Tsukiji Fish Market

So there we are, two aging business travellers on the streets of Tokyo at 4:45 am, braving the wind and rain in order to watch some foreign chaps sell fish. Fair enough, probably wasn't going to sleep much more anyway, but it still didn't feel quite as good an idea as it had the night before!

The hotel we were using - Royal Park Shiodome Tower - is no more than 10 minutes walk from the fish market so at least it was no big deal getting there. It has two entrances and we picked the first one, going in by way of the fruit and veg market that's housed in the same building.

As you can see, there's a lot of water sloshing about so point 1 is to make sure you wear shoes that are waterproof. Point 2 is to wear shoes you don't mind ending up smelling of fish! Actually, having said that, the floors are remarkably clean considering all the piscene-based hacking that goes on there. Largely, I think this is because the fish is either sold whole or, in the case of tuna, solidly frozen when sliced-up.

So what could you buy? "Pretty much anything you can think of that comes from the sea" is the answer, combined with quite a lot of things that you would have trouble imagining could come from anywhere at all. I think we saw krill at the small end of the size scale right up to massive tuna. In between ranged everything from shell fish, through flat fish, octopus, sea cucumbers, squid, snapper - the list is virtually endless. Some retailers were wholesale, some retail. And no, I didn't feel like buying any of it to bring home thanks very much! Can't imagine what the sniffer dogs at SFO would make of half that stuff; lunch, probably.

The market itself is a warren of individual stalls, many of which are bi-level with an upstairs portion acting as the office. Running up and down the gaps between the stall are small powered trailers, each of which is clearly on some sort of mission that you, the foreigner, are interfering with. Beware these things! To be fair, you are wandering around their offices, cluttering up the place and not buying anything so given all that then actually the rightful occupants were quite understanding.

We went over to look at the tuna auction but it's all sealed off and no visitors were permitted. Glanced through a door that opened and it looked like there were shrouded corpses lining the floor. The frozen exteriors of the tuna, combined with their shape, made them all look like bodies that had been wrapped for burial. Fascinating stuff.

The overall impression left by Tsukiji is that there's no way the seas of this planet can continue to deliver such a bounty. This was one day of the six days a week worth of commerce that's transacted here. Japan apparently accounts for 10% of the worlds consumption of fish, the largest slice of which goes through Tsukiji.

Can we really keep up this level of supply? Tuna are getting harder and harder to find and it's not clear to me whether or not Japan practices much in the way of fisheries management and preservation. Either way, though, Tsukiji is doomed. The Tokyo government is planning to relocate it soon to another part of Tokyo. See it soon, therefore, before either it moves and loses the uniqueness it has today or the fish runs out.

More Bad News

Late today, Intel announced it was likely to come up short this quarter. By "short", they meant about $1bn. Instead of doing around $10.5bn this Q, Intel is now forecasting more like $9bn. Whilst this is still a tidy sum, it's clearly a long way off where they started out believing the Q would take them.

Why such a big change relatively late in the quarter (bearing in mind Christmas is but a few short weeks away)? The blame is being laid on manufacturers for reducing inventories and cutting future orders. This is of course a by product of the obvious signs of weak consumer spending across-the-board. In short, every element of the supply chain is bracing itself in the expectation of weak holiday sales.

Now, how much of this is driven by a true and very negative picture of the spending patterns leading up to the holidays is debatable; just as likely, companies are doing two specific things designed to protect themselves regardless of how this all plays out.

Firstly, they are of course playing safe. Better to have too few products available on the shelves, with any shortfall helping keep prices up, than to have stock left sitting on shelves that they will have to discount deeply when January rolls around

Secondly, they are ratcheting down their corporate numbers across the board, both on the spending side as well as the income side. Cutting expenses faster than any actual revenue falls means that as things do start to improve there is a real accelerating effect as to how fast those increasing sales numbers flow through as profits to the bottom line. Wall Street has already baked a lot of bad news into the stock market so there's little point in being seen as a shining star today. Much better to keep that light safe in order to glow more brightly in the future when valuations can reflect it.

There is good news in all of this though for innovators in Silicon Valley. As we saw in 2000/2001, when sales are ramping quickly, no one pays much attention to trying to be more efficient or cutting costs. Consequently, if you are selling a process improvement/more efficient kind of value proposition, it's likely easier to garner mind-share now than it was, say, six months ago.

"It's an ill wind ..." and all that.