Quote of the Week: Here Is Where We Are Now with Quality Control


Truck-crash

From an actual email exchange that took place this morning (quoted as was written):

 

From a Customer to Operations Department of A_C Company:

Hi John,

Please deliver the second truckload from our current order on Monday 12/21.  Please confirm.

Customer 

 

From the Operations Department to the Customer, copying A_C Company's CEO as per protocol:

Good morning Bob,

Thanks for providing the delivery date!  We will begin to secure trucking.

Best regards,

John

 

From the CEO to the entire Operations Department, copying The Frustrated CFO and Managing Partners:

Please find a trucker who will not spill the product, drive into the customer's gardens, or drive recklessly through their parking lot damaging their employee's car, which all happened to this valuable customer in the recent past.

CEO 

Quote of the Week: Gender Pay Gap


635756935070330185-MAR-GCEITF-Arty07From CNN Breaking News:

"All US military combat positions are being opened up to women, Defense Secretary Ash Carter announced Thursday.

The decision allows women to fill about 220,000 jobs that are now limited to men – including infantry, armor, reconnaissance and some special operations units.

'This means that as long as they qualify and meet the standards, women will now be able to contribute to our mission in ways they could not before.  They'll be able to drive tanks, give orders, lead infantry soldiers into combat,' Carter said at a news conference Thursday.

'There will be no exceptions,' he added."

The Frustrated CFO Commentary:

Well, congratulations, ladies!  Just as the World Economic Form has concluded that women would not catch up to men in their pay until 2133 (not a typo – 117 years from now, in some hypothetical "future"), the Pentagon has proudly declared that they are making more equal-pay jobs available for us – the ones that they themselves officially list among 8 most dangerous military jobs. 

And this is why I can never align myself with feminist politics.  Don't get me wrong, I greatly admire our contemporary Jeannes d'Arc (or d'Newark) and their desire to challenge themselves in combat.  But I cannot possibly agree that it's good for the country when we put in harm's way the better, worthier half of our citizenry.  

Oil! It’s a Gas – Grab That Cash With Both Hands And Make a Stash


Shale-gas-7953-1I've been predicting that crude oil prices will eventually drop below $30 per barrel for nearly two years.  When I first started talking about it oil futures were trading on NYMEX at $108.  Everyone thought I was too radical in my predictions.  Even those interested in my reasoning refused to believe that such a drastic adjustment was possible. 

Then, on Friday, September 11, 2015, many industry insiders have received a MarketWatch alert letting them know that Goldman Sachs underbid my forecast, warning that "oil prices could sink to $20 a barrel."  I personally don't pay much attention to big-firm analysts (they are most likely low-balling because they have some shorting game in the works), but a few of my acquaintances thought I should've felt justified.  The only thing I can say is "What took them so long?"

Human myopia doesn't shock me anymore.   However, the level of denial exhibited by those in and around the business of oil and its derivatives borders on blindness.  I mean, it's not like I have some special connections or access to secret information, nor do I spent any time on extensive research.  The same self-evident facts were always right under everyone's noses, not just mine own.        

Look, having been one of the largest importer of oil in the world for decades, the United States used to limit supplies to other regions of the globe by consuming the majority of Saudi, Algerian, and Nigerian output, thus keeping everyone hungry and bidding.  Up to a certain price level it was considered more practical to buy foreign oil than to invest into domestic production by pretty much every branch of US energy and petrochemical sectors.  But as soon as the prices hit an attractive spot, everyone and their mothers started pumping more oil and throw it into the market.  The US production doubled; the same happened in Russia, Iraq, Canada.

Meanwhile on demand side, the oil consumption is slowly (too slow for my taste) diminishes.  Tapping into shale formations made natural gas a cheaper energy alternative.  Furthermore, the idea that switching to renewable energy (solar and wind) may offer a chance of survival seems to take a stronger hold in more reasonable heads worldwide.  Even in our country, in spite of all that protectionist auto lobbying in Washington, vehicular fuel-efficiency finally became a reality.  And those of us who travel to Europe and Japan have seen the itsy-bitsy cars most people had been driving there for the past 25 years. 

More significantly, the economies are weakening all over the globe.  EU is barely holding itself together.  China has finally admitted that the country has "problems,"  which is probably a tight-lipped way of describing a complete disaster.  This means shrinking consumption of everything, but especially of oil and oil-derivative products.   

As I said, it's self-evident.  As far as I was concerned, expecting the downward turn of the oil market was the only sensible conclusion.  But everyone seemed to have gone stupid.  Seriously, what's wrong with people?  You don't need a PhD in Economics to understand this!  What happens when you have a product surplus in the market of diminishing demand? Does the price goes up or down?   

