Archive for July, 2011
The dictated debt limit deadline looms and a credit rating downgrade, to US Treasury securities and agency mortgage-backed securities, seems likely. Naturally, a spike in treasury yields is expected and a subsequent rise in mortgage rates should follow. That’s right out of the senior year textbook, in most American business schools.
I’m not so sure the fixed-income markets will follow the textbook. Mortgage rates might … do nothing in response the the credit rating downgrade. Here’s why:
The credit ratings agencies lack……well…credibility.
The independent credit ratings agencies ( Moodys, Standard & Poors, Fitch, etc) have a reputation for being late on the scene. They got hoodwinked with Enron, MCI/Worldcom, and Greece. They were asleep at the wheel during the mortgage meltdown, issuing AAA ratings to CDOs, up until late 2007. They are often considered to be too chummy with the issuers (the issuers pay their fee) and when the issuer is a government (with the power to regulate their business), they generally walk on eggshells.
The news may be baked into the market already.
The ratings agencies have been signaling a potential downgrade for months. Clearly, raising the US debt limit will allow the Treasury to remain “liquid” but the agencies have said a downgrade is likely unless a substantive plan is enacted to reduce spending. Cut, Cap & Balance, the “most extreme” of the proposals offered, still might not have been “extreme” enough to avoid a downgrade. Both political parties are demonstrating that they lack the political will to address the long-term structural deficits, needed to bolster the Federal budget, to avoid the ratings downgrade. Fixed income traders seem to be shrugging that off.
US Treasury securities are still considered to be the safest investment in the world.
Certainly there are better run countries than the US but their debt offerings lack SIZE; there ain’t enough of that debt for the real money. Germany has its EU obligations hanging around in the background and Japan seems to be in worse shape than we are. Chinese sovereign debt could be a consideration but the Chinese and Japanese still want their investments dollar-denominated. The US is, for all purposes is “too big to fail”. While a world-wide bailout, under the auspices of the IMF seems unlikely, a de facto bailout, by countries who have no other place to park their cash, will probably happen. As paradoxical as it might sound, the ratings downgrade might attract more money because it affirms that while the US is getting ugly, we’re still the prettiest girl at this dance.
Domestic institutional investors are married to the US Treasury.
Insurance companies, state pension funds, union pension funds, banks, and credit unions are bound by charter to invest a certain amount of assets in US Treasury securities or agency derivatives. Banks are amending their charters to read that they “must invest in AAA securities or government debt” this week, to facilitate the downgrade. If you can’t be, with the one you love, baby, love the one your with.
Rebalanced portfolios could attract more money to US Treasuries
A downgrade will most likely affect the credit markets through the overnight borrowing market (where short-term treasuries are used as collateral). This could hamper the availability of private sector lending a bit which could be detrimental for domestic equity markets and corporate fixed income issuers. Subsequently, portfolio managers might rebalance their portfolios by trimming back on stocks and corporate bonds, and seek a “safe haven” with the proceeds. That safe haven may be the very asset class which caused the mess. Go figure.
The Fed might just continue to be…The Fed.
I’ve given up on trying to figure this creature out. The Fed does crap I never knew it could do (well, because it never could do what it’s done these past few years). The Fed could announce QE17 and start bidding 102 for the new treasury auctions, with the sole intent of “fooling” other investors into thinking the issue is in high demand. Please don’t tell me I’m a conspiracy theorist; the Fed has transparently operated outside of its charter for AT LEAST 3-4 years now.
Another thought is that the spread between mortgage-backed securities and treasuries could narrow after a downgrade. The bad news buried in the back of the breadbox is tempered by the fact that the MBS market has a
sugar daddy rich Uncle Fred and Aunt Fannie, which continue to be wealth redistribution conduits. Traders might figure that the profitable loans stay in the MBS pools while losses are laid off on the Treasury. If this theory gets traction, mortgage rates could be flat or actually go down.
None of this makes any sense but, in the world of “too big to fail” it ain’t supposed to make sense…it’s just the “right thing to do”. Right?
Call me Alfred E Neumann but I’m not too worried.17 comments
In the land of the free it might be too hot to go up (in flames) on the roof, but it’s always cool when you have an air conditioner cosy.
Since becoming a property manager in March, I’ve added some new hats to my collection: I am, like it or don’t, a bill collector and a tax collector. As of today, I am on the road to becoming an evictor, as well. I’m phlegmatic about all of this. I may not love those roles, but I freely contracted to take them on, and I have done them creditably, I think. Even so, I’m in the mood for a palate cleanser.
So: Here are some real estate photos I took this week:
Can’t figure out where to store those pesky spare gas cans? The whole roof is just sitting up there empty. We might-could build a dog run up there, too!
