Quotulatiousness

September 20, 2014

Can you trust Apple’s new commitment to your privacy?

Filed under: Business, Technology — Tags: , , , — Nicholas Russon @ 12:32

David Akin posted a list of questions posed by John Gilmore, challenging the Apple iOS8 cryptography promises:

Gilmore considered what Apple said and considered how Apple creates its software — a closed, secret, proprietary method — and what coders like him know about the code that Apple says protects our privacy — pretty much nothing — and then wrote the following for distribution on Dave Farber‘s Interesting People listserv. I’m pretty sure neither Farber nor Gilmore will begrudge me reproducing it.

    And why do we believe [Apple]?

    • Because we can read the source code and the protocol descriptions ourselves, and determine just how secure they are?
    • Because they’re a big company and big companies never lie?
    • Because they’ve implemented it in proprietary binary software, and proprietary crypto is always stronger than the company claims it to be?
    • Because they can’t covertly send your device updated software that would change all these promises, for a targeted individual, or on a mass basis?
    • Because you will never agree to upgrade the software on your device, ever, no matter how often they send you updates?
    • Because this first release of their encryption software has no security bugs, so you will never need to upgrade it to retain your privacy?
    • Because if a future update INSERTS privacy or security bugs, we will surely be able to distinguish these updates from future updates that FIX privacy or security bugs?
    • Because if they change their mind and decide to lessen our privacy for their convenience, or by secret government edict, they will be sure to let us know?
    • Because they have worked hard for years to prevent you from upgrading the software that runs on their devices so that YOU can choose it and control it instead of them?
    • Because the US export control bureacracy would never try to stop Apple from selling secure mass market proprietary encryption products across the border?
    • Because the countries that wouldn’t let Blackberry sell phones that communicate securely with your own corporate servers, will of course let Apple sell whatever high security non-tappable devices it wants to?
    • Because we’re apple fanboys and the company can do no wrong?
    • Because they want to help the terrorists win?
    • Because NSA made them mad once, therefore they are on the side of the public against NSA?
    • Because it’s always better to wiretap people after you convince them that they are perfectly secure, so they’ll spill all their best secrets?

    There must be some other reason, I’m just having trouble thinking of it.

Corporate inversions

Filed under: Business, Economics — Tags: , — Nicholas Russon @ 11:56

The most recent corporate inversion that hit the news — Burger King and Tim Hortons — may or may not work out, but it’s generally a sensible economic strategy that can yield strong results for the shareholders. In the most recent issue of The Freeman, Stewart Dompe and Adam C. Smith talk about why inversions are an example of competitive governance in action:

Populist themes like “economic patriotism” may appeal to voters, but such arguments are nonsensical: Firms are ultimately responsible to their shareholders. As Judge Learned Hand wrote, “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”

If anything, firms have a moral responsibility to minimize their taxable liabilities. The legal structure of a firm establishes the relationship between shareholders, who own the capital, and managers that make operating decisions. Executives have a fiduciary responsibility to pay the lowest tax possible because they are the stewards of their shareholders’ wealth. There is no functional difference between an executive who spends millions of dollars on a lavish party and an executive who gives that money to Washington instead—except that the former is probably a lot more fun to be around.

Think about tax compliance like a rent check owed to one’s landlord, with the added complication that it’s very difficult to move. Suppose a tenant is currently renting multiple apartments at one location, but decides the rent is just too damn high. Since the tenant can’t relocate entirely, suppose she moves some of her stuff out of one of the apartments into a storage unit across town, thus saving significantly on her rent. Would this be seen as unethical in that the tenant is attempting to avoid her fiduciary obligation to the landlord? Of course not. She is simply trying to reduce the costs of residing in a particular location.

In the same vein, minimizing the firm’s tax burden means minimizing part of the firm’s operating costs. Just as a resource manager can identify a more cost-efficient way to produce goods and services, so can a tax lawyer identify a more cost-efficient way of maintaining tax compliance. A business has no moral obligation to always use the same suppliers, be they suppliers of production inputs or corporate charters. The law is the law and firms have the option of changing how they are structured and located in order to minimize their taxable liabilities. If they use loopholes, so be it: Loopholes are by definition legal. Firms only have the obligation to pay the tax mandated by the law.

