Deep Green Crystals

October 11, 2008

the tunnel is getting smaller

Check outthe list of Global IPO's and M&A activity over the last four quarters here. Down and to the right. In q4 08 only 3 tec IPO's globally, down from 456 in 2007 (ok, quarter is just started, but I think it won't break 20).

Posted by Martin at 3:42 PM | Comments (0) | TrackBack (0) |

read this

the Sequoia CEO sumit notes. Batten down the hatches. It is going to be a long darkness.

Posted by Martin at 10:41 AM | Comments (0) | TrackBack (0) |

October 9, 2008

My first Chrome bug

Well, other than the usual that many sites won't support it because it is not identified as IE or Firefox. That isn't so bad, because if you say go ahead anyway, Chrome does a fine job. No this one is on evite. When you click on "add to my Outlook Calendar", it tries to open an evite.vcs file. Chrome opens the file in a browser window and shows you the plain text (the wrong answer). Firefox gives you an "open with" prompt suggesting MS Outlook (the right answer). Not a bad bug and I bet with poking around in configuration I could fix it, but that is a bit of a rookie mistake.

Posted by Martin at 12:01 PM | Comments (0) | TrackBack (0) |

don't lie to your board

I have invested in over 30 companies. Have sit on five boards. Been a CEO four times. I have been an optimistic CEO, but have never lied to any investor or board member about anything. Today, the CEO and CFO (both of whom I know) of the Ignition Partners (where I am affiliated) funded company Entellium did the perp walk for cooking the books to the tune of almost $12M in non-existent revenue over the last three years. This is actually very easy for me. As CEO you are always responsible for everything that you say to the board and all the performance of the company regardless of if you actually had any knowledge of it (see Enron). Keeping two sets of books in the hopes that you can raise lots of venture money on lies and "make up the difference" in later quarters is the most bizzare strategy I have ever heard of. I hope Paul and Parrish have a better defense than they put in their e-mail admitting the scheme to the board "it seemed like a good idea at the time." I am hoping drugs and hookers were at least involved. But this was not a one time thing. This was month by month fraud for three years. That was only discovered by confession. I can see more private company audits coming..... This sucks for the entire start-up community. You can't blame that on the credit crunch.

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October 8, 2008

just a little tech tidbit

Matt found out that Lenovo's FN+F5 control panel needs to be enabled to get bluetooth running. Thanks matt!!

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TED Spread up another 10% today

For those who haven't been following what Paulsen and Bernanke follow, start tracking the TED spread. The bloomberg link is here. This is the best real time measurement of how reluctant banks are to lend to each other. It is the spread between the rate investors get loaning to the fed (the Tbill) and the rate they get loaning on an interday basis in Euro Dollars to each other (the big ones) - the ED. This has historically been about even. Maybe .19-.25. It is today 3.91, up 10% today. That means banks want 391 basis points MORE to loan to each other than to the fed. That has for all intensive purposes put the kibosh on interbank lending. No-one would pay that rate. And those who must borrow at that rate are in BIG trouble. Watch this rate. If it goes back down to around 1, we have restored enough confidence and money should start to move again. But we ain't there yet folks. No where near.

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New Kashless.org landing page

Kashless.org is starting to have a pulse. Sign up to be invited to the Alpha and join the team!

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the new we can solve it ad that is banned from ABC

unbelieveable the influence of big oil. They are blocking ads from this non profit

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October 2, 2008

Sign of the economic times

so I have a bunch of money over at Prosper earning about 11.66%.  I only loan to AA and A credit rating. Up till sept. I had zero late and 100% payment.  Out of 28 loans I now have 2 that are more than 1 month late.  These are unsecured personal loans, so I suspect more defaults.  Oh, well.   

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Review of GoodReads

Starting to review some of the vertical markets that have created community around certain product categories. Like Books. One of the first of these was AllConsuming.net started by my friends in Seattle, now owned by RobotCoop. While AllConsuming was one of the first, there hasn't been much investment in it for some time.

