Tuesday, July 29, 2008

Peter Schiff On The Coming Economic Collapse

Link of the day - Who Is Shawn Casey? Is He For Real?

Link of the day - Who Is Shawn Casey? Is He For Real?

If you liked the video, you will enjoy Peter's latest book - Crash Proof: How to Profit From the Coming Economic Collapse

Peter Schiff, son of American patriot Irwin Schiff, has written a very useful book that can not only assist you to take the concrete steps necessary for financial survival, but also change your individual psychology toward the storm on the horizon that is rapidly gathering strength. Today, we have the illusion of prosperity, and the sooner we break through that delusional state, the sooner we can prepare for darker days.

At this point, there are so many possible triggers for the Second Great Depression, it's striking that it has not already begun. The sub-prime meltdown may just be such a trigger that brings down the house of cards, once it becomes more clear which entities actually hold all the risk created as part of the Housing Bubble. Wall Street, sub-prime lenders, and the large banks have been ingenious in their ability to push risk onto other parties, but it's not clear if the counter-parties will have the ability to weather the defaults. Thus, the risk may yet reside with the banks, which normally would have been more restricted in the number of loans they could create by more traditional standards. So much debt has been created, and so much risk obfuscated, that it is hard to imagine our present illusion of prosperity can be maintained much longer.

Mr. Schiff breaks through our modern mythology by shattering these illusions, and here is where he shines best. A bear's bear, Mr. Schiff steps down from the towers of the economic elite to provide analogies that can be readily digested by more casual readers. The analogy of the Asians and the American trapped on an island together is apropos, as it reveals much about the true state of international trade. The Dollar Bubble heavily distorts trade in favor of America, which benefits disproportionately from the inflated value of the dollar.

Mr. Schiff also understands very well the entitlement crisis brewing, and aptly names Social Security a Ponzi Scheme. Most people in Generations X and Y understand that we're the bagholders scheduled for the Ponzi Scheme, but many Baby Boomers love to be delusional about this tragic farce, thinking it's a form of savings rather than our government writing worthless IOUs to itself and lying to the American people. They think Gen X "owes" it to them! Ha Ha! The sooner we can end social security, the sooner we can start saving real money with real assets. Until then, we are slaves waiting for generational emancipation.

I remember the first time I heard Mr. Schiff speak on CNBC. The discussion was about inflation, and I couldn't help but notice Mr. Schiff's definition diverged significantly from the definition used by the brainless cheerleaders on CNBC, and for that matter, our government and most of Wall Street. The proper definition of inflation is "debasement" and secondarily, "an increase in the supply of money which causes a rise in prices" (Webster's 1982). Note the difference between these two definitions and the more commonly used definition today, which is simply "a rise in prices."

CNBC would have us believe that money supply doesn't matter when you can fool people into believing that the risks associated with exuberant money creation won't be felt by anyone, or only by parties "most able to bear that risk." How convenient! What the government doesn't want you to know is that the Federal Reserve creates inflation, and both government and the Federal Reserve benefit from this inflation at everyone else's expense. In the history of every mania and crash, rampant money creation is behind the genesis of every one. Usually, it takes a unique form. In this case, it was the Housing Bubble. So, inflation and the Housing Bubble are intimately linked. As many have often pointed out, the Housing Bubble was needed to replace the Nasdaq Bubble that popped in 2000-2002.

Finally, the juicy part - how to survive. Mr. Schiff advocates foreign equities that are sound and pay excellent dividends, which due to the Dollar Bubble, might do very well. So long as there is sufficient domestic demand (abroad) after a currency revaluation, this appears good advice. Although, one has to wonder if the U.S. catches cold, would Asians follow?

Next, buy gold and silver, and mining shares. This is pretty standard advice from the "Gloom and Doom" crowd as we are sometimes named. Lastly, he recommends staying liquid, which generally means reducing debt and keeping assets in a form that can be readily converted from one type to another. He recommends leveraging overvalued home equity in other currencies and storing small amounts of imported goods likely to rise in price, and a few other measures.

The piggy bank on the cover is a nice touch, and the list of books for further reading is most helpful for those who have not already read many of the titles.

A very quick read, easy to understand, and very well put together. I highly recommend this book.

Massive Economic Disaster Seems Possible — Will Survivalists Get the Last Laugh?

Naomi Klein: Bush Sees Crises in Fuel, Food, Housing and Banking as Chance to Exploit Us More

Crude Awakening - The Oil Crash

What If US Collapses? Soviet Collapse Lessons Every American Needs To Know

The Credit Crisis Is Going to Get Worse

Sunday, July 27, 2008

Web-Design Firm Uses Projects Employees Pursue in Their Spare Time at Work to Help Win New Business

Link of the day - Free $500 Sears Gift Card


In its early days, Chris Wallace's company didn't always have enough work to keep its staff fully occupied designing interactive Web sites for clients. But it didn't want to lose any talent. So he and his co-founders decided to tell employees they could pursue their own interests in their downtime, doing just about whatever they wanted, on the clock.

An unexpected side benefit emerged. Employees spent some of their spare time writing music and building photography and video skills. When the company needed ideas to pitch to potential clients, it tapped into employees' personal projects. Mr. Wallace says he has had meetings with potential clients where 40% of the work he showed them was done by employees in their downtime.

His company, SuperGroup Creative Omnimedia Inc., has grown to 15 employees and expects to post close to $3 million in revenue this year. These days, downtime is less frequent. But management's philosophy is the same: As long as employees get their work done, they're free to pursue outside projects from their cubicles. The company continues to lean on employees' personal projects to help win new clients and expand the work it does with existing clients.

The model works, Mr. Wallace says, because of the company's small size and collegial atmosphere. Most people in SuperGroup's Atlanta headquarters know what their colleagues are working on in their personal lives. Twice a week, the whole staff gathers to discuss both company business and personal projects. "A larger organization wouldn't have that intimate knowledge," says Mr. Wallace, who is the company's director of technology.

That knowledge proved handy last year, when the Weather Channel approached SuperGroup about putting together an interactive Web site to promote its winter ski forecasts. SuperGroup employees insisted they could write and produce the music on the site, but Weather Channel executives "were hesitant," Mr. Wallace says, because that wasn't an area where SuperGroup had a lot of experience.

To prove its abilities, Mr. Wallace presented the Weather Channel team with a CD of employees' original music -- and won the business. SuperGroup wrote all of the music for the project.

For employees, the cross-pollination between their work and their personal lives can be an opportunity to turn a hobby into a line on their resume -- and an ego boost. "I jumped at the chance to put my music out in front of anybody," says Elliott Rothman, a SuperGroup Web developer. Music he wrote and his guitar playing were used in the Weather Channel project.

On average, employees spend about a half-day each week working on outside pursuits. Mr. Wallace says occasionally employees have to be reminded that clients come first and they need to drop what they're doing if a client has an urgent request.

Mr. Wallace is careful to weed out potential hires who seem to thrive on a more regimented structure. For the most part, he says, granting employees more freedom engenders loyalty and hard work. Employees tend to "come in early and stay late."

Mob Tours

Inventor’s ideas pay off

ZimRide.Com Success Story

Parenting Sites For Non-Parents

Your Brownie Connection

Friday, July 25, 2008

Mob Tours

Link of the day - How PickyDomains.com Changed The Domain Game For Good


NIAGARA FALLS, N.Y. – When the mob takes you for a ride, don’t expect to be home any time soon.

When Michael Rizzo, founder of Mob Tours, takes you for a ride, it takes about 90 minutes and some of the highlights along the way include former hideouts, hangouts and homes of Niagara Falls, N.Y.'s best-known criminals.