New in Phoenix this week: The official Aunt Fannie and Uncle Freddie® brand air conditioner cosy. It’s the perfect closing gift, but why wait until Close of Escrow to buy it?
However: Style is style and fashion is fashion, so here’s a somewhat different look:
Form follows function. If we can’t put looters in jail, we have to put ourselves and our things in jail instead. But that doesn’t mean we can’t put gas cans on our roofs, dadgummit! This is still a free country, after all…
That doesn’t feel much better…
Here’s The White Stripes to change the subject entirely:
What’s the song about? It’s a break-up song, but we read it as a discussion of the most enthralling real estate of all.
And now I feel better.2 comments
It all started with two phone calls to two separate IDX vendors:
Eric: Hello. I really like your product and am considering moving from my current IDX vendor over to you.
Vendor #1: Great! Can I send you paperwork?
Eric: Well, there are a few features it’s missing – indexable listings and some conversion features I would like. Is there any way I can pay you guys to add these features for me? I have a decent budget for these features & understand that you would need to roll them out to the entire system, since you don’t provide custom IDX solutions.
Vendor #1: Sorry, we don’t take any customization orders.
Eric: Really? It seems like a win/win, since I get want I want, and you get to charge me to improve your own product.
Vendor #1: Sorry, it’s just something we don’t do.
Eric: Hello. I really like your product and wanted to get some more info.
Vendor #2: Great! What can I tell you?
Eric: Well, I already have a nice website and wanted to see if I could implement your indexable product on my own site.
Vendor #2: No, we have a proprietary system that it integrates with. You would have to move your site over. We charge $125/hour for that.
Eric: Okay…$125/hour is a little high, but I can live with that. I do tinker with code a bit and have some good, local vendors. Is there any way I could get access to just my site, once it’s moved over, in case I want to make my own customizations?
Vendor #2: No. You’ll have to use our developers and work on our schedule for any customizations.
Eric: Are you sure? It’s pretty easy to add directory specific FTP or shell access.
Vendor #2: There’s no way we can allow you to work on the site yourself or use your own vendors.
At this point, I was pretty frustrated. I spoke with a handful of developers in early stages of RETS projects with good, misguided intentions. They saw RETS from the consumer’s perspective, which is fantastic, but they didn’t understand RETS from an agents perspective – namely that the #1 goal is to generate leads.
From there, I made a call to who is now my business partner, Braxton Beyer. Braxton is a full time web developer and has been part time real estate agent for as long as I’ve known him – he was with One Source when we opened our doors in 2006. Because he likes to tinker with code, he had built a rudimentary RETS system on his own site as an exercise to learn a new language.
Braxton & I began working more and more on his own system. I helped him with feature ideas – always with lead conversion at the forefront – and Braxton helped prioritize what should be developed, and when. Within a couple of months we had another developer on the project. Within 2 months we had 2 more. At month 6 came our first true “client” – an agent in New York who wanted the system.
However, the trade-off is that agents can work on the sites themselves, have their developer brother-in-law make modifications, or use their favorite vendor. What a “monopoly developer” might charge $125 for, our agents can do themselves, or allow the free market to help them get it done for much cheaper. Here’s a video example – adding Google+ in under 3 minutes:
We <3 WordPress around the Displet office and have released a number of plugins. You can insert listings using ~30 different search criteria onto any page, which isn’t new. What is new, though, is that our plugins interface with the RETS app’s conversion tools, so these pages convert as well as they should.
I personally use Displet to generate much of my own real estate business, so I care deeply about how well it can convert. Any time we build a new feature, the first question we ask is, “Will this result in more leads from the system?” If the answer is “yes”, then there’s a good chance we’ll build it. If the answer is, “No” then we ask, “Why should we build it?”
Displet is now in 21 markets and we’re expanding to wherever makes sense. We’re still technically in “beta”, but it’s analogous to Gmail’s “beta” tag three years ago. However, because we still need beta feedback, we have introductory pricing. If you think you’d be a good fit for our beta program, let me know, and let’s talk. If you have constructive feedback on the system, let me know, and let’s talk.8 comments
Do you want to know how cool ARMLS could be? Sell it as a business and see what someone who is working for money can do with it.
Here’s a true fact of life: Not-for-profit “businesses” suck. Don’t believe me? We’ll discuss it after you get back from the Department of Motor Vehicles.
To be fair, I’m willing to regard the Arizona Regional Multiple Listings Service (ARMLS) as something of an exception, at least as administered by Bob Bemis. Under the last guy, it was run like the Mayberry Jail. This was not entirely a bad thing for me at the time, but it was nothing at all like a business. And the Bemis ARMLS is no business, even now, even if it is significantly more efficient — which is not entirely a good thing for me now, alas.
