Complaining About the Weather While Awaiting the Season’s Start

Complaining About the Weather While Awaiting the Season’s Start

—June 7, 2016

It has been a strange and slow-starting season. Already getting deep into June and I’ve only sailed once, one quick sail to bring the boat around from the marina to my dock.

Unheard of…. Well, at least in the fourteen years I’ve been living up here on the coast of Canada’s “Ocean Playground.” Normally I would have been out on the water at least a half-dozen times by now, and some years it was more than a dozen.

Heck, I haven’t even done my annual spring every-inch clean of the cabin’s interior, oiled the teak, washed the cushions or stowed the two truckloads of gear. In short, the boat might as well be up on the hard.

I could blame it on my especially heavy workload, but that would be a stretch as I’ve never let work keep me from slipping out on a fine day for an afternoon’s sail. No, it’s been the elusiveness of any such fine days hitting the shoreline. I think there have been a grand total of two this spring.

One was the day I brought my boat over from the marina, a rather quick and hurried journey due to having to spend most of that day trying to jury rig a fix for the floating dock in the hopes of getting one more season out of it. A jury rig that is now looking doubtful and will undoubtedly require more precious time away from sailing.

The other perfect day was devoted to the yard. Neglected all season due to work and weather—the grass was reaching near knee high. Sailing or yard work? It was a tough call, and yard work won out as the grounds have never looked so unsightly. Good timing as we’ve had nothing but rain and thick fog since, and the yard is already due another mowing.

Rain, fog and high winds. Oh, and cold. Very cold. So cold that the heating oil truck is still making the rounds. So cold that freshly planted annuals have been taken by frost. So cold that some of the hardy sailors who braved the foul weather of the first of the season’s Thursday evening racing series said it was the coldest inshore race they’d ever sailed. It was warmer here on Christmas day, a record-breaker by at least two dozen degrees, and a day truly suggestive of climate change.

But we should be used to the rain, fog and cold temperatures. Nova Scotia is known for them. Nevertheless, Nova Scotia is also known for the expression, “If you don’t like the weather wait five minutes,” because the weather generally changes so frequently. And yes, I’ve heard the expression claimed by New Englanders, too, but the weather here truly changes quite frequently at an instant.

Just not lately….

Seven-day forecast calls for six days of clouds, rain and showers with temperatures warming up a bit with a range between the mid-40s to one day in the low-60s; and one potentially sunny day with a possible high nearing 70 degrees.

Anyhow, don’t listen to me. My wife would tell you that I bitch about the weather every season and always claim that I don’t get enough sailing time.

I’ll admit to complaining about the weather too much, but truly do not get enough sailing time. I mean, there’s no such thing as too much sailing…that is, unless it’s blowing a prolonged cold rainy gale right on the nose. 

—This was supposed to have been published by slidemoor.com, but guess their southern readers didn’t want to hear about cold-weather boating. Oh, and am pleased to report that the weather has now turned beautiful and finally had a great day of sailing.

What This Sailor Wants for Christmas

What This Sailor Wants for Christmas

Along with my personal blog, I write blogs for several other websites. This is a blog I recently wrote for a boating website client. 

–December 16, 2015

Christmas is in the air and Santa Claus has undoubtedly checked off “who’s naughty and who’s nice” on his annual gift list. And naturally most avid boaters received a “nice” check by their names. But now Santa has to figure out what to get these boater(s).

If the boaters on his list don’t already have one, Santa could always consider surprising them with a SlideMoor docking system. Barring that, the options are almost limitless. Boaters tend to love boating gear and all things “nautical,” and most keep a running list of “gear” they’d love to own. Boating gear is continuously evolving and new gear seems to enter the market throughout the year, as evidenced by boating magazines which tend to feature a “new gear” section in every issue. In short, there’s such a plethora of nautical gift options spanning all price ranges that Santa may feel overwhelmed trying to pick out the perfect gift for each of those boaters on his list.

So, Santa, to give you some inspiration let me tell you what this avid boater would like to find under his Christmas tree (and yes, I’ve been a very good boy this year):

  • SALCA (Sacrificial Anode Line Cutter Assembly)—Overall I don’t tend to run afoul of stray lines that get wrapped around the propeller, say in a mooring field or from wayward lobster or crab traps? But last April, right after launching…well, I got to find out what hypothermia is when I had to free the prop from an unmarked mooring line. Some line cutting systems are rather expensive, but Sea Shield Marine has apparently come up with a cost-effective, easy to install line cutter that is combined with a sacrificial anode to protect against corrosion.
  • Dyson DC34 Cordless Vacuum—A vacuum cleaner? Yes, Santa, most cruising sailboats are filled with nooks, crannies and wonky spaces that make cleaning them more difficult than cleaning the house. I’ve got a cordless vac, but it just doesn’t have enough power to get up all the crud, and from what I hear this Dyson model is one of the most powerful handheld vacuums available.
  • Nokero Solar Light Bulb—Power consumption is always of concern on my sailboat, and I am always pleased to find ways to conserve power. Thus, Nokero’s Solar Light Bulb, which can provide 20 lumens of light for up to four hours (10 lumens for seven hours) on a day’s solar charge, would be a hit. Then again, if you’re feeling really generous, you might consider getting me a complete solar power system for the boat.
  • AIS System—Speaking of generous (and I have been really good this year), I’ve been wanting an Automatic Identification System receiver for some time now. Prices have been coming down, and you’ll have the added satisfaction of knowing that you’re helping keep this sailor safe while he’s offshore.
  • Simrad Autopilot—In case you didn’t know, my autohelm bit the dust this fall. And while the wheel-mounted models work pretty well, Simrad’s AP24 cable-mounted system is reportedly the most sophisticated and efficient small-boat pilot on the market.
  • Inflatable Dinghy—Well, Santa, my Avon rubber Dinghy has been in the family now for more than 40 years and is starting to show her age. Or, more specifically, starting to lose her air….
  • Shannon 43—Speaking of age, my beautiful sailboat is nearing her 40th birthday, and, well, I’m just not sure she has it in her anymore to undertake that circumnavigation we’ve been dreaming about for so long. The Shannon line is the perfect boat for such a circumnavigation, and I’m pretty sure you could find a used one for me for a half-million dollars or so….

