Central Perk

luni, 7 martie 2011

White House White Board: Austan Goolsbee on Patent Reform

Your Daily Snapshot for
Monday, March 7, 2011

White House White Board: Austan Goolsbee on Patent Reform

In this White House White Board, Austan Goolsbee, Chairman of the Council of Economic Advisers, explains the President's plan to reform the patent system so great American ideas can be turned into the jobs of the future quickly and effectively.

Watch the video.

Seth's Blog : Empathy

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Empathy

"If I were in your shoes, I know what I would do."

Marketers can't do their jobs without understanding what a prospect wants, talks about or is interested in.

And managers (and leaders) are ineffective when they're unable to imagine life through someone else's eyes.

The problem is this: if you were in my shoes, I wouldn't be me, I would be you.

As soon as you bring your beliefs, expectations and worldview to the table, you've lost the ability to imagine what someone else would do in this situation. All you're doing is imagining what you would do.

The next time you're puzzled by the behavior of a colleague or prospect, consider the reason might have nothing to do with the situation and everything to do with who is making the decision and what they bring to it.

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duminică, 6 martie 2011

Mish's Global Economic Trend Analysis

In Praise of Extreme Public Union Lunacy in San Jose
Libyan Rebels Capture Major Oil Hub; Government Forces Repel Rebel Attacks in Other Cities; How Long Can Qaddafi Hang On?
Union Divide: Debate Over Public Unions Divides Families; Debate a Good Thing
Echo Rolled Back

In Praise of Extreme Public Union Lunacy in San Jose

Posted: 06 Mar 2011 05:39 PM PST

Hardly a week goes by in which I do not see examples of extreme public union idiocy. Nonetheless, it is rare to see an entirely new concept prop up. Here's a new one.

Pete Constant, a San Jose Councilman wants to answer his own phone. However, union rules dictate that he have a $70,000 assistant he does not even want. What's even more ridiculous is the union has sent this matter to the courts to resolve.

Please consider Internal Affairs: The fight over Councilman Constant's missing secretary

At a time when San Jose faces more than a $100 million budget deficit and the prospect of hundreds of layoffs, San Jose City Councilman Pete Constant is battling with a City Hall employees' union over whether he should be forced to hire an administrative assistant.

Judge Kevin McKenney of Santa Clara County Superior Court recently ordered that the case be taken to a costly arbitration instead of the state's Public Employment Relations Board -- something both Constant and the city's attorneys had sought.

That decision pleased the city's 214-member Confidential Employees Organization, which contends the city was required to confer with the union before Constant decided to eliminate the position. The job -- which requires answering phones, scheduling appointments and making photocopies, among other duties -- pays about $70,000 a year.

"My concern quite frankly is not who decides the issues. It's getting a resolution on the core issue, which is: Who should determine how I staff my office?" said Constant, who was re-elected last year to a second term representing West San Jose.

The City Council's only Republican contends that residents of the district support his ability to make decisions for them. Besides, Constant said, he prefers to do all of the secretarial work himself, with help from four full-time council aides.

Councilman Constant contends that the $70,000 can be better spent on things such as resource fairs, helping neighborhood associations, an online database that updates Constant's office with constituent information and inquiries, and license fees for an iPhone app that allows residents to easily report problems.

But LaVerne Washington, president of the employees' association, said it is not Constant's prerogative to create his own "process and procedures," which she said conflict with labor agreements between the city and the union.

In Praise of Lunacy

I commend the sheer idiocy of LaVerne Washington, president of the employees' association, in pressing this case.

LaVerne Washington shows without a doubt why the only solution to this madness is the total repudiation and complete destruction of public unions.

I cheer Washington's idiocy because this is just the kind of thing that gets the public riled up against public unions. It will backfire.

Union Slave Rules

Union rules prohibit citizens from being volunteer fireman, from volunteering to help their schools, from seeking non-union employment, and from controlling their own lives.

Now we see union rules dictate a city councilman who does not want to hire an assistant to waste $70,000 hiring one.

