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Pictures from Matt

Posted by bigmobile on April 25, 2009

69 pictures
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Sheriff has is right in Arizona

Posted by bigmobile on February 23, 2009

You all remember Sheriff Joe Arpaio of Arizona , who painted the jail cells pink and made the inmates wear pink prison garb. Well……… SHERIFF JOE IS AT IT AGAIN! Oh, there’s MUCH more to know about Sheriff Joe! Maricopa County was spending approx. $18 million dollars a year on stray animals, like cats and dogs. Sheriff Joe offered to take the department over, and the County Supervisors said okay. The animal shelters are now all staffed and operated by prisoners. They feed and care for the strays. Every animal in his care is taken out and walked twice daily. He now has prisoners who are experts in animal nutrition and behavior. They give great classes for anyone who’d like to adopt an animal. He has literally taken stray dogs off the street, given them to the care of prisoners, and had them place in dog shows. The best part? His budget for the entire department is now under $3 million. Teresa and I adopted a Weimaraner from a Maricopa County shelter two years ago. He was neutered, and current on all shots, in great health, and even had a microchip inserted the day we got him. Cost us $78. The prisoners get the benefit of about $0.28 an hour for working, but most would work for free, just to be out of their cells for the day. Most of his budget is for utilities, building maintenance, etc. He pays the prisoners out of the fees collected for adopted animals. I have long wondered when the rest of the country would take a look at the way he runs the jail system, and copy some of his ideas. He has a huge farm, donated to the county years ago, where inmates can work, and they grow most of their own fresh vegetables and food, doing all the work and harvesting by hand. He has a pretty good sized hog farm, which provides meat, and fertilizer. It fertilizes the Christmas tree nursery, where prisoners work, and you can buy a living Christmas tree for $6 – $8 for the Holidays, and plant it later. We have six trees in our yard from the Prison. Yup, he was reelected last year with 83% of the vote. Now he’s in trouble with the ACLU again.. He painted all his buses and vehicles with a mural, that has a special hotline phone number painted on it, where you can call and report suspected illegal aliens. Immigrations and Customs Enforcement wasn’t doing enough in his eyes, so he had 40 deputies trained specifically for enforcing immigration laws, started up his hotline, and bought 4 new buses just for hauling folks back to the border. He’s kind of a ‘Git-R Dun’ kind of Sheriff. TO THOSE OF YOU NOT FAMILIAR WITH JOE ARPAIO HE IS THE MARICOPA ARIZONA COUNTY SHERIFF AND HE KEEPS GETTING ELECTED OVER AND OVER THIS IS ONE OF THE REASONS WHY: Sheriff Joe Arpaio (In Arizona ) who created the ‘ Tent City Jail’: He has jail meals down to 40 cents a serving and charges the inmates for them. He stopped smoking and porno magazines in the jails. Took away their weights Cut off all but ‘G’ movies. He started chain gangs so the inmates could do free work on county and city projects. Then He Started Chain Gangs For Women So He Wouldn’t Get Sued For Discrimination. He took away cable TV Until he found out there was A Federal Court Order that Required Cable TV For Jails So He Hooked Up The Cable TV Again Only Let In The Disney Channel And The Weather Channel. When asked why the weather channel He Replied, So They Will Know How Hot It’s Gonna Be While They Are Working ON My Chain Gangs. He Cut Off Coffee Since It Has Zero Nutritional Value. When the inmates complained, he told them, ‘This Isn’t The Ritz/Carlton……If You Don’t Like It, Don’t Come Back.’ More On The Arizona Sheriff: With Temperatures Being Even Hotter Than Usual In Phoenix (116 Degrees Just Set A New Record), the Associated Press Reports: About 2,000 Inmates Living In A Barbed-Wire-Surrounded Tent Encampment At The Maricopa County Jail Have Been Given Permission To Strip Down To Their Government-Issued Pink Boxer Shorts. On Wednesday, hundreds of men wearing boxers were either curled up on their bunk beds or chatted in the tents, which reached 138 Degrees Inside The Week Before. Many Were Also Swathed In Wet, Pink Towels As Sweat Collected On Their Chests And Dripped Down To Their PINK SOCKS. ‘It Feels Li ke We Are In A Furnace,’ Said James Zanzot, An Inmate Who Has Lived In The TENTS for 1 year. ‘It’s Inhumane.’ Joe Arpaio, the tough-guy sheriff who created the tent city and long ago started making his prisoners wear pink, and eat bologna sandwiches, is not one bit sympathetic. He said Wednesday that he told all of the inmates: ‘It’s 120 Degrees In Iraq And Our Soldiers Are Living In Tents Too, And They Have To Wear Full Battle Gear, But They Didn’t Commit Any Crimes,So Shut Your Mouths!’ Way To Go, Sheriff! Maybe if all prisons were like this one there would be a lot less crime and/or repeat offenders. Criminals should be punished for their crimes – not live in luxury until it’s time for their parole, only to go out and commit another crime so they can get back in to live on taxpayers money and enjoy things taxpayers can’t afford to have for themselves.

