What will life be like without police? Ask Mexico. Ask Africa.

The Federalist points out that all those demanding the "defunding" or abolition of police forces might do well to consider the consequences, which are clearly visible in Mexico.

But let’s say these ultra-progressive municipal governments could get their wish and abolish the police in their cities entirely. What would happen? Inevitably, an armed group would emerge and impose a monopoly on the use of force.

If you want an idea of how that works, look to our southern neighbor, Mexico, where over the past decade endemically corrupt police departments in some areas have been supplanted by autodefensas, or local self-defense militias. But before you get too excited about the prospect of paramilitary autodefensas policing American cities, understand that in Mexico these groups are a mixed bag at best—and at worst they’re not much better than the corrupt local police and cartel gunmen they replaced. More importantly, their mere presence in Mexico was and is a disturbing sign of societal decay.

To understand why, a bit of background is needed. The modern autodefensas movement in Mexico arose during some of the most violent years of Mexico’s ongoing drug war. In 2013, a doctor from the cartel-ravaged state of Michoacán, José Manuel Mireles Valverde, organized one of the first self-defense militias to fight against the Knights Templar Cartel. He initially recruited ordinary men, shop keepers and farmers, to hunt down cartel henchmen and drive them out of their towns.

Initially, these ad-hoc militias met with some success, capturing or killing members of the Knights Templar, setting up roadblocks and ambushes, and expanding the number of militias operating throughout Michoacán. But as the violence in the region increased, the militias eventually caught the attention of the Mexican government, which deployed the military against both cartels and autodefensas ... By then, the line between autodefensas and cartels had begun to blur. The militias had been infiltrated by cartel members, including former members of the Knights Templar who knew the cartel was losing power.

. . .

... the autodefensas movement quickly went from being an organic uprising against a vicious cartel to a vigilante free-for-all ... As the government stepped in to control the autodefensas movement, it became increasingly clear that cartel members were joining self-defense militias, especially in Michoacán and neighboring Guerrero state. Sometimes it worked in the opposite direction. Lacking resources and weapons, self-defense militias would turn to drug cartels for financing, and would later be used by drug lords as proxy forces against their rivals.

Today, autodefensas remain active in parts of Mexico but they have largely melded into the ever-shifting patchwork of gangs, cartel off-shoots, and corrupt local police forces vying for power and territory. The fragmenting of Mexico’s criminal gangs and armed groups has helped fuel rising violence in recent years, with this year on track to break last year’s record for homicides. As far as violence and corruption go, things are worse in Mexico now than they were when Mireles formed the first autodefensa group.

That is to say, the rise of self-defense militias in Mexico, no less than the rise of cartels, is a direct result of the collapse of civil authority. Absent a functioning state, militias are no more accountable to the general public than a drug cartel—and no more capable of resisting corruption than the local or federal police.

There's more at the link.

That was pretty much my experience in large parts of sub-Saharan Africa, too.  As the authority of the state and/or local government waned during periods of anarchy and civil unrest, local gangs, tribes or other groups would take advantage of the "power vacuum" to seize control of their own areas.  They would levy "taxes" against the people to fund their operations (in reality, organized looting on an ongoing basis), and terrorize anyone who refused to pay, up to and including rape, torture and killing.  If the "ordinary people" organized to oppose them, the opposing force would rapidly become corrupted by precisely the same temptations that had attracted their oppressors.  Once entrenched, such local power players could only be dislodged by superior force - never by reasoning with them.  They were making too much money (by local standards) to be willing to give it up, and nobody else in that impoverished continent had enough money to offer them a bribe big enough to stop.

Another part of that problem was that many merchants and other vendors simply refused to deliver supplies to the region(s) concerned.  They became food deserts, with the only exception being foreign aid (mostly stolen by the groups in control, and sold in local markets) or subsistence agriculture.  I can tell you right now, if BLM or other groups take over local city suburbs, the big stores in and near them will simply close their doors, rather than be robbed on a daily basis.  That will lead to the activists (a.k.a. thugs and looters) trying to extend their activities into areas still well supplied, which will in turn provoke a violent reaction from those in the latter areas, trying to protect what they've got.  Since "the best form of defense is attack", to quote a well-known saying, they'll probably take the fight to the activists in their own areas, too.  In the absence of effective policing, who's going to stop either side?

That's your recipe for at least a localized civil war, right there.  Don't tell me it won't happen.  It will.  I've seen it before, far too many times for comfort.  It'll happen here, too, if we create conditions favorable for it.

Peter

The pandemic continues to cause shipping problems

The container shipping industry remains in the doldrums thanks to the COVID-19 pandemic.  It hammered shipments earlier, as we noted in these pages:  and its ongoing effects are creating long-term problems for shippers and their customers.  GCaptain reports:

From sportswear maker Puma to mall stalwart Gap , many retailers have been forced to reduce or slow down shipments of new merchandise. Civil unrest in the United States has compounded their problems by further clouding the prospect for a recovery in the world’s biggest retail sales market.

Puma’s Chief Executive Bjorn Gulden, for example, said it was managing some of its excess inventory by stowing it on slow-going ships as stores in the United States and Europe tentatively reopen.

However, at the same time, the shipping slowdown has created headaches for those retailers, from Walmart and Amazon to shoe seller Rothy’s, who have never stopped selling products to homebound consumers, ranging from books and shoes to exercise equipment, much of it sold online.

Now those retailers are fighting for space on the fewer, faster-moving ships on the high seas.

. . .

Slower shipping times also means importers can delay payments made on delivery . . . Shereen Zarkani, Maersk’s global head of sales, told Reuters: “One customer told us: If you make my container go around the world a couple of times that would be good.”

. . .

There does not appear to be any let-up in sight for container shipping companies as their retail clients could still be feeling acute financial pain in July, when they begin placing orders for holiday and winter merchandise.

There's more at the link.

I've noticed the effects of shipping disruptions in a number of areas.  For example, there was a particular part I needed in my ongoing efforts to rebuild some older rifles for friends.  I ordered it in mid-April, but found it was out of stock at the time.  The manufacturer was waiting on a couple of injection-molded plastic components from an overseas supplier, which they would then build into the finished product.  Their supplier had the parts, but couldn't find shipping space to send them.  I was notified just this morning that the part I needed is finally in stock, and my order is in the process of being fulfilled.  That's a seven-week wait, for a part that's normally available 24/7/365!  I know I wasn't their only frustrated customer.  It's yet another example of how "just-in-time" manufacturing can grind to a halt if supplies of parts and components don't reach the factory on a regular basis.

The after-effects of the coronavirus pandemic are going to be with us for at least the rest of this year, and probably well into 2022.  Be prepared for that.

Peter

Walmart reads the signs of the times

I was initially puzzled to read about a tie-up between Walmart, the nation's largest retailer, and thredUP, a San Francisco-based used clothing reseller.  However, Barron's put it in perspective.

Walmart is taking a new tack in its effort to expand in e-commerce.

The company said this week that it formed a partnership with the clothing reseller ThredUp in a move that will see Walmart’s website offer secondhand clothing. The giant retailer will take a cut of the revenue.

Barron’s has written before about how ThredUp hopes to capitalize on a number of trends in the industry, from the treasure-hunt mentality that has fueled off-price retailers to millennials’ desire to shop more sustainably. We’ve also noted how Walmart has been willing to spend to boost its online presence in clothing, buying up brands like Modcloth and Jet.com to experiment with new ways to reach consumers.

. . .

