InfiniteCompetition.com

Manufacturers have become so good at making millions of highly reliable vehicles that the world is awash in them.  And this was true before the recent financial melt down, and is still before China begins producing and exporting decent vehicles (only a matter of time).

Not only are there way too many new cars coming on the market, but since cars a few years old are still incredibly useful, new cars must compete with these used cars too.

With so many manufacturers, in so many places, competing for so few buyers armed with so much information, we are approaching infinite automotive competition.

What does this mean?  Great deals for consumers.  Brutal business conditions for auto makers with no end EVER in sight.  Vehicles are truly a commodity, with a vast over-supply.  Only the strong will survive.

Manufacturers will have to clearly focus on one or at most two of the following: product, price, or service.  No one can win in all three for any given brand.

A good time to be a consumer.  A very bad time to be in the auto business.

Who knew that Icelandic banks were doing the same kind of investing in mortgage backed derivatives as U.S. banks, and that U.K. consumers banked at Icelandic banks, and U.K. local governments invested in Icelandic bank investments.  And who knew that Iceland’s banks became vastly bigger in deposits and obligations than the Icelandic government could support?

The BBC has written extensively on this mess and what it means.  Iceland’s banking system and government could well declared bankruptcy which would set that nation’s economy back years.

It is but one tragic fall out of the world of infinite banking.  Where investments become infinitely complex, and in most cases unregulated.  Money is moving at infinite speed around the globe, in millions of transactions per second.  How can ANY government regulate or monitor this?  And that is without considering all the CRIMINAL movement of money.

Speed ‘governors’ will probably be needed to slow down the movement of money around the world, so that alarms, indicators, and firewalls can be put in place to warn and potentially stop things getting out of control.

It will need the best financial and mathematical minds to work together to come up with new standards.  Will it happen?  Who knows.

The current financial crisis has been a long time coming.  The country is now reaping the results of decades of effort to evade economic cause and effect. Some government debt is understandable and often desirable as a means to accomplish a lofty goal (like borrow money to build a highway and pay it back through transportation tax income).

But the U.S. Federal government took things to a whole new level in the 1990’s by demanding that banks make loans to unqualified low and no income persons.  Freddie Mac and Fannie Mae supposedly would buy all these loans off the banks until one day they couldn’t!

With the government backed Freddie and Fannie distorting the market, Wall St. and in turn banks around the world, created distorted and outrageous financial derivatives around all these millions of mortgages, offering ‘great returns’ and great ratings, even though those ratings were not based on reality.

Well, the house of cards fell, bringing down not only the major investment banking scoundrels, but also many large and small banks that went along for the ride, caught up in the “well if they’re doing it I guess I need to be doing it too, to compete!”

The U.S. government created near INFINITE COMPETITION in banking and financial markets which is why NO ONE can understand the extent of what has happened.

The resulting mess and scrambling by governments and banks is a desperate attempt to stop the holes in financial dams everywhere.  Meanwhile, the general public has lost trillions, even those who played by the rules perfectly, and paid their bills, put money down, held a job, and did what their financial planners told them to do.

What a mess.  It will leave the U.S. economy broken for a long time, and the solutions just leave the U.S. government in even more debt.

Consumers today have almost infinite choices where to buy goods and services.

Customers in high volume ‘discount’ stores are no longer just those with low incomes.  Consumers with plenty of disposable income choose to shop at stores like Sams and Costco.

Millions of web sites like Amazon.com compete with brick and mortar stores for your business.

What has this done to margins?  Not surprisingly, margins on the actual goods and in many cases services too are tiny.  This is a great win for consumers and is what Capitalism is all about, bringing the best products for the lowest prices in an efficient competitive marketplace.

Smart retailers have found ways to add margin back however.  Best Buy is a great example.  So you buy that flat screen TV for a great price.  You’re psyched to go home and hook it up.  Oh wait, you need a new type of cable to connect it.  Hmm… it says $20 for a cheap one, $30 for a good one, and $50 for a supposedly great one with thick insulation, gold plating and some patented shielding.  Cables are one of the HIGHEST MARGIN ITEMS in Best Buy’s stores.  Their cost of goods is tiny, the margin is HUGE.  So they don’t mind the low margins on other items.  Same with batteries, ‘adapters’ (such as connecting an iPod to your car audio system), fashion cases for iPods and cell phones, and much more.  These impulse items are where the big profits are! Read the rest of this entry »

Infinite Competition, enabled by efficient communications, computers, and transportation, has brought many developing nations into the global marketplace that were not in it before.  Many of these nations have become, on a relative basis compared to earlier, fabulously wealthy.  Now all this ‘infinite money’ doesn’t just want to sit around, it wants to make more money, or rather the people whose money it is do!

Vast sums of ‘infinite money’ went seeking easy returns in the marketplace.  Much of it went to back global mortgage investments which were seen as relatively low risk with high return.  But, there was so much demand for this easy money that investment firms were running out of mortgages to ’sell’ as investments.  So they lowered the qualification bar for getting mortgages, to a ridiculous point where people could in essence borrow whatever they want with no qualifications.  And with all this easy money for borrowers, demand for homes skyrocketed, along with, no surprise, home prices.  And around and around it went.

This global pyramid scheme, like all others, was inevitably destined to collapse.

An excellent NPR (National Public Radio) audio stream about this can be found by clicking here and then click Full Episode on the left.

How many ways do you communicate? E-mail? Web forms? Blog? Paper? Instant messenger? Text messaging? Cell phone? Faxes? Postal service? POTS (plain old telephone system)? Advertising? These are just a few and you probably use most of them and more.

If we don’t yet have quite an infinite ways to communicate, we are moving toward an infinite number of channels among the ways and the quantities today are staggering between internet traffic, cell phone minutes and messaging, etc.

Besides all the ways you communicate, how MUCH are you communicating or at least trying to deal with?  Does a text message or IM or e-mail ever come at a bad time but you feel compelled to respond to it?  Do you get tons of bad jokes from friends and people you don’t know which you feel bad ignoring but you do anyway.  And then there’s spam.  One person’s treasure is another person’s spam!  Again the quantities are STAGGERING.

So what is infinite communication doing to us?  Leave a comment!  If you have time…

Traditional music publishers have held a tight grip on distribution, promotion, and deciding who will become popular!  The British television show Pop Idol, and now the American megahit American Idol, have turned this on its head, letting a potentially infinite number of ‘votes’ decide who will become popular, for whatever reason!  A stroke of genius by Simon Cowell and his associates.

Beyond American Idol bringing infinite competition to pop music, the distribution of music now has an infinite number of channels, with a huge number being illegal and unstoppable.  Otherwise law-abiding people think nothing of ‘burning a CD’ of someone else’s purchased CD, or downloading music from some questionable web site, often bringing viruses or worse onto their computers.

We now have infinite artists, with infinite distribution, to infinite consumers, and it is an infinite cacophony of sound!  And of course, video too…  Andy Warhol would be proud and smiling.

Welcome to InfiniteCompetition.com.  And so it begins…