September 17, 2014

Adrian Peterson won’t play this week (or perhaps for the rest of the NFL season)

Filed under: Business, Football, Law — Tags: , , , — Nicholas Russon @ 15:44

I haven’t been posting much about the Adrian Peterson situation, partly because I was still waiting for the picture to clarify and partly because it just depressed the hell out of me to think about it. I agreed with the Vikings’ decision to deactivate Peterson for Sunday’s game against New England, even though it clearly distracted the team and disrupted the game planning: it was the right thing to do. I was shocked and dismayed when the team announced that Peterson would be returning to the team on Monday and would play this weekend in New Orleans.

I wasn’t alone in my reaction: the fans, the media, and even the team’s sponsors reacted very negatively to the announcement. The governor of Minnesota weighed in on the issue and his intervention had to be awkward, as he’d been a major supporter of the team’s campaign to get public funding for their new stadium now under construction. Some Viking players were happy to have Peterson back, but even there the support was not as widespread as it might have been … players from the south were much more vocal in their support than those from elsewhere in the nation.

As Monday wore on, a few more pebbles came loose from the PR dam, as the team learned from one sponsor after another that they were suspending or contemplating ending their promotional relationship with the team. Companies and organizations with a direct relationship to Peterson himself were even more direct: Nike, for example, ordered their retailers in Minnesota to stop selling any items branded with Peterson’s name or number.

The team’s ownership and management met late last night to hammer out a new answer to the PR disaster that had landed on them on Friday and had been made far worse by their Monday decision. Shortly before 1 a.m., the team announced that they’d made a mistake and that Peterson would not be active for the coming game. Instead, he’s being put on the NFL’s little-known exempt list, meaning that he’ll be paid his salary but will not be with the team until his legal issues are resolved. Although he’s being paid, he will not count against the team’s 53-man roster.

ESPN1500‘s Andrew Krammer has more:

Instead of Mike Zimmer and Matt Cassel commanding the podium on a typical Wednesday at Winter Park, Minnesota Vikings owner Zygi Wilf issued a statement and Mark Wilf, general manager Rick Spielman and team attorney Kevin Warren took questions about getting “it right,” a mantra uttered nearly 30 times in the 17-minute press conference.

Running back Adrian Peterson has been placed on an exempt list, an order directed by the Vikings, agreed to by Peterson and made possible by NFL commissioner Roger Godell’s oversight. The Vikings’ decision comes two days after the team held a similar press conference at the same location announcing Peterson’s reinstatement.

Public outcry from fans, media, sponsors and even Governor Mark Dayton prompted the change, as Mark Wilf said: “We value our partners, sponsors and community, and especially our fans. In the end, it’s really about getting it right.”

Peterson will be paid his full salary while sorting out his legal matters, which assistant DA Phil Grant has reportedly said could take “nine to 12 months” to go to trial, though a judge can lengthen or shorten at his/her discretion.

The $12 million question for the Vikings is: Will Peterson play another game in 2014? If not, will he ever don the Vikings purple again?

“Until these legal matters are resolved, he will remain on this exemption list,” Spielman said.

SpaceX and Boeing get NASA funding for 2017 deadline

Filed under: Business, Space, Technology — Tags: , , , — Nicholas Russon @ 08:11

In Ars Technica, John Timmer reports on the NASA decision to fund two of the three competitors for manned launches to the ISS:

Today, NASA administrator Charles Bolden announced that there were two winners in the campaign to become the first company to launch astronauts to low-Earth orbit: Boeing and SpaceX. The two will receive contracts that total $6.8 billion dollars to have hardware ready for a 2017 certification — a process that will include one crewed flight to the International Space Station (ISS).

In announcing the plan, Bolden quoted President Obama in saying, “The greatest nation on earth should not be dependent on any other nation to get to space.” And he promoted the commercial crew program as a clear way of ending a reliance on Russian launch vehicles to get to the ISS. But Bolden and others at the press conference were also looking beyond that; several speakers, including Kennedy Space Center Director Bob Cabana and astronaut Mike Fincke, mentioned that the ultimate goal is Mars.

To that end, Bolden emphasized that NASA is still doing its own vehicle and rocket development. The Orion crew capsule, intended to be suitable for missions deeper into the Solar System, recently underwent a splashdown test in the Pacific. Its first test flight aboard a Delta IV rocket is scheduled for this December. Work on the Space Launch System, a heavy lift vehicle that can transport the additional hardware needed for deep space missions, was also mentioned.