But: ARMLS is a sleepy not-for-profit fiefdom that has been thrust by fate into the data-processing business. As an MLS, it’s not awful. But as a data-processing business — it sucks!
Why? For the same reason every other not-for-profit “business” sucks: Profits and losses are the guideposts to customer satisfaction in business. Without them, a not-for-profit “business” cannot ever hope to achieve customer satisfaction — which is not to imply that most of them are even trying.
Here’s the news, by way of Inman: ARMLS, now owned by four Phoenix-area Realtor associations, is to be sold for $4.75 million to the Arizona Association of Realtors instead.
First, metropolitan Phoenix Realtors will be robbed of an extremely valuable asset, and then all the other Realtors in the state will subsidize us hotshots in Phoenix, but that’s all just good old-fashioned Rotarian Socialism, to be expected from any crime syndicate with “Association of Realtors” as a part of its name.
And, as you might guess, the grand plan is to create a statewide Arizona MLS, so every neck can be conveniently strangled with one noose. ARMLS über alles.
But that’s all just the garden variety stupidity we expect from any not-for-profit “business”. We know from organizational theory that every sort of “service” organization comes to be a force of evil deployed against its own supposed “masters”. Do you disagree? Clearly you’re not spending enough time trying to renew your driver’s license.
I like Bob Bemis, along with the people I know in the Arizona Association of Realtors. Nice folks. Matters nothing. An organization is either focused on making money or it is not. If it is, it will either achieve customer satisfaction as a secondary consequence of the pursuit of profits, or it will be bought out by someone who can make money by delivering satisfaction to his customers. But if it is not, whatever agenda is motivating that organization instead of money will cause it to achieve a nearly-universal customer dissatisfaction. It may even come to regard customer hostility as a proof of its “success”.
All of that is baked in the cake. If you’re not pursuing profits, you’re racking up losses, or, at best, doing nothing at all. That’s the way the world works.
So selling ARMLS to the AAR is twice stupid: Some people will get robbed and others will reap the spoils of the robbery, but the motivations of ARMLS will not have changed. They will still and always have zero incentive to find the path to optimal profitability that would result from achieving the greatest attainable level of customer satisfaction.
Still worse, since ARMLS will never have that incentive, every potential innovation in the collection, filtration, interpretation and dissemination of real estate listings data will be inhibited if not entirely frustrated. Why is ARMLS — and every other MLS system — so bad at being in the data-processing business? Because they’re not in business, that’s why. Real businesses work for money, and they go head-to-head against competing businesses who are also working for money, and the business that comes home with the most money is the one that does the best job of delivering the best goods at the best price to the paying customer. Where does innovation come from? Greed.
Without the profit motive, ARMLS is just a better-behaved version of the Department of Motor Vehicles. It’s good enough for us schlubs who have no idea at all what we might be missing out on, but it’s not even close to being good. It can’t be. It has no incentive to pursue profits, and, lacking that incentive, it cannot benefit from the positive and negative feedback that only comes by way of profits and losses. This is straight out of von Mises: Without a price-based marketplace, every sort of organization lacks a rational basis for making choices or plans.
This is all just sad, and the saddest bit of all, perhaps, is me lamenting this missed opportunity. ARMLS should be sold to the highest bidder, period. Every MLS system should be. The data-processing business — amazingly enough — is done best by people who are already successful in… wait for it… the data-processing business. This is stone obvious, isn’t it?
Here’s the real tragedy, though: There is so much wonderful stuff going on in every other branch of data-processing that this latest dumbass move — deck chairs on the Titanic — makes it all too plain that we are missing out on a lot of sweet technology, even if we can’t quite say how it might emerge from a free real estate listings marketplace.
Want some examples?
Software engineers already know how to correct commonly-repeated errors in end-user-submitted content. No more misspellings, just like that. No more misplaced homes on the map, and no more useless driving directions, since Google already writes better directions than you can.
More: The software of massively large datasets is just in its infancy. What could young coders do with the ten years of data ARMLS currently has available? What could they do if they were free to mash-up that data with other databases?
Still more: The market value of that dataset could be so large that you, Joe Schlub, Realtor, might just get a free ride in exchange for your listings. It’s plausible that MLS vendors would pay you for your contributions to their databases.
There’s much more that I can only speculate about. The interesting thing about entrepreneurs is that they think up all the things you come to take for granted, yet you had no notion of — and perhaps no awareness of a need for — those things until they were lain at your feet, in exchange for your money.
And none of that can happen so long as ARMLS is being run like the Department of Motor Vehicles.