People cannot yell "fire" in a movie theater, for good reason. For the same reason, union rights to "organize" must stop at the point when they tread on the rights of others to pursue employment, to do whatever they want with their own time, and to not waste money hiring employees they do not need.

No one who stands up for the taxpayer in public union contracts. Worse yet, many of those contracts intrude on private rights as noted above.

The proper solution is the complete elimination of public unions and all the slavery they stand for.

Please see Paul Krugman, Stephen Colbert, Bill Maher, others, Ignore Extortion, Bribery, Coercion, and Slavery; No One Should Own You! for further discussion of the slavery issue.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Libyan Rebels Capture Major Oil Hub; Government Forces Repel Rebel Attacks in Other Cities; How Long Can Qaddafi Hang On?

Posted: 06 Mar 2011 09:47 AM PST

Yesterday, rebels captured Ras Lanuf, a town 400 miles east of Tripoli, home of a tanker terminal that exports about 200,000 barrels of oil a day as well as Libya's biggest refinery.

However, both sides have claimed victories elsewhere, and accurate assessments of precisely what is happening are difficult.

Please consider Libya's Rebels Claim Another Oil Hub in Day of Clashes

Fighting between Libyan rebels and troops loyal to Muammar Qaddafi intensified as the opposition advanced west from the oil hub of Ras Lanuf toward the leader's hometown of Sirte.

Rebel fighters battled Qaddafi's troops today as they approached Sirte, 230 miles east of the capital, Tripoli, said Khaled el-Sayeh, a coordinator between the opposition's military forces and its interim ruling council in Benghazi.

State television reports that Qaddafi's troops had recaptured Ras Lanuf overnight were false and designed to "bring down the morale of the youths," el-Sayeh said. The rebels today remained in control of the port, which regime forces shelled with rockets and artillery, the AP reported.

Rebels yesterday took control of Ras Lanuf, 400 miles east of Tripoli, where they shot down two helicopters and a fighter jet. The town has a tanker terminal that exports about 200,000 barrels of oil a day. It also contains Libya's biggest refinery, with a capacity of 220,000 barrels a day, more than half the country's total output, according to the International Energy Agency.

Rebel Advance in Libya Set Back by Heavy Assault

The New York Times reports Rebel Advance in Libya Set Back by Heavy Assault

The Libyan military drove rebel forces back along the main coastal road on Sunday, ambushing the advancing militias as they entered the town of Bin Jawwad and pushing them out with tank fire and airstrikes, according to witnesses near the town.

The number of the casualties in the battle was unclear, but it set back the rebels' advance just a day after they celebrated a major victory in taking the vital oil port of Ras Lanuf. On Sunday, rebel leaders said they were regrouping outside that city and would begin pushing toward Bin Jawwad again.

Just outside the capital, a standoff continued in the rebel-held city of Zawiyah, a day after forces loyal to Col. Muammar el-Qaddafi waged a heavy assault toward the city center and then pulled back to close off all roads out.

Nineteen days after it began with spirited demonstrations in the eastern city of Benghazi, the Libyan uprising has veered sharply from the pattern of relatively quick and nonviolent upheavals that ousted the leaders of Tunisia and Egypt. Instead, the rebellion here has become mired in a drawn-out ground campaign between two relatively unprofessional and loosely organized forces — the Libyan Army and the rebels — that is exacting high civilian casualties and appears likely to drag on for some time.

That bloody standoff was evident on Saturday in Zawiyah, the northwestern city seized by rebels a week ago, where the government's attacks raised puzzling questions about its strategy. For the second day in a row its forces punched into the city, then pulled back to maintain a siege from the perimeter. Hours later, they advanced and retreated again.

By the end of the day, both sides claimed control of the city.

In Benghazi, the rebels' de facto capital, the rebels took further steps toward political organization. Their shadow government, the Libyan National Council, held its inaugural meeting Saturday and appointed a three-member crisis committee.

