Archive for August, 2009

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The Auto Biz: Some reasons for optimism …

August 5, 2009

Ken’s Take: I’m still betting under on this one …

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According to the WEJ …

Ssome analysts are predicting that new car sales could hit 15 million in 2012 because …

  • American motorists are scrapping 10 million to 12 million vehicles each year.
  • There are nearly 6million buyers who have been kept out of the market because they owe more on their vehicles than they’re worth.
  • There are millions of consumers who bought the “near new” cars that the daily rental fleets quickly turned over at auction. Now, daily rental companies are holding their inventory much longer (30,000 miles plus), so the “near new” customer will be back in the new car market.

Conceivably, streamlined car manufacturers are positioned to make serious money when the market turns up.

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Excerpted from: WSJ, The Auto Industry’s Comeback, July 29, 2009
http://online.wsj.com/article/SB10001424052970204886304574308202570479912.html

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Posted in Autos - Travel | 2 Comments »

Tax revenues drop big time … let’s go after the top 1% (again) … or borrow some more from the Chinese

August 4, 2009

Summary: The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.  The deep recession is reducing incomes, wiping out corporate profits and straining government programs.

Ken’s Take: There will be no talk of slowing spending … marginal rates will go up (for more than the top 1%) … the economy will stall (again)

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Excerpted from: AP ENTERPRISE, Biggest tax revenue drop since 1932, Aug. 3, 2009

Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

  • Individual income tax receipts are down 22 percent from a year ago.
  • Corporate income taxes are down 57 percent.
  • Social Security tax receipts could drop for only the second time since 1940, and
  • Medicare taxes are on pace to drop for only the third time ever.

The last time the government’s revenues were this bleak, the year was 1932 in the midst of the Depression.

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While much of Washington is focused on how to pay for new programs such as overhauling health care — at a cost of $1 trillion over the next decade — existing programs are feeling the pinch, too.

  • Social Security is in danger of running out of money earlier than the government projected just a few month ago.
  • Highway, mass transit and airport projects are at risk because fuel and industry taxes are declining for the 2nd straight year.
  • The national debt already exceeds $11 trillion and
  • Bills just completed by the House would boost domestic agencies’ spending by 11 percent in 2010 and military spending by 4 percent.

* * * * *

The future of current programs — not to mention the new ones Obama is proposing — will depend largely on how fast the economy recovers from the recession’.

Full article:
http://www.google.com/hostednews/ap/article/ALeqM5ibGXhJv-N7Qg6nh-nQpPOgJRTgugD99RMD200

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Posted in Taxes | 1 Comment »

From The Numerati … the biology of personality

August 4, 2009

Ken’s Take:  Don’t blame me ! My personality is derived from my body chemistry. 

Perhaps, this is how marriage blood tests should be applied …

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From: The Numerati, Stephen Baker, Haughton Mifflin, 2008 

In the late 1990s, researchers began looking into the biology of personality: the genes, neurotransmitters, and specifically, the hormones.

A theory emerged at four different hormones — estrogen, testosterone, dopamine, serotonin – mold personalities.

People with lots of dopamine are likely to be “Explorers” — optimistic risk takers. Explore issues words like excite, spirit, dream, fire, and search. Explorers have a tendency to fly off in different directions the minute they get bored. They get into relationships fast, wonder how they got there, and then try to weasel their way out.

Serotonin breeds “builders” who tend to be calm and organized and work well in groups. Builders have a tendency to talk about law, honor, limits, and honesty. Builders like to keep finances in order, map out vacations, and make sure the cats get their latest battery of rabies shots.

People brimming with testosterone — two thirds of whom are men — our “directors”. They are analytical, logical, and often musical. Directors focused largely on the physical world and over use words like aim, measure, strong, and hard. They also talk a lot about “thinking.”

People high in estrogen are at the “negotiators.” They are verbal and intuitive, and a good people skills. Negotiators talked about links, bonds, love, team, and participation. Negotiators are smooth talking, problem solvers who patched together friendships.

* * * * *

When it comes to relationships,

  • Negotiators gravitate towards directors, and vice versa.
  • Explorers are attracted to negotiators.
  • No-nonsense builders are often drawn to explorers, who helped them “lighten up.”

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Posted in Book Summaries, Personality, Psychology | 1 Comment »

From The Numerati … the biology of personality

August 4, 2009

Ken’s Take:  Don’t blame me ! My personality is derived from my body chemistry. 

Perhaps, this is how marriage blood tests should be applied …

* * * * * 

From: The Numerati, Stephen Baker, Haughton Mifflin, 2008 

In the late 1990s, researchers began looking into the biology of personality: the genes, neurotransmitters, and specifically, the hormones.

A theory emerged at four different hormones — estrogen, testosterone, dopamine, serotonin – mold personalities.

People with lots of dopamine are likely to be “Explorers” — optimistic risk takers. Explore issues words like excite, spirit, dream, fire, and search. Explorers have a tendency to fly off in different directions the minute they get bored. They get into relationships fast, wonder how they got there, and then try to weasel their way out.

Serotonin breeds “builders” who tend to be calm and organized and work well in groups. Builders have a tendency to talk about law, honor, limits, and honesty. Builders like to keep finances in order, map out vacations, and make sure the cats get their latest battery of rabies shots.