The latest deal with ThredUp isn’t an acquisition. It will allow ThredUp products to appear on Walmart’s website, with Walmart providing free shipping for purchases over $35 and receiving a share of the sales.

Paying Walmart a commission seems like a reasonable trade-off for ThredUp, given that the partnership will give it access to a huge new audience.

Yet Walmart could also benefit from the deal, as it will have a large number of brands added to its site and get a piece of the preowned clothing market. Instead of making a risky acquisition, Walmart is mimicking Amazon.com, offering access to its site to a third-party seller.

There's more at the link.

What we're seeing is the emergence of online shopping malls.  In a physical shopping mall, people go "to the mall" to shop at an anchor tenant - a big store.  As they go to and from it, or relax with a snack in the food court, they see and are attracted to other stores in the same location.  The big stores attract customers to the small ones.  Online, customers go to Amazon.com or Walmart.com because they know they can get most of what they need there.  If, in the process, they can also be exposed to other businesses, and find interesting products there, they'll do their shopping through the main site, which gets a cut of the revenues from such transactions.  Ergo:  an online shopping mall.

I think we'll see more and more of this in future.  The big e-commerce sites basically have a lock on the market right now.  Smaller businesses would have a torrid time of it trying to break such a stranglehold from outside.  Therefore, as the old saying goes, "If you can't beat them, join them".

This may have an impact on independent authors and their books, too.  Right now, that market is owned by Amazon.com, which has made itself all but indispensable to most indie authors and publishers.  If another retailer such as Walmart can offer an alternative online home for them, with terms and conditions at least as good (if not better) than Amazon's and comparable market penetration, perhaps with better advertising and publicity opportunities, that might open up the market to more competition.  That'll be good for writers - and it can't be a bad thing for readers, either.

Peter

The vulnerable links in our economic chain

In one sense, I suppose we should actually be grateful to the coronavirus pandemic for the way it's highlighted how our economy has been structured around a series of assumptions, which in turn have driven decisions made to implement those assumptions.  The whole house of cards is predicated on nothing disturbing the arrangements thus made.  Throw a wild card into the equation, and massive disruption ensues - and COVID-19 has been one heck of a wild card!

Let me illustrate with a few examples.  Nobody in their right mind would argue that food safety is unimportant.  Upton Sinclair's novel "The Jungle", serialized in 1905 and published in book form the following year, exposed the appalling conditions in Chicago's meat-packing industry, leading to the establishment of what we know today as the Food and Drug Administration.  This regulates the food and drug industries, their methods of production, the safety of their products, etc.  In order to make such control easier, it was advantageous for many smaller plants to be consolidated into fewer, larger ones, so that fewer inspectors could supervise and control processing and production.  Over time, this consolidation increased, particularly as it became more and more expensive to attract and retain sufficient inspectors with the specialized knowledge and qualifications needed to oversee operations.

Today, there are relatively few meat-processing plants, and those that exist tend to be very large.  Cattle, pigs, sheep, poultry, etc. are brought to them over long distances for processing.  When these plants were hit by COVID-19 infections and closed, consumer shortages inevitably resulted, since there was nowhere else to take the animals for processing.  Because they could not be slaughtered, their numbers increased very rapidly, augmented by ongoing production on the "factory farms" that feed animals into the system on a regular basis.  The result has been the euthanasia of literally millions of animals and birds, and the disposal of their carcasses in landfills - even while consumers were having to make do with a more limited selection and lower quantities of meat available in stores.  Farmers and processors have lost tens of millions of dollars, all because the system was set up for massively large-scale processing in relatively few plants.  A more distributed system, with a lot more smaller plants situated closer to the farms, would probably have been less hard hit by the coronavirus pandemic, and supplies would probably have been maintained at a more stable level.

Another example is "just-in-time" manufacturing.  In the name of efficiency and the most productive application of capital, factories have largely been set up to keep minimal stocks of their input components (raw materials, parts, etc.) on hand.  They receive them "just in time" to use them on the production line.  (This has been reinforced by so-called "inventory taxes" levied by some states.  Where these are applied, it actually costs businesses money to keep large stocks of inventory, rather than move it in and out as quickly as possible.)  As a result, the factory-to-consumer pipeline is a high-volume, low-reserve proposition.  Goods move from factory, to distributor, to store, to consumer on a day-by-day basis.  There are no major reserves anywhere, so that a breakdown in that chain of movement inevitably results in shortages downstream of the break within a very short time.  We saw this earlier in the pandemic, where auto factories shut down within a couple of weeks of critical supplies of parts being interrupted.  It's since spread to almost every high-technology industry.

That, in turn, has been made worse by the global supply chain.  In the name of saving money on wages, buildings and other production costs, many companies shifted production of their components and finished products to lower-cost countries.  China, in particular, has benefited from this over the past few decades.  When manufacturing in those countries, and/or shipping of their production from source to market, was affected by the pandemic, supplies already on hand dried up fast, leaving chronic shortages that are still plaguing us.  (The availability of personal protective equipment for hospital personnel, such as masks, gloves, gowns, etc., is a well-known example.)

The question now becomes:  should our production and distribution systems, facilities and practices be revised in the light of the pandemic?  This seems like an obvious solution to many people - but it will involve massive expense.  To set up new factories in our own country, and have many smaller facilities rather than fewer, larger ones, and keep reserves of products in case of disruptions . . . we're talking billions, probably trillions of dollars in the short to medium term to accomplish those changes.  They may be desirable, and offer the only practical alternative to what we have at present;  but if we can't afford them, they're going to remain a pipe-dream.  What's more, if private enterprise is expected to accomplish all that on its own, it'll soak up a vast amount of money - something those who own the money will resist, because it'll take profits out of their pockets.  Also, countries where our products are presently made will do everything in their power to keep their factories open.  They may reduce their prices so much that it's uneconomical to make goods anywhere else, or impose economic sanctions to make the cost of moving production much higher than it would otherwise have been.  (China is taking all those steps at present, and being very unpleasant to countries that resist its pressures.)

We're in an "irresistible force meets immovable object" moment here.  What will the outcome be?  Nobody knows right now.  The only thing we can be sure of is that disruptions are likely to continue.

The current shape of our economy has proved to be inadequate to cope with a crisis like the coronavirus pandemic.  We can reshape it to be more flexible and responsive, but only at a very high cost.  Are we willing to pay that, as a society?  Are the owners of current means of production willing to forgo short-term profit to change the way they do business, in the hope of long-term stability of production?  Are our politicians willing to forgo short-term tax money (particularly inventory taxes), and provide tax credits, in order to make it easier and more affordable for businesses to change their methods of production?

Nobody knows the answers to those questions right now.  What we do have is a stark choice between a centrally managed economy (the socialist ideal) and a free-market one, where businesses decide for themselves how to change and the market tells them (by voting with its wallet) whether they've made good choices or bad.  Given government ineptitude in handling the coronavirus pandemic, I know which option I prefer.

