Labor v. Employer

Posted on November 20, 2013 by sinyaw

Boeing’s Machinist Union just voted against the company proposed contract. Since the current contract expires in 2016, there will be no strike or other negotiation. Boeing has until 2016 to figure out what to do next, primarily on the location of where to manufacture its new 777X airplanes.

Last time, in 2009, Boeing asked for a 10-year no-strike contract. The union did not agree. The company then moved its 787 line to South Carolina. Since the vote, the company has already solicited several cities — Salt Lake City, Long Beach, Calif., and Huntsville, Ala. — as potential sites to make the new airplanes.

The issue at hand is the pension plan. Boeing proposed to replace the current pension plan with 401k. With the current plan, the workers get a guaranteed income after the retirement. With 401k, they contribute to their own pension plans while they are working and get whatever the savings yield after. The vast majority of Americans have been on this “you save for your own retirement” deal for decades. GM, the other company with the old-style pension program, bankrupted on its burden.

The state of Washington gave Boeing an $8.7 billion incentive, in the form of tax breaks, to stay. Utah, California, Alabama, Texas, and South Carolina will probably all consider similar incentives. The facility to build large airplanes will be lots of investment and jobs.

Long gone are the days of proletariat and bourgeoisie on the opposite sides of the economy. Now, only the tight partnership between the knowledge workers and capital can compete against global rivals. If the labor/employer relationship is adversarial, soon there will be no place to work.

Posted in Peek into my mind, Seattle | 2 Comments

Retire in place

Posted on November 17, 2013 by sinyaw

There came a day when you had a thought, “I am doing OK. Everything is going just fine.” Bills were paid, debts were manageable, kids were fed, hobbies were attended to, health was not an issue. Things just needed to go exactly the same way until the day you retire. Subconsciously, you changed your goal from “getting ahead” to “not getting fired.”

That was day you were fired.

Imagine the coach of a professional sport team, can he or she afford any one of the players giving anything less than 100%? In fact, each player faces younger, stronger, hungrier ones who will do anything to be on the starter list. The coach will replace any player that was not optimal for the goal: winning the game.

This is the same for all profession: only those who give 100% all the time get to be on the roster. You are a professional, just like a sport player. Your boss and your company will do anything to win, just like that team. Unlike that sport team, your company faces competition globally. Therefore, there are young and hungry people halfway across the world to compete with you. They will stop at nothing to make you obsolete. You should worry if your 100% is not good enough to stay in the game. Anything less is perilous to your job.

Almost everyday, I observe people coming to work with the intention of getting another day’s pay with minimal effort. And they look so hurt and surprised when they got fired.

If you don’t give 100% to your jobs, someone will force you to retire. Don’t try it.

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The Curse of Malthus

Posted on November 10, 2013 by sinyaw

I must be a fan of Dan Brown, having read many of his novels: Da Vinci Code, Angels and Demons, Lost Symbol, and now Inferno. Digital Fortress is still my favorite, but that’s probably because I am in the security business.

I love novels with the background of extensive researches. Reading them is like going through a journey with the best guide. I don’t, however, like novels with a strong social agenda, that the author is manipulative in weaving an agenda through the story. Inferno is actually both, but Dan Brown did an excellent job hiding the agenda. It is a good read, but probably more as a library book or a loan. Basically, I don’t think it deserves a space on my shelf, but definitely a place in my memory.

Mild spoiler alert

Is Malthusian prediction a prophecy, instead of a theory? Would this earth collapse under the burden of human population? Would we run out of foods or natural resources to the point of inevitable extinction? If so, when? What are we going to do about this? Is there anything that can possibly be done?

With that setting, a mad scientist, Bertrand Zobrist, created a “cure” to the population problem. Robert Langdon, the protagonist, teamed with Sienna Brooks, ran around Italy, Venice, and Istanbul to stop the madness. We learned about Italian arts, Venetian history, and Turkish magnificence along the pursuit. This time, there were much less obscure symbolism or hidden historical gestures, just enough to be fun. Dan Brown’s craft is impeccable. The main setting of Dante’s Divine Comedy was brilliant. I felt like reading it after this novel.

The key plot concept is, however, illogical. The antagonist, Bertrand Zobrist, has no reason to create the set of clues so that Robert Langdon can even try to stop it. The “dance” was not necessary and illogical. Of course, the simple explanation is that Zobrist was a mad man. But, he was also supposed to be a brilliant scientist.

I don’t quite believe in the Malthusian prediction. But if it is true, then I must tip to Dan Brown, the solution was near perfect.

Posted in Books & Reviews, Peek into my mind | Tagged , , | 1 Comment

于記杏仁豆腐

Posted on November 4, 2013 by sinyaw

台北信義區,新光三越A11地下館B2. 聽說有其他分店. 他的杏仁豆腐雪花冰.一絕!