Of course, ever since the oil has become THE most important commodity on the market, it's been associated with that very special cardinal sin – Greed.  (If you search Amazon for books on oil, you will find the word "greed" on at least half of the covers.)  And greed is blinding.  It makes people reckless.  They refuse to consider a possibility that making a profit of $60 per barrel today can turn into a $20 loss tomorrow.

Greed always goes hand in hand with opportunism.  As I said above, higher prices attract more suppliers – it's hard for people to resist the opportunity to make an extra buck, regardless of the consequences.  All considerations of important values, including the planet's survival, are cast away in the pursuit of hot dollars.  They pump more and more.  They create new nightmare technologies like fracking.  They invest billions of dollars into new facilities, raping the Earth and turning household water into flammable liquids.  And then, these blind people have the audacity to look surprised when overproduction manifests itself in rapidly falling prices.

And it's not just oil – prices for every single product on the petrochemical flowchart (kerosene, polypropylene, PVC, polyethylene, etc.) are dictated by the prime material's behavior.  When the prices were high, the greedy piggies cranked up the production capacities of those products as well, with exactly the same result – massive overproduction followed by the drastic price drops.  What was selling at $1500-$1900 per metric ton a year a ago is now sold for $900.  

In theory, the only logical response should be to seize the output.  Yet, it's not easy to hit the breaks.  When in the fourth quarter of 2014 oil prices sharply adjusted from $93 to $45 per barrel, one CEO of a petrochemical trading company asked me, "Why those Russians and OPEC aren't doing anything to stop it?"  And I had to explain to her that for Russians oil is like payroll wages for an ordinary person – they need continuous oil income for sustenance.  They will not stop pumping no matter what.  What else can we possibly expect from a dictatorship where a handful of usurpers hold national property for personal gain?  And OPEC?  The cartel's members refused to cut their oil productions for an opposite reason: They are already so rich, they cannot be hurt by falling prices.  On the other hand, impoverishing the competition will benefit them in the long run.

Here in the States, though, we still have some shreds of the free-market economy left: shrinking markets and overflowing storage capacities inevitably result in industrial contraction.    So far 50% of rigs got decommissioned; research and investments are halted, over 200,000 workers have been laid off.

(Insider tidbit:  The other day, in casual banter over lunch, my commercial insurance broker told me that one of her Chinese clients is currently buying oil rigs and related equipment out of the US bankruptcy courts at about 15 cents on a dollar and shipping it to the homeland for resale.  Way to enrich our foreign creditors, you guys!)   

For the sake of clarity let me fiscally connect the sharp price drops to shutdowns and layoffs.  Let's say your product's market price was $1800 per unit, but it's now $900.  Even if you are a very shrewd business person capable to quickly adjust your costs to the changing market, avoid operating losses, and maintain your healthy 10% gross margin, in absolute dollars you are now making only $90 gross profit per unit instead of $180.  In other words, you have only 50% of cash available to pay salaries, benefits, rents, leases, bank interests, etc. – all those overhead items that have either fixed or increasing values.

And so, the steady stream of insiders' news that comes to me is not surprising at all: Nippon is closing their propylene unit, and Formosa shutting down its Delaware productions, and Exxon is halting their alcohol output, and Sterling Chemicals is running on the negative cash flow, etc., etc.     

Meanwhile, our state economists continue telling us that everything is okay and will be even better.  Well, I'm saying that it's only going to get worse (especially if voters will be fooled by phony, skin-deep feminism or silly, unattainable promises).  And you don't even have to take my "radical" word for it  – listen to you trusted "friends," the Goldman Sachs's analysts.

Why Do I Stay Subscribed to Quora Digest?


Quora LogoThe truth is I have no idea why I receive Quora Digest emails.  I don't recall subscribing to the feed.  Of course, nowadays one can passively "accept" electronic deliveries of bullshit by failing to unclick some hidden option box.  I am certain, however, that  I'm not registered on Quora website.  I wouldn't.   

Quora, as in plural of Quorum – in the same way as Data is plural of Datum. It is basically a blogging hub masked as a Q&A platform: one registered person posts a question and all other registered contributors are invited to answer.  Strictly speaking, this unrestricted invitation to participate clashes with the name, which refers to "select groups."  Maybe the founders confused it with fora (the Latin plural of forum).  I don't know and I don't care: The whole concept reminds me of Coffee Talk with Linda Richman, when Mike Myers would get "all verklempt" and invite us to talk amongst ourselves by providing a discussion topic.        