What about individuals and families?  Each of us needs to take these things into account in planning for our own future.  We should determine what our "essentials" are - the things that we really need to have on hand to cater for what's important to us.  Examples:

• We need a sound, reliable basic food supply.  It's not a bad idea for every family to have at least one month's food in reserve (what my wife calls a "deep pantry") in case of shortages or emergency.  I prefer a three-month supply, and some people try to keep a year or more's food on hand.
• If we rely on a vehicle for transportation, we should consider keeping basic consumables - oil, brake fluid, transmission fluid, filters, belts, etc. - on hand, so that if there's any disruption in factory supplies, we can keep it operating for at least a few months.  A few tools to allow us to change fluids and do other basic maintenance would not be amiss, either.  Also, we should probably be proactive in changing tires, shock-absorbers, etc. before they actually wear out, so that we can be sure they'll have a reasonable useful life if supplies of replacement components are disrupted.
• If we have particular interests, sports or hobbies, how about keeping enough reserve supplies that we can continue with them during interruptions?  For example, I enjoy the shooting sports.  I've made sure that I have a decent reserve supply of ammunition, so that in a sudden shortage (such as we're currently experiencing, and which looks set fair to continue for at least months, if not years) I can continue to enjoy my hobby.
• What about clothing?  Nobody can stock a complete spare wardrobe, but if you have specific needs - business clothing for office wear, or workshop clothing for blue-collar workers, etc. - there's no harm in keeping a small reserve supply of it, particularly safety gear such as work boots, head and eye protection, and so on.  That way, a shortage of supply won't prevent you working, or be embarrassing if you have to wear visibly old, worn-out clothing.
• We live in an electrically powered world.  How many of our essential items of equipment rely on batteries?  Do we have adequate stocks of spare batteries?  What if we suffer local brownouts or blackouts if the electricity supply is cut off due to a lack of spare parts?  Do we have emergency measures (e.g. battery powered flashlights or lanterns) in place?  What about recharging things like cellphones, tablets, laptop computers, etc.?  A small generator (or, at the very least, a solar charger) might well be regarded as an indispensable accessory today.  If we have well-stocked freezers, it's doubly so.

Those are just a few ideas.  If you have more, please share them with us in Comments.

Peter

Sometimes the jokes write themselves . . .

I had to do a double-take at this headline:

Elvis Presley’s bedazzled jockstrap

hits auction block for $35K

I've heard about the dick-tates of fashion, but I never expected them to go to that extreme!




Peter

The demon of inflation has lost more of the chains holding it back

Demonocracy is known for its graphic illustrations of financial facts and figures that can be so large we simply can't grasp them.  It puts them into visual terms to which we can relate.  For example, here's $1 trillion in $100 bills, stacked up and arranged neatly together alongside objects with which we're familiar (a Boeing 747, an eighteen-wheeler, the White House, etc.) for scale.  Click the image for a larger view.

Demonocracy has used the same technique to visualize the current US stimulus package in response to the coronavirus pandemic.  It's frightening when you realize just how big it is - and understand that the whole thing is based on borrowings and "printed money", generated out of nowhere, with no economic reality to back it up.  Here it is in video form.  I recommend watching it in full-screen mode to get the full impact.

You can see the whole thing as a Web page at this link.  It's even more frightening like that than in a small video window.

Finally, remember that you and I - every single US taxpayer - is on the hook to repay that money, sooner or later.  I don't think that's economically or mathematically feasible, which leaves only two options.  Both may happen, separately or together.

1. The rate of inflation will be deliberately allowed to grow, rendering "current" dollars almost worthless in relation to "historical" dollars.  Old debts can then be repaid with new dollars, a much less painful process.  Unfortunately, that leads to hyperinflation.  Just look what happened to Weimar Germany when it tried to do exactly that to repay war reparations.
   
   
   
   
2. The US government will simply ignore fiscal reality and continue to borrow money to fund its expenditure.  This will see the deficit climb, and climb, and climb, until eventually no-one will buy US bonds or securities any more, because the "debt overhang" has become so great as to threaten the stability of the world's economic system.  At that point, the US government's ability to pay for all its programs will collapse - as will the US dollar as a world reserve currency, and the US economy as a whole.

As I said, the really scary prospect is that we may see both of those things happening simultaneously.  During the previous recession, the Federal Reserve ended up as the largest "buyer" of securities issued by the US Treasury, effectively printing money to pay for printed securities that weren't worth the paper they were printed on.  It's doing the same thing now, as international demand for US securities can't absorb the trillions of dollars required for the current pandemic stimulus package.  The Federal Reserve's balance sheet has grown astronomically over the past couple of months, and the growth shows no signs of slowing down.

There are those who argue that the current situation may lead to deflation, rather than inflation, due to asset prices taking a major hit.  In the short term, they may well be correct.  However, in the long term, the lesson of history is clear.  Dilute the currency in any way (adulterating precious metals with base, or printing money without any economic foundation to support it) and sooner or later, the chickens come home to roost.  Inflation is the inevitable result.

I think we're already seeing some of that affecting the consumer.  Have you noticed food prices lately?  I know they're attributed to market conditions, but I think they also reflect the underlying reality of inflationary pressure on the consumer.  I've demonstrated several times in the past that real consumer inflation, as measured by objective sources such as Shadowstats or the Chapwood Index, has been far higher than official figures.  As Miss D. and I do our shopping every week, we're seeing inflation even higher than that.  Some items' prices have increased by more than 25% since March!

What will dumping an extra few trillion dollars into the economy, money created out of nothing from nowhere, do to the rate of inflation over time?  I think we all know.

Peter

Isn't this fraudulent misrepresentation?

I was baffled to read about a sales tactic by food delivery companies such as DoorDash and others.

In March 2019 a good friend who owns a few pizza restaurants messaged me ... For over a decade, he resisted adding delivery as an option for his restaurants ... But he had suddenly started getting customers calling in with complaints about their deliveries.

. . .

He realized that a delivery option had mysteriously appeared on their company's Google Listing. The delivery option was created by Doordash.

To confirm, he had never spoken with anyone from Doordash and after years of resisting the siren song of delivery revenue, certainly did not want to be listed. But the words "Order Delivery" were right there, prominently on the Google snippet.

. . .

Tricking businesses onto your platform and creating additional headaches for small business owners in the pursuit of Softbankian growth is a bad as it gets. Many restauranteurs were complaining about their Google listings being "hijacked" by Doordash, sometimes even usurping their own preferred delivery.

These underhanded tricks aren't unique to Doordash though. In recent weeks there has been some great work coming out around a Yelp - Grubhub phone scam. This one is just priceless (seriously, read this Buzzfeed piece). Grubhub for their own sites generates a phone number for each restaurant that goes to a centralized, Grubhub owned call center. If someone calls in and orders via this number, the restaurant gets charged a fee. Apparently, some enterprising BD folks came up with the idea that Yelp could put the Grubhub phone numbers in place of the real restaurant phone number on the Yelp listing. Customers who think they’re “helping” their local restaurants by calling in the order are still creating a fee for Grubhub.

There's more at the link.

I'd say that tactic is at least underhanded, if not downright dishonest.  How is it legal to publicly pass off a phone number for your company as the phone number to order from another company?  How is it legal to misrepresent your phone number as theirs, on other business Web sites?  How is it legal to have Google add your delivery service to the Web listing of another company, without that company's permission and authorization?  Isn't that almost the definition of the crime of fraudulent misrepresentation?  Why have no criminal charges or civil lawsuits been filed?  I'd appreciate comment from the legal eagles among my readers.

In this case, I'm glad to say that the misrepresentation backfired on Doordash when the owner of the pizza business found a way to make them pay him a lot of money at no extra cost to himself.  It's an amusing tale that I'll leave you to read for yourselves.

There's also the issue of delivery services charging fees to restaurants for referrals, even if customer calls didn't result in orders.  GrubHub is in all sorts of trouble in New York over that practice.  It looks like Yelp got in on the scam as well.  I don't understand why charges haven't been filed against both companies.  Surely that's illegal?

