bet an Apple EV will break some new ground?

Apple owned it by creating a pocket computer that just happened to take phone calls too.  

[indy]

Apple can have my financial business.

[Bact PhD]

Mar 31, 2022 22:29:33 GMT goldenvalley said:

Apple owned it by creating a pocket computer that just happened to take phone calls too.  

That’s almost exactly how I refer to the smartphone—a small personal computing device that happens to make and receive phone calls. It’s mind-boggling to realize that my first smartphone from 2013 was more powerful than the desktop Mac on which I wrote my dissertation in the ‘90s.

[pnwguy]

Mar 31, 2022 22:29:33 GMT goldenvalley said:

Apple owned it by creating a pocket computer that just happened to take phone calls too.  

And took quality digital pictures and played music or videos.  It was the combination of devices that people needed to carry around, plus the fact that they each worked better than the devices they replaced, gave Apple a considerable advantage.

I got my original iPhone just 3 months after launch, when Jobs dropped the price.  Having Safari there, instead of a WAP browser, meant that any conventional website rendered without change on a mobile device, with simple zooming finger gestures.   

[andydp]

Came across this marvelous summary of the Trump Organization.  Except, it would seem banks aren't lending to the organization anymore.

With weak balance sheets, banks tend to continue lending unprofitable businesses and leave them existing.

Toshihiko Fukui

[LFC]

F***ing Abbott is making food harder to get so he can score some performative political points..

A long trail of delivery trucks are backed up at the U.S.-Mexico border because the Texas governor is refusing to allow them to come into the United States without additional inspections by the Texas state troopers. Typically it's the federal government that inspects trucks. The decision is creating a massive backup at the border.

The Texas Tribune reported this week that the busiest trade crossing, the bridge connecting Pharr and Reynosa is the choke point. On the border Monday, the trucks were backed up for miles. It was the fifth day in a row they were dealing with the blockage. As a result, producer importers canceled orders.

Avocados, broccoli, peppers, strawberries and tomatoes are among the things being brought into the United States. Berries like strawberries are the largest import into the US, with bananas not far behind.

“One of our customers canceled the order because we didn’t deliver on time,” said Sterling Fresh Inc. sales manager Modesto Guerra. “It’s something beyond our control.”

At a time when Americans are frustrated over inflation and additional costs, Abbott's backup is significantly slashing supply and access in the United States, the White House said in a statement Wednesday.

[AnBr]

[LFC]

I hadn't heard about crop insurance scams before. It sounds particularly bad in Kentucky and North Carolina i.e. tobacco country. Why do we have gov't backed insurance for tobacco anyway?

In the South, they’re known as insurance farmers. The “classic way of doing it,” explains Henton, is to report to the insurance company that you planted 10 or even 100 acres of tobacco (and it is, most often, tobacco). “The trick is to do a pretty bad job of farming,” says Henton. “So you don’t incur very many costs — you put in half the seed, you put in half the fertilizer. You can even just throw some seeds onto the hillside with half a stand.” Then, sometime in the summer, you’re going to report that the weather was bad. You tell the insurance company that there was a hailstorm or the climate was too dry, or too wet, or the field was too flooded, and the crops were destroyed.

If you don’t have a hailstorm, well, then you make one up, like Robert and Viki Warren, who between the years of 1997 and 2003, swindled the government and insurance companies out of more than $9 million in bogus insurance claims — all it took was a bag of cocktail ice and a disposable camera. “The way we did it, we was down taking pictures, out this row, and then we just stood behind it and throwed the ice over the top,” Bobby Chambers, a former manager for Warren Farms, told NPR in 2005. “To me, it looked like a hailstorm.” But just for good measure, according to Chambers, they then had another employee use a wooden tomato stake to beat the shit out of 16,000 tomato plants.

If the disaster is confirmed by the insurance adjuster — which, according to Henton, it almost always is, since the insurance adjuster is likely in on the scheme — the crop insurance company sends the farmer a check. It’s no sweat off the back of the insurance companies, since the indemnity payout comes directly from government funds, i.e., tax dollars.

“The [insurance] company says, ‘Well, what do we care? It’s not our money,’” Henton tells me. As such, there is little stopping the farmer, the insurance agent and the adjuster from running the same scheme the following year. “When I go to buy insurance next year, who am I going to choose?” asks Henton. “The guy that paid off like an ATM machine.”

To be clear, there are a number of ostensibly self-correcting mechanisms in the program. For example, if you claim a loss, that reduces the amount that you can get in payments in future years. But all it takes, says Hampton, is changing one initial in your name and you’re a new farmer. “The agencies all know it,” Henton tells me. “But there are no real strong repercussions. They go after the farmer, but the agents are complicit in this. You’ll find that that shows up in some of the stories, that people selling the insurance knew this was happening in a major way.”

