Government: get out of my washing machine
- Less than 72 hours
- No pricing power
- Eight to go!
- In the mailbag
Breaking news from the Financial Times:
‘Electrolux, the Swedish appliance maker, is exploring starting an “Uber for laundry” in which consumers would use their own washing machines to wash other people’s clothes.’
Your editor has never used an Uber. We’ve never used an Airbnb either.
So the chances of us using an ‘Uber for laundry’ are pretty close to zero.
The idea intrigues us though, so we’d like to see how it plays out.
The hotel and taxi lobby groups have done a good job trying to shut down upstarts like Uber and Airbnb.
As a result, governments are issuing fines against the businesses, and even against individual purveyors of these services. The Economist reports:
‘The phoney war between home-sharing websites and Barcelona seems to have come to an end. After months of sparring between the parties, this week Barcelona levied finds of €600,000 each on Airbnb and HomeAway, which it says have been offering to rent properties that do not have a tourist licence to holidaymakers.’
In October, New York governor, Andrew Cuomo signed an anti-Airbnb law. As Bloomberg notes:
‘The fines for those who advertise vacant apartments in a multi-unit building for 30 days or less could be as high as $7,500 for repeat offenders, threatening the company’s operations in the state.’
The government tells you who can stay in your house. The government tells you who you can drive in your car. And if Electrolux goes ahead with ‘Uber Wash’, the government will soon tell you whose undies you can swish around in your washing machine!
Are there no depths to which a government won’t sink? Apparently not…
Over the weekend, the Dow Jones Industrial Average gained 68.96 points, or 0.36%.
The S&P 500 closed up 8.63 points, or 0.39%.
In Europe, the Euro Stoxx 50 index added 7.78 points, or 0.26%. Meanwhile, the FTSE 100 gained 0.17%, and Germany’s DAX index gained 0.09%.
In Asian markets, Japan’s Nikkei 225 index is down 36.46 points, or 0.2%. China’s CSI 300 is up 0.59%.
In Australia, the S&P/ASX 200 is down 43.39 points, or 0.79%.
On the commodities markets, West Texas Intermediate crude oil is trading for US$45.91 per barrel. Brent crude is US$47.08 per barrel.
Gold is US$1,193.83 (AU$1,597.41) per troy ounce. Silver is US$16.81 (AU$22.49) per troy ounce.
The Aussie dollar is worth 74.73 US cents.
Less than 72 hours
Time is running out to join the latest intake of Alliance memberships.
We close access to the Alliance program this Wednesday at midnight.
If you haven’t yet checked it out, you can do so here.
No pricing power
Last Thursday was the Thanksgiving Day holiday in the US.
Last Friday was the Black Friday shopping day in the US. Although, based on what we’ve seen both online and at bricks-and-mortar stores, Black Friday has now become a global shopping day.
It’s not difficult to see why.
In the pre-internet days, it didn’t matter a hoot to Aussie retailers what US retailers got up to. It certainly didn’t matter to them if US retailers held a major sales campaign.
But today, it does matter.
If you’re used to buying goods online, especially from US online retailers such as Amazon.com, you can see why Aussie shoppers may now base their buying patterns around overseas shopping holidays.
Myer, David Jones, and JB Hi-Fi aren’t just competing with other Aussie retailers. They’re now competing with US retailers. Not just indirectly, but directly too.
Online retailers know where you’re shopping from. They can offer discounted or free shipping as an inducement to buy from their online store on that particular day.
And because these offers are available online to ordinary Aussies, bricks-and-mortar retailers have to respond. Hence the experience of seeing ‘Black Friday Sales’ posters in suburban Melbourne shopping malls over the weekend.
So, just how big was this ‘Black Friday’ sales period for US retailers?
Based on one headline we saw over the weekend, it was the biggest sales period ever, with some online retailers actually discounting prices on Thanksgiving Day, rather than the day after.
This would all seem to fit in with the resurgent optimism of the markets following Donald Trump’s election win. But is it really a bright outlook?
Perhaps not. Bloomberg reports:
‘Americans went bargain hunting during the Thanksgiving holiday weekend. More than one-third of shoppers said all of their purchases were on sale, an increase exceeding triple the total from last year. Consumers spent an average of $289.19 over the four-day weekend, including both online and offline purchase, the National Retail Federation said on Sunday, a drop from the $299.60 spent a year ago.’
In an economy that’s supposed to be growing, consumers sought and found more discounts. And not only that, on average they spent less.