September 12, 2014

Scottish businesses face a “day of reckoning” after a Yes vote

Filed under: Britain, Business, Politics — Tags: , , , — Nicholas Russon @ 16:04

Usually, when someone is planning to punish their political enemies, they keep quiet about it until the votes are counted. The former deputy leader of the Scottish National Party is pretty forthright about just who is going to be facing punishment if Scotland votes yes:

Former SNP deputy leader Jim Sillars has claimed there will be a “day of reckoning” for major Scottish employers such as Royal Bank of Scotland and Standard Life after a Yes vote.

Speaking from his campaign vehicle the “Margo Mobile”, Mr Sillars insisted that employers are “subverting Scotland’s democratic process” and vowed that oil giant BP would be nationalised in an independent Scotland.

Earlier this week, a number of banks, including Lloyds Banking Group and RBS, said they would look to move their headquarters south of the border in the event of a Yes vote.

Mr Sillars, who earlier this week claimed he and First Minister Alex Salmond had put their long-held personal differences behind them to campaign together for independence, also revealed that he would not retire from politics on 19 September but said he would be “staying in” if Scotland became independent.

He claimed there is talk of a “boycott” of John Lewis, banks to be split up, and new law to force Ryder Cup sponsor Standard Life to explain to unions its reasons for moving outside Scotland.

He said: “This referendum is about power, and when we get a Yes majority, we will use that power for a day of reckoning with BP and the banks.

“The heads of these companies are rich men, in cahoots with a rich English Tory Prime Minister, to keep Scotland’s poor, poorer through lies and distortions. The power they have now to subvert our democracy will come to an end with a Yes.”

If I had any investments in Scotland, I would be calling my broker to review them in the light of this pretty specific set of economic and political goals for an independent Scotland. It won’t be a safe place to invest any kind of retirement savings if Sillars represents more than a fringe of the SNP.

Welcome to Indiana, here is your regulatory compliance brewpub menu

Filed under: Bureaucracy, Business, USA — Tags: , , , — Nicholas Russon @ 08:00

Indiana, like most states, has some odd laws still on the books from the immediate post-Prohibition era, including a “food requirements” rule that specifies that any establishment that serves retail alcoholic beverages must also maintain a restaurant on-site. That restaurant is required to serve certain specific food items. This is how the Bank Street Brewhouse complies with the law:

Indiana regulatory compliance menu

As you can see, this fully complies with the wording of the rule which requires “a food menu to consist of not less than the following:”

  • Hot soups.
  • Hot sandwiches.
  • Coffee and milk.
  • Soft drinks.

H/T to Katherine Mangu-Ward who has more on the ridiculous requirements.

September 7, 2014

Amazon and the taxman

Filed under: Britain, Business — Tags: , — Nicholas Russon @ 11:52

Tim Worstall discusses how Amazon structures its business to meet various efficiency targets, a major one being the need to be as tax-efficient as possible. This upsets many political commentators, who all seem to believe that businesses should structure their activities to pay as much tax as possible:

… it’s exactly the tax laws that create one of those synergies that keeps Amazon as the one single company (even if with many different divisions and P&L centres). Because if it were a series of separate companies then those mature businesses, the ones making profits, could not simply switch their profits over to the subsidisation of those newer businesses. Instead, they would have to declare those profits, 35% would float off towards Uncle Sam and thus there would be less of that free cash flow to invest in those newer businesses.

The way the tax laws work are what keeps Amazon from splitting out those profitable businesses from those ones not yet mature enough to be making a profit.

Which brings me to the second point, one more about British political economy. We have a prolific commentator over here who insists on two separate points. I’ll not name him in order to spare his blushes but he’s often referred to as the UK’s leading tax expert. The first thing he insists upon is that Amazon doesn’t pay very much corporation tax (entirely true) but also that it ought to. The second is that many companies have vast amounts of cash, profits they have made in the past, which they don’t know what to do with. Those cash reserves should therefore be taxed away so that they can be spent on what our tax expert thinks are good uses for other peoples’ money. What I enjoy so much about this is that he manages to believe both things together. A company like Amazon, which obviously does know what to do with its free cash flow, should be taxed more. And companies that don’t know what to do with their free cash flow should also be taxed more.