Oh, and have I mentioned how exceptionally good I’ve been this year?

Leaked Report Highlights Problems With Recently Built Condos

Leaked Report Highlights Problems With Recently Built Condos

–November 4, 2015

The CBC this morning reported on a leaked Nova Scotia government report that cites widespread workmanship problems with numerous condominiums built in the province during the past 10 years. The government study, which examined 42 condo buildings, found that 79 percent of the buildings experienced at least one defect from the original construction, and that defects have caused individual unit owners in those buildings an average of up to $20,000 to repair. The report, which reportedly called some developers “unscrupulous,” also pointed to a noticeable lack of any accountability process that would force builders to rectify discovered defects.

Condo Nova strives to know everything about condominium buildings in the Halifax region, and works to steer its clients away from buildings with known or rumored problems. Condo Nova also supports enactment of a province-wide mandatory multi-year warranty for the protection of new condo owners.

The study was conducted in 2013 for the former NDP Service Nova Scotia minister, John MacDonell, who was responsible for Nova Scotia’s Condominium Act. It is unclear why the report’s findings were never released or otherwise utilized by the government.

While the report does not name developers or the condominium corporations now responsible for the 42 surveyed buildings, it clearly suggests that some developments were plagued with poor workmanship and calls into question the lack of government oversight, in relation to both inspections of new buildings and protection of new condominium owners.

Among the more egregious findings in the report, according to the CBC was a row house-style condo building in Halifax in which balconies had not been properly affixed and could be pulled away from the building by hand. In another building the fireplace flues were installed with flammable materials and many units were subjected to rainwater leakage. Stove and dishwasher outlets were installed without proper junction boxes in another building, which almost caused a fire when a dishwasher leaked and caused a short circuit.

The report cited a lack of coordination between project managers, supervisors, subcontractors and labourers as being problematic, and noted that there “is evidence that unskilled and perhaps unlicensed personnel are performing critical installations even where the law requires licensed personnel.”

Along with 33 of the 42 buildings surveyed experiencing some kind of defect:

  • 29 (69 percent) were subject to varying degrees of premature building envelope failure, with seven of these subject to a near-total building envelope failure.
  • 15 (46 percent) experienced premature electrical, heating, ventilation or plumbing system failures.
  • seven were subject to latent defects in their structural components and/or fire safety.
  • And, 15 (36 percent) suffered from multiple defects among those mentioned above.

The report noted that while two developers agreed to alleviate problems when they were brought to their attention, many others did not. Condo corporation efforts to sue some of these other developers failed because the builders had already shut down their businesses. The majority of condo corporations did not seek legal action against the developers due to prohibitive costs.

The CBC story and radio broadcast on the report can be found here: Nova Scotia condos hurt by widespread workmanship woes: leaked report. Condo Nova has not been able to access the complete report.

—Originally published in CondoNova.com Nov. 4, 2015

Please Add Me to the Hit List!

Please Add Me to the Hit List!

–Sept. 29, 2015

Dear Bangladeshi Islamic Extremists (members of Ansarullah Bangla Team and Ansar al Islam Bangladesh): 

I understand that you have expanded your hit list of bloggers to be killed due to their written commentary that you believe to be offensive to Islam. So far this year you have successfully butchered four Bangladeshi bloggers for their writing, and have now expanded your hit list to call for any and all true-faith Muslims to assassinate nine bloggers living in Europe and North America. 

Please add me to this list. While I do not wish to insult your faith or reverence for Allah, Muhammad and Islam in general, I question and take issue with your interpretation of your holy book, the Quran. I believe that any man should be able to question and debate your interpretation without repercussion. I also do not believe that Allah would sanction your killing of other Muslims, or anybody, for that matter, for challenging your interpretation. Nor do I believe that Allah would sanction the killing of anyone for drawing a cartoon of Muhammad or otherwise insulting Islam.

Allah is supposed to be God, for Christ’s sake, and there’s no way his proverbial skin could be that thin. If Allah truly has an issue with people questioning his Godliness, making jokes about Muhammad, or portraying him as a cartoon figure, I am positive that he can deal with the  miscreants in his own Godlike fashion.   

So, in protest of your blatant killing for the sake of religious censorship, I want you to look at this photo. That guy whoseth-4 12.17.01 PM head is in the toilet, I believe that to be Muhammad. Therefore I am obviously guilty of blasphemy and of offending Allah–peace be upon him–and therefore should be hacked to bits.

Come and get me.