Some of the history he talks about on the tour relates to former mafia don Stefano Magaddino and his brothers, Gaspare and Nino, who ruled Western New York with iron fists.

“There are about a dozen locations that we go past, and we tell some stories about bookmaking and the history of Stefano Magaddino,” said Rizzo. “Everything is from the 1920s to the 1970s. We talk about prohibition, bootlegging, and we see some sites where there were some bombings, murders, bookmaking operations and where people lived.”

Rizzo, 43, a businessman, author and historian, came up with the idea about five years ago. He started research because there is so much history shared between the city of Niagara Falls, N.Y., criminal activity and the mob.

He put it aside for awhile, then last year decided to look into running a tour.

Mob Tours opened in mid-June and will run weekends and holidays. Reservations can be made through the website, www.themobtours.com. Tickets cost $29.95.

Rizzo said while the Magaddinos were alive, the city was known as a sin centre.

“We just try to capture some of that former drama and entertain our visitors for a short time, so that they have another reason to remember their visit to the Falls.”

Rizzo said historical accuracy is an important aspect of the tour. While there is very little information available about Magaddino in general circulation, as a researcher he knew where to find it and is now making it available with his tour.

He hopes the tour appeals to fans of organized crime, "The Sopranos," or mafia movies.

Included is a stop at the Magaddino Museum, which features one-of-a-kind memorabilia from the Magaddinos era and the Niagara Falls mob.

Magaddino, known to be involved in the bookmaking and bootlegging trades, was a respected – and feared – head of the mafia in the 1930s and early 1940s.

He controlled a considerable amount of territory in the Buffalo and Niagara area and had influence in southern Ontario, especially in the Toronto-Hamilton area.

“People in the circle obviously knew him. He had a large territory, but he was not well documented over the years. He didn’t make a lot of press noise, so up until Apalachin in 1957 he was pretty much unknown,” said Rizzo.

The infamous Apalachin crime 'conference' – a meeting of the most powerful mafia heads of the day, coming from The U.S., Italy and Canada – was held Nov. 14, 1957 at the home of mobster Joseph 'Joe the Barber' Barbara in Apalachin, N.Y.

Police became suspicious after they noticed expensive cars with licence plates from around the country starting to arrive. Officers raided the meeting, causing mafiosi to flee into the woods and the surrounding area.

The get-together proved disastrous for the mob, and many underworld bosses were detained and indicted. That meeting confirmed for the first time the existence of a national crime syndicate.

Until then, the Federal Bureau of Investigations refused to acknowledge such a thing even existed.

That meeting was planned as an opportunity for some of the most powerful mafiosi to socialize and resolve problems within their organization relating to gambling, casinos and narcotics operations.

Appalachin has been referred to in a number of movies, including the 1990 film "Goodfellas," 1999's "Analyze This," and in the novel "The Godfather Returns."

Don Stefano Magaddino was known as “the undertaker,” because the family owned a funeral parlour in Niagara Falls, N.Y.

“The funeral home is about half a mile from the casino and it was open until the 1990s. It’s now sitting vacant,” said Rizzo.

At one time, there was talk of turning that property into a mob museum, but nothing has materialized.

Asked if he had concerns about his own safety for starting a business that tells mob stories, Rizzo said it crossed his mind. But he’s basically talking about “ancient history,” he said, because Magaddino has been dead more than 30 years.

“Most of the family is out of the area, but there are a few people still around,” said Rizzo. “After Stefano died, the (mob) family changed hands so his family is not in it any longer.”

He noted the tour is more about the history of Stefano Magaddino and his relationship with the city, and not necessarily about the Niagara Falls or Buffalo mafia.

“I’m actually surprised that there aren't any books about him yet, considering how long it has been since he died. And that he had such a big area, you would think someone would want to put a book out about him,” said Rizzo.

Magaddino has been mentioned in books, but nothing has been written specifically on him.

While his name was often associated with the city of Buffalo – and one book on the mafia even referred to him as the old don of Buffalo – he lived in Niagara Falls, N.Y. and later in Lewiston, N.Y.

In November 1968, the FBI raided Stefano’s home in Lewiston, along with several others that belonged to members of his family including his son, Peter Magaddino. The father and son were arrested and charged with interstate bookmaking. One source says when the FBI searched Peter Magaddino’s home, they uncovered close to $500,000 in cash inside a bedroom wall. Another source claims the money was found in a suitcase under a bed.

The street where the family lived in Lewiston was referred to as Mafia Row.

Stefano Magaddino, who had a number of heart ailments over the years, died of a heart attack in hospital July 19, 1974. He was 82. He is remembered for being a crime boss for more than 50 years – possibly the longest reign in history.

Rent A Chicken

Inventor’s ideas pay off

ZimRide.Com Success Story

Wednesday, July 23, 2008

Inventor’s ideas pay off

Link of the day - How PickyDomains.com Changed The Domain Game For Good


Shane Chen was getting bored with his job. For 20 years, the founder of CID Inc. had focused on his Camas business, selling electronic instruments to plant scientists. He wanted a change.

“One day I saw an exercise equipment ad,” the Camas resident said. “I thought, ‘I can do better than that.’ ”

And he got to work. The result, the Body Toner, went on sale six years ago through infomercials and QVC, the television shopping network.

Suddenly Chen, 52, was not just the president of CID Inc. He was heading a new venture, Inventist, and he was enjoying his work again.

“It was more than scientific instruments,” Chen said. “It was fun.”

Following the success of the Body Toner, Chen started seeing new ideas everywhere he went.

“I saw a rotisserie oven for your countertop with a heater,” he said. “It was big and took up a lot of space. I thought I could come up with a rotisserie device you could put in your own oven.”

Soon he was selling the battery operated Leantisserie on the Web and on TV, too, and Chen was starting to view the world like a professional inventor.

Next came a series of skates, scooters and skateboards that do more than you might expect.

The Swerver Ultimate Carving Streetboard is a two-piece skateboard that allows riders to propel themselves without touching the ground. The three-wheeled Xing Scooter moves when you wiggle your hips. Global scooter manufacturer Razor bought rights to the Xing, and is now selling it as the Powerwing.

Younger input

Chen’s daughter, Ywanne, often helped her father with his tests and ideas, he said. Now 18 and studying physics at Oregon State University, Ywanne’s name is on one of Inventist’s patents.

Recently, Chen sold half of CID Inc. to Leonard Felix, who now manages day-to-day operations of the plant science business so Chen can focus on Inventist. Both enterprises are in Chen’s building at Camas Meadows.

“Inventing is unlimited, you never get bored.” Chen said. “When I got tired of kitchen gadgets, I did sporting goods. If I get bored of that, I can do anything I want.”

Even when he’s focused on a single area, such as scooters, Chen is working on dozens of ideas at a time. Discarded half-built scooters are piled next to a box of wheels and a shelf full of handlebars at Inventist’s store room.

A willingness to fail is one secret to an inventor’s success, Chen said.

“People come up with ideas daily,” he said. “One out of 100 might work, but you have to try. You have to absorb failures and not get discouraged.”

That attitude has paid off. Born six years ago at the hands of a bored tinkerer, Inventist has grown into a business that does $1 million per year in sales and has four employees.

Chen wants to keep the business lean, manufacturing in China and selling online or through third parties.

He expects to hire a few more employees to help him build his prototypes, and he hopes that sales grow as he comes up with more inventions.

“Right now I’m working on a new type of wind surfing device and a new type of skates,” Chen said. “You’ll have to wait until they come out to learn more.”