Moreover, many things about Quora simply creep me out.  For instance, Quora's T&C state that contributors retain the copyright to their content.  Well, it's great that they threw that in, however, the enforcement appears to be highly problematic.  Questions posted to the site are open for editing by everyone.  This includes official editors and all registered users.  Users can also submit unlimited number of suggestions for editing the responses.  Therefore, the possibilities for modifications of the original material are endless.  The apparent absence of a solution for the copyright sharing basically nullifies the notion of IP protection.

It's weird that the site demands its users to register with their real names instead of handles and go through email verification.  It's not that I think people should hide, but they must remember that Quoara automatically releases users' names to the search engines.  We don't know whether the site gets some sort of fees in return, but it wouldn't surprise me if they do.  Just like it wouldn't surprise me if they intend to sell the subscribers' lists to other marketers as well.  But these are just my speculations.  In the absence of a clear mission statement, that's the only thing one can do – guess.  

In reality, the fact that Adam D'Angelo (CEO) doesn't seem to be interested in generating revenues makes me very suspicious of his actual intentions and motivations.  It seems only logical to suggest that they are spying on the contributors, studying their interests, behavioral patterns, and tastes in preparation for eventual commercialization of the site.  Or is it something even more sinister?  How the hell did they get a $900 million third-round valuation?  What sort of potential revenue this number is based on? 

As I said, it's creepy.  I don't even open Quora Digest emails.  But I'm not unsubscribing either – because of the subject line, which always shows the top question of the day.  I don't want to give up the opportunity to glance at it.  Most of the time, what I see reeks of laziness.  I mean, we live in the Internet age – go on Wikipedia or just google this banal crap!  But once in a while some amazing shit pops up. 

The other day I read: "How can you maximize your happiness in life?"  Wow!  Is this person for real?  60,000 antelopes just died in Kazakhstan for unknown reason and half of Europe is covered in water and mud, but this human is not only happy, he wants to bring the bliss to the next level!  Even crazier, he expects to receive constructive instructions from his fellow Quora members?!  Well, good luck with that!

Actually, it's not this kind of oddities that keep me looking.  I am more interested in patterns and trends.  For instance, recently I've noticed an increase in frequency of the questions concerning material self-sufficiency and economic survival.  Well, it's surprising that people on Quora don't talk about their inability to support themselves all the time.  I'm guessing that most of them consider bringing it up under their real names in front of the strangers embarrassing.  Nevertheless, the number of such queries is apparently spiking. 

Below are three questions I found to be most typical; with my brief comments (remember: I'm not subscribed, so I don't know the answers that followed; I can only provide my own):

1.  "What kind of salary guarantees comfortable living in NYC?"  What a terribly formulated question!  It should've come with a separate note explaining what "comfortable" means to the inquirer.  Cause, what's comfortable to a person fresh out of Idaho who has never spent more than $100 on a pair of shoes and considers a $350 Michael Kors bag a chic statement may mean financial misery to someone with a different background. 

For the sake of argument, let's assume that the questioner is single and actually meant comfortable, but not extravagant, i.e. a good one-bedroom apartment in Manhattan with no roommates; year-round pleasant climate control; full range of cable and streaming entertainments; cell and land phones; a car kept in a garage; designer coffee in a favorite shop; going out for drinks at least once a week; eat out twice a week; cooking with high quality ingredients; good cheese, wine, and fruit in the fridge; mid-range ($800-$1500) outfits; 2-3 new pairs of $500 shoes a year; one new $2000-$3000 bag a year, at least one annual vacation; a play and a concert once in a while.  And the answer is – $250K annual salary should do it, assuming the drinking is actually limited to once a week. 

And you thought that those who made $250K a year are rich?!  Not in this town, baby!

2.  "At Facebook and Google, why are many new CS graduates offered 120K+ with a 30-120K signing bonus while those with a few years experience are offered a baseline salary with no bonus?"  Well, the direct answer to this question is simple: Computer Science, in a sense, is like Medicine and Pharmacology – they continuously undergo major changes and developments.  I mean, double-entry bookkeeping was created 600 years ago and it will remain fundamental as long as accounting records will be needed on this planet.  On the other hand, today's standard surgical techniques were experimental only 5 years ago.  It happens even faster in high-tech where innovations occur pretty much on a monthly basis. 

While doctors never stop studying and researching, most (not all) computer engineers and programmers are not as motivated to stay on top of the game.  Those in training are taught the most up-to-date techniques and methods; they are subjected to the most recent trends.  And that's what Facebooks and Googles want – the newest and the freshest; in order to keep ahead of the rat race.  So, it's not about whether you graduated this year or five years ago – it's the set of skills you put on your resume.  Veteran coders who can match the knacks with 22-year-olds can demand pretty much the same level of compensation. 