No worries, though. The Arizona Association of Realtors is telling data-processing entrepreneurs everywhere that there is a business worth at least $4.75 million up for grabs in Arizona. Because that’s the end of this line, no matter what: ARMLS can become a business, or it can be disintermediated by an even-better business. Sic semper tyrannosauris. Thus always to dinosaurs…6 comments
There are more changes coming to the residential lending world (all those surprised by that, please stand on your head and whistle). The Fed is maintaining the conforming loan limit of $417,000, but is lowering the non-conforming, conforming loan limits. The what now? A little background might help: in 2008 Fannie Mae’s charter was expanded to allow loan amounts in high cost areas (such as San Diego… yeah us!) to exceed the nationwide conforming loan limit of $417,000. The most recent loan limit in San Diego County has been $697,500, thus making it exceedingly difficult for those of us who toil away in the real estate salt mines of America’s Finest City to keep beautiful San Diegans housed in the luxury to which they have become accustomed…
But as of October 1, the limit is dropping; in San Diego County it will be $546,250 and some wonder if this isn’t just a stepping stone on the way down to the original $417,000!
As you might imagine, there is a long list of people who do not like this decision. The National Association of Realtors has sent out an Emergency “Call for Action” message in response, suggesting “… a housing recovery depends on keeping mortgages affordable” and warning this decrease in loan limits will “make creditworthy borrowers unable to access affordable financing” (emphasis mine). This raises an interesting question:
Should the government be providing affordable financing in high cost areas?
Hold on, let me ask that again, with a little more accuracy:
Should you and I be subsidizing mortgages for people buying $800,000 homes?
Wait… don’t answer that. We don’t want to be insensitive to the needs of my fellow San Diegans and we certainly don’t want to interfere with the ongoing success of the “housing recovery.” Let’s move on to the good news:
With the Fed in charge of “high cost” loans and a market unsure what the Fed might do next… well, they were kind of the elephant in the room; there was no space for anyone else, which meant that until very recently, there were no true Jumbo loans to be found. (Unlike jumbo shrimp, a jumbo loan actually means what it sets out to mean: a loan amount larger than Fannie Mae’s conforming – or in this case non-conforming, conforming – limits.) If you were buying a home for, oh… let’s say $1.5 million, you had better pony up something close to $1,000,000 of the purchase price to get any financing at all. How’s that for not providing access to affordable housing?
But something strange happened when the government decided to shrink its involvement in the “high cost area” loan market: Actual, bonafide, free market lenders came roaring back. What’s that mean for a quiet little outpost like San Diego County? It means you can get a loan for much, much more than $697,500 now; you can get a loan for $2 million, $3 million, even $4 million! Imagine that: just a couple of months ago these loans did not exist and then: “poof”, as if by magic, they’re back. “Oh sure,” you’re thinking, “these loans might exist again, and that’s nice, but what’s the rate? Can I even count that high? Do I want to count that high?” Surprisingly enough, if you can count into the 5’s, you can master the rates on these true Jumbo loans! So what’s the catch? The catch is this: these are actual loans originated by actual lenders, which means they expect the buyer to put 25% or even 30% down. They also expect the buyer to have a very good credit score. What! Those evil banks; is that what they call “access to affordable financing”? No, it’s what they call a risk assessment, and a surprisingly inexpensive one at that.
So, while some bemoan the lowering of the non-conforming, conforming loan limits, may I suggest that we celebrate?
- Celebrate the reawakening of lenders who provide loans that may not be common, but are needed; especially for the move-up market. Can stated income loans be far behind? (Is there anyone who doubts the validity and need for stated income loans?)
- Celebrate common sense underwriting standards that stabalize home prices, rather than placing under-qualified homebuyers into homes because “we keep financing affordable,” no matter the consequences.
- And maybe, just maybe, we can celebrate this as a how-to example of what actually helps the housing market.
The Fed is lowering their loan limits and moving out of the Jumbo loan market… that’s the best real estate news I’ve heard in quite a while!2 comments
I wrote this four years ago at DistinctivePhoenix.com. Given all the pissing and moaning going on nationwide about — get this — summer weather, I thought I’d give you a taste of what real heat feels like. –GSS
We’re in negotiations to list a house in the Coronado Historic District of Downtown Phoenix. The temperature hit 110 this week, and the seller has determined he would rather live elsewhere.
If you live anywhere but in the Desert Southwest, 100 degrees probably sounds unbearably hot to you. Eight-five degrees is hot. Ninety is a scorcher. Ninety-five is intolerable. One hundred degrees is the stuff of “you don’t know how lucky you kids have got it” family legends.
I have news for you. In Phoenix, we might see a 100 degree day as early as March. Once those temperatures arrive in earnest, we will go for 100 days with 100-degree-plus temperatures. How much plus? The hottest day on record was 122, but 115 and above is not uncommon.
How can we stand it?
