Archive for July 8th, 2009

Take the loyalty test …

July 8, 2009

From the summer read:
Why Loyalty Matters, Keiningham & Aksoy, Benbella Books, 2009

in prior posts, I highlighted 25 notable nuggets from the book and recounted the 10 Relationship DNA Factors (i.e “styles”)..

Here’s an acid test of loyalty:

Do your friends believe without a doubt that you convincingly demonstrate your loyalty to them? Specifically, do you

  1. Devote enough time to your relationships with them?
  2. Stand up for them when it is uncomfortable to do so?
  3. Celebrate their successes without envy?
  4. Support them during difficult times?
  5. Hold fast to information provided in confidence?
  6. Make every effort to carry out commitments to them, even when it requires considerable self-sacrifice?

Being truly loyal isn’t easy to do. 

Virtually all of us fall short in delivering true and comp,ete loyalty to friends and family.

The good news: there is always room for improvement.  Get started.

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Posted in Book Summaries, Relationship Skills, Relationships - Loyalty | Leave a Comment »

When loans exceed posted collateral, borrowers walk away … is that new news ?

July 8, 2009

Takeaway: About half of all foreclosures are attributable to loans going underwater.  That is, the borrower could keep the loan commitment and keep paying, but chooses to simply stop making payments.  For the other half, about half lose their jobs and can’t make payments and almost 40% are simply deadbeats who shouldn’t have been given the loans in the first place.  Relatively few borrowers are forced into foreclosure by rate hikes – e.g expired teaser rates and ARMs.

The good news: looks like almost all of the air has be let out of the bubble, i.e. the bottom may be near.

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Stanley Liebowitz — professor of economics at the University of Texas, Dallas – cranked through a database covering more than 30 million mortgages to determine the root causes of foreclosures.

 

image

His main conclusion:”Although the government is throwing money — almost $2 trillion and counting — at the mortgage markets with the intent of stabilizing house prices, its methods are poorly targeted”.”

Why?  Because “Zero money down, not subprime loans, led to the mortgage meltdown. The important factor is whether or not the homeowner currently has or ever had an important financial stake in the house. Yet merely because an individual has a home with negative equity does not imply that he or she cannot make mortgage payments so much as it implies that the borrower is more willing to walk away from the loan.”

The good news: “Housing prices are likely to stop falling fairly soon  … That’s because current prices are approaching their long-term, inflation-adjusted pre-bubble level. These pre-bubble prices appeared to be a long-term equilibrium, meaning that prices would be expected to return to those levels.”  

WSJ, New Evidence on the Foreclosure Crisis, July 3, 2009
http://online.wsj.com/article/SB124657539489189043.html#mod=djemEditorialPage

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Cutting Prof. Leibowitz’s numbers another way: about half of all foreclosures are attributable to loans going underwater.  That is, the borrower could keep the loan commitment and keep paying, but chooses to simply stop making payments.  For the other half, about half lose their jobs and can’t make payments and almost 40% are simply deadbeats who shouldn’t have been given the loans in the first place.  Relatively few borrowers are forced into foreclosure by rate hikes – e.g expired teaser rates and ARMs.

 

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Posted in Housing - Mortgages | Leave a Comment »

Get out your wallet … states move to tax internet sales

July 8, 2009

Ken’s Take: I hate taxes.  Not because I’m not willing to pay my fair share, but because so much of tax revenue is wasted or applied to  questionable political missions. 

That said, if there have to be taxes, I’m a fan of user taxes (think toll bridges) and consumption taxes (think sales taxes).

So, it never made sense to me that internet sales should be sales tax free, except for sites that have a local physical presence (think Best Buy or Barnes & Noble). Of course, I take advantage of the rules and buy stuff over the internet.   But, why should states forego this revenue and why should retailers with a local physical presence be put at a disadvantage.  It just doesn’t make sense.

I expect many states to pit internet sales in the sales tax bullseye.

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WSJ, Amazon Cuts North Carolina Affiliates to Avoid Tax,
June 27, 2009

North Carolina is in the process of passing a law that would force companies to collect the tax if they have in-state online-marketing affiliates — people who get a sales commission from links on their Web sites. To avoid getting caught by the law,

Amazon is dropping the affiliates. Amazon.com Inc. said it has ended business relationships with marketing affiliates in North Carolina to avoid collecting sales tax in the state. 

But the decision highlights mounting tensions between online retailers and cash-strapped states across the country. Other states are considering similar laws that would use affiliates as a way to force companies to collect a sales tax for online purchases. 

Consumers are technically supposed to pay a so-called use tax for online purchases on their own, but most don’t. Many e-commerce sites rely on the price advantage they have over traditional retailers because they don’t have to collect taxes. , and forcing them to collect the tax upfront could take away some of that advantage.

Full article:
http://online.wsj.com/article/SB124603593605261787.html#mod=testMod

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Posted in Internet Marketing - eCommerce -, Supply Chains | Leave a Comment »