聽說他將杏仁豆腐凍成冰,再刨成雪花.碗底為其他配料. 這冰入口軟軟涼涼的,沒有一般刨冰的尖刺. 雪白帶點甜,可愛又可口. 看官們如到附近,不彷試試.
yutofu

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The Right Not to Buy.

Posted on November 1, 2013 by sinyaw

Ding Tai Fung (鼎泰豐) is a world-famous restaurant chain with a humble beginning not too far from where I lived in Taipei. Over the past several decades, they have opened dozens of branches all over the world. Chinese, and foreigners alike, flock to these restaurant for their steamed buns, fried rice, spicy sour soup, etc. If you show up at their original restaurant on XinYi Road (信義路) at Taipei, the queue is over 90 minutes, at 2:30pm, for lunch.

Recently, their Taipei restaurants decided to charge people 50NTD extra (slightly less than $2) if they wish the fried rice to have extra soy sauce. The news and public up-roared. This is outrageous mark-up, said the news, and unreasonable profitability. DingTaiFung’s pricing makes their foods and services not accessible to the public.

Seriously!?!?

There are restaurants that charge 500NTD for a bowl of noodle, while the street vendors sell the same dish for less than 100. I see T-shirts from $5 each to more than $200, with essentially the same material.

As long as it is not a monopoly, a business has the right to price as much as they wish. The only right the consumers have is not to buy. There is no fairness in pricing for a market that is fully competitive and the goods fully substitutable. As far as I am concerned, those who feel the fried rice too expensive, with or without extra soy sauce, can simply walk to the restaurant next door and have a bowl of noodles for far less.

I will have DingTaiFung’s fried rice any day and won’t pay for the extra soy sauce. They will be glad to serve me the dish, without the extra sauce. At the end of the meal, I will thank them for the delicious food and excellent service and they will thank me for my business.

Free will, free market, all is good. Hmm, I am hungry now.

Postscript: DingTaiFeng later decided not to offer the option for extra soy sauce. So the controversy ended. Even with extra NT$50, fried rice with extra soy sauce is no longer.

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Food Scare in Taiwan

Posted on October 27, 2013 by sinyaw

The news industry in Taiwan is beyond sensationalism. For an island of 20 millions or so population, there are nearly a dozen news TV channels and half a dozen newspapers. The competition for eyeballs has been a blood sport. As the result, the waves of sensational news stories wash the island constantly.

It turned out a cooking oil manufacturer, having about 10% of the market, has been grossly misleading the consumers on exactly what’s the contents of the oil. The one labelled “peanut oil” has no peanut what-so-ever. It was cottonseed oil with peanut flavor additive and food coloring. The investigation soon revealed that their “extra virgin” Olive oil is the same scam. As I left the island, the CEO of the company was facing criminal indictment for gross fraudulence.

Few months prior, a large bakery chain was brought down for using synthesized addictive, instead “all natural” ingredients as they advertised. The spokesperson, a celebrity, bowed to the public. The government fined them with false advertisement. The controlling company now faced insider stock-trading charges. Clearly they profited handsomely selling their own stock at the opportune time.

And earlier this year, a major starch manufacturer was indicted for bleaching their products with questionable chemical to make the starch more appealing. Then a food container manufacturer was found cleaning their boxes with the wrong chemical that can be toxic.

I love to eat in Taiwan: so many childhood goodies and so many gourmet restaurants. I am not alone. Delicious and exotic tropical fruits and dogged competition on innovation and flavoring made the food industry a primary attraction for tourists.

Sigh… Should I take this seriously? Maybe ignorance is the bliss? How about turning off the TV, at least the news channels?

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They Actually Don’t Make Sense.

Posted on October 22, 2013 by sinyaw

“13 Things That Don’t Make Sense” is an engaging book for scientific minded.

The world around us is a familiar one. Things work the way they have always. There are patterns that we have long learned and assumed to be the rules. Our intellect and observational skills prohibit us to examine them closely.

But, upon examinations, we learned some really do not make sense. Michael Brooks’s book highlighted 13 of those.

Honestly, why do we age and die? Biologically, animal should die right after the reproductive age, or not at all. If we have passed on the genes, we have served the purpose. Are we, genetically, programmed to die? If not, why?

The book talked about three theories. First, we have collected garbage genes over the generations, mostly be being affected by virus or bacteria, and dying is the toll of those impurities. Secondly, the energy source we chose — oxygen — is also intoxicating us. The ashes from the burn are accumulating in our bodies and they are killing us. Lastly, our cells’ replicating mechanism is flawed. They degrade a little bit each time they divide. Eventually, we lost all fidelity.

The other anomaly that intrigued me was the existence of gender. Half of the population cannot reproduce and that is a big reduction on efficiency. There appears to be two reasons. Gender promotes division of labors. With that, the species actually become stronger as a whole, although not necessarily individually. Secondly, genders necessitates sex as the way to reproduce and it evolves the species faster. This prevent a single natural disaster would have wiped out the entire species.

