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For several years, it was customary to find Lagoa busy mainly on Wednesday and Friday night. However, I learned this morning that the owner of Lagoa had decided on a plan to increase business on Monday nights. As part of the plan, the owner reduced the entrance fee for clients from a high of R$65 to R$35. The price depends on the mode of payment. For example, if a credit card is used, a client pays the highest entrance fee. If cash is the mode of payment, the client pays the lower entrance fee. As Tomcal pointed out in a different thread, 98% of the sauna customers are Brazilians. It is the Brazilians that fill the saunas, not the foreign tourists. Therefore, in theory, the lower entrance fee plan for Monday nights (bringing in more clients) should be a success. To many Brazilians, the difference in the lower cash fee is a strong incentive to visit the sauna. The R$35 cash entrance fee is valid only on Monday night. This promotion has gone on for a short while and I was told that Monday night at Lagoa is, little-by-little, transforming into a busier night than some other busy nights. The main key to making Monday night a busy night is for word to get out to the garotos. If the garotos learn that Monday at Lagoa is loaded with clients, garotos will flock there, hopefully in large numbers. If there is not a major increase in garoto attendance, the Monday night R$35 plan will fail. We will see. I will again go to Lagoa tonight. Not so much for the lower entrance fee but to maybe find Leandro again. He is quite a memorable hunk. I will update this thread after I experience Lagoa tonight.

Meanwhile back to Lagoa, a Brazilian sauna - I returned to Lagoa this evening. Leandro was not there. Since I have an appointment with him for next Wednesday, I did not expect to see him there. This being Sunday, Lagoa was not so busy. At most, there were twenty clients and about that many garotos. Wednesday and Friday are the best days for Lagoa. Best meaning high probability of a lot of good looking garotos. The lack of airconditioning was obvious tonight due to today's temperature reaching more than 90 degrees in Sao Paulo. The heat and humidity most likely was the cause of the low turn out, both in garotos and clients. High temperatures are again predicted for tomorrow. I stayed at Lagoa longer than I thought I could, given the heat and the lack in interesting inventory (garotos). There is always tomorrow. -

So just when he was getting down to the nut cutting and name names, his PR guy unplugs his microphone and drags him off stage. Marchionne must have been bored out of his gourd. But I still say there's a humongous difference between not earning back your cost of capital for a few decades and actually losing cash money over the entire 90 year history of the industry, all firms combined. Remember GM may have pissed away all its retained capital (and a hell of a lot of its creditor's capital) in the run up to its bankruptcy, but from the 1920's through the 1980's it churned out a shit load of cash for its stockholders.

Ocean Life Faces Mass Extinction, Broad Study Says http://mobile.nytimes.com/2015/01/16/science/earth/study-raises-alarm-for-health-of-ocean-life.html?referrer= http://m.sciencemag.org/content/347/6219/1255641

