Confessions of a North American Exporter

Mexicana airlines files for bankruptcy protection

2010-08-03T15:47:00.000-07:00

Debt-ridden Mexicana de Aviacion, Mexico's largest air carrier, has filed for bankruptcy protection after failing to reach a new labor agreement with pilots and flight attendants.

¡Ay, caramba!

South Africa

2010-08-02T10:16:00.000-07:00

Matthew Saltmarsh from the New York Times writes:

A clutch of companies [in South Africa] are working in sectors like clean energy, aviation, engineering, defense and mining, hoping to benefit from positive growth forecasts for the region.

Obama initiative to double exports faces challenges

2010-08-02T06:25:00.000-07:00

One of which is the rising value of the dollar. Sewall Chan at the New York Times lays out many of the other issues.

China

2010-08-01T12:05:00.001-07:00

Joe MacDonald at the Associated Press writes:

China is set to overtake Japan as the world's second-largest economy in a resurgence that is changing everything from the global balance of military and financial power to how cars are designed.

In Mexico, foreign companies insulated from violence

2010-07-30T05:16:00.000-07:00

From msnbc.com:

While the drug trade has created a culture of enterprising criminals in Mexico who eagerly look for chances to exploit legitimate business, foreign stakeholders say they have been spared so far because criminals cannot find an access point.
Other executives suggested that taking on a foreign company in Mexico — which would likely elicit a stronger response from the Mexican government — is just too daunting for a criminal gang interested in quick cash.

Not exactly a ringing endorsement of doing business in Mexico. But in my opinion, now may an especially good time to connect with Mexico because other companies may be too afraid or put off. Also in Mexican news: a top leader of the Sinaloa cartel was killed yesterday in a raid near Guadalajara.

Super-slow steaming

2010-07-26T06:09:00.000-07:00

New York Times: "Some of the world’s biggest shipping companies, driven by the desire to save fuel and cut emissions, have adapted their vessels’ engines to run at 'super slow' speeds for many routes, according to a story in the Guardian."

Exporting Waste

2010-07-23T07:04:00.000-07:00

Last year I briefly referenced the growing global business of exporting waste. Today, the New York Times reported on a trading company in Amsterdam who got nailed for exporting waste from Amsderdam to Ivory Coast.
http://albamedia.net/

The company employed in Abidjan charged US$35 (euro27.24) per ton of waste, while in Amsterdam it would have cost euro750 ($963.75) per ton, the court said.

I doubt the trend is going to stop any time soon.

Aviation

2010-07-19T16:45:00.000-07:00

Two article from the New York Times:

2 Shanghai Ventures Seek Aviation Niches

From Nothing to a Global Hub for Aviation

Chess

2010-07-18T09:52:00.000-07:00

My grandfather taught me how to play chess. And there was a "Great Uncle Joe" in my family who was apparently ranked in the professional chess world. I am not a great player myself, but i do like the game. I mention this because the the New York Times Chess Blog has an interesting entry about the relationship between chess and business.

Strange Dream

2010-07-13T08:43:00.000-07:00

A post over at Jungle Trader Blog reminded me of a recent dream I had. I am not especially into dreams, either remembering them or analyzing them. But this one stood out. The setting of the dream was the valley where I grew up in western Wisconsin - quite a lovely part of the world really. I spent most of my time outdoors as a kid. It was great.

In particular, there is was a little creek in the valley that was the setting for a lot of childhood adventures. In the dream, this creek had expanded into a small river and I was very excited because I'd employed what turned out to be a very successful method for catching fish in this stream. The method being that of tossing in some kind of net and hauling out a motherload of perch, sunfish and bass. I vaguely recall in the dream that I brought some of the fish home for cooking. It was awesome.

Then things suddenly went in a nightmarish direction. On my second attempt to haul in another motherload of fish, the most unexpected thing happened: A crocodile launched its snout out of the water and got a hold of my arm. This was so startling that I actually woke up, which is why I remember it. A crocodile? Hiding in a little creek in western Wisconsin? I am still baffled as to how my subconscious pieced such a menacing dreamscape together.

U.S. relations with Costa Rica sweetens

2010-06-16T07:08:00.000-07:00

As reported by Reuters:

SAN JOSE Costa Rica, June 14 (Reuters) - Costa Rica applauded a move by the United States on Monday to ease tariffs on sugar imports from the Central American country, lifting the last barrier to a regional free-trade deal.

Hat tip: Latin Americanist Blog

Afghanistan

2010-06-14T04:11:00.000-07:00

The game is about to change big time in Afghanistan. The New York Times is reporting that Afghanistan has been discovered to have huge potential for mining of various minerals, including lithium. Afghanistan could become to minerals what Suadi Arabia is to oil.

Wisconsin Company "Nearshoring" in Mexico

2010-05-30T09:41:00.000-07:00

The Wisconsin operations of Polaris Industries is shutting down its operations in Osceola, Wisconsin, and moving them to the Monterrey area of Mexico. This is what is becoming known as "Nearshoring." Polaris Industries manufactures railcars, ships and other transportation equipment.

I grew up in Western Wisconsin just a little ways south of Osceola. I also happened to have lived for six months in Monterrey, Mexico a few years ago. So I know both areas fairly well. Among the justifications for the move cited by Polaris is the advantage of lower labor costs and being closer to customers in Latin America.

Nevertheless, it goes without saying that this is not a happy development for Osceola. But as I alluded to in a previous post, this is a trend that can be expected to grow as Mexico becomes more established as a competitive place for outsourcing manufacturing. Wisconsin will have to find new ways to be competitive in the international marketplace.

Source: Polaris Industries Shifts Work to Mexico in Realignment Effort

Yoga for the people

2010-04-25T13:34:00.000-07:00

In a previous post I mentioned my experience trying out Bikram or "hot" yoga. There is a new, anti-establishment trend in yoga starting to gain traction. I'll be curious to see if it hits the DC area.

Relationships: The holy grail of cross-border businesses

2010-04-22T19:45:00.000-07:00

Words of wisdom from Duncan J. McCampbell, president of McCampbell Global, a Minneapolis small-business export consultancy. McCampbell is quoted in a great article about how businesses can increase their international sales.

Hat tip: Global Small Business Blog

It pays to be an artist in Mexico

2010-04-17T11:43:00.000-07:00

Because you can pay your taxes with your artwork! No, really. Just in from USA Today:

MEXICO CITY — Can't afford to pay your income taxes? Paint a picture instead.
That's the deal Mexico has offered to artists since 1957, quietly amassing a modern art collection that would make most museum curators swoon. As the 2009 tax deadline approaches, tax collectors are getting ready to receive a whole new crop of masterworks.

"It's really an amazing concept," says José San Cristóbal Larrea, director of the program. "We're helping out artists while building a cultural inheritance for the country."

I love Mexico. Needless to say, I am very saddened by all the continued violence taking place there because of the narco wars.

Photo credit: Chris Hawley, USA TODAY

Who Are America's Exporters?

2010-04-17T08:52:00.000-07:00

Emilia Istrate has an interesting article up in the New Republic exploring the nature of U.S. exporters. Who's getting the most action, the big boys or the little guys? Apparently, the resounding answer is: the big boys. While large-sized businesses make up only 3 percent of all U.S. exporters, the big boy companies nevertheless generate almost 70 percent of U.S. export value.