Two things are clear.
It doesn’t appear that US businesses have much in the way of pricing power. If they did, they would surely increase prices, or not offer as many discounts.
And if consumers were genuinely flush with cash, even if they sought more discounts, you would expect overall spending to be higher than the year before.
Yet, it was not.
Is it possible that even with the market’s optimism of a Trump win, that there is still a two-speed economy? The haves and the have-nots?
As we write, the Aussie market has just closed down over 43 points. The index is still well above the recent Trumpian lows, immediately following his election win.
It’s possible that the market may have gotten ahead of itself. Especially in its over-optimism about the economy, and the prospects of a US Federal Reserve rate rise in December.
There are, after all, more than two weeks until the Fed’s meeting. As you’ve learned in recent months, anything can happen in that amount of time. Not least Italy’s constitutional referendum, set for this coming Sunday.
They say things come in threes: Brexit. Trump. Italy?
Eight to go!
Speaking of Italy, the Financial Times writes:
‘Up to eight of Italy’s troubled banks risk failing if prime minister Matteo Renzi loses a constitutional referendum next weekend and ensuing market turbulence deters investors from recapitalising them, officials and senior bankers say.
‘Mr Renzi, who says he will quit if he loses the referendum, had championed a market solution to solve the problems of Italy’s €4tn banking system and avoid a vote-losing “resolution” of Italian banks under new EU rules.’
Italy’s banks are in bad shape. The shares of one of the world’s oldest banks, Banca Monte dei Paschi di Siena SpA [IM:BMPS], is down 99.75% since the stock peaked in 2007.
The old Italian bank isn’t the only one in bad shape.
As the Financial Times notes, Italian banks have €360 billion in bad loans on their books, against just €225b of equity.
If the referendum goes against Italy’s PM, and he carries through his threat to resign, more ructions are sure to hit the market.
In the mailbag
Continuing the theme of climate change, Alliance member, Peter H writes:
‘As an Alliance Member and someone who made the trek to Port Douglas, I hold the views put forward by Port Phillip Publishing in some high regard……………..until I read your comments today about Climate Change.
‘I found the article to be at odds with your normal areas and style of commentary. And especially, to compare the considered opinion of (literally) thousands of reasoned science folk around the world with a mistake made by a few scientists within a profit motivated pharmaceutical company to be abhorrent and not worthy of your great reputation. On the whole, none of the good folk you malign with that ridiculous assertion have any profit motivation or anything to gain individually by commenting on the global warming issues. They simply have genuine and well-founded concern for the future of the planet as we know it.
‘Surely, any reasonable thinking person would see that if there is at least speculation that Carbon is bad for the atmosphere and we have the capacity to make the changes that make the problem go away, then implement those changes- so long as we don’t “break the bank” doing it. And I’m not talking about the stupid Green’s trumpeted taxpayer subsidised “renewable energy” alternatives. Those people need a sit-down lesson in forward projection of electricity capacity requirements, generation and distribution and to stop spending my tax dollars on subsidising that renewable rot………….and they have certainly never sat and read up on the significance of renewables in the energy mix and the impact they have on network stability and security.
‘No, I’m talking about real change with our energy, food production and transport mix that would:-
- Eliminate carbon production from electricity generation (yes, zero carbon)
- Provide virtually unlimited absolute baseload energy production for 1,000’s of years that is not dependent on natural sources.
- Provide absolute network reliability, stability and integrity.
- Have minimal waste of any consequence that would be easily managed with current technology
- Could be installed in small underground silos that would be out of sight with no requirement for
- Create the capacity to provide clean drinking water or water for irrigation by desalination as a by-product
- Create the opportunity to generate synthetic fuels that would enable the existing transport fleet to operate without any changes while becoming carbon neutral,
- Remove the requirement for expensive and unreliable interconnects from large remotely located power sources. The sources could be placed and grouped anywhere reducing losses in transmission and improving reliability and integrity of the network.
- Get rid of “Big Coal” and “Big Oil”
- Eliminate the need for wasting huge tracts of good agricultural land by turning ot into coal mines.
- Eliminate the need for extensive mining for energy sources as there is sufficient of the material already available in stock piles around the world…….and Australia has heaps of teh stuff.
- Remove any issues with the Middle East and let them go back to what they have been doing amongst themselves for millennia.
- Create a multi-Trillion dollar new economy on the new technologies this would bring
- ………….and I could go on. I haven’t even touched on the benefits and opportunities of a pure high temp heat source for industry.