While the rebels may have a new defense minister in Benghazi, their fighters on the eastern front did not appear to be taking orders from anyone on Saturday as they pushed past Ras Lanuf, an oil refinery town that they retook from Colonel Qaddafi's loyalists on Friday night.

Armed with rocket-propelled grenade launchers, the rebels advanced confidently by car and foot through the desert until a fighter jet was heard. Even a rumor of a jet engine in the distance would send the fighters in a mad dash through the dunes, searching for cover and firing in the air.

Slow, Uneven Progress

The battle for Libya is now 18 days and counting. The rebels continue to gain territory, then give some back only to take it again. Over time however, they appear to be advancing from multiple directions towards Tripoli.

Based on belief that Qaddafi's top military leaders would turn on him, I initially thought this would all be over in a few of weeks. So far that has not happened. Now with both sides disorganized and with rebels increasingly stretched thin as they capture more territory, how much longer this can go on remains to be seen.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Union Divide: Debate Over Public Unions Divides Families; Debate a Good Thing

Posted: 06 Mar 2011 01:29 AM PST

The debate over public unions has become increasingly intense, to the point of splitting families, even in once-solid union country.

Please consider In union strongholds, residents wrestle with cuts

In Midwestern union strongholds, residents torn over proposals to curb union benefits, powers.

There once was a time when Harry and Nancy Harrington -- their teenage children in tow -- walked the picket line outside the nursing home where she was a medical aide, protesting the lack of a pension plan for the unionized work force.

But those days of family solidarity are gone.

Harry now blames years of union demands for an exodus of manufacturing jobs from this blue-collar city on the shore of Lake Michigan. He praises new Wisconsin Gov. Scott Walker for attempting to strip public employee unions of nearly all of their collective bargaining rights.

"I'm sorry, but the unions want to yell, they want to intimidate," says Harry Harrington, 69, as he sets a coffee cup down next to another newspaper headline about the union demonstrations.

"They want to be heard," retorts Nancy Harrington, 66, who fears a weakened union would jeopardize the teaching career of their now 38-year-old daughter.

The Harringtons typify the new national reality for labor unions. Support is no longer a sure thing from the middle class -- not even in a city long considered a union stronghold in a state that gave birth to the nation's largest public employee union. National polls show that the portion of the public that views unions favorably has dropped to near historic lows in recent years, dipping below 50 percent by some accounts.

In Racine, a nearly two-hour drive southeast of the epicenter of the union controversy in Madison, the question of the union's appropriate role has divided husband and wife, mother and child, co-workers and friends. It's the hot topic on editorial pages, at coffee shops, even at the craft club that meets in the community center at Roosevelt Park, where a dozen retired women recently were talking over the top of each other about union powers while knitting socks and hats.

Yet the teachers union is not the power it once was in the Racine area. Despite a well-funded media campaign, the union's candidate, Democratic state Sen. John Lehmen, of Racine -- a former high school teacher -- was ousted by Republican challenger Van Wanggaard in last fall's election. District voters also picked Walker over Democratic gubernatorial candidate Tom Barrett.

Debate a Good Thing

This debate is a good thing. Debate portends change. Until recently few cared how much public unions and their untenable benefits were raping taxpayers. Now many do, and it's a start.

Unions have struck back of course, primarily by the same fear-mongering, extortionist tactics they always have. However, battles like these are not won in a day. Progress continues in Ohio, Wisconsin, Tennessee, New Jersey, and even California.

That's a good start.

A few years ago the only people talking about these issues were Jack Dean at Pension Tsunami and I. Even now, most bloggers have ignored the issue. Unfortunately, some bloggers such as Yves Smith at Naked Capitalism and Leo Kolivakis at Pension Pulse are on the wrong side of it.

The facts are indisputable however.