Istrate goes on to draw an important conclusion:

[The] size distribution of U.S. exporters puts into question the effectiveness of the National Export Initiative. Most of the U.S. exports are generated by large companies, so any surge in exports over the next five years would most likely not come from targeted SMBs, but from these large exporters. It is still unclear how the National Export Initiative addresses their needs and the needs of their subsidiaries across the United States.

Indeed, a lot remains to be seen as to how and in what way things are going to play out in Obama's push to promote exports. Will it benefit the "little guy"? The jury is out.

Hat tip: The Global Small Business Blog

Religion and Sub-Saharan Africa

2010-04-15T17:47:00.000-07:00

I am currently involved in two African countries, Nigeria and Cote d'Ivoire. I was surprised to discover that both countries are amost evenly divided between Muslems in the North and Christians in the south. And I was reading the New York Times today that Senegal is being urged to rein in religious schools which are basically exploiting the kids.

The Pew Forum on Religion & Public Life has recently conducted an interesting survey on the dynamics of religion in sub-saharan Africa.

Hit tip: Jungle Trader

Microloans

2010-04-14T11:30:00.001-07:00

From today's New York Times:

In recent years, the idea of giving small loans to poor people became the darling of the development world, hailed as the long elusive formula to propel even the most destitute into better lives.

Apparently, microloans have turn into macroprofits.

Speaking of exports or lack thereof

2010-04-14T06:30:00.000-07:00

The U.S. trade deficit widened in February:

Imports rose a larger 1.7 percent to $182.9 billion as imports of consumer goods rose to the highest level since October 2008. Increases were recorded in shipments of computers, televisions and other electronic appliances, toys and games and clothing. Imports of all petroleum products rose 1.6 percent to $27.6 billion on a seasonally adjusted basis even though the number of barrels of crude oil imported fell in February to the lowest level in 11 years.

Not entirely a bad sign in the short term because it suggests our domestic economy may be reviving. But still, it's not the overall trend we're looking for.

Export or die

2010-04-13T05:33:00.000-07:00

Claudia Cusumano from the April edition of the Economist writes:

More American companies will have to look abroad. They are the least likely to export out of 15 big economies, according to the National Association of Manufacturers, a trade group. Matthew Slaughter of Dartmouth College notes that only 4% of all American firms and 15% of American manufacturers do any exporting at all. And 80% of America’s total trade is conducted by just 1% of firms that export or import. This does not mean there is something wrong with American firms.

There you have it folks.

Hat tip: The Global Small Business Blog

Google and Ex-Im Bank team up

2010-04-05T14:29:00.000-07:00

Just arrived in my email:

GOOGLE TO JOIN EX-IM BANK
TO HELP SMALL BUSINESSES HARNESS INTERNET TO SELL GLOBALLY
WASHINGTON, DC - The Export-Import Bank of the United States (Ex-Im Bank) announces that it will work together with Google to help American small and mid-sized businesses harness the power of the Internet to initiate or expand sales outside of the United States. Google's tools empower businesses to reach new customers all over the world. By using the Internet effectively, even small businesses can create a global presence.
Ex-Im Bank Chairman and President Fred P. Hochberg said, "I am excited that Google has agreed to work with us to help other U.S. companies reach new international markets. Working together with Google helps us achieve President Obama's goal of doubling U.S. exports within the next five years and at the same time putting more Americans to work producing them," Hochberg said.
Google will participate with Ex-Im Bank and other federal agencies in the Bank's "Exports Live!" workshop series around the country.

Since August 2009, Exports Live! has delivered valuable information to small and mid-sized businesses on how to identify new markets and customers for U.S. products and services, and obtain government assistance and financing to turn sales leads into actual sales.

Read the whole thing here...

Cherry Blossoms

2010-04-04T18:49:00.001-07:00

They're about in full bloom.

How to Sell Anything

2010-04-03T09:16:00.000-07:00

The April 2010 edition of Inc Magazine is out. I encourage you to find a copy. This month's issue has a great series of articles about sales and salemanship. In my business, I feel that my salesmanship is getting better and better, and I am finding out how much I enjoy the challenge of it.

And of course closing deals is great positive reinforcement. But as Inc points out, the best salesmen and women are "Happy Losers" which is to say that rejection should be embraced as an important not-to-be avoided part of the sales process. My mentor had a bit of advice for me early on that has always helped during down moments: "Keep a positive attitude despite negative results."

My business model - like a realestate agent

2010-03-31T04:00:00.000-07:00

Sometimes I find myself explaining to people what my "business model" is. Of course I am not going to reveal all my secrets. But what one does as in international trader is not especially mysterious. And I've concluded that the simplest way to explain it is by comparing what I do to that of a realestate agent. The approaches are very similar.

Imagine what a realestate agent does. He or she gets a business card that identifies the person as being a realestate agent with such-and-such company. Then he or she engages in various marketing and networking strategies to find clients. As you know, a realestate agent can work on behalf of the buyer or the seller. That's pretty much the same as somebody involved in "import-export". I tend, on balanced, to focus on the buyer's side of the equation.

So what happens? I market to people that I sell "houses." I meet customers who want to buy a "house." I ask, "What kind of house do you want to buy?" And I ascertain, "How much money do you got to spend?" Now, if all goes well, I find a "house" that the customer likes in their price-range and I close the sale.

The important differences between me and a realestate agent are the following. First of all, I have to ship the "house" usually to a U.S. port (my customers are overseas). Secondly, I typically buy the "house" outright before I resell it to the customer. Which is to say, if the "house" costs $500,000 then I typically have to shell out $500,000 in order to do the deal, although there are some exceptions I won't get into now.

Finally, regarding payment, a realestate agent will typically get some commission on the proceeds of the sale, and the bank has already pre-approved some loan based on the creditworthiness of the buyer. I on the other hand have to invoice my customer directly and worry about whether or not my customer is creditworthy and what sort of payment mechanism is appropriate (open account, letter of credit etc).

This last difference is a biggie, as bad things happen when a customer does not pay. But otherwise, I think what I do and what a realestate agent does are pretty comparable.

China: Exports rising and imports too

2010-03-10T05:10:00.000-08:00

From today's New York Times:

BEIJING —China announced Wednesday that its exports climbed 46 percent in February from a year earlier. Economists said the data signaled a rebound in consumer demand from the United States and other Western markets after the financial crisis last year.

It was the third consecutive month of increases in Chinese exports and the fastest growth in three years. Orders from the United States, the European Union and Japan accounted for almost half the growth, following a pickup in demand from emerging markets in the previous two months.

Chinese imports also rose 45 percent over the previous year, led by crude oil as factories stepped up production.

The million Yuan question: will China raise the value of the Yuan relative to the US dollar? Remains to be seen...

Promote democracy by exporting the internet

2010-03-08T06:57:00.000-08:00

From the New York Times:

WASHINGTON — Seeking to exploit the Internet’s potential for prying open closed societies, the Obama administration will permit technology companies to export online services like instant messaging, chat and photo sharing to Iran, Cuba and Sudan, a senior administration official said Sunday.

