Tuesday, September 30, 2008
Anyway, John and I were talking about how the financial crisis will affect our family. He is understandably concerned about the future. My (hopefully) reassuring message to him was that we are in a major turning point in our country. This turning point is very similar to others in history: October, 1929; Pearl Harbor; the atomic bombing of Hiroshima and Nagasaki; the assasination of JFK, Watergate, Falling of the Berlin Wall, etc.
With historical understanding of present conditions, you will see that ultimately our country will prevail. I told him that with every change comes an opportunity to grow and fix the problems that face us. If life were boring, there would be no challenges. Without challenges, there would be no greatness.
Of course, these words come from a person who has be pretty conservative in his financial dealings in the past few years. As a result, we are reasonably prepared to deal with the economic changes. There are many in our economy who are not. For them, the changes are terrifying and they may need help from their friends and neighbors.
My final message to my son is that we are all in this together. Hopefully, we as a nation can come together to deal with the crisis and resulting economic downturn. We have done this before, and we can do it again.
Sunday, September 21, 2008
This plan will work to free up the credit markets and may help avert a larger disaster. However, the press seems to focus on the taxpayers bailing out rich banks. In fact, this has little to do with saving the banks. I will explain further. I will say, that the taxpayers are as much a part of the problem as the banks. It takes two to tango. Likewise, it takes both lenders and borrowers to make a mess this big.
Before I go further, please don't use the usual ADD response and say that this stuff hurts your brain or is too complicated. It is important and the more people who understand what is happening the better.
What has happened before this week:
In the past five or six years, we have seen access to mortgages open up in a way never before seen. Home prices rose at fantastic rates across the country. People who had never bought a home before were able to get adjustable rate mortgages with no money down and no mortgage insurance. Brokers, underwriters, and Wall Street happily took the money and passed on the risk to others in what is essentially, mortgage backed securities.
What went wrong:
Obviously, the problem was bound to happen. People started defaulting on their loans. Everyone has known there were bad loans out there for the past year. The problem is that no one knew where those bad loans were. They were mixed in with good loans and traded from one bank to another as securities. Everything limped along until investors (depositors) at the big investment banks started wanting their money back. Those big banks (Lehman Brothers for example) needed to liquidate (sell) their holdings in mortgage backed securities to give the money back to their investors. The problem is that no one wanted to buy them (they were illiquid). So with the investors screaming for their money back, the only answer was to file for bankruptcy (in Lehman's case). As more investors demand their money back, more banks face failure.
Since the investment banks are giving all their free cash back to their investors, then they are no longer loaning money to good companies for expansion, working capital or other projects. This will threaten to cause non-banking businesses to fail if not fixed quickly.
What the Treasury wants to do:
The fundamental problem is that banks cannot convert these securities over to cash. Treasury Secretary Paulson wants to use federal money to buy these securities from the investment banks. That will fix the run on the investment banks as well as thaw the frozen credit markets which will enable other businesses to borrow money for expansion or working capital.
Here is where the reporting is wrong. People are saying that the taxpayers are bailing out the banks and getting stuck with the bill. But in reality the taxpayers are the ones who owe the money back to the banks in the first place. (Circular market). With the Federal Government owning the mortgage paper, there are a number of things they can do which will help.
First, they can separate out the good loans from the bad loans. They will then sell the good loans back to Wall Street for a pretty fat profit.
Next, they can take the bad loans and work them out. This may mean changing the interest rate back to the first year rate for that loan. This would allow time for the homeowner to refinance or sell their home. In either case, they would avoid foreclosure.
Finally, since the banks are the ones selling the loans to the Fed or Treasury, then they will have to play by the rules set up to make this fair. That might mean the CEO's of the banks are limited to their pay. It may mean they have to take a big hit on the sale price. It might mean some other security is given. In any case, the banks are not going to "win" under this proposal. The banks will survive, but certainly will not make money on this thing.
In the future, it is going to be like the past. For instance, when I bought my first home, I had to have 20% down. I had to prove that I didn't borrow that money. If I had only 10% of the purchase price, then I had to pay for PMI or Primary Mortgage Insurance. In other words, I had not only the security of the house, but the insurance plan to protect the lender.
This means that going forward, it is going to be much harder to buy a home. It means that people will have to save for years before being able to afford their homes. We can count on some 20-30% of the buying market not able to qualify for a home loan.
So in a nutshell, the American Dream will go back to being something you worked for 20 or 30 years to attain. It will no longer be something a typical 25 year old will be able to achieve.
Wednesday, August 13, 2008
During this time of the year, we work pretty hard at retooling and cleaning house. I am amazed at how much stuff is created by our little company.
Anyway, right now we are in the process of working on a new marketing video. In addition, we are testing some new screens which are a bit lighter than the current screens. You may not realize it, but screens are a big part of our business.
In other update news, we are happy to say that we have kept our shipping costs stable throughout the massive increases in fuel over the past year. In fact, we haven't increased our shipping charges at all during the past 10 years.