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Politics Explained

Posted by bigmobile on January 8, 2009

Politics Explained

FEUDALISM: You have two cows. Your lord takes some of the milk.

PURE SOCIALISM: You have two cows. The government takes them and puts them
in a barn with everyone else’s cows. You have to take care of all of the
cows. The government gives you as much milk as you need.

BUREAUCRATIC SOCIALISM: You have two cows. The government takes them and
put them in a barn with everyone else’s cows. They are cared for by
ex-chicken farmers. You have to take care of the chickens the government
took from the chicken farmers. The government gives you as much milk and
eggs as the regulations say you need.

FASCISM: You have two cows. The government takes both, hires you to take
care of them and sells you the milk.

PURE COMMUNISM: You have two cows. Your neighbors help you take care of
them, and you all share the milk.

RUSSIAN COMMUNISM: You have two cows. You have to take care of them, but
the government takes all the milk.

CAMBODIAN COMMUNISM: You have two cows. The government takes both of them
and shoots you.

DICTATORSHIP: You have two cows. The government takes both and drafts you.

PURE DEMOCRACY: You have two cows. Your neighbors decide who gets the milk.

REPRESENTATIVE DEMOCRACY: You have two cows. Your neighbors pick someone to
tell you who gets the milk.

BUREAUCRACY: You have two cows. At first the government regulates what you
can feed them and when you can milk them. Then it pays you not to milk
them. Then it takes both, shoots one, milks the other and pours the milk
down the drain. Then it requires you to fill out forms accounting for the
missing cows.

PURE ANARCHY: You have two cows. Either you sell the milk at a fair price
or your neighbors try to take the cows and kill you.

LIBERTARIAN/ANARCHO-CAPITALISM: You have two cows. You sell one and buy a bull.

SURREALISM: You have two giraffes. The government requires you to take
harmonica lessons.

(Original source unknown . . . this version expanded and Illuminated by SJ.)

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Politics Explained

Posted by bigmobile on January 8, 2009

Politics Explained

FEUDALISM: You have two cows. Your lord takes some of the milk.

PURE SOCIALISM: You have two cows. The government takes them and puts them
in a barn with everyone else’s cows. You have to take care of all of the
cows. The government gives you as much milk as you need.

BUREAUCRATIC SOCIALISM: You have two cows. The government takes them and
put them in a barn with everyone else’s cows. They are cared for by
ex-chicken farmers. You have to take care of the chickens the government
took from the chicken farmers. The government gives you as much milk and
eggs as the regulations say you need.

FASCISM: You have two cows. The government takes both, hires you to take
care of them and sells you the milk.

PURE COMMUNISM: You have two cows. Your neighbors help you take care of
them, and you all share the milk.

RUSSIAN COMMUNISM: You have two cows. You have to take care of them, but
the government takes all the milk.

CAMBODIAN COMMUNISM: You have two cows. The government takes both of them
and shoots you.

DICTATORSHIP: You have two cows. The government takes both and drafts you.

PURE DEMOCRACY: You have two cows. Your neighbors decide who gets the milk.

REPRESENTATIVE DEMOCRACY: You have two cows. Your neighbors pick someone to
tell you who gets the milk.

BUREAUCRACY: You have two cows. At first the government regulates what you
can feed them and when you can milk them. Then it pays you not to milk
them. Then it takes both, shoots one, milks the other and pours the milk
down the drain. Then it requires you to fill out forms accounting for the
missing cows.

PURE ANARCHY: You have two cows. Either you sell the milk at a fair price
or your neighbors try to take the cows and kill you.

LIBERTARIAN/ANARCHO-CAPITALISM: You have two cows. You sell one and buy a bull.

SURREALISM: You have two giraffes. The government requires you to take
harmonica lessons.

(Original source unknown . . . this version expanded and Illuminated by SJ.)