It’s as if the only answer to anything ever is higher tax rates. Rather like if all you’ve got is a hammer then everything gets treated as a nail. I can’t help thinking that the views of a leading expert in anything, let alone tax, ought to be a little more subtle than that.

September 6, 2014

Feschuk debriefing – Tim Hortons is not a national treasure

Filed under: Business, Cancon, Humour — Tags: — Nicholas Russon @ 11:27

In Maclean’s Scott Feschuk attempts to win the title of “most hated man in Canada” by explaining to Canadians that the Tim Hortons on the corner is not a national shrine:

Have a seat, Canada. Are you comfortable? Good, that’s good.

I noticed you’ve been in a downward spiral since Burger King announced its plan to buy Tim Hortons for $12 billion — or roughly $1 for every Tims on Yonge Street in Toronto.

You’re worried about what the takeover will mean for your morning coffee — and for the corporation that is traditionally depicted in our media as adored, iconic and able to cure hepatitis with its doughnut glaze. (I’m paraphrasing.)

I’m here to help. This is a safe place, Canada. I want to see you get through this. Which is why I need you to listen to me closely. These words will be painful, but it’s important you hear them:

Tim Hortons is not a defining national institution. Rather, it is a chain of thousands of doughnut shops, several of which have working toilets.

Tim Hortons is not an indispensable part of the Canadian experience. Rather, it is a place that sells a breakfast sandwich that tastes like a dishcloth soaked in egg yolk and left out overnight on top of a radiator.

[...]

Canada, you sure do like your double-double — or, as it is by law referred to in news reports, the “beloved double-double.” But here’s a newsflash for you: If you drink your coffee with two creams and two sugars, the quality of the coffee itself is of little consequence. You’d might as well pour a mug of instant coffee or sip the urine of a house cat mixed with a clump of dirt from your golf spikes. It’s all basically the same thing once you bombard it with sweet and dairy. You’re really just wasting your …

I see from your reaction that I’ve crossed a line. I hereby withdraw my defamatory comments about the double-double and kindly ask that you return that handful of my chest hair.

September 4, 2014

A deluge of public domain images

Filed under: Business, Cancon, History, Media — Tags: , , — Nicholas Russon @ 00:02

Techdirt‘s Mike Masnick alerted me to a new source of old images:

Here’s some nice news. Kalev Leetaru has been liberating a ton of public domain images from books and putting them all on Flickr. He’s been going through Internet Archive scans of old, public domain books, isolating the images, and turning them into individual images. Because, while the books and images are all public domain, very few of the images have been separated from the books and released in a digital format.

There are all sorts of images in this stream, so you never know what you’ll find when you dive in. Here, for example is an image used in Canadian grocer January-June 1908:

Crown illustration from Canadian Grocer 1908

Which, if you follow the link to the original publication, was isolated from this page of ads:

Full page from Canadian Grocer 1908

Or the rather impressive works of George White & Sons in London, Ontario:

George White and Sons, London Ontario 1913

This image appeared in Canadian Machinery and Manufacturing News (January-June 1913), illustrating a “Staff article” about the company:

A description of the works of an old established firm building threshing machinery, traction engines, etc. The plant has been gradually built up to its present size, the foundry being the latest addition. The company maintain two branches in the West and have agencies in all the principal cities and towns in the grain growing districts of Canada.

August 28, 2014

Digital “ecosystems”, “platforms”, and sunk costs

Filed under: Business, Technology — Tags: , , — Nicholas Russon @ 09:19

The Guardian Technology Blog looks at how digital product vendors attempt to lock you into their own (more profitable) platform or ecosystem:

Depending on your view, the stuff you own is either a boon to business or a tremendous loss of opportunity.

For example, your collection of spice bottles in your pantry means that I could possibly sell you a spice rack. On the other hand, it also means that I can’t design a special spice rack that only admits spice bottles of my own patent-protected design, which would thereby ensure that if you wanted to buy spices in the future you’d either have to buy them from me or throw away that very nice spice rack I sold you.

In the tech world, this question is often framed in terms of “ecosystems” (as in the “Google/Chrome/Android ecosystem”) or platforms (as in the “Facebook platform”) but whatever you call it, the discussion turns on a crucial different concept: sunk cost.

