Taxes Increase Productivity for Rich People

The Official Economist Dogma on taxes is that they discourage work and innovation. It seems to make sense because you get less money for the extra work you do (progressive taxation means the better you do, the higher a percentage of your income is taken away by taxes).

And, certainly, if the absolute amount of money gained is the goal, progressive taxation would seem to discourage more work and innovation.

But any economist will tell you that money is not utility. Utility is what people (in theory) optimize. Utility is how much a dollar is worth to you. Clearly the first $30k or so you earn - which provide you with basic food and shelter - will be worth more to you than the $30k that pushes you up to 1000030$.

So, one positive effect of taxing the hell out of rich people is that it makes them value the actual marginal wealth increase MORE than if they weren't taxed. At least in some cases.
If Rich makes $1MM and is taxed down to, say $500,000 actually retained, how much more is an extra dollar of after tax income worth to him? How much more might that retained dollar be worth than the dollar that would push his income to $1,000,001?

Obviously it's not worth the $500,000 he lost to taxes (vs retaining all $1,000,000).

Or is it? What is the utility of a $1 to someone who doesn't need it.

A popular mantra amonth billionaires (if you don't mind adding a few zeroes to the example), is that they don't care about the money for spending. It's about keeping score!

If everyone is in the same tax boat, then the billionaire who is taxed an an extreme rate may actually end up with a better "score" in comparison to his fellow players for a dollar retained than he would have been had he not been taxed at all.

This assumes the "utility" of earning an extra $1 when you're income is much lower (due to taxes) is increased by more than the marginal tax rate. That seems clearly to be true.
For a billionaire who is keeping score rather than using his money, the utility is in topping your peers. But if you tax him/her down to the point where the money is ACTUALLY SPENT --- aside from being better for the economy (money is spent rather than invested), the $1 is worth a heck of a lot more. Actual spending utility is clearly hugely more valuable than "keeping score."
Ask anyone who doesn't have everything they want! Misers excepted.
The savings rate in the US would tend to suggest miserliness is not a wide spread problem.

SO: Taxing the hell out of billionaires increases the marginal utility for them of an extra $1 and should incent them to produce more.
(This does raise a Prisoners' Dilemma type problem. The Billionaires only want higher taxes if all Billionaires - against whom they compare scores - also get taxed. All agree to taxes and get the benefit of improved utility or none do).

Productivity Schmoductivity

You know how politicians love to talk about how the US worker is the most productive in the world?

That's based on GDP / hours worked.

So the US Worker has produced more GDP per hour than any other country by a safe margin.
http://www.nationmaster.com/graph/eco_ove_pro_ppp-economy-overall-productivity-ppp
(Ok. Except for Luxemberg. Actually, Ireland has been pretty high too lately. Both are tax havens, so a lot of foreign companies with virtually no workers dump $$$ there, which distorts the "productivity" number.)

US productivity kept growing and growing. Greenspan attributed it to technology - improving worker efficiency.

I think the truth is, a lot of it was the growth of the Financial sector. In 1973 it made up 16% of Corporate profits.
The recent peak put it at 30%. I think it made up something like nearly 20% of GDP at one point (I can't find the exact number).

So, with Financials of all sorts (banks, insurance, investment banks, brokers) all in the toilet, what happens to that big clump of GDP?
It was a fantasy. And Financial "productivity" was absurdly high. Very few employees per $ earned.
So with that collapse, productivity will go way down. Republicans are already saying it's because people aren't working as hard and they're going on welfare and all that. But it's the banks. (And housing distorted things too - towards the end. Though housing is more labor intensive, of course).

PKrugman about the growth of Financials way back in '07. The huge strength on growth and the "miracle of the American Worker" was basically propaganda.

Because so many hours (e.g. Wal*Mart) are off the books and US workers put in so many extra hours that the Bureau of Labor statistics don't record (illegal alien hours add to GDP but don't count in the BLS Productivity number).

On top of that, high medical costs actually add to the productivity number! Hospital GDP is still GDP!

Productivity-wise, we're closer to France than anyone wants to admit.

Solar Sucks

Everyone knows photovoltaic solar panels suck. They're inefficient, expensive and impractical. They indirectly increase green house gases and energy usage by diverting money that should go to insulation and other conservation improvements.
All for a teeny tiny teeny little few watts.

I had hope for solar water heating though. It is much more efficient than photovoltaic solar electricty. But...

Turns out even solar hot water sucks. From all the propaganda and junk about getting water up to 160F or higher (even here - Portland fall days ), I thought maybe solar "thermal" (that's what they call it, Solar Thermal) would be a reasonable idea.

Nope.

It costs about $2100 to get a panel (which weighs 200 lbs and measures 4x10') that will produce 10,000 btu on a cloudy day (40,000 on a nice summer warm summer day).
10,000 BTU

For reference, in gas terms, 100,000 BTU = 1 Therm.
NW Nat sells one therm of natural gas for $1.29

So TEN DAYS (regular portland cloudy days) of production from a $10,000 of panels would produce about $1.29 of equivalent gas water heating.
Or about $50/year, rounding up a little for furnace inefficiency. Wow. $50/10,000 = half a percent return. Actually not even that. The panels don't last forever...

Some different calculations get it up to 2%. Still sucks. After incentives? Maybe.
The whole thing just sucks.
And, I haven't even figured in the cost of the storage tank & heat exchanger system and other plumbing.

It's mind boggling that PV is so popular and even lower efficiency.

Of course, energy costs could go up. Also, that 3-4% return isn't real because (at best) that solar thermal system will last 30 years.
Your roof won't last that long. Also maintenance costs will eat into it. You're never going to recoup your costs anything like your costs.

Sucks.
I was really hopeful we could use Solar to reduce energy expenses. Insulation gives far far better return (even wall insulation).

ALL THAT SAID: With Federal Credits and Energy Trust money, maybe you can make a profit on the solar Thermal systems.
50% BETC (or RETC) tax credit - uncapped now, I think - even for residential.
About 15% from the Energy Trust straight cash incentive (taxed)
+30% Federal Tax credit.
You've got enough of your costs covered so you will eventually possibly do OK.

It's a better deal for businesses, because they get to depreciate the full cost of the system.
That's worth about another 32%, so you are over 100%.

Free Panels! And you get to feel good about yourself because the $10,000 in incentives (you paid for with taxes) is buying you $50 worth of warm water every year.
Take that OPEC.
It's just not time for Solar yet.
It's time for efficiency and conservation. Not as hip, but much smarter.

Why is Microsoft Selling Bonds for the First Time?

Microsoft recently announced they are issuing billions in bonds, and this is the first time they have ever sold bonds. They plan to use the money they raise for stock buy backs.

I'm convinced for MSFT borrowing money with bonds is a dividend reduction without calling it one.

Some Theory:
Whether you finance your company with bonds or stock doesn't change your company's profitability except for interest and taxes.
Otherwise, the results are mathematically identical.

Also, in theory, if you buy back stock, that should have no impact on your stock price. The cash used by the company for the buyback is company equity.
Spend equity to buy equity. There are fewer shares, but the company is smaller.

So... MSFT issues bonds. In the short term, they trade interest for dividend payments since the stock they buy back no longer gets paid dividends.
(and there's a tax break because interest payments are deductible and dividend payments are not).
And the existing shareholders (in theory) shouldn't see any improvement in their share price.
BUT: They own a bigger share of the company and get only the same amount paid as a dividend.

To take an extreme case, if MSFT borrowed money to buy everyone's shares except For Bill Gates' shares, Gates would get exactly the same dividend he gets now.
Even though he would own the whole company.

In the short term, like I said -- a wash (in theory). The dividends are offset by interest payments and the tax break. So the company doesn't really retain more money.
In fact, it probably chooses to start paying back bonds as profits improve. In the end, the bonds are gone. Paid down. Called. Now there would be fewer shares, and dividends are the same in $/share, but smaller in proportion to the ownership share.
(Each share represents a bigger part of the company, but only gets the same old dividend payment.)

What I don't know:
Why doesn't MSFT just use some of their cash hoard for the buybacks? Their debt does pay pretty low interest, so maybe they just have a better return on their cash already. But they sure have a lot of cash.

A lot of companies believe their stock is worth more than the market thinks it is. They believe in momentum and doldrums and stuff like that. Maybe they believe a few billion thrust into the market to buy back their shares will give it a temporary pop that other investors may see and they just might jump back on board. That would really raise the stock price.

Maybe there's other stuff going on? Companies buy back stock to redeem options. They could have a dozen other reasons for wanting a buyback or issuing debt.

This is just my thought.

Photography for Selling houses or Renting apartments

I rent apartments. I've had a fair bit of experience posting with architectural photography for the purpose of marketing.

My approach is simple, but I think produces very useful results.

The most critical tool I've found is a WIDE lens. I use a Canon compact (S70) with a 28mm equivalent. I've recently added a wide-angle adapter to make a 21mm equivalent. It adds some blur but FOR THE WEB that's OK.

If you're using a compact camera and not an SLR, a cheapo tripod is also very very useful.

In my mind, the keys are:
Use only natural light whenever possible. Turn off your lights and turn off your strobe (sorry strobist). You're not capturing action so a 1/2 or 1 second exposure is just the thing.
(Set your lens to 5.6 or 8 aperture for the best sharpness).

Personally, I've found a lower camera angle works best for most rooms. It emphasizes the size of the room and the wood floors.

With my camera, I find overexposing by about 2/3rds stop gives the best results.

PHOTOSHOP:
I prefer to shoot Raw because it gives me a bit more latitude for the photoshop manipulations I almost always do:
1. Use the Exposure slider till the room looks Bright. Brightness is almost always a better marketing tool than moody. There are exceptions, but that's what I've found. Go for as bright as you can without blowing out detail.
Flashes and "accent lighting" make for hot spots. That's one reason I prefer natural light.

2. Since I'm using a wide lens, the distort>Image correction tool is fantastic. Get rid of that barrel distortion and do some vertical perspective correction.

3. SLEAZY: Don't do this.
In PS4 there's a nifty tool for "context aware" resizing. You can make rooms look bigger without distorting the objects in them.
For a small bathroom...
But really. Don't do it. It's unethical.