Sincerely,

M.J. Moye

Muslims tend to take great offense at those who criticize Islam, question their interpretation of the Quran, or draw images of Muhammad. Many take their self-righteous sense of being offended so severely that they believe killing people who commit these offenses is justified. And while the majority of Muslims do not actively support such action, does not their noticeable lack of opposition to the practice mark them as silent accomplices?

What of the murder of innocent writers and cartoonists? Is that not the far greater offense? Sure the Western world expresses a brief surge of outrage every time writers and cartoonists are killed, but the media is generally loath to reprint or discuss the subject matter that led to the killing. Oh, we don’t want to offend the Muslim community, is the usual excuse.

Worse than that, though, is when the Western media is cowed by Islamic threats and self-censors material that may be deemed offensive to Islam. Remember Episodes 200 and 201 of South Park? Broadcast in 2010, it featured a character in a bear costume named Muhammad. A radical Muslim group sent South Park producers and broadcasters a photo of the nearly decapitated anti-Muslim Dutch filmmaker Theo van Gogh, with a warning that they would meet a similar fate. Muhammad was quickly censored out of the episodes.

Pussies!

In response a woman named Molly Norris organized an “Everybody Draw Mohammad Day” in support of free speech. The effort drew tremendous support, but also drew significant opposition from both Muslims and those of the political correct persuasion who felt the effort was a needless affront to the Muslim community. Meanwhile Ms. Norris was put on an Islamic hit list, and her name was later added to the same hit list that targeted Charlie Hebdo in Paris. She remains in hiding to this day.

Unreal!  

This is America, where freedom of speech is supposed to be sacrosanct. We’re going to let ourselves be bullied into limiting this freedom? We’re going to cave for the sake of Muslim sensibilities, the same sensibilities that believe murder for religious ideals is perfectly OK?

Screw that!

As I said in my letter to the hit-list Muslims, I do not wish to insult their religion. However, if they are going to target innocent writers and cartoonists and mark them for death for offending Islam, then I will join with those same writers and cartoonists. Plain and simply, religious beliefs that invoke murder or other egregious actions do not trump freedom of thought and speech.

And just to make clear that this blog and blogger are not specifically anti-Islam, the above letter would be proffered to any radical Christian groups that target people for insulting Jesus Christ and Christianity. But to my knowledge there aren’t any.

However, if there are any Radical Christians out there advocating death for those who insult Jesus, well, see that photo near the top of the page…that guy getting a swirly is Jesus.

Come and get me!

So, dear reader, what do you think? Are you willing to add your name to the list? Hash it out!

—Originally published Sept. 28, 2015 by Hash It Out!

Alabama Sorority Censored by Politically Correct Pressure

Alabama Sorority Censored by Politically Correct Pressure

—August 26, 2015

The potentates of political correctness have won another round in their battle to make the world all-inclusive and ensure that no one is ever offended. The University of Alabama’s Alpha Phi sorority this week removed a recruitment video from You Tube, bowing to political correct commentary that deemed the video highly offensive because of its lack of racial diversity, objectification of women, and emphasis on sorority fun rather than service. Prior to removal the video had received more than 700,000 views on You Tube.

Leading the charge in condemning the video was a “guest opinion” writer on AL.com named A.L. Bailey, a “writer, magazine copy editor, and online editor who lives in Hoover.” Bailey called the video a “parade of white girls and blonde hair dye, coordinated clothing, bikinis and daisy dukes, glitter and kisses, bouncing bodies, euphoric hand-holding and hugging, gratuitous booty shots, and matching aviator sunglasses. It’s all so racially and aesthetically homogeneous and forced, so hyper-feminine, so reductive and objectifying, so Stepford Wives; College Edition. It’s all so … unempowering.” Bailey further concluded that the sorority video “is doing more damage to women than presidential candidate Donald Trump.”

Bailey’s opinion piece spurred a flurry of negative news articles about the video–with “salacious” being the most widely used adjective to describe it–along with online commentary decrying the video for all of the appropriate politically correct reasons. Though now that the video has been removed, online commentary has swung in defence of the sorority and its video, and anger at the purveyors of political correctness.

Additionally, a new AL.com “guest opinion” writer, Lauren Hathaway, countered Bailey’s arguments by calling them superficial, as well as “mean and shallow,” among other things. Hathaway notes that the video might be “annoying,” but is not “offensive,” and encourages the girls of Alpha Phi to “keep embracing the glitter and kisses and ‘euphoric hand-holding and hugging’ ifalpha-phi-alabama that’s part of who you all are.” Hathaway further concludes that the video’s apparent ‘hyper-femininity” is not a threat to feminism, and points out that the girls of Alpha Phi are “clearly having a good time,” which is the “whole point” of the video.

While Ms. Hathaway has done an admirable job refuting the political correct arguments regarding the video’s alleged objectification of women,” the issue of racial diversity–or lack thereof–remains.

It is true, no black sorority sisters are seen in the video. Does this mean that the University of Alabama chapter of Alpha Phi is a bastion of Aryan racists?

Unclear, but we did examine some random videos promoting traditionally black sororities and couldn’t find a white face anywhere–can’t say we’ve ever heard any outcry about this lack of racial diversity.

So, is the relative lack of racial diversity in the university Greek system a crime? Does the U.S. Government need to call out the National Guard and enforce desegregation of fraternities and sororities nationwide? And at what point will each fraternity and sorority in the Greek system be deemed truly racially diverse?

Those with a politically correct bent are easily offended, so we’d better make sure these social institutions are representative and inclusive of everyone, racial or otherwise.