ZimRide.Com Success Story

Musical Video Tutorials As A Business

Put-In-Cups As A Business

Fingerprinting Turned Into Wearable Jewelry

Monday, July 21, 2008

ZimRide.Com Success Story

Link of the day - Free $50 Kmart card.


To launch his first company, 24-year-old Cos Cob native John Zimmer is taking a road trip.

Zimmer, a 2002 graduate of Greenwich High School, has embarked on a cross-country journey from New York City to the West Coast, part of an effort to promote his new online ride-sharing service, Zimride.com.

Ride-sharing is "easy, saves money (on gas) and will impact our environment and the future of travel in the United States," Zimmer said while driving through upstate New York. That, and "it's just a lot of fun."

Launched in 2007, Zimride allows car poolers with similar travel plans and preferences to connect with one another using the popular social-networking Web site Facebook, on which Zimride is featured.

To use the service, users sign on; type in their travel times, departure points and destinations; then peruse a database of other car poolers with similar preferences, like driving speeds, the kind of music they like and whether they smoke.

Once they've selected like-minded car poolers, users correspond via email to hammer out the details of their trip.

The idea of this system, Zimmer explained, is to take advantage of Facebook's "community-building" features.

Whereas other ride-sharing programs, like eRideshare or Craigslist, allow users to scour long, impersonal lists of car pools, Zimride lets people read personal profiles, view digital photos and interact with prospective travel buddies. "It's a lot easier to get into a car with somebody when you know something about their personality and share common interests," he said. "That aspect - the social aspect - is really what sets us apart."

Since launching the site in 2007, Zimmer and his founding business partner Logan Green have watched the number of users skyrocket from about 3,500 to more than 300,000.

Now they're hoping to boost those numbers higher by taking their eco-friendly message on the road.

Joined by a rotating crew of car poolers, Zimmer will spend two weeks traveling to such cities as Detroit, Chicago, Denver, Las Vegas and Los Angeles. At each stop, he'll meet with environmental groups and other, young "eco-entrepreneurs" to share ideas about saving the environment and aiding the economy, Zimmer said.

He'll also be joined by his friend Trevor White, a 23-year-old filmmaker who will document the entire journey for a documentary to be titled, "The Change We Seek."

"John's trip is perfect because it shows there are people in our generation who aren't lazy, who are at the forefront of global change, who are making an impact," White said. "Hopefully people can watch John and be motivated to do something, too."

[Via - GreenwichTime.Com]

Friday, July 18, 2008

Parenting Sites For Non-Parents

Link of the day - Win Free XBOX 360


Parents have long had a multitude of websites to choose from for community and advice, but until recently little has been available to serve the needs of what SavvyAuntie calls "P.A.N.K.s"—professional aunts with no kids of their own. SavvyAuntie, which just launched into beta last week, aims to fill that gap with a parenting site aimed at non-parents.

Roughly half of American women today are not mothers, the site says, but they often have numerous nieces and nephews to dote on. New York-based SavvyAuntie.com helps such aunts connect and become savvier about kids, so they no longer have to rely on a mom or a parenting guide for advice. With sections devoted to expertise, activities, gifts and community, the site provides tools and information to help women who are aunties by relation or by choice—along with great aunts, godmothers and all women who love kids. Forums, groups, blogs, an Auntiepedia and other social tools are designed uniquely for aunties, as are the site's digital scrapbooks and a "digital fridge door" for kids’ artwork, both of which are coming soon. Savvy Auntie has also teamed up with Nickelodeon’s GoCityKids for information on restaurants, events and local activities suitable for visits with nieces and nephews in major cities throughout the US. As the site puts it, "SavvyAuntie.com gives Aunts a unique and modern approach to learn, connect, share and celebrate Aunt-hood." Membership on the ad-supported site is free.

With considerable wealth and influence over roughly 85 percent of their household purchasing decisions, according to SavvyAuntie, P.A.N.K.s are a group worth targeting as they indulge the kids in their lives—and themselves. The advertising possibilities are compelling, needless to say. And what about localized versions of this site in countries around the world? Time to start thinking seriously about aunts!

Put-In-Cups As A Business

Becoming A Millionaire Before You Turn 21

Becoming Antipreneur

Thursday, July 17, 2008

Your Brownie Connection

Link of the day - How PickyDomains.com Changed The Domain Game For Good


Step into the Brownie Connection store in the historic Farmhouse Village in Gilbert and you think you're back in the early 1900's.

Inhale the sweet aroma of baking brownies coming from the small kitchen and you flash back to your childhood.

Take a look at the company financial reports while you're chewing a brownie and, this time, you move ahead into the modern age of successful corporate economics.

Very successful economics.

Brownie Connection was started as a home business by three generations of mothers. Today it sells its tasty product to more than 30,000 in the Valley, nationally and worldwide via telephone and Internet. But many of its customers are good, old-fashioned walk-ins who hear about it through word-of-mouth.

The business moved in 2001 into a less than 1,000-square-foot home that was built in the 1920s on a former farm between Elliot and Warner roads at 397 S. Gilbert Road. The brownies are baked in a relatively small oven, about 40 at a time.

"Yes, I'd say we've been a steadily successful business," said Amanda Dana, 31, the company's marketing manager and its youngest owner.

"We're a family-owned company, and we have fun working together," said Margo Fees, 51, the main brownie baker and Amanda's mother. Fees has created 17 brownie flavors as well as cupcakes, cookies and other taste treats.

"Here, take a taste," said Cletis Nutting, 83, known as "Granny" and the company's primary packager as she holds a sample brownie close to a visitor. Granny is Fees' mother and Dana's grandmother.

More than 25 percent of Brownie Connection business is with corporations, including Valley Private Mortgage Group of Scottsdale.

"Our clients love their brownies," said Darby Richter, executive assistant for the real estate lending firm.

"Brownie Connection builds a miniature home that is filled with a variety of brownies," Richter said, referring to one of their many brownie gift packages. "We give the brownie-filled home to our clients when we conclude a business agreement."

Fees started baking brownies as a child following her mom's three-pie-a-week routine.

"When men come into our store, they primarily ask about the flavors," said Fees.

The three most popular flavors are Double Trouble (double chocolate), Incredible Turtle (caramel and pecans) and Cream Cheese Swirl. All chocolate is Ghirardelli.

"Women customers are mostly interested in our gifts that come with the brownies. And kids, well, they're hopeful they have earned enough money to pay for a brownie."

Packages range in price from as low as $8 for a box of two brownies to as much as $175 for large packs, including shipping charges.

Walk-in customers can buy a coffee mug containing a coffee stick or packet of chocolate as well as two brownies of their choice for $25.

"Our busiest time of year is during Christmas," said the youngest brownie entrepreneur, whose two sons, Ashton, 10 and Wesston, 7, often run through their family store as the fourth generation of Brownie Connection members.

Trash Bucks

Cool Bicycle Niche Business

Service Lets Drivers Lock In Gas Prices

How To Buy Or Sell Your Experiences

Tuesday, July 15, 2008

Trash Bucks

Link of the day - Free $50 Kmart card.


We've already written about TerraCycle, the company that achieved a spot on the shelves of Home Depot, Wal-Mart and Target with its eco-fertilizer based on organic waste and worm castings. Now TerraCycle has found yet another way to create gold out of garbage by turning discarded wrappers and juice pouches into bags, pencil boxes and other accessories.

