By Lloyd Graff
A popular sports talk show in Chicago has a feature that exposes hypocrisy. They call it “Who you crapping?”
This crap goes out to Warren Buffett. After listening to Lloyd Blankfein, head of Goldman Sachs, tap dance in front of a Congressional inquiry about his company’s conduct during the subprime mortgage catastrophe, and reading Michael Lewis’s book, The Big Short, detailing the stupidity and duplicity of the ratings agencies, including the once venerated Moody’s during the same period, I was shocked to hear Saint Warren defend both at the annual Brookshire Hathaway pig roast in Omaha last Saturday.
But I suggest the real reason he defended them is that Buffett owns a big stake in both firms. Brookshire lent $10 billion to Goldman at 10 percent interest during the depths of the Wall Street chaos. He also has warrants to buy the company’s stock at $122 per share. He also owns 20 percent of Moody’s. He thinks Blankfein is great and wishes he could clone him. He also thinks Moody’s is a wonderful business.
These two pillars of Wall Street had a huge hand in virtually sinking the entire American economy. The SEC finally had the gall to challenge Goldman on a small deal and you would think capitalism as we know it is under siege. Thanks Warren, Oracle of Omaha, who you crapping?
Warren Buffet courtesy of lundxy.com
By Lloyd Graff
Call it the frap flap but Starbucks is pulling the New Coke.
Evidently the Buck is feeling the pain from McDonald’s competitive and cheaper McCafé, in tampering with one of its most successful products, the beloved Frappuccino. My wife Risa was addicted to the mocha, light, double blended Grande Frappuccino with easy whip. Along with the shortbread cookie it was the break in her rigorous workday that usually goes to 8 p.m. (The shortbread replaced her former staple, the Rice Krispy Treat, after Starbucks ruined that by taking out the Trans Fats a few years back). The baristas at our local Starbucks all knew her order and started making it when they saw her approaching the store. If I came in they asked me if I was there for the Missus.
And now they’ve ruined it. According to Risa the new process using pumps is so inconsistent they’ve lost her recipe and cannot seem to recover it. From store to store the variance is enormous. I would compare this to McDonald’s using different hamburger grinds and ketchup at each store.
Fast food depends on consistency. White Castle makes the slider the same way everywhere, and Wendy’s chili is always reliable. A Frappuccino is not a Domino’s Pizza, which was so uniformly awful everywhere that it begged for a redo.
Risa is appalled. She’s furious. It is a topic of conversation daily. She feels like she’s been robbed of something dear to her without warning. She says she beat the New Coke debacle by buying cases of old Coke ahead of time. But there is no old Frappuccino to be had.
Starbucks you were stupid. Let’s see how long it takes before you realize it.
Question: If you were Starbucks CEO Howard Schultz what would you do to compete with McDonald’s?
From Blog Will Starbucks Die soon?
By Lloyd Graff
Brian Capece has a five person shop in rural Maryland. He does wire EDM and precision machining for aerospace, satellite, medical and commercial clients, often working 65 to 70 hours a week. His wife runs his office now that his two children are in school. He’s been doing this for 10 years, since buying his first die sinker at an auction.
It’s been a rough year for Brian. He says he used up his cushion of money to keep the business afloat while not letting any of his people go, because those core employees are the key to his business and if he lost them he would be in the soup.
He is finally back in the black but wonders if the path he has taken for the last decade was the right one.
“After going to the tax man this year and seeing how much I had to pay, I really think I would have been better off working for somebody else than having my own business,” he told me.
His comment was not said out of anger or great regret, but I wonder how many people feel the same way—for the same money and less risk, they’d just as soon pull down a paycheck than sign all the checks.
Question: Do you think you would be happier owning your own company or being a well compensated, valued employee?
Michael Scott from The Office
By Noah Graff
For the May issue of Today’s Machining World, I interviewed Carl Hoffman, author of the new book, the Lunatic Express. The book chronicles Hoffman’s travels throughout Asia, Africa, South America and the U.S., during which he attempted to use the modes of transportation commonly used by natives, notorious for discomfort, tardiness and poor safety.
One thing Hoffman described to me is how the concept of time in Third World countries differs from that in the First World. In countries like India, the Congo and Columbia, people generally have a different expectation of what it means for things to start “on time.” People never know whether a train or bus is coming in one hour or three. Waiting for things for long periods of time, and arriving to destinations late is just an accepted way of life.
It’s mind boggling to me how anything gets done at all in places with such a low priority on punctuality. How can businesses operate if it’s unknown if workers will show up?
One would think the people of these countries would be happier if things functioned the way they do in the U.S.? It’s always so frustrating to me, knowing that precious time has slipped away that could have been used for things I care about. After all, time is a limited commodity. Once you lose it, it’s gone forever.
Yet many people I know from these places where things move so sloooooowly say they often feel more relaxed and centered when they return home to Slowville. And more and more it seems like us First Worlders in our civilized, efficient habitat are stressed out and paying top dollar for shrinks to help us chill out. We pay money to go to yoga classes and lie on the couch watching reality shows to slow ourselves down.
Is total efficiency sometimes unhealthy?
Jeepney Stop in Manila, Philippines