All I can say is, if I found another company misrepresenting itself as my business, I'd be furious.  Those sorts of shenanigans are why so many small restaurant owners I know are very angry with food delivery services.  They claim they're costing them customer goodwill by delivering food late and cold, causing customers to blame the restaurant, and post negative reviews about it on social media.  In other words, they're blaming the restaurant for the delivery service's shortcomings.  In the restaurant's shoes, I'd try getting together with others to launch a class action lawsuit against the delivery companies concerned.

That's why I won't use most food delivery services.  I'd rather call in my order direct to the restaurant, making sure it's their number, not a third party's.  I'll use a delivery service with whom they've contracted, knowingly and honestly, or collect my order if necessary.  I don't want to reward dishonest misrepresentation with my customer dollars.

Peter

Quote of the day

From Tamara:

Peter

Depressing, but probably accurate - and very important

Charles Hugh Smith, whom we've met many times in these pages, has a gloomy forecast for the economy in the short to medium term.  It's depressing reading, but it's vitally important to understand what's probably heading towards us.  Too many people are only looking at superficial details, not examining the "big picture" and planning (or failing to plan) accordingly.  Mr. Smith doesn't make that mistake.

Here's an excerpt.  Bold, underlined text is my emphasis.

While the stock market euphorically front-runs the Fed and a V-shaped recovery, the reality is the crash has only just begun. To understand why, look at income and debt. Income, earned and unearned, is in free-fall, while debt — which must be serviced by income — is exploding higher.

Bailouts are not a permanent substitute for income. In the short-term, bailouts are a necessary substitute for lost income. But longer term, subsidizing income with borrowed money weakens the currency and the economy, as productivity stagnates.

As for servicing debt — the unemployed working class is getting an extra $600 a week not out of kindness but to make sure these households can continue to service their debts: auto and truck loans, student loans, credit cards, etc. Absent a federal bailout, millions of unemployed would cease making loan payments, creating a financial crisis for lenders.

. . .

The money that’s being sent to unemployed workers is borrowed, and small businesses are being offered loans, much of which will be forgiven if the funds are used to pay wages. In other words, all of these trillions of dollars being substituted for earned income are borrowed ... there are no capital flows which will support a return to commerce and productivity that will pay wages or generate investment income.

. . .

The crash has only just begun. Everything, including a rational, connected-to-reality, effective financial system, is on back-order and unlikely to ship any time soon.

There's more at the link.

I'm afraid that from a logical, rational perspective, Mr. Smith is quite correct.  Every cent the government is throwing at the coronavirus pandemic and its economic consequences is borrowed money - and that's on top of trillions upon trillions of dollars already borrowed in the past.  That leaves only three possibilities to deal with so vast a burden of debt:

1. The debt will be repaid, but that'll take a long time (decades), and the burden on the economy will hobble further growth and development.
2. The currency will be deliberately inflated (i.e. the dollar will be allowed to weaken), thereby allowing the "old" debt to be paid off with new, much cheaper dollars.  This will lead to massive economic disruption (see the Weimar Republic for details).
3. The debt will be repudiated (i.e. rejected and not paid) - which will destroy the "full faith and credit" of the United States, and have catastrophic worldwide consequences on the international economic system.

Right now, I 'd say #1 is practically impossible - the debt is already too large to be repaid out of current and future revenues.  #2 is most likely, IMHO, but #3 isn't beyond the realms of possibility, especially if economic illiterates like Alexandria Ocasio-Cortez and her Democratic Socialists have their way.

Mr. Smith teamed up with Gordon Long to discuss the impact of the current economic situation on municipal and local governments.  Since many of us live under the administration of such entities (including yours truly), this is a vitally important subject, as well as a microcosm of what our big cities are facing.  As Mr. Long points out, such governments have "expenses going out, but nothing coming in".

I respectfully suggest that this video provides vitally important information for all of us.  It's half an hour long, but well worth your time, IMHO.

Brace yourselves, folks, and keep your powder dry - economically and in every other way.

Peter

The folly of relying on credit to save your fiscal butt

I've long advocated building up an emergency fund and/or "rainy day fund" if at all possible, to help get through hard times if and when they arrive.  However, I know many people who've dismissed that advice.  They've said they simply can't afford to do that on their income, so they'll rely on credit cards and other debt instruments to cover expenses if something goes wrong.

Well, they're now running headlong into the reality of the financial markets.  A lot of them are finding that the credit lines they'd planned on using are either less than they'd expected, or aren't available at all.  For a start, credit card issuers are reducing their exposure to potentially bad debt.  Everyone except those with stellar credit ratings and history is at risk.

A new survey has found that about 25% of card owners in the US had their limits reduced or accounts closed within the past 30 days.

Almost 50 million people saw their credit limits decreased or cards closed involuntarily, according to a CompareCards survey conducted in late April.

There's more at the link.  Bold, underlined text is my emphasis.

To make matters worse, credit limits on credit cards can be adjusted by their issuers without specifically notifying card-holders.  Your only notice will be the changed credit limit printed on your monthly statement - and many don't read those in any detail.  That means you could find yourself suddenly maxed out on your credit card, without any prior awareness of that risk.

That new wariness by lenders is extending even to secured debt such as mortgages and home equity lines of credit (HELOC's).

Over the past month, lenders have put in place higher credit-score and down payment requirements, and in some cases stopped issuing certain types of loans altogether, in effect shutting down a large swath of the mortgage market ... The impact has been dramatic, with one model showing mortgage credit availability has plunged by more than 25% since the U.S. outbreak of the virus.

. . .

JPMorgan Chase & Co. tightened its standards last month, requiring borrowers to have minimum credit scores of 700 and to make down payments of 20% of the home price on most mortgages, including refinances if the bank didn’t already manage the loan.

Wells Fargo & Co. increased its minimum credit score to 680 for government loans that it buys from smaller lenders before aggregating them into mortgage bonds.

The banks’ revised standards are far above the typical minimum score of 580 and down payment of 3.5% that borrowers need to qualify for home-buying programs supported by the federal government.

Wells Fargo is no longer letting borrowers refinance their mortgages while cashing out home equity, and both Wells and JPMorgan have suspended new home-equity lines of credit.

Again, more at the link.

That's potentially very bad news indeed if you were relying on a HELOC, or planning to cash out some of your equity in your home, to get you through the present crisis.  For example, if you own more than 50% equity in your home (i.e. the outstanding balance on your mortgage is less than 50% of your home's current market value), you might have planned to draw on that in a financial emergency (such as many of us are facing in these difficult times).  However, now you won't be allowed to access that equity through a HELOC.  That's going to put a big crimp in some people's ability to cope.

I've even heard from some friends that their existing, pre-approved HELOC's have been "frozen" or suspended at their present levels.  For example, they may have been approved for a $25,000 HELOC, but they're only using, say, $12,000 of that facility.  Now they're finding that they can no longer access the remaining balance of the credit they'd already arranged.  That's proving to be a huge financial headache for them.  I know a few who are applying for second mortgages, with different lenders, to make up the sudden shortfall - but that's costing them a lot more in fees and higher interest rates.  Worse, in the present economic climate, sometimes second mortgages are simply not available.

One can't blame lenders for seeking to protect themselves, but if you rely on credit to make ends meet from month to month, that doesn't help you at all.  As I've said so often in the past (for just one example, see here), get out of debt if at all possible, and stay that way!  That's investing in your own future, in the best possible way.  Also, build up some sort of emergency fund as soon as possible.  In fact, I'd go so far as to suggest, if possible, using your government coronavirus stimulus checks to start such a fund, rather than using them to pay off debt or cover other needs.  If you have no emergency financial "cushion" at all, that'll be a whole lot better than nothing.