As part of its ongoing mission to "eliminate the idea of waste," as its website puts it, TerraCycle has struck deals with large food and beverage manufacturers to collect the wrappers from their products and "upcycle" them into new, unique accessories. Through a partnership with Kraft's Capri Sun and Honest Kids juice makers, for example, TerraCycle collects juice pouches from individuals and organizations that have signed up to participate in its "Drink Pouch Brigade." Each time participants send some pouches in to TerraCycle, Capri Sun and Honest Kids donate USD 0.02 per pouch to the charity of the collector's choice (they pay USD 0.01 each for pouches from other juice brands). Nabisco, similarly, has sponsored TerraCycle's cookie wrapper program, while ClifBar and Kraft's Balance Bar have sponsored initiatives to upcycle energy bar wrappers. There are also programs for corks, yoghurt cups, soda bottles and Bear Naked granola bags.

Once TerraCycle gets the donated packaging, it converts it into bags and other accessories. Displayed on its site, for example, is a USD 9.99 tote bag available at Target.com that's made entirely from Capri Sun juice pouches. Also available are backpacks, pencil cases, homework folders and lunch boxes, all made entirely from TerraCycle's upcycled wrappers.

Juice pouches and wrappers have proven a particularly difficult challenge to break down and recycle, so TerraCycle's innovative, creative and green solution is clearly a compelling one for companies struggling with that problem. For consumers, bags and other goods made from recycled packaging are not just eco-friendly, but they also offer the added benefit of a story behind every product.

Cool Bicycle Niche Business

How To Get Media Attention? Just Say ‘Green,’ ‘Sex,’ ‘Cancer,’ ‘Secret’ Or ‘Fat’

Paper Clip Profiteer Story

ChefsLine.Com Success Story

Sunday, July 13, 2008

Cool Bicycle Niche Business

Link of the day - How PickyDomains.com Changed The Domain Game For Good


With gas prices a topic of urgent concern, it's no wonder bicycle-related innovations are coming fast and furious. One of the latest we've spotted is the Zigo Leader, a bicycle that's easily convertible into several different forms.

Much like the Danish trioBike, which we covered a while back, the Zigo Leader can be easily converted into any of four different modes: stand-alone bicycle; bicycle with front-attached kid trailer; jogging stroller; and traditional stroller. Converting from one mode to another is simply a matter of swivelling casters and attaching or detaching the "child pod" trailer, and can be done in 30 seconds or less, Zigo says. The vehicle also folds easily for storage. Priced at USD 1,349, the Zigo Leader will be available in August direct from the New Jersey-based company or through a network of dealers including bicycle shops and baby stores. It comes 98 percent assembled; shipping is available anywhere in North America, the EU and Australia. Accessories including a rain cover/bug screen and restraint harness can also be purchased.

Will modular, pedal-powered vehicles become the new cars? We'll keep you posted. In the meantime, keep those bicycle innovations coming!

How To Get Media Attention? Just Say ‘Green,’ ‘Sex,’ ‘Cancer,’ ‘Secret’ Or ‘Fat’

How Limiting Supplies Helps Profits

The Million Dollar Purse Story

Profiting From Human Irrationality. 10 Must Read Books

Friday, July 11, 2008

What If US Collapses? Soviet Collapse Lessons Every American Needs To Know

Link of the day - Free $500 Sears Gift Card

Good evening, ladies and gentlemen. I am not an expert or a scholar or an activist. I am more of an eye-witness. I watched the Soviet Union collapse, and I have tried to put my observations into a concise message. I will leave it up to you to decide just how urgent a message it is.

My talk tonight is about the lack of collapse-preparedness here in the United States. I will compare it with the situation in the Soviet Union, prior to its collapse. The rhetorical device I am going to use is the “Collapse Gap” – to go along with the Nuclear Gap, and the Space Gap, and various other superpower gaps that were fashionable during the Cold War.

Slide [2] The subject of economic collapse is generally a sad one. But I am an optimistic, cheerful sort of person, and I believe that, with a bit of preparation, such events can be taken in stride. As you can probably surmise, I am actually rather keen on observing economic collapses. Perhaps when I am really old, all collapses will start looking the same to me, but I am not at that point yet.

And this next one certainly has me intrigued. From what I’ve seen and read, it seems that there is a fair chance that the U.S. economy will collapse sometime within the foreseeable future. It also would seem that we won’t be particularly well-prepared for it. As things stand, the U.S. economy is poised to perform something like a disappearing act. And so I am eager to put my observations of the Soviet collapse to good use.

Slide [3] I anticipate that some people will react rather badly to having their country compared to the USSR. I would like to assure you that the Soviet people would have reacted similarly, had the United States collapsed first. Feelings aside, here are two 20th century superpowers, who wanted more or less the same things – things like technological progress, economic growth, full employment, and world domination – but they disagreed about the methods. And they obtained similar results – each had a good run, intimidated the whole planet, and kept the other scared. Each eventually went bankrupt.

Slide [4] The USA and the USSR were evenly matched in many categories, but let me just mention four.

The Soviet manned space program is alive and well under Russian management, and now offers first-ever space charters. The Americans have been hitching rides on the Soyuz while their remaining spaceships sit in the shop.

The arms race has not produced a clear winner, and that is excellent news, because Mutual Assured Destruction remains in effect. Russia still has more nuclear warheads than the US, and has supersonic cruise missile technology that can penetrate any missile shield, especially a nonexistent one.

The Jails Race once showed the Soviets with a decisive lead, thanks to their innovative GULAG program. But they gradually fell behind, and in the end the Jails Race has been won by the Americans, with the highest percentage of people in jail ever.

The Hated Evil Empire Race is also finally being won by the Americans. It’s easy now that they don’t have anyone to compete against.

Slide [5] Continuing with our list of superpower similarities, many of the problems that sunk the Soviet Union are now endangering the United States as well. Such as a huge, well-equipped, very expensive military, with no clear mission, bogged down in fighting Muslim insurgents. Such as energy shortfalls linked to peaking oil production. Such as a persistently unfavorable trade balance, resulting in runaway foreign debt. Add to that a delusional self-image, an inflexible ideology, and an unresponsive political system.

Slide [6] An economic collapse is amazing to observe, and very interesting if described accurately and in detail. A general description tends to fall short of the mark, but let me try. An economic arrangement can continue for quite some time after it becomes untenable, through sheer inertia. But at some point a tide of broken promises and invalidated assumptions sweeps it all out to sea. One such untenable arrangement rests on the notion that it is possible to perpetually borrow more and more money from abroad, to pay for more and more energy imports, while the price of these imports continues to double every few years. Free money with which to buy energy equals free energy, and free energy does not occur in nature. This must therefore be a transient condition. When the flow of energy snaps back toward equilibrium, much of the US economy will be forced to shut down.

Slide [7] I’ve described what happened to Russia in some detail in one of my articles, which is available on SurvivingPeakOil.com. I don’t see why what happens to the United States should be entirely dissimilar, at least in general terms. The specifics will be different, and we will get to them in a moment. We should certainly expect shortages of fuel, food, medicine, and countless consumer items, outages of electricity, gas, and water, breakdowns in transportation systems and other infrastructure, hyperinflation, widespread shutdowns and mass layoffs, along with a lot of despair, confusion, violence, and lawlessness. We definitely should not expect any grand rescue plans, innovative technology programs, or miracles of social cohesion.

Slide [8] When faced with such developments, some people are quick to realize what it is they have to do to survive, and start doing these things, generally without anyone’s permission. A sort of economy emerges, completely informal, and often semi-criminal. It revolves around liquidating, and recycling, the remains of the old economy. It is based on direct access to resources, and the threat of force, rather than ownership or legal authority. People who have a problem with this way of doing things, quickly find themselves out of the game.

