Not A Mystery

What do theatre owners and airline executives have in common?

Nothing.

Well, actually they do both provide their services to seated customers, which should imply some sort of similarity. But in practice nothing of the sort.

While the airlines constantly shrink their seats and services, theatre owners at least have a different take on customer satisfaction.

… theaters across the country [are] expanding the width of … seats and increasing … leg room, or row spacing …

“We want to err a little bit on the roomier side, because over the last 50 years Americans have gotten a little plumper,” [New York] City Center’s senior vice-president and managing director, Mark Litvin, said, “and we find these larger seats are much more comfortable for people.”

… Theatre Projects Consultants, a theater-development firm, found that the average standard width of seats in performing-arts theaters has expanded from 21 to 22 inches over the last two decades, “primarily due” to the concurrent rise in obesity. Over the course of the entire last century, the average width increased from 19 to 21 inches.

Source

If, like me, you spend your airtime crammed in coach you will be impressed with the ‘pitch’ on these seats.

The airlines might try to claim that frequent flyers are not succumbing to obesity like their theatre-going cousins.

But given that they now force some customers to purchase two tickets if they require a seatbelt ‘extender’, that excuse just won’t fly.

Talk about fast news cycles.

It’s the Economist’s Big Mac Index for 2010 … again!

In a sign of these unusually uncertain times The Economist has speeded up their news cycle, and in the process seems to be taking themselves and their index more seriously. Used to be we’d get annual updates to the index, this one has taken only six months.

I’m guessing that somewhere in the depths of the newsroom is an aspiring summer intern taking a run at the IMF and the ECB. And why not.

Just to review, The Economist has been publishing their (not so tongue-in-cheek) Big Mac Index since 1986. It’s a reality check on world-wide currency exchange rates, based on the concept of Purchasing-Power Parity. Purchasing-Power Parity (PPP) says that exchange rates are correct when the price of similar goods are the same in each country. The Big Mac survey compares the price of a Big Mac all over the world. The Big Mac is, after all, a basket of standard ingredients put together in a consistent process.

Coming Soon, A Ringtone Quoting Exchange Rates

And while I have a hard time getting excited about this morning’s price of a Big Mac in Krakow, the fact that Lisbeth Salandar would have to fork over SKr 48.4 in Stockholm if she wanted to treat Mikael Blomqvist might raise my blood pressure a few millibars.

When the world gets even more unusually uncertain we can probably expect the BMI to go live stream, with possibly a Twitter Feed and an iPhone app.

Hold the ketchup.

We all know that Big Government, Big Oil, Big Tobacco and Big Bank cannot be trusted.

But I’ve always thought I could trust Big Box.

Not any more.

Up until now I had written off ever-shrinking product packaging evilness to manufacturer’s greed. You know, charge the same price but put less ‘stuff’ in the box. It’s a price hike without a change in price.

Just like a tax increase that’s created by allowing a tax cut to expire. But I digress.

In our household we have many divisions of labor. One division is in the area of shopping. When it comes to shopping Leslie is in charge of food and shoes. I do most of the rest.

Most of the rest happens in COSTCO and SAM’s, where I resign myself to buying hideously large (for 2 people) packages of stuff in return for great prices. But it’s these great prices that have lead me down the road of complacency. I’ve let my guard down.

I have assumed, wrongly it turns out, that one huge package of stuff bought in any Big Box is equivalent in value to any other. I haven’t been comparison shopping. My bad.

But two things have changed for me lately,

1. A nagging suspicion that I’m being taken advantage of, and
2. I am packing an iPhone, with its built-in camera.

Today when I went to use my COSTCO coupon, I was shocked, shocked I say, to be let down by Big Box. The coupon made it look like I could purchase my normal huge f*cking container of Tide He detergent and save $2.50.

Fewer Loads by 26% In COSTCO On The Left, vs. SAM's On The Right

But when I compared that offering to SAM’s regular priced alternative it turns out that in this case because of the package size COSTCO was 20% more expensive, and not $2.50 cheaper.

