Archive for the 'The Economy' category

Anti-Green: The Modern Parking Meter

Feb 08 2011 Published by under Miscellany, Society, The Economy, The Law

As I was driving home this evening I couldn’t help but notice the staggering number of little slips of paper on my dash.  Our office is in a part of town with a lot of parking meters.  Most of the old school meters have been replaced with the single kiosk that accepts credit cards.

As I was pondering the paper, it occurred to me that while most things are moving toward a leaner, greener footprint, the parking meters are actually going the other way.

Old school parking meters require no electricity.  They generate no waste paper. They don’t involve dial up or broadband networks to process the transactions.

Moving to a system that is more “efficient” has actually moved us to a system that generates paper waste and consumes electricity (albeit relatively small amounts) for the computing power to handle the credit card transactions and keep the kiosk running.

At a time when we say we want things to be more green, we’ve replaced almost the perfect green model with one that is arguably the anti-green solution.  It just demonstrates that our commitment to environmental friendliness ends when we can come up with a solution that makes our lives a little easier.

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Investor Newsletter: Long Term Financial Strategy

Oct 09 2008 Published by under Craziness, Surviving the Apocalypse, The Economy

I’m not an economist or a trader, but I play one on the Internet. As a result, I’d like to give you my predictions for the market and share my long term investment strategy.

First, I am currently heavily invested in canned goods, firearms, ammunition, and gold – with extremely fortified positions in remote land and barbed wire. I can make a strong case for any company that sells batteries, generators, gasoline, torches, candles, flashlights, light explosives, armor plating for residential use and first aid kits.

As the strength of the dollar weakens even further, I’d start considering heavy investments in the currency of the future – candy bars, cigarettes, prostitutes, duct tape, alcohol and bottled water.

If your portfolio is light on any of the following tangible goods, you should stock up now:

  • Blankets
  • Hunting and camping equipment
  • Survival gear
  • Anything sold by Cabela’s

I would also strongly advise divesting any holding that places great faith in the American government’s ability to handle the current economic crisis. After all, the companies represented by the market have now lost so much value it’s entirely possible they won’t have enough money to pay their taxes and government services will have to be cut way, way back.

If you have any children of military age, I’d suggest you have them enroll in the military and request assignment to the same geographic area where you plan to establish a base camp. That way, when the government storms your compound, your child may be able to keep his buddies from killing you. If you don’t have a child old enough to be your man on the inside, stock pile significant amounts of the future currency items listed above. They may keep young kids unpaid by a broke military from pillaging your stronghold.

Finally, you should consider moving to somewhere with a stronger, healthier economy. You know, like one of the third world countries we’ve been supporting with copious amounts of foreign aid for the last five or six decades. If you pursue that strategy, however, I’d suggest you leave now as they’ll probably seal the borders soon.

Good luck, investors, and happy hunting. See you on the other side of the apocalypse.

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The Perfect Storm Of Stupid

Oct 03 2008 Published by under Business, Congress, Craziness, Crime, Democrats, Government, How Not To Sell, Legislation, Republicans, Society, Stuck On Stupid, The Economy, The Law, Waste

Let’s be clear about one thing. The economic disaster we find ourselves in is not entirely the making of Wall Street. For the Democrats in the audience, it is not entirely the fault of Republicans. For the Republicans in the audience, this is not entirely the fault of Democrats. This is, to put it plainly, the net result of the perfect storm of stupidity.

If you have ever read The Perfect Storm, there is a great explanation of the three weather phenomenon that came together to create the system that is the focus of the book. The movie glosses over the explanation, so read the book instead.

What we are witnessing this week is the same interaction of three deadly factors. Any one of the three would be destructive. In total, however, they have just cost you and I a trillion dollars. And don’t for a moment think the total will end there. Mark my words, this bailout has only begun to cost us.

The Three Factors

Under a Republican congress and Democratic President, Washington expanded a Carter era relic called the Community Reinvestment Act.

The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations.

In other words, banks will make loans for houses to people who are ill-equipped to pay them back. The “encouragement” came in the form of penalties for not doing so.

Add to that another bill passed by a GOP controlled Congress with a Democratic President. That bill, the Gramm-Leach-Bliley Act sought to:

Enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, insurance companies, and other financial service providers, and for other purposes.

In other words, prior to the law, Insurance companies could sell insurance, banks could do loans, securities firms sold stock, and never the three should meet. After the law, it was a free for all. Banks created securities out of the shitty loans they issued under the CRA, Insurance companies under wrote those while creating their own shitty securities, etc, etc.

Now into the mix you have to throw the American people. They look at the news and see home values going through the roof. The react the same way they did during the Beanie Baby craze. They rush out to get a piece of that action. They can buy a $5 stuffed animal and sell it for $300 on eBay, so they buy the hell out of Beanie Babies.

