Amazon To Open 3,000 Cashierless Convenience Stores By 2021

Retail workers who are pushing for higher wages better take notice: Amazon is preparing to put their bosses out of business.

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Roughly nine months after opening its first Amazon Go store in Seattle, Amazon announced on Wednesday that it is planning a massive expansion of the franchise. The company has been notoriously tight-lipped about Amazon Go since it first started offering tours of its prototype Seattle location to select journalists back in 2017. After opening its third cashierless Amazon Go location in Chicago earlier this year, and is planning to open six more locations by the end of this year, before eventually scaling up to 3,000 locations by the end of 2021. If Amazon succeeds, Go will become the largest convenience store chain in the US, per Bloomberg.

So far, most of the extant Amazon Go locations offer only a small selection comprising mostly salads, sandwiches and snacks.

An Amazon spokeswoman declined to comment. The company unveiled its first cashierless store near its headquarters in Seattle in 2016 and has since announced two additional sites in Seattle and one in Chicago. Two of the new stores offer only a limited selection of salads, sandwiches and snacks, showing that Amazon is experimenting with the concept simply as a meal-on-the-run option. Two other stores, including the original AmazonGo, also have a small selection of groceries, making it more akin to a convenience store.

But as the company ramps up the logistical back-bone necessary to support the chain, it ultimately hopes to conquer the fast-casual market in dense urban areas where wealthy professionals who might be willing to spend a little more on a salad or a sandwich typically proliferate. Ultimately, the company hopes to compete by eliminate meal-time congestion with its grab-and-go automation. The initial market reaction to the news was muted, though shareholders probably aren’t thrilled about the massive capital investment that will eat away at operating profits.

Chief Executive Officer Jeff Bezos sees eliminating meal-time logjams in busy cities as the best way for Amazon to reinvent the brick-and-mortar shopping experience, where most spending still occurs. But he’s still experimenting with the best format: a convenience store that sells fresh prepared foods as well as a limited grocery selection similar to 7-Eleven franchises, or a place to simply pick up a quick bite to eat for people in a rush, similar to the U.K.-based chain Pret a Manger, one of the people said.

Shoppers use a smartphone app to enter the store. Once they scan their phones at a turnstile, they can grab what they want from a range of salads, sandwiches, drinks and snacks — and then walk out without stopping at a cash register. Sensors and computer-vision technology detect what shoppers take and bills them automatically, eliminating checkout lines.

One potential obstacle to expanding the chain is the high cost of opening each location due to the sensors and AI technology necessary to support its automatic-checkout system. The company’s other physical stores include about 20 bookstores and Whole Foods, which it bought last year.

The challenge to Amazon’s plan is the high cost of opening each location. The original AmazonGo in downtown Seattle required more than $1 million in hardware alone, according to a person familiar with the matter. Narrowing the focus to prepared food-to-go would reduce the upfront cost of opening each store, because it would require fewer cameras and sensors. Prepared foods also have wider profit margins than groceries, which would help decrease the time it takes for the stores to become profitable.

Amazon no doubt sees an opportunity to profit by grabbing a slice of the $233 billion convenience store market. After eating the initial capital expenditure, Amazon will easily be able to compete on operating costs. But to thrive in such a competitive market, location will be key, according to several analysts.

AmazonGo will be more of a threat to fast-casual restaurants if it is targeting cities, said Jeff, vice president of NACS. Shoppers rate location and a lack of lines as the most important factors when shopping for convenience, he said.

“AmazonGo already has no lines,” Lenard said. “The key to success will be convenient locations. If it’s a quarter mile from where people are walking and biking, the novelty of the technology won’t matter. It’s too far away.”

One unintended consequence of Amazon’s expansion could be a worsening row with President Trump, as Amazon Go could eliminate some of the food-service and retail jobs that have been among the fastest-growing sub-sectors of the US labor market. This could threaten the robust employment gains that President Trump has cited as evidence of his presidency’s success. And Trump has lashed out at Amazon in the past for being a job-killer. And the FTC has been quietly hiring staffers who are looking into how the agency can bring an anti-trust case against tech giants like Amazon. 

Going forward, we imagine investors will be on the lookout for signs that this expansion could be the final antagonism that finally provokes the government to take action against Bezos before Amazon truly does become “the Everything Store”.

Though there is one potential upside for all those displaced low-wage workers: The format will make looting during natural disasters that much easier.