That’s the money, time, mental energy and social friction you’ve already sunk into the stuff you own. Your spice rack’s sunk cost includes the money you spend on the rack, the time you spent buying fixings for it and the time you spent affixing it, the emotional toil of getting your family to agree on a spice rack, and the incredible feeling of dread that arises when you contemplate going through the whole operation again.

If you’ve already got a lot of sunk costs, the canny product strategy is to convince you that you can buy something that will help you organise your spices, rip all your CDs and put them on a mobile device, or keep your clothes organised.

But what a vendor really wants is to get you to sink cost into his platform, ecosystem, or what have you. To convince you to buy his wares, in order to increase the likelihood that you’ll go on doing so — because they match the decor, because you already have the adapters, and so on.

The vendor wants to impose a switching cost on you, to penalise you for disloyalty should you defect to another ecosystem/platform. The higher your switching costs, the worse the vendor can afford to treat you — rather than supplying the best goods at the best price, he can provide the best goods at the best price, plus the switching cost you’d have to pay if you went somewhere else. Or he can offer the best price, but offer goods whose manufacture — and quality — is cheaper by a sum of about the cost you’d have to pay for switching.

August 27, 2014

Disappointingly, SpaceX plays the crony capitalist game with Texas politicians

Filed under: Business, Government, Space — Tags: , , — Nicholas Russon @ 10:28

If you’ve been reading the blog for a while, you’ll have picked up that I’m a fan of SpaceX and other non-governmental organizations in the space race. I wouldn’t go so far as to say Elon Musk is a hero, but I’ve generally been happy about his company’s successes in bringing more private enterprise into the launch business. However, as Lachlan Markay explains in some detail, Elon Musk is not above taking government funds to do things he’d be doing anyway, just like crony capitalists in the rest of the government-industrial complex:

Shortly before a private spaceflight company’s test rocket exploded over southern Texas last weekend, state lawmakers announced millions in subsidies to get the company to continue launching rockets in the Lone Star State.

Space Exploration Technologies, commonly known as SpaceX, will receive more than $15 million in public financing to build a launch pad in Cameron County, near the Mexican border.

The subsidies came after SpaceX’s founder, billionaire tech mogul and pop technologist Elon Musk, made campaign contributions to key state lawmakers and hired lobbyists with ties to Austin.

SpaceX is one of a number of innovative and disruptive startups that, though lauded by some free marketeers for making government-run markets more competitive, are finding themselves drawn to political advocacy, whether out of shrewdness or necessity.

Of the more than $15 million in incentives for a SpaceX launch facility in Brownsville, Texas, announced this month, $13 million will come from the state’s Spaceport Trust Fund.

Initially created in 2002, the fund began to wind down together with the idea of commercial spaceflight. But with the ascendancy of SpaceX and similar companies, Texas looked to secure its place as a destination for commercial spaceflight operations.

Musk took notice. A prolific political donor, he began pouring money into the campaigns of key state lawmakers. On November 7, 2012, he donated $1,000 to state representative Rene Oliveira (D). Two weeks later, he gave state senator Eddie Lucio Jr. (D) $2,000.

The next month, the Associated Press reported that Lucio and Oliveira were working to secure state backing for a potential SpaceX launch pad in Brownsville.

As Drew M. says at Ace of Spades H.Q., it’s not like this is a new thing for businesses or for politicians, it’s just disappointing:

I’m not naive to think this sort of stuff hasn’t gone on forever and will go on forever, it’s simply human nature. That’s why making government at levels as small as possible is so important.

What does continue to surprise me when it shouldn’t is how cheap it is to buy politicians. Remember Team GOP’s hero, Mississippi Senator Thad Cochran’s longtime aide who accepted $20-30K in gifts from Jack Abrahmof in return to ensuring the felon’s clients received millions in government money?

When you think about it it’s really no surprise that politicians sell themselves so cheaply. Unlike honorable whores who sell their own bodies, politicians sell other people’s money. Plus, they make it up in volume.

This bi-partisan rush to hand out everyone’s money for their own gain is part of why I’m drifting away from conservatism and towards libertarianism. Screw them all.