Some people have told me that they haven't bothered to build up their own emergency "nest egg" because they'll be eligible for unemployment, or some other form of social welfare or entitlement program, if they're laid off or their employer goes bankrupt.  Er . . . not so fast.

People in many states, including New Jersey,  Maine, and Pennsylvania report they haven’t yet gotten a dime from unemployment. In fact, a whopping 71% of jobless Americans haven’t gotten their unemployment payments from March.  Lines at food banks are literally miles long in some areas.

Without a nest egg, and with your usual credit facilities now circumscribed, you may find yourself in the same boat - unless you have something set aside for a rainy day.

If you're still doubtful about the need (or possibility of saving) for an emergency fund, see Aesop's latest.  Scroll down to point #3, and read it.  Slowly and carefully.  Yes, he's talking to you.  Then, go back and read the entire article.  He makes good sense, and underlines everything I've had to say on the subject for the past twelve years or so on this blog.

Peter

Landlords versus renters - not as simple as it looks

Governor Andrew Cuomo has extended for another two months his original 90-day order suspending evictions in New York state for failure to pay rent.

Cuomo said that landlords who face utility bills and mortgages can turn to banks and federal programming for help.

He also said that officials will ban any late-payment fees and allow renters to use their security deposits as payment.

"Everyone is just making do, and everyone has hardships," he said during his daily briefing Thursday. "We just want to make sure the people who are most vulnerable are protected."

There's more at the link.

This is very useful to those who've been laid off or furloughed.  They'll at least have roofs over their heads for the next few months, while they figure out how to make a living.  However, it doesn't excuse them from actually paying the rent they owe.  If they don't pay for five months, until August 20th, and then expect to go on as before, they're in for a big surprise.  I'm sure landlords will be applying for eviction orders as soon as they're legally able to do so, and kicking out those who haven't paid, and suing them for rent arrears.

Landlords are in a terrible position over this.  They'll be portrayed as evil and mean and greedy for insisting on payment:  yet they have to pay mortgages on their properties, and insurance, and rates and taxes, and pay for repairs when necessary.  Without rents coming in, how can they do that?

I'm not a landlord, but I know several small investors who rent out property as retirement income.  One of them owns an apartment block with 36 units (not in New York state, but the same principle applies).  His tenants (many of them still working) have gotten together and sent him a round-robin letter, telling him flatly that they're going on "rent strike" until the crisis is over (even though many of them are still working and able to pay).  The rent they pay is his only retirement income apart from Social Security.  What's he to do now?  He can't sue them or apply for eviction orders, because local courts are closed during the coronavirus pandemic shutdown.  His bank will insist on payment of his mortgage, under threat of foreclosure;  and the city will want its rates and taxes, or they'll suspend his license to do business.  Talk about being between a rock and a hard place!

It's all very well for Governor Cuomo to tell landlords to "turn to banks and federal programming for help".  Banks may not be interested in helping:  they want their money too.  Federal programming is not always available - many who've applied for small business loans have heard nothing so far, or have been turned down.  However, landlords are a relatively small class of voters.  Those who rent from them are a much larger class.  Therefore, the politicians will pander to those with the greatest number of votes.  Others are left holding the short end of the stick.

I think we may see a wave of landlord bankruptcies in the not too distant future, as banks and others foreclose on their properties.  That'll be a very strong disincentive to others to invest in rental property in future, for fear of the consequences if anything goes wrong.  Over time, that's likely to prove very negative for the rental property market as a whole, diminishing the supply of housing units and driving up costs for everyone.  I wonder if Governor Cuomo bothered to think about that before issuing his edict?

Peter

The wider, longer-term effects of the coronavirus pandemic

Aesop has an excellent article at his blog considering the wider ramifications of the current pandemic for our economy and our society.  Here's an excerpt.

The Oil Industry

People ignore the fact that Russia and OPEC were getting into a throat-slitting contest before the pandemic became news outside China, but that shindig, coupled with .Gov ringing the alarm over Kung Flu, gave Wall Street the go-ahead to take the most massive fiscal **** on itself in recorded history.

Last week, the price of oil was down to "If you'll take this crap off my hands, I'll pay YOU $19/bbl to unload it for me." Imagine Macy's giving $50 bills away for taking suits and dresses - marked down to "FREE" - off their store racks, and you've got the idea.

Fracking? Drilling? Fuggedabowdit.

Short-term, OPEC countries are going to starve, first for cash, and then quite possibly for real. This is when "Arab Spring" from a couple of years ago turns into a Long, Hot Summer Of Discontent.

American drilling platforms, oil fields, and general operations? Probably taking a months-to-years long **** on themselves too. We may never see things like they were last December again, for years, to decades, to ever.

. . .

The Auto Industry

We were already sitting on a months-long glut of cars, because the "booming" economy wasn't trickling down from banks and board rooms to where people buy new cars. With unemployment where it is now, defaults on auto loans to come, and metric ****tons of repo cars, demand for new cars will probably hit 1930 levels. I.e. nada. If Detroit announced there would be no 2021 models or model year, it wouldn't surprise me at this point. So auto workers, and ancillary parts makers, dealerships, auto finance, banking, etc.

. . .

Entertainment

Disney Inc. probably won't re-open any parks in 2020, by all accounts. They're posting 90% Q2 losses (on top of the epic flop that was their craptastic StarBores additions, which lost them billion$ already), and it isn't getting better, as they look to do without any summer park revenue either. Add Six Flags, and every other theme and amusement park to that list, as what gets re-opened, and the whims of both the government and the public change like the wind daily.

The movie business is about to get the worst summer in history, in all likelihood. Pisser not just for Tom Cruise and Top Gun 2, but for the entire multi-billion $$ industry, from fat-cat producers and overpaid actors, all the way down to the folks who wash the cars, take the tickets, sell the popcorn, and those who provide everything from midnight meals for production crews, to props, wardrobe, equipment, and a gajillion rentals of everything known to man.

Concerts? Who's likely going to attend COVIDfest 2020? Is it even going to be an option in most places? I'm thinking it's unlikely at best, for some time.

. . .

The engine of the economy just had a huge bubble of water pumped into the fuel line, and one of the pistons just sheared off. What happens after that?

You ain't seen nothin' yet.

And this is just the everyday stuff, inside the country.

Wait until this rumbles through 150 other countries' economies.

There's more at the link.  Recommended reading.

I can't disagree with anything Aesop says;  in fact, I've said many similar things myself over the past few months.  There's a chance - a small one - that the American economy will kick-start itself, and things will return to normal faster than anticipated:  but I doubt it.  Over thirty million people (let's look at that in figures:  30,000,000 people) have lost their jobs, or been furloughed, during the past two months or so.  How many of them will find that their employers have closed their doors?  How many will find that their hours have been cut when their employer re-opens, because the customers just aren't there in the same numbers as before, or spending as freely as before?  I think at least half of those thirty million people are going to be on the breadline for a long time to come.

The question then becomes:  what to do if you're among them?  I think this is a time to pull in your horns, financially speaking, and do everything possible to position yourself to survive.