Well, for one thing, you get used to it. If you live here for three years, your blood will thin out. Summer will seem much easier to bear than you remember. But Winter will be a bear, particularly if you go back home for the holidays.
But for another, the people who stay here by choice just like the heat. It’s not all that pleasant getting into the car when the interior is 160 and the steering wheel is even hotter than that. But to step outdoors in the late afternoon, when the heat is at its absolute worst, to feel those irrepressible waves of warmth flowing in on the Western breeze, to see forever by the light of an unrelenting sun…
If you hate it, you hate it, and, like our client, you can’t live here for long.
But if you love it…
I rode my bike today. I went out at 10:30 in the morning, so it was only about 93 degrees outside. Shorts, tee-shirt, sneakers and my iPod, all on a mountain bike. We live along the Arizona Canal in North Central Phoenix. The canals are like urban rivers, used to carry fresh water to the treatment plants. Some are developed as parks, but others are just long stretches of linear desert running right through the city, a place to walk, run, ride in silence and solitude while the world whirls on all around you.
Push off with The Caves of Jericho from The Band’s post-Robbie Robertson line-up. That same album had amazing covers of Atlantic City and Blind Willie McTell. The whole thing is freedom, the bike, the sun, the sound. Phoenix gets 87% of all possible sunlight. Seasonal Affective Disorder is just an inexplicable sound that sometimes emanates from the television.
More than halfway through the first lap, I’m No Stranger To The Rain comes up, Keith Whitley at his stoic, tragic best. There are piles of pine needles just off the path, baking in the sun. This is exercise, riding hard to build muscle. It can be fun to take things slower, to take in everything, but today’s goal is to ride as hard and as fast as possible.
About halfway through the second lap, Joe Ely comes around with My Baby Thinks She’s French, a wonderful reflection on the affected urbanity of urban living. Everything is very easy, and the heat is there as a friend, the invited guest of the sunlight.
Roger Miller’s My Uncle Used to Love Me But She Died bumps the tempo at just the right time. It’s a dumb song my father used to sing to me, and I’ve inflicted it upon my own son, but it’s just the right tune for pushing and pushing when things start to get a little warm.
And then there is Johnny Cash covering Depeche Mode with Personal Jesus, a perfect driving rhythm. The ride is fast, fast, fast, but there’s still time to take in everything, still time to see and hear and smell this desert where there should be no desert.
Just when things are starting to get hard we’re hit with the brutality of Barenaked Ladies’ The Old Apartment. It might be hard to imagine riding this hard and still having the energy to punch back at the wife-beater in the song, but that’s the kind of energy you can draw from this sun.
And bearing with her a perfect redemption is Mindy Smith singing Come To Jesus, her voice as clear and blue as the sky itself.
We’re maybe four laps in and the easy part of the ride is over. So it’s a magical kind of random serendipity that brings up Tom Petty with I Won’t Back Down. Art is the stuff that sticks with you when everything else has fled. Petty has hundreds of letters from people who stood firm against unbearable pressure because of that simple little pop song.
And the fifth and sixth laps are the easiest times to quit, the easiest times to rationalize quitting, but Petty comes back again with The Waiting Is The Hardest Part.
And we can’t quit now, because here comes The Boss himself with the original version of Atlantic City. The universe itself is hot and tired, breathing hard, pushing harder. And a breeze has kicked up, pushing back.
But here is Needles and Pins, Sonny Bono’s private lesson on the power of sticking with it.
And then, just when the idea of going home and cooling off seems sweetest, there’s Ray Charles with Baby, What’d I Say. You can pound into what by now feels like a solid wall of heat because the light is right, the air is right and the music is completely right.
Warren Zevon moves things down the road with Accidentally Like a Martyr, a song undemanding enough that it is possible to sing along even with no breath.
At the eighth lap, Mindy Smith comes back, this time with Dolly Parton along, doing a haunting cover of Jolene. Nothing is easy by now, but quitting is not even an option: It’s the same ride home either way.
Even so, Elvis Costello is there to make it easier with an acoustic demo of Green Shirt, a blistering tempo in the blistering heat.
We rode hard for an hour in the heat — it was 97 by the time I got back home. It takes every bit of energy and will to move the bike that hard, that fast, but the mind is free, and the sky and the silence are vast and perfect.
But, brother — it is hot! Your breathing will settle down in 15 or 20 minutes, but the sweat will pour out of you for an hour or more.
If you love this desert, there’s nothing like it. In other places, this kind of recreation is an activity, something to plan for, to buy gear for, to drive to. Here it’s just here, a normal part of everyday life. It’s hotter than anyplace you’ve ever lived. But if you learn to love the heat, you’ll never live happily anywhere else…24 comments
it was (theoretically) possible for you to “nuke” all of your competitors and remove them from Google’s index. For all of you who thought that your site was awesome and the other guys’ site was crap. You had your chance. Hat tip to the folks at Search Engine Land.
