Random travel photo

I have far too many photos of my more recent trips. This shows the aftermath of my luggage trying to escape while I was blasting down this road in the very south of Patagonia. It was scary – the box fell off but was held on to the bike by a plastic covered wire rope that I used to securely lock the boxes to the bike. The box bounced up and down on the road, with its sharp corners somehow missing vital components such as the chain, spokes and tire…

Riding in Patagonia - luggage

The top of the box fell off – but not too much of my gear was on the road as the gear was stuffed in there pretty hard. My computer was part of it, and survived.

It took me a long time to come to a stop – from about 100kmph, and as you can tell there really was nobody else around.

Patagonia 2

Floating (ARM) rate mortgages are on the rise

CalculatedRisk has created a lovely chart of the rise in popularity of Adjustable Rate Mortgages in the USA. It is scary is that around 30% of mortgages in the last few years are ARM’s.

This is bad as 1: ARM’s are easier for home buyers to get than fixed rate mortgages, indicating that the quality of the security is lower than historical norms, and 2: these mortgages are sensitive to increases in interest rates.

1: means there is a housing bubble, and people are buying with funny loans. 2: means when the bubble bursts then the effect is going to be more dramatic than desired.

Sell investment property. Now.

calculatedrisk - ARM popularity

Google Valuation

ValueCruncher tilts at Google – and finds the $500 per share market value wanting.

It’s hard to justify the $500+ valuation based on fundamentals – Google made 1/64th of it’s market cap in the last 12 months, and expects to make 1/37th of its market cap in the next 12 months.

Somehow analysts manage to keep upgrading their valuations as the price rises. I’ve seen this movie before – back in 2000/2001.

But the Google story is a great one, and they are in pole position to take advantage of the increasing importance of online advertising.

The global advertising market is forecast (ZenithOptimedia) to be $US421 billion in 2006, of which online ad spend will be $24 billion.

Already Google’s last 12 months revenue was $9bn, (YHOO made $6bn) so either they have close to half the market, or the online market is growing even more rapidly than expected. Either one of these is great for Google.

$24 billion is a lot, but that’s just 5.7% of global advertising spend. The rest of that spend is increasingly wasted on those valuable 18-35’s.

I know it is almost complety wasted on me.

Instead of TV there is the interaction of the internet, and if there is TV (sports) then the ads are skipped anyway.

Instead of newspapers there are blogs and online newspapers

Instead of movies there are DVD’s, youTube, iTunes, P2P and games – viewed on a HDTV or projector that approaches theater experience

Instead of radio there is the iPod and itunes.

Sooner rather than later there will be a sharp shift in ad spend, as it moves closer to the split of media time spent by consumers.

If online advertising moves to 40% of global ad spend, then it would approach $200 billion in the next few years. If Google had 30% of that market, then their revenue would be $60bn, and their EBITDA (at current rates) over $25bn. Microsoft has EBIT of $19bn, and a value of $265bn – so Google’s current value of $145bn is now vaguely justifiable. But I’m not investing – it is too much of a hype stock.

US built cars less safe….

The USA car industry has seldom put safety first, and never drivability. Turns out the second affects the measurement of the first, as electronic stability control (ESC) was deemed required for those 13 vehicles that maxed out the rating standard in the Insurance Institute for Highway Safety crash tests.

The winners include 3 Hondas, and 3 Subarus – good news for New Zealanders that have made the Subaru Legacy the biggest selling car (used imports included) here.

The introduction of ESC as a criteria is pleasing, as it moves away from ability to withstand a collision (from front, side or rear) to the more important ability to avoid a collision in the first place. The institute claims that fatal single vehicle crashes are reduced by 56% when ESC is involved.

The USA test is not bad, but I’d like to see more emphasis on avoidance – ESC is not a panacea. A handling test around some sort of standard track would sort the vehicles out a bit more, but I guess that isn’t really needed from a country with such superb roads as the US.

In NZ however, our narrow, twisty and greasy roads require the handling that keeps cars poised even when the rain falls and when flocks of sheep block the road. Which is probably why the Subaru Legacy is so popular.

Jeans that fit…

Can’t find jeans that fit? zafu.com matches jeans to your body shape and style. It’s not affiliated with any single brand of jeans, and they don’t actually sell jeans. They are claiming a 94% ‘we’ll make you look good’ rate – which is pretty amazing for a recommendation system based on self reporting of body shape and taste.

Kiwis can hit zafu.com, go to their favorite online jeans store to buy, and then use shipbuktu to ship the jeans here to NZ.