The clear leader in non-amazon book community sites is GoodReads. There are alot of things to like about the site. Here in my normal terse fashion are my likes and dislikes and summary:

Likes:

clean look and feel.
complete, rhobust search.
lots and lots of content, very active site. Very cool.
Good global connection ability to other readers.
facebook application is not too horrible, but doesn't do anything interesting either. it only imports facebook friends. No matches leaves me with nothing else to do.
have a basic swap feature.
Explore section is nice. Shows me some relevant books. Gives me lots of different ways to browse, popular, most read, unpolupar, listopia, ebooks, etc.
like the event section, auto propogate from bookTour. I don't get the impression that these are many user generated events though. Very cool local search.
good bookclub group functions.
they had my mother's book, Great walks in Florida.
they do all the right retention things to keep people engaged on the site.
the search for people is very good, easy and relevant.
in the find new people section, there is a "rate the book" quiz that takes you through 20 books and you see how your ratings match up with the other person's. Cool.

Dislikes:
stop pestering me to invite friends.
not very local. No clear way to connect with other book lovers of my interestes locally.
why don't they have outlook "friend" integration?
swap feature is hard to find, not promoted and i can't find anything or anyone to swap with.
many places they make you copy and paste HTML code instead of opening your mail client, etc. This is annoying.
a quick search of people profiles shows that many are inactive.

Summary: Useful site, needs a few more features, but I will keep coming back. Useful in the end.

Posted by Martin at 9:38 AM | Comments (0) | TrackBack (0) |

Read The Monk Who Sold His Ferrari

The Monk Who Sold His Ferrari: A Fable About Fulfilling Your Dreams & Reaching Your Destiny by Robin Sharma

My review

rating: 3 of 5 stars
Read on the recommendation of a friend. Pretty fluffy sometimes condescending writing. The author is trying too hard to be "mystical". The basic concepts are pretty solid zen stuff. I liked it. But wouldn't recommend it or read it again.


View all my reviews.

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Trying Widgetbucks but underwhelmed for now

changed from Google adsense to my friend Matt's widgetbucks on wend. I don't like the quality of ads they display, it is a noticable downgrade from Google. And too many image ads. Maybe I just need to reconfigure. After two days I earned $.01. On Adsense I was earning a couple of dollars a day. This is not a good start. Well matt just got there, so maybe he needs some time to get their network on track.

Posted by Martin at 8:02 AM | Comments (1) | TrackBack (0) |

October 1, 2008

trying out windows writer

i really need a drag and drop editor that makes it easier to add photos and doesn't require me to edit the tags. w.Bloggar has served me well, but fails in this area. With more media being posted, I am trying windows Writer.  I like the GUI so far. 

 

ok, first default publishing using the MT upload api for images gave the wrong path.  So i changed uploading to FTP. Windows writer did a VERY good job of navigating the FTP site and letting me click through directories to pick the right one and to choose the link path.  It even validated the link path. Way better than w.bloggar where this part is never explained.  I am thinking I am going to switch to windows writer for now. 

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RRE doing the right thing

tried to reblog through Zemanta. It doesn't integrate with my self hosted typepad. I just copied. Will try more later.

I found this fascinating quote today:

RecycleBank will pay you for recycling.  Tendril will save you money on electricity costs.  Peek will give you cheaper mobile email service.  These companies should thrive in a down economy.  I am working on a seed deal that entails free items for consumers.   What could be better for those who have been downsized?  In addition, companies that make capital available when banks dry up such as PrimeRevenue or On Deck Capital should be huge benefactors.  There are lots of opportunities out there for startup companies.  We at RRE intend to take full advantage of them.Five Years Too late, Sep 2008

You should read the whole article.

Posted by Martin at 4:28 PM | Comments (0) | TrackBack (0) |

Review of MeOwns

I thought MeOwns might be in the Recommerce space somehow, but it looks like it is squarely in the vanity bling space. And for programmers and people who can read Arabic as well. At this point, the site is totally useless to me. Here is my good/bad review.

Good:
there is a widget
there is a bookmarklet neatly tucked in the top of the screen for easy dragging up to the browser.
the idea of wish lists is good. The idea of showing people your wish lists is good.

bad:
only 364 books on site. No ability to search amazon and add something. No ability to import from anywhere.
No ability to search any catalogue of products to add your products.
when adding you have to start with a picture. I guess the owners think everyone wants to show pictures of themselves with their stuff.
the widget just shows everyone lists of crap you own, but has no actionable work to be done.
they try to force you to invite your friends at sign-up.
a search for "Moby" resulted in nothing. I understand there is nothing on the site, but Moby is somewhere on the internet, come on.
when they said "share your stuff" i thought they would actually let me share stuff. But they only let you share lists of your stuff. Stupid.
there seems to be about 50 people total on the site. (actually the "owners" section says 439, mostly overseas) one in china.
what exactly is the point of having me claim my copy of "Internet Explorer 7"????

summary: keep working boys.

