Bangkok Market Train

That's an integrated economy. The closest I know of in the U.S. is New York City. And perhaps Chicago.

How is it that this is the way that it is? In Bangkok, London, Paris, Tokyo, NYC, the Bay Area, and so on? How does one achieve this level of integration?

h/t How The World Works/Salon.

There's more...

It's About Oil Prices, Stupid

$80 Oil

Oil up 31% this year

Reuters

Oil hit an all-time high over $80 a barrel on Thursday after Hurricane Humberto forced the closure of some U.S. Gulf refiners, stoking concerns of fuel supply shortfalls.

U.S. crude traded up 9 cents to $80.00 a barrel by 2:15 p.m. EDT, after hitting a record $80.20 earlier. London Brent crude gave up 23 cents to $77.45 a barrel.

U.S. gasoline futures soared in early activity after Hurricane Humberto shut oil shipping channels and three refineries as it slammed onshore in Texas, before being downgraded to a tropical storm.

"We have a storm working its way to American facilities. We have an economic crisis, so many things are affecting ... prices," said Hasan Qabazard, director of OPEC's research division.

Though quadruple the levels of 2002, the price of oil when adjusted for inflation is below the $90-a-barrel peaks of the Iranian Revolution in 1979 and the start of the Iran-Iraq War the following year.

Strong fundamentals and the recent price surge has lured more investors into oil markets, their enthusiasm growing thanks to a market structure that encourages favorable returns.

"Modest demand growth combined with no significant supply increases has caused oil inventories to decline sharply, creating backwardation in the oil forward curve, which is a very bullish signal," said Jeffrey Currie of Goldman Sachs.

In a backwardated market, oil for delivery in the near term is more expensive than for later shipment. Investors make money by selling the more costly prompt oil futures contract and buying cheaper crude contracts for later delivery.

The market shifted into backwardation in part because some analysts and consumers believe OPEC will not pump enough oil to satisfy demand for fuel this winter. [jwe: emphasis added]

To try to soothe consumers, OPEC agreed a small supply increase on Tuesday. But analysts said OPEC's deal to raise output by 500,000 barrels per day (bpd) from November 1 was not enough to reverse a rally that has lifted prices by 31 percent this year.

And we're not even talking about the problem of national banks moving their investments from dollars to euros, and Iran trying to accept oil payment in euros instead of dollars. Which is a large part of why the United States is really planning an attack -- to maintain U.S. control of the world's reserve currency instead of allowing the Proposed Iranian Oil Bourse to succeed. More on this in another post another day.

In the meantime, the weakness of the dollar continues to cause oil producers to not want to cut either production or prices. Consequently when we see prices rise to new records due to shortfalls in the market, it becomes clear prices really are this high naturally. No one is holding back to jack up prices. Everyone is already at or near capacity because they're already being hurt by the low dollar.

Oil.
Another edition of Short Answers to Foolish Questions:

1. What kind of company gave the most to GWB's election?
2. What industry did Bush & Cheney spend their life in?
3. What is the principle product of Iraq?
4. Of Iran? Saudi Arabia? Hell, the whole middle east?
5. During war, which prices always go up, up, up?
6. In which industry does Cheney have his "blind trust" invested?
7. Which industry has had the biggest (record) profits since Iraq?
8. What prices would hit $150-300 a barrel if we invade Iran?
9. Saudi Arabia has the world's largest supply of ____?
10. Poor people die fighting each other over ____,
making rich people much richer who control all the ____.

Bonus: The Bush Administration denies its war is about?

There's more...

No Rebates for You, Sucker

Rebate Requests Found in Dumpster

Ever sent in a rebate request?

Know that sick feeling you get wondering if you'll ever see your money? Yeah, me too.

Turns out you're not just imagining things.

San Jose Mercury News

I am staring at more than 1,300 rebate requests sent to Vastech on Bonaventura Drive in San Jose. The envelopes were tossed - unopened - into a garbage dumpster near Vastech. I have two boxes of envelopes that were thrown out without being processed. In all of my years of reporting, I have never encountered such outrageous behavior against consumers.

An employee of nearby Dominion Enterprises found the letters, along with hundreds of others addressed to Vastech, at his company's dumpster. He turned them over to his boss, Joel Schwartz, who gave them to me. All of the letters were addressed to UR-04 Rebate or some variation of the product name at the Vastech address.

Vastech is a small computer accessories company owned by Weizhen Tan, who goes by William. I didn't get a response when I sent e-mails as directed by Vastech's Web site. And the company's voice mail was always full. But he was there at the small office at 63 Bonaventura Drive in San Jose when I came calling, letters in hand.