No one speaks for the taxpayer in so-called collective bargaining negotiations
Public unions are in power via a constant barrage of extortion, coercion, bribery, and backroom dealing.
Public unions have bankrupted countless cities and many states.
Public unions and collective bargaining are tantamount to slavery

For a look at the slavery debate, please consider Paul Krugman, Stephen Colbert, Bill Maher, others, Ignore Extortion, Bribery, Coercion, and Slavery; No One Should Own You!

The more the issues are discussed, the better the chances of change to address the problems.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Echo Rolled Back

Posted: 06 Mar 2011 01:15 AM PST

A few issues came up with Echo that will prevent deployment this weekend as planned. Will postpone for another weekend.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Seth's Blog : Cascade of broken promises

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Cascade of broken promises

... a cautionary tale. It's always easier to make a promise than it is to keep one, and if you're not careful, it compounds.

I got my new Macbook Pro the other day. It comes with Migration Assistant, a flawed piece of software that promises to easily transfer years of old data from one machine to another.

The software failed. (Promise broken). Having paid $99 for the One to One service (which promises individual hour long sessions), I make an appointment and head over to the store. Nate, the promised guide, doesn't know how to fix it, because, despite the promise, he's not trained to do so. He hands me over to a genius, Michael, who hears my story and promises to personally handle it (it takes ten hours to do the transfer, he'll watch over it and make sure it goes well.) He actually looks me in the eye and says, "I promise to personally handle this."

The next day, the phone rings. It's Aideen, who has the case, doesn't know who Michael is and doesn't know what to do. She leaves a message. I call back, talk to someone at the store who insists that Aideen isn't available but that someone will call me back within thirty minutes. He says, "I promise that someone will call you within thirty minutes." An hour later, no one has called back.

It goes on and on. Every employee means well. Every employee is overwhelmed by incoming traffic, most from people who have already had their promises broken. Every employee has discovered that it's easier to make a promise and pass it along than it is to either tell the truth or keep the promise.

The cascade starts with the product. When your brand makes promises it can't keep, your overworked staff bears the brunt.

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Seth's Blog : The limits of evidence-based marketing

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The limits of evidence-based marketing

That's what most of us do. We present facts and proof and expect a rational consumer/voter/follower/peer to make an intelligent decision on what's better.

That's how science works. Thesis, test, evidence, conclusion. All testable and rational.

Here's the conversation that needs to happen before we invest a lot of time in evidence-based marketing in the face of skepticism: "What evidence would you need to see in order to change your mind?"

If the honest answer is, "well, actually, there's nothing you could show me that would change my mind," you've just saved everyone a lot of time. Please don't bother having endless fact-based discussions.

[Apple tried to use evidence to persuade IT execs and big companies to adopt the Macs during the 80s. Ads and studies that proved the Mac was easier and cheaper to support. They failed. It was only the gentle persistence of storytelling and the elevation of evangelists that turned the tide.]

What would you have to show someone who believes men never walked on the moon? What evidence would you have to proffer in order to change the mind of someone who is certain the Earth is only 5,000 years old? If they're being truthful with you, there's nothing they haven't been exposed to that would do the trick. I was talking to someone who has a body of artistic work I respect a great deal. He explained to me his notion that the polio vaccine was a net negative, that it didn't really work and that more people have been hurt by it than helped.

I tried evidence. I showed him detailed reports from the Gates Foundation and from the WHO and from other sources. No, he said, that's all faked, promoted by the pharma business. There was no evidence that would change his mind.

Of course, evidence isn't the only marketing tactic that is effective. In fact, it's often not the best tactic. What would change his mind, what would change the mind of many people resistant to evidence is a series of eager testimonials from other tribe members who have changed their minds. When people who are respected in a social or professional circle clearly and loudly proclaim that they've changed their minds, a ripple effect starts. First, peer pressure tries to repress these flip-flopping outliers. But if they persist in their new mindset, over time others may come along. Soon, the majority flips. It's not easy or fast, but it happens.

That's why it's hard to find people who believe the earth is flat. That's why political parties change their stripes now and then. It wasn't that the majority reviewed the facts and made a shift. It's because people they respected sold them on a new faith, a new opinion.