These are the generalities. Now let’s look at some specifics.

Slide [9] One important element of collapse-preparedness is making sure that you don’t need a functioning economy to keep a roof over your head. In the Soviet Union, all housing belonged to the government, which made it available directly to the people. Since all housing was also built by the government, it was only built in places that the government could service using public transportation. After the collapse, almost everyone managed to keep their place.

In the United States, very few people own their place of residence free and clear, and even they need an income to pay real estate taxes. People without an income face homelessness. When the economy collapses, very few people will continue to have an income, so homelessness will become rampant. Add to that the car-dependent nature of most suburbs, and what you will get is mass migrations of homeless people toward city centers.

Slide [10] Soviet public transportation was more or less all there was, but there was plenty of it. There were also a few private cars, but so few that gasoline rationing and shortages were mostly inconsequential. All of this public infrastructure was designed to be almost infinitely maintainable, and continued to run even as the rest of the economy collapsed.

The population of the United States is almost entirely car-dependent, and relies on markets that control oil import, refining, and distribution. They also rely on continuous public investment in road construction and repair. The cars themselves require a steady stream of imported parts, and are not designed to last very long. When these intricately interconnected systems stop functioning, much of the population will find itself stranded.

Slide [11] Economic collapse affects public sector employment almost as much as private sector employment, eventually. Because government bureaucracies tend to be slow to act, they collapse more slowly. Also, because state-owned enterprises tend to be inefficient, and stockpile inventory, there is plenty of it left over, for the employees to take home, and use in barter. Most Soviet employment was in the public sector, and this gave people some time to think of what to do next.

Private enterprises tend to be much more efficient at many things. Such laying off their people, shutting their doors, and liquidating their assets. Since most employment in the United States is in the private sector, we should expect the transition to permanent unemployment to be quite abrupt for most people.

Slide [12] When confronting hardship, people usually fall back on their families for support. The Soviet Union experienced chronic housing shortages, which often resulted in three generations living together under one roof. This didn’t make them happy, but at least they were used to each other. The usual expectation was that they would stick it out together, come what may.

In the United States, families tend to be atomized, spread out over several states. They sometimes have trouble tolerating each other when they come together for Thanksgiving, or Christmas, even during the best of times. They might find it difficult to get along, in bad times. There is already too much loneliness in this country, and I doubt that economic collapse will cure it.

Slide [13] To keep evil at bay, Americans require money. In an economic collapse, there is usually hyperinflation, which wipes out savings. There is also rampant unemployment, which wipes out incomes. The result is a population that is largely penniless.

In the Soviet Union, very little could be obtained for money. It was treated as tokens rather than as wealth, and was shared among friends. Many things – housing and transportation among them – were either free or almost free.

Slide [14] Soviet consumer products were always an object of derision – refrigerators that kept the house warm – and the food, and so on. You’d be lucky if you got one at all, and it would be up to you to make it work once you got it home. But once you got it to work, it would become a priceless family heirloom, handed down from generation to generation, sturdy, and almost infinitely maintainable.

In the United States, you often hear that something “is not worth fixing.” This is enough to make a Russian see red. I once heard of an elderly Russian who became irate when a hardware store in Boston wouldn’t sell him replacement bedsprings: “People are throwing away perfectly good mattresses, how am I supposed to fix them?”

Economic collapse tends to shut down both local production and imports, and so it is vitally important that anything you own wears out slowly, and that you can fix it yourself if it breaks. Soviet-made stuff generally wore incredibly hard. The Chinese-made stuff you can get around here – much less so.

Slide [15] The Soviet agricultural sector was notoriously inefficient. Many people grew and gathered their own food even in relatively prosperous times. There were food warehouses in every city, stocked according to a government allocation scheme. There were very few restaurants, and most families cooked and ate at home. Shopping was rather labor-intensive, and involved carrying heavy loads. Sometimes it resembled hunting – stalking that elusive piece of meat lurking behind some store counter. So the people were well-prepared for what came next.

In the United States, most people get their food from a supermarket, which is supplied from far away using refrigerated diesel trucks. Many people don’t even bother to shop and just eat fast food. When people do cook, they rarely cook from scratch. This is all very unhealthy, and the effect on the nation’s girth, is visible, clear across the parking lot. A lot of the people, who just waddle to and from their cars, seem unprepared for what comes next. If they suddenly had to start living like the Russians, they would blow out their knees.

Slide [16] The Soviet government threw resources at immunization programs, infectious disease control, and basic care. It directly operated a system of state-owned clinics, hospitals, and sanatoriums. People with fatal ailments or chronic conditions often had reason to complain, and had to pay for private care – if they had the money.

In the United States, medicine is for profit. People seems to think nothing of this fact. There are really very few fields of endeavor to which Americans would deny the profit motive. The problem is, once the economy is removed, so is the profit, along with the services it once helped to motivate.

Slide [17] The Soviet education system was generally quite excellent. It produced an overwhelmingly literate population and many great specialists. The education was free at all levels, but higher education sometimes paid a stipend, and often provided room and board. The educational system held together quite well after the economy collapsed. The problem was that the graduates had no jobs to look forward to upon graduation. Many of them lost their way.

The higher education system in the United States is good at many things – government and industrial research, team sports, vocational training… Primary and secondary education fails to achieve in 12 years what Soviet schools generally achieved in 8. The massive scale and expense of maintaining these institutions is likely to prove too much for the post-collapse environment. Illiteracy is already a problem in the United States, and we should expect it to get a lot worse.

Slide [18] The Soviet Union did not need to import energy. The production and distribution system faltered, but never collapsed. Price controls kept the lights on even as hyperinflation raged.

The term “market failure” seems to fit the energy situation in the United States. Free markets develop some pernicious characteristics when there are shortages of key commodities. During World War II, the United States government understood this, and successfully rationed many things, from gasoline to bicycle parts. But that was a long time ago. Since then, the inviolability of free markets has become an article of faith.

Slide [19] My conclusion is that the Soviet Union was much better-prepared for economic collapse than the United States is.

I have left out two important superpower asymmetries, because they don’t have anything to do with collapse-preparedness. Some countries are simply luckier than others. But I will mention them, for the sake of completeness.

In terms of racial and ethnic composition, the United States resembles Yugoslavia more than it resembles Russia, so we shouldn’t expect it to be as peaceful as Russia was, following the collapse. Ethnically mixed societies are fragile and have a tendency to explode.

In terms of religion, the Soviet Union was relatively free of apocalyptic doomsday cults. Very few people there wished for a planet-sized atomic fireball to herald the second coming of their savior. This was indeed a blessing.

Slide [20] One area in which I cannot discern any Collapse Gap is national politics. The ideologies may be different, but the blind adherence to them couldn’t be more similar.

It is certainly more fun to watch two Capitalist parties go at each other than just having the one Communist party to vote for. The things they fight over in public are generally symbolic little tokens of social policy, chosen for ease of public posturing. The Communist party offered just one bitter pill. The two Capitalist parties offer a choice of two placebos. The latest innovation is the photo finish election, where each party buys 50% of the vote, and the result is pulled out of statistical noise, like a rabbit out of a hat.

The American way of dealing with dissent and with protest is certainly more advanced: why imprison dissidents when you can just let them shout into the wind to their heart’s content?

The American approach to bookkeeping is more subtle and nuanced than the Soviet. Why make a state secret of some statistic, when you can just distort it, in obscure ways? Here’s a simple example: inflation is “controlled” by substituting hamburger for steak, in order to minimize increases to Social Security payments.