Examples at livingislands.com and bestportlandrentals.com

OH. If you know how to do quicktime panoramas, for nice rooms with some architectural detail, that can just be an amazing thing to add to a website.

IMPORTANT: MAKE YOUR PICTURES BIG.
By big, I mean about 800 - 850 pixels wide. It boggles my mind that so many professionals post 400x300. POST BIG PICS.

Liberal vs Conservative Economists and Predetermination

The interesting thing is how different experts break down the analysis of the financial crisis.

Democrats (or liberals), like Paul Krugman and Joseph Stiglitz see this crisis as a unique event, or possibly an analogue of the great depression. They have very good arguments for why its different than previous US recessions since WWII and compare the differences with the Japanese Lost Decade.

Pretty central to their arguments is the idea of a Liquidity Trap - originated by Keynes to help explain the Great Depression and a big focus of Krugman who created some of the main models for the Asian Crisis. The thumbnail is, when you have very low or zero interest rates, there's no incentive for people to invest. They may as well just hold cash. You can't make money any cheaper. Money doesn't get invested. Monetary policy is pretty much useless. You can't fix it like a normal business cycle because you can't spur demand with monetary policy by itself.

In a normal business cycle, when things slow down, stuff gets cheap, demand increases, and things get better.
When that doesn't happen, the monetarists (Milton Friedman) say it's the fault of the central bank like the Fed.
If there is inflation and that's the problem, you need to tighten and raise rates. Deflation, and you lower rates.
Money is just a flow and if the business cycle doesn't flow naturally, you need to unstopper the flow.

This idea really took off in the 70s when Friedman became THE economist for the right. When Reagan took office, inflation was huge and the economy wasn't good. Carter had been ineffectual. Volker as Fed Chief and Reagan took really bold (monetarist) steps. Like raising interest rates 10 points! That lead to a huge recession, but it did kill inflation and was followed by a mammoth recovery called the 80s.

SO: Republican's believe in the model of Reagan/Volker/Friedman. If they fixed the 70s, surely they must be on the right track, and all can be fixed by tax cuts (Friedman believed in zero taxes, though I think his arguments are less clear on that and tended to be more populist than analytical) and proper flow of the currency.

And the Dems like to look to the Great Depression which was the origin of modern progressive politics.
It has in it the justification for all the policies they have a hard time getting through otherwise.

As analytical as Economists on both sides can be (with all those percentages and case histories and what not), a liberal economist is going to say this is a unique or Depression/Asian Crisis type event and a Conservative Economist is going to say it's a normal business cycle (odds are), and all will be happy soon (if we cut taxes).

There are a few things that make the world very different now. You have to decide if it is different enough to disqualify a normal biz cycle analyis:
- Credit/Banking Crisis: Credit isn't flowing even when there's plenty of cash. So low interest rates won't help that.
- Interest Rates are already near Zero: The Fed can't tweak normal monetary policy any further.
- It's already longer than any postwar recession

On the "Normal" side:
We have had worse unemployment in the past and recovered. (Though things could/will get worse)
We don't have inflation. (Deflation is worse, but people argue about whether we have deflation)
Productivity (GDP per hour worked) is up.
Wages are actually up.

Personally, I take the NOT A NORMAL CYCLE view. This doesn't feel like something we just slid in to and can slide out of. It feels like major bad mojo that isn't fixed and is getting worse.

Cause of the credit crunch and how to fix it - I think.

I wonder if the investment banks could actually save the day by creating some new securities. That's (partly) what created the mess, so it'd be only right...
I just read that securitizing residential & commercial mortgages, car loans, credit cards, and other consumer debt dropped 75% from last year.

That number seems like the best evidence of the credit crunch I could find. That's trillions less available money to be borrowed The people who would have bought those securities seem not to have found a place to put that money yet.
For one thing, a lot of them were bought by banks,pensions, or insurance companies for reserves . Since most of those securities were AA/AAA, they were bought by people who needed something conservative. Most of that money seems to be going to treasury bonds or AA commercial paper (30-90 day) stuff.

The banks continue to need reserves since their reserves were depleted. They're not loaning out their excess cash.
The insurance companies and pension funds just want to wait things out. They're filling their reserves or underfundings too. And they don't want to fill up with the same stuff that broke them (even though a lot of the structured securities are very secure and have very low losses).

I actually think the solution might come from structured finance. Chopping up and repackaging the consumer debt into bonds has three main parts.
Arbitrage (create bonds that are worth more than the collateral). That only works when the yields you have to pay out for the resulting bonds are low compared to the yields paid on the collateral (on average). Without arbitrage, no one will create the new securities. Extremely high yields on these securitizations (if they sell at all) are the big reason they've dried up.

Liquidity (chicken/egg with the arbitrage. You pay lower yields on the bonds partly because they're more liquid than the collateral. Also more secure, and maybe more desirable for regulatory reasons.)

Security: The bonds have credit enhancement structures. The simplest example is a "B" pool of collateral that is drawn on if there are defaults on any of the main A pool. What's left of the B pool is the "residual." Fancier structures also throw off excess interest and such to the B pool (or draw on excess interest from the B pool).

SO: Liquidity and Security are two of the HUGE objectives of structured finance. Since the banks, credit card companies and such have all this collateral building up and blocking their ability to do business, they will sell it for cheap (relatively), which normally would create a big arbitrage opportunity. All the investment banks have to do is come up with a new credit enhancement structure that isn't too expensive and that their customers will have some faith in.

Probably that's where the Treasury could actually do some good. They could make credible guarantees on bonds that (even without the guarantee) would be strong enough to get a legitimate AAA from overfunding, diversification, or some other means. (Not credit default swaps, probably).

So far, the treasury has guaranteed existing structured bonds. The TARP collateral purchases.
I think they should guarantee new bonds instead. That is what's needed to get the credit markets going again.
And it would be cheap. They'd be guaranteeing new bonds with new standards. Good enough to earn a AAA now (a lot harder than a year ago).

Bailout Bill - Now with Exxon Valdez Settlement Tax Breaks!

This is just hard to believe. The new bailout bill includes "tax relief" the Republicans required.
The CalculatedRisk blog
has a link to the full text of the Bailout Bill and points out a tax exemption for...
Children's Wooden Arrows (!)

That's the funniest. But other things aren't quite as funny.
How about a break on the Exxon Valdez settlement?
Tax breaks for Film & Television productions
Lower penalties if you understate your income

Ugly.
I can't believe the Exxon Valdez thing. That took some Chutzpah.

Halliburton was just practice!

Don't you think this bailout plan is going to make Halliburton look like small change?
It basically says George Bush - a lame duck president - and Paulson - lame duck treasury secretary - can give away any amount of money to anybody with absolutely no recourse (no payback required, no criminal or civil penalties against the government executives who make the call). The giveaway is not restricted to financial institutions or to US institutions.
It's not restricted to securities (any undervalued "asset"). They could give a billion to Goldman for impaired "goodwill" if they wanted to. No standard is set for price. Paulson says he wants it to be "clean" -- meaning the US gets no stake in the bailed companies.

It's lunacy. Plus, Paul Krugman, in the NYT, made a good argument that the bailout will have little effect precisely because it's so broad. The idea is supposed to be largely to support the prices of the depressed assets that are in free fall (like mortgage backed securities). But if you're using the money to buy all sorts of assets, no single assets will get enough of a bedrock to keep the price up. You've got a $100 Trillion asset market and $700 Billion to float.
That would work if you were just trying to keep treasury bonds up -- or even Mortgage backed securities (US) only.
But not for all assets. Not if they are going to try to hold up the housing market too (which they say they will).
It's lunacy.

Economic Cold War Looming with China -- Atlantic Monthly

Really worth reading. The "partnership" with China is the biggest economic gamble since the revolutionary war.
I like how he puts it in cold war terms. If either side pulls the plug, we're both screwed.

Atlantic Monthly Chinese Dollars Jan 08 article

Chinese can't dump their hundreds of billions without devaluing the US currency. Lower US currency not only devalues the US debt (mostly treasuries) they already hold, but also makes their products more expensive to Americans.

It's as if you went to a store and bought a TV. When you try to pay for the TV, the store owner says "why don't you hold on to it for me. Safe keeping." Now you have enough cash to buy a stereo and the owner does the same thing. You're basically buying stuff for free, which means you have the cash to buy more stuff. You owe him a lot of money, but if he collects, you ain't buying anything else.
The article argues that the Chinese population pays the price. The average person in the US has a TV and Stereo they bought with money borrowed from the average Chinese person who doesn't own squat.

Something that bugs me: Throughout history, when one country has a huge and growing debt they can't repay to another country, they generally find a reason to declare war (and cancel the debt). That would be no fun

AMD loses $2B, good news for shareholders?

Did you see that thing about AMD writing down a couple billion on ATI acquisition?

People are acting like it's bad news, but I think it's actually almost completely positive for AMD.

Before the write-down, AMD was required to depreciate the goodwill over many years. The depreciation reduces income, which reduces taxes, so that's cashflow positive, but makes the Net income look smaller (bad publicity). So now...

By "writing down" goodwill instead of depreciating it:
- They get to take the huge tax deduction up front for the loss, so they probably won't pay any taxes for several years, which will boost their net
- It's a devaluation of an asset instead of an expense, so they will improve their reported net (because no depreciation will be subtracted from income)

So I think this is going to be good for them in a real cash flow way (no taxes in the near future) and in a fake enhancing of reported Net Income way. Everyone knew AMD paid a premium. You can't buy a healthy tech company without a big premium, so I don't think the write down itself revealed anything material people didn't already know. Now they'll have higher income (reported) and lower taxes. A nice combo.

Not that I'm going long AMD!

Robot Revolution ETA 2015

I thought this was kinda fun: You can now buy a 1 teraflop super computer from HP that you can plug into a normal wall socket and doesn't need a data center. It costs about $50K. (That's about 50x faster than a pretty high end desktop).
For comparison, in 1998, the fastest civilian super computer in the world was the IBM Blue Gene with 9000+ Pentiums running at 1.3 teraflops and costing over $5MM. They've become dramatically cheaper in the last couple years w. all the multi-core chips.
A $100K computer in 2006 costs about $20K today (same performance).
Estimates are that all of the top 500 super computers in the world will run over 1 Petaflop by 2015.
Asimov's "positronic brains" always ran at 1 petaflop, so, not only are we going to run out of energy, have half the coastlines in the world under water and enormous droughts, but there will be a robot rebellion too. Watch your Roomba for odd behavior.