Other chapters talked about mysteries in the physic or astronomical worlds. I think those topics were too deep for non-scientifically inclined. This book is for adult geeks. Guess I am one.

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Ungovernability

Posted on October 16, 2013 by sinyaw

A while back, I wrote about California is structurally ungovernable. Simply put, spending increases requires super-majority and benefits need only simple majority. As years, or decades, go back, the government is permanently stuck with all those benefit mandates but not able to increase taxes to pay for them. Everything came of of “general budget” and that means nobody will be served.

The USA, yes, the country, is becoming ungovernable for another reason. This is more complex. The bottom line is simple: this democratic system has evolved to become minority rules, instead of majority.

When two parties of roughly equal size oppose to each other. An all-out battle will lead to mutual destruction. It is a stalemate situation that both sides are stuck. In this situation, a smaller third player becomes the deciding factor and wields disproportional power over the bigger players. China proved that in its SanGuo period (180~280AD) when three forces vied for the control of the middle kingdom. China witnessed the best display of diplomatic strategies and tactics then.

The controlling minority, by definition, does not care about the majority — that’s us, the people. If they do, they become part of the majority.

There are two possible outcomes: normally, the controlling minority gets absorbed into one of the majority parties and things get back to normal. (For historical China, the larger party proceeded to conquer the remaining players and unified China.) As I observe the dwindling of the Tea Party radicals, things appear to be heading that direction.

The other possibility is the opposite, that the system get broken down further. It takes a coalition of more than 2 parties to form majority. That became politically chaotic. System spirals downward until a strong leader emerges to unify everyone. Before that, nothing gets done. Several European countries are in this state right now.

We had an office pool betting on the length of this shutdown. I put my money after the posting date of this article. If you read this and the shutdown is not yet over, then I have won.

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Alone in the Wilderness

Posted on October 8, 2013 by sinyaw

Dick Proenneke lived in the wilderness near Twin Lakes, Alaska, for 35 years, until 1999, and retired from it at the age of 82. Mind boggling is an understatement.

Kid gave me this documentary movie several weeks ago and I watched it during one of my business trip. There wasn’t anything good on the air plane and I wanted a break from the book that I was reading. So, why not give it a shot.

This guy built a log cabin with only hand tools and lived there for 35 years by himself. The film documented the first year. In the year prior, he prepared and planned for everything. He lived primarily as a hunter/gather and some simple farming. The first year was spent mostly to build his log cabin and laid out the foundation for the subsequent years.

Most of the time, in addition to admiration for his skills, I was asking why. Is the need to be independent of everything so strong? Or it is about being alone? If he merely wished to prove himself, he could have return to civilization in a couple of years. But 35 years! In the film, he seemed like a content and happy person. Even with the only human contact to be 3 to 4 air deliveries of supplies.

I wondered if this documentary inspired other to pursue the same.

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A Formula on Investment

Posted on October 3, 2013 by sinyaw

A friend is retiring (at age 62), he put most of his money in CDs and wonder if there are better ways. He is active and in good health and plans to live to mid-80s or even 90s. They have sufficient income for day-to-day expenses for the next 3 to 5 years. After several rounds of drinks and lots of back and forth, we came up with a formula:

First, sock away money for minimally 6-month’s living expenses, assuming no income. Next make sure medical insurance is taken care of (they should receive medicare or Obamacare soon).

Divide the remain into two pots: one for risk-free investment in US Treasury bonds. Buy equal amount of 5-, 10-, and 15-year bonds and hold them until maturity. After 5 years, re-invest the proceeds for 15-year bonds. This is the “guaranteed income” part of the investment.

I recommend 30% for the safety pot, but everyone’s risk appetite is different. For people younger than 40, the first pot should be near zero. My friend decided for 20%. That means he will put 80% in stocks.

For the stock pot, first take 10% off the table. Those are “working capital” reserved for short-term maneuvering.

For the remaining (90% of the stock pile), divide it into two parts: one for the US market and the other for international. I recommended 60/40 and he went for 80/20. For the international, simply pick a good low-fee mutual fund.

The rest (80% of the 90% of the stock pile), divide it into roughly 20 parts and buy stocks of 20 companies of different industries. (I actually recommended 30 companies, but that was over-whelming for my friend.) Use one yard-stick, “win after at least one year.” It is relatively easy to predict if a stock will grow in a year or longer. It is essentially impossible to predict stock’s short-term behavior. This is the difficult and fun step. There is no need to invest all the money in one day. Take time to research and choose. Set a “loss target” (I recommend 75% of the purchase price and he agreed). If the stock fell below this number, accept your lost and dump it. Otherwise, no selling in less than a year.

If this pile is not big enough to divide, buy one, and only one, index fund (for the US stock market).

Inevitably, that 30 parts become different in sizes and hopefully the whole pile grows. Adjust to divide the big part into two companies, either still in the same industry or venture into a new one. After a year, re-evaluate the industry and switch companies if necessary. Yes, this means keeping track of about 20 industries.

Yes, this is a full-time job.

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