Friday, August 24, 2012


     Sometimes news events don’t come in one fell swoop, but are, over time, developed and examined in stages along the way. Today the New York Times headline,China Besieged by Glut of Unsold Goods, written By KEITH BRADSHER, underscores the world’s problem of unfulfilled expectations. The Times points out that – After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy, in the form of a huge buildup of unsold goods that clutter shop floors, clogging car dealerships and filling factory warehouses.
     Notice that over calculating how much food we need is never a story unless it’s the complaint prices aren’t rising high enough to satisfy retailers, wholesalers and the consumer. No sorry, that’s wrong, affordable prices aren’t the consumers complaint.
     So back to what The Times has space to complain about, stating – The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. So there’s a complete admission the country is now being fully run on capitalist principles? Because otherwise those goods could most likely be used in poorer rural areas? So all across China it’s now agreed the better solution is if ways were found to put money in everyone’s hands? That no longer will local rural leaders control financial access and be why the population has moved to the cities to succeed because, no doubt, anonymity allows a few more to keep their wealth than in the poor countryside where the desperation remains and hardship under the control of politics. As essentially, we all know, when politics is the instrument controlling money that’s hardly capitalism.
     Ah well, maybe The Times found some insight examining these crowded, overloaded warehouses, by pointing out the glut – has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home. Right, like excuses are really necessary to try to find a higher price.
     The Times continues the chant. – The severity of China’s inventory overhang has been carefully masked by the blocking or adjusting of economic data by the Chinese government, all part of an effort to prop up confidence in the economy among business managers and investors. Right, just duplicating the Wall Street Mad Sadness where everything depends on investors’ moods. Sure it does. Absolutely, but when everything is about the manipulation of the public’s confidence that’s not really capitalism, but a form of authoritarianism which is no doubt what’s been so appealing to the Communist Party that still insists the easy way out is managing the people rather than the people managing themselves.
     So The Times points out, the main nongovernment survey of manufacturers in China showed on Thursday that inventories of finished goods rose much faster in August than in any month since the survey began in April 2004. The previous record for rising inventories, according to the HSBC/Markit survey, had been set in June. May and July also showed increases. Right, those packed warehouses are the problem rather than sufficient prices to get all that crap moving along. How much did it cost? Ship it somewhere where the price is good and recycle it and ship it back so the material can then be used so the working poor can crank out more cheap stuff. Prices are finagled anyway so as absurd as that sounds it might work. Or recycle it at home, should we really care? This is the problem of a depression where the locals can’t afford what’s produced. Depending on shipping to the world as a marketplace is the HUGE mistake, no matter how much profit can be negotiated.
     The Times quotes Anne Stevenson-Yang, the research director for Hong Kong economic analysis firm J Capital Researchsaying, “Across the manufacturing industries we look at, people were expecting more sales over the summer and it just didn’t happen.” Son of a gun, just like the American Medical Industrial Complex where so many experts tell the doctors where they have failed to accomplish the money managers’ goals. Or maybe that’s too harsh when people are only trying to do their jobs. She, Ms. Stevenson-Young, added, “Things are kind of crawling to a halt.” Because no one wants the stuff? Uh huh.
     So The Times panders to the mantra offering – With inventories extremely high and factories now cutting production, China is the world’s second-largest economy and has been the largest engine of economic growth since the global financial crisis began in 2008. Economic weakness means that China is likely to buy fewer goods and services from abroad at a time when the sovereign debt crisis in Europe is already hurting demand, raising the prospect of a global glut of goods and falling prices and weak production around the world.
     This means the people of the world who’ve technically never labored a day in their lives, much of them, miscalculated and now must punish the rest of us to keep their bottom lines intact. Germany’s successful and their banking elite allies across the world rule the planet? Weren’t world wars fought to stop that and actually the Germans are pretty good industrious people, so it’s kind of criminal that they’re being thrust forth front and center as part of this public relations campaign reminding people their belts have to be tightened so a better bargain can be made out of the work done by people without the political power to survive behind a desk. If only everyone could run for President, as in America, then everyone would have a fighting chance to restart new careers. Otherwise the world’s lesser lights are a bunch of losers who deserve this contrived defeat at the hands of the money marketeers?
     But The Times becomes positive, then pessimistic of course. The key to well rounded news reports. – Chinese export growth, a mainstay of the economy for the last three decades, has slowed to a crawl. Imports have also practically stopped growing, particularly for raw materials like iron ore for steel making, as industrialists have lost confidence that they will be able to sell if they keep factories running. Real estate prices have slid sharply, although there have been hints that they might have bottomed out in July, and money has been leaving the country through a variety of legal and illegal channels. Right, exactly like New York City became, unless the top half of the financial food chain is satisfied everything runs to a halt. Primarily because whatever makes money among the lower half is bought out from under them once it’s seen there’s enough profit to satisfy engorged tastes. A point I can only wish there was a shadow of doubt about.