Slide [21] Many people expend a lot of energy protesting against their irresponsible, unresponsive government. It seems like a terrible waste of time, considering how ineffectual their protests are. Is it enough of a consolation for them to be able to read about their efforts in the foreign press? I think that they would feel better if they tuned out the politicians, the way the politicians tune them out. It’s as easy as turning off the television set. If they try it, they will probably observe that nothing about their lives has changed, nothing at all, except maybe their mood has improved. They might also find that they have more time and energy to devote to more important things.

Slide [22] I will now sketch out some approaches, realistic and otherwise, to closing the Collapse Gap. My little list of approaches might seem a bit glib, but keep in mind that this is a very difficult problem. In fact, it’s important to keep in mind that not all problems have solutions. I can promise you that we will not solve this problem tonight. What I will try to do is to shed some light on it from several angles.

Slide [23] Many people rail against the unresponsiveness and irresponsibility of the government. They often say things like “What is needed is…” plus the name of some big, successful government project from the glorious past – the Marshall Plan, the Manhattan Project, the Apollo program. But there is nothing in the history books about a government preparing for collapse. Gorbachev’s “Perestroika” is an example of a government trying to avert or delay collapse. It probably helped speed it along.

Slide [24] There are some things that I would like the government to take care of in preparation for collapse. I am particularly concerned about all the radioactive and toxic installations, stockpiles, and dumps. Future generations are unlikely to able to control them, especially if global warming puts them underwater. There is enough of this muck sitting around to kill off most of us. I am also worried about soldiers getting stranded overseas – abandoning one’s soldiers is among the most shameful things a country can do. Overseas military bases should be dismantled, and the troops repatriated. I’d like to see the huge prison population whittled away in a controlled manner, ahead of time, instead of in a chaotic general amnesty. Lastly, I think that this farce with debts that will never be repaid, has gone on long enough. Wiping the slate clean will give society time to readjust. So, you see, I am not asking for any miracles. Although, if any of these things do get done, I would consider it a miracle.

Slide [25] A private sector solution is not impossible; just very, very unlikely. Certain Soviet state enterprises were basically states within states. They controlled what amounted to an entire economic system, and could go on even without the larger economy. They kept to this arrangement even after they were privatized. They drove Western management consultants mad, with their endless kindergartens, retirement homes, laundries, and free clinics. These weren’t part of their core competency, you see. They needed to divest and to streamline their operations. The Western management gurus overlooked the most important thing: the core competency of these enterprises lay in their ability to survive economic collapse. Maybe the young geniuses at Google can wrap their heads around this one, but I doubt that their stockholders will.

Slide [26] It’s important to understand that the Soviet Union achieved collapse-preparedness inadvertently, and not because of the success of some crash program. Economic collapse has a way of turning economic negatives into positives. The last thing we want is a perfectly functioning, growing, prosperous economy that suddenly collapses one day, and leaves everybody in the lurch. It is not necessary for us to embrace the tenets of command economy and central planning to match the Soviet lackluster performance in this area. We have our own methods, that are working almost as well. I call them “boondoggles.” They are solutions to problems that cause more problems than they solve.

Just look around you, and you will see boondoggles sprouting up everywhere, in every field of endeavor: we have military boondoggles like Iraq, financial boondoggles like the doomed retirement system, medical boondoggles like private health insurance, legal boondoggles like the intellectual property system. The combined weight of all these boondoggles is slowly but surely pushing us all down. If it pushes us down far enough, then economic collapse, when it arrives, will be like falling out of a ground floor window. We just have to help this process along, or at least not interfere with it. So if somebody comes to you and says “I want to make a boondoggle that runs on hydrogen” – by all means encourage him! It’s not as good as a boondoggle that burns money directly, but it’s a step in the right direction.

Slide [27] Certain types of mainstream economic behavior are not prudent on a personal level, and are also counterproductive to bridging the Collapse Gap. Any behavior that might result in continued economic growth and prosperity is counterproductive: the higher you jump, the harder you land. It is traumatic to go from having a big retirement fund to having no retirement fund because of a market crash. It is also traumatic to go from a high income to little or no income. If, on top of that, you have kept yourself incredibly busy, and suddenly have nothing to do, then you will really be in rough shape.

Economic collapse is about the worst possible time for someone to suffer a nervous breakdown, yet this is what often happens. The people who are most at risk psychologically are successful middle-aged men. When their career is suddenly over, their savings are gone, and their property worthless, much of their sense of self-worth is gone as well. They tend to drink themselves to death and commit suicide in disproportionate numbers. Since they tend to be the most experienced and capable people, this is a staggering loss to society.

If the economy, and your place within it, is really important to you, you will be really hurt when it goes away. You can cultivate an attitude of studied indifference, but it has to be more than just a conceit. You have to develop the lifestyle and the habits and the physical stamina to back it up. It takes a lot of creativity and effort to put together a fulfilling existence on the margins of society. After the collapse, these margins may turn out to be some of the best places to live.

Slide [28] I hope that I didn’t make it sound as if the Soviet collapse was a walk in the park, because it was really quite awful in many ways. The point that I do want to stress is that when this economy collapses, it is bound to be much worse. Another point I would like to stress is that collapse here is likely to be permanent. The factors that allowed Russia and the other former Soviet republics to recover are not present here.

In spite of all this, I believe that in every age and circumstance, people can sometimes find not just a means and a reason to survive, but enlightenment, fulfillment, and freedom. If we can find them even after the economy collapses, then why not start looking for them now?

Thank you.

If you want Dmitry’s analysis in detail, get his lates book Reinventing Collapse: The Soviet Example and American Prospects

[Via - Dmitry Orlov]

Houston City Council Authorizes Spending Up To $150,000 To Defend Police Department Beard Ban

Drinking And Driving: Beer To Gas Ratio

Duo tries to break world handshaking record

Food banks squeezed by prices and demand

Not Your Regular Foreclosure Story - Man Loses Nine Houses

15 Dyed Dogs You’ve Got To See

Thursday, July 10, 2008

The Dog Who Breathed a New Business

Link of the day - Free $500 Sears Gift Card


First, it helps if you had an inventive streak as a child. Mrs. Roetheli, the daughter of a butcher-turned-insurance agent, for example, put on plays in her neighborhood, and besides charging an entrance fee, sold popcorn to her audience. Mr. Roetheli, who grew up poor on a farm on the edge of the Ozarks, raised his own hogs and learned a hard lesson when all 18 of his sows became infected with a disease that killed their offspring.

The lesson wasn't to avoid risk, but to embrace it. ''You don't fail; you learn,'' he said.

To my mind, the ultimate test of whether you're an entrepreneur is whether you can spot market opportunities that nobody else has noticed. (Please note: The product or service should be something people will actually buy.) For the Roethelis, the eureka moment came unbidden. After they married, she pursued a teaching career and he worked as an economist for the Department of Agriculture. Enter Ivan, their Samoyed, in 1996, when Mr. Roetheli was 48 and Mrs. Roetheli was 47 (and Ivan was 7).

''He had really bad breath,'' Mr. Roetheli said. ''Judy kept after me to do something about it. But there was nothing on the market that worked.'' Over the course of just a few days, he developed a mixture of wheat, chlorophyll, vegetable oil and other edible foods that he served dry (and later molded into a bone with a toothbrush at one end). Ivan was more or less a willing guinea pig, and within days, his teeth were clean and the odor gone.

Mr. Roetheli quit his job and he and his wife threw themselves full-time into marketing their canine halitosis cure. Here is where another entrepreneurial compulsion kicked in: pit-bull tenacity. He worked the phones from morning to night, and the couple made fruitless treks to every single bank within 70 miles of their home -- well over 100, pleading for a $250,000 loan.