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sâmbătă, 5 martie 2011

Mish's Global Economic Trend Analysis

Goodbye JS-Kit, Hello Echo: New Comment System on This Blog
Obama's Definition of Halfway: 18%; What Would a Government Shutdown Mean?
Big-Box Retailers Reconsider Size; Saturation, Online Sales Affect Store Expansion Plans and Hiring Needs

Goodbye JS-Kit, Hello Echo: New Comment System on This Blog

Posted: 05 Mar 2011 08:53 PM PST

At long last I am upgrading the comment system on my blog. I had been using JS-Kit for years in what is best described as a love-hate relationship. This change will take place shortly.

The JS-Kit release I have been on is a couple years old. Time and technology have moved on. My choices were as follows:

Write my own software
Wither and Die
Move to Disqus
Migrate to Echo

Number 1 is out. I do not have the time or interest in writing my own. I need a commercial product.

Wither and die hardly seems like a good option.

The choice came down to Disqus vs. Echo.

If you search the internet you can find whatever you want to hear, good or bad, with some users frustrated with one or both of the products.

However, Echo has a couple of significant advantages. First, Echo is a migration. JS-Kit developed Echo. Disqus, would be starting all over.

Second, Echo has attracted quite a following including Sports Illustrated, Newsweek, Slate, the Washington Post, Time, and numerous other big-name companies.

Here is a snapshot of some of the companies using Echo.

Moreover, Echo has an open architecture. Enhancements and solutions can be developed by end users. That may take a while but it is an enormous advantage.

Third, I tested and like the new interface. Echo supports sign-ins from the following.

You can also sign-in with your blogger ID (on page 2).

Those sign-ins will work regardless of what computer you are on. JS-Kit had issues moving from
computer to another.

What's New

Echo will not pop up in a new window as before. Instead, when clicking on "comments" the window will expand inline. This is typical of most other blogger commenting systems but is new to my blog. It takes no more time to do this than pop up a new window.

For new users, login or signup is the same. Just click on one of the options above to sign in.

As before, the first comment from everyone requires moderation. In this case, everyone.

I need some leeway in the time it takes to approve new users. However, I have better tools under Echo to see what comments await moderation. Hopefully the initial response will be faster than before.

The difference is we are starting with a blank slate. Everyone will have to be approved.

Here is the login window everyone will see.

Once you are logged in, simply type your comments in the above box.

Threaded vs. Unthreaded

The debate still rages. Some people like threaded mode. Others don't. Threaded mode works beautifully when there are under 50 comments. When comments get beyond a few pages, it can become unwieldy.

However, some people always like it. Others want to view comments sequentially by time stamp. It makes it easier to see what is new. Some like new comments displayed first other pure sequential.

There is no right or wrong actually. There are only preferences. Unfortunately, and as is with most other commenting systems, those preferences are not usable selectable.

For now, I have to make a selection. One of the moderators on my board has a strong preference for threaded mode.

Threaded mode it is. Let's try that for a while and see how it works out. In the meantime, I ask Echo for a user selectable set of controls so everyone can display comments as they see fit.

Migration of Comments

The last couple weeks of comments will be available shortly. A conversion process is already underway for the rest of them. Perhaps I only go back a year or so. Beyond that, I don't see that much use.

Those details will be up to the Echo team.

Issues

I am quite sure issues will arise just as they do with any new system. However, Echo is a big step in the right direction from JS-Kit.

It has numerous capabilities I did not turn on initially including incorporating comments from Facebook, Twitter, and other social network sites.

Thanks to Those Who Helped

With that I want to thank Khris Loux, Andrew Kushnir, Chris Saad, and the rest of the Echo staff for their assistance in this conversion.

Finally, one of the difficulties in this process is that nothing is easy in blogger templates. Here's to "MDH" who helped me in this effort. This migration would not have been possible without "MDH".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Obama's Definition of Halfway: 18%; What Would a Government Shutdown Mean?