Ex-Im Bank Annual Conference

2010-03-03T15:18:00.000-08:00

It's coming up on March 10-12. The location is the Omni Shoreham Hotel here in Washington. Let me know if you're coming and we can meet for coffee or a beer.

Click here for more info and to register.

Hint 1: if you're looking for great rates on hotels check out hotels located in Crystal City. It's a short subway ride to the conference and hotels compete hard out there on prices.

Hint 2: If you go to the conference, be sure to go to those sessions pitched toward educating bankers about how to use Ex-Im bank products. Many of those in attendance will be banking officers from various countries and they can 1) introduce you to prospective customers they do business with and 2) work with you to offer their customers advantageous lines of credit (to buy what you sell!).

Hint 3: Going out partying after a day's events with people you meet may very well be the most important way to establish connections with prospective people and customers. Know of some places to go so you can be ready to take the lead and show people a good time. I have a limo service that I will call, in pinch, if I'm with people who want to out partying. That's a classy little touch people remember. And not as expensive as you might think.

Unemployment down in Japan

2010-03-02T07:05:00.000-08:00

From the New York Times:

TOKYO — Japan’s jobless rate fell below 5 percent in January for the first time in nearly a year and job availability rose, in a sign steady improvements in exports and output are spreading to other sectors of the economy.

If only it was the same in the United States.

Toyoda vs. Toyota

2010-02-24T18:01:00.000-08:00

The Toyota Motor Company is experiencing a world of hurt right now. The point of this post is not to pile on. But rather to note that the name of the family whose cars bear its name is not "ToyoTA" but "ToyoDA." I find that interesting.

The current president of Toyota, Akio ToyoDA, gave testimony in front of Congress today. He is the grandson of the founding Toyoda. Apparently, the company changed its name from Toyoda to Toyota in 1936. There are various theories out there as to why this happened. The official reason is simply that Toyota "sounded better." I'm willing to believe that.

In fact, I changed my name pretty much for this very reason. It wasn't a one letter change, though. I adopted my middle name as my last name. I'd always liked my middle name much better than my given last name, which had been distorted from the original Slovakian spelling over a number of generations. And my middle named happened to also reference one kick-ass-take-names-later one-time ruler of the Western World. How could that go wrong?

My Dad wasn't too happy about the affair, but then again he couldn't stand his last name either. And my grandfather had altered his name when he moved to a small town in South Dakota to be the local doctor. Plus an uncle of mine changed his last name when he up and left Pennsylvania and moved to Florida. So it wasn't like there wasn't a tradition of name-changing on my father's side of the family tree.

Now my company's name was essentially derived from my new last name. It just felt right and I went with it. Perhaps a bit like the Toyoda/Toyota dynasty, eh? But hopefully not in the grandson-someday-testifies-in-front-of-congress-reputation-in-trash sort of way.

Outlook improving for John Deere

2010-02-17T10:25:00.000-08:00

In a previous post, I noted that things were not going so well for mega ag-equipment maker John Deere. Now, things seem to be looking up:

Deere predicts that sales will increase 4 percent to 6 percent in its main agriculture and turf division. Sales in Deere's smaller construction and forestry unit are expected to increase by about 21 percent as dealers restock inventory and the global economy begins to recover.

U.S. Dollar surging?

2010-02-15T16:27:00.001-08:00

It just may be. Again, from MSNBC:

The dollar has surged to an 8-month high against the euro, and is also rising against other major currencies. If it keeps strengthening, that could damage the already fragile U.S. economic recovery.

Nightmare scenario for U.S exporters. Pretty awesome if you're planning a trip abroad or importing stuff.

China to revalue yuan?

2010-02-15T16:16:00.000-08:00

From MSNBC:

NEW YORK - China could be about to allow its currency to strengthen by as much as 5 percent to slow down the country's fast-growing economy, Goldman Sachs' chief economist was quoted as saying on Sunday.

This could be a U.S. exporter's dream. Stay tuned for more on this.

Obama export plan unveiled

2010-02-11T20:27:00.000-08:00

In a previous post, I highlighted the ambitious goals President Obama mentioned in his state of the union address to double U.S. exports in five years.

More details about how this is to be achieved are now starting to come out. What is the plan? It consists of the following three aims:

increasing funding to $6 billion a year from $4 billion for small businesses through the U.S. Export-Import Bank; boosting the number of foreign commercial service officials in fast-growing nations such as India, China and Brazil; and combating unfair barriers to U.S.-made products.

Will the plan involve hammering the Chinese to raise the value of their artificially low currency? Apparently not - so much for the third aim.

Hat Tip: Global Small Business Blog

Mexican economy on surprise rebound?

2010-02-10T21:36:00.000-08:00

It may be a real possibility.

McDonalds

2010-02-09T09:30:00.000-08:00

Sales are up globally, but down in the United States. From MSNBC:

Sales in stores open at least 13 months fell 0.7 percent in the U.S. and rose 4.3 percent in Europe, Asia/Pacific, Middle East and Africa.

Another indication that the "action" is outside the United States.

Glue

2010-02-02T21:22:00.000-08:00

From Der Spiegel:

Scientists in Germany have discovered a way of making adhesives used in construction more heat-resistant. More buildings held together with glue may be the result.

Heat-resistant adhesives are permitting new forms of construction. Scientists at the Fraunhofer Institute for Wood Research in Braunschweig, northern Germany, have developed a way to harden adhesives that will permit construction work to continue on the Metropol Parasol in Seville, Spain, a planned group of mushroom-shaped buildings by Berlin architect J Mayer H to be be erected as an attraction in the city's Plaza de la Encarnacion square.

It's not just for sniffing any more.

Tourism in China

2010-02-01T16:45:00.000-08:00

It's doing well. From today's New York Times:

Nationally, tourism revenue [in China] has been climbing for more than a decade, and more people than ever are traveling.

The National Tourism Administration said domestic tourists had made 1.9 billion trips in 2009, an increase of 11 percent over the previous year, and generated 1 trillion renminbi of revenue, up 15 percent from the previous year.

But Ms. Cockerell of the World Travel and Tourism Council said the sector still had room to grow.

“For China, two billion trips is small,” she said. “When they start traveling like Americans, the numbers will be phenomenal.”

Are you a travel agent or involved in some aspect of the travel industry? This might be something to look into.

Obama set goal to double U.S. exports in five years

2010-01-30T00:00:00.000-08:00

The other night President Obama gave his second State of the Union address. In his speech, while adressing his plans to boost economic growth, he outlined some bold initiatives regarding U.S. exports:

Third, we need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America. So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we're launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.

We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. And that's why we'll continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea and Panama and Colombia.

You can read the full text of the Obama's 2010 state of the union address here.

Japanese exports

2010-01-27T23:00:00.000-08:00

are on the rise. Another sign that the global economy might be recovering faster than previously expected.

Herradura

2010-01-27T00:38:00.000-08:00

Herradura is the word for "horseshoe" in Spanish, and also the brand name of my favorite tequila in mexico. Tequila Herradura is one of the top-selling super-premium tequilas in Mexico, which is why I was a bit surprised to discover that the brand is actually owned by Brown-Foreman, a major U.S. wine and spirits company that also owns the Jack Daniels brand of Tennessee Whiskey, among many others.