Posted by Martin at 4:19 PM | Comments (0) | TrackBack (0) |

styrophobia....

One of the largest contributors to the landfill is all that disposable packaging we get with our food. Especially take out and bags. There are alternatives made from fiber and corn starch for ALL THAT STUFF TODAY. No need to wait. I have seen in Seattle Taco del Mar go all green with packaging. And Wahoo's in Hawaii. Check out your favorite fast food joint and ask them why they are still using non-biodegradable packaging.

Posted by Martin at 3:11 PM | Comments (0) | TrackBack (0) |

Paul brake levers...a thing of beauty

check out this minimal brake lever.

saw on this cool fixie today.

Posted by Martin at 12:48 PM | Comments (0) | TrackBack (0) |

gadget recycling sites

There seems to be an explosion lately of gadget recycling sites. The latest a friend sent me is NextWorth. They are all basically the same. Enter your gadget type, age, condition and they will give you a trade in or purchase price. They will send you a box and you sell it to them. Some get a bit creative and try to upsell you the new gadget right there, but most just offer you cash. The idea is that the early adopters need somewhere to get rid of their new old toys. What these sites all do is basically have a database of pricing trends off of ebay and other resale sites and offer to buy items for approximately 50% of the trailing 4 weeks price (a rough estimate on my own). They plan to resell the item immediately and make 100% profit. Not a bad business. But I wonder how hard it is for these gadget people to just post it on ebay themselves. It will be interesting if any of these guys make any money.

I doubt they will make money on the "newly used" stuff < 1 year. but they may be able to act as a collector of the longer tail of stuff in the states where the manufacturers are being forced to provide total lifecycle managment.

Posted by Martin at 11:27 AM | Comments (0) | TrackBack (0) |

Tax and Spend Democrats still running in Washington

my washington. Washington state. One hour after out D governor was sworn in in 2004 after promising no tax increases, she signed a huge one. She presided over a 35% increase in state spending in 4 years. Don't let her have another 4 years. Change is good.

Posted by Martin at 6:15 AM | Comments (0) | TrackBack (0) |

September 30, 2008

Nancy Pelosi's wickedly partisan hatred filled speech that killed the rescue package

don't let anyone tell you the republicans killed it. 95 democrats voted against it. And Pelosi played politics and tried to make this a Bush failure. This speech turned back all the good work McCain did to get house republicans on board. She undid it in one speech. Listen to the partisan rant. It will turn your stomach. This is why Americans hate politicians.

Posted by Martin at 2:09 PM | Comments (1) | TrackBack (0) |

What is the actual rescue package?

With all the finger pointing and sound bites, i am confused as to what was actually proposed and voted on. No longer. Here is the exact text of the bill. I look forward to reading the new one.

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OSU investment club outperforms the market

About five years ago, I gave my college, Oregon State University, an endowment to start a real money trading account for the finance club. It is much more interesting to actually invest real money than play money, it changes the dynamics of learning very significantly. After three years of managing this small endowment, the club has a track record and has attracted $1M in investment from the OSU foundation. Very cool to see a small investment of mine pay off big and to create real learning opportunities. Article here.

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breakfast in sfo

breakfast in sfo


Originally uploaded by ministeroforder

Testing Flickr blog integration. Very good actually. Just enter my mt.cgi path and give password. Then you have a blog this button on all your pictures. Very cool. This is breakfast this morning at the St. Regis in Sfo.

Posted by Martin at 11:39 AM | Comments (0) | TrackBack (0) |

September 26, 2008

just set up a meeid

Very simple user home page, possibly portable reputation later.

Posted by Martin at 5:09 PM | Comments (0) | TrackBack (0) |

washington Ewaste recycling law

over 17 states have passed laws requiring ewaste recycling funded by the manufacturers. Washington's law is here. e-takeback.org has the full list and tracks all these laws. I believe these laws will create lots of business opportunities.