Thus, in Alpha Phi’s next video we’d better see at least eight African-Americans, three Mexicans, two Chinese, two Pakistanis, two Indians, one Slav, one Vietnamese, one Korean, one Japanese, one Tibetan, one American Indian, one Inuit, two Muslims, one Jew, one Hindu, one Buddhist, four lesbians and one transgendered person. The new video also needs to include at least three people with visible physical disabilities, and seven people who would be considered clinically obese.

While 100 percent of the Alpha Phi women portrayed in the objectionable, now-removed You Tube video would likely be considered physically beautiful, this attribute is objectifying and demeaning to those who may lack physical beauty characteristics or are otherwise unsure about their own physical attractiveness. Therefore, only 15 percent of those filmed in any new video, should be those who a majority of people would conclude are physically beautiful.

Oh, and in the interest of the politically correct goal of gender neutrality, Alpha Phi should no longer be be referred to as a sorority, and its population should include an equal proportion of males.

Finally, all new videos will strictly conform to the idea of the Greek system being a service organization, and no portrayals of fun or frivolity of any sort will be allowed, as fun and frivolity might be considered offensive to those with a more serious nature and outlook on life.

Welcome to the politically correct brave new world….

–Originally published in Hash It Out! on August 26, 2015

Iconic Lion Slain by Dentist, Moronic Human Killed by Gator

–July 28, 2015

Cecil is dead.

Who? you ask.

Cecil. Cecil the Lion.

OK….

cecilthelion-e1438117510903Cecil the Lion made international headlines this week after being killed illegally in Zimbabwe by an American dentist who allegedly paid about $55,000 for the privilege. Cecil was Zimbabwe’s most famous lion and a star attraction at Hwange National Park. The 13-year-old lion was also part of an ongoing Oxford University research project and was wearing a GPS collar to trace his movements. The hunter and/or his guides reportedly tried, but failed, to destroy the collar, which researchers used to trace Cecil’s last movements, and ultimately discover his headless and skinned body.

The lion was apparently shot by a crossbow after being lured out of the park at night by the guides who dragged a dead animal from their vehicle. The dentist, Walter Palmer, hit Cecil with a crossbow bolt, but the injured lion managed to get away, only to be tracked down 40 hours later and dispatched with a gun shot. Two Zimbabwean guides have reportedly been arrested, while authorities are still searching for a third. No word yet on whether charges will be laid against the Minnesota dentist.

A spokesperson for Palmer, meanwhile, said that his client is “obviously quite upset over everything.” But we’re not sure if that is just in reference to the flooding of his dental office Facebook page with angry comments and threats, and an online petition demanding justice for Cecil. The petition, which went online this morning, had garnered more than 40,000 signatures by mid day.

The dentist is apparently a well known big game hunter who is in the archery record books for slaying an elk with a bow. He was also reportedly arrested by Wisconsin wildlife officials in 2008 for illegal bear hunting. A Flickr photo album by Trophy Hunt America contains shots of Palmer posing with a variety of dead animals, including a white rhinoceros, of which there are only about 20,000 left in the world.

Conservationists in Zimbabwe and around the world are bemoaning the loss of Cecil, noting that Cecil is the 23 or 24th collared lion to be killed in or near Hwange. Conservationists have pointed out that the dentist paid just $50,000 to kill an animal that was worth millions of dollars in tourism revenues. Along with Cecil, the illegal hunt also likely means the death of Cecil’s six young cubs, as the next Alpha male will probably kill them so as to assert his own bloodline within Cecil’s former pride.

Well, with one (plus six for the cubs) strike against the animal kingdom, I suppose we should balance this out with a strike against the human kingdom. Earlier this month in Texas, 28-year-old Tommie Woodward was killed by a large alligator. Woodward was reportedly killed by the  large gator after jumping into a bayou marked with signs stating: “No Swimming–Alligators!”  Not only did Woodward ignore the signs, but a marina employee reportedly told him to “[p]lease do not go swimming, there’s a big alligator out there. Just stay out of the water.”No_Swimming_sign

Woodward’s last words before screaming for help were reportedly, “Fuck the alligators!”

OK, so this doesn’t even nudge the balance beam, but I tried.

–Originally published by Hash It Out!, July 28, 2015.

The Gods Must be Angry With Us…Again!

The Gods Must be Angry With Us…Again!

—June 11, 2015

Why must the Gods always be so angry with us?

Case in point, Gods in Malaysia were apparently angered by a group of western tourists who stripped naked for a photo session on top of Mount Kinabalu late last month. The tourists’ antics evidently angered the mountain’s sacred ancestral spirits, who in response, cast down an earthquake on the area that killed 16 people (OK, so while not technically “Gods,” any spirit that can invoke a God-like cataclysm is pretty much a God in our book).

Four of the tourists have been arrested by Malaysian authorities, who are reportedly on the hunt for six others (no word yet on whether international arrest warrants have been issued). Pending charges center on public indecency, though local citizens and politicians have been calling for charges that could lead to much more severe penalties, with some of the locals requesting the tourists’ heads.

As is generally the case with all-powerful Gods, the mountain’s sacred spirits remain mute on the issue, and are letting theirAngryGod_answer_1_xlarge actions speak for themselves.

And what of Allah (“In sa Allah!”)?