Apparently, Brown-Forman bought out Pablo Romo de la Peña and Jose Guillermo Romo de la Peña, owners of Grupo Industrial Herradura, S.A. de C.V. (Casa Herradura), in 2006. Their 136-year-old company and related assets went for a cool $876 million dollars. Brown-Forman also owns the "El Jimador" brand of tequila as well.
Each of the different versions -- Blanco, Reposado, Añejo -- are quite delicious. I think my favorite would be the Reposado, translating as "reposed," or only briefly aged in a cask. And this tequila is meant to be sipped, not slammed.

Hit some waves

2010-01-26T22:55:00.000-08:00

In Liberia

Mexico City

2010-01-22T08:27:00.000-08:00

Mexico City is one of the most underrated and undiscovered cities in the world, in my opinion. (Yes, there is crime in Mexico City. But there is crime in Washington,D.C., too; you just do not go to those parts of the city.)

My favorite part of town is La Condesa. One of my favorite restaurants: La Bodega. Brook Barnes of the New York Times has a few more tips on what to do and where to go in Mexico City.

Glass

2010-01-19T05:49:00.000-08:00

Things aren't looking so good for the glass making industry in the United States. From today's New York Times:

The decline of glassmaking in America started gradually in the 1990s and accelerated during the Great Recession. What’s more, the big companies, like Corning and Guardian Industries, say that even as the economy improves, they are unlikely to bring domestic employment and production back to prerecession levels. Imports, for one thing, inhibit sales. And bigger profits lie abroad, so they are channeling investment and expansion to their overseas factories.

Eastern Europe

2010-01-11T09:54:00.000-08:00

From today's New York Times:

Jean-Claude Trichet, president of the European Central Bank, said the group saw a “progressive normalization” of global economy. Emerging economies, he said, had “demonstrated resilience” during the recession and are “very, very clearly in a more dynamic mode now...Many of the economies in Eastern Europe are still weak. But economists stressed that some, like Poland and the Czech Republic, managed better than others. ”

Aura of Credibility

2010-01-10T13:59:00.000-08:00

Der Spiegal has a great story out about how three Swedish men, during a night of heavy drinking, hatched a plan to establish a line of jeans made in North Korea. Yes, made in the dictatorship of North Korea. How did they carry out this improbable idea? Well, in part, they created an “Aura of Credibility”:

In November 2007, the three Swedes made their first telephone call to the North Korean Embassy in Stockholm. Ohlsson said: "I'm calling from Stockholm." The embassy spokesperson replied: "That's nearby. We also live in Stockholm." Ohlsson: "We have started this company…" Embassy spokesperson: "It'll be Christmas soon." Otherwise, the North Koreans promised the Swedes whatever support they could provide. The three Swedes brought along Ohlsson's father, a suit-wearing dentist, to their first meeting to add an aura of credibility.

So much about international business involves creating an "Aura of Credibility." If a potential customer does not think you are credible, there is no chance in hell that they are going to do business with you. How do you create an "aura of credibility"? Sometimes, you have to be creative.

Hit Tip: Jungle Trader

Want to make yourself some money?

2010-01-06T11:21:00.000-08:00

Go fishing and catch a big fat tuna. A 513-pound bluefin tuna fetches $177,000 at auction in Japan.

Northrop Grumman: My new neighbor

2010-01-05T14:23:00.000-08:00

Indeed, confirmed rumor has it that mega-defense contractor Northrop Grumman is moving to my 'hood. They are reportedly still looking for their office location. My office is a block from the White House, a stone's throw from the Pentagon. I'd be happy to show them around a bit.

Laos, Bolivia, and Turkmenistan

2010-01-04T15:34:00.000-08:00

Received today by email from the Ex-Im Bank News Desk:

EX-IM BANK OPENS FINANCING PROGRAMS
FOR LAOS, BOLIVIA, AND TURKMENISTAN
WASHINGTON, D.C. - The Export-Import Bank of the United States (Ex-Im Bank) announced today that it is open to provide short- and medium-term financing for purchases of U.S. exports by public-sector buyers in Laos as well as public and private sector buyers in Bolivia. In addition, Ex-Im Bank extended its available financing to include long-term public sector transactions in Turkmenistan, where the Bank had been open for short- and medium-term public sector financing. Short-term financing is available for up to two years, medium-term for up to seven years, and long-term for as much as 18 years.
The change in status for Laos follows the determination by President Barack Obama in June 2009 that Laos and Cambodia are no longer considered Marxist-Leninist countries as defined under section 2(b)(2B)(i) of the Export-Import Bank Act of 1945, as amended (Ex-Im Bank charter). Prior to the presidential determination, Ex-Im Bank had been prohibited from providing financing in either country because of this designation. Ex-Im Bank announced in October that it is open to provide short- and medium-term financing for purchases of U.S. exports by private-sector buyers in Cambodia.

Click here to see the full news release. As my trading career progresses, I will be very curious to discover how much Ex-Im financing is actually used in the "real world."

Japan

2010-01-02T00:44:00.000-08:00

I have always considered Japan to be pretty savvy when it comes to exporting and international trade. There is a least one area, however, where they could use some help: fashion.

From the New York Times:

"'For much of this decade, fashion trends have started in Japan and gone global. But Japanese brands don’t even realize that,” said Loic Bizel, a French-born fashion consultant based in Tokyo. Japan 'generates trends and ideas, but it stops there,' he said. 'Many brands are not even interested in going overseas.'"

Definitely seems like an opportunity for some fashion-minded entrepreneur.

Something of epic proportions

2009-12-30T11:10:00.000-08:00

From the New York Times:

As many Americans wait for an economic recovery, money is pouring into the fast-growing economies of Asia and Latin America, as well as into oil-rich Russia and the former Soviet bloc.

“What we’re living through now is something of epic proportions,” said Allan Conway, the head of emerging markets equities at Schroders, the big money management company in London. He likened the economic rise of nations like Brazil, Russia, India and China — the so-called BRIC countries — to that of postwar Japan.

Of course this is another reason why I chose to focus on exporting versus in importing in my enterprise. The action is in the developing countries. They need stuff, all kinds of it. That's why they're called "developing."

Cars in China: Demand outpaces supply

2009-12-29T09:12:00.000-08:00

From www.msnbc.msn.com:

Sales are exploding," says Zhu, a 32-year-old manager at a General Motors Co. joint venture dealership in Chengdu, pointing to charts on his laptop that vividly plot the steep incline.

Car buyers in Chengdu, a grimy city in southwestern China's Sichuan province best known for its giant pandas and spicy food, face waits of up to several weeks for some popular models, he says.

"We simply don't have the cars people want. Sales could be climbing even faster."

It is interesting that the demand is especially strong in the rural markets.

New China-Asean free trade zone

2009-12-28T09:29:00.000-08:00

Most people in the United States are familiar with the North American Free Trade Agreement (NAFTA) which establishes free trade between Canada, the United States and Mexico.