Posted by Martin at 4:16 PM | Comments (0) | TrackBack (0) |

how to use MTurk for audio transcription

I was very interested in automated transcription for awhile. But after the recent downtime of the PhoneTag system, I turned off the service. People kept getting a fast busy when their service was down. I had though to writing a script to send my voice mails to MTurk. Over at Waxy the guy did something similar and explained it very well, code included. It is the best MTurk audio transcription guide I have seen. It still ends up costing $.40 per minute which is about $.20 per :30 seconds. In volume you can get a contractor in the philipenes to do that for $.10 per :30. Still too much to support with ads, but WAY cheaper than doing yourself.

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September 25, 2008

Play the consumer consequences game

over at public radio. Figures out your environmental footprint in a fun way.

Posted by Martin at 3:40 PM | Comments (0) | TrackBack (0) |

McCain does the right thing

by suspending the campaign. Obama and the media saying McCain is somehow scared of a debate are totally not understanding how serious this frigging thing is.

Posted by Martin at 2:41 PM | Comments (1) | TrackBack (0) |

Create islands of oil independence now!

Posted by Martin at 11:47 AM | Comments (0) | TrackBack (0) |

September 24, 2008

iPhone continues to be useless

I don't know if all my iPhone problems are related to contacts, but the thing is totally useless now. I can't play music, play a video, browse the web, or use any application at all for more than 2 minutes. Every application crashes.
unbelievable they sell this piece of junk.

Posted by Martin at 6:05 PM | Comments (0) | TrackBack (0) |

September 23, 2008

ShopGoodWill has its own auctions

Goodwill has it's own auction site because they don't want to pay 11-15% to ebay. good for them.

thanks KK for pointer

Thrift store hunting isn't just a pasttime. It can be an honest living. Finding and flipping used goods for profit has been the main source of income for one of my friends for more than a decade. Though picking through racks of clothing, bins of electronics and boxes of watches -- or trolling eBay and Craigslist -- can be fruitful, another weekend-thrifter friend also swears by Goodwill's online auction site, which features 18,000 items daily that have been handpicked by several stores nationwide. You're getting access to the cream of the crop, but not every storeworker knows the value of what they have or how to describe it -- and every bidder doesn't necessarily know either (the market for vintage Levi's has become so lucrative that people try to pass off faux-jeans to less-discerning eBayers). Whether you're looking to join the flip economy or you enjoy stumbling on old, rare, cheap stuff, Goodwill's site is a great resource. Here's a bit of what I found recently (followed by current bids): Kodak Colorburst 50 Polaroid ($4.99), Ronco Rhinestone & Stud Setter ($5), Harley-Davidson Men's Boots - size 11 ($11), Nintendo 64 System ($15), Hohner Student IV Accordion w/Case ($9.59), and a Minolta Hi-Matic F 35mm ($8).Warning: shipping can be expensive. Also, items are purchased 'as is' and cannot be returned.-- Steven LeckartGoodwill Online Auctionshttp://www.shopgoodwill.com/listings/listbycat.asp?catid=8

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September 22, 2008

how to be an evangelist

Guy Kawasaki reminds us of the basics of a good product evangelist....
I am looking for one by the way....

Posted by Martin at 8:31 PM | Comments (0) | TrackBack (0) |

Why I hate the Iphone

I got the iphone thursday. My blackberry curve finally just died. The track ball fell out and is forever lost. The Blackberry Bold is not out yet, so I decided to try the iPhone because they finally added Exchange integration push which is a must have for me. After five days of hell and complaining I am ready to spike this piece of junk. The people at the Apple store were very nice and courteous today as they told me that having 8,000 contacts was my problem and I should cull those down and no their programmer error on how they page contacts in/out of memory is a feature not a bug, but I am rambling...

The reason the iPhone sucks eggs for a long term crackberry addict like myself is actually very easy.

Here are the features that are important to me in a mobile device in priority order, Most important to Least Important

eMail push
Calendar, contact, task wireless sync
Phone
text messaging
Camera
browser
Bluetooth
RSS readers
add on applications
game platform
media player

Here are the features that the IPhone is good at in BEST to WORST

Media Player
Browser
game platform
add on applications
Camera
Phone
text messaging
Calendar, contact wireless sync (no task)
email

Notice that the list is pretty much an exact inverse. The IPhone sucks at all the stuff that is important to me and excells at all the stuff that I don't really care about. Going back to the Blackberry.

