St. Louis (Stank Louie)

I usually don’t get my news from MSN, or click on their latest Top 10 list, but I couldn’t resist clicking through to see their Top 10 Unhappiest Cities.  I had to know if St. Louis, MO, my hometown, made the list.  I already knew it would.  Second place!  Click here for that list:

Funny short from The Onion:

Crisis of Credit Visualized

“The Crisis of Credit Visualized” by Jonathan Jarvis

Chinese Business Scam

Guilin City

Not a bad place to visit?

I have an interesting international business tale. It will be interesting to some and hopefully valuable advice to others.

So I listed our company and products on alibaba.com – a b2b website meant to match suppliers with buyers. Initially, it was developed to specifically help American companies find Chinese suppliers. It has since grown to a global marketplace with buyers and vendors from all countries, an orgy of globalization. I received an email one day from a distributor in Guilin, China. As always, I replied to “Kylie” with product info and pricing. She requested samples a few days later. I Google-searched the company. No website, but a dozen or so hits on market-research sites so I sent the samples. Weeks went by. I sent an email to confirm they received them. Kylie replied saying she did and that they needed to administer a product test, which can take up to a month. More than a month went by and I asked her if everything was OK. She said they were still waiting on the test results. She told me she would have more information in 2 – 4 days. Some two weeks went by and I forgot about her. One day, out of the blue, she emailed me a purchase contract with an order for $250K. In the email, she asked for somebody from our company to come to China to meet face-to-face and sign the contract. I was thrilled but trying not to get my hopes up. My GM looked over the contract and said everything seemed OK. I started looking into Chinese visas while emailing Kylie about various issues – primarily Mandarin translations for the packaging. We didn’t want to discuss or change packaging after the contract was signed because it would be hard enough to fill the large order in the stated lead time. We wanted to know exactly what languages would be on the packages before we went to China. Kylie danced around the issue and said we can discuss it face-to-face. Somewhere in all this mess, I decided to Google-search the company again. Same results (not much). I don’t know why I did what I did next but I thank God I did. I Google-searched “Guilin China scam.” Dozens of results came up with titles like “Chinese Internet Scam – Buying Center & Trip to China” and “Guilin China Fraud.”

I clicked and read. The links were forums (many on alibaba) describing the following scenario. Apparently, the scam is to lure small and medium-sized businesses to China under false pretenses of signing a purchase contract for a large order. They pick up the mark at the airport and take him to the 4 – 5 star hotel they had reserved for him. They take him around town to breakfasts, lunches, and dinners while talking business. The decision-making manager has a young female to translate for him the whole time. He negotiates hard and the deal slowly develops. Meanwhile, the Chinese are earning percentages from the hotel and all the high-end restaurants they take the mark to. (I assume the mark pays the bills because he is trying to win the customer’s business, and I assume the restaurants give them different menus with higher pricing because they know in advance who is coming). At the end of the mark’s trip, the decision-maker signs the worthless contract (which states that the contract takes effect after the first T/T payment of 50% is made). The mark is happy. The decision-maker says it still needs to be approved by the finance manager. Would the mark like to buy the finance manager a gift to win his approval? Sometimes the mark refuses. Sometimes the mark is thrilled about the deal and agrees. The mark is taken to an art gallery full of pieces that cost $10K – $30K. After buying one, he is told he can give it to the finance manager the next morning (the mark’s last day). The next morning, he is told that an emergency came up and the finance manager had to fly to Beijing. But the mark can give it to him when the finance manager visits the mark’s factory next month. The mark never hears from anybody again. The art is worth a couple hundred dollars.

As with anything, there is a lot of fraud on alibaba. I wasn’t born yesterday and I read newspapers. If I see Nigeria or Togo, I delete the email before I’m done reading. So I’ve become accustomed to what the scams look and read like. But this one didn’t feel like one. I dealt with this woman for almost three months before she placed an order. She asked skeptical questions and made me work for the deal. They wait so patiently, and at all the right times. Plus, they never ask for red-flag concessions like paying for a distribution license or granting credit for the first order.

There are a lot of people who made the trip and described the scam in the forums. One particularly angry victim is gathering evidence in an attempt to bring them to justice. I thank God I didn’t go. If I had, it would have been time for me to leave this company in January. Fortunately, management is actually very happy I found it. My colleague in exports (who handles the Spanish-speaking market) admitted she wouldn’t have caught that.

On the bright side, I didn’t immediately halt communication with the Chinese. I thought of ways to get something out of them – revenge, if you will, for playing with me. I knew they wouldn’t ever pay any money for anything. This kind of business only receives. But I decided to press harder for Mandarin translations. I told them we applied for our visas but our GM decided he absolutely will NOT buy the plane tickets until we have Mandarin text for the packages. They finally sent translations to me this week. I had my Mandarin-reading roommate look them over and they are accurate! So I have Mandarin texts if I need to sell our products into Chinatown USA, or even China for that matter. The whole office is in on the revenge. The colleagues want to tell the Chinese that we bought our tickets and have them meet us at the airport, just to waste more of their time. Preferably at 1am on a Friday night or something like that. Immature? Probably, but you need certain team-building activities to boost company morale. Right?