Posted: 05 Mar 2011 03:15 PM PST

President Obama claims he is meeting Republicans "half-way" on Republican plans to reduce the deficit by $61 billion. "Half-way" is $11 billion ($10.5 billion to be more precise).

My math strongly suggests the president needs math lessons.

Please consider Obama offers deeper cuts, appeals for budget deal

President Barack Obama says he's willing to make deeper spending cuts if Congress can compromise on a budget deal that would end the threat of a government shutdown.

Obama's appeal for common ground came Saturday in his weekly radio and Internet address, but lacked specifics on how to bridge the $50 billion gulf that divides the White House and Democratic budget proposal from the deeper reductions offered by Republicans.

The government is running on a temporary spending bill that expires March 18, so the parties have until then to come up with a plan to pay for the remainder of the budget year through September.

"We need to come together, Democrats and Republicans, around a long-term budget that sacrifices wasteful spending without sacrificing the job-creating investments in our future," Obama said.

"My administration has already put forward specific cuts that meet congressional Republicans halfway. And I'm prepared to do more," said Obama.

But the claim that Democrats are meeting Republicans halfway only stands up under the Democratic explanation of the intricate numbers game being played on Capitol Hill.

Obama has threatened to veto that plan, and a Democratic offer of $6.5 billion in cuts -- on top of $4 billion already signed into law -- restores money the House GOP cuts from education, health and other programs.

"You may have heard President Obama say that we need to make sure 'we're living within our means,'" said freshman Rep. Diane Black, R-Tenn. "He's right about that. Unfortunately, his budget doesn't match his words.

Tortured Math

The way that article is worded, I am not even positive the Democrats have offered up even as as the $11 billion I gave them credit for.

I am struggling with the fact that the Democratic proposal "restores money the House GOP cuts from education, health and other programs."

What kind of tortured logic allows you to claim credit for cuts if you restore money elsewhere?

Let's dive deeper into one of Obama's statements: "We need to come together, Democrats and Republicans, around a long-term budget that sacrifices wasteful spending without sacrificing the job-creating investments in our future"

Since when is getting rid of wasteful spending "a sacrifice"?

What Would a Government Shutdown Do?

For all this concern about having a budget in place by March 18 (revised later from March 5 by some sort of emergency funding provision), does it really matter?

CNN Money discusses the setup in Shutdown: What you need to know

Which services would stop?

During the last major shutdown, the government closed 368 National Park Service sites, along with national museums and monuments.

In addition, 200,000 passport applications went unprocessed, and toxic waste cleanup work at 609 sites stopped. The National Institutes of Health stopped accepting new clinical research patients, and services for veterans, including health care, were curtailed.

Work on bankruptcy cases could slow. In the last shutdown, more than 3,500 cases were delayed.

Which services would the government keep running?

Agencies are allowed to perform any operations necessary for the safety of human life and protection of property.

The government would keep essential services -- like air traffic control and the national security apparatus -- in full operating mode.

Federal workers who provide medical care on the job would be kept on, as well as employees who handle hazardous waste, inspect food, patrol the borders, protect federal property, guard inmates or work in power distribution.

Workers who protect essential elements of the money and banking system would also report to work.

The Postal Service, which is self-funded, will continue to operate.

Preposterous Hype

For all the hype over a shutdown, I fail to see how it would matter much. Republicans should stick to their guns. I assure you the world will not end.

The world did not end in the Clinton administration during five days in November 1995 and another 21 days that ended January 1996.

Indeed the best thing might be for everyone to see how little a "shutdown" would matter.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Big-Box Retailers Reconsider Size; Saturation, Online Sales Affect Store Expansion Plans and Hiring Needs

Posted: 04 Mar 2011 11:45 PM PST

Online shopping not only has state departments of revenue pulling their hair out over lost sales tax revenue, it also has retailers like Best Buy, Sears, KMart, and Home Depot questioning, the merits of the big-box mentality itself.

