My notes as I explore various business and financial topics

Friday, September 24, 2010

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Why Don't California Homes Have Basements?

None of the homes that I've seen in California have basements.  I've always wondered about this because coastal Southern California has some of the highest housing prices in the nation.  This is due to the scarcity of land to build on -- the result of being sandwiched between an ocean and a desert.

Houses here are sardined next to each other, like the little houses you put on your property in Monopoly. Ten feet is the average distance separating properties, but zero property lines -- where your neighbor's wall marks the boundary to your property -- are becoming more and more common.  To maximize profit, builders are squishing even more units into a smaller area.

With such high price per square foot and so little room to expand, it would make sense for California homes to expand their living space downward.  An engineer friend of mine says that it's because of zoning laws: a basement would count as an additional story.  A two story house with a basement would need to be zoned as a three story structure.  Still, it nagged at the back of my mind. I finally Googled the question to confirm this theory.  Some of the most popular answers are:

A basement in earthquake country would have to be certified as earthquake proof, waterproof, gremlin proof, and a whole bunch of other proofs.  As California is not the most business friendly state, most builders don't want to deal with the liability that goes with building a basement.

Because of the above mentioned factors, building a basement would also cost a ridiculously high amount, say about $2000 per sq/ft. as oppose to $200 sq/ft. to build.  Most home buyers refuse to spend the 4 million dollars when a similar house in the next development is going for only four hundred thousand.

The most logical answer that I've read is that basements are not needed in this sub-tropical climate.  In the frost belt, houses need to be built on a foundation that extends below the frost line, aka a basement.  Otherwise, the constant expansion and contraction of the ground from freezing/thawing would heave the house off its foundation.

Basements also shield water pipes from freezing and in a bygone era, it was where the huge furnaces sat and where coal was stored for the winter.

But the best answer on why California homes don't have a basement that I've seen so far has got to be. . .

"so we won't have to get any closer to hell any sooner than we have to?"

Tuesday, September 21, 2010 is for Lease!

Why lease

One word -  In the fall of 2008, was purchased by Bankrate for $15 million dollars.   Prior to then, was a Wordpress blog founded by John Wu.  It had an Alexa ranking of 42,168 and averages less than 20 comments per post, but had high rankings for banking searches.

"Bankaholic is ranked high in natural search for both deposit and credit card keywords." said Thomas R. Evans, President and CEO of Bankrate.  He went on to state that he believes will help increase their deposit and credit card revenue.

Although the ultimate goal may be to attract a major financial or investment institution, the domain naturally ranks high for the keyword  Combine that with high margins for financial affiliates and has great potential.  If you know how to optimize for SEO and build traffic, then you shouldn't have any trouble minting money here.


Q: How much does it cost to lease

A: The fee starts at $100/month. Rates increase at 25% a year.

Q: Why are you leasing out

A: Because I'm trying to follow Robert Kiyosaki's philosophy where I acquire assets instead of liabilities and happens to be a very good asset except that I'm not making any money off it yet, and there's a yearly registration fee, so in fact, it's still a liability, but I'm trying really, really hard to turn it into an asset, dammit!

Now, did I make you forget about the rate, yet? No? Fine! Read on, then!

Q: 25% a year! That's highway robbery!

A: Look, we start off low to make it a good risk proposition.  Anyone should be able to afford $100/month to start. I mean, your cell phone & cable bill costs more than that. The monthly fee SHOULD increase as the domain grows more valuable.  Here is the fee schedule at 25% increase a year. 

1    0.25    $125.00
2    0.25    $156.25
3    0.25    $195.31
4    0.25    $244.14
5    0.25    $305.18
6    0.25    $381.47
7    0.25    $476.84
8    0.25    $596.05
9    0.25    $745.06
10  0.25    $931.32

If you can't afford $305/month after five years, than it's time to give up and try something new. Ditto for ten years.

Q: Why should I lease

A: Because you're either just getting started building a finanical themed site, or you have a finance based business and want to expand your Internet presence. Trying to find the perfect domain name that's catchy, easy  to spell and appropriate is damn near impossible now a days. Once people hear the name BetheBank, they won't forget it. Shoot, I get daily searches for Be the Bank with zero presence on the web. 

Sure, you can try to build your own brand from scratch, but using will give you a jump start.

