Fri, 24 Nov 2006
Zopa, Consumer Lending
The latest newsletter from Springwise, which lists new businesses from around the world, mentions Zopa, which they describe as "eBay for money". The concept is fairly simple.
Zopa is a place where creditworthy people who want to borrow money can get together with people who are happy to lend it to them. And because there's no middleman - the borrower just pays a 1% exchange fee to Zopa up front - both get a great deal.
They pool loans together so each lender's loans are distributed among 50 or so borrowers. Lenders can decide what type of debtors they want to lend to based on the debtors' credit.
Zopa is only open to UK residents. I wonder how such a system would work in the states with each state having different lending laws. It's an interesting idea, and easier than standing outside the check cashing store looking for customers.
business » ideas | Permanent Link
Sat, 04 Nov 2006
Amazon aStore
A few months ago, Amazon introduced aStore, which allows associates to create their own Amazon store. It's a cool idea, but unfortunately, the current version is pretty limited in fuctionality. The store creator can only pick nine featured products sold by Amazon to display in the store. Categories of goods to be sold through the store can also be selected, but with only limited control over which products show up within these categories through the use of keywords.
For the nine featured products, the store builder can write a little description, but it would be nice if the products displayed the seller's product ratings, comments, etc.
Anyway, here's my store.
Fri, 19 May 2006
EU to Print Its Way Out of Inflation?
The EUobserver reports that members of the European Parliament are proposing to print €1 and €2 notes to replace one and two euro coins. They argue that the public doesn't correctly value the coins, and thus, a switch to notes will curb inflation as consumers stop throwing the coins around frivolously. Yeah, that's the cause of inflation. It can't have anything to do with those responsible for actually printing (or minting) the euros or the banks that create money out of thin air.
If the EU wants to get rid of their coins, I'll be happy to exchange each €1 coin for a $1 Federal Reserve Note. Limited Time Offer. While Supplies Last.
Perhaps the US should eliminate the $1 note and make the $2 note the smallest. The latter tends to be overvalued by American consumers.
Naked Shorts
I was forwarded this email:
Date: Wed, 17 May 2006 22:43:49 EDT From: xxxxxxxxx@aol.com To: undisclosed-recipients: ; Subject: If you invest in stocks, listen to this...from Bobby K. Turn up your volume and set aside about 10 minutes to listen to this. Theres a crack in the system whereby people can create bullshit shares of stock and sell it, where in essense creating more shares than there should be and driving a companies stock down and eventually destroying the company. Ive known about this for awhile and so have politicians, however, if they tried to fix it, the entire financial system of the U.S. would collapse. Ive always said that the stock market crash we saw in 2000 that wiped out alot of people would be a walk in the park compared to the next one that will happen. I think within the next 1-3 years the topic of these bullshit "phantom" shares will be the big one that will be the biggest hit the stock market has ever seen. Dont paic, just be careful. The stock market is done. The crooks have made billions in the last 60 years in the stock market and i think the shit will hit the fan soon. Listen... http://www.ultimateuploads.com/audio/view.php?play=10aa902b7bb9763edd29058fb220e350
I wrote the following response before listening to the audio. I should have guessed that it was the Overstock dude.
The CEO of Overstock.com bitches about naked shorts a lot. Read http://jeffmatthewsisnotmakingthisup.blogspot.com/. Mark Cuban talks about it on his blog sometimes too. There was also a 60 minutes story about it, but it wasn't very good as Leslie Stahl is about as financially literate as a chihuahua. While it's fraudulent to sell something that doesn't exist, the purchaser of a share of stock is the one who would have a complaint if he were unable to take delivery of said share. The CEOs who bitch about it are the ones whose compensation is in the form of stock options. If they were speaking on behalf of the company, they should be delighted that people are driving down the stock price. The company can buy back its shares cheaply enriching the existing shareholders. Imagine a company that sells 1,000,000 shares at $10/share during an IPO. If short sellers drive down the stock to $1/share, and the company can buy back all of its shares, it makes $9,000,000 without giving up any equity (neglecting underwriting fees and the upward movement of the stock price as the company starts to buy back a lot of shares). Likewise, if you're a shareholder, and you think the stock is undervalued at $1, you can buy more stock and wait for the profits to come rolling in. If your company isn't making any money, and you expect to make money on the stock, well, too bad. xn
Sun, 12 Mar 2006
Shorting Residential Real Estate
Patrick wants to short the housing market. This is something I've thought about over the past year or so.
I could short builders, mortgage banks, or Fannie Mae, but that's not exactly the same, and I'm not as confident they will fall.
I'm not sure why he doesn't want to take a short position in equities that are likely to track housing prices. If prices start to fall it'll likely be because people are defaulting on their mortgages. This will negatively impact those holding mortages, i.e. banks, Fannie Mae and Freddie Mac. As Greenspan pointed out, the GSEs are holding onto lots of mortgages.
