YOUR MONEY

When will the’ D’ word be used?

Britain is about to start it’s 3^rd recession in the last 5 years, according to the British Office of National Statistics reprinted in an article in the G&M, January 26, 2013, B8, entitled “Britain braces for triple –dip”.  If not for the flood of cash that went into last summer’s London Olympics, it is quite likely Britain would have had FIVE consecutive quarters of ‘negative growth’.

Japan has been on a roller coaster of frequent recessions since the housing bubble burst in the early 1990s and the phrase ‘lost decade’ is now three decades long!  Despite massive government cash priming the economy -- through infrastructure programs, earthquake and tsunami rebuilding, giving Japanese company money at close to 0% interest for over a decade – Japan still has ongoing deflation!

Brazil is, according to last week reports, into STAGFLATION, with inflation running above 6% and growth just above ZERO.

And as for Europe and the EU, as pointed out in an earlier blog, the entire EU has been in ongoing negative growth since 2008 except for Germany!

The United States is also in deep economic trouble with massive government debt (at all 3 levels: federal ,  state and municipal levels) and minimal growth!

So when is someone going to use the ‘D’ word?   You know, DEPRESSION!!!

Will we need to wait for historians to give us this ‘insight’ or hindsight some 10 years in the future, in some history or economics textbook?

 

__________________________

Stagflation – relatively high inflation compared to domestic economic growth – as currently in Brazil – will be the real challenge in the near future.

 

 

 

YOUR MONEY

Oops!!!  M1 or M4?

Sorry.  My  regular outcries on upcoming,  massive inflation -- as a result of Ben Bernanke’s money printing machine for the last 4 years—has not come true. 

The lack of U.S. inflation has perplexed me and most analysts as it is not consistent with standard economic theory.  Flooding the marketplace with cash (and near zero interest rates) to the tune of $3 TRILLION should trigger massive consumer spending -- after all, the money is almost ‘free’ – and result in supply shortages and increased prices.  That’s basic supply and demand theory.

But for 4 years there has been barely any inflation, let alone rampant inflation, in the U.S. (or piggyback Canada).  Inflation has stayed below 2%!

Why?

Because, as an article in the Globe and Mail, February 22, 2013 “Awash with money, where’s the inflation?” points out, we have all been focussing on the Bernanke’s ‘Inputs” or M1, but not the M4 ‘public circulation’ numbers.

What has actually happened is most of that cheap money has been ‘absorbed’ by the financial institutions who are still gun shy for lending out cash.  Instead, they have used the M1 as a windfall to shore up their own reverses and meet new, more stringent government regulation requirements while simultaneously (and from their perspective, more importantly) protecting their stock prices.

In short, the public is not getting much ‘cheap money’ but the banking sector is ‘healthier’ as a result. Quantitative Easing has been a windfall for financial institutions (M1) and a bust for the general public (M4).

And I and most analysts have messed up in our forecasts, because we only used the M1 crystal ball and ignored the M4 ball.

GAIA

GAIA and YOUR MONEY

How nature will reshape Globalization by 2020

By 2020 the world will become a different place as Globalization is replaced by ‘localization’ as the economic manta.

End of Globalization

The Global economy and market for high end (and highly profitable) manufactured goods  from the US and Europe (mainly Germany)  will radically shift as ‘developing ‘countries such as China and India continue to become technological and manufacturing leaders.  China and India are reaching the top of the ‘valued added’ scale as China’s successful Lenovo computers (which used to be IBM owned), China’s space program and Tata of India’s takeover of British Jaguar and Land Rover highlight.

Once the Asian markets are no longer export ‘growth areas’ and become ‘competitors’ at all levels of manufacturing and technology , European and North American companies will have to look to their own populations more and more as their almost exclusive customers: for profits and survival. 

Only raw material suppliers – of wood, minerals and surplus oil and gas -- will be needed by China, India, and the rest of the Far East.  So Canada will continue to do well.   

 

End of high oil and gas prices

And as the US becomes self-sufficient in oil and natural gas thanks to fracking technology, and becomes a net exporter of energy by 2020 (according to published projections), the world’s energy balance will shift beyond recognition. 

Middle Eastern oil -- without high demand from the US and other areas exploring fracking  - will drop in price and the Brent crude standard will fall to levels not seen since the first Arab oil embargo of the  1970s (in inflation adjusted dollars). Oil and gas energy will make ‘wind’ and ‘solar’ and ‘battery power’ so uneconomical in comparison that diehard eco-fanatics will lose sway. (Europe, which has massive fracking potential, will foolishly delay this GAIA gift under environmentalist, wind and solar power eco-mania for an extra decade.)

In Canada, fracking has begun in British Columbia, and throughout the East Coast provinces. Ontario’s’ gas potential is known and awaiting government approval, and the energy reserves hidden in Quebec’s Gaspe area will some day restore prosperous once again, when eco-mania  loses its sway in Quebec City.