The time has now passed and the security breach has now been fixed. Grin. And NO I did not harm ANY websites’ standing in Google in the making of this post. Nor do I encourage it. It may be illegal and is certainly immoral.
That said, I defy anyone to truthfully say that my job is not interesting. (grin) I was on a coaching call with an SEO client when I read the post. Very hard to keep my mind focused. grin.
But this begs the question…if you could vaporize your competitors from Google would you? and why?14 comments
Regarding the Zillow.com IPO: “Since when is a seven year old company with really no large scale growth prospects that has lost money every single year on revenue less than $45 million/year worth half a billion dollars? Am I missing something?”
The question comes from a comment to a post at Seattle-based start-up blog, GeekWire. The news? Zillow.com is bumping the per-share price on its forthcoming IPO to as high as $18, up from the $12-$14 range it started with when the public offering was announced.
I like that question, because it parallels one of my own: What, precisely, can Zillow hope to do — other than provide big paydays for its VCs and founders — with $71 million in new funding? Which parts of the site will require that much build-out?
My take: The web-tech IPO craze that’s going on right now is just the next phase in the rape-the-rubes strategy Wall Street has pursued since internet start-ups came on the scene in the late ’90s. There is plenty of money to be made churning the stock of “businesses” that, in the end, all amount to MySpace.com — all hype, no actual value.
What’s the name for that phenomenon…? Oh, yes — a bubble.
The good news: Cynthia Pang Nowak, formerly Redfin.com’s queen-bee PR geek, is now signed on with Zillow. While she may be both the smartest and most breathtakingly beautiful woman on the Puget Sound, it remains to be seen if she can answer the BloodhoundBlog question: What would David Gibbons do?
Meanwhile, GeekWire.com deserves your daily attention. Run by Todd Bishop and John Cook, formerly the start-up reporter for the Seattle Post-Intelligencer and a long-time friend of BloodhoundBlog, it’s kind of like TechCruch in the rain — but without the bluster and hyperbole. The daily email digest is quick way to keep up with the wired side of our world.
But: Am I all wet? Does Zillow.com look like a buy to you at $18? Can it go to $36? To $180? To $0.01? I like the people who work there, and the founders have been very good to us from the beginning. But I’ve never seen the value of Zillow.com, except as an advertising play, and I still don’t. As with the comment quoted above, am I missing something?16 comments
Angelo Codevilla, who brought us last year’s stunning essay, America’s ruling Class, is back again with an attempt at filling in the many, many blank pages in Barrack Hussein Obama’s back-story:
In our time, asking how a young man of scarce achievement got into position to win the Democratic Party’s nomination for president courts the contemporary synonyms for “impious”: “birther,” “conspiracy theorist,” and, of course, “racist.” Granted, to inquire into what formed a president is not as important as to understand what he does. Nevertheless, because fully to know where anyone is going requires grasping whence he comes, let us open ourselves to wonder how, minus miracles, a 10-year-old boy without obvious talent who had lived in Indonesia since age six ends up with an eight-year scholarship to Hawaii’s most exclusive school; a scholarship to Occidental College; a transfer into Columbia University; acceptance into Harvard Law School, and editorship of its law review; and how he goes from job to prestigious job without apparently mastering any of the previous ones. No wonder some of Barack Obama’s supporters treat him as if he were anointed by an extraterrestrial power.
No less an object of awe and curiosity is the seamlessness of Obama’s mentality. Without marbling or inconsistency, it is serviceable as a definition of contemporary American leftism, and leads one to wonder what earthly environment could have produced such a pure specimen.
Intellectually, Obama has always been a consumer, having left no record of formulating new ideas or of penetrating old ones. Politically, he is a follower and figurehead: having grown up in the ever branching stream of socialist voluntary organizations, he surfed its leftward eddies, never forming or leading a faction. He was handed a safe seat in the Illinois state senate, a nearly safe one in the U.S. Senate, and was surprised when Harry Reid informed him that influential Democrats wanted to run him for president. The Democratic campaign of 2008 pushed against an open door. As president, he rides his party’s center of gravity.
In short, Barack Obama himself is not that remarkable. He can give a rousing political speech, of course, but that is usually not sufficient to get oneself elected president. So, since he seems to have been reading from a teleprompter all his life, and since words certifiably his own are both few and opaque, it is most fruitful as well as relevant for us to focus on whom and what he has been following.