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One Agency’s Plan for 2009

Posted by bigmobile on January 7, 2009

For What It’s Worth — One Agency’s Plan for 2009

To Emerge Victorious, We’ll Continue to Adapt

Posted

by Phil Johnson
on

01.05.09

@ 12:43 PM

Phil Johnson
Phil Johnson

No predictions for me. I couldn’t have guessed in a million years what
2008 would bring, although I’ll be forever grateful that my meager
savings didn’t end up in Bernie Madoff’s hands. No advice from me
either. Anyone who reads this blog regularly has gotten some excellent
strategies for staying strong in a tough market from Bart Cleveland,
Tom Martin and Marc Brownstein. We’d all do well to listen to those
guys. As for pure attitude, I recommend reading Peter Madden whenever
he posts. He’s like a hockey player with a pen. Instead, let me offer
up what’s on my agenda for the next year. If nothing else, you’ll see
how one agency is getting ready to launch into 2009.

Sitting in my office on Jan. 2, I can’t tell one way or another which
way this year is going to go — up, down or sideways. Today, we’ve got
a decent pipeline, and there are two teams working on new-business
pitches this month. That’s no guarantee, but even one win puts us on a
nice trajectory. Experience has taught me that as long as the phone
keeps ringing, we’re good.

I’ve been expecting to see more budget cuts from current clients, but
so far any cuts have been modest. On the flip side, we’re seeing some
excellent media deals that have allowed us to design ambitious programs
with smaller budgets. Our director of planning, Hugh Kennedy, wrote
about some of these media opportunities on his blog, The Complex Brand.
One factor that may work in our favor this year is that two of our
biggest markets are technology and life sciences. While the recession
affects everybody, these sectors have held up better than retail and
financial services.

I’m most optimistic about initiatives that have nothing to do with the
economy. For one, I promoted my trusted partner, Mike O’Toole, to
president of the agency. He’s played a huge role in our success to
date, and I think he can lead us through our next round of evolution
and growth. A lot of people ask me if I’m retiring, or slowing down.
Hell no. This is about building our management team and letting the
best people shape our future. Mike and I spent six months looking at
every agency function and assigning responsibilities. At the top of my
list, I’ve got several client relationships, agency marketing, finances
and strategic planning. Mike’s got everything else.

We’re going to continue to add staff in key areas. Personally, I think
it’s hard to recruit great people in good times or bad, but recently we
managed to land a couple of people that we really wanted. A new
director of media, who has spent the last five years developing
programs for emerging channels, just joined our San Francisco office.
We were also able to recruit an interactive designer whose work we’ve
admired for the past year. I believe A-plus talent will get you through
almost anything.

A big ambition is to provide more training for the entire agency. Not
surprisingly, there’s a real hunger for knowledge about social media.
We’ve got pockets of expertise, and a group of people that are actively
using and experimenting with social networks. (You can follow me on
Twitter at philjohnson.)
But I’d like everybody in the office to increase their fluency and most
importantly participate in the action. We’ll also be lining up guest
speakers and lunchtime seminars throughout the year.

More than ever before, this will be a year for refining operations.
We’re going to look at every process and behavior in the agency and
weed out any habits that slow us down, add unnecessary expense or
stifle creativity. I’m betting that victory will go to agencies that
can be adaptable, quick on their feet, and able to dream up imaginative
marketing programs for the full continuum of budgets. I’m hoping to be
one of those agencies.

I wish all of you great success and personal satisfaction in
the coming year. May all of your hard work and talents be rewarded, all
of your opinions be heard, and all of your best ideas see the light of
day.

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Two Guys Walking in the Woods

Posted by bigmobile on November 24, 2008

There are two guys walking in the woods and they come across a hungry bear. The first guy takes out his running shoes and starts lacing them up when the second guy says, “Are you crazy? You can’t outrun that bear”. The first guy says, “I’m not going to try to outrun the bear… I’m going to try to outrun YOU!”

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American Housing Nightmare

Posted by bigmobile on November 24, 2008

The Great American Housing Nightmare: Next Phase

One of the
greatest blunders of our time is made by those who blindly assume home
prices are so low they couldn’t possibly go any lower.

In reality, home prices don’t stop going down at some particular level that appears to be “cheap.” Nor do they stop falling because they match some historical price that was previously a low.

The end of the decline in home prices will come only when there are no new economic forces driving them down.

When will that
be? I’d love to say it’s just around the corner. But
everything I see tells me that, despite the sharp declines already
recorded, a steeper plunge in home values is dead ahead.

The reason: So far, most of the troubles in the housing market have been caused by bad mortgages going sour. Meanwhile,

  • the more common
    causes of housing slumps — high interest rates, rising
    unemployment, and recession — are just starting to kick in. And

  • the most powerful causes — depression and deflation — are still on the horizon.

In the boom
leading up to the Great Depression of the 1930s, most Americans did not
borrow money to buy a home. Variable rate mortgages didn’t exist.
And Wall Street investors rarely got involved in the business of
financing homes. Home prices did fall dramatically. But those price
declines came mostly after the stock market crashed, after the economy shrunk and after millions of workers had lost their jobs.

