unique visitor counter

Posts filed under 'business and economics'

秋後算帳

There is one new Chinese trick that Americans learned today called 秋後算帳. In the old days, when farmers try to lease land from their landlord every year, landlord would use this term to mean they will determined the rent after Autumn’s harvest. More often than not they will be more than the farmer expects. But then again they have no choice. Under the eyes of contractual law, such term is unfairly favoring the landlord, as the terms are determined after the contract has been executed and forced upon the farmer by the landlord.

As a capitalist society, today marks a dark day when the congress decided to retroactively change the term of a contract already executed. It is requiring employees who work in companies that received “bailout money” to pay a 90% tax on their bonus. Of course the money has already been accepted. And if the companies know of such term I bet the majority of them who have a choice would not take the money. I bet many ate thinking how they can payback the govt right now.

The issue here is not whether these people deserve the money, but the spirit that a deal is a deal, a contract is a contract. It’s unfortunate that we the tax payer is paying for these greedy bastards who caused the crisis. But shaking investors confidence in our contractual settlement system will cost us far more than whatever money we can’t collect. Suck it up and deal with it.

Add comment March 20th, 2009

Moral Harzard

A deal is a deal, at least that’s what our economic foundation was founded on.  I said “was” because as the economy spiral downward, a lot of deal that made sense before all of a sudden doesn’t.  And people at the short end of the stick are starting to cry foul.  I read this story in NYT this weekend about Dow Chemical’s aquisition of a campany called Rohm & Hass.  Almost every opinion in the article agrees that the deal doesn’t make sense in this economic time.  But the opinions also agreeded that a deal is a deal and it should be completed as agreeded.  It’s hard to argue against something so fundamental.

Add comment February 10th, 2009

Tax deduction

I wonder what valuation can you use if you donate CDO securities to non-profits.  If you can value it with 0 default, it might be worth more as a tax deduction…

Add comment December 28th, 2008

Dear president bush

Dear president Bush

I would like to congratulation on your decision to consider using the 700 billion dollar originally allocated to stabalize the banking system to bail out the auto industry. There is nothing more delighted to see our government supporting philantropy at a time like this. I am a small business man in New York city, and I too run a money loosing business. My business model calls for me occasionally take our fine young tax paying female to suppport our local resturant, bars, florist, theater and other hard working merchants. But for some reason I don’t make any money on my business. That’s a shame because my business do support a lot of hard working americans who may loose their job otherwise. I am writing to you on behave of these good american tax paying citizens that you give me a bailout. To show some comitment, I’ll be taking my date on the subway instead of a cab. I will look forward to your check in the mail.

Kavin

Add comment December 14th, 2008

Private detectives

You can always count on the Texans to come up with some stupid ideas.  Here’s one: http://money.cnn.com/2008/07/18/smallbusiness/texas_pc_pi_law.fsb/index.htm

If your work involve analyzing data to discover information, you’d need to have a private investigator license.  What kind of weed are they smoking?

Add comment July 23rd, 2008

Amazon and NY Sales Tax

I realized a few weeks ago I was charge NY sales when ordering from Amazon.  This is definitely going to reduce my shopping at Amazon.  Realizing many cheap bastard like me are doing the same thing, Amazon is filing for appeal.  Amazon’s argument was that it doesn’t have a business presence in NY, therefore it should not be liable for collecting sales tax.  NY state is using the argument that since it’s associates have presence in NY, and the associates are part of Amazon’s business structure, it therefore has a business presence.

Associates are channels for which Amazon advertise.  That’s as of saying NY state will enforce sales tax collection on anyone who advertise in magazine that are sold in NY, or any web pages that’s viewable in NY.
I was never a fan of sales tax.  Besides its money out of my pocket, the worst part is that it is a flat tax, which means it charges everyone the exact same rate.  The lower income family will spend more of their income rather than saving them, therefore paying a higher percentage of their post tax income on yet another tax.  Sales tax is a form of income tax collected on residents of a city/state, to pay for facilities and service of that location.  I pay that god damn tax so I will see a garbage can on the street once in a while.  But the burden shouldn’t be put on companies like Amazon (I have to agree they do make an easy target).  Amazon didn’t receive any benefit from NY, why should they take that hit.