''We thought they probably laughed their heads off after we left,'' Mrs. Roetheli said. ''But O.K. We were going to keep going. We refused to give up.''

For three years, they earned nothing. To keep their fledgling enterprise afloat, they begged money from ''family, friends and fools,'' as Mr. Roetheli put it, and racked up $200,000 in credit card debt.

Even as they were fighting against disillusionment, they displayed another attribute critical to entrepreneurial survival, what the experts call ''tolerance for ambiguity'' and the rest of us call winging it. ''We had no business experience, no sales experience, no marketing experience, no manufacturing experience, no quality-control experience,'' Mr. Roetheli told me. ''After we got started, we had no budget, no organizational charts, no technical planning, no media advertising.''

Was that a boastful tone I detected? If so, he earned it. Things began falling into place. A raw-materials supplier saw promise in their product and let their debt to him pile up. The Roethelis reeled in a talented staff with the lure of future rewards, not fat salaries. Sales picked up, then soared. Fast-forward: when they sold S&M NuTec to Mars Inc. a year ago for an undisclosed price, it was the eighth-largest pet-food company in the world.

Why did they sell it? Because they were, or had become, entrepreneurs. Entrepreneurs like to create businesses (a k a have fun). They tend to shun the details of managing their ventures (think ''boring''). The bottom line is they want to run their own show. Once they make their escape from the office, they can't conceive of reporting to a boss again, not even to a chief executive they themselves hired.

Flush with cash, the Roethelis today are fulfilling yet another entrepreneurial imperative, wading into a hodgepodge of ventures, about 10 in all, from creating a village for homeless people in a developing country, to building a spa in Kansas City with a ''floatation room'' that they say is the ultimate in relaxation therapy, to acquiring a maker of equipment for smoking and grilling meats, to forming a partnership with a home remodeler to commercialize products he has developed.

''Whenever we describe any of those products to people,'' Mr. Roetheli said, ''they smack themselves on the forehead and say, 'Why didn't I think of that?' ''

So far, I have discussed half a dozen entrepreneurial patterns. Then again, I've written a book that asserts there are eight core attributes. Other people have come up with inventories of anywhere from 2 to 50. Joe Roetheli rattled off seven, starting with, ''Have a dream.'' A serial entrepreneur in New York City practically shouted in the phone at me, ''There's only one that counts: passion!'' Carl Schramm, chief executive of the Kauffman Foundation in Kansas City and author of ''The Entrepreneurial Imperative,'' puts risk-taking high up on his scale.

Americans are entrepreneurial in their bones, Mr. Schramm says, and there is a reason that 7 out of 10 of us will start a business at some point in our lives. We aren't afraid of failure, and in fact seem to thrive on it. ''Failure in Holland, Germany, France is a disaster,'' he said. ''But in this country, if your business becomes a shipwreck, nobody holds it against you. Some people value you even more.''

Green School As A Business

Paper Clip Profiteer Story

Pickup service for composting

Becoming Antipreneur

Wednesday, July 09, 2008

The All-Inclusive Social Site.

Link of the day - Free $500 JC Penny Gift Card


Recently, I wrote about 15 entrepreneur blogs worth reading. In compiling the list, one of the trickiest hurdles was simply locating blogs to evaluate.

One of the bloggers mentioned, Guy Kawasaki, has been building a Web site called Alltop that makes the hunt for information on many topics, including entrepreneurs, easier. Alltop is part part library, part news feed, part Yellow Pages. Mr. Kawasaki likens it to a digital Home Depot — “100,000 square feet and we try to have everything.”

Under “C” you’ll find links to articles and posts on Canada, Crime and Cricket, among others. “S” houses Sex and Startups, and so on. Within each topic, there’s a steady feed of blogs and other content from various sites. Hover over a story and the first few lines appear.

The main difference between Alltop and other aggregators such as Newser, popurls or Fark is that a story’s popularity isn’t the primarily driver. The mission is to put a range of offerings on the table (spinach and cake) and let people decide. Even if 90% of them choose cake, the spinach isn’t going away or getting pushed under the table.

Here Mr. Kawasaki invokes another big-box store: “The metaphor is the magazine rack in Borders or Barnes & Noble—we think people coming into our store want to “know” where their favorite publication usually are, so if the order of a topic were constantly changing based on, God forbid, some popularity contest, it would make Alltop less useful,” he writes in an email.

Still, opinion does matter. Alltop relies on recommendations of the Twitter community and other suggestions. But content order is based on what Alltop’s chieftains think matters. For instance, at the top of the “Very Important People” tab, there’s everyone from Barack Obama to Anwar Ibrahim, Malyasia’s opposition leader. There’s a “Celebrities” topic but also a “Disability” one too.

“Truly, we’re not big believers in the wisdom of the masses, social media, and the echo chamber,” Mr. Kawasaki notes. “We think people want a breadth of information about topics they are passionate about and not just pablum.” The site makes money on ads.

Alltop’s all-you-can-eat approach will be tested as topics get crowded, though you can hide feeds you don’t like. Mr. Kawasaki fielded criticism when Alltop launched in March from some in the tech community who note you can already collect feeds of content through iGoogle, Netvibes, MyYahoo, and others. But some note that its easy layout and accessibility might entice a different audience.

Why 4% Food Inflation Figure Is Bullshit (USA TODAY Article)

Irish woman seeks 'husband' for beer

Kung-Fu Capitalism. The business empire of Jackie Chan.

Tuesday, July 08, 2008

The New Paradigm for Financial Markets: The Credit Crash of 2008 and What It Means

Link of the day - Free $50 Kmart card.

In August 2006 the risk manager of the home equity division of one of the largest banks in the United States collected his staff together and told them that the portfolio they manage had begun to exhibit dramatic losses. All the other banking institutions were beginning to exhibit similar losses he said, but that policies to be put in place will mitigate these losses and therefore "not to worry." He resigned his position only six months later, and at the time the mortgage losses throughout the nation were accelerating dramatically, forcing layoffs, resignations, panic in the financial markets, and aggressive action from the Federal Reserve.

Theories abound on why this turmoil is occurring, one of these being discussed in this book, which is written by one of most well-known financial speculators of all time (Soros). The tone of the book is general and philosophical, and the author refrains from indulging in mathematical considerations, but there are many concepts in the book that are interesting and merit further investigation. The author's intellectual honesty is refreshing, in that he admits the job he has taken on is a formidable one. Describing the workings of the financial markets is challenging, and has occupied the time of countless researchers and financial analysts.

The author wants to get rid of the "market equilibrium" paradigm in traditional economics and replace it with one that he has called "reflexivity". This concept is similar to a few that have been discussed in recent months, one holding that investor analysis and modeling activities actually serve to change the markets, rather than just "mirror" them. The author's idea is that humans have both a cognitive function and a "manipulative" one when they approach the financial markets. This has the implication that social phenomena cannot be described or studied in the same way as natural phenomena. They are separate areas of study, he argues, and he attempts to justify their separation on the pages of this very short book.

His analysis is interesting and provocative, and certainly worthy of attention, but to put it on a firm quantitative foundation would require a large amount of work. The theory of reflexivity is not the only proposal to be put forward that differs from the classical one. There have been many in recent years due to the increasing importance of financial engineering, the latter of which has been applied on a massive scale. But the author proposed this theory almost two decades ago, when derivatives trading and financial modeling were beginning to ramp up. He therefore foresaw the need for alternative points of view when dealing with financial instruments and market activities that cannot be captured by the classical paradigm.