Apple is Dead! Amazon Music downloads are actually pretty good

So... Amazon's MP3 download store opened today (Sept. 25 2007) and it's actually good! The only negative I've got is selection, which ought to improve since the music labels have a huge incentive for helping an Apple competitor. Otherwise: Better Quality than the Apple/iTunes music store. Same price (or cheaper). No DRM (digital rights management - aka copy protection) so it's easier to put on other computers or non-iPod devices. Works well with iTunes (if you download the optional Amazon downloader - required for full Album downloads - it will automatically add the purchased music to iTunes if you want). I didn't see a reason to buy from Apple's store vs. buying a CD. My MP3's converted (ripped) from CD are higher quality, usually the same price, and have no copy protection. Amazon downloads are the same quality (256 bit average VBR) I would encode myself, cheaper ($8.99 for the current Nickel Creek Album for example - vs $14.99 for the CD CD) and all around pretty easy. I'm tempted to use the Amazon music download much more than Apple's. And I own an iPod (like most music downloaders), so I'm the target audience.

Solar Energy - Wait till October if you're a Business

Solar energy projects should wait till October. That's a little counter-intuitive. After all, there's not a lot of sun in October in Portland.
The thing is, solar projects are driven by both the desire to help the environment, and to save money. The money part is the big factor here.
Oregon House Bill 2211 is nearly law and will not only increase the Oregon Business Energy Tax Credits to 50% (with limitations), but will also allow you to add it to the Federal Tax Credit (30% through 2008). That's 80% of your cost in tax credits.
Tax Credits are better than cash because they're AFTER TAX money. If your tax rate is 40% that's about 1.66x better than cash. On top of that, you get to DEDUCT the full cost of the project. If you do the math, Solar is win-win.
For God's sake confirm this with accountants, Dept. of Energy, the IRS and everyone else smart, because I may not know what I'm talking about.
Also, there's money from the utilities (aka Energy Trust of Oregon). $2.25 per watt you generate if you're a business. That's $2,250 per kW.
If you're not a business there are still Federal & State credits and incentives to be had.
Enough so your project may be break-even if you do a small one.
solar power oregon incentives tax credits

DO NOT nuke your Sponges! (!)

Do Not Nuke (microwave) your sponges to disinfect them. There are better ways.
1. You might burn down your house
2. Your microwave will stink.
I've had direct experience with the smelly microwave repercussion. Do you really want your microwave to smell like eau d' kitchen sponge? I ultimately had to toss an otherwise perfectly good Sharp microwave. Everything I cooked had that sour moldy odor.
Also, fire departments around the world are reporting kitchen fires from people nuking dry sponges. You need some dampness or the damned undamp things will can ignite (and that smells REALLY bad).
So buy new sponges. They're cheap.
OR, I've found that just using some bleach type cleaner (like Ajax)to clean the sink once a week does a perfectly good job of sterilizing the sponge.
nuke microwave sponges fire bleach ajax odor smell

Google Must be ... Rationalized!

If I had any guts I'd short Google. They're nothing but a fast growing advertising company. 150 BILLION Market cap. Foo.
Though.... Omnicom Group (OMC) is the world's largest advertising/media company, so far as I can figure, and they only have about $10B in revenues (google is already at 9.3B). And Google has 3x their profit margin and 6x their growth (can't continue!)
But Google only has about 9x the market cap of OMC. In some sense, that makes Google cheap...
But how much can they increase sales?
US internet growth is slow and that's most of Google's revenue. They must be near ad saturation, at least in the US.
They're talking about buying billboards for pete's sake.
Ok. I don't have the guts to short them.
Maybe the Google-price will just keep going up.
That wouldn't be irrationally exhuberant
Though, as one famous economist said "If it is impossible for a trend to continue forever, it won't."
Some numbers:
Total US "Traditional" advertising 2006: $12 Billion
Estimated US Online and new media advertising: $7.6 Billion
google revenues advertising 2006 short

The iPhone really does run OS X (probably)

A research company has reported that the main applications processor in the iPhone is made by Samsung. Samsung produces low-power PowerPC based chips for embedded applications (like the iPhone). Apple could easily run a stripped down version of a Darwin-based OS X on a PowerPC chip like that. It won't run as fast as a quad G5, but fast enough. And Apple is not required by their own license to publish the code if they don't want to (A Cingular rep says they won't). So... there is no reason to suppose the iPhone does not run OS X.
It probably does use some subset.OS X iPhone PowerPC Samsung

iPhone OS X is not really OS X

The iPhone looks to be running on a Samsung provided ARM core processor. That means it's not running on an Intel (or PPC) core. That means it's not running OS X in any meaningful sense (Apple can brand toilet paper as running OS X if they like). Darwin, the BSD based operating system that underlies what Apple has previously called OS X does not run on ARM processors. The Darwin/Apple Public Source licensing agreement says the source would have to be made available if it is modified and sold (paraphrased. read it yourself). A Cingular rep has said the iPhone version of the OS source will not be made available. It will be closed, like the iPod OS and not Darwin. So if it ain't Darwin, it ain't OS X (in any meaningful way).An InfoWorld article on an FBR Research report breaks down iPhone component providers and lists Samsung as the chip maker for the main application/video cpu.
So, that leaves the question... What OS is this phone really running? (not Linux or the source would need to be open)
iPhone OS X Darwin ARM Samsung processor components

The price of Corn

Estimates are that half the corn crop will be used for Ethanol as early as next year.
Companies that use corn for
sweetner
animal feed
food aditives and ingredients
corn flour

Are screwed.

CPO is one company that does that and only that. Their stock is actually close to an all time high.
The theory is that shortages of the high fructose corn syrup (hfcs) sweetner (because of corn shortages because of ethanol production) will raise prices enough to offset the higher corn costs.
That doesn't make much sense to me. If hfcs was that profitable, the corn wouldn't go to ethanol.
Plus I think most hfcs users will go to alternative sweetners. In fact, most of the hfcs business is fake.
Sugar tariffs make sugar artificially high (the US uses more corn syrup than anyone else because of that).
Good article last month in the New Yorker economics column about that.

Citigroup analysis says the sensitivity of CPO earnings to HFCS prices is much greater than sensitivity to the cost of corn so the upside is greater than the downside. But I think they're just not taking into account a real corn shortage.
The real analysis that has to be made is profitability of ethanol production (subsidized as it is and with state mandates to produce a certain amount of ethanol fuel to be mixed with gasonline) versus the profitability of HFCS production (the most profitable current use of corn besides selling ears at the supermarket).
HFCS is buried by ethanol right now. It just seems inevitable to me that there simply won't be enough corn available to make ethanol and HFCS -- so HFCS will disappear except in quantities where its not replaceable.
Other sweetners (including sugar which is actually cheaper if imported and not tariffed) will displace corn syrup.

SHORT CPO!
Maybe.
I've gotta read more...corn syrup sweetner prices ethanol stocks cpo

Angry Money

Watch Mad Money on CNBC! BUY THE BOOK! Or not.
Do you really want your money to be mad (at you?).
The Cramer Mad Money show on CNBC is fun and loud and even has some good information. Unfortunately it's got bad info mixed in there and it isn't always easy to tell the difference. Don't trust every number you hear and, as Cramer always says "do the homework."
The best part of the show are Cramer's insights into particular favorite stocks he usually discusses at the top of the show or towards the end (after the goofy off the cuff lightning round). He's an original thinker and he comes up with great angles on how a stock might grow that isn't necessarily the main thrust of the company. For example, he loves Allergen for the vanity and aging market because they make some wrinkle smoothing stuff. But even the CEO tried to tell Cramer their main business is optical (e.g. contact lens solution). But Cramer shut him down cause that wasn't fun. Yet the contact lens stuff might turn out to be the growth area for them because their big competitor Bausch & Lomb is collapsing.
Cramer gives you a story - backed up by some numbers. Just be wary. They may not be the story -- or even the real numbers...
Cramer Mad Money stocks Allergen

Things are Looking Up

Secrets of the Superoptimist

The Classic Guide to Acheiving Momentary Peace of Mind.

Definitely recommended for all who find themselves in times of impending doom. And for George W. Bush (Who could write his own book.)
superoptimist optimist brighter side greener grass

Is Health Care Spending Good for the Economy?

The trouble with the argument that health care spending is bouying the economyis that it's only true if people wouldn't be spending that money on something else more useful. That seems on the surface to be true only true in the case of marginal families that need to use creditto survive and have growing debt.
If health care spending is good for the economy, then the income spent on health care should produce more jobs.
Is more money flowing in the US economy because of this spending?
There is one solid argument for that: Health care expenses have a very big labor component and a very big domestic component compared to, say, buying a Honda--or almost anything at Target.
So even if Health Care is just a spending alternative, it may be an alternative that is more productive for the economy in terms of jobs and domestic production.
ON the other hand, the traditional argument against spending for spending's sake is that money spent on health care does not improve productivity. Instead of a company buying a new factory, they buy health insurance.
It's like tossing money down a hole. Some say that's what should happen and it's what Keynes would propose.
That's distilling down to a catch phrase. I think he would only agree that government spending (or wasteful spending in general) is good for the economy if there was an illiquidity crisis (in the case of The Great Depression, mostly driven by deflation and tightening money supply. No one buys something expensive or invests if they know the price will be lower in a week. No one spends money or invests if there's no money to be had!).
But in the current economy, there is no deflation and interest rates are low. No liquidity problem. That means there isn't some big pile of money sitting around in mattresses that has to be extracted (by higher health care expense). The money available for productive investment is well employed.
The counter-argument would ask What Is Productivity? Money spent on health care helps grow the health care infrastructure (there isn't a lot of evidence that the growing infrastructure reduces demand. How many industries have as their goal the reduction of demand? Nominally, hospitals and doctors are in the business of killing their own business and making everyone healthy and happy.) The money spent on health care in the US seems only to spawn more demand and more money being spent on health care. Why? That's debatable: inefficiency? hospitals catering to rich patients? Skimming by HMO management? Most people would say the whole fragmented system is horribly inefficient vs Europe or almost any developed country.
In any case, health care spending seems to create a bigger health care industry.
Is that unproductive if it isn't making people healthier?
If a person buys either a Chevy or a Cadillac, most would say buying the Cadillac is better for the economy. But in terms of investment or actually creating an asset that improves the economy, the Cadillac is not much better. The Cadillac may make its owner happier, but it produces no measurably superior investment (enhancement of the future economy) than the Chevy. Both get the owner to work on time. The spending will lead to more Cadillac production investment. Just as health care spending will lead to more health care infrastructure investment (which seems to do nothing for improving the health of the average US citizen, but does lead to more spending on health care.
So the difference between spending on the Cadillac and the Chevy is a sink hole in the same sense health care dollars that do not improve health care are a sink hole. Wasted.
Yet it seems like that is exactly the kind of spending that keeps the US economy going: People buying stuff they don't need--stuff that serves little productive function, but costs a lot of money. Status, branding, advertising... all keep the US economy going.
Health Care dollars that do not improve health care are more of the same! As American as an Escalade.
health care spending keynes consumer economy economics

Apple's iPhone will be an Exclusive!