Wednesday, July 16, 2008
At first, I avoided buying and renting laptop computers. I thought the opportunity for catastrophic failure was too great. But just like always, our clients made the decision easy.
Ultimately, we were able to add and maintain close to 400 laptops to our inventory. Today, we carry the Durabook which is a rugged military grade laptop.
Tuesday, July 08, 2008
At one scene, the hero Walle holds onto a space ship as it launches. When they pass out of the Earth's atmosphere, they break through a solid ring of dead satellites.
Currently there are some 500 working satelittes in orbit and several thousand that are dead, space junk. We rely quite heavily upon satellites for things such as gps, meterology, earthquake study, communication, television, radio, and national defense.
These satellites are pretty safe from bad guys. Trying to damage or shoot down a moving satellite is pretty difficult. However, in recent years we have begun to see new technology move us closer to civilian population of space. This will start with Virgin Galactic and other space tourism ventures. In these, thrill seekers will go into space for a few short minutes of weightlessness.
Over time, the technology will become more reliable just as the airplane did in the first part of the 20th century. Eventually, there will be loads more people and stuff in low earth orbit. This presents the problem. If you can get people into space, then you will be able to put satellites into space cheaper too. What if someone designed a small "hunter" satellite that could seek out a target and push it out of orbit or simply damage it by getting close enough and exploding.
The resulting space terrorism would mean constant interruptions in our communications and financial systems and so much more. It would present all sorts of problems for those entrusted with protecting these things. (How do you protect a 20 pound, flimsy satellite from an attack?)
Now for the scary part: The FDA is moving forward with replacing the outdated radar systems at airports with GPS systems. Without GPS, pilots would be able to revert to using visual navigation, however, air traffic controllers would be blind.
Okay, so my prediction is that within the next 10 years, there will be an attack upon a satellite in orbit.
Thursday, May 22, 2008
The answer is simple: invest and grow. Going into this slowdown, I have replaced 70% of my rental inventory with new, better projectors and laptops. This required us to take on some significant debt. I have effectively lowered prices on projector rentals across the board. Is it a big risk? Nope! Not at all.
In fact, doing nothing is a bigger risk. By investing in new equipment, I can give my clients a better rental experience. Happy clients means more business. It is really very simple.
On my real estate side, I have a new building that has three empty spaces. These are office spaces, so the build out isn't special for each tenant. Over the past several months I have invested in finishing these spaces out with the best interiors I can afford. The payoff is finding great long term tenants who would otherwise pass my building over because the spaces were concrete floors and studs. Now, they have wood floors, kitchenettes, lots of interior glass doors and windows, and fiber optic internet service.
While everyone seems to be pulling back, I choose to push forward. The payoff is very good in the long term. In the short term, I am not wasting energy pulling back.
Tuesday, May 13, 2008
There have been some nice major changes. First, the site is centered instead of left justified. Second, we now have a css site, which I am still working the bugs out of. Finally, I went through and got rid of the thousands of old pages which date back to 1998.
There were files on the site which were just dead. It was a nice walk down memory lane, though. Since RentQuick is now 10 years old, this was a good time to clean things up.
Tuesday, April 29, 2008
We operate differently from other AV providers since we are not actually on site when the rental is taking place. Instead, we ship the equipment to arrive the day before the rental begins and have the client ship it back on a premade airbill on the day after the event.
We support our equipment with a 24/7 technical support line. All our rentals are guaranteed--no questions asked.
Many of our clients use our services daily for their national training programs or seminars. Other clients call us when their own equipment is overbooked or being serviced.
We have been doing this for 10 years and really enjoy serving the needs of our clients.
Thanks for listening to my keyword filled plea which is entirely designed to make the search engines happy!
Sunday, March 09, 2008
In 1959, the USSR launched Sputnik. The act sparked what would become the space race between the two great super powers. For the first few years, it appeared that the US was way behind. It was not until May 25, 1961 that Jack Kennedy propossed sending a man to the moon and returning him safely to earth.
In 1945, when the Allies entered Germany, they found the Autobahn. The Autobahn to them was unlike anything they had seen before. It consisted of four lanes on a well-built highway divided by a median. Of course, today we take the Interstates for granted. But the inspiration for the Interstate system came from the Autobahn. From the early 50's until the 80's new interstate highways were constructed. It fueled and supported an economic expansion still felt today. In fact, the interstate highway system may well be the greatest economic infrasture improvement ever.
The Manhattan Project, Kennedy's Moon Challenge, and The Interstate Highways are three examples of what good government can do and how problems can be solved. The efforts made by those previous administrations will be felt for generations to come. The spin off technologies and scientific and engineering development from these efforts are inumberable.
I challenge Congress and whichever candidate wins the Presidency to support and fund a research and development program unlike anything seen before. I challenge them to create a Manhattan Project for energy independence.
Imagine a world where oil no longer mattered. Imagine automobiles who do not polute. Now imagine the economic and technological benefit a country who develops the solutions would have.