Posted by Martin at 8:07 PM | Comments (0) | TrackBack (0) |

interesting traffic graph

of paperbackswap, swapthing, swaptree, freecycle.org
freecycle tends to get a hit when they get press. Swaptree is steadilly growing. Swapthing has much smaller traffic than their PR would lead you to believe. And the vertical market around books is actually larger than the general markets.
click here

Posted by Martin at 11:47 AM | Comments (0) | TrackBack (0) |

go Brammo

They just got $10M. Congrats

Posted by Martin at 10:33 AM | Comments (0) | TrackBack (0) |

review of Zwaggle

Been reviewing swap sites lately. One that has been sent across my radar is Zwaggle. Here is a first impression:

good:
- have virtual currency "zoints"
- have wish lists
- have simple "items in my neighborhood" button (searches zip codes near you).
- has ability for charities to register and for you to direct your gift to a charity.
- condition of items having drop down values
- some algroythm used year of purchase, condition and original value to calculate "zoints".
- four options on shipping, drop off, shipper pays, pick up, receipent pays.
- choose fed ex or usps media mail
- groups is good.
- decent marketing, press coverage, but very thin for how long the site has been up.

bad:
- terrible UI, very 1980.
- Too long a sign-up procedure, ask for too much information before I can use the site. Ask for duplicate information.
- no standard for Zoints assignment.
- national footprint from get go means only 700 active listings, very thin geographically.
- no integration with meta data provider
- forces you into massive item categorization. This is good for search results, but bad as a user experience. User should have option to use lots of categorization or little.
- five screens to fill out when posting an item. way too many.
- when you donate to charity, you don't actually donate the item to charity, you donate your "zoints" to charity. Apparently then the charity can come to the site and get stuff it wants from the site. This is a weird transaction.
- no ezplanation of how zoints are calculated or how they are valuable. The zoints calculation does not relate to any real world "garage sale" value. For example it estimated my VHS tape was worth 11 zoints, when that tape would be worth $.25 from good will.
- internal message system very kludgy.
- way to many clicks to do anything.
- when making an offer for an item, you can only choose shipping methods that the "giver" clicked. what if i want to offer to pay shipping but the giver didn't select that? i should be able to make that offer. Maybe the giver would change their mind.
- i tried to "take" five things. 100% failure rate. Nothing was available. Got back messages from the system saying the items were no longer available.
- the site crashed 3 out of 5 times I used it.
- very limited product focus to "family" items.
- facebook applicaiton is confusing and takes you to another app.
- twitter integration is lame.

Conclusion: Missed the mark. ignore for now.

Posted by Martin at 8:34 AM | Comments (0) | TrackBack (0) |

September 16, 2008

wow glasses, i must be getting old

Posted by Martin at 6:48 PM | Comments (3) | TrackBack (0) |

September 15, 2008

trying out catch the best

one of the keys to consuming less resources is to use virtual copies of everything you used to buy and spend resources for. One of those is employee recruiting. I am trying a new web site with some workflow in it. Want to work for my new startup? I have the free account so they have their branding on the page. They should have a free private label version. The branding sucks.

Posted by Martin at 8:06 PM | Comments (2) | TrackBack (0) |

New top level category

In light of the carnage going on in our financial system and the behind the sceens heroic efforts going on to preserve the very American way of life, I thought it was time to start point some of these events out and the good/bad things going on. So this category "Averting Economic Collapse" will have all that stuff. Paulson continues to impress me. The history books of this time will most likely credit him with saving the WORLD financial system (if it works). The politicians are largely followers and onlookers. Let the financial professionals do their job. And lets hope the poll watching vote sluts don't mess it up with some knee jerk red meat for the base.

Posted by Martin at 8:20 AM | Comments (0) | TrackBack (0) |

Special letter on Lehman collapse

Mark sent this around last night. He is right, We are closer to the beginning than the end. Look out mark to market accounting. In an upward spiral this is good for balance sheets. In a downward spiral marked by multiple firesales this is hell on balance sheets. More losses to come.