People brimming with testosterone — two thirds of whom are men — our “directors”. They are analytical, logical, and often musical. Directors focused largely on the physical world and over use words like aim, measure, strong, and hard. They also talk a lot about “thinking.”

People high in estrogen are at the “negotiators.” They are verbal and intuitive, and a good people skills. Negotiators talked about links, bonds, love, team, and participation. Negotiators are smooth talking, problem solvers who patched together friendships.

* * * * *

When it comes to relationships,

  • Negotiators gravitate towards directors, and vice versa.
  • Explorers are attracted to negotiators.
  • No-nonsense builders are often drawn to explorers, who helped them “lighten up.”

* * * * *

Posted in Book Summaries, Personality, Psychology | 1 Comment »

Cash for Clunkers Surprises its Critics … me included

August 3, 2009

I still don’t get it, but obviously I was wrong when I bet under on Cash for Clunkers (C4C). I disn’t think it would generate much showroom traffic, let alone sales.

Bit by all reports, C4C is the hottest promotion since Hoover UK almost bankrupted itself by offering free plane tickets with the purchase of a vacuum cleaner.

Where did I go wrong ?

First, I assumed that the $4,500 government rebate was just a replacement for a trade in allowance.  So, only real clunkers – worth less than $4,500 as a trade – would be advantaged.

Second, I assumed that clunkers were being driven by downscale folks who didn’t have the scratch for brand new rides – who bought used cars and drove them until they died.  These folks, I thought, wouldn’t be able to step-up to buy new cars.

Apparently, many rich folks make their teenage or college kids drive hand-me-down cars – maybe to humble them.  Dealers are saying that these are the clunkers being traded in.  So, the kids get fancy new bumpers for their Obama ‘08 stickers.

Third, and most important, I underestimated naturally pent-up demand. According to an analysis by Edmunds.com “in any given month 60,000 to 70,000 “clunker-like” deals happen with no government program in place .. over 100,000 buyers put their purchases on hold waiting for the program to launch.”

OK, I missed on the program’s initial take-up, but I still see problems:

1) Reports say that the bulk of deals are for non-Detroit brands. Oops.

2) Easy prediction: fraud will be prevalent, e.g. clunkers showing up on used car lots instead of scrap heaps.

3) It’ll be hard to go off the needle.  Over the past few years, auto companies have tried – with only modest success – to wean the market off deep price rebates.

Let’s see what happens when taxpayer-funded discounts end.  Hmmm.

Maybe they won’t. Ouch.

Even so, gotta admit that it makes me smile to see the President touting Cash for Clunkers as his administration’s hallmark stimulus initiative.  That alone is worth a couple of billion dollars.

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Source for Edmunds data
http://online.wsj.com/article/SB10001424052970204619004574324350084909302.html?mod=djemEditorialPage

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Posted in Autos - Travel | 1 Comment »

Summer Read: The Numerati

August 3, 2009

The Numerati, Stephen Baker, Haughton Mifflin, 2008

Ken’s Take: I read it so you don’t have to.

I was really excited when the TV show “Numbers” launched.  Being a quant guy, I thought the concept of solving crimes by using math analysis had a ring to it.  Disappointment set in (for me) when they started focusing on the characters and their relationships instead of the numbers.  Oh well.

I was equally as excited about the prospects for The Numerati … and about equally as disappointed.  Nice topic, but way too superficial.

The central premise of the book is good: prolific data accumulation (including mucho private data), integration of massive data sets, high speed data access and processing, sophisticated statistical models and data mining algorithms, and an increasing number of uses and users … is making all facets of life more and more numbers based.

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Specifically, Baker provides some anecdotal examples of numbers-in-use:

  • In the financial markets: credit scoring by bankers and credit card companies started the snowball rolling …
  • In the workplace: some companies are already trying to derive behavioral profiles of employees that can provide insight re: how to motivate them, which teams to assign them to, and how to build a leveragable database of employee skills and interests.
  • In the store: some retailers are combining market research behavioral, and financial information to more closely target products and promotions ..  think of it as loyalty carding on steroids with a dose of customer profitability management.
  • In politics: the Chicago machine controlled precincts, the Bushies went after “values” segments and swing voters, and the Obama folks micro-targeted and “rolled up” using social marketing methods (e.g. Facebook, Tweeter). 
  • On the blogs: some companies routinely scour the population of blogs to find references to their products that can be consolidated into a real time view of how the products are being perceived.
  • In the war on terror: neural data networks are processing a constant stream of information and electronic communications, hoping to spot behavior patterns that might provide an early warning of potential terrorist activity …  think “Patriot Act”
  • In the doctor’s office: electronic medical records appear to be gaining traction, providing docs with real time access, distributive capability (i.e. sending the info to other docs), and “evidence-based” analysis of best practices.  The looming questions: scalability and privacy.
  • In the heart: mate-finding sites (e.g. E-Harmony) are getting increasingly sophisticated – using behavioral and deep-psyche info and concepts to make the perfect matches.

Bottom line: For businesses, quant analytics used to provide a competitive edge.  Now, they are required just to compete. 

For individuals, kiss privacy good-by and expect to be increasingly targeted with customized products and promotions.

“These statistical tools are going to be quietly assuming more and more power in our lives.  We might as well grab the controls and use them for our own interests.”

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Posted in Analytics, Book Summaries | 1 Comment »

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