The crux of the problem today: That phase of the housing crisis still lies ahead. Moreover, this time, because of massive debts, the pressure to abandon or sell homes is far greater.

Conclusion: If
the U.S. sinks into a depression, home price declines could be as deep
as, or deeper than, those of the Great Depression, especially in the
hardest hit regions of the country.

It is a
frightening thought. Yet, on the positive side, a sharply reduced price
for the average home is the only fundamental, enduring mechanism for
making homes more affordable and restoring demand — especially if
the days of easy credit are gone.

Already, in 2008,
one in ten American homeowners has defaulted on their mortgage or lost
their home in foreclosure. Nearly four in ten owe more than their home
is worth.

And all this is before the recession deepens and before we experience the next phase of the Great American Housing Nightmare.

Why This Was One of the Biggest
Speculative Manias of All Time

The Great American Housing Nightmare has no precedent; no historical roadmap to guide you, no proven pathway to follow.

No one can tell
you with precision how far U.S. home prices will decline, when they
will hit bottom, how many homeowners will lose their homes, or how soon
a real recovery will begin. Getting to a recovery could take many years.

In fact, to throw
some light on the speculative frenzy and panic that have swept through
the U.S. housing market, the most relevant precedents I could find have
nothing to do with homes at all. They are the Dutch speculative mania
of the 1630s, the South Sea Bubble of the 1700s and the stock market
panics of the early 1900s.

In those
boom-and-bust episodes, the objects of speculation were tulips, slaves
and stocks. This time, it was the American home. But despite that key
difference, the critical boom-bust elements that helped create the speculation — and the depth of the losses which ensued — were roughly similar.

Boom-Bust Element #1: Debt

Debt is the fuel
of speculation. Without it, speculative bubbles cannot emerge. With it,
prices can be inflated beyond the wildest imagination.

In seventeenth
century Holland, investors speculated wildly on tulips, putting up as
little as 2.5% of their own cash. Similarly, in early 20th century
stock market booms, investors put up as little as 10% of their own
money, using borrowed funds for up to 90% of their purchases.

But in many
respects, the borrowing mania that created the Great American Housing
Nightmare makes all previous debt manias pale by comparison.

By mid-year 2008,
the Federal Reserve reported a grand total of $14.8 trillion in U.S.
mortgages outstanding — 40% more than the entire national debt
and triple the total of all the mortgages in America just a dozen years
earlier.

Sadly, it was not just the supersized quantity of debt that was so dangerous. Even more dangerous was the substandard quality of the debt. Consider the facts:

Bullet In all prior speculative bubbles in history, investors were required to put up at least some
of their own money to buy into the boom. Even in the tech stock mania
of the early 2000s, investors had to put up a minimum of 50% cash for
their stock purchases.

But in the frenzy that preceded the Great American Housing Nightmare, millions of Americans bought homes with zero money down!

Lenders
didn’t merely look the other way while home owners borrowed the
down payment; they actively encouraged it. Homebuyers without enough
cash to buy a $500 TV set were declared the proud new owners of
$500,000 luxury homes. Many took it one step further with serial
purchases of homes, leapfrogging with glee from one free ride to the
next.

Bullet
In all prior speculative bubbles, borrowers were invariably required to
make payments of interest and principal in full and without fail, with
zero tolerance for any other arrangement.

In
contrast, during the Great American Housing Nightmare, millions of
homeowners were allowed to pay interest only or even less than full
interest.

So it should come
as no surprise that the majority opted to make the smallest payments
allowed, while the lender added the unpaid amounts to the loan balance.
As with credit cards, the more that time went by, the deeper into debt
the borrowers fell.

Bullet
In prior historical episodes of rampant speculation, loans were almost
invariably held by the lenders, who, in turn, had a vested interest in
making sure the borrower’s finances were sound and their payments
were kept current.

But in
the Great American Housing Nightmare, the mortgages were mostly held by
non-lenders — institutions and investors that were far removed
from the borrowers.

Bullet
In earlier manias, investors speculating with borrowed funds were
required to document that they were worthy of the loans. They
invariably had to present hard evidence of income, proof of assets, or
both.

But in
the Great American Housing Nightmare, even that was not the case.
Millions were allowed to borrow huge sums without a scintilla of proof
that they had the wherewithal to make the payments.

Bullet In earlier manias, the bubble was generally confined primarily to one debt sector.