He seems to have kept his anger in relative check for five centuries, but then started getting all pissed off about 50 years ago, sparked in large part by those Jewish folks who had the audacity to call his sacred land theirs. That ire soon expanded to include those who had the nerve support the Jews, and more recently to his own people, who tick him off for a broad range of reasons–Idolatry, blasphemy, apostasy, adultery, listening to western music, looking at women, shaving, flying kites, to name a few. Most recently, Allah has been casting his holy anger on those foolhardy artists who dare attempt to create his holy likeness.

Allah’s not like most Gods, though, as he does not utilize his power over the elements to inveigh his wrath. Instead he invokes his holy ire through the righteous actions of his most devoted followers. And why not? They can certainly be just as effective as a natural disaster, and they’re becoming so media savvy that the depth of Allah’s anger can truly be conveyed to the masses in color and in almost-real-time.

Jesus (“Praise the Lord!”), while relatively quiet these past few centuries, certainly had his moments.

He seems to be an equal-opportunity wrath dispenser, utilizing both the natural elements and his flock to carry out his righteous anger. Everything from the great plague to any number of earthquakes, tempests, volcanoes and other natural disasters have been attributed to his rage, though in recent centuries less and less so. His people have also been quite effective at holy wrath dispensary. Just ask the ancestors of Muslims, North and South American Indians, Africans and any number of the world’s people who have been slaughtered by Christians in the name of Christ.

How about Jeusus’ Dad (also considered to be the young version of the Hebrew God, Yehova, God of Israel, though not father of Christ)–Wrathful?

You betcha! Can you say “Great Flood” or “Sodom” and “Gomorrah?” Heck, the Old Testament is full of natural cataclysms called down upon us for one reason or another.

Roman Gods? Greek Gods? Egyptian Gods?

Sadists!

And they didn’t even have to be angry…. Perhaps they just liked to practice.

Hellfire and brimstone, what Gods don’t get angry with us?

OK so Buddah tends to be fairly benign, and some of the Hindu Gods don’t seem to have anger issues.

But we’d wager that they all have their moments, too.

Bottom line is that we’d love to see what the Gods might do should they ever be happy with us. But we’re not going to hold our breath….

–Originally published by Hash It Out! on June 11, 2015

China’s Rising Middle Class Giant

China’s Rising Middle Class Giant

How Big and How Much is He Going to Grow?

Chinese economic numbers have been considered suspect by the west for years, but even  high-level Chinese officials are starting to admit that government figures on GDP growth, fiscal revenues, credit data, and imports/exports are unreliable, at best. “Many of the numbers are watery,” Dong Dasheng, former deputy auditor at China’s National Audit Office, told audience members at an annual meeting of high-level political advisors in Beijing in March. Noting that numbers have long been massaged, Dong said the official 7.4 percent GDP growth rate (lowest one in 24 years) for 2014 is far from the truth, but “relatively more realistic comparing (sic) to the numbers in the past years.”

Despite the likely manipulation of economic numbers, few people will dispute that China’s economy, like its population, is massive. The question is, how big and how much is it going to grow? It’s like trying to calculate the size of a giant by looking at his grainy photographic portrait, and then trying to figure out potential growth by rummaging through his compost bin to determine how much he consumes.

But, no matter what the answer is, a giant is still a giant, and the Chinese middle class has quickly grown into one such giant. Again the question is, how big and how much is it going to grow?

Let’s look at this giant’s portrait and rummage through his compost bin:

To start with we need to determine what constitutes “middle class,” an ambiguous term that can easily be misapplied if its parameters aren’t delineated. Broadly speaking, middle class is the group of people in a society who reside socio-economically between the working class and upper class. In describing the North American middle class social scientists generally apply social aspects–such as educational attainment and type of employment–to the equation. On a strictly monetary basis, social scientists and economists trying to constitute what determines middle class in North America have come up with annual income ranges from $35,000 on up to $150,000.

There is no hard-set definition of what constitutes “middle class” in China, but Helen H. Wang, author of the award-winning book–The Chinese Dream: The Rise of the World’s Largest Middle Class and What it Means for You–defines Chinese middle class as households with a “third of its income available for discretionary spending.” Monetarily, a middle class household would earn somewhere between $10,000 and $60,000 per year, says Ms. Wang.

Global consultant McKinsey & Company, which conducts extensive studies on China’s middle class, believes $9,000 to $34,000 per year constitutes Chinese middle class earnings. Where one lives in China can also dictate middle class standards, as the spending power of the yuan varies widely between regions and between the countryside and urban areas. Thus, someone living in Shanghai needs to earn several thousand dollars more per year to be considered middle class than someone living in a rural village in Qinghai province.

Annual income rates have grown phenomenally in China over the past three decades, with a 10-fold jump between 1980 to 2010. According to an analysis of official government statistics by the China Market Research Group, the average annual disposable income per capita rose from $280 in 1980 to $3,000 in 2010, which put the typical Chinese household at earning about $9,000 per year as of 2010.  As of January 2014, the National Bureau of Statistics of China reported the average annual disposable income per capita at about $4,720, a 57 percent increase from 2010. The World Bank reports that China’s gross national income per capita quadrupled from 2000 to 2013, rising from $2,830 to $11,850.

So, how many Chinese are middle class, and how many will be middle class in the years to come?

Ms. Wang put the number at “more than 300-million” and at “more than the entire population of the United States,” and believes this population will reach 700- to 800-million by 2022. These indefinite figures have been bandied about by numerous other sources over the past three years, likely due in large part to the extensive media coverage Ms. Wang has received since the release of her book.