Q: It still doesn't seem fair that you will be making money off the domain when I'm doing all the work creating content.

A: Ok, let me try to explain with an analogy. is like a billboard.  I happen to own the billboard in a potentially very very good spot on the information superhighway. There's not very much traffic passing through this spot, yet, but the billboard is highly visible.

If some event causes an increase in traffic, such as a new city, or a new airport or a Justin Biebier concert (just wanted to get the keyword in there for Google searches), then will be a very, very good spot to advertise your business.

Of course, you can always go put up your own billboard, but it might not be in as good a spot or as visible as

Q: I'm not sure that analogy quite fits . . .

A: Ok, let me try another one. is like . . . a city in Texas.  They're not real cities, the way New York or Chicago is. They're there to help people locate things. So the locals can say,"I live about 2 hours North West of Dallas."

Plus, they also help the airlines navigate. For instance:

Flight 223: Good Morning tower. We're about 30 minutes outside of Houston, approaching from the South East at bearing 223 degrees.

Tower: Roger that 223.  Hold course for 15 minutes then
proceed to bearing 115.

Q: ummm . . .

A: sigh - nevermind. I can show you the Cool-aid; can't make you drink it.

Q: I'm not sure I'm convinced. What can you say to convince me to lease

A: Remember the high finanicial affiliate margins? Remember Sold for $15 million dollars! I'll split it 70/30 with ya??!!

Q: Yeah right! In your wildest dreams!

A: Ok,then. Let's pretend that YOU know what you're doing and create great content and traffic and get an offer for ... um ... $70,000.  You keep $49,000.  I get $21,000.  But, since we're pretending, let's pretend that we get an offer for $571 million . . .

Q: What makes you think that will ever rate such an offer?

A: Well, some of the wealthiest companies are banks! Don't you think that Bank of America or Chase or Citi would pay to own

A second group that would be interested are investors . . . and companies that provide finanical services to them.  In other words, people with money. Tagline - would you love to earn 25% on your money? Don't wait, Be the Bank today! Ooops, I better grab that domain name, too!

Finally, there's this social lending club trend. Either a major player will come in, or a big institution will come and try to take it big. is much more memorable than or . . . what's that other one?  See! I can't even remember the name!

Looking for a Good Postal Scale

I am looking for a good postal scale. A quick search on pulled up several models. I was surprised that even the four star rated ones all appear to have a power glitch.

The USPS PS-100 10 lb. Postal Scale 

This scale has a four star rating.  But it has ten 1 or 2 star reviews out of 59.  Common problems include:

  • stops working after a couple months. Ok, that's definitely a deal breaker
  • doesn't turn on sporadically.  One user discovered that warming it up on a sunlight windowsill or using a heating pad helps it turn on???
  • another user commented, "this scale does work occasionally, so I can't say it is COMPLETELY useless, but I had been hoping for one that would work all the time."

I think I'll pass on this one.

Weighmax 2822-75 lb Postal Scale

Another 4 star rated scale. Wow! This one will weigh packages up to 75 lbs!  If you ship large items than this is definitely the one you want.

The down-side is, it tends to bounce around the numbers for light weight items. Not quite as precise for shipping smaller packages.

Just 1 review complaining about a power problem, out of a total of 17 positive  reviews.  Ok, I can live with that.  And the price is right, too!

If you ship a-lot of large items, then the Weighmax is definitely the one for you.

Digital Postal Bench 35 lbs


I think the official name is Digital Postal Shipping Postage Bench Scales 35 lbs???

Other than the overly wordy product name, this scale appears to be a winner. 28 positive customer reviews.  And it can weigh items up to 35 lbs.  Good enough for my foreseeable shipping needs. This is the one I'm getting.

    Monday, September 20, 2010

    Best Business Logo Ever!

    I recently saw the logo for the Pittsburgh Zoo.    I love the artistic design!  It perfectly  conveys a sense of wonder and mystery for the zoo.

    Despite that, I think that such a complex logo would be difficult to pull off for most businesses.  They don't scale down well when you have to miniaturize them to fit on a business card or a pen.  With that said, I am still puzzled at the simplicity of most corporate logos, which mostly consists of the company name in a specific font and color.  I don't understand how these logos are suppose to brand the company?

    I feel that the perfect business logos should be a balance of simplicity and artistic design and it should also embody the the business either in name or product.