NAFTA currently is the largest free trade zone in the world measured by trade volume. However, China along with 10 other southeastern asian nations are estbalishing their own NAFTA. From today's New York Times:

The zone will rank behind only the European Economic Area and the North American Free Trade Area in trade volume. It will encompass 1.9 billion people. The free trade area is expected to help Asean countries increase exports, particularly those with commodities that resource-hungry China desperately wants.

Will the United States be able to tap into to this growing East Asian market? Perhaps the more important question: Can the United States afford not to tap into these markets?

Somewhat related post: The Fate of the U.S. Dollar

Good cheap eats in Hong Kong

2009-12-22T10:31:00.001-08:00

As mentioned in the New York Times, here are a few options that have received the coveted Micheln-star:

Hung’s Delicacies (Shop 4, G/F, Ngan Fai Building, 84-94 Wharf Road, North Point; 852-2570-1108) won particular praise for its chiu chow dishes, from the Chaoshan region of China. The surveyors praised traditional staples: “the roast meats and bean curd with special sauce, and the crispy squid squares are worthy of note.”

Loaf On (49 See Cheung Street, Sai Kung; 852-2792-9966), an unpretentious joint tucked down a side street, is the pick of Sai Kung’s seafood restaurants. Of note is the soup of the day, made with whatever fresh seafood the chef gets from local fishermen.

Tim Ho Wan (Shop 8, Kwong Wa Street, Mong Kok, Kowloon; 852-2332-2896), which opened in March, is the brainchild of Mak Pui-gor, the former dim sum director at the three-star Lung King Heen in the Four Seasons. The beef balls and radish cake cost only 10 Hong Kong dollars each, making them probable bets for the cheapest starred dishes in the world.

I am hungry already.

Washington under a white veil

2009-12-20T09:43:00.000-08:00

Click here for more pics of the great Washington, D.C., snow storm of 2009.

U.S. exports of B-school grads on rise

2009-12-17T08:37:00.000-08:00

From Newsweek:

Many of the nation's top business schools report an increase in the number of students who are interested in working overseas in emerging markets such as India, China, Russia, and Brazil. Roughly 25 percent of recent Wharton M.B.A. graduates are now working abroad, compared with 16 percent a few years ago, and the trend no longer applies simply to international M.B.A. students who opt to return home after earning their degrees. In addition to working in finance and consulting, these M.B.A. students are moving overseas to work in real estate, investing, energy, and infrastructure. "It definitely feels like it's not a temporary hiccup," says Michelle Antonio, director of the MBA Career Management at Wharton. "The students feel like that's where the action is."

That's what I would do if I was just graduating from business school. I wonder what the Harmonized Tariff Code for "B-school Grad" is? And more importantly: how many fit on a pallet?

Chile: Soon to become 'Developed' country

2009-12-16T21:16:00.000-08:00

This is expected to happen in the next ten years. According to Juan Forero in the Washington Post:

Chile has posted Latin America's fastest economic growth over a generation, and poverty has dropped from 45 percent before the demise of Gen. Augusto Pinochet's government to a regional low of 14 percent today. But Giugale and other economists say Chile has advanced in areas more difficult to measure, such as strengthening state institutions like the courts and fighting corruption.

Chile also has a stable and robust democracy, ruled since 1990 by a coalition of Socialists and Christian Democrats that unseated Pinochet. The current president, Michelle Bachelet, has a popularity rate hovering at nearly 80 percent.

Chile would be the first "developed" country in Latin America.

Exporting vs. Importing

2009-12-14T06:24:00.000-08:00

Sometimes when I am explaining to someone what I do I say, "I run an import-export company, but I don't do any importing." Which often leads to the question, why not import? Well, of course, there is nothing wrong with importing and there is a lot of money to be made importing. Think: Wallmart, which is essentially a gigantic import trading company.

When you are starting out, however, I think it makes sense to focus on one side of the trading coin, either importing or exporting. I chose exporting when I started out for a number of reasons but mostly "just because."

I figured, if I can sell something to a foreign customer and really make them happy, that strikes me a real achievement. Everybody everywhere is already trying to sell stuff to Americans who are chronically unhappy despite their wealth. With exporting, I am challenged to learn something new about another culture and some part of the world that I didn't know before, while making a cargo-ship load of money doing it.

Another bonus of exporting is that there is more incentive to export than to import. And by "incentive" I mean two things. First, you can get government backed bank financing to support an export transaction, whereas you cannot with regard to importing. Second: there is a gigantic horde of producers in the United States that have no clue as to how to tap foreign markets; hence my chances of finding willing partners here in the United States eager to export are pretty high.

Eventually, I expect that I will be involved in importing as I gain more experience, capital and contacts. And as my company grows, I expect to deal with a lot more complexity. This could include doing countertrades and brokering third-country trade (where the United States is neither the country of origin nor country of destination).

For now, however, I am going to focus single-mindedly on helping reduce the United States trade deficit. Thank you, I will accept my award any time now. On second thought, just send me the money.

Volcan de Ipala

2009-12-09T10:34:00.000-08:00

While I was out getting a cup of coffee today, I met guy from Guatemala. Although I have been to other parts of central america, I have not been to Guatemala. I asked him about his country and where he is from.

He said he is from a village near what turns out to be a dormant volcano, called 'Volcan de Ipala.' He said the volcano is especially beautiful because rather than being filled with lava, it is filled with water. The following photo of it I got from a guatemala toursist blog:

I look forward to checking it out next time I find myself in Central America.

Business meetings in the buff?

2009-12-08T06:24:00.000-08:00

Business attire in Washington, DC, is pretty easy, at least for men (and I'm a terrible cross-dresser). Most events and customer meetings call for full business suit and tie.

Of course it is not always so easy when travelling for business abroad. I was in Hawaii for business a number of weeks ago and I met a guy for lunch wearing full business suit and tie, a la Washington. I figured the guy -- the CEO of a major government contracting outfit -- would be dressed pretty formally. Wrong. He was dressed in jeans and a Hawaiian t-shirt. I felt like a Washington, D.C., weenie. I now treat Hawaii as "foreign culture" for the purposes of doing business.

In general, I am really not great with the “business casual” category, and the standards vary greatly around the world.

But what about those occasions when "business casual" requires only your birthday suit? That’s right, buck naked. I have not had the pleasure of having a business meeting in the buff. As discussed by Christina Brinkley in the Wall Street Journal, however, such situations do occur in Northern Europe and in other places in the world. The article has some good tips about attire or the lack of it for international business executives.

In the mean time, until I have a glistening ripped body like Daniel Craig, I’m thinking that I will be packing a bathing suit for the foreseeable future.

Hat tip: Laural Delaney at the Global Small Business Blog

Somalia: Perceived to be the most corrupt country in world

2009-12-05T21:32:00.001-08:00

No surprise there. Somalia was dead last in 2008 too. The country perceived to be most "honest": New Zealand. The United States ranks 19th out of the 180 countries surveyed, down one notch from last year. Mexico took a dive down 17 points to 89th place.

Source: Transparancy International's Corruption Perceptions Index 2009

Between fact and fancy

2009-12-03T10:01:00.000-08:00

"Facts have a cruel way of substituting themselves for fancies. There is nothing more remorseless, just as there is nothing more helpful, than truth."

