Reasons Unbeknownst

A short but true story. A guy had his car in the shop. The shop wrecked his car. The shop refused to fix it. The owner raised a stink on the internet. The shop gave him a new car.

Yesterday I bought a Subaru WRX . It died on the way to work today. I limped it in and they agreed to replace some sensors for free.

In a seemingly unrelated development, my blog has somehow managed to garner a Google Page rank of 5 out of 10. A Google search for “unbeknownst” returns about 2,140,000 results. My blog shows up third because I have a relatively decent ranking. I wrote a review of Amazon’s Unbox when it was released and my blog was at the top of the list for a while which generated a ton of traffic for my humble site.

So how are these facts related? It means that if a dealership decided to screw me over, and I told the world about it on my blog, searches for the dealer’s name on Google would probably return my rant at the top of the list.

Random ideas had after drinking too much coffee…

• Dynamic page width should become adjustable by the user using AJAX. And it probably will as more get wide-screen monitors. Nobody is using AJAX for page layout yet.
• Open standards should be used for printable views of websites so they can be aggregated into something that would allow you to print new articles from all of your favorites sites in a seamless, newspaperesque format.
• I started building the econ simulator. I’m learning Erlang to do it so it can someday take advantage of future CPUs and because C++ kills me.
• I’m noticing fewer websites that make me slap my forehead and say “Why the hell haven’t they fixed this?”. 1 divided by that quote is my measure of web maturity.

Some quotes:

• “Computer Science is no more about computers than astronomy is about telescopes.”
• “The competent programmer is fully aware of the limited size of his own skull. He therefore approaches his task with full humility, and avoids clever tricks like the plague.”
• “Object-oriented programming is an exceptionally bad idea which could only have originated in California.”

Computer Science and Economics are the same damn thing if you step back far enough, hence my use of Erlang(free markets) instead of C++(communism++). How a Libertarian, agnostic, econ-geek programmer could use anything other than Erlang for simulating economics strikes me as bizarre. I’m probably the only person trying so I guess I shouldn’t worry about it.

So I wrote this big fancy website in C# that calculates distances between zip codes and retrieves the nearest results. Microsoft even did a case study on it. Bill Gates was in San Diego and he was supposed to show up at our office. I was terrified he was going to ask to see my code. Well he never made it but now in my old age I realize that my code only worked because I didn’t try to do it by the book. And now Erlang shows up and tells me I’m not crazy.

It just struck me that I could convince a lot of programmers that believe in socialism to convert to the un-dark side by listing brilliant software quotes and them converting them to economic quotes. Most already believe in the logic behind free markets. They haven’t considered it outside of the domain of 1s and 0s yet.

Someone found our code and wrote a bit of their own that simulates a vision system. The video shows a car following another car using a software brain. Sounds very mad-scientist but this stuff now lives in the domain of the public. One of my ideas is to someday use the 3D engine from our car simulator to build an economics simulator that explains complicated ideas visually. If a picture says a thousand words then a rotating 3D model must be the equivalent of something the size of an econ textbook.

One of those big picture ideas brewing in my brain is the need for 3D interfaces on just about everything. The world is 3D, most ideas consist of a few dimensions, but all of our textbooks consist mainly of linear text. Granted, we’re good at turning strings of text into imagined things in our brains but why not cut out the middle man and allow interaction with the topic to boot?

I can’t seem to get away from econ. I tried reading fiction to no avail. Truth is stranger anyway.

What follows is a comparison of two articles, one published on the blog Global Economic Analysis on Wednesday, September 27, 2006 at 9:40AM and the other published on roughly a day later at 8:29AM, September 28th on TheStreet.com. I’ll leave it to the reader to draw any conclusions so I don’t get sued.

Exhibit A – A comparison of two blocks of text referring to a DR Horton advertisment.

The Blog: “That is a 30% haircut… Any flipper who paid full price is now 30% underwater (not counting interest expenses, insurance, property taxes, etc).“

TheStreet.com one day later: “You just took a 30% haircut on your inventory, not to mention carrying costs of a mortgage, real estate taxes and expenses to keep up the property (landscaping, utilities, etc).”

Coincidence? Maybe. Weird? Absolutely.

Exhibit B:

The Blog: “Add in real estate commissions and that flipper may be down by as much as 50% or more.”

TheStreet.com one day later: “…you have to pay a real estate agent a 6% commission. That speculator… is now out, by my calculation about 50%.”

Exhibit C:

The Blog: Uses a quote from David Lereah… ““We do expect an adjustment in home prices to last several months, as we work through a buildup in the inventory of homes on the market,” he said in a written statement. “This is the price correction we’ve been expecting — with sales stabilizing, we should go back to positive price growth early next year.”“

TheStreet.com: Uses the same quote… “We do expect an adjustment in home prices to last several months, as we work through a buildup in the inventory of homes on the market. …This is the price correction we’ve been expecting — with sales stabilizing, we should go back to positive price growth early next year.”