• Cut back on every single expenditure you can.  Budget carefully, and stick to it no matter what.  No impulse purchases, no extravagances, no "my spouse will never know about that!" moments.  Every penny counts.
• Reduce costs wherever possible.  Refinance your mortgage if necessary, to get a lower monthly payment even at the expense of a longer payment period.  Get rid of whatever you can't afford, even if you take a loss on it (for example, a car that's costing you several hundred dollars a month that you no longer have).
• Sell assets that can bring in cash to reduce debt elsewhere.  I got a head start on that after my heart attack last November.  I knew my writing income would suffer badly over the recovery period, so I began to sell firearms from my collection, and ammunition from my stash, to cover expenses.  It's kept me afloat so far.  Sadly, thanks to COVID-19's effect on the economy, I may have to do a lot more of that, for a lot longer than I'd anticipated.  Watch this blog for more sales soon!  Take a long, hard look at your own hobbies, assets and valuables, and consider doing likewise.
• Consider what you can earn on the "black economy", doing odd jobs for cash or swapping your goods and services for those of others.  ("I'll help fix your plumbing if you'll help me service my car," and that sort of thing.)  This can save a lot of money, and generate a little income on the side.
• Be prepared to walk away from debts that become intolerable.  It's lousy to be homeless . . . but if keeping your home is crippling you financially, why are you still there?  Begin planning right now what you'll do if you're forced into such an extremity.  Do you have family or friends with whom you can stay?  For how long?  What about the stress to which that'll subject your relationship with them?  Can you arrange to stay at one place for a week or two, then move to another, and so on, to create less stress for your hosts?  Plan ahead.

Finally, if you don't already have one, I urge you as strongly as possible to find a network of like-minded people, relatives and/or friends you trust to help you and your family through hard times.  None of us know what those hard times may include, but I think we can all see them coming.  A small network of people providing mutual support is much more likely to survive them than a "lone wolf".  Miss D. and I are blessed to have a local group of friends like that, and a wider one online.  I hope you're as fortunate.

In one sense, the readership of this blog, and of Aesop's, and those that have come together around other blogs and bloggers, already form such networks.  Let's share ideas and support each other, even if at present it's only moral support.  Who knows what dividends that may pay in future?

Peter

Grasping for security: gun sales spike again - but what about ammunition?

In March, gun sales soared to the highest monthly figure ever recorded in the USA - and that was only sales that involved a background check.  Most private, face-to-face sales weren't included in the total.  I'd be interested to know how much traffic Armslist and similar Web sites, not to mention local gun shows, generated from people in the same city or area, seeking to buy used firearms from one another.  I'm willing to bet it was heavy.

It seems that April was also a very busy gun-buying month.

Gun sales in April spiked by more than 70 percent from the previous year, with the purchase of more than 1.7 million firearms as concerns related to the novel coronavirus continued, recently released statistics show.

An estimated 1,797,910 guns were sold in April 2020 – a 71.3 percent increase from April 2019. March saw an even higher surge in sales, with 2,583,238 firearms sold – or 85.3 percent more than the previous year, according to data released late Monday by Small Arms Analytics and Forecasting.

SAAF data also indicated a surge in handgun over long-gun purchases, a group spokesperson said.

Mark Oliva, a spokesperson for the National Shooting Sports Foundation, which represents gunmakers, said the NSSF had reached similar figures, though slightly lower at 69.1 percent ... he said the numbers showed, "the strongest April on record."

"This shows us there is continued appetite among Americans to be able to provide for their own safety during times of uncertainty. These are buyers who have witnessed their governments empty prisons... Police departments are stretched beyond capacity in many cases. Law-abiding Americans recognize this and exercising their right to own a gun and defend themselves and their loved ones."

. . .

Fears gun shops would be closed and that economic downturn would lead to high crime and safety concerns have helped fuel the run on firearms.

Oliva previously [said] that during a time of extreme uncertainty, “Americans want to know they can provide for their own safety and the safety of their loved ones.”

“Our rights don’t end during a pandemic,” he said. “In fact, the need for responsible and law-abiding adults to exercise their rights is magnified.”

There's more at the link.

I have no problem at all with people wanting to ensure their own and their family's safety, and buying a firearm to help with that process.  As Samuel Colt, inventor of the first successful revolver, famously declaimed:

Be not afraid of any man,
No matter what your size.
When danger threatens, call on me,
And I will equalize.

However, I am concerned about a few issues.  First is that many people turned to handguns for defense, rather than long guns (i.e. rifles or shotguns).  This is entirely understandable, as a handgun can be concealed and carried more easily than a long gun.  However, handguns are much more difficult to shoot accurately than long guns.  They require more training, and then need regular practice to keep that training fresh in one's mind and reflexes.  I wonder how many of those who've just bought handguns will bother to get any training at all, let alone advanced training?  How many will willingly spend the money it'll take to buy ammunition for regular practice?  Relatively few, I suspect - and therein lies the potential for more problems in future.

I'm sure many of my readers are familiar with firearms, and accustomed to handling them.  Please, friends, encourage the new firearm owners among your acquaintances to get training and ongoing practice with their weapons.  We'll all be safer if they do.  Remember, firing wildly to deter a criminal may have the desired effect - but every bullet fired has to end up somewhere.  Hopefully, it won't be in the body of an innocent bystander!  Training and practice can help to ensure that.

As for regular practice in the ongoing ammo drought . . . that 's another thorny issue.  I don't think the supply of ammunition will return to normal for at least two to three years (judging by the length of time it took to recover from the previous ammo drought).  My favorite online ammunition vendor, SGAmmo, said this in their latest e-mail flyer:

As mentioned in my recent newsletters a lot has changed in the ammo business over the past few months as the Covid-19 outbreak created the largest rush to purchase ammo in all of history. This has greatly reduced supply stockpiles and driven prices up substantially from the 12 year bottom they hit in 2019 and early 2020. Here at SGAmmo [we] were holding huge investments in ammunition inventories which have helped us keep better than average availability but our stockpiles are really running thin, especially in 9mm, 45 Auto, 223 / 5.56, 300 Blackout, and 12 gauge buckshot, additionally 7.62x39, 308 Win, 22LR as well as many other popular calibers are not looking good either. Getting resupplied from the factories has also not been going well due to extremely high demand in the dealer market as retailers and distributors have all put in huge orders at the same time in an attempt to restock, effectively wiping out supply and buying up all 2020 future production of key calibers from the major factories. This new level of demand has led most factories to raise prices, eliminate 'special deals' which are key to keeping prices attractive, and allocate stock in very limited amounts.  Many factories have also reworked their process in attempt to protect their staff from COVID19 which has reduced their capacity substantially, so in general less ammo is being made today. I'd love to stay positive but realistically there are dark times ahead for the ammunition supply chain.

All is not dark as far as training and practice are concerned.  Interim, low-cost solutions are available.  Again, if you have friends who are new to firearms ownership, please recommend that they consider them.  If you have a decent ammo stash of your own, you might consider giving some to new shooters among your friends, to help them grow accustomed to their firearms.  I've set aside a few hundred rounds for that purpose.

In closing, I can only repeat the warning I gave last week (scroll down to the end of that article to read it).  I believe the likelihood of increased crime and violence is trending much higher, thanks to economic disruption, the release of many criminals to reduce COVID-19 infections in prison, and other factors.  We should all be on the alert, and ready to defend ourselves if necessary.  We should also be unwilling to give up our firearms, the most effective means of personal defense available to us - no matter what liberal and/or progressive politicians may demand or dictate.  That's worth remembering in the November 2020 elections, and voting accordingly.