While not putting a specific number on today’s Chinese middle class, and, like Ms. Wang in referring to it as larger than the total U.S. population, McKinley & Company believes that China’s middle class will number 630 million by 2022. This equates to roughly 75 percent of the urban population and 45 percent of the country’s entire population.

The Brookings Institution, a highly influential Washington, DC think tank, put China’s middle class at 157-million people as of 2009. Brookings’ “absolute approach” for defining middle class uses the delineation of “households with daily expenditures between $10 and $100 per person in purchasing power parity terms.”

In its report–China’s Emerging Middle Class: Beyond Economic Transformation–Brookings reported that China’s middle class represented roughly 12 percent of the total population as of 2009, but that China’s middle class was on the cusp of expanding exponentially due to China’s    rapid growth rate and because a significant proportion of the population was “close to the lower-bound threshold of [Brookings’] definition of the middle class.” Given this assessment, Brookings believes China’s middle class will consist of about 42 percent of the population by 2020, and over 70 percent of the population by 2030.

Using these percentages with Chinese population projections puts the number of middle class in China at roughly 575-million by 2020, and more than 960-million by 2030.

Ernst & Young Global Limited’s Middle Class Growth in Emerging Markets report has projections similar to Brookings, placing China’s middle class as of 2010 at about 150-million, with this number rising to almost 500-million by 2020, and almost reaching 1-billion by 2030.

All of these projections about the size of China’s middle class are “giant-like,” to say the least. But will these projections be reached?

Brookings brings up several uncertainties that could impede the growth of China’s middle class, foremost being whether China can continue generating economic growth at the levels its been achieving for the past two decades. Noting that China’s “labor-Screen Shot 2015-11-10 at 5.24.33 PMintensive export-led growth…is showing signs of strain,” Brookings suggests that China needs “a new growth strategy” that encourages much greater domestic consumption. “The great uncertainty for China is whether its current growth is sufficiently robust to carry it forward until the middle class consumption engine can start to fire, or whether growth will stall before the middle class really matures.”

Ms. Wang, while more optimistic, addresses this issue as well by saying that Chinese households, which traditionally save 20 to 25 percent of their annual earnings, need to be encouraged to save less and spend more. Ms. Wang’s optimism is driven in large part by her observation that China’s younger generations are “consuming like crazy.”

An observation shared by McKinsey & Company, which considers the younger generation born between 1990 and 2010 to be the most westernized to date. The company expects that this generation–three times larger than the U.S. Baby Boomers who drove U.S. consumption for years–will double their share of consumer demand within 10 years.

Such observations are supported by recent data, such as U.S. exports to China growing from $27-billion in 2003 to $124-billion in 2014, or the fact General Motors sells more cars and trucks in China than in the U.S., whereas just 11 years ago the ratio was one vehicle for every 10 sold in the U.S.

Another factor to consider about the Chinese middle class is that it may be bigger than pundits think, and wealthier. As with their government, Chinese people are known to be “watery” when reporting financial numbers. Undeclared wealth is called “gray money” in China and it represents the proceeds from corruption (considered by some as rampant in China), income earned from “gray” areas of the economy, and unreported income such as year-end bonuses that most Chinese do not report. A 2012 survey by the China Society of Economic Reform concluded that gray income accounts for $1 trillion per year, or 12 percent of China’s economy.

But what of the elephant in the Chinese living room (pardon the pun) that no one seems to notice. That being the lop-sided demographics of the country that make it the fastest aging country in the world by median age, and estimated to become among the oldest by median age within 20 years.

China’s economic success has been largely driven by its vast pool of labor, but the water in that pool reached its peak and is now starting to slowly but steadily evaporate. According to China’s National Bureau of Statistics, the country’s potential labor force shrunk for the first time in modern history in 2012, an emerging trend that is expected to continue for at least the next 20 years due to the country’s “one-child” population control strategy.

That one-child policy, according to Chinese government statistics, has kept the country’s population in check by a factor of 400-million people. And while that had served as an economic accelerant of sorts because those additional people did not need to be fed, clothed, educated or housed, it also means that many fewer consumers, wage earners and taxpayers to help continue driving the country’s economy.

China’s lop-sided demographics suggest that the coming years will bring a dramatic decline in the cheap labor market that has served as the primary driver of the Chinese economy. At the same time China will see a dramatic increase in its elderly population, which earns little, spends little and pays little in taxes, yet will need much in the way of government services and health care.

It remains unclear how much this elephant in the living room is going to impact the economy and how much it may slow the expansion of the middle class. But it’s an elephant. It may be sleeping now, but when it wakes up people are going to notice.

–Presented to SPI June 2015

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Sources:

Wang, Helen H. The Chinese Dream: The Rise of the World’s Largest Middle Class and What It Means to You. Bestseller Press, 2010, 2012.

Kharas, Homi, and Geoffrey Gertz. China’s Emerging Middle Class; Beyond Economic Transformation. Brookings Institution Press, 2010.

Barton, Dominic, Yougang Chen, and Amy Jin. Mapping China’s Middle Class. Insights & Publications. McKinsy.com. June 2013.

Chen, Lu. Why Chinese Economic Data Can’t be Trusted. China Business & Economy. TheEpochTimes.com. March 2015.

Kuhn, Anthony. Lure of China’s Gray Economy Reaches Rich and Poor. National Public Radio. NPR.org. January 2014.

The World Bank. World DataBank: World Development indicators. databank.worldbank.org. 2015.