Not this
time around! Beyond the $14.8 trillion in residential and commercial
mortgages in America, there are another $20.4 trillion in consumer and
corporate debts. This meant that mortgages represent only 42% of the
private-sector debt problem in the country.

Result: Americans
are not only under tremendous pressure to sell their homes due to
burdensome mortgages, they are also squeezed by huge credit card
balances and by layoffs from employers equally addicted to debt.

By virtually
every measure, the debts piled up prior to the Great American Housing
Nightmare are far bigger and worse than any debt pile-up ever witnessed
in history.

Boom-Bust Element #2: Investor Frenzy

Gouda Tulip Bulbs
South Sea Co. Shares

In 1637, at the height of the tulip mania, just one Semper Augustus
bulb changed hands for 12 acres of land. Another bulb was sold for a
massive collection of goods, including 160 bushels of wheat, 160
bushels of rye, four oxen, twelve swine, two hogsheds of wine, four
casks of beer, two tons of butter, 1,000 pounds of cheese and more. But
just a few months later, similar bulbs were practically worthless.

In 1720,
investors drove up shares in the South Sea Company from 125 to 960 in
six months and back down again to 180 in less than three months.

In 1929, the Dow Jones Industrials surged from 213 in 1928 to 381 in 1929, only fall to 41 in 1932.

In each case,
investors and speculators — most with little experience in the
market — were caught up in a wild buying frenzy, only to dump
nearly everything in an even wilder selling panic.

Unfortunately, we
witnessed a similar pattern prior to the Great American Housing
Nightmare. As the buying frenzy heated up, homes and condos were
flipped faster than hotcakes. Prices were driven through the roof. And
even mortgages themselves were transformed into securities that were
riskier than some of the riskiest stocks in the world.

At the peak of
the housing bubble, the average price of existing home reached nearly
five times the total yearly income of its owners, the highest in
history. At the same time, the affordability of each home plunged to
its lowest level in history.

Once set in
motion, the speculative fever spread quickly. From Miami to Phoenix to
San Diego to Las Vegas, investors camped outside housing developments
to snap up three, four, five, or more units at a time. Condominium
developers built gleaming towers in major cities, based almost
exclusively on anticipated bids from investors and speculators and with
no evidence of real underlying demand. From coast to coast, investors
signed on to millions of pre-construction contracts, only to flip them
before the first shovels touched the ground.

This kind of
speculation was traditionally just a small niche in the giant U.S.
housing market. But at the peak of the housing boom, it nearly took
over: An astounding 40% of houses and condos were bought as second
homes or investments. The yearly rate of appreciation on existing homes
catapulted from 3.6% in January 2001 to 16.6% in November 2005. On new
homes, meanwhile, it surged from 4.8% in to 18.1%.

Fueling the
bubble, government agencies like Ginnie Mae, government-sponsored
enterprises like Fannie Mae and Freddie Mac, and private investment
banks bundled up mortgages and resold them as securities that could be
traded much like stocks and bonds. These securities, in turn, were
bought by banks and investors in the U.S., Europe and Asia. The total
amount of mortgages transformed into these securities: $4.8 trillion,
60% more than the total value of all the stocks in the Dow Jones
Industrial Average.

In just one year — 2006 — $2.4 trillion in new mortgage-backed securities were created, more than triple the
amount of just six years prior. Even in past investment manias, there
was no such structure. Even the wild and wooly speculators of the
1600s, 1700s and the early 1900s did not take the madness to that extreme.

Boom-Bust Element #3:
Government-Created Monopolies,
Corruption, Fraud and Cover-Ups

Some of the
largest speculative bubbles of all time were born out of
government-sponsored monopolies, nurtured by government-bred
bureaucrats and kept alive beyond their time by government-inspired
corruption, fraud and cover-ups.

In the South Sea
Bubble of 1711, the English government needed to find a way to fund the
huge debts it had incurred in the War of Spanish Succession. So the
Lord Treasurer, Robert Harley, created the South Sea Trading company to
help finance the government’s debts. The company got exclusive
trading rights in the South Atlantic plus a perpetual government
annuity of over a half million pounds per year. In exchange, its
investors agreed to assume responsibility for about £10 million
of the government’s debt.

It seemed like a
win-win. But the government’s sponsorship and the company’s
monopoly led to big trouble. The company’s managers, thinking
they had the government’s largesse to fall back on, were
complacent and ignored signs of economic troubles. They took excessive
risk. And ultimately, investigations turned up massive fraud at the
company and pervasive corruption in the government.

When the entire
structure collapsed, there was nothing the government could do except
to pass what later become known as the “Bubble Act” aimed
to prevent a future recurrence.