As for Alberta’s tar sands, their heydays are numbered.  Soon it will lose its closest and primary market —the US – and need to look to East Asian customers and oil tanker ships -- which increase transportation costs while reducing daily volume.   (That is why I see the Keystone XL pipeline expansion project as a pointless waste of money as it will be ‘obsolete’ within 5 years  --  unless, of course, we plan to import cheaper US oil into Alberta!!!)   

Jobs

Another plus to locally based energy will be the restoration of ‘local’ jobs – through energy sector engineering, construction and skilled labour; as well as in the stores and goods and housing needed to support these booming industries. 

 

SUMMATION

 Western countries will have no option but to refocus to their ‘inner’ consumers and markets, and eventually revitalize ‘local’ employment’ as the East rises to full industrial and technological equality and leadership.

The gifts of Gaia – in the form of oil and gas fracking – will save the West from its ongoing Recessions/Depression and allow a new era of low cost energy self-sufficiency  -- as shale oil and gas are found almost everywhere on the planet.   

 So say goodbye to outsourcing and hello to ‘insourcing’.

And thank you Gaia!

TECHNOLOGY

Car design, the human face and MKZ

I am not a trained car designer but I do know that there is a relationship between modern car design and the human body – usually the female body.

The overall shape and lines emulate the idealized, smooth female body and its curves.  Men don’t call their cars “she/her” by accident. And a car’s front and rear are related to the human face.    Headlights are our eyes, the grill our nose or more often mouth, the front bumper our jaw and the rear tailings our ears – the only part of the head visible from the back.

Headlights

Round headlights mimic unadorned eyes while the new trend to stretched and curved headlight assemblies, and new LED variations, suggest a woman’s eye makeup and drama.   Think Lady Gaga or any Goth. 

When recessed headlights are used, the ‘masked” concept is mimicked – creating a sense of mystery as in Batman or ninjas.

 Front Grill

This is today – with wide grills - the mouth, lips and smile/teeth equivalent. It sets the tone of the car’s ‘face’ and can range from close lipped – thin grill, to mouth wide open – Mazda’s new super wide gapping grill, to Ford’s fixation on heavy chrome bars: reminiscent of teenage braces – a poor visual association.

Bumper

Today’s wrap around front bumper is the jaw line.  While more crashworthy, today’s oversized bumpers and their extension up to the headlights at the corners, create a jaw line similar to the  Family Guy’s Joe Swanson, newspaper Dick Tracy or Tasmanian Devil.

Tail Lights

They are the ears, as mentioned before, unless extended from corner to corner like a hair band.

In either case, their position up the “head’ and overall proportions are important to ‘look normal’.  Dumbo size taillights or mimi-size lights ‘deformities’ will not do.  Extra colours and some additions -- as with human earrings  -- are acceptable.

Lincoln MKZ

So, based on the above principles, how well does the new Lincoln MKZ do?

The front integrated grill and headlight resembles someone smirking. And I cannot get Jack Nicholson’s Joke grimace out of my mind whenever I see the MKZ front.

The rear, taillight 'hair ribbon' is also sending out an undesirable message. It is so thin as to be out of proportion to the rest of the back (and too small for adequate turn signal lighting) and makes the rear end ‘metal’ look obese, proportionally speaking.

So, face wise, it is an error prone design. 

Is Lincoln alone in this error filled design?   NO.

But for a brand famous for its past car beauties, this is sad.

For a brand trying to revive itself, these ‘features’, I think, will hurt sales more than help.

 

PS

Great Lincoln car designs -- distinctive, well proportioned and the envy of the world:

·         1960 Lincoln Continental Mark V Landau Sedan

·         1961 Lincoln Continental Convertible

·         1978 Lincoln Continental

·         1989 Lincoln Town Car

·         2003-07 Lincoln Town Car

 **** The Nissan Juke probably wins hands down as the ugliest car in decades with the Pontiac Aztek a close second -- both dismal sales failures.

 MEDIA

Lincoln shoots itself in the foot and head

Ford’s Lincoln division, one North America’s great luxury brands in years past, is trying to re-image itself and attract new customers – those under 65. There is new styling, trendy letter car names such as the MKZ (see my earlier blog on this stupid trend) and full page ads with colour.

The new campaign, which takes up 2 full pages in the Globe and Mail, February 13, 2013 Life & Arts section, is a disaster and unlikely to accomplish anything but get the ad agency fired!

Redhead Ad

One full page ad starts with dramatic flair and colour that catches the reader’s eye.   It shows a variety of people with gorgeously bright red hair. Then, in the middle of the page is the MKZ front view.  It is a dull dark grey and looks like an old black and white picture.    Then the text below, in relatively small print for the size of the ad, becomes even more laughable.

The message – with the obscure 2 headlines about statistics --argues that the new Lincoln Motor Company is “focus[ed] on the individual”.  It then adds at the end – without a matching picture image, the new “fully retractable glass roof”.

If the goal of this ad is to attract younger buyers with money, who believe in highlighting their distinctiveness through flashy red hair – probably all dye jobs – and eye catching hair does, why have the CAR in dull grey or black and white?

The car too should have been in bold redhead colour to stress its out-of-the-crowd ‘individuality’ – even if the real cars do not come in such a colour.