Source: ZeroHedge

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The College Collapse

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“..What this tells us is the elite are beginning to set fire to the bridges over the river that separates them from us. The positions in the Cloud will require passing through one of the monasteries to be properly vetted. In the future, the Dirt People will have to sort out their status system within their favelas…”

Back when National Review first allowed comments on their posts, they would post all sorts of things in their group blog. Readers would respond to all of it. For example, when they were looking for a receptionist, they posted the job on the blog. Hilariously, one of the requirements was a four-year degree. Why anyone with a college degree would take a receptionist job was a mystery, but an even bigger mystery was why National Review would require it. The comments on it were the best things posted that week.

Of course, Rich Lowry was not really thinking about the requirements of the job when he posted it. What he wanted was someone from his world, the world where everyone goes off to college and sends their kids off to college. In other words, he was signalling to potential applicants that he did not want Rosie from the neighborhood, who likes to file her nails while on the phone. Instead, he wanted a young white girl fresh out of college, who just needed a job while she sorted out what she was going to do with her life.

That is, in many ways, what a college degree has become since the 60’s. It tells potential employers things about yourself that they could never ask and that would never show up on the CV. For example, if you went to a private college, it means you most likely were raised in an upper middle-class family. If you went to the satellite campus of the state university, it probably means you came from the lower ranks and you were not a great student. These are the sort of subtle clues that are reflected in the education section.

Of course, attending an elite university is the big flashing neon sign on a person’s resume, which is why entrance is super-competitive. It’s also why it is not difficult to graduate from one of these colleges. The graduation rates at these colleges are near 100%, even for athletes. Compare that to Ranger School, where 60% fail the first time. Yet, if you have the former on your CV, it counts for more than if you have the latter. The people hiring for elite positions care much more about what the former says about the applicant.

This is why a few years ago the elites started to panic over the influx of foreign students into elite colleges. The competition for these slots was already tough. Having to compete with the children of foreign ruling classes would make the process even more difficult for the children of Cloud People. Of course, this is why Harvard, and most likely the other elite colleges, discriminate against Asians. The elite is for whites and Jews, with a sprinkling of diversity to spice it up to allow the elite to pretend they like diversity.

This “problem” with the elite colleges has been an excuse for the ConservoCons to shriek “hypocrite” at their Progressive masters, but it is actually a good thing that the people in charge are fine with racial discrimination. At the minimum, it suggests they still have the will to survive. It also reminds us that they are not bound by their own rules when defending their privileges. No ruling class in human history has peacefully agreed to step aside based on the logic of their own rules. They always have to be removed by force.

At the other end of the spectrum, colleges that serve the hoi polloi have been struggling with a different set of problems. A diploma from State U is about practical things like getting a job and bargaining for a salary. In fact, it really only matters for the first decade after graduation. After that, the work history is what counts. The great bust-out that is the American public college system has reached a terminus and enrollments are now starting to drop, as people figure out the return is not always worth the investment.

As a result, the public universities in America are slowly beginning to change. One remedy has been to import foreign students, who will pay full rate. This actually started with small private colleges like Boston University in the 1980’s. They figured out that Japanese kids would come to Boston, pay tuition in cash, as long as they were not required to study too hard. For state colleges, there is the added benefit of being able to charge full rate, rather than the discounted rate for in-state students. That and it counts for diversity points.

Of course, like every business fighting a revenue drop, cost cutting is on the table. In America, much of college is just an extension of high school. Look at the requirements of college fifty years ago and compare them to now. Then there are the frivolous things like gender studies or communication arts. Pretty much everything in the core curriculum of a modern college should be tackled in high school. The rest should be discarded. That’s why we see colleges dropping large chunks of their current offerings.

There is something else going on that speaks to the larger issues looming over the North American Economic Zone. Members of the High Moral Council are starting to drop the college requirement for new hires. What this tells us is the elite are beginning to set fire to the bridges over the river that separates them from us. The positions in the Cloud will require passing through one of the monasteries to be properly vetted. In the future, the Dirt People will have to sort out their status system within their favelas.

It also opens the door to further polluting the standards that reflect biological reality. By dropping the college requirement, the companies are free to hire the black over the white, the female over the male. After all, without anything close to an objective standard, the latest moral fads handed down from on high are the default filter. It also makes the diversity tax explicit. Companies will be expected to hit their vibrancy quotas, because they will not have the excuse that they cannot find qualified non-white candidates.

Source: The ZMan

What’s Driving The Housing Market Today?