Here are links to two of the better comment forums with lots of stories from victims, would-be victims, and even former employees of the fraudulent companies:

http://resources.alibaba.com/topic/331887/Guilin_China_Fraud.htm

http://resources.alibaba.com/topic/267452/Guilin_Union_Guangxi_Union_SCAM_.htm

Did you find this blog after dealing with a similar “business”?  If so, leave your story in the comments.

Bias in The Swedish Academy?

In October, The Swedish Academy awarded the 2008 Nobel Prize for Literature to French-Mauritian author Jean-Marie Gustave Le Clezio.  Le Clezio has authored over forty novels, essays, and children’s books.  His first novel, Le Proces-verbal (The Interrogation), and Desert  are among his most famous.  Le Proces-verbal is about a deranged young man living on the fringe of modern society who ends up in a mental hospital.  Desert follows the life of a young woman from a nomadic tribe in North Africa who immigrates to France.  The book describes urban Europe from the eyes of an unwanted immigrant.  The Swedish Academy describes Le Clezio as “an author of new departures, poetic adventure and sensual ecstasy.”

Le Clezio was born in France to a Mauritian doctor and a French mother.  He spent much of his youth in Africa.  After finishing college, he spent years in Central America, including four years with an Indian tribe in Panama.  His world travels is reflected in the diverse settings of his novels.  His themes have evolved drastically between periods of his life and even between consecutive books, so he is unable to classify.

Before the announcement of Le Clezio as the winner, The Swedish Academy was the subject of considerable controversy due to statements made by its permanent secretary of literature, Horace Engdahl.  Engdahl asserted that American literature was “too isolated, too insular.  They don’t translate enough and don’t really participate in the big dialogue of literature.”  Engdahl went further in saying that “Europe still is the center of the literary world.”  Critics contend that Engdahl’s comments clearly demonstrate a bias against American writers, who haven’t won the prize since 1993 (Toni Morrison).  The announcement of Le Clezio as the 2008 winner further exacerbated the controversy, as he was virtually unknown even among academics.  Many of his works had never been translated into English.  In researching the author, I found some rare English copies for sale online for upwards of $1,000 – presumably by opportunistic entrepeneurs hoping to cash in before the award-inspired translations and reprints hit the market.

While the fact that Le Clezio is almost inaccessible in the States may support Engdahl’s argument that American literature isn’t worldly enough, a closer examination of past winners can lend to the argument that there is a bias at the foundation.  Most are as unrecognizable to me as Le Clezio.  It makes sense that, in a a flat world where borders mean less and globalization reigns supreme, the most relevant writing will come from worldly authors like Le Clezio and other past winners.  At the same time, indicators of bias are glaring.  I am currently reading 2007 winner Doris Lessing’s The Grass is Singing about a murder in apartheid South Africa.  While it did come ten years prior, it is no To Kill a Mockingbird.  On the other hand, Lessing was a fervent activist for causes including communism and ending apartheid.  Click here to read an article in which Lessing says that 9/11 was “not that bad.”   She contended it was less severe than the IRA terror against the UK, which culminated in the 1984 bombing of parliament that killed five.  Lessing went on to say that Americans are “a very naive people.”

Being an American, I am inclined to conclude that there is a bias in the selection of the Nobel Prize for Literature.  As a bibliophile, I am unbiased in concluding that Lessing is no John Updike, Mario Vargas Llosa, or Salman Rushdie – none of whom have won the award and happen to represent four countries on as many continents.

Capitalism at Bay

The Economist ran an excellent article about the looming debate on the proper role of capitalism and deregulation.  Click here to read “Capitalism at Bay.”

Highlights:

“In the short term defending capitalism means, paradoxically, state intervention.”
 
“This time governments are buying banks (or shares in them) because they believe, rightly, that public capital is needed to keep credit flowing.”
 
“Even if it staves off disaster, the bail-out will cause huge problems. It creates moral hazard: such a visible safety net encourages risky behaviour. It may also politicise lending.”
 
“Capitalism’s defenders need to deal with two sorts of criticism … The weaker, populist argument is that Anglo-Saxon capitalism has failed … A second group of critics focuses on deregulation in finance, rather than the economy as a whole.  This case has much more merit. Finance needs regulation. It has always been prone to panics, crashes and bubbles (in Victorian times this newspaper was moaning about railway stocks, not house prices). Because the rest of the economy cannot work without it, governments have always been heavily involved.”
 
“Yet the failures of modern finance cannot be blamed on deregulation alone. After all, the American mortgage market is one of the most regulated parts of finance anywhere: dominated by two government sponsored agencies, Fannie Mae and Freddie Mac, and guided by congressional schemes to increase home-ownership.”
 