People like 63-year-old crop insurance agent Debra Muse, who in 2018 was sentenced to five years in prison and ordered to pay $1.6 million in restitution for crop insurance fraud. Muse, who doubled as an employee of Clay’s Tobacco Warehouse — where a number of insurance farmers hid away their yield — admitted that she created multiple false documents, including Clay’s Tobacco Warehouse sale bills and shipping reports to help farmers hide their crop production from their insurance adjusters and falsify the quality of the tobacco. These false claims led to $5,917,515 in crop insurance indemnity payments, split up between the farmers, insurance agents and adjusters in on the scheme — all backed by the federal government, of course.

Some of the payments also went to Roger Wilson, the former owner of the since defunct tobacco warehouse, along with farmers John D. and Kevin C. Watkins. In March, all three men were indicted as part of the same conspiracy. In part, because the scam became so facile, the conspirators got lazy: According to the indictment, Watkins allegedly used matching photos of damaged tobacco in separate claims.

These crimes, according to Bill Estep, a reporter for the Lexington Herald Leader, who’s reported on 20 different cases of crop insurance fraud in the last three years alone, has been particularly “pervasive” and “widespread” in Kentucky. He tells me that anywhere there’s crop insurance, there’s potential for crop insurance fraud. “A lot of these cases that they’re citing in Central Kentucky go back to the 2012, 2013 timeframe, so I think it took [the USDA] a while to catch on, and then they started indicting them four or five years after that,” says Estep.

[goldenvalley]

The part of Tennessee I lived in back in the late 70's early 80's had some tobacco farms around.  Very hilly land, very red clay soil. This wasn't a mechanical crop.  My brother's high school summer jobs were cutting and hanging tobacco.  No machinery.   I always wondered how they could make a living on the tiny plots that were plantable.

[LFC]

Paul Ryan, the man with a Rand but not the man with a plan, whined that Trump wouldn't let him destroy the social safety net. Ryan loves to talk about "entitlement reform" but as we saw from what details he would release and his horrendously transparent "Republican health plan" his idea of reform is partial repeal. He has not "conservative approach" to helping people because helping people is the antithesis of American conservatism. It should be of no surprise to anybody that Ryan is set to suckle on the government teat for the rest of his life. I'm sure he thinks he "earned" it.

Former House Speaker Paul Ryan (R-WI) has a bone to pick with former President Trump — the 44th POTUS failed to carry out Paul’s legacy of pursuing cuts to safety net programs.

During a book event at the American Enterprise Institute on Wednesday, Ryan recalled how he and Trump “fought about Medicare and entitlement reform all the time.”

“It became clear to me there was no way he wanted to embrace that,” the former House speaker said.

Ryan went on to admit that, well, cutting back on safety net programs isn’t a popular policy platform to begin with — which he apparently found to be a “frustrating” fact; that Americans aren’t thrilled about taking long-established entitlement benefits away from low-income people.

“It wasn’t popular in his mind and therefore it wasn’t going to be pursued,” Ryan said. “That was always really frustrating to me, but that gives you an example of where the right is now — which is either we don’t touch it or we reform it. But repealing it is not in the cards.”

During his time in Congress, Ryan was a proponent of cutting back federal spending on safety-net programs such as Social Security and Medicare. The former House Speaker also proposed raising the retirement age for Social Security to 70 in order to shrink federal spending on the programs — despite his retirement in 2018 at 48 years old, allowing him to draw his pension at age 50.

[goldenvalley]

Apr 27, 2022 21:42:40 GMT LFC said:

Paul Ryan, the man with a Rand but not the man with a plan, whined that Trump wouldn't let him destroy the social safety net. Ryan loves to talk about "entitlement reform" but as we saw from what details he would release and his horrendously transparent "Republican health plan" his idea of reform is partial repeal. He has not "conservative approach" to helping people because helping people is the antithesis of American conservatism. It should be of no surprise to anybody that Ryan is set to suckle on the government teat for the rest of his life. I'm sure he thinks he "earned" it.

He is one of those malevolent people who are so convinced of their rightness on all issues.  I'm glad he was at least smart enough to get out of Congress when he realized Trump was never going to help him out with his personal hobby horse.

[goldenvalley]

As stocks fall, economic fears rise. I have no idea what this means or if it means anything other than a "market correction."  After all how much stuff can Americans buy from Amazon after a 2 year binge of buying?  And with supply chain issues, big ticket items like cars, furniture aren't moving.  I wonder how many people have just said forget it for now.  