Words of wisdom from the first U.S. Secretary of Commerce (1913 to 1919), William C. Redfield, appointed by President Woodrow Wilson. Personally, I'm reluctant to doubt anything said by a guy sporting one bad-ass Franz Josef lip-curtain.

Going global: Cupcakes

2009-12-02T21:48:00.001-08:00

I am a big sucker for cupcakes. And I am fascinated by the recent entreprenurial emergance of cupcakeries. One cupcake company, Sprinkles Cupcakes, has even taken their brand and product global. Elizabeth Olsen has an article up in the New York Times about this delicious trend.

John Deere international sales down 35%

2009-11-30T14:31:00.000-08:00

Export sales of the big U.S. manufacturer of farm equipment are down:

Sales of farm and construction equipment dropped 26 percent in the U.S. and Canada and 35 percent in the rest of the world. Deere's equipment operations reported an operating loss of $22 million for the quarter, down from a profit of $549 million a year earlier.

Ouch.

Libertarians and the Small Business Administration

2009-11-21T17:38:00.000-08:00

I was talking with a small business owner the other evening during a happy hour here in Washington. The guy runs a computer and information systems company doing what sounds like a large portion of his business, like so many outfits around here, as a government sub-contractor. Let’s call him “Craig.”

Craig and I got talking about financing and it turns out he, like me, is looking for some extra bank financing to expand. I asked him if he was going to utilize any of the Small Business Administration (SBA) backed loan programs.

Craig’s reply was an affirmative: “No way.” I asked him the reason. He said he was “against” the SBA on philosophical grounds: he is a libertarian.

I told him that I respected his perspective. But if the government can dole out how many billions of dollars to the free-market geniuses on Wall Street, and to the auto industry, I don’t have any qualms availing myself of every possible penny offered by the SBA (or the United States Export-Import bank).

Interestingly, a little research reveals that the Small Business Administration was established in 1953 in the first act of the 83rd United States Congress. At that time, both chambers were dominated by a Republican majority. And the President at that time, Dwight Eisenhower, was of course also a Republican.

I have a hunch that Craig is a Republican too. In any case, it just doesn't seem pragmatic to let politics - whatever your persuasion - get in the way of business decisions.

Western men are doomed!

2009-11-20T05:35:00.000-08:00

Unless they adapt. This, at least, is the view of New York Times columnist David Brooks, whose views on this topic are elicited in a blog conversation between himself and co-columnist Gail Colins. Brooks goes on to make some interesting broad-brush comparisons between Asian and Western style thinking:

The mode of thought more common in Asia is better suited to the complex networks that make up the modern world. The contextual, associational style is simply more valid. The linear style we’ve inherited from the Greeks is less adaptive toward the modern age. I think the West may be doomed.

Brooks probably overstates his case here, but I think he may be onto something. My question for Brooks: are western women doomed too?

Viva México

2009-11-15T11:10:00.000-08:00

I had a great opportunity to work and live in Mexico for a year a number of years ago. And I’ve travelled all around the country, although there are many places yet to explore. I really like Mexico – the people, the culture, the food, the music. I miss it very much.

While the country is not without its share of problems, it is my impression that it gets a bad rap in the U.S. media and from many people in the U.S. and, often, from our government itself. And I am always surprised by how little people north of the border actually know about Mexico, a country which is our second largest trading partner (Canada is number one).

So I was happy to learn that Mexico has become the hot new spot for manufacturing, beating out even China. Yes, Mexico. According a recent article in CNNMoney.com:

Mexico did not have an extreme economic makeover, but the global recession was enough to defeat China as the number one place for American assembly-for-export factories, or maquiladoras.
"For many companies that want to export to the United States, like the maquiladoras, Mexico's exchange rate will be seen as a stable and permanent advantage and we are going to see much stronger investment flows associated to this industry," said Cesar Hernandez, general director of foreign trade at the Mexican Trade Ministry.

When NAFTA was first enacted, there was great hope and expectation that Mexico would be the prime spot for outsourcing of manufacturing. It didn’t turn out that way because China could do it even cheaper. Until now.

The other thing to keep in mind is this: the maquiladoras need lots of supplies. This sector of the Mexican marketplace, among others, is a prime destination for U.S. exports. On the down side, however, is the real problem Mexico is having with violence related to narco-trafficking. The worst violence exists at the border cities, like Tijuana, which is of course where a lot of these maquiladoras are located.

Nevertheless, I am looking forward to doing business in Mexico in the not-too-distant future.

What you can learn from an International Arms Dealer

2009-11-15T10:41:00.000-08:00

If you want to learn about how to be successful in international business, I think there is a lot one can learn from Adnan Khashoggi. Yes, that guy: the infamous international arms dealer associated with a long line of scandals including the Iran-Contra affair. The guy who in 1980s was considered the richest man in the world.

The New York Times has an interesting article up on Khashoggi and it appears that he is not flying as high these days. In fact, there is a definite air of “has been” about him judging from the tone of the article, although it also appears that he is trying to stage a comeback. Personally, I wouldn't count him out.

Nevertheless, as I said, I think there are lessons to be learned from the guy, both “dos” and “don’ts”. Of particular note, I think, is his meticulous adherence to what I have called the “first principle” of international business.

You can read the article here and judge for yourself: An Arms Dealer Returns, Now Selling an Image

Blackout in Brazil

2009-11-10T21:07:00.000-08:00

Apparently, there was a massive black out in Brazil today. It lasted two hours and was so bad that the power was wiped out in all of Paraguay as well.

I wonder if in nine months from now there will be a wave of "blackout babies."

Photo Credit: Felipe Dana/Associated Press

S. 1208, The Small Business Export Opportunity Development Act of 2009

2009-11-02T21:23:00.000-08:00

Sen. Olympia Snowe (R-ME) has offered some legislation to beef up support of small business exporting. This caught my eye:

Allows the Administrator to guarantee small business loans of up to $5 million for the purpose of developing foreign markets.

This is a pretty hefty increase from what it is now. It would be great to see this get passed.

U.S. Small Biz Exporters to receive TARP funding?

2009-10-21T11:36:00.000-07:00

Apparently, all of the so-called TARP (Toxic Asset Relief Program) money has not been completely blown on ~~inflating the profit margin~~ bailing out the Wall Street geniuses at Goldman Saks and company. So Obama is now suggesting that some of what is left over be directed toward stimulating lending to small businesses. Good idea. How much? It is not clear. I will be curious to find out if any of the TARP leftovers will go toward supporting small business exporting.

Ancient Chinese Secret: Predatory Pricing

2009-10-21T09:13:00.000-07:00

My mentor once explained to me one strategy to gain market share: bid below cost. Essentially, this is called predatory pricing. Then once you get the business and knock out competition, raise prices.

Businesses do this all the time - you want to get customers to try your cereal, well, offer a fire-sale (i.e. below cost) discount and get them hooked. In international trade, Chinese businesses do this sort of thing all the time as well, but it is important to note that the Chinese government's strategy of systemically undervaluing their currency gives predatory pricing strategies a boost. If you think of it, it is a kind trade barrier, but in reverse, a practice also known as dumping.

