Saturday, July 24, 2010

Friday, July 23, 2010

A little Fourplay.........................

Four of the best: Bob James, Nathan East, Lee Ritenour,
and Harvey Mason. Enjoy!

Delivering Happiness..........................

The good folks at Amazon shipped me a new book the other day. 

Delivering Happiness: A Path to Profits, Passion, and Purpose.
Written by Tony Hsieh, it is both his story and the story of  Zappos was birthed in 1999 as an Internet shoe
     "Nick summarized his entire pitch in three sentences: 'Footwear
is a $40 billion industry in the United State, of which catalog sales
make up $2 billion.  It is likely that e-commerce will continue to
grow.  And it is likely that people will continue to wear shoes in
the foreseeable future.'
      'Do you have any experience in the footwear industry?'
Alfred asked.
      'No, but I walked around a shoe show in Las Vegas a few
months ago and some of the people said they thought it was an
interesting idea.'"

Thus was born a business which was acquired not so long ago by
Amazon for the tidy sum of One Point Two Billion Dollars.  It is
an interesting story and Tony Hsieh is an interesting man.  It was
not all smooth sailing, and there were a number of course
corrections along the way, but a group of people who are more
committed to a specific idea of what a successful business should
feel like would be hard to find.  I suspect you could sub-title the
book, "Culture Matters- a whole lot".

Zappos started out with a list of 37 core values.  Afraid that a
list that long might become a "meaningless plaque on the wall of
the corporate lobby", the Zappos folk winnowed the list down
to ten core values.  Values that they were willing "to hire and
fire on".   Here they are:

1.   Deliver WOW Through Service
2.   Embrace and Drive Change
3.   Create Fun and a Little Weirdness
4.   Be Adventurous, Creative, and Open-Minded
5.   Pursue Growth and Learning
6.   Build Open and Honest Relationships with Communication
7.   Build a Positive Team and Family Spirit
8.   Do More with Less
9.   Be Passionate and Determined
10. Be Humble

Hsieh added, "Integrity was a value that had been suggested by
some employees, but I made a conscious choice to leave it out.
I felt that integrity would come from us actually committing to
and living up to our core values in everything we did, not just
referring to them when it was convenient."

More to follow.

Not sure that my friends in residential sales will concur............

"The housing tax credit was a clear and unequivocal failure. Not
only did most of the benefit go to people who were going to buy
anyway, but the credit didn't reduce the overall supply (the total
supply includes both homes and rental units). The credit just
incentivized some people to move - and pulled some sales
forward - and to the extent the credit went to new home sales, it
actually was counterproductive by increasing the excess supply.
This is a textbook example of bad policy."

So opines Bill McBride at Calculated Risk, here

I don't know about the 'clear and unequivocal failure' part.  I
suspect a sale to day is more useful for all hands than maybe a
sale tomorrow.

McBride is very clear in his opinion that the over supply of
housing is the critical problem with the real estate markets.
(I use the plural on purpose.  There is no national real estate
market, just a huge collection of local ones.  Some are doing
better than others).  I have  to agree with him.

From 2000 to 2006 real estate development was the engine
driving the U.S. economy.  Perhaps a poor choice for an engine.
It's that sustainability thing.  Left to their own devices, as
the history of the last forty years suggests, developers will
always crush a market by over building.  This time though,
over building had the full support of both policy makers and
the public.

In the year 2000, a smart market study guy projected  that the
Central Ohio market place could absorb 6,200 newly built
houses per year. But, if we add up the number of home built
between the years 2000 and 2006, the production building
industry created in excess of 8,000 more homes than the
market was projected to be able to absorb over that time

This scenario was repeated in market after market, and some
were over built to a much greater degree than Central Ohio.

What did we think was going to happen?   When one goes
on a binge, one gets a hangover.  When a whole country
goes on a really long binge, it gets a really serious recession.

I don't know if the housing tax credit was good or bad
policy.  I do know that the passage of time is the only cure
for a hangover, and likewise, the passage of time is the only
cure for the glut of housing stock. 

It must be hard for a politician or a  policy maker to admit
there is nothing to be done but to go through the necessary
passage of time, but I suspect that all other attempts to rectify
the situation will be, as the Bard said, "full of sound and fury,
signifying nothing".

Shall we evolve.....................?

There's no place like home....................

Sean Carpenter, blogging at The REALTORS Toolbox, reinforces
the notion that residential real estate is not primarily an
investment, here.