    Using this criteria, here are some of my favorite logos.

    Check out all the other great logo samples at  Do you have a favorite logo?  Please submit them in the comments. I'd love to see them!

    Friday, September 17, 2010

    It's Like Riding Horseback in the Sky!

    Ever since these new airline seats debut at the Aircraft Interiors Expo Americas conference in Long Beach, CA, they've been spotlighted all over the media.  I first spotted them in a USA Today article and have seen them in a dozen other venue since: CNN, radio talk shows, and all the blogger news and Twitter feeds that I subscribe to.

    In stark contrast to Continental's new luxurious business class seats, the Skyrider airline saddle seats straddle the minimalistic line from hell.

    Aviointerior, the creators of the Skyrider, claims these seats will emulate the comfort of horsebacking riding.

    "Cowboys ride eight hours on their horses during the day and still feel comfortable in the saddle," cites an official from the Italian based, airline interior design firm.

    Maybe so, but cowboys aren't packed into a giant sardine can with a hundred other horses just a foot away.

    As many commentators noted, the passenger pictured doesn't look very comfortable -- in the showcase seats with nothing in front of her.  Now, imagine yourself on this contraption, sandwiched in between rows with the back of the other seat less than 23 inches away from your face!

    Still Aviointerior is confident the Skyrider will find market appeal due to the cost savings these space saving seats offer. And with airlines desperately searching for more ways to cut cost, they may be on to something.

    Still, can you think of any other industry where such customer loathed designs are unveiled with such fanfare?

    Friday, September 10, 2010

    Fantastic Business Class Airline Seats!

    My wife just returned from an overseas business trip.  I was trying to explain to her what business class seats were like.  But these posh seats went way beyond my expectations.  Check it out!

    And to help you afford these fantastic seats, check out Joe Brancatelli's tips for getting great prices on business class fares!

    Friday, July 23, 2010

    Take a Picture to Deposit Checks!

    It's one of those things that we expect to have and eagerly await, yet, has proven elusive so far.  No, it's not the flying car, but for some, it's on the same level.  It's the ability to deposit a check into your bank account simply by taking a picture of it!

    I first heard how USAA and ING were offering this service.  Now, Chase is also offering this service via an iPhone app.  Can't wait for it to be available for non-iPhone users, too.

    Wednesday, June 30, 2010

    How to Save the U.S. Auto Industry

    I stumbled across a letter from the December 22nd 2008 issue of Fortune Magazine about one reader's viewpoint which I absolutely love!

    "Why don't we take the $25 billion the auto industry wants and give it to Steve Jobs and Tim Cook ("The Genius Behind Steve")? I have to think that with those two in charge, Apple could develop an iCar that Americans would enjoy driving and actually want to buy." - Paul M. Keebler, Fortune, 12/22/2008

    A year and a half later, and this still doesn't seem like a bad idea -- considering how everything Apple does turns golden!  There's even a parody website: the iCar - Drive Different!

    Monday, May 24, 2010

    Mortgage Rate Boon May Herald Further Economic Trouble

    Mortgage rates reached a new low last week approaching their lowest level in 50 year. Although these record rates may help the housing sector recover, a growing number of investors read it as a sign for more economic miasma.

    Mortgage rates are tied to long term U.S. Treasury, such as the ten year bond. And a drop in bond yield stems from investors moving money out of the stock market and into safe bond investments (raising bond prices and thus lowering the yield rate).

    Bond rates are hovering around 3.2%. Many analyst are bracing for them to hit 3%. What remains unkown is if investors expect a the recession to extend for more years, or are simply nervous over current financial conditions such as the Greek financial crisis, or U.S. jobless rates.


    Bonds Ring Economic Alarm Bells - CNN Money
    Surprise Drop in Mortgage Rates - WSJ

    Sunday, May 23, 2010

    Quote, "About the time we can make the ends meet . . ."

    Quote of the Day

    "About the time we can make the ends meet somebody moves the ends!" - Herbert Clark Hoover, 31st President of the United States.

    Great quote for describing my 401K.  Just heard from financial pundits on the radio, Steve Forbes among them, that it's the usual 10% market correction.

    Tuesday, May 18, 2010

    Artificial Economy Hits Reality?