“There was something of a perfect storm in which policy mistakes combined with Wall Street’s excesses.”
 
“Indeed, history suggests that a prejudice against more rules is a good idea. Too often they have unintended consequences, helping to create the next disaster. And capitalism, eventually, corrects itself. After a crisis investors (and for that matter regulators) seldom make exactly the same mistake twice. There are, for instance, already plans for clearing houses for CDSs.”
 
“Capitalism is at bay, but those who believe in it must fight for it. For all its flaws, it is the best economic system man has invented yet. “

CDS stands for credit-default swap.  This video explains them in layman’s terms:

Venezuela President Hugo Chavez

We play this video around the office a lot.  I like to imitate Chavez’ accent while saying “Mr. Danger”.  It’s hard to believe the guy goes on for three and a half minutes!  To provide context, this April 2006 ’speech’ follows a February statement from the US State Department asserting that Hugo Chavez was the greatest “danger” facing democracy in Latin America.

Banksy in New Orleans

patriot loitering

military looting

gray ghost

rat

band in gas masks

abe the bum

taps

strong winds

World-famous stencil graffiti artist, Banksy, has been in New Orleans to highlight the state of that city’s clean up operation three years after Hurricane Katrina.

Report Says 9/11 Not Inside Job

7 World Trade Center, the 47 story office building adjacent to the Twin Towers which was not hit by a plane and fell in suspicious fashion, has been the focal point of conspiracy theories eluding to the September 11, 2001 attacks being an inside job (a dastardly plan by government powers to launch a “war on terror” - in an aim to keep power, line pockets, and otherwise be dastardly and evil).  After three years of research and investigation, the National Institute of Standards and Technology (NIST) has just released a 915 page report explaining that fire, debris, and other factors caused the falling of 7 World Trade Center.  Will the Loose Change freaks relax?  Probably not.

Fire, Not Explosives, Felled Third Tower on 9/11, Report Says (NY Times)

The Internet and Your Brain

The Atlantic Cover

Nicholas Carr is a management guru on the forefront of business ideas concerning technology.  His most famous piece, “Does IT Matter?” featured in Harvard Business Review, asserted at the height of companies investing in Information Systems technology that IT would move toward commoditization and could not provide competitive advantage. 

Carr recently inked “Is Google Making Us Stoopid?”  Published in The Atlantic, Carr asks if the nature of the Internet – short posts, aggregated info, fast results, immediate gratification - can actually change the way humans think.  He worries that his ten years online have rendered him intellectually lazy and incapable of delving into long, complex writing and ideas.

 

I have recently felt pressure to shorten blog posts because people don’t have the patience to read through all the content.  You can see in my marketing blog how I tried to put a few quick thoughts in short posts, especially concerning Steve Ballmer’s failed Microsoft bid for Yahoo!.  However, because I was trying to limit the quantity, I only covered a small facet of the story and that facet has been rendered irrelevant by the developments of the last month.  I always felt that, if I am going to write at all, I should really dig in and examine all sides of a story, as I think I did concerning MySpace vs. Facebook.  I am old school and, although I am blogging now, I don’t think I have been corrupted yet.  In grad school, I got my news from the daily New York Times – the hard copy.  I read most of the articles in the World and Business sections.  I read books also.  But since starting my new job, most of what I read is online.  I may develop the habits Carr mentions.  And I feel the pressure to keep this post short.  I may be joining the trend after all.  Goodbye now…

www.theatlantic.com/doc/200807/google

Anheuser-Busch InBev

It was reported that InBev and Anheuser-Busch have come to an agreement to sell AB for $70 / share. About a year ago, I was in Rio de Janeiro drinking in a bar with two friends – Gabe and Marcela. Gabe and I were staying with Marcela, who works for AmBev (the Brazil unit of InBev). She works on Pepsi, but we ran into a bunch of her coworkers who were sales reps for their beer brands, most notably Brahma. Latinos in general are really interested in gringos and were engaging me in conversation. But when they found out I worked for Anheuser-Busch for two years, they went crazy. They told me that AB was in Rio that weekend for talks about InBev buying them. I cried foul. It couldn’t be true.  I had no idea what the truth was, but it just couldn’t be. When I worked for AB, it was the biggest brewery in the world with the most iconic brand. There was no way AB would sell to InBev. I went so far as to proclaim that if AB sold to InBev, I would leave the States. I would move out of America for my career, which had not occurred to me at the time but I said it in all seriousness of someone who had been drinking in Brazil for a week. I looked it up on the Internet that night and learned that, in June 2007, they were in merger talks as opposed to buyout talks. Well, low and behold, things have changed and InBev out-maneuvered AB to put themselves in a position to buy the company outright. But my favorite part of this story is that I made good on my promise months before buyout rumors even started. How’s that for foresight?

Click here to read my blog post I wrote when InBev made the unsolicited offer

Click here for a timeline of the events in InBev’s acquisition of Anheuser-Busch