The book is part autobiographical and could probably be better appreciated if the reader was familiar with the author's earlier works. But anyone interested in making sense out of the current news reports will find an interesting read here, even though at times the author's political affiliation comes out a bit heavy-handed. In addition, his attitude about free markets and "laissez faire" is somewhat puzzling since a purely "laissez faire" economy has not been realized historically. Any arguments against its efficacy are therefore misplaced. Those who still believe in "laissez faire" may therefore object strongly to many of the author's assertions and his recommendations at the end of the book for fixing the current "credit crisis." Whatever your world view though it is perhaps fair to say that the increasing complexity of the financial markets demands new ideas and approaches.If anything a good understanding of financial dynamics is a matter of survival. The financial markets of the twenty-first century take no prisoners.

Peegly.Com - Share Your Feelings.

Service Lets Drivers Lock In Gas Prices

Here is a brilliant idea - clothing rentals for people who are losing weight

Sunday, July 06, 2008

Peegly.Com Success Story

Link of the day - Free NFL tshirts and jerseys


No doubt you've heard about file sharing. How about feeling sharing? That's exactly what Peegly.Com founders strived to do. Since you can share just about anything online now, from expenses to music files, why not human emotions?

Here is how site founders describe the service:

What is Peegly’s Share-your-feelings Service? Peegly is a virtual pillow intended for your inmost thoughts, feelings and emotions. A big, soft and good-natured pillow is always ready to hear you out and help you.

Here you can tell just anything, share any emotions you seethe with or are overwhelmed with. Love and hatred, shame and desire, joy and fear – all these you can surely confide to Peegly.

The main task of the service is to bring down psychological tension and improve people’s mood by creating in them positive attitude and enabling them to express their thoughts and to be heard. All new sentiments appear on the main page of the portal, which gives every visitor a personal ‘podium’ to declare their feelings.

Writing a sentiment is very easy – neither registration nor any personal information is required to do so. If for some reason an author does not want discussion started on their message, they have right to forbid other users to comment on it.

The most thoughtful, original and beautiful sentiments are chosen by users by means of voting. Five best sentiments of the week become a part of Peegly’s weekly email newsletter and are advertised on pages of partnering Internet resources for the entire following week.

Do not hold it within yourself – share your feelings with Peegly!

People come to the site with a wide variety of feelings. Here is one of boredom. Here is one of jealousy. Pride and love are there, too. Some posts are silly and immature. Others are deep and insightful.

Definitely a site to keep an eye on.

Kung-Fu Capitalism. The business empire of Jackie Chan.

Man sells soul for $3,800 ... to a pizza joint

Australians making odd choices for funeral songs

Man Wants To Change His Name To 'Fuck Censorship'. Judge Says 'No'.

Is This How Americans Will Live A Few Years From Now?

Saturday, July 05, 2008

How To Buy Or Sell Your Experiences

Link of the day - Who Is Shawn Casey? Is He For Real?


Online auctions for goods are plentiful, thanks to eBay and all the others it has inspired. It was only a matter of time before experiences got an auction of their very own.

To be fair, American Express tried out an auction for experiences a few years ago that was known as Blue Play, but that's since been disbanded. Instead, we now have Sweemo, a brand-new UK-based site that allows users to buy, sell, swap and request exciting experiences—or "sweet moments," after which it's named. Sweemo lets those with access to exclusive experiences open those experiences up to everyone, connectinge—as the site puts it—"those who have with those who want to." Experiences are listed in five main categories—entertainment, adrenaline, lifestyle, travel and groups—and they range from a beauty makeover with TV presenter Sarah Cawood (priced starting at GBP 56) to a day of extreme speed sailing on the Hugo Boss for GBP 12,000. Shopping for experiences is free, and users get a profile page where they can track details about experiences that have interested them as well as leave comments and rate experiences they have already won. For those with experiences to offer, listing fees are based on the starting price and begin at GBP 1.50; closing fees range from 1.5 percent to 5 percent of the final selling price. Sellers can also rate those who have bought from them.

Jay Nguyen, managing director of Sweemo, explains: "Sweemo gives everyone the opportunity to access special experiences that simply aren't available in any other marketplace. We are motivating and inspiring people to recognise the incredible experiences within their own lives and making them available to others. They can be weird, wild or wonderful—so long as they can be enjoyed."

Service Lets Drivers Lock In Gas Prices

Here is a brilliant idea - clothing rentals for people who are losing weight

Becoming A Millionaire Before You Turn 21

Thursday, July 03, 2008

Service Lets Drivers Lock In Gas Prices

Link of the day - Who Is Shawn Casey? Is He For Real?


The high price of gasoline has some U.S. drivers looking to the future.

A recently introduced service called MyGallons.com allows drivers to fill up their tanks sometime in the future but at current prices, using a debit-like card which banks gallons rather than dollars.

“The price of gasoline was changing all the time. It seemed unpredictable,” Steven Verona, founder and owner of the Miami-based company, said on Monday.

“It seemed there had to be a way to fix the price,” he said.

Working on the assumption that the price of gasoline will continue to rise, Verona started about two and a half years ago to put together the company which gives the driver some measure of control of what he pays for gasoline.

Since a soft launch in January, about 2,000 people representing a cross-section of regions across the U.S. have signed up with MyGallons.com to be able to help them find ways to cope with the rapidly rising price of gasoline, Verona said.

Verona said that new customers generally begin by purchasing 25 to 50 gallons of gasoline.

“Once they are comfortable with how MyGallons work, they are buying 100 to 200 gallons at a time,” Verona said.

Using regular unleaded gasoline as the benchmark, drivers pre-buy gasoline based on their zip code. MyGallons.com determines what that price is based using established providers of oil prices.

“We don’t sell futures. It’s prepurchased gas,” said Verona, who said MyGallons.com uses a sophisticated hedging strategy to protect and meet obligations to members.

The risk to the consumer is if price of gasoline in the future becomes cheaper rather than more expensive. But if members are dissatisfied, they can drop out of the program and receive a lesser of the current price or what they paid as a refund.

“There is that risk that the price could fall significantly,” said Verona.

Here is a brilliant idea - clothing rentals for people who are losing weight

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Tuesday, July 01, 2008

Here is a brilliant idea - clothing rentals for people who are losing weight

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For dieters working to lose weight, maintaining a decent wardrobe of clothes that fit can be an ongoing—and expensive—challenge on the way to a target size. With just that situation in mind, Transitional Sizes rents out name-brand clothing for temporary use while the pounds come off.

Maryland-based Transitional Sizes, which just recently launched, offers women's and maternity clothing in a range of sizes for monthly rental fees ranging from about USD 3 to USD 25. (Men's clothes are coming soon, the site says.) Customers order items in the sizes they need and keep them for as long as they want; once they're done, they clean them per the instructions provided by Transitional Sizes and send them back in the original box. Customers needn't be members to order from the site, but membership packages ranging from USD 10 to USD 40 per year are designed to give dieters a range of extra perks, including coupons, discounts, email alerts and weight-loss incentives.

Transitional Sizes' inventory is still very limited, and its site feels rough around the edges. Nevertheless, the concept is a good one, and could be enhanced by personal features such as automatically sending a smaller set of clothes when a customer is scheduled to have dropped to the next size, for example. And how about a partnership with Weight Watchers or Jenny Craig? Either way, dieters are just one group among the legions of transumers out there, eager to be free from the bonds of (unnecessary) ownership. Which creates lots of opportunities for entrepreneurs who can support the new leasing lifestyle!

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