    Another dismal week for Wall Street.  Has the Artificial Economy finally met up with reality?

    Christopher Thornberg, a speaker at the Los Angeles Economic Forecast Conference and a founding principal of Beacon Economics, attributes last years economic growth to government intervention and not due to economic fundamentals.

    "The fundamentals are still bad, and are creating a new set of imbalances," he said. " . . . how we got into this mess was that we had trends that made no fundamental sense."

    The HAMP program, FHA program, low interest rates, Hope for Homeowners, housing tax credits, "government intervention is preventing the fundamentals issues from being fixed and has created its own set of potentially serious problems for the economy."

     Also consider these factors:
    •  the increase in consumer spending responsible for corporate profits in some sectors, such as automobile sales, are not in line with their income
    • the banking sector still has massive amounts of bad debt that will take years to work through
    • 12 million homeowners are underwater on their mortgages
    • Federal Reserve Bank of San Francisco does not see the economy humming until 2013, at the earliest (SBA newsletter May 2010)

      Monday, May 10, 2010

      The Artifical Economy - When Will it Crash?

      In resolving to be more diligent in reviewing my 401K, I'm puzzling over the conflicting financial news.  On one hand, I keep hearing that the economy will grow slowly, take years to recover and  be a jobless recovery.

      On the other hand, despite an anemic 3% growth, job loss has tapered off, corporations were reporting record profits and the stock market is at its 2 year high.

      The stock market crash last week, just adds to the confusion. I had just concluded that the market would continue to rise until the latter half of 2010 when Wall Street imploded. The Greek debt crisis and a glitch in the computer order of a major trader caused the stock market to plunge over 900 points during the day.

      Where are corporate profits coming from?

      Where are those profits coming from while we are at a 9.9% unemployment?

      Banks - no secret here.  With the government bailout, banks are getting virtually free money.  Its easy to make record profits when you can borrow money from the government for almost 0% interest then lend it out in the form of credit card interest rate of 23%.  Or, the banks can simply purchase government bonds and earn 3% - 4% interest on their free money.

      Auto makers - had some of their best sales figures in three years. I attribute this to the cash for clunkers program which artificially drives auto sales, much as the government tax credit for home buyers fueled the huge home sales numbers.

      Corporate Profits - this number didn't make any sense at all. With the record profits some companies were reporting, our economy should be humming!  A closer look shows that much of the profits came from two areas: the savings from cost cutting measures, such as reduction in workforce; and an increase in overseas sales.  Here are some examples:


      Earned $233 million, or 36 cents a share, up from a $112 million lost a year earlier. Chairman and CEO Jim Owens attributes the strong numbers in this light.

      "The main driver behind our improved outlook is robust growth in Asia/Pacific and Latin America and continued improvement in mining and energy globally," - source


      Shares now trade at $112.42, near it 52-week high of $118.44.  Contrast that to a low of $37.24 last year.  The company credits the more than doubling of its first quarter to the $300 million rebate program offered as part of the government stimulus bill. - source Cleveland and Ohio Business News

      Also, the company's press release shows that while North American sales (2.3 billion) and European sales (739 million) rose just 7% and 6%, while Latin American sales (1.1 billion) rose by 65%! - source Whirlpool company press release.


      I believe that the best summary for this post is a quote at the second annual Los Angeles Economic Forecast Conference from Christopher Thornberg, a co-founder of Beacon Economics,

      Although the economy appears to be on a rebound,  "but unfortunately it is not due to fundamentals, it is due to government intervention."

      The question now is how to weather the current economic climate?  And how should I redistribute my 401?

      Thursday, April 29, 2010

      March Home Sales Surge 27%!

      I was puzzled over the huge surge. While all the numbers such as the stock market, corporate profits and general business and economic activities are rising, the one key element necessary to support such a huge increase in housing sales -- job growth --  is missing.  And then I realized that the government tax credit for first time home buyers was expiring on April 30.

      Just as the "Cash for Clunkers" program caused a surge in auto sales, the home buyer's tax credit is fueling the March, and no doubt, April home sales figures.

      Any bets on how badly home sales figures will tank after the tax credit expires?  And many expect another wave of foreclosures to hit in the second half of the year as the rates for 5 year ARMs from 2005 reset.

      more on this topic:

      Selling frenzy as homebuyer credit nears end - MSNBC