When I asked why rebate letters were tossed out, he initially said it was due to a "bad employee." Later, he said that it was probably done by a friend of the family who was not a formal employee but was supposed to be helping out. That person, he said, probably threw the letters out because of "laziness." He said the person no longer does any work for the company.

Tan acknowledged receiving a lot of complaints, some filtered through Fry's Electronics, which he said was the only chain that offered the Vastech products with rebates. He promised to respond quickly to complaints lodged at the company's voice mail at (408) 786-7699, or its e-mail address at support@vastechinc.com.

"If we do rebates in the future, we will put in place a better system for tracking them," he said, promising that his company would be caught up on rebate processing this month. "It's unfortunate this happened. We will take responsibility for them and handle it better."

"They don't make it easy for you," said Vastech customer Richard Louie. "It's a lot of work. When it's a small amount of money, I don't keep track of it. For the bigger ones, I do keep track and sometimes I have to call them to complain."

Manuel Valerio, a spokesman for Fry's in San Jose, confirmed that Fry's had received complaints about Vastech's rebates and that Fry's had assisted some customers in getting paid. He said the store didn't know rebate letters had been dumped, adding that Fry's would likely not sell products from companies that engaged in such practices.

But Fry's has no plans to ban rebates.

"We certainly know there are many people who are no fans of rebates, and we are not the greatest fans of rebates as well, but the reality is they are out there," he said. "So long as manufacturers and other retailers offer them, Fry's will continue to do so because we don't want to be at a disadvantage vis-a-vis other competitors in the retail industry."

I avoid rebates.

Retail shopping is tricky enough for me anyway. I didn't grow up shopping. My mom and sister (and best friends' mom and sisters -- *waves to Ann*) did the shopping. I did the eating and the wearing. Till I became a single dad, shopping was an excruciating experience. I didn't even control a checkbook other than for my businesses.

Which explains how so many of my early start-ups and small businesses failed or had trouble. I lacked an innate grasp of ordinary shopping, money and business sense.

Rebates are an attempt to confuse an ordinary transaction. Just as Science Daily reports that smaller digits to the right side of a price, make the transaction seem smaller:

Science Daily

The researchers show that "right-digit effect" influences consumer perception of sale prices. When the right digits are small, people perceive the discount to be larger than when the right digits are large. In other words, an item on sale for $211 from the original price of $222 is thought to be a better deal than an item on sale for $188 from an original price of $199, even though both discounts are $11.

Hat tip: Boing Boing

When I started shopping, precisely because I'd never really been exposed to stores (and not a lot of television), initially I was very susceptible to marketing. Ended up with a lot of crappy carbohydrates in large boxes from big stores instead of the good food I'd eaten most of my life, t-shirts instead of stuff which made made me look handsome, and every geeky product I'd ever wanted to buy.

I learned. Along the way I learned to compare apples to apples.

Rebates are a way of tricking you from getting full value in a transaction.

A rebate is a promise to provide value in the future in the form of a check, that is, a pomise of future satisfaction. Like any promise it could be broken (as we discover in San Jose and have always suspected), therefore rebates -- actually all offers which mature in the future -- have less value now. So their face value is not worth the full face value now (the discount rate against face value.)

Because at a minimum --

a) rebates must be discounted against face value (even tiny rebates);

b) the cost of your time, the stamp and envelop must be factored in -- on a $3.50 rebate a $0.41 stamp plus envelop comes to a significant percentage of the total rebate; and

c) you might not get your rebate at all. At least on significant rebates you'll need to make a photocopy, keep a follow-up system, and all this takes your time. How much is your time worth?

-- rebates accomplish their intent...they make genuine price comparison near impossible, while sucking customers into stores and into purchases. Don't be a sucker.

If all goes well, you'll get your rebates.

If not...

There's more...

Another Bridge Damaged

A dump truck bomb damaged a bridge on the main road north of Ramadi, Iraq. WAPO has more here.

A dump truck laden with explosives detonated on a bridge over the Euphrates River on Sunday, the latest in a series of attacks targeting Iraq's bridge network.

The 3 p.m. suicide bombing damaged a large section of the bridge, which is along the main road north of Ramadi in the western province of Anbar. Two civilians were injured and evacuated to a hospital, according to U.S. military officials.

Thats 3 bridges just recently, al-Sarafiya bridge in Baghdad, and the Sarha bridge just north of Baghdad in early June.

There's more...