The Housing Picture Is Not Brightening – Part I

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A house should be earned – It is not a right

The future of the housing market is a topic that has been subject to a great deal of debate and can be somewhat confusing. The intention of this post is to dispel some of the myths that have been generated and add some clarity to the discussion. One of the charts below clearly shows that new construction is still far below levels prior to 2008. It should also be noted that much of the new construction is in apartments and not single family dwellings. In much of the country, housing units are being built using cheap money flowing from the Fed and Wall Street under the idea that if it is built “they will come.” While many people claim the formation of new households and pent-up demand drives this construction I beg to differ. I contend it is a combination of too much money looking for a place to hide and buyers looking for a safe place to put their money.

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As I wrote this post I tried to do a bit of additional research to supplement what I know as a contractor and Apartment owner but what I found was more like a pack of lies and half-truths spun to fit an agenda. In America, the government, coupled with a slew of builder and Realtor associations control the housing narrative. Huge discrepancies exist in the cost of housing in the various markets across America and while price variations are not uncommon they should be seen as a red flag and reason for caution. Many of the messages being promoted as common knowledge do not pass serious scrutiny. Those of us in the trenches and with our boots on the ground often see things from a different perspective than the economist in their ivory towers, Washington politicians, Wall Street elite, or the media. Home ownership in America is in decline and demographics are not supportive of higher prices. If prices rise it most likely it will be a result of inflation.

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Note the amount of traffic, or calls an apartment complex receives may have little to do with the strength of the market. A well qualified potential tenant only has to apply at one complex while those who are rejected continue time after time. Government subsidized housing through programs such as section 8 have cannibalized the market often taking the “best of the worse” and leaving those landlords who choose not to participate with a rather unsavory pool of potential tenants from which to choose. This often includes those denied government housing, nearly bankrupt, or chronically unemployed. The city where I live ranks 23rd in the nation for having the most “zombie foreclosures” however, markets in other parts of the nation are often not as strong as the media claims. A relative of mine who sold a home with an extra lot that was on a golf course north of Houston several years ago took a severe beating. Weak pricing in a market that was touted as very solid is more proof that what many claim is a “boom” is far from spectacular.

A Bloomberg article years ago titled “Wall Street Unlocks Profits From Distress With Rental Revolution” looked behind the curtain and pointed out that a great deal of this housing recovery that has driven the average home price up 30% since 2012 has been the result of Wall Street hedge funds buying in bulk foreclosed houses in order to turn them into rentals. Like many people, I find it totally objectionable these deals were “bundled” and offered in such a way that allowed big business to crowd the average American out of the housing market. In parts of the country, cash fleeing China and other troubled countries has flowed into the market pumping up prices. These type of situations create a questionable base for higher home prices when we consider the low end of the market is driven by Fannie, Freddie, and the FHA all insuring 3.5% down payments from borrowers that lack substantial collateral. History has shown that such special financing simply encourages people to rush out and buy homes they cannot afford. It is important to remember that low-interest rates do not necessarily bring about quality growth or prosperity, decades of slow growth in Japan has proven this.

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One of the sad accomplishments of current Fed policy is that low-interest rates often do not create all that much new demand but simply moves what does exist forward. To make the situation worse the FHA is busy issuing and guaranteeing risky mortgages written by thinly capitalized non-banks. In 2012 the large Wall Street banks represented over 65% of FHA backed loans, today that number has cratered. Even they have realized loaning money to people that won’t pay it back is a recipe for disaster. America is preparing for a replay of the 2008 housing crisis. Our politically motivated government has insured subprime mortgages with down payments of as little as 3.5% while using weak underwriting standards. We are even seeing restrictions raised on borrowers with past foreclosures in a housing market that may drop 20% when this Fed Wall Street bubble pops. Years ago Lee Iacocca who brought Chrysler back from the brink and made the company viable said something to the effect of when you special out all your cars on Monday you have no sales for the rest of the week. In the current situation, low-interest rates are only one of the factors distorting and skewing America’s housing markets, others will be discussed in part two.

Housing In America – Part II

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When it comes to real estate, low-interest rates at some point becomes a double edge sword, that affects both its value by making it easier to purchase thus driving up prices, and at the same time allowing more building to take place and increasing the supply. Often we reach or exceed demand, this eventually has a dampening effect on rents and people stop buying it as an “investment”. Rents from real estate and the prices it brings when sold must appreciate more than the natural depreciation from the wear and tear from age or the main driver for owning it as an investment quickly vanishes. Oversupply is the bane of real estate and crushes the value of this hard and expensive to maintain commodity. History has generally shown homes that are paid for and un-leveraged to be a better than average place to store wealth when purchased for a good price, as to whether now is a good time to buy that is difficult to say.