He links to Winifred Gallagher's essay in the NYT: 

"Like the old song says, there’s no place like home, not
because of the real estate, but because of the sense of
shelter and nurture that it provides."

We can always use the reminder.

Thursday, July 22, 2010

Making in look easy................

P.S.  It is Don Henley's birthday.  Happy Birthday to
a major talent.

Home sweet home.....................


Ahhh, prime real there is a concept...

Jonathan Miller, a blogger cited here before, is at the top of
his game.  Essay on "how quickly they forget" here.

Excerpt here:

"Now, if you’re going to overpay, market bottom is the time to do
it, and many of these deals are modestly leveraged or even all
cash.  And since interest rates can’t go any lower and the stock
market looks rocky, a six cap or under deal can be rationalized
when you’re talking buying up prime real estate in the best

What is a prime real estate?   Fresh out of college, I managed
a restaurant/coffee shop operation located in the Philadelphia
National Bank building at the corner of Broad and Chestnut
Streets in downtown Philadelphia.  It was in a prime building
and  a prime location- in 1974, or, prime real estate. 

Flash forward a few years to 1987, and developer Willard
Rouse III opened One Liberty Place about four blocks to the
west of what used to be THE prime corner.  Ooops.  Not so
prime anymore.  Subsequently, newer office buildings have been
erected a few blocks even further west.  Twenty five years later,
formerly prime real estate is now older, less up-to-date, and
located a significant distance from all the action, and its cash flow
and value most likely reflect that change in status.

The thing about real estate investing- it is a long, long term
proposition.  Paying a premium for trophy properties may be
good for the ego, and the cash buyers that Miller was talking
about may be happy today and tomorrow with a 6% return
on their investment.  But..........I was taught that getting your
investment back was pretty important too.

I'm having a hard time figuring out how investors who  bought
investment real estate at 6% or 7% cap rates between the years
2002 and 2007 plan on ever getting their money back.   It is a tad
bit surprising to see that behavior continuing.  Rationalized indeed.

Does it make me a bad person if I root for inflation............?

Back story here.

Thanks Alpha.

A few final excerpts from....................

Clay Shirky's Cognitive Surplus: Creativity and Generosity in
a Connected Age:

"This is the paradox of revolution.  The bigger the opportunity
offered by new tools, the less completely anyone can
extrapolate the future from the previous shape of society.
So it is today.  The communications tools we now have,
which a mere decade ago seemed to offer an improvement
to the 20th-century media landscape, are now seen to be
rapidly eroding it instead."
"...creating the most value from a tool involves not master
plans or great leaps forward but constant trial and error."
"It doesn't matter how much you want users to behave a
certain way. What matters is how they react to the
opportunities you give them.  If you want different
behavior, you have to provide different opportunities."
"The 20th-century inculcated in us 'the myth of the
audience,' the notion that people are generally the same,
and that any large group of readers, listeners,or viewers
is a relatively uniform lump of consumers......Where the
myth of the audience held true, it was largely by
"As my NYU colleague Nicholas Mirzoeff has remarked,
the reason the web continues to astonish is simple: 'The
we means we're finally being exposed to the full crazy
range of what people are actually interested in.'"

Wednesday, July 21, 2010

Happy 59th birthday to Robin Williams............

The challenge is in finding a G Rated video clip.

For the irony lovers amongst us.....................

Greg Mankiw points to this story, here

"The old man was dreaming about lions."

Ernest Hemingway was born this day in 1899.  I always
liked the matter-of-factness of  The Old Man and the Sea.

The tale opens like this:

He was an old man who fished alone in a skiff in the Gulf Stream
and he had gone eighty-four days now without taking a fish. 
It the first forty days a boy had been with him.  But after forty
days without a fish the boy's parents has told him that the old
man was now definitely and finally salao, which is the worst
form of unlucky, and the boy had gone at their orders in another
boat which caught three good fish the first week.  It made the
boy sad to see the old man come in each day with his skiff
empty and he always went down to help him carry either the
coiled lines or the gaff and harpoon and the sail that was furled
around the mast.  The sail was patched with flour sacks and,
furled, it looked like the flag of permanent defeat.

The old man was thin and gaunt with deep wrinkles in the
back of his neck.  The brown blotches of the benevolent skin
cancer the sun brings from its reflections on the tropic sea
were on his cheeks.  The blotches ran well down the sides of
his face and his hands had the deep-creased scars from
handling heavy fish on the cords.  But none of these scars were
fresh.  They were as old as erosions in a fishless desert.