The Wall Street Journal reports As Big Boxes Shrink, They Also Rethink

Major big-box retailers have been shifting to smaller stores—and scratching around for more profitable ways to fill under-used spaces as they go about reinventing themselves.

Sears Holdings Corp. is letting prospective tenants browse an online list of Kmart and Sears stores with space to rent.

Sears reached a deal to lease 34,000 square feet of store space in Greensboro, N.C., to Whole Foods Market Inc. for a grocery store set to open in 2012.

Home Depot Inc. is selling off portions of its parking lots to fast-food chains and auto repair shops. Gap Inc. is reverting to a Russian nesting-doll strategy: after years of expanding by adding standalone stores such as GapKids and Gap Body, it is shrinking them and stacking them back inside its namesake Gap stores.

Best Buy Co. last week became the latest retail chain to go smaller, announcing last week that it was slowing growth of new big-box stores this year in favor of adding 150 Best Buy Mobile locations, focused on smartphones.

Wal-Mart Stores Inc. also said last week that it was accelerating the rollout of smaller locations—40,000 square feet or less—after it reported a seventh straight quarterly decline in sales at U.S. stores open at least a year. The retail giant, which rose to dominance with 185,000-foot Supercenters, plans to open its first Walmart Express store in the second quarter of this year, though it won't say where.

The miniature Staples carries just 1,200 of the retailer's most high-volume sales items, compared to 8,000 items in traditional stores.

Office Depot Inc., meanwhile, quietly began opening new shops the size of convenience stores in December. The new 5,000-square-foot Office Depot stores are barely a fifth the size of the company's traditional locations, yet still manage to contain the office supplies and copy and mail services that account for 93% of the bigger stores' sales, said Kevin Peters, Office Depot's North American retail president.

"Our box was just too big and didn't work for our customers," Mr. Peters said Wednesday. "We are reinventing Office Depot as a convenience retailer. Think CVS and Walgreens."

Key Word is Saturation

The "bigger is better model" that collapsed with residential real estate, has expanded to its big brother, commercial real estate.

The problem is not the size of the stores, but the sheer number of them. Areas that got by with a single Home Depot, now have 2 Home Depots, a Lowes, and a Menards.

If they all shrink, does it do any of them any good?

Store Advantages

Those who need something and want it now
Those who want to make comparisons and see a product in person

Online Shopping Advantages

It's invariably cheaper online
There is frequently no sales tax
You do not have to waste time and money traveling

Online Sales Have States Furious Over Lost Sales Taxes

Cash strapped states are furious with Amazon.Com over sales tax collections. Several states passed laws or have sent Amazon bills. Amazon's response in every case so far is to leave the state.

For details, please see Amazon May Cut Ties to California Over Tax Issues; Texas Distribution Site Closed Over Similar Issues Last Month; Litigation Issues Move to Forefront

Last week I went to Best Buy to buy a particular cable I needed. They did not have it. I ended up ordering it from Amazon. If stores shrink, and they do not have what customers want, customers will just buy more stuff online.

Big-Box Decisions Affect Store Hiring Plans

I am wondering, do we really need "Walmart Express" at all? At best it is a sign of total saturation of big boxes and a turf battle for smaller cities and neighborhoods.

As such, think about store hiring plans now vs. store hiring plans in the midst of the big-box commercial real estate boom.

With the new "smaller is better" model, another commercial real estate boom remotely close to the build-out that occurred in 2005-2007 is not in the cards.

Moreover, residential housing is still dead.

Together, the picture just does not add up to the 200,000+ jobs a month many economists and market cheerleaders expect.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

luni, 7 martie 2011

White House White Board: Austan Goolsbee on Patent Reform

Seth's Blog : Empathy

Empathy

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duminică, 6 martie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : Cascade of broken promises

Cascade of broken promises

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Seth's Blog : The limits of evidence-based marketing

The limits of evidence-based marketing

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sâmbătă, 5 martie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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luni, 7 martie 2011

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duminică, 6 martie 2011

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sâmbătă, 5 martie 2011

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