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Monday, November 29, 2010

Three Things Confusing Me Today


"And in Atlanta, before the Apple Store opened on Friday morning, the first people in line were Jose Aguiar, 50; his son Tiago, 20; and two of Tiago’s friends. They had driven 45 minutes from Kennesaw and were in line at 2 a.m.

The store opened at 5 a.m., and by 5:05, the group had bought their items — an iPad and four iPods — and were ready to leave. There were no special prices that day, which disappointed Jose Aguiar.

“I thought it would be much cheaper,” he said, but it didn’t stop him from buying."

I thought buying a toaster just like the one you already owned just because it's a good deal was crazy.  But this just makes no sense to me at all.

2) David Leonhardt wrote a massive piece on China.  I don't understand this paragraph:

"For the rest of the world, the Chinese consumer is one of the best hopes for future economic growth. In the years ahead, when the United States, Europe and Japan will have no choice but to slow their spending and pay off their debts, China could pick up the slack. Millions of Americans — yes, millions — could end up with jobs that exist, at least in part, to design, make or sell goods and services to China."

Why would China want to buy goods from us when they can buy their own goods for much less?  Said differently, China will buy Chinese goods for the same reason Americans buy Chinese goods.


"Lame duck lawmakers will have only one day when they return to work on Monday to renew the expiring benefits. If they don’t, two million people will be cut off in December alone. This lack of regard for working Americans is shocking."

Huh?  Working Americans?  Last time I checked, working Americans don't get unemployment benefits.

-KD

12 comments:

Anal_ said...

All of the 'black friday,' 'cyber monday,' and general holiday sales stories I've seen are total freaking garbage. Anecdotes do not statistics or even useful data points make. The MSM does the public a major disservice in their traditional holiday shopping coverage, wherein they get a few people (of usually questionable intelligence) to say what they did, and then quote the NRF about sales expectations. Argh!

Daumier said...

Is a Chinese person buying an iPad buying an American good or a Chinese one? Seems there is plenty of American jobs involved in its production.

Or put another way, a Chinese person will buy an "American good" in the future for the exact same reason they do now: comparative advantage of its producer.

(Note I am just commenting on the quote as excerpted).

Kid Dynamite said...

Daumier - right, so Leonhardt talked about America's competitive advantage later in the article... and yet - we buy most of our stuff from China! I guess the point is that China will buy most of THEIR stuff internally as well, but their increased consumption can still have a positive effect on our employment and our companies (ie, GM - production driven by Chinese demand)

Anonymous said...

if china becomes a consumer society -- big if -- then almost by definition they will no longer have a big supply of cheap labor. ie people having money to buy things equals people getting paid good money equals labor not cheap. so this particular competitive advantage will wane as they become a richer society.

Transor Z said...

Re: China -- a rising tide raises all boats, I guess.

Re: Jose and his kids -- dumbasses.

Kid Dynamite said...

anon @ 414pm: there are a lot of people in China! I don't think they face an immediate shortage of cheap labor.

i think it's more along the lines of TZ's summary: "a rising tide lifts all ships"

Greycap said...

KD, as a poker player, you must have seen this pattern of thinking before!

This example runs as follows:

Axiom: It is painful to get up in the middle of the night, drive forever, then wait in line longer in order to buy an iPad.

Axiom: If there is no reason to buy an iPad at 5:05am on Black Friday, then I am a moron, because I have suffered this pain for nothing.

Proposition: I am not a moron.

Conclusion: In that case, it must be right to buy an iPad.

Yangabanga said...

One of the missing pieces is brand. Chinese (and Japanese and mostly all Asians, which of course I freely speak for) love name brands to the level of complete irrationality. So for now we have a natural leg up just by being American.

We're the next Italy.

Anonymous said...

anon 414 here. i'm not saying that chinese will reach parity with the US anytime soon -- they are still poor -- or that they will not produce most of what they buy. but two trends will make the situation less pronounced than at present. first, the RMB will go up -- assuming the central bank of china will let it -- which will make goods from the rest of the world cheaper. that might not mean they buy a lot from the US, but they might buy from a country richer than they are but poorer than the US -- i'll call that "hungary" -- and then hungary would have more money to buy things from the US. a more expensive RMB also means less cheap labor in china from the US p.o.v.. second, the chinese govt is under a lot of internal pressure to distribute cash to more people -- they are afraid mass chaos will break out if people stay poor. lots of chinese have traveled abroad and have a lot of the internet etc and know what kind of deal people in other countries are getting.

Anonymous said...

The best part about Jose is that Apple DID have sales --- online, all day on Black Friday. About 10% off every item.

Kid Dynamite said...

Anon re: AAPL online sales: that is TREMENDOUS. thanks.

Anonymous said...

KD, China is suffering a shortage of qualified labourers and this is pushing wages up. I know of a few companies already looking to relocate to Vietnam. Luclily China can simply force its citizens to work for less...

Danny