Economics & Finance

No Parking

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My friend Nathan and I differ greatly in our perspective of how and when film crews ought to be allowed to close off parking in the maze that is Manhattan’s Chinatown. You can catch some of our debate here and here.

What it comes down to for me, as a libertarian, is that the film studios are using the coercive power of the state to force (see if the police won’t clear away any protests before you object to my use of the word “force”, especially if the protestor is a lone businessman) the neighborhood into accepting something that will benefit the private film company, and a minority of the businesses there. The difference from the Suzette Kelo case is only a matter of degree.

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Are Credit Cards the New Universal Currency?

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In the past, paying for things while traveling overseas was complicated. You had to convert some of your native currency into the local currency or get travel checks  demarcated  in local currency. Today, you can just hop on a plane with whatever major credit cards you have on hand and fly anywhere in the world and pay for anything with a swipe of the card.  

Has this widespread adoption of credit card effectively made them a universal  currency?  

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Freakonomic Based Real Life Story

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I am a middle man.   I run a business that sells HVAC products and equipment to contractors.   We do not do any retail.

In my world, it is common for the manufacturer of the equipment that I am selling to set up factory direct stores that welcome contractor business.   It makes it interesting, to say the least.   Imagine you are doing your best you can to sell a company’s products, then they set up a store down the street a few blocks and sell directly to your customers.   It may sound weird to some, but it happens all the time in my industry.

We sell service, delivery, no damage, taking care of problems, and basically do everything that the factory direct stores can’t, or won’t.    The relationship is more complex than this, but for this post that is all  I need to  explain about it, as that is the nuts and bolts of it.  

The  huge problem with this situation is that  as a reseller, you  are obviously at a price disadvantage to the factory direct store.   There is only so far you will go with this line.   That is fine with me, you either take it or leave it.   But something interesting happened a few weeks ago.   I received a call that this particular manufacturer was shutting down its operations in my state.   That is awesome news for me.

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Calling The Bottom… or not

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In financial circles it is common to use the term “Calling the Bottom”. What does this mean? It means that when a stock is beat up enough and poised for a rebound, that is the time that you want to buy. The real trick, however, is when something really hits the bottom, or if it has further to fall.

Recently there has been carnage in the financial sector. Bear Stearns had to be rescued by JP Morgan when they collapsed, and Citigroup & Merrill Lynch had huge write offs. This has continued into the quasi-government entities Fannie Mae and Freddie Mac.

While the vast majority of my investments are in index funds (or income investments), from time to time I like to think I am a stock picker and will put a negligible amount of my portfolio into this type of work.

I picked four stocks that I figured (maybe wrongly, in hindsight) that might be near the bottom right at the end of 2007, and started this post back in April. My fellow blog-mate Dan has been hounding me to clean up my “draft” posts (he is a blog-neat freak, but that is good for all of us) but I have been leaving it there to age, not like a fine wine, but like a room-temperature PBR, after all. My four stocks were picked based on 1) look, someone has to survive in the long run 2) some entities are “too big to fail” and the government will back them out.

Here were the stocks at the time (end of 2007) and their prices:

1) Citigroup – $29
2) Merrill Lynch – $53
3) Fannie Mae – $40
4) Freddie Mac – $34

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