Peter

Behind the scenes of the meat shortage

The Washington Examiner takes a hard look at some of the factors causing the current meat shortage in the USA.  As usual, they can be summed up in a single phrase:  the government got involved.

Dig a little deeper, and the situation gets even more dire. We could soon see farmers unable to keep their farms afloat, livestock killed in mass with no means to be sold, and hungry families.

For those unfamiliar with agriculture policy, this scenario seems unimaginable. But according to those who’ve spent their years toiling in the amber waves of grain, the problem was merely exasperated by the pandemic, not the result of it.

. . .

There is no actual shortage in livestock ... Rather, the breakdown is coming on the plant side of the equation where cramped quarters are hazardous. Why can’t farmers sell directly to consumers and circumvent this problem? You guessed it — government regulations.

In 1967, the federal government blocked states from making their own decisions on how meat was processed and promptly handed the power to the Department of Agriculture, or USDA.

What followed was essentially a takeover of control of the industry. Farmers had to travel long distances and sell their livestock to a small number of USDA slaughterhouses instead of to local butchers, small processors, or directly to consumers. This relationship began to severely impact their profit margins as the government was able to force farmers to sell their product for pennies on the dollar. When you limit the number of places the producers can sell, you control the prices.

Even before the current crisis, this was a powder keg of cronyism waiting to blow. The economic model forced on farmers by the government simply doesn’t work. They’re buried in debt as they must finance expensive equipment to do their jobs, yet also must pay all of the costs of raising the animals upfront. And they increasingly see their returns diminish at the end of the equation.

Farmers are boxed in. While “Big Ag” gets bailed out from the ramifications of trade wars and other bad economic policies, small farmers, who make up the bulk of production, are struggling to survive.

To add insult to injury, as our farmers bend over backward to create under the heavy burden of strenuous regulations on our own soil, the USDA continues to import beef from Brazil’s cheaper, unregulated marketplace instead. You wouldn’t know that, though, because in 2013, Congress abolished the Country of Origin Labeling (COOL) law that would have tipped consumers off.

There's more at the link.

The article doesn't mention some of the positives of USDA involvement and the centralization of slaughterhouses.  Among others, they include the best use of the limited number of inspectors.  There aren't enough of them to assign several to every remote slaughterhouse;  but if those facilities are centralized into larger, regional units, the inspectors can cope with the workload.  Also, there's the problem of ensuring uniform standards among many scattered processing plants.  This is illustrated every day by outbreaks of food poisoning in countries that don't pay enough attention to standardized processing, food hygiene, etc.  (We've all heard phrases such as "Montezuma's Revenge", "gyppo gut", "the Zulu two-step", "Delhi belly", and so on.  They all have the same origin - or should I say "point of departure"?  On second thought, perhaps not . . . )

That said, there's also a very strong case to re-examine the current system and see whether it can't be improved, for the benefit of the nation as a whole.  I, for one, would like to know whether I'm buying beef "made in America" or produced elsewhere.  I'd also like to see an expansion of farm "buying clubs" where farmers are allowed to sell their meat direct to consumers.  Miss D. and I have bought half a cow before (its name was "Sir Loin", we were told), and it lasted us well over a year - it was very good meat, too, straight from the farmer to the consumer.  Why not allow that on a wider basis?  Local game processors, ubiquitous in the hunting regions of the country, could just as easily process cows or pigs as they can deer or wild hogs.

Peter

"How do you build a city for a pandemic?"

That's the question the BBC asks in an intriguing article examining how the size, structure, layout and systems of our cities may contribute to the spread of disease, and how they might be changed to prevent that.  It's a long article, and has a lot of "green" propaganda in it, but it also has some interesting suggestions.  Here are a few excerpts.

Modern cities weren’t designed to cope with life during a pandemic, and this upside-down way of living has turned them into “a disorganised array of disconnected bedrooms and studios”, says Lydia Kallipoliti, assistant professor of architecture at The Cooper Union in New York. This layout might have made sense when cities were internationally connected hubs filled with millions of people working, commuting, sightseeing, drinking, dancing and hugging one another without a second thought. But that world seems a long way off now.

The 21st Century has so far seen Sars, Mers, Ebola, bird flu, swine flu and now Covid-19. If we have indeed entered an era of pandemics, how might we design the cities of tomorrow so that the outdoors doesn’t become a no-go zone, but remains a safe and habitable space?

. . .

So making different use of our current spaces, implementing further sanitation and transitioning toward more room for pedestrians are all going to be key features in a pandemic-resilient city of the future.
But one of the biggest changes to our cities won’t be so visible as a fancy new building or a big new park, according to Davina Jackson, author of Data cities: How satellites are transforming architecture and design.

“Cities of the future are going to have to be designed to deal with completely invisible flows [like a global virus], and that’s where the data mapping comes in.”

She gives an example which brings us back to the urban gut of a city: researchers at the Senseable City Lab at MIT placed sensors into sewers to detect concentrations of illegal drugs and harmful bacteria in specific areas. A city built for a pandemic would likely be filled with hidden sensors to help map the spread of disease.

Another important aspect in building a city resilient to pandemics is thinking about how to source food ... She suggests that to reduce risk, our cities may need to become more localised and self-sufficient in the future. “If you had a city, for example, that could feed itself ... It’s not like each place has to be an island, but that there’s some kind of sense of balance and sustainability that you can see within your own settlement.”

There are already examples of urban farming feeding millions when there is little other choice. During World War Two Americans planted 20 million household vegetable plots, producing nine million lbs of produce each year and amounting to 44% of the US harvest, but the challenge of building a self-sufficient city is still a huge one.

. . .

Our homes will need to change too. In an effort to make them more energy and heat efficient, many workspaces, flats and apartment blocks don’t have operable windows. But if we are to going to be spending more time indoors, our houses will need to be better ventilated and offer more light, according to the Irwin S. Chanin School of Architecture’s Kallipoliti. She describes the need to avoid something called “sick building syndrome”, which is what happens “when buildings [are] entirely sealed and start recirculating pathogens through their systems”.

There's much more at the link.

I think a large part of the solution may be a greater emphasis on working from home or in regional centers, as we discussed yesterday.  If jobs can be done without requiring people to be concentrated in big cities and city centers, I think a lot of people will jump at the chance to move to smaller towns with a lower cost of living and better quality of life, and telecommute to their jobs from there.  That might be inimical to the "green city" advocates, who want everyone to occupy minimal space, use public rather than private transport, and be "less of a burden on nature" . . . but it'll be very practical.

Peter

The central business district may not be so central for much longer

Earlier in the coronavirus pandemic, I speculated:

Think about it.  If you're a business that until now has rented, say, a couple of floors in an office building to house your administrative functions, but you now learn to do the same job with most of your admin workers telecommuting from home . . . why go back to renting that space?  Why not continue to have them work from home, and save tens or hundreds of thousands of dollars in rental every year?  It's a no-brainer.  Landlords should already be factoring that into their considerations for the future - and getting concerned.

Looks like I'm far from alone in thinking about that.  The BBC reports:

Having thousands of bank workers in big, expensive city offices "may be a thing of the past", Barclays boss Jes Staley has said.

About 70,000 of Barclays' staff worldwide are working from home due to coronavirus lockdown measures.

This had led to a rethink of the bank's long term "location strategy", Mr Staley said.

. . .

In recent years, banks worldwide have shifted staff away from expensive skyscrapers in financial hubs, but Barclays and its rivals still have busy offices in places such as London's Canary Wharf.

But Mr Staley said his bank was re-evaluating how much office space it needed, as it was now being run by staff working "from their kitchens".