Tangentially but interestingly, to me anyway, at the Detroit Auto Show this past week the inimitable Sergio Marchionne made somewhat comparable remarks about the car biz. For most of his career, Sergio Marchionne has been treating established business practices with blithe disregard. And with remarkable success. Whether it involves taking control of Chrysler in 2009 without laying out a penny, or something as simple as wearing a dark sweater and gingham shirt everywhere in place of a suit and tie, Marchionne goes his own way. He doesn’t make a fetish out of it (though you suspect he’s amused by the reactions he gets), he just does it. The latest demonstration of Marchionne the iconoclast was on display at the Detroit auto show on Monday. In remarkable display of candor, the FCA CEO gave what amounted to a graduate seminar in automotive economics— using numbers from Fiat Chrysler’s business plan that are usually considered confidential. It was the kind of information that is confided in private conversation and on off-the-record terms, not in a public forum like a motor show. The revelations came about 40 minutes into what had, up until that point, been a duller-than-usual news conference dominated by parochial questions about Chrysler assembly plants in Toledo and Windsor, Ontario. Then a reporter asked Marchionne about the possibility of industry consolidation, a subject on which he has spoken many times. Perhaps bored by the familiar subject matter, Marchionne moved on. He usually complains about manufacturers who are forced to maintain production capacity for which they have few customers because of government opposition. This time, he raised the discussion to a new level. Marchionne started what became an eight-minute monologue. “The problem with the car business has never structurally been that it is an unrestrained production farm that keeps on spewing off cars for a demand that doesn’t exist,” he told the assembled journalists, thereby skewering one piece of received wisdom. Instead, he continued, the problem was the inability of the industry to earn its cost of capital. This wouldn’t be surprising coming from a securities analyst, but was a breathtaking admission coming from a CEO. “I don’t know how many car companies can say with a straight face we are earning our cost of capital,” he went on, “even in the benign interest environment in which we are living.” In other words, automakers would be better off investing in something other than the auto business. The reason is, Marchionne said, that the cost for each manufacturer to develop its own unique cars and trucks had become prohibitive. Case in point: Chrysler’s new Town & Country minivan, coming in 2016. Actual numbers are hard to come by, but in past years the cost of developing a new vehicle for a single plant was often put at $1 billion. Marchionne said the new minivan was costing twice that—$2 billion! He even broke the number down: $700 million to $800 million to engineer the new vehicle and its powertrain, the rest for improvements and additions to the Canadian plant where it will be built, along with the paint shop. That’s a huge number for a vehicle that is usually considered to be moderately, though not hugely profitable. That’s also a lot of fixed costs to amortize on every unit. Multiply the cost for one model line across an entire company, and you come up with a big number. Marchionne told his audience that capital spending by Fiat Chrysler will amount to $75 billion to $80 billion by 2018. “That’s a lot of money,” he added unnecessarily. The problem, as Marchionne sees it, is that while manufacturers are able to cooperate on small cost-sharing ventures, they aren’t willing to do so on large ones. Marchionne referenced Fiat’s own joint venture with Mazda to develop a new roadster. “Have we saved money? Yes. Had we done it with a mass-market vehicle, the answer is no. “ Competition and brand-building means that every manufacturer wants to make its own core components, like, say, four cylinder engines, leading to ruinous overlap in Marchionne’s estimation. “You are talking about hundreds of millions of duplicative and redundant investments that do not bear any benefit for the consumer.” He sees no reason why similar engines can’t be made with 85 percent common parts, with 15 percent reserved for individualization. Marchionne singled out Toyota and Volkswagen as two companies that successfully and economically reuse components among product lines. But he argues that other makers won’t be bailed out by expanded markets and higher sales. While many have looked to demand in China as a solution to higher costs, Marchionne doesn’t see it that way. “We have created some pretty formidable players over there as joint venture partners who are going to be looking for [market] space that will have to be created and the only way you can respond to the competitive pressure is to have the least-cost solution.” Marchionne calls it a medium or long-term issue, not a short-term one. “It is not a problem for 2015 or 2016, but it will be in 2020.” The news conference was winding down. Marchione was asked if family owners like the Fords, VW’s Piechs, or Fiat Agnellis were blocking sensible collaboration among manufacturers. “I know them all,” Marchionne said. “The real problem is not them. The real problem is the ego of executives. I don’t ever remember a turkey inviting himself to a Thanksgiving dinner. Redundancy in cases like this exists in the executive ranks That’s where it needs to be addressed.” Too many executives! Marchionne seemed to be enjoying his lecture, but at that point, a public relations operative declared that no more questions would be accepted and the microphones were turned off. The Marchionne seminar on automotive economics was concluded. Until next time. http://fortune.com/2015/01/13/sergio-marchionne-detroit-auto-show/

Have to earn my keep somehow, when I'm not busy emptying the slop jars.

Oops, my bad, RA1. Pure ignorance on my part. I recall reading a while back that if you toted up all the cash that has been invested in the airline industry since the twenties and subtracted the current net worth of the airlines, you would have a negative figure, even if you added back in all the dividends ever paid. Right off hand, I can't think of any other major industry that has been such a black hole for investor money. Yet somehow they keep flying. There really is something magical about aviation.

Who knew the Ball squashers were called "Gaffs" ??? I guess that's why we keep Adam Smith around here ?

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Some sisterly advice..... Cameltoe ain't Cute !

Maybe it would be better to say that the deregulation of fares and route structure exposed the true cost of flying from here to there at any given level of service? Pilots and other labor want to get paid as though the FAA still set airline revenues at whatever level the airlines needed to make a profit. Passengers demand a high level of service at a cattle car price point. But I agree that, for management, figuring out how to operate in a competitive environment is still a work in progress.

I just realized that I failed to mention that Lagoa was recently remodeled. The most obvious change is the demolition of the former "non smoking" television room. That floor space is now part of the former small bar near where the shows are performed and near where the open glass showers are found. Drinks and food are served at the larger bar area. The larger space gives the illusion of a larger sauna. I am not too crazy about the color of paint used in the new bar area but at least the color is cheerful. Some other areas of the sauna were ungraded and a gym area was added in the room just past the "swimming" pool. The new gym area doesn't get much foot traffic except from admirers of body builders. I noticed that a couple of the body builders seemed entranced at watching themselves in the mirrors in the new gym. I never saw the body builders come out of the gym to mingle among other folks in the general sauna area. One change that was not made is the failure to add air conditioning to the sauna. During the current heat wave in Sao Paulo, it would be nice to visit Lagoa and not have to endure a hot and humid environment. Considering the high cash flow to the sauna, the cost to add air conditioning would probably be offset by the increase in paying customers during the three hot months of Brazil's summer. Bottom line? Lagoa's facilities have been upgraded for the better - try the place -you will like it.