From: Strategic News Service
To: Martin
Sent: Sun Sep 14 23:02:40 2008
Subject: SNS Special Alert: U.S. Treasury Out of Bullets?

Lehman declared bankruptcy tonight, and B of A announced it was purchasing Merrill Lynch for $50B.

Here is my blog post from yesterday:

This weekend finds Lehman Bros. twisting in the wind. Guys who remember 8th grade dance class remember the feeling, as the Teutonic teacher loudly and suddenly announces the Sadie Hawkins dance, where girls get to pick boys, and there you are, still sitting along the wall. (Of course, for girls, every dance offered this delightful experience.)

Welcome to the world of Lehman.

People are fond of reciting the phrase: The darkest hour is often just before the dawn. It seems to me, on local as well as global stages, that the opposite is just as often true: the moment of greatest peril is when you think the challenge is over.

So it is for the U.S., and therefore global, financial system. And I dont say this with any intended hubris. I doubt that any reader would argue long over the posit that a failed U.S. financial system would cast the world into complete economic chaos. In this particular and key universe, the U.S. is still in the World Series hunt, and China is a farm team.

With the rescue of Fannie and Freddie (may we make that assumption? on paper, at least), my prediction to my British friends and co-bloggers has come to pass: there was no way Secretary Paulson was going to let them fail, and he didnt. It was never about moral hazard, it was about the complete collapse of the U.S. lending system.

But now what? Paulson has, just as wisely, met with Lehman and the leading global banks last night. While I havent seen any transcript of the meeting, my guess is that he has told them he will not be bailing out Lehman, that he will be glad to help with the meetings part, but the money and risk assumption will be theirs. Support, but no money.

This, too, is exactly the right move, in my opinion, but it brings up a difficult question. What if, in this game of chicken, no one blinks?

I have little doubt that Lehman is a basket case, based solely on their losses announced to date. But I have the same feeling about Merrill Lynch, one of the supposed saviors in last nights meeting. Other than Goldman Sachs, there are a lot of walking wounded out there right now, who, despite all the triage and medical care, will take a couple more years to heal their balance sheets.

The Congress, and the Treasury, are probably on the same page regarding additional bank failures: let them happen. But what will be the result, if they do?

The chances of another bank failure, starting with Lehman, are, I believe, very high. When these failures occur, they will probably be like Palins self description: pigs with lipstick on. In this case, that probably means, for example, a sale to someone like Bank of America on such draconian terms that all equity value is effectively wiped out, the managers are fired, and huge headcount reductions follow.

Was it a sale, a fire sale, or just a fire, with B of A sweeping up the ashes?

And if it turns out to be the latter, as I expect, will the ensuing damage to the markets be manageable? Once? Twice?

I think the Treasury is essentially out of bullets in this war to save the U.S. financial system, and if so, the next few weeks and months will be those of greatest peril, even as many on the Street are heaving sighs of relief and writing about how the danger has already passed.

--

The disappearance of Lehman and ML as independent banks over the 24 hours since this was written underlines the danger the U.S. financial sector is facing. No one can blame B of A for taking Merrill instead of Lehman; no doubt, some will try to blame John Thain for selling Merrill, but one should keep in mind that it is what we don't know, rather than what we know, that probably led to the (forced) sale.

This double event confirms my concerns about the elevated level of peril the banking industry is in today.

Mark Anderson
CEO
Strategic News Service

Posted by Martin at 8:13 AM | Comments (0) | TrackBack (0) |

interesting solution to the mortgage crisis

I have been saying for some time that the current economic crisis is actually a crisis of confidence not a fundamental problem with any particular business. It is a problem of Trust and Faith. things the scientific among us are very bad at managing. The core problem here is that investors have lost their bearings. The old "rules of thumb" are not working. Rules like "Bear Stearns and Lehman Bros are credible co-parties". Rules like "A house is worth what the assessment says". The basic problem is that money is frozen because parties are finding it too hard to assess the risk of lending it around. There is no way to come to a "clearing price". The market is illiquid. So how do you set prices that everyone can agree on and get the risk takers to start taking risk again (probably for a higher price now). Well in home markets, Michale Lissack has an interesting idea: I like it, pass it on.