Apple will have a phone! Rumors (with pictures, even) have been around since 2001...yet no phone. But there has to be one. Without an iPhone the iPod dominion will end. If competing phones can play music, have access to good music stores and competitive prices, look good and have a good interface, who is going to pay another $250 for an iPod just for the privilege of carrying yet another device? Pockets just can't deal. Eventually LG or Sony or someone will get it right.
So Apple needs to have a phone. Why there is no phone yet is the real question. The answer seems to be that Apple must partner with the mobile phone service providers -- Verizon, T-Mobile, Cingular, etc, the gatekeepers (them and the FCC) for any new phone hardware. But these companies want their own interfaces, branding, music store and so on. And they want a say in the phone design (horror).
Apple can't allow that (for good reason! Look at the mucked up piece of pretty junk the LG Chocolate turned out to be).
So, how can Apple gain the leverage it needs to control the hardware design and iTunes store connection?
The answer...
They will make an exclusive deal. The providers know that millions are waiting for an iPod phone. They know an exclusive means new customers and customer loyalty. And these will be customers who are into downloading music and other extra $ services--the most wonderful customers they could dream of. So a single provider will give up its perogative to alter the design and impose their ugly interface requirements in exchange for that Apple exclusive. They gain little or nothing if Apple offers the iPhone to every provider.
So Apple will make one deal with one Mobile phone company.
There have been dozens of rumors about imminent iPhones and imminent deals.
The lastest is that Apple has already come to an agreement with Cingular.
Apple iPod iPhone Cingular mobile exclusive

The Wall Street Journal is an Ass

The Wall Street Journal had a brief article on the trade deficit numbers published today (6/9/06).I know it's the WSJ and all, but are these guys just saying stuff that makes no sense?
"The U.S. trade deficit widened 2.5% to $63.4 billion, pushed up by the high cost of imported oil, the Commerce Department said. The consensus forecast of Wall Street economists had been for the deficit to widen to $64.8 billion.
Separately, prices of goods imported into the U.S. rose 1.6%"
What do they mean "separately?" The prices rose, and the the trade deficit (measured in dollars) rose too. So of course, some of that trade deficit widening was due to the higher prices! What the heck to they mean by "separately?"
"Hawkish comments from a number of Federal Reserve officials in the past week have indicated the Fed's heightened sense of vigilance toward inflation, fueling hopes the U.S. central bank will continue lifting interest rates. Higher rates tend to boost demand for dollar-denominated investments."
I'm sorry. But this seems just as knee-jerk and dumb. YES. All things being equal, higher interest rates attract more investment. But you know what? Inflation discourages investment. So, if the Fed is worried about inflation, that ought to discourage investment. Unless the investors think they know better or are stuck with dollars for some reason (I mean, domestic savings will increase). I wouldn't think it was so dumb except it's all in one little paragraph with no apparent sense of irony (irony? WSJ? OK. Too much to ask.)
My head hurts.
trade deficit currency inflation

Tips for buying New Tile for remodeling

Number One Tip for Buying floor and counter Tile:
MAKE SURE IT's IN STOCK! Sometimes the salesperson will tell you they can get it in a few days - or even 24 hours. If they don't have everything you need in stock don't buy it. You may need more and you'll wait (and the wait may be much longer than they say). You will need finish pieces (like the bullnose pieces with a rounded edge - and corner pices). Those may take even longer to get.
If the tiles aren't in stock and local, it's not worth it.
Number Two Tip:
Figure out what kind of finish pieces you need (as well as you can) and make sure they're available in the tile you picked.
Every tile has basic bullnose and corners (or nearly every tile). But you may need other pieces like "radius" or "v-cap" or cove moulding for where the floor meets the wall - and even corner cove pieces. Each different tile will have different finish pieces available. Find out what's available for your tile and make sure what you need is in stock and local.
Number 3 Tip:
Measure your counter, floor, stairs or whatever. Figure out how many tiles you will need in standard sizes (12x12" or 13x13" for floors for example). You can waste a ton of tile if your space is, say 25" wide and you get 12x12 tile. You'll waste lots and add cuts filling in that inch.
Number 4 Tip: Different tile has different roughness. Some tile is legal to use on stairs and other places where slip is an issue. Obviously you won't want a high polish tile there. Make sure the tile you buy is OK for the code for your use if it's for a floor area, stairs, entryway etc.
All tips learned the hardway. I hope it's easier for you!
tile remodeling tips pitfalls floor

Making Rain in a Virtual Economy

Virtual worlds are pretty interesting and are getting a lot bigger.
Essentially they are private economies. Imagine an economy entirely run and owned by Sony.
Sort of like a company town - except work is replaced by play and so there is never a shortage of "employment" available (as long as there are paying members. Unpopular worlds do close sometimes though.)
Traditional advertising potential is less interesting than the idea of a virtual market with virtual property, possessions and even virtual status and social aspects for sale.
There was some talk of virtual TV a while ago where you could maybe buy the clothing you see on an episode of some show.
Interactive games are much more visceral than that. People can be the character in the show and need that clothing or whatever in a way they can't feel just from TV. The experience itself is advertising. As if a rain gear company could make it rain in the real world. Or if the "government" could encourage more gas guzzelling cars to sell more gas (oh wait...that does happen in the real world...) Anyway, control of the reality of the game is a much more compelling form of advertising than billboards. Not only that, but the means of production is totally controlled by the company owning the game.
What you need, they provide. The only cost to them is a sort of "inflation" that would come from saturating the economy with too much stuff which can be bartered (so in some games, what can be bartered is restricted. Again by the company).
It's a nightmare 1984 totalitarian world in the form of play. Except playing is optional of course.
But 90% of the junk people buy is optional (hand held blenders, BMWs, big TVs etc). So the game is as real as any other social interaction.
virtual world second life

Online Video - Big Business or just more Porn?

The premise that people will start up video production shops all over the place because of the new online distribution possibilities is not at all certain.
First, there is an analogous opening of the video channel from a few years ago: DVDs.
Anyone with $10,000 (less now) can produce their own DVDs.
Who did use DVDs for distribution of their video content?
At first, of course, porn companies did, and so far they are still the most successful of the non-movie-studio vendors.
TV shows also eventually (relatively recently) have found a successful channel in DVD sales.
Movies from major studios - mostly new releases - still dominate sales. There are lots of niche companies selling specialty videos (how to build a deck, history, performance, etc) that rely on the then-new DVD channel of video distribution.
So what has changed for a would-be vendor now that it is becoming plausible to distribute quality video content online?
First, what are the advantages of online distribution vs. broadcast, theaters, or DVDs?
1. Lower cost per unit (once you pass a certain threshold of a few thousand)
2. No middleman - or at least thinner middle-margins - like iTunes
3. rapid dissemination (content can be very new - like a news story. Also, shelf life for an expensive production has a heavy carrying cost. I often wonder if when studios delay a release for a month, if they're figuring the interest on the $100MM it borrowed to make the movie.
4. DRM. Content owners have more faith in the DRM they can concoct for online distribution than in the crappy DVD drm.
So, will online distribution really become a new full-blown channel? If it does, who will distribute what content?
Obviously porn will be big user of online distribution (it is already).
Companies that already have the content will be happy to experiment with online distribution, if they can protect it. So far, the tendency is to put lower value stuff out there (re-runs of last week's shows, crappy movies), plus a couple of flashy high profile movies and TV shows, just to get people looking.
I'm sure there will be tons of stuff that formerly had its big premiere on basic cable at 2AM.
Technical problems in the Short term:
I just don't understand how people are going to watch the stuff they download. On their computer? On an iPod?
I can't see how this is going to work yet. I don't believe iPod video is really going to be a big market.
I just don't see it happening yet. I still think this stuff has to be integrated in a mainstream way with the main home TV.
That doesn't exist - though many are trying. The closest approximation right now is On Demand movies on cable.
When downloading movies is that easy, and if movie companies don't charge rip-off prices, that may become a real channel.
(There have been stories that movie companies want $12/download. Good Luck)
I can't put my finger on who will benefit in even the short term because (other than porn),
I don't know who will be using online video on a large scale.
Fox is putting shows out and other networks are too. But how many networks are there?
I think most are likely to use the Flash/Adobe video server. It's efficient and idiot proof and supports some forms of DRM.
It's also codec agnostic more or less.
But how many are they going to sell? All the networks in the US would only be a few million in gross sales.
Maybe $20 Million.
Throw in all the cable channels, and you're getting bigger. But they may outsource the actual video distribution to some online hub.
Who is going to be a video distribution hub? Google and YouTube.com are the biggest video hubs so far (you tube doesn't charge)
MSN is sure to be in there. iTunes will be big (AAPL sticks to Quicktime and proprietary stuff. Windows will of course stick to windows video format).
online google video iVideo MSN channel

Why are there so many REBATES!

