Isegoria

Steve Rose on how Dubai’s bubble burst:

It has finally happened: the Dubai bubble has burst. Architecture-spotters like myself have looked on in amazement, or rather incredulity, at the way the tiny emirate has continued to unveil ever grander construction projects — taller skyscrapers, huger hotels, vaster artificial islands — in apparent defiance of the global credit crunch.

Now, that crunch has hit home. This week’s Architect’s Journal reports that “architects and developers in Dubai are freezing recruitment and making redundancies as the emirate’s real-estate market begins to crumble.” Large developers in Dubai are laying off staff, including Emaar the company behind the Burj Dubai, the world’s tallest structure, the magazine reports. Other headline-grabbing projects like the Palm Deira, the next artificial island planned off the coast, are on hold indefinitely, and foreign architects and construction specialists out there, such as RMJM and Ramboll Whitbyird, are making staff cuts or freezing recruitment as a result, says the AJ.

According to one British architect I spoke to, who was in Dubai just 10 days ago, the situation is even worse than that. “Projects are being pulled left right and centre,” he said. “Unless they’ve been funded by a sovereign wealth fund, they’re being pulled. A lot of things have to be redesigned more cheaply, to sell at lower prices. Where people have made first down payments on projects, they’re not making the second one. And a lot of what has been completed will be standing empty.”

Not that anyone in Dubai will officially admit any of the above.

Dubai’s “build it and they will come” philosophy had worked spectacularly:

Remember when David Beckham was buying a house on the Palm? How many people have seen him there since? Still, the publicity worked: properties on the Palm changed hands for huge sums before they were even built, peaking at a preposterous £5m. Today those houses are apparently closer to £1.8m, down from £2.7m just two months ago.

Reality however, has finally come to town: the Dubai Financial Market — the general stock index — has fallen from a high of 6,315 earlier this year to just 2,012 yesterday. Emaar’s share price has plummeted 79% in less than a year; according to some estimates, property prices have fallen by as much as 49% in parts of the Dubai market. The overall figure is much lower, in the region of 4%, but this is a place that’s become accustomed to its figures only going in one direction and a lot of people are being caught out by the turnaround.

So now, it’s more a case of “don’t build it, because nobody can afford to come.”

Japan's Latest Fashion Has Women Playing Princess:

Ms. Yamamoto is a hime gyaru, or princess girl, a growing new tribe of Japanese women who aim to look like sugarcoated, 21st-century versions of old-style European royalty. They idolize Marie Antoinette and Paris Hilton, for her baby-doll looks and princess lifestyle. They speak in soft, chirpy voices and flock to specialized boutiques with names like Jesus Diamante, which looks like a bedroom in a European chateau. There, some hime girls spend more than $1,000 for an outfit including a satin dress, parasol and rhinestone-studded handbag.

It all started simply enough:

Jesus Diamante started the princess boom. Toyotaka Miyamae, 52, who had run an import shop specializing in evening gowns, set up the company in Osaka seven years ago to design feminine dresses tailored to Japanese women, whom he found to be shorter and to have smaller chests than Western women. Inspired by his favorite actress, Brigitte Bardot, he created dresses in quality fabrics that mimicked the feminine and elegant style of her youth.

“What I wanted to do wasn’t that unique,” says Mr. Miyamae, who named the company after a Japanese musical. “I just made them to fit Japanese bodies.”

Mr. Miyamae’s knee-length dresses are studded with fake pearls and flowers and have names like Antoine (short for Marie Antoinette). They became popular among women who were looking for a cleaned-up look after the popularity of ripped jeans and layered casual clothing in the late 1990s. The chain’s sales have grown 20% a year, to $13.4 million in the year ended March 2008, even though it has just four stores, including one in Tokyo’s trendy Harajuku neighborhood. It has spurred a slew of rivals with names like Liz Lisa and La Pafait.

I’m not sure it’s what Toyota knows that GM doesn’t so much as what Toyota does:

Do you know how many hourly jobs GM has laid off from 2006 to July 2008? Take a guess. How about 34,000? And now, they’re talking about another 5,500 layoffs.
[...]
How many hourly jobs has Toyota’s American production system laid off in the same time frame? Zero. That’s right. ZERO. How? Isn’t Toyota experiencing the same slow down in auto sales as GM is? Yes, it is. And yes, Toyota has halted production at its Texas and Indiana plants for the past 3 months. But the 4,500 people who work at those plants have not been laid off.
[...]
“This was the first chance we’ve really had to live out our values,” says Latondra Newton, general manager of Toyota’s Team Member Development Center in Erlanger, Ky. “We’re not just keeping people on the payroll because we’re nice. At the end of all this, our hope is that we’ll end up with a more skilled North American workforce.”