What accounts for his smooth, unlikely ascent? Both his advancement and his character seem most likely attributable to the network into which he was born, and out of which he never stepped for an instant. That network’s privileges, wealth, and intellectual-social proclivities always depended to some extent—and nowadays depend more than ever—on its connection with the U.S. government. Its intellectual and moral character, like that of modern government itself, has always been on the left side of American life and, as such, has undergone splits and transmogrifications surely the most important of which in our time combines upscale social norms with radical disdain for the rest of America. Barack Obama came of age through these.
Read the whole essay at The Claremont Institute.3 comments
If MySpace (current valuation, $30 million) is the Facebook of the past, then what does that make Google Plus?
I’m not sure. But, as an inveterate fan of all things Google, I hold some hope that Google will succeed where other platforms have failed, or are failing.
I share Greg’s skeptical view of Facebook, which has struck me from day one as a kludgy mess. I find it virtually useless for business. It strikes me as AOL-like in its attempt to separate itself from the Internet.
Facebook wants all things to be Facebook. The Internet wants to be free. Google wants to help us more effectively find things on the Internet. Those are radically different visions of what it means to organize information and minds.
Google does all this at great risk, since making things more accessible, more open, and more transparent also lowers barriers to entry for competitors.
Google Plus seemingly moves in a different direction, by providing the tools by which can interact in a “social framework”. The trick will be to keep it all more free-wheeling than is possible on Facebook, give users more control over how information about them is shared, make it easy and intuitive to use, and make money at it.
Here’s where Google has an advantage: because it is the means by which people already search and organization information, that means that social networks can be brought to bear on that information, such that search results, for instance, can be influenced by your network.
For businesses, that means figuring out to make their business a part of various social networks can really give them a leg up if, and when, Google Plus takes off. And, unlike the pointless Google Wave and dreadful Google Buzz, I think it just might.4 comments
One of the sad things about the modern welfare state – which I’d date to about World War I and really got underway with the New Deal – is that it’s caused a poverty of imagination. People can’t imagine what the world would be like without this or that government regulation or this or that government program.
For instance, I gently suggested below that three years of law school is a waste of time – and, in fact, most other common law countries don’t require it, and don’t seem to be imploding. I also suggested that maybe some rules should be loosened.
You merely need to look at the comments section of that post to see the handwringing about what would befall our great civilization if there were under-educated or incompetent lawyers!
This is what I meant when I said that people prefer security over freedom. You’d think, by suggesting that three year law schools (which have only been in existence since the 1930s or so) should be done away with, I was suggesting a return to the dark ages,
“I’m all for free markets,” people say. “I just think a free market depends on [insert this or that government program] to ensure [this or that value].” As if, granting the premise that a free market depends on those things [it plainly does not, because a free market depends on nothing but the free, unfettered interplay of billions of human beings], government has any reasonably good track record of providing any effective program that produces a desired value.
There are awful lawyers today. There are also awful cosmetologists, auto mechanics, plumbers, farmers, shopowners, etc. etc. Let’s have regulations for everything until every sector ends up like the health care industry.
This video is instructive. Watch to the very end. The woman’s rejoinder is a perfect encapsulation of the Poverty of Imagination mindset I describe above.
I recently bought the book, How To Write A Sentence (and how to read one) by Stanley Fish, but it still didn’t give me what I wanted. What I wanted was assurance that all those tricky uses of semi-colons and parentheticals, gerunds and so on, that I mastered during my state college educational stay, were still in literary vogue. You know, in case I ever publish something besides here.
I’ve been receiving The New Yorker in the mail every week or so for the past twenty years so, in theory, I could probably learn as much in those volumes (and saved paying $19.99 USA for the Fish book) if I ever did more than simply browse the cartoons, movie reviews, and fluff essay pieces–Sedaris, Larry David, etc– and then immediately stack the latest issue neatly on top of the previous issue with tiny alleys separating each pile, on the floor, next to my bookshelf. My wife keeps threatening to scoop up the whole multi-tiered lot and haul them to the curb, all 1,000 or so cleverly covered magazines, but I beg her otherwise. To reconsider. A modification, perhaps…
“Since I failed as a real estate developer,” I tell her, “At least allow me to construct a pulp fiction/non-fiction skyline on my own office floor. As of this morning the stacks most closely resemble Omaha, Nebraska, from a bird’s eye view. I suppose that’s a city.
And to be truthful, I really didn’t ‘fail’ as a developer because I never actually jumped in with both feet (I know, two ‘ly’ adverbs and a cliche in a single sentence but in case you missed it the first time: state college. Hel-lloo!) and I never lost any other people’s money. I guess I could have been a bit more ruthless and turned a buck or two but we’re talking about residential real estate and in the end, somebody has to eventually live there. At least, that is, until the banks stop merely threatening and actually figure out a way to first scoop it all up…and then haul it all to the curb.9 comments
A fascinating story about open source programmers deploying Microsoft’s Kinect hardware in amazing off-label applications.