Of course the smart shopper will notice that COSTCO is selling “Advanced Power” as compared to the “Original Scent” at SAM’s. This is because of the clever arrangement between Big Box and Big Detergent to confuse the shopper with (supposedly) non-equivalent product.

If you ask me, nothing about this obfuscation smells good.

Recent events have moved the line between Cheap Knock-Offs and Counterfeit goods.

Last week, major UK supermarket chain Tesco was caught in the act of selling what turned out to be a bogus bottle of Louis Jadot Pouilly-Fuissé wine.

Danny McGowan bought two bottles of French Louis Jadot Pouilly-Fuisse wine, reduced from £14.49 to a bargain £5.  He [noted] that the label “looked photocopied” and the bottles had a screw top instead of Louis Jadot’s usual cork. But when he opened them at home, he discovered the fine white wine was actually cheap plonk.

Source

C’mon Danny, what did you expect for your £5?

Frankly, Either One Works For Me

While it’s estimated that 5% of the wine sold today is Counterfeit, most of the dubious stuff is up at the high end, where it’s worth everyone’s while to monkey with reality. The most famous example were the Jefferson bottles whose history was recounted in The Billionaire’s Vinegar which we reported on last year. Those babies went for north of $100,000 … each.

Whoever produced the bogus Pouilly-Fuissé is giving the real hardworking counterfeiters a bad name. It’s a shame and embarrassing. They should have come up with their own cheap label for their own cheap wine. Producing a great Knock-Off instead of a crummy Counterfeit.

They should Think Different, as a modern philosopher once said.

And speaking of Thinking Different, how about this for a unique idea … Counterfeiting people.

A union protesting the hiring of non-union workers is hiring non-union pickets to impersonate union strikers.

The Mid-Atlantic Regional Council of Carpenters is seeking paid demonstrators to march and chant in its current picket line [pretending to be union workers] outside the McPherson Building, an office complex here where the council says work is being done with nonunion labor … [so] the union hires unemployed people at the minimum wage—$8.25 an hour—to walk picket lines.

Source

So would you say that the minimum-wage ‘strikers‘ are the cheap plonk compared to bona fide carpenters?

We report, you decide.

It’s not a secret that California is fiscally challenged, with the legislature locked in partisan battles and unable to compromise on a budget.

California [began] a new budget year … without a spending plan in place and with no agreement imminent between state legislators and Gov. Arnold Schwarzenegger on how to close a $19.1-billion deficit.

State employees and others who depend on government money were bracing for the possible fallout … Community colleges and vendors that do business with the state are on edge, their payments in jeopardy because of the budget delay.

Source

So it’s nice to know that they can still get the really important things done. Like stripping Serpentine, the State Rock of it’s rights.

The bill to defrock the [state] rock — which recently passed the full State Senate and is awaiting a vote in the Assembly — is sponsored by Senator Gloria Romero, a Los Angeles Democrat, with the strong support of the Asbestos Disease Awareness Organization.

Declaring that serpentine “has known health effects,” the bill would leave California … without an official rock. Asbestos occurs naturally in many minerals, and indeed some serpentine rocks do serve as a host for chrysotile, a form of asbestos. But geologists say chrysotile … would be a danger — like scores of other rocks — only if a person were to breathe its dust repeatedly.

“There is no way anyone is going to get bothered by casual exposure to that kind of rock,” said Malcolm Ross, a geologist who retired from the United States Geological Survey in 1995. “Unless they were breaking it up with a sledgehammer year after year.”

Source

It could be worse. They might have passed a law requiring that any officer engaged in a lawful stop, detention or arrest should, when practicable, ask whether that person is carrying a serpentine rock, when a reasonable suspicion exists that the person is in the U.S. illegally.

But that would be rock profiling, which might be going too far.

Being an expert must be harder these days.

Nobody seems to have any good answers to tough questions about the economy.

Morningstar pundits are usually pretty good when it comes to personal financial advice. But in is a recent answer on how to maintain yourself in retirement, they managed to coin the phrase ‘pre-tire’ when recommending that you just keep working.