[andydp]

Apr 29, 2022 21:20:39 GMT goldenvalley said:

As stocks fall, economic fears rise. I have no idea what this means or if it means anything other than a "market correction."  After all how much stuff can Americans buy from Amazon after a 2 year binge of buying?  And with supply chain issues, big ticket items like cars, furniture aren't moving.  I wonder how many people have just said forget it for now.  

Last summer my wife and I put down $1,000 for the privilege of getting on a buyer's waiting list for the new Corvette ZO6.  (The 1K is refundable and will be put towards the cost.)

Frankly, with supply chain problems, shortages of chips and overall demand for the vehicle, it will be at least two years until our turn comes.  Our dealer has a Corvette allotment of about 150/year.  They estimate 30% will be ZO6.  This puts us in the 2023 model year window.  Frankly, the longer is takes the more money I'll have to buy it outright.

I was getting grief from a Corvette page because I wasn't borrowing at some stupid figure while my 401K was building money.  I'm past that game playing.

[Bact PhD]

Apr 29, 2022 22:15:09 GMT andydp said:

Apr 29, 2022 21:20:39 GMT goldenvalley said:

As stocks fall, economic fears rise. I have no idea what this means or if it means anything other than a "market correction."  After all how much stuff can Americans buy from Amazon after a 2 year binge of buying?  And with supply chain issues, big ticket items like cars, furniture aren't moving.  I wonder how many people have just said forget it for now.  

Last summer my wife and I put down $1,000 for the privilege of getting on a buyer's waiting list for the new Corvette ZO6.  (The 1K is refundable and will be put towards the cost.)

Frankly, with supply chain problems, shortages of chips and overall demand for the vehicle, it will be at least two years until our turn comes.  Our dealer has a Corvette allotment of about 150/year.  They estimate 30% will be ZO6.  This puts us in the 2023 model year window.  Frankly, the longer is takes the more money I'll have to buy it outright.

I was getting grief from a Corvette page because I wasn't borrowing at some stupid figure while my 401K was building money.  I'm past that game playing.

Hmmm.

I concur about being past the game playing.

I’m not sure, GV, but to a degree you may have nailed it with the idea that the American consumer is one part tapped-out when it comes with general “stuff” and one part frustrated enough about supply-chain issues with the big-ticket stuff that they’re approaching a “wait it out” (where possible) mode. For the most part, we’ve been out of the “accumulate random stuff” phase for some years—if anything, we’re in “divest of the superfluous stuff” phase. Our batting average over the last year or so when it comes to the big-ticket items has been fair:

-Car body parts needed to repair after a crash — not a problem
-Late-model used car for the Family Fleet (Dear Daughter’s ride) — paid more than we anticipated, but a reasonable selection of vehicles.
-Tile for family room — no problem getting the materials, but securing someone to do the job took some effort.
-Replacement intercom, postponed from Spring 2020 — this was the supply-chain headache. It took over three months from the order date to when it arrived at the shop. The issue was getting the part with the electronic “guts”.
-Luxury vinyl plank flooring for upstairs, another postponement from 2020 — this was the luckiest break of the bunch, especially since I wasn’t sure whether the pattern we got for the downstairs in 2017 was still available. It was, the materials were in stock, and we went from preliminary looking to ordered to arrived to installed in about 6 weeks.

-Medium-ticket: New formal wear for Dear Son, including shoes—we had to order the dinner jacket in the style he wanted, but they had a try-on in another color of the style. That came in 2 days, and there were enough shoe styles to choose from that he didn’t feel deprived.

Unless some high-ticket item (computer, phone, TV, vehicle) DIES in the near future, we’re done with the major purchases for a while.

Interestingly, where I’m really seeing the effects of supply-chain issues and inflation is the grocery store. Some shelves are empty for weeks before the items get back in stock. There isn’t much rhyme or reason to it, either. I wonder whether higher prices there are dampening consumers’ enthusiasm elsewhere?

[andydp]

This popped up in my daily diatribe search:

If I taught a class, on my final exam I would take an Internet company and ask, 'How much is this company worth?' Anyone who would answer, I would flunk.

Warren Buffett

[pnwguy]

May 11, 2022 11:54:46 GMT andydp said:

This popped up in my daily diatribe search:

If I taught a class, on my final exam I would take an Internet company and ask, 'How much is this company worth?' Anyone who would answer, I would flunk.

Warren Buffett

I guess Elon would get an F minus from the Oracle of Omaha.