August 26, 2014

Tax inversions: “Canada, it would seem, is the new Delaware”

Filed under: Business, Cancon — Tags: , , — Nicholas Russon @ 08:04

In Maclean’s, Jason Kirby looks for reasons why Tim Hortons is interested in a deal with Burger King:

For starters, let’s consider Burger King’s motivation for buying Tim Hortons. It is not looking for synergies. Don’t expect to see Burger King roll out twinned stores, with one counter selling Whoppers, the other Timbits, as per Wendy’s strategy when it owned Tims. Instead, Burger King wants to avoid paying U.S. taxes. If the deal goes ahead (no agreement has been finalized) Burger King will achieve this through what’s known as a “tax inversion.” It would buy Tim Hortons, then declare the newly merged company to be Canadian. And because companies in Canada enjoy a lower corporate tax rate than those in America — 15 per cent in Canada compared to an official U.S. rate of 35 per cent — Burger King’s future tax bills could be a lot smaller.

Canada, it would seem, is the new Delaware.

So Burger King is buying Tim Hortons, but in doing so, the combined Tim Hortons and Burger King will be financially engineered to be Canadian, at least on paper. A statement released by the companies following the Wall Street Journal‘s initial report on the deal said Burger King’s largest shareholder, 3G Capital, a Brazilian private equity firm, would own the majority of the shares of the newly created company. And you can be sure any tax savings will flow back to shareholders in the form of higher dividends.

It’s clear what’s driving Burger King to pursue this deal. But there’s been far less attention paid to the question: what’s in this for Tim Hortons?

According to Tim Hortons, the answer — as it unceasingly has been for the past two decades — is the pursuit of international growth. In the statement from Tim Hortons and Burger King, the companies said the coffee chain will have ”the potential to leverage Burger King’s worldwide footprint and experience in global development to accelerate Tim Hortons growth in international markets.”

Update: Kevin Williamson points out that relatively few US companies actually relocate to other countries now, but that the number is clearly increasing and knee-jerk reactions to that by politicians may well make it worse.

There are trillions of dollars in U.S. corporate earnings parked overseas, and progressives want the government to shove its greedy snout all up in that, denouncing “corporate cash hoarders” and blaming un-repatriated corporate earnings for everything from the weak job market to chronic halitosis. Harebrained schemes for putting that corporate cash in government coffers abound. So the current balance could quite easily be tipped. And after years of ad-hocracy under Barack Obama et al., U.S.-style “rule of law” may not be as attractive as it once was. A few more arbitrary NLRB decisions or political jihads from the IRS could change a few minds about the value of U.S. law and governance.

The question isn’t whether you can bully Walgreens out of its plan to move to Switzerland. The question is whether the next Apple or Pfizer ever puts down legal roots in the United States in the first place. Right now, the friction works in favor of the United States, but there is no reason to believe that that will always be the case. You think that Singapore wouldn’t like to be the world’s banking or pharmaceutical capital? That Seoul lacks ambition? That the Scots who brought us the Enlightenment can’t run a decent system of law and property rights? Burger King is not talking about moving to some steamy banana republic for tax purposes, but to stodgy, stable, predictable, boring old Canada. Boring and predictable looks pretty good if you’re Burger King, especially when the alternative is unpredictable and expensive. Unpredictable and expensive is what you date when you’re young and stupid — you don’t marry it.

Update the second:

August 21, 2014

Missing the Target, badly

Filed under: Business, Cancon, USA — Tags: — Nicholas Russon @ 08:05

I’d heard lots of good things about the Target chain before they came north to Canada (James Lileks, for example, should be getting a regular cheque from the firm for his regular name-check of the local Target store in his writing). When a new Target store opened in Whitby, Elizabeth and I visited shortly after the doors opened. To say it was disappointing is an understatement. We expected to find a new, clean, fully stocked store with different brands and lower prices. What we found was a new, clean store with exactly the same stuff we’d seen before at pretty much the same prices. In other words, there was literally no reason to come back … and we haven’t been back.

Jason Kirby says that our experience was pretty much what everyone else experienced:

Target Canada is an unmitigated disaster. On that point, everyone, from its customers to investors to the company’s executives, can agree. In reporting its second-quarter results this morning, Target revealed its Canadian operations lost another US$200 million, while same-store sales — a gauge of performance that measures only those locations that have been open for at least a year — fell 11.4 per cent from the same period in 2013.