In any case, while it would be nice if the chinese played "fair," i think it would be naive to expect them to do so. On the other hand, China is already getting some measure of comeuppance in that some countries (e.g. Vietnam) are out-cheaping them. China also has to contend with the perception that, yes, while their products are cheap, they also are low quality or otherwise unreliable (think: toys with lead poinsoning, melamine contaminated milk powder etc).

But let's look at the bright side: we are effectively buying lots of stuff below cost! Thank you Chinese government for subsidizing my consumption. (Never mind if your kid is born with a second head.)

Things looking up in Singapore

2009-10-11T19:45:00.000-07:00

"Singapore’s Economy Grows for Second Straight Quarter":

SINGAPORE (AP) -- Singapore's economy surged for a second straight quarter in the July-to-September period as manufacturing led the city-state out of recession.

George Washington: Successful Entrepreneur

2009-10-11T19:40:00.000-07:00

Joel Achenbach of the Washington Post writes:

As thoroughly researched as the life of Washington has been, his career as a warrior and statesman has largely overshadowed his entrepreneurial history. He was the CEO, in effect, of a farming, manufacturing and real estate operation that by the end of his life encompassed more than 50,000 acres of field and forest. Farms, fisheries, weavers, smithies, a grist mill, a distillery -- these were just part of the Washington empire.
Washington came of age as a backcountry surveyor of relatively modest means. His business sensibilities, innovative thinking and willingness to take chances are all part and parcel of his evolution as a revolutionary.

Who knew?

Aloha

2009-10-07T11:31:00.001-07:00

Been in Hawaii for a few days on business. Am exploring some defense sub-contracting opportunities with some Hawaiian native corporations.

The young, the restless and wealthy in Washington

2009-09-29T08:13:00.000-07:00

Patricia Reaney at Reuters:

Washington, D.C. has become the favorite area for wealthy young adults, with the nation's highest percentage of 25-34 year-olds making more than $100,000 a year, according to a new analysis.

Import-Export Opportunity: Female virginity-faking device

2009-09-28T20:01:00.001-07:00

An opportunity not here in the U.S., but in countries such as Egypt where pre-marital sex remains a major no-no (for women only of course). However, the endeavor would not be without a few extra risks...

Hat tip: Jungle Trader

Exporting Waste

2009-09-26T11:22:00.000-07:00

Elisabeth Rosenthal of the New York Times:

Exporting waste illegally to poor countries has become a vast and growing international business, as companies try to minimize the costs of new environmental laws, like those here, that tax waste or require that it be recycled or otherwise disposed of in an environmentally responsible way.

Flu Shot

2009-09-26T04:36:00.000-07:00

In anticipation of doing some international travel in the next number of months, I decided to get a flu shot this week. I have never gotten a flu shot before and, although I get sick once in a while like everybody else, am pretty healthy overall. Well, two days after the shot I'm bedridden with flu-like symptoms. A friend of mine who is a biochemist says this is "normal" - the body is waging a fake battle against an inactive virus and thereby developing all the requisite defenses in the process. All I know is that I feel pretty miserable.

Europe, Latin America Gain on U.S. in Wealth

2009-09-20T08:32:00.000-07:00

According to thestreet.com:

The U.S., Canada and Mexico were deposed by Europe, which had tighter controls on credit lending and securities trading. Latin America was the only region in which wealth increased.

Hat tip: The Latin Americanist

Going global - the Korean Language

2009-09-13T07:37:00.000-07:00

"South Korea’s Latest Export: Its Alphabet":

Now, one South Korean woman, Lee Ki-nam, is determined to wring more recognition from the world with an unusual export: the Korean alphabet. Ms. Lee
is using a fortune she made in real estate to try to bring the alphabet to places where native peoples lack an indigenous written system to record their language.

Singapore

2009-09-12T07:00:00.000-07:00

For a fourth year in a row, Singapore is the top-ranked economy on the ease of doing business. Runner up: New Zealand.

Source: Doing Business 2010: A record in business regulation reform

New arctic shipping lanes?

2009-09-11T07:28:00.000-07:00

"Arctic Shortcut Beckons Shippers as Ice Thaws":

Lawson W. Brigham, a professor of geography at the University of Fairbanks who led the writing of an international report on Arctic commerce, the Arctic Marine Shipping Assessment, confirmed that the passage of the two German ships appeared to be the first true commercial transit of the entire Northeast Passage from Asia to the West.

$2 million

2009-09-09T05:50:00.000-07:00

That is the maximum loan amount that the Small Bussiness Association will guarantee under their Export Working Capital Program.

International Arms Dealing: the winner goes to

2009-09-06T15:03:00.000-07:00

The United States:

The United States was the leader not only in arms sales worldwide [in 2008], but also to the subset of nations in the developing world, signing $29.6 billion in weapons agreements with these nations, or 70.1 percent of all such deals.

Is anyone really surprised by this?

Pressure switches, ITAR and Intent

2009-09-05T09:41:00.000-07:00

You always hear complaints about how long it takes the State Department to issue export licenses for those items that fall under ITAR. I've had pretty good luck though. Most recently, I submitted a license application for some pressure switches on August 21st and it came back yesterday. Two weeks. Not bad. I had a previous application earlier this year get turned around in 10 days.

My beef with the licensing process is not the application process, which after you do it a few times is not hard. It is convenienly managed online through D-Trade. No, my beef is that ITAR regulations are so vague. If you are exporting, say, SCUD missiles or a tank, then it is pretty obvious that this would need prior approval from the Pentagon, perhaps even Congress.

But what about these pressure switches? Did they need an export license? It was not initially clear. Now, if the pressure switch turns out to be a military-only component of, say, a SCUD missile then you need a license. But what if the pressure switch is suitable for use on a SCUD missile and the boiler of your local highscool furnace? This puts the pressure switch in the category items called "dual use" - they can be used for either a military or a commercial setting.

"Dual use" stuff fall in a grey zone. I typically call the manufacturer and simply ask, "Do your products fall under ITAR." They will usually know. In the case of these pressure switches, it was ambiguous: one guy said definitely not, then somebody else said "we have been having a lot of license issues lately. "

Further research on these pressure switches provided the key. I discovered that, although these pressure switches are used in common commercial industrial settings, the ones I was selling were specially designed as "explosion proof." Does your local highchool need an explosion-proof pressure switch? I doubt it.

This was sufficient enough to suggest to me that these switches had been designed with the intent of being used in a military setting. Intent is the key idea here, not the end-use. So I submitted for a license and, as mentioned, it came back in two weeks so it wasn't a huge deal. But it is nevertheless not always clear what falls under ITAR and what doesn't, espcially for dual-use stuff. And no wonder: the concept of "intention" is one of the most vague and inscrutable ideas out there.

Japanese couple wins world tango title

2009-09-01T20:25:00.000-07:00

Bravo:
"A Japanese married couple has danced to victory in Buenos Aires, knocking the reigning Argentines out of the top spot at the World Tango Championships.Hiroshi and Kyoko Yamao placed first in the traditional Tango Salon category of the seventh edition of the international competition at Luna Park stadium this weekend.After earning the highest point score during Friday's semifinal, the couple was praised by the jury for the "dexterity and feeling" of their final performance Saturday evening. "

Is there any wonder why the Japanese are so adept and successful in international business? Some of the most successful brands of automobiles in the United States are...