Similarly, in the
early 1900s, the Panic of 1901 occurred in the wake of a failed attempt
to create a massive railroad monopoly; the Panic of 1907 followed a
failed attempt to corner the copper market; and the Crash of 1929
resulted, to a large degree, from collusion among brokers, bankers and
tycoons.

In nearly every
case, the government gave select companies or individuals special
privileges, waived critical regulations and encouraged great
concentration of power. And in nearly every case, the government made
desperate attempts to salvage the boom long after the bust began. But it was ultimately powerless to avert a collapse in the very structures it had helped to create.

Unfortunately,
the same, or worse, could happen in the Great American Housing Bubble:
The U.S. government created two monopolies that made England’s
eighteenth century South Sea Company and America’s twentieth
century industrial monopolies look small by comparison. Their names:
Fannie Mae and Freddie Mac.

The U.S.
Government gave these companies monopolistic control over
America’s largest debt market — mortgages. And then,
beginning in the early 2000s, the government spurred these monopolies
to compete aggressively with private subprime lenders.

Not surprisingly,
the results were similar to those of earlier bubbles: Extreme
complacency, excessive risk-taking, and, ultimately, fraud.

In September
2004, the Office of Federal Housing Enterprise (OFHE), Fannie’s
and Freddie’s primary regulator, issued a special report
revealing massive accounting irregularities. And four years later, in
September 2008, the companies had still not cleaned up their
act, prompting the Securities and Exchange Commission to launch new
investigations into accounting deceptions.

The biggest
deception of all: In their official filings and public pronouncements
this year, Fannie and Freddie consistently and wildly overstated their
capital, while understating their risk. Supposedly built with mortar
and steel, Fannie and Freddie were actually houses of cards in disguise.

Repeatedly, the
company executives swore on oath that they had more than enough
capital. And even on the eve of their demise, their regulators
testified before Congress that the companies were solvent.

Based on their
smoke-and-mirrors accounting, perhaps. But based on the basic rules
that you and I must abide by, not even close. For longer than anyone
cared to admit, Fannie and Freddie had been insolvent. Meanwhile, their
chief executives hid behind carefully camouflaged facade, marched into
riskier corners of the mortgage market, and trashed the trust of
millions of Americans with no sign of restraint and little expression
of regret.

Between 2005 and
2008, for example, Fannie Mae purchased or guaranteed at least $270
billion in subprime mortgages — high-fee loans to high-risk
borrowers. That was more than three times as much as it had bought in all its earlier years combined.

Yet no one seemed to bat an eyelash.

Quite the contrary, Wall Street and Washington cheered loudly, encouraging them to take on even more risk.

Why such
enthusiasm? Because the rapid growth in fees supercharged
Fannie’s stock price. Because big revenues meant huge bonuses for
executives — $90 million for one, $30.8 million for another, and
$10 million for a third. And because the easy money flowing to
unqualified borrowers indirectly helped politicians buy millions of
votes.

Suddenly,
however, in September 2008, it was finally recognized that all the
financial statements and all the sworn testimony about solvency were
unabashed lies. Suddenly, the two largest mortgage lenders on earth,
supposedly rich and prosperous, were thoroughly bankrupt. And suddenly,
underscoring the depth of their demise, each company needed an
unprecedented $100 billion injection of government funds just to keep
it alive.

The potential
bill to taxpayers: $200 billion. But that figure assumes an end to the
credit crunch, no more debt collapses, no recession, and certainly no
depression. If any of these assumptions should prove wrong, $200
billion will barely cover what is fast becoming history’s largest
cesspool of sinking debts and commitments — $5.2 trillion in
mortgages guaranteed or owned by the two companies, their $1.5 trillion
in debts, and their $2 trillion in derivatives.

Boom-Bust Element #4: Collapse!

How much could
home prices ultimately decline in the Great American Housing Nightmare?
We have no way of knowing with certainty. But we can draw some lessons from similar bubbles and crashes throughout history:

  • In the Dutch
    Tulip Mania, investors lost nearly all of their money if they bought
    for cash; more than all of their money if they bought on the slim
    margin of just 2.5%.

  • In the
    South Sea Bubble, the cost of the shares investors bought fell from a
    peak of 1,000 to less than 100, a loss of 90% or more.

  • In the
    Crash of 1929 and the ensuing 3-year bear market, investors lost 89% of
    their money even in America’s largest industrial stocks.

  • In the
    tech wreck of 2000-2002, when a myriad of Internet and technology
    companies collapsed, investors lost 78% of their money invested in the
    average Nasdaq stock; and 100% in companies that went under.

  • In
    Japan’s long bear market, which stretches from 1990 to the
    present, investors have lost 82% of their money from peak to trough in
    companies that make up the Nikkei average, and much more in smaller
    companies.