     Then The Times restates – Interviews with business owners and managers across a wide range of Chinese industries presented a picture of mounting stockpiles of unsold goods. Which their article redundantly repeats every few paragraphs as if there’s space to fill because there’s nowhere to put this b___ s___ if China’s warehouses are full.
     But of course The Times is correct, the problem is everywhere and seems insurmountable. – Business owners who manufacture or distribute products as varied as dehumidifiers, plastic tubing for ventilation systems, solar panels, bedsheets and steel beams for false ceilings said that sales had fallen over the last year and showed little sign of recovering. Right, well when American money-managers complain Chinese solar panels are too cheap for this country so that obvious necessary need goes unfulfilled, there’s a problem. But not because the Chinese have a lot of extra solar panels available. Really, are any money managers awake to take real responsibility for anything real? No, boo hoo, your million-plus vacation home needs air conditioning now and not after you personally invest in solar panels that should already be covering the entire face of the planet by now. Wars can last decades but four decades of solar paneling is behind schedule because an efficient way to profit enough hasn’t been found?Good thing the rich are comfortable now because your legacy will read didn’t really try because solutions already exist for most every problem the world currently endures. Damn you people, capitalism and profit work even if you have to call it socialism. Oh boo hoo, but my lazy political friends will never be elected if they can’t redundantly scapegoat that supposed dead issue into the ground for a few more decades. Look how profitable lying to each other still is. The military, a socialist institution, was torn apart pretending private finance could fix it. FIX THE MILITARY. Morons, the American one was probably the most efficient institution this country ever created until, as with doctors, it was decided others outside the military should count the money. Uh huh.
     But China’s problem continues to be copying failed, elections or not, Western, supposedly non-communist, totalitarian formulas. “Sales are down 50 percent from last year, and inventory is piled high,” said To Liangjian, the owner of a wholesale company distributing picture frames and cups, as he paused while playing online poker in his deserted storefront here in southeastern China. Right, more than half the country, no doubt, can’t afford picture frames and cups. And face it, when pressed half the world has already figured out how to make their own cups to cry in. As with the supposedly conservative problem with reality that ending the drug warmakes nowhere near as much money as can be made if people are allowed to grow their own when it’s so much more fun playing with guns and pretending cops and robbers will always be the only world we’re welcome to. Even though it would be better if we’d just realize and accept where we all came from. A bunch of territorial monsters who had no place in their hearts for the common people, so we still hear the weak told to wake up and deal with the real world. When the real world refuses to face the solution: Physicians heal thyselves.
     So poor Chinese. – Wu Weiqing, the manager of a faucet and sink wholesaler, said that his sales had dropped 30 percent in the last year and he has piled up extra merchandise. Yet the factory supplying him is still cranking out shiny kitchen fixtures at a fast pace. Nowhere in China could use those items? How many Brooklyn Bridges are for sale all over the world? Mr. Wu says, “My supplier’s inventory is huge because he cannot cut production and doesn’t want to miss out on sales when the demand comes back.” Right, while the workers, that are the country’s built-in system of demand, can’t afford proper housing.
     Part of the problem, The Times states, is that the Chinese government’s leaders have decided to put quality-of-life concerns ahead of maximizing economic growth when it comes to two of the country’s largest industries, housing and autos. Sure, there you go, influential Times, back that premise. Tell the Chinese government their mistake is the same as the Cubans unwillingness to overwhelm their country with asphalt and mega-financed housing.
     Premier Wen Jiabao has imposed a strict ban on purchases of second and subsequent homes, in the hope that discouraging real estate speculation will improve the affordability of homes. No, I agree, what possible difference does that make? Let them buy second homes all over the world co-owned by the government. What difference does it make when the citizens pressed, don’t even have a real independent judiciary to assist them anyway? So the result, states The Times, has been a steep decline in residential real estate prices, a sharp fall in housing construction and widespread job losses among construction workers. But the people still can’t afford homes. Is anyone really listening to ourselves?
     At the same time, The Times continues, the municipal government inGuangzhou, one of China’s largest cities, has sharply reduced the number of new car registrations it allows this summer to reduce traffic congestion and air pollution. An elitist measure, no doubt, and finger in an exploding dike anyway, but who has the money to finance efficient close to work housing and sufficiently filled trains to take everyone on holiday? Municipal officials from all over China have been flocking to Guangzhou to ask for details. Xi’an, the metropolis of northwestern China, has already announced this month that it will limit car registrations, although it has not settled on the details.
     So, The Times of course must recite the pablum we’re all fed on associated with the glamor of our oh so useful mobile thrones – when there’s no traffic. Is that what’s going on here? Only those who can afford bribes are allowed cars so there’s enough space to comfortably drive until the whole country can be asphalted over?
     Tell everybody, Times – The Chinese auto industry has grown tenfold in the last decade to become the world’s largest, looking like a formidable challenger to Detroit. But now, the Chinese industry is starting to look more like Detroit in its dark days in the 1980s. Inventories of unsold cars are soaring at dealerships across the nation. Quality problems are emerging and buyers are becoming disenchanted as car salesmen increasingly resort to hard-sell tactics to clear clogged dealership lots. You mean salespeople are being salespeople? That’s a hoot.
