Entries Tagged 'Global Economy' ↓

Even though I have never been to Cleveland I feel like I have some kind of strange connection to it through a few friends. One of my super geeky friends likes to say three things to indicate that something is cool. Those three words are “orange, ninja, and Cleveland”. I guess he got it from the opening song of Drew Carey where they yell “CLEVELAND ROCKS! CLEVELAND ROCKS!”. So sometimes he says “I’m in Cleveland” to mean that he’s awesome. Anyway, two of my other friends from high school are also connected to Cleveland. One of them is actually attending Case Western’s medical school, and the other one grew up in Cleveland. The three of us had a sort of “big head club”, because we all have quite large heads. So imagine my surprise when I read that most of the foreclosures in the Cleveland we love is now owned by Deutsche Bank. The BBC has also provided a lovely graphic to pinpoint all the German-owned properties:

I am at a loss for words. Though one thing that is clear is that the foreclosure situation in America affects financial institutions all around the world. It makes you wonder, how many other cities are getting owned by foreign banks?

P.S. Cleveland still rocks, because Ohio is going to start teaching mandatory personal finance classes in high school. Californian public schools are in desperate need of such courses too.

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So at the beginning of the year I heard that one of my ex-coworkers left our ex-employer and joined a startup called Instructables in San Francisco. The idea of the site is that anyone can post step by step instructions for making anything and doing anything. So I signed up for the site because my ex-coworker is a pretty cool guy and I wanted to support him. From time to time Instructables sends me newsletters with some quite odd things that people posted. Anyway, here’s my own Instructables newsletter with a collection of tips and do it yourself guides for saving money and saving the world:

1. Save Money By Melting Your Deodorant — This is written by a tightwad who combines the forces of his old deodorants together. I actually did this with my lip balm before, by accident. Basically I left the little jar of it in my car and it all melted. I guess this will work with all kinds of things you can melt.

2. How to Save Water by Showering Navy Style — Very simple Instructable that makes a lot of sense. You really don’t need the water on when you’re putting on soap. This especially works well when you’re in sunny California and it doesn’t get very cold.

3. Cheap Redneck Ceramic Smoker — If you’re into smoking meat or fish, this is pretty awesome.

4. Carbonating the Cheap and Easy Way — This is the guide to homemade sodas. I don’t really drink sodas very often, but it’s still pretty cool.

5. Make Your Own Prescription Card and Save at the Pharmacy – I’m not sure how this works since I always just pay $10 at the pharmacy as a copay. This could help people who don’t have an insurance plan that covers a lot of drug expenses though.

6. EXTREME Power Saving Wireless Mouse Mod — My hubby actually has a wireless mouse. I wonder if he will let me experiment.

7. How to save water in gardens and small-holdings: the Scrooge Bottle — I don’t have a garden, but this contraption is an awesome idea.

8. Hack a Toilet for Free Water — I think the people who don’t flush to save water will enjoy this hack. It is true that it’s pretty wasteful to use so much clean water to carry our waste down the drain.

9. Homemade Laundry Detergent — I don’t know if I would make this, but it seems that if you make it in large enough batches it’s worth it. It does take work though.

10. How to Make Bacon Soap — If you eat a lot of bacon and save the fat then this may be useful to you. It’s a little gross, but it is good fat!

11. Refill Scrubbing Bubbles Automatic Shower Cleaner for $1.00 — The hubby’s friend gave us one of these things for our wedding. Now I know what to do with it when we need refills.

12. Build a Solar Hot Dog Cooker — Use enewable energy to heat up wieners! The picture is awesome on this one.

13. Homemade Fabric Refresher — Very easy instructable, though I’m not quite sure if it’s cheaper than just buying the Febreze.

14. Compact Fluorescentize Your House — This is sort of a propaganda piece for compact flourescent lights, but it’s pretty well written and full of information.

15. Lazy Line Dry — Pretty much all Chinese people in China actually do this and dry their clothes with the power of the sun. We used to do this when we first moved to America and then one night all of our clothes were stolen by some vagabond. My mom was pretty sad and stopped putting clothes outside. If you have a pretty safe yard or patio this is a good way to dry your clothes in sunny weather.

All of these guides should be used with caution. There are some Instructables that are truly frightening and could harm people. I will not list them here but I do enjoy reading them. Until next time, have fun on Instructables and save our planet!

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Many of my friends ask me, “why are you worried about retirement already? You’re only 24 and you have more than forty years until your retire!” The truth is that I don’t think we have forty years until retirement and a lot of us will be forced to retire early. In fact, a recent article in Newsweek stated that the current average retirement age is 57. That only gives me 33 years, which still seems like a long time. However, I think in the future the average retirement age will only get lower and here are my reasons.

1. No Job Security — Our generation no longer work at a company for life. I don’t think it means that we are less loyal, but it’s more of a reaction to the profit seeking inhumanity of corporations. There are often mass layoffs and good benefits such as pensions are mostly eliminated. Basically there are no advantages to being an employee for life. I think the only people in the Silicon Valley who have worked for a private company their entire lives are all at Lockheed Martin, and they’re relics of the old economy waiting to cash in on their pensions. The new world order means that we have no job security and one day we may not be able to find a job and be forced to retire.

2. A Growing Population — The United States population is growing fairly slowly right now, but it is expected to increase to around 392 million by 2050. Why does this affect our retirement age? Well, basically in 15 to 20 years our children will enter the work force and compete for the same limited pool of resources and positions. In China many baby boomers are forced to retire at age 50 so that their jobs can be passed down to younger people. You may say that it’s ageism, but I think it actually makes sense because you can’t let millions of young people run around without a purpose. Our skills need to be passed down to our children, and we need to step aside at some point. I think forty five years is way too long for us to hold on to a job because two generations of people will enter the workforce in that time period.