People hate rebates and there are two big reasons they exist. The first is kind of obvious. Seduce customers with a low "after rebate price" and hope they never send in the rebate slip or mess up the form somehow (some companies even lie and say you need to send the form again, which is impossible without the original receipt). But that's only the obvious reason rebates continue to be a retail plague. The other reason is even more disingenuous.
Accounting and looking good to the stock analysts. That's a big factor. You would think that a rebate is a wash. You get higher sales, but you have to subtract the cost of the rebate refunds. True, but not true. For many companies, rebates do not decrease what they report as their total sales. Instead they call rebates a marketing expense. That way, they can show a nice big sales number even if they're losing money! To the naive analyst (or cynical stock promoting analyst), the sales number will appear bigger. Naturally a company might have some large marketing expense when they're showing such growth!
The falacy is that they analyst (or public) might assume those sales are sustainable, when, in fact, they've been bought, dollar for dollar, with rebates.
Al Capone wondered why there are so many criminals when there are so many perfectly good ways to steal legally.
rebates stock sales analysts retail

The Apple Road to World Domination

On my own website, I've been seeing a steady rise in Mac users from about 7-8% last year to 11-12% recently.
Those are home users, but still, very impressive numbers. People who can afford a Mac who don't need to sync with work PCs will want to buy a Mac (if they care and know anything).
If I didn't need to run Quickbooks and work with the office PCs all the time, I'd have a Mac.
(Qbooks on the Mac isn't as good)
If Apple wants to own the world, it has two big issues in front of it:
1: Getting a foot hold in the TV/stereo/entertainment room
2: Phones
Phones are a huge issue for Apple, and if you ask me, there's a 100% chance of an iPod phone soon.
The problem is, everyone has a phone and phones can easily do what an iPod does. Eventually people will not want to carry and pay for two devices. Motorola or somebody will eventually make a good phone/music player and Apple knows it.
The other issue is the entertainment room. As long as Microsoft or Sony (with the Playstation 3) has a shot at getting a foothold there and owning it, there is another place where people may buy their music and videos. You will be able to do that through XBoxes & Playstations. Sony & Microsoft will improve their music stores.
Once they manage to have a viable online store, they will be able to sell more competitive iPod like devices (including phones). Apple will lose the iTunes lock and the iPod dominance. People will use whatever device plays their music. If that's Windows media format (unplayable on iPods), then they will buy Microsoft compatible players.
It's up to Apple. So far the ROKR phone and the Mac Mini have been weak in these two markets. Apple will have to do better. Soon.

Apple AAPL strategy goal entertainment

Crazy Marbles

Normal econ 101 supply/demand says that if prices are higher than what people want to pay, the sellers will naturally lower their prices.
And if prices are too low, sellers will naturally raise prices to pick up the slack.
But...
The thing is, price itself is often the main determinant in what people are willing to pay in some markets (like housing right now). There are several reasons why that's true, but the important thing is, sometimes a rising market makes people believe they should pay more, because they will get a good return (as the market continues to rise). Similarly, if the market is dropping, they will jump ship at a lower price than they might otherwise.
This is the normal idea in economics of how "expectations" alter the price. But usually the theory is applied to argue that the equilibrium price is shifted (upwards by expectation of good things coming). In fact, expectations don't merely shift what people are willing to pay, altering the intersection of the supply & demand curves a little, settling on a slightly different sales price.
Expectations totally destroy the normal "invisible hand" forces that would make buyers and sellers arrive at something like a static price.
Buyers will believe, as the market rises, they should pay even more. Sometimes more than the asking price (as happens in the housing market regularly). Similarly, dropping prices are a signal to sell rapidly. Time is the key. Buyers and sellers are focused on return over time. If they believe in 5% monthly appreciation, they will want to close the deal as rapidly as possible, and will happily pay a 5% premium to do it.
The opposite of equilibrium: In an Adam Smith/David Ricardo happy balanced market, a price is like a marble in a bowl (you can imagine the right side of the bowl represents low prices and the right side, high). No matter where the marble goes, right, left, anywhere except the one price at the bottom, it will be forced back to the bottom. The invisible hand. But expectations turn the bowl upside down.
Now the marble sits on top (if it can ever get there at all). If it starts to slip up or down, the speed will feed on itself. All of the forces are away from equilibrium and stability - which may never occur. If prices level off for a while, it's because people are waiting for signals, or the market is tired (volatility itself can be a damper on some markets, if the participants are risk averse for the scale of investment required - like a house).
The logical mode of pricing in such a (rising) market is to avoid setting a price at all, and simply solicit multiple offers.
If you believe the market is falling, it makes sense to set a price, just below what you think the market price of that moment might be.
Sell quickly. And that's what happens. Isn't it? So who says the economy as a whole isn't at least tugged by these forces of disequilibria, and all those pretty supply/demand/money supply models are fairy tails, told by Greenspan, full of supply and demand, signifying nothing.
economics equilibrium balance bubble ricardo

Bush Ramble

Any economist would say that it makes sense to regulate where a company makes a profit at the expense of the community because it can. For example, if there was no regulation against dumping toxic waste into the ground water and "everybody else is doing it," most companies would do it (happens in India. It happens here when companies think no one is watching).

There are lots of cases like that where the cost is real, but the company that is profiting isn't the one paying. Regulation can simply allocate the cost properly to make the market more efficient. Even conservative economists agree with that. Markets are not necessarily naturally efficient. Graft is another example. It's regulated because the company benefiting by paying the bribe isn't paying the real price (the community pays it).

So if a president deregulates the drug companies so they can profit by testing drugs on the general population rather than paying for appropriate testing, is that worth it? The whole idea is to keep one person from shitting in another person's backyard.
That seems reasonable to me. Some people favor deregulation of Nuclear Power? That's forward thinking.

Protective tariffs, inefficient state-granted monopolies (like cable tv), high taxes on people too poor to afford adequate housing or health care... all things that could use a little government trimming. Deregulate there! And, of course, all employees of the DMV should be summarily executed.

Personally I think Clinton did a better job than Bush. The country was certainly in better shape, though Clinton doesn't get all the credit or Bush the blame for all of that. But I do think a lot of this military activity is hurting more than helping. And I really don't think we're better protected since 911. I wish we were. Obviously anything we have approximating a diplomatic relationship with even our allies is in shreds. We're in the middle of a weak, vacillating recovery that seems to be weighted towards the wealthier segments, with continuing higher than typical unemployment and probably significant inflation. Numbers below poverty levels are actually increasing.
It just doesn't seem good. Bush didn't cause 911 and he didn't cause Katerina either. Even if he signed Kyoto, global warming may be irreversible. He didn't even cause (all of) the mess in the middle east.

So it's not all his fault. But that doesn't mean things are good! FDR (some think) was great, but nobody would say things were good during his presidency. What with a great depression & wwII. So things aren't good.
I happen to think some of it is Bush's fault (unbalanced budget from tax cuts even before Iraq. Then there's Iraq. Then more tax cuts.)
He certainly doesn't seem to think he did anything wrong. Except from a PR point of view.

He seems to believe his low popularity now is a PR goof because of Katerina.
He really seems to believe Iraq is going well and according to plan. I'm sure that's what Dick tells him - and he doesn't read the papers.
Certainly not the NYT or Washington Post. Maybe some Hoover news letter.
I wish he did.
A lot of people feel like if only he knew what was going on, he would fix it. That he's a good man who simply isn't seeing what's going on.
I remember that clip where he was asking his adviser --"we already gave cuts to the wealthy. Shouldn't we give to the middle?"
Answer "stay on message Mr. President." I don't think he cares.
I wish he did.
bush regulation heartless bastard

How do people watch Downloaded Movies?

Time Warner just started a P2P - bittorrent like - subscription download service in Germany. So how do people watch movies once they're downloaded? On the computer?
Doesn't it seem like there's a big cork in this media distribution bottle?
I mean, until there's a brainless way for people to get this content onto their TVs, that doesn't require going back & forth between the TV & computer, hows it going to work? Media Center PCs
1. aren't brainless enough
2. are too expensive
3. aren't really on the consumer radar
4. require you to have a computer in your TV room
5. aren't brainless enough
That's one reason I'm big on the cable companies (hey -- Time Warner is a cable company....)
They could easily integrate downloads into a nice simple transparent "on demand" kind of thing in their cable boxes.
Actually - on demand isn't much different from downloading files like this. It's just not p2p
P2P would make on-demand far more practical for them bandwidth-wise. It might help them with the problem of not enough content.
(I think it's interesting that Comcast says 90+% of on demand programming is free. The thing is, the free content is either
1. repeats of HBO (which you only get if you're already paying for HBO - or other pay channels)
2. CRAP
So what it tells you is that people don't like the On-Demand business model. They want to pay once. Not every time.
The thing is, people will watch a sort of lame movie if there's a fixed cost (monthtly) but no marginal cost.
They don't want to pay $5 on top of their cable bill to watch an Adam Sandler movie. Though they would watch it if it was included.
The fact that people watch all that free crap content more than the paid content (which is actual relatively current releases) proves that.
I'm not saying they will exploit it - but the cable companies have the opportunity.
QUESTION: How are people watching downloaded movies Now??
My best guess is that they're burning them to DVDs. I base that on all the blank DVDs being sold.
(are there any numbers on that? There are so many ads. What else are people burning. I know they're not making backups!)
p2p download subscription time-warner

The Greatest Mystery In the Known Universe

Why are there no McOnion Rings? McDonalds has market tested McRibs and Mc(cough) Salads. Even McFruit and McDog (local specialty).
Why is there no McOnion Ring to be had anywhere on the planet.
It's gotta be a conspiracy. A "no McRing" pact with the devil.
onion rings mcdonalds fried conspiracy devil

More Google Sitemaps Odd Behavior

Listing my website on Google Sitemaps killed my listing(sitemaps is a new Google webmaster tool to aid Google in correctly indexing your site). First bestportlandrentals.com was removed from Google search results after I set it up in Sitemaps. I removed the sitemaps entry and in a little over a month, the search results came back. The same thing happened with portlandpage.com. Entered in sitemaps. Got de-googled. Removed from sitemaps. Re-googled.
Maybe there's something I missed. Google seemed to indicate I had made the correct entries. Could be my goof.
In the meantime, I would strongly caution any webmasters out in the world to think 2x before entering a Sitemap with Google.
google sitemaps de-list delist