Fixing the Financial MessUGH!
Procrastination has led us to what may be a financial precipice, but there is a solution.A vast portion of the mess is caused by the mark-to-market accounting rule and the lack of liquidity (and thus a market and thus a meaningful market price) for uncertain and "tainted" assets (mostly mortgages, credit card debt, and related derivatives).
The mark to market rules ASSUME a liquid market and thus meaningful market prices. Such is not our present environment. It is too late in the gain to suspend the mark to market rules. That solution would have worked well a year ago, but today investors would merely be even more spooked by the uncertainty.
The solution lies in recognizing the shift between equity and debt which the market turmoil has created. Since the government now control Fannie and Freddie it also controls the very mechanisms to solve the problem.
Fannie and Freddie should mandate that every conforming loan outstanding be subject to an appraisal for the underlying property. If the appraisal suggests a loan to value ration in excess of 110%, it is time to recognize that a PORTION of the loan is in reality an equity investment. All such loans should then be subjected to a mandatory split such that 90% of the appraised value receives a Fannie/Freddie guarantee and the other piece does not. The first piece would have an established market value based on par for the principal and current interest rates. The second piece would become in effect participating equity. Banks and borrowers should have the option of exchanging the second piece for up to 75% of the future appreciation in the property valuing each 25% of future appreciation (above the current appraised value determined above) at 5% of the current appraised value of the home.

These two steps would restore value to perhaps 70-80% of the currently illiquid uncertain mortgage assets plaguing the US financial markets. The mess would be over.Please pass this message on to your elected officials AND your bankers.

Posted by Martin at 8:09 AM | Comments (0) | TrackBack (0) |

The dynamic duo let us down (rated 1 star)

Posted by Martin at 7:42 AM | Comments (0) | TrackBack (0) |

A story about "Defenders of the Faith"

Posted by Martin at 7:38 AM | Comments (1) | TrackBack (0) |

September 14, 2008

Free is a very good price

A corollary to conserving resources, reuse of resources, is to get something for nothing. Yes sometimes Free is a very green price. So I have become a bit obsessed with the depth and breadth of free offers. Now I am not talking free things that actually have a cost like Radio and TV. The cost being your attention. Free email with ads. Some minor attention payment is fine, but major attention sucker like Evite is too much. So what is out there that is truly free? Or free "enough" with minimum attention cost?

Therefore a new category "Free is a very good price". Here you will find not only reuse commerce but also offers from companies of free stuff. I will post stuff that I think are actually attractive offers. Where the "cost" in attention or contact information is small enough to be worth the free item.

One of the first to catch my eye was 000webhosting.com. 250MB disk space, 100GM data transfer and zero ads. All the stuff you expect from web hosting but no costs. They support it because they know you will need more space, more domains, more email, whatever. So you will upgrade. These are very effective offers. Just like the drug dealer. The first one is free. Razor and Razorblade. I like. And many times the first one maybe all you need.

Posted by Martin at 10:53 PM | Comments (0) | TrackBack (0) |

Alt-A mortgages, the other shoe to drop

Ok, we have all heard of sub prime. But did you know that there are only about $855B of them? The next level up the rung (from the bottom) of easy to get mortgages are Alt-A mortgages. Those are also called "stated income". Basically no W2 required. Mostly made to small businesses or to people with lots of non wage income, they just said "my income is XXX" and there was little verification. Estimates of overstated income range from 5-50%. And then these small businesses are not doing well in the current environment. In the second quarter default rates of this kind of loans went into double digits. Hummm... More coming.

See where all the bones are in Alt-A mortgages over at Bloomberg.

Posted by Martin at 10:18 PM | Comments (0) | TrackBack (0) |

corn ethanol bust continues

Very hit it home story from bloomberg

As I pointed out months ago, we are WAY long on ethanol.

"The 168 plants had capacity for 9.96 billion gallons as of Aug. 26, almost 1 billion more than the U.S. requires this year, the Washington trade group Renewable Fuels Association says. Another 43 plants scheduled to be built or expanded would raise capacity to 13.8 billion gallons. Most make ethanol from corn."

Posted by Martin at 10:06 PM | Comments (0) | TrackBack (0) |

trying google talk

Posted by Martin at 4:07 PM | Comments (0) | TrackBack (0) |