Exhibit D:

The Blog: Right at the bottom of the ad in large type is the message “Realtors Warmly Welcomed”… That is a dramatic change and right off the bottom line of builders.

TheStreet.com: Consider the dramatic sale of D.R. Horton (DHI) homes in the Daytona Beach market in Florida. Please note the message at the bottom of this advertisement: “Realtors Warmly Welcomed!” That’s never a good sign.

I was wrongly accused of plagiarism in my final semester of college by a professor who was convinced that I couldn’t have written a paper in a weekend. I eventually won but it wasn’t a fun process. I don’t take this sort of thing lightly.

---

Notes:
“Editor’s note: This column by Doug Kass is a special bonus for TheStreet.com and RealMoney readers. It first appeared on Street Insight on Sept. 28 at 8:29 a.m. EDT.”

The blog post, if the clock is right, was online at
“9:40 AM” on “Wednesday, September 27, 2006″

Click on the photo to visit Flickr for the photog’s comments.

Some quotes from the end of the Roaring ’20s.

“There will be no interruption of our permanent prosperity.”
- Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

“There may be a recession in stock prices, but not anything in the nature of a crash.”
- Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
- Irving Fisher, Ph.D. in economics, Oct. 17, 1929

“This crash is not going to have much effect on business.”
- Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
- R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

“… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”
- HES, November 10, 1929

“The spring of 1930 marks the end of a period of grave concern…American business is steadily coming back to a normal level of prosperity.”
- Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930

Some quotes from our current crop of experts:

“Home sales are coming down from the mountain peak, but they will level out at a high plateau — a plateau that is higher than previous peaks in the housing cycle.”
- David Lereah, Chief Economist, National Association of Realtors

“It’s impossible for prices to go down this year.”
- Gary Watts, Spokesman Orange Country Association of Realtors

“I don’t worry about new home sales,”
- James Glassman, JP Morgan Chase Economist

“There is no national housing market, so there can’t be a national house-price bubble.”
- Michael Youngblood, Managing Director, Friedman Billings Ramsey & Co

“If you own your own home free and clear, people will often refer to you as a fool. All that money sitting there, doing nothing.”
- Anthony Hsieh, CEO Lending Tree

“I think investors will have a good reason to come out here and buy again.”
- Jeromith Sutton, 2006, NAR Investment Advisor

“We’re now in the ‘middle innings’ of the current economic expansion, and the next economic recession is not yet in sight.”
- David Seiders, Chief Economist, National Association of Home Builders, Jan 2006

The Housing Bubble Blog

I’m trying to avoid the allure of the heady aroma of econ and reporters but they keep writing potpourretic articles about money. Not fascinating compared to the bizarre rantings in Catch 22 but compared to cats stuck in trees

…it’s mind bogglingly fascinating. From the aforementioned book. And I quote:

“She was a tall, strapping girl with long hair and incandescent blue veins converging populously beneath her cocoa-colored skin where the flesh was most tender, and she kept cursing and shrieking and jumping high up into the air on her bare feet to keep right on hitting him on the top of his head with the spiked heel of her shoe.”

and

Colonel Cargill was so awful a marketing executive that his services were much sought after by firms eager to establish losses for tax purposes.

and

General Peckem was a general with whom neatness definitely counted. He was a spry, suave and very precise general who know the circumference of the equator and always wrote “enhanced” when he meant “increased.” He was a prick, and no one knew this better than General Dreedle…

The closest thing we have in finance is the Mogambo Guru. Who writes about the sordid misadventures of the federal reserve board. Who CSI Miami will no doubt dedicate an episode to. Because they’re just that tabloid fodderesque. Random fact. I was at the Hard Rock pool a while ago and Paris Hilton was there, and Tom Brady, who had a rough two years and day respectively, and another famous, more talented singer, who stole my bloody mary (* If the drink is served without the vodka, it is called a “Bloody Shame”). It was a bloody shame that I had to resort to drinking tepid, chlorinated Brady/Hilton sweat but I did meet a girl who went by the name of “Chaps”. A teacher from LA if you believed her.

I thought I invented two words in this post. Potpourretic and Fodderesque. Google found nine references to fodderesque but potpourretic is an unbeknownst original. Potpourri means “A miscellaneous anthology or collection: a potpourri of short stories and humorous verse.” Potpourretic is just the adjective version. Sort of like bombast vs. bombastic. Give it time.

I heart NY.

I’ve had a good run predicting some economic events, but I’m tiring of the mechanics of money when the rules are made by those who wonder whether Democracy inevitably leads to Socialism followed by economic collapse. In other words, why trade baseball cards when success is dictated by the quality of steroids. So I’m reading three books relatively unrelated to money.

Catch 22 - Lots of names unsuited to my un-photogenic photographic memory.
Faust - Goethe was supposedly the smartest person who ever lived. I don’t put a lot of stock in raw IQ because wisdom is supposedly a combination of brains and correctly interpreted experience. But the guy could write.
The 10 Day MBA – As much as I love technology I think someday technology will be used to make technology easier to use at which point knowledge of business will be more important than knowledge of microprocessor core sizes.