Everything about him was old except for his eyes and  they
were the same color as the sea and were cheerful and

"An inexhaustible river of invention and discovery......."

Arts & Letters Daily points the way to prosperity, here.

The Rational Optimist: How Prosperity Evolves

Fun excerpts:

"The secret of the modern world is its gigantic inter-
connectedness. Ideas are having sex with other ideas
from all over the planet with  ever-increasing
promiscuity. The telephone had sex with the computer
and spawned the Internet."

"But so long as it can hop from country to country and from
industry to industry, discovery is a fast-breeder chain reaction;
innovation is a feedback loop; invention is a self-fulfilling
prophecy.  Equilibrium and stagnation are not only avoidable
in a free-exchanging world. They are impossible."

Let's keep the world "free-exchanging".

Think of it as cliff notes for the digital generation...

Tuesday, July 20, 2010

Needing no introduction..................Chuck Berry

I finally understand Immanuel Kant........sort of

thanks to our friends at Open Culture.  Tomorrow we study Galileo

I'm just tickled pink somebody is thinking about this.......

Tony Downs writes an essay in the latest National Real Estate
Investor magazine titled, "Where will future development occur?"

While there are many obstacles to present development - serious
overbuilding in the decade past comes to mind, future growth
will come.  A major factor, as Downs says, "is the sheer size of
future population growth. The Census Bureau projects the
population will grow by 55 million from 2010 to 2030, compared
with 58 million from 1990 to 2010."  That is a lot more folks.
As Downs notes, commercial development will always follow
the residential growth.

Downs believes that urban planners want a "strategy of densifying
existing metropolitan areas and making them more walkable".

Downs believes that is a fantasy, and concludes his essay with:

"These realities mean that future commercial real estate
development will arise slowly and will still consist mainly of out-
ward expansion at metropolitan fringes rather than a radical shift
to walkability, public transit, high density, and mainly infill

The reader will understand my happiness at reading this- our
fair city qualifies as a "metropolitan fringe".  Can't wait.

Full essay here

Some Summertime wisdom from Jim Rohn..............

"The summer of life is a time to protect; it is a time for
constant daily effort to guard against the busy bugs and
noxious weeds...The bugs and the weeds of life exist
to test the human will to succeed, and the human
worthiness for life's rich rewards."
"Life is designed to be a story of achievement in spite of
adversity, not in the absence of adversity."
"Develop an understanding and awareness of the fact
that all good will be attacked.  It is nature's way of
qualifying those who are worthy and those who are not."
"Do not spend valuable time arguing with nature."
"Do not spend time regretting the past, but invest that
time wisely by preparing for a better future."
"Learn to accept the perpetual existence of negativity,
and learn also that negativity always yields to constant
human effort coupled with the constantly growing
human faith and attitude."
"Be grateful for adversity, for it forces the  human
spirit to grow- for surely, the human character is
formed not in the absence of difficulty but in our
response to the difficulty."
"Since you cannot control the weather,or the traffic,
or the one you love, or your neighbors, or your
boss, then you must learn to control you.... the one
whose response to the difficulties of life really counts.

Everybody is an expert...............

Mark Perry points to a Wall Street Journal essay predicting
one dip, not two. Here.

Lots of comments from argumentative folks, here.

Joe Scarborough on "showing restraint abroad"..........

The mailman brought me the Summer issue of Cato's Letter
today.  If I could find it on-line, I would post it.  Former
Congressman and current talking head Joe Scarborough
writes an interesting essay, questioning our country's foreign
policy and asking conservatives to look to their roots.

He quotes George W. Bush from the year 2000:

"We must be judicious in the use of the military.  We will fight
only when it is in the vital interests of the United States, when
our mission is clear and when the exit strategy is obvious."

He cites the Weinberger (Casper) doctrine, written with
the assistance of a young Colin Powell:

"U.S. troops should only be deployed when (1) it is vital to
U.S. National interests; (2) our troop commitment is full and
overwhelming; (3) the objectives for our troops are clearly
defined; (4) our leaders are willing to constantly reassess
troop levels; (5) Americans support the war before engage-
ment; and (6) U.S. combat troops are sent in only as a last
resort...............Colin Powell says the key to the Weinberger
doctrine is that you never send troops in until you know what
the trigger is to bring them home."

Scarborough concludes:

"....we need to understand that this country has borne a dis-
proportionate share of the world's security responsibilities
for too long.  We need to begin to show some restraint and
back away from some of our long standing military commit-
ments.  As conservatives liked to say to flustered Clinton
administration officials during the 1990's, 'America can't be
the world's 9-1-1'.  We can't go it alone anymore, and we've
been going it alone for too long.  We need to realize that the
U. S. military is overstretched, we are facing crippling debt,
our economy is in crisis, our people are war-weary, and
America's days as the world's watchman are over."