Customer service – how to ensure phones are answered

Meg Whitman commented that in the early days Paypal customer support staff didn’t answer the phone – they were avoiding speaking to customers.

I don’t understand why more customer service lines don’t follow Trade Me’s example. At Trade Me you pay$1.99 per minute when you call (a 900 or o900 number) customer service – but in return there is no waiting on hold, excellent service and, and I like this, a real effort by callers as well as CS staff to resolve the issue quickly. The average call time is low, and the issues dealt with are the material ones, and the less material problems are coped with via email.

Sadly for an otherwise great service Telecom takes a huge chunk of the income – 50 cents per minute, and a bunch of monthly fees, so businesses don’t have the ability to charge at a lower rate. This extortionate rate is a legacy (that’s a good article by the way) of expensive long distance calls and these days it clearly isn’t market pricing.

If the price were a fixed fee, or 10 cents per minute, then it opens up a world of possibilities. Businesses could vary the price they charge dependent upon demand, and even credit customers who have a genuine issue, who buy on the call or who are valuable. Telecom NZ could make a lot more money by lowering their prices for this service. But then again Telcos could make a lot more money by doing a lot of things.

Telcos could start with their own terrible CS experiences – offering an 0800/800 service to everybody, but a premium 0900/900 service to those with more money than patience (pretty much everybody it seems), promising in return instant contact with an operator. The nice thing about this is that it pays for itself – more operators are easily justified when they actually bring in more revenue than they cost.

Drop cover hold

Much like the drop and cover drill americans went rtghrough in the early cold war, we Kiwis too have our rituals. This aimed at earthquakes though….Earthquake Commission

I don’t recall it having such a snappy title though – for us schoolkids it was “get under your desks now!”

Surfing from work…

Personal surfing from work is bad, says the Deputy Leader of the Opposition in New Zealand. While this may be a great debating point for the chamber, Brownlee clearly isn’t thinking this one through. I certaibnkly wouldn’t want ot work for him, nor for any organisation that wanted such micro control over my activities.
Better to treat people like adults, until proven otherwise. If a little time online during work hours helps people smooth their lives then that’s great. After all, it is far more efficent to buy things on Trade Me or bank online than to wander into the city for extended lunch breaks.

Wait until he discovers blogs…..

Business class gets even better

Singapore airlines have launched their version of the lie-flat standard business class.

singaporeair

It is insane – not only lie flat, but look at the size of that seat! It seems to be begging for two people to sleep in it…

The bed itself does not seem that wide at the top – it appears that you flip the seat somehow, and your legs get all that juicy width while your head is constrained…

singaporeair

It is all very cool, but it worries me that airlines are spending too much on setting up their business class. Just let me lie flat and I am happy – I do not care if the chair is the size of a lounge suite, or if the meals are from Paris and the linen by Giorgio of Piacenza. I’d rather have a narrow, horizontal bed and a cheaper fare. Save the fat seats for the first class.

that housing bubble is bursting….

That sharp drop on the right of the chart – that’s the sign of a bubble bursting.

It is saying “Don’t buy housing, especially ‘investment’ property, and especially in your area, which is ‘different from the rest’.”

econobrowser

econobrowser does a great job of monitoring the US housing market, amongst other things. and as the US goes, so does the rest of the world….

Woz, Kawasaki and lousy flash video players

Great interview. Shame I can’t see it as the video player and my orcon/xtra broadband are lousy.

Will flash video creators please realise that not only do people have variable speeds of internet access, but that we also have variable quality. Once I get a dropoff from a youtube or, it seems, a zbiz, video then that is it – the movie stops.

Once the movie stops I am done – there is no ‘reload’, no ‘try again from here’, no’connection reset’ error (a la iTunes). It is just toast, and burnt at that.

As for streaming – and Apple is guilty of this with their Steve Jobs shows – it simply doesn’t work. Traffic speeds are too erratic and the result is a stop start experience that eventually grinds to a halt.

ShipBuktu – shop the USA

Shipbuktu alpha-launched today. The site is still in test, but the back-end logistics are set. essentially. I’m involved on an unconfirmed sem-official basis.
Shipbuktu gives Kiwis a USA address, so you can shop the internet USA style. Amazon electronics, Gap clothing, and everything from telescopes to car parts are finally¬† available to us here. Believe me – it’s been hard living here without the ability to get hte latest Apple gear, clothes off the rack that fit or books delivered the next day. This site will help, and along the way render Ferrit a bit of damage.

The only catch is that some sites require a US addressed credit card. Try using an APO address in the meantime, and we’ll keep working on the credit card thing.