… most retirees are going to have to make some hard choices … [it's] hard to generate a livable income unless you have a lot of money, [so] working longer is going to be part of the solution for a lot of pre-retirees.

Source

Which is probably not the solution most people are looking for.

But whether you like that or not, at least they were working in the present, or near future.

On the other hand we have Mohamed A. El-Erian, CEO and co-CIO of PIMCO, who at the end of a good piece on The Real Tragedy of Persistent Unemployment suggests that,

… policy makers should also come up with a comprehensive strategy that focuses on improving human capital, particularly through a greater emphasis on education and training; expanding infrastructure and technology investments, in part by creating a more friendly tax system; encouraging a bigger translation of scientific advances into economy-wide productivity gains; and better protecting the most vulnerable segments of society …

Source

And while I can’t disagree with Mr. El-Erian, the time-frame for his solutions are measured in generations.

It’s a good time to remind ourselves that the fun is in the journey and not the destination.

And Somebody Already Mortgaged The Parachutes

J. Wellington Wimpy was many years ahead of his time, and at least honest, when he offered that, “I will gladly pay you Tuesday for a hamburger today.”

Where’s Shirley Polykoff when you need her?

It’s been a tough few weeks for investors. The other day I came across this observation while reading a financial report:

First investors had their hair set on fire by the “flash crash” of May 6. Then came the jolt of June, as stocks lost another 5.2% and finished the month with five down days in a row.

Source

I hadn’t heard that great turn-of-phrase “hair on fire” before, but it is now on my list of all-time favorites. Especially as it relates to your typical Mom & Pop investor.

Always Wanted To Live Your Life As A Blonde?

Maybe now Wall Street could gain some [any] respect by claiming,

“Does she or doesn’t she, only her Broker knows for sure.”

It’s worth a try.

Note: Shirley Polykoff, profiled in “What The Dog Saw“,  invented the tagline “Does she or doesn’t she? Only her hairdresser knows for sure.” Clairol sales skyrocketed as a result and earned Polykoff a place in the Advertising Hall of Fame. If you get a chance, read the Dog profile, which is much better than her obit.

It’s always better to have been born lucky than to have been born smart.

That’s just my opinion, but the evidence is all around us.

Take for example, Unfunded Pension Liabilities.

• You could have worked most of your life for a Private Company that didn’t put enough money into their pension scheme to actually pay your pension when the time came. This story has an Unhappy ending.

• Or you could have worked most of your life for a Municipality that never even had the money to pay your pension in the first place no matter what they claimed. This story has an as yet Undetermined ending.

• Or you could have worked most of your life for a small Scottish distillery with god knows what kind of pension scheme, that got bought out by a huge multi-national corporation who for sure was not funding anyone’s pension scheme. But this story has a Lucky ending.

An ending so good, we can drink to it.

Being Lucky Never Gets Lost In Translation

Said multinational corporation is Diageo, the world’s largest beer, wine and spirits company.

Diageo, the maker of Johnnie Walker whiskey, found an innovative way to plug a gaping deficit in its pension plan: put aside 2 million barrels of maturing whiskey from its distilleries in Scotland.

Diageo said Thursday it would transfer ownership of £430 million, or $645 million, worth of whiskey to a pension funding partnership. Diageo employees would not receive their pensions in whiskey rather than cash, but the move does give them a guarantee that they would not walk away empty-handed should the company default.

Source

I’d call that an unqualified Lucky Ending.

By the way, that picture of Bill Murray is from Lost In Translation, one of our all time favorite films. Five Stars at least, and Bill Murray should have gotten Best Actor for his role as Bob Harris, an actor in Japan for a week doing whisky commercials.

In the film Harris was working for Suntory, and the film takes its title from the scene where Murray is attempting to deliver the famous line,

For relaxing times, make it Suntory time.

With Diageo’s announcement, now we could change that to,

For retiring times, make it Diageo time.