China Profile. Median Age of the Population in China, India, Europe and the United States of America, 1950-2100. China-Profile.com. June, 2011.

Rodney Dangerfield of Telecom Sector Seeks Respect

Rodney Dangerfield of Telecom Sector Seeks Respect

—June 9, 2009

Interdigital Communications Corporation (IDCC) has long been the Rodney Dangerfield of the wireless Telecom sector, as it just “can’t get no respect,” from either Wall Street or many of the big wireless players.  However, that may finally change later this summer as the world’s leader in cell phone sales, Nokia, could decide to come to terms with IDCC rather than face a possible U.S. importation ban on its smart phones.

IDCC has been seeking respect and revenues from its technology and patents since it was founded in 1972.  Its attempts to generate revenues from its proprietary wireless phone system resulted in significant operating losses, but the company realized that its patented cell phone technologies–those used both in handsets and for transmission (base stations)–were crucial to the development of the fledgling worldwide cell phone system. 

The big cell phone players, however, basically decided that IDCC’s patented technologies were not “essential” to the system, and balked at paying the royalties Interdigital sought, forcing the company to seek redress through the court system.

In 1995 Interdigital lost a crucial patent infringement case against the biggest cell phone maker of that time period, Motorola, which reputedly made other companies even more hesitant to license with IDCC and pay for the company’s technology.  This despite the fact that the U.S. Patent Office, and several European patent offices, revalidated and affirmed the disputed patents in 1999. 

A 10-year legal battle Ericsson resulted in a settlement in 2003, but the settlement itself disappointed Wall Street as it appeared that IDCC, which had reportedly been seeking more than $1 billion in damages, accepted “pennies on the dollar” (the settlement gave IDCC $34 million for past infringement and established a new license with rates of between .5 percent to .75 percent for handsets and a flat $6 million per year for base stations).  However, Wall Street did get excited because IDCC announced that the Ericsson settlement initiated licenses and multi-million dollar payments from Samsung and Nokia under licensing frameworks (basically agreements to pay whatever Ericsson agreed to pay) IDCC had in place with those two companies, and the stock rose  from about $14 to reach a high of $27.14 within two months. 

Of course, both Nokia and Samsung claimed foul, initiated arbitration and began other legal maneuvering (Nokia has initiated more than 10 separate legal actions–most of which ultimately proved unsuccessful–in the U.S. and abroad in a strategy some call “delay and obfuscate”) to get out of paying IDCC anything for its patented technology.  Ultimately, after arbitration awards granted to IDCC, appeals of those awards and other legal maneuvering by the defendants, Nokia in 2006 paid $253 million for their use of IDCC patented technology up to the year 2006, while Samsung in late 2008 settled for a reported $400 to $500 million to cover both past infringement and a royalty bearing license good until 2012.

At this point in the story it should be noted that most of the above mentioned legal saga revolved around 2G (or second generation) cell phone patents.  IDCC has also been a key player in the development of 3G technologies (which resulted in “smart phones” and is used extensively in wireless computing) and served on the international standards body that coordinated the development of 3G for commercial application.  The standards body reportedly accepted about 300 IDCC contributions of patented technology as either essential to the system or commercially attractive.

Starting in about 2003, Interdigital began publicly announcing that its goal was to get paid for every 3G device sold worldwide, and that it was aiming to receive from between $1 to $2 per every device.  Since then, IDCC has managed to license more than 50 percent of the 3G market with companies such as LG Electronics, Research in Motion, Apple, Panasonic, NEC, Hitachi, Kyocera, High Tech Computer, Arima, Toshiba, and, most recently, Samsung, coming to terms with the company.

And now Nokia, which remains the biggest hold-out, is facing an August 14 “initial determination” on whether the International Trade Commission (ITC) should ban the importation of Nokia handsets into the U.S. due to infringement of IDCC patents.  The ITC case mirrors the one IDCC had with Samsung prior to their settlement, in that it involves some of the same patents and that the ITC staff have recommended a finding of “no violation” (and thus, no importation ban) against the alleged infringer.  Samsung agreed to settlement just weeks prior to the “initial determination” deadline in its case, and many pundits believe Nokia will do the same. 

While the ITC staff recommendation would appear to favor Nokia, ITC judges are not under any obligation to follow the staff recommendation, and, in fact, often rule contrary to them.  And, like Samsung, Nokia just cannot afford even the risk–a sword of Damocles–of an importation ban due to the scale of the potential economic disruption it could cause.

If Nokia settles as expected, the rest of the 3G market, including Sony-Ericsson and Motorola, is expected to quickly follow.  In fact, IDCC officers have alluded to a 3G license framework the company has with Sony-Ericsson that dictates the terms under which that company will take a 3G license, and many analysts believe the primary dictate to be that IDCC licenses Nokia to 3G.       

A Nokia 3G license would boost IDCC’s annual revenues by at least 30 percent, and adding the other holdouts to the mix should represent a doubling of revenues.  While the company has been aiming for licensing terms of between $1 to $2 per 3G device, it appears that the company has been getting terms of between $0.50 to $1.25.  However, this still adds up to hundreds of millions of dollars in revenues per year, most of which will flow to the bottom line as the company generates almost 100 percent gross margin on licensing revenues. 

And these revenues should continue to increase every year for the foreseeable future as the number of 3G devices being sold every year continues to grow.  Under Interdigital’s own projections for the year 2012, with 75 percent of the 3G market licensed at $1 per device the company would earn about $700 million in 2012.  With 100 percent of the market licensed at $1 per device this figure almost reaches $1 billion.   