Unfortunately, economic laws will only support that for so long. The company will make more (thereby reducing demand for the things), people will lose interest, or some other force will enter the market and suddenly your left with crates full of stuffed animals rotting in closets. Beanie Babies were an artificial market.

In the same way, people saw home ownership as a great way to make money. Home flipping became the rage, people took out second mortgages to buy second homes, and suddenly everyone had to buy a house.

The Perfect Storm

The trouble is when you have people who can’t afford to buy houses meeting up with people who have to sell houses to keep from running afoul of laws designed to promote home ownership among the poor, you wind up with a) a guy who will lie about his income or b) a guy who will lie about the value of the house or the terms of the loan.

So suddenly a lot of people are invested in houses they can barely afford anyway, and the real terms of those notes go into effect. People can’t pay, so the value of that note becomes worthless.

Since you have built shitty securities on the value of that house, the value of those securities go into the toilet. When that happens, the debt that the mortgage company is carrying becomes unsustainable and the house of cards comes tumbling down.

This is exactly what we’re witnessing. We’re seeing exactly what happens when an artificial market comes tumbling down. There never was a market for housing for people who can’t afford it. The government created one, took their eyes of the guys who were managing it, and is now asking us to throw another deck on the house of cards so people who can’t afford to borrow can keep doing so.

DC is Fundamentally Broken

I have said that Washington DC is so fundamentally broken it is going to drag the rest of the country down with it. I am more convinced of that than ever today.

With this bailout, we’re solving nothing. We’re simply allowing people who shouldn’t have credit to keep on borrowing. We’re enabling addictive behavior. The Congressmen who voted for the bailout should be tried as traitors.

Despite all of that, I was forced to watch to politicians on TV last night both of whom blamed “the greed and corruption of Wall Street” for the mess while giving a pass to the incompetence and stupidity of Washington. Make no mistake. This dismal situation was the result of horrible policy that started with, and was supposed to be overseen by, Congress. They passed the laws that allowed this to happen and ARE TAKING ABSOLUTELY NO RESPONSIBILITY for the mess they created.

What’s worse, is both candidates for President, and both candidates for Vice President, appear to have learned absolutely nothing from watching this happen and are pursuing the same ridculous policies that have crippled our nation.

I believe you can absolutely count on two things.

First, when the next Administration is about 6 months or a year into its term, they will have to deal with an economic disaster of Biblical proportions. This is a band-aid fix for a missing leg. It’s stupid and will do nothing but punt the problem into an off-year when the sheep aren’t watching.

Second, if you think we dodged a bullet with this bill today, you haven’t seen anything yet.

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FCC Commissioner Weighs In On Broadband Deployment

Jul 24 2007 Published by under Broadband Policy, Congress, Government, Legislation, Technology, The Economy, The Internet, The Law

Commissioner Robert McDowell has jumped into the broadband access debate neck deep today with a brilliant piece in the Wall Street Journal (subscription required, but I’ll post the highlights). McDowell’s op-ed challenges the entire basis for the “sky is falling” crowds constant hand wringing – the OECD numbers on broadband penetration.

The OECD’s methodology is seriously flawed, however. According to an analysis by the Phoenix Center, if all OECD countries including the U.S. enjoyed 100% broadband penetration — with all homes and businesses being connected — our rank would fall to 20th. The U.S. would be deemed a relative failure because the OECD methodology measures broadband connections per capita, putting countries with larger household sizes at a statistical disadvantage.

What’s that? If every man woman and child on the planet had broadband, we’d still be ranked 20th? How can that be? We’re currently 12th, and a segment of our population are constantly stressed out about it. What if we dropped to 20th? My god, the hospitals would overflow with heart attack patients.

The OECD also overlooks that the U.S. is the largest broadband market in the world, with over 65 million subscribers — more than twice the number of America’s closest competitor. We got there because of our superior household adoption rates. According to several recent surveys, the average percentage of U.S. households taking broadband is about 42%; the EU average is 23%.

Furthermore, the OECD does not weigh a country’s geographic size relative to its population density, which matters because more consumers may live farther from the pipes. Only one country above the U.S. on the OECD list (Canada) stretches from one end of a continent to another like we do. Only one country above us on this list is at least 75% rural, like the U.S. In fact, 13 of the 14 countries that the OECD ranks higher are significantly smaller than the U.S.

Well, that reflects something I have been pointing out for two years now – it costs much less to wire a population that lives in a very small area than to wire, oh… I don’t know, let’s say Montana.

And if we compare many of our states individually with some countries that are allegedly beating us in the broadband race, we are actually winning. Forty-three American states have a higher household broadband adoption rate than all but five EU countries. Even large rural western states such as Montana, Wyoming, Colorado and both Dakotas exhibit much stronger household broadband adoption rates than France or Britain. Even if we use the OECD’s flawed methodology, New Jersey has a higher penetration rate than fourth-ranked Korea. Alaska is more broadband-saturated than France.

