Our mission is to protect the habitat of Puget Sound tidelands from the underregulated expansion of new and intensive shellfish aquaculture methods. These methods were never anticipated when the Shoreline Management Act was passed. They are transforming the natural tideland ecosystems in Puget Sound and are resulting in a fractured shoreline habitat. In South Puget Sound much of this has been done with few if any meaningful shoreline permits, limited public input, and with minimal peer-reviewed science. It is exactly what the Shoreline Management Act was intended to prevent.

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Thursday, March 28, 2013

China's President Xi Jinping - Popping the Geoduck Bubble

Update 12/15/2013: China bans geoduck harvested from Washington due to elevated levels of paralytic shellfish poisoning toxins and arsenic. There should be little surprise to the Chinese - nor the Department of Health - given many of these geoduck are harvested from sediments which lie in the plume of the old ARSACO smelter which left elevated levels of arsenic and lead in the sediments from where geoduck are harvested. See Dec. 14 post on the ban and June 10 post on sediment contamination in Puget Sound where shellfish are harvested from.

Update 9/1/2013: China’s crackdown on corruption ... has forced a decline in lavish banquets.- In another indication of the risks tideland owners take on when leasing tidelands to geoduck farmers PhysOrg has reported that China's crackdown on corruption continues to decrease lavish banquets. While the focus of the article is on shark fins sold in China, geoduck are included in that category. It is only the hyper-elite in China who are able to afford the geoduck. That price is not sustainable, especially as the younger and more educated population come to realize the size of a geocuck neck has nothing to do with male virility.

"...sales of shark fins had dropped more than 70 percent,
and sales of edible swallow nests,
the main ingredient of a $100-a-bowl delicacy,
were down 40 percent."
 
Market prices will not stay up forever.
 
"A half-dozen [geoduck] sold in a Hong Kong grocery
could fetch nearly enough cash
to make a four-figure mortgage payment."
 
For a decade a small number of people have profited handsomely from China's unsustainable lust for geoducks grown in Puget Sound. For a decade agencies have allowed a small number of people to transform Puget Sound's intertidal tidelands into geoduck farms. China is changing and agency oversight in Washington needs to change with it.

All bubbles will pop.
Driven by nothing more than a superstitious belief in a geoduck's ability to endow its consumer with virility, prices in China have sky rocketed. Affordable by only the elite upper class of China it is only a matter of time before this bubble, like all unsustainable bubbles in the past, will pop. China's new president, Xi Jinping, is holding a big pin next to the geoduck bubble.
 
Only a matter of time.

 
President Xi Jinping's
gastronomic vision:
"4 dishes and a soup."

"If we don't redress unhealthy tendencies...
we will lose our roots, our lifeblood and our strength."
 
A new vision...
President Xi Jinping will be the president of China for the next decade and has made a point of curbing the wild spending of the past and displays of gluttony so prevalent by the elite in China, under the catch phrase of "4 dishes and a soup." As reported on page 46 of the February 9, 2013 issue of The Economist, "China's online public is ever more furious about a parade of corrupt officials, whose stories are far more compelling than any statistics." To help quell the public's anger and to show action is being taken, Chinese authorities are now "descending on restaurants in search of large tabs".
“Order according to your needs.”

No reservations needed.
At this Xiang Xi Qing restaurant
business is down 30%.

...followed by results.
Radical drops in the symbols of gastronomic excess are currently being experienced. As reported in today's New York Times, shark fin sales have dropped 70% and edible swallow nests were down 40%. More to the point, "So far, most victims of the frugality drive have been purveyors of the good life: high-end caterers, abalone wholesalers, five star hotels and makers of Yellow Pavilion cigarettes, the $300-carton brand coveted by the up-and-coming bureaucrats." [click here for article] Not mentioned specifically but included are geoducks.

Bubbles don't pop overnight...

Nasdaq stock market -1996 to Febrary 2000.
 
...but when they do it happens quickly.
Nasdaq stock market from February 2000 - November 2002
 
 
"weird market blips in China regarding geoducks" (Bill Taylor, September 2012)
Bubbles grow over time and never pop immediately, but when they do it is dramatic and many people are left holding nothing. Anyone who was invested between the time Alan Greenspan expressed concern about the "irrational exuberance" he saw in December of 1996, through November of 2002, watched over those 4 years as it rose 500%. In the following two years it fell below the level it was when Mr. Greenspan made his remark. In September of 2012, Bill Taylor with Taylor Shellfish noted geoduck prices in China were experiencing "weird market blips."

"Everything about geoduck is driven by China," said Mark Schaffel, who raises farmed geoducks for Olympia's Northwest Shellfish Company. (Seattle Times, April 21, 2012)
Geoduck in Washington used to be nothing more than a side ingredient used in clam chowder. Today they are an overpriced food item, selling for over $27/pound in Seattle, only because of China's "irrational exuberance." That exuberance is coming to an end, and with it, the support of the unsustainable price rise seen over the last five years. With it, the profits supporting geoduck farms throughout Puget Sound will come to an end.

Who will clean up the mess
and restore the tideland habitat 
when the geoduck market collapses?

Agencies need to act on the probability of a market collapse.
Agencies acting on permit applications cannot allow themselves to be blinded by the "irrational exuberance" seen in the current geoduck market. When prices fall, and they will, it will no longer be profitable for growers to maintain or harvest their farms. When that happens who will be responsible for restoring Puget Sound's tidelands? Washington taxpayers are already supporting the shellfish industry through state funded hatchery research and state funding of water quality testing. Minimal tax receipts are received and jobs created are jobs not wanted by the unemployed, filled instead through migrant worker programs. Will Washington taxpayers also be responsible for cleaning up the aftermath of a collapsed geoduck market?

 



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