I understand the problem of the state trying to protect their own businesses.  After all the reason a lot of people buy from Amazon and not BN is that you automatically get 8.5% discount.  But that needs to cover all out of state merchants and not just those with “associates” in NY.

Now I just need to start a mailbox business outside of Holland tunnel…

Add comment July 17th, 2008

Mass manufacturing for one

I pass by the old Cambridge Member store on 33th st and Broadway in NYC yesterday and saw they converted their stored to “made to measure suit”. I was lookign for a grey suit with blue strips so I pop in to check on their price range. Their super 130s starts from $495 and go up to $695 for Italian mill fabric with working buttons and everything, which is 1/2 of what I was expecting. They do one fitting and send your measurement out to Korea for the suit to be made. You get it back in a few weeks.

Increasingly clothing companies have figured out how to use their globalization know how to setup manufacturing channels for individual items at exactly the same cost as the mas manufactured version: initialed polos at polo.com, custom shirt at Alexander West… All involve taking individual measurement and sending it oversea to assemble the end product from pre-manufactured parts; just like Dell have been doing for a long time

Add comment March 31st, 2008

Book recommendation: Good to great and the social sector

I’ve been wanting to read this book since my days in the social entrepreneurship. Like Deutsche Bank’s recent microloan syndication, I firmly believe you cna create a sustainable business model doign good thing. The first chapter goes into why meauring percentage of fund used for cause vs management was flawed; instead the fitness function should focus of output rather than input. The next few chapters focus assembling great people for who they are rather than what they can do, the skillset required to lead an organization with a diffused power structure, how to focus on delivering core value and why turning down much needed but restricted resource will steer you closer to the mission. And last building pocket of greatness in an environment with systematic issues.

A very short book. Well worth my 15 minutes.  You can find it here

Add comment February 7th, 2008

Reverse colonization

Tata purchased British car icon Jaguar and Land Rover from Ford.  I am sure Ajit have been waiting for this day for a long time.

1 comment January 28th, 2008

the economics of ticket scalping

Like everything else, tickets has a supply and demand. A ticket is an option to redeem something valuable (i.e. a pleasant experience) in the future. For a particular concert, supply is govern by the number of seats in the venue.

Let’s ignore the artist and the social implication for the moment. From the event organizer’s economic perspective, it’s goal is to maximize profit by selling the highest number of ticket at the highest possible price before the ticket expires. Much like a good IPO, a perfect ticket price is one that won’t have much secondary demand at a higher price immediately after the sale. It means everyone who is willing to pay up to and more than the ticket price for the experience is satisfied. There is no one else willing to pay more than what the ticket is being sold for. Of course this never happens. That where ticket scalper comes in. The put in capital ad buy up these futures, provide a liquid secondary market that picks up the pricing inefficiency by the event organizer so everyone can be satisfied.

One of the problem is the complication that comes with non regulated scalpers. There is no way to determine if the ticket is legit, leaving the secondary ticket buying in a vulnerable situation. Another one is the common view that it is the social responsibility of the event organizer to offer the experience to the public who can’t afford the high ticket price by subsidizing it with it’s own potential profit. But nonetheless, economically speaking ticket scalping improve the efficiency of ticket pricing.

Now comes this site. http://nyc.tablexchange.com/ It’s a market place for people to buy and sell reservations. There is just something wrong about it. When you make a reservation at a restaurant, most of the time you don’t need to put any capital in. There is no mechanism to prevent someone from taking up the entire restaurant at no cost, then reselling it for a profit. Unless the restaurant start charging for reservations, which it won’t, since that will likely turn customer away.  What they could do is to ask for a credit card at the time of the reservation, do a $1 auth, and charge the card a fix amount at no show.  That does not prevent scalpers, but does present a form of identification and opportunity to reject the reservation if the card has been blacklisted.  But unlike ticket scalpers, honestly I don’t see any value that this site has for the restaurants if the reservation is indeed demand.

Add comment January 3rd, 2008

Previous Posts


Calendar

May 2017
M T W T F S S
« Aug    
1234567
891011121314
15161718192021
22232425262728
293031  

Posts by Month

Posts by Category