Interesting. But what does that last line mean? “At the end of all this, our hope is that we’ll end up with a more skilled North American workforce.” It means that while these employees were not manufacturing automobiles, they were in training. They were doing safety drills, participating in productivity improvement exercises, attending presentations on material handling and workplace hazards, taking diversity and ethics classes, attending maintenance education and taking a stream of online tests to measure and record their skill improvements. Toyota is shifted the Texas and Indiana workers temporarily to Toyota plants whose assembly lines were moving at full speed, such as the Camry assembly plant in Georgetown, Ky. In addition to all of this, the workers also spent some time painting the plants and even helped build Habitat for Humanity homes. And they were getting paid.
[...]
When, not if, the plants return to full production, Toyota will have well trained employees on the front line, ready and able to meet the demand for their vehicles. And not only will they be well trained, they’ll be happy and motivated to work. Because Toyota is willing to go to the mat for their people, their people will be willing to do the same for Toyota.

That’s the element of the Toyota Production System (TPS) that no one wants to emulate — Add value to the organization by developing your people and partners.

Chinese May Buy GM and Chrysler — which, I suppose, terrifies many Americans:

A take-over of a large overseas auto maker would fit perfectly into China’s plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.

At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China’s more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology.

Michael Lewis describes The End of Wall Street’s Boom — but first he describes how and why he wrote Liar’s Poker 20 years ago, when he thought the end was imminent:

To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital — to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.

I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous — which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.

When I sat down to write my account of the experience in 1989 — Liar’s Poker, it was called — it was in the spirit of a young man who thought he was getting out while the getting was good. I was merely scribbling down a message on my way out and stuffing it into a bottle for those who would pass through these parts in the far distant future.

Unless some insider got all of this down on paper, I figured, no future human would believe that it happened.

I thought I was writing a period piece about the 1980s in America. Not for a moment did I suspect that the financial 1980s would last two full decades longer or that the difference in degree between Wall Street and ordinary life would swell into a difference in kind. I expected readers of the future to be outraged that back in 1986, the C.E.O. of Salomon Brothers, John Gutfreund, was paid $3.1 million; I expected them to gape in horror when I reported that one of our traders, Howie Rubin, had moved to Merrill Lynch, where he lost $250 million; I assumed they’d be shocked to learn that a Wall Street C.E.O. had only the vaguest idea of the risks his traders were running. What I didn’t expect was that any future reader would look on my experience and say, “How quaint.”

I love the way he was totally misinterpreted:

I had no great agenda, apart from telling what I took to be a remarkable tale, but if you got a few drinks in me and then asked what effect I thought my book would have on the world, I might have said something like, “I hope that college students trying to figure out what to do with their lives will read it and decide that it’s silly to phony it up and abandon their passions to become financiers.” I hoped that some bright kid at, say, Ohio State University who really wanted to be an oceanographer would read my book, spurn the offer from Morgan Stanley, and set out to sea.

Somehow that message failed to come across. Six months after Liar’s Poker was published, I was knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share about Wall Street. They’d read my book as a how-to manual.

Amazon is moving to what it calls Frustration-Free Packaging:

The Frustration-Free Package (on the left) is recyclable and comes without excess packaging materials such as hard plastic clamshell casings, plastic bindings, and wire ties. It’s designed to be opened without the use of a box cutter or knife and will protect your product just as well as traditional packaging (on the right). Products with Frustration-Free Packaging can frequently be shipped in their own boxes, without an additional shipping box.

That last sentence points to one potential downside:

Frustration-Free Packages ship in their original boxes, without an additional box for shipping. If you want the contents of your package to remain a surprise to the recipient, you should select the ‘Gift Wrap’ option during check out. Your gift-wrapped package will be sent in an additional Amazon shipping box. If you include a gift note but not gift wrap, your package will ship in its original box and the contents may be visible to the recipient.

Anyway, the folks at Amazon clearly “get” logistics.