So even Montana is better off? Hmm…

The OECD conclusions really unravel when we look at wireless services, especially Wi-Fi. One-third of the world’s Wi-Fi hot spots are in the U.S., but Wi-Fi is not included in the OECD study unless it is used in a so-called “fixed wireless” setting. I can’t recall ever seeing any fixed wireless users cemented into a coffee shop, airport or college campus. Most American Wi-Fi users do so with personal portable devices. It is difficult to determine how many wireless broadband users are online at any given moment, since they may not qualify as “subscribers” to anyone’s service.

In short, the OECD data do not include all of the ways Americans can make high-speed connections to the Internet, therefore omitting millions of American broadband users. Europe, with its more regulatory approach, may actually end up being the laggard because of latent weaknesses in its broadband market. It lacks adequate competition among alternative broadband platforms to spur the faster speeds that consumers and an ever-expanding Internet will require.

So we’re not even counting Wi-Fi when every street corner has a Starbuck’s and every Starbuck’s has a Wi-Fi hot spot? I can hook up via wi-fi for $30 a month throug Starbuck’s. Surely the problem must be the cable/telco duopoly, right? They’re holding us back, right? Hardly.

In the U.S., cable is available to 94% of all households. Also, the U.S. is home to the world’s fastest fiber-to-home market, with a 99% annual growth rate in subscribers compared with a relatively anemic 13% growth rate in Europe.

In fact, the European Competitive Telecommunications Association reported last fall that Europe is experiencing a significant slowdown in the annual growth rate of broadband subscriptions, falling to 14% from 23% annual growth. Growth stalled in a number of countries, including Denmark and Belgium (4% in each country). And France — a relative star — exhibited just 10% growth. Yet all of these nations are “ahead” of us on the much-talked-about OECD chart.

Here in the U.S., the country that is allegedly “falling behind,”

broadband adoption is accelerating. Government studies confirm that America’s broadband growth rate has jumped from 32% per year to 52%.

With new numbers expected shortly, we anticipate a continued positive trend. Criticisms of our definition of “broadband” being too lax are already irrelevant as over 50 million subscribers are in the 1.5 to 3.0 megabits-per-second “fast lane.”

So cable covers 94% of American households. Tack on the telephone companies and you’re covering 98%. With FTTH installs growing at 99% per year, and cable dramatically increasing speeds on their existing infrastructure, our problem isn’t deployment. It’s also not speed. Our problem is, simply put, one of adoption.

As hard as this is for the “enlightened” technologists to understand, some people just don’t see the advantage to having a high speed connection. For many, a night out at a movie with a family of four ($51 – $36 for tickets, and let’s say $15 for popcorn and cokes) is worth more than that high-speed connection ($40).

You can argue the relative value of the Internet in people’s lives, but unless the buyer sees the value, you’ll never make the sale.

I imagine when electricity was new – and a lot of people were wiring up their homes, and touting the great things you could do with lights on-demand – there were still some who didn’t get it. “Why spend the money on electricity?” they asked. “I have candles, why would I need to pay someone for electric lights?”

That mentality still exists. There will always be late adopters. There will always be hold-outs. However, empowering the federal government to solve yet another problem (Immigration reform? Hurricane Katrina? Waco? Ruby Ridge?) is never a good idea. Having them pick winners and losers in technology is a sure-fire way to be sure you end up with nothing but losers.

If government must get involved in trying to spur broadband adoption, they should give tax credits for broadband, or incentivize companies who provide broadband services to expand their offering or engage in R&D to find new, faster methods of connection.

Address the problem, not the hysteria.

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She’s My Girlfriend From Canada. You Don’t Know Her.

Feb 26 2007 Published by under Craziness, Jobs, Self-Promotion, Technology, The Economy, The Internet

It’s sad to see a cottage industry rise up to meet the demand of the nerd set. It used to be if a geeky kid wanted to pretend he had friends he’d cut a picture out of a catalog, slip it into one of the plastic sleeves inside his velcro wallet, and pretend he had a girlfriend. Any questions about here would be met with irritation ad comments that “You don’t know her. She’s not from around here.”

Well, nerdy kids can rejoice. A company has sprung up to meet the needs of today’s friendless dorks.

FakeYourSpace.com, a business founded by Brant Walker… offered users of MySpace.com and similar sites a way to enhance their page with photographs and comments from hired ‚Äúfriends‚Äù ‚Äî mainly attractive models ‚Äî for 99 cents a month each.

The company was shut down after the royalty-free photo service they were using to supply the pictures demanded they stop. Oddly, they expect to be back up and running quickly after securing models for the effort.

I guess there may be more money in this than I would have assumed. I guess the $5 per lawn the little spaz down the street charges me has to go somewhere.

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