But what interests me the most in this inquiry is its fiscal aspect.  There is no way the $120K/year new hires of Facebook and Google will be able to enjoy the comforts similar to those listed in point 1.  These companies operate largely in San Francisco Bay area, which, according to my observations of exactly 2 years ago, is even less affordable than NYC.  Of course, high-tech nerds of both sexes go to work in khakis and polo shirts and don't carry Prada bags to the office.  On the other hand, they buy more electronic devices than any other human and their coffee is far more expensive.  So, some corners will need to be cut.  

Obviously their lower-compensated older co-workers have even harder time (hence, the exasperation and the bitterness).  Let's hope that they are smart enough to share expenses with their partners/spouses and don't plan on having any kids.

3.  "I'm unemployed, broke, balding, living with my parents, about to turn 30, friendless, depressed, and miserable.  How can I possibly turn it around?"

Ah, and here we come to the reality of the vast majority.  This boy probably forgot to mention that he has a degree(s) in Liberal Arts and no practical skills.  The horde of young people in similar situations is ever-expanding.  They are so far removed from the idea of "comfortable" living that a $120K salary seems just as fantastic to them as a $3 million book advance or a $20 million per movie compensation package.

They were brought up on the illusion that in this Land of Opportunities they have the freedom of pursuing their interests in humanities and, "as long as they work hard," their "rightful" place in the economic system is guaranteed.  They failed to realize that this clinically dead ideal has been kept on life support by the tuition-hungry education institutions for years.  They probably still don't know that the economic system in question has been deformed and became unrecognizable, just like the sociopolitical structures, environmental conditions, and human relationships.

I can just imagine the answers elicited by this question.  They probably fell into two categories: the ones from the peers ("Dude, you are totally fucked!" or "I hear you, bro!") and the ones from the middle-aged politically correct deniers of reality ("It's okay, things will get better" or "There is nothing wrong with being bold").    

As for me, only a few years ago I would've still tried to be motivational and push my entrepreneurial agenda, urging this person to crystallize his aptitudes into a small business idea and work hard on making it happen for himself.  I used to say that if misplaced children of my peers went into landscaping, housekeeping, and maintenance businesses, it would've solved both the employment and the immigration problems in one sweep.  But now we operate under the most severe government interference in the small-business matters (minimum wages, Obamacare tolls, US Treasury restrictions on borrowing, etc.) and the number of illegal immigrants became unmanageable.  So, giving such an advice would be adding insult to injury.  All I can say is – you are totally fucked, dude!                            

Quote of the Week: A Tall Order for Minorities Everywhere


Scandal-301-rowan-reads-livRowan (Eli) Pope:  How many times did I tell you?!  You have to be what?!

Olivia Pope:  Twice as good as them to get a half of what they have.

                                                                 Scandal, Season 3, Episode 1

The Frustrated CFO's Comment: 

I'm not placing this excerpt into quotation marks.  First of all, it's not an exact citation – on screen it gets all broken up, because the characters interrupt each other with anger, frustration, exasperation, and all other similar feelings; Eli is yelling, and Liv is sort of shudders and attempts to shy away - all those over-the-top dramatics and stuff.  More importantly, though, it's not an original phrase.  Shonda Rhimes, who actually penned this episode herself, is brilliantly entertaining, but she didn't come up with this maxim.  Many African-American journalists, bloggers, and celebrities commented on its wide-spread popularity in their families and communities.  Some even tried to date it – 70s, 50s…

The truth is, however, this concept doesn't belong exclusively to black people of the United States.  In fact, everywhere around the world similar formulas are spoken in different languages to bright and promising children who will have to spend their lives jumping over the barriers raised in front of them for no other reason than their minority status: Kurds in Turkey, Chinese in Indonesia, Hui in China, Indians in Uganda, Rohingyas in Burma, Jews and Gypsies wherever they are, etc., etc., etc.   

Furthermore, the applicability of this mandate goes way beyond race and ethnicity.  The same mantra is adapted as a way of life by every marginalized overachiever even in our blessed land we call "Free Country:" women going into "men's" professions; immigrants with strong accents attempting to climb corporate ladders; members of LGBT community trying to get a job outside of the fashion and the entertainment industries; overweight and deformed individuals applying for any position; young talented people without connections trying to break into especially nepotistic fields – the list is long. 

Growing up a Jewish girl in one of the most anti-Semitic of European countries, I was barred from many professional careers and life opportunities.  And in those that were permissible, someone like me had one chance in a thousand.  My personal slogan was even more maximal: I had to be the best just to get in.  Was I able to completely shake off the disenfranchised complex after nearly three decades in America?  Fat chance!  For starters, I'm a woman…