     But sadly The Times prints – The Chinese industry’s problems show every sign of growing worse, not better. So many auto factories have opened in China in the last two years that the industry is operating at only about 65 percent of full capacity — far below the 80 percent usually needed for profitability. Huh. The counters are pissed. Watch.
     The Times continues – Yet so many new factories are being built that, according to the Chinese government’s National Development and Reform Commission, the country’s auto manufacturing capacity is on track to increase again in the next three years by an amount equal to all the auto factories in Japan, or nearly all the auto factories in the United States.
     Said Geoff Broderick, the general manager of Asian operations at the global consulting firm, J. D. Power & Associates, “I worry that we’re going down the same road the U.S. went down, (now they’re worrying?) and it takes quite some time to fix that.” Automakers in China have reported that the number of cars they sold at wholesale to dealers rose by nearly 600,000 units, or 9 percent, in the first half of this year compared to the same period last year. Yet dealerships’ inventories of new cars rose 900,000 units from the end of December to the end of June. While part of the increase is seasonal, auto analysts say that the data shows that retail sales are flat at best and most likely declining which is a sharp reversal for an industry accustomed to double-digit annual growth. Until, of course, the ____ hits the fan.
     Said Huang Yi, the chairman of China’s fifth-largest dealership chain, Zhongsheng Group, “Inventory levels for us now are very, very high. If I hadn’t done special offers in the first half of this year, my inventory would be even higher.” Special deals to whom?
     Americans, where has this next piece of information from The Times been heard before? – Manufacturers have largely refused to cut production, and are putting heavy pressure on dealers to accept delivery of cars under their franchise agreements even though many dealers are struggling to find places to park them or ways to finance their swelling inventories. This prompted the government-controlledChina Automobile Dealers Association to issue a rare appeal to automakers earlier this month. “We call on manufacturers to be highly concerned about dealer inventories, and to take timely and effective measures to actively digest inventory, especially taking into account the financial strain on distributors, as manufacturers have to provide the necessary financing support to help dealers ride out the storm.”
     So The Times repeats, in case anyone wants to forget what’s being imbedded in their brains. – As dealer lots become cluttered, many salesmen have resorted to high-pressure sales tactics. That has resulted in growing customer dissatisfaction in the past year, according to surveys by J. D. Power. As a result, auto dealers are voicing the same complaints about inventory as businesspeople in a wide range of other industries. Son of the _____.
     Officially, though, most of the inventory problems are a nonissue for the government. Son of the _____ I may as well repeat, using The Times method.
     The Public Security Bureau, for example, has halted the release of data about slumping car registrations. Data on the steel sector has been repeatedly revised this year after a new methodology showed a steeper downturn than the government had acknowledged. And while rows of empty apartment buildings line highways outside major cities all over China, the government has not released information about the number of empty apartments since 2008, according to a report last Friday. But as much of a problem as manufacturing reality is, Wall Street and most other institutions don’t just salivate wishing that same opportunity was open to them. As has been proven, by just putting a ribbon on any calculations, no one cares if enough friends can be kept above the financial storm. Then dress up the rest of us as a disgruntled electorate fed hope till the next election after the next after …
     Using the word – Yet, as if this were a real accounting, The Times adds – businesspeople in a wide range of other industries have little doubt that the Chinese economy is in trouble. Wasn’t this comment slipped in at the beginning? What is this Times report, some kind of mass hypnotization?
     “Inventory used to flow in and out,” said Mr. Wu, the faucet and sink sales manager. “Now, it just sits there, and there’s more of it.” Well good grief, if governments and The Times repeat the problem is TOO MUCH then it must be so. Really?
     When the problem is this incessant need to profit from and keep up with inflation, then the problem is we need to grow up and solve this. Stop pretending there’s not enough money in the wrong people’s wallets for EVERYONE to get ahead. PERIOD. If I may be so callous to insinuate those with enough are too spoiled and those are really spoiled, as in falling apart, aren’t worth the comfortable’s time to renovate. But that’s ok. The Chiefs-of-State all over the world will still afford the best clothes so the only real problem is we can’t empty those warehouses in China the world’s wholesalers decided the poor will never afford.
Month Day - ..., 2017
8/24/2012 concluded: When the problem is this incessant need to profit from and keep up with inflation, then the problem is we need to grow up and solve this. Stop pretending there’s not enough money in the wrong people’s wallets for EVERYONE to get ahead. PERIOD. If I may be so callous to insinuate those with enough are too spoiled and those are really spoiled, as in falling apart, aren’t worth the comfortable’s time to renovate. But that’s ok. The Chiefs-of-State all over the world will still afford the best clothes so the only real problem is we can’t empty those warehouses in China the world’s wholesalers decided the poor will never afford.


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