He added that in the future retail branches could be used by investment banking and call centre workers, hinting at an end to long commutes for some workers.

"There will be a long-term adjustment to our location strategy," Mr Staley told reporters. "The notion of putting 7,000 people in the building may be a thing of the past."

There's more at the link.

The implications of such a decision, spread across thousands of companies currently taking up office space in cities' central business districts (CBD's), are staggering.  Consider:

• What about the transport infrastructure that's been built up to ferry people in to work and back home again?  Railways, buses, even the roads themselves - what if the historical network suddenly falls to a much lower level of use or occupancy?  Budgets will have to be adjusted, plans for expansion curtailed, vehicles and rolling stock mothballed, staff laid off.  I don't think anyone's looking at that yet.
• What about businesses created to support businesses in the CBD?  Cafes, restaurants, food carts, dry-cleaning outlets, gift shops - there are thousands of businesses set up to cater to and for office workers.  If those workers aren't there in the numbers they were before, what's going to happen to those businesses?
• The biggest losers in the business world may be landlords.  Hugely expensive office buildings may become financial millstones around their necks.  (For example, One World Trade Center cost almost $4 billion to construct.)  Loans to build more such buildings may dry up altogether if banks can't be sure of a return on so large an investment.  Rents will probably have to be drastically reduced in an effort to persuade tenants to remain, and/or to persuade tenants to move from one landlord's premises to another's.  Competition to sell office space might become much more cut-throat than has been normal up to now.
• Cities will be faced with a massive reduction in rates and taxes from a shrinking CBD.  How will they make up for the shortfall?  What about the money they've spent to build up a transport network to support the CBD?  Many such networks have "featherbedded" contracts with trades unions.  If demand for their services falls, can the city lay off workers, or is it contractually obliged to keep them, at vast expense?  What will the unions have to say about it?

All these are questions that will have to be answered, and soon.  Frankly, once companies see how much money they can save by having employees work from home, I can't see them keeping up such large offices any longer than they have to.  They can always bring in staff once a week to smaller premises, staggering work days so that a central office receives, say, one-fifth of the employees and/or corporate divisions every day to brief them on developments, ensure everyone's working to the same script, and do the necessary administrative work.  Even one day a week may prove to be more than is necessary in the long run.  How will companies reorganize their operations and structure to take advantage of the "new normal"?

This will bear careful watching.  I think it's going to affect a great many white-collar workers before long.

Peter

A monster container ship is collecting . . . empties?

One of the biggest container ships in the world, the MSC Anna, recently visited California.  Here's a video report about her arrival.

What I found most interesting was the comment that she'd come to collect empty containers, and take them back to China.  This is a vitally important part of re-establishing international trade.  With the shutdown across the globe, containers that were en route to their destinations were delivered - and then just sat there, with no way to get them back to the factories that sent them.  Without those containers, the factories couldn't pack goods for export, even if they got their production lines running again.  There was basically a complete, almost unbridgeable disconnect between producer and consumer, particularly when most container shipping shut down.

It's encouraging to see so large a ship filled with thousands upon thousands of empty containers.  May they soon be filled again!

(The ship itself is an absolute monster, posing all sorts of challenges to pilots and port staff.  You can read about that in this article.  I found it very interesting.)

Peter

Oh, I wish . . .

. . . this wasn't just a comic!  Click the image to be taken to a larger version at the "Pearls Before Swine" Web page.

The only improvement I can think of would be to have the CEO try to call 911 to complain - only to find it's been outsourced to India, and the staff there speak English with an accent so heavy it's almost indecipherable.




Peter

He's not kidding

From "Pearls Before Swine" yesterday (click the image to be taken to a larger version at the comic's Web site):

Our local Sams Club hasn't had toilet paper in stock for over two weeks now. Fortunately, that doesn't worry Miss D. or I - we had our usual stock of the stuff, and it's holding out well without needing to "panic buy" more.

Peter

Ammunition sale

I'm continuing my efforts to make up for the current shortfall in my writing income, caused by my heart attack last November and my ongoing recovery from it.  I don't want to ask for charity while I have other means to make a living - I was raised to believe that wouldn't be moral, and I still feel that way - so I'm afraid I'll have to ask you to put up with occasional sales patter for firearms and related stuff on this blog instead.

In the current ammunition drought, I'm fortunate to have built up a decent reserve stash of the good stuff over the years - more than I need.  I'm also rationalizing my caliber and cartridge selection, cutting down to those that I really need and disposing of firearms and ammunition in the others.  I'm glad, now, that I put time and effort into building up my collection in the "fat years", because it's helping to make the "lean years" a lot more survivable!  With luck, once my year of heavier medication is over and I've finished with a troublesome medication, my writing output will get back to normal, and I won't need to worry about that any more.

The problem with selling ammunition is twofold.  First, there are legal and other restrictions in several states that make it difficult for a private citizen like me, not knowing all the regulatory red flags, to ship ammunition there.  (For example, in California, all ammo must be sold through licensed dealers;  in New Jersey, it's illegal for citizens to own hollow-point handgun ammunition;  and so on.)  I'm going to get around that by saying, up front, that if your state has any restrictions at all on the sale and/or possession of ammunition, I'm going to ship through a dealer who will make sure that all those i's are dotted and all those t's are crossed.  That will protect me against such legal minefields, but it'll also add to the cost of every transaction, which I'll cover for the sake of our mutual peace of mind.

Second, ammo is very heavy, so shipping it is an expensive exercise (it's classified as ORM-D, and must therefore be shipped by private carrier - not USPS - using ground transport).  I have to take account of that in setting my price, because even though I have stuff that may not be readily available elsewhere right now, if it's not affordable, I won't be able to sell it.  Face-to-face sales within a couple of hours' drive of the Wichita Falls, TX area are much easier (and cheaper!), so I'll give preference to such sales if I can.

That said, I still think I can offer decent prices for what I have.  My dealer, who's a good guy, advised me to use Web sites such as Ammobuy, Ammosearch and Ammoseek to find out the lowest actual, current retail price for each selection, then price mine at three-quarters of that figure, plus 10% to cover shipping charges, if applicable (remember that as a private citizen, I don't get the massive shipping discounts that a large-scale online retailer can command).  That's what I've done.  (If you use the same services to check my or other prices, remember that their figures may change from day to day as they find new stock and/or drop out-of-date listings.)

All that said, here's what I have available.  Click on each link to see a spreadsheet image of the listings.  The final column is what I'll charge per box;  and if you want a lot (more than $250 worth), I'll pay the shipping costs as an incentive.  Below that, add 10% for shipping.

9mm Luger

.40 Smith & Wesson

.45 ACP

45 Colt ("Long Colt")

If you're interested in any of them, please e-mail me (my e-mail address is in my blog profile, under the heading "Peter" beneath "About Me & Contact Info" in the sidebar).  First come, first served!  As for payment, we can't use PayPal or similar services, because they don't allow firearms-related transactions.  It'll have to be done using US Postal Service money orders.  That'll be a bit slower, but it has legal "insurance value" for both parties.

I may have more calibers to offer in future, handgun and long gun, if this proves successful.  This is a test posting for a few popular handgun cartridges.  Let's see how it goes.

Thanks for your interest!

Peter

Edited at 09:54 Central to add:  A reader bought my entire stock of .40 S&W, so that's gone.

Edited on April 22 at 06:14 Central to add:  Just about everything's sold, so I've taken down the links.  Thank you all very much!