How does the reality of a half-empty apartment complex and a slew of empty houses gel with what we hear about soaring rents, the demand for more housing, and more affordable housing? Those declaring housing has fully recovered must admit housing prices vary greatly across the nation and this is a problem that can be difficult to get your head around. Only politicians in Washington would be silly enough to think that landlords who have to compete against subsidized housing would be eager to remain in the game or that someone working for a living enjoys paying more for an older apartment than someone on the dole who moves into a brand new unit for a fraction of the cost. By not rewarding those who do the right thing our current policies have a corrosive effect on both housing and society.

America has built a lot of housing units over the years, now we must face the fact that they need to be maintained. Instead of focusing and creating policies to rebuild our cities by encouraging homeowners to invest more in upgrading windows, adding insulation and improving the existing housing stock, Washington has doled out low-interest money to Wall Street and home builders in an effort to kick-start the economy by building new housing to generate the illusion of growth and rising prices. Currently, we are in uncharted waters and where this market is headed is anyone’s guess but one thing is certain it is not straight up. Speculating on housing is dangerous and should not be encouraged through bad policy. When people leave older neighborhoods and move to a new house in the suburbs enticed by current artificially low-interest rates they in effect hollow out our cities.

https://martinhladyniuk.files.wordpress.com/2018/09/440c6-old-house-crazy-painting-the-porch-diy-05.jpg?w=624&h=416Old houses need to be maintained

Adding to our housing problems is low down payments and other policies often put people in older houses that they have no interest or knowledge in how to maintain. This can cause even more people to flee the area and brings about further decay. When offered the choice many people find moving easier than repairing and maintaining their homes or neighborhoods and low-interest rates power this trend forward.  Policies should be geared toward creating jobs that maintain these units instead of making them prematurely obsolete. This is a flashing red light warning of danger ahead. By choosing the easy answers America has not faced its housing problems with long-term solutions and encouraging this bodes poorly for the future.

Get your financing in order and get the project started before the market dries up has been how developers everywhere have operated for decades. I have owned an apartment complex in the Midwest for many years and many houses in my area are empty or under leased. In 2005 and 2006 prior to the housing collapse, many people were looking at second homes, today not only have they shed the extra home many have doubled up with family or friends reducing the need for housing. This has left me busy trying to sort out and make sense of the current economy. This is no easy task, it seems we are pushing on a string and calling it demand when someone who can barely pay the rent is encouraged by the government to buy a house they can neither afford or maintain. Currently, we have a shortage of “qualified” buyers and renters.

A close look of permits and starts shows many of the future housing starts are multi-family units, these are being built with cheap “Wall Street” money for the markets of tomorrow with little regard for the realities of today. A new report by Yardi Systems Inc indicates apartment construction is far outpacing demand in many markets, this overbuilding of multi-family will have ramifications on the cost of living and the resale value of homes going forward. It is a fact that single-family housing starts have languished as the percentage of multi-unit buildings under construction has risen. Some of these may be slated as condos but another name for an unsold condo that is being leased is “apartment.”  Let us call a spade a spade, much of what we see today is not a housing market, it is a place where too much money has gone to hide under the impression and hope it will pay off when inflation awakes and comes out roaring from its quiet slumber.

Source: by Bruce Wilds | Advancing Time | Part 1 | Part 2

Permits Plunge But Starts Surge As Housing Data Suggests Rough Future Ahead

After small rebounds in July (after three ugly months prior), August was expected to see those gains consolidate but the picture was extremely mixed with Starts spiking 9.2% MoM and Permits plunging 5.7% MoM.

  • The surge in Starts is the best month since January 2018
  • The plunge in Permits is the worst month since Feb 2017

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This suggests a rough time ahead for housing as Permits plummet to the lowest since May 2017…

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All of which suggests home builder stocks have further to fall…

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Probably time for some more rate hikes!

Source: ZeroHedge

Trump & Lighthizer Announce Round #2 Tariffs on $200 Billion of Chinese Imports

…When you plant your trees in another man’s orchard, don’t be surprised when you pay for your own apples…

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President Trump has instructed U.S. Trade Representative Robert Lighthizer to execute Round Two of tariffs on Chinese imports. The first round applied to $50 billion in products. The current round applies a 10% tariff to $200 billion (effective Sept. 24, 2018), until January 1st, 2019, when the tariff increases to 25%.

The list of products is particularly focused, and happily we note it includes almost all Chinese processed food imports.