All of our foreign wars since Vietnam have been connected to oil in some way or another. Iran, Iraq, Lybia, Kuwait, Saudi Arabia and even Afganistan (Bin Laden was pissed about the troops being in the holy land during Gulf War I) have been tied to oil. If we no longer needed oil, those conflicts and occupations would stop.
I believe that if left to the major energy corporations or to the automakers, we will never see a break from oil. They have too much invested in the older technology. Barriers to entry are very significant in both energy and automobile manufacturing. Expecting a major investment of this size to be carried by industry is unreasonable. That is why we need to have the best and brightest in the country and among our allies to go on the government payroll, move to a single research center, and develop a solution. Once the solution is developed, the technology can be licensed to private industry to market it.
It has been done before. We have the infrastructure to do it. We have the money to do it. (Take the savings from no more oil wars) When gas reaches $4 a gallon, we will have the political will to do it.
The plan is simple: Invest $1 Trillion into a research and developement program which will have the stated goal of getting the United States to be a net exporter of energy withing ten years.
Friday, March 07, 2008
hometown of Staunton, Virginia.
At issue is the local prosecuter charging both the owner and an employee
of an adult video store with indecency.
Regardless of your opinion on the subject of porn, you should be worried
about the government, any government, arresting people based upon the
content of the media they possess.
If they are successful in defining crimes based upon content rather than
actions, then they become free to define any content as objectionable.
When this happens, the book burnings and political executions are quick
Monday, March 03, 2008
In the best column: It has email, internet (slow), calendar, syncs with my outlook on my desktop, and a blue tooth head set.
In the worst column: It eats battery life like crazy. I am lucky if I can get 45 minutes of talk and 3 hours of standby.
In an attempt to fix the problem, (I have 9 months left on the current contract) I spent Sunday tracking down various fixes and hacks for the damned thing. What I found was that for about $40 I can get the extra large battery. I ordered it today.
After that, I made some adjustments (http://www.everythingq.com) found online. These include a handy little program called Candlelight which lowers the back light but makes it impossible to see in sunlight. I also learned that I need to kill all the programs all the time. Apparently, when you start your mail program, for instance, it runs forever. You need to "kill" through a messed up series of menus.
So if you are looking for a smart phone, stay the hell away from the Q.
Friday, February 29, 2008
For instance, I believed that costs of delivery would increase with normal inflation. So my math models showed a 3% increase in shipping each year. Instead, we have seen the actual cost of shipping increase 8% per year (close to 125% total). The main cause has been the fuel surcharge. The secondary cause is the oligopoly that is UPS and Federal Express. During the entire 10 year period, we have only increased our shipping rates to our clients 8% in total.
In my predictions, I believed that the equipment rental industry would eventually go through a series of mergers or consolidations. This has not happened. It is likely because as an AV company gets bigger, the margins compress. In any case, I don't have competitors calling me regularly about buying me our or wanting to be bought out.
Fundamentally, our model for delivery of projector rentals and other AV equipment has not changed. We hopefully have become more efficient and better at what we do, but the basic rules still apply. We send it out, it is used and it is sent back. Pretty simple stuff.
Over the past ten years, I have truly enjoyed serving the needs of my clients. I can honestly say that my small crew are the best employees I have ever had. In fact, I would say they are the most customer-centered people I have ever met. That is no reflection on me. I believe they are caring people who love serving others. I am lucky to have them on my side.
As an entreprenuer who has several irons in the fire at any given time, RentQuick, my crew and our clients are the best business I could ever hope to have.
Tuesday, February 19, 2008
Monday, February 18, 2008
I could name examples, but it would only make matters worse. During my work as an entreprenuer, developer and investor I have found that most of the licensed professionals who I hire are mediocre at best and impressively incompetant at worse. I am sometimes at my breaking point when dealing with these guys.
The logical solution is to check references, follow up on details and dump bad vendors quickly. However, recognizing that they don't know what they are doing early is difficult. We are talking about a group of people who somehow continue to earn a living while performing their work very poorly. They know how to hide things. That is the one thing they are good at.
So I will trudge on often paying double for someone else to fix the mistakes of the first guy. In the future, I will try to less forgiving of failed promises early on. When a hired professional fails me, I will cut them before they destroy the entire project.
Thursday, January 31, 2008
I know what you are saying: Only the super rich can afford the $200,000 to go up. Yes, that is true. However, it has been that way for a long time. You could risk you life and go up in a Russian rocket if you paid enough. However, this is different. In this case, it is the goal of Virgin Galactic to get you into space. Whereas with the Russians, it was just about the big payoff.
For those of you who think this is just a waste of money for people to get shot into space, consider this: you need the early adopters to pay the big bucks early so later on, the regular guy can do it.
Just like in the case of air travel, early on only crazy people and the rich could go flying. Now, everyone with teeth has flown at some point in their lives.
Would I spend big bucks to fly into space? You bet! What an opportunity! Imagine doing something that was only dreamed about two generations back. Even if it is only for a few minutes, the idea of breaking the confines of this planet would be incredible. Yes, it is tourism and a little kitchy. Who cares? It is space...the final frontier and all.