We have to start thinking about Western Union. To show how out of touch I am, I figured they were out of business, or close to it. I would have said they must be hanging on by a thread, possibly part of the bail out so downtrodden are they with the lack of need for wiring things. With email, faxes, and phones reaching across waters previously unreachable, what need is there for Western Union? Silly me.
Did you know…
Last year, US migrants sent 300,000,000,000 (Yep BILLIONS) back to their families in third world countries and guess who carried the cash, or the lion’s share of it? Yep, West Union.
Western Union has five times as many locations as MacDonald’s, Starbucks, Burger King and Wal-Mart combined. Huh? This gives new irrelevance to the Big Mac for sure. Where are these locations? I think it might be like Nielsen Boxes. Have you ever met anyone who has a Nielsen box in their home? Didn’t think so. But you know they are out there, you just don’t know where.
And, guess what else? I was right. When the Internet boom hit, Western Union went out of business. Not so much now. In 2008, Western Union had revenues of $6.3 billion and posted an operating income margin of 26%.
I discovered the nature of Western Union’s purpose during a conversation today with a police person. We were talking about all the issues wrapped up with the illegal work force that is so prevalent in the Hamptons. He was lamenting the lack of money that goes to the workers coming back into the system that they use in such abundance. (They do use the emergency room as their personal doctor waiting room.) I knew they sent the money back to their Mothership. I got that. But I guess I assumed it was sent in boxes wrapped in cut up grocery bags and string. Sometimes my own stupidity surprises even me. But who’s the stupid one? If we know the illegal-untaxed money is heading out through a publicly traded company, why don’t we shut it down?
“Global Migration is the cornerstone of how we’ve grown,” said Christina Gold, Western Union’s chief executive. Let me translate. ”Money laundering is the cornerstone of how we’ve grown.” And, to top it off, this will come as no surprise, Western Union spends millions and millions of dollars in Washington in immigrant support through political action groups. This part really excites me. I always wanted my own “follow the money” scenario. It made Woodward a famous writer, so it could work for me. It’s an awful lot of money though. I think Woodward only had to follow a few hundred thousand. No way I can keep up.
Ok, so anyway, my new best friend police officer said they (not sure who they are; I’m still new in all this) want to start taxing Western Union 11% on each transaction out of the country. One percent would go to the local police department, 6% would go to local school education, and 5% to the local hospitals and health services, all of which serve this constituency. Since Western Union’s profit margin was 26% last year, seems to me they can give back 11% to be able to keep laundering money legally. Makes sense right? Or maybe not. I don’t know.
Either way, I checked the stock and it’s $16 and change. I might buy some on Monday. Oh, wait, that would be so two-faced. I’m not doing it.