Buy Versus Rent

Here's something strange.
Rent for a house in NW Portland is now less than interest on a mortgage by a good amount.
Consider a $500K house.
1 mo interest = $2500 (NOT principal. This is just the interest)
(6%)
Rent is about $1600/mo.
If you rented a house for 5 years, you could pocket $900/mo = $54,000 that would've gone to interest.
If the house has appreciated less than 10% over that time, you would have fared better saving your money and renting). In this market, many would make that bet.
But...
As a renter, you do also get interest on the principal portion you would have paid out over the 5 years had you been making mortgage payments, but that's a wash because you're also paying less interest on the mortgage as you pay principal. It's close to a wash. You also get interest on the $54K saved vs paying interest as it accumulates, but only a couple thousand.
Also, you don't pay property taxes (another $25K over 5 years). Insurance is another $5K.
Add it all up and you save probably at least 100K over 5 years by not buying.
That's 20% of the purchase price. You would have $100,000 more in 5 years if you rent. (Not counting money that would have gone to pay principal. Just money that would've gone to pay interest and other owner expenses versus being a renter).
It looks like buying a house is quite a nasty speculation right now.
buy rent home real estate portland oregon

Google Plays Good-Cop-Bad-Cop with Itself

First Google de-lists my business site bestportlandrentals.com (apartment rentals in Portland OR) after I enter it in their Sitemaps webmaster tool. Now, a month later, with no more sense than they revoked my (very high) listing, they restore it. But now they remove the listing for my portlandpage.com Portland guide. !
Why? Who knows. Only Google. And you can't talk to Google. Google is everywhere but nowhere. It speaks, but has no voice. It aspires to be not evil, but it is all things, and to be not evil is to be not good, if you are all things.

google sitemap delist unlist

Home Theater PCs Finally Get Practical (sort of)

HTPCs are novelty hunks of wires and metal that don't do anything you don't already have some other blinkin' lights box doing. DVD, Tivo, whatever. But Microsoft and DirecTV just announced a deal. Your HTPC (aka Windows MediaCenter PC) will be able to take the place of your DirecTV settop box! (Ditto XBox 360 and some other thingies). At last the HTPC has an actual practical place in the universe.
It's not a cheaper alternative, but it can take the place of your Tivo/PVR, DVD/CD player and DirecTV box. That's something. It may not be easier to use (no one over 50 will ever be able to set it up), it may not be cheaper, and it may not do that much more than what you had. But it will eventually nibble away at all those problems. I think this is the real start of computers in the living room.

When Cable companies follow (they will because they would rather have You buy your own HTPC than pay for your set top box), then the transformation will begin in earnest because that's a much bigger market than DirecTV and it will also have broadband internet access (including music and video downloads) - and probably VoIP too. That's the real potato. If only it would work nice with Apple's iPOD and Video service. HTPCs (that will work with Cable/Satellite providers' systems are Microsoft-centric, so will never really integrate well with iTunes/Apple DRM.
htpc directv cable settop ces media center

A Portland Mystery

In the far far North tip of Portland, at Kelly Point, where the Willamette flows into the mighty Columbia there is a parking lot. And in this parking lot are thousands upon thousands of white cars. They are always there. I have never seen one drive in or out. Portland is a big port (Port Land - get it? It's not named after beer. I think), and, sure, maybe they're just new cars on the way to a dealer, but then they wouldn't be all white, would they?!
Google Earth (and real earth too) coordinates:
45deg38'32.02" N 122deg45'32.43 W
These could be the cute economy car equivalent of the Black Helicopters!



portland oregon mystery secret hidden

Google Sitemaps is Evil and Might De-list You!

Google introduced a service called "Sitemaps" for people with websites a little while ago. The idea is that you can tell google how your website is set up (all the pages, home page, etc.) and Google will index it for you so all your pages show up for searches.
I entered one of my websites and Google de-listed me! The site is gone! Not in the index at all. Nada. Since the de-listing I've got no calls at all and my web traffic has been cut in half.
Oh, Yee Evile Google! Come off thye Mountain and Facey Thye Foe!
And please re-list my website...

Tech Tags: google sitemaps de-list delist

Equilibrium is a Convenient Myth

I gotta say - this whole Equilibrium idea has brainwashed the macroeconomists of the world.
Even in its simplest form - a supply & demand graph that intersect at equilibrium, where's the evidence of ANY market that follows a graph like that? Show me the static and knowable supply and demand curves (if they're not static, equilibrium is meaningless).
You would think the commodities trading pit would be the simple and pure example of a market where supply and demand set the price and so equilibrium is nothing else but the price paid. But how can you call it equilibrium when the price jumps from second to second? Maybe it's an equilibrium for that millisecond. The curves are not just jumping around constantly, but they're not continuous (so all that calculus in the textbooks can be chucked. Calculus presumes smooth unbroken curves). You can have a sudden jump if there's a rumor. You can have a steep section appear if people think there's a supply constraint above some volume of production. You can have the price manipulated by speculation (where's speculation in supply/demand equilibrium). Where's credit/margin. I don't see how you can say that doesn't alter price.
So even in the simplest and purest of limited markets, the idea of supply/demand equilibrium is absurd. Of course I'm not saying supply and demand forces don't determine the markets. They do. But they do not reach any meaningful equilibrium. Extrapolations from an assumption of equilibrium (which dominates macroeconomics) are a very dubious abuse of logic.

economics equilibrium keynes supply demand

Who needs a "Media Center" PC

I'm the perfect candidate for a "media center" PC, but if you gave me a fancy box like Sony's $2200 Digital Living system, I don't even know what I would do with it.
I listen to music through iTunes (connected to my stereo), I watch videos from my computer's hard disk on my TV. I also have a PVR (Tivo-like video recorder rented from Comcast - it even does HDTV). So if the Sony or other Media Center PC can get rid of all those wires and make my life easier, why wouldn't I want it?
Well...it can't do that. It is redundant. It won't work with what I'm already using (or it won't do anything better than my regular PC), and it seems to add more wires and complexity. If it's not making things simpler, what's it for?
First and foremost, it's got to work with iTunes. Who on the planet is going to use a media center who doesn't have an iPod or use iTunes? Apple doesn't particularly want other companies selling a media center that integrates things like on-tv-screen display, recording of streaming content, or simple remote control. Apple might do those things when they come out with a media PC, but in the meantime, your tunes will stay on your main computer or on your iPod. Sure. You can play music, but things will be no different than with a regular PC. The Sony box, for example, doesn't have a wireless client, so you can't send tunes from another computer or to a different room. It's just no different than any other PC for digital music.
What about video? Anyone who is contemplating spending $2K on a media center probably has cable or satellite TV. In which case, odds are they can probably get Tivo-type service from their cable box (for a bit more money). DirecTV, Comcast, and the other big companies offer it. The quality is higher (because you're not recompressing an already compressed signal). The Sony box doesn't even have a digital video input. Comcast has a high-def recording box that has two tuners (you can record two shows at once), and there is no recompression of the digital signal.
So a media center PC isn't really better than what you probably already have for digital audio and video. You can get some other features (the Sony had a 500 CD changer that looks up titles for your CD index from the internet CDDB database). It includes a DVD player and recorder. If you're really into recording what you've Tivo'd onto a DVD, you can make your own (significantly degraded double compressed low-bitrate) DVDs.
What about gaming? Most media PCs (including the expensive Sony) have pretty mediocre video cards. You CAN play on your TV, but an XBOX 360 will look a lot better.
Until existing media companies - especially cable and music companies(well -- Apple anyway), decide that a media PC world is what they want, they have little incentive to make a media PC a better way to play than the jumble of iPods, Tivos, blinking LEDs and digital redundancy we have. And if it's not making things easier, simpler or cheaper, what's the $2000 for? Like I said, if Sony gave me a Digital Living System ensemble I don't even know what I could use it for.
What is needed (before hardware) are standards so all the blinking black boxes can talk to each other (wirelessly) and share a single interface. With competing interests or just plain lack of interest from the existing entertainment vendors, how is that going to happen?

Tech Tags: mediacenter htpc theater mediapc sony

Do Not Install Firefox 1.5 (Yet...)

I went ahead and updated my Firefox browser to 1.5. Java apps won't load anymore! I Googled for Java problems and apparently several people had trouble with the release candidates. Re-installing/updating everything didn't help. It's probably not compatible with some other extensions.
If you don't care, everything else seems to work well. But I need Java! I hope they fix this soon. I know it's not happening to everybody there would be a lot of noise about it.
UPDATE: This is only happening to people who are using the AdBlock extension (which is pretty much the most popular extension - and my favorite). Somewhere out there on the net is another extension called Adblock Plus that's supposed to fix the Java problem. I think I'll just wait till they fix the old Adblock so I don't lose my filters. Disabling the adblock extension and re-starting Firefox does allow Java to run. The Firefox Folk recommend getting the new Java in any case; You can get it at java.com
UPDATE2: It turns out you can export your adblock filters, uninstall adblock, install adblock plus, then re-import the filters tools>adblock>preferences. Works! I'm Firefoxing 1.5'ing and adblocking (and Java-ing) all at once! The way God meant browsing to be.

Tech Tags: firefox adblock plugin bug

The Oregonian Must Die!

I stopped advertising in The Oregonian Classifieds a couple months ago. They responded by raising the cost of my ads, because now I'm a low volume user. I explained that their circulation is down and their subscribers are getting older (so are we all), but my customers stay the same age (cf Matthew McConaughey in "Dazed and Confused" on high school girls). And the Oregonian competition, especially Craigslist, is cheaper, faster, and better in virtually every way.
The Oregonian is following classic old monopoly behavior. "We don't care because We don't have to." As little as a year ago, advertising in the Oregonian was required business practice for me. About 80% of my business came directly from that advertising. This year, because of Craigslist and my own website, www.bestportlandrentals.com, only 10% of calls were coming from those (expensive) Oregonian ads.
I have to think loss of classifieds to the Web is happening to every regionally dominant newspaper with a weak web presence and (the Oregonian farms out their website, such as it is, to another company). Newspapers with competition are more conscious of losing market share and sometimes even have free ads. Monopoly papers muddle along with blinders thinking all they have to do is churn out enough tons of inky pressed pulp and the dollars will roll along, merrily. But that won't work much longer.
So the Oregonian Must Die! And not just because I want it to.