Monday, July 19, 2010

Boz....................another American Classic

Nobody says it better than Nicholas Bate...............

Just taped this one to the refrigerator door.

A poem for Monday............for Ted

Do not go gentle into that good night,
Old age should burn and rave at the close of day;
Rage, Rage against the dying of the light.

Though wise men at their end know dark is right,
Because their words had forked no lightning they
Do not go gentle into that night.

Good men, the last wave by, crying how bright
Their frail deeds might have danced in a green bay,
Rage, rage against the dying of the light.

Wild men who caught and sang the sun in flight,
And learn, too late, they grieved it on its way,
Do not go gentle into that good night.

Grave men, near death, who see with blinding sight
Blink eyes could blaze like meteors and be gay,
Rage, rage against the dying of the light.

And you, my father, their on the sad height,
Curse, bless, me now with your fierce tears, I pray,
Do not go gentle into that good night,
Rage, rage against the dying of the light.

-Dylan Thomas

More thinking from Clay Shirky.......................

"Because all the public media we've known until recently
abided by Gutenberg economics, we assumed, without
even really thinking about it, that media needed
professionals to guarantee its very existence.  We
assumed that we audience members weren't just relegated
to consuming, but preferred that status.  With this implicit
theory of the media landscape in our heads, generous, public,
and creative behavior does indeed look puzzling, at the very
least.  Like so many surprising behaviors, this one comes
mainly from mistaking an accidental pattern for a deep truth."
"People surprised at our new behaviors assume that behavior
is a stable category, but it isn't.  Human motivations change
little over the years, but opportunity can change a little or a lot,
depending on the social environment.  In a world where
opportunities change little, behavior will change little, but when
opportunity changes a lot, behavior will as well, so long as the
opportunities appeal to real human motivations."
"A study of video games concluded that the principal draw for
the players was not graphics and gore but the feelings of control
and competence the players could attain as they mastered the game."
"When you see people acting in ways you don't understand,
you may ask rhetorically, Why are they behaving that way?  A
better question is this:  Is their behavior rewarding a desire for
autonomy, or for competence?  Is it rewarding their desire to feel
connected or generous?  If the answer to any of those questions
is yes, you may have your explanation.  If the answer to more
than one of those questions is yes, you probably do."

All excerpts taken from:
Cognitive Surplus: Creativity and Generosity in a Connected Age

Those of us who think "strategic default" is an oxymoron....

will probably think this story sounds about right.

Sunday, July 18, 2010

Freedom at Midnight..................

A Happy Birthday to a man most amazing.................

Nelson Mandela turns 92 today.  Two books that not only
illuminate his greatness, but are well worth reading:

InvictusLong Walk to Freedom: The Autobiography of Nelson Mandela

A Verse for Sunday...........................

Do you think you can take over the universe and improve it?
I do not believe it can be done.

Everything under heaven is a sacred vessel and cannot be
Trying to control leads to ruin,
Trying to grasp, we lose.

Allow your life to unfold naturally,
Know that it too is a vessel of perfection.
Just as you breathe in and breathe out,
there is a time for being ahead
and a time for being behind;
a time for being in motion
and a time for being at rest;
a time for being vigorous
and a time for being exhausted;
a time for being safe
and a time for being in danger.

To the sage
all of life is a movement toward perfection,
so what need has he
for the excessive, the extravagant, or the extreme?

Tao Te Ching:  29th Verse
translation from:
Change Your Thoughts - Change Your Life: Living the
Wisdom of the Tao

Three things I pray............

Energy shortage? What energy shortage?

"Let’s be clear: there is no shortage of high-grade energy, only
a shortage of ambition in some quarters and a retreat from the
idea of human progress through technical innovation."

So writes Colin McInnes in an excerpt for his longish essay,
(here) "Energy crisis? We’ve been here before: Around 400
years ago, Britain faced another problem of dwindling energy
resources: ‘peak wood’."

McInnes is singing from the same hymnal as Peter Huber
and Mark Mills, who cover the same topic, only from an
American perspective, in their book The Bottomless Well:
The Twilight of Fuel, the Virtue of Waste, and Why We
Will Never Run Out of Energy.

This blog has featured several excerpts from The Bottomless
Well.  There will be more.  Promise.