The company has more than 3,000 patents issued worldwide, with another 9,000 pending, and was ranked 141 among companies worldwide for the number of patents issued by US Patent Office in 2007.  Its patents cover 3G wireless, the future 4G wireless, wireless LAN and Mobility/Convergence.  Its roster of current 3G licensees represents a “who’s who” of the wireless business and currently help the company earn more than $1 per share (excepting a recent $37.1 million repositioning charge).  The addition of Nokia and other holdouts, along with a growing market for 3G devices, could easily raise the company’s earnings to between $2 to $3 per share by late 2010.

With a current P/E of around 109  and a price to sales ratio of 3.6 we cannot argue that the stock is cheap, however we would argue that the P/E is misleading given the repositioning charge.  We believe that future positive news flows, earnings surprises, new licenses, and growing revenues make the stock especially attractive on a forecasted 2010-2011 P/E of 9.5.  We expect investors to drive the price back up to the $32 to $36 range by the end of the year.

Disclosure: Long IDCC

 

Harley Davidson Executives, Investors Wear Generational Blinders

Harley Davidson Executives, Investors Wear Generational Blinders

–One of more than 70 articles I produced for the Financial Website, Seeking Alpha.

Harley Davidson Inc. (HOG) yesterday reported an 84 percent plunge in third-quarter profits and announced the dissolution of its Buell line of specialty sport motorcycles and the sale of its MV Agusta division in order to focus its resources on its namesake brand.  Harley Davidson CEO Keith Wandell said the return from the sale of an MV Agusta or Buell is far less than the return the company gets from a Harley Davidson, and that “we’re going to be able to grow the company more quickly … by investing in the power of the Harley Davidson brand.”  According to the Wall Street Journal, Wandell admitted that both Buell and MV Agusta have a strong following, but that those divisions were “diverting investment dollars away from the Harley brand to support those brands.”

The shares rose almost 5 percent on the news, and were up another 3 percent in this morning’s trading, but we wonder if investors have considered how the company plans to generate these greater returns when the Baby Boomer generation that makes up the vast bulk of its customer base is rapidly aging out of the market, and the generations following do not seem to share the same affinity for the iconic brand.

On a price to sales and price to book ratio one can see from the chart below that Harley Davidson is back to the levels of the late 1980s.  With the average age of a Harley owner at 47 years, the difference now is that unlike the period 1990 to 2002, the company is no longer mining the demographic growth market of the large Baby Boomer generation.  So, not only is the company’s potential market base growing smaller due to the smaller size of the oncoming Generation X, its growing smaller because the oncoming market base has displayed little inkling that it even likes the product.

In short, we feel that the company is making a big mistake in divesting itself of two brands that have far more appeal to younger generations than the Harley Hogs, and that company executives, as well as investors, have blinders on with regard to the multi-generational earnings power of the Harley Davidson brand.

How many people under 40 do you know that own or want to own a Harley Davidson Motorcycle? We know of none, and an informal poll of friends and family turned up none, which is not saying a whole lot because aforesaid informal poll certainly lacks statistical significance.  However, anyone giving any consideration to investing in HOG should conduct their own informal poll because those 40-and-under-year-olds are Harley Davidson’s fast approaching future market, and early indications suggest this future market doesn’t give a fig about Harley Davidson.  However, ask an under-40-year-old motorcycle rider if they’d like to own a Buell or an MV Agusta, and the response will likely be quite positive and in some cases may even induce a Pavlovian response.

The stock price action would suggest that we do not know what we are talking about; however, demographic change does not happen overnight, it’s a relatively slow progression, kind of like the Harley riders of today slipping into old age and out of their Hogs and into golf carts and wheel chairs.  As this comes to pass, Harley Davidson is going to see significant sales declines if the incoming and younger generations don’t buy into the Harley Davidson brand.

And Harley Davidson’s earlier success was built on a brand, the branding of the outlaw biker.  In the 1960s and ‘70s the Harley Davidson logo was signature wear for the “Hells Angels,” other biker gangs, and bad-boy wannabes–relatively rare and thus “cool.”  Today the logo seems almost ubiquitous on middle-aged and elderly bikers, who wear far more black leather and sport shinier chrome on their Harleys than any Hells Angel ever did.  The once cool, outlaw-style logo has been homogenized, and is about as outlaw and cool as the Walt Disney (DIS) logo.

Harley Davidson has been seeing significant sales declines since 2006, and the CEO reported that it will “bump along the bottom through 2010,” but suggested that the company’s “strategy,” cost-cutting efforts, and overseas opportunities position it for future growth.  We believe that a rebounding economy will help Harley Davidson for the short term, but feel that demographic headwinds will prove detrimental to the company’s long term future unless it accounts for the younger generations (please see our July 17 Seeking Alpha article).  With the boot Harley is giving to Buell and MV Agusta it appears that executives aren’t giving full credence to younger generational tastes quite yet, but at least they still have a bit of hope with the V-Rod model.

Oh, and speaking of overseas opportunities, Harley Davidson executives believe that India and China represent great opportunities and plan to significantly boost the company’s presence in both countries.  Let’s see, Harley Davidson primarily makes big, in many cases really big, production motorcycles.  People in China, and even more so, India, on average are among the world’s shortest people.  There’s just something not right about this picture.

–Originally Published Oct. 16, 2009 in Seeking Alpha.