Tech Tags: classifieds ads portland oregonian newspaper

Why the Fed Should Hide Inflation

Robert Lucas most famous idea is "rational expectations" where he argued that if people expect (for example) inflation based on some reports or policies, they will adjust prices before it happens. From the old days through to the 1960s people had built in a lag for higher production costs to trickle through the economy including higher pay, CPI etc. In the 1960s - 70s Friedman and others emphasized the "quantity" idea of inflation which pretty simply says more money = more inflation. But they didn't address the lag issue. Lucas speculated that the "verbal" basis of their theories made incorporating something like expectation too complex and so was ignored (even though the older papers acknowledged that such a thing ought to exist). So he said in his Nobel lecture.
Anyway, here's something interesting: Lucas showed that a moving average of M2 correlates very strongly with inflation. (his graph didn't show if that was adjusted for GDP. I would think it would have to be.) Unemployment (Phillips curve) on the other hand, has at best a tenuous negative corellation. More money means Inflation.
Now, last week the Fed announced they're no longer publishing M2 because it's not meaningful anymore.
Either something has happened recently that is throwing m2 off (possible. That's what the fed argues. The money/financial market effects are skewing M2 so much that it has lost its significance for policy decisions). That may be true. The fed has to make relatively short term decisions. A 10 year moving average (where the correlation shows up) is not meaningful for policy.
But...it could also be true that the Fed realizes publishing a powerful forward indicator of incipient inflation is against their interests!
It creates a rational expectation of inflation.
(Robert Lucas is considered the most influential economist of the last 30 years. Nobel in 1995. But he's not Friedman-esque. His work is Very mathematical. In fact, he's apparently responsible for making graduate economics so heavy on math. I think it's really interesting that you almost never read in the press or even most macroeconomics textbooks about dynamic -- continuously changing in time -- models of the economy vs simple static equilibrium models you always see. Partial differential equations, stochastic Markhov chains, Banach function spaces -- a bit of a jump compared to the little Supply-Demand graphs. Yet it's the dynamic models most economists take seriously these days).

Tech Tags: economics rational expectations inflation bernanke federal reserve

How to Gouge Passively by Joe Exxon

The huge oil company profits after Katerina aren't from simple price gouging. It's more subtle, but equally insidious. It's the Refineries. The fact is the domestic oil refiners have an incentive to underbuild. Under normal conditions, the refinery capacity might be adequate to meet ordinary demand. The refiners might even make a little more money if they built extra capacity for demand peaks. The thing is, they make A LOT more money ($50 Billion for Exxon?) if they do not build that capacity and there is a shortage. Simply, the supply curve (short term domestic) is much steeper if they don't build that extra capacity. When there is a shortage because of a hurricaine or whatever, the profits are huge compared to what they would be in the same circumstance if the refiners built a litte more capacity. Because of this incentive, they may actually underbuild vs what is required to optimize even normal demand. It's a kind of passive profiteering. Draw the little rectangles under the curve for relative profits (or read Exxon's quarterly), and you will see what I mean.

Tech Tags: economics gas prices refinery capacity supply demand

This Guy Hates Keynes...and not in a good way

I am really just stuck on Economics lately. I have to admit it's more the arguments that grab me than the actual numerical/descriptive analysis of economies.
Have you read the "glass window" fallacy? This is old, but was popularized by an economist WSJ writer Henry Hazlitt in a book called "Economics in One lesson." The guy HATED Keynes. He wrote a whole book line by line trying to refute Keynes "General Theory" book and was famous for saying "What is original in the book is not true; and what is true is not original" (which is more or less what Keynes says classical economists would write about his book.)
Anyway, the glass window fallacy: Some kid throws a rock through a baker's window. This is good for the economy because the baker has to give work to the glass installer who pays the sheet glass maker who buys goods (including baked goods) from others with the money. Hazlitt makes the standard refutation of this fallacy by saying the baker will spend $100 replacing the window, but would have spent that $100 somewhere else (presumably on something more desirable or productive). So it doesn't help the economy.
It's not surprising this guy hates Keynes. What Keynes would say is that Hazlitt is absolutely right IF the baker has Zero Propensity to Save Money (e.g. he spends every dollar he has). What if he has savings? What if there is deflation and people are not spending money because they know things will be cheaper in a month (like happened in The Great Depression and in Japan in this decade), causing personal savings to increase, spending to decrease, which causes more deflation...
How do you get the baker to spend money he wouldn't otherwise spend?
1. Break his window
2. Tax him and have the government spend the money for him (not very efficient except for taxing rich people, because most people during a depression need to spend most of their income).
3. Have the Government borrow money (a proxy for the baker borrowing money) and spend it on general productive projects like the Tennessee Valley Authority or police to prevent windows from getting broken.
The whole issue of credit (government and consumer) and propensity to save/invest vs. spend seems by-passed by monetarist types.
Another issue I haven't read discussed is how shifting the distribution of aggregate income alters demand.
A dollar to a poor person = 100% $1 of demand. That's consistent with the classical "Says law" that supply (cost of supply is paid out to "factors" like workers) = demand (because every supply $ will be spent and no more, no less). But the richer the person the less they need to spend and the more they will save/invest. Since the savings rate is a pretty serious indicator (along with things like the consumer outlook or attitude), it's surprising that it doesn't seem generally indexed to distribution of GDP rich<--->poor.
Especially since that has dramatically shifted over the last 20-30 years.
That can actually cause stagflation because more money in the system, if not spent, will result in both inflation and a slower economy.
I think.

Tech Tags: economics hazlitt keynes broken window falacy

To err or make an economic prediction is human

It seems to me the history of economics has been a history of modeling human behavior and decision making in particular. That explains why it has been so unsuccessful except when you hold "all other things being equal" or some other elaborate set of constraints and assumptions. Looked at that way, economic predictions aren't that much different than predicting where the dow is going to be next year. Both depend a lot on attitudes. The economy and especially consumer behavior and commodity pricing are subject to the same flux.
Micro = one human. Macro = group of humans in aggregate.
You would think that humans all lumped together would be more predictable (since things average out and irrational factors would be more obvious since more people would follow them), but it's the opposite. Microecon is generally the more practical tool. Walmart uses micro pricing models (albeit more elaborate and data-mine based than you find in textbooks), so they must work. Or maybe that's self fulfilling. Because Wal*mart (I think the asterisk is censored - like cussing in comic strips) sets a price based on a model of behavior, people follow and behave the way the price guides them to. Like people following the old K-mart blue light. They buy more cause it's flashing. It's not flashing because people buy more.

economics crowds prediction

Sallie is a Whore

One thing I've discovered as a landlord: Americans are totally ripped off on education.
Over and over again I see this huge student loan debt on applications from people who have jobs as waiters and retail clerks getting maybe 2000/month. It's sad. They have $30-60K or more in debt for what? I can't tell whether they went to legitimate institutions or rip off trade schools, but it's clear something is broken.
There has got to be more strict accreditation or some different kind of rule. I would say Most of the people under 30 who apply have big student loan debt and some kind of entry level job. That is certainly an artifact of our apartments to some extent (people under 30 love the neighborhood and won't live in the burbs. It's the more trendypart of Portland. ). But even so, there is a large segment of people just getting started in life who have an absurd debt burden without getting the foot up into better jobs that supposedly higher education would give them (not counting film majors). If this happens to one percent of the population, that's $20 Billion in unnecessary debt very roughly. Sallie Mae (SLM NYSE) had $80 Billion in outstanding debt in the most recent quarter.

Tech Tags: student loans sallie mae salliemae debt

What Would China Do?

I keep thinking about China. They supposedly have $100 - $300 (latest estimates) billion in US currency & obligations. What will they do with it?
Since the trade imbalance is only growing and they know it will continue that way forseeably, what do they think they will do with it?
They don't want to or won't buy enough American or European products.
Of course they want to buy oil companies because natural resources are something they do want.
They will buy raw materials and technology. They have even bought entire factories.
I predict HUGE amounts of money will be put towards political influence.
Most likely the largest part will come indirectly through China's corporate trade partners.
Walmart in particular probably has or will evolve a huge pro-China-trade lobby.
Energy companies, which are already the most effective lobbiests will be recruited (with semi-direct inducements to officers or through entities like the Carlyle group that exist for this purpose).

But what will they do with all the money they still have? And it's not just dollars. It's billions in Euros too. If they are blocked from buying resources and they can't buy adequate influence to change that, what will they do?
Sell dollars?
Threaten to sell dollars?
Would the US be happier because the weaker dollar (from Chinese hypothetical dumping) might ease trade?
Or??
Or maybe the Chinese are just pretending their dollar purchases are for stabilizing Chinese currency but really it's a sabotage of US monetary policy by forcing a stronger dollar even in the face of a trade deficit (to continue the trade deficit).
They don't really lose much by hording dollars.

It's very puzzling to me. What would you do if you were China.
Your goal is to increase employment and worker standard of living.
To maintain the means necessary for continuing growth and influence in the world.
To improve national defense and regional influence.

The biggest obstacles: Natural resources, trade barriers, technology, infrastructure, geographic (it's a big country with resources and major urban centers very spread out).

It's a reasonable bet that a significant portion of world GDP over the next 10-15 years will go into the Chinese infrastructure.

If I was China, I would be looking to put my money
1. Where it was productive and free of potential politically motivated trade problems
2. Where it could influence trade policy of its partners - especially the US and EU
3. Where it could create a de facto control of territories - esp. Taiwan - where it has an ideological interest.
4. Resources it doesn't have enough of (mostly oil, technology, and technologists).

I don't think they're going to be buying a big pile of Chevrolets.
They're already trying to buy oil (and they did buy Canadian oil)
I bet the influence buying has happened and is just hidden or underpublicized.
Who knows what they're doing in Taiwan. A lot I bet. I wonder if they're making huge investments in Korea to gain influence and/or control there?

Tech Tags: economics china cash investment surplus

Greenspan doesn't ask for much...