  • And in
    the financial crisis of 2008, investors lost 99% or more of their money
    in some of America’s most respected financial institutions.

My argument: The
speculative bubble in U.S. homes is as extreme as each of these
historic examples; and in the most hard-hit regions, the resulting
price collapse could be equally extreme. Indeed, the Great American
Housing Nightmare is progressing in three phases:

Phase 1. The bust in the subprime mortgage market. This is now history.

Phase 2. A severe U.S. recession. As of this writing, this phase is just beginning.

Phase 3. Depression and deflation. Still ahead.

Therefore, no
matter how far home prices in your area have already fallen and no
matter how cheap they may appear, they could still fall a lot further.

In the hardest
hit regions, an individual home that was once priced for $400,000 at
its peak could fall to as low as $200,000 by the end of Phase 1. But
don’t blindly assume that’s the bottom. In Phase 2, it
could fall in half again, to $100,000. And in Phase 3, it could fall by
at least half for a third time, to as low as $50,000 or $40,000.

Homes with peak
prices of $1 million could sell for as little as $100,000; some,
originally priced for $10 million may have no buyers at all —
even with asking prices as low as $1 million.

Nationwide, the
median home price will not fall nearly that far. But that factoid alone
will do nothing for homeowners in bubble areas like Florida, Nevada or
California. Nor will it help those in blighted regions where factories
are closed and unemployment rises far above the national average.

Never before in
history have we witnessed home price declines of this magnitude! But
that fact alone does not make them implausible, let alone impossible.

Remember: Never
before in history has so much debt, speculation, government
manipulation, fraud, corruption and consumer abuse been heaped onto any
housing market! And if there’s one thing that history teaches us,
it’s that unprecedented causes lead to unprecedented consequences.

Lessons To Learn Now Before It’s Too Late

Lesson #1. Don’t blame yourself.
Virtually every realtor and expert in America told you that investing
in homes was a “sure bet”; and any lender in the country
that accepted your loan application was, in effect, telling you that
you had the means to make the payments.

Lesson #2. Don’t look back.
Forget what your property was worth at its peak. And try to forget what
you paid for it as well. That’s water under the bridge. Instead,
look at what’s happening today — in the headlines, in your neighborhood, at companies in your area.

Lesson #3. Don’t count on the government to save the day.
There are bound to be a series of public programs to help some people
some of the time. But they will be spotty; they won’t turn the
housing market around; and you may not qualify. For example, the
FHASecure program rolled out in late 2007 essentially created three
classes of homeowners with mortgages:

  • Homeowners current on their mortgages and not at risk of foreclosure were mostly not eligible for federal assistance;

  • Those already in foreclosure were also not eligible; and …

  • Ironically, only home owners falling behind in their mortgage payments could get government help.

Not only did that make it very difficult for most people to qualify, but it also gave a strong incentive to households to deliberately fall behind on their mortgages. People asked: Why should I cut my food budget or give up on my nights out when my neighbor is having all the fun, skipping his mortgage payments and getting rewarded by the government for his imprudent behavior?”

Ultimately, these kinds of government programs are fundamentally flawed and doomed to fail.

The most important lesson of all: Don’t
underestimate the potential depth, speed and duration of the decline.
As the debts are unraveled, the economy comes unglued and the
deceptions are uncovered, home prices could continue to plunge much
further.

If you are able and willing to sell your properties, do so now. Don’t wait.

Posted in Business, History, real estate | Leave a Comment »

Infamous Sequoia Capital downturn presentation

Posted by bigmobile on November 24, 2008

Posted in Business, Venture Funding | Leave a Comment »

parenting blogging community

Posted by bigmobile on November 24, 2008

imagine a blog community soley focused on parenting.  The members would each have their own blog to publish parenting problems, stories, ideas, advice, etc for others in the community to view, comment on and rate.  Imagine all the worlds parental wisdom written in one location, categorized, ranked, discussed, debated, and of course all searchable.  You could share your daily, weekly, monthly blog entries with just friends, or family, or everyone, or anonymously.