3. Technology Eliminates Jobs — We live in an age where so many things are automated and simplified so that it takes much less people to do a job. For example, my parents are accountants, and they all use software like Excel and Quicken to balance their books these days. However, before these software packages existed people had to do everything by hand. It definitely took many more accountants to run a billion dollar enterprise sixty years ago. I imagine that technology advancements will eliminate a lot more jobs in the future. It’s possible that technology related positions will increase, but if you’ve ever worked in the Silicon Valley you’d know that these jobs are dominated by the under 40 crowd. Additionally, not all of us work in the tech industry so as technology phases out more and more jobs some of us will be forced to retire.

4. Global Competition — Globalization is something a lot of people fight against. Right now, a lot of manufacturing jobs in America have already been outsourced to other countries. Since technology has expedited the delivery of goods and services around the world Americans are competing with the global workforce for business. High end professional jobs are also being outsourced to other countries because their workforces are cheaper. This all means that wages will probably decrease for Americans in the future. In fact, our generation is the first generation where our wages have decreased compared to our parents. This means that we should save as much as we can now before our earning power is further eroded.

5. The Bottom Line of Corporations — Corporations outsource because it is cheaper, and they also hire younger workers because they are cheaper. I have heard of stories of where senior engineers are laid off and replaced with cheaper college grads. Ageism is rampant, and in some cases it’s reasonable. For example, an 80 year old probably isn’t as good of a physical laborer than a 23 year old. However, most of the time corporations want younger workers to pad their own bottomline.

6. The Zenith of a Career – The proverbial “glass ceiling” is reached much quicker by our generation because our parents’ generation is still in charge of the current state of the world well into our middle ages. Generally people work so that they can reach higher places in their career, and if the peak is reached so quickly then work may become meaningless.

This post may seem pessimistic and paint sort of a grim future, but I think it’s what my mom calls “cautious pessimism”. I think it’s highly likely that our generation will need to or be forced to retire as early as 45 to 50 and that only leaves me 20 to 25 years to save for the rest of my life. A lower retirement age coupled with longer life spans mean that our generation needs to save as much as we can during our working years. I am not really worried about retirement because I am taking steps to prepare for it. It’s much better to start preparing for the second half of your life now and not worry about it when you get there. I am also very optimistic about our generation because we may be able to enjoy our lives more if we plan well and retire early. So to my friends, if you haven’t started contributing to your retirement plan you should do it now before it’s too late.

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My fubby asked me why I am so concerned about the mortgage meltdown recently when I work in the tech industry which seemingly has nothing to do with mortgages.  It actually already affected me because most companies that sell ads on the internet are hurt by the fiasco in some way. Internet outfits like LowerMyBills and LendingTree that thrive on mortgage leads are also hit heavily by the implosion of so many mortgage companies this year.  A mortgage lead is basically a form that’s filled out by a consumer requesting a mortgage rate quote.  As recent as last year, some of these leads were selling for more than $100 per pop to companies like New Century Financial, which operates mostly under the name Home123 on the internet. The selling of leads is still a viable business, but less mortgage companies are alive to bid on the leads, and thus the prices are falling.

In addition to mortgage leads, there are mortgage ads.  “Mortgages” and similar terms were very expensive in the AdWords market place because of the flurry of mortgage lenders and lead generation companies that wanted to attract customers.  With the implosion, the mortgage ads revenue will definitely have to go down.  The July 2007 Nielsen rating of the top 5 internet advertisers based on estimated earnings are as follows:

1. Low Rate Source — One of the largest mortgage leads companies.
2.  NexTag, Inc — One of the largest shopping comparison engines which has a mortgage leads service
3. Experian Group Limited — One of the three credit rating bureaus that also happens to own LowerMyBills
4. Countrywide Financial Corporation — I think we all know this one as the largest mortgage lender in the country.
5.  InterActiveCorp — The owner of LendingTree and other internet properties.

You have to take Nielsen’s estimated ad spending with a grain of salt since they don’t know exactly what amount of money each of these companies spend on ads, but these five companies do serve up a lot of ad impressions and ALL of them have revenues either partially or totally from mortgage related businesses.  With the current market conditions, it would be prudent for them to cut down on mortgage related ads.  Companies such as Countrywide might even need the advertising dollars to survive, as it recently borrowed billions from other banks to fund its operations. Lower advertising spending by these companies would mean less revenues for all advertisers carrying mortgage related ads.

I am not sure what percentage of ad revenues internet giants like Google and Yahoo are losing due to this situation, but Yahoo did lower their revenue guidance for Q3. Could less ad revenues spell new rounds of layoffs for the Valley? Only time will tell.

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This week central banks around the world injected billions of dollars into their financial systems to ease the credit crunch. Stories like this really makes me feel like I am living in a virtual world. In any MMORPG, the administrators have the power to create as much money as they want and “inject” the assets into the world. They can also create items and put them into the world. The items then get traded by players. This is practically what happened here in the real world. Many homes were created on the basis of non-existent money, and then the non-existent returns got sold all around the world. When the world realized that all of these assets are essentially virtual, the powers that be created more fictitious currency and lent it out to its minions to balance out the economy. Since our currency system is decoupled from the gold standard, there is no real world item that ties to our money. Essentially our money is as digital and virtual as the money in a game. In games there are designers and QA engineers that work on the balance of the economy and sometimes they do catastrophic things to the worlds to make the gameplay more interesting. There are also times when the original design is flawed, and balance needs to be brought to the world through patches. So what are the central banks doing exactly in our world by lending out more money? I think they’re trying to restore balance, but are they ultimately fixing the bugs in the system or just applying a workaround? Real life is the ultimate MMORPG with 6 billion players world wide, but who are the ones pulling the strings?

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