I read How to Profit from the Coming Real Estate Bust yesterday, and the author, John Rubino, suggests a number of ways to make money when the euphoria ends. He, of course, suggests shorting the GSEs, banks, and builders. But the housing market doesn't exist in a bubble (pun intended). The fall in housing prices is likely to correspond to a fall in the dollar. It is foreign investment in dollar debt that is helping to keep interest rates low. When foreigners get tired of financing American consumers, and not making much money doing so, they'll take their money elsewhere causing the dollar to fall. (Yes, I realize it's not that simple. Foreign governments also want to keep their exports affordable.) To get them back, we have to offer higher returns, i.e. higher interest rates, on their investments. Higher interest rates make for grumpy homeowners with ARMs, over half of recent home buyers. For a thorough discussion of the problems ahead for the dollar, check out The Dollar Crisis: Causes, Consequences, Cures. Rubino thinks Swiss Francs are the way to go. I'm not sure of that. I have money in Yen and Canadian Dollars right now. Subscribe to Chuck Butler's Daily Pfennig for daily commentary on foreign currencies.
Gold and other precious metals are another way to make money from a falling dollar.
Some more directly housing related stocks to short are those of title insurers, appliance and furniture manufacturers, property development companies and REITs. He also suggests going long apartment REITs and health care REITs. Apartments should do well, but I'd be more wary of the latter. REITs that own nursing homes should do OK, but I'd be hesitant to invest in hospitals which seem to be closing with increasing frequency as doctors are required to provide services to people who don't pay their bills.
Mon, 02 Jan 2006
Losing Money Vicariously Through Slate
I have the fantasy of opening up a little cafe, apparently like many other
people. Michael Idov has already done it and documented the money-losing venture
at Slate.
His cafe, which he opened in Manhattan, was right out of my fantasy, "where coffee was served on silver trays with a glass of water and a little chocolate cookie" — it's actually a little chocolate square in my imagination.
He goes on to describe how he lost money on every croissant sold, and how he and his wife end up working "$8-per-hour jobs slinging coffee" before going bankrupt.
The European cafes that Michael tried to emulate probably don't $4,500/month rents to pay, because I don't think they get the to-go business that makes Starbucks so profitable.
Fri, 25 Nov 2005
10 Free Burritos From Chipotle
I eat at Chipotle
probably twice a week. A couple days ago, I dropped my business card in the
fishbowl next to the register. Today, I got a call from Shabby at Chipotle,
telling me that I had won 10 free burritos. Unfortunately, it's 10 free
burritos to be ordered for a single lunch, to feed an office of people.
I work from home. I don't think I even know 10 people who live in Northridge. Anybody want to join me for lunch next week?
Sun, 13 Nov 2005
Coffee Bean Inconsistency
Hey Sunny, I was hanging out at one of your stores today, the one at Devonshire and Reseda in Northridge. You really need to get your franchisees to get their shops in order. While overall, you guys make good coffee, much too often, I get a terrible one. It's quite a crapshoot to get a coffee at one of your stores. There's simply no consistency in the coffees made at The Coffee Bean. While on a good day, your lattes are quite delicious, I'd estimate that about 10% of the time, I get a terrible coffee. Part of problem seems to be under-trained staff. Different baristas in the same store often make coffees differently. The first iced latte that I sent back today was clearly disproportioned, lacking the nice milky tone; it looked like coffee-water. Nonetheless, I drank some of the bitter swill and added some more milk. Alas, it still tasted quite bad. I had the latte remade, and while the second looked right, it still tasted poorly. Hoping that perhaps someone spilled some dish water into the ice maker, I had it replaced with a hot latte. Unfortunately, the hot one was not much better. I did burn my tongue a bit on it which helped keep my taste buds from revolting. I suggest that you visit the shops and make sure that they're cleaning out the espresso machines regularly. Or perhaps they are using low-grade coffee beans in order to widen the narrow profit margins on $3 cups of coffee. Please let me know what your research turns up and when it's safe to return to Coffee Bean stores. Thanks, Christian
Fri, 28 Oct 2005
Checking References
Company X submits a proposal to Organization Y to do some work. Company X, having been in business for quite a while, has a rather extensive list of past clients listed on its web site. Organization Y decides to contact some of the listed clients to ask about their experiences with Company X rather than asking Company X for a list of references.
Some of the organizations contacted aren't very happy to be contacted out of the blue by Organization Y and complain to Company X.
Did Organization Y act inappropriately? I'm not sure, but I tend to think not. Assuming Organization Y can find people in the past-client organizations who were involved in the work done by Company X, doing so seems like prudent research before completing a deal for thousands of dollars.
Sun, 02 Oct 2005
The Economist Subscription Discount
The Economist is offering its subscribers discounts on gift subscriptions. The first gift (or personal renewel) is $98, and additional subscriptions are only $69. Unlike most magazines, it's pretty much impossible to find discounts on subscriptions to The Economist. Amazon sells subscriptions at the normal rate of $129.
The Economist is the only magazine I read now. I cancelled my subscription to Time after I started reading The Economist. It's great for keeping up on what's going on in the world without having to read a broadsheet, the format of which I hate.
If you're interested in a subscription, let me know, and we can split the difference between the gift price and my renewel, making each $83.50. The subscription would start at the end of December with the double issue.