Image- AP ("Hiroshi Yamao, right, and Kyoko Yamao, from Japan celebrate winning the Salon category of the 7th Tango Dance World Chamopionship, in Buenos Aires, Saturday, Aug. 29, 2009.")Online Sources- CBC, AFP

Hogs have arrived in India

2009-08-31T05:53:00.000-07:00

Famed U.S. motorcycle company Harley-Davidson is attempting to establish a foothold in India. I'll be interested to see what happens to this endeavor. Matthew Levatich, president of Harley-Davidson's main motorcycle division says:

"The rise of middle-class consumption, increased government investment in new highways and the recent economic boom have ushered in a perfect time for the market for leisure motorcycle riding."

Something all U.S. manufacturers should take note of.

The Fate of the U.S. Dollar

2009-08-30T13:23:00.000-07:00

History professor Paul Kennedy has an interesting editorial up on the New York Times addressing the fate of the U.S. Dollar. Kennedy concludes:

As China, India, South Korea, Brazil, Mexico and Indonesia all “catch up,” the American share of things will relatively shrink. Sooner or later — and this debate really is about “sooner” or “later,” not about “if” — we are going to witness another major shift in the global balances of power.

Bad Packing

2009-08-27T19:36:00.000-07:00

In July I delivered the final shipment of an order to one of my customers in Korea. This month I received an unhappy notification that there was a "discrepency." What, did I deliver the wrong stuff? No. Everything in the box was exactly what they'd ordered and the discreprency report said this. But for each of the four line items in the order there was the opprobrious comment: "Bad Packing."

What did I do wrong? Well, it turns out that the labelling was not correct. Now, it was not that the items weren't labeled. Oh yes they were. But they were not labelled in exactly the manner they like. So I am importing the shipment back into the U.S., repacking the whole thing, and resending it.

It is difficult to overestimate the importance of proper packing in international trade.

Blowing off Steam

2009-08-26T09:09:00.000-07:00

It's important to blow off steam in life. Especially for entrepreneurs for whom "the business" can be all consuming. So last night with this in mind I decided to give Bikram or "Hot" Yoga a try. Bikram yoga is like regular yoga except (and this is a big exception) it takes place in a room heated to 105°F (40.5°C) with a humidity of about 40%. Basically, a human cauldron. The class lasted 90 minutes and it was one of the most excruciating workouts of my life.

One in 100

2009-08-25T07:01:00.000-07:00

That is apparently the approximate number of U.S. small businesses engaged in exporting

China and Solar Energy

2009-08-24T19:15:00.001-07:00

If international trade is like a game of chess, I'd say that China is definitely threatening to take a piece. Or perhaps I should say another piece...

UPS and shipping

2009-08-24T18:59:00.000-07:00

Today I met with a sales representative from UPS. I've been in business for over 3 years and my volume is increasing, so I'm negotiating for "preferential" rates. I'll see what FedEx and DHL have to offer and compare.

Stress, risk and lost fortunes

2009-08-23T07:00:00.000-07:00

I don’t know about you, but not a day goes by when I am not “concerned” about money and cash flow. Some days, I'll confess, that “concern” morphs into “worry.” Such is the plight of most entrepreneurs, I imagine. Nor do such concerns nessarily go away even for super-successful entrepreneurs.

As David Leonhardt and Geraldine Fabrikant explore in a recent edition of the New York Times, the super-wealthy have in many cases been especially hit hard by the mega asset deflation precipitated by the recent mortgage-backed securities meltdown. To drive home the point, the article highlights the plight and lost fortunes of super-successful serial entrepreneur John McAfee (yes, the Mcafee virus guy!) whose net worth has reportedly fallen to 4 million from a peak of 100 million. The guy strikes me as being pretty zen about it all, and pragmatic – he’s busy sell off assets to generate cash even at a steep loss. I’m sure he’ll pick up the pieces and launch other successful ventures. But still, that’s got to hurt.

Risk is risk, no matter how much money is at stake.

8x8

2009-08-22T13:12:00.000-07:00

I recently switched my company's phone service to a VOIP (Voice Over IP) system managed by a company called 8x8. It's a pretty good setup. My company is spread out over a number of locations: downtown office, home office, staff who work from home or warehouse etc. It creates a seamless system. Plus I can can go anywhere in the world and, as long as there is a good internet connection, I plug it in and it is just like I am in Washington. My favorite feature, however, is that my voice messages arrive as an attachment to my email.

"I have to know that I can trust you"

2009-08-21T05:33:00.000-07:00

In the two most recent James Bond movies, actress Judi Dench plays the authoritative yet elusive character of "M," Bond's boss who is the head of Britain's Foreign Intelligence service. Bond and "M" clearly have a personal relationship, although perhaps not exactly as friends, definitely one of mutual respect and mutual dependence.

Nevertheless, at one point in Quantum of Solace, "M" tells Bond that "I have to know that I can trust you." And we find out that part of the drama in Quantum is whether or not Bond has "gone rogue" or otherwise can't be trusted to carry out the mission he has been assigned. For a moment, "M" loses her trust in Bond.

There is a lesson here for those engaged in international trade for which a large part of the "work" involves establishing trust. You or your customer can't simply call a lawyer to fix a problem. You have to depend on the relationship. Needless to say, trust takes a long time to build, it can be lost quickly, and once broken, is very hard to get back.

And the prize goes to...United Arab Emerites

2009-08-20T06:30:00.000-07:00

As you can see in a recent report published by the U.S. Office of Trade and Industry, U.S. exports to our top 30 trading partners were down across the board in 2008. This is not surprising given the significant downdraft in the global economy. However, if you look closely at the report, there is one exception: United Arab Emirates. During 2008, U.S. exports to UAE increased by a modest 1.4%. What accounts for this you ask?

An examination of our trade stats with UAE reveals the answer. In 2008, UAE imported a little over 10.7 billion dollars worth of U.S. goods. A full 40% or almost 4.3 billion fell in one of two categories: "Nuclear Reactors, Boilers, Machinery etc; Parts" and "Vehicles and Parts." All indicative of singificant infrastructure spending. Other categories, such as their importation of US meat which was up 129%, were also strong.

Of course we also recall that in 2008 the price of oil was at an all-time high. So as we can see, in a certain respect, we got some of "our money" back...

Survival Knives

2009-08-19T15:54:00.000-07:00

Today I worked on a request for quotation for a good number of survival knives. Research revealed that the knife was officially adopted by the USAF in 1958 and had been in use by other armed services as well since then, and was popular for use in the Vietnam war. In 2007, however, the Original Equipment Manufacturer (OEM) went out of business, and it was not clear if the knife was still being made. I was "this close" to giving up on it when I was surfing one last google link only to discover that another company in Ohio took on the product line. I called them up and got a quote. I think my chances of winning this bid are pretty decent.

American Whiskey

2009-08-19T06:46:00.000-07:00

Inc.com says that one of the best areas to start a business right now is in the Beer, Wine, and Liquor Wholesale Industry. Of special note is that that estimated exports of U.S. distilled spirits grew by 8 percent last year, to $1.1 billion, led by robust demand for American whiskeys. A down economy is clearly no reason to cut down on the booze.