Chinese food processing is sketchy, and China has refused to comply with most international food safety programs. However, President Trump spared smart watches from Apple and Fitbit and other consumer products such as bicycle helmets and baby car seats.

In a statement announcing the Round-Two tariffs, President Trump warned China if they take retaliatory action against U.S. farmers or industries, “we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.”  That would hit Apple and all consumer good imports. Here’s the announcement and the list of products:

Washington, DC – As part of the United States’ continuing response to China’s theft of American intellectual property and forced transfer of American technology, the Office of the United States Trade Representative (USTR) today released a list of approximately $200 billion worth of Chinese imports that will be subject to additional tariffs.

In accordance with the direction of President Trump, the additional tariffs will be effective starting September 24, 2018, and initially will be in the amount of 10 percent. Starting January 1, 2019, the level of the additional tariffs will increase to 25 percent.

The list contains 5,745 full or partial lines of the original 6,031 tariff lines that were on a proposed list of Chinese imports announced on July 10, 2018.

[…] In March 2018, USTR released the findings of its exhaustive Section 301 investigation that found China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory and burden or restrict U.S. commerce.

Specifically, the Section 301 investigation revealed:

  • China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.
  • China deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations.
  • China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer.
  • China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.
  • After separate notice and comment proceedings, in June and August USTR released two lists of Chinese imports, with a combined annual trade value of approximately $50 billion, with the goal of obtaining the elimination of China’s harmful acts, policies and practices.

Unfortunately, China has been unwilling to change its policies involving the unfair acquisition of U.S. technology and intellectual property. Instead, China responded to the United States’ tariff action by taking further steps to harm U.S. workers and businesses. In these circumstances, the President has directed the U.S. Trade Representative to increase the level of trade covered by the additional duties in order to obtain elimination of China’s unfair policies. The Administration will continue to encourage China to allow for fair trade with the United States.

A formal notice of the $200 billion tariff action will be published shortly in the Federal Register.  (read more)

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A PDF list of the Round #2 impacted products is Available HERE.

Source: by Sundance | The Conservative Tree House
***

China Retaliates: Beijing To Levy $60BN In Tariffs On US Goods Effective Sept 24

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As expected, Beijing did not waste much time responding to Trump’s latest tariffs, and moments ago China issued a statement disclosing what its planned retaliation would look like.

US Treasury Secretary Mnuchin Lists Park Ave. Apartment For $33 Million, Three Times What He Paid For It

No sooner did we report that the housing “recovery” over the last 10 years has skipped many “underwater” communities in the United States, than we found confirmation of the opposite: Treasury Secretary Steve Mnuchin is selling his Park Avenue apartment in Manhattan for three times the price that his aunt paid for it 18 years ago. He has listed the apartment for $32.5 million. His Aunt is listed as the broker on the sale.

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The sale is happening at the same time that residents of numerous commuter towns across the United States have seen the values of their houses collapse to less than half of what they were in 2006, prior to the housing crisis.

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Mnuchin recently listed the 6500 square-foot, 12 room apartment that he bought from his aunt in 2000. It was purchased then for just $10.5 million. It had been in his family since the 1960s and, when he turns around to list the property this time, he stands to net $22 million more than what he paid for it, if his asking price is met.

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The apartment is being listed by Warburg Realty and is located inside of 740 Park Ave., inside the historic Rosario Candela building. Other famous former tenants of this building include the Rockefellers and the Kochs. Currently, Stephen Schwarzman, the CEO of Blackstone Group, lives there. The building was developed by Jacqueline Kennedy Onassis’ grandfather.

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Other than that, it’s just your average ordinary run of the mill apartment on Park Avenue: five bedrooms, a wall wood paneled library, a wet bar, a formal dining room, a private elevator, 11 foot ceilings, marble floors and a sweeping spiraling staircase that still has its original banister.

The first floor of the apartment has six bathrooms and an 800 square-foot living room.

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Upstairs, the apartment has a master suite, walk-in cupboards, study, two more bathrooms and three extra bedrooms. The apartment spans two levels in the building on both the eighth and the ninth floor and it also has a large kitchen with a “breakfast nook”.

While that all seems extremely glamorous, Mnuchin hasn’t even used this apartment as his main residence, reportedly. Mnuchin was living in California before his appointment to the Trump administration, but has since bought a $12.6 million apartment in Washington DC.

We’re glad to hear that Mnuchin was able to ride out the housing crisis successfully. We were worried about him for a moment.

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Source: ZeroHedge