What are we, retarded?

Konrad Yakabuski had an op-ed in the Globe and Mail the other day wherein he bemoaned the fact that certain fast-fashion retail chains have become so globally ubiquitous that he's not sure whether he's shopping in London or Paris, Tokyo or Toronto. "McShopping," he calls it.

And while the veil of stultifying sameness that has descended on the great shopping cities of the world makes him sad, he does find a silver lining; millions of "decent" jobs have been created in the global South to bring this cornucopia of fast-fashion to the consumers in the global North.

How retarded would you have to be to buy into that?

The reality is that the same brand names that were once manufactured in factories in Canada and the US are now made in sweatshops in Bangladesh and Pakistan and China. As recently as twenty years ago you could buy jeans made in Canada, shirts made in Canada, shoes made in Canada... and while we may have referred to those factories as "sweatshops," they had little in common with the sweatshops in Asia that we've outsourced our production to.

Back in the "boat people" era my family sponsored a family of Vietnamese refugees into Canada. Two or three of them got jobs at the Rennie shirt factory in Guelph. That was considered a bottom-rung shit-job, the kind of place that new immigrants go to to get a toe-hold in the new land. Within three or four years that Vietnamese-Chinese family had bought their own house in Guelph, which was a veritable palace compared to the "house" that a typical Bangladeshi garment worker in one of Yakabuski's "decent" jobs would find themselves living in today.

Yet we are constantly implored to view the immiseration of workers in the global South as evidence of progress.

That's not progress!

That's just bullshit!

And here's some more progress for you. I happened to find myself wandering around Home Depot this afternoon. Spied a Samsung fridge that had been marked down by an unbelievable $2500! That caught my eye; I often buy shit I don't need because I get a good price on in. My garage is so full of these bargains I haven't been able to park a vehicle in there for years.

But wait a minute... even with that $2500 discount, this refrigerator is still within a whisker of five grand. What gives?

It's a good-sized double door stainless-steel with an ice-maker. OK, that's way more complexity than I'd ever consider, but you can get one of those for around fifteen hundred. So where's the other six thou come in?

Aha! Our Samsung has a 21.5 inch touch screen right on the fridge door! But wait a minute; how does that become a six thousand dollar touch? There's plenty of touch-screen monitors out there for $500 or less...

I figure you can buy that stainless two-door fridge, a computer with a bigger touch-screen, and top the package off with a decent phone, and you'll barely break the two grand barrier. I guess the genius of Samsung is to stitch all that into one package and charge a 200% premium! That premium is your ticket to the "internet of things!"

That's more progress for you!

Or maybe just more bullshit.

Is it still time to short Apple?

Apple shares have lost about a third of their value since I originally made  that short call last summer. That's a couple hundred billion of market cap gone like farts in a hurricane.

I'm perfectly aware that there's lots of reasonably well-informed analysts out there who project the company's rate of cash accumulation going forward will continue at the rate of the past few years. If one accepts that line of reasoning it's easy to think that two or three years down the road the cash horde alone will equal the current market cap.

Ergo, at $430 Apple is a buy, even a bargain!

I think not, and my argument against buying Apple is based at least as much in sociology as in economics.

Dominant brands in any tech field don't dominate forever. Think Kodak, Xerox, Sony, Nortel, RIM...  that's a list that could go on for a long time. Times change, tastes change, and most importantly, the competition never stops competing.

Here's an insightful review of Steve Job's biography by Evgeny Morozov, published a year ago. I was especially intrigued by Morozov's discussion of corporate culture at Apple and how dependent it was on the personality of one man.

No matter how gifted the professional managers now at the helm are (and the jury is out on that question) it is not possible for them to maintain that corporate culture. It will be self-maintaining due to its own momentum, but that's a time-limited phenomenon.

I think the share price drop over the past six months has more to do with the atrophy of that momentum than with any material developments with the company.

And that's something the management cannot change.

Between the image problems that have emerged due to its relationship with Foxconn, its increasing dependence on litigation instead of innovation to maintain market share, the loss of a charismatic leader, the renaissance of key competitors, especially Samsung, the next three years are not going to look like the past three.

At $430, Apple still has a long way to drop.

Pot addled hillbilly notices Samsung making Apple sauce months before Wall Street Journal

Recently there's been a flurry of debate over whether Apple is losing their coolness factor. Ian Sherr and Evan Ramstad triggered the debate with this article in the Wall Street Journal a few weeks ago.

That's almost six months after Falling Downs raised the same question.

C'mon boys, if you're reading this blog, give credit where credit is due!