They could have an entire campaign going through the colour spectrum with platinum blonde, gold, purple, neon green, orange, etc., hairdos and matching car colour.  

And, finally, as to the text portion, it is old fashioned and Dull, Dull, Dull!!!   Boring and in thin, pale grey type!!!

Why not matching redhead type?   Why no funky font?

Why no memorable tag line or slogan?

 Maybe the emphasis on the company’s new name --  in the bottom right corner (which is a key visual spot) -- says it all.

“Introducing THE LINCOLN MOTOR COMPANY”

How pathetic!!!   Firstly, the company and name is decades old and not new. 

More importantly, no one in his or her right mind would stretch out this key endpoint with the words “motor company” as the ad is not for chocolates or cat litter.

Long, wordy phrases that mean nothing is bad advertising.  Short and snappy is in.  So it should simply have said:    “LINCOLN” in larger font.

Better yet, have a slogan such as:

·  “the wave of the future”	§  “the future is now"
·  “where technology and art become one”	§  “take a stand”  (the ‘individual’ theme)
·  “making others envious”	·       " Be a leader"

 

·         “Bold and beautiful”

 

Full Page Ad #2

The adjoining page, with large and a bold redhead headline, is also very much a waste.

 Firstly, the ad pretends to be a newspaper review article using standard newspaper tiny print – a devious and transparent fraud that any educated reader would pick up even if they did not see the G&M warning at the top: “SPECIAL INFORMATION FEATURE”.

Secondly, in today’s world of text messaging and twitter, LONNNNNNGGGGGG texts are Stone Age relics to be avoided.  Short and snappy is the mantra.

So this full page ad shoots itself in the foot from the start.  Just looking at the         5 columns of print would make most people just move on.  (Grade F-)

As for the text’s content, the first 1/3 chronicle’s the company’s history going back to 1921 and is unlikely to influence any younger reader.  Again, in today’s younger mindset, old history only becomes of interest re: vintage wines.    The long history lesson is counter productive!  (Grade: F)

The next section --  on the new designer -- is helpful as he is young at 40 and non-American, and he says frothy lines that say nothing but are in vogue among today’s affluent.  (Grade: B)

The final 1/3 is pure brochure material.  Too tiny in print but with nice pictures.  Too bad it did not take up the entire page -- so the font could be large and readable!!   (Grade: C)

 

Oh, and NO SLOGAN!    (Grade:  F-)

                                                            - - - - - - - - - -

In conclusion, Ford’s Lincoln division is trying to re-image itself and sell more than just a few cars to those over age 65.  These two, full page ads, however, are more memorable for their flaws and dullness, though one might be tempted to try a new hairdo or buy Clairol’s bright red hair dye!

TECHNOLOGY

A Rose by any other name … but not R241s

Shakespeare’s comment that a rose would smell as sweet if called by another name is true, but no one would be interested to go near a flower called Armpit or R241s.    The former has associations of bad odours and sweat, and as for R241s, it has no meaning or associations and would only confuse people.

Too bad the world of luxury cars has gone the R241s route – obscure model ‘names’ that only car geeks would ‘understand’ and remember.

This year, Cadillac and Lincoln have joined the club from Germany, Japan, Sweden and even Jaguar of Britain. Gone are names that resonated with classic associations: Deville, Eldorado, Continental, Town Car.

Try this test. 

Below are a host of current luxury car names – including the new Cadillacs and Lincolns.  Do you know which ‘name’ goes with which manufacturer and car model?

ATS, XRS, CTS, GLK 350, G35, GX, E300, ES300, E-CK63,  Ml350, XF, NSX, NSF, 328i, 10W40, XC60, S60, RLX, MKZ, MKX. 

The letter-number disease has also hit the revived Chrysler with its luxury model C300, the 200 replacing the Sebring nameplate and the addition of the Fiat 500.   Thank goodness their new subcompact has revived that clever Dart name and the Charger, Avenger and Viper names persist -- to thrill car buyers and lovers of language and associations.

Once upon a time, Ford was the master of naming cars, with mythic images of wild and free roaming horses: Mustang, Bronco, Pinto and Pony.    Taurus just replaced the pathetic 500 for Ford’s current full size model, and Fusion and Fiesta round out the car division.  No coherent pattern, but names with real- world meaning and positive associations.

Of course, the danger of making a poor word choice has long been known in the car and other manufacturing industries.  A name must be memorable but have no negative associations in various languages as models are sold around the world.  So when Chevrolet came up with the name Nova  for its first compact car years ago, it sounded great – nova means new in Italia and Latin – but in Spanish it can be sounded out “no va” which  means “won’t start".

Also, copyright issues may arise if the name is used by even a chip manufacturer or department store.

To avoid such problems, oil giant Imperial Esso became Exxon, a name using a double x which is never found in any language.

So, using random seeming letters and number codes precludes language issues, but at the cost of rich associations, average person comprehension and memorability.

Thank goodness Chevrolet has revived that fantastic name, Stingray, for its newest Corvette.

 

PS: Re: word test,  I am not giving away the answers.  If you don’t know, do a Google search.   By the way, two of the ‘names’ are not car names but you should recognize them.