I can't believe Greenspan is saying everything is OK because "the vast majority of homeowners have an equity surplus." JEEZ. That's a pretty damn low standard considering how much equity the average homeowner put in. Even new homeowners, who are usually the most leveraged, average something like a 20% down-payment. Can you imagine if the average homeowner was in the red? Of course the whole point of a bubble is that it's a bubble till it pops. Homeowners actually have a growing equity surplus BECAUSE it's a bubble. It's like saying there's no danger from a bubble because the bubble is big. Is Greenspan so timid about tweaking the markets that he actually has to say junk like this? He says only 5% of owners are more than 90% leveraged. If that's the best sounding stat he can come up with, we're in some deep shit.
The thing is, even after the bubble pops, history seems to show there won't be really good (cheap) buying opportunities for about 3-6 years (liquidity will vanish, but prices will take time to drop).
That's because it's tough to sell when you have very low or negative equity. Most people don't have that kind of cash (or they wouldn't have borrowed so much in the first place). It's easier to make a mortgage payment than it is to make the lump payment of remaining principal your house sale can't cover.

Tech Tags: economics housing bubble debt greenspan

Fox News Can't Make Reality Match Agenda

I was flipping around watching hurricane news and was surprised what I saw on Fox. It's a strange trend with this disaster that the cable news channels are all continuing their regular personality shows (Oreilly, Hannity, Scarborough...) except those personalities are acting as MCs, interviewing the actual field reporters. The idea seems to be that the MC tells people how to interpret the raw images and reports.
On Fox, Hannity is one of their conservative (aren't they all?) talking heads. He was interviewing one of their prettyboy reporters at the NO convention center or superdome (?). The reporter was pretty broken down and when Hannity tried to say, "but let's have some perspective on this..." the reporter shouted him down (clearly knowing he was risking his career) and said (pretty close)
"There is NO PERSPECTIVE. There is NO PERSPECTIVE EXCEPT THESE PEOPLE ARE DYING!. We've been showing them and telling the world to get them out of here and get them food and medicine for days. The same people are still dying on the floor with NOTHING! Something is going wrong. This isn't about democrats or republicans. This is just wrong."
Hannity continued to whitewash, but the reporter interrupted him and shouted him down.
Even when Hannity cut to Geraldo who was doing his usual grandstanding (holding up crying babies and shouting into the camera), he was clearly tired and altered by the whole experience and also started shouting down Hannity - explaining that the people at the convention center have been locked in. If they try to walk out on the highway - walking maybe ten miles would get them to food and water. But the national guard keeps saying help is coming (same story for days) and won't let them walk. Geraldo was cut off when he just started shouting at the camera (to the government) LET THEM WALK - LET THEM OUT OF HERE - JUST LET THEM GO.
And that was FOX news.

Why does Google Want to Talk?

The interesting thing about googletalk (their new IM & Skype-like client) is that it's a window on their strategy. Yahoo and MSN blindly mimicked gmail's big storage and free access just to compete, but it wasn't clear why google sought to be in that business. It's probably profitable - with ads next to every email you read that are relevant to your emails. But it looks like the real reason was to create a user base for other kinds of applications. There has been a lot of speculation about Google creating something like a platform independent (browser based mostly) OS using the AJAX extensions. Their two strengths are searching/data distribution and now a user base - which can be used for peer to peer (email and IM are the most basic forms of peer to peer). So talk.google.com seems to be the first non-email use of that user base. Remember I was saying AOL ought to be in the telephone/VoIP business because they already have the directory of users from their IM business? This would seem to be Google's attempt at that angle. Certainly from Google's first client (beta they say, but I think maps is still technically beta) is pretty weak. It's very simple though. They seem to have decided that they would rather have utter simplicity over features. It worked for them before, but existing IM users have higher expectations. Also, IM in businesses is partly popular because it mostly isn't tracked or archived, unlike email. Google probably is tracking and storing IM, if not voice.

Housing Bubble: The Soft Landing Myth

Housing Bubbles have a soft landing. Prices just stablize or dip a little - no more than 20% - and everyone is happy. That's the myth and even the Wall Street Journal has bought into it to some degree in their recent article about housing prices stabilizing in Australia (where the bubble has been growing more dramatically than in the US).
There is truth there.
A housing bubble can stop expanding without a total collapse in prices. But there are at least two other kinds of bubble-popping: How long does it take to sell a house? How many houses are available for sale? If the average 2 bedroom home is selling for $500,000 at the peak and 1000 of them are selling in your city every 30 days, is that the same as 1 home selling for 500,000 every six months? That's what happened (with different numbers) in the early 90s in L.A. Speculators drop out of the market. People are afraid to buy a home when all the hype about astronomical appreciation isn't there anymore. They can't commit as much of their income to payments. Sellers still try (for two or three years) to get the peak prices. They can't afford to sell for less than their mortgage. It's a stalemate. And for people who thought they would flip their home for easy money and can't afford their zero principal ARM payments, it's not a good time. Of course, when those people go bust, there will be a bunch of nice, lower priced homes coming on the market that will ease the crunch. And that is the "soft" landing.

Tech Tags: economics housing bubble soft landing

Cheap Cheap Cheap

There are lots of ways to find cheap stuff on the internet. Some of the websites specializing in new bargains are well known and some are a bit more obscure. Here are some I use all the time...

Froogle (go to google.com and click on the froogle link). They have everything. Not always the lowest price and not always helpful. But not a bad first place to shop.
Woot! Woot! more like shopping in a game show than a quickiemart. They have just one item till they're sold out. It could be an inflatable chair. Foot warmer. Toy Rocket. Stereos... Almost always an exceptional deal. And their product descriptions are just hilarious.
slickdeals.net has some of the best deals. They list just a few exceptional deals every day.
Mostly Tech - electronics - computer stuff:
fatwallet
Fatwallet has a hot deals forum where people post the best deals they've found. Some of the best deals ever are here. My favorite deals forum. Also, they allow posting of coupons. Manufacturers and advertisers don't like that so a lot of sites don't allow um.
techbargains is a catchall techbargains listing updated constantly and really good for finding the best coupons or deals from the big chains like Staples and Best Buy. Always a good place to look when you're shopping for that special... well really when you're shopping for yourself.

Tech Tags: cheap coupons deals shopping

Housing Bubble in Portland?

Is there a bubble in Portland or will housing prices just keep going up and up (or level off without a crash)? No one knows. But looking at past housing bubbles (they do happen) in places like Los Angeles and NYC, the answer is YES, we are in a bubble. YES prices are likely to be lower (someday), and NO you don't know when. One thing that seems likely from history's example: things will level off for a while (a year or two) before a collapse. During that leveling off period the number of homes bought and sold will slow down dramatically.
And what is a collapse? Prices could drop by as much as 50%, but that would be extraordinary. One economic evaluation based on Portland employment levels, population size, market size, income and residential density extimated that Portland Metro housing is overpriced by about 25%. If I were to guess, that would be the maximum magnitude of a price drop. But it will take a lot longer to find a home and buyers will find sellers reluctant to negotiate for quite a while (until the reality of the market drop has set in). There just won't be as many buyers and they won't be able to afford as much because mortgage rates are and will be higher.
Should you buy now? IF you are currently renting and you can afford a fixed rate mortgage and you plan to stay in the house more than 10 years, it's probably not a bad idea. Should you sell now?
Do you have somewhere else to live? If the market does drop, you can probably expect a two or three year wait to get a deal worth the effort and expense. And I could be wrong. All the guys who work for house builders think so.

Tech Tags: economics portland oregon housing bubble

City Gives Giant Developer a Free Ride

Trammell Crow - one of the biggest developers in the country is building a giant 22 story apartment building in the South Waterfront area near OHSU. The Oregonian had this feeble story about it:
http://www.oregonlive.com/printer/printer.ssf?/base/business/1112353024199980.xml
The city is waiving property taxes on this megalith for 10 years. Since the cost of the building is huge, this means potentially tens of millions escaping the cities coffers in order to subsidize an already glutted rental market! It would be nice if the Oregonian's author questioned ANYTHING the developers spoon fed him but
Dylan Rivera: 503-221-8532; dylanrivera@news.oregonian.com
didn't look into why this project got such a subsidy or really anything beyond a a press release. (Dylan - you should at least cite your source - a Trammell Crow brochure?)
The argument that this project will create lots of affordable housing makes no sense. The city could provide aide for five times that much housing by subsidizing rent on existing units (wandering around the Waterfront area, you will see "For RENT" on every other building.) We're all suckers.

Tech Tags: Portland Oregon Real Estate Development graft

Why Sony's iTunes for Movies is Dumb. A better idea

Sony wants to do "iTunes for Movies" (BBC story):
http://news.bbc.co.uk/1/hi/technology/4396481.stm
This would be for portables (like the PSP and probably phones).
This only makes marginal sense as a business model (a little better as a technology). A better idea would be to sell TV shows they day after broadcast for $2/pop.
At least Sony partnered with a few other studios so it's not only Sony Pictures content that will be available. But if they partnered with Networks/TV production companies they would have a much better product to sell over an iTunes-like store for the in
There are a lot of reasons why cloning the iTunes model for movies makes so much less sense than selling TV shows:
1) The movie customer really wants to watch the content on his TV, not mobile device, so this is a peripheral market (how often do non-airplane trapped people want to sit down and watch a 2 hour movie on a tiny screen?). Compare to the real iTunes where portable players and computers are becoming the primary playback method for music. So movie content for portables is a much smaller market.
2) Most songs are sold 1 song at a time. Some whole albums are sold. But even a whole album is a much smaller $ unit than a movie. And also a much smaller download.
3) iTunes song quality is equal (as far as most consumers are concerened) to CD quality. Portable distributed movies are VHS quality - not DVD quality, so the customers isn't getting the quality they would want. The quality expectation for series TV is lower than for DVDs.
4) Movies are a much bigger download than TV shows. How long will a customer want to wait for their purchase to be on the portable device?
So I think Sony is blindly mimicking the iTunes strategy without really understanding the market or even the technology issues.
But like I said, if they did the same thing with TV episodes (day-of or day-after broadcast) they could do very well - if they charged $2/episode or something.

What would you like to see on this page?

I'm trying to make this site as useful as possible, so if there's something that ought to be here that isn't, tell me! You can click on the link for this post and give me a comment on the Portlandpage blog. You owe it to yourself, the community, and your country. Go USA.

Welcome to the Portlandpage

Hopefully you will find some of the info I've gathered for you useful. As people suggest things and I get bored with the old stuff, new stuff will slowly take over. It's a mini-malls vs. old growth entropy kind of deal.