Posted in Ideas | Leave a Comment »

How to Pitch Anything in Two Minutes

Posted by bigmobile on September 10, 2008

Communications coach Carmine Gallo discusses five simple tips for pitching a product, service, company—or yourself

I recently gave a talk about communications skills at a company that
makes high-end kitchen appliances. Later in the day, the company’s new
spokesperson, a celebrity chef, demonstrated some new products. Out of
several appliances, I thought the toaster would be the least
interesting. After all, what’s so exciting about a toaster? Mine works
perfectly fine, thank you. But as much as I didn’t want to admit it, by
the end of the demo I wanted to buy the toaster. I returned home and
asked my wife if it was time to replace our toaster. Why? The chef’s
two-minute pitch had been so persuasive it changed my attitude and
turned me into a believer. Actually, it did better than that. It
transformed me into a product evangelist. I’ve already sung the
toaster’s praises to several people. The chef, perhaps unknowingly but
extremely convincingly, used five techniques to sell me. Anyone can
adopt these techniques to pitch just about anything—from
appliances to services to themselves.

Demonstrate enthusiasm. If you’re not passionate about the product,
your listeners won’t be. The chef said: “Now here’s something I’m
really excited about.” I thought to myself, If he’s excited, maybe I
should pay attention. There might be more to this toaster than I
thought. Your listeners are giving you permission to have fun and to
show excitement. All too often, business professionals get into
“presentation mode,” and lose their personality and enthusiasm. Virgin’s
Richard Branson has a key condition for entering a new business: It has
to be fun. If it’s not fun, why bother? Too many of us are subject to
dull pitches and presentations. Inject some excitement into your pitch.
(For tips on boosting your energy level, read my previous column (see BusinessWeek.com, 12/21/07).

Find a personal connection. The chef didn’t start by demonstrating the
toaster. He spent a few seconds talking about how he grew up with this
company’s products in his home and just how ingrained the products were
in his country’s culture. By doing so, he showed he cared about the
product and wasn’t just paid to pitch something with which he had no
personal connection. Remember, people want to like the person behind
the product. A famous New York mutual fund manager once told me that he
invests in people, not buildings or things. He needs to respect and
admire the person behind the company before he considers investing.
Your listeners want to make an investment in you. Make them feel good
about the person they’re backing.

Sell the benefit. While showing us that the outside of the appliance
was cool to the touch, the chef mentioned how it was designed with
safety in mind, and used an example of kids playing in a kitchen.
Instead of simply demonstrating the features behind the product, the
chef sold the benefit behind the features. This is a critical
persuasion technique. Identify the potential problem before offering a
solution.

Nobody Wants a Drill Bit

There is a saying in the insurance industry that every year, 6
million quarter-inch drill bits are sold, yet nobody wants a
quarter-inch drill bit; they want a quarter-inch hole. Nobody cares
about the features of a life-insurance policy, but they want to know
what the features provide, such as peace of mind and financial security
in the event of a mishap. When I returned home from my trip on
Southwest (LUV),
I noticed that in all the company’s marketing material, Southwest is
not selling a plane ride—it is selling productivity. From the way
the company describes its new boarding procedures, promoting on-time
arrivals and new workspaces in waiting areas, the message is
clear—we sell productivity. Ask yourself: What are you really
selling? You will find that you are not selling a widget; instead, you
are selling a better life for your customer thanks to the experience
your widget provides.

Tell stories. “Let me tell you about an experience I had with a
world-renowned chef in London…” With that, the chef regaled us with
memories of his travels. Stories create connections between
individuals. They can tell your listeners more about your product than
just the facts.

For example, in the area of enterprise security technology, I
recently met a smart IT manager who successfully sells ideas by telling
stories. He doesn’t start a pitch by saying: “This enterprise level
security solution represents best-in-class technology for our scalable
architecture.” Instead, he tells stories that begin like this: “Imagine
walking into work Monday morning to find that your computers had been
stolen…” Simple stories can take under 30 seconds to tell but
can offer more information than mountains of data. Too few business
professionals recognize the power of stories to create a common thread
of understanding between speaker and listener. Tell more stories and
you’ll stand apart.

Teach us something new. The chef demonstrating the toaster taught us
about a nesting trend and how this new toaster fit into it. Kitchens
have become showplaces, he explained. Homeowners not only want
appliances that look good—they want devices that save energy,
come in colors other than white, offer more functions, and are easy to
clean.

A venture capitalist who I interviewed for a panel offered this
advice to the entrepreneurs in the audience: “If you can teach me
something I didn’t know before, you’ll have my attention, and perhaps
my money!” Every successful pitch has the element of knowledge,
teaching your listeners something that wasn’t obvious to your audience.

Creating a positive association with a product as mundane as a
toaster is no easy feat. Yet this chef won me over in under two
minutes. This proves you have the ability to persuade your listeners
with every pitch. Don’t believe you have a dull product. As a former
correspondent for CNN, I learned that how the message is told is as
important as the message itself.

Carmine Gallo is a Pleasanton, Calif. communications coach and author of the book, Fire Them Up! (John Wiley & Sons; October, 2007).

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