For 25 years, the field of robotics has been bedeviled by a fundamental problem: If a robot is to move through the world, it needs to be able to create a map of its environment and understand its place within it. Roboticists have developed tools to accomplish this task, known as simultaneous localization and mapping, or SLAM. But the sensors required to build that map have traditionally been either expensive and bulky or cheap and inaccurate. Laser arrays cost a few thousand dollars and weigh several pounds, and the images they capture are only two-dimensional. Stereo cameras are less expensive, lighter, and can construct 3-D maps, but they require a massive amount of computing power. Until a reasonably priced, easier method could be designed, autonomous robots were trapped in the lab.
On November 4, a solution was discovered—in a videogame. That’s the day Microsoft released the Kinect for Xbox 360, a $150 add-on that allows players to direct the action in a game simply by moving their bodies. Most of the world focused on the controller-free interface, but roboticists saw something else entirely: an affordable, lightweight camera that could capture 3-D images in real time.
Within weeks of the device’s release, YouTube was filled with videos of Kinect-enabled robots. A group from UC Berkeley strapped a Kinect to a quadrotor—a small helicopter with four propellers—enabling it to fly autonomously around a room. A couple of students at the University of Bundeswehr Munich attached a Kinect to a robotic car and sent it through an obstacle course. And a team from the University of Warwick in the UK built a robot that had the potential to navigate around post-earthquake rubble and search for trapped victims. “When something is that cheap, it opens up all sorts of possibilities,” says Ken Conley of Willow Garage, which sells a $500 open source robotics kit that incorporates the Kinect. (The previous non-Kinect version cost $280,000.) “Now it’s in the hands of just about anybody.”
Robot freaks weren’t the only people to explore the Kinect’s possibilities. Researchers, visual artists, and pornographers have all begun cobbling together home-brewed Kinect projects and posting the results online. Artist Robert Hodgin built a makeshift motion-capture animation program that allows users to manipulate video of themselves on the fly, turning their bodies into bulbous cartoon characters or reflective mercury-like blobs. Two students at Germany’s University of Konstanz bolted a Kinect to a helmet, creating a bare-bones navigational system for the blind. And a company called ThriXXX built a rudimentary sex game that allows players to rub women’s body parts with a creepy disembodied hand.
None of these projects were sanctioned by Microsoft (especially that last one). Indeed, for the past few months, if you wanted to use the Kinect on anything other than an Xbox, you had to install homemade drivers cobbled together by a dedicated group of hackers. Yet the company’s official response to all this activity has gone from hostility to acceptance to vigorous support. In June, Microsoft expects to release a software development kit that makes it easier for any academic or hobbyist to build Windows applications using the Kinect’s camera and microphones. The company is also granting access to the high-powered algorithms that help the machine recognize individual bodies and track motion, unleashing the kind of power that was previously available to only a small group of PhDs. (Microsoft is also working on a commercial version of its software development kit, which will allow entire new businesses to be built using the Kinect’s technology.)
This is all blue sky stuff, right now, and if you watch the video you’ll see that some of the applications have that open-sourcey slapped-together look and feel. But the simple idea of using any surface as a virtual touch screen is revolutionary.
Looking for a real estate angle? Someone get Obeo on the horn. Virtual tours just got a whole lot more interesting!2 comments
Ahem: “Today’s young people would be foolish to imitate their parents and view ownership as the cornerstone of personal finance.”
From the Wall Street Journal:
At the risk of heaping more misery on the struggling residential property market, an analysis of home-price and ownership data for the last 30 years in California—the Golden State with notoriously golden property prices—indicates that the average single family house has never been a particularly stellar investment.
In a society increasingly concerned with providing for retirement security and housing affordability, this finding has large implications. It means that we have put excessive emphasis on owner-occupied housing for social objectives, mistakenly relied on homebuilding for economic stimulus, and fostered misconceptions about homeownership and financial independence. We’ve diverted capital from more productive investments and misallocated scarce public resources.
Between 1980 and 2010, the value of a median-price, single-family house in California rose by an average of 3.6% per year—to $296,820 from $99,550, according to data from the California Association of Realtors, Freddie Mac and the U.S. Census. Even if that house was sold at the most recent market peak in 2007, the average annual price growth was just 6.61%.
So a dollar used to purchase a median-price, single-family California home in 1980 would have grown to $5.63 in 2007, and to $2.98 in 2010. The same dollar invested in the Dow Jones Industrial Index would have been worth $14.41 in 2007, and $11.49 in 2010.
No need to pass these facts along to the National Association of Realtors. They already know.24 comments