‘The answer to all of the above and more is one word — Thorium.
‘The world needs to take the time to learn and understand the nuances and subtlety of alternative nuclear power sources and face up to the real issues caused by coal and oil. Not all nuclear is the same and not all nuclear leads to Plutonium and proliferation and concerns with intractable waste. As a wonderful by-product the Thorium based reactors would generate the capacity to consume and largely get rid of the intractable “waste” issue we have with “spent” nuclear fuel held in repositories around the world while creating vast amounts of controlled energy doing it.
‘~2.5T of Thorium would provide sufficient (zero carbon) power for all of my home state for a year…………2.5T!!. By comparison, one wagon of coal is about 100T.
‘The Thorium based nuclear technology was invented in the 50’s, was operated for 5+ years as a trial site in the 60’s in the US but scrapped by Nixon…………..why?? Political expediency and corporate greed.
‘So if you want to beat your chest about the bogeyman of Climate Change, don’t do it at the expense of 1,000’s of good science folk around the world and be mindful that there is an opportunity to create a whole new economy that makes the old fossil fuel economy, and as an aside, the Global Warming issue an irrelevance. There is a better way. By focusing on the wrong thing and ignoring issues at our peril, we are missing the vast untapped opportunities staring us in the face.
‘Keep up the good work in your normal areas of commentary. I like the diversity of views presented by your cohort of writers.’
Our response is simple. If spending trillions of dollars, and transferring wealth from middle and working classes to elites should be made just on the basis of ‘speculation that Carbon is bad for the atmosphere’, we would argue that there is also ‘speculation’ that carbon isn’t bad for the atmosphere.
Therefore, we argue the expedient move is to do nothing — not without more convincing proof that climate change is real, and that if it is, governments have the skill to do anything about it.
As for thorium, we would be more than happy for thorium to become the energy of choice. As we understand it, the only reason it isn’t is because…er…governments and the military wanted to develop uranium-based nuclear power, due to its usefulness in creating nuclear weapons.
So, when anyone tries to suggest that governments have any interest in saving or caring for the environment…give us a break. Climate change is a government and United Nations-sponsored money-grab, and nothing else.
Subscriber, Peter F, writes:
‘Your arguments against climate change are ridiculous and unsubstantiated.
‘To answer one critic by saying that scientists are fallible: one word ‘Thalidomide’ is lazy.
‘To say those who take climate change seriously are going to return us to the dark ages is illogical and based on nothing. Not sure what satisfaction you get from pedalling this nonsense.
‘Overwhelmingly scientists agree on human induced climate change, based on research not unsubstantiated opinion. The more interesting question you should reflect on is what if you are wrong!?’
Only ‘overwhelmingly’, because that’s where the money is. If the funding for and against the climate charge argument was a 50/50 split, you would see a 50/50 split in opinion too.
This from subscriber, Mark:
‘I’ve been following your comments regarding climate change over the last few days, and I just wanted to thank you for taking a stand on this issue.
‘Some people call me a ‘skeptic’, but it’s much worse than that!
‘I have also been on the receiving end of anger and hate (including ALL CAPS attacks), and I think I’m on the right side of the argument, as are you.
‘That’s all. Keep up the good work.’
There is nothing worse than an ‘ALL CAPS’ attack!
And this from Roger C:
‘Re the comments about climate science and the meme that humans are changing the weather – I agree with you totally, it is a scam. It is your newsletter, so guess what, you can write anything you like. The idea that you need to have training in physics to understand climate science is of course nonsense and one of the many logical fallacies (in this case, appeal to a vague authority) that devotees to climate science persistently promote. Keep up the good work.’
Finally, this from Clive:
‘I still believe the earth is flat and that the sun revolves around the earth and we do not have global warming.’
Nice. The difference, of course, is that a flat Earth and the belief that the Sun revolves around the Earth, were both provably wrong, and were proven wrong.
Climate change fanatics haven’t yet been able to prove anything, and there is no certainty that they will be able to do so — ever.
Furthermore, to compare ‘flat Earthers’ with those of us who are sceptical about the bone fides of climate change is to take the wrong side of the argument.
It was the state, the establishment, and the church that insisted the Earth was flat and the Sun revolved around the Earth. Today, it is those same actors who now believe in climate change.
Therefore, if anyone deserves to be compared to ‘flat Earthers’, it’s the climate change fanatics, not those seeking to question the actions, motives, and pseudo-science of the mainstream.