[...]

In a conference call with Canadian media Wednesday, Target chief financial officer John Mulligan declared: “We bit off way too much, too early. In retrospect, (we would) probably open five to 10 stores last year — refine the operations, refine the supply chain, the technology, get our store teams trained. But again, that’s all hindsight, we are where are right now and we’re focused on moving forward to fix this for our guests.”

[...]

It took Target from early 2011, when it announced the Zellers deal, to March 2013 before it opened its doors and could ring up its first sale. To date, Target has racked up $1.8 billion in losses from its Canadian operations. Here a good breakdown of the losses.

In Wal-Mart’s fiscal 1995 annual report, the retailer said its operating, selling and general and administrative expenses, as a percentage of sales, had risen just 0.2 per cent and 0.3 per cent in each of the previous two years as a result of the Canadian acquisition and launch. By Wal-Mart’s second year in Canada it had already generated an operating profit, having doubled sales per square foot since taking over from Woolco. By year two it boasted a 40 per cent share of the market.

It’s taken three years for Target to admit just how flawed the Canadian expansion has been. An atrocious inventory management system left shelves empty, while Canadians were completely turned off by Target Canada’s decidedly un-Target-like prices on goods.

August 20, 2014

New report calls for Ontario to break up the LCBO

Filed under: Business, Cancon, Economics, Wine — Tags: , , , , , — Nicholas Russon @ 13:33

In the Toronto Star, Richard Brennan reports on a new study by the C.D. Howe Institute calling for the province to join the modern era:

The “quasi-monopoly” LCBO and The Beer Store have hosed Ontario consumers long enough, a C.D. Howe Institute report says.

The right-wing think tank said the Ontario government should strip them both of their almost exclusive right to sell beer, wine and spirits, suggesting the report proves that opening up to alcohol sales to competition will mean lower prices.

“The lack of competition in Ontario’s system for alcoholic beverage retailing causes higher prices for consumers and foregone government revenue,” states the 30-page report, Uncorking a Strange Brew: The Need for More Competition in Ontario’s Alcoholic Beverage Retailing System, to be released publicly Wednesday.

The report includes tables comparing Ontario beer prices to other provinces with greater private sector involvement, particularly with Quebec, where a case of 24 domestic beers can be as much as $10 cheaper and even more for imported brands.

Since 1927, when the Liquor Control Act was passed, the Liquor Control Board of Ontario and the privately owned Brewers Warehousing Company Limited have had a stranglehold on alcohol sale in the province.

“The Beer Store’s quasi-monopoly of beer retailing is … an anachronism,” the report says, referring to the foreign-owned private retailer that is protected by provincial legislation.

August 18, 2014

Worstall confirms that “the UK would lose 3 million jobs in the year it left the European Union”

Filed under: Britain, Business, Economics, Europe — Tags: , , — Nicholas Russon @ 09:15

There you go … proof positive that the UK cannot possibly, under any circumstances, leave the European Union. Except for the fact that the UK would lose 3 million jobs in the year even if it stayed with the EU, because that’s how many jobs it normally loses in a year:

UK Would Not Lose 3 Million Jobs If It Left The European Union

Well, of course, the UK would lose 3 million jobs in the year it left the European Union because the UK loses 3 million jobs each and every year. Roughly 10% of all jobs are destroyed in a year and the economy, generally, tends to create 3 million jobs a year as well. But that’s not the point at contention here which is the oft repeated claim that because we left the EU then therefore the UK economy would suddenly be bereft of 3 million jobs, that 10% of the workforce. And sadly this claim is a common one and it just goes to show that there’s lies, damned lies and then there’s politics.

The way we’re supposed to understand the contention is that there’s three million who make their living making things that are then exported to our partners in the European Union. And we’re then to make the leap to the idea that if we did leave the EU then absolutely none of those jobs would exist: leaving the EU would be the same as never exporting another thing to the EU. This is of course entirely nonsense as any even random reading of our mutual histories would indicate: what became the UK has been exporting to the Continent ever since there’s actually been the technology to facilitate trade. Further too: there have been finds in shipwrecks in the Eastern Mediterranean of Cornish tin dating from 1,000 BC, so it’s not just bloodthirsty and drunken louts that we’ve been exporting all these years.

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